II 

113TH CONGRESS 

1ST SESSION S. 11 

To provide a comprehensive deficit reduction plan, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 26, 2013 

Mr. CORKER (for himself and Mr. ALEXANDER) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To provide a comprehensive deficit reduction plan, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Fiscal Sustainability Act of 2013’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MEDICAID 

Sec. 1101. Comprehensive Medicaid Waivers. 

Sec. 1102. Phased-in elimination of allowable provider taxes under Medicaid. 

TITLE II—MEDICARE 

mstockstill on DSK4VPTVN1PROD with BILLS

2 

•S 11 IS

Subtitle A—Medicare Total Health Program; Medicare Fee-for-Service 

Program Reforms; Reports 

Sec. 2000. Short title; purpose. 

PART I—MEDICARE TOTAL HEALTH PROGRAM

Sec. 2001. Establishment of Medicare Total Health program. 

‘‘Subpart 2—Medicare Total Health Program 

‘‘Sec. 1860C–1. Eligibility, enrollment, and information. 

‘‘Sec. 1860C–2. Total Health plan benefits. 

‘‘Sec. 1860C–3. Access to a choice of qualified Total Health benefits plans. 

‘‘Sec. 1860C–4. Beneficiary protections for Total Health plan enrollees. 

‘‘Sec. 1860C–5. Total Health regions; submission of bids; Total Health 

plan approval. 

‘‘Sec. 1860C–6. Requirements for and contracts with Total Health sponsors. 

‘‘Sec. 1860C–7. Total Health premiums. 

‘‘Sec. 1860C–8. Premium and cost-sharing support for Total Health eligible individuals. 

‘‘Sec. 1860C–9. Exemption for MSA plans. 

‘‘Sec. 1860C–10. Special rules for employer-sponsored programs. 

‘‘Sec. 1860C–11. Coordination with State Medicaid programs. 

‘‘Sec. 1860C–12. Definitions and miscellaneous provisions. 

Sec. 2002. Replacement of part B premium with Medicare Total Health program plan premium; other technical and conforming amendments. 

PART II—MEDICARE FEE-FOR-SERVICE REFORMS

Sec. 2011. Medicare protection against high out-of-pocket expenditures for feefor-service benefits. 

Sec. 2012. Unified Medicare deductible. 

Sec. 2013. Uniform Medicare coinsurance rate. 

Sec. 2014. Prohibition on first-dollar coverage under Medigap policies and development of new standards for Medigap policies. 

PART III—ANNUAL REPORT TO CONGRESS

Sec. 2021. Annual report to Congress. 

Subtitle B—Elimination of Exemption of Medicare Payments to Physicians 

Under Statutory PAYGO 

Sec. 2101. Elimination of exemption of Medicare payments to physicians under 

statutory PAYGO. 

Subtitle C—Adjustments to Medicare Part B and D Premiums for HighIncome Beneficiaries 

Sec. 2201. Adjustments to Medicare part B and D premiums for high-income 

beneficiaries. 

Subtitle D—Increase in the Medicare Eligibility Age 

Sec. 2301. Increase in the Medicare eligibility age. 

mstockstill on DSK4VPTVN1PROD with BILLS

3 

•S 11 IS

Subtitle E—Other Provisions 

Sec. 2401. Limitation on Medicare payments for direct graduate medical education (DGME). 

Sec. 2402. Reduction in Medicare indirect graduate medical education (IME) 

payments. 

Sec. 2403. Acceleration of application of productivity adjustment to Medicare 

home health prospective payment amounts. 

Sec. 2404. Acceleration of rebasing of Medicare home health prospective payment amounts. 

Sec. 2405. Reduction of bad debt treated as an allowable cost. 

TITLE III—SOCIAL SECURITY 

Sec. 3101. Adjustments to bend points in determining primary insurance 

amount. 

Sec. 3102. Adjustment to calculation of benefit computation years. 

Sec. 3103. Minimum Social Security benefit. 

Sec. 3104. Increase in benefits starting 20 years after initial eligibility. 

Sec. 3105. Adjustment to normal and early retirement ages. 

Sec. 3106. Application of actuarial reduction for disabled beneficiaries who attain early retirement age. 

Sec. 3107. Option to collect up to one-half of old-age insurance benefit at age 

62. 

Sec. 3108. Coverage of newly hired State and local employees. 

Sec. 3109. Inclusion in annual Social Security account statement of estimated 

present value of taxes and benefits for Social Security and 

Medicare and projected deficit as a percent of lifetime earnings. 

Sec. 3110. Retirement information campaign. 

TITLE IV—CONVERSION TO CHAINED CPI 

Sec. 4101. Conversion to Chained CPI. 

1 TITLE I—MEDICAID 

2 SEC. 1101. COMPREHENSIVE MEDICAID WAIVERS. 

3 Section 1115 of the Social Security Act (42 U.S.C. 

4 1315) is amended by adding at the end the following: 

5 ‘‘(g) COMPREHENSIVE MEDICAID WAIVERS.— 

6 ‘‘(1) AUTHORITY.— 

7 ‘‘(A) IN GENERAL.—A State may elect to 

8 provide medical assistance under title XIX, di9 rectly or by contract, to eligible individuals pur10 suant to a comprehensive Medicaid waiver 

mstockstill on DSK4VPTVN1PROD with BILLS

4 

•S 11 IS

1 under this subsection in lieu of providing such 

2 assistance under a State plan approved under 

3 title XIX or a waiver approved under subsection 

4 (d) or extended under subsection (e). A State 

5 shall make such an election by submitting a 

6 waiver application to the Secretary for certifi7 cation that the application satisfies the require8 ments of paragraph (2). 

9 ‘‘(B) WAIVER OF STATE MEDICAID PRO10 GRAM REQUIREMENTS.—Any requirements ap11 plicable under this title or title XIX that would 

12 prevent a State from carrying out a comprehen13 sive Medicaid waiver in accordance with the 

14 State’s certified application and the require15 ments of this subsection are deemed waived. 

16 ‘‘(C) SHARED SAVINGS BONUS.—A State 

17 conducting a comprehensive Medicaid waiver 

18 under this subsection shall be eligible for a 

19 shared savings bonus in accordance with para20 graph (4). 

21 ‘‘(D) OPTION TO INCLUDE CHIP-ELIGIBLE

22 INDIVIDUALS.—A State may elect to treat indi23 viduals eligible for child health assistance under 

24 the State child health plan under title XXI as 

25 eligible individuals under a comprehensive Medmstockstill on DSK4VPTVN1PROD with BILLS

5 

•S 11 IS

1 icaid waiver. The waiver application and deter2 mination of the aggregate spending cap for the 

3 State for the waiver period shall take into ac4 count the inclusion of such individuals in the 

5 comprehensive Medicaid waiver. Any require6 ments applicable under this title, title XIX, or 

7 title XXI that would prevent a State from in8 cluding such individuals in the comprehensive 

9 Medicaid waiver in accordance with the State’s 

10 certified application and the requirements of 

11 this subsection are deemed waived. 

12 ‘‘(2) COMPREHENSIVE MEDICAID WAIVER AP13 PLICATION.—An application for a comprehensive 

14 Medicaid waiver under this subsection shall contain 

15 the following: 

16 ‘‘(A) GENERAL DESCRIPTION OF PRO17 POSED BENEFIT DELIVERY MODELS, ELIGI18 BILITY CRITERIA, AND BENEFITS.—A brief de19 scription, which may be in outline form, of the 

20 eligibility criteria and medical assistance to be 

21 provided that includes the methods for delivery 

22 of such assistance, the criteria for the deter23 mination of eligibility for such assistance, and 

24 the amount, duration, and scope of such assist25 ance, including a description of the amount (if 

mstockstill on DSK4VPTVN1PROD with BILLS

6 

•S 11 IS

1 any) of premiums, deductibles, coinsurance, or 

2 other cost-sharing. 

3 ‘‘(B) HEDIS MEASURES TO EVALUATE

4 PERFORMANCE.— 

5 ‘‘(i) IN GENERAL.—A description of 

6 not less than 20 of the standard Medicaid 

7 Healthcare Effectiveness Data and Infor8 mation Set (HEDIS) measures established 

9 by the National Committee for Quality As10 surance selected by the State to annually 

11 evaluate the quality and cost-effectiveness 

12 of the medical assistance provided under 

13 the waiver, and for each such measure 

14 (and, if applicable, the distinct rates asso15 ciated with the measure), the baseline data 

16 and the target performance goal applicable 

17 for each such measure or rate. The State 

18 shall select HEDIS measures that are 

19 closely aligned with the health care items 

20 and services that are provided to eligible 

21 individuals as medical assistance under the 

22 waiver. 

23 ‘‘(ii) EVALUATION.—The description 

24 under this subparagraph shall specify the 

25 independent entity that the State will use 

mstockstill on DSK4VPTVN1PROD with BILLS

7 

•S 11 IS

1 to evaluate the waiver. The State shall pro2 vide an assurance that the State will sub3 mit a copy of the annual evaluation to the 

4 Secretary. 

5 ‘‘(C) PROGRAM INTEGRITY.—A brief de6 scription of the State’s program to prevent 

7 waste, fraud, and abuse under the waiver. 

8 ‘‘(D) AGGREGATE SPENDING CAP.—An as9 surance that the State agrees— 

10 ‘‘(i) to establish categories that accu11 rately account for each of the distinct pop12 ulation groups that will qualify as eligible 

13 individuals under the waiver (such as chil14 dren, parents, pregnant women, and the 

15 blind or disabled) based on such criteria as 

16 are determined appropriate by the State 

17 (referred to in this subsection as a ‘popu18 lation category’); 

19 ‘‘(ii) to provide the Secretary with all 

20 data relevant to the determination of the 

21 aggregate spending cap for the State for 

22 the waiver period, as determined by the 

23 Secretary under paragraph (3)(B); and 

24 ‘‘(iii) with respect to each period for 

25 which the waiver is approved, to not remstockstill on DSK4VPTVN1PROD with BILLS

8 

•S 11 IS

1 ceive any Federal payments from the Sec2 retary for amounts expended during such 

3 period that exceed the aggregate spending 

4 cap. 

5 ‘‘(3) DETERMINATION OF AGGREGATE SPEND6 ING CAP.— 

7 ‘‘(A) ESTABLISHMENT OF SPENDING TEM8 PLATE.— 

9 ‘‘(i) IN GENERAL.—The Secretary, in 

10 coordination with the Director of the Of11 fice of Management and Budget (referred 

12 to in this subsection as the ‘Director’), 

13 shall establish a template for determining, 

14 with respect to each State, the aggregate 

15 spending cap for each period for which the 

16 State conducts a comprehensive Medicaid 

17 waiver under this subsection. The Sec18 retary shall— 

19 ‘‘(I) publish a proposed template 

20 not later than 60 days after the date 

21 of enactment of this subsection; 

22 ‘‘(II) provide for a period for 

23 public comment on the proposed tem24 plate; and 

mstockstill on DSK4VPTVN1PROD with BILLS

9 

•S 11 IS

1 ‘‘(III) promulgate a final tem2 plate not later than 120 days after 

3 such date of enactment. 

4 ‘‘(ii) REVISIONS.— 

5 ‘‘(I) IN GENERAL.—Subject to 

6 subclause (II), the Secretary, in co7 ordination with the Director, shall re8 vise the template, as appropriate, not 

9 less than every 5 years pursuant to a 

10 process that allows for public com11 ment prior to publication of the re12 vised template. 

13 ‘‘(II) TECHNICAL CHANGES.— 

14 The Secretary or the Director may 

15 make any necessary technical or con16 forming changes to the template at 

17 such times and in such manner as is 

18 determined appropriate. 

19 ‘‘(B) DETERMINATION OF AGGREGATE

20 SPENDING CAP FOR EACH STATE.— 

21 ‘‘(i) IN GENERAL.—Subject to sub22 paragraph (C), the aggregate spending cap 

23 applicable to a State for a waiver period 

24 shall be equal to 99 percent of the amount 

25 determined under clause (ii). 

mstockstill on DSK4VPTVN1PROD with BILLS

10 

•S 11 IS

1 ‘‘(ii) TOTAL AMOUNT OF PROJECTED

2 FEDERAL PAYMENTS.—The amount de3 scribed in this clause is equal to the sum 

4 of— 

5 ‘‘(I) the total amount of Federal 

6 payments that would otherwise be 

7 made to the State during the waiver 

8 period with respect to any dispropor9 tionate share payment adjustment 

10 made under section 1923; and 

11 ‘‘(II) the sum of the amounts de12 termined under clause (iii) for each 

13 population category. 

14 ‘‘(iii) PROJECTED FEDERAL PAY15 MENTS FOR MEDICAL ASSISTANCE PRO16 VIDED TO POPULATION CATEGORIES.—For 

17 purposes of clause (ii)(II), the Secretary 

18 and the Director shall calculate the 

19 amount of projected expenditures for the 

20 provision of medical assistance to eligible 

21 individuals in each population category 

22 during the waiver period (as determined 

23 based upon the population categories es24 tablished and the data provided by the 

25 State pursuant to paragraph (2)(D), as 

mstockstill on DSK4VPTVN1PROD with BILLS

11 

•S 11 IS

1 well as the annual baseline estimates sup2 plied by the Director and such other data 

3 as is determined appropriate by the Sec4 retary), which shall be equal to the product 

5 of— 

6 ‘‘(I) subject to clause (iv), the 

7 monthly per capita amount of Federal 

8 payments that were made to the State 

9 under the State plan under title XIX 

10 (or under a waiver approved under 

11 subsection (d) or extended under sub12 section (e)) for an individual in such 

13 population category during the fiscal 

14 year prior to the State application for 

15 the waiver (referred to in this para16 graph as the ‘population category per 

17 capita baseline’); 

18 ‘‘(II) the number of individuals 

19 within such population category that 

20 are projected to be eligible to receive 

21 medical assistance during the waiver 

22 period; and 

23 ‘‘(III) the number of months in 

24 the waiver period. 

mstockstill on DSK4VPTVN1PROD with BILLS

12 

•S 11 IS

1 ‘‘(iv) POPULATION CATEGORIES WITH

2 NO BASELINE DATA.—For purposes of any 

3 determination under clause (iii)(I) for a 

4 population category that lacks sufficient 

5 data to calculate the population category 

6 per capita baseline and that consists of in7 dividuals for which the State would other8 wise be required to provide medical assist9 ance to pursuant to section 

10 1902(a)(10)(A)(i)(VIII), the population 

11 category per capita baseline shall be equal 

12 to the monthly per capita amount of Fed13 eral payments that would otherwise have 

14 been made to the State under the State 

15 plan under title XIX (or under a waiver 

16 approved under subsection (d) or extended 

17 under subsection (e)) during the preceding 

18 fiscal year for an individual who is under 

19 65 years of age, not pregnant, not entitled 

20 to, or enrolled for, benefits under part A of 

21 title XVIII, or enrolled for benefits under 

22 part B of title XVIII. 

23 ‘‘(v) BUDGET NEUTRALITY.—In no 

24 event shall the aggregate spending cap es25 tablished for a State for a waiver period 

mstockstill on DSK4VPTVN1PROD with BILLS

13 

•S 11 IS

1 allow for Federal payments to the State 

2 during the waiver period that exceed the 

3 amount of Federal payments to the State 

4 that would have been made during that pe5 riod if the State had not elected to conduct 

6 a comprehensive Medicaid waiver under 

7 this subsection during the period. 

8 ‘‘(C) ADJUSTMENT OF AGGREGATE SPEND9 ING CAP FOR HIGH UNEMPLOYMENT.—For pur10 poses of subparagraph (B)(i), if the average 

11 monthly unemployment rate (as defined in 

12 paragraph (8)(A)) for a State exceeds 10 per13 cent for any consecutive period of at least 6 

14 months occurring during the waiver period, the 

15 aggregate spending cap applicable to the State 

16 for such waiver period shall be equal to 100 

17 percent of the amount determined under sub18 paragraph (B)(ii). 

19 ‘‘(4) SHARED SAVINGS BONUSES.— 

20 ‘‘(A) IN GENERAL.—The Secretary shall 

21 annually pay each State conducting a com22 prehensive Medicaid waiver under this sub23 section an amount equal to 25 percent of the 

24 waiver savings determined with respect to a 

mstockstill on DSK4VPTVN1PROD with BILLS

14 

•S 11 IS

1 State and a waiver period under subparagraph 

2 (C). 

3 ‘‘(B) DEDICATED TO HEALTH CARE.—A 

4 State that receives a payment under this para5 graph shall spend not less than 80 percent of 

6 the payment on health care services or health7 related activities for eligible individuals. 

8 ‘‘(C) DETERMINATION OF WAIVER SAV9 INGS.—The Secretary and the Director shall es10 tablish a process for determining with respect 

11 to a State and a waiver period the amount of 

12 savings achieved by a State for the period. The 

13 process shall take into account the difference 

14 between the aggregate spending cap applicable 

15 to the State for the waiver period and the total 

16 amount expended by the State under the waiver 

17 for the period. 

18 ‘‘(D) PAYMENT; RETROSPECTIVE ADJUST19 MENT.—The Secretary shall make annual pay20 ments under this paragraph on the basis of 

21 claims submitted by the State for expenses paid 

22 by the State for medical assistance provided 

23 under the waiver, and such other investigation 

24 as the Secretary or the Director may find nec25 essary, and may reduce or increase the paymstockstill on DSK4VPTVN1PROD with BILLS

15 

•S 11 IS

1 ments as necessary to adjust for prior overpay2 ments or under payments under this paragraph. 

3 ‘‘(5) DURATION.— 

4 ‘‘(A) IN GENERAL.—A State shall conduct 

5 a comprehensive Medicaid waiver under this 

6 subsection for a 5-year period. Subject to sub7 paragraph (B), a comprehensive Medicaid waiv8 er may be renewed for additional 3-year periods 

9 upon the request of the State, unless within 90 

10 days after receipt of a State request for a re11 newal of a waiver, the Secretary and the Direc12 tor determine, based on the State evaluations 

13 required under paragraph (2)(B), that the waiv14 er should not be renewed. 

15 ‘‘(B) STATE EVALUATIONS AND TARGET

16 PERFORMANCE GOALS.—For purposes of sub17 paragraph (A), the Secretary and the Director 

18 may not renew a waiver unless each of the 

19 measures or rates selected by the State pursu20 ant to paragraph (2)(B) has improved or re21 mained constant during the waiver period. 

22 ‘‘(6) LIMITED SECRETARIAL AUTHORITY; AD23 MINISTRATIVE AND JUDICIAL REVIEW.— 

24 ‘‘(A) CERTIFICATION OF WAIVER APPLICA25 TIONS.— 

mstockstill on DSK4VPTVN1PROD with BILLS

16 

•S 11 IS

1 ‘‘(i) IN GENERAL.—Except as pro2 vided under clause (ii), the Secretary and 

3 the Director shall have 90 days from re4 ceipt of an application by a State for a 

5 comprehensive Medicaid waiver to certify 

6 the application as satisfying the require7 ments of paragraph (2). 

8 ‘‘(ii) INQUIRIES.—The Secretary and 

9 the Director may submit a single set of in10 quiries for additional information to the 

11 State during the initial 90-day period de12 scribed under clause (i). If a State receives 

13 a set of inquires, the State shall have up 

14 to 60 days to respond. The Secretary and 

15 the Director shall have an additional 30- 

16 day period, starting on the date the Sec17 retary receives a State response to a set of 

18 inquiries, to make a final determination as 

19 to whether the State’s waiver application 

20 may be certified as complying with the re21 quirements of paragraph (2). 

22 ‘‘(iii) FAILURE TO RESPOND BY THE

23 SECRETARY.—An application by a State 

24 for a comprehensive Medicaid waiver shall 

25 be deemed certified by the Secretary if the 

mstockstill on DSK4VPTVN1PROD with BILLS

17 

•S 11 IS

1 Secretary does not submit any inquiries 

2 during the initial 90-day review period. 

3 ‘‘(iv) EFFECTIVE DATE.—A waiver 

4 that has been certified by the Secretary (or 

5 deemed to be certified) may be effective, at 

6 the discretion of the State, as of the first 

7 day of the calendar quarter in which the 

8 application for the waiver was submitted 

9 by the State. 

10 ‘‘(B) DENIAL OF WAIVER APPLICATIONS

11 OR RENEWAL REQUESTS.— 

12 ‘‘(i) IN GENERAL.—If the Secretary 

13 and the Director determine that an appli14 cation for a comprehensive Medicaid waiv15 er, or a request for extension of an existing 

16 comprehensive Medicaid waiver, does not 

17 satisfy the requirements of paragraph (2), 

18 the Secretary shall notify the State of the 

19 disapproval by written notification, not 

20 later than 10 days following the issuance 

21 of such determination and shall provide a 

22 detailed description of the reasons for the 

23 denial of the waiver to— 

mstockstill on DSK4VPTVN1PROD with BILLS

18 

•S 11 IS

1 ‘‘(I) the State that submitted the 

2 waiver application or extension re3 quest; 

4 ‘‘(II) the members of Congress 

5 representing such State; and 

6 ‘‘(III) the Committee on Finance 

7 of the Senate and the Committee on 

8 Energy and Commerce of the House 

9 of Representatives. 

10 ‘‘(ii) ADMINISTRATIVE AND JUDICIAL

11 REVIEW.— 

12 ‘‘(I) ADMINISTRATIVE REVIEW.— 

13 Within 60 days after the date that a 

14 State receives notice of the denial of a 

15 waiver application or extension re16 quest, the State may appeal the deter17 mination to the Departmental Appeals 

18 Board established in the Department 

19 of Health and Human Services. The 

20 Departmental Appeals Board shall 

21 make a final determination with re22 spect to an appeal filed under this 

23 subparagraph not less than 60 days 

24 after the date on which the appeal is 

25 filed. 

mstockstill on DSK4VPTVN1PROD with BILLS

19 

•S 11 IS

1 ‘‘(II) JUDICIAL REVIEW.—Within 

2 60 days after the date of a final deci3 sion by the Board under subclause (I) 

4 that is adverse to a State, the State 

5 may obtain judicial review of the final 

6 decision by filing an action in the dis7 trict court of the United States for 

8 the judicial district in which the prin9 cipal or headquarters office of the 

10 State agency responsible for admin11 istering the State Medicaid program 

12 is located or the United States Dis13 trict Court for the District of Colum14 bia. 

15 ‘‘(C) REPORTS.— 

16 ‘‘(i) IN GENERAL.—Not later than 2 

17 years after the date on which the Secretary 

18 and the Director first approve an applica19 tion for a comprehensive Medicaid waiver 

20 under this subsection and every 3 years 

21 thereafter, the Comptroller General of the 

22 United States (referred to in this subpara23 graph as the ‘Comptroller’) shall submit to 

24 the Committee on Finance of the Senate 

25 and the Committee on Energy and Commstockstill on DSK4VPTVN1PROD with BILLS

20 

•S 11 IS

1 merce of the House of Representatives a 

2 report on the waivers certified as of the 

3 date of such report. Each report shall in4 clude an evaluation of the quality and cost5 effectiveness of the comprehensive Med6 icaid waivers in effect during the reporting 

7 period in providing medical assistance to 

8 eligible individuals, as well as the financial 

9 effort of the waiver on State and Federal 

10 budgets. 

11 ‘‘(ii) REPORTING OF INFORMATION.— 

12 A State with a comprehensive Medicaid 

13 waiver under this subsection shall provide 

14 the Comptroller, in such form and manner 

15 as the Comptroller may require, with any 

16 relevant information regarding the waiver, 

17 including total expenditures by the State 

18 under the waiver, the number of individ19 uals provided medical assistance under the 

20 waiver, and such other information as the 

21 Comptroller may require for purposes of 

22 preparing the reports required under this 

23 subparagraph. 

24 ‘‘(7) NON-APPLICATIONS.—A comprehensive 

25 Medicaid waiver shall not apply to— 

mstockstill on DSK4VPTVN1PROD with BILLS

21 

•S 11 IS

1 ‘‘(A) the pediatric vaccine program under 

2 section 1928; and 

3 ‘‘(B) limitations on total payments to terri4 tories under section 1108. 

5 ‘‘(8) OUTREACH AND EDUCATION.— 

6 ‘‘(A) STATE AWARENESS.—Not later than 

7 30 days after the date of enactment of this sub8 section, the Secretary shall conduct an outreach 

9 and education campaign to States regarding the 

10 availability of comprehensive Medicaid waivers 

11 under this subsection. 

12 ‘‘(B) PUBLIC NOTICE AND COMMENT.—Be13 fore submitting an application for a comprehen14 sive Medicaid waiver, a State shall make the 

15 proposed application available to the public 

16 through such means as the State determines 

17 appropriate and allow for a reasonable public 

18 comment period of not greater than 30 days. 

19 ‘‘(C) PUBLIC AWARENESS OF APPROVED

20 WAIVER.—A State that has been certified for a 

21 comprehensive Medicaid waiver shall conduct an 

22 outreach and education campaign to ensure 

23 that health care providers and eligible individ24 uals within the State are provided with ade25 quate notice regarding the methods and criteria 

mstockstill on DSK4VPTVN1PROD with BILLS

22 

•S 11 IS

1 through which the State intends to provide 

2 medical assistance under the waiver. 

3 ‘‘(9) DEFINITIONS.—In this subsection: 

4 ‘‘(A) AVERAGE MONTHLY UNEMPLOYMENT

5 RATE.—The term ‘average monthly unemploy6 ment rate’ means the average of the monthly 

7 number unemployed in the State, divided by the 

8 average of the monthly civilian labor force in 

9 the State, seasonally adjusted, as determined 

10 based on the most recent monthly publications 

11 of the Bureau of Labor Statistics of the De12 partment of Labor. 

13 ‘‘(B) ELIGIBLE INDIVIDUAL.—The term 

14 ‘eligible individual’ means, for each year during 

15 the waiver period— 

16 ‘‘(i) any individual who, for such year, 

17 the State would otherwise be required to 

18 provide medical assistance to pursuant 

19 to— 

20 ‘‘(I) section 1902(a)(10)(A)(i); 

21 ‘‘(II) paragraphs (1) or (4) of 

22 section 1902(e); 

23 ‘‘(III) section 1925; or 

24 ‘‘(IV) section 1931; and 

mstockstill on DSK4VPTVN1PROD with BILLS

23 

•S 11 IS

1 ‘‘(ii) at the option of the State, any 

2 individual who, for such year, the State 

3 would otherwise provide child health assist4 ance to under the State child health plan 

5 under title XXI; and 

6 ‘‘(iii) at the option of the State, any 

7 individual who is not described in clause (i) 

8 or (ii) and who satisfies such income, re9 sources, health status, or other criteria as 

10 the State may establish. 

11 ‘‘(C) MEDICAL ASSISTANCE.—The term 

12 ‘medical assistance’ means— 

13 ‘‘(i) health care coverage (as deter14 mined by the State); and 

15 ‘‘(ii) rehabilitation and other services 

16 to help eligible individuals attain or retain 

17 capability for independence or self-care, 

18 such as home and community-based serv19 ices. 

