108th CONGRESS
1st Session
H. R. 3189
To amend title XVIII of the Social Security Act and the Employee
Retirement Income Security Act of 1974 to improve access to health insurance
and Medicare benefits for individuals ages 55 to 65 to be fully funded through
premiums and anti-fraud provisions, to amend title XIX of the Social Security
Act to provide financial assistance for those individuals who are too poor
to afford the premiums, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
September 25, 2003
Mr. PALLONE introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the Committees on Energy and Commerce,
and Education and the Workforce, 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 title XVIII of the Social Security Act and the Employee
Retirement Income Security Act of 1974 to improve access to health insurance
and Medicare benefits for individuals ages 55 to 65 to be fully funded through
premiums and anti-fraud provisions, to amend title XIX of the Social Security
Act to provide financial assistance for those individuals who are too poor
to afford the premiums, and for other purposes.
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 `Early Medicare Access and Affordability
Act of 2003'.
Sec. 1. Short title; table of contents.
TITLE I--ACCESS TO MEDICARE BENEFITS FOR INDIVIDUALS 62 TO 65 YEARS OF AGE
Sec. 101. Access to Medicare benefits for individuals 62 to 65 years of
age.
`Part D--Purchase of Medicare Benefits by Certain Individuals Age 62 to
65 Years of Age
`Sec. 1859. Program benefits; eligibility.
`Sec. 1859A. Enrollment process; coverage.
`Sec. 1859B. Premiums.
`Sec. 1859C. Payment of premiums.
`Sec. 1859D. Medicare Early Access Trust Fund.
`Sec. 1859E. Oversight and accountability.
`Sec. 1859F. Administration and miscellaneous.
TITLE II--ACCESS TO MEDICARE BENEFITS FOR DISPLACED WORKERS 55 TO 62 YEARS
OF AGE
Sec. 201. Access to Medicare benefits for displaced workers 55 to 62 years
of age.
TITLE III--COBRA PROTECTION FOR EARLY RETIREES
Subtitle A--Amendments to the Employee Retirement Income Security Act of
1974
Sec. 301. COBRA continuation benefits for certain retired workers who lose
retiree health coverage.
Subtitle B--Amendments to the Public Health Service Act
Sec. 311. COBRA continuation benefits for certain retired workers who lose
retiree health coverage.
Subtitle C--Amendments to the Internal Revenue Code of 1986
Sec. 321. COBRA continuation benefits for certain retired workers who lose
retiree health coverage.
TITLE IV--FINANCING
Sec. 401. Reference to financing provisions.
TITLE V--PROVISION OF PREMIUM ASSISTANCE FOR LOW-INCOME INDIVIDUALS PURCHASING
EARLY COVERAGE UNDER THE MEDICARE PROGRAM
Sec. 501. Provision of premium assistance for low-income individuals purchasing
early coverage under the Medicare program.
TITLE I--ACCESS TO MEDICARE BENEFITS FOR INDIVIDUALS 62 TO 65 YEARS OF AGE
SEC. 101. ACCESS TO MEDICARE BENEFITS FOR INDIVIDUALS 62 TO 65 YEARS OF
AGE.
(a) IN GENERAL- Title XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.) is amended--
(1) by redesignating section 1859 and part D as section 1858 and part E,
respectively; and
(2) by inserting after such section the following new part:
`Part D--Purchase of Medicare Benefits by Certain Individuals Age 62 to
65 Years of Age
`SEC. 1859. PROGRAM BENEFITS; ELIGIBILITY.
`(a) ENTITLEMENT TO MEDICARE BENEFITS FOR ENROLLED INDIVIDUALS-
`(1) IN GENERAL- An individual enrolled under this part is entitled to the
same benefits under this title as an individual entitled to benefits under
part A and enrolled under part B.
`(2) DEFINITIONS- For purposes of this part:
`(A) FEDERAL OR STATE COBRA CONTINUATION PROVISION- The term `Federal
or State COBRA continuation provision' has the meaning given the term
`COBRA continuation provision' in section 2791(d)(4) of the Public Health
Service Act and includes a comparable State program, as determined by
the Secretary.
`(B) FEDERAL HEALTH INSURANCE PROGRAM DEFINED- The term `Federal health
insurance program' means any of the following:
`(i) MEDICARE- Part A or part B of this title (other than by reason
of this part).
`(ii) MEDICAID- A State plan under title XIX.
`(iii) FEHBP- The Federal employees health benefit program under chapter
89 of title 5, United States Code.
`(iv) TRICARE- The TRICARE program (as defined in section 1072(7) of
title 10, United States Code).
`(v) ACTIVE DUTY MILITARY- Health benefits under title 10, United States
Code, to an individual as a member of the uniformed services of the
United States.
`(C) GROUP HEALTH PLAN- The term `group health plan' has the meaning given
such
term in section 2791(a)(1) of the Public Health Service Act.
`(b) ELIGIBILITY OF INDIVIDUALS AGE 62 TO 65 YEARS OF AGE-
`(1) IN GENERAL- Subject to paragraph (2), an individual who meets the following
requirements with respect to a month is eligible to enroll under this part
with respect to such month:
`(A) AGE- As of the last day of the month, the individual has attained
62 years of age, but has not attained 65 years of age.
`(B) MEDICARE ELIGIBILITY (BUT FOR AGE)- The individual would be eligible
for benefits under part A or part B for the month if the individual were
65 years of age.
`(C) NOT ELIGIBLE FOR COVERAGE UNDER GROUP HEALTH PLANS OR FEDERAL HEALTH
INSURANCE PROGRAMS- The individual is not eligible for benefits or coverage
under a Federal health insurance program (as defined in subsection (a)(2)(B))
or under a group health plan (other than such eligibility merely through
a Federal or State COBRA continuation provision) as of the last day of
the month involved.
`(2) LIMITATION ON ELIGIBILITY IF TERMINATED ENROLLMENT- If an individual
described in paragraph (1) enrolls under this part and coverage of the individual
is terminated under section 1859A(d) (other than because of age), the individual
is not again eligible to enroll under this subsection unless the following
requirements are met:
`(A) NEW COVERAGE UNDER GROUP HEALTH PLAN OR FEDERAL HEALTH INSURANCE
PROGRAM- After the date of termination of coverage under such section,
the individual obtains coverage under a group health plan or under a Federal
health insurance program.
`(B) SUBSEQUENT LOSS OF NEW COVERAGE- The individual subsequently loses
eligibility for the coverage described in subparagraph (A) and exhausts
any eligibility the individual may subsequently have for coverage under
a Federal or State COBRA continuation provision.
`(3) CHANGE IN HEALTH PLAN ELIGIBILITY DOES NOT AFFECT COVERAGE- In the
case of an individual who is eligible for and enrolls under this part under
this subsection, the individual's continued entitlement to benefits under
this part shall not be affected by the individual's subsequent eligibility
for benefits or coverage described in paragraph (1)(C), or entitlement to
such benefits or coverage.
`SEC. 1859A. ENROLLMENT PROCESS; COVERAGE.
`(a) IN GENERAL- An individual may enroll in the program established under
this part only in such manner and form as may be prescribed by regulations,
and only during an enrollment period prescribed by the Secretary consistent
with the provisions of this section. Such regulations shall provide a process
under which--
`(1) individuals eligible to enroll as of a month are permitted to pre-enroll
during a prior month within an enrollment period described in subsection
(b); and
`(2) each individual seeking to enroll under section 1859(b) is notified,
before enrolling, of the deferred monthly premium amount the individual
will be liable for under section 1859C(b) upon attaining 65 years of age
as determined under section 1859B(c)(3).
