I 
108TH CONGRESS 
1ST SESSION H. R. 2461
To amend title XVIII of the Social Security Act to provide for establishment 
of a Medicare prescription drug benefit covering costs that exceed a 
percentage of a beneficiary’s income. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 12, 2003
Ms. LORETTA SANCHEZ of California introduced the following bill; which was 
referred to the Committee on Energy and Commerce, and in addition to 
the Committee on Ways and Means, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for establishment of a Medicare prescription drug benefit 
covering costs that exceed a percentage of a beneficiary’s 
income.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Equal Access to Pre-
scription Drugs for All Seniors Act’’.
SEC. 2. MEDICARE PRESCRIPTION DRUG BENEFIT PRO-
GRAM FOR CATASTROPHIC EXPENSES. 
Part B of title XVIII of the Social Security Act is 
amended by adding at the end the following new section: 
‘‘ESTABLISHMENT OF OUTPATIENT PRESCRIPTION DRUG 
BENEFIT PROGRAM 
‘‘SEC. 1849. (a) IN GENERAL.—The Secretary shall 
establish a program that provides outpatient prescription 
drug benefits for individuals who are enrolled under this 
part and entitled to benefits under part A. 
‘‘(b) DESIGN OF BENEFIT.—The outpatient prescrip-
tion drug benefit program shall be established under sub-
section (a) consistent with the following: 
‘‘(1) PERIOD
OF
BENEFITS.—Benefits under 
the program are first available for prescription drugs 
dispensed on or after January 1, 2005, and shall not 
be available for drugs dispensed after September 30, 
2013. 
‘‘(2) FISCAL LIMITATIONS.—
‘‘(A) IN GENERAL.—During the 10-fiscal-
year period beginning with fiscal year 2004, the 
program shall be designed to result in addi-
tional, net expenditures under this title equal to 
$400,000,000,000, and expenditures consistent 
with the amounts specified in subparagraph 
(B). In order to do this, the Secretary shall es-
tablish an appropriate deductible under para-
graph (3), incentives for efficient use of generic 
drugs and other management techniques de-
scribed in paragraph (8), and efficient methods 
for payment for covered benefits. 
‘‘(B) FUNDING
STREAM.—The following 
shall be the amounts available for start-up and 
administrative costs and payment of benefits 
under this section: 
‘‘(i) For start-up and administrative 
costs, 
without 
fiscal 
year 
limitation, 
$22,811,420,000. 
‘‘(ii) For payments for benefits in fis-
cal year 2005, $25,756,250,000. 
‘‘(iii) For payments for benefits in fis-
cal year 2006, $28,859,150,000. 
‘‘(iv) For payments for benefits in fis-
cal year 2007, $32,219,690,000. 
‘‘(v) For payments for benefits in fis-
cal year 2008, $36,021,300,000. 
‘‘(vi) For payments for benefits in fis-
cal year 2009, $40,164,610,000. 
‘‘(vii) For payments for benefits in 
fiscal year 2010, $44,746,360,000.
‘‘(viii) For payments for benefits in 
fiscal year 2011, $49,904,730,000. 
‘‘(ix) For payments for benefits in fis-
cal year 2012, $55,974,380,000. 
‘‘(x) For payments for benefits in fis-
cal year 2013, $63,542,120,000. 
‘‘(3) CATASTROPHIC NATURE OF BENEFIT.—
‘‘(A) IN GENERAL.—The program is de-
signed to provide benefits in a calendar year for 
a beneficiary after the beneficiary has incurred 
out-of-pocket costs (as defined under the pro-
gram) for covered outpatient prescription drugs 
that exceeds such percentage of income (such as 
5 percent) as the Secretary shall specify for 
each year (beginning with 2005) consistent with 
paragraph (2). Such percentage shall vary from 
year to year [and may vary based on the in-
come of beneficiaries]. 
‘‘(B) INCOME
DETERMINATION.—Under 
the program, income shall be based on the pre-
vious year’s income tax return of, in the ab-
sence of such a return, on such income eligi-
bility statement as the Secretary shall provide 
for. 
The 
Secretary 
shall 
provide 
for 
a 
verification of the income on such a statement
through the income eligibility verification sys-
tem used for purposes of the medicaid and SSI 
programs or other comparable system approved 
by the Secretary. 
‘‘(C) UTILIZATION
OF
BENEFITS.—The 
program shall be designed to permit access to 
benefits in 2 different ways: 
‘‘(i) MONTHLY PAYMENT OF
1⁄12 OF 
DEDUCTIBLE.—In the case of a beneficiary 
who is expected to have prescription drug 
costs over the catastrophic threshold under 
subparagraph (A) for a year, the Secretary 
shall permit the beneficiary to elect to ob-
tain benefits immediately at the beginning 
of the year and to pay to the Secretary, on 
a monthly basis, 1⁄12 of the applicable 
amount of the threshold under such sub-
paragraph for the year. 
‘‘(ii) BENEFITS UPON SATISFACTION 
OF
DEDUCTIBLE.—Access 
to 
benefits 
would be available once prescription drug 
expenditures, as documented through a 
smart card or similar method, have met 
the applicable annual deductible.
‘‘(D) USE OF ELECTRONIC SYSTEMS FOR 
TRACKING
EXPENDITURES.—In any case the 
monitoring of expenditures under the program, 
both before and after the annual deductible has 
been met, shall be done electronically through 
the submittal of claims information and, if ap-
plicable, the use of an appropriate electronic 
transaction card system. 
‘‘(4) DEFINED TERMS.—The Secretary shall de-
fine for purposes of the benefit ‘covered outpatient 
prescription drugs’, ‘out-of-pocket costs’, and ‘in-
come’ consistent with the following: 
‘‘(A) ‘Income’ shall be based on adjusted 
gross income for the most recent previous year 
and shall take into account, in an appropriate 
manner in the case of a married couple, the in-
come of the spouses, and shall also income in-
come derived from tax exempt sources, includ-
ing social security benefits and municipal bond 
interest. 
‘‘(B) 
‘Covered 
outpatient 
prescription 
drugs’ shall not include prescription drugs for 
which any benefits are otherwise available 
under this part.
‘‘(5) APPLICATION OF SECONDARY PAYOR PRO-
VISIONS.—The secondary payor provisions of section 
1862(b) shall apply to this benefits under this pro-
gram. 
‘‘(6) NO PREMIUM; NO IMPACT ON PART B PRE-
MIUM.—There shall be no additional premium 
charged for the benefits under the program and the 
amount of the monthly premiums under section 
1839 and under section 1818 shall not be changed 
or affected as a result of the implementation of the 
program. 
‘‘(7) PAYMENT FROM SMI TRUST FUND.—Bene-
fits under the program shall be payable from the 
Federal Supplementary Medical Insurance Trust 
Fund under section 1841. 
‘‘(8) USE
OF
UTILIZATION
MECHANISMS.—In 
implementing the program, the Secretary shall es-
tablish appropriate mechanisms to encourage the 
substitution of generic drugs and appropriate tech-
niques for the management of prescription drugs. 
‘‘(9) PHARMACY ACCESS.—The program shall 
be designed in a manner so that beneficiaries are 
provided timely access to prescription drugs and 
may choose among the broadest range of qualified, 
participating pharmacies so as to result in the least
disruption on current methods for the delivery of 
outpatient prescription drugs. 
‘‘(10) 
USE
OF
CONTRACTUAL
ARRANGE-
MENTS.—The program may be implemented through 
contracts with pharmaceutical benefit managers and 
other qualified entities, including carriers under this 
part.’’.
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