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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1324 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1324

To ensure that every American has a health insurance plan that they can 
                         afford, own, and keep.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 23, 2009

  Mr. DeMint introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To ensure that every American has a health insurance plan that they can 
                         afford, own, and keep.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Freedom Act of 2009''.

             TITLE I--ACCESS TO COVERAGE FOR EVERY AMERICAN

                      Subtitle A--Tax Code Equity

SEC. 101. REFUNDABLE CREDIT FOR HEALTH INSURANCE COVERAGE.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 36A the following new section:

``SEC. 36B. QUALIFIED HEALTH INSURANCE CREDIT.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year so much of the qualified health insurance costs of 
the taxpayer as does not exceed the sum of the monthly limitations 
determined under subsection (b).
    ``(b) Monthly Limitation.--
            ``(1) In general.--The monthly limitation for each month 
        during the taxable year is \1/12\th of--
                    ``(A) $2,000, in the case of an individual 
                purchasing individual coverage for an eligible 
                individual, and
                    ``(B) $5,000, in the case of an individual 
                purchasing family coverage for 2 or more eligible 
                individuals.
            ``(2) Limitation.--In no case shall the annual sum of the 
        monthly limitations with respect to any taxpayer exceed $5,000.
            ``(3) No credit for ineligible months.--With respect to any 
        individual, the monthly limitation shall be zero for any month 
        for which such individual is not an eligible individual.
    ``(c) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' means, 
        with respect to any month, an individual who--
                    ``(A) is the taxpayer, the taxpayer's spouse, or 
                the taxpayer's dependent,
                    ``(B) is covered under qualified health insurance 
                as of the 1st day of such month, and
                    ``(C) is not covered under employer-provided health 
                insurance as of the 1st day of such month.
            ``(2) Coverage under medicare, medicaid, schip, military 
        coverage.--The term `eligible individual' shall not include any 
        individual for a month if, as of the first day of such month, 
        such individual is--
                    ``(A) entitled to benefits under part A of title 
                XVIII of the Social Security Act or enrolled under part 
                B of such title, and the individual is not a 
                participant or beneficiary in a group health plan or 
                large group health plan that is a primary plan (as 
                defined in section 1862(b)(2)(A) of such Act),
                    ``(B) in the case of a State that has not made the 
                election described in section 1939(a)(1)(B) of the 
                Social Security Act, enrolled in the program under 
                title XIX of such Act (other than under section 1928 of 
                such Act), or
                    ``(C) entitled to benefits under chapter 55 of 
                title 10, United States Code.
            ``(3) Identification requirements.--The term `eligible 
        individual' shall not include any individual for any month 
        unless the policy number associated with the qualified health 
        insurance and the TIN of each eligible individual covered under 
        such health insurance for such month are included on the return 
        of tax for the taxable year in which such month occurs.
            ``(4) Prisoners.--The term `eligible individual' shall not 
        include any individual for a month if, as of the first day of 
        such month, such individual is imprisoned under Federal, State, 
        or local authority.
            ``(5) Aliens.--The term `eligible individual' shall not 
        include any alien individual for a month if, as of the first 
        day of such month, such individual is not a lawful permanent 
        resident of the United States.
    ``(d) Qualified Health Insurance Costs.--For purposes of this 
section, the term `qualified health insurance costs' means the sum of 
the amounts paid during the taxable year to obtain qualified health 
insurance for 1 or more eligible individuals.
    ``(e) Qualified Health Insurance.--For purposes of this section, 
the term `qualified health insurance' includes a high deductible health 
plan within the meaning of section 223(c)(2), but shall not include any 
insurance if a substantial portion of its benefits are excepted 
benefits (as defined in section 9832(c)).
    ``(f) Other Definitions.--For purposes of this section--
            ``(1) Dependent.--The term `dependent' has the meaning 
        given such term by section 152 (determined without regard to 
        subsections (b)(1), (b)(2), and (d)(1)(B) thereof). An 
        individual who is a child to whom section 152(e) applies shall 
        be treated as a dependent of the custodial parent for a 
        coverage month unless the custodial and noncustodial parent 
        agree otherwise.
            ``(2) Child.--The term `child' means a qualifying child (as 
        defined in section 152(c)).
    ``(g) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--Any amount 
        paid by a taxpayer for insurance to which subsection (a) 
        applies shall not be taken into account in computing the amount 
        allowable to the taxpayer as a credit under section 35 or as a 
        deduction under section 213(a).
            ``(2) Medical and health savings accounts.--The amounts 
        taken into account as qualified health insurance costs for any 
        taxable year shall be reduced by the aggregate amounts, if any, 
        distributed from Archer MSAs (as defined in section 220(d)) and 
        health savings accounts (as defined in section 223(d)) which 
        are excludable from gross income for such taxable year by 
        reason of being used to pay premiums for coverage of an 
        individual under qualified health insurance for any month 
        during such taxable year.
            ``(3) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
            ``(4) Married couples must file joint return.--
                    ``(A) In general.--If the taxpayer is married at 
                the close of the taxable year, the credit shall be 
                allowed under subsection (a) only if the taxpayer and 
                his spouse file a joint return for the taxable year.
                    ``(B) Marital status; certain married individuals 
                living apart.--Rules similar to the rules of paragraphs 
                (3) and (4) of section 21(e) shall apply for purposes 
                of this paragraph.
            ``(5) Verification of coverage, etc.--No credit shall be 
        allowed under this section with respect to any individual 
        unless such individual's coverage (and such related information 
        as the Secretary may require) is verified in such manner as the 
        Secretary may prescribe.
            ``(6) Insurance which covers other individuals; treatment 
        of payments.--Rules similar to the rules of paragraphs (7) and 
        (8) of section 35(g) shall apply for purposes of this section.
            ``(7) Participants in health care sharing ministries.--
                    ``(A) In general.--In the case of a taxpayer who is 
                a participant or contributor to a health care sharing 
                ministry during a month in the taxable year, and who is 
                not covered under qualified health insurance during 
                such month--
                            ``(i) such taxpayer (and such taxpayer's 
                        spouse and dependents, if such individuals are 
                        covered by such health care sharing ministry) 
                        shall be considered to be eligible individuals 
                        for purposes of subsection (c)(1) for such 
                        month,
                            ``(ii) the amount of such taxpayer's 
                        contribution to such health care sharing 
                        ministry in such month shall be considered to 
                        be qualified health insurance costs in such 
                        month,
                            ``(iii) subsection (c)(3) shall apply to 
                        such taxpayer (and such taxpayer's spouse and 
                        dependents, if such individuals are covered by 
                        such ministry) without regard to the policy 
                        number requirement, and
                            ``(iv) the Secretary may require such 
                        information under paragraph (5) of this 
                        subsection as may be necessary to verify such 
                        taxpayer's contribution to such ministry.
                    ``(B) Health care sharing ministry.--For purposes 
                of this paragraph, the term `health care sharing 
                ministry' means any health care cost sharing 
                arrangement among persons of similar beliefs that is 
                not in the trade or business of providing health 
                insurance.
                    ``(C) Credit denied in the case of charitable 
                contributions.--This paragraph shall not apply in the 
                case of any contribution for which a deduction is 
                allowable under section 170.
    ``(h) Election To Forgo Other Federal Health Benefit Programs.--
            ``(1) In general.--An individual who is a participant in, 
        or is entitled to benefits under, any program described in 
        subsection (c)(2) in any month may elect to forgo such 
        individual's participation in or entitlement to benefits under 
        such program in such month. If such election is made with 
        respect to any month, such month shall not fail to be deemed a 
        coverage month with respect to such individual solely because 
        such individual would, but for such election, be a participant 
        in or be entitled to benefits under a program described in 
        subsection (c)(2).
            ``(2) Manner and reporting of election.--The election 
        described in paragraph (1) shall be made in a form and manner 
        specified by the Secretary of Health and Human Services, in 
        consultation with the Secretary of the Treasury, and a 
        declaration of such election shall be attached to the 
        taxpayer's return of tax for the taxable year, in a manner 
        specified by the Secretary of the Treasury.
            ``(3) Prospective and year-long election.--Each election 
        described in paragraph (1)--
                    ``(A) shall not be made with respect to any month 
                beginning before the date of such election, and
                    ``(B) shall be effective for such period (not less 
                than 1 calendar year) as shall be specified by the 
                Secretary of Health and Human Services, in consultation 
                with the Secretary of the Treasury.
    ``(i) Credit in Excess of Allowable Credit Deposited in Tax-favored 
Health Care Accounts.--
            ``(1) In general.--The excess, if any, of--
                    ``(A) the monthly limitation applicable to the 
                individual under subsection (b), multiplied by the 
                number of coverage months of the individual for the 
                taxable year, over
                    ``(B) the credit allowed in such taxable year with 
                respect to such individual under subsection (a),
        shall be paid by the Secretary into the designated account of 
        the individual.
            ``(2) Designated accounts.--
                    ``(A) Designated account.--For purposes of this 
                subsection, the term `designated account' means any 
                health savings account under section 223 or any Archer 
                MSA under section 220 established and maintained by the 
                provider of the individual's qualified health 
                insurance--
                            ``(i) which is designated by the individual 
                        (in such form and manner as the Secretary may 
                        provide) on the return of tax for the taxable 
                        year, and
                            ``(ii) which, under the terms of the 
                        account, accepts the payment described in 
                        paragraph (1) on behalf of the individual.
                    ``(B) Treatment of payment.--Any payment under this 
                subsection to a designated account--
                            ``(i) shall not be taken into account with 
                        respect to any dollar limitation which applies 
                        with respect to contributions to such account 
                        (or to tax benefits with respect to such 
                        contributions),
                            ``(ii) shall be included in gross income of 
                        the taxpayer for the taxable year in which the 
                        payment is made (except as provided in clause 
                        (iii)), and
                            ``(iii) shall be taken into account in 
                        determining any deduction or exclusion from 
                        gross income in the same manner as if such 
                        contribution were made by the taxpayer.
    ``(j) Coordination With Advance Payments.--
            ``(1) Reduction in credit for advance payments.--With 
        respect to any taxable year, the amount which would (but for 
        this subsection, and without regard to subsection (i)) be 
        allowed as a credit to the taxpayer under subsection (a) shall 
        be reduced (but not below zero) by the aggregate amount paid on 
        behalf of such taxpayer under section 7527A for months 
        beginning in such taxable year.
            ``(2) Recapture of excess advance payments.--If the 
        aggregate amount paid on behalf of the taxpayer under section 
        7527A for months beginning in the taxable year exceeds the sum 
        of the monthly limitations under subsection (b) for such 
        taxable year, then the tax imposed by this chapter for such 
        taxable year shall be increased by the sum of--
                    ``(A) such excess, plus
                    ``(B) interest on such excess determined at the 
                underpayment rate established under section 6621 for 
                the period from the date of the payment under section 
                7527A to the date such excess is paid.
        For purposes of subparagraph (B), an equal part of the 
        aggregate amount of the excess shall be deemed to be 
        attributable to payments made under section 7527A on the first 
        day of each month beginning in such taxable year, unless the 
        taxpayer establishes the date on which each such payment giving 
        rise to such excess occurred, in which case subparagraph (B) 
        shall be applied with respect to each date so established.
    ``(k) Regulations.--The Secretary shall prescribe regulations for 
the administration of this section to ensure that no portion of the 
amounts taken into account as qualified health insurance costs are 
amounts for which another credit, deduction, or exclusion is allowed 
under this subtitle, including through a health flexible spending 
arrangement.''.
    (b) Advance Payment of Credit.--Chapter 77 of the Internal Revenue 
Code of 1986 is amended by inserting after section 7527 the following 
new section:

