II

103D CONGRESS

1ST SESSION S. 1057

To provide for the establishment of a nationwide, universal access health

coverage program, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 27 (legislative day, APRIL 19), 1993

Mr. JEFFORDS introduced the following bill; which was read twice and

referred to the Committee on Finance

A BILL

To provide for the establishment of a nationwide, universal

access health coverage program, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘MediCORE Health Act

5 of 1993’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Findings.

Sec. 4. Definitions.
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(1) Board.

(2) CORE services.

(3) Secretary.

(4) State.

(5) State plan.

(6) State program.

TITLE I—ELIGIBILITY AND ENROLLMENT

Sec. 101. Eligibility.

(a) In general.

(b) Lawful resident alien defined.

(c) Overseas residents and travelers.

(1) Overseas residents.

(2) Travelers.

(d) Non-resident aliens and illegal immigrants.

(e) Primary residence.

Sec. 102. Enrollment in State programs.

(a) Enrollment process.

(1) Automatic enrollment.

(2) Enrollment process for other individuals.

(3) Default enrollment.

(b) MediCORE cards.

TITLE II—ADMINISTRATION BY FEDERAL MEDICORE BOARD

Sec. 201. Establishment and composition.

(a) Establishment.

(b) Composition.

(1) Appointment.

(2) Terms.

(3) Vacancies.

(4) Chairperson.

(5) Compensation.

(c) Staff.

(1) Authority.

(2) Applicability of civil service provisions.

Sec. 202. Duties of MediCORE Board.
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(a) General administration.

(b) CORE services.

(c) Federal MediCORE guidelines.

(d) Approval and oversight of State programs.

(e) Model MediCORE Administration Manual.

(1) In general.

(2) Contents.

(3) Time for provision of manuals.

(f) National data bank system.

(1) Establishment.

(2) Functions.

(g) Studies.

(1) In general.

(2) Immigrants and early retirees.

(3) Veterans affairs.

(4) Malpractice reform.

(5) Coordination of programs.

(h) Annual report.

Sec. 203. Organization.

(a) In general.

(b) Subcommittees.

(c) Advisory panels.

TITLE III—CORE SERVICES

Sec. 301. CORE services.

(a) Review.

(b) Scope and content of CORE services.

(c) Specific components.

(1) Medically necessary services.

(2) Medicare services.

(3) Supplemental benefits.

(4) Preventive health care services.

(5) Long-term health, custodial or personal assistance.

(6) Catastrophic care.

(d) Adjustment or expansion of CORE services.

Sec. 302. Special supplemental food program.

(a) In general.

(b) Appropriation.

TITLE IV—FEDERAL MEDICORE GUIDELINES

Sec. 401. Federal MediCORE guidelines.
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(a) Procedure.

(1) Submission to States.

(2) Adjustment of guidelines.

(b) Requirements.

(1) Universality.

(2) Portability.

(3) Single administrator.

(4) Choice and managed competition.

(5) Rural and underserved areas.

(6) Private health insurance.

(7) Cost sharing.

(8) Mental health.

(9) Primary care.

TITLE V—APPROVAL AND OVERSIGHT OF STATE PROGRAMS

Sec. 501. Approval and oversight of State programs.

(a) In general.

(b) Submission of programs.

(1) In general.

(2) Regional programs.

(c) Review and approval of programs.

(d) Annual review.

(e) Failure of approval.

(1) Resubmission.

(2) Sanctions.

(f) Payments, premiums, copayments, deductibles, etc.

(1) Reimbursements.

(2) Mandatory assignment.

(g) Administration by State.

(1) In general.

(2) Administration by contract.

TITLE VI—MEDICORE BUDGET

Sec. 601. MediCORE budget.

(a) Budgetary requirement.

(b) National average per capita costs.

(1) In general.

(2) Adjustments for risk groups.

(3) State adjustments to national average per capita costs.

(c) State total expenditures.

(d) Federal contributions.

(1) In general.

(2) State share.

(3) State protection.

(e) Subsequent calculations.

Sec. 602. Health care revenue share payments to States.

(a) In general.

(b) Use of funds.

Sec. 603. MediCORE trust fund.
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(a) Trust fund established.

(1) In general.

(2) Transfer of amounts equivalent to certain taxes.

(3) Transfer of funds.

(4) Appropriation of additional sums.

(5) Incorporation of trust fund provisions.

(b) Expenditures.

(1) To States.

(2) Administrative expenses.

(c) Trust fund off-budget.

Sec. 604. Health care revenue sharing provisions.

(a) Payroll taxes.

(1) Tax on employees.

(2) Tax on employers.

(3) Tax on self-employment income.

(4) Elimination of limit on employer-portion of wages or

self-employment income subject to MediCORE tax.

(5) Additional Federal, State, and local employees subject

to MediCORE taxes.

(6) Effective date.

(b) Individual tax on certain adjusted gross income.

(1) In general.

(2) Conforming amendment.

(3) Effective date.

(d) Treatment of health care deductions, exclusions, and credits.

(1) Limitation on exclusion of compensation for injuries or

sickness.

(2) Termination of exclusion for amounts received under

accident and health plans.

(3) Termination of exclusion for contributions by employer

to accident and health plans.

(4) Limitation on cafeteria plans.

(5) Prohibition on use of MediCORE expenses as business

expense deduction for employer.

(6) Deduction for medical expenses limited to uncompensated expenses and employee MediCORE tax.

(7) Termination of pension payment of medical benefits.

(8) Termination of child health insurance credit.

(9) Effective date.

TITLE VII—PREPARATION AND SUBMISSION OF MEDICORE

BUDGET TO CONGRESS

Sec. 701. Preparation and submission.

Sec. 702. Publication and comment.

Sec. 703. Submission to Congress.

(a) In general.

(b) Income requirements.

Sec. 704. Action by Congress.

TITLE VIII—EFFECTIVE DATE; REPEALS; TRANSITION; RELATION

TO ERISA

Sec. 801. Effective date.

Sec. 802. Repeals.
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(a) In general.

(b) Repeal of CHAMPUS provisions.

(1) Amendments to chapter 55 of title 10.

(2) Table of sections.

(3) Conforming amendments.

(c) Health care financing administration.

(d) Effective date.

Sec. 803. Authorization of appropriations and transition.

(a) Authorization of appropriations.

(b) Regulations.

Sec. 804. Relation to ERISA.

Sec. 805. Relation to other laws.

(a) In general.

(b) Definition.

1 SEC. 3. FINDINGS.

2 Congress finds the following:

3 (1) The rate of growth in health care costs in

4 the United States in both the public and private sec5 tors is excessive and destructive, and more specifi6 cally—

7 (A)(i) between 1980 and 1992, health care

8 spending in the United States increased from 9

9 percent of the Gross Domestic Product to 14

10 percent and in 1993 it is expected to rise to 15

11 percent, a higher percentage of Gross Domestic

12 Product than that of any other industrialized

13 nation; and

14 (ii) by the year 2000 health care spending

15 in the United States will exceed 18 percent of

16 the Gross Domestic Product if left at current

17 spending levels;

18 (B) expenditures for health care in the

19 United States will total approximately
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1 $885,000,000,000 in 1993, a rise of 13 percent

2 since 1992, while Gross Domestic Product rose

3 at only a 4.6-percent rate over the same period;

4 (C)(i) health care costs for an average

5 family in the United States grew by 147 per6 cent while average family income rose by 88

7 percent during the 1980s;

8 (ii) average family cost for health care was

9 $1,742 in 1980 and has grown to $4,887 in

10 1992; and

11 (iii) 50 percent of all personal bankruptcies

12 are caused by unmanageable health care costs;

13 (D) the average cost of private employer

14 health plans rose approximately 119 percent be15 tween 1984 and 1991, badly eroding company

16 profits and international competitiveness;

17 (E)(i) the cost of Medicare grew from

18 $34,000,000,000 in 1980 to $104,000,000,000

19 in fiscal year 1990; and

20 (ii) 27 percent of Medicare costs are paid

21 for from general funds from the Treasury and

22 not from specifically dedicated taxes;

23 (F)(i) the cost of Medicaid is expected to

24 increase 38 percent between 1991 and 1993

25 and Medicaid has grown from 10.2 percent of
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1 State health budgets in 1987 to approximately

2 46 percent in 1992;

3 (ii) all Federal expenditures for Medicaid

4 are financed from general funds from the

5 Treasury; and

6 (iii) by the year 2000 under current spend7 ing levels, State Medicaid will have grown to 56

8 percent of State health care budgets;

9 (G) the cost of medical care in general in

10 the United States continues to rise at approxi11 mately three times the rate of the Consumer

12 Price Index;

13 (H) these disproportionate rises in health

14 care costs are inflicting undue burdens on the

15 United States economy, business and citizens in

16 recessionary and deficit ridden times;

17 (I) the Congressional Budget Office esti18 mates that unless costs are stabilized, medical

19 care cost increases in Federal programs above

20 increases in Federal revenues, will by them21 selves increase the Federal debt by over

22 $1,500,000,000,000 by the middle of the next

23 decade, and will result in an increase in annual

24 Federal medical care costs over baseline by

25 $190,000,000,000 at the end of a decade; and
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1 (J) unless Federal health care cost in2 creases are halted it will take Draconian meas3 ures to bring the Federal deficit under control.

4 (2) Structural defects in the organization of the

5 health care system in the United States are leading

6 to excessive costs, to unequal and limited access, and

7 to fragmentation, complexity, and confusion in the

8 delivery of health care because—

9 (A) an anachronism in tax policy carried

10 forward from World War II has led to great in11 equities in health care between those employed

12 in firms paying for health care of employees,

13 and those working for companies without such

14 coverage and all others paying for health care

15 coverage;

16 (B) the employer-based system, due to in17 herent limitations, has been ineffective in pro18 viding affordable health care to large segments

19 of the population including the poor and elderly;

20 (C) the costs of ‘‘uncompensated care’’ are

21 shifted in concealed and indirect ways to pro22 viders, employers and the insured, and ulti23 mately to governments and taxpayers;

24 (D) the widespread coverage gaps caused

25 by the employer-based health care system have
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1 been inadequately compensated for by public

2 programs, in terms of the number of people

3 covered, the scope of services provided, and the

4 efficiency of providing services;

5 (E) private and public insurance alike have

6 adopted reimbursement policies which encour7 age providers to maximize income with unneces8 sary services and consumers to overutilize;

9 (F)(i) attempts to reduce costs of overbur10 dened and under funded public programs have

11 caused increasing cost shifting back to employ12 ers, further diminishing the ability of employers

13 to provide adequate health insurance and to be

14 competitive internationally;

15 (ii) for these reasons and others retiree

16 health benefits are being curtailed dramatically;

17 and

18 (iii) such shifts are also limiting the avail19 ability and affordability of adequate coverage to

20 others;

21 (G) piecemeal attempts to control cost es22 calation in both the private and public sectors,

23 including the use of managed care and other al24 ternative delivery systems, by themselves are
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1 not succeeding in significantly controlling cost

2 or cost shifting;

3 (H) cost escalation has left gaps is cov4 erage, especially with respect to preventive, pri5 mary and long-term care, and protection

6 against catastrophic costs;

7 (I)(i) increasing costs and cost shifts have

8 resulted in insurers reducing cost by reducing

9 risks with the result that more and more indi10 viduals are left uncovered;

11 (ii) this has substantially reduced the ef12 fectiveness of private health insurance as a ade13 quate answer to health care problems because—

14 (I) insurance companies use defensive

15 practices such as pre-existing conditions

16 exclusions and ‘‘cherry-picking’’ which re17 duce access rather than promote cost effi18 cient competition on the basis of price and

19 product design;

20 (II) short-term ‘‘experience ratings’’

21 are depriving Americans of consistent pro22 tection against catastrophic health care

23 occurrences; and

24 (III) employer-group organized health

25 care has spawned excessive numbers of
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1 commercial insurers causing undue adver2 tising costs, administrative expense and

3 confusion, and redtape for employers, pro4 viders and consumers;

5 (J) tax induced employer-based health care

6 has diminished the market role of both employ7 ers and employees in making prudent and

8 thrifty choices for efficient and cost conscious

9 health care coverage; and

10 (K) the administrative difficulties, payment

11 inequities, regional differences in cost of serv12 ices, and the cost containment problems of

13 Medicare exemplify the difficulties of a federally

14 run program.

