Common use of House Bill Clause in Contracts

House Bill. New Section 1860D-1 would specify that PDP sponsors and MA or EFFS organizations providing qualified prescription drug coverage could not deny, limit, or condition the coverage or provision of benefits or increase the premium based on any health-related status factor in the case of persons who maintained continuous prescription drug coverage since the date they first qualified to elect drug coverage under Part D. Individuals who did not maintain continuous coverage could be subject to an adjusted premium or a pre-existing condition exclusion in a manner reflecting the additional actuarial risk involved. Such risk would be established through an appropriate actuarial opinion. The Administrator would provide a mechanism for assisting sponsors and entities in identifying eligible individuals who had, or had not, maintained continuous coverage. The provision would specify that an individual would be considered to have had continuous prescription drug coverage if the individual established that he or she had coverage under one of the following (and coverage in one plan occurred no more than 63 days after termination of coverage in another plan): 1) qualified prescription drug coverage under a PDP or MA Rx or EFFS Rx plan; 2) Medicaid prescription drug coverage; 3) prescription drug coverage under a group health plan, but only if benefits were at least equivalent to benefits under a qualified PDP; 4) prescription drug coverage under a Medigap plan, but only if the policy was in effect on January 1, 2006, and only if the benefits were at least equivalent to benefits under a qualified PDP; 5) state pharmaceutical assistance program, but only if benefits were at least equivalent to benefits under a qualified PDP; and 6) veterans coverage for prescription drugs, but only if benefits were at least equivalent to benefits under a qualified PDP. Individuals could apply to the Administrator to waive the requirement that such coverage be at least equivalent to benefits under a qualified prescription drug plan. They could make such application if they could establish that they were not adequately informed that the coverage did not provide such level of coverage. New Section 1860D-6 would specify that the bid and premium for a PDP could not vary among individuals enrolled in the plan in the same service area, provided they were not subject to late enrollment penalties. A PDP sponsor would permit each enrollee to have their premiums withheld from their Social Security checks in the same manner as is currently done for Part B premiums. Beneficiaries could also make payment of the premium through an electronic funds transfer mechanism. The amount would be credited to the Medicare Prescription Drug Trust Fund. Reductions in Part B premiums attributable to enrollment in MA or EFFS plans could be used to reduce the premium otherwise applicable. Under certain conditions, the PDP sponsor or entity offering an MA Rx or EFFS Rx plan in an area would be required to accept, for an individual eligible for a low-income premium subsidy, the reference premium amount (premium for standard coverage) as payment in full for the premium for qualified prescription coverage. This requirement would apply if there was no standard coverage available in the area. Senate Bill New section 1860D-2 would specify that persons enrolling in Part D after their initial enrollment period would be subject to delayed enrollment penalties. The actuarially sound increase for each 12-month period of delayed enrollment would be determined by the Administrator. Eligible beneficiaries with creditable drug coverage could elect to continue to receive such coverage, not enroll in Part D, and subsequently enroll in Part D without penalty if the plan terminates, ceases to provide, or reduces the value of the prescription drug coverage under the plan to below the actuarial value of standard prescription drug coverage. Subject to certain conditions, creditable drug coverage would include drug coverage through Medicaid or through a Section 1115 waiver for persons who are not dual eligibles, a group health plan, state pharmaceutical assistance program, Veterans’ programs, and Medigap. Entities offering creditable coverage would be required to disclose whether coverage equals or exceeds the actuarial value of standard coverage. A special enrollment period would apply for persons losing creditable coverage. In general, it would be the 63-day period beginning on the date the individual lost such coverage. Entitlement would begin the first day of the first month following enrollment. The New Section 1860D-14 would require the Administrator to compute a monthly standard coverage premium for each Medicare Prescription Drug plan and for each Medicare Advantage plan. This would equal the value of standard coverage or actuarially equivalent coverage if the plan provided no additional benefits. If the plan offered additional benefits, the calculation would reflect only the value of standard coverage or, alternatively the approved plan premium for the required qualified coverage plan offered by the entity. The New Section 1860D-15 would