Sets the outpatient prescription drug benefit at 50 percent of the lesser of: (1) the cost of such drugs for a year; or (2) $5,000.
Establishes special rules with respect to Medicare supplemental health insurance (Medigap) for individuals enrolled in the Rx Option.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1263 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1263
To amend title XVIII of the Social Security Act to establish a
voluntary Medicare Prescription Drug Plan under which eligible medicare
beneficiaries may elect to receive coverage under the Rx Option for
outpatient prescription drugs and a combined deductible.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 27, 2001
Mr. Smith of New Hampshire (for himself and Mr. Allard) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend title XVIII of the Social Security Act to establish a
voluntary Medicare Prescription Drug Plan under which eligible medicare
beneficiaries may elect to receive coverage under the Rx Option for
outpatient prescription drugs and a combined deductible.
Be it enacted by the Senate and House of Representatives 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 ``Voluntary Medicare
Prescription Drug Plan Act of 2001''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Medicare payment for outpatient prescription drugs.
``Part D--Voluntary Medicare Prescription Drug Coverage
``Sec. 1860A. Medicare Prescription Drug Plan.
``Sec. 1860B. Rx Option.
``Sec. 1860C. Combined deductible.
``Sec. 1860D. Partnerships with private entities to offer the
Rx Option.''.
Sec. 3. Conforming changes to Medigap.
SEC. 2. MEDICARE PAYMENT FOR OUTPATIENT PRESCRIPTION DRUGS.
(a) In General.--Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) is amended by redesignating part D as part E and by
inserting after part C the following new part:
``Part D--Voluntary Medicare Prescription Drug Coverage
``medicare prescription drug plan
``Sec. 1860A. (a) In General.--Each Medicare Prescription Drug Plan
eligible individual may elect coverage (beginning on January 1, 2002)
under this part by enrolling in the Rx Option in order to receive
coverage for outpatient prescription drugs as described in section
1860B and to pay a combined deductible under section 1860C.
``(b) Medicare Prescription Drug Plan Eligible Individual
Defined.--In this part, the term `Medicare Prescription Drug Plan
eligible individual' means an individual who is--
``(1) eligible for benefits under part A and enrolled under
part B;
``(2) not enrolled in a Medicare+Choice plan under part C;
and
``(3) not eligible for medical assistance for outpatient
prescription drugs under title XIX.
``rx option
``Sec. 1860B. (a) Enrollment in the Rx Option.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall establish a process for the enrollment of
Medicare Prescription Drug Plan eligible individuals under the
Rx Option that is based upon the process for enrollment in
Medicare+Choice plans under part C of this title.
``(2) Exceptions.--
``(A) 2-year obligation.--Except as provided in
subparagraph (B), a Medicare Prescription Drug Plan
eligible individual who elects the Rx Option shall be
subject to the provisions of this part for a minimum
period of 2 years, beginning with the first full month
during which the individual is eligible for benefits
under the Rx Option.
``(B) Free look period.--An individual who elects
the Rx Option may disenroll from such Option no later
than the last day of the first full month following the
month in which such election was made.
``(3) Enrollment in medicare supplemental policies.--An
individual enrolled in the Rx Option may be enrolled only in a
medicare supplemental policy subject to the special rules
described in section 1882(v).
``(b) Outpatient Prescription Drug Benefits.--
``(1) In general.--Beginning in 2002, under the Rx Option,
after the enrollee has met the combined deductible under
section 1860C, the Secretary shall provide a benefit for
outpatient prescription drugs through private entities under
section 1860D equal to 50 percent of the lesser of--
``(A) the cost of outpatient prescription drugs for
such year; or
``(B) $5000.
``(2) Cost-of-living adjustment.--In the case of any
calendar year beginning after 2002, the dollar amount in
paragraph (1)(B) shall be increased by an amount equal to--
``(A) such dollar amount; multiplied by
``(B) the percentage (if any) by which--
``(i) the prescription drug component of
the Consumer Price Index for all urban
consumers (all items city average) for the 12-
month period ending with August of the
preceding year; exceeds
``(ii) such prescription drug component of
the Consumer Price Index for the 12-month
period ending with August 2001.