15 (3) Other factors, as well, demonstrate the need

16 for comprehensive reform in the nations health care

17 systems. These include:

18 (A) Current health care spending with

19 proper cost sharing and resource allocation is

20 sufficient to cover presently uncovered benefits,

21 such as preventative health, long-term health

22 care, pharmaceutical costs, and catastrophic

23 protection.

24 (B) The reduction of present administra25 tive inefficiencies, defensive medical costs, and
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1 increased use of outcome research will accom2 modate improved coverage and care.

3 (C) State run programs, with single or ad4 ministrative agencies, but federally structured

5 and coordinated will result in a less costly, more

6 efficient and diversified system.

7 (D) Present tax inequities can only be cor8 rected at the Federal level, and only Federal

9 funds can provide sufficient funding for com10 prehensive change.

11 (E) A coordinated global cost containment

12 structure can only be provided by the Federal

13 Government.

14 (F) States are best placed to create effi15 cient competition among health care providers

16 for administrative and service cost reductions.

17 SEC. 4. DEFINITIONS.

18 As used in this Act:

19 (1) BOARD.—The term ‘‘Board’’ means the

20 Federal MediCORE Board established under section

21 201.

22 (2) CORE SERVICES.—The term ‘‘CORE

23 SERVICES’’ means those health care services speci24 fied in section 301.
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1 (3) SECRETARY.—The term ‘‘Secretary’’ means

2 the Secretary of Health and Human Services.

3 (4) STATE.—

4 (A) IN GENERAL.—The term ‘‘State’’ in5 cludes the District of Columbia, the Common6 wealth of Puerto Rico, the United States Virgin

7 Islands, Guam, American Samoa, and the Com8 monwealth of the Northern Mariana Islands.

9 (B) REGION.—A reference to a State

10 under this Act shall be considered to include a

11 region implementing a regional program under

12 the authority of this Act.

13 (5) STATE PLAN.—The term ‘‘State plan’’

14 means a health delivery plan approved under a State

15 program.

16 (6) STATE PROGRAM.—

17 (A) IN GENERAL.—The term ‘‘State pro18 gram’’ means a State health care program ap19 proved under section 501.

20 (B) REGIONAL PROGRAM.—A reference to

21 a State program under this Act shall be consid22 ered to include a regional program implemented

23 under the authority of this Act.
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1 TITLE I—ELIGIBILITY AND

2 ENROLLMENT

3 SEC. 101. ELIGIBILITY.

4 (a) IN GENERAL.—Except as otherwise provided in

5 this section, each individual who is a legal resident of the

6 United States, including lawful resident aliens, is eligible

7 for CORE SERVICES under the State program in the

8 State in which the individual maintains a primary resi9 dence.

10 (b) LAWFUL RESIDENT ALIEN DEFINED.—For pur11 poses of this section, the term ‘‘lawful resident alien’’

12 means an alien lawfully admitted for permanent residence

13 or for educational purposes and any other alien lawfully

14 residing permanently in the United States under color of

15 law, including an alien with lawful temporary resident sta16 tus under section 210, 210A, or 245A of the Immigration

17 and Nationality Act (8 U.S.C. 1160, 1161, or 1255a).

18 (c) OVERSEAS RESIDENTS AND TRAVELERS.—

19 (1) OVERSEAS RESIDENTS.—As used in sub20 section (a), the term ‘‘legal resident of the United

21 States’’ does not include a United States citizen or

22 lawful resident alien who has established a primary

23 residence outside of the United States.

24 (2) TRAVELERS.—An individual described in

25 subsection (a) who is traveling at the time at which
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1 CORE SERVICES are provided to such individual

2 shall be covered under the State program in the

3 State in which the individual maintains a primary

4 residence.

5 (d) NON-RESIDENT ALIENS AND ILLEGAL IMMI6 GRANTS.—The Board shall develop and implement special

7 procedures with respect to the eligibility of non-resident

8 aliens and illegal immigrants for CORE SERVICES

9 under a State program. In developing such procedures, the

10 Board shall ensure that those States with the highest inci11 dence of illegal immigrants receive some type of additional

12 payment under this Act for the provision of CORE SERV13 ICES to such aliens and immigrants.

14 (e) PRIMARY RESIDENCE.—As used in this title, the

15 term ‘‘primary residence’’ means that State in which the

16 individual resides for the greatest period of time (not nec17 essarily a consecutive period of time) during the calendar

18 year. With respect to individuals who are unemancipated

19 students, the primary residence of such individuals shall

20 be the primary residence of their parents or legal guard21 ians. With respect to a homeless individual, the State of

22 primary residence shall be the State in which such individ23 ual applies for CORE benefits.

24 SEC. 102. ENROLLMENT IN STATE PROGRAMS.

25 (a) ENROLLMENT PROCESS.—
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1 (1) AUTOMATIC ENROLLMENT.—Each State

2 program shall provide for the automatic enrollment

3 of an individual described in section 101 who is born

4 after the effective date described in section 801, on

5 the date on which such individual is born.

6 (2) ENROLLMENT PROCESS FOR OTHER INDI7 VIDUALS.—With respect to individuals described in

8 section 101 who are not automatically enrolled

9 under paragraph (1), each State program shall de10 velop and utilize an understandable and readily

11 available process for the enrollment of such individ12 uals in the State program.

13 (3) DEFAULT ENROLLMENT.—In the case of an

14 individual described in section 101 who otherwise is

15 not enrolled in a State program, such individual

16 shall be covered by the State program in the State

17 in which such individual maintains a primary resi18 dence. The State shall provide a process for enroll19 ment of the individual at the time and place in

20 which the individual first is provided (after the effec21 tive date described in section 801) CORE SERV22 ICES under a State program.

23 (b) MEDICORE CARDS.—Upon enrollment in a State

24 program, an individual shall be issued a MediCORE card

25 that shall—
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1 (1) indicate the State program in which the in2 dividual is enrolled;

3 (2) contain a brief description of any cost-shar4 ing, benefit or delivery features of the program in

5 which such individual is enrolled;

6 (3) where feasible, and if privacy interests can

7 be maintained, contain the health record of the indi8 vidual; and

9 (4) indicate any other information determined

10 appropriate by the Board.

11 TITLE II—ADMINISTRATION BY

12 FEDERAL MEDICORE BOARD

13 SEC. 201. ESTABLISHMENT AND COMPOSITION.

14 (a) ESTABLISHMENT.—There is established within

15 the Department of Health and Human Services a Federal

16 MediCORE Board.

17 (b) COMPOSITION.—

18 (1) APPOINTMENT.—The Board shall be com19 posed of nine members to be appointed by the Presi20 dent not later than 60 days after the date of enact21 ment of this Act, by and with the advice and consent

22 of the Senate, from among individuals who will, as

23 a whole, represent the interests of the following—

24 (A) Federal and State governments;

25 (B) employers;
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1 (C) employees and labor unions;

2 (D) health care providers;

3 (E) consumers;

4 (F) academic and industry experts in

5 health care delivery; and

6 (G) cost containment and quality improve7 ment experts.

8 (2) TERMS.—Individuals appointed to the

9 Board under paragraph (1) shall serve for a term of

10 5 years, except that the terms of individuals initially

11 appointed shall be as follows—

12 (A) three of such individuals shall be ap13 pointed for a term of 2 years;

14 (B) three of such individuals shall be ap15 pointed for a term of 3 years; and

16 (C) three of such individuals shall be ap17 pointed for a term of 4 years.

18 (3) VACANCIES.—The President shall fill any

19 vacancy in the membership of the Board in the same

20 manner as the original appointment and such mem21 bers shall serve for the remainder of the term for

22 which the predecessor of the member was appointed.

23 The vacancy shall not affect the power of the re24 maining members to execute the duties of the

25 Board.
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1 (4) CHAIRPERSON.—

2 (A) INITIAL CHAIRPERSON.—The initial

3 chairperson of the Board shall be selected by

4 the President and serve for a term of 3 years.

5 (B) SUBSEQUENT CHAIRPERSONS.—Ex6 cept as provided in subparagraph (A), the mem7 bers of the Board shall select a chairperson of

8 the Board from among such members and such

9 chairperson shall serve for a term of 3 years.

10 (5) COMPENSATION.—Members of the Board

11 shall be compensated at a level comparable to level

12 II of the Executive Schedule, in accordance with sec13 tion 5313 of title 5, United States Code. Amounts

14 for such compensation shall be derived from the

15 MediCORE Trust Fund.

16 (c) STAFF.—

17 (1) AUTHORITY.—The Board shall employ such

18 staff as the Board may determine necessary and

19 such staff shall be compensated in accordance with

20 paragraph (2).

21 (2) APPLICABILITY OF CIVIL SERVICE PROVI22 SIONS.—The staff of the Board may be appointed

23 without regard to the provisions of title 5, United

24 States Code, governing appointments in the competi25 tive service and be compensated without regard to
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1 the provisions of chapter 51, and subchapter III of

2 chapter 53 of title 5 relating to classification and

3 General Schedule pay rates, except that no individ4 ual may receive pay more than the rate of basic pay

5 payable for level IV of the Executive Schedule.

6 Amounts for such compensation shall be derived

7 from the MediCORE Trust Fund.

8 SEC. 202. DUTIES OF MEDICORE BOARD.

9 (a) GENERAL ADMINISTRATION.—The Board shall be

10 responsible for the overall administration of this Act and

11 for the oversight of State compliance with this Act, as well

12 as the development of CORE SERVICES and of specific

13 guidelines to permit States to carry out this Act.

14 (b) CORE SERVICES.—The Board shall, in accord15 ance with title III, determine a basic, comprehensive pack16 age of health care services (referred to in this Act as

17 ‘‘CORE SERVICES’’) that shall be provided under this

18 Act.

19 (c) FEDERAL MEDICORE GUIDELINES.—The Board

20 shall, in accordance with title IV, develop and implement

21 Federal guidelines for the equitable and efficient delivery

22 of CORE SERVICES through State programs operating

23 under this Act.

24 (d) APPROVAL AND OVERSIGHT OF STATE PRO25 GRAMS.—Not later than 16 months after the date of en-
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1 actment of this Act, the Board shall, in accordance with

2 title V, develop and administer procedures for the approval

3 of State programs under this Act and for the monitoring

4 of State compliance with the requirements of this Act.

5 Such procedures shall be published in the Federal Register

6 and made available to States.

