Medicare Reform Act of 2003 - Amends the Social Security Act (SSA) to add a new title XXII (Establishment of Medicare Premium Support System) to restructure the Medicare program under SSA title XVIII into a health care program similar to that for Federal employees under the Federal Employees Health Benefits Program (which includes prescription drug benefits). Provides for standard and high option Medicare plans, while allowing certain Medicare beneficiaries to elect to retain their current Medicare benefits. Bases premiums on the beneficiary's level of income. Pays the entire premium in cases involving qualified low-income Medicare beneficiaries with income that does not exceed 200 percent of the official poverty line, with partial premium payments for other low-income Medicare beneficiaries. Establishes in the Treasury the Medicare Trust Fund, consisting in part of an appropriation of hospital insurance taxes from under Medicare part A (Hospital Insurance), for paying the expenses incurred by this Act.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2469 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 2469
To amend the Social Security Act to modify the Medicare Program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 12, 2003
Mr. Terry (for himself, Mr. Tancredo, Mrs. Musgrave, Mr. Sessions, Mr.
Manzullo, and Mr. Jenkins) introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Energy and Commerce, 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 the Social Security Act to modify the Medicare Program.
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 ``Medicare Reform
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 premium support system.
``TITLE XXII--ESTABLISHMENT OF MEDICARE PREMIUM SUPPORT SYSTEM
``Sec. 2200. Construction; references; general definitions.
``Part A--Premium Support System
``Sec. 2201. Offering of benefits through Medicare plans.
``Sec. 2202. Standard and high option Medicare plans.
``Sec. 2203. Submission of benefit packages and premium rates
for Medicare plans.
``Sec. 2204. Government contribution toward coverage and
beneficiary premium.
``Sec. 2205. Subsidized premiums for low-income individuals to
enroll in high option Medicare plans.
``Sec. 2206. Relation to certain laws; treatment of current
plans.
``Part B--Medicare Trust Fund
``Sec. 2211. Medicare Trust Fund.
``Sec. 2212. Programmatic insolvency and limitation on general
revenue financing.
Sec. 3. Conforming amendments to the Internal Revenue Code of 1986.
SEC. 2. ESTABLISHMENT OF MEDICARE PREMIUM SUPPORT SYSTEM.
The Social Security Act is amended by adding at the end the
following:
``TITLE XXII--ESTABLISHMENT OF MEDICARE PREMIUM SUPPORT SYSTEM
``SEC. 2200. CONSTRUCTION; REFERENCES; GENERAL DEFINITIONS.
``(a) Construction of Title.--The provisions of this title shall be
construed to modify and supersede the provisions and operation of title
XVIII to the extent such provisions are inconsistent with the
provisions of this title.
``(b) References to Medicare Provisions.--Any reference in any law
or regulation (other than in this title) to any provision of title
XVIII is deemed a reference to such provision as modified through the
operation of this title.
``(c) Definitions Relating to Medicare Plans.--
``(1) Medicare plan.--The term `Medicare plan' means a
health benefits plan which the Secretary permits to be offered
by an entity that is licensed under State law to provide health
benefits plans in the State involved to Medicare beneficiaries
under this title.
``(2) High option medicare plan.--The term `high option
Medicare plan' means a Medicare plan that includes stop loss
coverage consistent with section 2202(b).
``(3) Standard medicare plan.--The term `standard Medicare
plan' means a Medicare plan that is not a high option Medicare
plan.
``(4) FEHBP.--The term `FEHBP' means the Federal Employees
Health Benefits program under chapter 89 of title 5, United
States Code.
``(d) Other General Definitions.--For purposes of this title:
``(1) Medicare beneficiary.--The term `Medicare
beneficiary' means an individual entitled to benefits under
part A of title XVIII, enrolled for benefits under part B of
such title, or both.
``(2) Medicare trust fund.--The term `Medicare Trust Fund'
means such trust fund as established under section 2211.
``Part A--Premium Support System
``SEC. 2201. OFFERING OF BENEFITS THROUGH MEDICARE PLANS.
``(a) Election of Coverage Through a Medicare Plan.--
``(1) Continued entitlement to medicare benefits.--
Effective January 1, 2008, in accordance with this title,
Medicare beneficiaries shall continue to be entitled to receive
benefits under title XVIII (as modified by this title) and with
respect to medicare beneficiaries first eligible for benefits
on or after January 1, 2008, shall only receive such benefits
through enrollment in a Medicare plan.
