H.R. 7909 — Medicare Expansion and Lowering Costs Now Act

This section states congressional findings on Medicare coverage gaps. Specifically, Congress finds that (1) Medicare should provide more comprehensive coverage, including for beneficiaries' hearing, dental, and vision care needs; (2) special needs populations face financial challenges in covering Medicare's out-of-pocket costs and other hurdles; and (3) Medicare Buy-In represents progress as Congress considers further legislation to address these Medicare coverage and beneficiary financial issues.

This section establishes a Medicare buy-in option under a new section 1899D of the Social Security Act for individuals ages 50 through 64 (i.e., attained age 50 but not 65) who meet Medicare Parts A or B eligibility requirements but for age. Enrollees receive the same Parts A, B, and D benefits and protections as other Medicare beneficiaries, including eligibility for Medicare Advantage plans with prescription drug coverage (MA-PD plans) and access to the Medicare Beneficiary Ombudsman. (Medicare Parts A, B, and D provide hospital insurance, outpatient/physician services, and prescription drug coverage, respectively, primarily to individuals 65 and older or with certain disabilities.) The Secretary must establish enrollment and coverage periods coordinated with ACA Exchange periods, with coverage first beginning January 1 of the first year at least one year after enactment and including special enrollment periods applicable to Exchange plans. Monthly premiums, determined annually and equal to 1/12 of the estimated average annual per capita Parts A, B, and D benefits and administrative costs, are adjusted (1) to ensure no increase in Medicare expenditures, (2) by geographic factors for affordability, and (3) potentially by age to increase enrollment and mitigate adverse selection; enrollees may incur additional Part D premiums for enhanced plans. Premiums are paid to the Secretary and deposited into a new Medicare Buy-In Trust Fund, to which Supplementary Medical Insurance Trust Fund provisions generally apply. Enrollment under this option does not affect Medicare or Medicaid eligibility or benefits.

This section establishes a new voluntary Medicare Direct Supplemental Insurance Option (under new SSA section 1882A) for individuals entitled to Medicare Part A benefits and enrolled in Part B but not enrolled in a Medicare Advantage plan under part C or a cost plan under SSA section 1876. (As background, Medicare supplemental insurance, or Medigap, covers out-of-pocket costs such as deductibles, copayments, and coinsurance under Parts A and B; this program offers a government-administered alternative to private Medigap policies.) The program provides benefits consisting of payment for deductibles, copayments, coinsurance, and balance billing under Parts A and B, subject to a $100 annual deductible and with no preexisting condition exclusions. The Secretary must set a community-rated monthly premium each September (beginning in 2027) based on estimated costs (including administration and a contingency margin), collect premiums like Part B premiums into a new Direct Medicare Supplemental Insurance Account in the Treasury (with investment authority like the Supplementary Medical Insurance Trust Fund), and use account funds without appropriation for benefits and administration; late enrollment incurs a premium penalty of 10% for each full 12-month period not enrolled (up to 100%, excluding creditable coverage periods), similar to Part B late penalties. Enrollment procedures include (1) an initial period in the last quarter of 2027 (effective January 1, 2028); (2) for newly eligible individuals, a 6-month period like that under SSA section 1882(s)(2)(A); and (3) additional uniform opportunities at least annually (subject to late penalty). Coverage under this program is treated as Medigap coverage for purposes of SSA section 1882(d)(3)(A) nonduplication rules. The amendments apply to benefits for months beginning January 2027.

This section repeals the Medicare Part D noninterference provision (previously prohibiting the Secretary from negotiating drug prices or interfering in private negotiations) and requires the Secretary to negotiate with pharmaceutical manufacturers the prices (including discounts, rebates, and other concessions) charged to prescription drug plan (PDP) sponsors and Medicare Advantage prescription drug (MA-PD) organizations for covered Part D drugs under such plans for Part D eligible individuals. The section clarifies that this authority does not permit the Secretary to require a particular formulary (while preserving authority to ensure plan compliance with formulary access requirements) or prevent plans from negotiating additional discounts; and requires semi-annual reports to Congress on negotiations and achieved prices/discounts, beginning June 1, 2029. The amendments take effect on enactment and first apply to negotiations and prices for plan years beginning January 1, 2029.

This section establishes the Individual Market Reinsurance Fund, administered by the Secretary of Health and Human Services, to make reinsurance payments to issuers of qualified health plans (QHPs) in the individual market—excluding grandfathered health plans (i.e., those in which individuals were enrolled on March 23, 2010) and transitional health plans—for high-cost enrollees in plan years beginning with 2025. (As background, reinsurance programs reimburse insurers for a share of claims costs above specified attachment points for high-cost enrollees, thereby helping stabilize premiums in the nongrandfathered individual market.) The reinsurance payment to an issuer equals 80% of the lesser of (1) an enrollee's plan-year claims exceeding an attachment point of $50,000 (for 2026-2028 plan years) or $100,000 (for other plan years) or (2) a cap of $450,000 (for 2026-2028) or $400,000 (for other plan years), with both thresholds indexed after 2026 using the premium adjustment percentage under ACA §1302(c)(4) (42 U.S.C. 18022(c)(4)); the Secretary may adjust thresholds if budget-neutral and must use flexible payment methods, including interim payments conditioned on issuers providing claims data (subject to HIPAA privacy protections). The Fund is financed by fees that the Secretary charges to participating QHPs (set after consulting stakeholders to avoid discouraging participation), with amounts available without fiscal-year limitation beginning calendar year 2029. This section further requires the Secretary to submit annual reports to Congress beginning January 21, 2026 (detailing plans, reinsurance impacts, premiums, and outreach funding), and an evaluation report by January 31, 2029 (analyzing premiums, enrollment, and state program designs).

This section authorizes the Center for Medicare and Medicaid Innovation (CMI) to include individuals aged 50 to 64 enrolled in Medicare under new section 1899D in existing and future demonstrations testing innovative payment and service delivery models. (As background, the CMI tests such models for Medicare, Medicaid, and dually eligible beneficiaries to reduce program expenditures while preserving or enhancing quality of care.)

This section repeals Subtitle B of title VII of P.L. 119-21 (An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14), which contained health care provisions. (Thus, laws and regulations referenced in that subtitle are applied as if the subtitle and its amendments had not been enacted.)

This section expands eligibility for the premium tax credit—available to individuals and families purchasing health insurance through Affordable Care Act (ACA) Marketplaces by subsidizing a portion of premiums based on income relative to the federal poverty line—to all household income levels above the current lower threshold by striking the 400% upper limit. It revises the applicable percentage table for required household contributions to premiums, which slide linearly within income tiers, as follows: (1) up to 150% of poverty line, 0% to 0%; (2) 150% up to 200%, 0% to 2.0%; (3) 200% up to 250%, 2.0% to 4.0%; (4) 250% up to 300%, 4.0% to 6.0%; (5) 300% up to 400%, 6.0% to 8.5%; and (6) 400% and higher, 8.5% to 8.5% (previously, percentages applied only through 400% of poverty line). The section also strikes statutory provisions on affordability of employer-sponsored coverage previously tied to the 400% limit. (Thus, higher-income households qualify for premium subsidies capped at 8.5% of income.) The changes apply to taxable years beginning after December 31, 2026.