require the Administrator, each year, beginning in 2006, to compute a monthly national average premium equal to the average of the monthly standard coverage premium for each Medicare Prescription Drug plan and each Medicare Advantage plan. The calculation would be a weighted average based on the number of enrollees in the plan in the previous year. The Administrator would establish a methodology for making an adjustment to take into account differences in prices among different areas. In making this calculation, the Administrator could take into account geographic differences in utilization. Any adjustment would be budget neutral. The Administrator would establish procedures for making the calculation for 2005. New Section 1860D-17 would specify that if the plan’s monthly approved premium for standard coverage was equal to the national monthly weighted average premium for such coverage, the beneficiary would pay: 1) the applicable percentage, established for the area, of the monthly national average. If the plan’s monthly approved premium was less than the national average the beneficiary would pay: 1) the applicable percentage for the area, minus, 2) the difference between the national average and the plan’s premium. If the plan’s monthly premium was greater than the national average, the beneficiary would pay: 1) the applicable percentage for the area, plus 2) the difference between the national average and the plan’s premium. The applicable percentage for an area would be 30% divided by 100% minus a percentage equal to: total reinsurance payments that will be made in a year (including such payments to qualified retiree plans) divided by such amount plus total payments that would be made to plans, including Medicare Advantage plans, in the year for standard coverage (or actuarially equivalent coverage). New Section 1860D-18 would specify that premiums would be collected in the same manner as Part B premiums. The collections would be credited to the Prescription Drug Account. The Administrator would establish procedures whereby the sponsor of employment-based retiree coverage could pay the premium. The Administrator would transmit the information necessary for collection to the Commissioner of Social Security. New section 1860D-6 would specify that premiums for a plan would not vary within a region. However, this requirement would not apply to enrollees who were enrolled in a plan pursuant to a contract between the plan and the employer or other group plan that provided employment-based retiree health coverage, if the premium amount was the same for all such enrollees under such agreement. Conference Agreement The conference agreement establishes a new section 1860D-13 which sets requirements for beneficiary premiums. The monthly beneficiary premium for a prescription drug plan is defined as the base beneficiary premium, as adjusted. The base beneficiary premium equals the product of the beneficiary premium percentage and the national average monthly bid amount. The beneficiary premium percentage is equal to: 1) 26%, divided by 2) 100 % minus a percentage equal to total reinsurance payments divided by the sum of such reinsurance payments and total payments the Secretary estimates will be paid to prescription drug plans in a year that are attributable to the standardized bid amount (taking into account amounts paid by the Secretary and enrollees and the application of risk adjustment). The national average monthly bid amount is a weighted average of standardized bid amounts for each prescription drug plan and each MA-PD plan. It does not take into account bids submitted for MSA plans, MA private fee-for-service plans, specialized MA plans for special needs beneficiaries, PACE programs, and reasonable cost reimbursement contracts. Once the base beneficiary premium is calculated, it is adjusted up or down, as appropriate, to reflect differences between it and the geographically- adjusted national average monthly bid amount. It is further increased for any supplemental benefits and decreased if the individual is entitled to a low-income subsidy. The premium is uniform for all persons enrolled in the plan, except for those receiving low-income subsidies or those subject to a late enrollment penalty. Late enrollment penalties would be applied to beneficiaries who failed to maintain creditable coverage for a period of 63 days (within a continuous period of eligibility), beginning on the day after the individual’s initial enrollment period and ending on the date of enrollment in a prescription drug plan or MA-PD plan. The amount of the penalty is equal to the amount that is the greater of what the Secretary determines is actuarially sound or 1 percent of the national average monthly beneficiary basic premium (not geographically adjusted) for each uncovered month. The provision specifies that an individual is considered to have had creditable prescription drug coverage if the individual establishes that he or she had coverage under one of the following: 1) prescription drug plan or MA-PD; 2) Medicaid; 3) group health plan, including a Federal Employees Health Benefits (FEHB) plan and a qualified retiree prescription drug plan;