7 (e) MODEL MEDICORE ADMINISTRATION MAN8 UAL.—

9 (1) IN GENERAL.—The Board shall develop,

10 publish and make available to each State a Model

11 MediCORE Administration Manual.

12 (2) CONTENTS.—The Manual developed under

13 paragraph (1) shall contain—

14 (A) recommendations, models, policies and

15 procedures, in sufficient detail, concerning all

16 aspects of the administration required for a

17 State program covering CORE SERVICES so

18 as to avoid any unnecessary duplication of de19 velopment effort by States;

20 (B) sample requests for proposals and

21 model selection criteria for a claims adminis22 trator, managed care vendors, health care pro23 vider networks and regional or areawide provid24 ers of highly specialized or tertiary health

25 services;
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1 (C) model fee schedules with respect to all

2 professional and ancillary health services (such

3 schedules shall allow for regional cost dif4 ferences);

5 (D) model payment systems with respect to

6 hospitals, skilled nursing facilities and other

7 health care facilities, developed in a manner

8 that would encourage the efficient bundling of

9 services;

10 (E) outcome review procedures that may

11 be implemented by the States through the es12 tablishment of a State outcome review panel;

13 (F) ethical consideration policies that may

14 be implemented by the States through the es15 tablishment of a State Medical Ethics Panel;

16 and

17 (G) any other information determined ap18 propriate by the Board.

19 (3) TIME FOR PROVISION OF MANUALS.—With

20 respect to the Manual developed under paragraph

21 (1)—

22 (A) an initial draft of such Manual shall be

23 provided to the States for comment not later

24 than 12 months after the date of enactment of

25 this Act; and
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1 (B) the final draft of such Manual shall be

2 provided to the States not later than 14 months

3 after the date of enactment of this Act.

4 (f) NATIONAL DATA BANK DATA SYSTEM.—

5 (1) ESTABLISHMENT.—Not later than 12

6 months after the date of enactment of this Act, the

7 Board, in consultation with the National Institutes

8 of Health and the Health Care Financing Adminis9 tration, shall establish and administer the operation

10 of a National Data Bank System.

11 (2) FUNCTIONS.—The National Data Bank

12 System shall—

13 (A) function as the nationwide repository

14 for health care data and information collected

15 under this Act;

16 (B) collect information, with respect to

17 State programs, concerning—

18 (i) comprehensive individual medical

19 records, available health insurance and de20 livery plans and health services under such

21 plans, and administrative data including

22 claims, billing and electronic billing infor23 mation; and

24 (ii) outcomes analyses that detail the

25 effectiveness, efficiency, viability and ethi-
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1 cal considerations involved in medical

2 treatments, technology and practice; and

3 (C) assist in conducting and supervising

4 the studies required under subsection (g).

5 (g) STUDIES.—

6 (1) IN GENERAL.—

7 (A) GENERAL REPORT.—Not later than 18

8 months after the date of enactment of this Act,

9 the Board, acting through the National Data

10 Bank System, if appropriate, shall prepare and

11 submit to the Secretary and the appropriate

12 committees of Congress, a report concerning

13 the studies conducted under this paragraph.

14 (B) NATIONAL SERVICE AND HOME

15 HEALTH CARE.—The Board, acting through the

16 National Data Bank System, if appropriate, ei17 ther directly or in consultation and cooperation

18 with the Commission on National and Commu19 nity Service, shall conduct studies or dem20 onstration projects concerning—

21 (i) the feasibility and desirability of

22 instituting a national service program

23 under which individuals under the age of

24 25 who are not serving in the armed forces

25 would coordinate with other home health
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1 service providers to provide assistance to

2 disabled or older individuals in their

3 homes; and

4 (ii) the feasibility and desirability of

5 providing financial assistance to families

6 that care for and provide financial assist7 ance to disabled or older individuals in

8 their homes, evaluated both as a cost sav9 ings measure and as an avenue to improve

10 the quality of care and quality of life of

11 such individuals.

12 (C) OTHER STUDIES.—The Board, acting

13 through the National Data Bank System, if ap14 propriate, shall conduct, either directly or

15 through grant or contract, studies to determine

16 the feasibility and desirability of—

17 (i) authorizing certain States to im18 plement statewide demonstration health

19 delivery programs, consistent with the

20 MediCORE program, prior to the full im21 plementation of this Act as models for the

22 MediCORE program;

23 (ii) implementing a program to pro24 vide for reduced deductibles or other cost25 sharing mechanisms with respect to CORE
27

•S 1057 IS

1 SERVICES for individuals or families cer2 tified as being free of substance use or as

3 abiding by a specified physical fitness

4 program; and

5 (iii) including health information on a

6 MediCORE card pursuant to section

7 102(b)(3), particularly as it relates to the

8 privacy interests of individuals.

9 (2) IMMIGRANTS AND EARLY RETIREES.—Not

10 later than 14 months after the date of enactment of

11 this Act, the Board, acting through the National

12 Data Bank System, if appropriate, shall conduct a

13 study, and prepare and submit to the Secretary and

14 the appropriate committees of Congress a report,

15 concerning—

16 (A) the provision of CORE SERVICES to

17 illegal immigrants and, if appropriate, the im18 plementation of a system to compensate those

19 States with the highest incidence of resident il20 legal immigrants for such services; and

21 (B) the implementation of procedures for

22 the appropriate recapture of the costs of cov23 erage of CORE SERVICES provided to em24 ployees retired on the date described in section

25 801, and those who retire after such date, and
28

•S 1057 IS

1 further procedures, to be developed with the

2 Secretary of the Treasury, for the equitable

3 treatment of those retirees who have contrac4 tual agreements with their former employers for

5 the provision of such health care to ensure that

6 the employees are treated fairly with respect to

7 taxation on their retirement income under this

8 Act.

9 (3) VETERANS AFFAIRS.—

10 (A) STUDY.—The Board shall, either di11 rectly or through grant or contract, conduct a

12 study of the role of the Department of Veterans

13 Affairs, and its independent medical care sys14 tem for veterans under title 38, United States

15 Code, as it relates to the MediCORE program

16 under this Act.

17 (B) CONDUCT.—In conducting the study

18 under subparagraph (A), the Board shall—

19 (i) recognize and maintain the inde20 pendent responsibility of the Department

21 of Veterans Affairs for the special health

22 care needs and rights of veterans, its

23 unique and long-standing contributions to

24 the health of the United States through

25 medical and mental health care, medical
29

•S 1057 IS

1 research and health professional education,

2 and its function as the primary back-up to

3 military medicine in time of war;

4 (ii) identify opportunities for entering

5 into health care, research and education

6 sharing arrangements with the Depart7 ment of Veterans Affairs to optimize the

8 use of medical and mental health resources

9 in the United States;

10 (iii) consider the manner in which the

11 cost containment features of the

12 MediCORE program under this Act and of

13 the Department of Veterans Affairs may

14 be coordinated and integrated in the inter15 est of containing national health care

16 costs; and

17 (iv) review the findings of the Depart18 ment of Veterans Affairs Commission on

19 the Future Structure of Veterans Health

20 Care, the Paralyzed Veterans of America,

21 study entitled ‘‘The VA: Responsibility in

22 Tomorrow’s National Health Care Sys23 tem,’’ and such other publications as it

24 considers appropriate.
30

•S 1057 IS

1 (C) STUDY.—Not later than 36 months

2 after the date of enactment of this Act, the

3 Board shall prepare and submit to the Sec4 retary and the appropriate committees of Con5 gress a report, concerning the results of the

6 study conducted under this paragraph.

7 (4) MALPRACTICE REFORM.—

8 (A) STUDY AND MODEL LEGISLATION.—

9 The Board shall conduct a study of Federal and

10 State medical malpractice laws and proposals

11 for the reform of such laws. Not later than 24

12 months after the date of enactment of this Act,

13 the Board shall develop a model malpractice al14 ternative dispute/claims dispute resolution re15 form law or laws for the guidance of the States.

16 In developing such model law or laws, the

17 Board shall consider—

18 (i) alternative dispute resolution sys19 tems and coordination with State claims

20 dispute resolution systems;

21 (ii) State tort reforms;

22 (iii) payments of future damages;

23 (iv) caps on noneconomic damages;

24 (v) caps on punitive damages and pay25 ment of punitive damages to States for use
31

•S 1057 IS

1 in monitoring, disciplining and educating

2 of health care providers;

3 (vi) collateral source rules;

4 (vii) restrictions on attorney fees, in5 cluding contingency fees, and costs;

6 (viii) statutes of limitations;

7 (ix) patient protection and disciplinary

8 reforms and coordination with professional

9 self-regulation;

10 (x) joint and several liability;

11 (xi) community and migrant health

12 care centers and risk retention groups;

13 (xii) practice guidelines and quality

14 assurance;

15 (xiii) products liability protections for

16 medical products; and

17 (xiv) others matters determined ap18 propriate.

19 (B) GRANTS.—The Board shall award

20 grants to selected States from amounts avail21 able under the MediCORE Trust Fund for the

22 development or implementation of State mal23 practice alternative dispute/claims dispute reso24 lution systems under regulations to be adopted

25 by the Board. The Board shall monitor and
32

•S 1057 IS

1 evaluate the effectiveness of State systems and

2 prepare reports concerning such systems to be

3 included in the annual report required under

4 subsection (h).

5 (C) IMPLEMENTATION.—Not later than 2

6 years after the development of the model law or

7 laws under subparagraph (A), a State shall

8 enact and implement a malpractice alternative

9 dispute/claims dispute resolution system that

10 the Board determined is in substantial conform11 ity with the requirements and guidelines of the

12 Board as developed under subparagraphs (A)

13 and (B).

14 (D) ENFORCEMENT.—If the Board deter15 mines that a State has not complied with the

16 requirements of subparagraph (C), the Board

17 may not grant the approval required in title V.

18 (5) COORDINATION OF PROGRAMS.—

19 (A) IN GENERAL.—The Board shall con20 duct a study of any agencies of the Department

21 of Health and Human Services, including the

22 Health Care Financing Administration and the

23 Agency for Health Care Policy and Research,

24 and any other department and agency of the

25 Federal Government, to calculate the various
33

•S 1057 IS

1 programs and activities of such department and

2 agencies, and to recommend how best to coordi3 nate any of such programs and activities with

4 the MediCORE Board and the MediCORE pro5 gram under this Act. Such study shall deter6 mine which activities and programs should be

7 retained, repealed or reorganized, and which

8 should be consigned to State responsibility.

9 Within such study, the Board shall review any

10 ongoing studies being conducted by such de11 partments and agencies, and in particular the

12 debit/credit card study of the Health Care Fi13 nance Administration, to determine the feasibil14 ity and desirability of such within the

15 MediCORE program.

16 (B) REPORT.—Not later than 14 months

17 after the date of enactment of this Act, the

18 Board shall prepare and submit to the Sec19 retary and the appropriate committees of Con20 gress a report concerning the results of the

21 study completed under this subparagraph (A).

22 (6) ETHICAL GUIDELINES.—

23 (A) IN GENERAL.—The Board shall con24 duct a study concerning the feasibility and de25 sirability of establishing ethical guidelines on
34

•S 1057 IS

1 medical and biomedical issues (such as cutting

2 edge lifesaving techniques and biotechnology

3 procedures) that are consistent with the

4 MediCORE program. Such study shall focus on

5 whether the guidelines can be established prior

6 to the full implementation of this Act and be

7 utilized as an ethical model for the MediCORE

8 program. In conducting such study, the Board

9 shall conduct a review of existing medical ethi10 cal studies completed or currently being done

11 within the United States and foreign nations

12 (such as France).

13 (B) REPORT.—Not later than 18 months

14 after the date of enactment of this Act, the

15 Board shall prepare and submit to the Sec16 retary and the appropriate committees of Con17 gress a report concerning the results of the

18 study completed under this subparagraph (A).

