American Health Security Partnership Act of 1995

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Health Security Partnership 
Act of 1995.''

SEC. 2. FINDINGS; PURPOSE.

    (a) Findings.--Congress finds as follows:
            (1) 40 million Americans do not have health insurance 
        coverage.
            (2) Cost shifting among payers and providers contributes to 
        the increasing cost of health care in the United States.
            (3) The only means of ending this cost shifting is to 
        ensure that each individual in the United States has health 
        insurance coverage.
    (b) Purpose.--It is the purpose of this Act to provide assistance 
to each State to enable the State to ensure, in the manner the State 
itself considers most appropriate, that each individual has health 
insurance coverage at least equivalent to the coverage provided to 
employees of the Federal Government.

SEC. 3. STATE DEFINED.

    In this Act, the term ``State'' means each of the 50 States and the 
District of Columbia.

                  TITLE I--FEDERAL PAYMENTS TO STATES

SEC. 101. PAYMENTS TO STATES WITH CERTIFIED PLANS.

    For purposes of assisting States in carrying out plans approved 
under title II, the Secretary of Health and Human Services (hereafter 
in this Act referred to as the ``Secretary'') shall make payments to 
States with comprehensive health insurance plans certified under title 
II for a fiscal year in an amount determined under section 102.

SEC. 102. AMOUNT OF STATE PAYMENT.

    The amount of payment made to a State for a fiscal year under 
section 101 shall be equal to the State's allocation of the total 
amount available for payments under this title for the fiscal year 
under section 103, as determined in accordance with the following 
formula:
            (1) 50 percent of the total amount available shall be 
        allocated among the States on the basis of the ratio of the 
        population of each State to the population of all States.
            (2) 50 percent of the total amount available shall be 
        allocated among the States in amounts determined in accordance 
        with the representative revenue system established by the 
        Advisory Commission on Intergovernmental Relations.

SEC. 103. TOTAL AMOUNT AVAILABLE FOR PAYMENTS.

    The total amount available for payments to States for a fiscal year 
under this title is equal to the following:
            (1) For fiscal year 1998, $1,000,000,000.
            (2) For fiscal year 1999, $2,000,000,000.
            (3) For fiscal year 2000, $28,000,000,000.
            (4) For fiscal year 2001, $29,000,000,000.
            (5) For fiscal year 2002, $30,000,000,000.
            (6) For fiscal year 2003, $31,000,000,000.

         TITLE II--REQUIREMENTS FOR COMPREHENSIVE HEALTH PLANS

SEC. 201. IMPLEMENTATION OF CERTIFIED HEALTH INSURANCE PLANS BY STATES.

    (a) In General.--Not later than July 1, 1999, each State shall 
submit to the Secretary a comprehensive health insurance plan designed 
to be administered by the State and containing the provisions required 
under this title, and shall have such plan in place and operating not 
later than January 1, 2000.
    (b) Certification of Plans by Secretary.--The Secretary shall 
certify for a fiscal year those State plans developed and implemented 
under this title which meet the applicable requirements of this title 
for the fiscal year.

SEC. 202. REQUIRED PROVISIONS OF HEALTH INSURANCE PLAN.

    Each State shall have maximum flexibility in developing and 
implementing its comprehensive health insurance plan under this title, 
except that the plan shall include at least the following provisions:
            (1) Coverage.--Health insurance coverage meeting the 
        requirements of this title for all individuals in the State 
        without regard to employment status, income, or pre-existing 
        condition or other health status.
            (2) Portability and guaranteed renewal.--A prohibition 
        against the denial, cancellation, or refusal to renew the 
        coverage of an individual or employer except--
                    (A) on the basis of nonpayment of premiums,
                    (B) on the basis of fraud or misrepresentation, or
                    (C) because the plan is ceasing to provide any 
                coverage in a geographic area.
            (3) Benefits.--
                    (A) Comparable to fehbp.--Coverage comparable to 
                the coverage available to employees of the Federal 
                Government under the Federal Employees Health Benefits 
                Program (FEHBP) (as determined by the Secretary). 
                Coverage under title XVIII of the Social Security Act 
                or coverage under a State plan under title XIX of such 
                Act shall be deemed to meet the requirement of the 
                previous sentence.
                    (B) Availability of home- and community-based 
                care.--The offering of home- and community-based care 
as an alternative to institutional care if medically appropriate.
            (4) Community rating of premiums.--A requirement that the 
        premium charged shall be equivalent for all individuals within 
        any community, except that the premium may vary with respect to 
        an individual on the basis of the individual's age or the 
        number of members of the individual's family covered.
            (5) State supplemental premium payments.--The payment by 
        the State of supplemental amounts to ensure that all 
        individuals may obtain coverage at reasonable rates.
            (6) Quality of care.--The creation of adequate mechanisms 
        designed to assure, monitor, and maintain the provision of high 
        quality health care to individuals in the State.
            (7) Cost containment.--The creation of adequate mechanisms 
        designed to control premiums and the costs of providing high 
        quality health care to individuals in the State.

