Amends title XVIII (Medicare) of the Social Security Act (SSA) to add a new part D (Voluntary Prescription Drug Benefit Program). Establishes a new optional Medicare prescription drug benefit program augmenting with a comprehensive, flexible, and permanent voluntary prescription drug benefit program the limited coverage of certain outpatient prescription drugs, biologicals, and vaccines currently covered under the Medicare program under its original fee-for-service component under both Medicare parts A (Hospital Insurance) and B (Supplementary Medical Insurance) and under its managed care, medical savings account (MSA), and private fee-for-service component under Medicare part C (Medicare+Choice). Provides under this new prescription drug benefit program for offering eligible Medicare beneficiaries, regardless of income or health status, access to more coverage options, options which provide enhanced benefits, with cost-sharing, and additional beneficiary protections and assistance, such as access to negotiated prices, catastrophic coverage limits, and premium subsidies for certain low-income beneficiaries.
Provides for these options to be offered through both: (1) a new Medicare part C Medicare Advantage (MA) program that integrates basic medical coverage with added prescription drug coverage, including coverage through specialized MA plans for special needs individuals; and (2) a new separate, stand-alone Medicare Prescription Drug plan (PDP) program under Medicare part D that relies on private plans to provide coverage and to bear a portion of the financial risk for drug costs.
Makes this new program effective January 1, 2006.
Provides that until this new permanent prescription drug benefit program is effective, the Secretary of Health and Human Services (HHS) shall establish a program to endorse prescription drug discount card programs in order to provide access to prescription drug discounts through prescription drug card sponsors for discount card eligible individuals throughout the United States and to provide for transitional assistance for transitional assistance eligible individuals enrolled in such endorsed programs. Provides that the program shall not apply to covered discount card drugs dispensed after December 31, 2005, and transitional assistance shall be available after such date to the extent the assistance relates to drugs dispensed on or before such date. Allows beneficiaries entitled to benefits under Medicare part A or enrolled under Medicare part B (eligible beneficiaries) to elect to enroll under new Medicare part D, and: (1) provided that they are not enrolled in an MA plan, keep their current Medicare fee-for-service coverage and receive qualified prescription drug coverage (as described below) through enrollment in Medicare part D in a new PDP that is offered in the geographic area in which the beneficiary resides; or (2) enroll in the new Medicare part C MA program in an MA plan, give up their current Medicare fee-for-service coverage, and receive qualified prescription drug coverage under the plan along with basic and possibly enhanced medical coverage through health maintenance organization (HMO) or revised MSA coverage options under the new MA program established by this Act under Medicare part C (and as otherwise provided under Medicare+Choice under Medicare part C as discussed more fully below under title II (MedicareAdvantage) of this Act).
Provides an exception for MA enrollees: (1) enrolled in MSA plans to receive qualified coverage of prescription drugs through enrollment in a PDP; (2) enrolled in private-fee-for service plans that do not provide qualified prescription drug coverage to receive qualified coverage of prescription drugs through enrollment in PDP plans; and (3) enrolled in an MA prescription drug plan (MA-PD) to receive qualified prescription drug coverage under that plan. Directs the Secretary to establish a process for the enrollment, disenrollment, termination, and change of enrollment of Medicare part D eligible individuals in prescription drug plans. Establishes an initial enrollment period beginning November 15, 2005 . Directs the Secretary to conduct activities designed to broadly disseminate information to part D eligible individuals (and prospective part D eligible individuals) regarding the coverage under Medicare part D, including information comparing the plans offered by eligible entities under Medicare part D that are available to eligible beneficiaries in an area.
Divides qualified prescription drug coverage into either a standard coverage benefit package or an alternative prescription drug coverage with at least actuarially equivalent benefits, both with access to negotiated drug prices. Outlines the standard coverage package, which includes, for 2006, a $250 deductible, 25 percent cost-sharing for drug costs between $250 and the initial coverage limit of $2,250, then no coverage; except that the beneficiary shall have access to negotiated prices, regardless of the fact that no benefits may be payable under the coverage, until incurring out-of-pocket costs for covered drugs in a year equal $3,600, with the beneficiary thereafter to pay five percent of the cost of a prescription, or a copayment of $2 for a generic drug and $5 for any other drug, whichever is greater. Includes as negotiated prices all discounts, direct or indirect subsidies, rebates, and direct or indirect remunerations. Increases these amounts in future years by the annual percentage increase in average per capita aggregate expenditures for covered drugs for the year ending the previous July. Includes among the out-of-pocket costs counting toward the annual $3,600 limit any costs paid by the part D eligible individual (or by another person such as a family member) under the Medicaid program or under a State pharmaceutical assistance program for which the individual (or other person) is not reimbursed.