`(1) INDIVIDUALS 62 TO 65 YEARS OF AGE- In the case of individuals eligible
to enroll under this part under section 1859(b)--
`(A) INITIAL ENROLLMENT PERIOD- If the individual is eligible to enroll
under such section for July 2005, the enrollment period shall begin on
May 1, 2005, and shall end on August 31, 2005. Any such enrollment before
July 1, 2005, is conditioned upon compliance with the conditions of eligibility
for July 2005.
`(B) SUBSEQUENT PERIODS- If the individual is eligible to enroll under
such section for a month after July 2005, the enrollment period shall
begin on the first day of the second month before the month in which the
individual first is eligible to so enroll and shall end four months later.
Any such enrollment before the first day of the third month of such enrollment
period is conditioned upon compliance with the conditions of eligibility
for such third month.
`(2) AUTHORITY TO CORRECT FOR GOVERNMENT ERRORS- The provisions of section
1837(h) apply with respect to enrollment under this part in the same manner
as they apply to enrollment under part B.
`(c) DATE COVERAGE BEGINS-
`(1) IN GENERAL- The period during which an individual is entitled to benefits
under this part shall begin as follows, but in no case earlier than July
1, 2005:
`(A) In the case of an individual who enrolls (including pre-enrolls)
before the month in which the individual satisfies eligibility for enrollment
under section 1859, the first day of such month of eligibility.
`(B) In the case of an individual who enrolls during or after the month
in which the individual first satisfies eligibility for enrollment under
such section, the first day of the following month.
`(2) AUTHORITY TO PROVIDE FOR PARTIAL MONTHS OF COVERAGE- Under regulations,
the Secretary may, in the Secretary's discretion, provide for coverage periods
that include portions of a month in order to avoid lapses of coverage.
`(3) LIMITATION ON PAYMENTS- No payments may be made under this title with
respect to the expenses of an individual enrolled under this part unless
such expenses were incurred by such individual during a period which, with
respect to the individual, is a coverage period under this section.
`(d) TERMINATION OF COVERAGE-
`(1) IN GENERAL- An individual's coverage period under this part shall continue
until the individual's enrollment has been terminated at the earliest of
the following:
`(i) NOTICE- The individual files notice (in a form and manner prescribed
by the Secretary) that the individual no longer wishes to participate
in the insurance program under this part.
`(ii) NONPAYMENT OF PREMIUMS- The individual fails to make payment of
premiums required for enrollment under this part.
`(iii) MEDICARE ELIGIBILITY- The individual becomes entitled to benefits
under part A or enrolled under part B (other than by reason of this
part).
`(B) TERMINATION BASED ON AGE- The individual attains 65 years of age.
`(2) EFFECTIVE DATE OF TERMINATION-
`(A) NOTICE- The termination of a coverage period under paragraph (1)(A)(i)
shall take effect at the close of the month following for which the notice
is filed.
`(B) NONPAYMENT OF PREMIUM- The termination of a coverage period under
paragraph (1)(A)(ii) shall take effect on a date determined under regulations,
which may be determined so as to provide a grace period in which overdue
premiums may be paid and coverage continued. The grace period determined
under the preceding sentence shall not exceed 60 days; except that it
may be extended for an additional 30 days in any case where the Secretary
determines that there was good cause for failure to pay the overdue premiums
within such 60-day period.
`(C) AGE OR MEDICARE ELIGIBILITY- The termination of a coverage period
under paragraph (1)(A)(iii) or (1)(B) shall take effect as of the first
day of the month in which the individual attains 65 years of age or becomes
entitled to benefits under part A or enrolled for benefits under part
B (other than by reason of this part).
`SEC. 1859B. PREMIUMS.
`(a) AMOUNT OF MONTHLY PREMIUMS-
`(1) BASE MONTHLY PREMIUMS- The Secretary shall, during September of each
year (beginning with 2004), determine the following premium rates which
shall apply with respect to coverage provided under this title for any month
in the succeeding year:
`(A) BASE MONTHLY PREMIUM FOR INDIVIDUALS 62 YEARS OF AGE OR OLDER- A
base monthly premium for individuals 62 years of age or older, equal to
1/12 of the base annual premium rate computed under subsection (b) for
each premium area.
`(2) DEFERRED MONTHLY PREMIUMS FOR INDIVIDUALS 62 YEARS OF AGE OR OLDER-
The Secretary shall, during September of each year (beginning with 2004),
determine under subsection (c) the amount of deferred monthly premiums that
shall apply with respect to individuals who first obtain coverage under
this part under section 1859(b) in the succeeding year.
`(3) ESTABLISHMENT OF PREMIUM AREAS- For purposes of this part, the term
`premium area' means such an area as the Secretary shall specify to carry
out this part. The Secretary from time to time may change the boundaries
of such premium areas. The Secretary shall seek to minimize the number of
such areas specified under this paragraph.
`(b) BASE ANNUAL PREMIUM FOR INDIVIDUALS 62 YEARS OF AGE OR OLDER-
`(1) NATIONAL, PER CAPITA AVERAGE- The Secretary shall estimate the average,
annual per capita amount that would be payable under this title with respect
to individuals residing in the United States who meet the requirement of
section 1859(b)(1)(A) as if all such individuals were eligible for (and
enrolled) under this title during the entire year (and assuming that section
1862(b)(2)(A)(i) did not apply).
`(2) GEOGRAPHIC ADJUSTMENT- The Secretary shall adjust the amount determined
under paragraph (1) for each premium area (specified under subsection (a)(3))
in order to take into account such factors as the Secretary deems appropriate
and shall limit the maximum premium under this paragraph in a premium area
to assure participation in all areas throughout the United States.
`(3) BASE ANNUAL PREMIUM- The base annual premium under this subsection
for months in a year for individuals 62 years of age or older residing in
a premium area is equal to the average, annual per capita amount estimated
under paragraph (1) for the year, adjusted for such area under paragraph
(2).
`(c) DEFERRED PREMIUM RATE FOR INDIVIDUALS 62 YEARS OF AGE OR OLDER- The deferred
premium rate for individuals with a group of individuals who obtain coverage
under section 1859(b) in a year shall be computed by the Secretary as follows:
`(1) ESTIMATION OF NATIONAL, PER CAPITA ANNUAL AVERAGE EXPENDITURES FOR
ENROLLMENT GROUP- The Secretary shall estimate the average, per capita annual
amount that will be paid under this part for individuals in such group during
the period of enrollment under section 1859(b). In making such estimate
for coverage beginning in a year before 2004, the Secretary may base such
estimate on the average, per capita amount that would be payable if the
program had been in operation over a previous period of at least 4 years.
`(2) DIFFERENCE BETWEEN ESTIMATED EXPENDITURES AND ESTIMATED PREMIUMS- Based
on the characteristics of individuals in such group, the Secretary shall
estimate during the period of coverage of the group under this part under
section 1859(b) the amount by which--
`(A) the amount estimated under paragraph (1); exceeds
`(B) the average, annual per capita amount of premiums that will be payable
for months during the year under section 1859C(a) for individuals in such
group (including premiums that would be payable if there were no terminations
in enrollment under clause (i) or (ii) of section 1859A(d)(1)(A)).
`(3) ACTUARIAL COMPUTATION OF DEFERRED MONTHLY PREMIUM RATES- The Secretary
shall determine deferred monthly premium rates for individuals in such group
in a manner so that--
`(A) the estimated actuarial value of such premiums payable under section
1859C(b), is equal to
`(B) the estimated actuarial present value of the differences described
in paragraph (2).