``(2) Election for certain medicare beneficiaries to retain
current medicare benefits program.--In the case of a medicare
beneficiary who was first eligible for benefits under title
XVIII before January 1, 2008, such beneficiaries may make a
one-time, irrevocable election, in a form and manner determined
by the Secretary to continue to receive benefits for items and
services for which payment may be made under title XVIII.
``(3) Enrollment process.--The Secretary shall establish a
process for the enrollment of Medicare beneficiaries under
Medicare plans that is based, except as the Secretary may
provide, upon the process for enrollment for health plans under
FEHBP, including provision of information and open enrollment
and disenrollment opportunities.
``(4) Contract period.--Each contract under this part with
an entity offering a Medicare plan shall be for a term of at
least 2 years, as determined by the Secretary, and may be made
automatically renewable from term to term in the absence of
notice by either party of intention to terminate at the end of
the current term.
``(5) Plan period.--The plan period for a Medicare plan
offered by an entity with a contract under paragraph (4) shall
be a term of 2 years.
``(b) Beneficiary Protections and Other Qualifications for Medicare
Plans.--In order to be offered as a Medicare plan under this part,
except as provided in this title, the plan and the entity offering the
plan shall meet the requirements applicable to health benefits plans
and qualified carriers under FEHBP, including--
``(1) the offering and scope of benefits;
``(2) protections for beneficiaries enrolled in the plans;
and
``(3) requirements for financial solvency.
``(c) Selection of Plans.--
``(1) In general.--With respect to each plan period under
subsection (a)(5), a medicare beneficiary shall be deemed to
have elected to remain enrolled in the medicare plan in which
the beneficiary was enrolled during the prior plan period.
``(2) Default.--In the case of a medicare beneficiary who
fails to enroll in a medicare plan for a plan period, the
Secretary shall provide for enrollment of the beneficiary under
a medicare plan offered in the State in which the beneficiary
resides that the Secretary determines to be appropriate.
``(d) Exclusive Payment Methodology.--Except as provided in
subsection (a)(2) and other provisions of this title, for items and
services furnished on or after January 1, 2008--
``(1) payment to an entity offering a Medicare plan in the
amounts provided under this title shall be instead of any
amounts that may be otherwise payable under title XVIII; and
``(2) only the entity offering the Medicare plan is
eligible to receive payment for items and services under such
title.
``SEC. 2202. STANDARD AND HIGH OPTION MEDICARE PLANS.
``(a) Benefits Under Standard Plans.--Subject to section
2203(b)(2), the Secretary may approve benefits submitted under section
2203(a)(1) with respect to a standard plan only if the plan include
benefits for the items and services described in subsection (d).
``(b) Benefits Under High Option Plans.--The Secretary may approve
the benefits submitted under section 2203(a)(1) with respect to a high
option Medicare plan only if the plan includes benefits required for a
standard plan under subsection (a) and also includes--
``(1) rates of beneficiary deductible, cost-sharing, and
coinsurance requirements that are lower than such rates
applicable under standard plans under subsection (a); and
``(2) stop-loss coverage benefits that are designed to
limit the application of beneficiary cost-sharing for covered
benefits in a year after incurring out-of-pocket covered
expenditures that exceed a limit applicable to health benefits
plans under FEHBP.
``(c) Requirement To Offer High Option Medicare Plan.--The
Secretary may not approve the offering of a standard Medicare plan by
an entity under this title in an area unless the entity also offers a
high option Medicare plan in that area that the Secretary approves
under this title.
``(d) Benefits Described.--For purposes of this part, a Medicare
plan shall provide for coverage for the following items and services
that are medically necessary and appropriate:
``(1) Hospital services, including inpatient, outpatient,
and 24-hour a day emergency services.
``(2) Services of health professionals, such as physicians
services and services that would be physicians services if
furnished by a physician but are provided by any other licensed
health care professional.
``(3) Emergency and ambulatory medical and surgical
services furnished by a facility that is not a hospital.
``(4) Clinical preventive services.
``(5) Services for pregnant women.
``(6) Hospice care.
``(7) Home health care and home infusion drug therapy
services.