19 (7) PRIMARY CARE.—

20 (A) IN GENERAL.—The Board shall con21 duct a study concerning the feasibility and de22 sirability of establishing, consistent with the

23 MediCORE program and prior to the full imple24 mentation of this Act—
35

•S 1057 IS

1 (i) recruitment guidelines to encour2 age or provide incentives for medical stu3 dents to enter into primary care services;

4 and

5 (ii) guidelines to attract the physician

6 manpower necessary to insure Americans

7 have access to continued health care and

8 preliminary health care, which may include

9 guidelines for—

10 (I) expanding the National

11 Health Service Corps;

12 (II) providing increased funding

13 for innovative training schedules;

14 (III) developing recruitment poli15 cies to increase the number of minor16 ity primary care physicians; and

17 (IV) the development of flexible

18 loan and loan repayment policies.

19 In conducting such study the Board shall re20 view primary care physician shortages in inner21 city and rural areas.

22 (B) REPORT.—Not later than 18 months

23 after the date of enactment of this Act, the

24 Board shall prepare and submit to the Sec25 retary and the appropriate committees of Con-
36

•S 1057 IS

1 gress a report concerning the results of the

2 study completed under this subparagraph (A).

3 (h) ANNUAL REPORT.—The Board shall annually

4 prepare and submit to the appropriate committees of Con5 gress a report entitled ‘‘The State of the Nation’s Health

6 Care Services’’ which shall concern the effectiveness of the

7 MediCORE program and the improvement in health care

8 quality and cost effectiveness of CORE SERVICES pro9 vided under such program.

10 SEC. 203. ORGANIZATION.

11 (a) IN GENERAL.—The Board may organize itself

12 into such subcommittees as the Board determines are ap13 propriate for the efficient and effective administration of

14 the requirements of this Act.

15 (b) SUBCOMMITTEES.—In addition to any sub16 committees established under subsection (a), the Board

17 shall establish—

18 (1) a MediCORE Fund Administration Sub19 committee that shall be responsible for the day to

20 day administration of this Act and the development

21 of policies and guidelines for such administration,

22 including revenue, payment and reimbursement poli23 cies, with special emphasis being placed on the ad24 ministration of the MediCORE Trust Fund; and
37

•S 1057 IS

1 (2) a MediCORE Health Policy Subcommittee

2 that shall be responsible for—

3 (A) the development of health policy rec4 ommendations;

5 (B) performance outcomes analyses that

6 are based on medical appropriateness deter7 minations and the issuance of guidelines con8 cerning such determinations, with special con9 sideration placed on the ethical implications of

10 the implementation of this Act;

11 (C) the development of CORE SERVICES

12 interpretations and access and quality guide13 lines; and

14 (D) any other aspects determined appro15 priate by the Board.

16 (c) ADVISORY PANELS.—The Board may establish

17 such advisory panels as the Board determines appropriate

18 to assist the Board in its duties, projects or studies.

19 TITLE III—CORE SERVICES

20 SEC. 301. CORE SERVICES.

21 (a) REVIEW.—The Board shall conduct a detailed re22 view of the health services and benefits provided or as23 sisted under—
38

•S 1057 IS

1 (1) Federal health programs (including pro2 grams under titles XVIII and XIX of the Social

3 Security Act);

4 (2) health insurance plans available to Federal

5 and State employees;

6 (3) other private health insurance plans in gen7 eral (such as Blue Cross/Blue Shield); and

8 (4) such other programs or plans determined

9 appropriate by the Board;

10 that are operating or provided on the date of enactment

11 of this Act.

12 (b) SCOPE AND CONTENT OF CORE SERVICES.—

13 The Board shall define the content and scope of the

14 CORE SERVICES to be as comprehensive as practicable

15 taking into consideration the monetary constraints of the

16 MediCORE Trust Fund. In making such definition, the

17 Board shall consider the estimated costs of the CORE

18 SERVICES and coordinate the content and scope of such

19 SERVICES to the extent necessary to reconcile such

20 costs, as outlined in the MediCORE Budget, with the

21 amount of funds expected to be available with respect to

22 the year involved from the MediCORE Trust Fund. The

23 MediCORE Budget Report shall contain a detailed de24 scription of the CORE SERVICES as required by title

25 VII.
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•S 1057 IS

1 (c) SPECIFIC COMPONENTS.—In defining the CORE

2 SERVICES to be provided under this Act under sub3 section (b), the Board shall include, subject to such limita4 tions, schedules, formularies, appropriateness criteria and

5 cost sharing requirements as the Board shall determine

6 appropriate, the following components:

7 (1) MEDICALLY NECESSARY SERVICES.—The

8 CORE SERVICES shall include those services de9 termined by the Board as being medically necessary,

10 including prescription drugs, mental health and sub11 stance abuse and rehabilitative services.

12 (2) MEDICARE SERVICES.—The CORE SERV13 ICES shall include those services that otherwise

14 would have been provided to individuals under title

15 XVIII of the Social Security Act prior to the effec16 tive date of the amendments made by section 702 as

17 reconfigured by the Board in consideration of the

18 MediCORE budget.

19 (3) PREVENTIVE HEALTH CARE SERVICES.—

20 (A) SPECIFICATIONS.—The CORE SERV21 ICES shall include minimum preventive health

22 care services determined appropriate under

23 specifications developed by the Board taking

24 into consideration the cost-effectiveness of such

25 services in significantly reducing preventable ill-
40

•S 1057 IS

1 nesses and the administrative efficiency of pro2 viding such services within the scope of appro3 priate State programs.

4 (B) TRANSITION.—Prior to the publication

5 of the specifications referred to in subparagraph

6 (A), the preventive health care services that

7 shall be covered under a State program shall

8 include:

9 (i) HEALTH SCREENING AND IMMUNI10 ZATION SERVICES.—Those screening and

11 immunization services recommended in the

12 document entitled ‘‘Guide to Clinical Pre13 ventive Services’’ published by the Preven14 tive Services Task Force for asyptomatic

15 low-risk pregnant women, infants and all

16 other age groups. Screening services shall

17 include the medical history, physical exam

18 and laboratory or diagnostic procedures de19 scribed in the Guide, and dental screening

20 for individuals under the age of 18.

21 (ii) EDUCATION AND COUNSELING

22 SERVICES.—Those education services pro23 vided as part of a public education pro24 gram administered by the State that are

25 designed to educate individuals, including
41

•S 1057 IS

1 school-aged children, concerning taking

2 personal responsibility for their health.

3 Such services shall include the health as4 pects of those counseling topics rec5 ommended in the Guide referred to in

6 clause (i) such as nutrition, exercise, sex7 ual behavior, tobacco use, substance abuse,

8 injury prevention and the value of periodic

9 preventive health and dental care.

10 (C) STATE ELECTION.—Services required

11 under this paragraph shall be delivered under a

12 State program in a manner determined appro13 priate by the Board. In addition to the services

14 required under subparagraph (B), a State may

15 elect to provide enhanced preventive services for

16 high-risk individuals until such time as such

17 services are mandated under the guidelines de18 veloped under subparagraph (A). Individual

19 counseling concerning preventive health care be20 havior and intervention should be made avail21 able as part of a State education or public

22 health program or otherwise incorporated into

23 the delivery of other CORE SERVICES under

24 the State program.
42

•S 1057 IS

1 (4) LONG-TERM HEALTH, CUSTODIAL OR PER2 SONAL ASSISTANCE.—The Board shall establish

3 specifications and eligibility criteria with respect to

4 long-term health, custodial or personal assistance

5 services that may be provided under this Act. Bene6 fits such as home health, skilled and unskilled care,

7 respite care and adult day care shall be evaluated by

8 the Board as options to prevent institutionalization

9 and to reduce stress on families. Guidance will be

10 provided to States with respect to supplemental in11 surance and sliding scale supplemental payments for

12 nursing home care or other additional long-term care

13 benefits that may not be covered initially under the

14 MediCORE program.

15 (5) CATASTROPHIC CARE.—The Board shall im16 pose a limitation concerning the amount of expenses

17 for catastrophic care that an individual shall be lia18 ble for with respect to CORE SERVICES provided

19 under the MediCORE program.

20 (d) EXCLUSION OF SERVICES.—The Board may not

21 include as part of CORE SERVICES the hospital care,

22 medical services and domiciliary care provided to veterans

23 for service-connected disabilities pursuant to chapter 17

24 of title 38, United States Code.
43

•S 1057 IS

1 (e) ADJUSTMENT OR EXPANSION OF CORE SERV2 ICES.—The Board shall annually review the type and

3 level of CORE SERVICES that are required to be pro4 vided under this Act and adjust such SERVICES if the

5 Board determines that a more efficient or effective use of

6 available resources is desirable. In undertaking such re7 view and making any adjustments, the Board shall make

8 available to the States a description of such adjustments

9 and provide such States with an appropriate period in

10 which to comment on such adjustments.

11 SEC. 302. SPECIAL SUPPLEMENTAL FOOD PROGRAM.

12 (a) IN GENERAL.—Section 17(c)(1) of the Child Nu13 trition Act of 1966 (42 U.S.C. 1786(c)(1)) is amended—

14 (1) in the first sentence, by striking ‘‘may’’ and

15 inserting ‘‘shall’’; and

16 (2) by inserting after the first sentence the fol17 lowing new sentence: ‘‘Subject to the other provi18 sions of this section, an eligible individual shall be

19 entitled to receive the full amount of benefits author20 ized under this section, except for those benefits that

21 would otherwise be covered under the MediCORE

22 Health Act of 1993.’’.

23 (b) APPROPRIATION.—Section 17(g)(1) of such Act

24 is amended by striking the first sentence and inserting the

25 following new sentences: ‘‘For purposes of providing bene-
44

•S 1057 IS

1 fits (except for those benefits that would otherwise be cov2 ered under the MediCORE Health Act of 1993) to all eli3 gible individuals in the program and otherwise carrying

4 out this section, there are authorized to be appropriated,

5 and there are appropriated, to carry out this section such

6 sums as may be necessary for fiscal year 1992 and each

7 succeeding fiscal year. The Secretary shall make available

8 the sums described in the previous sentence to carry out

9 this section.’’.

10 TITLE IV—FEDERAL MEDICORE

11 GUIDELINES

12 SEC. 401. FEDERAL MEDICORE GUIDELINES.

13 (a) PROCEDURE.—

14 (1) SUBMISSION TO STATES.—Not later than

15 14 months after the date of enactment of this Act,

16 the Board shall publish in the Federal Register a de17 scription of the preliminary Federal MediCORE

18 guidelines to be implemented by the Board under

19 section 202(c). Subsequent to such publication, the

20 Board shall solicit comments from the States con21 cerning the preliminary guidelines. Not later than 19

22 months after the date of enactment of this Act, the

23 Board shall publish in the Federal Register the final

24 initial Federal guidelines to be implemented by the

25 Board under section 202(c).
45

•S 1057 IS

1 (2) ADJUSTMENT OF GUIDELINES.—The Board

2 shall periodically review the Federal MediCORE

3 guidelines developed under this section and adjust

4 such guidelines as the Board determines appro5 priate. In undertaking such review and making any

6 adjustments, the Board shall make available to the

7 States a description of such adjustments and provide

8 the States with an appropriate period in which to

9 comment on such adjustments.

10 (b) REQUIREMENTS.—Federal guidelines shall be de11 veloped and implemented by the Board under section

12 202(c) for the delivery of CORE SERVICES to ensure

13 that:

14 (1) UNIVERSALITY.—CORE SERVICES are

15 universally accessible and delivered in a nondiscrim16 inatory manner.