Such rate shall be computed for each individual in the group in a manner
so that the rate is based on the number of months between the first month
of coverage based on enrollment under section 1859(b) and the month in which
the individual attains 65 years of age.
`(4) DETERMINANTS OF ACTUARIAL PRESENT VALUES- The actuarial present values
described in paragraph (3) shall reflect--
`(A) the estimated probabilities of survival at ages 62 through 84 for
individuals enrolled during the year; and
`(B) the estimated effective average interest rates that would be earned
on investments held in the trust funds under this title during the period
in question.
`SEC. 1859C. PAYMENT OF PREMIUMS.
`(a) PAYMENT OF BASE MONTHLY PREMIUM-
`(1) IN GENERAL- The Secretary shall provide for payment and collection
of the base monthly premium, determined under section 1859B(a)(1) for the
age (and age cohort, if applicable) of the individual involved and the premium
area in which the individual principally resides, in the same manner as
for payment of monthly premiums under section 1840, except that, for purposes
of applying this section, any reference in such section to the Federal Supplementary
Medical Insurance Trust Fund is deemed a reference to the Trust Fund established
under section 1859D.
`(2) PERIOD OF PAYMENT- In the case of an individual who participates in
the program established by this title, the base monthly premium shall be
payable for the period commencing with the first month of the individual's
coverage period and ending with the month in which the individual's coverage
under this title terminates.
`(b) PAYMENT OF DEFERRED PREMIUM FOR INDIVIDUALS COVERED AFTER ATTAINING AGE
62-
`(A) IN GENERAL- In the case of an individual who is covered under this
part for a month pursuant to an enrollment under section 1859(b), subject
to subparagraph (B), the individual is liable for payment of a deferred
premium in each month during the period described in paragraph (2) in
an amount equal to the full deferred monthly premium rate determined for
the individual under section 1859B(c).
`(B) SPECIAL RULES FOR THOSE WHO DISENROLL EARLY-
`(i) IN GENERAL- If such an individual's enrollment under such section
is terminated under clause (i) or (ii) of section 1859A(d)(1)(A), subject
to clause (ii), the amount of the deferred premium otherwise established
under this paragraph shall be pro-rated to reflect the number of months
of coverage under this part under such enrollment compared to the maximum
number of months of coverage that the individual would have had if the
enrollment were not so terminated.
`(ii) ROUNDING TO 12-MONTH MINIMUM COVERAGE PERIODS- In applying clause
(i), the number of months of coverage (if not a multiple of 12) shall
be rounded to the next highest multiple of 12 months, except that in
no case shall this clause result in a number of months of coverage exceeding
the maximum number of months of coverage that the individual would have
had if the enrollment were not so terminated.
`(2) PERIOD OF PAYMENT- The period described in this paragraph for an individual
is the period beginning with the first month in which the individual has
attained 65 years of age and ending with the month before the month in which
the individual attains 85 years of age.
`(3) COLLECTION- In the case of an individual who is liable for a premium
under this subsection, the amount of the premium shall be collected in the
same manner as the premium for enrollment under such part is collected under
section 1840, except that any reference in such section to the Federal Supplementary
Medical Insurance Trust Fund is deemed to be a reference to the Medicare Early
Access Trust Fund established under section 1859D.
`(c) APPLICATION OF CERTAIN PROVISIONS- The provisions of section 1840 (other
than subsection (h)) shall apply to premiums collected under this section
in the same manner as they apply to premiums collected under part B, except
that any reference in such section to the Federal Supplementary Medical Insurance
Trust Fund is deemed a reference to the Trust Fund established under section
1859D.
`SEC. 1859D. MEDICARE EARLY ACCESS TRUST FUND.
`(a) ESTABLISHMENT OF TRUST FUND-
`(1) IN GENERAL- There is hereby created on the books of the Treasury of
the United States a trust fund to be known as the `Medicare Early Access
Trust Fund' (in this section referred to as the
`Trust Fund'). The Trust Fund shall consist of such gifts and bequests as
may be made as provided in section 201(i)(1) and such amounts as may be deposited
in, or appropriated to, such fund as provided in this title.
`(2) PREMIUMS- Premiums collected under section 1859B shall be transferred
to the Trust Fund.
`(3) TRANSFER OF SAVINGS FROM NEW FRAUD AND ABUSE INITIATIVES-
`(A) IN GENERAL- There is hereby transferred to the Trust Fund from the
Federal Hospital Insurance Trust Fund and from the Federal Supplementary
Medical Insurance Trust Fund amounts equivalent to the amounts (specified
under subparagraph (B)) of the reductions in expenditures under such respective
trust fund as may be attributable to the enactment of the Medicare Fraud
and Overpayment Act of 2003.
`(B) USE OF CBO ESTIMATES- For each fiscal year during the 10-fiscal-year
period beginning with fiscal year 2005, the amounts under subparagraph
(A) shall be the amounts described in such subparagraph as determined
by the Congressional Budget Office at the time of, and in connection with,
the enactment of the Early Medicare Access and Affordability Act of 2003.
For subsequent fiscal years, the amounts under subparagraph (A) shall be the
amount determined under this subparagraph for the previous fiscal year increased
by the same percentage as the percentage increase in aggregate expenditures
under this title from the second previous fiscal year to the previous fiscal
year.
`(b) INCORPORATION OF PROVISIONS-
`(1) IN GENERAL- Subject to paragraph (2), subsections (b) through (i) of
section 1841 shall apply with respect to the Trust Fund and this title in
the same manner as they apply with respect to the Federal Supplementary
Medical Insurance Trust Fund and part B, respectively.
`(2) MISCELLANEOUS REFERENCES- In applying provisions of section 1841 under
paragraph (1)--
`(A) any reference in such section to `this part' is construed to refer
to this part D;
`(B) any reference in section 1841(h) to section 1840(d) and in section
1841(i) to sections 1840(b)(1) and 1842(g) are deemed references to comparable
authority exercised under this part; and
`(C) payments may be made under section 1841(g) to the Trust Funds under
sections 1817 and 1841 as reimbursement to such funds for payments they
made for benefits provided under this part.
`SEC. 1859E. OVERSIGHT AND ACCOUNTABILITY.
`(a) THROUGH ANNUAL REPORTS OF TRUSTEES- The Board of Trustees of the Medicare
Early Access Trust Fund under section 1859D(b)(1) shall report on an annual
basis to Congress concerning the status of the Trust Fund and the need for
adjustments in the program under this part to maintain financial solvency
of the program under this part.
`(b) PERIODIC GAO REPORTS- The Comptroller General of the United States shall
periodically submit to Congress reports on the adequacy of the financing of
coverage provided under this part. The Comptroller General shall include in
such report such recommendations for adjustments in such financing and coverage
as the Comptroller General deems appropriate in order to maintain financial
solvency of the program under this part.
`SEC. 1859F. ADMINISTRATION AND MISCELLANEOUS.
`(a) TREATMENT FOR PURPOSES OF TITLE- Except as otherwise provided in this
part--
`(1) individuals enrolled under this part shall be treated for purposes
of this title as though the individual were entitled to benefits under part
A and enrolled under part B; and
`(2) benefits described in section 1859 shall be payable under this title
to such individuals in the same manner as if such individuals were so entitled
and enrolled.