``(8) Extended care services, as defined in section
1861(h).
``(9) Ambulance services, including ground, air, and water
transportation, as appropriate.
``(10) Outpatient laboratory, radiology, and diagnostic
services.
``(11) Outpatient prescription drugs and biologicals.
``(12) Outpatient rehabilitation services, including
outpatient occupational therapy, physical therapy, and speech
pathology services.
``(13) Durable medical equipment and prosthetic and
orthotic devices.
``(14) Vision care, to the same extent such services are a
covered benefit under title XVIII as of the date of the
enactment of this Act.
``(e) Scope of Benefits.--Each Medicare plan shall establish the
scope of benefits applicable under the plan, subject to approval by the
Secretary, including the scope of outpatient prescription drugs under
the plan, any formulary restrictions for such drugs, and any copayment
structure under such formulary (if any).
``(f) Paperwork Reduction.--Each Medicare plan shall comply with
the provisions of part C of title XI, relating to administrative
simplification and paperwork reduction with respect to health care
transactions for health care providers submitting claims to health
plans.
``(g) Licensure.--Each entity offering a Medicare plan shall be
licensed under State law to provide health benefits plans in the State.
``SEC. 2203. SUBMISSION OF BENEFIT PACKAGES AND PREMIUM RATES FOR
MEDICARE PLANS.
``(a) In General.--Each entity that intends to offer a Medicare
plan in a year (beginning with 2008) in a State shall submit to the
Secretary, at such time (before the beginning of each open enrollment
period for each year) and in such manner as the Secretary specifies,
such information as the Secretary may require to carry out title XVIII
(as modified by this title). Such information shall include information
on each of the following:
``(1) Benefits.--A description of the benefits under the
plan.
``(2) Premium bid.--The premium proposed to be charged for
enrollment under the plan.
``(b) Review and Approval by Secretary.--
``(1) In general.--The Secretary shall review the benefits
and premium bids submitted under subsection (a).
``(2) Authority to negotiate.--The Secretary may negotiate
with the entities offering such plans regarding such terms and
conditions but may approve such a submission only if the
Secretary finds that it complies with the requirements of this
section and section 2202. The terms and conditions with respect
to which the Secretary may negotiate include--
``(A) the scope of benefits offered under the plan;
``(B) the premium bid for the benefits so offered;
and
``(C) the assumptions of the entities offering the
plan with respect to cost, risk, geographic variation,
and projected number of enrollees.
``(3) Special rule for high option medicare plans.--If
information is submitted to establish that a Medicare plan is a
high option Medicare plan, the Secretary shall determine
whether or not the plan meets the requirements to be a high
option Medicare plan.
``(4) Benefit approval.--Subject to section 2202, the
following applies to approval by the Secretary of benefits
submitted under subsection (a)(1):
``(A) In general.--The Secretary may approve
benefits submitted under subsection (a)(1) only if the
benefits are not designed in such a manner that the
Secretary finds that it is likely to result in
favorable selection of beneficiaries.
``(B) Variation in cost-sharing.--For purposes of
meeting the requirement of section 2202, the Secretary
shall permit reasonable variation in cost-sharing so
long as actuarial equivalence of total cost-sharing for
the benefits described in such section is maintained.
Nothing in this subparagraph shall be construed as
preventing a Medicare plan from providing, as an
additional benefit, a lower level of cost-sharing from
that otherwise described in title XVIII (as modified by
this title).
``(5) Premium approval.--The Secretary may approve premiums
submitted under subsection (a)(2) only if the Secretary finds
that the premium rates are adequate in terms of actuarial
soundness to assure the financial solvency of the entity
offering the plan.
``(6) Statewide service area.--
``(A) In general.--Except as provided in
subparagraph (B), for purposes of this title, a State
shall be the service area for a Medicare plan.
``(B) Discretion to establish multistate areas.--If
the Secretary determines that medicare plans will not
be offered in a State for a plan period, the Secretary
may provide for a multistate service area to ensure the
offering of such plans in such State during such plan
period.
``(c) Providing Information To Promote Informed Choice.--The
Secretary shall provide for activities to broadly disseminate
information to medicare beneficiaries (and prospective medicare
beneficiaries) on the coverage options under medicare plans provided
under this title in order to promote an active, informed selection
among such options.
