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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 18 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 18

To provide improved access to health care, enhance informed individual 
choice regarding health care services, lower health care costs through 
 the use of appropriate providers, improve the quality of health care, 
       improve access to long-term care, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

             January 21 (legislative day, January 5), 1993

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

_______________________________________________________________________

                                 A BILL

 
To provide improved access to health care, enhance informed individual 
choice regarding health care services, lower health care costs through 
 the use of appropriate providers, improve the quality of health care, 
       improve access to long-term care, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Comprehensive 
Health Care Act of 1993''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

            TITLE I--HEALTH CARE INSURANCE REFORM PROVISIONS

         Subtitle A--Model Health Care Insurance Benefits Plan

Sec. 101. Model health care insurance benefits plan.
Sec. 102. Definitions.
                        Subtitle B--Managed Care

Sec. 111. Development of standards for managed care plans.
Sec. 112. Preemption of provisions relating to managed care.
              Subtitle C--Small Employer Purchasing Groups

Sec. 121. Qualified small employer purchasing groups.
Sec. 122. Preemption from insurance mandates for small employer 
                            purchasing groups.
                  Subtitle D--Insurance Market Reform

Sec. 131. Failure to satisfy certain standards for health care 
                            insurance provided to small employers.
   Subtitle E--Deduction for Health Insurance Costs of Self-Employed 
                              Individuals

Sec. 141. Increase in deductible health insurance costs for self-
                            employed individuals.
             TITLE II--PRIMARY AND PREVENTIVE CARE SERVICES

Sec. 201. Maternal and infant care coordination.
Sec. 202. Reauthorization of certain programs providing primary and 
                            preventive care.
Sec. 203. Comprehensive school health education program.
Sec. 204. Comprehensive early childhood health education program.
TITLE III--DISCLOSURE OF CERTAIN INFORMATION TO BENEFICIARIES UNDER THE 
                     MEDICARE AND MEDICAID PROGRAMS

Sec. 301. Regulations requiring disclosure of certain information to 
                            beneficiaries under the medicare and 
                            medicaid programs.
Sec. 302. Outreach activities.
         TITLE IV--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

Sec. 401. Right to decline medical treatment.
Sec. 402. Federal right enforceable in Federal courts.
Sec. 403. Suicide and homicide.
Sec. 404. Rights granted by States.
Sec. 405. Effect on other laws.
Sec. 406. Information provided to certain individuals.
Sec. 407. Recommendations to the Congress on issues relating to a 
                            patient's right of self-determination.
Sec. 408. Effective date.
             TITLE V--PRIMARY AND PREVENTIVE CARE PROVIDERS

Sec. 501. Increasing payments to certain nonphysician providers under 
                            the medicare program. 
Sec. 502. Requiring coverage of certain nonphysician providers under 
                            the medicaid program.
Sec. 503. Medical student tutorial program grants.
Sec. 504. General medical practice grants.
Sec. 505. Payments for direct and indirect graduate medical education 
                            costs.
      TITLE VI--MEDICARE PREFERRED PROVIDER DEMONSTRATION PROJECTS

Sec. 601. Establishment of medicare primary and specialty preferred 
                            provider organization demonstration 
                            projects.
                      TITLE VII--COST CONTAINMENT

Sec. 701. New drug clinical trials program.
Sec. 702. Medical treatment effectiveness.
Sec. 703. Health care cost control--expenditure targets.
                       TITLE VIII--LONG-TERM CARE

    Subtitle A--Tax Treatment of Qualified Long-Term Care Insurance 
                                Policies

Sec. 801. Amendment of 1986 Code.
Sec. 802. Definitions of qualified long-term care insurance and 
                            premiums.
Sec. 803. Treatment of qualified long-term care insurance as accident 
                            and health insurance for purposes of 
                            taxation of insurance companies.
Sec. 804. Treatment of accelerated death benefits under life insurance 
                            contracts.
  Subtitle B--Tax Incentives for Purchase of Qualified Long-Term Care 
                               Insurance

Sec. 811. Credit for qualified long-term care premiums.
Sec. 812. Deduction for expenses relating to qualified long-term care.
Sec. 813. Exclusion from gross income of benefits received under 
                            qualified long-term care insurance.
Sec. 814. Employer deduction for contributions made for long-term care 
                            insurance.
Sec. 815. Inclusion of qualified long-term care insurance in cafeteria 
                            plans.
Sec. 816. Exclusion from gross income for amounts withdrawn from 
                            individual retirement plans and section 
                            401(k) plans for qualified long-term care 
                            premiums and expenses.
Sec. 817. Exclusion from gross income for amounts received on 
                            cancellation of life insurance policies and 
                            used for qualified long-term care 
                            insurance.
Sec. 818. Use of gain from sale of principal residence for purchase of 
                            qualified long-term health care insurance.
                    Subtitle C--Medicaid Amendments

Sec. 821. Expansion of medicaid eligibility for long-term care 
                            benefits.
Sec. 822. Effective date.

            TITLE I--HEALTH CARE INSURANCE REFORM PROVISIONS

         Subtitle A--Model Health Care Insurance Benefits Plan

SEC. 101. MODEL HEALTH CARE INSURANCE BENEFITS PLAN.

    (a) In General.--The Secretary shall request that the NAIC--
            (1) develop a model health care insurance benefits plan 
        that shall contain standards that entities offering health care 
        insurance policies should meet with respect to the benefits and 
        coverage provided under such policies, and
            (2) report to the Secretary on such standards, not later 
        than 1 year after the date of the enactment of this Act.
If the NAIC develops such a plan by such date and the Secretary finds 
that such plan implements the requirements of subsection (c), such plan 
shall be the model health care insurance benefits plan under this Act.
    (b) Role of the Secretary in Absence of NAIC Plan.--If the NAIC 
fails to develop and report a model health care insurance benefits plan 
by the date specified in subsection (a) or the Secretary finds that 
such plan does not implement the requirements of subsection (c), the 
Secretary shall develop and publish such a plan, by not later than 18 
months after the date of the enactment of this Act. Such plan shall 
then be the plan under this Act.
    (c) Contents.--The standards under the model benefits plan should 
require--
            (1) that coverage be provided under health care insurance 
        policies for basic hospital, medical and surgical services, 
        including preventive care services, mental health services, and 
        other ancillary services determined appropriate by the 
        Secretary;
            (2) reasonable cost sharing by the beneficiaries under such 
        policies; and
            (3) appropriate copayments and deductibles.

SEC. 102. DEFINITIONS.

    As used in this title:
            (1) Health care insurance.--The term ``health care 
        insurance'' means any hospital or medical expense incurred 
        policy or certificate, hospital or medical service plan 
        contract, health maintenance subscriber contract, multiple 
        employer welfare arrangement, other employee welfare plan (as 
        defined in the Employee Retirement Income Security Act of 
        1974), or any other health insurance arrangement, and includes 
        an employment-related reinsurance plan, but does not include--
                    (A) a self-insured health care insurance plan; or
                    (B) any of the following offered by an insurer--
                            (i) accident only, dental only, or 
                        disability income only insurance,
                            (ii) coverage issued as a supplement to 
                        liability insurance,
                            (iii) worker's compensation or similar 
                        insurance, or
                            (iv) automobile medical-payment insurance.
            (2) Managed care plan.--The term ``managed care plan'' 
        means a health care insurance plan in which the insurer 
        offering such plan utilizes the recommended standards developed 
        under section 111 concerning the benefits and coverage under 
        such plan.
            (3) Model benefits plan.--The term ``model benefits plan'' 
        means the model health care insurance benefits plan developed 
        under section 101(a).
            (4) NAIC.--The term ``NAIC'' means the National Association 
        of Insurance Commissioners.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (6) Small employer.--
                    (A) In general.--The term ``small employer'' means 
                any employer which, on an average business day during 
                the preceding taxable year, had more than 2 but less 
                than 100 employees.
                    (B) Employee.--The term ``employee'' shall not 
                include--
                            (i) a self-employed individual as defined 
                        in section 401(c)(1) of the Internal Revenue 
                        Code of 1986, or
                            (ii) an employee who works less than 20 
                        hours per week.

