regardless of whether the medicine is included in any 
formulary established under this part if such medi-
cine is certified as medically necessary by such 
health care professional (except that the Secretary 
shall encourage to the maximum extent possible the 
substitution and use of lower-cost generics), up to 
the benefit limits specified in section 1860B; and 
‘‘(2) charging by pharmacies of the negotiated 
price— 
‘‘(A) for all covered prescription medicines, 
without regard to such benefit limit; and 
‘‘(B) established with respect to any drugs 
or classes of drugs described in subparagraphs 
(A), (B), (D), (E), or (F) of section 1927(d)(2) 
that are available to individuals receiving bene-
fits under this title. 
‘‘(b) COVERED PRESCRIPTION MEDICINES.— 
‘‘(1) IN GENERAL.—Covered prescription medi-
cines, for purposes of this part, include all prescrip-
tion medicines (as defined in section 1860K(1)), in-
cluding smoking cessation agents, except as other-
wise provided in this subsection. 
‘‘(2) EXCLUSIONS FROM COVERAGE.—Covered 
prescription medicines shall not include drugs or 
classes of drugs described in subparagraphs (A)
through (D) and (F) through (H) of section 
1927(d)(2) unless— 
‘‘(A) specifically provided otherwise by the 
Secretary with respect to a drug in any of such 
classes; or 
‘‘(B) a drug in any of such classes is cer-
tified to be medically necessary by a health care 
professional. 
‘‘(3) EXCLUSION OF PRESCRIPTION MEDICINES 
TO THE EXTENT COVERED UNDER PART A OR B.— 
A medicine prescribed for an individual that would 
otherwise be a covered prescription medicine under 
this part shall not be so considered to the extent 
that payment for such medicine is available under 
part A or B, including all injectable drugs and 
biologicals for which payment was made or should 
have been made by a carrier under section 
1861(s)(2) (A) or (B) as of the date of enactment 
of the Medicare Drugs for Seniors (MEDS) Act of 
2006. Medicines otherwise covered under part A or 
B shall be covered under this part to the extent that 
benefits under part A or B are exhausted. 
‘‘(4) STUDY ON INCLUSION OF HOME INFUSION 
THERAPY SERVICES.—Not later than one year after 
the date of the enactment of the Medicare Drugs for
Seniors (MEDS) Act of 2006, the Secretary shall 
submit to Congress a legislative proposal for the de-
livery of home infusion therapy services under this 
title and for a system of payment for such a benefit 
that coordinates items and services furnished under 
part B and under this part. 
‘‘PAYMENT OF BENEFITS; BENEFIT LIMITS 
‘‘SEC. 1860B. (a) PAYMENT OF BENEFITS.— 
‘‘(1) IN GENERAL.—There shall be paid from 
the Prescription Medicine Insurance Account within 
the Supplementary Medical Insurance Trust Fund, 
in the case of each individual who is enrolled in the 
insurance program under this part and who pur-
chases covered prescription medicines in a calendar 
year— 
‘‘(A) with respect to costs incurred for cov-
ered prescription medicine furnished during a 
year, before the individual has incurred out-of- 
pocket expenses under this subsection equal to 
the catastrophic out-of-pocket limit specified in 
subsection (b), an amount equal to the applica-
ble percentage (specified in paragraph (2)) of 
the negotiated price for each such covered pre-
scription medicine or such higher percentage as 
is proposed under section 1860G(b)(7); and
‘‘(B) with respect to costs incurred for cov-
ered prescription medicine furnished during a 
year, after the individual has incurred out-of- 
pocket expenses under this subsection equal to 
the catastrophic out-of-pocket limit specified in 
subsection (b), an amount equal to 100 percent 
of the negotiated price for each such covered 
prescription medicine. 
‘‘(2) APPLICABLE PERCENTAGE.—The applica-
ble percentage specified in this paragraph is 80 per-
cent or such higher percentage as is proposed under 
section 1860G(b)(7), if the Secretary finds that such 
higher percentage will not increase aggregate costs 
to the Prescription Medicine Insurance Account. 
‘‘(b) CATASTROPHIC LIMIT ON OUT-OF-POCKET EX-
PENSES.— 
‘‘(1) IN GENERAL.—The catastrophic limit on 
out-of-pocket expenses specified in this subsection— 
‘‘(A) for each of calendar years 2007 and 
2008, $2,000; and 
‘‘(B) subject to paragraph (2), for calendar 
year 2009 and each subsequent calendar year is 
equal to the limit for the preceding year under 
this paragraph adjusted by the sustainable
growth rate percentage (determined under sec-
tion 1860I(b)) for the year involved. 
‘‘(2) 
ROUNDING.—Any 
amount 
determined 
under paragraph (1)(B) that is not a multiple of 
$10 shall be rounded to the nearest multiple of $10. 
‘‘ELIGIBILITY AND ENROLLMENT 
‘‘SEC. 1860C. (a) ELIGIBILITY.—Every individual 
who, during or after 2007, is entitled to hospital insurance 
benefits under part A or enrolled in the medical insurance 
program under part B is eligible to enroll, in accordance 
with the provisions of this section, in the insurance pro-
gram under this part, during an enrollment period under 
this section, in such manner and form specified by the Sec-
retary in regulations. 
‘‘(b) ENROLLMENT.— 
‘‘(1) IN GENERAL.—Each individual who satis-
fies subsection (a) shall be enrolled (or eligible to en-
roll) in the program under this part in accordance 
with the provisions of section 1837, as if that section 
applied to this part, except as otherwise explicitly 
provided in this part. 
‘‘(2) SINGLE ENROLLMENT PERIOD.—Except as 
provided in section 1837(i) (as such section applies 
to this part), 1860E, or 1860H(e), or as otherwise 
explicitly provided, no individual shall be entitled to 
enroll in the program under this part at any time
after the initial enrollment period without penalty, 
and in the case of all other late enrollments, the Sec-
retary shall develop a late enrollment penalty for the 
individual that fully recovers the additional actuarial 
risk involved providing coverage for the individual. 
‘‘(3) 
SPECIAL
ENROLLMENT
PERIOD
FOR 
2007.— 
‘‘(A) IN
GENERAL.—An individual who 
first satisfies subsection (a) in 2007 may on or 
after the date on which they first become eligi-
ble and at any time on or before December 31, 
2007— 
‘‘(i) enroll in the program under this 
part; and 
‘‘(ii) enroll or reenroll in such pro-
gram after having previously declined or 
terminated enrollment in such program. 
‘‘(B) EFFECTIVE DATE OF COVERAGE.— 
An individual who enrolls under the program 
under this part pursuant to subparagraph (A) 
shall be entitled to benefits under this part be-
ginning on the first day of the month following 
the month in which such enrollment occurs. 
‘‘(c) PERIOD OF COVERAGE.—