``SEC. 2204. GOVERNMENT CONTRIBUTION TOWARD COVERAGE AND BENEFICIARY
PREMIUM.
``(a) Premium Support Payment by Government.--Except as provided in
subsection (d), the amount of payment to an entity offering a Medicare
plan in a State for a Medicare beneficiary (other than a qualified low-
income Medicare beneficiary, as defined in section 2115(a)) residing in
the State who is enrolled in the plan for a year is equal to the bid
amount determined or negotiated, as the case may be, by the Secretary
under section 2203.
``(b) Computation and Collection of Beneficiary Premium.--
``(1) Computation of total beneficiary premium.--
``(A) In general.--For purposes of this section,
the amount of the total beneficiary premium for a
Medicare beneficiary enrolled in a Medicare plan is
equal 30 percent (or in the case of an individual to
whom subsection (c) applies, the means-tested premium
percentage determined under such subsection) of the
amount of payment to the entity offering the Medicare
plan under subsection (a).
``(B) No application to qualified low-income
medicare beneficiaries.--For provisions relating to
computation of beneficiary premiums for qualified low-
income Medicare beneficiaries, see section 2205(b).
``(2) Collection of amount in same manner as part b
premium.--
``(A) In general.--The amount of the total
beneficiary premium under paragraph (1) shall be paid
to the Medicare Trust Fund in the same manner as
monthly premiums under part B of title XVIII were
payable to the credit of the Federal Supplementary
Medical Insurance Trust Fund under section 1840 (as in
effect as of the date of the enactment of this title).
``(B) Collection.--In order to carry out
subparagraph (A), the Secretary shall transmit to the
Commissioner of Social Security--
``(i) at the beginning of each year,
information on the name, social security
account number, and the total beneficiary
premium owed by each individual enrolled in a
Medicare plan for months in the year; and
``(ii) periodically throughout the year,
information to update the information
previously transmitted under this subparagraph
during the year.
``(c) Means-Tested Premium Percentage.--
``(1) Increase in premium amount.--
``(A) In general.--Subject to subparagraph (B), in
the case of an Medicare beneficiary whose modified
adjusted gross income for a taxable year ending with or
within a calendar year (as initially determined by the
Secretary in accordance with paragraph (2)) is equal to
or greater than 300 percent of the official poverty
line (referred to in section 1905(p)(2)(A)), the
Secretary shall increase the amount of the total
beneficiary premium under subsection (b) for months in
the calendar year by 10 percent for each multiple of
100 percent by which such individual's income exceeds
200 percent of such poverty line.
``(B) Upper limit on premium amount.--In no case
may the application of subparagraph (A) result in a
premium contribution amount under subsection (b) of
greater than 70 percent of the amount of payment to the
entity offering the Medicare plan under subsection (a).
``(2) Determination of Income.--The Secretary shall make an
initial determination of the amount of an individual's modified
adjusted gross income for a taxable year ending with or within
a calendar year for purposes of this subsection as follows:
``(A) Secretary's estimate of amount.--Not later
than September 1 of the year preceding the year, the
Secretary shall provide notice to each individual whom
the Secretary finds (on the basis of the individual's
actual modified adjusted gross income for the most
recent taxable year for which such information is
available or other information provided to the
Secretary by the Secretary of the Treasury) will be
subject to an increase under this subsection that the
individual will be subject to such an increase, and
shall include in such notice the Secretary's estimate
of the individual's modified adjusted gross income for
the year.
``(B) Modification of secretary's estimate.--If,
during the 30-day period beginning on the date notice
is provided to an individual under subparagraph (A),
the individual provides the Secretary with information
on the individual's anticipated modified adjusted gross
income for the year, the amount initially determined by
the Secretary under this paragraph with respect to the
individual shall be based on the information provided
by the individual.
``(C) Default income amount.--If an individual does
not provide the Secretary with information under
subparagraph (B), the amount initially determined by
the Secretary under this paragraph with respect to the
individual shall be the amount included in the notice
provided to the individual under subparagraph (A).