                        Subtitle B--Managed Care

SEC. 111. DEVELOPMENT OF STANDARDS FOR MANAGED CARE PLANS.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary, taking into account 
recommendations of the Managed Care Advisory Committee, shall develop 
recommended standards that insurers offering managed care plans should 
meet with respect to the benefits, coverage, and delivery systems 
provided under such plans. Such standards shall encompass the standards 
by which managed care entities operate.
    (b) Managed Care Advisory Committee.--
            (1) Establishment.--There shall be established a Managed 
        Care Advisory Committee (hereinafter referred to as the 
        ``Committee'').
            (2) Membership.--The Committee shall be composed of 
        individuals appointed by the Secretary, representing the 
        following:
                    (A) Consumers.
                    (B) Physicians.
                    (C) Nurses.
                    (D) Hospitals.
                    (E) Community-based providers.
                    (F) Organizations delivering managed care services.
                    (G) Academia (with specific expertise in managed 
                care plans).
                    (H) Business management.
                    (I) Organized labor.
            (3) Compensation.--
                    (A) In general.--Members of the Committee shall 
                serve without compensation.
                    (B) Expenses, etc., reimbursed.--While away from 
                their homes or regular places of business on the 
                business of the Committee, the members may be allowed 
                travel expenses, including per diem in lieu of 
                subsistence, as authorized by section 5703 of title 5, 
                United States Code, for persons employed intermittently 
                in Government service.
                    (C) Application of act.--The provisions of the 
                Federal Advisory Committee Act (5 U.S.C. App.) shall 
                not apply with respect to the Committee.
                    (D) Support.--The Secretary shall supply such 
                necessary office facilities, office supplies, support 
                services, and related expenses as necessary to carry 
                out the functions of the Committee.

SEC. 112. PREEMPTION OF PROVISIONS RELATING TO MANAGED CARE.

    In the case of a managed care plan meeting the recommended 
standards developed under section 111 that is offered by an insurer, 
the following provisions of State law are preempted and may not be 
enforced against the managed care plan with respect to an insurer 
offering such plan:
            (1) Restrictions on reimbursement rates or selective 
        contracting.--Any law that restricts the ability of the insurer 
        to negotiate reimbursement rates with health care providers or 
        to contract selectively with one provider or a limited number 
        of providers.
            (2) Restrictions on differential financial incentives.--Any 
        law that limits the financial incentives that the managed care 
        plan may require a beneficiary to pay when a nonplan provider 
        is used on a nonemergency basis.
            (3) Restrictions on utilization review methods.--
                    (A) In general.--Any law that--
                            (i) prohibits utilization review of any or 
                        all treatments and conditions;
                            (ii) requires that such review be made by a 
                        resident of the State in which the treatment is 
                        to be offered or by an individual licensed in 
                        such State, or by a physician in any particular 
                        specialty or with any board certified specialty 
                        of the same medical specialty as the provider 
                        whose services are being rendered;
                            (iii) requires the use of specified 
                        standards of health care practice in such 
                        review or requires the disclosure of the 
                        specific criteria used in such review;
                            (iv) requires payments to providers for the 
                        expenses of responding to utilization review 
                        requests; or
                            (v) imposes liability for delays in 
                        performing such review.
                    (B) Construction.--Nothing in subparagraph (A)(ii) 
                shall be construed as prohibiting a State from 
                requiring that utilization review be conducted by a 
                licensed health care professional, or requiring that 
                any appeal from such a review be made by a licensed 
                physician or by a licensed physician in any particular 
                specialty or with any board certified specialty of the 
                same medical specialty as the provider whose services 
                are being rendered.
            (4) Restrictions on benefits.--Any law that mandates 
        benefits under the managed care plan that are greater than the 
        benefits recommended under the standards developed under 
        section 111.

              Subtitle C--Small Employer Purchasing Groups

SEC. 121. QUALIFIED SMALL EMPLOYER PURCHASING GROUPS.

