I 
108TH CONGRESS 
1ST SESSION H. R. 2199
To amend title XVIII of the Social Security Act to provide for a voluntary 
program for limiting maximum out-of-pocket expenditures for bene-
ficiaries under the Medicare Program. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 21, 2003
Mr. STARK 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 determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To amend title XVIII of the Social Security Act to provide 
for a voluntary program for limiting maximum out-of-
pocket expenditures for beneficiaries under the Medicare 
Program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Medicare Out-of-Pocket Spending Limit Act of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Establishment of medicare voluntary catastrophic coverage program.
‘‘PART D—VOLUNTARY CATASTROPHIC BENEFIT PROGRAM 
‘‘Sec. 1860. Establishment of program. 
‘‘Sec. 1860A. Scope of benefits. 
‘‘Sec. 1860B. Eligibility and enrollment. 
‘‘Sec. 1860C. Monthly premium; collection of premiums. 
‘‘Sec. 1860E. Federal Catastrophic Insurance Account. 
‘‘Sec. 1860F. Appropriations to cover Government contributions. 
Sec. 3. Medicaid buy-in of medicare catastrophic coverage for certain low-in-
come individuals. 
‘‘Sec. 1860D. Special eligibility, enrollment, and copayment rules for low-in-
come individuals.
SEC. 2. ESTABLISHMENT OF MEDICARE VOLUNTARY CATA-
STROPHIC COVERAGE PROGRAM. 
(a) IN GENERAL.—Title XVIII of the Social Security 
Act is amended—
(1) by redesignating part D as part E; and 
(2) by inserting after part C the following new 
part: 
‘‘PART D—VOLUNTARY CATASTROPHIC BENEFIT 
PROGRAM 
‘‘ESTABLISHMENT OF PROGRAM 
‘‘SEC. 1860. There is established as a part of the 
medicare program under this title a voluntary program to 
cover catastrophic out-of-pocket costs incurred under 
parts A and B. 
‘‘SCOPE OF BENEFITS 
‘‘SEC. 1860A. (a) IN GENERAL.—The benefits pro-
vided to an individual enrolled in the insurance program 
under this part shall consist of elimination of further cost-
sharing (described in subsection (b)) for expenses incurred 
during a year after the individual has incurred cost-shar-
ing totaling the catastrophic limit specified in subsection 
(c). 
‘‘(b) COST-SHARING COVERED.—
‘‘(1) IN GENERAL.—For purposes of this part, 
the term ‘cost-sharing’ means costs incurred by an 
individual that are attributable to the following: 
‘‘(A) INPATIENT
HOSPITAL
DEDUCTIBLE 
AND HOSPITAL COINSURANCE.—Costs incurred 
for the deductible and coinsurance described in 
section 1813(a)(1). 
‘‘(2) BLOOD DEDUCTIBLE.—The deduction 
described in section 1813(a)(2). 
‘‘(C) SNF 
COINSURANCE.—Coinsurance 
described in section 1813(a)(3). 
‘‘(D) HOSPICE
COINSURANCE.—Hospice 
coinsurance under section 1813(a)(4). 
‘‘(E) PART B DEDUCTIBLE AND COINSUR-
ANCE.—Amounts charged as the deductible or 
coinsurance or copayments under part B, but 
not including any amounts owed in excess of 
the full payment rate recognized under this title 
with respect to the items or services involved.
‘‘(2) TREATMENT OF INCURRED COSTS.—For 
purposes of this part, costs shall be treated as in-
curred only if they were incurred during an individ-
ual’s coverage period under this part and only if 
they were billed and owed, regardless of whether 
payment was or was not made by the individual or 
by another party (including by a group health plan, 
by a medicare supplemental health insurance policy, 
under title XIX, or otherwise). 
‘‘(c) CATASTROPHIC LIMIT.—
‘‘(1) IN
GENERAL.—The catastrophic limit 
under this subsection is equal to—
‘‘(A) for 2006, $2000; or 
‘‘(B) for a subsequent year, is equal to 
$2,000 increased the percentage by which the 
average expenditures per full-year enrollee 
under this part for that subsequent year will ex-
ceed such average for 2006. 