``(3) Adjustment of premiums to account for
misestimation.--
``(A) In general.--If the Secretary determines (on
the basis of final information provided by the
Secretary of the Treasury) that the amount of an
individual's actual modified adjusted gross income for
a taxable year ending with or within a calendar year is
less than or greater than the amount initially
determined by the Secretary under paragraph (3), the
Secretary shall increase or decrease the amount of the
individual's monthly premium under this section (as the
case may be) for months during the following calendar
year by an amount equal to \1/12\ of the difference
between--
``(i) the total amount of all monthly
premiums paid by the individual under this
section during the previous calendar year; and
``(ii) the total amount of all such
premiums which would have been paid by the
individual during the previous calendar year if
the amount of the individual's modified
adjusted gross income initially determined
under paragraph (3) were equal to the actual
amount of the individual's modified adjusted
gross income determined under this paragraph.
``(B) Application of interest charge.--
``(i) In general.--In the case of an
individual for whom the amount initially
determined by the Secretary under paragraph (3)
is based on information provided by the
individual under subparagraph (B) of such
paragraph, if the Secretary determines under
subparagraph (A) that the amount of the
individual's actual modified adjusted gross
income for a taxable year is greater than the
amount initially determined under paragraph
(3), the Secretary shall increase the amount
otherwise determined for the year under
subparagraph (A) by interest in an amount equal
to the sum of the amounts determined under
clause (ii) for each of the months described in clause (ii).
``(ii) Computation of interest charge.--
Interest shall be computed for any month in an
amount determined by applying the underpayment
rate established under section 6621 of the
Internal Revenue Code of 1986 (compounded
daily) to any portion of the difference between
the amount initially determined under paragraph
(3) and the amount determined under
subparagraph (A) for the period beginning on
the first day of the month beginning after the
individual provided information to the
Secretary under subparagraph (B) of paragraph
(3) and ending 30 days before the first month
for which the individual's monthly premium is
increased under this paragraph.
``(iii) Waiver of interest charge.--
Interest shall not be imposed under this
subparagraph if the amount of the individual's
modified adjusted gross income provided by the
individual under subparagraph (B) of paragraph
(3) was not less than the individual's modified
adjusted gross income determined on the basis
of information shown on the return of tax
imposed by chapter 1 of the Internal Revenue
Code of 1986 for the taxable year involved.
``(C) Enrollment during a portion of the year.--In
the case of an individual who is not enrolled under
this part for any calendar year for which the
individual's monthly premium under this section for
months during the year would be increased pursuant to
subparagraph (A) if the individual were enrolled under
this part for the year, the Secretary may take such
steps as the Secretary considers appropriate to recover
from the individual the total amount by which the
individual's monthly premium for months during the year
would have been increased under subparagraph (A) if the
individual were enrolled under this part for the year.
``(D) Payments to surviving spouse for enrollees
who die during the year.--In the case of a deceased
individual for whom the amount of the monthly premium
under this section for months in a year would have been
decreased pursuant to subparagraph (A) if the
individual were not deceased, the Secretary shall make
a payment to the individual's surviving spouse (or, in
the case of an individual who does not have a surviving
spouse, to the individual's estate) in an amount equal
to the difference between--
``(i) the total amount by which the
individual's premium would have been decreased
for all months during the year pursuant to
subparagraph (A); and
``(ii) the amount (if any) by which the
individual's premium was decreased for months
during the year pursuant to subparagraph (A).
``(4) Modified adjusted gross income defined.--In this
subsection, the term `modified adjusted gross income' means
adjusted gross income (as defined in section 62 of the Internal
Revenue Code of 1986)--
``(A) determined without regard to sections 135,
911, 931, and 933 of such Code, and
``(B) increased by the amount of interest received
or accrued by the taxpayer during the taxable year
which is exempt from tax under such Code.
``(d) Payment Terms.--Payment under this section or section 2205(c)
to an entity offering a Medicare plan shall be made in a manner
determined by the Secretary and based upon the manner in which payments
are made to qualified carriers under FEHBP for health benefits plans.
``(e) Special Adjustment for Medicare Beneficiaries With End-Stage
Renal Disease.--
``(1) In general.--Subject to paragraph (2), the amount of
payment to an entity offering a Medicare plan for a Medicare
beneficiary under subsection (a) shall be increased by 20
percent for each Medicare beneficiary who is diagnosed with
end-stage renal disease.
``(2) Exception.--Paragraph (1) shall not apply to a
Medicare beneficiary who develops end-stage renal disease while
enrolled in a Medicare plan.