20 ‘‘(D) STATE MEDICAID PROGRAM.—The 

21 term ‘State Medicaid program’ means the State 

22 program for medical assistance provided under 

23 a State plan under title XIX, including any 

24 waiver that has been approved with respect to 

25 a State plan prior to an application by the 

mstockstill on DSK4VPTVN1PROD with BILLS

24 

•S 11 IS

1 State for a comprehensive Medicaid waiver 

2 under this subsection.’’. 

3 SEC. 1102. PHASED-IN ELIMINATION OF ALLOWABLE PRO4 VIDER TAXES UNDER MEDICAID. 

5 (a) IN GENERAL.—Clause (ii) of section 

6 1903(w)(4)(C) of the Social Security Act (42 U.S.C. 

7 1396b(w)(4)(C)) is amended to read as follows: 

8 ‘‘(ii) For purposes of clause (i), a determination 

9 of the existence of an indirect guarantee shall be 

10 made under paragraph (3)(i) of section 433.68(f) of 

11 title 42, Code of Federal Regulations, as in effect on 

12 November 1, 2006, except that— 

13 ‘‘(I) for portions of fiscal years beginning 

14 on or after January 1, 2008, and before Octo15 ber 1, 2011, ‘5.5 percent’ shall be substituted 

16 for ‘6 percent’ each place it appears; 

17 ‘‘(II) for fiscal years 2012 and 2013, the 

18 percentage specified under such paragraph shall 

19 apply; 

20 ‘‘(III) for fiscal years 2014 through 2022, 

21 the percentage determined under clause (iii) for 

22 the fiscal year shall be substituted for ‘6 per23 cent’ each place it appears; and 

mstockstill on DSK4VPTVN1PROD with BILLS

25 

•S 11 IS

1 ‘‘(IV) for fiscal year 2023 and each fiscal 

2 year thereafter, ‘0 percent’ shall be substituted 

3 for ‘6 percent’ each place it appears. 

4 ‘‘(iii) For purposes of clause (ii)(III), the per5 centage determined under this clause shall be equal 

6 to the percentage applicable under subclause (II) or 

7 (III) of clause (ii) for the preceding fiscal year, re8 duced by 0.6 percentage points.’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 subsection (a) shall take effect on October 1, 2013. 

11 TITLE II—MEDICARE 

12 Subtitle A—Medicare Total Health 

13 Program; Medicare Fee-for14 Service Program Reforms; Re15 ports 

16 SEC. 2000. SHORT TITLE; PURPOSE. 

17 (a) SHORT TITLE.—This subtitle may be cited as the 

18 ‘‘Medicare Total Health Act of 2013’’. 

19 (b) PURPOSE.—The purpose of this subtitle is to 

20 amend title XVIII of the Social Security Act to improve 

21 the sustainability of the Medicare program by establishing 

22 a Total Health system, reforming the Medicare fee-for23 service program, and for other purposes. 

mstockstill on DSK4VPTVN1PROD with BILLS

26 

•S 11 IS

1 PART I—MEDICARE TOTAL HEALTH PROGRAM 

2 SEC. 2001. ESTABLISHMENT OF MEDICARE TOTAL HEALTH 

3 PROGRAM. 

4 (a) SUNSET OF MEDICARE ADVANTAGE PLANS.— 

5 Section 1851(a)(1) of the Social Security Act (42 U.S.C. 

6 1395w–21(a)(1)), in the matter preceding subparagraph 

7 (A), is amended by striking ‘‘Subject to’’ and inserting 

8 ‘‘For plan years beginning prior to January 1, 2017, and 

9 subject to’’. 

10 (b) ESTABLISHMENT.—Part C of title XVIII of the 

11 Social Security Act (42 U.S.C. 1395w–21 et seq.) is 

12 amended— 

13 (1) in the part heading, by striking 

14 ‘‘MEDICARE+CHOICE PROGRAM’’ and inserting 

15 ‘‘MEDICARE ADVANTAGE PROGRAM; MEDICARE

16 TOTAL HEALTH PROGRAM’’; 

17 (2) by inserting before section 1851 the fol18 lowing: 

19 ‘‘Subpart 1—Medicare Advantage Program’’; and 

20 (3) by adding at the end the following new sub21 part: 

22 ‘‘Subpart 2—Medicare Total Health Program 

23 ‘‘ELIGIBILITY, ENROLLMENT, AND INFORMATION

24 ‘‘SEC. 1860C–1. (a) ELIGIBILITY.— 

25 ‘‘(1) IN GENERAL.—Notwithstanding section 

26 1851(a)(1) and subject to the succeeding provisions 

mstockstill on DSK4VPTVN1PROD with BILLS

27 

•S 11 IS

1 of this subpart, each Total Health eligible individual 

2 (as defined in paragraph (3)) may elect to receive 

3 benefits under this title— 

4 ‘‘(A) through the original medicare fee-for5 service program under parts A and B, including 

6 the option to elect qualified prescription drug 

7 coverage in accordance with section 1860D–1; 

8 or 

9 ‘‘(B) through enrollment in a Total Health 

10 plan under this subpart. 

11 ‘‘(2) COVERAGE FIRST EFFECTIVE JANUARY 1, 

12 2017.—Coverage under the Medicare Total Health 

13 program shall first be effective on January 1, 2017. 

14 ‘‘(3) TOTAL HEALTH ELIGIBLE INDIVIDUAL.— 

15 For purposes of this subpart, the term ‘Total Health 

16 eligible individual’ means an individual who is enti17 tled to benefits under part A and enrolled under 

18 part B who resides in a Total Health region. 

19 ‘‘(4) TYPES OF TOTAL HEALTH PLANS THAT

20 MAY BE AVAILABLE.—A Total Health plan may be 

21 any of the types of plans of health insurance de22 scribed in section 1851(a)(2)(A), including a plan 

23 for special needs individuals described in clause (ii) 

24 of such section. 

mstockstill on DSK4VPTVN1PROD with BILLS

28 

•S 11 IS

1 ‘‘(b) ENROLLMENT PROCESS FOR TOTAL HEALTH

2 PLANS.— 

3 ‘‘(1) ESTABLISHMENT OF PROCESS.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 establish a process for the enrollment, 

6 disenrollment, termination, and change of en7 rollment of Total Health eligible individuals in 

8 Total Health plans in a manner similar to (and 

9 coordinated with) the process established under 

10 section 1860D–1(b)(1). 

11 ‘‘(B) REQUIREMENTS.—Except as other12 wise provided in this subsection, the process es13 tablished under subparagraph (A) shall include 

14 a residency requirement similar to the residency 

15 requirement described in section 1851(b)(1) 

16 and shall take into account the process for exer17 cising choice described in section 1851(c). 

18 ‘‘(2) INITIAL ENROLLMENT PERIOD.— 

19 ‘‘(A) PROGRAM INITIATION.—In the case 

20 of an individual who is a Total Health eligible 

21 individual as of November 15, 2016, there shall 

22 be an initial enrollment period beginning on Oc23 tober 15, 2016, and ending on December 7, 

24 2016. 

mstockstill on DSK4VPTVN1PROD with BILLS

29 

•S 11 IS

1 ‘‘(B) CONTINUING PERIODS.—In the case 

2 of an individual who first becomes a Total 

3 Health eligible individual after November 15, 

4 2016, there shall be an initial enrollment period 

5 which is the same as the period under section 

6 1851(e)(1). 

7 ‘‘(3) ANNUAL, COORDINATED ELECTION PE8 RIOD.— 

9 ‘‘(A) IN GENERAL.—As part of the process 

10 established under paragraph (1), each indi11 vidual who is eligible to make an election under 

12 this section may change such election during an 

13 annual, coordinated election period. 

14 ‘‘(B) ANNUAL, COORDINATED ELECTION

15 PERIOD.—For purposes of this section, the 

16 term ‘annual, coordinated election period’ 

17 means, with respect to 2017 and succeeding 

18 years, the period beginning on October 15 and 

19 ending on December 7 of the year before such 

20 year. 

21 ‘‘(4) SPECIAL ENROLLMENT PERIODS.—The 

22 Secretary shall establish special enrollment periods 

23 that are similar to the special enrollment periods es24 tablished under section 1851(e)(4). 

25 ‘‘(5) SPECIAL RULE.— 

mstockstill on DSK4VPTVN1PROD with BILLS

30 

•S 11 IS

1 ‘‘(A) IN GENERAL.—Notwithstanding any 

2 other provision of law, the process established 

3 under paragraph (1) shall include, in the case 

4 of a Total Health eligible individual who has 

5 failed to enroll in either the original medicare 

6 fee-for-service program option or a Total 

7 Health plan prior to the beginning of a plan 

8 year (including a full-benefit dual eligible indi9 vidual (as defined in section 1935(c)(6))), for 

10 the enrollment in a Total Health plan with a 

11 monthly beneficiary premium under section 

12 1860C–7(a) (taking into account any adjust13 ment under subparagraph (B) or (C) of section 

14 1860C–7(a)(2) and without regard to any ad15 justment under subparagraph (D) or (E) of 

16 such section) that does not exceed the base ben17 eficiary premium computed under section 

18 1860C–7(a)(1). 

19 ‘‘(B) SELECTION OF PLAN BY THE SEC20 RETARY.—In selecting a plan for the enrollment 

21 of a Total Health eligible individual under sub22 paragraph (A), the Secretary shall first attempt 

23 to identify the Total Health plan in which the 

24 cost-sharing and health benefits are most simi25 lar to the coverage the individual had in the 

mstockstill on DSK4VPTVN1PROD with BILLS

31 

•S 11 IS

1 preceding plan year. If there is more than one 

2 such plan available, the Secretary shall enroll 

3 such an individual on a random basis among all 

4 such plans in the Total Health region. Nothing 

5 in the previous sentence shall prevent such an 

6 individual from declining or changing such en7 rollment. 

8 ‘‘(C) INDIVIDUALS WHO ARE NOT TOTAL

9 HEALTH ELIGIBLE INDIVIDUALS.—The Sec10 retary shall establish procedures under which 

11 individuals who are entitled to, or enrolled for, 

12 coverage under part A or enrolled for coverage 

13 under part B (but not both), may continue to 

14 receive benefits with deductible and coinsurance 

15 amounts comparable to the benefits, deductible, 

16 and coinsurance amounts they would have re17 ceived if this subpart had not been enacted. 

18 ‘‘(c) PROVIDING INFORMATION TO BENE19 FICIARIES.— 

20 ‘‘(1) IN GENERAL.—The Secretary shall con21 duct activities that are designed to broadly dissemi22 nate information to Total Health eligible individuals 

23 (and prospective Total Health eligible individuals) 

24 regarding the coverage provided under this subpart. 

25 Such activities shall ensure that such information is 

mstockstill on DSK4VPTVN1PROD with BILLS

32 

•S 11 IS

1 first made available at least 30 days prior to the ini2 tial enrollment period described in subsection 

3 (b)(2)(A). 

4 ‘‘(2) ACTIVITIES.—The activities conducted 

5 under paragraph (1) shall be similar to the activities 

6 described in paragraph (2) of section 1860D–1(c) 

7 and contain comparative information similar to the 

8 information described in paragraph (3) of such sec9 tion. 

10 ‘‘TOTAL HEALTH PLAN BENEFITS

11 ‘‘SEC. 1860C–2. (a) REQUIREMENTS.— 

12 ‘‘(1) QUALIFIED TOTAL HEALTH BENEFITS.— 

13 Each Total Health plan shall provide to individuals 

14 enrolled under this subpart, through providers and 

15 other persons that meet the applicable requirements 

16 of this title and part A of title XI, a qualified Total 

17 Health benefits package and qualified prescription 

18 drug coverage (described in section 1860D–2(a)). 

19 ‘‘(2) DEFINITION OF QUALIFIED TOTAL

20 HEALTH BENEFITS PACKAGE.—For purposes of this 

21 subpart, the term ‘qualified Total Health benefits 

22 package’ means either of the following: 

23 ‘‘(A) STANDARD HEALTH BENEFITS COV24 ERAGE WITH ACCESS TO NEGOTIATED

25 PRICES.—Standard health benefits coverage (as 

mstockstill on DSK4VPTVN1PROD with BILLS

33 

•S 11 IS

1 defined in subsection (b)) and access to nego2 tiated prices under subsection (d). 

3 ‘‘(B) ALTERNATIVE TOTAL HEALTH BENE4 FITS COVERAGE WITH AT LEAST ACTUARIALLY

5 EQUIVALENT BENEFITS AND ACCESS TO NEGO6 TIATED PRICES.—Coverage of health benefits 

7 which meets the alternative health benefits cov8 erage requirements under subsection (c) and ac9 cess to negotiated prices under subsection (d), 

10 but only if the benefit design of such coverage 

11 is approved by the Secretary, as provided under 

12 subsection (c). 

13 ‘‘(3) PERMITTING SUPPLEMENTAL HEALTH

14 BENEFITS COVERAGE.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), a qualified Total Health benefits 

17 package may include supplemental health bene18 fits coverage consisting of either or both of the 

19 following: 

20 ‘‘(i) CERTAIN REDUCTIONS IN COST21 SHARING.— 

22 ‘‘(I) IN GENERAL.—A reduction 

23 in the annual deductible or a reduc24 tion in the coinsurance percentage, or 

25 any combination thereof, insofar as 

mstockstill on DSK4VPTVN1PROD with BILLS

34 

•S 11 IS

1 such a reduction or increase increases 

2 the actuarial value of benefits above 

3 the actuarial value of a basic Total 

4 Health benefits package. 

5 ‘‘(II) CONSTRUCTION.—Nothing 

6 in this clause shall be construed as af7 fecting the application of subsection 

8 (c)(3). 

9 ‘‘(ii) ADDITIONAL BENEFITS.—Cov10 erage of any health care item or service 

11 that is not covered under the original 

12 medicare fee-for-service program option or 

13 that is eligible for coverage under part D, 

14 subject to the approval of the Secretary. 

15 ‘‘(B) REQUIREMENT FOR AT LEAST ONE

16 BASIC BENEFITS PLAN.—A Total Health spon17 sor may not offer a Total Health plan that pro18 vides supplemental health benefits coverage 

19 pursuant to subparagraph (A) in an area unless 

20 the sponsor also offers a Total Health plan in 

21 the area that only provides a basic Total Health 

22 benefits package. 

23 ‘‘(4) BASIC TOTAL HEALTH BENEFITS PACK24 AGE.—For purposes of this subpart, the term ‘basic 

mstockstill on DSK4VPTVN1PROD with BILLS

35 

•S 11 IS

1 Total Health benefits package’ means either of the 

2 following: 

3 ‘‘(A) Coverage that meets the requirements 

4 of paragraph (2)(A). 

5 ‘‘(B) Coverage that meets the requirements 

6 of paragraph (2)(B) but does not have any sup7 plemental health benefits coverage described in 

8 paragraph (3)(A). 

9 ‘‘(5) APPLICATION OF SECONDARY PAYER PRO10 VISIONS.—The provisions of section 1852(a)(4) shall 

11 apply under this subpart in the same manner as 

12 such provisions applied to a Medicare Advantage 

13 plan. 

14 ‘‘(6) CONSTRUCTION.—Nothing in this sub15 section shall be construed as changing the computa16 tion of incurred costs under subsection (b)(3). 

17 ‘‘(b) STANDARD HEALTH BENEFITS COVERAGE.— 

18 For purposes of this subpart, the term ‘standard health 

19 benefits coverage’ means coverage of benefits under the 

20 original medicare fee-for-service program option (as de21 fined in section 1852(a)(1)(B)), including the following re22 quirements: 

23 ‘‘(1) DEDUCTIBLE.—The coverage has an an24 nual deductible that is equal to the amount of the 

25 unified deductible for the year under section 1899C. 

mstockstill on DSK4VPTVN1PROD with BILLS

36 

•S 11 IS

1 ‘‘(2) 20 PERCENT COINSURANCE.—The cov2 erage has coinsurance (for costs above the annual 

3 deductible specified in paragraph (1) and up to the 

4 first threshold annual out-of-pocket limit specified in 

5 paragraph (3)(B)(i)) that is— 

6 ‘‘(A) equal to 20 percent; or 

7 ‘‘(B) actuarially equivalent (using proc8 esses and methods established by the Secretary) 

9 to an average expected payment of 20 percent 

10 of such costs. 

11 ‘‘(3) PROTECTION AGAINST HIGH OUT-OF-POCK12 ET EXPENDITURES.— 

13 ‘‘(A) IN GENERAL.—The coverage provides 

14 benefits, after the Total Health eligible indi15 vidual has incurred costs (as described in sub16 paragraph (C)) for health benefits in a year 

17 equal to— 

18 ‘‘(i) the first threshold annual out-of19 pocket limit specified in subparagraph 

20 (B)(i) for that year but less than the sec21 ond threshold annual out-of-pocket limit 

22 specified in subparagraph (B)(ii) for that 

23 year, with coinsurance that is equal to 5 

24 percent; and 

mstockstill on DSK4VPTVN1PROD with BILLS

37 

•S 11 IS

1 ‘‘(ii) the second threshold annual out2 of-pocket limit specified in subparagraph 

3 (B)(ii) for that year, without coinsurance. 

4 ‘‘(B) ANNUAL OUT-OF-POCKET LIMITS

5 SPECIFIED.—For purposes of this subpart: 

6 ‘‘(i) FIRST THRESHOLD ANNUAL OUT7 OF-POCKET LIMIT SPECIFIED.—The ‘first 

8 threshold annual out-of-pocket limit’ speci9 fied in this clause is equal to the first 

10 threshold annual out-of-pocket limit for the 

11 year specified in section 1899B(b)(1). 

12 ‘‘(ii) SECOND THRESHOLD ANNUAL

13 OUT-OF-POCKET LIMIT SPECIFIED.—The 

14 ‘second threshold annual out-of-pocket 

15 limit’ specified in this clause is equal to the 

16 second threshold annual out-of-pocket limit 

17 for the year specified in section 

18 1899B(b)(2). 

19 ‘‘(C) APPLICATION.—In applying subpara20 graph (A), incurred costs shall only include 

21 costs incurred with respect to health benefits 

22 for the annual deductible described in para23 graph (1) and for cost-sharing described in 

24 paragraph (2) or paragraph (3)(A)(i), or for 

25 benefits that would have otherwise been covered 

mstockstill on DSK4VPTVN1PROD with BILLS

38 

•S 11 IS

1 under the plan but for the exhaustion of those 

2 benefits. Incurred costs do not include any costs 

3 incurred for health benefits which are not in4 cluded (or treated as being included) under the 

5 plan. 

6 ‘‘(c) ALTERNATIVE TOTAL HEALTH BENEFITS COV7 ERAGE REQUIREMENTS.—A Total Health plan may pro8 vide a different benefit design from standard health bene9 fits coverage so long as the Secretary determines that the 

10 following requirements are met and the plan applies for, 

11 and receives, the approval of the Secretary for such benefit 

12 design: 

13 ‘‘(1) ASSURING AT LEAST ACTUARIALLY EQUIV14 ALENT COVERAGE.— 

15 ‘‘(A) ASSURING EQUIVALENT VALUE OF

16 TOTAL COVERAGE.—The actuarial value of the 

17 total coverage is at least equal to the actuarial 

18 value of standard health benefits coverage. 

19 ‘‘(B) ASSURING EQUIVALENT UNSUB20 SIDIZED VALUE OF COVERAGE.—The unsub21 sidized value of the coverage is at least equal to 

22 the unsubsidized value of standard health bene23 fits coverage. For purposes of this subpara24 graph, the unsubsidized value of coverage is the 

25 amount by which the actuarial value of the covmstockstill on DSK4VPTVN1PROD with BILLS

39 

•S 11 IS

1 erage exceeds the subsidy payments with re2 spect to such coverage. 

3 ‘‘(C) ASSURING STANDARD PAYMENT FOR

4 COSTS BELOW FIRST THRESHOLD ANNUAL OUT5 OF-POCKET LIMIT.—The coverage is designed, 

6 based upon an actuarially representative pat7 tern of utilization, to provide for the payment, 

8 with respect to costs incurred up to the first 

9 threshold annual out-of-pocket limit specified in 

10 subsection (b)(3)(B)(i), of an amount equal to 

11 at least the product of— 

12 ‘‘(i) the amount by which the costs in13 curred exceed the deductible described in 

14 subsection (b)(1) for the year; and 

15 ‘‘(ii) 100 percent minus the coinsur16 ance percentage specified in subsection 

17 (b)(2). 

18 ‘‘(2) APPROVAL OF BENEFIT PACKAGE.—The 

19 benefit package is approved by the Secretary as con20 taining a comparable range of benefits to standard 

21 health benefits coverage and meets such other re22 quirements of this subpart as the Secretary may 

23 specify. 

24 ‘‘(3) MAXIMUM REQUIRED DEDUCTIBLE.—The 

25 deductible under the coverage shall not exceed the 

mstockstill on DSK4VPTVN1PROD with BILLS

40 

•S 11 IS

1 deductible amount specified under subsection (b)(1) 

2 for the year. 

3 ‘‘(4) SAME PROTECTION AGAINST HIGH OUT-OF4 POCKET EXPENDITURES.—The coverage provides the 

5 coverage required under subsection (b)(3). 

6 ‘‘(d) ACCESS TO NEGOTIATED PRICES.— 

7 ‘‘(1) ACCESS.— 

8 ‘‘(A) IN GENERAL.—Under a qualified 

9 Total Health benefits package offered by a 

10 Total Health sponsor offering a Total Health 

11 plan, the sponsor shall provide enrollees with 

12 access to negotiated prices used for payment for 

13 covered health benefits, regardless of the fact 

14 that no benefits may be payable under the cov15 erage with respect to such benefits because of 

16 the application of a deductible or other cost17 sharing. 

18 ‘‘(B) NEGOTIATED PRICES.—For purposes 

19 of this subpart, negotiated prices shall take into 

20 account negotiated price concessions, such as 

21 discounts, direct or indirect subsidies, rebates, 

22 and direct or indirect remunerations, for cov23 ered health benefits. 

24 ‘‘(2) AUDITS.—To protect against fraud and 

25 abuse and to ensure proper disclosures and accountmstockstill on DSK4VPTVN1PROD with BILLS

41 

•S 11 IS

1 ing under this part and in accordance with section 

2 1857(d)(2)(B), the Secretary may conduct periodic 

3 audits, directly or through contracts, of the financial 

4 statements and records of Total Health sponsors 

5 with respect to Total Health Plans. 

6 ‘‘(3) APPLICATION OF GENERAL EXCLUSION

7 PROVISIONS.— 

8 ‘‘(A) IN GENERAL.—A Total Health plan 

9 may exclude from a qualified Total Health ben10 efits package any health care item or service— 

11 ‘‘(i) for which payment would not be 

12 made if section 1862(a) applied to this 

13 subpart; or 

14 ‘‘(ii) which is not prescribed in ac15 cordance with the Total Health plan or 

16 this subpart. 

17 ‘‘(B) RECONSIDERATION AND APPEAL.— 

18 Any exclusion under subparagraph (A) is a de19 termination subject to reconsideration and ap20 peal under this subpart. 

21 ‘‘(e) SATISFACTION OF REQUIREMENTS.—A Total 

22 Health plan satisfies the requirements of subsection (a) 

23 in the same way a Medicare Advantage plan satisfied the 

24 requirements of section 1852(a)(2). 

mstockstill on DSK4VPTVN1PROD with BILLS

42 

•S 11 IS

1 ‘‘ACCESS TO A CHOICE OF QUALIFIED TOTAL HEALTH

2 BENEFITS PLANS

3 ‘‘SEC. 1860C–3. (a) ASSURING ACCESS TO A CHOICE

4 OF PLANS.— 

5 ‘‘(1) CHOICE OF AT LEAST TWO PLANS IN EACH

6 AREA.—The Secretary shall ensure that each Total 

7 Health eligible individual has available, consistent 

8 with paragraph (2), a choice of enrollment in at 

9 least 2 Total Health plans in the area in which the 

10 individual resides. 

11 ‘‘(2) REQUIREMENT FOR DIFFERENT PLAN

12 SPONSORS.—The requirement in paragraph (1) is 

13 not satisfied with respect to an area if only one enti14 ty offers all of the qualifying plans in the area. 

15 ‘‘(b) FLEXIBILITY IN RISK ASSUMED.—In order to 

16 ensure access pursuant to subsection (a) in an area the 

17 Secretary may approve limited risk plans under section 

18 1860C–5(g) for the area. 

19 ‘‘BENEFICIARY PROTECTIONS FOR TOTAL HEALTH PLAN

20 ENROLLEES

21 ‘‘SEC. 1860C–4. (a) DISSEMINATION OF INFORMA22 TION.— 

23 ‘‘(1) GENERAL INFORMATION.—A Total Health 

24 sponsor shall disclose, in a clear, accurate, and 

25 standardized form to each enrollee with a Total 

26 Health plan offered by the sponsor under this submstockstill on DSK4VPTVN1PROD with BILLS

43 

•S 11 IS

1 part at the time of enrollment and at least annually 

2 thereafter, the information described in section 

3 1852(c)(1) relating to such plan, insofar as the Sec4 retary determines appropriate with respect to bene5 fits provided under this subpart, and including the 

6 information described in section 1860D–4 relating to 

7 qualified prescription drug coverage under the plan. 

8 ‘‘(2) DISCLOSURE UPON REQUEST OF GENERAL

9 COVERAGE, UTILIZATION, AND GRIEVANCE INFORMA10 TION.—Upon request of a Total Health eligible indi11 vidual who is eligible to enroll in a Total Health 

12 plan, the Total Health sponsor offering such plan 

13 shall provide information similar (as determined by 

14 the Secretary) to the information described in sec15 tion 1852(c)(2) to such individual. 

16 ‘‘(3) PROVISION OF SPECIFIC INFORMATION.— 

17 Each Total Health sponsor offering a Total Health 

18 plan shall have a mechanism for providing specific 

19 information on a timely basis to enrollees upon re20 quest. Such mechanism shall include access to infor21 mation through the use of a toll-free telephone num22 ber and, upon request, the provision of such infor23 mation in writing. 

24 ‘‘(4) CLAIMS INFORMATION.— 

mstockstill on DSK4VPTVN1PROD with BILLS

44 

•S 11 IS

1 ‘‘(A) IN GENERAL.—A Total Health spon2 sor offering a Total Health plan must furnish 

3 to each enrollee in a form easily understandable 

4 to such enrollees— 

5 ‘‘(i) an explanation of benefits (in ac6 cordance with section 1806(a) or in a com7 parable manner); and 

8 ‘‘(ii) when Total Health benefits are 

9 provided under this subpart, a notice of 

10 the benefits in relation to— 

11 ‘‘(I) the deductible described in 

12 paragraph (1) of section 1860C–2(b) 

13 for the current year; and 

14 ‘‘(II) the annual out-of-pocket 

15 limits under paragraph (3) of such 

16 section for the current year. 