‘‘(2) ROUNDING.—Any amount computed under 
paragraph (1)(B) shall be rounded to the nearest 
$50.
‘‘(3) PROMULGATION.—Not later than Sep-
tember 1 of each year (beginning with 2006) the 
Secretary shall determine the catastrophic limit 
under this subsection for the following year.
‘‘(d) ADMINISTRATION
OF BENEFITS.—The Sec-
retary shall establish a method for the administration of 
this part through fiscal intermediaries and carriers under 
parts A and B in coordination with the payment of bene-
fits under those parts. In carrying out this part—
‘‘(1) to the maximum extent feasible, the Sec-
retary shall provide for timely determination of eligi-
bility and benefits so as to permit the adjustment of 
the amount of payments made to providers under 
such parts to take into account the catastrophic ben-
efits provided under this part and to avoid the need 
for payment of covered cost-sharing by beneficiaries; 
‘‘(2) the Secretary shall develop a method for 
the reimbursement of individuals (or other parties) 
in cases in which they make payment for costs for 
which benefits are available under this part; and 
‘‘(3) the Secretary may enter into contracts 
with other parties to administer and facilitate ad-
ministration of this part. 
‘‘(e) SOURCE OF PAYMENT.—Payment of benefits 
under this part shall be made from the Federal Cata-
strophic Insurance Account within the Federal Supple-
mentary Medical Insurance Trust Fund and shall be 
transferred (in a manner specified by the Secretary) to 
the Federal Hospital Insurance Trust Fund.
‘‘ELIGIBILITY AND ENROLLMENT 
‘‘SEC. 1860B. (a) ELIGIBILITY.—Every individual 
who, in or after 2006, is entitled to hospital insurance ben-
efits under part A and is enrolled in the medical insurance 
program under part B is eligible to enroll in the insurance 
program under this part, during an enrollment period pre-
scribed in or under this section, in such manner and form 
as may be prescribed by 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 (other than sub-
section (f)), as if that section applied to this part, 
except as otherwise explicitly provided in this part. 
‘‘(2) PENALTY FOR LATE ENROLLMENT.—Ex-
cept as provided in subsection (d), section 1860D(b) 
(relating to loss of coverage under the medicaid pro-
gram) or as otherwise explicitly provided, no indi-
vidual shall be entitled to enroll in the program 
under this part at any time after the initial enroll-
ment period without penalty, and in the case of all 
other late enrollments, the Secretary shall develop 
and apply a late enrollment penalty for the indi-
vidual that is similar to the late enrollment penalty 
described in section 1839(b). 
‘‘(3) SPECIAL ENROLLMENT PERIOD IN 2005.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who first satisfies subsection (a) on or 
before October 1, 2005, there shall be an initial 
general enrollment period beginning on such 
date and ending on March 31, 2006, during 
which the individual may enroll under this part. 
‘‘(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, but 
in no case earlier than January 1, 2006. 
‘‘(c) PERIOD OF COVERAGE.—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this part, an individual’s coverage under the 
program under this part shall be effective for the pe-
riod provided in section 1838, as if that section ap-
plied to the program under this part. 
‘‘(2) PART D COVERAGE TERMINATED BY TER-
MINATION OF COVERAGE UNDER PART A OR PART 
B.—In addition to the causes of termination speci-
fied in section 1838, an individual’s coverage under 
this part shall be terminated when the individual 
terminates coverage under either part A or part B, 
effective on the effective date of the earlier termi-
nation of coverage under either such part. 
‘‘(d) ENROLLMENT FOR INDIVIDUALS WHOSE GROUP 
HEALTH PLAN COVERAGE ENDS.—The provisions of sec-
tion 1837(i) shall apply with respect to enrollment under 
this part in the same manner as such section applies with 
respect to enrollment under part B. 
‘‘MONTHLY PREMIUM; COLLECTION OF PREMIUMS 
‘‘SEC. 1860C. (a) MONTHLY PREMIUM BASED ON 
PART B METHODOLOGY.—
‘‘(1) DETERMINATION OF MONTHLY ACTUARIAL 
RATE
AND
MONTHLY
PREMIUM.—The Secretary 
shall compute, with respect to this part and the Fed-
eral Catastrophic Insurance Account, a monthly ac-
tuarial rate and a monthly premium in the same 
manner as such a rate and premium is computed 
under section 1839(a) with respect to part B and 
the Federal Supplementary Medical Insurance Trust 
Fund. 