    (a) Defined.--For purposes of this title, an entity is a qualified 
small employer purchasing group if--
            (1) the entity submits an application to the Secretary at 
        such time, in such form and containing such information as the 
        Secretary may require; and
            (2) on the basis of information contained in the 
        application and any other information the Secretary may 
        require, the Secretary determines that--
                    (A) the entity is administered solely under the 
                authority and control of its member employers;
                    (B) the membership of the entity consists solely of 
                small employers (except that an employer member of the 
                group may retain its membership in the group if, after 
                the Secretary determines that the entity meets the 
                requirements of this subsection, the number of 
                employees of the employer member increases to more than 
                100);
                    (C) with respect to each State in which its members 
                are located, the entity consists of not fewer than 100 
                employers;
                    (D) at the time the entity submits its application, 
                the health care insurance plans with respect to the 
                employer members of the entity are in compliance with 
                applicable State laws and the model benefits plan 
                relating to such plans;
                    (E) the health care insurance plans of the entity 
                and the employer members of the entity are not self-
                insured plans;
                    (F) each enrollee in the program of the entity may 
                enroll with any participating carrier that offers 
                health care insurance coverage in the geographic area 
                in which the enrollee resides; and
                    (G) such entity will be a nonprofit entity; and
            (3) such entity has a board of directors as described in 
        subsection (b) with authority to act as described in subsection 
        (c).
    (b) Operations.--A small employer purchasing group shall be 
administered by a board of directors. The members of such board shall 
be elected by the employers that are members of the group, and such 
board members shall serve at the pleasure of the majority of such 
employers.
    (c) Duties of Board.--
            (1) In general.--The board shall have the authority to--
                    (A) enter into contracts with carriers to provide 
                health care insurance coverage to eligible employees 
                and their dependents;
                    (B) enter into other contracts as are necessary or 
                proper to carry out the provisions of this subtitle;
                    (C) employ necessary staff;
                    (D) appoint committees as necessary to provide 
                technical assistance in the operation of the entity's 
                program;
                    (E) assess participating employers a reasonable fee 
                for necessary costs in connection with the program;
                    (F) undertake activities necessary to administer 
                the program including marketing and publicizing the 
                program and assuring carrier, employer, and enrollee 
                compliance with program requirements;
                    (G) issue rules and regulations necessary to carry 
                out the purpose of this subtitle; and
                    (H) accept and expend funds received through fees, 
                grants, appropriations, or other appropriate and lawful 
                means.
            (2) Program management.--
                    (A) Geographic areas of coverage.--The board shall 
                establish geographic areas within which participating 
                carriers may offer health care insurance coverage to 
                eligible employees and dependents. The board shall 
                contract with sufficient numbers and types of carriers 
                in an area to assure that employees have a choice from 
                among a reasonable number and type of competing health 
                care insurance carriers.
                    (B) Contract requirements.--
                            (i) In general.--The board shall enter into 
                        contracts with qualified carriers for the 
                        purpose of providing health care insurance 
                        coverage to eligible employees and dependents, 
                        and shall pay qualified carriers on at least a 
                        monthly basis at the contracted rates.
                            (ii) General qualifications of carriers.--
                        Participating carriers shall be qualified if 
                        such carriers have--
                                    (I) adequate administrative 
                                management,
                                    (II) financial solvency, and
                                    (III) the ability to assume the 
                                risk of providing and paying for 
                                covered services.
                        A participating carrier may utilize 
                        reinsurance, provider risk sharing, and other 
                        appropriate mechanisms to share a portion of 
                        the risk described in subclause (III). The 
                        board may establish risk adjustment mechanisms 
                        that can be utilized to address circumstances 
                        where a participating carrier has a 
                        significantly disproportionate share of high 
                        risk or low risk enrollees based upon valid 
                        data provided by the carrier. Any such risk 
                        adjustment mechanism may be developed and 
                        applied only after consultation with the 
                        participating carriers.
                    (C) Program standards.--The board shall require 
                that participating carriers that contract with or 
                employ health care providers shall have mechanisms to 
                accomplish at least the following, satisfactory to the 
                program:
                            (i) Review the quality of care covered.
                            (ii) Review the appropriateness of care 
                        covered.
                            (iii) Provide accessible health services.
                    (D) Uniformity of benefits.--The board shall assure 
                that participating carriers--
                            (i) shall offer substantially similar 
                        benefits to enrollees in the program, except 
                        that enrollees cost sharing required by 
                        participating carriers may vary according to 
                        the basic method of operation of the carrier, 
                        and
                            (ii) shall not vary rates to small 
                        employers or enrollees in the program on 
                        account of claim experience, health status, or 
                        duration from issue.
                    (E) Payment mechanism.--The board shall establish a 
                mechanism to collect premiums from small employers, 
                including remittance of the enrollee's share of the 
                premium.
            (3) Notification of program benefits.--The board shall use 
        appropriate and efficient means to notify employers of the 
        availability of sponsored health care insurance coverage under 
        the program. The board shall make available marketing materials 
        which accurately summarize the carriers' insurance plans and 
        rates which are offered through the program. A participating 
        carrier may contract with an agent or broker to provide 
        marketing, advertising, or presentation proposals or otherwise 
        disseminate information regarding coverage or services or rates 
        offered in connection with the program.
            (4) Conditions of participation.--
                    (A) In general.--The board shall establish 
                conditions of participation for small employers and 
                enrollees that--
                            (i) assure that the entity is a valid small 
                        employer purchasing group and is not formed for 
                        the purpose of securing health care insurance 
                        coverage;
                            (ii) assure that individuals in the group 
                        are not added for the purpose of securing such 
                        coverage;
                            (iii) require that a specified percentage 
                        of employees and dependents obtain health care 
                        insurance coverage;
                            (iv) require minimum employer 
                        contributions; and
                            (v) require prepayment of premiums or other 
                        mechanisms to assure that payment will be made 
                        for coverage.
                    (B) Minimum participation.--The board may require 
                participating employers to agree to participate in the 
                program for a specified minimum period of time and may 
                include in any participation agreements with employers 
                a requirement for a financial deposit or provision for 
                a financial penalty, which would be invoked in the 
                event the employer violates the participation 
                agreement.
    (d) Grants.--
            (1) Authority.--The Secretary may award grants to qualified 
        small employer purchasing groups to assist such groups in 
        paying the expenditures associated with the formation and 
        initial operations of such groups.
            (2) Application.--To be eligible to receive a grant under 
        this subsection, a qualified small employer purchasing group 
        shall request such a grant as part of the application submitted 
        by such group under subsection (a)(1).
            (3) Authorization of appropriations.--There are authorized 
        to be appropriated for awarding grants under this subsection 
        such sums as may be necessary.
    (e) Freedom of Contract.--Nothing in this subtitle shall be 
construed to prohibit a participating carrier from offering health care 
insurance coverage to small employers that are not participating in the 
program of a small employer purchasing group.

SEC. 122. PREEMPTION FROM INSURANCE MANDATES FOR SMALL EMPLOYER 
              PURCHASING GROUPS.

    (a) Finding.--The Congress finds that qualified small employer 
purchasing groups organized for the purpose of obtaining health 
insurance for the employer members of such groups affect interstate 
commerce.
    (b) Preemption of State Mandates.--In the case of a qualified small 
employer purchasing group, no provision of State law shall apply that 
requires the offering, as part of the health care insurance plan with 
respect to an employer member of such a group, of any services, 
category of care, or services of any class or type of provider that is 
in excess of that recommended under the model benefit plan.

                  Subtitle D--Insurance Market Reform

SEC. 131. FAILURE TO SATISFY CERTAIN STANDARDS FOR HEALTH CARE 
              INSURANCE PROVIDED TO SMALL EMPLOYERS.

    (a) In General.--Subchapter L of chapter 1 of the Internal Revenue 
Code of 1986 (relating to insurance companies) is amended by adding at 
the end thereof the following new part:

      ``PART IV--HEALTH CARE INSURANCE PROVIDED TO SMALL EMPLOYERS

                              ``Sec. 850. Failure to satisfy standards 
                                        for health care insurance of 
                                        small employers.
                              ``Sec. 850A. General issuance 
                                        requirements.
                              ``Sec. 850B. Specific contractual 
                                        requirements.
                              ``Sec. 850C. State compliance agreements.
                              ``Sec. 850D. Definitions and other rules.

``SEC. 850. FAILURE TO SATISFY CERTAIN STANDARDS FOR HEALTH CARE 
              INSURANCE OF SMALL EMPLOYERS.

    ``(a) General Rule.--No health insurance contract issued to an 
eligible small employer shall be treated as a contract for purposes of 
section 807 or 832 if the issuer of such a contract fails to meet at 
any time during any taxable year--
            ``(1) the general issuance requirements of section 850A, or
            ``(2) the specific contractual requirements of section 
        850B.
    ``(b) Limitation.--
            ``(1) Section not to apply where failure not discovered 
        exercising reasonable diligence.--Subsection (a) shall not 
        apply with respect to any failure for which it is established 
        to the satisfaction of the Secretary that the person described 
        in such subsection did not know, or exercising reasonable 
        diligence would not have known, that such failure existed.
            ``(2) Section not to apply where failures corrected within 
        30 days.--Subsection (a) shall not apply with respect to any 
        failure if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected during the 30-day 
                period beginning on the 1st date any of the persons 
                described in such subsection knew, or exercising 
                reasonable diligence would have known, that such 
                failure existed.
            ``(3) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive the application of subsection (a).

``SEC. 850A. GENERAL ISSUANCE REQUIREMENTS.