17 ‘‘(B) TIMING OF NOTICES.—Notices under 

18 subparagraph (A)(ii) need not be provided more 

19 often than as specified by the Secretary. 

20 ‘‘(b) ACCESS TO HEALTH CARE PROVIDERS.— 

21 ‘‘(1) ASSURING PROVIDER ACCESS.— 

22 ‘‘(A) DISCOUNTS ALLOWED FOR NETWORK

23 PROVIDERS.—For health benefits furnished 

24 through in-network providers, a Total Health 

25 plan may reduce coinsurance or copayments for 

mstockstill on DSK4VPTVN1PROD with BILLS

45 

•S 11 IS

1 Total Health eligible individuals enrolled in the 

2 plan below the level otherwise required. In no 

3 case shall such a reduction result in an increase 

4 in payments made by the Secretary under sec5 tion 1860C–8 to the Total Health sponsor of 

6 the plan. 

7 ‘‘(B) CONVENIENT ACCESS FOR NETWORK

8 PROVIDERS.— 

9 ‘‘(i) IN GENERAL.—The Total Health 

10 sponsor of the Total Health plan shall se11 cure the participation in its network of a 

12 sufficient number of health care providers 

13 that furnish health care items and services 

14 under the plan directly to patients to en15 sure convenient access (consistent with 

16 rules established by the Secretary). 

17 ‘‘(ii) ADEQUATE EMERGENCY AC18 CESS.—Such rules shall include adequate 

19 emergency access for enrollees. 

20 ‘‘(C) LEVEL PLAYING FIELD.—Such a 

21 sponsor shall permit enrollees to receive benefits 

22 through any health care provider participating 

23 in the program under this title with any dif24 ferential in charge paid by such enrollees. 

25 ‘‘(2) USE OF STANDARDIZED TECHNOLOGY.— 

mstockstill on DSK4VPTVN1PROD with BILLS

46 

•S 11 IS

1 ‘‘(A) IN GENERAL.—The Total Health 

2 sponsor of a Total Health plan shall issue (and 

3 reissue, as appropriate) such a card (or other 

4 technology) that may be used by an enrollee to 

5 assure access to health benefits under this sub6 part. 

7 ‘‘(B) STANDARDS.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall provide for the development, adop10 tion, or recognition of standards relating to 

11 a standardized format for the card or 

12 other technology required under subpara13 graph (A). Such standards shall be com14 patible with part C of title XI and may be 

15 based on standards developed by an appro16 priate standard setting organization. 

17 ‘‘(ii) CONSULTATION.—In developing 

18 the standards under clause (i), the Sec19 retary shall consult with standard setting 

20 organizations determined appropriate by 

21 the Secretary. 

22 ‘‘(iii) IMPLEMENTATION.—The Sec23 retary shall develop, adopt, or recognize 

24 the standards under clause (i) by such date 

25 as the Secretary determines shall be suffimstockstill on DSK4VPTVN1PROD with BILLS

47 

•S 11 IS

1 cient to ensure that Total Health sponsors 

2 utilize such standards beginning January 

3 1, 2017. 

4 ‘‘(c) COST AND UTILIZATION MANAGEMENT; QUAL5 ITY ASSURANCE; WELLNESS PROGRAM.— 

6 ‘‘(1) IN GENERAL.—The Total Health sponsor 

7 shall have in place, directly or through appropriate 

8 arrangements, the following: 

9 ‘‘(A) A cost-effective health benefits man10 agement program, including incentives to re11 duce costs when medically appropriate. 

12 ‘‘(B) Quality assurance measures and sys13 tems to reduce errors and improve the use of 

14 health benefits. 

15 ‘‘(C) A wellness program described in 

16 paragraph (2). 

17 ‘‘(D) A program to control fraud, abuse, 

18 and waste. 

19 Nothing in this section shall be construed as impair20 ing a Total Health sponsor from utilizing cost man21 agement tools (including differential payments) 

22 under all methods of operation. 

23 ‘‘(2) WELLNESS PROGRAM.— 

24 ‘‘(A) DESCRIPTION.—A wellness program 

25 described in this paragraph is a program fomstockstill on DSK4VPTVN1PROD with BILLS

48 

•S 11 IS

1 cused on health improvement, disease preven2 tion, and management of chronic conditions for 

3 Total Health eligible individuals enrolled in a 

4 plan under this part to optimize health out5 comes through improved use of health care 

6 items and services and to reduce the risk of ad7 verse events. 

8 ‘‘(B) ELEMENTS.—Such program may in9 clude elements that promote— 

10 ‘‘(i) enhanced enrollee understanding 

11 to promote the appropriate use of health 

12 care items and services by enrollees and to 

13 reduce the risk of potential adverse events 

14 and to improve health outcomes through 

15 beneficiary education, counseling, and 

16 other appropriate means; 

17 ‘‘(ii) increased enrollee adherence with 

18 recommended regimens through compliance 

19 programs and other appropriate means; 

20 and 

21 ‘‘(iii) detection of adverse events and 

22 patterns of overuse and underuse of health 

23 care items and services. 

24 ‘‘(C) ASSESSMENT.—The Total Health 

25 sponsor shall have in place a process to assess, 

mstockstill on DSK4VPTVN1PROD with BILLS

49 

•S 11 IS

1 at least on a quarterly basis, the health benefits 

2 use of individuals who are not enrolled in the 

3 wellness program. 

4 ‘‘(D) WELLNESS PROGRAM ENROLL5 MENT.—The Total Health sponsor shall have in 

6 place a process to— 

7 ‘‘(i) subject to clause (ii), automati8 cally enroll plan enrollees in the wellness 

9 program required under this subsection; 

10 and 

11 ‘‘(ii) permit plan enrolles to opt-out of 

12 enrollment in the wellness program. 

13 ‘‘(E) DEVELOPMENT OF PROGRAM IN CO14 OPERATION WITH PHYSICIANS.—Such program 

15 shall be developed in cooperation with physi16 cians. 

17 ‘‘(F) COORDINATION WITH CARE MANAGE18 MENT PLANS.—The Secretary shall establish 

19 guidelines for the coordination of any wellness 

20 program under this paragraph with respect to 

21 a targeted beneficiary described in section 

22 1860D–4(c)(2)(A)(i) (applied by substituting 

23 ‘Total Health eligible individual’ for ‘part D eli24 gible individual’) with any care management 

25 plan established with respect to such beneficiary 

mstockstill on DSK4VPTVN1PROD with BILLS

50 

•S 11 IS

1 under a chronic care improvement program 

2 under section 1807. 

3 ‘‘(G) CONSIDERATIONS IN PROVIDER

4 FEES.—The Total Health sponsor of a Total 

5 Health plan shall take into account, in estab6 lishing fees for entities providing services under 

7 such plan, the resources used, and time re8 quired to, implement the wellness program 

9 under this paragraph. Each such sponsor shall 

10 disclose to the Secretary upon request the 

11 amount of any such fees. 

12 ‘‘(d) CONSUMER SATISFACTION SURVEYS.—In order 

13 to provide for comparative information under section 

14 1860C–1(c), the Secretary shall conduct consumer satis15 faction surveys with respect to Total Health sponsors and 

16 Total Health plans in a manner similar to the manner 

17 such surveys were conducted for MA organizations and 

18 MA plans under subpart 1. 

19 ‘‘(e) GRIEVANCE MECHANISM.—Each Total Health 

20 sponsor shall provide meaningful procedures for hearing 

21 and resolving grievances between the sponsor (including 

22 any entity or individual through which the sponsor pro23 vides covered benefits) and enrollees with Total Health 

24 plans of the sponsor under this part in accordance with 

25 section 1852(f). 

mstockstill on DSK4VPTVN1PROD with BILLS

51 

•S 11 IS

1 ‘‘(f) COVERAGE DETERMINATIONS AND RECONSID2 ERATIONS.—A Total Health sponsor shall meet the re3 quirements of paragraphs (1) through (3) of section 

4 1852(g) with respect to covered benefits under the Total 

5 Health plan offered by the sponsor under this subpart in 

6 the same manner as such requirements applied to an MA 

7 organization with respect to covered benefits under an MA 

8 plan offered by the organization under subpart 1. 

9 ‘‘(g) APPEALS.—A Total Health sponsor shall meet 

10 the requirements of paragraphs (4) and (5) of section 

11 1852(g) with respect to benefits in a manner similar (as 

12 determined by the Secretary) to the manner such require13 ments applied to an MA organization with respect to bene14 fits under the original medicare fee-for-service program 

15 option under an MA plan. In applying this subsection, only 

16 the Total Health eligible individual shall be entitled to 

17 bring such an appeal. 

18 ‘‘(h) PRIVACY, CONFIDENTIALITY, AND ACCURACY

19 OF ENROLLEE RECORDS.—The provisions of section 

20 1852(h) shall apply to a Total Health sponsor and Total 

21 Health plan in the same manner as such provisions ap22 plied to an MA organization and an MA plan. 

23 ‘‘(i) TREATMENT OF ACCREDITATION.—Subpara24 graph (A) of section 1852(e)(4) (relating to treatment of 

25 accreditation) shall apply to a Total Health sponsor under 

mstockstill on DSK4VPTVN1PROD with BILLS

52 

•S 11 IS

1 this part in the same manner as such subparagraph ap2 plied to an MA organization. 

3 ‘‘(j) REQUIREMENTS WITH RESPECT TO SALES AND

4 MARKETING ACTIVITIES.—The following provisions shall 

5 apply to a Total Health sponsor (and the agents, brokers, 

6 and other third parties representing such sponsor) in the 

7 same manner as such provisions applied to a Medicare Ad8 vantage organization (and the agents, brokers, and other 

9 third parties representing such organization): 

10 ‘‘(1) The prohibition under section 

11 1851(h)(4)(C) on conducting activities described in 

12 section 1851(j)(1). 

13 ‘‘(2) The requirement under section 

14 1851(h)(4)(D) to conduct activities described in 

15 paragraph (2) of section 1851(j) in accordance with 

16 the limitations established under such section. 

17 ‘‘(3) The inclusion of the plan type in the plan 

18 name under section 1851(h)(6). 

19 ‘‘(4) The requirements regarding the appoint20 ment of agents and brokers and compliance with 

21 State information requests under subparagraphs (A) 

22 and (B), respectively, of section 1851(h)(7). 

23 ‘‘TOTAL HEALTH REGIONS; SUBMISSION OF BIDS; TOTAL

24 HEALTH PLAN APPROVAL

25 ‘‘SEC. 1860C–5. (a) ESTABLISHMENT OF TOTAL

26 HEALTH REGIONS; SERVICE AREAS.— 

mstockstill on DSK4VPTVN1PROD with BILLS

53 

•S 11 IS

1 ‘‘(1) COVERAGE OF ENTIRE TOTAL HEALTH RE2 GION.— 

3 ‘‘(A) IN GENERAL.—The service area for a 

4 Total Health plan shall consist of an entire 

5 Total Health region established under para6 graph (2). 

7 ‘‘(B) NO USE OF SEGMENTS OF SERVICE

8 AREAS.—In no case may a Total Health plan 

9 serve only segments of the service area. 

10 ‘‘(2) ESTABLISHMENT OF TOTAL HEALTH RE11 GIONS.— 

12 ‘‘(A) IN GENERAL.—The Secretary shall 

13 establish, and may revise, Total Health regions 

14 in accordance with the requirements of this 

15 paragraph. 

16 ‘‘(B) REGIONS TO BE LARGER THAN A SIN17 GLE COUNTY.—Total Health regions shall in18 clude more than one county. 

19 ‘‘(C) REGIONS WITHIN MSAS.—Among 

20 counties in a metropolitan statistical area, a 

21 Total Health region shall include all of the 

22 counties located in the same State in that met23 ropolitan statistical area. 

24 ‘‘(D) REGIONS OUTSIDE MSAS.—Among 

25 counties outside a metropolitan statistical area, 

mstockstill on DSK4VPTVN1PROD with BILLS

54 

•S 11 IS

1 a Total Health region shall include all of the 

2 counties in the same State that the Secretary 

3 determines are accurate reflections of health 

4 care market areas, such as health service areas. 

5 ‘‘(E) AUTHORITY FOR TERRITORIES.—The 

6 Secretary shall establish, and may revise, Total 

7 Health regions for areas in States that are not 

8 within the 50 States or the District of Colum9 bia. 

10 ‘‘(3) NATIONAL PLAN.—Nothing in this sub11 section shall be construed as preventing a Total 

12 Health plan from being offered in more than one 

13 Total Health region (including all Total Health re14 gions). 

15 ‘‘(b) SUBMISSION OF BIDS, PREMIUMS, AND RE16 LATED INFORMATION.— 

17 ‘‘(1) IN GENERAL.—A Total Health sponsor 

18 shall submit to the Secretary information described 

19 in paragraph (2) with respect to each Total Health 

20 plan it offers. Such information shall be submitted 

21 at the same time and in a similar manner to the 

22 manner in which information described in paragraph 

23 (6) of section 1854(a) was submitted by an MA or24 ganization under paragraph (1) of such section. 

mstockstill on DSK4VPTVN1PROD with BILLS

55 

•S 11 IS

1 ‘‘(2) INFORMATION DESCRIBED.—The informa2 tion described in this paragraph is information on 

3 the following: 

4 ‘‘(A) BENEFITS PACKAGE PROVIDED.—The 

5 qualified Total Health benefits package pro6 vided under the plan, including the deductible 

7 and other cost-sharing. 

8 ‘‘(B) ACTUARIAL VALUE.—The actuarial 

9 value of the qualified Total Health benefits 

10 package in the Total Health region for a Total 

11 Health eligible individual with a national aver12 age risk profile for the factors described in sec13 tion 1860C–8(b)(1)(A) (as specified by the Sec14 retary). 

15 ‘‘(C) BID.—Information on the bid, includ16 ing an actuarial certification of— 

17 ‘‘(i) the basis for the actuarial value 

18 described in subparagraph (B) assumed in 

19 such bid; 

20 ‘‘(ii) the portion of such bid attrib21 utable to a basic Total Health benefits 

22 package and, if applicable, the portion of 

23 such bid attributable to supplemental bene24 fits; and 

mstockstill on DSK4VPTVN1PROD with BILLS

56 

•S 11 IS

1 ‘‘(iii) administrative expenses assumed 

2 in the bid. 

3 ‘‘(D) SERVICE AREA.—The service area for 

4 the plan (as described in subsection (a)(1)). 

5 ‘‘(E) LEVEL OF RISK ASSUMED.—Whether 

6 the Total Health sponsor requires a modifica7 tion of risk level and, if so, the extent of such 

8 modification. Any such modification shall apply 

9 with respect to all Total Health plans offered 

10 by a Total Health sponsor in a Total Health re11 gion. 

12 ‘‘(F) ADDITIONAL INFORMATION.—Such 

13 other information as the Secretary may require 

14 to carry out this subpart. 

15 ‘‘(3) PAPERWORK REDUCTION FOR OFFERING

16 OF TOTAL HEALTH PLANS NATIONALLY OR IN

17 MULTI-REGION AREAS.—The Secretary shall estab18 lish requirements for the submission of information 

19 under this subsection in a manner that promotes the 

20 offering of such plans in more than one Total 

21 Health region (including all regions) through the fil22 ing of consolidated information. 

23 ‘‘(c) MEDICARE FEE-FOR-SERVICE BID.—For pur24 poses of this subpart, the bid for benefits under the origi25 nal medicare fee-for-service program option (as defined in 

mstockstill on DSK4VPTVN1PROD with BILLS

57 

•S 11 IS

1 section 1852(a)(1)(B)) is the dollar amount of the actu2 arial valuation of the benefits under that option for each 

3 Total Health region (as determined and submitted by the 

4 Chief Actuary of the Centers for Medicare & Medicaid 

5 Services using the same processes used to value Total 

6 Health plans under subsection (d)). 

7 ‘‘(d) ACTUARIAL VALUATION.— 

8 ‘‘(1) PROCESSES.—For purposes of this sub9 part, the Secretary shall establish processes and 

10 methods for determining the actuarial valuation of a 

11 Total Health benefits package, including— 

12 ‘‘(A) an actuarial valuation of the benefits 

13 under the original medicare fee-for-service pro14 gram option (as defined in section 

15 1852(a)(1)(B)) in each service area; 

16 ‘‘(B) actuarial valuations relating to the 

17 qualified Total Health benefits package under 

18 section 1860C–2(a)(1); 

19 ‘‘(C) the use of generally accepted actu20 arial principles and methodologies; and 

21 ‘‘(D) applying the same methodology for 

22 determinations of actuarial valuations under 

23 subparagraphs (A) and (B). 

24 ‘‘(2) ACCOUNTING FOR UTILIZATION.—Such 

25 processes and methods for determining actuarial 

mstockstill on DSK4VPTVN1PROD with BILLS

58 

•S 11 IS

1 valuation shall take into account the effect that pro2 viding a qualified Total Health benefits package 

3 (rather than benefits under the original medicare 

4 fee-for-service program option) has on the utilization 

5 of health care items and services. 

6 ‘‘(3) RESPONSIBILITIES.— 

7 ‘‘(A) PLAN RESPONSIBILITIES.—Total 

8 Health sponsors are responsible for the prepa9 ration and submission of actuarial valuations 

10 required under this subpart for the Total 

11 Health plans offered by the sponsor. 

12 ‘‘(B) USE OF OUTSIDE ACTUARIES.— 

13 Under the processes and methods established 

14 under paragraph (1), Total Health sponsors of15 fering a Total Health benefits package may use 

16 actuarial opinions certified by independent, 

17 qualified actuaries to establish actuarial values. 

18 ‘‘(e) REVIEW OF INFORMATION AND NEGOTIA19 TION.— 

20 ‘‘(1) REVIEW OF INFORMATION.—The Secretary 

21 shall review the information submitted under sub22 section (b) for the purpose of conducting negotia23 tions under paragraph (2). 

24 ‘‘(2) NEGOTIATION REGARDING TERMS AND

25 CONDITIONS.—Subject to subsection (i), in exermstockstill on DSK4VPTVN1PROD with BILLS

59 

•S 11 IS

1 cising the authority under paragraph (1), the Sec2 retary— 

3 ‘‘(A) has the authority to negotiate the 

4 terms and conditions of the proposed bid sub5 mitted and other terms and conditions of a pro6 posed plan; and 

7 ‘‘(B) has authority similar to the authority 

8 of the Director of the Office of Personnel Man9 agement with respect to health benefits plans 

10 under chapter 89 of title 5, United States Code. 

11 ‘‘(3) REJECTION OF BIDS.—Paragraph (5)(C) 

12 of section 1854(a) shall apply with respect to bids 

13 submitted by a Total Health sponsor under sub14 section (b) in the same manner as such paragraph 

15 applied to bids submitted by an MA organization 

16 under such section 1854(a). 

17 ‘‘(f) APPROVAL OF PROPOSED PLANS.— 

18 ‘‘(1) IN GENERAL.—After review and negotia19 tion under subsection (e), the Secretary shall ap20 prove or disapprove the Total Health plan. 

21 ‘‘(2) REQUIREMENTS FOR APPROVAL.—The 

22 Secretary may approve a Total Health plan only if 

23 the Secretary determines the following requirements 

24 are met: 

mstockstill on DSK4VPTVN1PROD with BILLS

60 

•S 11 IS

1 ‘‘(A) COMPLIANCE WITH REQUIRE2 MENTS.—The plan and the Total Health spon3 sor offering the plan comply with the require4 ments under this subpart, including the provi5 sion of a qualified Total Health benefits pack6 age. 

7 ‘‘(B) ACTUARIAL DETERMINATIONS.—The 

8 plan and Total Health sponsor offering the plan 

9 meet the requirements under this subpart relat10 ing to actuarial determinations, including such 

11 requirements under section 1860C–2(c). 

12 ‘‘(C) APPLICATION OF FEHBP STAND13 ARD.— 

14 ‘‘(i) IN GENERAL.—The portion of the 

15 bid submitted under subsection (b) that is 

16 attributable to basic health benefits cov17 erage is supported by the actuarial bases 

18 provided under such subsection and rea19 sonably and equitably reflects the revenue 

20 requirements (as used for purposes of sec21 tion 1302(8)(C) of the Public Health Serv22 ice Act) for benefits provided under that 

23 plan. 

24 ‘‘(ii) SUPPLEMENTAL COVERAGE.— 

25 The portion of the bid submitted under 

mstockstill on DSK4VPTVN1PROD with BILLS

61 

•S 11 IS

1 subsection (b) that is attributable to sup2 plemental health benefits coverage pursu3 ant to section 1860C–2(a)(3) is supported 

4 by the actuarial bases provided under such 

5 subsection and reasonably and equitably 

6 reflects the revenue requirements (as used 

7 for purposes of section 1302(8)(C) of the 

8 Public Health Service Act) for such cov9 erage under the plan. 

10 ‘‘(D) PLAN DESIGN.—The design of the 

11 plan and covered benefits under the plan are 

12 not likely to substantially discourage enrollment 

13 by certain Total Health eligible individuals in 

14 the plan. 

15 ‘‘(g) APPLICATION OF LIMITED RISK PLANS.— 

16 ‘‘(1) CONDITIONS FOR APPROVAL OF LIMITED

17 RISK PLANS.—The Secretary may only approve a 

18 limited risk plan (as defined in paragraph (4)(A)) 

19 for a Total Health region if the access requirements 

20 under section 1860C–3(a) would not be met for the 

21 region but for the approval of such a plan. 

22 ‘‘(2) RULES.—The following rules shall apply 

23 with respect to the approval of a limited risk plan 

24 in a Total Health region: 

mstockstill on DSK4VPTVN1PROD with BILLS

62 

•S 11 IS

1 ‘‘(A) LIMITED EXERCISE OF AUTHOR2 ITY.—Only the minimum number of such plans 

3 may be approved in order to meet the access re4 quirements under section 1860C–3(a). 

5 ‘‘(B) MAXIMIZING ASSUMPTION OF RISK.— 

6 The Secretary shall provide priority in approval 

7 for those plans bearing the highest level of risk 

8 (as computed by the Secretary), but the Sec9 retary may take into account the level of the 

10 bids submitted by such plans. 

11 ‘‘(C) NO FULL UNDERWRITING FOR LIM12 ITED RISK PLANS.—In no case may the Sec13 retary approve a limited risk plan under which 

14 the modification of risk level provides for no (or 

15 a de minimis) level of financial risk. 

16 ‘‘(3) ACCEPTANCE OF ALL FULL RISK CON17 TRACTS.—There shall be no limit on the number of 

18 full risk plans that are approved under subsection 

19 (e). 

20 ‘‘(4) RISK-PLANS DEFINED.—For purposes of 

21 this subsection: 

22 ‘‘(A) LIMITED RISK PLAN.—The term ‘lim23 ited risk plan’ means a Total Health plan that 

24 provides a basic Total Health benefits package 

25 and for which the Total Health sponsor inmstockstill on DSK4VPTVN1PROD with BILLS

63 

•S 11 IS

1 cludes a modification of risk level described in 

2 subparagraph (E) of subsection (b)(2) in the 

3 bid submitted for the plan under such sub4 section. 

5 ‘‘(B) FULL RISK PLAN.—The term ‘full 

6 risk plan’ means a Total Health plan that is 

7 not a limited risk plan. 

8 ‘‘(h) ANNUAL REPORT ON USE OF LIMITED RISK

9 PLANS.—The Secretary shall submit to Congress an an10 nual report that describes instances in which limited risk 

11 plans were approved under this section. The Secretary 

12 shall include in such report such recommendations as may 

13 be appropriate to limit the need for the provision of such 

14 plans and to maximize the assumption of financial risk 

15 under such subsection. 

16 ‘‘(i) NONINTERFERENCE.—In order to promote com17 petition under this part and in carrying out this part, the 

18 Secretary— 

19 ‘‘(1) may not interfere with the negotiations be20 tween physicians or other health professionals, pro21 viders, suppliers, drug manufacturers, pharmacies, 

22 and Total Health sponsors; and 

23 ‘‘(2) may not require a particular benefit design 

24 or formulary, or institute a price structure for the 

25 reimbursement of covered items and services. 

mstockstill on DSK4VPTVN1PROD with BILLS

64 

•S 11 IS

1 ‘‘REQUIREMENTS FOR AND CONTRACTS WITH TOTAL

2 HEALTH SPONSORS

3 ‘‘SEC. 1860C–6. (a) GENERAL REQUIREMENTS.— 

4 Each sponsor of a Total Health plan shall meet the fol5 lowing requirements: 

6 ‘‘(1) LICENSURE.—Subject to subsection (c), 

7 the sponsor is organized and licensed under State 

8 law as a risk-bearing entity eligible to offer health 

9 insurance or health benefits coverage in each State 

10 in which it offers a Total Health plan. 

11 ‘‘(2) ASSUMPTION OF FINANCIAL RISK FOR UN12 SUBSIDIZED COVERAGE.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graph (B), to the extent that the entity is at 

15 risk the entity assumes financial risk on a pro16 spective basis for benefits that it offers under 

17 a Total Health plan. 

18 ‘‘(B) REINSURANCE PERMITTED.—The 

19 plan sponsor may obtain insurance or make 

20 other arrangements for the cost of coverage 

21 provided to any enrollee to the extent that the 

22 sponsor is at risk for providing such coverage. 

23 ‘‘(3) SOLVENCY FOR UNLICENSED SPONSORS.— 

24 In the case of a Total Health sponsor that is not de25 scribed in paragraph (1) and for which a waiver has 

mstockstill on DSK4VPTVN1PROD with BILLS

65 

•S 11 IS

1 been approved under subsection (c), such sponsor 

2 shall meet solvency standards established by the Sec3 retary under subsection (d). 

4 ‘‘(b) CONTRACT REQUIREMENTS.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall not 

6 permit the enrollment under section 1860C–1 in a 

7 Total Health plan offered by a Total Health sponsor 

8 under this subpart, and the sponsor shall not be eli9 gible for payments under section 1860C–8, unless 

10 the Secretary has entered into a contract under this 

11 subsection with the sponsor with respect to the of12 fering of such plan. Such a contract with a sponsor 

13 may cover more than one Total Health plan. Such 

14 contract shall provide that the sponsor agrees to 

15 comply with the applicable requirements and stand16 ards of this subpart and the terms and conditions of 

17 payment as provided for in this subpart. 

18 ‘‘(2) INCORPORATION OF CERTAIN MEDICARE

19 ADVANTAGE CONTRACT REQUIREMENTS.—Except as 

20 otherwise provided, the following provisions of sec21 tion 1857 shall apply to contracts under this section 

22 in the same manner as such provisions applied to 

23 contracts under section 1857(a): 

mstockstill on DSK4VPTVN1PROD with BILLS

66 

•S 11 IS

1 ‘‘(A) MINIMUM ENROLLMENT.—Para2 graphs (1) and (3) of section 1857(b), except 

3 that— 

4 ‘‘(i) the Secretary may increase the 

5 minimum number of enrollees required 

6 under such paragraph (1) as the Secretary 

7 determines appropriate; and 

8 ‘‘(ii) the requirement of such para9 graph (1) shall be waived during the first 

10 contract year with respect to an organiza11 tion in a region. 

