Title: Lowering Drug Costs for Seniors Act of 2020
Policy area: Health

Summary:
Lowering Drug Costs for Seniors Act of 2020
This bill modifies and establishes certain requirements under the Medicare prescription drug benefit. Specifically, the bill lowers the annual out-of-pocket spending threshold for 2021, and requires the Centers for Medicare & Medicaid Services to issue payments to beneficiaries who exceed a modified 2020 threshold, as specified.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7877 Introduced in House (IH)]

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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 
   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 jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
  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.

    Be it enacted by the Senate and House of Representatives 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''.

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 payment from 
                        the Medicare Prescription Drug Account as 
                        follows:
                                    ``(I) In the case of a specified 
                                individual (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 individual has exceeded the annual 
                                out-of-pocket threshold applied under 
                                subparagraph (B)(i)(V) for 2020, 
                                payment to the individual by not later 
                                than 15th day of the third month 
                                following the end of such quarter of 
                                the amount by which such threshold so 
                                applied exceeded the target threshold 
                                for 2020.
                                    ``(II) In the case of a specified 
                                individual who is not described in 
                                subclause (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 
                                        prescription 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 income-related subsidy under 
                                        section 1860D-14(a).
                                    ``(II) Target threshold for 2020.--
                                The term `target threshold for 2020' 
                                means the annual out-of-pocket 
                                threshold that would have been applied 
                                under subparagraph (B)(i) for 2020 if 
                                such threshold had been determined 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 Secretary shall, not 
                        later than September 30, 2021, provide to such 
                        individual a notification informing such 
                        individual of such individual'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 individual.
                            ``(v) Implementation.--The Secretary may 
                        implement this subparagraph by program 
                        instruction or otherwise.''.
    (b) Reduced Growth Rate for 2021 of Medicare Part D Out-of-Pocket 
Cost Threshold.--Section 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 subclause (VIII); 
        and
            (3) by inserting after subclause (V) the following 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) instead 
                                of subclause (V), increased by the 
                                lesser of--
                                            ``(aa) the annual 
                                        percentage increase described 
                                        in paragraph (7) for 2021, plus 
                                        2 percentage points; or
                                            ``(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''.
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