Lowering Drug Costs for Seniors Act of 2020

I 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 fol- lowing bill; which was referred to the Committee on Energy and Com- merce, and in addition to the Committee on Ways and Means, for a pe- riod to be subsequently determined by the Speaker, in each case for con- sideration of such provisions as fall within the jurisdiction of the com- mittee concerned A BILL To amend title XVIII of the Social Security Act to provide Medicare part D beneficiaries with certain offset pay- ments 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Lowering Drug Costs 4 for Seniors Act of 2020’’. 5 VerDate Sep 11 2014 04:06 Aug 18, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7877.IH H7877 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 7877 IH SEC. 2. GROWTH RATE OF MEDICARE PART D OUT-OF- 1 POCKET COST THRESHOLD. 2 (a) PROVIDING MEDICARE PART D BENEFICIARIES 3 WITH CERTAIN 2020 OFFSET PAYMENTS.—Section 4 1860D–2(b)(4) of the Social Security Act (42 U.S.C. 5 1395w–102(b)(4)) is amended by adding at the end the 6 following new subparagraph: 7 ‘‘(F) 2020 OFFSET PAYMENTS.— 8 ‘‘(i) IN GENERAL.—Subject to clause 9 (iv), the Secretary shall provide for pay- 10 ment from the Medicare Prescription Drug 11 Account as follows: 12 ‘‘(I) In the case of a specified in- 13 dividual (as defined in clause (ii)(I)) 14 who as of the last day of a calendar 15 quarter in 2020 has incurred costs for 16 covered part D drugs so that the indi- 17 vidual has exceeded the annual out-of- 18 pocket threshold applied under sub- 19 paragraph (B)(i)(V) for 2020, pay- 20 ment to the individual by not later 21 than 15th day of the third month fol- 22 lowing the end of such quarter of the 23 amount by which such threshold so 24 applied exceeded the target threshold 25 for 2020. 26 VerDate Sep 11 2014 04:06 Aug 18, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7877.IH H7877 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 7877 IH ‘‘(II) In the case of a specified 1 individual who is not described in sub- 2 clause (I) and who as of the last day 3 of 2020 has incurred costs for covered 4 part D drugs so that the individual 5 has exceeded the target threshold for 6 2020, payment to the individual by 7 not later than December 31, 2021, of 8 the amount by which such incurred 9 costs exceeded the target threshold for 10 2020. 11 ‘‘(ii) DEFINITIONS.—For purposes of 12 this subparagraph: 13 ‘‘(I) SPECIFIED INDIVIDUAL.— 14 The term ‘specified individual’ means 15 an individual who— 16 ‘‘(aa) is enrolled in a pre- 17 scription drug plan or an MA– 18 PD plan; 19 ‘‘(bb) is not enrolled in a 20 qualified retiree prescription drug 21 plan; and 22 ‘‘(cc) is not entitled to an in- 23 come-related subsidy under sec- 24 tion 1860D–14(a). 25 VerDate Sep 11 2014 04:06 Aug 18, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7877.IH H7877 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 7877 IH ‘‘(II) TARGET THRESHOLD FOR 1 2020.—The term ‘target threshold for 2 2020’ means the annual out-of-pocket 3 threshold that would have been ap- 4 plied under subparagraph (B)(i) for 5 2020 if such threshold had been de- 6 termined in accordance with subclause 7 (IV) of such subparagraph instead of 8 subclause (V) of such subparagraph. 9 ‘‘(iii) NOTIFICATION.—In the case of 10 any specified individual who during 2020 11 has incurred costs for covered part D 12 drugs so that the individual has exceeded 13 the target threshold for 2020, the Sec- 14 retary shall, not later than September 30, 15 2021, provide to such individual a notifica- 16 tion informing such individual of such indi- 17 vidual’s right to a payment described in 18 clause (i) and the estimated timing of such 19 payment. 20 ‘‘(iv) CLARIFICATION.—The Secretary 21 shall provide only 1 payment under this 22 subparagraph with respect to any indi- 23 vidual. 24 VerDate Sep 11 2014 21:36 Aug 24, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7877.IH H7877 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 7877 IH ‘‘(v) IMPLEMENTATION.—The Sec- 1 retary may implement this subparagraph 2 by program instruction or otherwise.’’. 3 (b) REDUCED GROWTH RATE FOR 2021 OF MEDI- 4 CARE PART D OUT-OF-POCKET COST THRESHOLD.—Sec- 5 tion 1860D–2(b)(4)(B)(i) of the Social Security Act (42 6 U.S.C. 1395w–102(b)(4)(B)(i)) is amended— 7 (1) in subclause (V), by striking at the end 8 ‘‘or’’; 9 (2) by redesignating subclause (VI) as sub- 10 clause (VIII); and 11 (3) by inserting after subclause (V) the fol- 12 lowing new subclauses: 13 ‘‘(VI) for 2021, is equal to the 14 amount that would have been applied 15 under this subparagraph for 2020 if 16 such amount had been determined in 17 accordance with subclause (IV) in- 18 stead of subclause (V), increased by 19 the lesser of— 20 ‘‘(aa) the annual percentage 21 increase described in paragraph 22 (7) for 2021, plus 2 percentage 23 points; or 24 VerDate Sep 11 2014 21:36 Aug 24, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7877.IH H7877 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 7877 IH ‘‘(bb) the annual percentage 1 increase described in paragraph 2 (6) for 2021; 3 ‘‘(VII) for 2022, is equal to the 4 amount that would have been applied 5 under this subparagraph for 2022 if 6 the amendments made by section 7 1101(d)(1) of the Health Care and 8 Education Reconciliation Act of 2010 9 and by section 2 of the Lowering 10 Drug Costs for Seniors Act of 2020 11 had not been enacted; or’’. 12 Æ VerDate Sep 11 2014 04:06 Aug 18, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H7877.IH H7877 kjohnson on DSK79L0C42PROD with BILLS