``SEC. 2205. SUBSIDIZED PREMIUMS FOR LOW-INCOME INDIVIDUALS TO ENROLL
IN HIGH OPTION MEDICARE PLANS.
``(a) Qualified Low-Income Medicare Beneficiary Defined.--
``(1) In general.--For purposes of this part, the term
`qualified low-income Medicare beneficiary' means a Medicare
beneficiary whose income (as determined for purposes of section
1905(p)) does not exceed 200 percent of the official poverty
line (referred to in paragraph (2)(A) of such section)
applicable to a family of the size involved and who is enrolled
in a high option Medicare plan.
``(2) Annual eligibility determination by states.--The
Secretary shall establish an arrangement with each State (as
defined under section 1861(x) for purposes of title XVIII)
under which the State provides for the determination of whether
a Medicare beneficiary in the State is a qualified low-income
Medicare beneficiary. A determination that a Medicare
beneficiary is a qualified low-income Medicare beneficiary
shall remain valid for a period of 12 months but is conditioned
upon continuing enrollment in a high option Medicare plan.
``(b) Payment by Government on Behalf of Qualified Low-Income
Medicare Beneficiaries.--
``(1) Amount.--The amount of payment to an entity offering
a Medicare plan for a qualified low-income Medicare beneficiary
who is enrolled in the plan for a year is equal to--
``(A) in the case of a plan that is the lowest cost
high option plan offered in the State, the full premium
for the plan determined or negotiated, as the case may
be, by the Secretary under section 2203; and
``(B) in the case of a plan that is not the lowest
cost high option plan, the full premium for the plan
described in subparagraph (A).
If a qualified low-income Medicare beneficiary elects a plan referred
to in subparagraph (B), the beneficiary is responsible for payment, in
the manner prescribed in subsection (c), of any premium in excess of
the amount payable by the Secretary under such subparagraph.
``(2) Geographic and risk adjustment.--
``(A) In general.--Subject to subparagraph (B), the
Secretary shall establish an appropriate methodology
for adjusting the amount paid under paragraph (1) to
take into account, in a budget neutral manner,
appropriate variations in costs--
``(i) based on provision of items and
services in different geographic areas; and
``(ii) based on differences in the
actuarial risk of different enrollees being
served.
``(B) Considerations.--The provisions of section
2204(b)(2)(B) shall apply to establishing adjustors
under subparagraph (A) in the same manner as they apply
to establishing adjustors under section 2204(b)(2)(A),
except that the population for which such adjustors is
computed and applicable shall be the population of
qualified low-income Medicare beneficiaries.
``(c) Collection of Beneficiary Premium (if any).--The provisions
of section 2204 apply to collection of premiums under subsection
(b)(1)(B) in the same manner as they apply to collection of premiums
under section 2204(b)(2).
``(d) Construction Relative to Other Benefits.--
``(1) No requirement for state medicaid payment.--Nothing
in this section shall be construed as requiring a State, under
its plan under title XIX, to pay any part of the additional
subsidy provided under this section to qualified low-income
Medicare beneficiaries.
``(2) No medicaid matching for payment.--Insofar as this
section applies to an individual, notwithstanding any other
provision of law, a State plan under title XIX is not required
to provide medical assistance with respect to Medicare cost-
sharing described in section 1905(p)(3)(A) and Federal
financial assistance shall not be available under section 1903
with respect to such medical assistance.
``(3) Nonduplication of prescription drug benefits.--In the
case of prescription drugs provided to a qualified low-income
Medicare beneficiary enrolled in a high option Medicare plan to
the extent the beneficiary is covered under a State-funded
prescription drug program, the entity offering the plan may
charge or authorize the provider of such services to charge, in
accordance with the charges allowed under the program--
``(A) the State program for payment for the drugs;
or
``(B) such beneficiary to the extent that the
beneficiary has been paid under such program for such
drugs.
``SEC. 2206. RELATION TO CERTAIN LAWS; TREATMENT OF CURRENT PLANS.
``(a) In General.--Effective January 1, 2008, the following
provisions of law are modified as follows, in order to reflect the
policies specified in this part:
``(1) Change in payment rules.--Payment rates established
under sections 2204 and 2205 shall supersede the payment rates
and amounts applicable under parts A, B, C, and D of title
XVIII in the case of individuals enrolled in a medicare plan
under this title.
