Medicare Cost Cap Act of 2026

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4886 Introduced in Senate (IS)]

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119th CONGRESS
  2d Session
                                S. 4886

To amend title XVIII of the Social Security Act to protect against high
 out-of-pocket expenditures for Medicare fee-for-service benefits, and
  to amend titles XVIII and XIX of the Social Security Act to enhance
        programs that protect low-income Medicare beneficiaries.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 24, 2026

Ms. Blunt Rochester (for herself, Mr. Wyden, Mr. Schumer, Mr. Merkley,
Mr. Lujan, Mr. Markey, Ms. Warren, Mr. Reed, Ms. Duckworth, Mr. Welch,
  Mr. Booker, Mrs. Gillibrand, Mr. Padilla, Mr. Van Hollen, and Mrs.
    Murray) introduced the following bill; which was read twice and
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

To amend title XVIII of the Social Security Act to protect against high
 out-of-pocket expenditures for Medicare fee-for-service benefits, and
  to amend titles XVIII and XIX of the Social Security Act to enhance
        programs that protect low-income Medicare beneficiaries.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare Cost Cap Act of 2026''.

SEC. 2. PROTECTION AGAINST HIGH OUT-OF-POCKET EXPENDITURES FOR MEDICARE
              FEE-FOR-SERVICE BENEFITS.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.) is amended by adding at the end the following new
section:

``SEC. 1899D. PROTECTION AGAINST HIGH OUT-OF-POCKET EXPENDITURES.

    ``(a) In General.--Notwithstanding any other provision of this
title, in the case of an applicable individual (as defined in
subsection (c)), if the amount of the out-of-pocket cost-sharing (as
defined in subsection (d)) incurred by such individual for a year
(beginning with 2028) equals or exceeds the annual out-of-pocket limit
under subsection (b) for that year, the individual shall not be
responsible for additional out-of-pocket cost-sharing incurred during
that year.
    ``(b) Annual Out-of-Pocket Limit.--
            ``(1) In general.--The amount of the annual out-of-pocket
        limit under this subsection shall be--
                    ``(A) for 2028, $5,000; or
                    ``(B) for a subsequent year, the amount specified
                in this subsection for the preceding year increased by
                the annual percentage increase in average per capita
                aggregate expenditures under parts A and B, as
                determined by the Secretary for the 12-month period
                ending in July of the previous year using such methods
                as the Secretary shall specify.
            ``(2) Rounding.--If any amount determined under paragraph
        (1)(B) is not a multiple of $5, such amount shall be rounded to
        the nearest multiple of $5.
    ``(c) Applicable Individual Defined.--In this section, the term
`applicable individual' means an individual who is entitled to, or
enrolled for, benefits under part A or enrolled in part B.
    ``(d) Out-of-Pocket Cost-Sharing Defined.--
            ``(1) In general.--Subject to paragraphs (2) and (3), in
        this section, the term `out-of-pocket cost-sharing' means, with
        respect to an applicable individual, the amount of the expenses
        incurred by the individual that are attributable to
        coinsurance, deductible, copayment, or other cost-sharing
        otherwise applicable under part A or B.
            ``(2) Certain costs not included.--
                    ``(A) Non-covered items and services.--Expenses
                incurred for items and services which are not covered
                under part A or B shall not be considered incurred
                expenses for purposes of determining out-of-pocket
                cost-sharing under paragraph (1).
                    ``(B) Items and services not furnished on an
                assignment-related basis.--If an item or service is
                furnished to an individual under this title and is not
                furnished on an assignment-related basis, any
                additional expenses the individual incurs above the
                amount the individual would have incurred if the item
                or service was furnished on an assignment-related basis
                shall not be considered incurred expenses for purposes
                of determining out-of-pocket cost-sharing under
                paragraph (1).
            ``(3) Application.--For purposes of paragraph (1), the
        Secretary shall consider expenses to be incurred by the
        individual regardless of whether such costs are reimbursed
        through insurance or otherwise, a group health plan, or other
        third-party payment arrangement.
    ``(e) Announcement.--Not later than the first Monday in April of
each year (beginning with 2027), the Secretary shall determine, and
shall announce (in a manner intended to provide notice to interested
parties), the annual out-of-pocket limit under this section for the
succeeding year.
    ``(f) Implementation.--The Secretary shall establish procedures to