``SEC. 7527A. ADVANCE PAYMENT OF QUALIFIED HEALTH INSURANCE CREDIT.

    ``(a) In General.--The Secretary shall establish a program for 
making payments on behalf of taxpayers who are eligible individuals 
within the meaning of section 36B(c) to providers of qualified health 
insurance (as defined in section 36B(e)) or to health care sharing 
ministries (as defined in section 36B(g)(7)(B)) for such individuals.
    ``(b) Limitation.--The Secretary may make payments under subsection 
(a) only to the extent that the Secretary determines that the amount of 
such payments made on behalf of any taxpayer for any month does not 
exceed the monthly limitation in effect under section 36B(b) for the 
taxpayer for such month.''.
    (c) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of the Internal Revenue Code of 1986 is amended by 
        inserting after section 6050W the following new section:

``SEC. 6050X. RETURNS RELATING TO QUALIFIED HEALTH INSURANCE CREDIT.

    ``(a) Requirement of Reporting.--Every person who is entitled to 
receive payments for any month of any calendar year under section 7527A 
(relating to advance payment of qualified health insurance credit) with 
respect to any individual shall, at such time as the Secretary may 
prescribe, make the return described in subsection (b) with respect to 
each such individual.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains, with respect to each individual referred to 
        in subsection (a)--
                    ``(A) the name, address, and TIN of each such 
                individual,
                    ``(B) the months for which amounts payments under 
                section 7527A were received,
                    ``(C) the amount of each such payment,
                    ``(D) the type of insurance coverage provided by 
                such person with respect to such individual and the 
                policy number associated with such coverage, if 
                applicable,
                    ``(E) the name, address, and TIN of the spouse and 
                each dependent covered under such coverage, and
                    ``(F) such other information as the Secretary may 
                prescribe.
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each individual whose name is 
required to be set forth in such return a written statement showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(2) the information required to be shown on the return 
        with respect to such individual.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be made.
    ``(d) Returns Which Would Be Required To Be Made by 2 or More 
Persons.--Except to the extent provided in regulations prescribed by 
the Secretary, in the case of any amount received by any person on 
behalf of another person, only the person first receiving such amount 
shall be required to make the return under subsection (a).''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) of such 
                Code is amended by striking ``or'' at the end of clause 
                (xxii), by striking ``and'' at the end of clause 
                (xxiii) and inserting ``or'', and by inserting after 
                clause (xxiii) the following new clause:
                            ``(xxiv) section 6050X (relating to returns 
                        relating to qualified health insurance credit), 
                        and''.
                    (B) Paragraph (2) of section 6724(d) of such Code 
                is amended by striking ``or'' at the end of 
                subparagraph (EE), by striking the period at the end of 
                subparagraph (FF) and inserting ``, or'', and by 
                inserting after subparagraph (FF) the following new 
                subparagraph:
                    ``(GG) section 6050X (relating to returns relating 
                to qualified health insurance credit).''.
    (d) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36B,'' after ``36A,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36A 
        the following new item:

``Sec. 36B. Qualified health insurance credit.''.
            (3) The table of sections for chapter 77 of such Code is 
        amended by inserting after the item relating to section 7527 
        the following new item:

``Sec. 7527A. Advance payment of qualified health insurance credit.''.
            (4) The table of sections for subpart B of part III of 
        subchapter A of chapter 61 of such Code is amended by adding at 
        the end the following new item:

``Sec. 6050X. Returns relating to qualified health insurance credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

          Subtitle B--Improvements to Health Savings Accounts

SEC. 111. PURCHASE OF HEALTH INSURANCE FROM HSA AND ARCHER MSA 
              ACCOUNTS.

    (a) Health Savings Accounts.--Paragraph (2) of section 223(d) of 
the Internal Revenue Code of 1986 is amended to read as follows:
            ``(2) Qualified medical expenses.--
                    ``(A) In general.--The term `qualified medical 
                expenses' means, with respect to an account 
                beneficiary, amounts paid by such beneficiary for 
                medical care (as defined in section 213(d)) for any 
                individual covered by a high deductible health plan of 
                the account beneficiary, but only to the extent such 
                amounts are not compensated for by insurance or 
                otherwise.
                    ``(B) Health insurance may not be purchased from 
                account.--Except as provided in subparagraph (C), 
                subparagraph (A) shall not apply to any payment for 
                insurance.
                    ``(C) Exceptions.--Subparagraph (B) shall not apply 
                to any expense for coverage under--
                            ``(i) a health plan during any period of 
                        continuation coverage required under any 
                        Federal law,
                            ``(ii) a qualified long-term care insurance 
                        contract (as defined in section 7702B(b)),
                            ``(iii) a health plan during any period in 
                        which the individual is receiving unemployment 
                        compensation under any Federal or State law,
                            ``(iv) a high deductible health plan, or
                            ``(v) any health insurance under title 
                        XVIII of the Social Security Act, other than a 
                        Medicare supplemental policy (as defined in 
                        section 1882 of such Act).''.
    (b) Archer MSAs.--Subparagraph (B) of section 220(d)(2) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(B) Health insurance may not be purchased from 
                account.--
                            ``(i) In general.--Subparagraph (A) shall 
                        not apply to any payment for insurance.
                            ``(ii) Exceptions.--Clause (i) shall not 
                        apply to any expense for coverage under--
                                    ``(I) a health plan during any 
                                period of continuation coverage 
                                required under any Federal law,
                                    ``(II) a qualified long-term care 
                                insurance contract (as defined in 
                                section 7702B(b)),
                                    ``(III) a health plan during any 
                                period in which the individual is 
                                receiving unemployment compensation 
                                under any Federal or State law,
                                    ``(IV) a high deductible health 
                                plan, or
                                    ``(V) any health insurance under 
                                title XVIII of the Social Security Act, 
                                other than a Medicare supplemental 
                                policy (as defined in section 1882 of 
                                such Act).''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to insurance purchased after the date of the 
enactment of this Act in taxable years beginning after such date.

               Subtitle C--Medical Care Access Protection

SEC. 121. SHORT TITLE.

    This subtitle may be cited as the ``Medical Care Access Protection 
Act of 2009'' or the ``MCAP Act''.

SEC. 122. FINDINGS AND PURPOSE.