`(b) NOT TREATED AS MEDICARE PROGRAM FOR PURPOSES OF MEDICAID PROGRAM- For
purposes of applying title XIX (including the provision of Medicare cost-sharing
assistance under such title), an individual who is enrolled under this part
shall not be treated as being entitled to benefits under this title.
`(c) NOT TREATED AS MEDICARE PROGRAM FOR PURPOSES OF COBRA CONTINUATION PROVISIONS-
In applying a COBRA continuation provision (as defined in section 2791(d)(4)
of the Public Health Service Act), any reference to an entitlement to benefits
under this title shall not be construed to include entitlement to benefits
under this title pursuant to the operation of this part.'.
(b) CONFORMING AMENDMENTS TO SOCIAL SECURITY ACT PROVISIONS-
(1) Section 201(i)(1) of the Social Security Act (42 U.S.C. 401(i)(1)) is
amended by striking `or the Federal Supplementary Medical Insurance Trust
Fund' and inserting `the Federal Supplementary Medical Insurance Trust Fund,
and the Medicare Early Access Trust Fund'.
(2) Section 201(g)(1)(A) of such Act (42 U.S.C. 401(g)(1)(A)) is amended
by striking ` and the Federal Supplementary Medical Insurance Trust Fund
established by title XVIII' and inserting `, the Federal Supplementary Medical
Insurance Trust Fund, and the Medicare Early Access Trust Fund established
by title XVIII'.
(3) Section 1820(i) of such Act (42 U.S.C. 1395i-4(i)) is amended by striking
`part D' and inserting `part E'.
(4) Part C of title XVIII of such Act is amended--
(A) in section 1851(a)(2)(B) (42 U.S.C. 1395w-21(a)(2)(B)), by striking
`1859(b)(3)' and inserting `1858(b)(3);
(B) in section 1851(a)(2)(C) (42 U.S.C. 1395w-21(a)(2)(C)), by striking
`1859(b)(2)' and inserting `1858(b)(2)';
(C) in section 1852(a)(1) (42 U.S.C. 1395w-22(a)(1)), by striking `1859(b)(3)'
and inserting `1858(b)(3);
(D) in section 1852(a)(3)(B)(ii) (42 U.S.C. 1395w-22(a)(3)(B)(ii)), by
striking `1859(b)(2)(B)' and inserting `1858(b)(2)(B)';
(E) in section 1853(a)(1)(A) (42 U.S.C. 1395w-23(a)(1)(A)), by striking
`1859(e)(4)' and inserting `1858(e)(4)'; and
(F) in section 1853(a)(3)(D) (42 U.S.C. 1395w-23(a)(3)(D)), by striking
`1859(e)(4)' and inserting `1858(e)(4)'.
(5) Section 1853(c) of such Act (42 U.S.C. 1395w-23(c)) is amended--
(A) in paragraph (1), by striking `or (7)' and inserting `, (7), or (8)',
and
(B) by adding at the end the following:
`(8) ADJUSTMENT FOR EARLY ACCESS- In applying this subsection with respect
to individuals entitled to benefits under part D, the Secretary shall provide
for an appropriate adjustment in the Medicare+Choice capitation rate as
may be appropriate to reflect differences between the population
served under such part and the population under parts A and B.'.
(c) OTHER CONFORMING AMENDMENTS-
(1) Section 138(b)(4) of the Internal Revenue Code of 1986 is amended by
striking `1859(b)(3)' and inserting `1858(b)(3)'.
(2)(A) Section 602(2)(D)(ii) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1162(2)) is amended by inserting `(not including
an individual who is so entitled pursuant to enrollment under section 1859A)'
after `Social Security Act'.
(B) Section 2202(2)(D)(ii) of the Public Health Service Act (42 U.S.C. 300bb-2(2)(D)(ii))
is amended by inserting `(not including an individual who is so entitled
pursuant to enrollment under section 1859A of such Act)' after `Social Security
Act'.
(C) Section 4980B(f)(2)(B)(i)(V) of the Internal Revenue Code of 1986 is
amended by inserting `(not including an individual who is so entitled pursuant
to enrollment under section 1859A of such Act)' after `Social Security Act'.
TITLE II--ACCESS TO MEDICARE BENEFITS FOR DISPLACED WORKERS 55 TO 62 YEARS
OF AGE
SEC. 201. ACCESS TO MEDICARE BENEFITS FOR DISPLACED WORKERS 55 TO 62 YEARS
OF AGE.
(a) ELIGIBILITY- Section 1859 of the Social Security Act, as inserted by section
101(a)(2), is amended by adding at the end the following new subsection:
`(c) DISPLACED WORKERS AND SPOUSES-
`(1) DISPLACED WORKERS- Subject to paragraph (3), an individual who meets
the following requirements with respect to a month is eligible to enroll
under this part with respect to such month:
`(A) AGE- As of the last day of the month, the individual has attained
55 years of age, but has not attained 62 years of age.
`(B) MEDICARE ELIGIBILITY (BUT FOR AGE)- The individual would be eligible
for benefits under part A or part B for the month if the individual were
65 years of age.
`(C) LOSS OF EMPLOYMENT-BASED COVERAGE-
`(i) ELIGIBLE FOR UNEMPLOYMENT COMPENSATION- The individual meets the
requirements relating to period of covered employment and conditions
of separation from employment to be eligible for unemployment compensation
(as defined in section 85(b) of the Internal Revenue Code of 1986),
based on a separation from employment occurring on or after January
1, 2004. The previous sentence shall not be construed as requiring the
individual to be receiving such unemployment compensation.
`(ii) LOSS OF EMPLOYMENT-BASED COVERAGE- Immediately before the time
of such separation of employment, the individual was covered under a
group health plan on the basis of such employment, and, because of such
loss, is no longer eligible for coverage under such plan (including
such eligibility based on the application of a Federal or State COBRA
continuation provision) as of the last day of the month involved.
`(iii) PREVIOUS CREDITABLE COVERAGE FOR AT LEAST 1 YEAR- As of the date
on which the individual loses coverage described in clause (ii), the
aggregate of the periods of creditable coverage (as determined under
section 2701(c) of the Public Health Service Act) is 12 months or longer.
`(D) EXHAUSTION OF AVAILABLE COBRA CONTINUATION BENEFITS-
`(i) IN GENERAL- In the case of an individual described in clause (ii)
for a month described in clause (iii)--
`(I) the individual (or spouse) elected coverage described in clause
(ii); and
`(II) the individual (or spouse) has continued such coverage for all
months described in clause (iii) in which the individual (or spouse)
is eligible for such coverage.
`(ii) INDIVIDUALS TO WHOM COBRA CONTINUATION COVERAGE MADE AVAILABLE-
An individual described in this clause is an individual--
`(I) who was offered coverage under a Federal or State COBRA continuation
provision at the time of
loss of coverage eligibility described in subparagraph (C)(ii); or
`(II) whose spouse was offered such coverage in a manner that permitted
coverage of the individual at such time.
`(iii) MONTHS OF POSSIBLE COBRA CONTINUATION COVERAGE- A month described
in this clause is a month for which an individual described in clause
(ii) could have had coverage described in such clause as of the last
day of the month if the individual (or the spouse of the individual,
as the case may be) had elected such coverage on a timely basis.
`(E) NOT ELIGIBLE FOR COVERAGE UNDER FEDERAL HEALTH INSURANCE PROGRAM
OR GROUP HEALTH PLANS- The individual is not eligible for benefits or
coverage under a Federal health insurance program or under a group health
plan (whether on the basis of the individual's employment or employment
of the individual's spouse) as of the last day of the month involved.