SEC. 203. WAIVER OF ERISA LIMITATION ON STATE REGULATION OF SELF-
              INSURED PLANS.

    Section 514(b) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1144(b)) is amended by adding at the end the following 
paragraph:
            ``(9) Subsection (a) shall not apply to any State law to 
        the extent such law conforms to or reflects the provisions of a 
        comprehensive health insurance plan developed and implemented 
        by the State and certified by the Secretary of Health and Human 
        Services under title II of the American Health Security 
        Partnership Act of 1995.''.

SEC. 204. REQUIRING OPERATION OF CERTIFIED PLAN TO RECEIVE MEDICAID 
              PAYMENTS.

    Section 1903 of the Social Security Act (42 U.S.C. 1396b) is 
amended by adding at the end the following new subsection:
    ``(x)(1) In order to receive payments under this title for any 
quarter beginning on or after January 1, 2000, a State must have in 
effect a comprehensive health insurance plan certified for the fiscal 
year in which the quarter occurs by the Secretary under section 201(b) 
of the American Health Security Partnership Act of 1995.
    ``(2)(A) The provisions of this subsection shall not apply to a 
State for any quarter--
            ``(i) that follows the quarter during which the State meets 
        the requirements of this subsection; or
            ``(ii) with respect to which the Secretary determines that 
        the State is unable to comply with the relevant requirements of 
        this subsection--
                    ``(I) for good cause (but such a waiver may not be 
                for a period in excess of 4 quarters), or
                    ``(II) due to circumstances beyond the control of 
                such State.
    ``(B) For purposes of determining deadlines imposed under this 
subsection, any time period during which a State was found under 
subparagraph (A)(ii)(II) to be unable to comply with the requirements 
of this subsection shall not be taken into account, and the Secretary 
shall modify all such deadlines with respect to such State 
accordingly.''.

SEC. 205. INCREASE IN MINIMUM COMMUNITY SPOUSE RESOURCE ALLOWANCE UNDER 
              MEDICAID.

    (a) In General.--Section 1924(f)(2)(A)(i) of the Social Security 
Act (42 U.S.C. 1396r-5(f)(2)(A)(i)) is amended by striking ``$12,000'' 
and inserting ``$50,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to quarters beginning on or after October 1, 1995.

                    TITLE III--FINANCING MECHANISMS

SEC. 301. INCREASE IN TOP INCOME TAX RATE APPLICABLE TO CORPORATIONS.

    (a) In General.--Subsection (b) of section 11 of the Internal 
Revenue Code of 1986 is amended by striking ``35 percent'' each place 
it appears and inserting ``36 percent''.
    (b) Conforming Amendments.--
            (1) The last sentence of section 11(b) of such Code is 
        amended by striking ``$100,000'' and inserting ``$200,000''.
            (2) Clause (iii) of section 852(b)(3)(D) of such Code is 
        amended by striking ``65 percent'' and inserting ``64 
        percent''.
            (3) Subsection (a) of section 1201 of such Code is amended 
        by striking ``35 percent'' each place it appears and inserting 
        ``36 percent''.
            (4) Paragraphs (1) and (2) of section 1445(e) of such Code 
        are each amended by striking ``35 percent'' and inserting ``36 
        percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

SEC. 302. REVISION OF FEDERAL MEDICAL ASSISTANCE PERCENTAGE UNDER 
              MEDICAID.

    Section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is 
amended--
            (1) in the first sentence, by striking ``83 per centum'' 
        and inserting ``the applicable maximum percentage described in 
        the second sentence''; and
            (2) by inserting after the first sentence the following new 
        sentence: ``In the previous sentence, the `applicable maximum 
        percentage' is 83 per centum for quarters occurring during 
        fiscal years prior to fiscal year 1998 and 60 per centum for 
        quarters occurring during fiscal year 1998 and each succeeding 
        fiscal year.''.

SEC. 303. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.