    (a) Findings.--
            (1) Effect on health care access and costs.--Congress finds 
        that our current civil justice system is adversely affecting 
        patient access to health care services, better patient care, 
        and cost-efficient health care, in that the health care 
        liability system is a costly and ineffective mechanism for 
        resolving claims of health care liability and compensating 
        injured patients, and is a deterrent to the sharing of 
        information among health care professionals which impedes 
        efforts to improve patient safety and quality of care.
            (2) Effect on interstate commerce.--Congress finds that the 
        health care and insurance industries are industries affecting 
        interstate commerce and the health care liability litigation 
        systems existing throughout the United States are activities 
        that affect interstate commerce by contributing to the high 
        costs of health care and premiums for health care liability 
        insurance purchased by health care system providers.
            (3) Effect on federal spending.--Congress finds that the 
        health care liability litigation systems existing throughout 
        the United States have a significant effect on the amount, 
        distribution, and use of Federal funds because of--
                    (A) the large number of individuals who receive 
                health care benefits under programs operated or 
                financed by the Federal Government;
                    (B) the large number of individuals who benefit 
                because of the exclusion from Federal taxes of the 
                amounts spent to provide them with health insurance 
                benefits; and
                    (C) the large number of health care providers who 
                provide items or services for which the Federal 
                Government makes payments.
    (b) Purpose.--It is the purpose of this subtitle to implement 
reasonable, comprehensive, and effective health care liability reforms 
designed to--
            (1) improve the availability of health care services in 
        cases in which health care liability actions have been shown to 
        be a factor in the decreased availability of services;
            (2) reduce the incidence of ``defensive medicine'' and 
        lower the cost of health care liability insurance, all of which 
        contribute to the escalation of health care costs;
            (3) ensure that persons with meritorious health care injury 
        claims receive fair and adequate compensation, including 
        reasonable noneconomic damages;
            (4) improve the fairness and cost-effectiveness of our 
        current health care liability system to resolve disputes over, 
        and provide compensation for, health care liability by reducing 
        uncertainty in the amount of compensation provided to injured 
        individuals; and
            (5) provide an increased sharing of information in the 
        health care system which will reduce unintended injury and 
        improve patient care.

SEC. 123. DEFINITIONS.

    In this subtitle:
            (1) Alternative dispute resolution system; adr.--The term 
        ``alternative dispute resolution system'' or ``ADR'' means a 
        system that provides for the resolution of health care lawsuits 
        in a manner other than through a civil action brought in a 
        State or Federal court.
            (2) Claimant.--The term ``claimant'' means any person who 
        brings a health care lawsuit, including a person who asserts or 
        claims a right to legal or equitable contribution, indemnity or 
        subrogation, arising out of a health care liability claim or 
        action, and any person on whose behalf such a claim is asserted 
        or such an action is brought, whether deceased, incompetent, or 
        a minor.
            (3) Collateral source benefits.--The term ``collateral 
        source benefits'' means any amount paid or reasonably likely to 
        be paid in the future to or on behalf of the claimant, or any 
        service, product or other benefit provided or reasonably likely 
        to be provided in the future to or on behalf of the claimant, 
        as a result of the injury or wrongful death, pursuant to--
                    (A) any State or Federal health, sickness, income-
                disability, accident, or workers' compensation law;
                    (B) any health, sickness, income-disability, or 
                accident insurance that provides health benefits or 
                income-disability coverage;
                    (C) any contract or agreement of any group, 
                organization, partnership, or corporation to provide, 
                pay for, or reimburse the cost of medical, hospital, 
                dental, or income disability benefits; and
                    (D) any other publicly or privately funded program.
            (4) Compensatory damages.--The term ``compensatory 
        damages'' means objectively verifiable monetary losses incurred 
        as a result of the provision of, use of, or payment for (or 
        failure to provide, use, or pay for) health care services or 
        medical products, such as past and future medical expenses, 
        loss of past and future earnings, cost of obtaining domestic 
        services, loss of employment, and loss of business or 
        employment opportunities, damages for physical and emotional 
        pain, suffering, inconvenience, physical impairment, mental 
        anguish, disfigurement, loss of enjoyment of life, loss of 
        society and companionship, loss of consortium (other than loss 
        of domestic service), hedonic damages, injury to reputation, 
        and all other nonpecuniary losses of any kind or nature. Such 
        term includes economic damages and noneconomic damages, as such 
        terms are defined in this section.
            (5) Contingent fee.--The term ``contingent fee'' includes 
        all compensation to any person or persons which is payable only 
        if a recovery is effected on behalf of one or more claimants.
            (6) Economic damages.--The term ``economic damages'' means 
        objectively verifiable monetary losses incurred as a result of 
        the provision of, use of, or payment for (or failure to 
        provide, use, or pay for) health care services or medical 
        products, such as past and future medical expenses, loss of 
        past and future earnings, cost of obtaining domestic services, 
        loss of employment, and loss of business or employment 
        opportunities.
            (7) Health care goods or services.--The term ``health care 
        goods or services'' means any goods or services provided by a 
        health care institution, provider, or by any individual working 
        under the supervision of a health care provider, that relates 
        to the diagnosis, prevention, care, or treatment of any human 
        disease or impairment, or the assessment of the health of human 
        beings.
            (8) Health care institution.--The term ``health care 
        institution'' means any entity licensed under Federal or State 
        law to provide health care services (including but not limited 
        to ambulatory surgical centers, assisted living facilities, 
        emergency medical services providers, hospices, hospitals and 
        hospital systems, nursing homes, or other entities licensed to 
        provide such services).
            (9) Health care lawsuit.--The term ``health care lawsuit'' 
        means any health care liability claim concerning the provision 
        of health care goods or services affecting interstate commerce, 
        or any health care liability action concerning the provision of 
        (or the failure to provide) health care goods or services 
        affecting interstate commerce, brought in a State or Federal 
        court or pursuant to an alternative dispute resolution system, 
        against a health care provider or a health care institution 
        regardless of the theory of liability on which the claim is 
        based, or the number of claimants, plaintiffs, defendants, or 
        other parties, or the number of claims or causes of action, in 
        which the claimant alleges a health care liability claim.
            (10) Health care liability action.--The term ``health care 
        liability action'' means a civil action brought in a State or 
        Federal Court or pursuant to an alternative dispute resolution 
        system, against a health care provider or a health care 
        institution regardless of the theory of liability on which the 
        claim is based, or the number of plaintiffs, defendants, or 
        other parties, or the number of causes of action, in which the 
        claimant alleges a health care liability claim.
            (11) Health care liability claim.--The term ``health care 
        liability claim'' means a demand by any person, whether or not 
        pursuant to ADR, against a health care provider or health care 
        institution, including third-party claims, cross-claims, 
        counter-claims, or contribution claims, which are based upon 
        the provision of, use of, or payment for (or the failure to 
        provide, use, or pay for) health care services, regardless of 
        the theory of liability on which the claim is based, or the 
        number of plaintiffs, defendants, or other parties, or the 
        number of causes of action.
            (12) Health care provider.--
                    (A) In general.--The term ``health care provider'' 
                means any person (including but not limited to a 
                physician (as defined by section 1861(r) of the Social 
                Security Act (42 U.S.C. 1395x(r)), registered nurse, 
                dentist, podiatrist, pharmacist, chiropractor, or 
                optometrist) required by State or Federal law to be 
                licensed, registered, or certified to provide health 
                care services, and being either so licensed, 
                registered, or certified, or exempted from such 
                requirement by other statute or regulation.
                    (B) Treatment of certain professional 
                associations.--For purposes of this subtitle, a 
                professional association that is organized under State 
                law by an individual physician or group of physicians, 
                a partnership or limited liability partnership formed 
                by a group of physicians, a nonprofit health 
                corporation certified under State law, or a company 
                formed by a group of physicians under State law shall 
                be treated as a health care provider under subparagraph 
                (A).
            (13) Malicious intent to injure.--The term ``malicious 
        intent to injure'' means intentionally causing or attempting to 
        cause physical injury other than providing health care goods or 
        services.
            (14) Noneconomic damages.--The term ``noneconomic damages'' 
        means damages for physical and emotional pain, suffering, 
        inconvenience, physical impairment, mental anguish, 
        disfigurement, loss of enjoyment of life, loss of society and 
        companionship, loss of consortium (other than loss of domestic 
        service), hedonic damages, injury to reputation, and all other 
        nonpecuniary losses of any kind or nature.
            (15) Punitive damages.--The term ``punitive damages'' means 
        damages awarded, for the purpose of punishment or deterrence, 
        and not solely for compensatory purposes, against a health care 
        provider or health care institution. Punitive damages are 
        neither economic nor noneconomic damages.
            (16) Recovery.--The term ``recovery'' means the net sum 
        recovered after deducting any disbursements or costs incurred 
        in connection with prosecution or settlement of the claim, 
        including all costs paid or advanced by any person. Costs of 
        health care incurred by the plaintiff and the attorneys' office 
        overhead costs or charges for legal services are not deductible 
        disbursements or costs for such purpose.
            (17) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the Northern 
        Mariana Islands, the Trust Territory of the Pacific Islands, 
        and any other territory or possession of the United States, or 
        any political subdivision thereof.

SEC. 124. ENCOURAGING SPEEDY RESOLUTION OF CLAIMS.

