SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Work Incentive and Self-Sufficiency 
Act of 1996''.

SEC. 2. RETURN-TO-WORK PROGRAM FOR SOCIAL SECURITY DISABILITY INCOME 
              BENEFICIARIES.

    (a) SSDI Work Incentive Threshold.--
            (1) In general.--Section 223(a) of the Social Security Act 
        (42 U.S.C. 423(a)) is amended by adding at the end the 
        following new paragraph:
    ``(3)(A) Except as provided in subparagraph (B), an individual's 
disability insurance benefit for any month shall be reduced by such 
individual's excess earnings under rules similar to the rules under 
section 203, except that--
            ``(i) for purposes of section 203(f)(3), an individual's 
        excess earnings for a taxable year shall be 50 percent of the 
        individual's earnings for such year in excess of the product of 
        the applicable exempt amount and the number of months in such 
        year; and
            ``(ii) for purposes of section 203(f)(8)(D), the applicable 
        exempt amount for any taxable year ending after 1996 shall be 
        $500 for each month of such year.
    ``(B) In the case of an individual who is a blind or disabled 
individual who is receiving benefits under this section and title XVI, 
such individual's benefits under this section shall be reduced under 
subparagraph (A) only after the individual's benefits under title XVI 
are reduced in the same manner.''.
            (2) Conforming amendments.--
                    (A) Section 223(a)(2) of such Act is amended by 
                striking ``section 202(q)'' and inserting ``paragraph 
                (3), section 202(q),''.
                    (B) Paragraphs (1) and (2) of section 1611(b) of 
                such Act (42 U.S.C. 1382(b)) are each amended by 
                striking ``The benefit'' and inserting ``Except as 
                provided in section 223(a)(3)(B), the benefit''.
    (b) Repeal of Trial Work Period and Extended Period of 
Eligibility.--
            (1) Subsection (c) of section 222 of the Social Security 
        Act (42 U.S.C. 422) is repealed.
            (2) Section 223(a)(1) of such Act (42 U.S.C. 423(a)(1)) is 
        amended--
                    (A) by striking ``subject to subsection (e), the 
                termination month'' and inserting ``the third month 
                following the month in which his disability ceases''; 
                and
                    (B) by striking the second sentence.
            (3) Section 223 of such Act (42 U.S.C. 423) is amended by 
        striking subsection (e).
            (4) Section 202(d)(1)(G)(i) (42 U.S.C. 402(d)(1)(G)(i)) is 
        amended to read as follows:
            ``(i) the third month following the month in which his 
        disability ceases,''.
            (5) Section 202(d)(6)(E) (42 U.S.C. 402(d)(6)(E)) is 
        amended by striking ``the termination month (as defined in 
        paragraph (1)(G)(i)), subject to section 223(e)'' and inserting 
        ``the third month following the month in which his disability 
        ceases''.
            (6) Section 202(e)(1) of such Act (42 U.S.C. 402(e)(1)) is 
        amended--
                    (A) in the first sentence, by striking ``subject to 
                section 223(e),''; and
                    (B) by striking the second sentence and inserting 
                ``For purposes of the preceding sentence, the 
                termination month for any individual shall be the third 
                month following the month in which her disability 
                ceases.''.
            (7) Section 202(f)(1) of such Act (42 U.S.C. 402(f)(1)) is 
        amended--
                    (A) in the first sentence, by striking ``subject to 
                section 223(e),''; and
                    (B) by striking the second sentence and inserting 
                ``For purposes of the preceding sentence, the 
                termination month for any individual shall be the third 
                month following the month in which his disability 
                ceases.''.

SEC. 3. CONTINUED ELIGIBILITY FOR MEDICARE BENEFITS FOR DISABLED 
              INDIVIDUALS WHOSE ANNUAL ADJUSTED GROSS INCOME DOES NOT 
              EXCEED $15,000.

    Section 226(b) of the Social Security Act (42 U.S.C. 426(b)) is 
amended by striking the last 2 sentences thereof and inserting the 
following: ``For purposes of this subsection, an individual who is no 
longer eligible for cash benefits under section 223, after the 
application of subsection (a)(3) thereof, and whose entitlement to 
benefits or status as a qualified railroad retirement beneficiary as 
described in paragraph (2) has subsequently terminated, shall be deemed 
to be entitled to such benefits or to occupy such status 
(notwithstanding the termination of such entitlement or status) for the 
period of consecutive months throughout all of which the physical or 
mental impairment, on which such entitlement or status was based, 
continues, and until such individual's annual adjusted gross income 
exceeds $15,000.''.