‘‘(2) APPLICATION OF PART B LATE ENROLL-
MENT
PENALTY
AND
RELATED
PROVISIONS.—The 
provisions of subsections (b), (d), and (e) of section 
1839 shall apply with respect to enrollment under
this part and the premium established under para-
graph (1) in the same manner as such provisions 
apply to enrollment under part B and the premium 
established under section 1839(a). 
‘‘(3) TREATMENT AS PART OF CONSOLIDATED 
PREMIUM.—The provisions of section 1839(f) shall 
be applied (after the first year in which this part is 
in effect) as if the premium established under this 
section were included as part of the premium under 
section 1839. 
‘‘(b) PAYMENT OF PREMIUMS.—
‘‘(1) GENERALLY THROUGH DEDUCTION FROM 
SOCIAL
SECURITY, RAILROAD
RETIREMENT
BENE-
FITS, OR BENEFITS ADMINISTERED BY OPM.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is entitled to or receiving benefits as 
described in subsection (a), (b), or (d) of sec-
tion 1840, premiums payable under this part 
shall be collected by deduction from such bene-
fits at the same time and in the same manner
as premiums payable under part B are collected 
pursuant to section 1840. 
‘‘(B) TRANSFERS OF DEDUCTION TO AC-
COUNT.—The Secretary of the Treasury shall, 
from time to time, but not less often than quar-
terly, transfer premiums collected pursuant to 
subparagraph (A) to the Federal Catastrophic 
Insurance Account from the appropriate funds 
and accounts described in subsections (a)(2), 
(b)(2), and (d)(2) of section 1840, on the basis 
of the certifications described in such sub-
sections. The amounts of such transfers shall be 
appropriately adjusted to the extent that prior 
transfers were too great or too small. 
‘‘(2) OTHERWISE THROUGH DIRECT PAYMENTS 
BY ENROLLEE TO SECRETARY.—
‘‘(A) IN THE CASE OF INADEQUATE DE-
DUCTION.—An individual to whom paragraph 
(1) applies (other than an individual receiving 
benefits as described in section 1840(d)) and 
who estimates that the amount that will be 
available for deduction under such paragraph 
for any premium payment period will be less 
than the amount of the monthly premiums for 
such period may (under regulations) pay to the 
Secretary the estimated balance, or such great-
er portion of the monthly premium as the indi-
vidual chooses. 
‘‘(B) OTHER
CASES.—An individual en-
rolled in the insurance program under this part
with respect to whom none of the preceding 
provisions of this subsection applies (or to 
whom section 1840(c) applies) shall pay pre-
miums to the Secretary at such times and in 
such manner as the Secretary shall by regula-
tions prescribe. 
‘‘(C) DEPOSIT
OF
PREMIUMS
IN
AC-
COUNT.—Amounts paid to the Secretary under 
this paragraph shall be deposited in the Treas-
ury to the credit of the Federal Catastrophic 
Insurance Account in the Federal Supple-
mentary Medical Insurance Trust Fund. 
‘‘SPECIAL ELIGIBILITY, ENROLLMENT, AND COPAYMENT 
RULES FOR LOW-INCOME INDIVIDUALS 
‘‘SEC. 1860D. (a) STATE OPTIONS FOR COVERAGE: 
CONTINUATION OF MEDICAID COVERAGE OR ENROLL-
MENT UNDER THIS PART.—
‘‘(1) IN GENERAL.—The Secretary shall, at the 
request of a State, enter into an agreement with the 
State under which all individuals described in para-
graph (2) are enrolled in the program under this 
part, without regard to whether any such individual 
has previously declined the opportunity to enroll in 
such program. 
‘‘(2) ELIGIBILITY GROUPS.—The individuals de-
scribed in this paragraph, for purposes of paragraph
(1), are individuals who satisfy section 1860B(a) 
and who are—
‘‘(A) in a coverage group or groups per-
mitted under section 1843 (as selected by the 
State and specified in the agreement); or 
‘‘(B) qualified medicare catastrophic bene-
ficiaries (as defined in section 1905(x)(1)). 