    (a) In General.--Except as otherwise provided for in this section, 
the time for the commencement of a health care lawsuit shall be 3 years 
after the date of manifestation of injury or 1 year after the claimant 
discovers, or through the use of reasonable diligence should have 
discovered, the injury, whichever occurs first.
    (b) General Exception.--The time for the commencement of a health 
care lawsuit shall not exceed 3 years after the date of manifestation 
of injury unless the tolling of time was delayed as a result of--
            (1) fraud;
            (2) intentional concealment; or
            (3) the presence of a foreign body, which has no 
        therapeutic or diagnostic purpose or effect, in the person of 
        the injured person.
    (c) Minors.--An action by a minor shall be commenced within 3 years 
from the date of the alleged manifestation of injury except that if 
such minor is under the full age of 6 years, such action shall be 
commenced within 3 years of the manifestation of injury, or prior to 
the eighth birthday of the minor, whichever provides a longer period. 
Such time limitation shall be tolled for minors for any period during 
which a parent or guardian and a health care provider or health care 
institution have committed fraud or collusion in the failure to bring 
an action on behalf of the injured minor.
    (d) Rule 11 Sanctions.--Whenever a Federal or State court 
determines (whether by motion of the parties or whether on the motion 
of the court) that there has been a violation of rule 11 of the Federal 
Rules of Civil Procedure (or a similar violation of applicable State 
court rules) in a health care liability action to which this subtitle 
applies, the court shall impose upon the attorneys, law firms, or pro 
se litigants that have violated rule 11 or are responsible for the 
violation, an appropriate sanction, which shall include an order to pay 
the other party or parties for the reasonable expenses incurred as a 
direct result of the filing of the pleading, motion, or other paper 
that is the subject of the violation, including a reasonable attorneys' 
fee. Such sanction shall be sufficient to deter repetition of such 
conduct or comparable conduct by others similarly situated, and to 
compensate the party or parties injured by such conduct.

SEC. 125. COMPENSATING PATIENT INJURY.

    (a) Unlimited Amount of Damages for Actual Economic Losses in 
Health Care Lawsuits.--In any health care lawsuit, nothing in this 
subtitle shall limit the recovery by a claimant of the full amount of 
the available economic damages, notwithstanding the limitation 
contained in subsection (b).
    (b) Additional Noneconomic Damages.--
            (1) Health care providers.--In any health care lawsuit 
        where final judgment is rendered against a health care 
        provider, the amount of noneconomic damages recovered from the 
        provider, if otherwise available under applicable Federal or 
        State law, may be as much as $250,000, regardless of the number 
        of parties other than a health care institution against whom 
        the action is brought or the number of separate claims or 
        actions brought with respect to the same occurrence.
            (2) Health care institutions.--
                    (A) Single institution.--In any health care lawsuit 
                where final judgment is rendered against a single 
                health care institution, the amount of noneconomic 
                damages recovered from the institution, if otherwise 
                available under applicable Federal or State law, may be 
                as much as $250,000, regardless of the number of 
                parties against whom the action is brought or the 
                number of separate claims or actions brought with 
                respect to the same occurrence.
                    (B) Multiple institutions.--In any health care 
                lawsuit where final judgment is rendered against more 
                than one health care institution, the amount of 
                noneconomic damages recovered from each institution, if 
                otherwise available under applicable Federal or State 
                law, may be as much as $250,000, regardless of the 
                number of parties against whom the action is brought or 
                the number of separate claims or actions brought with 
                respect to the same occurrence, except that the total 
                amount recovered from all such institutions in such 
                lawsuit shall not exceed $500,000.
    (c) No Discount of Award for Noneconomic Damages.--In any health 
care lawsuit--
            (1) an award for future noneconomic damages shall not be 
        discounted to present value;
            (2) the jury shall not be informed about the maximum award 
        for noneconomic damages under subsection (b);
            (3) an award for noneconomic damages in excess of the 
        limitations provided for in subsection (b) shall be reduced 
        either before the entry of judgment, or by amendment of the 
        judgment after entry of judgment, and such reduction shall be 
        made before accounting for any other reduction in damages 
        required by law; and
            (4) if separate awards are rendered for past and future 
        noneconomic damages and the combined awards exceed the 
        limitations described in subsection (b), the future noneconomic 
        damages shall be reduced first.
    (d) Fair Share Rule.--In any health care lawsuit, each party shall 
be liable for that party's several share of any damages only and not 
for the share of any other person. Each party shall be liable only for 
the amount of damages allocated to such party in direct proportion to 
such party's percentage of responsibility. A separate judgment shall be 
rendered against each such party for the amount allocated to such 
party. For purposes of this section, the trier of fact shall determine 
the proportion of responsibility of each party for the claimant's harm.

SEC. 126. MAXIMIZING PATIENT RECOVERY.

    (a) Court Supervision of Share of Damages Actually Paid to 
Claimants.--
            (1) In general.--In any health care lawsuit, the court 
        shall supervise the arrangements for payment of damages to 
        protect against conflicts of interest that may have the effect 
        of reducing the amount of damages awarded that are actually 
        paid to claimants.
            (2) Contingency fees.--
                    (A) In general.--In any health care lawsuit in 
                which the attorney for a party claims a financial stake 
                in the outcome by virtue of a contingent fee, the court 
                shall have the power to restrict the payment of a 
                claimant's damage recovery to such attorney, and to 
                redirect such damages to the claimant based upon the 
                interests of justice and principles of equity.
                    (B) Limitation.--The total of all contingent fees 
                for representing all claimants in a health care lawsuit 
                shall not exceed the following limits:
                            (i) 40 percent of the first $50,000 
                        recovered by the claimant(s).
                            (ii) 33\1/3\ percent of the next $50,000 
                        recovered by the claimant(s).
                            (iii) 25 percent of the next $500,000 
                        recovered by the claimant(s).
                            (iv) 15 percent of any amount by which the 
                        recovery by the claimant(s) is in excess of 
                        $600,000.
    (b) Applicability.--
            (1) In general.--The limitations in subsection (a) shall 
        apply whether the recovery is by judgment, settlement, 
        mediation, arbitration, or any other form of alternative 
        dispute resolution.
            (2) Minors.--In a health care lawsuit involving a minor or 
        incompetent person, a court retains the authority to authorize 
        or approve a fee that is less than the maximum permitted under 
        this section.
    (c) Expert Witnesses.--
            (1) Requirement.--No individual shall be qualified to 
        testify as an expert witness concerning issues of negligence in 
        any health care lawsuit against a defendant unless such 
        individual--
                    (A) except as required under paragraph (2), is a 
                health care professional who--
                            (i) is appropriately credentialed or 
                        licensed in 1 or more States to deliver health 
                        care services; and
                            (ii) typically treats the diagnosis or 
                        condition or provides the type of treatment 
                        under review; and
                    (B) can demonstrate by competent evidence that, as 
                a result of training, education, knowledge, and 
                experience in the evaluation, diagnosis, and treatment 
                of the disease or injury which is the subject matter of 
                the lawsuit against the defendant, the individual was 
                substantially familiar with applicable standards of 
                care and practice as they relate to the act or omission 
                which is the subject of the lawsuit on the date of the 
                incident.
            (2) Physician review.--In a health care lawsuit, if the 
        claim of the plaintiff involved treatment that is recommended 
        or provided by a physician (allopathic or osteopathic), an 
        individual shall not be qualified to be an expert witness under 
        this subsection with respect to issues of negligence concerning 
        such treatment unless such individual is a physician.
            (3) Specialties and subspecialties.--With respect to a 
        lawsuit described in paragraph (1), a court shall not permit an 
        expert in one medical specialty or subspecialty to testify 
        against a defendant in another medical specialty or 
        subspecialty unless, in addition to a showing of substantial 
        familiarity in accordance with paragraph (1)(B), there is a 
        showing that the standards of care and practice in the two 
        specialty or subspecialty fields are similar.
            (4) Limitation.--The limitations in this subsection shall 
        not apply to expert witnesses testifying as to the degree or 
        permanency of medical or physical impairment.

SEC. 127. ADDITIONAL HEALTH BENEFITS.

    (a) In General.--The amount of any damages received by a claimant 
in any health care lawsuit shall be reduced by the court by the amount 
of any collateral source benefits to which the claimant is entitled, 
less any insurance premiums or other payments made by the claimant (or 
by the spouse, parent, child, or legal guardian of the claimant) to 
obtain or secure such benefits.
    (b) Preservation of Current Law.--Where a payor of collateral 
source benefits has a right of recovery by reimbursement or subrogation 
and such right is permitted under Federal or State law, subsection (a) 
shall not apply.
    (c) Application of Provision.--This section shall apply to any 
health care lawsuit that is settled or resolved by a fact finder.

SEC. 128. PUNITIVE DAMAGES.