12 ‘‘(B) CONTRACT PERIOD AND EFFECTIVE13 NESS.—Section 1857(c), except that in applying 

14 paragraph (4)(B) of such section any reference 

15 to payment amounts under section 1853 is 

16 deemed a reference to payment amounts under 

17 section 1860C–8. 

18 ‘‘(C) PROTECTIONS AGAINST FRAUD AND

19 BENEFICIARY PROTECTIONS.—Section 1857(d). 

20 ‘‘(D) ADDITIONAL CONTRACT TERMS.— 

21 Section 1857(e); except that section 1857(e)(2) 

22 shall apply as specified to Total Health spon23 sors and payments to a Total Health plan 

24 under this subpart shall be treated as expendi25 tures made under this subpart. Notwithmstockstill on DSK4VPTVN1PROD with BILLS

67 

•S 11 IS

1 standing any other provision of law, information 

2 provided to the Secretary under the application 

3 of section 1857(e)(1) to contracts under this 

4 section under the preceding sentence— 

5 ‘‘(i) may be used for the purposes of 

6 carrying out this subpart, improving public 

7 health through research on the utilization, 

8 safety, effectiveness, quality, and efficiency 

9 of health care services (as the Secretary 

10 determines appropriate); and 

11 ‘‘(ii) shall be made available to Con12 gressional support agencies (in accordance 

13 with their obligations to support Congress 

14 as set out in their authorizing statutes) for 

15 the purposes of conducting Congressional 

16 oversight, monitoring, making rec17 ommendations, and analysis of the pro18 gram under this title. 

19 ‘‘(E) INTERMEDIATE SANCTIONS.—Section 

20 1857(g) (other than paragraph (1)(F) of such 

21 section), except that in applying such section 

22 the reference in section 1857(g)(1)(B) to sec23 tion 1854 is deemed a reference to this subpart. 

24 ‘‘(F) PROCEDURES FOR TERMINATION.— 

25 Section 1857(h). 

mstockstill on DSK4VPTVN1PROD with BILLS

68 

•S 11 IS

1 ‘‘(c) WAIVER OF CERTAIN REQUIREMENTS TO EX2 PAND CHOICE.— 

3 ‘‘(1) AUTHORIZING WAIVER.— 

4 ‘‘(A) IN GENERAL.—In the case of an enti5 ty that seeks to offer a Total Health plan in a 

6 State, the Secretary shall waive the requirement 

7 of subsection (a)(1) that the entity be licensed 

8 in that State if the Secretary determines, based 

9 on the application and other evidence presented 

10 to the Secretary, that any of the grounds for 

11 approval of the application described in para12 graph (2) have been met. 

13 ‘‘(B) APPLICATION OF REGIONAL PLAN

14 WAIVER RULE.—In addition to the waiver avail15 able under subparagraph (A), the provisions of 

16 section 1858(d) shall apply to Total Health 

17 sponsors under this part in a manner similar to 

18 the manner in which such provisions applied to 

19 MA organizations. 

20 ‘‘(2) GROUNDS FOR APPROVAL.— 

21 ‘‘(A) IN GENERAL.—The grounds for ap22 proval under this paragraph are— 

23 ‘‘(i) subject to subparagraph (B), the 

24 grounds for approval described in subparamstockstill on DSK4VPTVN1PROD with BILLS

69 

•S 11 IS

1 graphs (B), (C), and (D) of section 

2 1855(a)(2); and 

3 ‘‘(ii) the application by a State of any 

4 grounds other than those required under 

5 Federal law. 

6 ‘‘(B) SPECIAL RULES.—In applying sub7 paragraph (A)(i)— 

8 ‘‘(i) the ground of approval described 

9 in section 1855(a)(2)(B) is deemed to have 

10 been met if the State does not have a li11 censing process in effect with respect to 

12 the Total Health sponsor; and 

13 ‘‘(ii) for plan years beginning before 

14 January 1, 2019, if the State does have 

15 such a licensing process in effect, such 

16 ground for approval described in such sec17 tion is deemed to have been met upon sub18 mission of an application described in such 

19 section. 

20 ‘‘(3) APPLICATION OF WAIVER PROCEDURES.— 

21 With respect to an application for a waiver (or a 

22 waiver granted) under paragraph (1)(A) of this sub23 section, the provisions of subparagraphs (E), (F), 

24 and (G) of section 1855(a)(2) shall apply, except 

25 that clauses (i) and (ii) of such subparagraph (E) 

mstockstill on DSK4VPTVN1PROD with BILLS

70 

•S 11 IS

1 shall not apply in the case of a State that does not 

2 have a licensing process described in paragraph 

3 (2)(B)(i) in effect. 

4 ‘‘(4) REFERENCES TO CERTAIN PROVISIONS.— 

5 In applying provisions of section 1855(a)(2) under 

6 paragraphs (2) and (3) of this subsection to Total 

7 Health plans and Total Health sponsors— 

8 ‘‘(A) any reference to a waiver application 

9 under section 1855 shall be treated as a ref10 erence to a waiver application under paragraph 

11 (1)(A) of this subsection; and 

12 ‘‘(B) any reference to solvency standards 

13 shall be treated as a reference to solvency 

14 standards established under subsection (d) of 

15 this section. 

16 ‘‘(d) SOLVENCY STANDARDS FOR NON-LICENSED

17 ENTITIES.— 

18 ‘‘(1) ESTABLISHMENT AND PUBLICATION.—The 

19 Secretary, in consultation with the National Associa20 tion of Insurance Commissioners, shall establish and 

21 publish, by not later than January 1, 2016, financial 

22 solvency and capital adequacy standards for entities 

23 described in paragraph (2). 

24 ‘‘(2) COMPLIANCE WITH STANDARDS.—A Total 

25 Health sponsor that is not licensed by a State under 

mstockstill on DSK4VPTVN1PROD with BILLS

71 

•S 11 IS

1 subsection (a)(1) and for which a waiver application 

2 has been approved under subsection (c) shall meet 

3 solvency and capital adequacy standards established 

4 under paragraph (1). The Secretary shall establish 

5 certification procedures for such sponsors with re6 spect to such solvency standards in the manner de7 scribed in section 1855(c)(2). 

8 ‘‘(e) LICENSURE DOES NOT SUBSTITUTE FOR OR

9 CONSTITUTE CERTIFICATION.—The fact that a Total 

10 Health sponsor is licensed in accordance with subsection 

11 (a)(1) or has a waiver application approved under sub12 section (c) does not deem the sponsor to meet other re13 quirements imposed under this subpart for a sponsor. 

14 ‘‘(f) PERIODIC REVIEW AND REVISION OF STAND15 ARDS.— 

16 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

17 the Secretary may periodically review the standards 

18 established under this section and, based on such re19 view, may revise such standards if the Secretary de20 termines such revision to be appropriate. 

21 ‘‘(2) PROHIBITION OF MIDYEAR IMPLEMENTA22 TION OF SIGNIFICANT NEW REGULATORY REQUIRE23 MENTS.—The Secretary may not implement, other 

24 than at the beginning of a calendar year, regulations 

25 under this section that impose new, significant regumstockstill on DSK4VPTVN1PROD with BILLS

72 

•S 11 IS

1 latory requirements on a Total Health sponsor or a 

2 Total Health plan. 

3 ‘‘(g) PROHIBITION OF STATE IMPOSITION OF PRE4 MIUM TAXES; RELATION TO STATE LAWS.—The provi5 sions of sections 1854(g) and 1856(b)(3) shall apply with 

6 respect to Total Health sponsors and Total Health plans 

7 under this part in the same manner as such provisions 

8 applied to MA organizations and MA plans. 

9 ‘‘TOTAL HEALTH PREMIUMS

10 ‘‘SEC. 1860C–7. (a) MONTHLY BENEFICIARY PRE11 MIUM.— 

12 ‘‘(1) BASE BENEFICIARY PREMIUM.—The base 

13 beneficiary premium under this paragraph for a 

14 Total Health plan for a month is equal to the prod15 uct of— 

16 ‘‘(A) 15 percent; and 

17 ‘‘(B) an amount determined by the Sec18 retary to be equal to the 40th percentile of the 

19 monthly standardized bid amounts (as defined 

20 in subsection (c), weighted under subsection 

21 (b), and adjusted under section 1860C–8(b)(2)) 

22 for the service area in which the plan is offered. 

23 ‘‘(2) COMPUTATION OF MONTHLY BENEFICIARY

24 PREMIUM.— 

25 ‘‘(A) IN GENERAL.—The monthly bene26 ficiary premium for a Total Health plan is the 

mstockstill on DSK4VPTVN1PROD with BILLS

73 

•S 11 IS

1 base beneficiary premium computed under para2 graph (1) as adjusted under this paragraph. 

3 ‘‘(B) ADJUSTMENT TO REFLECT DIF4 FERENCE BETWEEN BID AND 40TH PER5 CENTILE OF THE MONTHLY STANDARDIZED BID

6 AMOUNT.— 

7 ‘‘(i) ABOVE 40TH PERCENTILE.—If 

8 the beneficiary enrolls in a plan with a 

9 monthly standardized bid amount that ex10 ceeds the 40th percentile (as determined 

11 under paragraph (1)(B)), the base bene12 ficiary premium for the month shall be in13 creased by the amount of such excess. 

14 ‘‘(ii) BELOW 40TH PERCENTILE.—If 

15 the beneficiary enrolls in a plan with a 

16 monthly standardized bid amount that is 

17 less than the 40th percentile (as deter18 mined under paragraph (1)(B)), the base 

19 beneficiary premium for the month shall be 

20 decreased by the amount of such dif21 ference. Any reduction under the preceding 

22 sentence shall not result in a monthly ben23 eficiary premium that is less than $0. 

24 ‘‘(C) INCREASE FOR SUPPLEMENTAL BEN25 EFITS.—The base beneficiary premium shall be 

mstockstill on DSK4VPTVN1PROD with BILLS

74 

•S 11 IS

1 increased by the portion of the Total Health ap2 proved bid that is attributable to supplemental 

3 benefits. 

4 ‘‘(D) INCREASE FOR LATE ENROLLMENT

5 PENALTY.—The base beneficiary premium shall 

6 be increased by the amount of any late enroll7 ment penalty under subsection (e). 

8 ‘‘(E) INCREASE BASED ON INCOME.—The 

9 monthly beneficiary premium shall be increased 

10 pursuant to subsection (f). 

11 ‘‘(F) UNIFORM PREMIUM.—Except as pro12 vided in subparagraphs (D) and (E), the 

13 monthly beneficiary premium for a Total 

14 Health plan in a Total Health region is the 

15 same for all Total Health eligible individuals 

16 enrolled in the plan. 

17 ‘‘(b) WEIGHTING OF BID AMOUNTS BASED ON EN18 ROLLMENT.— 

19 ‘‘(1) IN GENERAL.—For purposes of subsection 

20 (a)(1)(B), the weight for each plan in the service 

21 area shall be equal to the average number of Total 

22 Health eligible individuals enrolled in such plan in 

23 the reference month (as defined in section 

24 1858(f)(4)). 

mstockstill on DSK4VPTVN1PROD with BILLS

75 

•S 11 IS

1 ‘‘(2) SPECIAL RULE FOR 2017.—For purposes of 

2 applying this paragraph for 2017, the Secretary 

3 shall establish procedures for determining the 

4 weighted average under paragraph (1) for 2016. 

5 ‘‘(c) STANDARDIZED BID AMOUNT DEFINED.—For 

6 purposes of this subsection, the term ‘standardized bid 

7 amount’ means the following: 

8 ‘‘(1) BASIC COVERAGE ONLY.—In the case of a 

9 Total Health plan that provides basic health benefits 

10 coverage, the Total Health approved bid (as defined 

11 in subsection (d)). 

12 ‘‘(2) PLANS OFFERING SUPPLEMENTAL COV13 ERAGE.—In the case of a Total Health plan that 

14 provides supplemental health benefits coverage, only 

15 the portion of the Total Health approved bid that is 

16 attributable to basic health benefits coverage. 

17 ‘‘(d) TOTAL HEALTH APPROVED BID DEFINED.— 

18 For purposes of this subpart, the term ‘Total Health ap19 proved bid’ means— 

20 ‘‘(1) with respect to a Total Health plan, the 

21 bid amount approved for the plan under section 

22 1860C–5; 

23 ‘‘(2) with respect to the original medicare fee24 for-service program option, the bid described in sec25 tion 1860C–5(c). 

mstockstill on DSK4VPTVN1PROD with BILLS

76 

•S 11 IS

1 ‘‘(e) LATE ENROLLMENT PENALTY.—The monthly 

2 beneficiary premium established under subsection (a) shall 

3 be subject to adjustment in the same manner as the part 

4 B monthly beneficiary premium computed under section 

5 1839 is subject to adjustment under subsection (b) of such 

6 section, except that, in applying the late enrollment pen7 alty under such subsection, the initial enrollment period 

8 of the individual shall be the enrollment period under 

9 1860C–1(b)(2) instead of the initial enrollment period de10 scribed in such section 1839(b). 

11 ‘‘(f) INCREASE IN BASE BENEFICIARY PREMIUM

12 BASED ON INCOME.— 

13 ‘‘(1) IN GENERAL.—In the case of an individual 

14 whose modified adjusted gross income (as defined in 

15 paragraph (2)) exceeds the threshold amount appli16 cable under paragraph (2) of section 1839(i) (includ17 ing application of paragraph (5) of such section), the 

18 Secretary shall substitute the applicable percentage 

19 determined under paragraph (3)(C) of section 

20 1839(i) for the individual for the calendar year for 

21 the percentage described in subsection (a)(1)(A). 

22 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.— 

23 For purposes of this subsection, the term ‘modified 

24 adjusted gross income’ has the meaning given such 

25 term in subparagraph (A) of section 1839(i)(4), demstockstill on DSK4VPTVN1PROD with BILLS

77 

•S 11 IS

1 termined for the taxable year applicable under sub2 paragraphs (B) and (C) of such section. 

3 ‘‘(3) DETERMINATION BY COMMISSIONER OF

4 SOCIAL SECURITY.—The Commissioner of Social Se5 curity shall make any determination necessary to 

6 carry out the income-related increase in the base 

7 beneficiary premium under this subsection. 

8 ‘‘(4) PROCEDURES TO ASSURE CORRECT IN9 COME-RELATED INCREASE IN BASE BENEFICIARY

10 PREMIUM.— 

11 ‘‘(A) DISCLOSURE OF BASE BENEFICIARY

12 PREMIUM.—Not later than September 15 of 

13 each year beginning with 2016, the Secretary 

14 shall disclose to the Commissioner of Social Se15 curity the amount of the base beneficiary pre16 mium (as computed under subsection (a)(1)) 

17 for the purpose of carrying out the income-re18 lated increase in the base beneficiary premium 

19 under this subsection with respect to the fol20 lowing year. 

21 ‘‘(B) ADDITIONAL DISCLOSURE.—Not later 

22 than October 15 of each year beginning with 

23 2016, the Secretary shall disclose to the Com24 missioner of Social Security the following infor25 mation for the purpose of carrying out the inmstockstill on DSK4VPTVN1PROD with BILLS

78 

•S 11 IS

1 come-related increase in the base beneficiary 

2 premium under this subsection with respect to 

3 the following year: 

4 ‘‘(i) The modified adjusted gross in5 come threshold applicable under paragraph 

6 (2) of section 1839(i) (including applica7 tion of paragraph (5) of such section). 

8 ‘‘(ii) The applicable percentage deter9 mined under paragraph (3)(C) of section 

10 1839(i) (including application of paragraph 

11 (5) of such section). 

12 ‘‘(iii) Any other information the Com13 missioner of Social Security determines 

14 necessary to carry out the income-related 

15 increase in the base beneficiary premium 

16 under this subsection. 

17 ‘‘PREMIUM AND COST-SHARING SUPPORT FOR TOTAL

18 HEALTH ELIGIBLE INDIVIDUALS

19 ‘‘SEC. 1860C–8. (a) DIRECT SUBSIDY PAYMENT.— 

20 The Secretary shall provide for payment to a Total Health 

21 sponsor that offers a Total Health plan a direct subsidy 

22 for each Total Health eligible individual enrolled in a 

23 Total Health plan for a month equal to— 

24 ‘‘(1) the amount of the plan’s standardized bid 

25 amount (as defined in section 1860C–7(c)), adjusted 

26 under subsection (b)(1), reduced by 

mstockstill on DSK4VPTVN1PROD with BILLS

79 

•S 11 IS

1 ‘‘(2) the base beneficiary premium (as com2 puted under paragraph (1) of section 1860C–7(a) 

3 and as adjusted under paragraph (2)(B) of such sec4 tion). 

5 ‘‘(b) ADJUSTMENTS RELATING TO BIDS.— 

6 ‘‘(1) HEALTH STATUS RISK ADJUSTMENT.— 

7 ‘‘(A) ESTABLISHMENT OF RISK ADJUS8 TORS.—The Secretary shall establish an appro9 priate methodology for adjusting the standard10 ized bid amount under subsection (a)(1) to take 

11 into account variation in costs for health bene12 fits coverage among Total Health plans based 

13 on the differences in actuarial risk of different 

14 enrollees being served. Any such risk adjust15 ment shall be designed in a manner so as not 

16 to result in a change in the aggregate amounts 

17 payable to such plans under subsection (a) and 

18 through that portion of the monthly beneficiary 

19 Total Health premiums described in subsection 

20 (a)(2). 

21 ‘‘(B) CONSIDERATIONS.—In establishing 

22 the methodology under subparagraph (A), the 

23 Secretary may take into account the similar 

24 methodologies used under section 1853(a)(3) to 

25 adjust payments to MA organizations for benemstockstill on DSK4VPTVN1PROD with BILLS

80 

•S 11 IS

1 fits under the original medicare fee-for-service 

2 program option. 

3 ‘‘(C) DATA COLLECTION.—In order to 

4 carry out this paragraph, the Secretary shall re5 quire Total Health sponsors to submit data re6 garding claims that can be linked at the indi7 vidual level to data under this title and such 

8 other information as the Secretary determines 

9 necessary. 

10 ‘‘(D) PUBLICATION.—At the time of publi11 cation of risk adjustment factors under section 

12 1860D–15(c)(1)(D), the Secretary shall publish 

13 the risk adjusters established under this para14 graph for the succeeding year. 

15 ‘‘(2) GEOGRAPHIC ADJUSTMENT.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), for purposes of section 1860C– 

18 7(a)(1)(B), the Secretary shall establish an ap19 propriate methodology for adjusting the amount 

20 determined under such section to take into ac21 count differences in prices for covered health 

22 benefits among Total Health regions. 

23 ‘‘(B) DE MINIMIS RULE.—If the Secretary 

24 determines that the price variations described 

25 in subparagraph (A) among Total Health remstockstill on DSK4VPTVN1PROD with BILLS

81 

•S 11 IS

1 gions are de minimis, the Secretary shall not 

2 provide for adjustment under this paragraph. 

3 ‘‘(C) BUDGET NEUTRAL ADJUSTMENT.— 

4 Any adjustment under this paragraph shall be 

5 applied in a manner so as to not result in a 

6 change in the aggregate payments made under 

7 this subpart that would have been made if the 

8 Secretary had not applied such adjustment. 

9 ‘‘(c) PAYMENT METHODS.— 

10 ‘‘(1) IN GENERAL.—Payments under this sec11 tion shall be based on such a method as the Sec12 retary determines. The Secretary may establish a 

13 payment method by which interim payments of 

14 amounts under this section are made during a year 

15 based on the Secretary’s best estimate of amounts 

16 that will be payable after obtaining all of the infor17 mation. 

18 ‘‘(2) REQUIREMENT FOR PROVISION OF INFOR19 MATION.— 

20 ‘‘(A) REQUIREMENT.—Payments under 

21 this section to a Total Health sponsor are con22 ditioned upon the furnishing to the Secretary, 

23 in a form and manner specified by the Sec24 retary, of such information as may be required 

25 to carry out this section. 

mstockstill on DSK4VPTVN1PROD with BILLS

82 

•S 11 IS

1 ‘‘(B) RESTRICTION ON USE OF INFORMA2 TION.—Information disclosed or obtained pur3 suant to subparagraph (A) may be used by offi4 cers, employees, and contractors of the Depart5 ment of Health and Human Services only for 

6 the purposes of, and to the extent necessary in, 

7 carrying out this section. 

8 ‘‘(3) SOURCE OF PAYMENTS.—Payments under 

9 this section shall be made from the Federal Hospital 

10 Insurance Trust Fund under section 1817 and the 

11 Federal Supplementary Medical Insurance Trust 

12 Fund under section 1841, in such proportion as the 

13 Secretary determines appropriate. 

14 ‘‘(4) APPLICATION OF ENROLLEE ADJUST15 MENT.—The provisions of section 1853(a)(2) shall 

16 apply to payments to Total Health sponsors under 

17 this section in the same manner as they applied to 

18 payments to MA organizations under section 

19 1853(a). 

20 ‘‘(d) PLANS AT RISK FOR ENTIRE AMOUNT OF BEN21 EFITS.—A Total Health sponsor that offers a plan under 

22 this subpart shall be at full financial risk for the provision 

23 of benefits under such plan. 

24 ‘‘(e) DISCLOSURE OF INFORMATION.— 

mstockstill on DSK4VPTVN1PROD with BILLS

83 

•S 11 IS

1 ‘‘(1) IN GENERAL.—Each contract under this 

2 subpart shall provide that— 

3 ‘‘(A) the Total Health sponsor offering a 

4 Total Health plan shall provide the Secretary 

5 with such information as the Secretary deter6 mines is necessary to carry out this section; and 

7 ‘‘(B) the Secretary shall have the right in 

8 accordance with section 1857(d)(2)(B) (as ap9 plied under section 1860C–6(b)(2)(C)) to in10 spect and audit any books and records of a 

11 Total Health sponsor that pertain to the infor12 mation regarding costs provided to the Sec13 retary under subparagraph (A). 

14 ‘‘(2) RESTRICTION ON USE OF INFORMATION.— 

15 Information disclosed or obtained pursuant to the 

16 provisions of this section may be used— 

17 ‘‘(A) by officers, employees, and contrac18 tors of the Department of Health and Human 

19 Services for the purposes of, and to the extent 

20 necessary in— 

21 ‘‘(i) carrying out this section; and 

22 ‘‘(ii) conducting oversight, evaluation, 

23 and enforcement under this title; and 

24 ‘‘(B) by the Attorney General and the 

25 Comptroller General of the United States for 

mstockstill on DSK4VPTVN1PROD with BILLS

84 

•S 11 IS

1 the purposes of, and to the extent necessary in, 

2 carrying out health oversight activities. 

3 ‘‘EXEMPTION FOR MSA PLANS

4 ‘‘SEC. 1860C–9. (a) IN GENERAL.—None of the pro5 visions in this subpart shall apply to an MSA plan (as 

6 defined in section 1859(b)(3)) and an MSA plan may not 

7 be a Total Health plan. 

8 ‘‘(b) CONTINUING AVAILABILITY.—Notwithstanding 

9 any other provision of law, the Secretary shall establish 

10 procedures under which— 

11 ‘‘(1) MSA plans may continue to operate on 

12 and after January 1, 2017; and 

13 ‘‘(2) individuals who would have been eligible to 

14 enroll in those plans prior to such date continue to 

15 be eligible to enroll in such a plan. 

16 ‘‘SPECIAL RULES FOR EMPLOYER-SPONSORED PROGRAMS

17 ‘‘SEC. 1860C–10. (a) SUBSIDY PAYMENT.— 

18 ‘‘(1) IN GENERAL.—The Secretary shall provide 

19 in accordance with this subsection for payment to 

20 the sponsor of a qualified retiree health benefits plan 

21 (as defined in paragraph (2)) of a special subsidy 

22 payment equal to the amount specified in paragraph 

23 (3) for each qualified covered retiree under the plan 

24 (as defined in paragraph (4)). This subsection con25 stitutes budget authority in advance of appropria26 tions Acts and represents the obligation of the Secmstockstill on DSK4VPTVN1PROD with BILLS

85 

•S 11 IS

1 retary to provide for the payment of amounts pro2 vided under this section. 

3 ‘‘(2) QUALIFIED RETIREE HEALTH BENEFITS

4 PLAN DEFINED.—For purposes of this subsection, 

5 the term ‘qualified retiree health benefits plan’ 

6 means employment-based retiree health coverage (as 

7 defined in subsection (c)(1)) if, with respect to a 

8 Total Health eligible individual who is a participant 

9 or beneficiary under such coverage, the following re10 quirements are met: 

11 ‘‘(A) ATTESTATION OF ACTUARIAL

12 EQUIVALENCE TO STANDARD COVERAGE.—The 

13 sponsor of the plan provides the Secretary, an14 nually or at such other time as the Secretary 

15 may require, with an attestation that the actu16 arial value of health benefits coverage under the 

17 plan (as determined using the processes and 

18 methods described in section 1860C–5(d)) is at 

19 least equal to the actuarial value of standard 

20 health benefits coverage. 

21 ‘‘(B) AUDITS.—The sponsor of the plan, or 

22 an administrator of the plan designated by the 

23 sponsor, shall maintain (and afford the Sec24 retary access to) such records as the Secretary 

25 may require for purposes of audits and other 

mstockstill on DSK4VPTVN1PROD with BILLS

86 

•S 11 IS

1 oversight activities necessary to ensure the ade2 quacy of health benefits coverage and the accu3 racy of payments made under this section. The 

4 provisions of section 1860C–2(d)(2) shall apply 

5 to such information under this section (includ6 ing such actuarial value and attestation) in a 

7 manner similar to the manner in which they 

8 apply to financial records of Total Health spon9 sors. 

10 ‘‘(C) PROVISION OF DISCLOSURE REGARD11 ING HEALTH BENEFITS COVERAGE.— 

12 ‘‘(i) IN GENERAL.—Each entity that 

13 offers employment-based retiree health cov14 erage shall provide for disclosure, in a 

15 form, manner, and time consistent with 

16 standards established by the Secretary, to 

17 the Secretary and Total Health eligible in18 dividuals of whether the coverage meets 

19 the requirement of subparagraph (A) or 

20 whether such coverage is changed so it no 

21 longer meets such requirement. 

22 ‘‘(ii) DISCLOSURE OF NON-QUALIFIED

23 COVERAGE.—In the case of such coverage 

24 that does not meet such requirement, the 

25 disclosure to Total Health eligible individmstockstill on DSK4VPTVN1PROD with BILLS

87 

•S 11 IS

1 uals under this subparagraph shall include 

2 information regarding the fact that be3 cause such coverage does not meet such re4 quirement there are limitations on the pe5 riods in a year in which the individuals 

6 may enroll under a Total Health plan. 

7 ‘‘(iii) WAIVER OF REQUIREMENT.—In 

8 the case of a Total Health eligible indi9 vidual who was enrolled in employment10 based retiree health coverage which does 

11 not meet the requirement of subparagraph 

12 (A), the individual may apply to the Sec13 retary to have such coverage treated as a 

14 qualified retiree health benefits plan if the 

15 individual establishes that the individual 

16 was not adequately informed that such cov17 erage did not meet such requirement. 