SEC. 4. MEDICARE BUY-IN PROVISIONS FOR DISABLED INDIVIDUALS WHO HAVE 
              EXHAUSTED OTHER ENTITLEMENT AND FOR DISABLED INDIVIDUALS 
              WHO ARE NOT OTHERWISE ELIGIBLE FOR MEDICARE BENEFITS.

    (a) Change in Payment for Hospital Insurance Benefits for Disabled 
Individuals Who Have Exhausted Other Entitlement.--Section 1818A(d)(2) 
of the Social Security Act (42 U.S.C. 1395i-2a(d)(2)) is amended to 
read as follows:
    ``(2)(i) The amount of an individual's monthly premium for any 
calendar year under this section shall be equal to the lesser of--
            ``(I) 10 percent of such individual's adjusted gross income 
        for the preceding calendar year; or
            ``(II) the amount of the premium determined under section 
        1818(d).
    ``(ii) The provisions of subsections (e) and (f) of section 1818 
(relating to premiums) shall apply to individuals enrolled under this 
section in the same manner as such provisions apply to individuals 
enrolled under that section.''.
    (b) Hospital Insurance Benefits for Disabled Individuals Who Are 
Not Otherwise Eligible.--Title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.) is amended by inserting after section 1818A the 
following new section:

  ``hospital insurance benefits for disabled individuals who are not 
                           otherwise eligible

    ``Sec. 1818B. (a) Every individual who--
            ``(1) has not attained the age of 65;
            ``(2) would have been entitled to benefits under this part 
        under section 226(b) except that such individual's earnings 
        exceeded the substantial gainful activity amount (as defined in 
        section 223(d)(4));
            ``(3)(i) continues to have the disabling physical or mental 
        impairment on the basis of which the individual would have been 
        found to be under a disability or to have been a disabled 
        qualified railroad retirement beneficiary, or (ii) is blind 
        (within the meaning of section 216(i)(1)); and
            ``(4) is not otherwise entitled to benefits under this 
        part,
shall be eligible to enroll in the insurance program established by 
this part.
    ``(b)(1) An individual may enroll under this section only in such 
manner and form as may be prescribed in regulations, and only during an 
enrollment period prescribed in regulations.
    ``(2) There shall be a general enrollment period during the period 
beginning on January 1 and ending on March 31 of each year (beginning 
with 1997).
    ``(c)(1) The period (in this subsection referred to as a ``coverage 
period'') during which an individual is entitled to benefits under the 
insurance program under this part shall begin, for an individual who 
enrolls under subsection (b), on the first day of the month following 
the month in which the individual so enrolls.
    ``(2) An individual's coverage period under this section shall 
continue until the individual's enrollment is terminated as follows:
            ``(A) As of the month following the month in which the 
        Secretary provides notice to the individual that the individual 
        no longer meets the condition described in subsection (a)(3).
            ``(B) As of the month following the month in which the 
        individual files notice that the individual no longer wishes to 
        participate in the insurance program established by this part.
            ``(C) As of the month before the first month in which the 
        individual becomes eligible for hospital insurance benefits 
        under section 226(a) or 226A.
            ``(D) As of a date, determined under regulations of the 
        Secretary, for nonpayment of premiums.
The regulations under subparagraph (D) may provide a grace period of 
not longer than 90 days, which may be extended to not to exceed 180 
days in any case where the Secretary determines that there was good 
cause for failure to pay the overdue premiums within such 90-day 
period. Termination of coverage under this section shall result in 