    ``(a) General Rule.--The requirements of this section are met if a 
person meets--
            ``(1) the mandatory policy requirements of subsection (b),
            ``(2) the guaranteed issue requirements of subsection (c), 
        and
            ``(3) the mandatory registration and disclosure 
        requirements of subsection (d).
    ``(b) Mandatory Policy Requirements.--
            ``(1) In general.--The requirements of this subsection are 
        met if any person issuing a health care insurance contract to 
        any eligible small employer makes available to such employer a 
        health care insurance contract which--
                    ``(A) provides benefits and coverage consistent 
                with the model health care insurance benefits plan 
                developed under section 101 of the Comprehensive Health 
                Care Act of 1993, and
                    ``(B) is for a term of not less than 12 months.
            ``(2) Pricing and marketing requirements.--The requirements 
        of paragraph (1) are not met unless--
                    ``(A) the price at which the contract described in 
                paragraph (1) is made available is not greater than the 
                price for such contract determined on the same basis as 
                prices for other health care insurance contracts within 
                the same class of business made available by the person 
                to eligible small employers, and
                    ``(B) such contract is made available to eligible 
                small employers using at least the marketing methods 
                and other sales practices which are used in selling 
                such other contracts.
    ``(c) Guaranteed Issue.--
            ``(1) In general.--The requirements of this subsection are 
        met if the person offering health care insurance contracts to 
        eligible small employers issues such a contract to any eligible 
        small employer seeking to enter into such a contract.
            ``(2) Financial capacity exception.--Paragraph (1) shall 
        not require any person to issue a health care insurance 
        contract to the extent that the issuance of such contract would 
        result in such person violating the financial solvency 
        standards (if any) established by the State in which such 
        contract is to be issued.
            ``(3) Delivery capacity exception.--Paragraph (1) shall not 
        require any person to issue a health care insurance contract to 
        the extent that the issuance of such contract would result, 
        upon demonstration to the Secretary, in such person exceeding 
        such person's administrative capacity to serve previously 
        enrolled groups and individuals (and additional individuals who 
        will be expected to enroll because of affiliation with such 
        previously enrolled groups).
            ``(4) Exception for certain employers.--Paragraph (1) shall 
        not apply to a failure to issue a health care insurance 
        contract to an eligible small employer if--
                    ``(A) such employer is unable to pay the premium 
                for such contract, or
                    ``(B) in the case of an eligible small employer 
                with fewer than 15 employees, such employer fails to 
                enroll a minimum percentage of the employer's eligible 
                employees for coverage under such contract, so long as 
                such percentage is enforced uniformly for all eligible 
                small employers of comparable size.
            ``(5) Exception for alternative state programs.--
                    ``(A) In general.--Paragraph (1) shall not apply if 
                the State in which the health care insurance contract 
                is issued--
                            ``(i) has a program which--
                                    ``(I) assures the availability of 
                                health care insurance contracts to 
                                eligible small employers through the 
                                equitable distribution of high risk 
                                groups among all persons offering such 
                                contracts to such employers, and
                                    ``(II) is consistent with a model 
                                program developed by the NAIC;
                            ``(ii) has a qualified State-run 
                        reinsurance program, or
                            ``(iii) has a program which the Secretary 
                        of Health and Human Services has determined 
                        assures all eligible small employers in the 
                        State an opportunity to purchase a health care 
                        insurance contract without regard to any risk 
                        characteristic.
                    ``(B) Reinsurance program.--
                            ``(i) Program requirements.--For purposes 
                        of subparagraph (A)(ii), a State-run 
                        reinsurance program is qualified if such 
                        program is one of the NAIC reinsurance program 
                        models developed under clause (ii) or is a 
                        variation of one of such models, as approved by 
                        the Secretary of Health and Human Services.
                            ``(ii) Models.--Not later than 120 days 
                        after the date of the enactment of the 
                        Comprehensive Health Care Act of 1993, the NAIC 
                        shall develop several models for a reinsurance 
                        program, including options for program funding.
    ``(d) Mandatory Registration and Disclosure Requirements.--The 
requirements of this subsection are met if the person offering health 
care insurance contracts to eligible small employers in any State--
            ``(1) registers with the State commissioner or 
        superintendent of insurance or other State authority 
        responsible for regulation of health insurance,
            ``(2) fully discloses the rating practices for small 
        employer health care insurance contracts at the time such 
        person offers a health care insurance contract to an eligible 
        small employer, and
            ``(3) fully discloses the terms for renewal of the contract 
        at the time of the offering of such contract and at least 90 
        days before the expiration of such contract.

``SEC. 850B. SPECIFIC CONTRACTUAL REQUIREMENTS.