18 ‘‘(3) EMPLOYER AND UNION SPECIAL SUBSIDY

19 AMOUNTS.— 

20 ‘‘(A) IN GENERAL.—For purposes of this 

21 subsection, the special subsidy payment amount 

22 under this paragraph for a qualifying covered 

23 retiree for a coverage year enrolled with the 

24 sponsor of a qualified retiree health benefits 

25 plan is, for the portion of the retiree’s gross 

mstockstill on DSK4VPTVN1PROD with BILLS

88 

•S 11 IS

1 covered retiree plan-related health benefits costs 

2 (as defined in subparagraph (C)(ii)) for such 

3 year that exceeds the cost threshold amount 

4 specified in subparagraph (B) and does not ex5 ceed the cost limit under such subparagraph, an 

6 amount equal to 28 percent of the allowable re7 tiree costs (as defined in subparagraph (C)(i)) 

8 attributable to such gross covered retiree plan9 related health benefits costs. 

10 ‘‘(B) COST THRESHOLD AND COST LIMIT

11 APPLICABLE.— 

12 ‘‘(i) IN GENERAL.—Subject to clause 

13 (ii)— 

14 ‘‘(I) the cost threshold under this 

15 subparagraph is equal to $250 for 

16 plan years that end in 2017; and 

17 ‘‘(II) the cost limit under this 

18 subparagraph is equal to $5,000 for 

19 plan years that end in 2017. 

20 ‘‘(ii) INDEXING.—The cost threshold 

21 and cost limit amounts specified in sub22 clauses (I) and (II) of clause (i) for a plan 

23 year that ends after 2017 shall be adjusted 

24 in the same manner as the unified deduct25 ible and the annual out-of-pocket limits, 

mstockstill on DSK4VPTVN1PROD with BILLS

89 

•S 11 IS

1 respectively, are annually adjusted under 

2 sections 1899B and 1899C. 

3 ‘‘(C) DEFINITIONS.—For purposes of this 

4 paragraph: 

5 ‘‘(i) ALLOWABLE RETIREE COSTS.— 

6 The term ‘allowable retiree costs’ means, 

7 with respect to gross covered health bene8 fits costs under a qualified retiree health 

9 benefits plan by a plan sponsor, the part of 

10 such costs that are actually paid (net of 

11 discounts, chargebacks, and average per12 centage rebates) by the sponsor or by or 

13 on behalf of a qualifying covered retiree 

14 under the plan. 

15 ‘‘(ii) GROSS COVERED RETIREE PLAN16 RELATED HEALTH BENEFITS COSTS.—The 

17 term ‘gross covered retiree plan-related 

18 health benefits costs’ means, with respect 

19 to a qualifying covered retiree enrolled in 

20 a qualified retiree health benefits plan dur21 ing a coverage year, the costs incurred 

22 under the plan, not including administra23 tive costs, but including costs directly re24 lated to the furnishing of health benefits 

25 items and services during the year. Such 

mstockstill on DSK4VPTVN1PROD with BILLS

90 

•S 11 IS

1 costs shall be determined whether they are 

2 paid by the retiree or under the plan. 

3 ‘‘(iii) COVERAGE YEAR.—The term 

4 ‘coverage year’ has the meaning given such 

5 term in section 1860D–15(b)(4) (as ap6 plied by substituting ‘covered health bene7 fits’ for ‘covered part D drugs’). 

8 ‘‘(4) QUALIFYING COVERED RETIREE DE9 FINED.—For purposes of this subsection, the term 

10 ‘qualifying covered retiree’ means a Total Health eli11 gible individual who is not enrolled in a Total Health 

12 plan but is covered under a qualified retiree health 

13 benefits plan. 

14 ‘‘(5) PAYMENT METHODS, INCLUDING PROVI15 SION OF NECESSARY INFORMATION.—The provisions 

16 of section 1860C–8(c) (including paragraph (2) of 

17 such section, relating to requirement for provision of 

18 information) shall apply to payments under this sub19 section in a manner similar to the manner in which 

20 they apply to payments under section 1860C–8. 

21 ‘‘(6) CONSTRUCTION.—Nothing in this sub22 section shall be construed as— 

23 ‘‘(A) precluding a Total Health eligible in24 dividual who is covered under employmentmstockstill on DSK4VPTVN1PROD with BILLS

91 

•S 11 IS

1 based retiree health coverage from enrolling in 

2 a Total Health plan; 

3 ‘‘(B) precluding such employment-based 

4 retiree health coverage or an employer or other 

5 person from paying all or any portion of any 

6 premium required for coverage under a Total 

7 Health plan on behalf of such an individual; 

8 ‘‘(C) preventing such employment-based 

9 retiree health coverage from providing cov10 erage— 

11 ‘‘(i) that is better than standard 

12 health benefits coverage to retirees who are 

13 covered under a qualified retiree health 

14 benefits plan; or 

15 ‘‘(ii) that is supplemental to the bene16 fits provided under a Total Health plan, 

17 including benefits to retirees who are not 

18 covered under a qualified retiree health 

19 benefits plan but who are enrolled in such 

20 a Total Health plan; or 

21 ‘‘(D) preventing employers from providing 

22 for flexibility in benefit design and provider ac23 cess provisions, without regard to the require24 ments for basic health benefits coverage, so 

mstockstill on DSK4VPTVN1PROD with BILLS

92 

•S 11 IS

1 long as the actuarial equivalence requirement of 

2 paragraph (2)(A) is met. 

3 ‘‘(b) APPLICATION OF MEDICARE ADVANTAGE WAIV4 ER AUTHORITY.—The provisions of section 1857(i) shall 

5 apply with respect to Total Health plans in relation to em6 ployment-based retiree health coverage in a manner simi7 lar to the manner in which they applied to an MA plan 

8 in relation to employers, including authorizing the estab9 lishment of separate premium amounts for enrollees in a 

10 Total Health plan by reason of such coverage and limita11 tions on enrollment to Total Health eligible individuals en12 rolled under such coverage. 

13 ‘‘(c) DEFINITIONS.—For purposes of this section: 

14 ‘‘(1) EMPLOYMENT-BASED RETIREE HEALTH

15 COVERAGE.—The term ‘employment-based retiree 

16 health coverage’ means health insurance or other 

17 coverage of health care costs (whether provided by 

18 voluntary insurance coverage or pursuant to statu19 tory or contractual obligation) for Total Health eligi20 ble individuals (or for such individuals and their 

21 spouses and dependents) under a group health plan 

22 based on their status as retired participants in such 

23 plan. 

24 ‘‘(2) SPONSOR.—The term ‘sponsor’ means a 

25 plan sponsor, as defined in section (16)(B) of the 

mstockstill on DSK4VPTVN1PROD with BILLS

93 

•S 11 IS

1 Employee Retirement Income Security Act of 1974, 

2 in relation to a group health plan, except that, in the 

3 case of a plan maintained jointly by one employer 

4 and an employee organization and with respect to 

5 which the employer is the primary source of financ6 ing, such term means such employer. 

7 ‘‘(3) GROUP HEALTH PLAN.—The term ‘group 

8 health plan’ includes such a plan as defined in sec9 tion 607(1) of the Employee Retirement Income Se10 curity Act of 1974 and also includes the following: 

11 ‘‘(A) FEDERAL AND STATE GOVERN12 MENTAL PLANS.—Such a plan established or 

13 maintained for its employees by the Govern14 ment of the United States, by the government 

15 of any State or political subdivision thereof, or 

16 by any agency or instrumentality of any of the 

17 foregoing, including a health benefits plan of18 fered under chapter 89 of title 5, United States 

19 Code. 

20 ‘‘(B) COLLECTIVELY BARGAINED PLANS.— 

21 Such a plan established or maintained under or 

22 pursuant to one or more collective bargaining 

23 agreements. 

24 ‘‘(C) CHURCH PLANS.—Such a plan estab25 lished and maintained for its employees (or 

mstockstill on DSK4VPTVN1PROD with BILLS

94 

•S 11 IS

1 their beneficiaries) by a church or by a conven2 tion or association of churches which is exempt 

3 from tax under section 501 of the Internal Rev4 enue Code of 1986. 

5 ‘‘COORDINATION WITH STATE MEDICAID PROGRAMS

6 ‘‘SEC. 1860C–11. (a) APPLICATION.— 

7 ‘‘(1) IN GENERAL.—Subject to subsection 

8 (c)(2), a State may apply to the Secretary for the 

9 waiver of any or all requirements described in this 

10 subpart for plan years beginning on or after Janu11 ary 1, 2017, with respect to a Total Health plan of12 fered within the State for the purpose of coordi13 nating that plan with its State plan under title XIX 

14 to ensure— 

15 ‘‘(A) dually eligible individuals have full 

16 access to the services to which they are entitled; 

17 ‘‘(B) the development of innovative care 

18 coordination and integration models; and 

19 ‘‘(C) the elimination of financial misalign20 ments that lead to poor quality and cost-shift21 ing. 

22 ‘‘(2) REQUIREMENTS.—Such application 

23 shall— 

24 ‘‘(A) be filed at such time and in such 

25 manner as the Secretary may require; 

mstockstill on DSK4VPTVN1PROD with BILLS

95 

•S 11 IS

1 ‘‘(B) contain such information as the Sec2 retary may require, including— 

3 ‘‘(i) a comprehensive description of 

4 the proposal and program to implement a 

5 plan meeting the requirements for a waiver 

6 under this section; and 

7 ‘‘(ii) an analysis of the proposal dem8 onstrating that the plan will not increase 

9 Federal Government expenditures; and 

10 ‘‘(C) provide an assurance that, if ap11 proved, the Total Health sponsor will offer the 

12 plan that is the subject of the proposal. 

13 ‘‘(3) WAIVER CONSIDERATION AND TRANS14 PARENCY.— 

15 ‘‘(A) IN GENERAL.—An application for a 

16 waiver under this section shall be considered by 

17 the Secretary in accordance with the regula18 tions described in subparagraph (B). 

19 ‘‘(B) REGULATIONS.—Not later than 180 

20 days after the date of enactment of this sub21 part, the Secretary shall promulgate regulations 

22 relating to waivers under this section that pro23 vide— 

mstockstill on DSK4VPTVN1PROD with BILLS

96 

•S 11 IS

1 ‘‘(i) a process for public notice and 

2 comment sufficient to ensure a meaningful 

3 level of public input; 

4 ‘‘(ii) a process for the submission of 

5 an application for the waiver; 

6 ‘‘(iii) a process for the submission to 

7 the Secretary of periodic reports by the 

8 State concerning the implementation of the 

9 program under the waiver; and 

10 ‘‘(iv) a process for the periodic evalua11 tion by the Secretary of the program under 

12 the waiver. 

13 ‘‘(C) REPORT.—The Secretary shall annu14 ally report to Congress concerning actions 

15 taken by the Secretary with respect to applica16 tions for waivers under this section. 

17 ‘‘(4) STATE OPTION TO BE A TOTAL HEALTH

18 SPONSOR.—For purposes of this section, a State 

19 may elect to be the sponsor of a Total Health plan 

20 for residents of the State who are eligible for bene21 fits under this title and title XIX or to apply on be22 half of a Total Health sponsor offering a Total 

23 Health plan in the State. 

24 ‘‘(5) COORDINATED WAIVER PROCESS.—The 

25 Secretary shall develop a process for coordinating 

mstockstill on DSK4VPTVN1PROD with BILLS

97 

•S 11 IS

1 and consolidating the waiver processes applicable 

2 under the provisions of this section to ensure that 

3 individuals eligible to enroll in a plan offered under 

4 the waiver are initially able to do so during an an5 nual, coordinated election period. 

6 ‘‘(b) GRANTING OF WAIVERS.— 

7 ‘‘(1) IN GENERAL.—The Secretary may grant a 

8 request for a waiver under subsection (a)(1) only if 

9 the Secretary determines that the proposed Total 

10 Health plan— 

11 ‘‘(A) will provide coverage that is at least 

12 as comprehensive as the coverage described in 

13 section 1860C–2(a)(1) as certified by Office of 

14 the Actuary of the Centers for Medicare & Med15 icaid Services; 

16 ‘‘(B) will provide coverage and cost-sharing 

17 protections against excessive out-of-pocket 

18 spending that are at least as affordable as the 

19 provisions of this subtitle would provide; and 

20 ‘‘(C) will not increase the Federal deficit. 

21 ‘‘(c) SCOPE OF WAIVER.— 

22 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

23 the Secretary shall determine the scope of a waiver 

24 granted with respect to a Total Health plan under 

25 subsection (a)(1). 

mstockstill on DSK4VPTVN1PROD with BILLS

98 

•S 11 IS

1 ‘‘(2) LIMITATION.—The Secretary may only 

2 waive provisions under this title and titles II, XI, 

3 XIX, and XXI under a waiver under this section. 

4 ‘‘(d) DETERMINATIONS BY THE SECRETARY.— 

5 ‘‘(1) TIME FOR DETERMINATION.—The Sec6 retary shall make a determination under subsection 

7 (a)(1) not later than 180 days after the receipt of 

8 an application from a State under such subsection. 

9 ‘‘(2) EFFECT OF DETERMINATION.— 

10 ‘‘(A) GRANTING OF WAIVERS.—If the Sec11 retary determines to grant a waiver under sub12 section (a)(1), the Secretary shall notify the 

13 Total Health sponsor involved of such deter14 mination and the terms and effectiveness of 

15 such waiver. 

16 ‘‘(B) DENIAL OF WAIVER.—If the Sec17 retary determines a waiver should not be grant18 ed under subsection (a)(1), the Secretary shall 

19 notify the Total Health sponsor involved, in20 cluding the reasons therefor. 

21 ‘‘(e) TERM OF WAIVER.—No waiver under this sec22 tion may extend over a period of longer than 5 years un23 less the Total Health sponsor requests continuation of 

24 such waiver, and such request shall be deemed granted 

25 unless the Secretary, within 90 days after the date of the 

mstockstill on DSK4VPTVN1PROD with BILLS

99 

•S 11 IS

1 submission of the request to the Secretary, either denies 

2 such request in writing or informs the State in writing 

3 with respect to any additional information that is needed 

4 in order to make a final determination with respect to the 

5 request. 

6 ‘‘DEFINITIONS AND MISCELLANEOUS PROVISIONS

7 ‘‘SEC. 1860C–12. (a) DEFINITIONS.—For purposes 

8 of this subpart: 

9 ‘‘(1) BASIC HEALTH BENEFITS COVERAGE.— 

10 The term ‘basic health benefits coverage’ means cov11 erage of the health care items and services for which 

12 payment may be made under the original medicare 

13 fee-for-service program option. 

14 ‘‘(2) INSURANCE RISK.—The term ‘insurance 

15 risk’ means, with respect to a participating health 

16 care provider, risk of the type commonly assumed 

17 only by insurers licensed by a State and does not in18 clude payment variations designed to reflect per19 formance-based measures of activities within the 

20 control of the health care provider. 

21 ‘‘(3) MA PLAN; MEDICARE ADVANTAGE PLAN.— 

22 The terms ‘MA plan’ and ‘Medicare Advantage plan’ 

23 have the meaning given such terms in section 

24 1859(b)(1). 

25 ‘‘(4) ORIGINAL MEDICARE FEE-FOR-SERVICE

26 PROGRAM OPTION.—The term ‘original medicare feemstockstill on DSK4VPTVN1PROD with BILLS

100 

•S 11 IS

1 for-service program option’ means the original medi2 care fee-for-service program under parts A and B, 

3 as modified by this subpart. 

4 ‘‘(5) STANDARD HEALTH BENEFITS COV5 ERAGE.—The term ‘standard health benefits cov6 erage’ has the meaning given such term in section 

7 1860C–2(b). 

8 ‘‘(6) TOTAL HEALTH ELIGIBLE INDIVIDUAL.— 

9 The term ‘Total Health eligible individual’ has the 

10 meaning given such term in section 1860C–1(a)(3). 

11 ‘‘(7) TOTAL HEALTH PLAN.—The term ‘Total 

12 Health plan’ means health benefits coverage that is 

13 offered— 

14 ‘‘(A) under a policy, contract, or plan that 

15 has been approved under section 1860C–5(f); 

16 and 

17 ‘‘(B) by a Total Health sponsor pursuant 

18 to, and in accordance with, a contract between 

19 the Secretary and the sponsor under section 

20 1860C–6(b). 

21 ‘‘(8) TOTAL HEALTH SPONSOR.—The term 

22 ‘Total Health sponsor’ means a nongovernmental en23 tity that is certified under this subpart as meeting 

24 the requirements and standards of this subpart for 

25 such a sponsor. 

mstockstill on DSK4VPTVN1PROD with BILLS

101 

•S 11 IS

1 ‘‘(b) APPLICATION OF SUBPART 1 PROVISIONS AND

2 REGULATIONS UNDER THIS SUBPART.—For purposes of 

3 applying provisions of subpart 1 under this subpart (and 

4 regulations implementing such provisions) with respect to 

5 a Total Health plan and a Total Health sponsor, unless 

6 otherwise provided in this subpart, and to the extent con7 sistent with this subpart, such provisions (and regulations 

8 implementing such provisions) shall be applied as the pro9 visions (and regulations) applied for plan years beginning 

10 prior to January 1, 2017, and as if— 

11 ‘‘(1) any reference to a Medicare Advantage 

12 plan or an MA plan included a reference to a Total 

13 Health plan; 

14 ‘‘(2) any reference to an MA organization or a 

15 provider-sponsored organization included a reference 

16 to a Total Health sponsor; 

17 ‘‘(3) any reference to a contract under section 

18 1857 included a reference to a contract under sec19 tion 1860C–6(b); 

20 ‘‘(4) any reference to subpart 1 included a ref21 erence to this subpart; and 

22 ‘‘(5) any reference to an election period under 

23 section 1851 were a reference to an enrollment pe24 riod under section 1860C–1.’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

102 

•S 11 IS

1 SEC. 2002. REPLACEMENT OF PART B PREMIUM WITH 

2 MEDICARE TOTAL HEALTH PROGRAM PLAN 

3 PREMIUM; OTHER TECHNICAL AND CON4 FORMING AMENDMENTS. 

5 (a) REPLACEMENT OF PART B PREMIUM WITH

6 MEDICARE TOTAL HEALTH PROGRAM PLAN PREMIUM.— 

7 Section 1839 of the Social Security Act (42 U.S.C. 1395r) 

8 is amended— 

9 (1) in subsection (a)(2), by striking ‘‘The 

10 monthly premium’’ and inserting ‘‘Subject to sub11 section (j),’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(j) REPLACEMENT OF PART B PREMIUM WITH

15 MEDICARE TOTAL HEALTH PROGRAM PLAN PREMIUM.— 

16 ‘‘(1) IN GENERAL.—Notwithstanding the pre17 ceding provisions of this section, except as provided 

18 in paragraph (2), on and after January 1, 2017, in 

19 lieu of the premium otherwise applicable under this 

20 section, the monthly premium of each Total Health 

21 eligible individual (as defined in section 1860C– 

22 1(a)(3)) shall be the monthly beneficiary premium 

23 determined under section 1860C–7 for the Total 

24 Health plan or the original medicare fee-for-service 

25 program option and the plan year involved. 

mstockstill on DSK4VPTVN1PROD with BILLS

103 

•S 11 IS

1 ‘‘(2) INDIVIDUALS ENROLLED FOR COVERAGE

2 UNDER PART B ONLY.—Individuals enrolled under 

3 this part only (and not entitled to, or enrolled for, 

4 benefits under part A) shall pay the premium that 

5 would have been calculated under this section but 

6 for the enactment of this subsection. 

7 ‘‘(3) CREDITING OF PREMIUMS.—Premiums 

8 paid by each Total Health eligible individual enrolled 

9 in the original medicare fee-for-service program op10 tion (as defined in section 1860E–13(a)(4)), shall be 

11 deposited in the Treasury to the credit of the Fed12 eral Supplementary Medical Insurance Trust Fund 

13 under section 1841.’’. 

14 (b) OTHER TECHNICAL AND CONFORMING AMEND15 MENTS.—Not later than 6 months after the date of the 

16 enactment of this Act, the Secretary of Health and 

17 Human Services shall submit to the appropriate commit18 tees of Congress a legislative proposal providing for such 

19 technical and conforming amendments in the law as are 

20 required by the provisions of this part and part II. 

mstockstill on DSK4VPTVN1PROD with BILLS

104 

•S 11 IS

1 PART II—MEDICARE FEE-FOR-SERVICE REFORMS 

2 SEC. 2011. MEDICARE PROTECTION AGAINST HIGH OUT-OF3 POCKET EXPENDITURES FOR FEE-FOR-SERV4 ICE BENEFITS. 

5 Title XVIII of the Social Security Act (42 U.S.C. 

6 1395 et seq.) is amended by adding at the end the fol7 lowing new section: 

8 ‘‘PROTECTION AGAINST HIGH OUT-OF-POCKET

9 EXPENDITURES

10 ‘‘SEC. 1899B. (a) IN GENERAL.—Notwithstanding 

11 any other provision of this title, in the case of an indi12 vidual entitled to, or enrolled for, benefits under part A 

13 or enrolled in part B, if the amount of the out-of-pocket 

14 cost-sharing of such individual for a year (beginning with 

15 2015) equals or exceeds— 

16 ‘‘(1) the first threshold annual out-of-pocket 

17 limit under subsection (b)(1) but is less than the 

18 second threshold annual out-of-pocket limit under 

19 subsection (b)(2) for that year, section 1899D(a) 

20 shall be applied by substituting ‘5 percent’ for ‘20 

21 percent’; and 

22 ‘‘(2) the second threshold annual out-of-pocket 

23 limit under subsection (b)(2) for that year, there 

24 shall not be any additional reduction under section 

25 1899D for the remainder of the year (and the indimstockstill on DSK4VPTVN1PROD with BILLS

105 

•S 11 IS

1 vidual shall not be responsible for additional out-of2 pocket cost-sharing incurred during that year). 

3 ‘‘(b) AMOUNT OF ANNUAL OUT-OF-POCKET LIM4 ITS.— 

5 ‘‘(1) FIRST THRESHOLD ANNUAL OUT-OF-POCK6 ET LIMIT.—The amount of the first threshold an7 nual out-of-pocket limit under this subsection shall 

8 be— 

9 ‘‘(A) for 2015, $5,500; or 

10 ‘‘(B) for a subsequent year, the amount 

11 specified in this subsection for the preceding 

12 year increased or decreased by the percentage 

13 change in the Chained Consumer Price Index 

14 for All Urban Consumers for the 12-month pe15 riod ending with June of such preceding year 

16 (as published in its initial form by the Bureau 

17 of Labor Statistics of the Department of Labor 

18 as of the end of such period). 

19 ‘‘(2) SECOND THRESHOLD ANNUAL OUT-OF20 POCKET LIMIT.—The amount of the second thresh21 old annual out-of-pocket limit under this subsection 

22 shall be— 

23 ‘‘(A) for 2015, $7,500; or 

24 ‘‘(B) for a subsequent year, the amount 

25 specified in this subsection for the preceding 

mstockstill on DSK4VPTVN1PROD with BILLS

106 

•S 11 IS

1 year increased or decreased by the percentage 

2 change in the Chained Consumer Price Index 

3 for All Urban Consumers for the 12-month pe4 riod ending with June of such preceding year 

5 (as published in its initial form by the Bureau 

6 of Labor Statistics of the Department of Labor 

7 as of the end of such period). 

8 ‘‘(3) ROUNDING.—If any amount determined 

9 under subparagraph (A) or (B) is not a multiple of 

10 $5, such amount shall be rounded to the nearest 

11 multiple of $5. 

12 ‘‘(c) OUT-OF-POCKET COST-SHARING DEFINED.— 

13 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

14 and (3), in this section, the term ‘out-of-pocket cost15 sharing’ means, with respect to an individual, the 

16 amount of the expenses incurred by the individual 

17 that are attributable to— 

18 ‘‘(A) deductibles, coinsurance and copay19 ments applicable under part A or B; or 

20 ‘‘(B) for items and services that would 

21 have otherwise been covered under part A or B 

22 but for the exhaustion of those benefits. 

23 ‘‘(2) CERTAIN COSTS NOT INCLUDED.— 

24 ‘‘(A) NON-COVERED ITEMS AND SERV25 ICES.—Expenses incurred for items and servmstockstill on DSK4VPTVN1PROD with BILLS

107 

•S 11 IS

1 ices which are not included (or treated as being 

2 included) under part A or B shall not be con3 sidered incurred expenses for purposes of deter4 mining out-of-pocket cost-sharing under para5 graph (1). 

6 ‘‘(B) ITEMS AND SERVICES NOT FUR7 NISHED ON AN ASSIGNMENT-RELATED BASIS.— 

8 If an item or service is furnished to an indi9 vidual under this title and is not furnished on 

10 an assignment-related basis, any additional ex11 penses the individual incurs above the amount 

12 the individual would have incurred if the item 

13 or service was furnished on an assignment-re14 lated basis shall not be considered incurred ex15 penses for purposes of determining out-of-pock16 et cost-sharing under paragraph (1). 

17 ‘‘(3) SOURCE OF PAYMENT.—For purposes of 

18 paragraph (1), the Secretary shall consider expenses 

19 to be incurred by the individual without regard to 

20 whether the individual or another person, including 

21 a State program or other third-party coverage, has 

22 paid for such expenses. 

23 ‘‘(d) ANNOUNCEMENT OF ANNUAL OUT-OF-POCKET

24 LIMIT AND UNIFIED DEDUCTIBLE.—The Secretary shall 

25 (beginning in 2014) announce (in a manner intended to 

mstockstill on DSK4VPTVN1PROD with BILLS

108 

•S 11 IS

1 provide notice to all interested parties) the annual out2 of-pocket limit under this section and the unified deduct3 ible under section 1899C that will be applicable for the 

4 succeeding year.’’. 

5 SEC. 2012. UNIFIED MEDICARE DEDUCTIBLE. 

6 (a) IN GENERAL.—Title XVIII of the Social Security 

7 Act (42 U.S.C. 1395 et seq.), as amended by section 2011, 

8 is amended by adding at the end the following new section: 

9 ‘‘UNIFIED PART A AND B DEDUCTIBLE

10 ‘‘SEC. 1899C. (a) IN GENERAL.—Notwithstanding 

11 any other provision of this title, subject to subsection (d), 

12 for a year (beginning with 2015), in the case of an indi13 vidual entitled to, or enrolled for, benefits under part A 

14 or enrolled in part B— 

15 ‘‘(1) the amount otherwise payable under part 

16 A and the total amount of expenses incurred by the 

17 individual during a year which would (except for this 

18 section) constitute incurred expenses for which bene19 fits payable under section 1833(a) are determinable, 

20 shall be reduced by the amount of the unified de21 ductible under subsection (b); and 

22 ‘‘(2) the individual shall be responsible for pay23 ment of such amount. 

