|
No: 108-15
Date: December 11, 2003
President Bush Signs into Law H.R. 1, The Medicare Prescription
Drug, Improvement, and Modernization Act of 2003
On December 8, 2003, President Bush signed into law H.R. 1, the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (Public
Law 108-173).
H.R. 1 creates a voluntary prescription drug benefit program (Part D)
for all individuals eligible for Medicare under which they will pay a
monthly premium for coverage in helping them purchase prescription drugs. Part D is effective
January 1, 2006. The bill establishes a transitional drug discount card,
includes provisions for combating fraud, waste, and abuse in the Medicare
program, and makes revisions in existing Parts A and B of Medicare including
provisions relating to rural health care, inpatient hospital services,
skilled nursing facility services and home health care. The bill also
reduces the Medicare Part B premium subsidies for certain individuals
and establishes tax-free Medical Savings Accounts.
Following are descriptions of provisions in the bill that directly affect
the Social Security Administration (SSA). These provisions are identical
to those described in Legislative Bulletin 108-13R, but the descriptions
have been modified to reflect their enactment.
Premium and Cost-Sharing Subsidies for Low-Income Individuals Under
Part D
- Provides Part D prescription drug premium and co-payment subsidies
for low-income individuals. Individuals with incomes of less than 135%
of the Federal poverty guidelines for a family of the applicable size,
and resources of less than three times the SSI resource limits ($6,000
individual/$9,000 couple, indexed for inflation) are eligible for a 100%
premium subsidy.
- Automatically treats as subsidy-eligible individuals those individuals
who are eligible for SSI; individuals not eligible for SSI but who are
eligible for full Medicaid coverage along with Part D coverage; certain
Qualified Medicare Beneficiaries (QMB); and certain Specified Low-Income
Medicare Beneficiaries.
- Provides premium subsidy assistance for individuals with incomes
between 135% and 150 percent of the Federal poverty guidelines for a
family of the applicable size. In order to qualify, the resources of
an individual could not exceed $10,000, while resources for a couple
could not exceed $20,000. These resource limits will be indexed in the
future for inflation. The amount of the subsidy will equal 100% of the
monthly premium for individuals at 135% of poverty and would gradually
decline until it would be completely phased out for those at 150% of
poverty.
-
Provides that individuals eligible for premium subsidies will also
qualify for lower co-payments when purchasing drugs.
- Requires SSA and the States to accept and adjudicate applications
for Part D subsidy assistance. In making determinations, both SSA and
the States will employ the SSI definition of income and resources. The
law is silent concerning methods of verifying income and resources except
under the simplified application process described below. The law appropriates
$500 million for SSA's use in administering these subsidies for fiscal
years 2004 and 2005.
-
The Secretary of Health and Human Services (HHS), in consultation with
the Commissioner, is required to develop a modified, simplified application
form for determination and verification of such individuals' income
and resources. The application is required to include the individual's
attestation under penalty of perjury regarding the value of his or
her resources. Recent statements (if any) from financial institutions
are required to accompany the application, and appropriate methods
of verification are required for all matters attested to in the application.
- Requires that whichever entity--SSA or the State--made the initial
determination of eligibility for a subsidy would conduct any appeal and
redetermination of the case. The Commissioner is required to establish
procedures for appeals of SSA determinations similar to the current hearing
procedures in the SSI program. SSA redeterminations of eligibility will
be made at such time or times as provided by the Commissioner.
- Provides the Commissioner with access to tax information to
carry out low-income determinations under Part D as is currently available
under the SSI program.
- Will be effective January 1, 2006, with an initial 6-month open
season for Part D enrollment between November 15, 2005 and May 15, 2006.
Medicare Prescription Drug Discount Card and Transitional Assistance
Program
- The Secretary of HHS will administer the drug discount card
transitional assistance program using information from other agencies
for verifying an individual's self-certification relating to such matters
as income and family size in connection with his or her application for
such assistance. SSA is required to provide financial information from
its records for this purpose. States will provide the Secretary with
Medicaid information, and the Secretary of the Treasury will provide
HHS with tax information.
- Will be effective no later than 6 months after the date of enactment—June
8, 2003--and remain in effect until Part D is implemented in January
2006.
Outreach by the Commissioner
- Requires the Commissioner to identify and notify individuals
eligible for
Part D subsidies and the transitional drug assistance similar to the
current-law requirement in section 1144 concerning identification and
notification of individuals potentially eligible for Medicare cost sharing
programs (e.g. QMB and SLMB.)
-
Requires the Commissioner to furnish appropriate State agencies with
the name and address of individuals residing in the State who may be
eligible for Part D subsidies or transitional drug assistance based on
benefit information in SSA's records.