`(2) SPOUSE OF DISPLACED WORKER- Subject to paragraph (3), an individual
who meets the following requirements with respect to a month is eligible
to enroll under this part with respect to such month:
`(A) AGE- As of the last day of the month, the individual has not attained
62 years of age.
`(B) MARRIED TO DISPLACED WORKER- The individual is the spouse of an individual
at the time the individual enrolls under this part under paragraph (1)
and loses coverage described in paragraph (1)(C)(ii) because the individual's
spouse lost such coverage.
`(C) MEDICARE ELIGIBILITY (BUT FOR AGE); EXHAUSTION OF ANY COBRA CONTINUATION
COVERAGE; AND NOT ELIGIBLE FOR COVERAGE UNDER FEDERAL HEALTH INSURANCE
PROGRAM OR GROUP HEALTH PLAN- The individual meets the requirements of
subparagraphs (B), (D), and (E) of paragraph (1).
`(3) CHANGE IN HEALTH PLAN ELIGIBILITY AFFECTS CONTINUED ELIGIBILITY- For
provision that terminates enrollment under this section in the case of an
individual who becomes eligible for coverage under a group health plan or
under a Federal health insurance program, see section 1859A(d)(1)(C).
`(4) REENROLLMENT PERMITTED- Nothing in this subsection shall be construed
as preventing an individual who, after enrolling under this subsection,
terminates such enrollment from subsequently reenrolling under this subsection
if the individual is eligible to enroll under this subsection at that time.'.
(b) ENROLLMENT- Section 1859A of such Act, as so inserted, is amended--
(A) by striking `and' at the end of paragraph (1),
(B) by striking the period at the end of paragraph (2) and inserting `;
and', and
(C) by adding at the end the following new paragraph:
`(3) individuals whose coverage under this part would terminate because
of subsection (d)(1)(B)(ii) are provided notice and an opportunity to continue
enrollment in accordance with section 1859E(c)(1).';
(2) in subsection (b), by inserting after `Notwithstanding any other provision
of law, (1)' the following:
`(2) DISPLACED WORKERS AND SPOUSES- In the case of individuals eligible
to enroll under this part under section 1859(c), the following rules apply:
`(A) INITIAL ENROLLMENT PERIOD- If the individual is first eligible to
enroll under such section for July 2005, the enrollment period shall begin
on May 1, 2005, and shall end on August 31, 2005. Any such enrollment
before July 1, 2005, is conditioned upon compliance with the conditions
of eligibility for July 2005.
`(B) SUBSEQUENT PERIODS- If the individual is eligible to enroll under
such section for a month after July 2005, the enrollment period based
on such eligibility shall begin on the first day of the second month before
the month in which the individual first is eligible to so enroll (or reenroll)
and shall end four months later.';
(3) in subsection (d)(1), by amending subparagraph (B) to read as follows:
`(B) TERMINATION BASED ON AGE-
`(i) AT AGE 65- Subject to clause (ii), the individual attains 65 years
of age.
`(ii) AT AGE 62 FOR DISPLACED WORKERS AND SPOUSES- In the case of an
individual enrolled under this part pursuant to section 1859(c), subject
to subsection (a)(1), the individual attains 62 years of age.';
(4) in subsection (d)(1), by adding at the end the following new subparagraph:
`(C) OBTAINING ACCESS TO EMPLOYMENT-BASED COVERAGE OR FEDERAL HEALTH INSURANCE
PROGRAM FOR INDIVIDUALS UNDER 62 YEARS OF AGE- In the case of an individual
who has not attained 62 years of age, the individual is covered (or eligible
for coverage) as a participant or beneficiary under a group health plan
or under a Federal health insurance program.';
(5) in subsection (d)(2), by amending subparagraph (C) to read as follows:
`(C) AGE OR MEDICARE ELIGIBILITY-
`(i) IN GENERAL- The termination of a coverage period under paragraph
(1)(A)(iii) or (1)(B)(i) shall take effect as
of the first day of the month in which the individual attains 65 years of
age or becomes entitled to benefits under part A or enrolled for benefits
under part B.
`(ii) DISPLACED WORKERS- The termination of a coverage period under
paragraph (1)(B)(ii) shall take effect as of the first day of the month
in which the individual attains 62 years of age, unless the individual
has enrolled under this part pursuant to section 1859(b) and section
1859E(c)(1).'; and
(6) in subsection (d)(2), by adding at the end the following new subparagraph:
`(D) ACCESS TO COVERAGE- The termination of a coverage period under paragraph
(1)(C) shall take effect on the date on which the individual is eligible
to begin a period of creditable coverage (as defined in section 2701(c)
of the Public Health Service Act) under a group health plan or under a
Federal health insurance program.'.
(c) PREMIUMS- Section 1859B of such Act, as so inserted, is amended--
(1) in subsection (a)(1), by adding at the end the following:
`(B) BASE MONTHLY PREMIUM FOR INDIVIDUALS UNDER 62 YEARS OF AGE- A base
monthly premium for individuals under 62 years of age, equal to 1/12 of
the base annual premium rate computed under subsection (d)(3) for each
premium area and age cohort.'; and
(2) by adding at the end the following new subsection:
`(d) BASE MONTHLY PREMIUM FOR INDIVIDUALS UNDER 62 YEARS OF AGE-
`(1) NATIONAL, PER CAPITA AVERAGE FOR AGE GROUPS-
`(A) ESTIMATE OF AMOUNT- The Secretary shall estimate the average, annual
per capita amount that would be payable under this title with respect
to individuals residing in the United States who meet the requirement
of section 1859(c)(1)(A) within each of the age cohorts established under
subparagraph (B) as if all such individuals within such cohort were eligible
for (and enrolled) under this title during the entire year (and assuming
that section 1862(b)(2)(A)(i) did not apply).
`(B) AGE COHORTS- For purposes of subparagraph (A), the Secretary shall
establish separate age cohorts in 5 year age increments for individuals
who have not attained 60 years of age and a separate cohort for individuals
who have attained 60 years of age.
`(2) GEOGRAPHIC ADJUSTMENT- The Secretary shall adjust the amount determined
under paragraph (1)(A) for each premium area (specified under subsection
(a)(3)) in the same manner and to the same extent as the Secretary provides
for adjustments under subsection (b)(2).
`(3) BASE ANNUAL PREMIUM- The base annual premium under this subsection
for months in a
year for individuals in an age cohort under paragraph (1)(B) in a premium
area is equal to 165 percent of the average, annual per capita amount estimated
under paragraph (1) for the age cohort and year, adjusted for such area under
paragraph (2).
`(4) PRO-RATION OF PREMIUMS TO REFLECT COVERAGE DURING A PART OF A MONTH-
If the Secretary provides for coverage of portions of a month under section
1859A(c)(2), the Secretary shall pro-rate the premiums attributable to such
coverage under this section to reflect the portion of the month so covered.'.
(d) ADMINISTRATIVE PROVISIONS- Section 1859F of such Act, as so inserted,
is amended by adding at the end the following:
`(d) ADDITIONAL ADMINISTRATIVE PROVISIONS-
`(1) PROCESS FOR CONTINUED ENROLLMENT OF DISPLACED WORKERS WHO ATTAIN 62
YEARS OF AGE- The Secretary shall provide a process for the continuation
of enrollment of individuals whose enrollment under section 1859(c) would
be terminated upon attaining 62 years of age. Under such process such individuals
shall be provided appropriate and timely notice before the date of such
termination and of the requirement to enroll under this part pursuant to
section 1859(b) in order to continue entitlement to benefits under this
title after attaining 62 years of age.