24 ‘‘(b) AMOUNT OF UNIFIED DEDUCTIBLE.— 

25 ‘‘(1) IN GENERAL.—The amount of the unified 

26 deductible under this section shall be— 

mstockstill on DSK4VPTVN1PROD with BILLS

109 

•S 11 IS

1 ‘‘(A) for 2015, $550; or 

2 ‘‘(B) for a subsequent year, the amount 

3 specified in this subsection for the preceding 

4 year increased or decreased by the percentage 

5 change in the Chained Consumer Price Index 

6 for All Urban Consumers for the 12-month pe7 riod ending with June of such preceding year 

8 (as published in its initial form by the Bureau 

9 of Labor Statistics of the Department of Labor 

10 as of the end of such period). 

11 ‘‘(2) ROUNDING.—If any amount determined 

12 under paragraph (1) is not a multiple of $5, such 

13 amount shall be rounded to the nearest multiple of 

14 $5. 

15 ‘‘(c) APPLICATION TO ALL ITEMS AND SERVICES.— 

16 The unified deductible under this section for a year shall 

17 be applied as follows: 

18 ‘‘(1) With respect to items and services covered 

19 under part A, such unified deductible shall be ap20 plied on the basis of the amount that is payable for 

21 such items and services without regard to any copay22 ments or coinsurance and before the application of 

23 any such copayments or coinsurance. 

24 ‘‘(2) With respect to items and services covered 

25 under part B, such unified deductible shall be apmstockstill on DSK4VPTVN1PROD with BILLS

110 

•S 11 IS

1 plied on the basis of the total amount of the ex2 penses incurred by the individual during a year 

3 which would, except for the application of the unified 

4 deductible, constitute incurred expenses for which 

5 items and services are payable under part B, without 

6 regard to any copayments or coinsurance and before 

7 the application of any such copayments or coinsur8 ance. 

9 ‘‘(3)(A) Except as provided in subparagraph 

10 (B), such unified deductible shall be applied with re11 spect to all items and services covered under parts 

12 A and B and in lieu of the deductibles described in 

13 sections 1813(b) and 1833(b) or otherwise. 

14 ‘‘(B) The deductible applicable to blood under 

15 sections 1813 and 1833 shall apply to blood instead 

16 of such unified deductible. 

17 ‘‘(d) TREATMENT OF INDIVIDUALS NOT ENROLLED

18 IN BOTH PARTS A AND B.—The Secretary shall establish 

19 procedures under which an individual who entitled to, or 

20 enrolled for, benefits under part A or enrolled in part B 

21 (but not both) will continue to be subject to a deductible 

22 under this title that is comparable to the deductible the 

23 individual would have been subject to if this section had 

24 not been enacted.’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

111 

•S 11 IS

1 (b) CLARIFICATION REGARDING APPLICATION

2 UNDER MEDICARE ADVANTAGE.—Section 

3 1852(a)(1)(B)(iii) of the Social Security Act (42 U.S.C. 

4 1395w–22(a)(1)(B)(iii)) is amended by adding at the end 

5 the following new sentence: ‘‘For plan years 2015 and 

6 2016, the preceding sentence shall be applied to take into 

7 account the application of sections 1899B, 1899C, and 

8 1899D.’’. 

9 SEC. 2013. UNIFORM MEDICARE COINSURANCE RATE. 

10 (a) IN GENERAL.—Title XVIII of the Social Security 

11 Act (42 U.S.C. 1395 et seq.), as amended by sections 

12 2011 and 2012, is amended by adding at the end the fol13 lowing new section: 

14 ‘‘UNIFORM PART A AND B COINSURANCE RATE

15 ‘‘SEC. 1899D. (a) IN GENERAL.—Notwithstanding 

16 any other provision of this title, in the case of an indi17 vidual entitled to, or enrolled for, benefits under part A 

18 or enrolled in part B, after the application of the unified 

19 deductible under section 1899C and subject to the limit 

20 on annual out-of-pocket expenses under section 1899B, 

21 the amount otherwise payable under part A and the total 

22 amount of expenses incurred by the individual during a 

23 year (beginning in 2015) which would (except for this sec24 tion) constitute incurred expenses for which benefits are 

25 payable under part B, shall be reduced by a coinsurance 

26 of 20 percent of such amount. 

mstockstill on DSK4VPTVN1PROD with BILLS

112 

•S 11 IS

1 ‘‘(b) APPLICATION TO ALL ITEMS AND SERVICES.— 

2 The uniform coinsurance under this section for a year 

3 shall be applied as follows: 

4 ‘‘(1) With respect to items and services covered 

5 under part A, such uniform coinsurance shall be ap6 plied on the basis of the amount that is payable for 

7 such items and services. 

8 ‘‘(2) With respect to items and services covered 

9 under part B, such uniform coinsurance shall be ap10 plied on the basis of the total amount of the ex11 penses incurred by the individual during a year 

12 which would, except for the application of the unified 

13 deductible, constitute incurred expenses from which 

14 items and services are payable under part B. 

15 ‘‘(3)(A) Except as provided in subparagraph 

16 (B), such uniform coinsurance shall be applied with 

17 respect to all items and services covered under parts 

18 A and B and in lieu of any other copayments or co19 insurance under such parts. 

20 ‘‘(B) Coinsurance for blood under this title 

21 shall be determined under the rules that were appli22 cable to blood on December 31, 2014, rather than 

23 under this section.’’. 

24 (b) CONFORMING AMENDMENTS.— 

mstockstill on DSK4VPTVN1PROD with BILLS

113 

•S 11 IS

1 (1) Section 1813 of the Social Security Act (42 

2 U.S.C. 1395e) is amended— 

3 (A) in subsection (a), by inserting ‘‘Subject 

4 to sections 1899B, 1899C, and 1899D:’’ before 

5 paragraph (1); and 

6 (B) in subsection (b), by inserting ‘‘Sub7 ject to sections 1899B, 1899C, and 1899D:’’ 

8 before paragraph (1). 

9 (2) Section 1833 of the Social Security Act (42 

10 U.S.C. 1395l) is amended— 

11 (A) in subsection (a), in the matter pre12 ceding paragraph (1), by inserting ‘‘and sec13 tions 1899B, 1899C, and 1899D’’ after ‘‘suc14 ceeding provisions of this section’’; 

15 (B) in subsection (b), in the first sentence, 

16 by striking ‘‘Before applying’’ and inserting 

17 ‘‘Subject to sections 1899B, 1899C, and 

18 1899D, before applying’’; 

19 (C) in subsection (c)(1), in the matter pre20 ceding subparagraph (A), by inserting ‘‘subject 

21 to sections 1899B, 1899C, and 1899D,’’ after 

22 ‘‘this part,’’; 

23 (D) in subsection (f), by striking ‘‘In es24 tablishing’’ and inserting ‘‘Subject to sections 

mstockstill on DSK4VPTVN1PROD with BILLS

114 

•S 11 IS

1 1899B, 1899C, and 1899D, in establishing’’; 

2 and 

3 (E) in subsection (g)(1), by inserting ‘‘and 

4 sections 1899B, 1899C, and 1899D’’ after 

5 ‘‘paragraphs (4) and (5)’’. 

6 (3) Section 1905(p)(3) of the Social Security 

7 Act (42 U.S.C. 1396d(p)(3)) is amended— 

8 (A) in subparagraph (B), by striking ‘‘sec9 tion 1813’’ and inserting ‘‘sections 1813 and 

10 1899D’’; and 

11 (B) in subparagraph (C), by striking ‘‘and 

12 section 1833(b)’’ and inserting ‘‘, 1833(b), and 

13 1899C’’. 

14 SEC. 2014. PROHIBITION ON FIRST-DOLLAR COVERAGE 

15 UNDER MEDIGAP POLICIES AND DEVELOP16 MENT OF NEW STANDARDS FOR MEDIGAP 

17 POLICIES. 

18 Section 1882 of the Social Security Act (42 U.S.C. 

19 1395ss) is amended by adding at the end the following 

20 new subsections: 

21 ‘‘(z) PROHIBITION ON FIRST-DOLLAR COVERAGE

22 AND DEVELOPMENT OF NEW STANDARDS FOR MEDICARE

23 SUPPLEMENTAL POLICIES.— 

24 ‘‘(1) DEVELOPMENT.—The Secretary shall re25 quest the National Association of Insurance Commstockstill on DSK4VPTVN1PROD with BILLS

115 

•S 11 IS

1 missioners to review and revise the standards for 

2 benefit packages under subsection (p)(1), taking into 

3 account the changes in benefits resulting from the 

4 enactment of the Fiscal Sustainability Act of 2013 

5 and to otherwise update standards to include the re6 quirements for cost-sharing described in paragraph 

7 (2). Such revisions shall be made consistent with the 

8 rules applicable under subsection (p)(1)(E) with the 

9 reference to the ‘1991 NAIC Model Regulation’ 

10 deemed a reference to the NAIC Model Regulation 

11 as published in the Federal Register on December 4, 

12 1998, and as subsequently updated by the National 

13 Association of Insurance Commissioners to reflect 

14 previous changes in law and the reference to ‘date 

15 of enactment of this subsection’ deemed a reference 

16 to the date of enactment of the Fiscal Sustainability 

17 Act of 2013. To the extent practicable, such revision 

18 shall provide for the implementation of revised 

19 standards for benefit packages as of January 1, 

20 2015. 

21 ‘‘(2) COST-SHARING REQUIREMENTS.—The 

22 cost-sharing requirements described in this para23 graph are that, notwithstanding any other provision 

24 of law, no medicare supplemental policy may provide 

25 for coverage of— 

mstockstill on DSK4VPTVN1PROD with BILLS

116 

•S 11 IS

1 ‘‘(A) any portion of the unified deductible 

2 under section 1899C(b) for the year; and 

3 ‘‘(B) more than 50 percent of the cost4 sharing (excluding premiums) otherwise appli5 cable under parts A and B after the individual 

6 has met the unified deductible under section 

7 1899C(b) for the year and before the individual 

8 has reached the first threshold annual out-of9 pocket limit under section 1899B(b)(1) for the 

10 year. 

11 ‘‘(3) RENEWABILITY.—The renewability re12 quirement under subsection (q)(1) shall be satisfied 

13 with the renewal of the revised package under para14 graph (1) that most closely matches the policy in 

15 which the individual was enrolled prior to such revi16 sion. 

17 ‘‘(aa) LIMITATION ON ISSUING NEW MEDICARE SUP18 PLEMENTAL POLICIES AFTER 2016.— 

19 ‘‘(1) IN GENERAL.—Notwithstanding any other 

20 provision of law, a medicare supplemental policies 

21 may not be issued to an individual after December 

22 31, 2016, unless the individual was covered under a 

23 medicare supplemental policy as of such date. 

mstockstill on DSK4VPTVN1PROD with BILLS

117 

•S 11 IS

1 ‘‘(2) RENEWALS AND NEW POLICIES.—Nothing 

2 in this subsection shall be construed as prohib3 iting— 

4 ‘‘(A) the renewal after December 31, 2016, 

5 of a medicare supplemental policy that was 

6 issued on or before such date; or 

7 ‘‘(B) the issuance of a new medicare sup8 plemental policy after such date as long as the 

9 individual was covered under any medicare sup10 plemental policy as of such date.’’. 

11 PART III—ANNUAL REPORT TO CONGRESS 

12 SEC. 2021. ANNUAL REPORT TO CONGRESS. 

13 (a) IN GENERAL.—Not later than July 1, 2016, and 

14 annually thereafter, the Secretary of Health and Human 

15 Services shall submit to the Committee on Finance and 

16 the Special Committee on Aging of the Senate and to the 

17 Committee on Ways and Means and the Committee on En18 ergy and Commerce of the House of Representatives a re19 port on the provisions of, and amendments made by, parts 

20 I and II. 

21 (b) CONTENTS.—The report submitted under sub22 section (a) shall contain the following information: 

23 (1) An evaluation of the financial impact of 

24 such provisions and amendments. 

mstockstill on DSK4VPTVN1PROD with BILLS

118 

•S 11 IS

1 (2) An evaluation of changes in access to physi2 cians and other health care providers as a result of 

3 such provisions and amendments. 

4 (3) An evaluation of changes in beneficiary sat5 isfaction under the Medicare program as a result of 

6 such provisions and amendments. 

7 (4) Such other information as the Secretary de8 termines to be appropriate. 

9 Subtitle B—Elimination of Exemp10 tion of Medicare Payments to 

11 Physicians Under Statutory 

12 PAYGO 

13 SEC. 2101. ELIMINATION OF EXEMPTION OF MEDICARE 

14 PAYMENTS TO PHYSICIANS UNDER STATU15 TORY PAYGO. 

16 (a) IN GENERAL.—Section 7 of the Statutory Pay17 As-You-Go Act of 2010 (2 U.S.C. 936) is amended— 

18 (1) in subsection (a), by striking paragraph (1); 

19 and 

20 (2) by striking subsection (c). 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 subsection (a) shall take effect on the date of the enact23 ment of this Act. 

mstockstill on DSK4VPTVN1PROD with BILLS

119 

•S 11 IS

1 Subtitle C—Adjustments to Medi2 care Part B and D Premiums for 

3 High-Income Beneficiaries 

4 SEC. 2201. ADJUSTMENTS TO MEDICARE PART B AND D 

5 PREMIUMS FOR HIGH-INCOME BENE6 FICIARIES. 

7 (a) IN GENERAL.—Section 1839(i) of the Social Se8 curity Act (42 U.S.C. 1395r(i)) is amended— 

9 (1) in paragraph (2)(A), by inserting (or, in the 

10 case of 2013 or a subsequent year, $50,000) after 

11 ‘‘$80,000’’; and 

12 (2) in paragraph (3)— 

13 (A) in subparagraph (A)(i)— 

14 (i) by inserting ‘‘applicable’’ before 

15 ‘‘table’’; and 

16 (ii) by inserting ‘‘and year’’ after ‘‘in17 dividual’’; and 

18 (B) in subparagraph (C)(i)— 

19 (i) by striking ‘‘(i) IN GENERAL.—’’ 

20 and inserting ‘‘(i)(I) FOR 2007 THROUGH

21 2012.—For each of 2007 through 2012:’’; 

22 and 

23 (ii) by adding at the end the following 

24 new subclause: 

mstockstill on DSK4VPTVN1PROD with BILLS

120 

•S 11 IS

1 ‘‘(II) FOR 2013 AND SUBSEQUENT

2 YEARS.—For 2013 or a subsequent year: 

‘‘If the modified adjusted gross income is: The applicable 

percentage is: 

More than $50,000 but not more than $85,000 ........................ 35 percent

More than $85,000 but not more than $107,000 ...................... 40 percent

More than $107,000 but not more than $160,000 .................... 55 percent

More than $160,000 but not more than $214,000 .................... 70 percent

More than $214,000 but not more than $250,000 .................... 85 percent

More than $250,000 ................................................................... 100 percent.’’. 

3 (b) EXTENSION OF TEMPORARY ADJUSTMENT TO IN4 COME THRESHOLDS.— 

5 (1) IN GENERAL.—Section 1839(i)(6) of the 

6 Social Security Act (42 U.S.C. 1395r(i)(6)) is 

7 amended— 

8 (A) in the matter preceding subparagraph 

9 (A), by striking ‘‘December 31, 2019’’ and in10 serting ‘‘December 31, 2021’’; 

11 (B) in subparagraph (A), by striking 

12 ‘‘equal to such amount for 2010; and’’ and in13 serting the following: ‘‘equal to— 

14 ‘‘(i) in the case of each of 2011 and 

15 2012, such amount for 2010; and 

16 ‘‘(ii) in the case of each of 2013 

17 through 2021, such amount for 2013; 

18 and’’; and 

mstockstill on DSK4VPTVN1PROD with BILLS

121 

•S 11 IS

1 (C) in subparagraph (B), by striking 

2 ‘‘equal to such dollar amounts for 2010.’’ and 

3 inserting the following: ‘‘equal to— 

4 ‘‘(i) in the case of each of 2011 and 

5 2012, such dollar amounts for 2010; and 

6 ‘‘(ii) in the case of each of 2013 

7 through 2021, such dollar amounts for 

8 2013.’’. 

9 (2) CONFORMING AMENDMENT.—Section 

10 1839(i)(5)(A) of the Social Security Act (42 U.S.C. 

11 1395r(i)(5)(A)) is amended by inserting ‘‘for such 

12 year’’ after ‘‘paragraph (2) or (3)’’; 

13 Subtitle D—Increase in the 

14 Medicare Eligibility Age 

15 SEC. 2301. INCREASE IN THE MEDICARE ELIGIBILITY AGE. 

16 Section 226 of the Social Security Act (42 U.S.C. 

17 426) is amended by adding at the end the following new 

18 subsection: 

19 ‘‘(k) INCREASING MEDICARE QUALIFYING AGE.— 

20 ‘‘(1) IN GENERAL.—Notwithstanding any other 

21 provision of law, any reference in this section, title 

22 XVIII, or title XIX (insofar as it relates to the eligi23 bility age for Medicare benefits under title XVIII) to 

24 ‘age 65’ shall be deemed a reference to the Medicare 

25 qualifying age specified in paragraph (2). 

mstockstill on DSK4VPTVN1PROD with BILLS

122 

•S 11 IS

1 ‘‘(2) MEDICARE QUALIFYING AGE SPECIFIED.— 

2 The Medicare qualifying age specified in this para3 graph is determined as follows: 

4 ‘‘(A) In the case of an individual who at5 tains 65 years of age before January 1, 2014, 

6 the Medicare qualifying age is 65 years of age. 

7 ‘‘(B) In the case of an individual who at8 tains 65 years of age in a year after 2013, and 

9 before 2025, the Medicare qualifying age is the 

10 Medicare qualifying age specified in this para11 graph for the previous year increased by 2 

12 months. 

13 ‘‘(C) In the case of an individual who at14 tains 65 years of age in a year after 2024, the 

15 Medicare qualifying age is 67 years of age.’’. 

16 Subtitle E—Other Provisions 

17 SEC. 2401. LIMITATION ON MEDICARE PAYMENTS FOR DI18 RECT GRADUATE MEDICAL EDUCATION 

19 (DGME). 

20 Section 1886(h)(2)(D) of the Social Security Act (42 

21 U.S.C. 1395ww(h)(2)(D)) is amended by adding at the 

22 end the following new clause: 

23 ‘‘(v) CAP ON APPROVED FTE RESI24 DENT AMOUNT.— 

mstockstill on DSK4VPTVN1PROD with BILLS

123 

•S 11 IS

1 ‘‘(I) IN GENERAL.—The ap2 proved FTE resident amount for a 

3 hospital for a cost reporting period be4 ginning during fiscal year 2014 or a 

5 subsequent fiscal year shall not be 

6 more than the applicable amount for 

7 the year. 

8 ‘‘(II) APPLICABLE AMOUNT.— 

9 For purposes of subclause (I), the ap10 plicable amount for a year shall be an 

11 amount equal to 120 percent of the 

12 national average salary paid to resi13 dents in 2010, updated through the 

14 year involved by the Chained Con15 sumer Price Index. 

16 ‘‘(III) CHAINED CONSUMER

17 PRICE INDEX.—In subclause (II), the 

18 term ‘Chained Consumer Price Index’ 

19 means the initial Chained Consumer 

20 Price Index for all-urban consumers 

21 published by the Department of 

22 Labor.’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

124 

•S 11 IS

1 SEC. 2402. REDUCTION IN MEDICARE INDIRECT GRADUATE 

2 MEDICAL EDUCATION (IME) PAYMENTS. 

3 (a) IN GENERAL.—Section 1886(d)(5)(B)(ii) of the 

4 Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(ii)) is 

5 amended— 

6 (1) in subclause (XI), by striking ‘‘and’’ at the 

7 end; 

8 (2) in subclause (XII)— 

9 (A) by inserting ‘‘and before October 1, 

10 2013,’’ after ‘‘2007,’’; and 

11 (B) by striking the period at the end and 

12 inserting ‘‘; and’’; and 

13 (3) by adding at the end the following new sub14 clause: 

15 ‘‘(XIII) on or after October 1, 2013, ‘c’ is 

16 equal to 0.54.’’. 

17 (b) CONFORMING AMENDMENT RELATING TO DE18 TERMINATION OF STANDARDIZED AMOUNT.—Section 

19 1886(d)(2)(C)(i) of the Social Security Act (42 U.S.C. 

20 1395ww(d)(2)(C)(i)) is amended by inserting ‘‘or of sec21 tion 2402(a) of the Fiscal Sustainability Act of 2013’’ 

22 after ‘‘Act of 1997’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

125 

•S 11 IS

1 SEC. 2403. ACCELERATION OF APPLICATION OF PRODUC2 TIVITY ADJUSTMENT TO MEDICARE HOME 

3 HEALTH PROSPECTIVE PAYMENT AMOUNTS. 

4 Section 1895(b)(3)(B)(vi)(I) of the Social Security 

5 Act (42 U.S.C. 1395fff(b)(3)(B)(vi)(I)) is amended by 

6 striking ‘‘2015’’ and inserting ‘‘2014’’. 

7 SEC. 2404. ACCELERATION OF REBASING OF MEDICARE 

8 HOME HEALTH PROSPECTIVE PAYMENT 

9 AMOUNTS. 

10 Section 1895(b)(3)(A)(iii)(II) of the Social Security 

11 Act (42 U.S.C. 1395fff(b)(3)(A)(iii)(II)) is amended— 

12 (1) in the first sentence— 

13 (A) by striking ‘‘4-year’’ and inserting ‘‘2- 

14 year’’; and 

15 (B) by striking ‘‘2017’’ and inserting 

16 ‘‘2015’’; and 

17 (2) by striking the second sentence. 

18 SEC. 2405. REDUCTION OF BAD DEBT TREATED AS AN AL19 LOWABLE COST. 

20 (a) HOSPITALS.—Section 1861(v)(1)(T) of the Social 

21 Security Act (42 U.S.C. 1395x(v)(1)(T)) is amended— 

22 (1) in clause (iv), by striking ‘‘and’’ at the end; 

23 (2) in clause (v)— 

24 (A) by striking ‘‘or a subsequent fiscal 

25 year’’; and 

mstockstill on DSK4VPTVN1PROD with BILLS

126 

•S 11 IS

1 (B) by striking the period at the end and 

2 inserting a comma; and 

3 (3) by adding at the end the following: 

4 ‘‘(vi) for cost reporting periods beginning dur5 ing fiscal year 2014, by 48 percent of such amount 

6 otherwise allowable, 

7 ‘‘(vii) for cost reporting periods beginning dur8 ing fiscal year 2015, by 61 percent of such amount 

9 otherwise allowable, 

10 ‘‘(viii) for cost reporting periods beginning dur11 ing fiscal year 2016, by 74 percent of such amount 

12 otherwise allowable, 

13 ‘‘(ix) for cost reporting periods beginning dur14 ing fiscal year 2017, by 87 percent of such amount 

15 otherwise allowable, and 

16 ‘‘(x) for cost reporting periods beginning during 

17 fiscal year 2018 or a subsequent fiscal year, by 100 

18 percent of such amount otherwise allowable.’’. 

19 (b) SKILLED NURSING FACILITIES.—Section 

20 1861(v)(1)(V) of the Social Security Act (42 U.S.C. 

21 1395x(v)(1)(V)) is amended— 

22 (1) by moving subclauses (I) and (II) of clause 

23 (i) and subclauses (I) through (IV) of clause (ii) two 

24 ems to the right; and 

25 (2) in clause (i)— 

mstockstill on DSK4VPTVN1PROD with BILLS

127 

•S 11 IS

1 (A) in subclause (I), by striking ‘‘and’’ at 

2 the end; 

3 (B) in subclause (II)— 

4 (i) by striking ‘‘or a subsequent fiscal 

5 year’’; and 

6 (ii) by striking the period at the end 

7 and inserting a semicolon; and 

8 (C) by adding at the end the following: 

9 ‘‘(III) for cost reporting periods beginning 

10 during fiscal year 2014, by 48 percent of such 

11 amount otherwise allowable; 

12 ‘‘(IV) for cost reporting periods beginning 

13 during fiscal year 2015, by 61 percent of such 

14 amount otherwise allowable; 

15 ‘‘(V) for cost reporting periods beginning 

16 during fiscal year 2016, by 74 percent of such 

17 amount otherwise allowable; 

18 ‘‘(VI) for cost reporting periods beginning 

19 during fiscal year 2017, by 87 percent of such 

20 amount otherwise allowable; and 

21 ‘‘(VII) for cost reporting periods beginning 

22 during fiscal year 2018 or a subsequent fiscal 

23 year, by 100 percent of such amount otherwise 

24 allowable.’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

128 

•S 11 IS

1 (c) CERTAIN OTHER PROVIDERS.—Section 

2 1861(v)(1)(W)(i) of the Social Security Act (42 U.S.C. 

3 1395x(v)(1)(W)(i)) is amended— 

4 (1) in subclause (II), by striking ‘‘and’’ at the 

5 end; 

6 (2) in subclause (III)— 

7 (A) by striking ‘‘a subsequent fiscal year’’ 

8 and inserting ‘‘fiscal year 2015’’; and 

9 (B) by striking the period at the end and 

10 inserting a semicolon; and 

11 (3) by adding at the end the following: 

12 ‘‘(IV) for cost reporting periods beginning dur13 ing fiscal year 2016, by 48 percent of such amount 

14 otherwise allowable; 

15 ‘‘(V) for cost reporting periods beginning dur16 ing fiscal year 2017, by 61 percent of such amount 

17 otherwise allowable; 

18 ‘‘(VI) for cost reporting periods beginning dur19 ing fiscal year 2018, by 74 percent of such amount 

20 otherwise allowable; 

21 ‘‘(VII) for cost reporting periods beginning dur22 ing fiscal year 2019, by 87 percent of such amount 

23 otherwise allowable; and 

24 ‘‘(VIII) for cost reporting periods beginning 

25 during fiscal year 2020 or a subsequent fiscal year, 

mstockstill on DSK4VPTVN1PROD with BILLS

129 

•S 11 IS

1 by 100 percent of such amount otherwise allow2 able.’’. 