``(3) Rounding.--If any increase determined under paragraph
(2) is not a multiple of $1, such increase shall be rounded to
the nearest multiple of $1.
``combined deductible
``Sec. 1860C. (a) In General.--Notwithstanding any provision of
this title and beginning in 2002, a beneficiary electing the Rx Option
shall be subject to a combined deductible that shall apply in lieu of
the deductibles applied under sections 1813(a)(1) and 1833(b).
``(b) Amount.--
``(1) In general.--For purposes of subsection (a), the
combined deductible is equal to $675.
``(2) Cost-of-living adjustment.--In the case of any
calendar year after 2002, the dollar amount in paragraph (1)
shall be increased by an amount equal to--
``(A) such dollar amount; multiplied by
``(B) the percentage (if any) by which--
``(i) the medical component of the Consumer
Price Index for all urban consumers (all items
city average) for the 12-month period ending
with August of the preceding year; exceeds
``(ii) such medical component of the
Consumer Price Index for the 12-month period
ending with August 2001.
``(3) Rounding.--If any increase determined under paragraph
(2) is not a multiple of $1, such increase shall be rounded to
the nearest multiple of $1.
``(c) Application.--In applying the combined deductible described
in subsection (a) such deductible shall apply to each expense incurred
on a calendar year basis for each item or service covered under this
title, and each expense paid on a calendar year basis for such an item
or service shall be credited against such deductible.
``partnerships with private entities to offer the rx option
``Sec. 1860D. (a) Partnerships.--
``(1) In general.--The Secretary shall contract with
private entities for the provision of outpatient prescription
drug benefits under the Rx Option.
``(2) Private entities.--The private entities described in
paragraph (1) shall include insurers (including issuers of
medicare supplemental policies under section 1882),
pharmaceutical benefit managers, chain pharmacies, groups of
independent pharmacies, and other private entities that the
Secretary determines are appropriate.
``(3) Areas.--The Secretary may award a contract to a
private entity under this section on a local, regional, or
national basis.
``(4) Drug benefits only through private entities.--
Outpatient prescription drug benefits under the Rx Option shall
be offered only through a contract with a private entity under
this section.
``(b) Secretary Required To Contract With Any Willing Qualified
Private Entity.--The Secretary may not exclude a private entity from
receiving a contract to provide outpatient prescription drug benefits
under the Rx Option if the private entity meets all of the requirements
established by the Secretary for providing such benefits.''.
SEC. 3. CONFORMING CHANGES TO MEDIGAP.
Section 1882 of the Social Security Act (42 U.S.C. 1395ss) is
amended by adding at the end the following new subsection:
``(v) Special Rules for Medicare Prescription Drug Plan
Enrollees.--
``(1) Revision of benefit packages.--
``(A) In general.--Notwithstanding subsection (p),
the benefit packages established under such subsection
(including the 2 plans described in paragraph (11)(A)
of such subsection) shall be revised (in the manner
described in subsection (p)(1)(E)) so that each of the
benefit packages classified as `A' through `J' remain
exactly the same, except that each benefit package
shall include special rules that apply only to
individuals enrolled in the Rx Option under section
1860B as follows:
``(i) Combined deductible.--Each benefit
package shall require the beneficiary of the
policy to pay annual out-of-pocket expenses
(other than premiums) in an amount equal to the
amount of the combined deductible under section
1860C(b) before the policy begins payment of
any benefits.
``(ii) Prescription drug coverage.--In the
case of a benefit package classified as `H',
`I', and `J', such policy may not provide
coverage for outpatient prescription drugs that
duplicates the coverage for outpatient
prescription drugs provided under the Rx Option
under section 1860B(b).
``(B) Adjusted premium.--In the case of an
individual enrolled in the Rx Option, the premium for
the policy in which the individual is enrolled may be
appropriately adjusted to reflect the special rules
applicable to such individual under subparagraph (A).
``(2) Renewability and continuity of coverage.--The
revisions of benefit packages under paragraph (1) shall not
affect--
``(A) the renewal of medicare supplemental policies
under this section that are in existence on the
effective date of such revisions; or
``(B) the continuity of coverage under such
policies.''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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