II

104TH CONGRESS

2D SESSION S. 1979

To amend the Social Security Act to help disabled individuals become economically self-sufficient and eligible for health care coverage through

work incentives and a Medicare buy-in program, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 22, 1996

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

referred to the Committee on Finance

A BILL

To amend the Social Security Act to help disabled individuals

become economically self-sufficient and eligible for health

care coverage through work incentives and a Medicare

buy-in program, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Work Incentive and

5 Self-Sufficiency Act of 1996’’.

6 SEC. 2. RETURN-TO-WORK PROGRAM FOR SOCIAL SECU7 RITY DISABILITY INCOME BENEFICIARIES.

8 (a) SSDI WORK INCENTIVE THRESHOLD.—
2

•S 1979 IS

1 (1) IN GENERAL.—Section 223(a) of the Social

2 Security Act (42 U.S.C. 423(a)) is amended by add3 ing at the end the following new paragraph:

4 ‘‘(3)(A) Except as provided in subparagraph (B), an

5 individual’s disability insurance benefit for any month

6 shall be reduced by such individual’s excess earnings

7 under rules similar to the rules under section 203, except

8 that—

9 ‘‘(i) for purposes of section 203(f)(3), an indi10 vidual’s excess earnings for a taxable year shall be

11 50 percent of the individual’s earnings for such year

12 in excess of the product of the applicable exempt

13 amount and the number of months in such year; and

14 ‘‘(ii) for purposes of section 203(f)(8)(D), the

15 applicable exempt amount for any taxable year end16 ing after 1996 shall be $500 for each month of such

17 year.

18 ‘‘(B) In the case of an individual who is a blind or

19 disabled individual who is receiving benefits under this

20 section and title XVI, such individual’s benefits under this

21 section shall be reduced under subparagraph (A) only

22 after the individual’s benefits under title XVI are reduced

23 in the same manner.’’.

24 (2) CONFORMING AMENDMENTS.—
3

•S 1979 IS

1 (A) Section 223(a)(2) of such Act is

2 amended by striking ‘‘section 202(q)’’ and in3 serting ‘‘paragraph (3), section 202(q),’’.

4 (B) Paragraphs (1) and (2) of section

5 1611(b) of such Act (42 U.S.C. 1382(b)) are

6 each amended by striking ‘‘The benefit’’ and in7 serting ‘‘Except as provided in section

8 223(a)(3)(B), the benefit’’.

9 (b) REPEAL OF TRIAL WORK PERIOD AND EX10 TENDED PERIOD OF ELIGIBILITY.—

11 (1) Subsection (c) of section 222 of the Social

12 Security Act (42 U.S.C. 422) is repealed.

13 (2) Section 223(a)(1) of such Act (42 U.S.C.

14 423(a)(1)) is amended—

15 (A) by striking ‘‘subject to subsection (e),

16 the termination month’’ and inserting ‘‘the

17 third month following the month in which his

18 disability ceases’’; and

19 (B) by striking the second sentence.

20 (3) Section 223 of such Act (42 U.S.C. 423) is

21 amended by striking subsection (e).

22 (4) Section 202(d)(1)(G)(i) (42 U.S.C.

23 402(d)(1)(G)(i)) is amended to read as follows:

24 ‘‘(i) the third month following the month in

25 which his disability ceases,’’.
4

•S 1979 IS

1 (5) Section 202(d)(6)(E) (42 U.S.C.

2 402(d)(6)(E)) is amended by striking ‘‘the termi3 nation month (as defined in paragraph (1)(G)(i)),

4 subject to section 223(e)’’ and inserting ‘‘the third

5 month following the month in which his disability

6 ceases’’.

7 (6) Section 202(e)(1) of such Act (42 U.S.C.

8 402(e)(1)) is amended—

9 (A) in the first sentence, by striking ‘‘sub10 ject to section 223(e),’’; and

11 (B) by striking the second sentence and in12 serting ‘‘For purposes of the preceding sen13 tence, the termination month for any individual

14 shall be the third month following the month in

15 which her disability ceases.’’.