    (a) Punitive Damages Permitted.--
            (1) In general.--Punitive damages may, if otherwise 
        available under applicable State or Federal law, be awarded 
        against any person in a health care lawsuit only if it is 
        proven by clear and convincing evidence that such person acted 
        with malicious intent to injure the claimant, or that such 
        person deliberately failed to avoid unnecessary injury that 
        such person knew the claimant was substantially certain to 
        suffer.
            (2) Filing of lawsuit.--No demand for punitive damages 
        shall be included in a health care lawsuit as initially filed. 
        A court may allow a claimant to file an amended pleading for 
        punitive damages only upon a motion by the claimant and after a 
        finding by the court, upon review of supporting and opposing 
        affidavits or after a hearing, after weighing the evidence, 
        that the claimant has established by a substantial probability 
        that the claimant will prevail on the claim for punitive 
        damages.
            (3) Separate proceeding.--At the request of any party in a 
        health care lawsuit, the trier of fact shall consider in a 
        separate proceeding--
                    (A) whether punitive damages are to be awarded and 
                the amount of such award; and
                    (B) the amount of punitive damages following a 
                determination of punitive liability.
        If a separate proceeding is requested, evidence relevant only 
        to the claim for punitive damages, as determined by applicable 
        State law, shall be inadmissible in any proceeding to determine 
        whether compensatory damages are to be awarded.
            (4) Limitation where no compensatory damages are awarded.--
        In any health care lawsuit where no judgment for compensatory 
        damages is rendered against a person, no punitive damages may 
        be awarded with respect to the claim in such lawsuit against 
        such person.
    (b) Determining Amount of Punitive Damages.--
            (1) Factors considered.--In determining the amount of 
        punitive damages under this section, the trier of fact shall 
        consider only the following:
                    (A) the severity of the harm caused by the conduct 
                of such party;
                    (B) the duration of the conduct or any concealment 
                of it by such party;
                    (C) the profitability of the conduct to such party;
                    (D) the number of products sold or medical 
                procedures rendered for compensation, as the case may 
                be, by such party, of the kind causing the harm 
                complained of by the claimant;
                    (E) any criminal penalties imposed on such party, 
                as a result of the conduct complained of by the 
                claimant; and
                    (F) the amount of any civil fines assessed against 
                such party as a result of the conduct complained of by 
                the claimant.
            (2) Maximum award.--The amount of punitive damages awarded 
        in a health care lawsuit may not exceed an amount equal to two 
        times the amount of economic damages awarded in the lawsuit or 
        $250,000, whichever is greater. The jury shall not be informed 
        of the limitation under the preceding sentence.
    (c) Liability of Health Care Providers.--
            (1) In general.--A health care provider who prescribes, or 
        who dispenses pursuant to a prescription, a drug, biological 
        product, or medical device approved by the Food and Drug 
        Administration, for an approved indication of the drug, 
        biological product, or medical device, shall not be named as a 
        party to a product liability lawsuit invoking such drug, 
        biological product, or medical device and shall not be liable 
        to a claimant in a class action lawsuit against the 
        manufacturer, distributor, or product seller of such drug, 
        biological product, or medical device.
            (2) Medical product.--The term ``medical product'' means a 
        drug or device intended for humans. The terms ``drug'' and 
        ``device'' have the meanings given such terms in sections 
        201(g)(1) and 201(h) of the Federal Food, Drug and Cosmetic Act 
        (21 U.S.C. 321), respectively, including any component or raw 
        material used therein, but excluding health care services.

SEC. 129. AUTHORIZATION OF PAYMENT OF FUTURE DAMAGES TO CLAIMANTS IN 
              HEALTH CARE LAWSUITS.

    (a) In General.--In any health care lawsuit, if an award of future 
damages, without reduction to present value, equaling or exceeding 
$50,000 is made against a party with sufficient insurance or other 
assets to fund a periodic payment of such a judgment, the court shall, 
at the request of any party, enter a judgment ordering that the future 
damages be paid by periodic payments in accordance with the Uniform 
Periodic Payment of Judgments Act promulgated by the National 
Conference of Commissioners on Uniform State Laws.
    (b) Applicability.--This section applies to all actions which have 
not been first set for trial or retrial before the effective date of 
this subtitle.

SEC. 130. EFFECT ON OTHER LAWS.

    (a) General Vaccine Injury.--
            (1) In general.--To the extent that title XXI of the Public 
        Health Service Act establishes a Federal rule of law applicable 
        to a civil action brought for a vaccine-related injury or 
        death--
                    (A) this subtitle shall not affect the application 
                of the rule of law to such an action; and
                    (B) any rule of law prescribed by this subtitle in 
                conflict with a rule of law of such title XXI shall not 
                apply to such action.
            (2) Exception.--If there is an aspect of a civil action 
        brought for a vaccine-related injury or death to which a 
        Federal rule of law under title XXI of the Public Health 
        Service Act does not apply, then this subtitle or otherwise 
        applicable law (as determined under this subtitle) will apply 
        to such aspect of such action.
    (b) Smallpox Vaccine Injury.--
            (1) In general.--To the extent that part C of title II of 
        the Public Health Service Act establishes a Federal rule of law 
        applicable to a civil action brought for a smallpox vaccine-
        related injury or death--
                    (A) this subtitle shall not affect the application 
                of the rule of law to such an action; and
                    (B) any rule of law prescribed by this subtitle in 
                conflict with a rule of law of such part C shall not 
                apply to such action.
            (2) Exception.--If there is an aspect of a civil action 
        brought for a smallpox vaccine-related injury or death to which 
        a Federal rule of law under part C of title II of the Public 
        Health Service Act does not apply, then this subtitle or 
        otherwise applicable law (as determined under this subtitle) 
        will apply to such aspect of such action.
    (c) Other Federal Law.--Except as provided in this section, nothing 
in this subtitle shall be deemed to affect any defense available, or 
any limitation on liability that applies to, a defendant in a health 
care lawsuit or action under any other provision of Federal law.

SEC. 131. STATE FLEXIBILITY AND PROTECTION OF STATES' RIGHTS.

    (a) Health Care Lawsuits.--The provisions governing health care 
lawsuits set forth in this subtitle shall preempt, subject to 
subsections (b) and (c), State law to the extent that State law 
prevents the application of any provisions of law established by or 
under this subtitle. The provisions governing health care lawsuits set 
forth in this subtitle supersede chapter 171 of title 28, United States 
Code, to the extent that such chapter--
            (1) provides for a greater amount of damages or contingent 
        fees, a longer period in which a health care lawsuit may be 
        commenced, or a reduced applicability or scope of periodic 
        payment of future damages, than provided in this subtitle; or
            (2) prohibits the introduction of evidence regarding 
        collateral source benefits.
    (b) Preemption of Certain State Laws.--No provision of this 
subtitle shall be construed to preempt any State law (whether effective 
before, on, or after the date of the enactment of this subtitle) that 
specifies a particular monetary amount of compensatory or punitive 
damages (or the total amount of damages) that may be awarded in a 
health care lawsuit, regardless of whether such monetary amount is 
greater or lesser than is provided for under this subtitle, 
notwithstanding section 125(a).
    (c) Protection of States' Rights and Other Laws.--
            (1) In general.--Any issue that is not governed by a 
        provision of law established by or under this subtitle 
        (including the State standards of negligence) shall be governed 
        by otherwise applicable Federal or State law.
            (2) Rule of construction.--Nothing in this subtitle shall 
        be construed to--
                    (A) preempt or supersede any Federal or State law 
                that imposes greater procedural or substantive 
                protections (such as a shorter statute of limitations) 
                for a health care provider or health care institution 
                from liability, loss, or damages than those provided by 
                this subtitle;
                    (B) preempt or supercede any State law that permits 
                and provides for the enforcement of any arbitration 
                agreement related to a health care liability claim 
                whether enacted prior to or after the date of enactment 
                of this subtitle;
                    (C) create a cause of action that is not otherwise 
                available under Federal or State law; or
                    (D) affect the scope of preemption of any other 
                Federal law.

SEC. 132. APPLICABILITY; EFFECTIVE DATE.

    This subtitle shall apply to any health care lawsuit brought in a 
Federal or State court, or subject to an alternative dispute resolution 
system, that is initiated on or after the date of the enactment of this 
subtitle, except that any health care lawsuit arising from an injury 
occurring prior to the date of enactment of this subtitle shall be 
governed by the applicable statute of limitations provisions in effect 
at the time the injury occurred.

      TITLE II--ENHANCEMENT OF INSURANCE MARKETS FOR ALL AMERICANS

                  Subtitle A--Elimination of Barriers

SEC. 201. SHORT TITLE.

    This title may be cited as ``Health Care Choice Act of 2009''.

SEC. 202. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR ENACTMENT OF 
              LAW.

    This title is enacted pursuant to the power granted Congress under 
article I, section 8, clause 3, of the United States Constitution.

SEC. 203. FINDINGS.

    Congress finds the following:
            (1) The application of numerous and significant variations 
        in State law impacts the ability of insurers to offer, and 
        individuals to obtain, affordable individual health insurance 
        coverage, thereby impeding commerce in individual health 
        insurance coverage.
            (2) Individual health insurance coverage is increasingly 
        offered through the Internet, other electronic means, and by 
        mail, all of which are inherently part of interstate commerce.
            (3) In response to these issues, it is appropriate to 
        encourage increased efficiency in the offering of individual 
        health insurance coverage through a collaborative approach by 
        the States in regulating this coverage.
            (4) The establishment of risk-retention groups has provided 
        a successful model for the sale of insurance across State 
        lines, as the acts establishing those groups allow insurance to 
        be sold in multiple States but regulated by a single State.