`(2) ARRANGEMENTS WITH STATES FOR DETERMINATIONS RELATING TO UNEMPLOYMENT
COMPENSATION ELIGIBILITY- The Secretary may provide for appropriate arrangements
with States for the determination of whether individuals in the State meet
or would meet the requirements of section 1859(c)(1)(C)(i).'.
(e) CONFORMING AMENDMENT TO HEADING TO PART- The heading of part D of title
XVIII of the Social Security Act, as so inserted, is amended by striking `62'
and inserting `55'.
TITLE III--COBRA PROTECTION FOR EARLY RETIREES
Subtitle A--Amendments to the Employee Retirement Income Security Act of
1974
SEC. 301. COBRA CONTINUATION BENEFITS FOR CERTAIN RETIRED WORKERS WHO LOSE
RETIREE HEALTH COVERAGE.
(a) ESTABLISHMENT OF NEW QUALIFYING EVENT-
(1) IN GENERAL- Section 603 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1163) is amended by inserting after paragraph (6) the
following new paragraph:
`(7) The termination or substantial reduction in benefits (as defined in
section 607(7)) of group health plan coverage as a result of plan changes
or termination in the case of a covered employee who is a qualified retiree.'.
(2) QUALIFIED RETIREE; QUALIFIED BENEFICIARY; AND SUBSTANTIAL REDUCTION
DEFINED- Section 607 of such Act (29 U.S.C. 1167) is amended--
(i) in subparagraph (A), by inserting `except as otherwise provided
in this paragraph,' after `means,'; and
(ii) by adding at the end the following new subparagraph:
`(D) SPECIAL RULE FOR QUALIFYING RETIREES AND DEPENDENTS- In the case
of a qualifying event described in section 603(7), the term `qualified
beneficiary' means a qualified retiree and any other individual who, on
the day before such qualifying event, is a beneficiary under the plan
on the basis of the individual's relationship to such qualified retiree.';
and
(B) by adding at the end the following new paragraphs:
`(6) QUALIFIED RETIREE- The term `qualified retiree' means, with respect
to a qualifying event described in section 603(7), a covered employee who,
at the time of the event--
`(A) has attained 55 years of age; and
`(B) was receiving group health coverage under the plan by reason of the
retirement of the covered employee.
`(7) SUBSTANTIAL REDUCTION- The term `substantial reduction'--
`(A) means, as determined under regulations of the Secretary and with
respect to a qualified beneficiary, a reduction in the average actuarial
value of benefits under the plan (through reduction or elimination of
benefits, an increase in premiums, deductibles, copayments, and coinsurance,
or any combination thereof), since the date of commencement of coverage
of the beneficiary by reason of the retirement of the covered employee
(or, if later, January 6, 2004), in an amount equal to at least 50 percent
of the total average actuarial value of the benefits under the plan as
of such date (taking into account an appropriate adjustment to permit
comparison of values over time); and
`(B) includes an increase in premiums required to an amount that exceeds
the premium level described in the fourth sentence of section 602(3).'
(b) DURATION OF COVERAGE THROUGH AGE 65- Section 602(2)(A) of such Act (29
U.S.C. 1162(2)(A)) is amended--
(1) in clause (ii), by inserting `or 603(7)' after `603(6)';
(2) in clause (iv), by striking `or 603(6)' and inserting `, 603(6), or
603(7)';
(3) by redesignating clause (iv) as clause (vi);
(4) by redesignating clause (v) as clause (iv) and by moving such clause
to immediately follow clause (iii); and
(5) by inserting after such clause (iv) the following new clause:
`(v) Special rule for certain dependents in case of termination or substantial
reduction of retiree
HEALTH COVERAGE- In the case of a qualifying event described in section 603(7),
in the case of a qualified beneficiary described in section 607(3)(D) who
is not the qualified retiree or spouse of such retiree, the later of--
`(I) the date that is 36 months after the earlier of the date the
qualified retiree becomes entitled to benefits under title XVIII of
the Social Security Act, or the date of the death of the qualified
retiree; or
`(II) the date that is 36 months after the date of the qualifying
event.'.
(c) TYPE OF COVERAGE IN CASE OF TERMINATION OR SUBSTANTIAL REDUCTION OF RETIREE
HEALTH COVERAGE- Section 602(1) of such Act (29 U.S.C. 1162(1)) is amended--
(1) by striking `The coverage' and inserting the following:
`(A) IN GENERAL- Except as provided in subparagraph (B), the coverage';
and
(2) by adding at the end the following:
`(B) CERTAIN RETIREES- In the case of a qualifying event described in
section 603(7), in applying the first sentence of subparagraph (A) and
the fourth sentence of paragraph (3), the coverage offered that is the
most prevalent coverage option (as determined under regulations of the
Secretary) continued under the group health plan (or, if none, under the
most prevalent other plan offered by the same plan sponsor) shall be treated
as the coverage described in such sentence, or (at the option of the plan
and qualified beneficiary) such other coverage option as may be offered
and elected by the qualified beneficiary involved.'.
(d) INCREASED LEVEL OF PREMIUMS PERMITTED- Section 602(3) of such Act (29
U.S.C. 1162(3)) is amended by adding at the end the following new sentence:
`In the case of an individual provided continuation coverage by reason of
a qualifying event described in section 603(7), any reference in subparagraph
(A) of this paragraph to `102 percent of the applicable premium' is deemed
a reference to `125 percent of the applicable premium for employed individuals
(and their dependents, if applicable) for the coverage option referred to
in paragraph (1)(B)'.'.
(e) NOTICE- Section 606(a) of such Act (29 U.S.C. 1166) is amended--
(1) in paragraph (4)(A), by striking `or (6)' and inserting `(6), or (7)';
and
(2) by adding at the end the following:
`The notice under paragraph (4) in the case of a qualifying event described
in section 603(7) shall be provided at least 90 days before the date of the
qualifying event.'.
(1) IN GENERAL- The amendments made by this section (other than subsection
(e)(2)) shall apply to qualifying events occurring on or after January 6,
2004. In the case of a qualifying event occurring on or after such date
and before the date of the enactment of this Act, such event shall be deemed
(for purposes of such amendments) to have occurred on the date of the enactment
of this Act.
(2) ADVANCE NOTICE OF TERMINATIONS AND REDUCTIONS- The amendment made by
subsection (e)(2) shall apply to qualifying events occurring after the date
of the enactment of this Act, except that in no case shall notice be required
under such amendment before such date.
Subtitle B--Amendments to the Public Health Service Act
SEC. 311. COBRA CONTINUATION BENEFITS FOR CERTAIN RETIRED WORKERS WHO LOSE
RETIREE HEALTH COVERAGE.
(a) ESTABLISHMENT OF NEW QUALIFYING EVENT-
(1) IN GENERAL- Section 2203 of the Public Health Service Act (42 U.S.C.
300bb-3) is amended by inserting after paragraph (5) the following new paragraph:
`(6) The termination or substantial reduction in benefits (as defined in
section 2208(6)) of group health plan coverage as a result of plan changes
or termination in the case of a covered employee who is a qualified retiree.'.