    ``(a) General Rule.--The requirements of this section are met if 
the following requirements are met:
            ``(1) The coverage requirements of subsection (b).
            ``(2) The rating requirements of subsection (c).
    ``(b) Coverage Requirements.--
            ``(1) In general.--The requirements of this subsection are 
        met with respect to any health care insurance contract if, 
        under the terms and operation of the contract, the following 
        requirements are met:
                    ``(A) Guaranteed eligibility.--No eligible employee 
                (and the spouse or any dependent child of the employee 
                eligible for coverage) may be excluded from coverage 
                under the contract.
                    ``(B) Limitations on coverage of preexisting 
                conditions.--Any limitation under the contract on any 
                preexisting condition--
                            ``(i) may not extend beyond the 6-month 
                        period beginning with the date an insured is 
                        first covered by the contract, and
                            ``(ii) may only apply to preexisting 
                        conditions which manifested themselves, or for 
                        which medical care or advice was sought or 
                        recommended, during the 3-month period 
                        preceding the date an insured is first covered 
                        by the contract.
                    ``(C) Guaranteed renewability.--
                            ``(i) In general.--The contract must be 
                        renewed at the election of the eligible small 
                        employer unless the contract is terminated for 
                        cause.
                            ``(ii) Cause.--For purposes of this 
                        subparagraph, the term `cause' means--
                                    ``(I) nonpayment of the required 
                                premiums;
                                    ``(II) fraud or misrepresentation 
                                of the employer or, with respect to 
                                coverage of individual insureds, the 
                                insureds or their representatives;
                                    ``(III) noncompliance with the 
                                contract's minimum participation 
                                requirements;
                                    ``(IV) noncompliance with the 
                                contract's employer contribution 
                                requirements; or
                                    ``(V) repeated misuse of a provider 
                                network provision in the contract.
            ``(2) Waiting periods.--Paragraph (1)(A) shall not apply to 
        any period an employee is excluded from coverage under the 
        contract solely by reason of a requirement applicable to all 
        employees that a minimum period of service with the employer is 
        required before the employee is eligible for such coverage.
            ``(3) Determination of periods for rules relating to 
        preexisting conditions.--For purposes of paragraph (1)(B), the 
        date on which an insured is first covered by a contract shall 
        be the earlier of--
                    ``(A) the date on which coverage under such 
                contract begins, or
                    ``(B) the first day of any continuous period--
                            ``(i) during which the insured was covered 
                        under one or more other health insurance 
                        arrangements, and
                            ``(ii) which does not end more than 120 
                        days before the date employment with the 
                        employer begins.
            ``(4) Cessation of small employer health insurance 
        business.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, a person shall not be treated as 
                failing to meet the requirements of paragraph (1)(C) if 
                such person terminates the class of business which 
                includes the health care insurance contract.
                    ``(B) Notice requirement.--Subparagraph (A) shall 
                apply only if the person gives notice of the decision 
                to terminate at least 90 days before the expiration of 
                the contract.
                    ``(C) 5-year moratorium.--If, within 5 years of the 
                year in which a person terminates a class of business 
                under subparagraph (A), such person establishes a new 
                class of business, the issuance of such contracts in 
                that year shall be treated as a failure to which this 
                section applies.
                    ``(D) Transfers.--If, upon a failure to renew a 
                contract to which subparagraph (A) applies, a person 
                offers to transfer such contract to another class of 
                business, such transfer must be made without regard to 
                risk characteristics.
    ``(c) Rating Requirements.--
            ``(1) In general.--The requirements of this subsection are 
        met if--
                    ``(A) the requirements of paragraphs (2) and (3) 
                are met, and
                    ``(B) any increase in any premium rate under the 
                renewal contract over the corresponding rate under the 
                health care insurance contract being renewed does not 
                exceed the applicable annual adjusted increase.
            ``(2) Limit on variation of premiums between classes of 
        business.--
                    ``(A) In general.--The requirements of this 
                paragraph are met if the index rate for a rating period 
                for any class of business of the insurer does not 
                exceed the index rate for any other class of business 
                by more than 20 percent.
                    ``(B) Exceptions.--Subparagraph (A) shall not apply 
                to a class of business if--
                            ``(i) the class is one for which the 
                        insurer does not reject, and never has 
                        rejected, eligible small employers included 
                        within the class of business or otherwise 
                        eligible employees and dependents who enroll on 
                        a timely basis, based upon risk 
                        characteristics,
                            ``(ii) the insurer does not transfer, and 
                        never has transferred, a health care insurance 
                        contract involuntarily into or out of the class 
                        of business, and
                            ``(iii) the class of business is currently 
                        available for purchase.
            ``(3) Limit on variation in premium rates within a class of 
        business.--The requirements of this paragraph are met if the 
        premium rates charged during a rating period to eligible small 
        employers with similar case characteristics (other than risk 
        characteristics) for the same or similar coverage, or the rates 
        which could be charged to such employers under the rating 
        system for that class of business, do not vary from the index 
        rate by more than 20 percent of the index rate.
            ``(4) Applicable annual adjusted increase.--For purposes of 
        paragraph (1)(B)--
                    ``(A) In general.--The applicable annual adjusted 
                increase is an amount equal to the sum of--
                            ``(i) the applicable percentage of the 
                        premium rate under the health care insurance 
                        contract being renewed, plus
                            ``(ii) any increase in the rate under the 
                        renewal contract due to any change in coverage 
                        or to any change of case characteristics (other 
                        than risk characteristics), plus
                            ``(iii) 5 percentage points.
                    ``(B) Applicable percentage.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the applicable percentage is 
                        the percentage (if any) by which--
                                    ``(I) the premium rate for newly 
                                issued contracts for substantially 
                                similar coverage for an employer with 
                                similar case characteristics (other 
                                than risk characteristics) as the 
                                employer under the health care 
                                insurance contract (determined on the 
                                1st day of the rating period applicable 
                                to such contracts), exceeds
                                    ``(II) such rate on the 1st day of 
                                the rating period applicable to the 
                                contract being renewed.
                            ``(ii) Cases where no new business.--If no 
                        new contracts are being issued for a class of 
                        business during any rating period, the 
                        applicable percentage shall be the percentage 
                        (if any) by which the base premium rate 
                        determined under paragraph (5)(B) with respect 
                        to the renewal contract exceeds such rate for 
                        the contract to be renewed.
            ``(5) Definitions.--For purposes of this subsection--
                    ``(A) Index rate.--The term `index rate' means, 
                with respect to a class of business, the arithmetic 
                average of the applicable base premium rate and the 
                corresponding highest premium rate for that class.
                    ``(B) Base premium rate.--The term `base premium 
                rate' means, for each class of business for each rating 
                period, the lowest premium rate which could have been 
                charged under a rating system for that class of 
                business by the insurer to eligible small employers 
                with similar case characteristics (other than risk 
                characteristics) for health care insurance contracts 
                with the same or similar coverage.

``SEC. 850C. STATE COMPLIANCE AGREEMENTS.

    ``(a) Agreements.--The Secretary of Health and Human Services may 
enter into an agreement with any State--
            ``(1) to apply the standards set by the NAIC for health 
        care insurance contracts in lieu of the requirements of this 
        subchapter, and
            ``(2) to provide for the State to make the initial 
        determination as to whether a person is in compliance with such 
        standards for purposes of applying the sanctions under section 
        850.
    ``(b) Standards.--An agreement may be entered into under subsection 
(a)(1) only if--
            ``(1) the chief executive officer of the State requests 
        that such agreement be entered into,
            ``(2) the Secretary of Health and Human Services determines 
        that the NAIC standards to be applied under the agreement will 
        carry out the purposes of this subchapter, and
            ``(3) the Secretary determines that the NAIC standards to 
        be applied under the agreement will apply to substantially all 
        health care insurance contracts issued in such State to 
        eligible small employers.
    ``(c) Termination.--The Secretary of Health and Human Services 
shall terminate any agreement if the Secretary determines that the 
application of NAIC standards by the State ceases to carry out the 
purposes of this subchapter.
    ``(d) NAIC Standards.--Not later than 270 days after the date of 
the enactment of the Comprehensive Health Care Act of 1993, the NAIC 
shall develop standards which provide for requirements substantially 
similar to the requirements of this subchapter.

``SEC. 850D. DEFINITIONS AND OTHER RULES.

    ``For purposes of this part--
            ``(1) Health care insurance.--The term `health care 
        insurance' means any hospital or medical expense incurred 
        policy or certificate, hospital or medical service plan 
        contract, health maintenance subscriber contract, multiple 
        employer welfare arrangement, other employee welfare plan (as 
        defined in the Employee Retirement Income Security Act of 
        1974), or any other health insurance arrangement, and includes 
        an employment-related reinsurance plan, but does not include--
                    ``(A) a self-insured health care insurance plan; or
                    ``(B) any of the following offered by an insurer--
                            ``(i) accident only, dental only, or 
                        disability income only insurance,
                            ``(ii) coverage issued as a supplement to 
                        liability insurance,
                            ``(iii) worker's compensation or similar 
                        insurance, or
                            ``(iv) automobile medical-payment 
                        insurance.
            ``(2) Class of business.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `class of business' means, 
                with respect to health care insurance provided to 
                eligible small employers, all health care insurance 
                provided to such employers.
                    ``(B) Establishment of groupings.--
                            ``(i) In general.--An issuer may establish 
                        separate classes of business with respect to 
                        health care insurance provided to eligible 
                        small employers but only if such classes are 
                        based on one or more of the following:
                                    ``(I) Business marketed and sold 
                                through persons not participating in 
                                the marketing and sale of such 
                                insurance to other eligible small 
                                employers.
                                    ``(II) Business acquired from other 
                                insurers as a distinct grouping.
                                    ``(III) Business provided through 
                                an association of not less than 20 
                                eligible small employers which was 
                                established for purposes other than 
                                obtaining insurance.
                                    ``(IV) Business related to managed 
                                care plans (as defined in section 
                                102(2) of the Comprehensive Health Care 
                                Act of 1993.
                                    ``(V) Any other business which the 
                                Secretary of Health and Human Services 
                                determines needs to be separately 
                                grouped to prevent a substantial threat 
                                to the solvency of the insurer.
                            ``(ii) Exception allowed.--Except as 
                        provided in subparagraph (C), an insurer may 
                        not establish more than one distinct group of 
                        eligible small employers for each category 
                        specified in clause (i).
                    ``(C) Special rule.--An insurer may establish up to 
                2 groups under each category in subparagraph (A) or (B) 
                to account for differences in characteristics (other 
                than differences in plan benefits) of health insurance 
                plans that are expected to produce substantial 
                variation in health care costs.
            ``(3) Characteristics.--
                    ``(A) In general.--The term `characteristics' 
                means, with respect to any insurance rating system, the 
                factors used in determining rates.
                    ``(B) Risk characteristics.--The term `risk 
                characteristics' means factors related to the health 
                risks of individuals, including health status, prior 
                claims experience, the duration since the date of issue 
                of a health insurance plan or arrangement, industry, 
                and occupation.
                    ``(C) Geographic factors.--
                            ``(i) In general.--In applying geographic 
                        location as a characteristic, an insurer may 
                        not use for purposes of this subchapter areas 
                        smaller than 3-digit postal zip code areas.
                            ``(ii) Study and report.--Not later than 
                        120 days after the date of the enactment of the 
                        Comprehensive Health Care Act of 1993, the 
                        Comptroller General of the United States shall 
                        study and report to the Congress concerning--
                                    ``(I) insurance industry practices 
                                in determining the geographic 
                                boundaries of communities used for 
                                setting rates,
                                    ``(II) the feasibility and 
                                desirability of establishing 
                                standardized geographic communities for 
                                setting rates, and
                                    ``(III) the effect such 
                                standardized geographic communities 
                                would have on rates charged small 
                                employers.
            ``(4) Eligible small employer.--
                    ``(A) In general.--The term `eligible small 
                employer' means any person which, on an average 
                business day during the preceding taxable year, had 
                more than 2 but less than 50 employees.
                    ``(B) Aggregation rules.--All members of the same 
                controlled group of corporations (within the meaning of 
                section 52(a)) and all persons under common control 
                (within the meaning of section 52(b)) shall be treated 
                as 1 person.
                    ``(C) Employee.--The term `employee' shall not 
                include--
                            ``(i) a self-employed individual as defined 
                        in section 401(c)(1), or
                            ``(ii) an employee who works less than 20 
                        hours per week.
            ``(5) Naic.--The term `NAIC' means the National Association 
        of Insurance Commissioners.''.
    (b) Conforming Amendment.--Subchapter L of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end thereof 
the following new item:

