An amendment to provide an extension of enrollment periods for Medicare benefits.

At the end of the bill before the short title, insert the following:

SEC. ___. EXTENDED PERIOD OF MEDICARE OPEN ENROLLMENT DURING ALL OF 2006 WITHOUT LATE ENROLLMENT PENALTY.

Section 1851(e)(3)(B) of the Social Security Act (42 U.S.C. 1395w-21(e)(3)(B)) is amended--

(1) in clause (iii), by striking “May 15, 2006” and inserting “December 31, 2006”; and

(2) by adding at the end the following new sentence: “An individual making an election during the period beginning on November 15, 2006, and ending on December 15, 2006, shall specify whether the election is to be effective with respect to 2006 or with respect to 2007 (or both).”.

SEC. ___. ONE-TIME CHANGE OF PLAN ENROLLMENT FOR MEDICARE PRESCRIPTION DRUG BENEFIT DURING ALL OF 2006.

(a) Application to MA-PD Plans.--Section 1851(e) of the Social Security Act (42 U.S.C. 1395w-21(e)) is amended--

(1) in paragraph (2)(B)--

(A) in the heading, by striking “for first 6 months”;

(B) in clause (i)--

(i) by striking “the first 6 months of 2006” and inserting “2006”; and

(ii) by striking “the first 6 months during 2006” and inserting “2006”;

(C) in clause (ii), by inserting “(other than during 2006)” after “paragraph (3)”; and

(D) in clause (iii), by striking “2006” and inserting “2007”; and

(2) in paragraph (4), by striking “2006” and inserting “2007” each place it appears.

(b) Conforming Amendment to Part D.--Section 1860D-1(b)(1)(B)(iii) of such Act (42 U.S.C. 1395w-101(b)(1)(B)(iii)) is amended by striking “subparagraphs (B) and (C) of paragraph (2)” and inserting “paragraph (2)(C)”.

SEC. ___. ESTABLISHMENT OF MEDICARE OPERATED PRESCRIPTION DRUG PLAN OPTION.

(a) In General.--Subpart 2 of part D of the Social Security Act is amended by inserting after section 1860D-11 (42 U.S.C. 1395w-111) the following new section:

“Medicare operated prescription drug plan option

“Sec. 1860D-11A. (a) In General.--Notwithstanding any other provision of this part, for each year (beginning with 2007), in addition to any plans offered under section 1860D-11, the Secretary shall offer one or more medicare operated prescription drug plans (as defined in subsection (c)) with a service area that consists of the entire United States and shall enter into negotiations with pharmaceutical manufacturers to reduce the purchase cost of covered part D drugs for eligible part D individuals in accordance with subsection (b).

“(b) Negotiations.--Notwithstanding section 1860D-11(i), for purposes of offering a medicare operated prescription drug plan under this section, the Secretary shall negotiate with pharmaceutical manufacturers with respect to the purchase price of covered part D drugs and shall encourage the use of more affordable therapeutic equivalents to the extent such practices do not override medical necessity as determined by the prescribing physician. To the extent practicable and consistent with the previous sentence, the Secretary shall implement strategies similar to those used by other Federal purchasers of prescription drugs, and other strategies, to reduce the purchase cost of covered part D drugs.

“(c) Medicare Operated Prescription Drug Plan Defined.--For purposes of this part, the term ‘medicare operated prescription drug plan' means a prescription drug plan that offers qualified prescription drug coverage and access to negotiated prices described in section 1860D-2(a)(1)(A). Such a plan may offer supplemental prescription drug coverage in the same manner as other qualified prescription drug coverage offered by other prescription drug plans.

“(d) Monthly Beneficiary Premium.--

“(1) Qualified prescription drug coverage.--The monthly beneficiary premium for qualified prescription drug coverage and access to negotiated prices described in section 1860D-2(a)(1)(A) to be charged under a medicare operated prescription drug plan shall be uniform nationally. Such premium for months in a year shall be based on the average monthly per capita actuarial cost of offering the medicare operated prescription drug plan for the year involved, including administrative expenses.

“(2) Supplemental prescription drug coverage.--Insofar as a medicare operated prescription drug plan offers supplemental prescription drug coverage, the Secretary may adjust the amount of the premium charged under paragraph (1).”.

(b) Conforming Amendments.--

(1) Section 1860D-3(a) of the Social Security Act (42 U.S.C. 1395w-103(a)) is amended by adding at the end the following new paragraph:

“(4) Availability of the medicare operated prescription drug plan.--

“(A) In general.--A medicare operated prescription drug plan (as defined in section 1860D-11A(c)) shall be offered nationally in accordance with section 1860D-11A.

“(B) Relationship to other plans.--

“(i) In general.--Subject to clause (ii), a medicare operated prescription drug plan shall be offered in addition to any qualifying plan or fallback prescription drug plan offered in a PDP region and shall not be considered to be such a plan purposes of meeting the requirements of this subsection.

“(ii) Designation as a fallback plan.--Notwithstanding any other provision of this part, the Secretary may designate the medicare operated prescription drug plan as the fallback prescription drug plan for any fallback service area (as defined in section 1860D-11(g)(3)) determined to be appropriate by the Secretary.”.

(2) Section 1860D-13(c)(3) of such Act (42 U.S.C. 1395w-113(c)(3)) is amended--

(A) in the heading, by inserting “and medicare operated prescription drug plans” after “Fallback plans”; and

(B) by inserting “or a medicare operated prescription drug plan” after “a fallback prescription drug plan”.

(3) Section 1860D-16(b)(1) of such Act (42 U.S.C.1395w-116(b)(1)) is amended--

(A) in subparagraph (C), by striking “and” after the semicolon at the end;

(B) in subparagraph (D), by striking the period at the end and inserting “; and”; and

“(E) payments for expenses incurred with respect to the operation of medicare operated prescription drug plans under section 1860D-11A.”.

(4) Section 1860D-41(a) of such Act (42 U.S.C. 1395w-151(a)) is amended by adding at the end the following new paragraph:

“(19) Medicare operated prescription drug plan.--The term ‘medicare operated prescription drug plan' has the meaning given such term in section 1860D-11A(c).”.