‘‘(3) COVERAGE PERIOD.—The period of cov-
erage under this part of an individual enrolled under 
an agreement under this subsection shall be as fol-
lows: 
‘‘(A) INDIVIDUALS
ELIGIBLE
(AT
STATE 
OPTION) FOR PART B BUY-IN.—In the case of 
an individual described in subsection (a)(2)(A), 
the coverage period shall be the same period 
that applies (or would apply) pursuant to sec-
tion 1843(d). 
‘‘(B) 
QUALIFIED
MEDICARE
CATA-
STROPHIC BENEFICIARIES.—In the case of an 
individual described in subsection (a)(2)(B)—
‘‘(i) the coverage period shall begin on 
the latest of—
‘‘(I) January 1, 2006; 
‘‘(II) the first day of the third 
month following the month in which
the State agreement is entered into; 
or 
‘‘(III) the first day of the first 
month following the month in which 
the 
individual 
satisfies 
section 
1860B(a); and 
‘‘(ii) the coverage period shall end on 
the last day of the month in which the in-
dividual is determined by the State to have 
become ineligible for medicare catastrophic 
coverage benefits. 
‘‘(4) ENROLLMENT FOR LOW-INCOME SUBSIDY 
THROUGH OTHER MEANS.—
‘‘(A) FLEXIBILITY IN ENROLLMENT PROC-
ESS.—With respect to low-income individuals 
residing in a State enrolling under this part on 
or after January 1, 2006, the Secretary shall 
provide for determinations of whether the indi-
vidual is eligible for a subsidy and the amount 
of such individual’s income to be made under 
arrangements with appropriate entities other 
than State medicaid agencies. 
‘‘(B) USE
OF
CERTAIN
INFORMATION.—
Arrangements with entities under subparagraph 
(A) shall provide for —
‘‘(i) the use of existing Federal gov-
ernment databases to identify eligibility; 
and 
‘‘(ii) the use of information obtained 
under section 154 of the Social Security 
Act Amendments of 1994 for newly eligible 
medicare beneficiaries, and the application 
of such information with respect to other 
medicare beneficiaries. 
‘‘(b) SPECIAL PART D ENROLLMENT OPPORTUNITY 
FOR INDIVIDUALS LOSING MEDICAID ELIGIBILITY.—
‘‘(1) IN GENERAL.—In the case of an individual 
who—
‘‘(A) satisfies section 1860B(a); and 
‘‘(B) loses eligibility for benefits under the 
State plan under title XIX after having been 
enrolled under such plan or having been deter-
mined eligible for such benefits; 
the Secretary shall provide an opportunity for enroll-
ment under the program under this part during the
period that begins on the date that such individual 
loses such eligibility and ends on the date specified 
by the Secretary. 
‘‘(2) REFERENCE TO WAIVER OF LATE ENROLL-
MENT PENALTY.—For provision waiving imposition
of late enrollment penalty in the case of an enroll-
ment of an individual under this part by reason of 
paragraph (1), see section 1860B(b)(2). 
‘‘(c) DEFINITION.—For purposes of this section, the 
term ‘State’ has the meaning given such term under sec-
tion 1101(a) for purposes of title XIX. 
‘‘FEDERAL CATASTROPHIC INSURANCE ACCOUNT 
‘‘SEC. 1860E. (a) ESTABLISHMENT.—There is cre-
ated within the Federal Supplementary Medical Insurance 
Trust Fund established by section 1841 an account to be 
known as the ‘Federal Catastrophic Insurance Account’ 
(in this section referred to as the ‘Account’). 
‘‘(b) AMOUNTS IN ACCOUNT.—
‘‘(1) IN GENERAL.—The Account shall consist 
of—
‘‘(A) such amounts as may be deposited in, 
or appropriated to, such fund as provided in 
this part; and 
‘‘(B) such gifts and bequests as may be 
made as provided in section 201(i)(1). 
‘‘(2) SEPARATION OF FUNDS.—Funds provided 
under this part to the Account shall be kept sepa-
rate from all other funds within the Federal Supple-
mentary Medical Insurance Trust Fund. 