                              ``Part IV. Health Care Insurance Provided 
                                        to Small Employers.''.
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to contracts issued, or renewed, after the date of the 
        enactment of this Act.
            (2) Guaranteed issue.--The provisions of section 850A(c) of 
        the Internal Revenue Code of 1986, as added by this section, 
        shall apply to contracts which are issued, or renewed, after 
        the date which is 18 months after the date of the enactment of 
        this Act.
            (3) Premium range.--In the case of any contract in effect 
        on the date of the enactment of this Act, the provisions of 
        section 850B(c)(1)(A) of such Code, as added by this section, 
        shall not apply to the premiums under such contract or any 
        renewal contract for benefits provided during the period 
        beginning on such date and ending on the last day of the 2nd 
        plan year beginning after such date.

   Subtitle E--Deduction for Health Insurance Costs of Self-Employed 
                              Individuals

SEC. 141. INCREASE IN DEDUCTIBLE HEALTH INSURANCE COSTS FOR SELF-
              EMPLOYED INDIVIDUALS.

    (a) In General.--Paragraph (1) of section 162(l) of the Internal 
Revenue Code of 1986 (relating to special rules for health insurance 
costs of self-employed individuals) is amended by striking ``25 
percent'' and inserting ``100 percent''.
    (b) Repeal of Termination Provision.--Paragraph (6) of section 
162(l) of such Code (relating to termination) is repealed.
    (c) Conforming Amendment.--Section 110(a) of the Tax Extension Act 
of 1991 is amended by striking paragraph (2).
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after June 30, 1992.

             TITLE II--PRIMARY AND PREVENTIVE CARE SERVICES

SEC. 201. MATERNAL AND INFANT CARE COORDINATION.

    (a) Purpose.--It is the purpose of this section to assist States in 
the development and implementation of coordinated, multidisciplinary, 
and comprehensive primary health care and social services, and health 
and nutrition education programs, designed to improve maternal and 
child health.
    (b) Grants for Implementation of Programs.--
            (1) Authority.--The Secretary of Health and Human Services 
        (hereafter referred to in this section as the ``Secretary'') is 
        authorized to award grants to States to enable such States to 
        plan and implement coordinated, multidisciplinary, and 
        comprehensive primary health care and social service programs 
        targeted to pregnant women and infants.
            (2) Eligibility.--To be eligible to receive a grant under 
        this section, a State shall--
                    (A) prepare and submit to the Secretary an 
                application at such time, in such manner, and 
                containing such information as the Secretary may 
                require;
                    (B) provide assurances that under the program 
                established with amounts received under a grant, 
                individuals will have access (without any barriers) to 
                comprehensive family planning counseling, pregnancy 
                testing, prenatal care, delivery, intrapartum and 
                postpartum care, pediatric care for infants, and social 
                services as appropriate, including outreach activities, 
                home visits, child care, transportation, risk 
                assessment, nutrition counseling, dental care, mental 
                health services, substance abuse services, services 
                relating to HIV infection, and prevention counseling;
                    (C) provide assurances that under the program 
                individuals will have access, without any barriers, to 
                the full range of pediatric services provided by 
                pediatric nurse practitioners and clinical nurse 
                specialists, including in-home services for low birth 
                weight babies;
                    (D) as part of the State application, submit a plan 
                for providing incentive payments of up to $500 to 
                pregnant women who--
                            (i) have not attained age 20;
                            (ii) are at risk of having low birth weight 
                        babies;
                            (iii) agree to attend not less than 5 
                        prenatal visits and 1 postnatal visit; and
                            (iv) agree to attend a requisite number of 
                        prenatal care and parenting classes, as 
                        determined by the State;
                    (E) as part of the State application, submit a plan 
                for the coordination and maximization of existing and 
                proposed Federal and State resources, including amounts 
                provided under the medicaid program under title XIX of 
                the Social Security Act, the special supplemental food 
                program under section 17 of the Child Nutrition Act of 
                1966, family planning programs, substance abuse 
                programs, State maternal and child health programs 
                funded under title V of the Social Security Act, 
                community and migrant health center programs under the 
                Public Health Service Act, and other publicly, or where 
                practicable, privately supported programs;
                    (F) demonstrate that the major service providers to 
                be involved, including private nonprofit entities 
                committed to improving maternal and infant health, are 
                committed to and involved in the program to be funded 
                with amounts received under the grant;
                    (G) with respect to States with high infant 
                mortality rates among minority populations, demonstrate 
                the involvement of major health, multiservice, 
                professional, or civic group representatives of such 
                minority groups in the planning and implementation of 
                the State program; and
                    (H) demonstrate that health promotion and outreach 
                activities under the State program are targeted to 
                women of childbearing age, particularly those at risk 
                for having low birth weight babies.
            (3) Term of grant.--A grant awarded under this subsection 
        shall be for a period of 5 years.
            (4) Use of amounts.--Amounts received by a State under a 
        grant awarded under this subsection shall be used to establish 
        a State program to provide coordinated, multidisciplinary, and 
        comprehensive primary health care and social services, and 
        health and nutrition education program services, that are 
        designed to improve maternal and child health.
            (5) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, $100,000,000 
        for fiscal year 1994, $300,000,000 for fiscal year 1995, and 
        $500,000,000 for each of the fiscal years 1996 through 1998.
    (c) Model Health and Nutrition Education Curricula.--
            (1) Authority.--The Secretary, in conjunction with the 
        Secretary of Education and the Secretary of Agriculture, is 
        authorized to award grants, on a competitive basis, to public 
        or nonprofit private entities to enable such entities to 
        develop model health and nutrition education curricula for 
        children in grades kindergarten through twelfth.
            (2) Application.--To be eligible to receive a grant under 
        paragraph (1), an entity shall prepare and submit to the 
        Secretary an application at such time, in such manner, and 
        containing such information as the Secretary may require.
            (3) Curricula.--Curricula developed under paragraph (1) 
        should be consistent with the goals of ``Healthy People 2000: 
        National Health Promotion and Disease Prevention Objectives'', 
        published by the Department of Health and Human Services in 
        September 1990, and shall address the cultural and lifestyle 
        realities of racial and ethnic minority populations.
            (4) Authorization of appropriations.--There are authorized 
        to be appropriated to carry out this subsection, $10,000,000 
        for fiscal year 1994.

