May 16,2006

Senators Announce Bipartisan Bill to Allow Penalty-Free Enrollment in New Prescription Drug Plan

WASHINGTON — A bipartisan group of senators said today they will seek immediate
action on new legislation to waive the enrollment penalty for Medicare’s new prescription drug

The proposal — sponsored by Sens. Chuck Grassley, Max Baucus, Mike DeWine, and
Bill Nelson, and introduced today — is designed to encourage more beneficiaries to sign up
during the next enrollment period for Medicare Part D, the new, voluntary drug benefit. The
legislation also provides more resources for state-based efforts to help seniors, especially those
who qualify for low-income benefits, make informed decisions about participating in the drug

The first six-month sign-up period for Part D ended yesterday. The next six-week signup
period begins November 15. The bipartisan bill announced today would allow Medicare
beneficiaries to sign up during the next open enrollment period without a one-percent per month
penalty. It also would provide an additional $18 million for counseling to Senior Health
Insurance Information Programs and Area Agencies on Aging. In addition, Medicare program
officials already have said that eligible beneficiaries may sign up for the low-income
prescription drug benefit at any time during 2006 without penalty. Today’s bill would waive in
statute the late enrollment penalty for the low-income benefit.

During a news conference today, Grassley, Baucus, DeWine and Nelson said they hope
to see Senate action on their legislation — the Medicare Late Enrollment Assistance Act — as
quickly as possible.

“The prescription drug program is Medicare’s most significant new benefit in 40 years,”
said Grassley, chairman of the Senate Committee on Finance. “The first enrollment period for
Part D was very successful. Waiving the enrollment penalty and further enhancing outreach
efforts will help even more seniors choose to sign up. It stands to reason that it takes time for
people to learn about benefits available to them. For example, employees with access to 401(k)
plans and a generous employer contribution often don’t sign up right away, even with a lot of
encouragement from their employers. The more participants in Medicare Part D, the better for
both the program’s strength and seniors’ quality of life. Medicare beneficiaries increasingly
depend on life-enhancing and life-saving prescription drugs. Part D offers them an affordable
way to obtain medicine prescribed by their doctors.”

“I believe it’s right to cut seniors some slack in this first year, when there were too many
plans to choose from and more than a few kinks in the program’s implementation,” said Baucus,
ranking member of the Senate Committee on Finance. “I helped write this benefit, and I want it
to work. That's why we're also including additional funding to help rural seniors enroll. This bill
is a positive compromise that lets seniors know if they missed the boat on May 15, there’s still
some grace available as this benefit gets off the ground.”

“By waiving the Medicare Part D late enrollment penalty during the next sign-up period,
we can give seniors the opportunity to make informed decisions about their prescription drug
plan, penalty-free,” said DeWine, a member of the Senate Committee on Health, Education,
Labor, and Pensions. “Millions of Americans have signed up for this program to get help they
need to pay for prescription drugs. My hope is that more people will benefit by waiving the
penalty during the next enrollment period.”

“This Medicare prescription drug program is confusing for too many seniors,” Nelson
said. “This bill will give seniors more time to sign up, without facing stiff financial penalties.”

Grassley and Baucus were the principal Senate sponsors of the Medicare Prescription
Drug, Improvement and Modernization Act of 2003, which created the new prescription drug
benefit. DeWine and Nelson have sought to increase opportunities for beneficiary enrollment in
the drug benefit this year. A number of senators have signed on to the legislation unveiled today
as original co-sponsors, including Kyl, Carper, Talent, Lincoln, Snowe, Cantwell, Santorum,
and Bayh.