16 (7) Section 202(f)(1) of such Act (42 U.S.C.

17 402(f)(1)) is amended—

18 (A) in the first sentence, by striking ‘‘sub19 ject to section 223(e),’’; and

20 (B) by striking the second sentence and in21 serting ‘‘For purposes of the preceding sen22 tence, the termination month for any individual

23 shall be the third month following the month in

24 which his disability ceases.’’.
5

•S 1979 IS

1 SEC. 3. CONTINUED ELIGIBILITY FOR MEDICARE BENEFITS

2 FOR DISABLED INDIVIDUALS WHOSE ANNUAL

3 ADJUSTED GROSS INCOME DOES NOT EX4 CEED $15,000.

5 Section 226(b) of the Social Security Act (42 U.S.C.

6 426(b)) is amended by striking the last 2 sentences there7 of and inserting the following: ‘‘For purposes of this sub8 section, an individual who is no longer eligible for cash

9 benefits under section 223, after the application of sub10 section (a)(3) thereof, and whose entitlement to benefits

11 or status as a qualified railroad retirement beneficiary as

12 described in paragraph (2) has subsequently terminated,

13 shall be deemed to be entitled to such benefits or to occupy

14 such status (notwithstanding the termination of such enti15 tlement or status) for the period of consecutive months

16 throughout all of which the physical or mental impair17 ment, on which such entitlement or status was based, con18 tinues, and until such individual’s annual adjusted gross

19 income exceeds $15,000.’’.

20 SEC. 4. MEDICARE BUY-IN PROVISIONS FOR DISABLED IN21 DIVIDUALS WHO HAVE EXHAUSTED OTHER

22 ENTITLEMENT AND FOR DISABLED INDIVID23 UALS WHO ARE NOT OTHERWISE ELIGIBLE

24 FOR MEDICARE BENEFITS.

25 (a) CHANGE IN PAYMENT FOR HOSPITAL INSURANCE

26 BENEFITS FOR DISABLED INDIVIDUALS WHO HAVE EX-
6

•S 1979 IS

1 HAUSTED OTHER ENTITLEMENT.—Section 1818A(d)(2)

2 of the Social Security Act (42 U.S.C. 1395i-2a(d)(2)) is

3 amended to read as follows:

4 ‘‘(2)(i) The amount of an individual’s monthly pre5 mium for any calendar year under this section shall be

6 equal to the lesser of—

7 ‘‘(I) 10 percent of such individual’s adjusted

8 gross income for the preceding calendar year; or

9 ‘‘(II) the amount of the premium determined

10 under section 1818(d).

11 ‘‘(ii) The provisions of subsections (e) and (f) of sec12 tion 1818 (relating to premiums) shall apply to individuals

13 enrolled under this section in the same manner as such

14 provisions apply to individuals enrolled under that sec15 tion.’’.

16 (b) HOSPITAL INSURANCE BENEFITS FOR DISABLED

17 INDIVIDUALS WHO ARE NOT OTHERWISE ELIGIBLE.—

18 Title XVIII of the Social Security Act (42 U.S.C. 1395

19 et seq.) is amended by inserting after section 1818A the

20 following new section:

21 ‘‘HOSPITAL INSURANCE BENEFITS FOR DISABLED

22 INDIVIDUALS WHO ARE NOT OTHERWISE ELIGIBLE

23 ‘‘SEC. 1818B. (a) Every individual who—

24 ‘‘(1) has not attained the age of 65;

25 ‘‘(2) would have been entitled to benefits under

26 this part under section 226(b) except that such indi-
7

•S 1979 IS

1 vidual’s earnings exceeded the substantial gainful ac2 tivity amount (as defined in section 223(d)(4));

3 ‘‘(3)(i) continues to have the disabling physical

4 or mental impairment on the basis of which the indi5 vidual would have been found to be under a disabil6 ity or to have been a disabled qualified railroad re7 tirement beneficiary, or (ii) is blind (within the

8 meaning of section 216(i)(1)); and

9 ‘‘(4) is not otherwise entitled to benefits under

10 this part,

11 shall be eligible to enroll in the insurance program estab12 lished by this part.