‘‘(c) PAYMENTS FROM ACCOUNT.—
‘‘(1) IN
GENERAL.—The Managing Trustee 
shall pay from time to time from the Account such 
amounts as the Secretary certifies are necessary to 
make the payments provided for by this part, and 
the payments with respect to administrative ex-
penses in accordance with section 201(g). 
‘‘(2) TREATMENT IN RELATION TO PART B PRE-
MIUM.—Amounts payable from the Account shall not 
be taken into account in computing actuarial rates 
or premium amounts under section 1839. 
‘‘APPROPRIATIONS TO COVER GOVERNMENT 
CONTRIBUTIONS 
‘‘SEC. 1860F. There are authorized to be appro-
priated from time to time, out of any moneys in the Treas-
ury not otherwise appropriated, to the Federal Cata-
strophic Insurance Account, a Government contribution 
computed in the same manner as the Government con-
tributions are computed under section 1844(a)(1), except 
that any reference to part B or a provision in section 
1839(a) is deemed to be a reference to this part and the 
corresponding provision in section 1860C.’’. 
(b) CATASTROPHIC
COVERAGE
OPTION
UNDER 
MEDICARE+CHOICE PLANS.—
(1) ELIGIBILITY, 
ELECTION, 
AND
ENROLL-
MENT.—Section 1851 of the Social Security Act (42 
U.S.C. 1395w–21) is amended—
(A) in subsection (a)(1)(A), by striking 
‘‘parts A and B’’ inserting ‘‘parts A, B, and 
D’’; and 
(B) in subsection (i)(1), by striking ‘‘parts 
A and B’’ and inserting ‘‘parts A, B, and D’’. 
(2) VOLUNTARY
BENEFICIARY
ENROLLMENT 
FOR
CATASTROPHIC
COVERAGE.—Section 
1852(a)(1)(A) of such Act (42 U.S.C. 1395w–
22(a)(1)(A)) is amended by inserting ‘‘(and under 
part D to individuals also enrolled under that part)’’ 
after ‘‘parts A and B’’. 
(3) PAYMENTS
TO
ORGANIZATIONS.—Section 
1853(a)(1)(A) of such Act (42 U.S.C. 1395w–
23(a)(1)(A)) is amended—
(A) by inserting ‘‘determined separately for 
benefits under parts A and B and under part 
D (for individuals enrolled under that part)’’ 
after ‘‘as calculated under subsection (c)’’; 
(B) by striking ‘‘that area, adjusted for 
such risk factors’’ and inserting ‘‘that area. In 
the case of payment for benefits under parts A 
and B, such payment shall be adjusted for such 
risk factors as’’; and 
(C) by inserting before the last sentence 
the following: ‘‘In the case of the payments for
benefits under part D, such payment shall be 
adjusted for the risk factors of each enrollee as 
the Secretary determines to be feasible and ap-
propriate.’’. 
(4) 
CALCULATION
OF
ANNUAL 
MEDICARE+CHOICE
CAPITATION
RATES.—Section 
1853(c) of such Act (42 U.S.C. 1395w–23(c)) is 
amended—
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by inserting ‘‘for ben-
efits under parts A and B’’ after ‘‘capitation 
rate’’; 
(B) in paragraph (6)(A), by striking ‘‘rate 
of growth in expenditures under this title’’ and 
inserting ‘‘rate of growth in expenditures for 
benefits available under parts A and B’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(8) 
PAYMENT
FOR
CATASTROPHIC
COV-
ERAGE.—The Secretary shall determine a capitation 
rate for catastrophic coverage described in part D—
‘‘(A) for 2006, which is based on the pro-
jected national per capita costs for coverage 
under part D and associated claims processing
costs for beneficiaries under the original medi-
care fee-for-service program; and 
‘‘(B) for each subsequent year, which shall 
be equal to the rate for the previous year up-
dated by the Secretary’s estimate of the pro-
jected per capita rate of growth in expenditures 
under this title for such coverage for an indi-
vidual enrolled under part D. 
The Secretary shall provide for an appropriate geo-
graphic adjustment in such capitation rate to reflect 
differences (other than those reflected in the health 
status adjustments) in the average per capita ex-
penditures under part D in the different geographic 
areas.’’. 
