Medicare Prescription Drug and Modernization Act of 2001

Medicare Prescription Drug and Modernization Act of 2001 - Amends the Social Security Act (SSA) to add a new title XXII (Medicare Competition and Prescription Drugs) to establish a Medicare Competition Agency, headed by a Commissioner, to administer the Medicare Prescription Drug and Supplemental Benefit Program (program) created under a new SSA title XXIII part B by this Act and the Medicare+Choice program under part C (Medicare+Choice) of SSA title XVIII (Medicare).

Amends SSA title XXII to add a new part B (Medicare Prescription Drug and Supplemental Benefit Program) requiring the Commissioner to establish the Medicare Prescription Drug and Supplemental Benefit Program under which an eligible beneficiary may voluntarily enroll in, and receive access to covered outpatient prescription drugs and other benefits through, a Medicare Prescription Plus plan offered by a private entity or by a Medicare+Choice plan.

Amends SSA title XVIII part C to prohibit a Medicare+Choice organization from offering prescription drug coverage to a Medicare+Choice plan enrollee except as specified.

Amends SSA title XIX (Medicaid) to require a State, as a condition for receiving Federal financial assistance for its Medicaid plan, to make Medicare prescription drug benefit eligibility determinations for low-income premium and cost-sharing subsidies.

Provides for phased-in Federal assumption of Medicaid prescription drug costs.

Prohibits: (1) any new Medigap policy covering prescription drugs from being issued, on or after January 1, 2004, to an individual unless it replaces a Medigap policy issued to that individual which provided some coverage of prescription drug expenses; and (2) a Medigap policy issuer from denying or conditioning Medigap coverage for certain individuals.

Amends SSA title XVIII (Medicare) to establish Medigap protections for individuals who lose Medicare prescription plus plan coverage.

Amends Medicare part C to establish a Medicare+Choice Competition Program. Amends SSA title XXII to add a new part C (Medicare Consumer Coalitions) authorizing the Commissioner of the Competitive Medicare Agency to establish Medicare Consumer Coalitions to conduct information programs comparing the original Medicare fee-for-service program, available Medicare+Choice plans, and available Medicare Prescription Plus plans.