13 ‘‘(b)(1) An individual may enroll under this section

14 only in such manner and form as may be prescribed in

15 regulations, and only during an enrollment period pre16 scribed in regulations.

17 ‘‘(2) There shall be a general enrollment period dur18 ing the period beginning on January 1 and ending on

19 March 31 of each year (beginning with 1997).

20 ‘‘(c)(1) The period (in this subsection referred to as

21 a ‘‘coverage period’’) during which an individual is entitled

22 to benefits under the insurance program under this part

23 shall begin, for an individual who enrolls under subsection

24 (b), on the first day of the month following the month

25 in which the individual so enrolls.
8

•S 1979 IS

1 ‘‘(2) An individual’s coverage period under this sec2 tion shall continue until the individual’s enrollment is ter3 minated as follows:

4 ‘‘(A) As of the month following the month in

5 which the Secretary provides notice to the individual

6 that the individual no longer meets the condition de7 scribed in subsection (a)(3).

8 ‘‘(B) As of the month following the month in

9 which the individual files notice that the individual

10 no longer wishes to participate in the insurance pro11 gram established by this part.

12 ‘‘(C) As of the month before the first month in

13 which the individual becomes eligible for hospital in14 surance benefits under section 226(a) or 226A.

15 ‘‘(D) As of a date, determined under regula16 tions of the Secretary, for nonpayment of premiums.

17 The regulations under subparagraph (D) may provide a

18 grace period of not longer than 90 days, which may be

19 extended to not to exceed 180 days in any case where the

20 Secretary determines that there was good cause for failure

21 to pay the overdue premiums within such 90-day period.

22 Termination of coverage under this section shall result in

23 simultaneous termination of any coverage affected under

24 any other part of this title.
9

•S 1979 IS

1 ‘‘(3) The provisions of subsections (h) and (i) of sec2 tion 1837 apply to enrollment and nonenrollment under

3 this section in the same manner as they apply to enroll4 ment and nonenrollment and special enrollment periods

5 under section 1818.

6 ‘‘(d)(1)(A) Premiums for enrollment under this sec7 tion shall be paid to the Secretary at such times, and in

8 such manner, as the Secretary shall by regulations pre9 scribe, and shall be deposited in the Treasury to the credit

10 of the Federal Hospital Insurance Trust Fund.

11 ‘‘(B)(i) Subject to clause (ii), such premiums shall

12 be payable for the period commencing with the first month

13 of an individual’s coverage period and ending with the

14 month in which the individual dies or, if earlier, in which

15 the individual’s coverage period terminates.

16 ‘‘(ii) Such premiums shall not be payable for any

17 month in which the individual is eligible for benefits under

18 this part pursuant to section 226(b).

19 ‘‘(2) The provisions of section 1818A(d)(2) shall

20 apply to individuals enrolled under this section in the same

21 manner as they apply to individuals enrolled under that

22 section.’’.

23 (c) PREMIUM FOR SUPPLEMENTARY MEDICAL IN24 SURANCE BENEFITS FOR DISABLED INDIVIDUALS WHO

25 HAVE EXHAUSTED OTHER ENTITLEMENT AND FOR DIS-
10

•S 1979 IS

1 ABLED INDIVIDUALS WHO ARE NOT OTHERWISE ELIGI2 BLE.—

3 (1) IN GENERAL.—Section 1839 of the Social

4 Security Act (42 U.S.C. 1395r) is amended by add5 ing at the end the following new subsection:

6 ‘‘(h)(1) Notwithstanding the provisions of subsections

7 (a) and (e), the monthly premium for each individual who

8 is—

9 ‘‘(A) eligible for enrollment under this part be10 cause such individual is eligible for benefits under

11 part A under section 1818A or 1818B; and

12 ‘‘(B) enrolled under this part,

13 shall be an amount determined under paragraph (2).