``(2) Elimination of adjusted community rate rules.--
Section 1854(f)(1)(A) (relating to requiring additional
benefits) no longer applies in the case of individuals enrolled
in a medicare plan under this title.
``(3) Elimination of premium regulations.--Section 1854(e)
(relating to regulations of Medicare+Choice premiums) no longer
applies in the case of individuals enrolled in a medicare plan
under this title.
``(4) Part b premium.--No separate premium is payable under
section 1839 in the case of individuals enrolled in a medicare
plan under this title.
``(5) Medicaid premium assistance.--Sections 1902(a)(10)(E)
and 1905(p)(3)(A), insofar as they require the provision of
medical assistance for Medicare cost-sharing described in
section 1905(p)(3)(A) for qualified low-income Medicare
beneficiaries, no longer apply in the case of individuals
enrolled in a medicare plan under this title.
``(6) Elimination of restriction on enrollment under
certain plans.--Subparagraph (B) of section 1851(a)(3) no
longer applies in the case of individuals enrolled in a
medicare plan under this title.
The fact that a provision is not cited in this subsection does not
indicate that the provision is not modified under this title in some
manner consistent with section 2200(a).
``(b) Relation to State Laws.--Any standard established under this
title or by the Secretary pursuant to this title shall supersede any
State law or regulation with respect to Medicare plans which are
offered by entities under this title to the extent such law or
regulation is inconsistent with such standards.
``Part B--Medicare Trust Fund
``SEC. 2211. MEDICARE TRUST FUND.
``(a) Establishment.--Effective January 1, 2008, there is created
on the books of the Treasury of the United States a trust fund to be
known as the Medicare Trust Fund.
``(b) Amounts in Medicare Trust Fund.--
``(1) In general.--The Medicare Trust Fund shall consist of
the following amounts:
``(A) Amounts deposited in, or appropriated to, the
Medicare Trust Fund as provided in this title.
``(B) Any gifts and bequests made to the Medicare
Trust Fund as provided in section 201(i)(1).
``(2) Appropriation of hospital insurance taxes.--
``(A) In general.--Beginning January 1, 2008, and
for each subsequent year, there is appropriated to the
Medicare Trust Fund, out of moneys in the Treasury not
otherwise appropriated, an amount equal to such percent
of the taxes described in paragraphs (1) and (2) of
section 1817(a) that the Secretary estimates reflects
the relative weight that benefits under part A
represents of the actuarial value of the total benefits
under this title.
``(B) Transfer.--The amounts appropriated pursuant
to subparagraph (A) shall be transferred from time to
time from the general fund in the Treasury to the
Medicare Trust Fund. The amount to be transferred under
this paragraph shall be determined on the basis of
estimates by the Secretary of the Treasury of the
taxes, described in such paragraph, paid to or
deposited into the Treasury. The Secretary of the
Treasury shall make adjustments in amounts subsequently
transferred to the extent that prior estimates were in
excess of, or were less than, such taxes.
``(3) General revenue contribution.--Beginning January 1,
2008, and for each subsequent year, there is appropriated to
the Medicare Trust Fund, out of moneys in the Treasury not
otherwise appropriated, from time to time, an amount equal to
the amount by which the aggregate expenditures under this title
(including payments made to Medicare plans under section 2204)
exceed the sum of--
``(A) the amount appropriated under paragraph (2)
for the period involved;
``(B) the premiums collected under sections
2204(b)(2) and 2205(c) for such period; and
``(C) the fees collected under section 2206 for
such period.
``(4) Application to obligations of, and amounts owed to,
the part a and b trust funds.--
``(A) Certification.--Beginning January 1, 2008,
the Secretary shall periodically certify to the Board
of Trustees of the Medicare Trust Fund any amounts that
would otherwise be--
``(i) payable from the Federal Hospital
Insurance Trust Fund or the Federal
Supplementary Medical Insurance Trust Fund for
items and services provided prior to such date;
or
``(ii) due to such trust funds for items
and services provided prior to such date.
``(B) Transfers and deposits.--
``(i) Transfers.--If Secretary certifies an
amount pursuant to subparagraph (A)(i), the
Board of Trustees of the Medicare Trust Fund
shall transfer to the Secretary from such trust
fund an amount equal to the amount certified.