carry out this section, including procedures--
            ``(1) to track the amount of out-of-pocket cost-sharing
        incurred by applicable individuals for items and services
        covered under this title during a year; and
            ``(2) provide notice to the applicable individual and
        providers of services and suppliers who furnish items and
        services to the applicable individual when the applicable
        individual has incurred expenses that exceed the annual out-of-
        pocket limit under subsection (b) for the year.
    ``(g) Payment.--For provisions relating to payment for items and
services furnished to an applicable individual once the annual out-of-
pocket limit has been met, see sections 1813(c) and 1833(ee).''.
    (b) Conforming Amendments.--
            (1) Part a.--Section 1813 of the Social Security Act (42
        U.S.C. 1395e) is amended by adding at the end the following new
        subsection:
    ``(c)(1) Notwithstanding subsections (a) and (b), if the amount of
the out-of-pocket cost-sharing for an applicable individual for a year
(beginning with 2028) equals or exceeds the annual out-of-pocket limit
under section 1899D(b) for that year, payment under this part with
respect to any additional incurred expenses for items or services
furnished to the applicable individual in the calendar year shall be
made as if any reduction in the amount payable for such items or
services under subsection (a) due to any deductible or coinsurance that
would (but for the application of section 1899D) otherwise be
applicable no longer applied.
    ``(2) In this subsection, the terms `applicable individual' and
`out-of-pocket cost sharing' have the meaning given those terms in
section 1899D.''.
            (2) Part b.--
                    (A) Payment.--Section 1833 of the Social Security
                Act (42 U.S.C. 1395l) is amended--
                            (i) by adding at the end the following new
                        subsection:
    ``(ee)(1) Notwithstanding subsections (a) and (b), if the amount of
the out-of-pocket cost-sharing for an applicable individual for a year
(beginning with 2028) equals or exceeds the annual out-of-pocket limit
under section 1899D(b) for that year, payment under this part with
respect to any additional incurred expenses for items or services
furnished to the applicable individual in the calendar year shall be
made as if--
            ``(A) the deductible under subsection (b) no longer
        applied;
            ``(B) the deduction described in the second sentence of
        subsection (b) (relating to blood) no longer applied; and
            ``(C) `100 percent' and `0 percent' were substituted for
        `80 percent' and `20 percent', respectively, each place either
        appears in subsection (a), in subsection (i)(2), in section
        1835(b)(2), and in subsections (b)(2) and (b)(3) of section
        1881.
    ``(2) In this subsection, the terms `applicable individual' and
`out-of-pocket cost sharing' have the meaning given those terms in
section 1899D.''; and
                            (ii) in subsections (c) and (g), by
                        striking ``(a) and (b)'' each place it appears
                        and inserting ``(a), (b), and (ee)''.
                    (B) Limitation on charges when annual limit
                reached.--Section 1866(a)(2)(A) of the Social Security
                Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by adding at
                the end the following new sentence: ``A provider of
                services may not impose a charge under the first
                sentence of this subparagraph for services for which
                payment is made to the provider pursuant to section
                1833(ee) (relating to protection against high out-of-
                pocket expenses).''.
                    (C) Beneficiary protections.--Section 1842(b)(3) of
                the Social Security Act (42 U.S.C. 1395u(b)(3)) is
                amended--
                            (i) in subparagraph (L), by striking the
                        period at the end and inserting ``; and''; and
                            (ii) by inserting after subparagraph (L)
                        the following new subparagraph:
            ``(M) if it makes determinations or payments with respect
        to items and services furnished by a physician for which
        payment is made pursuant to section 1833(ee) but not on an
        assignment-related basis, provide to the physician a notice
        that--
                    ``(i) states that the individual provided the
                service has reached the annual out-of-pocket limit
                under section 1899D(b) for the year, and
                    ``(ii) encourages the physician not to charge the
                individual amounts in excess of the reasonable charge
                recognized under this section and to accept payment on
                an assignment-related basis for physicians' services
                furnished the individual during the remainder of the
                year.''.