(2) QUALIFIED RETIREE; QUALIFIED BENEFICIARY; AND SUBSTANTIAL REDUCTION
DEFINED- Section 2208 of such Act (42 U.S.C. 300bb-8) is amended--
(i) in subparagraph (A), by inserting `except as otherwise provided
in this paragraph,' after `means,'; and
(ii) by adding at the end the following new subparagraph:
`(C) SPECIAL RULE FOR QUALIFYING RETIREES AND DEPENDENTS- In the case
of a qualifying event described in section 2203(6), the term `qualified
beneficiary' means a qualified retiree and any other individual who, on
the day before such qualifying event, is a beneficiary under the plan
on the basis of the individual's relationship to such qualified retiree.';
and
(B) by adding at the end the following new paragraphs:
`(5) QUALIFIED RETIREE- The term `qualified retiree' means, with respect
to a qualifying event described in section 2203(6), a covered employee who,
at the time of the event--
`(A) has attained 55 years of age; and
`(B) was receiving group health coverage under the plan by reason of the
retirement of the covered employee.
`(6) SUBSTANTIAL REDUCTION- The term `substantial reduction'--
`(A) means, as determined under regulations of the Secretary of Labor
and with respect
to a qualified beneficiary, a reduction in the average actuarial value of
benefits under the plan (through reduction or elimination of benefits, an
increase in premiums, deductibles, copayments, and coinsurance, or any combination
thereof), since the date of commencement of coverage of the beneficiary by
reason of the retirement of the covered employee (or, if later, January 6,
2004), in an amount equal to at least 50 percent of the total average actuarial
value of the benefits under the plan as of such date (taking into account
an appropriate adjustment to permit comparison of values over time); and
`(B) includes an increase in premiums required to an amount that exceeds
the premium level described in the fourth sentence of section 2202(3).'.
(b) DURATION OF COVERAGE THROUGH AGE 65- Section 2202(2)(A) of such Act (42
U.S.C. 300bb-2(2)(A)) is amended--
(1) by redesignating clause (iii) as clause (iv); and
(2) by inserting after clause (ii) the following new clause:
`(iii) SPECIAL RULE FOR CERTAIN DEPENDENTS IN CASE OF TERMINATION OR
SUBSTANTIAL REDUCTION OF RETIREE HEALTH COVERAGE- In the case of a qualifying
event described in section 2203(6), in the case of a qualified beneficiary
described in section 2208(3)(C) who is not the qualified retiree or
spouse of such retiree, the later of--
`(I) the date that is 36 months after the earlier of the date the
qualified retiree becomes entitled to benefits under title XVIII of
the Social Security Act, or the date of the death of the qualified
retiree; or
`(II) the date that is 36 months after the date of the qualifying
event.'.
(c) TYPE OF COVERAGE IN CASE OF TERMINATION OR SUBSTANTIAL REDUCTION OF RETIREE
HEALTH COVERAGE- Section 2202(1) of such Act (42 U.S.C. 300bb-2(1)) is amended--
(1) by striking `The coverage' and inserting the following:
`(A) IN GENERAL- Except as provided in subparagraph (B), the coverage';
and
(2) by adding at the end the following:
`(B) CERTAIN RETIREES- In the case of a qualifying event described in
section 2203(6), in applying the first sentence of subparagraph (A) and
the fourth sentence of paragraph (3), the coverage offered that is the
most prevalent coverage option (as determined under regulations of the
Secretary of Labor) continued under the group health plan (or, if none,
under the most prevalent other plan offered by the same plan sponsor)
shall be treated as the coverage described in such sentence, or (at the
option of the plan and qualified beneficiary) such other coverage option
as may be offered and elected by the qualified beneficiary involved.'.
(d) INCREASED LEVEL OF PREMIUMS PERMITTED- Section 2202(3) of such Act (42
U.S.C. 300bb-2(3)) is amended by adding at the end the following new sentence:
`In the case of an individual provided continuation coverage by reason of
a qualifying event described in section 2203(6), any reference in subparagraph
(A) of this paragraph to `102 percent of the applicable premium' is deemed
a reference to `125 percent of the applicable premium for employed individuals
(and their dependents, if applicable) for the coverage option referred to
in paragraph (1)(B)'.'.
(e) NOTICE- Section 2206(a) of such Act (42 U.S.C. 300bb-6(a)) is amended--
(1) in paragraph (4)(A), by striking `or (4)' and inserting `(4), or (6)';
and
(2) by adding at the end the following:
`The notice under paragraph (4) in the case of a qualifying event described
in section 2203(6) shall be provided at least 90 days before the date of the
qualifying event.'.
(1) IN GENERAL- The amendments made by this section (other than subsection
(e)(2)) shall apply to qualifying events occurring on or after January 6,
2004. In the case of a qualifying event occurring on or after such date
and before the date of the enactment of this Act, such event shall be deemed
(for purposes of such amendments) to have occurred on the date of the enactment
of this Act.
(2) ADVANCE NOTICE OF TERMINATIONS AND REDUCTIONS- The amendment made by
subsection (e)(2) shall apply to qualifying events occurring after the date
of the enactment of this Act, except that in no case shall notice be required
under such amendment before such date.
Subtitle C--Amendments to the Internal Revenue Code of 1986
SEC. 321. COBRA CONTINUATION BENEFITS FOR CERTAIN RETIRED WORKERS WHO LOSE
RETIREE HEALTH COVERAGE.
(a) ESTABLISHMENT OF NEW QUALIFYING EVENT-
(1) IN GENERAL- Section 4980B(f)(3) of the Internal Revenue Code of 1986
is amended by inserting after subparagraph (F) the following new subparagraph:
`(G) The termination or substantial reduction in benefits (as defined
in subsection (g)(6)) of group health plan coverage as a result of plan
changes or termination in the case of a covered employee who is a qualified
retiree.'.
(2) QUALIFIED RETIREE; QUALIFIED BENEFICIARY; AND SUBSTANTIAL REDUCTION
DEFINED- Section 4980B(g) of such Code is amended--
(i) in subparagraph (A), by inserting `except as otherwise provided
in this paragraph,' after `means,'; and
(ii) by adding at the end the following new subparagraph:
`(E) SPECIAL RULE FOR QUALIFYING RETIREES AND DEPENDENTS- In the case
of a qualifying event described in subsection (f)(3)(G), the term `qualified
beneficiary' means a qualified retiree and any other individual who, on
the day before such qualifying event, is a beneficiary under the plan
on the basis of the individual's relationship to such qualified retiree.';
and
(B) by adding at the end the following new paragraphs:
`(5) QUALIFIED RETIREE- The term `qualified retiree' means, with respect
to a qualifying event described in subsection (f)(3)(G), a covered employee
who, at the time of the event--
`(A) has attained 55 years of age; and
`(B) was receiving group health coverage under the plan by reason of the
retirement of the covered employee.
`(6) SUBSTANTIAL REDUCTION- The term `substantial reduction'--
`(A) means, as determined under regulations of the Secretary of Labor
and with respect to a qualified beneficiary, a reduction in the average
actuarial value of benefits under the plan (through reduction or elimination
of benefits, an increase in premiums, deductibles, copayments, and coinsurance,
or any combination thereof), since the date of commencement of coverage
of the beneficiary by reason of the retirement of the covered employee
(or, if later, January 6, 2004), in an amount equal to at least 50 percent
of the total average actuarial value of the benefits under the plan as
of such date (taking into account an appropriate adjustment to permit
comparison of values over time); and
`(B) includes an increase in premiums required to an amount that exceeds
the premium level described in the fourth sentence of subsection (f)(2)(C).'.