(5) REQUIREMENT
FOR
ADDITIONAL
BENE-
FITS.—Section 1854(f)(1) of such Act (42 U.S.C. 
1395w–24(f)(1)) is amended by adding at the end 
the following new sentence: ‘‘Such determination 
shall be made separately for benefits under parts A
and B and for catastrophic coverage benefits under 
part D.’’. 
(c) CONFORMING REVISION
OF MEDIGAP STAND-
ARDS.—The provisions of section 1882(p)(1)(E) of the So-
cial Security Act (42 U.S.C. 1395ss(p)(1)(E)) shall apply 
to the benefit changes effected by this section and the
standards for benefit packages previously established 
under section 1882(p) of such Act shall be revised to avoid 
duplication with the benefits provided under part D of title 
XVIII of such Act (as inserted by subsection (a)). 
(d) CONFORMING AMENDMENTS TO FEDERAL SUP-
PLEMENTARY HEALTH INSURANCE TRUST FUND.—Sec-
tion 1841 of the Social Security Act (42 U.S.C. 1395t) 
is amended—
(1) in the last sentence of subsection (a)—
(A) by striking ‘‘and’’ after ‘‘section 
201(i)(1)’’; and 
(B) by inserting before the period the fol-
lowing: ‘‘, and such amounts as may be depos-
ited in, or appropriated to, the Federal Cata-
strophic Insurance Account established by sec-
tion 1860E’’; 
(2) in subsection (g), by inserting after ‘‘by this 
part,’’ the following: ‘‘the payments provided for 
under part D (in which case the payments shall 
come from the Federal Catastrophic Insurance Ac-
count in the Federal Supplementary Medical Insur-
ance Trust Fund),’’; 
(3) in the first sentence of subsection (h), by 
inserting before the period the following: ‘‘and sec-
tion 1860C(b)(1)(A) (in which case the payments
shall come from the Federal Catastrophic Insurance 
Account in the Federal Supplementary Medical In-
surance Trust Fund)’’; and 
(4) in the first sentence of subsection (i)—
(A) by striking ‘‘and’’ after ‘‘section 
1840(b)(1)’’; and 
(B) by inserting before the period the fol-
lowing: ‘‘, section 1860D(b)(1)(A) (in which 
case the payments shall come from the Federal 
Catastrophic Insurance Account in the Federal 
Supplementary 
Medical 
Insurance 
Trust 
Fund)’’. 
(e) APPLYING EXCLUSIONS FROM COVERAGE.—Sec-
tion 1862(a) of such Act (42 U.S.C. 1395y(a)) is amended 
in the matter preceding paragraph (1) by striking ‘‘part 
A or part B’’ and inserting ‘‘part A, B, or D’’. 
SEC. 3. MEDICAID BUY-IN OF MEDICARE CATASTROPHIC 
COVERAGE FOR CERTAIN LOW-INCOME INDI-
VIDUALS. 
(a) STATE OPTION TO BUY-IN LOW-INCOME INDI-
VIDUALS.—
(1) IN GENERAL.—Section 1902(a)(10)(E) of 
the Social Security Act (42 U.S.C. 1396a(a)(10)(E)) 
is amended—
(A) by striking ‘‘and’’ at the end of clause 
(iii); 
(B) by adding ‘‘and’’ at the end of clause 
(iv); and 
(C) by adding at the end the following new 
clause: 
‘‘(v) at the option of a State, for mak-
ing medical assistance available for medi-
care catastrophic cost-sharing for qualified 
medicare catastrophic beneficiaries (as de-
fined in subsection (x)(1)), regardless of 
whether or not such beneficiaries are oth-
erwise eligible for medical assistance under 
this title;’’. 
(2) CONSTRUCTION.—Nothing in this section 
shall be construed as reducing the amount of med-
ical assistance otherwise available to medicare bene-
ficiaries under the medicaid program.
(b) ADDITIONAL FUNDS FOR TERRITORIES.—Section 
1108 of the Social Security Act (42 U.S.C. 1308) is 
amended—
(1) in subsection (f), by striking ‘‘subsection 
(g),’’ and inserting ‘‘subsections (g) and (h)’’; and 
(2) by adding at the end the following new sub-
section:
‘‘(h) ADDITIONAL MEDICAID PAYMENTS TO TERRI-
TORIES FOR MEDICARE CATASTROPHIC COVERAGE.—. 