SEC. 202. REAUTHORIZATION OF CERTAIN PROGRAMS PROVIDING PRIMARY AND 
              PREVENTIVE CARE.

    (a) Immunization Programs.--Section 317(j)(1)(A) of the Public 
Health Service Act (42 U.S.C. 247b(j)(1)(A)) is amended--
            (1) by striking ``and such sums'' and inserting ``such 
        sums''; and
            (2) by striking ``each of the fiscal years 1992 through 
        1995'' and inserting ``each of the fiscal years 1992 and 1993, 
        $380,000,000 for fiscal year 1994, and such sums as may be 
        necessary for each of the fiscal years 1995 through 1998''.
    (b) Tuberculosis Prevention Grants.--Section 317(j)(2) of the 
Public Health Service Act (42 U.S.C. 247b(j)(2)) is amended--
            (1) by striking ``and such sums'' and inserting ``such 
        sums''; and
            (2) by striking ``each of the fiscal years 1992 through 
        1995'' and inserting ``each of the fiscal years 1992 and 1993, 
        $30,000,000 for fiscal year 1994, and such sums as may be 
        necessary for each of the fiscal years 1995 through 1998''.
    (c) Sexually Transmitted Diseases.--Section 318(d)(1) of the Public 
Health Service Act (42 U.S.C. 247c(d)(1)) is amended--
            (1) by striking ``and such sums'' and inserting ``such 
        sums''; and
            (2) by inserting before the first period the following: 
        ``$125,000,000 for fiscal year 1994, and such sums as may be 
        necessary for each of the fiscal years 1995 through 1998''.
    (d) Migrant Health Centers.--Section 329(h)(1)(A) of the Public 
Health Service Act (42 U.S.C. 254b(h)(1)(A)) is amended by striking 
``and 1991, and such sums as may be necessary for each of the fiscal 
years 1992 through 1994'' and inserting ``through 1993, $80,000,000 for 
fiscal year 1994, and such sums as may be necessary for each of the 
fiscal years 1995 through 1998''.
    (e) Community Health Centers.--Section 330(g)(1)(A) of the Public 
Health Service Act (42 U.S.C. 254c(g)(1)(A)) is amended by striking 
``and 1991, and such sums as may be necessary for each of the fiscal 
years 1992 through 1994'' and inserting ``through 1993, $700,000,000 
for fiscal year 1994, and such sums as may be necessary for each of the 
fiscal years 1995 through 1998''.
    (f) Health Care Services for the Homeless.--Section 340(q)(1) of 
the Public Health Service Act (42 U.S.C. 256(q)(1)) is amended by 
striking ``and such sums'' and all that follows through the period and 
inserting ``$90,000,000 for fiscal year 1994, and such sums as may be 
necessary for each of the fiscal years 1995 through 1998.''.
    (g) Family Planning Project Grants.--Section 1001(d) of the Public 
Health Service Act (42 U.S.C. 300(d)) is amended--
            (1) by striking ``and $158,400,000'' and inserting 
        ``$158,400,000''; and
            (2) by inserting before the period the following: ``, 
        $200,000,000 for fiscal year 1994, and such sums as may be 
        necessary for each of the fiscal years 1995 through 1998''.
    (h) Breast and Cervical Cancer Prevention.--Section 1509(a) of the 
Public Health Service Act (42 U.S.C. 300n-5(a)) is amended--
            (1) by striking ``and such sums'' and inserting ``such 
        sums''; and
            (2) by striking ``for each of the fiscal years 1992 and 
        1993'' and inserting ``for each of the fiscal years 1992 and 
        1993, $100,000,000 for fiscal year 1994, and such sums as may 
        be necessary for each of the fiscal years 1995 through 1998''.
    (i) Preventive Health and Health Services Block Grant.--Section 
1901(a) of the Public Health Service Act (42 U.S.C. 300w(a)) is amended 
by striking ``$205,000,000'' and inserting ``$235,000,000''.
    (j) HIV Early Intervention.--Section 2655 of the Public Health 
Service Act (42 U.S.C. 300ff-55) is amended--
            (1) by striking ``and such sums'' and inserting ``such 
        sums''; and
            (2) by striking ``each of the fiscal years 1992 through 
        1995'' and inserting ``each of fiscal years 1992 and 1993, 
        $310,000,000 for fiscal year 1994, and such sums as may be 
        necessary for each of the fiscal years 1995 through 1998''.
    (k) Maternal and Child Health Services Block Grant.--Section 501(a) 
of the Social Security Act (42 U.S.C. 701(a)) is amended by striking 
``$686,000,000 for fiscal year 1990 and each fiscal year thereafter'' 
and inserting ``$800,000,000 for fiscal year 1994, and such sums as may 
be necessary in each of the fiscal years 1995 through 1998''.

SEC. 203. COMPREHENSIVE SCHOOL HEALTH EDUCATION PROGRAM.

    Section 4605 of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 3155) is amended to read as follows:

``SEC. 4605. COMPREHENSIVE SCHOOL HEALTH EDUCATION PROGRAMS.