(b) DURATION OF COVERAGE THROUGH AGE 65- Section 4980B(f)(2)(B)(i) of such
Code is amended--
(1) in subclause (II), by inserting `or (3)(G)' after `(3)(F)';
(2) in subclause (IV), by striking `or (3)(F)' and inserting `, (3)(F),
or (3)(G)';
(3) by redesignating subclause (IV) as subclause (VI);
(4) by redesignating subclause (V) as subclause (IV) and by moving such
clause to immediately follow subclause (III); and
(5) by inserting after such subclause (IV) the following new subclause:
`(V) SPECIAL RULE FOR CERTAIN DEPENDENTS IN CASE OF TERMINATION OR
SUBSTANTIAL REDUCTION OF RETIREE HEALTH COVERAGE- In the case of a
qualifying event described in paragraph (3)(G), in the case of a qualified
beneficiary described in subsection (g)(1)(E) who is not the qualified
retiree or spouse of such retiree, the later of--
`(a) the date that is 36 months after the earlier of the date the
qualified retiree becomes entitled to benefits under title XVIII of the Social
Security Act, or the date of the death of the qualified retiree; or
`(b) the date that is 36 months after the date of the qualifying
event.'.
(c) TYPE OF COVERAGE IN CASE OF TERMINATION OR SUBSTANTIAL REDUCTION OF RETIREE
HEALTH COVERAGE- Section 4980B(f)(2)(A) of such Code is amended--
(1) by striking `The coverage' and inserting the following:
`(i) IN GENERAL- Except as provided in clause (ii), the coverage'; and
(2) by adding at the end the following:
`(ii) CERTAIN RETIREES- In the case of a qualifying event described
in paragraph (3)(G), in applying the first sentence of clause (i) and
the fourth sentence of subparagraph (C), the coverage offered that is
the most prevalent coverage option (as determined under regulations
of the Secretary of Labor) continued under the group health plan (or,
if none, under the most prevalent other plan offered by the same plan
sponsor) shall be treated as the coverage described in such sentence,
or (at the option of the plan and qualified beneficiary) such other
coverage option as may be offered and elected by the qualified beneficiary
involved.'.
(d) INCREASED LEVEL OF PREMIUMS PERMITTED- Section 4980B(f)(2)(C) of such
Code is amended by adding at the end the following new sentence: `In the case
of an individual provided continuation coverage by reason of a qualifying
event described in paragraph (3)(G), any reference in clause (i) of this subparagraph
to `102 percent of the applicable premium' is deemed a reference to `125 percent
of the applicable premium for employed individuals (and their dependents,
if applicable) for the coverage option referred to in subparagraph (A)(ii)'.'.
(e) NOTICE- Section 4980B(f)(6) of such Code is amended--
(1) in subparagraph (D)(i), by striking `or (F)' and inserting `(F), or
(G)'; and
(2) by adding at the end the following:
`The notice under subparagraph (D)(i) in the case of a qualifying event described
in paragraph (3)(G) shall be provided at least 90 days before the date of
the qualifying event.'.
(1) IN GENERAL- The amendments made by this section (other than subsection
(e)(2)) shall apply to qualifying events occurring on or after January 6,
2004. In the case of a qualifying event occurring on or after such date
and before the date of the enactment of this Act, such event shall be deemed
(for purposes of such amendments) to have occurred on the date of the enactment
of this Act.
(2) ADVANCE NOTICE OF TERMINATIONS AND REDUCTIONS- The amendment made by
subsection (e)(2) shall apply to qualifying events occurring after the date
of the enactment of this Act, except that in no case shall notice be required
under such amendment before such date.
TITLE IV--FINANCING
SEC. 401. REFERENCE TO FINANCING PROVISIONS.
Any increase in payments under the medicare program under title XVIII of the
Social Security Act that results from the enactment of this Act shall be offset
by reductions in payments under such program pursuant to the anti-fraud and
anti-abuse provisions enacted as part of the Medicare Fraud and Overpayment
Act of 1998.
TITLE V--PROVISION OF PREMIUM ASSISTANCE FOR LOW-INCOME INDIVIDUALS PURCHASING
EARLY COVERAGE UNDER THE MEDICARE PROGRAM
SEC. 501. PROVISION OF PREMIUM ASSISTANCE FOR LOW-INCOME INDIVIDUALS PURCHASING
EARLY COVERAGE UNDER THE MEDICARE PROGRAM.
(a) IN GENERAL- Section 1902(a)(10) of the Social Security Act (42 U.S.C.
1396a(a)(10)) is amended--
(1) in subparagraph (E)--
(A) by striking `and' at the end of clause (iii), and
(B) by adding at the end the following new clause:
`(v) for making medical assistance available consistent with section 1916(d)(2)
for medicare cost-sharing described in section 1905(p)(3)(A)(iii) for
individuals who have enrolled for benefits under part D of title XVIII,
whose income (as determined in the same manner as income is determined
under section 1905(p) for qualified medicare beneficiaries) does not exceed
200 percent of the official poverty line (referred to in such section)
applicable to a family of the size involved, and who are not otherwise
entitled to medical assistance under the plan;'; and
(2) in the matter following subparagraph (G)--
(A) by striking `and' before `(XIV)', and
(B) by inserting before the semicolon at the end the following: `, and
(XV) the medical assistance made available to an individual described
in subparagraph (E)(v) shall be limited to medical assistance for medicare
cost-sharing described in the last sentence of section 1905(p)(3)'.
(b) SLIDING SCALE FOR BENEFITS- Section 1916(d) of such Act (42 U.S.C. 1396o(d))
is amended--
(1) by inserting `(1)' after `(d)', and
(2) by adding at the end the following:
`(2) With respect to an individual described in section 1902(a)(10)(E)(v),
the State plan of a State shall provide for the charging of a premium (expressed
as a percentage of the medicare cost-sharing described in the last sentence
of paragraph (3) of section 1905(p)(3) provided with respect to the individual)
according to a sliding scale under which such percentage increases from 10
percent to 100 percent, in reasonable increments (as determined by the Secretary),
as the individual's income increases from 100 percent of the official poverty
line (referred to in such section) to 200 percent of such poverty line.'.
(c) 100 PERCENT FEDERAL MEDICAL ASSISTANCE PERCENTAGE- The first sentence
of section 1905(b) of such Act (42 U.S.C. 1396d(b)) is amended--
(1) by striking `and' before `(4)', and
(2) by inserting before the period at the end the following: `, and (5)
the Federal medical assistance percentage shall be 100 percent with respect
to medical assistance provided under section 1902(a)(10)(E)(v)'.
(d) MEDICARE COST-SHARING INCLUDING BUY-IN PREMIUM- Section 1905(p)(3) of
such Act (42 U.S.C. 1396d(p)(3)) is amended by adding at the end the following:
`Such term also includes premiums under part D of title XVIII but only with
respect to individuals described in section 1902(a)(10)(E)(v).'.
(e) TREATMENT OF TERRITORIES- Section 1108(g) of such Act (42 U.S.C. 1308(g))
is amended by adding at the end the following new paragraph:
`(3) Notwithstanding the preceding provisions of this subsection, with respect
to fiscal year 2005 and any fiscal year thereafter, the amount otherwise determined
under this subsection (and subsection (f)) for the fiscal year for a Commonwealth
or territory shall be increased by the ratio (as estimated by the Secretary)
of--
`(A) the aggregate amount of payments made to the 50 States and the District
of Columbia for the fiscal year under title XIX that are attributable to
the amendments made by the Early Medicare Access and Affordability Act of
2003; to
`(B) the aggregate amount of total payments made to such States and District
for the fiscal year under such title.'.
(f) EFFECTIVE DATE- The amendments made by this section shall apply to premiums
for months beginning with July 2005.
END