SEC. 204. COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE 
              COVERAGE.

    (a) In General.--Title XXVII of the Public Health Service Act (42 
U.S.C. 300gg et seq.) is amended by adding at the end the following new 
part:

``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL HEALTH INSURANCE COVERAGE

``SEC. 2795. DEFINITIONS.

    ``In this part:
            ``(1) Primary state.--The term `primary State' means, with 
        respect to individual health insurance coverage offered by a 
        health insurance issuer, the State designated by the issuer as 
        the State whose covered laws shall govern the health insurance 
        issuer in the sale of such coverage under this part. An issuer, 
        with respect to a particular policy, may only designate one 
        such State as its primary State with respect to all such 
        coverage it offers. Such an issuer may not change the 
        designated primary State with respect to individual health 
        insurance coverage once the policy is issued, except that such 
        a change may be made upon renewal of the policy. With respect 
        to such designated State, the issuer is deemed to be doing 
        business in that State.
            ``(2) Secondary state.--The term `secondary State' means, 
        with respect to individual health insurance coverage offered by 
        a health insurance issuer, any State that is not the primary 
        State. In the case of a health insurance issuer that is selling 
        a policy in, or to a resident of, a secondary State, the issuer 
        is deemed to be doing business in that secondary State.
            ``(3) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 2791(b)(2), 
        except that such an issuer must be licensed in the primary 
        State and be qualified to sell individual health insurance 
        coverage in that State.
            ``(4) Individual health insurance coverage.--The term 
        `individual health insurance coverage' means health insurance 
        coverage offered in the individual market, as defined in 
        section 2791(e)(1).
            ``(5) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of this title for the State with respect to the 
        issuer.
            ``(6) Hazardous financial condition.--The term `hazardous 
        financial condition' means that, based on its present or 
        reasonably anticipated financial condition, a health insurance 
        issuer is unlikely to be able--
                    ``(A) to meet obligations to policyholders with 
                respect to known claims and reasonably anticipated 
                claims; or
                    ``(B) to pay other obligations in the normal course 
                of business.
            ``(7) Covered laws.--
                    ``(A) In general.--The term `covered laws' means 
                the laws, rules, regulations, agreements, and orders 
                governing the insurance business pertaining to--
                            ``(i) individual health insurance coverage 
                        issued by a health insurance issuer;
                            ``(ii) the offer, sale, rating (including 
                        medical underwriting), renewal, and issuance of 
                        individual health insurance coverage to an 
                        individual;
                            ``(iii) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of health care and insurance related 
                        services;
                            ``(iv) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of management, operations, and 
                        investment activities of a health insurance 
                        issuer; and
                            ``(v) the provision to an individual in 
                        relation to individual health insurance 
                        coverage of loss control and claims 
                        administration for a health insurance issuer 
                        with respect to liability for which the issuer 
                        provides insurance.
                    ``(B) Exception.--Such term does not include any 
                law, rule, regulation, agreement, or order governing 
                the use of care or cost management techniques, 
                including any requirement related to provider 
                contracting, network access or adequacy, health care 
                data collection, or quality assurance.
            ``(8) State.--The term `State' means the 50 States and 
        includes the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
            ``(9) Unfair claims settlement practices.--The term `unfair 
        claims settlement practices' means only the following 
        practices:
                    ``(A) Knowingly misrepresenting to claimants and 
                insured individuals relevant facts or policy provisions 
                relating to coverage at issue.
                    ``(B) Failing to acknowledge with reasonable 
                promptness pertinent communications with respect to 
                claims arising under policies.
                    ``(C) Failing to adopt and implement reasonable 
                standards for the prompt investigation and settlement 
                of claims arising under policies.
                    ``(D) Failing to effectuate prompt, fair, and 
                equitable settlement of claims submitted in which 
                liability has become reasonably clear.
                    ``(E) Refusing to pay claims without conducting a 
                reasonable investigation.
                    ``(F) Failing to affirm or deny coverage of claims 
                within a reasonable period of time after having 
                completed an investigation related to those claims.
                    ``(G) A pattern or practice of compelling insured 
                individuals or their beneficiaries to institute suits 
                to recover amounts due under its policies by offering 
                substantially less than the amounts ultimately 
                recovered in suits brought by them.
                    ``(H) A pattern or practice of attempting to settle 
                or settling claims for less than the amount that a 
                reasonable person would believe the insured individual 
                or his or her beneficiary was entitled by reference to 
                written or printed advertising material accompanying or 
                made part of an application.
                    ``(I) Attempting to settle or settling claims on 
                the basis of an application that was materially altered 
                without notice to, or knowledge or consent of, the 
                insured.
                    ``(J) Failing to provide forms necessary to present 
                claims within 15 calendar days of a requests with 
                reasonable explanations regarding their use.
                    ``(K) Attempting to cancel a policy in less time 
                than that prescribed in the policy or by the law of the 
                primary State.
            ``(10) Fraud and abuse.--The term `fraud and abuse' means 
        an act or omission committed by a person who, knowingly and 
        with intent to defraud, commits, or conceals any material 
        information concerning, one or more of the following:
                    ``(A) Presenting, causing to be presented or 
                preparing with knowledge or belief that it will be 
                presented to or by an insurer, a reinsurer, broker or 
                its agent, false information as part of, in support of 
                or concerning a fact material to one or more of the 
                following:
                            ``(i) An application for the issuance or 
                        renewal of an insurance policy or reinsurance 
                        contract.
                            ``(ii) The rating of an insurance policy or 
                        reinsurance contract.
                            ``(iii) A claim for payment or benefit 
                        pursuant to an insurance policy or reinsurance 
                        contract.
                            ``(iv) Premiums paid on an insurance policy 
                        or reinsurance contract.
                            ``(v) Payments made in accordance with the 
                        terms of an insurance policy or reinsurance 
                        contract.
                            ``(vi) A document filed with the 
                        commissioner or the chief insurance regulatory 
                        official of another jurisdiction.
                            ``(vii) The financial condition of an 
                        insurer or reinsurer.
                            ``(viii) The formation, acquisition, 
                        merger, reconsolidation, dissolution or 
                        withdrawal from one or more lines of insurance 
                        or reinsurance in all or part of a State by an 
                        insurer or reinsurer.
                            ``(ix) The issuance of written evidence of 
                        insurance.
                            ``(x) The reinstatement of an insurance 
                        policy.
                    ``(B) Solicitation or acceptance of new or renewal 
                insurance risks on behalf of an insurer reinsurer or 
                other person engaged in the business of insurance by a 
                person who knows or should know that the insurer or 
                other person responsible for the risk is insolvent at 
                the time of the transaction.
                    ``(C) Transaction of the business of insurance in 
                violation of laws requiring a license, certificate of 
                authority, or other legal authority for the transaction 
                of the business of insurance.
                    ``(D) Attempt to commit, aiding or abetting in the 
                commission of, or conspiracy to commit the acts or 
                omissions specified in this paragraph.

``SEC. 2796. APPLICATION OF LAW.