17 (2) PORTABILITY.—CORE SERVICES, with

18 respect to those services and benefits provided by

19 the State of primary residence (as such term is de20 fined in section 101(d)), will be portable across

21 State lines, except that preventive health care serv22 ices and other specific services may be limited to the

23 State of primary residence.

24 (3) SINGLE ADMINISTRATOR.—With respect to

25 each State with a program approved under section
46

•S 1057 IS

1 501, a single agency is designated as being respon2 sible for the administration of the State program, in3 cluding ensuring that services and payments to pro4 viders are equitably and efficiently delivered under

5 such programs.

6 (4) CHOICE AND MANAGED COMPETITION.—

7 (A) CHOICE OF DELIVERY PLANS.—A

8 State is encouraged to include two or more

9 CORE SERVICES delivery plans within the

10 State program to permit market forces to oper11 ate within such State with respect to health

12 care delivery through managed competition

13 between such plans.

14 (B) CONSIDERATION BY STATE.—A State

15 should consider the inclusion of at least one

16 CORE SERVICES delivery plan that would

17 permit a significant freedom of choice by con18 sumers with respect to health care providers

19 (including physicians) for which additional fees

20 may be assessed by the State. Other plans may

21 include managed care programs (such as health

22 maintenance organizations or community health

23 centers) and health care provider contracts that

24 share responsibility for cost and outcome man-
47

•S 1057 IS

1 agement with health care providers or provider

2 networks.

3 (C) PROVISION OF INFORMATION.—A

4 State annually shall provide information to resi5 dents of the State concerning the CORE

6 SERVICES delivery plans available within that

7 State. Such information shall be in such form

8 and contain information of such a nature so as

9 to permit State residents to seek the highest

10 health care value within the State for the lowest

11 prices.

12 (5) RURAL AND UNDERSERVED AREAS.—Rural

13 and underserved areas, and the disability commu14 nity, are provided with fair access to CORE SERV15 ICES on equitable terms.

16 (6) PRIVATE HEALTH INSURANCE.—Private in17 surance covering health care services that are not

18 otherwise covered under this Act may be sold in a

19 State.

20 (7) COST SHARING.—A State program may re21 quire or permit the assessment of premiums,

22 copayments, coinsurance, or annual deductibles with

23 respect to expenses incurred in the provision of

24 CORE SERVICES under a program to the extent

25 and in a manner consistent with specific guidelines
48

•S 1057 IS

1 to be developed by the Board. In no event shall cost

2 sharing be permitted with respect to preventive

3 health care CORE SERVICES. Total cost sharing

4 may not exceed 15 percent of the cost of CORE

5 SERVICES as determined in the MediCORE Budg6 et pursuant to section 601. The cost sharing per7 mitted by this paragraph may be income sensitive

8 and should decrease as the cost of the care

9 increases.

10 (8) MENTAL HEALTH.—A State program shall

11 ensure that CORE SERVICES include benefits cov12 ering medically and psychologically necessary treat13 ments for mental health services that are equitable

14 and comparable to benefits offered for any other

15 illness.

16 (9) PRIMARY CARE.—A State program shall en17 sure that primary care benefits and services are em18 phasized and focused within the State program in

19 accordance with the results of the study conducted

20 under section 202(g)(7). In complying with this

21 paragraph, a State shall be encouraged and guided

22 by the Board in order to develop programs to at23 tract, educate and train more primary care physi24 cians, and other primary care providers, and to give
49

•S 1057 IS

1 the support necessary to retain them in primary

2 care.

3 TITLE V—APPROVAL AND OVER4 SIGHT OF STATE PROGRAMS

5 SEC. 501. APPROVAL AND OVERSIGHT OF STATE PRO6 GRAMS

7 (a) IN GENERAL.—The Board shall administer this

8 Act, with respect to the approval of, and oversight over,

9 State programs, in accordance with this section.

10 (b) SUBMISSION OF PROGRAMS.—

11 (1) IN GENERAL.—Not later than 19 months

12 after the date of enactment of this Act, each State

13 shall prepare and submit to the Board the State

14 program in the State.

15 (2) REGIONAL PROGRAMS.—Any State may join

16 with neighboring States to prepare and submit to

17 the Board a regional program to operate in all

18 States so joined in lieu of a State program.

19 (c) REVIEW AND APPROVAL OF PROGRAMS.—Not

20 later than 20 months after the date of enactment of this

21 Act, the Board shall review the programs submitted under

22 subsection (b) and determine whether such programs meet

23 the requirements and guidelines of the Board for approval.

24 The Board shall not approve such a program unless it de-
50

•S 1057 IS

1 termines that the program provides, consistent with the

2 provisions of this Act, for the following:

3 (1) The equitable and efficient delivery of

4 CORE SERVICES within the State or for the deliv5 ery of a defined set of health care services deter6 mined by the Board to be substantially equivalent to

7 the CORE SERVICES, except that no diminution

8 shall be permitted with respect to the MediCORE

9 guidelines concerning preventive health care services

10 included in the CORE SERVICES. A State may

11 provide additional services and benefits to supple12 ment CORE SERVICES but the cost of any such

13 additional services or benefits shall be borne solely

14 by such State and a State may use demonstrated

15 savings from its MediCORE program to supplement

16 its CORE SERVICES on terms to be approved by

17 the Board.

18 (2) Adequate financing of CORE SERVICES

19 under the program, including the annual submission

20 of the State program budget to the Board.

21 (3) A system by which the State program shall

22 provide all enrolled individuals within the State with

23 standardized information about CORE SERVICES

24 under the State program.
51

•S 1057 IS

1 (4) Effective cost containment measures and

2 payment methodologies consistent with the guide3 lines developed by the Board.

4 (5) Adequate administration, including the des5 ignation of a single agency responsible for adminis6 tration of the program consistent with the guidelines

7 developed by the Board. Administrative costs of a

8 State may not exceed 5 percent of the cost of CORE

9 SERVICES co-determined in the MediCORE

10 Budget pursuant to section 601.

11 (6) Adequate quality assurance mechanisms.

12 (7) Organization of a State procedure to deter13 mine capital needs and recommend allocation of cap14 ital to localities and institutions consistent with the

15 guidelines developed by the Board.

16 (8) An organized grievance procedure available

17 to consumers through which complaints about the

18 organization and administration of the State pro19 gram and delivery of CORE SERVICES covered by

20 the State program may be filed, heard, and resolved.

21 (9) A process for developing the State’s annual

22 health budget, fee schedules, cost containment meas23 ures, payment practices, quality assurance mecha24 nisms, grievance procedures, outcomes review proce25 dures, ethical analyses procedures, and other rel-
52

•S 1057 IS

1 evant aspects of the State program, which process

2 shall include regular and adequate opportunities in

3 diverse geographical settings for the citizens of the

4 State to have their opinions solicited and heard, con5 sistent with the guidelines developed by the Board.

6 (10) An agreement, if sufficient capacity exists,

7 with veterans hospitals to reimburse the hospitals

8 for care, not required under Federal law, provided to

9 veterans and their dependents (any such agreement

10 shall not be for charges in excess of these charged

11 other providers under the State program).

12 (11) A process under which self-insured groups

13 may seek State certification if such groups are made

14 up of at least 1,000 participants and if such groups

15 are provided with health care benefits, including

16 quality of care, that is at least equal to that other17 wise required under the State program. The State

18 may require such groups to meet other require19 ments, including data collection or surcharge re20 quirements. Self-insured groups certified by the

21 State shall be reimbursed by the State in an amount

22 that equals the actual costs incurred in self-insuring,

23 or 6 percent of the amount the State receives under

24 section 602 for the fiscal year involved, whichever is

25 less.
53

•S 1057 IS

1 (12) Any other matter determined appropriate

2 by the Board.

3 In assessing the cost containment measures and payment

4 methodologies of a State for purposes of paragraph (4),

5 the Board shall consider whether the State program in6 cludes different CORE SERVICES delivery plans as de7 scribed in section 401(4)(A) that permit enrollees to be

8 presented with a choice of delivery plans and allow for

9 health care efficiencies and effectiveness to result from the

10 competition of such plans.

11 (d) ANNUAL REVIEW.—Beginning the second year

12 after a State program under this Act is in operation, and

13 annually thereafter, the Board shall review such State pro14 gram and determine whether such program continues to

15 meet the requirements of this Act. At least 3 months prior

16 to the conduct of each such review, the Board shall publish

17 a description of the criteria to be used by the Board in

18 determining whether a State program complies with the

19 requirements of this Act.

20 (e) FAILURE OF APPROVAL.—

21 (1) RESUBMISSION.—If the Board determines

22 that the initial State program submitted under sub23 section (b) does not meet the requirements for ap24 proval under subsection (c), the Board shall provide

25 notice to the State of such failure and the State
54

•S 1057 IS

1 shall, not later than 21 months after the date of en2 actment of this Act, resubmit such program with the

3 modifications required by the Board.

4 (2) SANCTIONS.—

5 (A) RESUBMISSION.—If the Board deter6 mines that a State program resubmitted under

7 paragraph (1) does not meet the requirements

8 for approval under subsection (c), the Board

9 shall provide notice to the State of such failure

10 and may place the State program in receiver11 ship under the jurisdiction of the Board or im12 pose the other sanctions described in subpara13 graph (C).

14 (B) OTHER FAILURES.—If under a review

15 conducted under subsection (d) the Board de16 termines that a State program previously ap17 proved under subsection (c) no longer meets the

18 requirements of such section, the Board shall

19 provide notice to the State of such failure and

20 that unless corrective action is taken within a

21 period of 90 days the sanctions described in

22 subparagraph (C) may be applied, effective 30

23 days after the end of such 90-day period.

24 (C) SANCTIONS.—The sanctions described

25 in subparagraph (B) are—
55

•S 1057 IS

1 (i) censure;

2 (ii) reductions in the future amounts

3 otherwise payable by the Federal Govern4 ment under this Act to the State, but in no

5 event shall such amount be reduced by

6 more than 5 percent; and

7 (iii) placing the State program in re8 ceivership under the jurisdiction of the

9 Board.

10 For purposes of clause (ii), no reduction

11 shall result in the contraction of primary or es12 sential CORE SERVICES as determined ap13 propriate by the Board.

14 (3) RECEIVERSHIP.—In the event that a State

15 program is placed in receivership under paragraph

16 (2)(C)(iii), the Board shall ensure that such pro17 gram is administered using managed competition

18 networks determined appropriate by the Board in all

19 areas in the State except those areas determined to

20 lack sufficient health care providers.

21 (f) PAYMENTS, PREMIUMS, COPAYMENTS, DEDUCT22 IBLES, ETC.

23 (1) PAYMENTS.—A State program shall provide

24 for the payment of CORE service providers accord25 ing to procedures established under the State pro-
56

•S 1057 IS

1 gram consistent with the guidelines developed by the

2 Board.

3 (2) MANDATORY ASSIGNMENT.—Each provider

4 of services or other practitioner, institution or facil5 ity that receives reimbursement related to CORE

6 SERVICES provided under this Act shall be consid7 ered to have agreed to accept the reimbursement

8 amount recognized under the State program for the

9 CORE SERVICES covered under such program as

10 payment in full for such services and may not im11 pose any charges for such services other than those

12 permitted with respect to such services under the

13 procedures established by the State consistent with

14 the guidelines developed by the Board.

15 (g) ADMINISTRATION BY STATE.—

16 (1) IN GENERAL.—On the January 1 referred

17 to in section 801, and subject to the approval of a

18 State program under subsection (c), the State shall

19 begin the administration, management, and super20 vision of its program under this Act.