Income-Related Reduction in Part B Premium Subsidy
- Requires, beginning in 2007, that Part B Medicare beneficiaries
with modified adjusted gross incomes over $80,000 for an individual and
$160,000 for a married couple pay a higher Part B premium than individuals
with lesser incomes. The amount of the increased premium will be based
on ranges of income specified in the bill. For example, an individual
with modified adjusted gross income between $100,000 and $150,000 would
pay a higher Part B premium than an individual with income between $80,000
and $100,000.
- Requires SSA to make the determinations as to the amount of
an individual's Part B premium if above the applicable threshold.
- Authorizes the Secretary of the Treasury to give SSA information
concerning an individual who may be subject to the increased premium.
Such information will include an individual's modified adjusted gross
income, filing status, and amounts of tax-exempt interest. Generally,
tax information used for the determinations will be for the taxable year
beginning in the second calendar year preceding the year involved.
- Provides that tax information from an earlier year will be used
on a temporary basis if an individual's tax information for the applicable
year were not yet available. When tax information from the applicable
year is available, such information will be used and adjustments in the
premiums would be made.
- Requires the Commissioner and the Secretary of the Treasury
to develop regulations to provide for an increased premium if an individual
does not file a tax return and there is information that the individual's
modified adjusted gross income exceeds the thresholds. Generally, this
will apply in situations in which individuals pay their taxes in full
on a quarterly basis over the tax year.
- Requires the Commissioner, in consultation with the Secretary
of the Treasury, to develop procedures to use more recent year's tax
information at the request of the individual and an appropriate method
for aggregating or disaggregating information from tax returns in the
case of marriage or divorce. Also requires the Commissioner, in consultation
with the Secretary, to promulgate regulations about using more recent
information in the event of an individual's life changing circumstances
and what constitutes such circumstances.
Collection of Premiums Under Medicare Advantage Program
- Provides individuals who are enrolled in Medicare Advantage
programs the option of having their Medicare premiums deducted from their
Social Security benefits or by an electronic funds transfer such as an
automatic withdrawal from a bank account or by debit or credit card.
(Medicare Advantage replaces existing Medicare + Choice plans and enables
individuals to enroll in designated private plans, which may be local
Health Maintenance Organizations or regional Preferred Provider Organizations.
Medicare Advantage plans will offer drug coverage in addition to other
medical benefits.
Beneficiary Outreach Demonstration Program
- Requires Secretary of HHS to establish a 3-year demonstration
project under which Medicare specialists employed by HHS would be stationed
in at least 6 SSA field offices to assist Medicare beneficiaries. At
least 2 of the demonstration sites would be in rural areas.
- Requires an evaluation by the Secretary about the utilization
and satisfaction of the individuals served by the Medicare specialists
and the cost-effectiveness of providing such assistance in SSA field
offices.
- Requires a report to Congress on the evaluation of the project
and recommendation regarding permanently out-stationing Medicare specialists
at SSA offices.
ALJ Medicare Hearing Transfer
- Requires SSA and HHS to provide a plan to Congress and the General
Accounting Office (GAO) for transferring administrative law judge (ALJ)
Medicare hearing functions from SSA to HHS no later than April 1, 2004. The plan is required
to include information on the following:
- anticipated workload and staffing requirements;
- funding requirements;
- transition timetable;
- regulations;
- case tracking system;
- feasibility of developing a process to give Department Appeals Board
decisions binding precedential authority;
- feasibility of filing appeals with ALJs electronically and conducting
hearings using teleconferencing or video-conferencing technologies;
- steps that should be taken to ensure the independence of ALJs;
- steps that should be taken to provide for an appropriate geographic
distribution of ALJs throughout the United States;
- steps that should be taken to hire ALJs and support staff;
- appropriateness of establishing performance standards;
- steps that should be taken to carry out any needed shared resources
with SSA;
- needed training; and,
- any additional recommendations for further congressional action.
- Requires GAO to evaluate the plan and submit a report to Congress
on its evaluation no later than 6 months after the date on which it receives
the plan.
- Requires the Commissioner and Secretary to implement the plan
no earlier than
July 1, 2005, and no later than October 1, 2005.
- Requires the Secretary to provide for appropriate geographic
distribution of ALJs, authorizes the Secretary to hire ALJs and support
staff and enter into arrangements with the Commissioner, as appropriate,
to share office space, support staff and other resources with appropriate
reimbursement.
Funding Start-Up Administrative Costs for Medicare Reform
- As mentioned earlier, appropriates through September 30, 2005,
$500 million to SSA and $1 billion to the Centers for Medicare and Medicaid
Services to carry out the provisions of this bill.
|
|