Allows a PDP or an MA plan to provide a different prescription drug benefit design from the standard prescription drug coverage as long as the Administrator of the Medicare Benefits Administration approves of such benefit design.
Directs the Secretary to ensure that each part D eligible individual has available a choice of enrollment in at least two qualifying plans in the area in which the individual resides, at least one of which is a prescription drug plan. Provides that in such case in which such plans are not available the part D eligible individual shall be given the opportunity to enroll in a fallback prescription drug plan. Establishes beneficiary protection requirements for qualified prescription drug plans, such as requiring each PDP sponsor offering a prescription drug plan to: (1) have a mechanism for providing specific information on a timely basis to enrollees upon request; (2) have in place with respect to covered part D drugs a cost-effective drug utilization management program and a medication therapy management program; and (3) provide that each pharmacy that dispenses a covered part D drug shall inform an enrollee of any differential between the price of the drug to the enrollee and the price of the lowest priced generic covered part D drug under the plan that is therapeutically equivalent and bioequivalent and available at such pharmacy. Directs the Secretary to establish, and allows the Secretary to revise PDP regions in a manner that is consistent with the requirements below for the establishment and revision of MA regions, and to the extent practicable PDP regions shall be the same as MA regions. Requires a PDP sponsor to submit to the Secretary bid and other described information with respect to each prescription drug plan it offers for review by the Secretary for the purpose of conducting negotiations concerning the terms and conditions of the proposed bid submitted and other terms and conditions of a proposed plan in order for the Secretary to approve or disapprove the plan. Provides that in order to promote competition under new Medicare part D and in carrying out such part, the Secretary may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponosors and may not require a particular formulary or institute a price structure for the reimbursement of covered part D drugs.
Establishes organizational requirements for PDP sponsors, such as licenses, and requires that they enter into a contract with the Secretary to be eligible to receive payments.
Provides for premium and cost-sharing subsidies for low-income subsidy-eligible individuals. Provides: (1) for the establishment of risk corridors for each PDP that determines the amount of risk that the PDP shall be exposed to for drug spending, and the resultant adjustment in payment attributable to this risk; and (2) that a PDP sponsor and MA organization that offers a plan that provides supplemental prescription drug benefits shall be at full financial risk for the provision of such supplemental benefits. Prohibits adjustment in payments made by reason of this paragraph from affecting the monthly beneficiary premium or the MA monthly prescription drug beneficiary premium. Creates within the Federal Supplementary Medical Insurance Trust Fund the Medicare Prescription Drug Account for payments for low-income subsidy payments, subsidy payments, payments to qualified retiree prescription drug plans, and administrative expenses. Authorizes appropriations. Requires transfers to be made to the Medicaid account for increased administrative costs. Requires amounts withheld for late penalties to be deposited into the Fund. Requires States to make payments to the Account for dual eligibles as provided for under Medicaid. Directs the Secretary to establish requirements for PDPs to ensure the effective coordination between a part D plan and a State Pharmaceutical Assistance Program with respect to payment of premiums and coverage and payment for supplemental prescription drug benefits for part D eligible individuals enrolled under both types of plans. Requires the Secretary to apply such coordination requirements to described Rx plans, which include Medicaid programs and group health plans and the Federal Employees Health Benefit Program (FEHBP), in the same manner as such requirements apply to a State Pharmaceutical Assistance Program.
Requires the prescription drug discount program and the transitional assistance program to be implemented by the Secretary so that interim prescription drug discount cards and transitional assistance are first available by not later than six months after the enactment of this Act in 2004 and 2005 until coverage under the new part D program becomes effective on January 1, 2006. Requires each prescription drug card sponsor that offers an endorsed discount card program to provide each discount card eligible individual entitled to benefits, or enrolled, under Medicare part A (Hospital Insurance) or part B (Supplementary Medical Insurance) with access to negotiated prices and savings on prescription drugs through enrollment in an endorsed discount card program. Allows card sponsors to charge annual enrollment fees, not to exceed $30. Requires the fee to be uniform for all discount eligible individuals enrolled in the program. Requires a prescription drug card sponsor offering an endorsed discount card program to provide that each pharmacy that dispenses a covered discount card drug shall inform a discount card eligible individual enrolled in the program of any differential between the price of the drug to the enrollee and the price of the lowest priced generic covered discount card drug under the program that is therapeutically equivalent and bioequivalent and available at such pharmacy. Provides that a discount card eligible individual is an individual whose income is not more than 135 percent of the poverty line and who is entitled to have payment made of any annual enrollment fee and to have payment made, up to $600 in 2004, under such endorsed program of 90 percent of the costs incurred for covered discount card drugs. Creates within the Federal Supplementary Medical Insurance Trust Fund the Transitional Assistance Account for payments for transitional assistance. Makes necessary appropriations.