simultaneous termination of any coverage affected under any other part 
of this title.
    ``(3) The provisions of subsections (h) and (i) of section 1837 
apply to enrollment and nonenrollment under this section in the same 
manner as they apply to enrollment and nonenrollment and special 
enrollment periods under section 1818.
    ``(d)(1)(A) Premiums for enrollment under this section shall be 
paid to the Secretary at such times, and in such manner, as the 
Secretary shall by regulations prescribe, and shall be deposited in the 
Treasury to the credit of the Federal Hospital Insurance Trust Fund.
    ``(B)(i) Subject to clause (ii), such premiums shall be payable for 
the period commencing with the first month of an individual's coverage 
period and ending with the month in which the individual dies or, if 
earlier, in which the individual's coverage period terminates.
    ``(ii) Such premiums shall not be payable for any month in which 
the individual is eligible for benefits under this part pursuant to 
section 226(b).
    ``(2) The provisions of section 1818A(d)(2) shall apply to 
individuals enrolled under this section in the same manner as they 
apply to individuals enrolled under that section.''.
    (c) Premium for Supplementary Medical Insurance Benefits for 
Disabled Individuals Who Have Exhausted Other Entitlement and for 
Disabled Individuals Who Are Not Otherwise Eligible.--
            (1) In general.--Section 1839 of the Social Security Act 
        (42 U.S.C. 1395r) is amended by adding at the end the following 
        new subsection:
    ``(h)(1) Notwithstanding the provisions of subsections (a) and (e), 
the monthly premium for each individual who is--
            ``(A) eligible for enrollment under this part because such 
        individual is eligible for benefits under part A under section 
        1818A or 1818B; and
            ``(B) enrolled under this part,
shall be an amount determined under paragraph (2).
    ``(2) The amount of monthly premium for each individual described 
under paragraph (1) shall be established by the Administrator of the 
Health Care Financing Administration based on the individual's adjusted 
gross income, and determined over a sliding scale--
            ``(A) beginning at 50 percent of the monthly actuarial rate 
        for enrollees age 65 and over, as determined under subsection 
        (a)(1) and applicable to such month, for individuals who have 
        the minimum level of adjusted gross income established for 
        eligibility under section 1818A; and
            ``(B) ending at 100 percent of the monthly actuarial rate 
        for enrollees age 65 and over, as determined under subsection 
        (a)(1) and applicable to such month, for individuals required 
        to pay a monthly premium under section 1818A at the level 
        established under section 1818(d).''.
            (2) Initial open enrollment and secondary payor 
        requirements for disabled individuals who are not otherwise 
        eligible.--
                    (A) Initial open enrollment.--Section 1837(g) of 
                the Social Security Act (42 U.S.C. 1395p(g)) is 
                amended--
                            (i) by striking ``and'' at the end of 
                        paragraph (2)(B);
                            (ii) by striking the period at the end of 
                        paragraph (3) and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(4) in the case of an individual who satisfies subsection 
        (f) by reason of entitlement to enroll for benefits under 
        section 1818B, the Secretary shall establish by regulation such 
        individual's initial enrollment period.''.
                    (B) Secondary payor.--Section 1862(b)(1)(B)(i) of 
                the Social Security Act (42 U.S.C. 1395y(b)(1)(B)(i)) 
                is amended by inserting ``or entitled to enroll for 
                benefits under this title under section 1818B'' after 
                ``section 226(b)''.