    (a) Cigarettes.--Subsection (b) of section 5701 of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``$12 per thousand ($10 per thousand on 
        cigarettes removed during 1991 or 1992)'' in paragraph (1) and 
        inserting ``$49.50 per thousand'', and
            (2) by striking ``$25.20 per thousand ($21 per thousand on 
        cigarettes removed during 1991 or 1992)'' in paragraph (2) and 
        inserting ``$103.95 per thousand''.
    (b) Cigars.--Subsection (a) of section 5701 of such Code is 
amended--
            (1) by striking ``$1.125 cents per thousand (93.75 cents 
        per thousand on cigars removed during 1991 or 1992)'' in 
        paragraph (1) and inserting ``$38.62\1/2\ per thousand'', and
            (2) by striking ``equal to'' and all that follows in 
        paragraph (2) and inserting ``equal to 52.594 percent of the 
        price for which sold but not more than $123.75 per thousand.''.
    (c) Cigarette Papers.--Subsection (c) of section 5701 of such Code 
is amended by striking ``0.75 cent (0.625 cent on cigarette papers 
removed during 1991 or 1992)'' and inserting ``3.09 cents''.
    (d) Cigarette Tubes.--Subsection (d) of section 5701 of such Code 
is amended by striking ``1.5 cents (1.25 cents on cigarette tubes 
removed during 1991 or 1992)'' and inserting ``6.19 cents''.
    (e) Smokeless Tobacco.--Subsection (e) of section 5701 of such Code 
is amended--
            (1) by striking ``36 cents (30 cents on snuff removed 
        during 1991 or 1992)'' in paragraph (1) and inserting 
        ``$12.86'', and
            (2) by striking ``12 cents (10 cents on chewing tobacco 
        removed during 1991 or 1992)'' in paragraph (2) and inserting 
        ``$12.62''.
    (f) Pipe Tobacco.--Subsection (f) of section 5701 of such Code is 
amended by striking ``67.5 cents (56.25 cents on pipe tobacco removed 
during 1991 or 1992)'' and inserting ``$13.17\1/2\''.
    (g) Effective Date.--The amendments made by this section shall 
apply to articles removed (as defined in section 5702(k) of the 
Internal Revenue Code of 1986) after December 31, 1996.

            TITLE IV--TAX DEDUCTIBILITY OF HEALTH INSURANCE

SEC. 401. TAX DEDUCTIBILITY OF HEALTH INSURANCE.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions) is amended by redesignating section 220 as section 221 and 
by inserting after section 219 the following new section:

``SEC. 220. HEALTH INSURANCE COSTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a deduction an amount equal to 80 percent (or 100 percent, 
in the case of an individual who is a self-employed individual within 
the meaning of section 401(c)) of the amount paid during the taxable 
year for insurance which constitutes medical care for the taxpayer, his 
spouse, and dependents.
    ``(b) Limitation Based on Earned Income.--No deduction shall be 
allowed under subsection (a) to the extent that the amount of such 
deduction exceeds the sum of--
            ``(1) the taxpayer's wages, salaries, tips, and other 
        employee compensation includible in gross income, plus
            ``(2) the taxpayer's earned income (as defined in section 
        401(c)(2)).
    ``(c) Other Coverage.--Subsection (a) shall not apply to any 
taxpayer for any calendar month for which the taxpayer is eligible to 
participate in any subsidized health plan maintained by any employer of 
the taxpayer or of the spouse of the taxpayer.
    ``(d) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--Any amount 
        paid by a taxpayer for insurance to which subsection (a) 
        applies shall not be taken into account in computing the amount 
        allowable to the taxpayer as a deduction under section 213(a).
            ``(2) Deduction not allowed for self-employment tax 
        purposes.--The deduction allowable by reason of this section 
        shall not be taken into account in determining an individual's 
        net earnings from self-employment (within the meaning of 
        section 1402(a)) for purposes of chapter 2.''
    (b) Conforming Amendments.--
            (1) Subsection (l) of section 162 of such Code is hereby 
        repealed.
            (2) Subsection (a) of section 62 of such Code is amended by 
        inserting after paragraph (15) the following new item:
            ``(16) Health insurance costs.--The deduction allowed by 
        section 220.''
            (3) The table of sections for part VII of subchapter B of 
        chapter 1 of such Code is amended by striking the last item and 
        inserting the following new items:

                              ``Sec. 220. Health insurance costs.
                              ``Sec. 221. Cross reference.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

Summary: TABLE OF CONTENTS: Title I: Federal Payments to States Title II: Requirements for Comprehensive Health Plans Title III: Financing Mechanisms Title IV: Tax Deductibility of Health Insurance American Health Security Partnership Act of 1995 - Title I: Federal Payments to States - Mandates payments to States for comprehensive health insurance plans certified under title II of this Act. Title II: Requirements for Comprehensive Health Plans - Requires each State to submit and operate a comprehensive health insurance plan designed to be administered by the State and having at least: (1) coverage for all individuals in the State. (2) benefits comparable to that available under the Federal Employees Health Benefits Program (deeming coverage under titles XVIII (Medicare) and XIX, (3) home- and community-based care when medically appropriate, (4) community premium rating. (5) payment by the State of supplemental amounts to ensure that all individuals may obtain coverage at reasonable rates, (6) quality control mechanisms. And (7) premium control and cost control mechanisms. Amends the Employee Retirement Income Security Act of 1974 (ERISA) to exempt from ERISA State laws conforming to or reflecting a plan certified under this Act. Amends title XIX (Medicaid) of the Social Security Act to condition Medicaid payments to a State on the State having a certified plan in effect by the deadline. Modifies the method for determining the amount of the community spouse resource allowance for Medicaid provisions relating to transferring resources to a community spouse. Title III: Financing Mechanisms - Amends the Internal Revenue Code (IRC) to increase the highest corporate income tax rate. Amends Medicaid provisions to reduce the maximum Federal medical assistance percentage. Amends the IRC to increase the tax rate on tobacco and related products. Title IV: Tax Deductibility of Health Insurance - Allows a tax deduction for insurance that constitutes medical care.