‘‘(1) IN GENERAL.—In the case of a territory 
that develops and implements a plan described in 
paragraph (2) (for providing medical assistance with 
respect to the provision of catastrophic coverage to 
medicare beneficiaries), the amount otherwise deter-
mined under subsection (f) (as increased under sub-
section (g)) for the State shall be increased by the 
amount specified in paragraph (3). 
‘‘(2) PLAN.—The plan described in this para-
graph is a plan that—
‘‘(A) provides medical assistance with re-
spect to the provision of some or all medicare 
catastrophic coverage described in part D of 
title XVIII to low-income medicare bene-
ficiaries; and 
‘‘(B) assures that additional amounts re-
ceived by the State that are attributable to the 
operation of this subsection are used only for 
such assistance. 
‘‘(3) INCREASED AMOUNT.—
‘‘(A) IN GENERAL.—The amount specified 
in this paragraph for a State for a year is equal 
to the product of—
‘‘(i) the aggregate amount specified in 
subparagraph (B); and 
‘‘(ii) the amount specified in sub-
section (g)(1) for that State, divided by the 
sum of the amounts specified in such sec-
tion for all such States. 
‘‘(B) AGGREGATE
AMOUNT.—The aggre-
gate amount specified in this subparagraph 
for—
‘‘(i) 2006, is equal to $15,000,000; or 
‘‘(ii) a subsequent year, is equal to 
$15,000,000 multiplied by the percentage 
described in section 1860A(c)(1)(B) for 
that subsequent year.’’. 
(c) DEFINITIONS OF ELIGIBLE BENEFICIARIES AND 
COVERAGE.—Section 1905 of the Social Security Act (42 
U.S.C. 1396d) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(x)(1) The term ‘qualified medicare catastrophic 
beneficiary’ means an individual—
‘‘(A) who is enrolled or enrolling under part D 
of title XVIII; and 
‘‘(B) whose income (as determined under sec-
tion 1612 for purposes of the supplemental security 
income program, except as provided in subsection
(p)(2)(D)) is below 175 percent of the official pov-
erty line (as referred to in subsection (p)(2)) appli-
cable to a family of the size involved.
‘‘(2) The term ‘medicare catastrophic cost-sharing’ 
means the following: 
‘‘(A) In the case of a qualified medicare cata-
strophic beneficiary whose income (as determined 
under paragraph (1)) is less than 150 percent of the 
official poverty line, premiums under section 1860D. 
‘‘(B) In the case of a qualified medicare cata-
strophic beneficiary whose income (as determined 
under paragraph (1)) is at least 150 percent but less 
than 175 percent of the official poverty line, a per-
centage of premiums under section 1860D, deter-
mined on a linear sliding scale ranging from 100 
percent for individuals with incomes at 150 percent 
of such line to 0 percent for individuals with incomes 
at 175 percent of such line. 
‘‘(3) In the case of any State which is providing med-
ical assistance to its residents under a waiver granted 
under section 1115, the Secretary shall require the State 
to meet the requirement of section 1902(a)(10)(E) in the 
same manner as the State would be required to meet such 
requirement if the State had in effect a plan approved 
under this title.’’.
(d) 100 PERCENT FMAP FOR COST-SHARING.—The 
first sentence of section 1905(b) of such Act (42 U.S.C. 
1396d(b)) is amended—
(1) by striking ‘‘and’’ before ‘‘(4)’’; and 
(2) by inserting before the period at the end the 
following: ‘‘, and (5) with respect to the 50 States 
and the District of Columbia the Federal medical as-
sistance percentage shall be 100 percent with respect 
to medicare catastrophic cost-sharing (as defined in 
subsection (x)(2))’’. 
(e) CONFORMING AMENDMENT.—Section 1905(a) of 
the Social Security Act (42 U.S.C. 1396d) is amended in 
the second sentence of the flush matter at the end by 
striking ‘‘premiums under part B’’ the first place it ap-
pears and inserting ‘‘premiums under parts B and D’’.
Æ