21 (2) ADMINISTRATION BY CONTRACT.—A State

22 may contract with a third party or parties (including

23 private health insurance carriers, claims administra24 tions, and managed care organizations) or with the

25 MediCORE Fund Administration for the administra-
57

•S 1057 IS

1 tion, management, and supervision of its program,

2 but in no event shall more than one entity be re3 sponsible for such duties with respect to CORE

4 SERVICES provided under the State program. The

5 Board may waive the single entity claims processing

6 requirement of the preceding sentence if the Board

7 determines such action appropriate.

8 TITLE VI—MEDICORE BUDGET

9 SEC. 601. MEDICORE BUDGET.

10 (a) BUDGETARY REQUIREMENT.—The Board shall

11 prepare an annual MediCORE Budget containing esti12 mates of—

13 (1) the total expenditures the Board expects to

14 be made during the calendar year for which the

15 budget is being prepared by States and the Federal

16 Government for CORE SERVICES under this Act

17 (including administrative costs); and

18 (2) the total amount that the Board expects to

19 be available in the MediCORE Trust Fund for the

20 calendar year for which the budget is being pre21 pared.

22 (b) NATIONAL AVERAGE PER CAPITA COSTS.—

23 (1) IN GENERAL.—The Board shall compute

24 the national average per capita cost for each cat25 egory of the CORE SERVICES described in section
58

•S 1057 IS

1 301(b) using data from the national health accounts

2 of the Office of National Cost Estimates of the Of3 fice of the Actuary of the Health Care Financing

4 Administration, and other available data. On the ef5 fective date of the repeals under section 702, the

6 National Data Bank System established under sec7 tion 202(f) shall compile and maintain the data pre8 viously collected by the Office of National Cost Esti9 mates of the Office of the Actuary of the Health

10 Care Financing Administration.

11 (2) ADJUSTMENTS FOR RISK GROUPS.—

12 (A) IN GENERAL.—The Board shall de13 velop an adjustment factor to the national aver14 age per capita costs computed under paragraph

15 (1) for each risk group (as designated under

16 subparagraph (B)) to reflect the national aver17 age per capita costs for that risk group.

18 (B) RISK GROUPS.—The Board shall des19 ignate a series of risk groups, determined by

20 age, sex, and other factors that represent dis21 tinct patterns of health care services and long22 term care services utilization and costs.

23 (3) STATE ADJUSTMENTS TO NATIONAL AVER24 AGE PER CAPITA COSTS.—The Board shall develop

25 for each State a factor to adjust the national aver-
59

•S 1057 IS

1 age per capita costs for each risk group to reflect

2 the differing circumstances with respect to each such

3 State, including—

4 (A) the number of illegal immigrants in

5 such State;

6 (B) the number of homeless individuals in

7 such State;

8 (C) the overall poverty level of the State;

9 (D) the percentage of the State that is de10 termined to be rural and the percentage deter11 mined to be urban;

12 (E) the overall health status of the State;

13 and

14 (F) other factors determined appropriate

15 by the Board.

16 (c) STATE TOTAL EXPENDITURES.—The Board shall

17 compute for each State total projected expenditures for

18 each of the CORE SERVICES described in subsection (a)

19 by multiplying the national average per capita costs of

20 each risk group designated in subsection (b)(2)(B) by the

21 State adjustment factors described in subsection (b)(3) by

22 the number of persons in the State estimated by the Bu23 reau of the Census to be resident members of each risk

24 group.

25 (d) FEDERAL CONTRIBUTIONS.—
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•S 1057 IS

1 (1) IN GENERAL.—The Board shall determine

2 the appropriate Federal health care revenue con3 tribution for each State. The Federal health care

4 revenue contribution shall be determined by sub5 tracting the State share from 100 percent of the

6 total State expenditures for such State for the cal7 endar year involved (as described under subsection

8 (c)).

9 (2) STATE SHARE.—The State share referred to

10 in paragraph (1) shall not be less than an amount

11 that equals—

12 (A) the revenue generated under section

13 3101(c) of the Internal Revenue Code of 1986

14 with respect to a State; and

15 (B) the State’s share of spending under

16 title XVIII of the Social Security Act in 1995,

17 as adjusted for each subsequent fiscal year

18 based on the increase in the Gross Domestic

19 Product for such year and demographic changes

20 determined relevant by the Board.

21 (3) STATE PROTECTION.—In determining the

22 amount of the State share under paragraph (2), the

23 Board shall consider the ability of the State to pro24 vide for the continued operation of the State pro25 gram at a level sufficient to provide individuals with-
61

•S 1057 IS

1 in such State with the CORE SERVICES under

2 such program.

3 (e) SUBSEQUENT CALCULATIONS.—For each subse4 quent calendar year during which a program is in effect

5 in a State, the Board shall make recomputations under

6 subsections (a), (b), (c), and (d) for the State at least 7

7 months before the beginning of such calendar year.

8 SEC. 602. HEALTH CARE REVENUE SHARE PAYMENTS TO

9 STATES.

10 (a) IN GENERAL.—Each State with an approved

11 State program is entitled to receive, from amounts in the

12 Trust Fund, an amount equal to the annual Federal share

13 determined under section 601(d) with respect to each such

14 State.

15 (b) USE OF FUNDS.—Amounts provided to a State

16 under subsection (a) and the State share, as defined in

17 section 601(d)(2) shall be used to carry out the State pro18 gram in such State.

19 SEC. 603. MEDICORE TRUST FUND.

20 (a) TRUST FUND ESTABLISHED.—

21 (1) IN GENERAL.—There is hereby created on

22 the books of the Treasury of the United States a

23 trust fund to be known as the ‘‘MediCORE Trust

24 Fund’’. The Trust Fund shall consist of such gifts

25 and bequests as may be made and such amounts as
62

•S 1057 IS

1 may be deposited in, or appropriated to, such Trust

2 Fund as provided in this Act.

3 (2) TRANSFER OF AMOUNTS EQUIVALENT TO

4 CERTAIN TAXES.—

5 (A) IN GENERAL.—There are hereby ap6 propriated to the Trust Fund amounts equiva7 lent to 100 percent of the taxes imposed under

8 sections 59B, 1401(b), 1401(c), 3101(b),

9 3101(c), 3111(b), and 3111(c) of the Internal

10 Revenue Code of 1986.

11 (B) ADDITIONAL REVENUES.—There are

12 appropriated to the Trust Fund amounts equiv13 alent to the additional revenues received in the

14 Treasury as the result of the amendments made

15 by section 604(d) of this Act.

16 (C) TRANSFERS BASED ON ESTIMATES.—

17 The amounts appropriated by subparagraphs

18 (A) and (B) shall be transferred from time to

19 time (not less frequently than monthly) from

20 the general fund in the Treasury to the Trust

21 Fund, such amounts to be determined on the

22 basis of estimates by the Secretary of the

23 Treasury of the taxes, specified in such sub24 paragraphs, paid to or deposited into the Treas25 ury; and proper adjustments shall be made in
63

•S 1057 IS

1 amounts subsequently transferred to the extent

2 prior estimates were in excess of or were less

3 than the taxes specified in such subparagraphs.

4 (3) TRANSFER OF FUNDS.—All amounts, not

5 otherwise obligated, that remain in the Federal Hos6 pital Insurance Trust Fund and the Federal Supple7 mental Medical Insurance Trust Fund on the first

8 day of the year described in section 801 shall be

9 transferred to the Trust Fund.

10 (4) APPROPRIATION OF ADDITIONAL SUMS.—

11 There is hereby appropriated to the Trust Fund—

12 (A) on January 1 of the year described in

13 section 801 of MediCORE Health Act of 1992,

14 an amount equal to the amounts appropriated

15 with respect to titles XVIII and XIX of the So16 cial Security Act, section 1079 of title 10, Unit17 ed States Code (CHAMPUS), and chapter 89

18 of title 5, United States Code, for the fiscal

19 year ending before such year,

20 (B) on January 1 of each succeeding year,

21 an amount equal to the amount determined

22 under this paragraph for the preceding year in23 creased by the percentage increase (if any) in

24 Gross Domestic Product.
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1 (5) INCORPORATION OF TRUST FUND PROVI2 SIONS.—The provisions of subsections (b) through

3 (e) of section 1841 of the Social Security Act (42

4 U.S.C. 1395t), as in effect on the day before the

5 date of the enactment of this Act, shall apply to the

6 Trust Fund in the same manner as such provisions

7 apply to the Federal Supplemental Medical Insur8 ance Trust Fund, except that any reference to the

9 Secretary of Health and Human Services or the Ad10 ministrator of the Health Care Financing Adminis11 tration shall be deemed a reference to the Board.

12 (b) EXPENDITURES.—

13 (1) RESERVATION.—The Board shall reserve 2

14 percent of amounts contained in the Trust Fund

15 each fiscal year to provide supplemental payments to

16 States determined by the Board to be in need of

17 such supplemental payments. Such payments may be

18 made by the Board where the Board determines that

19 the amount of payment to which a State is entitled

20 under section 602 is inadequate as a result of an

21 unforeseen health emergency or other increase in

22 health care demand in such State.

23 (2) TO STATES.—Payments in each calendar

24 year to each State from the Trust Fund as deter-
65

•S 1057 IS

1 mined under section 602 are hereby authorized and

2 appropriated.

3 (3) ADMINISTRATIVE EXPENSES.—There are

4 hereby authorized and appropriated such sums as

5 are necessary for the administrative expenses of the

6 Board for each year, not to exceed 1 percent of the

7 total payments made to the States for such year as

8 determined under section 602.

9 (c) TRUST FUND OFF-BUDGET.—The receipts and

10 disbursements of the Trust Fund and the taxes described

11 in subsection (a)(2) shall not be included in the totals of

12 the budget of the United States Government as submitted

13 by the President or of the congressional budget and shall

14 be exempt from any general budget limitation imposed by

15 statute on expenditures and net lending (budget outlays)

16 of the United States Government.

17 SEC. 604. HEALTH CARE REVENUE SHARING PROVISIONS.

18 (a) PAYROLL TAXES.—

19 (1) TAX ON EMPLOYEES.—Section 3101 of the

20 Internal Revenue Code of 1986 (relating to rate of

21 tax on employees) is amended by redesignating sub22 sections (c) and (d) as subsections (d) and (e) and

23 by inserting after subsection (b) the following new

24 subsection:
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•S 1057 IS

1 ‘‘(c) MEDICORE.—In addition to the taxes imposed

2 by the preceding subsections, there is hereby imposed on

3 the income of every individual a tax equal to 2 percent

4 of the wages (as defined in section 3121(a)) received by

5 such individual on or after January 1 of the year described

6 in section 801 of MediCORE Health Act of 1992, with

7 respect to employment (as defined in section 3121(b)).’’.

8 (2) TAX ON EMPLOYERS.—Section 3111 of such

9 Code (relating to rate of tax on employers) is

10 amended by redesignating subsection (c) as sub11 section (d) and by inserting after subsection (b) the

12 following new subsection:

13 ‘‘(c) MEDICORE.—In addition to the taxes imposed

14 by the preceding subsections, there is hereby imposed on

15 every employer an excise tax, with respect to having indi16 viduals in such employer’s employ, equal to 4 percent of

17 the wages (as defined in section 3121(a)) paid by such

18 employer during each calendar year beginning on or after

19 January 1 of the year described in section 801 of

20 MediCORE Health Act of 1992, with respect to employ21 ment (as defined in section 3121(b)).’’.

22 (3) TAX ON SELF-EMPLOYMENT INCOME.—Sec23 tion 1401 of such Code (relating to rate of tax on

24 self-employment income for hospital insurance) is

25 amended by redesignating subsection (c) as sub-
67

•S 1057 IS

1 section (d) and by inserting after subsection (b) the

2 following new subsection:

3 ‘‘(c) MEDICORE.—In addition to the taxes imposed

4 by the preceding subsections, there shall be imposed for

5 each taxable year beginning on or after January 1 of the

6 year described in section 801 of MediCORE Health Act

7 of 1992, on the self-employment income of every individ8 ual, a tax equal to the sum of—

9 ‘‘(1) 2 percent, plus

10 ‘‘(2) 4 percent

11 of the amount of the self-employment income for such tax12 able year.’’.