SEC. 3. ENHANCEMENTS TO PROGRAMS THAT PROTECT LOW-INCOME MEDICARE
              BENEFICIARIES.

    (a) Elimination of Resource Standard for Eligibility and Enrollment
Determinations.--
            (1) LIS.--Section 1860D-14(a)(3)(A)(iii) of the Social
        Security Act (42 U.S.C. 1395w-114(a)(3)(A)(iii)) is amended by
        striking ``meets'' and inserting ``with respect to a plan year
        beginning before January 1, 2028, meets''.
            (2) MSP.--Section 1905(p)(1)(C) of the Social Security Act
        (42 U.S.C. 1396d(p)(1)(C)) is amended by striking ``whose
        resources'' and inserting ``prior to January 1, 2028, whose
        resources''.
    (b) Aligning Eligibility Criteria Across MSP and LIS.--
            (1) LIS.--Section 1860D-14(a) of the Social Security Act
        (42 U.S.C. 1395w-114(a)) is amended--
                    (A) in paragraph (1), in the matter preceding
                subparagraph (A), by inserting ``or, with respect to a
                plan year beginning on or after January 1, 2028, 200
                percent'' after ``150 percent''; and
                    (B) in paragraph (3)(A)(ii), by inserting ``(or,
                with respect to a plan year beginning on or after
                January 1, 2028, 200 percent'' after ``150 percent''.
            (2) MSP.--
                    (A) In general.--Section 1905(p) of the Social
                Security Act (42 U.S.C. 1396d(p)) is amended--
                            (i) in paragraph (1)(B), by inserting ``,
                        except that, beginning with January 1, 2028,
                        the methodology used in determining income
                        eligibility under this subsection shall be no
                        more restrictive than the methodology used by
                        the Social Security Administration in making
                        income determinations under section 1860D-
                        14(a)(3)(C)'' after ``income program''; and
                            (ii) in paragraph (2)--
                                    (I) in subparagraph (A)--
                                            (aa) by striking ``shall be
                                        at least'' and inserting
                                        ``shall be--
            ``(i) prior to January 1, 2028, at least'';
                                            (bb) in clause (i), as
                                        added by item (aa), by striking
                                        the period and inserting ``;
                                        and''; and
                                            (cc) by adding at the end
                                        the following new clause:
            ``(ii) on or after January 1, 2028, 200 percent of the
        poverty line applicable to a family of the size involved.'';
        and
                                    (II) by adding at the end the
                                following new subparagraph:
    ``(E) With respect to eligibility for medical assistance on or
after January 1, 2028, in this paragraph, the definition of the term
`family of the size involved' shall be no more restrictive than the
definition of that term for purposes of section 1860D-14.''.
                    (B) Conforming amendments.--Title XIX of the Social
                Security Act (42 U.S.C. 1396 et seq.) is amended--
                            (i) in section 1902(a)(10)(E)--
                                    (I) in clause (iii), by striking
                                ``for making'' and inserting ``prior to
                                January 1, 2028, for making''; and
                                    (II) in clause (iv), by striking
                                ``subject to'' and inserting ``prior to
                                January 1, 2028, subject to''; and
                            (ii) in section 1933(a), by striking ``A
                        State plan'' and inserting ``Prior to January
                        1, 2028, a State plan''.
            (3) Bidirectional eligibility deeming between msp and
        lis.--
                    (A) LIS.--Section 1860D-14(a)(3)(B)(v) of the
                Social Security Act (42 U.S.C. 1395w-114(a)(3)(B)(v))
                is amended to read as follows:
                            ``(v) Treatment of medicaid
                        beneficiaries.--Subject to subparagraph (F),
                        the Secretary shall treat a part D eligible
                        individual as a subsidy eligible individual
                        described in paragraph (1) if they are--
                                    ``(I) a full-benefit dual eligible
                                individual (as defined in section
                                1935(c)(6));
                                    ``(II) a recipient of supplemental
                                security income benefits under title
                                XVI; or
                                    ``(III) determined for purposes of
                                the State plan under title XIX to be
                                eligible for medical assistance under
                                section 1902(a)(10)(E)(i).''.
                    (B) MSP.--Section 1905(p) of the Social Security
                Act (42 U.S.C. 1396d(p)) is amended by adding at the
                end the following new paragraph:
    ``(7) Beginning January 1, 2028, a State shall provide that an
individual described in paragraph (1)(A) who is a subsidy eligible
individual described in section 1860D-14(a)(3) shall be treated as a
qualified medicare beneficiary described in paragraph (1).''.
                    (C) Treatment of leads data.--
                            (i) Transmittal.--Section 1144(c)(3) of the
                        Social Security Act (42 U.S.C. 1320b-14(c)(3))
                        is amended by striking ``which transmittal
                        shall initiate an application of the individual
                        for benefits under the Medicare Savings Program
                        with the State Medicaid agency'' and inserting
                        ``which the State Medicaid agency shall treat
                        as an application of the individual for
                        benefits under the Medicare Savings Program
                        consistent with section 1935(a)(4)''.
                            (ii) Consideration by states.--Section
                        1935(a)(4) of the Social Security Act (42
                        U.S.C. 1396u-5(a)(4)) is amended to read as
                        follows:
            ``(4) Consideration of data transmitted by the social
        security administration for purposes of medicare savings
        program.--
                    ``(A) In general.--The State shall accept data
                transmitted under section 1144(c)(3) and--
                            ``(i) in the case of an individual who is a
                        subsidy eligible individual described in
                        section 1860D-14(a)(3), promptly treat such
                        individual as a qualified medicare beneficiary
                        described in 1905(p)(1); and
                            ``(ii) in the case of any other individual
                        who is likely to be a qualified medicare
                        beneficiary, as determined by the Secretary,
                        act on such data in the same manner and in
                        accordance with the same deadlines as if the
                        data constituted an initiation of an
                        application for benefits under the Medicare
                        Savings Program (as defined for purposes of
                        section 1144(c)(3)) that had been submitted
                        directly by the applicant.
                    ``(B) Date of application.--For purposes of
                subparagraph (A)(ii), the date of the individual's
                application for the low income subsidy program from
                which the data have been derived shall constitute the
                date of filing of such application for benefits under
                the Medicare Savings Program.''.
                    (D) Effective date.--The amendments made by this
                paragraph shall take effect on January 1, 2028.
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