14 ‘‘(2) The amount of monthly premium for each indi15 vidual described under paragraph (1) shall be established

16 by the Administrator of the Health Care Financing Ad17 ministration based on the individual’s adjusted gross in18 come, and determined over a sliding scale—

19 ‘‘(A) beginning at 50 percent of the monthly ac20 tuarial rate for enrollees age 65 and over, as deter21 mined under subsection (a)(1) and applicable to

22 such month, for individuals who have the minimum

23 level of adjusted gross income established for eligi24 bility under section 1818A; and
11

•S 1979 IS

1 ‘‘(B) ending at 100 percent of the monthly ac2 tuarial rate for enrollees age 65 and over, as deter3 mined under subsection (a)(1) and applicable to

4 such month, for individuals required to pay a month5 ly premium under section 1818A at the level estab6 lished under section 1818(d).’’.

7 (2) INITIAL OPEN ENROLLMENT AND SECOND8 ARY PAYOR REQUIREMENTS FOR DISABLED INDIVID9 UALS WHO ARE NOT OTHERWISE ELIGIBLE.—

10 (A) INITIAL OPEN ENROLLMENT.—Section

11 1837(g) of the Social Security Act (42 U.S.C.

12 1395p(g)) is amended—

13 (i) by striking ‘‘and’’ at the end of

14 paragraph (2)(B);

15 (ii) by striking the period at the end

16 of paragraph (3) and inserting ‘‘; and’’;

17 and

18 (iii) by adding at the end the follow19 ing new paragraph:

20 ‘‘(4) in the case of an individual who satisfies

21 subsection (f) by reason of entitlement to enroll for

22 benefits under section 1818B, the Secretary shall es23 tablish by regulation such individual’s initial enroll24 ment period.’’.
12

•S 1979 IS

1 (B) SECONDARY PAYOR.—Section

2 1862(b)(1)(B)(i) of the Social Security Act (42

3 U.S.C. 1395y(b)(1)(B)(i)) is amended by in4 serting ‘‘or entitled to enroll for benefits under

5 this title under section 1818B’’ after ‘‘section

6 226(b)’’.

7 SEC. 5. MEDICARE/MEDICAID INTEGRATION DEMONSTRA8 TION PROJECT.

9 (a) DESCRIPTION OF PROJECTS.—

10 (1) IN GENERAL.—The Secretary of Health and

11 Human Services (in this section referred to as the

12 ‘‘Secretary’’) shall conduct demonstration projects

13 under this section to demonstrate the manner in

14 which States may use funds from the Medicare pro15 gram under title XVIII of the Social Security Act

16 and the Medicaid program under title XIX of such

17 Act (in this section referred to as the ‘‘Medicare and

18 Medicaid programs’’) for the purpose of providing a

19 more cost-effective full continuum of care for deliver20 ing services to meet the needs of chronically-ill elder21 ly and disabled beneficiaries who are eligible for

22 items and services under such programs, through in23 tegrated systems of care, with an emphasis on case

24 management, prevention, and interventions designed

25 to avoid institutionalization whenever possible. The
13

•S 1979 IS

1 Secretary shall use funds from the amounts appro2 priated for the Medicare and Medicaid programs to

3 make the payments required under subsection

4 (d)(1).

5 (2) OPTION TO PARTICIPATE.—A State may not

6 require an individual eligible to receive items and

7 services under the Medicare and Medicaid programs

8 to participate in a demonstration project under this

9 section.

10 (b) ESTABLISHMENT.—The Secretary shall make

11 payments in accordance with subsection (d) for the con12 duct of demonstration projects that provide for integrated

13 systems of care in accordance with subsection (a). Not

14 more than 10 demonstration projects shall be conducted

15 under this section.

16 (c) APPLICATIONS.—Each State, or a coalition of

17 States, desiring to conduct a demonstration project under

18 this section shall prepare and submit to the Secretary an

19 application at such time, in such manner, and containing

20 such information as the Secretary may require, including

21 an explanation of a plan for evaluating the project. The

22 Secretary shall approve or deny an application not later

23 than 90 days after the receipt of such application.