``(ii) Deposits.--If Secretary certifies an
amount pursuant to subparagraph (A)(ii), the
Secretary shall deposit in the Medicare Trust
Fund an amount equal to the amount certified.
``(c) Application of HI Trust Fund Provisions.--Subject to other
provisions of this title, the provisions of subsections (b) through (i)
of section 1817 shall apply to title XVIII (as modified by this title)
and the Medicare Trust Fund in the same manner as they apply to part A
of title XVIII and the Federal Hospital Insurance Trust Fund,
respectively.
``SEC. 2212. PROGRAMMATIC INSOLVENCY AND LIMITATION ON GENERAL REVENUE
FINANCING.
``(a) Annual Determinations.--In addition to any other duties, the
Board of Trustees of the Medicare Trust Fund (in this section referred
to as the `Board of Trustees') shall determine and report to Congress
as part of its annual report each year the following:
``(1) The percentage of total expenditures from the
Medicare Trust Fund that is financed by the general revenue
contributions described in section 2211(b)(3).
``(2) The first fiscal year (if any) that the Medicare
Trust Fund is projected to become programmatically insolvent
(as defined in subsection (b)).
``(3) The first fiscal year (if any) in which the amounts
in the Medicare Trust Fund will be insufficient to pay for the
total expenses incurred under title XVIII (as revised by this
title).
``(4) Recommendations to preclude the program from becoming
programmatically insolvent.
``(b) Programmatic Insolvency Defined.--
``(1) In general.--For purposes of this part, the Medicare
Trust Fund shall be deemed to be `programmatically insolvent'
for a fiscal year if the amount appropriated to the Medicare
Trust Fund under section 2211(b)(3) would exceed 40 percent of
the amount described in paragraph (2).
``(2) Net expenditures on basic benefits.--The amount
described in this paragraph is, as estimated by the Board of
Trustees in consultation with the Secretary and the Secretary
of the Treasury, the total expenditures from the Medicare Trust
Fund in the fiscal year involved, reduced by an amount equal to
the administrative expenses of the Secretary for that fiscal
year.''.
SEC. 3. CONFORMING AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.
(a) Reporting Requirements for Secretary of the Treasury.--
(1) In general.--Subsection (l) of section 6103 of the
Internal Revenue Code of 1986 (relating to confidentiality and
disclosure of returns and return information) is amended by
adding at the end the following new paragraph:
``(19) Disclosure of return information to carry out
income-related reduction in medicare part b premium.--
``(A) In general.--The Secretary may, upon written
request from the Secretary of Health and Human
Services, disclose to officers and employees of the
Centers for Medicare & Medicaid Services return
information with respect to a taxpayer who is required
to pay a monthly premium under section 1839 of the
Social Security Act. Such return information shall be
limited to--
``(i) taxpayer identity information with
respect to such taxpayer,
``(ii) the filing status of such taxpayer,
``(iii) the adjusted gross income of such
taxpayer,
``(iv) the amounts excluded from such
taxpayer's gross income under sections 135 and
911,
``(v) the interest received or accrued
during the taxable year which is exempt from
the tax imposed by chapter 1 to the extent such
information is available, and
``(vi) the amounts excluded from such
taxpayer's gross income by sections 931 and 933
to the extent such information is available.
``(B) Restriction on use of disclosed
information.--Return information disclosed under
subparagraph (A) may be used by officers and employees
of the Centers for Medicare & Medicaid Services only
for the purposes of, and to the extent necessary in,
establishing the appropriate monthly premium under
section 1839 of the Social Security Act.''
(2) Conforming amendment.--Paragraphs (3)(A) and (4) of
section 6103(p) of such Code are each amended by striking ``or
(14)'' each place it appears and inserting ``(14), or (19)''.
(b) Effective Date.--
(1) In general.--The amendments made by subsection (a)
shall apply to the monthly premium under section 2204 of the
Social Security Act for months beginning with January 2008.
(2) Information for prior years.--The Secretary of Health
and Human Services may request information under section
6013(l)(15) of the Social Security Act (as added by subsection
(c)) for taxable years beginning after December 31, 2007.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.
Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.
Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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.
Sponsor introductory remarks on measure. (CR E1250)
Referred to the Subcommittee on Health.
Referred to the Subcommittee on Health.
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