3 TITLE III—SOCIAL SECURITY 

4 SEC. 3101. ADJUSTMENTS TO BEND POINTS IN DETER5 MINING PRIMARY INSURANCE AMOUNT. 

6 Section 215(a)(1) of the Social Security Act (42 

7 U.S.C. 415(a)(1)) is amended— 

8 (1) in subparagraph (A), in the matter pre9 ceding clause (i), by inserting ‘‘who initially becomes 

10 eligible for old-age or disability insurance benefits, 

11 or who dies (before becoming eligible for such bene12 fits), in any calendar year after 1979 and before 

13 2017’’ after ‘‘individual’’; 

14 (2) in subparagraph (B)(ii), in the matter pre15 ceding subclause (I), by inserting ‘‘and before 2017’’ 

16 after ‘‘after 1979’’; 

17 (3) in subparagraph (C)(i), by inserting ‘‘or 

18 (E)’’ after ‘‘(A)’’; and 

19 (4) by adding at the end the following: 

20 ‘‘(E)(i) The primary insurance amount of an indi21 vidual who initially becomes eligible for old-age or dis22 ability insurance benefits, or who dies (before becoming 

23 eligible for such benefits), in any calendar year after 2016 

24 shall (except as otherwise provided in this section) be 

25 equal to the sum of— 

mstockstill on DSK4VPTVN1PROD with BILLS

130 

•S 11 IS

1 ‘‘(I) 90 percent of the individual’s average in2 dexed monthly earnings (determined under sub3 section (b)) to the extent that such earnings do not 

4 exceed the amount established for purposes of this 

5 subclause by clause (ii), 

6 ‘‘(II) 30 percent of the individual’s average in7 dexed monthly earnings to the extent that such 

8 earnings exceed the amount established for purposes 

9 of subclause (I) but do not exceed the amount estab10 lished for purposes of this subclause by clause (ii), 

11 ‘‘(III) 10 percent of the individual’s average in12 dexed monthly earnings to the extent that such 

13 earnings exceed the amount established for purposes 

14 of subclause (II) but do not exceed the amount es15 tablished for purposes of this subclause by clause 

16 (ii), and 

17 ‘‘(IV) 5 percent of the individual’s average in18 dexed monthly earnings to the extent that such 

19 earnings exceed the amount established for purposes 

20 of subclause (III), 

21 rounded, if not a multiple of $0.10, to the next lower mul22 tiple of $0.10, and thereafter increased as provided in sub23 section (i). 

24 ‘‘(ii) For individuals who initially become eligible for 

25 old-age or disability insurance benefits, or who die (before 

mstockstill on DSK4VPTVN1PROD with BILLS

131 

•S 11 IS

1 becoming eligible for such benefits) in the calendar year 

2 2017 or later, the amount established for purposes of sub3 clauses (I), (II), and (III) of subparagraph (E)(i) shall 

4 be $180, $736, and $1,085, respectively, as if such 

5 amount was applicable with respect to 1979 and was ad6 justed for years after 1979 in the same manner as pro7 vided under subparagraph (B)(ii), without regard to the 

8 limitation that such adjustment only applies to individuals 

9 who initially become eligible for old-age benefits or dis10 ability insurance benefits, or who die (before becoming eli11 gible for benefits) before 2017. 

12 ‘‘(iii)(I) Notwithstanding clauses (i) and (ii), in the 

13 case of any individual who becomes eligible for old-age or 

14 disability insurance benefits, or who dies (before becoming 

15 eligible for such benefits) in any calendar year after 2016 

16 and before 2051, the primary insurance amount of the in17 dividual shall be equal to the sum of— 

18 ‘‘(aa) the primary insurance amount determined 

19 for the individual under subparagraphs (A) and (B) 

20 (without regard to the limitation that such subpara21 graphs apply only to individuals who initially become 

22 eligible for old-age benefits or disability insurance 

23 benefits, or who die (before becoming eligible for 

24 benefits) before 2017) multiplied by the applicable 

mstockstill on DSK4VPTVN1PROD with BILLS

132 

•S 11 IS

1 phase-in factor for the calendar year under sub2 clause (II); and 

3 ‘‘(bb) the primary insurance amount deter4 mined for the individual under this subparagraph 

5 (other than under this clause) multiplied by the ap6 plicable phase-in factor for the calendar year under 

7 subclause (II). 

8 ‘‘(II) For purposes of— 

9 ‘‘(aa) subclause (I)(aa), the applicable phase-in 

10 factor for calendar year 2017, is the quotient of 33 

11 divided by 34, and for each year thereafter is the 

12 quotient of— 

13 ‘‘(AA) the numerator applicable for the 

14 preceding year reduced by 1, divided by 

15 ‘‘(BB) 34; and 

16 ‘‘(bb) subclause (I)(bb), the applicable phase-in 

17 factor for calendar year 2017 is the quotient of 1 di18 vided by 34, and for each year thereafter is the 

19 quotient of— 

20 ‘‘(AA) the numerator applicable for the 

21 preceding year increased by 1, divided by 

22 ‘‘(BB) 34.’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

133 

•S 11 IS

1 SEC. 3102. ADJUSTMENT TO CALCULATION OF BENEFIT 

2 COMPUTATION YEARS. 

3 (a) IN GENERAL.—Clause (i) of section 215(b)(2)(A) 

4 of the Social Security Act (42 U.S.C. 415(b)(2)(A)) is 

5 amended to read as follows: 

6 ‘‘(i) in the case of an individual who is entitled 

7 to old-age insurance benefits (except as provided in 

8 the second sentence of this subparagraph), or who 

9 has died— 

10 ‘‘(I) before January 1, 2014, by 5 years; 

11 ‘‘(II) after December 31, 2013, and before 

12 January 1, 2015, by 4 years; 

13 ‘‘(III) after December 31, 2014, and be14 fore January 1, 2016, by 3 years; and 

15 ‘‘(IV) after December 31, 2015, and before 

16 January 1, 2017, by 2 years; and’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to benefits payable for months be19 ginning after December 31, 2013. 

20 SEC. 3103. MINIMUM SOCIAL SECURITY BENEFIT. 

21 (a) IN GENERAL.—Section 215 of the Social Security 

22 Act (42 U.S.C. 415) is amended by adding at the end the 

23 following: 

24 ‘‘Minimum Monthly Insurance Benefit 

25 ‘‘(j)(1) Notwithstanding the preceding provisions of 

26 this section— 

mstockstill on DSK4VPTVN1PROD with BILLS

134 

•S 11 IS

1 ‘‘(A) subject to paragraph (3), the primary in2 surance amount of any individual who is credited 

3 with at least 10 years of coverage and who initially 

4 becomes eligible for old-age or disability insurance 

5 benefits or dies (before becoming eligible for such 

6 benefits) for a month beginning after December 31, 

7 2016 (in this subsection referred to as a ‘qualified 

8 individual’), shall be equal to the greater of— 

9 ‘‘(i) the primary insurance amount deter10 mined under this section (without regard to this 

11 subsection), or 

12 ‘‘(ii) the minimum monthly insurance ben13 efit determined under paragraph (2), and 

14 ‘‘(B) any recomputation of the primary insur15 ance amount of a qualified individual shall not result 

16 in a primary insurance amount less than the pri17 mary insurance amount as in effect immediately 

18 prior to such recomputation. 

19 ‘‘(2) For purposes of this subsection, the term ‘minimum monthly insurance benefit’ means 1 20 ⁄12 of the appli21 cable percentage of the adjusted minimum benefit level (as 

22 defined in paragraph (5)). 

23 ‘‘(3)(A) For purposes of this subsection, subject to 

24 subparagraph (B), the applicable percentage shall be 125 

25 percent reduced by the number of percentage points determstockstill on DSK4VPTVN1PROD with BILLS

135 

•S 11 IS

1 mined under subparagraph (B)(ii) for each year of cov2 erage of the qualified individual less than 30. 

3 ‘‘(B)(i) In the case of an individual who initially be4 comes eligible for disability insurance benefits under sec5 tion 223 before attaining age 62, or who dies before at6 taining age 62, in a month beginning after December 31, 

7 2016, and who is credited with at least 5 years of cov8 erage, the individual shall be treated as a qualified indi9 vidual and the applicable percentage shall be 125 reduced 

10 by the number of percentage points determined under 

11 clause (ii) for each year of coverage of the qualified indi12 vidual less than the number as determined under clause 

13 (iii). 

14 ‘‘(ii) The number of percentage points under this 

15 clause shall be determined by— 

16 ‘‘(I) dividing the number of the qualifying indi17 vidual’s elapsed years (as defined in subsection 

18 (b)(2)(B)(iii)) by 40; 

19 ‘‘(II) multiplying the result under subclause (I) 

20 by 20; and 

21 ‘‘(III) dividing 125 by the result under sub22 clause (II) and rounding to the nearest one hun23 dredth of 1 percentage point. 

24 ‘‘(iii) The number of years of coverage under this 

25 clause shall be determined by multiplying the ratio determstockstill on DSK4VPTVN1PROD with BILLS

136 

•S 11 IS

1 mined under clause (ii)(I) by 30 and rounding to the next 

2 lower whole number. 

3 ‘‘(4) For purposes of this subsection, a year of cov4 erage is a calendar year for which an individual is credited 

5 with 4 quarters of coverage. 

6 ‘‘(5) For purposes of this subsection— 

7 ‘‘(A) for individuals who initially become eligible 

8 for old-age or disability insurance benefits or die 

9 (before becoming eligible for such benefits) in 2017, 

10 the term ‘adjusted minimum benefit level’ means the 

11 weighted average of the Federal poverty threshold 

12 applicable to a family of 1 for 2009 (as determined 

13 by the Bureau of the Census), increased for each 

14 year occurring after 2009 and before 2018, by the 

15 percentage increase (rounded to the nearest one16 tenth of 1 percent) in the Chained Consumer Price 

17 Index for All Urban Consumers (as published by the 

18 Bureau of Labor Statistics of the Department of 

19 Labor) for each such year; and 

20 ‘‘(B) for individuals who initially become eligi21 ble for old-age or disability insurance benefits or die 

22 (before becoming eligible for such benefits) in a year 

23 after 2017, the term ‘adjusted minimum benefit 

24 level’ means the amount specified in subparagraph 

25 (A), multiplied by the quotient described in submstockstill on DSK4VPTVN1PROD with BILLS

137 

•S 11 IS

1 section (b)(3)(A)(ii), except that the reference to 

2 ‘the computation base year for which the determina3 tion is made’ in such subsection shall be deemed in4 stead to be a reference to ‘2009’. 

5 ‘‘(6) The provisions of this subsection shall not apply 

6 in the case of an individual whose primary insurance 

7 amount would otherwise be computed under subsection 

8 (a)(7).’’. 

9 (b) CONFORMING AMENDMENT.—Section 202(a) of 

10 such Act (42 U.S.C. 402(a)) is amended in the last sen11 tence by striking ‘‘section 215(a)’’ and inserting ‘‘section 

12 215’’. 

13 SEC. 3104. INCREASE IN BENEFITS STARTING 20 YEARS 

14 AFTER INITIAL ELIGIBILITY. 

15 (a) IN GENERAL.—Section 215 of the Social Security 

16 Act (42 U.S.C. 415), as amended by this Act, is amended 

17 by adding at the end the following new subsection: 

18 ‘‘Increased Monthly Insurance Benefit After 20 Years of 

19 Initial Eligibility 

20 ‘‘(k)(1) Notwithstanding the preceding provisions of 

21 this section, in the case of an individual who is a 20-year 

22 beneficiary, the primary insurance amount of the indi23 vidual (as determined before the application of this sub24 section) shall be increased for months beginning with the 

25 first month for which the individual attains such status 

mstockstill on DSK4VPTVN1PROD with BILLS

138 

•S 11 IS

1 by the amount equal to the applicable percentage of the 

2 applicable average primary insurance amount. 

3 ‘‘(2) For purposes of this subsection, the term ‘20- 

4 year beneficiary’ means an individual who has been eligible 

5 for old-age insurance benefits or disability insurance bene6 fits under this title for at least 240 months. 

7 ‘‘(3) For purposes of paragraph (1), the term ‘appli8 cable average primary insurance amount’ means, with re9 spect to a 20-year beneficiary, the primary insurance 

10 amount determined by the Commissioner of Social Secu11 rity that would apply to an individual of the same age as 

12 the age at which the 20-year beneficiary first attains such 

13 status, if the individual had earnings for each calendar 

14 year in which the individual would have attained ages 20 

15 through the year prior to the age of eligibility, respectively, 

16 equal to the national average earnings for all such individ17 uals for each such year. 

18 ‘‘(4) For purposes of paragraph (1), the applicable 

19 percentage is— 

20 ‘‘(A) for each month occurring during the first 

21 12-month period for which an individual is a 20-year 

22 beneficiary, 1 percent; 

23 ‘‘(B) for each month occurring during the sec24 ond 12-month period for which an individual is such 

25 a beneficiary, 2 percent; 

mstockstill on DSK4VPTVN1PROD with BILLS

139 

•S 11 IS

1 ‘‘(C) for each month occurring during the third 

2 12-month period for which an individual is such a 

3 beneficiary, 3 percent; 

4 ‘‘(D) for each month occurring during the 

5 fourth 12-month period for which an individual is 

6 such a beneficiary, 4 percent; and 

7 ‘‘(E) for each month occurring thereafter, 5 

8 percent.’’. 

9 (b) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to benefits payable for months be11 ginning after December 31, 2013. 

12 SEC. 3105. ADJUSTMENT TO NORMAL AND EARLY RETIRE13 MENT AGES. 

14 Section 216(l) of the Social Security Act (42 U.S.C. 

15 416(l)) is amended— 

16 (1) in paragraph (1)— 

17 (A) in subparagraph (D), by striking ‘‘; 

18 and’’ and inserting a semicolon; and 

19 (B) by striking subparagraph (E) and in20 serting the following new subparagraphs: 

21 ‘‘(E) with respect to an individual who at22 tains early retirement age after December 31, 

23 2021, and before January 1, 2023, 67 years of 

24 age; 

mstockstill on DSK4VPTVN1PROD with BILLS

140 

•S 11 IS

1 ‘‘(F) with respect to an individual who, 

2 during the period after December 31, 2022, 

3 and before January 1, 2070— 

4 ‘‘(i) for purposes of paragraph 

5 (2)(A)(ii), attains 62 years of age, such in6 dividual’s early retirement age plus 60 

7 months; or 

8 ‘‘(ii) attains early retirement age pur9 suant to paragraph (2)(B), 67 years plus 

10 the number of months determined under 

11 the age increase factor for the calendar 

12 year in which such individual attains early 

13 retirement age; and 

14 ‘‘(G) with respect to an individual who— 

15 ‘‘(i) for purposes of paragraph 

16 (2)(A)(iii), attains 62 years of age after 

17 December 31, 2069, 69 years of age; or 

18 ‘‘(ii) attains early retirement age pur19 suant to paragraph (2)(B) after December 

20 31, 2069, 69 years of age.’’; 

21 (2) by amending paragraph (2) to read as fol22 lows: 

23 ‘‘(2) The term ‘early retirement age’ means— 

24 ‘‘(A) in the case of an old-age, wife’s, or 

25 husband’s insurance benefit— 

mstockstill on DSK4VPTVN1PROD with BILLS

141 

•S 11 IS

1 ‘‘(i) 62 years of age with respect to an 

2 individual who attains such age before 

3 January 1, 2023; 

4 ‘‘(ii) with respect to an individual who 

5 attains 62 years of age after December 31, 

6 2022, and before January 1, 2070, 62 

7 years of age plus the number of months 

8 determined under the age increase factor 

9 for the calendar year in which such indi10 vidual attains 62 years of age; and 

11 ‘‘(iii) with respect to an individual 

12 who attains age 62 after December 31, 

13 2069, 64 years of age; or 

14 ‘‘(B) in the case of a widow’s or widower’s 

15 insurance benefit, 60 years of age.’’; and 

16 (3) by adding at the end the following new 

17 paragraph: 

18 ‘‘(4) The age increase factor shall be equal to 

1 19 ⁄24 of the number of months (rounded down to a 

20 full month) in the period beginning with January 

21 2023 and ending with December of the year in 

22 which— 

23 ‘‘(A) for purposes of paragraph (1)(F)(ii), 

24 the individual attains 60 years of age; or 

mstockstill on DSK4VPTVN1PROD with BILLS

142 

•S 11 IS

1 ‘‘(B) for purposes of paragraph (2)(A)(ii), 

2 the individual attains 62 years of age.’’. 

3 SEC. 3106. APPLICATION OF ACTUARIAL REDUCTION FOR 

4 DISABLED BENEFICIARIES WHO ATTAIN 

5 EARLY RETIREMENT AGE. 

6 (a) IN GENERAL.—Section 202(k)(4) of the Social 

7 Security Act (42 U.S.C. 402(k)(4)) is amended to read 

8 as follows: 

9 ‘‘(4)(A) Subject to subparagraph (B), any individual 

10 who, under this section and section 223, is entitled for 

11 any month to both an old-age insurance benefit and a dis12 ability insurance benefit under this title shall be entitled 

13 to only the larger of such benefits for such month, except 

14 that, if such individual so elects, he shall instead be enti15 tled to only the smaller of such benefits for such month. 

16 ‘‘(B) An individual described in subparagraph (A) 

17 who has attained transitional retirement age (as deter18 mined under subparagraph (C)) shall only be entitled to 

19 the old-age insurance benefit for such month, as reduced 

20 for such month pursuant to subsection (q)(1). 

21 ‘‘(C) For purposes of subparagraph (B), the term 

22 ‘transitional retirement age’ means— 

23 ‘‘(i) with respect to an individual who attains 

24 62 years of age before January 1, 2014, 66 years 

25 of age; 

mstockstill on DSK4VPTVN1PROD with BILLS

143 

•S 11 IS

1 ‘‘(ii) with respect to an individual who attains 

2 62 years of age after December 31, 2013, and before 

3 January 1, 2025, 66 years of age reduced by the 

4 number of months determined under the transition 

5 factor (as determined under subparagraph (D)) for 

6 the calendar year in which such individual attains 62 

7 years of age; and 

8 ‘‘(iii) with respect to an individual who attains 

9 62 years of age after December 31, 2024, 64 years 

10 of age. 

11 ‘‘(D) For purposes of subparagraph (C)(ii), the tran12 sition factor shall be equal to two-twelfths of the number 

13 of months in the period beginning with January 2014 and 

14 ending with December of the year in which the individual 

15 attains 62 years of age.’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) PERIOD OF DISABILITY.—Clause (i) of sec18 tion 216(i)(2)(D) of the Social Security Act (42 

19 U.S.C. 416(i)(2)(D)) is amended by striking ‘‘retire20 ment age (as defined in subsection (l))’’ and insert21 ing ‘‘transitional retirement age (as defined in sec22 tion 216(k)(4))’’. 

23 (2) DISABILITY INSURANCE BENEFIT PAY24 MENTS.—Section 223(a)(1) of the Social Security 

25 (42 U.S.C. 423(a)(1)) is amended— 

mstockstill on DSK4VPTVN1PROD with BILLS

144 

•S 11 IS

1 (A) in subparagraph (B), by striking ‘‘re2 tirement age (as defined in section 216(l))’’ and 

3 inserting ‘‘transitional retirement age (as de4 fined in section 216(k)(4))’’; and 

5 (B) in the flush matter at the end, by 

6 striking ‘‘retirement age (as defined in section 

7 216(l))’’ and inserting ‘‘transitional retirement 

8 age (as defined in section 216(k)(4))’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to benefits payable for months be11 ginning after December 31, 2013. 

12 SEC. 3107. OPTION TO COLLECT UP TO ONE-HALF OF OLD13 AGE INSURANCE BENEFIT AT AGE 62. 

14 (a) IN GENERAL.—Section 202 of the Social Security 

15 Act (42 U.S.C. 402) is amended by adding at the end the 

16 following: 

17 ‘‘Option to Collect up to One-Half of Old-Age Insurance 

18 Benefit Beginning at Age 62 

19 ‘‘(z)(1) Not later than January 1, 2014, the Commis20 sioner of Social Security shall establish an option, subject 

21 to such regulations as are prescribed by the Commissioner 

22 under paragraph (2), for a fully insured individual (as de23 fined in section 214) to elect to receive a reduced monthly 

24 benefit after such individual attains 62 years of age, con25 sisting of the following: 

mstockstill on DSK4VPTVN1PROD with BILLS

145 

•S 11 IS

1 ‘‘(A) Subject to paragraph (3), for months be2 ginning with the month in which the individual at3 tains age 62, a monthly benefit equal to such per4 centage as is elected by the individual, but which 

5 shall not be greater than 50 percent, of the primary 

6 insurance amount determined for the individual at 

7 age 62. 

8 ‘‘(B) For months beginning with the month in 

9 which the individual attains early retirement age, a 

10 monthly benefit equal to the sum of— 

11 ‘‘(i) the monthly benefit payable to the in12 dividual under subparagraph (A); and 

13 ‘‘(ii) the amount equal to the applicable 

14 percentage (as determined under subparagraph 

15 (C)) of primary insurance amount determined 

16 for the individual under section 215 for such 

17 month (determined without regard to any elec18 tion under this subsection). 

19 ‘‘(C) For purposes of subparagraph (B)(ii), the 

20 applicable percentage shall be equal to the difference 

21 between— 

22 ‘‘(i) 100 percent; and 

23 ‘‘(ii) the percentage elected by the indi24 vidual under subparagraph (A). 

mstockstill on DSK4VPTVN1PROD with BILLS

146 

•S 11 IS

1 ‘‘(2) An individual shall elect the option under this 

2 subsection in accordance with regulations prescribed by 

3 the Commissioner of Social Security. 

4 ‘‘(3) The monthly benefit payable to an individual 

5 under paragraph (1)(A) shall be subject to reduction as 

6 provided in subsection (q).’’. 

7 (b) CONFORMING AMENDMENT.—Section 202(a) of 

8 the Social Security Act (42 U.S.C. 402(a)) is amended 

9 in the last sentence, by striking ‘‘subsection (q) and sub10 section (w)’’ and inserting ‘‘subsections (q), (w), and (z)’’. 

11 SEC. 3108. COVERAGE OF NEWLY HIRED STATE AND LOCAL 

12 EMPLOYEES. 

13 (a) AMENDMENTS TO THE SOCIAL SECURITY ACT.— 

14 (1) IN GENERAL.—Paragraph (7) of section 

15 210(a) of the Social Security Act (42 U.S.C. 

16 410(a)(7)) is amended to read as follows: 

17 ‘‘(7) Excluded State or local government em18 ployment (as defined in subsection (s));’’. 

19 (2) EXCLUDED STATE OR LOCAL GOVERNMENT

20 EMPLOYMENT.— 

21 (A) IN GENERAL.—Section 210 of such 

22 Act (42 U.S.C. 410) is amended by adding at 

23 the end the following new subsection: 

24 ‘‘(s) EXCLUDED STATE OR LOCAL GOVERNMENT

25 EMPLOYMENT.—(1) IN GENERAL.—The term ‘excluded 

mstockstill on DSK4VPTVN1PROD with BILLS

147 

•S 11 IS

1 State or local government employment’ means any service 

2 performed in the employ of a State, of any political sub3 division thereof, or of any instrumentality of any one or 

4 more of the foregoing which is wholly owned thereby, if— 

5 ‘‘(A)(i) such service would be excluded from the 

6 term ‘employment’ for purposes of this title if the 

7 preceding provisions of this section as in effect in 

8 December 2020 had remained in effect, and (ii) the 

9 requirements of paragraph (2) are met with respect 

10 to such service, or 

11 ‘‘(B) the requirements of paragraph (3) are met 

12 with respect to such service. 

13 ‘‘(2) EXCEPTION FOR CURRENT EMPLOYMENT

14 WHICH CONTINUES.— 

15 ‘‘(A) IN GENERAL.—The requirements of this 

16 paragraph are met with respect to service for any 

17 employer if— 

18 ‘‘(i) such service is performed by an indi19 vidual— 

20 ‘‘(I) who was performing substantial 

21 and regular service for remuneration for 

22 that employer before January 1, 2021, 

23 ‘‘(II) who is a bona fide employee of 

24 that employer on December 31, 2020, and 

mstockstill on DSK4VPTVN1PROD with BILLS

148 

•S 11 IS

1 ‘‘(III) whose employment relationship 

2 with that employer was not entered into 

3 for purposes of meeting the requirements 

4 of this subparagraph, and 

5 ‘‘(ii) the employment relationship with that 

6 employer has not been terminated after Decem7 ber 31, 2020. 

8 ‘‘(B) TREATMENT OF MULTIPLE AGENCIES AND

9 INSTRUMENTALITIES.—For purposes of subpara10 graph (A), under regulations (consistent with regula11 tions established under section 3121(t)(2)(B) of the 

12 Internal Revenue Code of 1986)— 

13 ‘‘(i) all agencies and instrumentalities of a 

14 State (as defined in section 218(b)) or of the 

15 District of Columbia shall be treated as a single 

16 employer, and 

17 ‘‘(ii) all agencies and instrumentalities of a 

18 political subdivision of a State (as so defined) 

19 shall be treated as a single employer and shall 

20 not be treated as described in clause (i). 

21 ‘‘(3) EXCEPTION FOR CERTAIN SERVICES.— 

22 ‘‘(A) IN GENERAL.—The requirements of this 

23 paragraph are met with respect to service if such 

24 service is performed— 

mstockstill on DSK4VPTVN1PROD with BILLS

149 

•S 11 IS

1 ‘‘(i) by an individual who is employed by a 

2 State or political subdivision thereof to relieve 

3 such individual from unemployment, 

4 ‘‘(ii) in a hospital, home, or other institu5 tion by a patient or inmate thereof as an em6 ployee of a State or political subdivision thereof 

7 or of the District of Columbia, 

8 ‘‘(iii) by an individual, as an employee of 

9 a State or political subdivision thereof or of the 

10 District of Columbia, serving on a temporary 

11 basis in case of fire, storm, snow, earthquake, 

12 flood, or other similar emergency, 

13 ‘‘(iv) by any individual as an employee in14 cluded under section 5351(2) of title 5, United 

15 States Code (relating to certain interns, student 

16 nurses, and other student employees of hos17 pitals of the District of Columbia Government), 

18 other than as a medical or dental intern or a 

19 medical or dental resident in training, 

20 ‘‘(v) by an election official or election 

21 worker if the remuneration paid in a calendar 

22 year for such service is less than $1,000 with 

23 respect to service performed during 2021, and 

24 the adjusted amount determined under sub25 paragraph (C) for any subsequent year with remstockstill on DSK4VPTVN1PROD with BILLS

150 

•S 11 IS

1 spect to service performed during such subse2 quent year, except to the extent that service by 

3 such election official or election worker is in4 cluded in employment under an agreement 

5 under section 218, or 

6 ‘‘(vi) by an employee in a position com7 pensated solely on a fee basis which is treated 

8 pursuant to section 211(c)(2)(E) as a trade or 

9 business for purposes of inclusion of such fees 

10 in net earnings from self-employment. 

11 ‘‘(B) DEFINITIONS.—As used in this para12 graph, the terms ‘State’ and ‘political subdivision’ 

13 have the meanings given those terms in section 

14 218(b). 

15 ‘‘(C) ADJUSTMENTS TO DOLLAR AMOUNT FOR

16 ELECTION OFFICIALS AND ELECTION WORKERS.— 

17 For each year after 2021, the Commissioner of So18 cial Security shall adjust the amount referred to in 

19 subparagraph (A)(v) at the same time and in the 

20 same manner as is provided under section 

21 215(a)(1)(B)(ii) with respect to the amounts re22 ferred to in section 215(a)(1)(B)(i), except that— 

23 ‘‘(i) for purposes of this subparagraph, 

24 2018 shall be substituted for the calendar year 

25 referred to in section 215(a)(1)(B)(ii)(II), and 

mstockstill on DSK4VPTVN1PROD with BILLS

151 

•S 11 IS

1 ‘‘(ii) such amount as so adjusted, if not a 

2 multiple of $100, shall be rounded to the next 

3 higher multiple of $100 where such amount is 

4 a multiple of $50 and to the nearest multiple 

5 of $100 in any other case. 