SEC. 5. MEDICARE/MEDICAID INTEGRATION DEMONSTRATION PROJECT.

    (a) Description of Projects.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct demonstration projects under this section to 
        demonstrate the manner in which States may use funds from the 
        Medicare program under title XVIII of the Social Security Act 
        and the Medicaid program under title XIX of such Act (in this 
        section referred to as the ``Medicare and Medicaid programs'') 
        for the purpose of providing a more cost-effective full 
        continuum of care for delivering services to meet the needs of 
        chronically-ill elderly and disabled beneficiaries who are 
        eligible for items and services under such programs, through 
        integrated systems of care, with an emphasis on case 
        management, prevention, and interventions designed to avoid 
        institutionalization whenever possible. The Secretary shall use 
funds from the amounts appropriated for the Medicare and Medicaid 
programs to make the payments required under subsection (d)(1).
            (2) Option to participate.--A State may not require an 
        individual eligible to receive items and services under the 
        Medicare and Medicaid programs to participate in a 
        demonstration project under this section.
    (b) Establishment.--The Secretary shall make payments in accordance 
with subsection (d) for the conduct of demonstration projects that 
provide for integrated systems of care in accordance with subsection 
(a). Not more than 10 demonstration projects shall be conducted under 
this section.
    (c) Applications.--Each State, or a coalition of States, desiring 
to conduct a demonstration project under this section shall prepare and 
submit to the Secretary an application at such time, in such manner, 
and containing such information as the Secretary may require, including 
an explanation of a plan for evaluating the project. The Secretary 
shall approve or deny an application not later than 90 days after the 
receipt of such application.
    (d) Payments.--
            (1) In general.--For each calendar quarter occurring during 
        a demonstration project conducted under this section, the 
        Secretary shall pay to each entity designated under paragraph 
        (3) an amount equal to the Federal capitated payment rate 
        determined under paragraph (2).
            (2) Federal capitated payment rate.--The Secretary shall 
        determine the Federal capitated payment rate for purposes of 
        this section based on the anticipated Federal quarterly cost of 
        providing care to chronically-ill elderly and disabled 
        beneficiaries who are eligible for items and services under the 
        Medicare and Medicaid programs and who have elected to 
        participate in a demonstration project under this section.
            (3) Designation of entity.--
                    (A) In general.--Each State, or coalition of 
                States, shall designate entities to directly receive 
                the payments described in paragraph (1).
                    (B) Requirement.--A State, or a coalition of 
                States, may not designate an entity under subparagraph 
                (A) unless such entity meets the quality, solvency, and 
                coverage standards applicable to providers of items and 
                services under the Medicare and Medicaid programs.
            (4) State payments.--Each State conducting, or in the case 
        of a coalition of States, participating in a demonstration 
        project under this section shall pay to the entities designated 
        under paragraph (3) an amount equal to the product of (A) 100 
        percent minus the applicable Federal medical assistance 
        percentage (as defined in section 2122(e) of the Social 
        Security Act) for the State, and (B) the expenditures under the 
        project attributable to the Medicaid program for items and 
        services provided to chronically-ill elderly and disabled 
        beneficiaries who have elected to participate in the 
        demonstration.
            (5) Budget neutrality.--The aggregate amount of Federal 
        payments to entities designated by a State, or coalition of 
        States, under paragraph (3) for a fiscal year shall not exceed 
        the aggregate amount of such payments that would otherwise have 
        been made under the Medicare and Medicaid programs for such 
        fiscal year for items and services provided to beneficiaries 
        under such programs but for the election of such beneficiaries 
        to participate in a demonstration project under this section.
    (e) Duration.--
            (1) In general.--The demonstration projects conducted under 
        this section shall be conducted for a 5-year period, subject to 
        annual review and approval by the Secretary.
            (2) Termination.--The Secretary may, with 90 days' notice, 
        terminate any demonstration project conducted under this 
        section that is not in substantial compliance with the terms of 
        the application approved by the Secretary under this section.
    (f) Oversight.--The Secretary shall establish quality standards for 
evaluating and monitoring the demonstration projects conducted under 
this section. Such quality standards shall include reporting 
requirements which contain the following:
            (1) A description of the demonstration project.
            (2) An analysis of beneficiary satisfaction under such 
        project.
            (3) An analysis of the quality of the services delivered 
        under the project.
            (4) A description of the savings to the Medicare and 
        Medicaid programs as a result of the demonstration project.

SEC. 6. REPEAL OF MEDICARE AND MEDICAID COVERAGE DATA BANK.

    (a) In General.--Section 13581 of the Omnibus Budget Reconciliation 
Act of 1993 is hereby repealed.
    (b) Application of the Social Security Act.--The Social Security 
Act shall be applied and administered as if section 13581 of the 
Omnibus Budget Reconciliation Act of 1993 (and the amendments made by 
such section) had not been enacted.

SEC. 7. EFFECTIVE DATE.

    The amendments made by sections 2, 3, and 4 shall apply with 
respect to taxable years ending after 1996.
Work Incentive and Self-Sufficiency Act of 1996 - Amends titles II (Old Age, Survivors and Disability Insurance) (OASDI) and XVIII (Medicare) of the Social Security Act to make a variety of specified changes designed to create a work incentive policy for social security disability income (SSDI) beneficiaries by:  (1) repealing the trial work period and extended period of eligibility; (2) providing for continued Medicare eligibility for disabled individuals whose annual adjusted gross income does not exceed $15,000; (3) revising payment for Medicare hospital insurance benefits for disabled individuals who have exhausted other entitlement; and (4) providing for hospital insurance benefits for certain disabled individuals who are not otherwise eligible for them.  Revises the premium for supplementary medical insurance benefits for disabled individuals who have exhausted other entitlement and for certain disabled individuals who are not otherwise eligible. 
Directs the Secretary of Health and Human Services to conduct projects to demonstrate the manner in which States may use funds from the Medicare and Medicaid programs to provide a more cost-effective full continuum of care for delivering services to meet the needs of chronically-ill elderly and disabled beneficiaries who are eligible for items and services under such programs, through integrated systems of care, with an emphasis on case management, prevention, and interventions designed to avoid institutionalization whenever possible. 
Amends the Omnibus Budget Reconciliation Act of 1993 to repeal the Medicare and Medicaid Coverage Data Bank.
Work Incentive and Self-Sufficiency Act of 1996