    ``(a) In General.--The covered laws of the primary State shall 
apply to individual health insurance coverage offered by a health 
insurance issuer in the primary State and in any secondary State, but 
only if the coverage and issuer comply with the conditions of this 
section with respect to the offering of coverage in any secondary 
State.
    ``(b) Exemptions From Covered Laws in a Secondary State.--Except as 
provided in this section, a health insurance issuer with respect to its 
offer, sale, rating (including medical underwriting), renewal, and 
issuance of individual health insurance coverage in any secondary State 
is exempt from any covered laws of the secondary State (and any rules, 
regulations, agreements, or orders sought or issued by such State under 
or related to such covered laws) to the extent that such laws would--
            ``(1) make unlawful, or regulate, directly or indirectly, 
        the operation of the health insurance issuer operating in the 
        secondary State, except that any secondary State may require 
        such an issuer--
                    ``(A) to pay, on a nondiscriminatory basis, 
                applicable premium and other taxes (including high risk 
                pool assessments) which are levied on insurers and 
                surplus lines insurers, brokers, or policyholders under 
                the laws of the State;
                    ``(B) to register with and designate the State 
                insurance commissioner as its agent solely for the 
                purpose of receiving service of legal documents or 
                process;
                    ``(C) to submit to an examination of its financial 
                condition by the State insurance commissioner in any 
                State in which the issuer is doing business to 
                determine the issuer's financial condition, if--
                            ``(i) the State insurance commissioner of 
                        the primary State has not done an examination 
                        within the period recommended by the National 
                        Association of Insurance Commissioners; and
                            ``(ii) any such examination is conducted in 
                        accordance with the examiners' handbook of the 
                        National Association of Insurance Commissioners 
                        and is coordinated to avoid unjustified 
                        duplication and unjustified repetition;
                    ``(D) to comply with a lawful order issued--
                            ``(i) in a delinquency proceeding commenced 
                        by the State insurance commissioner if there 
                        has been a finding of financial impairment 
                        under subparagraph (C); or
                            ``(ii) in a voluntary dissolution 
                        proceeding;
                    ``(E) to comply with an injunction issued by a 
                court of competent jurisdiction, upon a petition by the 
                State insurance commissioner alleging that the issuer 
                is in hazardous financial condition;
                    ``(F) to participate, on a nondiscriminatory basis, 
                in any insurance insolvency guaranty association or 
                similar association to which a health insurance issuer 
                in the State is required to belong;
                    ``(G) to comply with any State law regarding fraud 
                and abuse (as defined in section 2795(10)), except that 
                if the State seeks an injunction regarding the conduct 
                described in this subparagraph, such injunction must be 
                obtained from a court of competent jurisdiction;
                    ``(H) to comply with any State law regarding unfair 
                claims settlement practices (as defined in section 
                2795(9)); or
                    ``(I) to comply with the applicable requirements 
                for independent review under section 2798 with respect 
                to coverage offered in the State;
            ``(2) require any individual health insurance coverage 
        issued by the issuer to be countersigned by an insurance agent 
        or broker residing in that Secondary State; or
            ``(3) otherwise discriminate against the issuer issuing 
        insurance in both the primary State and in any secondary State.
    ``(c) Clear and Conspicuous Disclosure.--A health insurance issuer 
shall provide the following notice, in 12-point bold type, in any 
insurance coverage offered in a secondary State under this part by such 
a health insurance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the name of the 
health insurance issuer, the name of primary State, the name of the 
secondary State, the name of the secondary State, and the name of the 
secondary State, respectively, for the coverage concerned:
```This policy is issued by _____ and is governed by the laws and 
regulations of the State of _____, and it has met all the laws of that 
State as determined by that State's Department of Insurance. This 
policy may be less expensive than others because it is not subject to 
all of the insurance laws and regulations of the State of _____, 
including coverage of some services or benefits mandated by the law of 
the State of _____. Additionally, this policy is not subject to all of 
the consumer protection laws or restrictions on rate changes of the 
State of _____. As with all insurance products, before purchasing this 
policy, you should carefully review the policy and determine what 
health care services the policy covers and what benefits it provides, 
including any exclusions, limitations, or conditions for such services 
or benefits.'
    ``(d) Prohibition on Certain Reclassifications and Premium 
Increases.--
            ``(1) In general.--For purposes of this section, a health 
        insurance issuer that provides individual health insurance 
        coverage to an individual under this part in a primary or 
        secondary State may not upon renewal--
                    ``(A) move or reclassify the individual insured 
                under the health insurance coverage from the class such 
                individual is in at the time of issue of the contract 
                based on the health-status related factors of the 
                individual; or
                    ``(B) increase the premiums assessed the individual 
                for such coverage based on a health status-related 
                factor or change of a health status-related factor or 
                the past or prospective claim experience of the insured 
                individual.
            ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed to prohibit a health insurance issuer--
                    ``(A) from terminating or discontinuing coverage or 
                a class of coverage in accordance with subsections (b) 
                and (c) of section 2742;
                    ``(B) from raising premium rates for all policy 
                holders within a class based on claims experience;
                    ``(C) from changing premiums or offering discounted 
                premiums to individuals who engage in wellness 
                activities at intervals prescribed by the issuer, if 
                such premium changes or incentives--
                            ``(i) are disclosed to the consumer in the 
                        insurance contract;
                            ``(ii) are based on specific wellness 
                        activities that are not applicable to all 
                        individuals; and
                            ``(iii) are not obtainable by all 
                        individuals to whom coverage is offered;
                    ``(D) from reinstating lapsed coverage; or
                    ``(E) from retroactively adjusting the rates 
                charged an insured individual if the initial rates were 
                set based on material misrepresentation by the 
                individual at the time of issue.
    ``(e) Prior Offering of Policy in Primary State.--A health 
insurance issuer may not offer for sale individual health insurance 
coverage in a secondary State unless that coverage is currently offered 
for sale in the primary State.
    ``(f) Licensing of Agents or Brokers for Health Insurance 
Issuers.--Any State may require that a person acting, or offering to 
act, as an agent or broker for a health insurance issuer with respect 
to the offering of individual health insurance coverage obtain a 
license from that State, with commissions or other compensation subject 
to the provisions of the laws of that State, except that a State may 
not impose any qualification or requirement which discriminates against 
a nonresident agent or broker.
    ``(g) Documents for Submission to State Insurance Commissioner.--
Each health insurance issuer issuing individual health insurance 
coverage in both primary and secondary States shall submit--
            ``(1) to the insurance commissioner of each State in which 
        it intends to offer such coverage, before it may offer 
        individual health insurance coverage in such State--
                    ``(A) a copy of the plan of operation or 
                feasibility study or any similar statement of the 
                policy being offered and its coverage (which shall 
                include the name of its primary State and its principal 
                place of business);
                    ``(B) written notice of any change in its 
                designation of its primary State; and
                    ``(C) written notice from the issuer of the 
                issuer's compliance with all the laws of the primary 
                State; and
            ``(2) to the insurance commissioner of each secondary State 
        in which it offers individual health insurance coverage, a copy 
        of the issuer's quarterly financial statement submitted to the 
        primary State, which statement shall be certified by an 
        independent public accountant and contain a statement of 
        opinion on loss and loss adjustment expense reserves made by--
                    ``(A) a member of the American Academy of 
                Actuaries; or
                    ``(B) a qualified loss reserve specialist.
    ``(h) Power of Courts To Enjoin Conduct.--Nothing in this section 
shall be construed to affect the authority of any Federal or State 
court to enjoin--
            ``(1) the solicitation or sale of individual health 
        insurance coverage by a health insurance issuer to any person 
        or group who is not eligible for such insurance; or
            ``(2) the solicitation or sale of individual health 
        insurance coverage that violates the requirements of the law of 
        a secondary State which are described in subparagraphs (A) 
        through (H) of section 2796(b)(1).
    ``(i) Power of Secondary States To Take Administrative Action.--
Nothing in this section shall be construed to affect the authority of 
any State to enjoin conduct in violation of that State's laws described 
in section 2796(b)(1).
    ``(j) State Powers To Enforce State Laws.--
            ``(1) In general.--Subject to the provisions of subsection 
        (b)(1)(G) (relating to injunctions) and paragraph (2), nothing 
        in this section shall be construed to affect the authority of 
        any State to make use of any of its powers to enforce the laws 
        of such State with respect to which a health insurance issuer 
        is not exempt under subsection (b).
            ``(2) Courts of competent jurisdiction.--If a State seeks 
        an injunction regarding the conduct described in paragraphs (1) 
        and (2) of subsection (h), such injunction must be obtained 
        from a Federal or State court of competent jurisdiction.
    ``(k) States' Authority To Sue.--Nothing in this section shall 
affect the authority of any State to bring action in any Federal or 
State court.
    ``(l) Generally Applicable Laws.--Nothing in this section shall be 
construed to affect the applicability of State laws generally 
applicable to persons or corporations.
    ``(m) Guaranteed Availability of Coverage to HIPAA Eligible 
Individuals.--To the extent that a health insurance issuer is offering 
coverage in a primary State that does not accommodate residents of 
secondary States or does not provide a working mechanism for residents 
of a secondary State, and the issuer is offering coverage under this 
part in such secondary State which has not adopted a qualified high 
risk pool as its acceptable alternative mechanism (as defined in 
section 2744(c)(2)), the issuer shall, with respect to any individual 
health insurance coverage offered in a secondary State under this part, 
comply with the guaranteed availability requirements for eligible 
individuals in section 2741.

``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY 
              SELL INTO SECONDARY STATES.

    ``A health insurance issuer may not offer, sell, or issue 
individual health insurance coverage in a secondary State if the State 
insurance commissioner does not use a risk-based capital formula for 
the determination of capital and surplus requirements for all health 
insurance issuers.

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    ``(a) Right to External Appeal.--A health insurance issuer may not 
offer, sell, or issue individual health insurance coverage in a 
secondary State under the provisions of this title unless--
            ``(1) both the secondary State and the primary State have 
        legislation or regulations in place establishing an independent 
        review process for individuals who are covered by individual 
        health insurance coverage, or
            ``(2) in any case in which the requirements of subparagraph 