6 The Commissioner of Social Security shall determine and 

7 publish in the Federal Register each adjusted amount de8 termined under this subparagraph not later than Novem9 ber 1 preceding the year for which the adjustment is 

10 made.’’. 

11 (B) CONFORMING AMENDMENTS.— 

12 (i) Subsection (k) of section 210 of 

13 such Act (42 U.S.C. 410(k)) (relating to 

14 covered transportation service) is repealed. 

15 (ii) Section 210(p) of such Act (42 

16 U.S.C. 410(p)) is amended— 

17 (I) in paragraph (2), by striking 

18 ‘‘service is performed’’ and all that 

19 follows and inserting ‘‘service is serv20 ice described in subsection (s)(3)(A).’’; 

21 and 

22 (II) in paragraph (3)(A), by in23 serting ‘‘under subsection (a)(7) as in 

24 effect in December 2020’’ after ‘‘sec25 tion’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

152 

•S 11 IS

1 (iii) Section 218(c)(6) of such Act (42 

2 U.S.C. 418(c)(6)) is amended— 

3 (I) by striking subparagraph (C); 

4 (II) by redesignating subpara5 graphs (D) and (E) as subparagraphs 

6 (C) and (D), respectively; and 

7 (III) by striking subparagraph 

8 (F) and inserting the following: 

9 ‘‘(E) service which is included as employment 

10 under section 210(a).’’. 

11 (b) AMENDMENTS TO THE INTERNAL REVENUE

12 CODE OF 1986.— 

13 (1) IN GENERAL.—Paragraph (7) of section 

14 3121(b) of the Internal Revenue Code of 1986 (re15 lating to employment) is amended to read as follows: 

16 ‘‘(7) excluded State or local government em17 ployment (as defined in subsection (t));’’. 

18 (2) EXCLUDED STATE OR LOCAL GOVERNMENT

19 EMPLOYMENT.—Section 3121 of such Code is 

20 amended by inserting after subsection (s) the fol21 lowing new subsection: 

22 ‘‘(t) EXCLUDED STATE OR LOCAL GOVERNMENT EM23 PLOYMENT.— 

24 ‘‘(1) IN GENERAL.—For purposes of this chap25 ter, the term ‘excluded State or local government 

mstockstill on DSK4VPTVN1PROD with BILLS

153 

•S 11 IS

1 employment’ means any service performed in the 

2 employ of a State, of any political subdivision there3 of, or of any instrumentality of any one or more of 

4 the foregoing which is wholly owned thereby, if— 

5 ‘‘(A)(i) such service would be excluded 

6 from the term ‘employment’ for purposes of this 

7 chapter if the provisions of subsection (b)(7) as 

8 in effect in December 2020 had remained in ef9 fect, and (ii) the requirements of paragraph (2) 

10 are met with respect to such service, or 

11 ‘‘(B) the requirements of paragraph (3) 

12 are met with respect to such service. 

13 ‘‘(2) EXCEPTION FOR CURRENT EMPLOYMENT

14 WHICH CONTINUES.— 

15 ‘‘(A) IN GENERAL.—The requirements of 

16 this paragraph are met with respect to service 

17 for any employer if— 

18 ‘‘(i) such service is performed by an 

19 individual— 

20 ‘‘(I) who was performing sub21 stantial and regular service for remu22 neration for that employer before Jan23 uary 1, 2021, 

mstockstill on DSK4VPTVN1PROD with BILLS

154 

•S 11 IS

1 ‘‘(II) who is a bona fide employee 

2 of that employer on December 31, 

3 2020, and 

4 ‘‘(III) whose employment rela5 tionship with that employer was not 

6 entered into for purposes of meeting 

7 the requirements of this subpara8 graph, and 

9 ‘‘(ii) the employment relationship with 

10 that employer has not been terminated 

11 after December 31, 2020. 

12 ‘‘(B) TREATMENT OF MULTIPLE AGENCIES

13 AND INSTRUMENTALITIES.—For purposes of 

14 subparagraph (A), under regulations— 

15 ‘‘(i) all agencies and instrumentalities 

16 of a State (as defined in section 218(b) of 

17 the Social Security Act) or of the District 

18 of Columbia shall be treated as a single 

19 employer, and 

20 ‘‘(ii) all agencies and instrumentalities 

21 of a political subdivision of a State (as so 

22 defined) shall be treated as a single em23 ployer and shall not be treated as de24 scribed in clause (i). 

25 ‘‘(3) EXCEPTION FOR CERTAIN SERVICES.— 

mstockstill on DSK4VPTVN1PROD with BILLS

155 

•S 11 IS

1 ‘‘(A) IN GENERAL.—The requirements of 

2 this paragraph are met with respect to service 

3 if such service is performed— 

4 ‘‘(i) by an individual who is employed 

5 by a State or political subdivision thereof 

6 to relieve such individual from unemploy7 ment, 

8 ‘‘(ii) in a hospital, home, or other in9 stitution by a patient or inmate thereof as 

10 an employee of a State or political subdivi11 sion thereof or of the District of Columbia, 

12 ‘‘(iii) by an individual, as an employee 

13 of a State or political subdivision thereof 

14 or of the District of Columbia, serving on 

15 a temporary basis in case of fire, storm, 

16 snow, earthquake, flood, or other similar 

17 emergency, 

18 ‘‘(iv) by any individual as an employee 

19 included under section 5351(2) of title 5, 

20 United States Code (relating to certain in21 terns, student nurses, and other student 

22 employees of hospitals of the District of 

23 Columbia Government), other than as a 

24 medical or dental intern or a medical or 

25 dental resident in training, 

mstockstill on DSK4VPTVN1PROD with BILLS

156 

•S 11 IS

1 ‘‘(v) by an election official or election 

2 worker if the remuneration paid in a cal3 endar year for such service is less than 

4 $1,000 with respect to service performed 

5 during 2021, and the adjusted amount de6 termined under section 210(s)(3)(C) of the 

7 Social Security Act for any subsequent 

8 year with respect to service performed dur9 ing such subsequent year, except to the ex10 tent that service by such election official or 

11 election worker is included in employment 

12 under an agreement under section 218 of 

13 the Social Security Act, or 

14 ‘‘(vi) by an employee in a position 

15 compensated solely on a fee basis which is 

16 treated pursuant to section 1402(c)(2)(E) 

17 as a trade or business for purposes of in18 clusion of such fees in net earnings from 

19 self-employment. 

20 ‘‘(B) DEFINITIONS.—As used in this para21 graph, the terms ‘State’ and ‘political subdivi22 sion’ have the meanings given those terms in 

23 section 218(b) of the Social Security Act.’’. 

24 (3) CONFORMING AMENDMENTS.— 

mstockstill on DSK4VPTVN1PROD with BILLS

157 

•S 11 IS

1 (A) Subsection (j) of such section 3121 

2 (relating to covered transportation service) is 

3 repealed. 

4 (B) Paragraph (2) of section 3121(u) of 

5 such Code (relating to application of hospital 

6 insurance tax to Federal, State, and local em7 ployment) is amended— 

8 (i) in subparagraph (B), by striking 

9 ‘‘service is performed’’ in clause (ii) and all 

10 that follows through the end of such sub11 paragraph and inserting ‘‘service is service 

12 described in subsection (t)(3)(A).’’; and 

13 (ii) in subparagraph (C)(i), by insert14 ing ‘‘under subsection (b)(7) as in effect in 

15 December 2020’’ after ‘‘chapter’’. 

16 (c) EFFECTIVE DATE.—Except as otherwise provided 

17 in this section, the amendments made by this section shall 

18 apply with respect to service performed after December 

19 31, 2020. 

mstockstill on DSK4VPTVN1PROD with BILLS

158 

•S 11 IS

1 SEC. 3109. INCLUSION IN ANNUAL SOCIAL SECURITY AC2 COUNT STATEMENT OF ESTIMATED PRESENT 

3 VALUE OF TAXES AND BENEFITS FOR SOCIAL 

4 SECURITY AND MEDICARE AND PROJECTED 

5 DEFICIT AS A PERCENT OF LIFETIME EARN6 INGS. 

7 (a) IN GENERAL.—Section 1143(a)(2) of the Social 

8 Security Act (42 U.S.C. 1320b–13(a)(2)) is amended— 

9 (1) in subparagraph (E), by striking ‘‘benefits.’’ 

10 and inserting ‘‘benefits;’’; and 

11 (2) by adding after subparagraph (E) the fol12 lowing new subparagraphs: 

13 ‘‘(F) an estimate, as determined by the Com14 missioner, in consultation with the Secretary of 

15 Health and Human Services, on the basis of avail16 able records of the Commissioner and projections 

17 based on reasonable assumptions, of— 

18 ‘‘(i) the present value of potential lifetime 

19 aggregate employer, employee, and self-employ20 ment contributions of the eligible individual for 

21 old-age, survivors, and disability insurance 

22 (under title II) and for hospital insurance 

23 (under part A of title XVIII); 

24 ‘‘(ii) the present value of potential lifetime 

25 premiums payable (under parts B and D of title 

26 XVIII); and 

mstockstill on DSK4VPTVN1PROD with BILLS

159 

•S 11 IS

1 ‘‘(iii) the present value of potential lifetime 

2 aggregate retirement, disability, survivor, and 

3 auxiliary benefits payable on the eligible individ4 ual’s account under title II and per capita bene5 fits payable under the Medicare program of title 

6 XVIII; and 

7 ‘‘(G) an estimate, as determined by the Com8 missioner, in consultation with the Secretary of 

9 Health and Human Services, on the basis of avail10 able records of the Commissioner and projections 

11 based on reasonable assumptions, of the ratio (ex12 pressed as a percentage) of— 

13 ‘‘(i) the sum of the projected deficit-fi14 nanced benefits under the old-age, survivors, 

15 and disability insurance program with respect 

16 to the eligible individual and the projected def17 icit-financed benefits under part A of the Medi18 care program under title XVIII with respect to 

19 the eligible individual, to 

20 ‘‘(ii) projected lifetime earnings of the eli21 gible individual.’’. 

22 (b) DEFINITIONS.—Section 1143(a) of such Act (42 

23 U.S.C. 1320b–13(a)) is amended— 

24 (1) by redesignating paragraph (3) as para25 graph (4); and 

mstockstill on DSK4VPTVN1PROD with BILLS

160 

•S 11 IS

1 (2) by inserting after paragraph (2) the fol2 lowing new paragraph: 

3 ‘‘(3) For purposes of paragraph (2)(G)— 

4 ‘‘(A) The term ‘projected deficit-financed bene5 fits’ means— 

6 ‘‘(i) with respect to an eligible individual in 

7 connection with the old-age, survivors, and dis8 ability insurance program, the product of— 

9 ‘‘(I) the benefits described in subpara10 graph (F)(ii) of such individual under such 

11 program, and 

12 ‘‘(II) the ratio of future annual defi13 cits, excluding interest, of the Federal Old14 Age and Survivors Insurance Trust Fund 

15 and the Federal Disability Insurance Trust 

16 Fund over the eligible individual’s lifetime 

17 to future annual outlays from such Trust 

18 Funds over such lifetime; and 

19 ‘‘(ii) with respect to an eligible individual 

20 in connection with the Medicare program under 

21 title XVIII, the product of— 

22 ‘‘(I) the benefits for hospital insur23 ance (under part A of title XVIII) de24 scribed in subparagraph (F)(ii) of such in25 dividual under such program, and 

mstockstill on DSK4VPTVN1PROD with BILLS

161 

•S 11 IS

1 ‘‘(II) the ratio of future annual defi2 cits of the Federal Hospital Insurance 

3 Trust Fund over the eligible individual’s 

4 lifetime to future annual outlays from such 

5 Trust Fund over such lifetime. 

6 ‘‘(B) The term ‘projected lifetime earnings’ of 

7 the eligible individual means the present value of the 

8 potential total wages paid to, and self-employment 

9 income derived by, the eligible individual over the eli10 gible individual’s lifetime, as determined without re11 gard to the contribution and benefit base under sec12 tion 230.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply with respect to annual statements 

15 issued after 2013. 

16 SEC. 3110. RETIREMENT INFORMATION CAMPAIGN. 

17 The Commissioner of Social Security shall establish 

18 a public information campaign to provide information and 

19 education regarding the implications on personal financial 

20 security of early and other retirement decisions and the 

21 need for greater retirement savings. The information cam22 paign should be designed to encourage individuals to delay 

23 retirement so as to build enhanced levels of social security 

24 benefits and personal retirement savings. To the extent 

25 the Commissioner of Social Security determines appromstockstill on DSK4VPTVN1PROD with BILLS

162 

•S 11 IS

1 priate, the information provided through the campaign 

2 should utilize behavioral economics approaches, such as 

3 structured choice, and other scientific approaches. 

4 TITLE IV—CONVERSION TO 

5 CHAINED CPI 

6 SEC. 4101. CONVERSION TO CHAINED CPI. 

7 (a) CONSUMER PRICE INDEX ADJUSTMENTS APPLI8 CABLE TO THE INTERNAL REVENUE CODE PROVI9 SIONS.— 

10 (1) IN GENERAL.—Paragraph (3) of section 

11 1(f) of the Internal Revenue Code of 1986 is amend12 ed to read as follows: 

13 ‘‘(3) COST-OF-LIVING ADJUSTMENT.— 

14 ‘‘(A) IN GENERAL.—For purposes of para15 graph (2), the cost-of-living adjustment for any 

16 calendar year is— 

17 ‘‘(i) for adjustments first beginning 

18 before 2014, the product of— 

19 ‘‘(I) the CPI fraction for cal20 endar years before 2014, multiplied 

21 by 

22 ‘‘(II) the Chained CPI fraction 

23 for calendar years after 2013, 

24 reduced by 1, and 

mstockstill on DSK4VPTVN1PROD with BILLS

163 

•S 11 IS

1 ‘‘(ii) for adjustments first beginning 

2 after 2013, the Chained CPI fraction for 

3 years after 2013. 

4 ‘‘(B) CPI FRACTION FOR CALENDAR

5 YEARS BEFORE 2014.—The CPI fraction for cal6 endar years before 2014 is the fraction— 

7 ‘‘(i) the numerator of which is the 

8 CPI for the calendar year 2012; and 

9 ‘‘(ii) the denominator of which is the 

10 CPI for the calendar year 1992. 

11 ‘‘(C) CHAINED CPI FRACTION FOR CAL12 ENDAR YEARS AFTER 2013.—The Chained CPI 

13 fraction for calendar years after 2013 is the 

14 fraction— 

15 ‘‘(i) the numerator of which is the 

16 Chained CPI for the preceding calendar 

17 year, and 

18 ‘‘(ii) the denominator of which is the 

19 Chained CPI for the calendar year 2012.’’. 

20 (2) CONFORMING AMENDMENTS.— 

21 (A) Paragraph (4) of section 1(f) of such 

22 Code is amended to read as follows: 

23 ‘‘(4) CPI AND CHAINED CPI FOR ANY CALENDAR

24 YEAR.—For purposes of paragraph (3)— 

mstockstill on DSK4VPTVN1PROD with BILLS

164 

•S 11 IS

1 ‘‘(A) CPI.—The CPI for any calendar year 

2 is the average of the Consumer Price Index as 

3 of the close of the 12-month period ending on 

4 August 31 of such calendar year. 

5 ‘‘(B) CHAINED CPI.—The Chained CPI for 

6 any calendar year is the average of the Chained 

7 Consumer Price Index as of the close of the 12- 

8 month period ending on August 31 of such cal9 endar year.’’. 

10 (B) Paragraph (5) of section 1(f) of such 

11 Code is amended to read as follows: 

12 ‘‘(5) CONSUMER PRICE INDEX AND CHAINED

13 CONSUMER PRICE INDEX.—For purposes of para14 graph (4)— 

15 ‘‘(A) CONSUMER PRICE INDEX.—The term 

16 ‘Consumer Price Index’ means the last Con17 sumer Price Index for all urban consumers pub18 lished by the Department of Labor. For pur19 poses of the preceding sentence, the revision of 

20 the Consumer Price Index which is most con21 sistent with the Consumer Price Index for cal22 endar year 1986 shall be used. 

23 ‘‘(B) CHAINED CONSUMER PRICE INDEX.— 

24 The term ‘Chained Consumer Price Index’ 

25 means the most recent estimate of the Chained 

mstockstill on DSK4VPTVN1PROD with BILLS

165 

•S 11 IS

1 Consumer Price Index for all urban consumers 

2 published by the Department of Labor.’’. 

3 (C) Subclause (II) of section 

4 36B(b)(3)(A)(ii) of such Code is amended by 

5 striking ‘‘consumer price index’’ and inserting 

6 ‘‘Chained Consumer Price Index (as defined in 

7 section 1(f)(5)(B))’’. 

8 (D) Subclause (II) of section 

9 36B(f)(2)(B)(ii) of such Code is amended by 

10 striking ‘‘by substituting ‘calendar year 2013’ 

11 for ‘calendar year 1992’ in subparagraph (B) 

12 thereof’’ and inserting ‘‘by substituting ‘cal13 endar year 2013’ for ‘calendar year 2012’ in 

14 subparagraph (C) thereof’’. 

15 (E) Clause (ii) of section 45R(d)(3)(B) of 

16 such Code is amended by striking ‘‘determined 

17 by substituting ‘calendar year 2012’ for ‘cal18 endar year 1992’ in subparagraph (B) thereof’’. 

19 (F) Subparagraph (B) of section 125(i)(2) 

20 of such Code is amended by striking ‘‘deter21 mined by substituting ‘calendar year 2012’ for 

22 ‘calendar year 1992’ in subparagraph (B) 

23 thereof’’. 

24 (G) Subclause (II) of section 

25 4980I(b)(3)(C)(v) of such Code is amended by 

mstockstill on DSK4VPTVN1PROD with BILLS

166 

•S 11 IS

1 striking ‘‘for ‘1992’ in subparagraph (B) there2 of’’ and inserting ‘‘for ‘2012’ in subparagraph 

3 (C) thereof’’. 

4 (H) Clause (ii) of section 5000A(c)(3)(D) 

5 of such Code is amended by striking ‘‘by sub6 stituting ‘calendar year 2015’ for ‘calendar year 

7 1992’ in subparagraph (B) thereof’’ and insert8 ing ‘‘by substituting ‘calendar year 2015’ for 

9 ‘calendar year 2012’ in subparagraph (C) there10 of’’. 

11 (3) EFFECTIVE DATE.—The amendments made 

12 by this subsection shall apply to taxable years begin13 ning after December 31, 2013. 

14 (b) MODIFICATIONS TO COST-OF-LIVING INDEX15 ATION OF SOCIAL SECURITY BENEFITS.— 

16 (1) IN GENERAL.—Section 215(i)(1)(D) of the 

17 Social Security Act (42 U.S.C. 415(i)(1)(D)) is 

18 amended to read as follows: 

19 ‘‘(D) the term ‘CPI increase percentage’, with 

20 respect to a base quarter or cost-of-living computa21 tion quarter in any calendar year, means the per22 centage (rounded to the nearest one-tenth of 1 per23 cent) by which the Chained Consumer Price Index 

24 for All Urban Consumers (as published in its initial 

25 form by the Bureau of Labor Statistics of the Demstockstill on DSK4VPTVN1PROD with BILLS

167 

•S 11 IS

1 partment of Labor) for such base quarter or cost-of2 living computation quarter exceeds such index for 

3 the later of— 

4 ‘‘(i) the most recent calendar quarter 

5 (prior to such base quarter or cost-of-living 

6 computation quarter) which was a base quarter 

7 under subparagraph (A)(ii); or 

8 ‘‘(ii) the most recent cost-of-living com9 putation quarter under subparagraph (B);’’. 

10 (2) DEFINITIONS.—Section 215(i)(1)(G) of 

11 such Act (42 U.S.C. 415(i)(1)(G)) is amended to 

12 read as follows: 

13 ‘‘(G) the Chained Consumer Price Index for All 

14 Urban Consumers for a base quarter, a cost-of-living 

15 computation quarter, or any other calendar quarter 

16 shall be the arithmetical mean of such index (as 

17 published in its initial form by the Bureau of Labor 

18 Statistics of the Department of Labor as of the end 

19 of such quarter) for the 12-month period ending 

20 with such quarter.’’. 

21 (3) CONFORMING CHANGES FOR PRE-1977

22 LAW.— 

23 (A) Section 215(i)(1) of such Act, as in ef24 fect in December 1978, and as applied in cermstockstill on DSK4VPTVN1PROD with BILLS

168 

•S 11 IS

1 tain cases under the provisions of such Act as 

2 in effect after December 1978, is amended— 

3 (i) in subparagraph (B), by striking 

4 ‘‘and’’ after the semicolon; 

5 (ii) in subparagraph (C), by striking 

6 ‘‘for the 3 months in such quarter.’’ and 

7 inserting ‘‘for the 12 months in the 12- 

8 month period ending with such quarter; 

9 and’’; and 

10 (iii) by adding at the end the fol11 lowing new subparagraph: 

12 ‘‘(D) the term ‘Consumer Price Index’ means 

13 the Chained Consumer Price Index for All Urban 

14 Consumers (C-CPI-U), as published in its initial 

15 form by the Bureau of Labor Statistics of the De16 partment of Labor.’’. 

17 (B) Section 215(i)(4) of the Social Secu18 rity Act (42 U.S.C. 415(i)(4)) is amended by 

19 inserting ‘‘ and by section 4101(b) of the Fiscal 

20 Sustainability Act of 2013’’ after ‘‘1986,’’. 

21 (4) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall apply with respect to in23 creases described in section 215(i) of the Social Se24 curity Act, and to increases under programs depend25 ent on Social Security cost-of-living adjustments, efmstockstill on DSK4VPTVN1PROD with BILLS

169 

•S 11 IS

1 fective with the month of December for years after 

2 2012. 

3 (c) ADJUSTMENTS OF PROVISIONS UTILIZING THE

4 CONSUMER PRICE INDEX.— 

5 (1) IN GENERAL.—Notwithstanding any other 

6 provision of law, and except as provided in this sec7 tion, for purposes of determining the amount of any 

8 cost-of-living increase or similar adjustment under a 

9 Federal program or law effective in the month of 

10 December 2013 and thereafter, any such increase 

11 for the period for which the percentage change is de12 termined shall be deemed to be, in lieu of the in13 crease otherwise determined under applicable law, 

14 the increase determined under such applicable law 

15 by substituting the Chained CPI for the CPI. 

16 (2) INCREASES DETERMINED FROM A CON17 STANT BASE YEAR.— 

18 (A) IN GENERAL.—In any case in which 

19 the amount of a cost-of-living increase effective 

20 in the month of December 2012 and thereafter 

21 is determined under applicable law by reference 

22 to a change in the CPI over a period which is 

23 determined by reference to a base period which 

24 remains constant from year to year, any such 

25 increase for any period shall be deemed to be, 

mstockstill on DSK4VPTVN1PROD with BILLS

170 

•S 11 IS

1 in lieu of the increase otherwise determined 

2 under applicable law, the increase, expressed as 

3 a percentage increase, equal to the product of— 

4 (i) the CPI fraction prior to 2014; 

5 multiplied by 

6 (ii) the Chained CPI fraction after 

7 2013, 

8 reduced by 1. 

9 (B) CPI FRACTION PRIOR TO 2014.—The 

10 CPI fraction prior to 2014 is the fraction— 

11 (i) the numerator of which is the CPI 

12 for the period, ending with or during 2012, 

13 which corresponds to the base period; and 

14 (ii) the denominator of which is the 

15 CPI for the base period. 

16 (C) CHAINED CPI FRACTION AFTER 2013.— 

17 The Chained CPI fraction after 2013 is the 

18 fraction— 

19 (i) the numerator of which is the 

20 Chained CPI for the period, ending with or 

21 during the year preceding the year in 

22 which the determination takes effect, which 

23 corresponds to the base period; and 

24 (ii) the denominator of which is the 

25 most recently published estimate of the 

mstockstill on DSK4VPTVN1PROD with BILLS

171 

•S 11 IS

1 Chained CPI for the period, ending with or 

2 during 2012, which corresponds to the 

3 base period. 

4 (3) SPECIAL PROVISIONS AND EXCEPTIONS.— 

5 (A) PROGRAMS TIED TO SOCIAL SECU6 RITY.—Subject to subparagraph (B) and the ef7 fective date under subsection (b)(4), this section 

8 and the amendments made by this section shall 

9 apply to any cost-of-living increase or other ad10 justment which is determined by reference to an 

11 adjustment made under section 215(i) of the 

12 Social Security Act (42 U.S.C. 415(i)). 

13 (B) POVERTY LINE.—This subsection shall 

14 apply to revisions to the poverty line made pur15 suant to 42 U.S.C. 9902(2), and any programs 

16 for which adjustments or eligibility thresholds 

17 are based upon the poverty line as defined in 

18 that section. 

19 (4) CPI AND CHAINED CPI.—For purposes of 

20 this subsection— 

21 (A) the CPI for any period means the av22 erage monthly Consumer Price Index for such 

23 period, or a component thereof, as determined 

24 under the applicable law in connection with any 

25 cost-of-living increase or similar adjustment remstockstill on DSK4VPTVN1PROD with BILLS

172 

•S 11 IS

1 quired for such period (without regard to this 

2 subsection); and 

3 (B) the Chained CPI for any period 

4 means, except as provided in paragraph 

5 (2)(C)(ii), the Chained Consumer Price Index 

6 for all urban consumers (as published in its ini7 tial form by the Bureau of Labor Statistics of 

8 the Department of Labor) for such period, or a 

9 component thereof, determined under applicable 

10 law in the same manner as the CPI for such pe11 riod would be determined. 

12 (d) CHANGE TO 12-MONTH PERIOD FOR COST-OF13 LIVING INDEXATION FOR FEDERAL CIVIL SERVICE AND

14 MILITARY RETIREMENT PROGRAMS.— 

15 (1) IN GENERAL.— 

16 (A) FEDERAL CIVIL SERVICE.—Sections 

17 8340(a)(2) and 8462(a)(2) of title 5, United 

18 States Code, are each amended by striking ‘‘3 

19 months comprising such quarter’’ and inserting 

20 ‘‘12-month period ending with such quarter’’. 

21 (B) MILITARY.—Section 1401a(h) of title 

22 10, United States Code, is amended by striking 

23 ‘‘three months comprising that quarter’’ and in24 serting ‘‘12-month period ending with such 

25 quarter’’. 

mstockstill on DSK4VPTVN1PROD with BILLS

173 

•S 11 IS

1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply with respect to cost3 of-living increases effective with the month of De4 cember of years after 2012. 

Æ 

mstockstill on DSK4VPTVN1PROD with BILLS