24 (d) PAYMENTS.—
14

•S 1979 IS

1 (1) IN GENERAL.—For each calendar quarter

2 occurring during a demonstration project conducted

3 under this section, the Secretary shall pay to each

4 entity designated under paragraph (3) an amount

5 equal to the Federal capitated payment rate deter6 mined under paragraph (2).

7 (2) FEDERAL CAPITATED PAYMENT RATE.—

8 The Secretary shall determine the Federal capitated

9 payment rate for purposes of this section based on

10 the anticipated Federal quarterly cost of providing

11 care to chronically-ill elderly and disabled bene12 ficiaries who are eligible for items and services under

13 the Medicare and Medicaid programs and who have

14 elected to participate in a demonstration project

15 under this section.

16 (3) DESIGNATION OF ENTITY.—

17 (A) IN GENERAL.—Each State, or coalition

18 of States, shall designate entities to directly re19 ceive the payments described in paragraph (1).

20 (B) REQUIREMENT.—A State, or a coali21 tion of States, may not designate an entity

22 under subparagraph (A) unless such entity

23 meets the quality, solvency, and coverage stand24 ards applicable to providers of items and serv-
15

•S 1979 IS

1 ices under the Medicare and Medicaid pro2 grams.

3 (4) STATE PAYMENTS.—Each State conducting,

4 or in the case of a coalition of States, participating

5 in a demonstration project under this section shall

6 pay to the entities designated under paragraph (3)

7 an amount equal to the product of (A) 100 percent

8 minus the applicable Federal medical assistance per9 centage (as defined in section 2122(e) of the Social

10 Security Act) for the State, and (B) the expendi11 tures under the project attributable to the Medicaid

12 program for items and services provided to chron13 ically-ill elderly and disabled beneficiaries who have

14 elected to participate in the demonstration.

15 (5) BUDGET NEUTRALITY.—The aggregate

16 amount of Federal payments to entities designated

17 by a State, or coalition of States, under paragraph

18 (3) for a fiscal year shall not exceed the aggregate

19 amount of such payments that would otherwise have

20 been made under the Medicare and Medicaid pro21 grams for such fiscal year for items and services

22 provided to beneficiaries under such programs but

23 for the election of such beneficiaries to participate in

24 a demonstration project under this section.

25 (e) DURATION.—
16

•S 1979 IS

1 (1) IN GENERAL.—The demonstration projects

2 conducted under this section shall be conducted for

3 a 5-year period, subject to annual review and ap4 proval by the Secretary.

5 (2) TERMINATION.—The Secretary may, with

6 90 days’ notice, terminate any demonstration project

7 conducted under this section that is not in substan8 tial compliance with the terms of the application ap9 proved by the Secretary under this section.

10 (f) OVERSIGHT.—The Secretary shall establish qual11 ity standards for evaluating and monitoring the dem12 onstration projects conducted under this section. Such

13 quality standards shall include reporting requirements

14 which contain the following:

15 (1) A description of the demonstration project.

16 (2) An analysis of beneficiary satisfaction under

17 such project.

18 (3) An analysis of the quality of the services de19 livered under the project.

20 (4) A description of the savings to the Medicare

21 and Medicaid programs as a result of the dem22 onstration project.
17

•S 1979 IS

1 SEC. 6. REPEAL OF MEDICARE AND MEDICAID COVERAGE

2 DATA BANK.

3 (a) IN GENERAL.—Section 13581 of the Omnibus

4 Budget Reconciliation Act of 1993 is hereby repealed.

5 (b) APPLICATION OF THE SOCIAL SECURITY ACT.—

6 The Social Security Act shall be applied and administered

7 as if section 13581 of the Omnibus Budget Reconciliation

8 Act of 1993 (and the amendments made by such section)

9 had not been enacted.

10 SEC. 7. EFFECTIVE DATE.

11 The amendments made by sections 2, 3, and 4 shall

12 apply with respect to taxable years ending after 1996.

Æ