13 (4) ELIMINATION OF LIMIT ON EMPLOYER POR14 TION OF WAGES OR SELF-EMPLOYMENT INCOME

15 SUBJECT TO MEDICORE TAX.—

16 (A) WAGES.—Subsection (x) of section

17 3121 of the Internal Revenue Code of 1986 (re18 lating to applicable contribution base) is amend19 ed by adding at the end thereof the following

20 new paragraph:

21 ‘‘(3) MEDICORE.—

22 ‘‘(A) EMPLOYEE PORTION.—For purposes

23 of the taxes imposed by section 3101(c), the ap24 plicable contribution base is—
68

•S 1057 IS

1 ‘‘(i) $100,000 for the calendar year

2 beginning on January 1 of the year de3 scribed in section 801 of MediCORE

4 Health Act of 1992, and

5 ‘‘(ii) for any calendar year after the

6 calendar year described in clause (i), the

7 applicable contribution base for the preced8 ing year adjusted in the same manner as

9 is used in adjusting the contribution and

10 benefit base under section 230(b) of the

11 Social Security Act.

12 ‘‘(B) EMPLOYER PORTION.—For purposes

13 of the taxes imposed by section 3111(c), the ap14 plicable contribution base for any calendar year

15 is equal to the remuneration for employment

16 paid to an individual for such calendar year.’’.

17 (B) SELF-EMPLOYMENT INCOME.—Sub18 section (k) of section 1402 of such Code (relat19 ing to applicable contribution base) is amended

20 by adding at the end thereof the following new

21 paragraph:

22 ‘‘(3) MEDICORE.—

23 ‘‘(A) EMPLOYEE PORTION.—For purposes

24 of the taxes imposed by section 1402(c)(1), the

25 applicable contribution base is—
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•S 1057 IS

1 ‘‘(i) $100,000 for calendar year begin2 ning on January 1 of the year described in

3 section 801 of MediCORE Health Act of

4 1992, and

5 ‘‘(ii) for any calendar year after the

6 calendar year described in clause (i), the

7 applicable contribution base for the preced8 ing year adjusted in the same manner as

9 is used in adjusting the contribution and

10 benefit base under section 230(b) of the

11 Social Security Act.

12 ‘‘(B) EMPLOYER PORTION.—For purposes

13 of the tax imposed by section 1401(c)(2), the

14 applicable contribution base for any calendar

15 year is equal to the individual’s net earnings

16 from self-employment for such calendar year.’’.

17 (C) CONFORMING AMENDMENT.—Sub18 section (c) of section 6413 of such Code is

19 amended by adding at the end thereof the fol20 lowing new paragraph:

21 ‘‘(4) SEPARATE APPLICATION FOR MEDICORE

22 TAXES.—In applying this subsection with respect

23 to—

24 ‘‘(A) the tax imposed by section 3101(c)

25 (or any amount equivalent to such tax), and
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•S 1057 IS

1 ‘‘(B) so much of the tax imposed by sec2 tion 3201 as is determined at a rate not greater

3 than the rate in effect under section 3101(c),

4 the applicable contribution base determined under

5 section 3121(x)(3)(A) for any calendar year shall be

6 substituted for ‘contribution and benefit base (as de7 termined under section 230 of the Social Security

8 Act)’ each place it appears.’’.

9 (5) ADDITIONAL FEDERAL, STATE, AND LOCAL

10 EMPLOYEES SUBJECT TO MEDICORE TAXES.—Sec11 tion 3121(u) (relating to application of hospital in12 surance tax to Federal, State, and local employ13 ment) is amended—

14 (A) by striking ‘‘sections 3101(b) and

15 3111(b)’’ in paragraph (1) and inserting ‘‘sec16 tions 3101(b), 3101(c), 3111(b), and 3111(c)’’,

17 (B) by striking ‘‘Except as provided in

18 subparagraphs (B) and (C)’’ in paragraph

19 (2)(A) and inserting ‘‘Except as provided in

20 subparagraph (B)’’ , and

21 (C) by striking subparagraphs (C) and (D)

22 of paragraph (2).

23 (6) EFFECTIVE DATE.—The amendments made

24 by this subsection shall apply with respect to remu25 neration paid on or after January 1 of the year de-
71

•S 1057 IS

1 scribed in section 801 of MediCORE Health Act of

2 1992, and with respect to earnings from self-employ3 ment attributable to taxable years beginning on or

4 after such date.

5 (b) INDIVIDUAL TAX ON CERTAIN ADJUSTED GROSS

6 INCOME.—

7 (1) IN GENERAL.—Subchapter A of chapter 1

8 of the Internal Revenue Code of 1986 (relating to

9 normal taxes and surtaxes) is amended by adding at

10 the end thereof the following new part:

11 ‘‘PART VIII—MEDICORE REVENUE SHARING

12 TAXES

‘‘Sec. 59B. Individual MediCORE tax.

13 ‘‘SEC. 59B. INDIVIDUAL MEDICORE TAX.

14 ‘‘(a) IN GENERAL.—In the case of an individual,

15 there is hereby imposed (in addition to any other tax im16 posed by this subtitle) a tax equal to the excess (if any)

17 of—

18 ‘‘(1) the tax determined under subsection (b),

19 over

20 ‘‘(2) the sum of—

21 ‘‘(A) the tax imposed under section

22 3111(c) or 1402(c)(2) for such taxable year

23 with respect to the wages or self-employment

24 income (as the case may be) of such individual
72

•S 1057 IS

1 which does not exceed the applicable contribu2 tion base under section 3121(x)(3)(A) or

3 1402(k)(3)(A) (as the case may be), plus

4 ‘‘(B) the retiree health care amount avail5 able to the individual for such taxable year.

6 ‘‘(b) TAX ON ADJUSTED GROSS INCOME.—The tax

7 imposed under this subsection is as follows:

8 ‘‘(1) MARRIED INDIVIDUALS FILING JOINT RE9 TURNS AND SURVIVING SPOUSES.—There is hereby

10 imposed on the adjusted gross income of—

11 ‘‘(A) every married individual (as defined

12 in section 7703) who makes a single return

13 jointly with such individual’s spouse under sec14 tion 6013, and

15 ‘‘(B) every surviving spouse (as defined in

16 section 2(a)),

17 a tax determined in accordance with the following

18 table:

‘‘If adjusted gross income is: The tax is:

Not over $10,000 .......................... $0.

Over $10,000 but not over

$11,000.

$0, plus 1% of the excess over

$10,000.

Over $11,000 but not over

$12,000.

$10, plus 2% of the excess over

$11,000.

Over $12,000 but not over

$13,000.

$30, plus 3% of the excess over

$12,000.

Over $13,000 but not over

$14,000.

$60, plus 4% of the excess over

$13,000.

Over $14,000 but not over

$15,000.

$100, plus 5% of the excess over

$14,000.

Over $15,000 but not over

$162,500.

$150, plus 6% of the excess over

$15,000.
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•S 1057 IS

1 ‘‘(2) UNMARRIED INDIVIDUALS (OTHER THAN

2 SURVIVING SPOUSES).—There is hereby imposed on

3 the adjusted gross income of every individual (other

4 than a surviving spouse as defined in section 2(a))

5 who is not a married individual (as defined in sec6 tion 7703) a tax determined in accordance with the

7 following table:

‘‘If adjusted gross income is: The tax is:

Not over $7,000 ............................ $0.

Over $7,000 but not over $8,000 .. $0, plus 1% of the excess over

$7,000.

Over $8,000 but not over $9,000 .. $10, plus 2% of the excess over

$8,000.

Over $9,000 but not over $10,000 $30, plus 3% of the excess over

$9,000.

Over $10,000 but not over

$11,000.

$60, plus 4% of the excess over

$10,000.

Over $11,000 but not over

$12,000.

$100, plus 5% of the excess over

$11,000.

Over $12,000 but not over

$109,500.

$150, plus 6% of the excess over

$12,000.

8 ‘‘(3) MARRIED INDIVIDUALS FILING SEPARATE

9 RETURNS.—There is hereby imposed on the adjusted

10 gross income of every married individual (as defined

11 in section 7703) who does not make a single return

12 jointly with such individual’s spouse under section

13 6013, a tax determined in accordance with the fol14 lowing table:

‘‘If adjusted gross income is: The tax is:

Not over $5,000 ............................ $0.

Over $5,000 but not over $5,500 .. $0, plus 1% of the excess over

$5,000.

Over $5,500 but not over $6,000 .. $5, plus 2% of the excess over

$5,500.

Over $6,000 but not over $6,500 .. $15, plus 3% of the excess over

$6,000.

Over $6,500 but not over $7,000 .. $30, plus 4% of the excess over

$6,500.
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•S 1057 IS

‘‘If adjusted gross income is: The tax is:

Over $7,000 but not over $7,500 .. $50, plus 5% of the excess over

$7,000.

Over $7,500 but not over $81,250 $75, plus 6% of the excess over

$7,500.

1 ‘‘(c) RETIREE HEALTH CARE AMOUNTS.—For pur2 poses of subsection (a)(2)(B), and to the extent provided

3 by regulation, an individual’s retiree health care amount

4 is equal to the amount deposited in the MediCORE Trust

5 Fund by the individual’s employer with respect to such

6 individual under an agreement with the Secretary.’’.

7 (2) CONFORMING AMENDMENT.—The table of

8 parts of subchapter A of chapter 1 of such Code is

9 amended by adding at the end thereof the following

10 new item:

‘‘Part VIII. MediCORE taxes.’’.

11 (3) EFFECTIVE DATE.—The amendments made

12 by this subsection shall apply to taxable years begin13 ning on or after January 1 of the year described in

14 section 801 of MediCORE Health Act of 1992.

15 (c) TREATMENT OF HEALTH CARE DEDUCTIONS,

16 EXCLUSIONS, AND CREDITS.—

17 (1) LIMITATION ON EXCLUSION OF COMPENSA18 TION FOR INJURIES OR SICKNESS.—Subsection (a)

19 of section 104 of the Internal Revenue Code of 1986

20 (relating to compensation for injuries or sickness) is

21 amended—
75

•S 1057 IS

1 (A) by striking paragraph (3) and insert2 ing the following new paragraph:

3 ‘‘(3) amounts received through MediCORE for

4 personal injuries or sickness;’’, and

5 (B) by striking the second sentence there6 of.

7 (2) TERMINATION OF EXCLUSION FOR

8 AMOUNTS RECEIVED UNDER ACCIDENT AND HEALTH

9 PLANS.—

10 (A) IN GENERAL.—Section 105 of such

11 Code (relating to amounts received under acci12 dent and health plans) is amended—

13 (i) by striking ‘‘income’’ and all that

14 follows in subsection (a) and inserting ‘‘in15 come.’’,

16 (ii) by striking subsections (b), (e),

17 (f), (g), and (h), and

18 (iii) by redesignating subsections (c)

19 and (i) as subsections (b) and (c), respec20 tively.