        (A) are not met with respect to the either of such States, the 
        issuer provides an independent review mechanism substantially 
        identical (as determined by the applicable State authority of 
        such State) to that prescribed in the `Health Carrier External 
        Review Model Act' of the National Association of Insurance 
        Commissioners for all individuals who purchase insurance 
        coverage under the terms of this part, except that, under such 
        mechanism, the review is conducted by an independent medical 
        reviewer, or a panel of such reviewers, with respect to whom 
        the requirements of subsection (b) are met.
    ``(b) Qualifications of Independent Medical Reviewers.--In the case 
of any independent review mechanism referred to in subsection (a)(2)--
            ``(1) In general.--In referring a denial of a claim to an 
        independent medical reviewer, or to any panel of such 
        reviewers, to conduct independent medical review, the issuer 
        shall ensure that--
                    ``(A) each independent medical reviewer meets the 
                qualifications described in paragraphs (2) and (3);
                    ``(B) with respect to each review, each reviewer 
                meets the requirements of paragraph (4) and the 
                reviewer, or at least 1 reviewer on the panel, meets 
                the requirements described in paragraph (5); and
                    ``(C) compensation provided by the issuer to each 
                reviewer is consistent with paragraph (6).
            ``(2) Licensure and expertise.--Each independent medical 
        reviewer shall be a physician (allopathic or osteopathic) or 
        health care professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment under 
                review.
            ``(3) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer in a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (7));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the issuer, from 
                        serving as an independent medical reviewer if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the issuer 
                                and the enrollee (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the issuer and does 
                                not provide services exclusively or 
                                primarily to or on behalf of the 
                                issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        an independent medical reviewer merely on the 
                        basis of such affiliation if the affiliation is 
                        disclosed to the issuer and the enrollee (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        an independent medical reviewer from an entity 
                        if the compensation is provided consistent with 
                        paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--In a case involving treatment, 
                or the provision of items or services--
                            ``(i) by a physician, a reviewer shall be a 
                        practicing physician (allopathic or 
                        osteopathic) of the same or similar specialty, 
                        as a physician who, acting within the 
                        appropriate scope of practice within the State 
                        in which the service is provided or rendered, 
                        typically treats the condition, makes the 
                        diagnosis, or provides the type of treatment 
                        under review; or
                            ``(ii) by a non-physician health care 
                        professional, the reviewer, or at least 1 
                        member of the review panel, shall be a 
                        practicing non-physician health care 
                        professional of the same or similar specialty 
                        as the non-physician health care professional 
                        who, acting within the appropriate scope of 
                        practice within the State in which the service 
                        is provided or rendered, typically treats the 
                        condition, makes the diagnosis, or provides the 
                        type of treatment under review.
                    ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with respect to 
                an individual who is a physician or other health care 
                professional, that the individual provides health care 
                services to individual patients on average at least 2 
                days per week.
            ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a reviewer shall have expertise 
        under paragraph (2) in pediatrics.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by the issuer to an independent medical reviewer in 
        connection with a review under this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a coverage relating to an enrollee, any of the 
        following:
                    ``(A) The issuer involved, or any fiduciary, 
                officer, director, or employee of the issuer.
                    ``(B) The enrollee (or authorized representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the denial.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the denial are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the denial.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the 
                denial involved.
            ``(8) Definitions.--For purposes of this subsection:
                    ``(A) Enrollee.--The term `enrollee' means, with 
                respect to health insurance coverage offered by a 
                health insurance issuer, an individual enrolled with 
                the issuer to receive such coverage.
                    ``(B) Health care professional.--The term `health 
                care professional' means an individual who is licensed, 
                accredited, or certified under State law to provide 
                specified health care services and who is operating 
                within the scope of such licensure, accreditation, or 
                certification.

``SEC. 2799. ENFORCEMENT.

    ``(a) In General.--Subject to subsection (b), with respect to 
specific individual health insurance coverage the primary State for 
such coverage has sole jurisdiction to enforce the primary State's 
covered laws in the primary State and any secondary State.
    ``(b) Secondary State's Authority.--Nothing in subsection (a) shall 
be construed to affect the authority of a secondary State to enforce 
its laws as set forth in the exception specified in section 2796(b)(1).
    ``(c) Court Interpretation.--In reviewing action initiated by the 
applicable secondary State authority, the court of competent 
jurisdiction shall apply the covered laws of the primary State.
    ``(d) Notice of Compliance Failure.--In the case of individual 
health insurance coverage offered in a secondary State that fails to 
comply with the covered laws of the primary State, the applicable State 
authority of the secondary State may notify the applicable State 
authority of the primary State.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individual health insurance coverage offered, issued, or sold 
after the date that is one year after the date of the enactment of this 
Act.
    (c) GAO Ongoing Study and Reports.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct an ongoing study concerning the effect of the 
        amendment made by subsection (a) on--
                    (A) the number of uninsured and under-insured;
                    (B) the availability and cost of health insurance 
                policies for individuals with pre-existing medical 
                conditions;
                    (C) the availability and cost of health insurance 
                policies generally;
                    (D) the elimination or reduction of different types 
                of benefits under health insurance policies offered in 
                different States; and
                    (E) cases of fraud or abuse relating to health 
                insurance coverage offered under such amendment and the 
                resolution of such cases.
            (2) Annual reports.--The Comptroller General shall submit 
        to Congress an annual report, after the end of each of the 5 
        years following the effective date of the amendment made by 
        subsection (a), on the ongoing study conducted under paragraph 
        (1).

SEC. 205. SEVERABILITY.

    If any provision of the Act or the application of such provision to 
any person or circumstance is held to be unconstitutional, the 
remainder of this Act and the application of the provisions of such to 
any other person or circumstance shall not be affected.

                   Subtitle B--Pre-existing Condition

SEC. 211. BLOCK GRANTS TO STATES.

    (a) In General.--The Secretary of Health and Human Services 
(referred to in this section as the ``Secretary'') shall award block 
grants to States to provide for the development of innovative models 
that ensure affordable health insurance coverage for Americans with 
pre-existing health conditions.
    (b) Application.--To be eligible to receive a grant under this 
section a State shall submit to the Secretary an application, at such 
time, in such manner, and containing such information as the Secretary 
may require.
    (c) Use of Funds.--A State shall use amounts received under a grant 
under this section to develop innovative programs that ensure the 
provision of affordable health insurance coverage for eligible 
individuals with pre-existing health conditions. Such models may 
include the development and funding of State high-risk pools and the 
enhancement of funding for existing State high risk pools.
    (d) Eligibility.--To be eligible to participate in a program 
developed under subsection (c), an individual shall--
            (1) be a resident of the State involved;
            (2) provide assurances to the Secretary that activities 
        carried out under the grant will not result in an increase in 
        health insurance premiums for residents of the State; and
            (3) comply with any other requirements established by the 
        State.
    (e) Amount of Grant.--The amount of a grant to a State under this 
section shall be determined by the Secretary.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, $5,000,000,000 for each of the 
fiscal years 2010 through 2014.
    (g) Definition.--In this section, the term ``pre-existing 
condition'' means a medical or other condition in an individual that 
exists prior to the date on which such individuals attempts to enroll 
in health insurance coverage, whether or not any medical advice, 
diagnosis, care, or treatment was recommended or received before such 
date.

             TITLE III--EMPOWERING THE HEALTH CARE CONSUMER

SEC. 301. ENHANCING THE PATIENT-PROVIDER RELATIONSHIP.

    (a) Provision of Information.--The Secretary of Health and Human 
Services shall promulgate regulations under which a health care 
provider (including a hospital) that receives reimbursement under title 
XVIII or XIX of the Social Security Act (42 U.S.C. 1395 and 1396 et 
seq.) shall be required to provide each patient of such provider (or 
hospital), upon the request of such patient, price information with 
respect to the items or services provided (or that will be provided) to 
such patient.
    (b) Requirement.--The pricing information required under subsection 
(a) shall be broken down into the following categories:
            (1) The usual and customary price charged for the item or 
        service involved.
            (2) The amount that would be provided as reimbursement 
        under the Medicare and Medicaid Programs under titles XVIII and 
        XIX of the Social Security Act (42 U.S.C. 1395 and 1396 et 
        seq.) for the items or services involved.
            (3) The average amount that would be paid by an insured 
        individual with respect to such item or service.

SEC. 302. HEALTH INSURANCE POLICY INFORMATION.

    (a) In General.--A group health plan, or health insurance issuer in 
connection with group or individual health insurance coverage, shall 
provide an enrollee, upon the request of the enrollee, with information 
concerning their allowable payment for items or services under the plan 
or coverage involved.
    (b) Fee.--A plan or issuer may assess an enrollee a reasonable fee 
to cover the costs incurred by the plan or issuer in providing the 
enrollee with the information requested under subsection (a).
    (c) Definitions.--The definitions contained in section 2791 of the 
Public Health Service Act (42 U.S.C. 300gg-91) shall apply for purposes 
of this section.

                           TITLE IV--FUNDING

SEC. 401. FUNDING PROVISIONS.

    (a) Termination of TARP Program.--Notwithstanding any provision of 
the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et 
seq.) or any other provision of law, the Secretary of Treasury may not, 
on and after the date of enactment of this Act, make any payment or 
obligation under the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5201 et seq.). Any funds made available under such Act that have 
not been obligated shall be rescinded and made available to carry out 
this Act.
    (b) Collecting Funds.--Notwithstanding any other provision of the 
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et seq.) 
or any other provision of law, the Secretary of Treasury shall collect 
all revenues relating to, and proceeds from the sale of, obligations 
purchased and made under the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5201 et seq.) by not later than September 30, 2014, at 
a rate of not less than 20 percent per year of the total obligations 
purchased and made under such Act.
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