I 
116TH CONGRESS 
2D SESSION 
H. R. 7877 
To amend title XVIII of the Social Security Act to provide Medicare part 
D beneficiaries with certain offset payments and reduce the growth 
rate of the Medicare part D out-of-pocket cost threshold, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 30, 2020 
Mr. KATKO (for himself and Mrs. MURPHY of Florida) introduced the fol-
lowing bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committee on Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
Medicare part D beneficiaries with certain offset pay-
ments and reduce the growth rate of the Medicare part 
D out-of-pocket cost threshold, and for other purposes. 
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 ‘‘Lowering Drug Costs 
for Seniors Act of 2020’’. 
VerDate Sep 11 2014 
04:06 Aug 18, 2020
Jkt 099200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H7877.IH
H7877
kjohnson on DSK79L0C42PROD with BILLS
SEC. 2. GROWTH RATE OF MEDICARE PART D OUT-OF- 
POCKET COST THRESHOLD. 
(a) PROVIDING MEDICARE PART D BENEFICIARIES 
WITH
CERTAIN
2020 OFFSET
PAYMENTS.—Section 
1860D–2(b)(4) of the Social Security Act (42 U.S.C. 
1395w–102(b)(4)) is amended by adding at the end the 
following new subparagraph: 
‘‘(F) 2020 OFFSET PAYMENTS.— 
‘‘(i) IN GENERAL.—Subject to clause 
(iv), the Secretary shall provide for pay-
ment from the Medicare Prescription Drug 
Account as follows: 
‘‘(I) In the case of a specified in-
dividual (as defined in clause (ii)(I)) 
who as of the last day of a calendar 
quarter in 2020 has incurred costs for 
covered part D drugs so that the indi-
vidual has exceeded the annual out-of- 
pocket threshold applied under sub-
paragraph (B)(i)(V) for 2020, pay-
ment to the individual by not later 
than 15th day of the third month fol-
lowing the end of such quarter of the 
amount by which such threshold so 
applied exceeded the target threshold 
for 2020. 
VerDate Sep 11 2014 
04:06 Aug 18, 2020
Jkt 099200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H7877.IH
H7877
kjohnson on DSK79L0C42PROD with BILLS
‘‘(II) In the case of a specified 
individual who is not described in sub-
clause (I) and who as of the last day 
of 2020 has incurred costs for covered 
part D drugs so that the individual 
has exceeded the target threshold for 
2020, payment to the individual by 
not later than December 31, 2021, of 
the amount by which such incurred 
costs exceeded the target threshold for 
2020. 
‘‘(ii) DEFINITIONS.—For purposes of 
this subparagraph: 
‘‘(I) SPECIFIED
INDIVIDUAL.— 
The term ‘specified individual’ means 
an individual who— 
‘‘(aa) is enrolled in a pre-
scription drug plan or an MA– 
PD plan; 
‘‘(bb) is not enrolled in a 
qualified retiree prescription drug 
plan; and 
‘‘(cc) is not entitled to an in-
come-related subsidy under sec-
tion 1860D–14(a). 
VerDate Sep 11 2014 
04:06 Aug 18, 2020
Jkt 099200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H7877.IH
H7877
kjohnson on DSK79L0C42PROD with BILLS
‘‘(II) TARGET
THRESHOLD
FOR 
2020.—The term ‘target threshold for 
2020’ means the annual out-of-pocket 
threshold that would have been ap-
plied under subparagraph (B)(i) for 
2020 if such threshold had been de-
termined in accordance with subclause 
(IV) of such subparagraph instead of 
subclause (V) of such subparagraph. 
‘‘(iii) NOTIFICATION.—In the case of 
any specified individual who during 2020 
has incurred costs for covered part D 
drugs so that the individual has exceeded 
the target threshold for 2020, the Sec-
retary shall, not later than September 30, 
2021, provide to such individual a notifica-
tion informing such individual of such indi-
vidual’s right to a payment described in 
clause (i) and the estimated timing of such 
payment. 
‘‘(iv) CLARIFICATION.—The Secretary 
shall provide only 1 payment under this 
subparagraph with respect to any indi-
vidual. 
VerDate Sep 11 2014 
21:36 Aug 24, 2020
Jkt 099200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H7877.IH
H7877
kjohnson on DSK79L0C42PROD with BILLS
‘‘(v) 
IMPLEMENTATION.—The 
Sec-
retary may implement this subparagraph 
by program instruction or otherwise.’’. 
(b) REDUCED GROWTH RATE FOR 2021 OF MEDI-
CARE PART D OUT-OF-POCKET COST THRESHOLD.—Sec-
tion 1860D–2(b)(4)(B)(i) of the Social Security Act (42 
U.S.C. 1395w–102(b)(4)(B)(i)) is amended— 
(1) in subclause (V), by striking at the end 
‘‘or’’; 
(2) by redesignating subclause (VI) as sub-
clause (VIII); and 
(3) by inserting after subclause (V) the fol-
lowing new subclauses: 
‘‘(VI) for 2021, is equal to the 
amount that would have been applied 
under this subparagraph for 2020 if 
such amount had been determined in 
accordance with subclause (IV) in-
stead of subclause (V), increased by 
the lesser of— 
‘‘(aa) the annual percentage 
increase described in paragraph 
(7) for 2021, plus 2 percentage 
points; or 
VerDate Sep 11 2014 
21:36 Aug 24, 2020
Jkt 099200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H7877.IH
H7877
kjohnson on DSK79L0C42PROD with BILLS
‘‘(bb) the annual percentage 
increase described in paragraph 
(6) for 2021; 
‘‘(VII) for 2022, is equal to the 
amount that would have been applied 
under this subparagraph for 2022 if 
the amendments made by section 
1101(d)(1) of the Health Care and 
Education Reconciliation Act of 2010 
and by section 2 of the Lowering 
Drug Costs for Seniors Act of 2020 
had not been enacted; or’’. 
Æ 
VerDate Sep 11 2014 
04:06 Aug 18, 2020
Jkt 099200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6301
E:\BILLS\H7877.IH
H7877
kjohnson on DSK79L0C42PROD with BILLS