21 (B) CONFORMING AMENDMENT.—Para22 graph (6) of section 7871(a)(6) of such Code is

23 amended by striking subparagraph (A) and by

24 redesignating subparagraphs (B), (C), and (D)
76

•S 1057 IS

1 as subparagraphs (A), (B), and (C), respec2 tively.

3 (3) TERMINATION OF EXCLUSION FOR CON4 TRIBUTIONS BY EMPLOYER TO ACCIDENT AND

5 HEALTH PLANS.—

6 (A) IN GENERAL.—Section 106 of such

7 Code (relating to contributions by employer to

8 accident and health plans) is repealed.

9 (B) CONFORMING AMENDMENTS.—

10 (i) Subsection (c) of section 104 of

11 such Code is amended to read as follows:

12 ‘‘(c) CROSS REFERENCE.— ‘‘For exclusion of part of disability retirement pay

from the application of subsection (a)(4) of this section, see section 1403 of title 10, United States Code

(relating to career compensation laws).’’.

13 (ii) Sections 414(n)(3)(C), 414(t)(2),

14 and 6039D(d)(1) of such Code are each

15 amended by striking ‘‘106,’’.

16 (4) LIMITATION ON CAFETERIA PLANS.—Sub17 section (g) of section 125 of such Code (relating to

18 cafeteria plans) is amended by striking paragraph

19 (2) and by redesignating paragraphs (3) and (4) as

20 paragraphs (2) and (3), respectively.

21 (5) PROHIBITION ON USE OF MEDICORE EX22 PENSES AS BUSINESS EXPENSE DEDUCTION FOR EM23 PLOYER.—Subsection (l) of section 162 of such Code
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•S 1057 IS

1 (relating to trade or business expenses) is amended

2 to read as follows:

3 ‘‘(l) EMPLOYER MEDICORE EXPENSES.—No

4 amount paid or incurred with respect to MediCORE may

5 be allowed as a deduction under this section.’’.

6 (6) DEDUCTION FOR MEDICAL EXPENSES LIM7 ITED TO UNCOMPENSATED EXPENSES AND EM8 PLOYEE MEDICORE TAX.—

9 (A) IN GENERAL.—Subsection (a) of sec10 tion 213 of such Code (relating to medical, den11 tal, etc., expenses) is amended to read as fol12 lows:

13 ‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be

14 allowed as a deduction the expenses paid during the tax15 able year, not compensated for by insurance or otherwise

16 for—

17 ‘‘(1) medical care of the taxpayer, the tax18 payer’s spouse, or a dependent of the taxpayer (as

19 defined in section 152), to the extent that such ex20 penses exceed 7.5 percent of adjusted gross income,

21 and

22 ‘‘(2) the tax imposed under section 3101(c) or

23 1402(c)(1).’’.
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•S 1057 IS

1 (B) CONFORMING AMENDMENTS.—Sub2 section (d) of section 213 of such Code (relat3 ing to definitions) is amended—

4 (i) by inserting ‘‘or’’ at the end of

5 paragraph (1)(A),

6 (ii) by striking ‘‘, or’’ at the end of

7 paragraph (1)(B) and inserting a period,

8 (iii) by striking paragraph (1)(C),

9 (iv) by striking paragraphs (6) and

10 (7) and by redesignating paragraphs (8)

11 and (9) as paragraphs (6) and (7),

12 respectively.

13 (7) TERMINATION OF PENSION PAYMENT OF

14 MEDICAL BENEFITS.—Subsection (h) of section 401

15 of such Code (relating to qualified pension, profit16 sharing, and stock bonus plans) is repealed.

17 (8) TERMINATION OF CHILD HEALTH INSUR18 ANCE CREDIT.—Clause (i) of section 32(b)(2)(A) of

19 such Code (relating to health insurance credit) is

20 amended by inserting ‘‘(0 percent for taxable years

21 beginning on or after January 1 of the year de22 scribed in section 801 of MediCORE Health Act of

23 1992)’’ after ‘‘6 percent’’.

24 (9) EFFECTIVE DATE.—The amendments made

25 by this subsection shall apply with respect to taxable
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1 years beginning on or after January 1 of the year

2 described in section 801 of MediCORE Health Act

3 of 1992.

4 TITLE VII—PREPARATION AND

5 SUBMISSION OF MEDICORE

6 BUDGET TO CONGRESS

7 SEC. 701. PREPARATION AND SUBMISSION.

8 The Board shall annually prepare and submit to Con9 gress a MediCORE Budget Report. Such Report shall in10 clude a description of—

11 (1) the content and scope of the CORE SERV12 ICES as required under title III;

13 (2) the MediCORE Budget prepared under sec14 tion 601(a) (1) and (2);

15 (3) the national average per capita cost for each

16 category of the CORE SERVICES as required

17 under section 601(b);

18 (4) the adjustments for risk groups as required

19 under section 601(b)(2) (A) and (B);

20 (5) the State adjustment factor as computed

21 under section 601(b)(3);

22 (6) the total projected expenditures for each

23 State for each of the CORE SERVICES as com24 puted under section 601(c); and
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1 (7) the recommended Federal contributions and

2 State share for each State, including the state pro3 tection required under section 601(d).

4 SEC. 702. PUBLICATION AND COMMENT.

5 In preparing the MediCORE Budget Report under

6 section 701, the Board shall—

7 (1) not later than 9 months prior to the first

8 January 1 referred to in section 801, and each Jan9 uary 1 thereafter, publish in the Federal Register

10 the preliminary findings and recommendations of the

11 Board with respect to the Report;

12 (2) not later than 2 months after the publica13 tion required under paragraph (1) is made, solicit

14 from each State comments concerning the published

15 preliminary findings and recommendations; and

16 (3) consider the comments received under para17 graph (2) in developing the final MediCORE Budget

18 Report to be submitted to Congress pursuant to

19 section 703.

20 SEC. 703. SUBMISSION TO CONGRESS.

21 (a) IN GENERAL.—Not later than 4 months prior to

22 the effective date of the Act referred to in section 801,

23 and prior to January 1 of each succeeding calendar year,

24 the Board shall submit the final MediCORE Budget

25 Report to Congress.
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1 (b) INCOME REQUIREMENTS.—With respect to a cal2 endar year for which the Board determines in the

3 MediCORE Budget Report that the Federal income and

4 administrative expenses required under this Act exceed the

5 amounts expected to be available from the MediCORE

6 Trust Fund for such calendar year, the Board shall rec7 ommend in the MediCORE Budget Report one of the

8 following:

9 (1) That a reduction be made in the CORE

10 SERVICES covered under section 301 to the extent

11 necessary to meet the limitation of such Budget,

12 with a description of the details as to the manner in

13 which such a reduction will be accomplished (which

14 may include the establishment of restrictions on the

15 availability of services so as to achieve the greatest

16 possible social benefit). The Report shall also con17 tain guidelines for the States as to the methodology

18 of and the cost containment measures for the States

19 to accomplish the reduction.

20 (2) That an increase be made in the revenues

21 generated for deposit into the MediCORE Trust

22 Fund.

23 (3) That a combination of the measures de24 scribed in paragraphs (1) and (2) be implemented.
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1 SEC. 704. ACTION BY CONGRESS.

2 If Congress fails to act with respect to any increase

3 in funds recommended under section 703(b)(2) and (3)

4 within 2 months of the date of the submission of the

5 MediCORE Budget, the Board shall proceed to reduce the

6 CORE SERVICES covered under section 301 as required

7 by the recommendation referred to in section 703(b)(1).

8 TITLE VIII—EFFECTIVE DATE;

9 REPEALS; TRANSITION; RELA10 TION TO ERISA

11 SEC. 801. EFFECTIVE DATE.

12 The program established under this Act shall become

13 effective in each State on January 1 of the first calendar

14 year beginning after the date that is 24 months after the

15 date of enactment of this Act.

16 SEC. 802. REPEALS.

17 (a) IN GENERAL.—Titles XVIII and XIX of the So18 cial Security Act and chapter 89 of title 5, United States

19 Code, are repealed.

20 (b) REPEAL OF CHAMPUS PROVISIONS.—

21 (1) AMENDMENTS TO CHAPTER 55 OF TITLE

22 10.—Sections 1079 through 1083, 1086, and 1097

23 through 1100 of title 10, United States Code, are

24 repealed.

25 (2) TABLE OF SECTIONS.—The table of sections

26 at the beginning of chapter 55 of title 10, United
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1 States Code, is amended by striking out the items

2 relating to the sections referred to in paragraph (1).

3 (3) CONFORMING AMENDMENTS.—Chapter 55

4 of title 10, United States Code, is amended as

5 follows:

6 (A) DEFINITION.—Section 1072 is amend7 ed by striking out paragraph (4).

8 (B) REIMBURSEMENT OF THE DEPART9 MENT OF VETERANS AFFAIRS.—Section

10 1104(b) is amended—

11 (i) in the subsection heading, by strik12 ing out ‘‘from CHAMPUS funds’’;

13 and

14 (ii) by striking out ‘‘from funds’’ and

15 all that follows and inserting in lieu thereof

16 ‘‘for medical care provided by the Depart17 ment of Veterans Affairs pursuant to such

18 agreement.’’.

19 (c) HEALTH CARE FINANCING ADMINISTRATION.—

20 Upon the effective date of the repeals described in sub21 section (a), the duties and activities of the Health Care

22 Financing Administration shall be transferred to and

23 assumed by the Board.
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1 (d) EFFECTIVE DATE.—The repeals and amend2 ments made by this section shall take effect on the first

3 day of the year described in section 801.

4 SEC. 803. AUTHORIZATION OF APPROPRIATIONS AND

5 TRANSITION.

6 (a) AUTHORIZATION OF APPROPRIATIONS.—There

7 are authorized to be appropriated for each of the fiscal

8 years beginning after the effective date referred to in sec9 tion 801, such sums as may be necessary to provide for

10 financial assistance to States in the planning and develop11 ment of State programs.

12 (b) REGULATIONS.—The Board shall issue such reg13 ulations as are necessary to provide for a transition to the

14 MediCORE health care program established under this

15 Act from the programs repealed under section 802.

16 SEC. 804. RELATION TO ERISA.

17 The provisions of the Employee Retirement Income

18 Security Act are superseded to the extent inconsistent

19 with the requirements of this Act.

20 SEC. 805. RELATION TO OTHER LAWS.

21 (a) IN GENERAL.—Notwithstanding any provision of

22 the antitrust laws, it shall not be considered a violation

23 of the antitrust laws for a State to develop or implement

24 a State program under this Act.
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1 (b) DEFINITION.—For purposes of subsection (a),

2 the term ‘‘antitrust laws’’ means—

3 (1) the Act entitled ‘‘An Act to protect trade

4 and commerce against unlawful restraints and mo5 nopolies’’, approved July 2, 1890, commonly known

6 as the Sherman Act (26 Stat. 209; chapter 647; 15

7 U.S.C. 1 et seq.);

8 (2) the Federal Trade Commission Act, ap9 proved September 26, 1914 (38 Stat. 717; chapter

10 311; 15 U.S.C. 41 et seq.);

11 (3) the Act entitled ‘‘An Act to supplement ex12 isting laws against unlawful restraints and monopo13 lies’’, and for other purposes, approved October 15,

14 1914, commonly known as the Clayton Act (38 Stat.

15 730; chapter 323; 15 U.S.C. 12 et seq.; 18 U.S.C.

16 402, 660, 3285, 3691; 29 U.S.C. 52, 53); and

17 (4) any State antitrust laws that would prohibit

18 the State from carrying out a State program under

19 this Act.

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