    ``(a) Purpose.--It is the purpose of this section to establish a 
comprehensive school health education and prevention program for 
elementary and secondary school students.
    ``(b) Program Authorized.--The Secretary, through the Office of 
Comprehensive School Health Education established in subsection (e), 
shall award grants to States from allotments under subsection (c) to 
enable such States to--
            ``(1) award grants to local or intermediate educational 
        agencies, and consortia thereof, to enable such agencies or 
        consortia to establish, operate and improve local programs of 
        comprehensive health education and prevention, early health 
        intervention, and health education, in elementary and secondary 
        schools (including preschool, kindergarten, intermediate, and 
        junior high schools); and
            ``(2) develop training, technical assistance and 
        coordination activities for the programs assisted pursuant to 
        paragraph (1).
    ``(c) Reservations and State Allotments.--
            ``(1) Reservations.--From the sums appropriated pursuant to 
        the authority of subsection (f) for any fiscal year, the 
        Secretary shall reserve--
                    ``(A) 1 percent for payments to Guam, American 
                Samoa, the Virgin Islands, the Republic of the Marshall 
                Islands, the Federated States of Micronesia, the 
                Northern Mariana Islands, and the Republic of Palau, to 
                be allotted in accordance with their respective needs; 
                and
                    ``(B) 1 percent for payments to the Bureau of 
                Indian Affairs.
            ``(2) State allotments.--From the remainder of the sums not 
        reserved under paragraph (1), the Secretary shall allot to each 
        State an amount which bears the same ratio to the amount of 
        such remainder as the school-age population of the State bears 
        to the school-age population of all States, except that no 
        State shall be allotted less than an amount equal to 0.5 
        percent of such remainder.
            ``(3) Reallotment.--The Secretary may reallot any amount of 
        any allotment to a State to the extent that the Secretary 
        determines that the State will not be able to obligate such 
        amount within 2 years of allotment. Any such reallotment shall 
        be made on the same basis as an allotment under paragraph (2).
    ``(d) Use of Funds.--Grant funds provided to local or intermediate 
educational agencies, or consortia thereof, under this section may be 
used to improve elementary and secondary education in the areas of--
            ``(1) personal health and fitness;
            ``(2) prevention of chronic diseases;
            ``(3) prevention and control of communicable diseases;
            ``(4) nutrition;
            ``(5) substance use and abuse;
            ``(6) accident prevention and safety;
            ``(7) community and environmental health;
            ``(8) mental and emotional health;
            ``(9) parenting and the challenges of raising children; and
            ``(10) the effective use of the health services delivery 
        system.
    ``(e) Office of Comprehensive School Health Education.--The 
Secretary shall establish within the Office of the Secretary an Office 
of Comprehensive School Health Education which shall have the following 
responsibilities:
            ``(1) To recommend mechanisms for the coordination of 
        school health education programs conducted by the various 
        departments and agencies of the Federal Government.
            ``(2) To advise the Secretary on formulation of school 
        health education policy within the Department of Education.
            ``(3) To disseminate information on the benefits to health 
        education of utilizing a comprehensive health curriculum in 
        schools.
    ``(f) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        $50,000,000 for fiscal year 1994 and such sums as may be 
        necessary for each of the fiscal years 1995 and 1996 to carry 
        out this section.
            ``(2) Availability.--Funds appropriated pursuant to the 
        authority of paragraph (1) in any fiscal year shall remain 
        available for obligation and expenditure until the end of the 
        fiscal year succeeding the fiscal year for which such funds 
        were appropriated.''.

SEC. 204. COMPREHENSIVE EARLY CHILDHOOD HEALTH EDUCATION PROGRAM.

    (a) Purpose.--It is the purpose of this section to establish a 
comprehensive early childhood health education program.
    (b) Program.--The Secretary of Health and Human Services shall 
conduct a program of awarding grants to agencies conducting Head Start 
training to enable such agencies to provide training and technical 
assistance to Head Start teachers and other child care providers. Such 
program shall--
            (1) establish a training system through the Head Start 
        agencies and organizations conducting Head Start training for 
        the purpose of enhancing teacher skills and providing 
        comprehensive early childhood health education curriculum;
            (2) enable such agencies and organizations to provide 
        training to day care providers in order to strengthen the 
        skills of the early childhood workforce in providing health 
        education;
            (3) provide technical support for health education programs 
        and curricula; and
            (4) provide cooperation with other early childhood 
        providers to ensure coordination of such programs and the 
        transition of students into the public school environment.
    (c) Use of Funds.--Grant funds under this section may be used to 
provide training and technical assistance in the areas of--
            (1) personal health and fitness;
            (2) prevention of chronic diseases;
            (3) prevention and control of communicable diseases;
            (4) dental health;
            (5) nutrition;
            (6) substance use and abuse;
            (7) accident prevention and safety;
            (8) community and environmental health;
            (9) mental and emotional health; and
            (10) strengthening the role of parent involvement.
    (d) Reservation for Innovative Programs.--The Secretary shall 
reserve 5 percent of the funds appropriated pursuant to the authority 
of subsection (e) in each fiscal year for the development of innovative 
model health education programs or curricula.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated $40,000,000 for fiscal year 1994 and such sums as may be 
necessary for each of the fiscal years 1995 and 1996 to carry out this 
section.

TITLE III--DISCLOSURE OF CERTAIN INFORMATION TO BENEFICIARIES UNDER THE 
                     MEDICARE AND MEDICAID PROGRAMS

SEC. 301. REGULATIONS REQUIRING DISCLOSURE OF CERTAIN INFORMATION TO 
              BENEFICIARIES UNDER THE MEDICARE AND MEDICAID PROGRAMS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by adding at the end the following new section:

``disclosure of certain information to beneficiaries under the medicare 
                         and medicaid programs

    ``Sec. 1144. (a) Annual Reports.--
            ``(1) Institutional health care providers.--
                    ``(A) In general.--The Secretary shall issue 
                regulations requiring that each institutional health 
                care provider receiving payment for services provided 
                under title XVIII or XIX shall make an annual report 
                available to the recipients of services under such 
                title.
                    ``(B) Contents of report.--The annual report 
                referred to in subparagraph (A) shall include--
                            ``(i) mortality rates relating to services 
                        provided to individuals, including incidence 
                        and outcomes of surgical and other invasive 
                        procedures;
                            ``(ii) nosocomial infection rates;
                            ``(iii) a list of routine preoperative 
                        tests and other frequently performed medical 
                        tests, including blood tests, chest x-rays, 
                        magnetic resonance imaging, computerized axial 
                        tomography, urinalysis, and heart 
                        catherizations, and the cost of such tests;
                            ``(iv) the number and types of malpractice 
                        claims against the provider decided or settled 
                        for the year; and
                            ``(v) such other information as the 
                        Secretary shall require.
            ``(2) Noninstitutional health care providers.--
                    ``(A) In general.--The Secretary shall issue 
                regulations requiring that each noninstitutional 
                provider receiving payment for services provided under 
                title XVIII or XIX shall make an annual report 
                available to the recipients of services under such 
                title.
                    ``(B) Contents of report.--The report referred to 
                in subparagraph (A) shall include--
                            ``(i) information regarding the provider's 
                        education, experience, qualifications, board 
                        certification, and license to provide health 
                        care services, including a list of the States 
                        in which such provider is licensed and any 
                        limitations on such provider's license;
                            ``(ii) any disciplinary actions taken 
                        against the provider by any health care 
                        facility, State medical agency, or medical 
                        organization which result in a finding of 
                        improper conduct;
                            ``(iii) any malpractice action against the 
                        provider decided or settled;
                            ``(iv) a disclosure of any ownership 
                        interest the provider may have in any health 
                        care facility, laboratory, or health care 
                        supply company; and
                            ``(v) such other information as the 
                        Secretary shall require.
    ``(b) Disclosure of Information Regarding Health Care Procedures 
and Forms.--
            ``(1) Information regarding health care procedures and 
        forms.--The Secretary shall issue regulations requiring that 
        each institutional and noninstitutional health care provider 
        receiving payment for services under title XVIII or XIX shall 
        make available any forms required in connection with the 
        receipt of services under such title which consist of any 
        diagnostic, surgical, or other invasive procedure, prior to the 
        performance of such procedure.
            ``(2) Information provided before performance of 
        procedure.--The Secretary shall issue regulations requiring 
        each institutional and noninstitutional health care provider 
        receiving payment for services provided under title XVIII or 
        XIX to disclose to any individual receiving any surgical, 
        palliative, or other health care procedure or any drug therapy 
        or other treatment, the following information prior to the 
        performance of such procedure or treatment:
                    ``(A) The nature of the procedure or treatment.
                    ``(B) A description of the procedure or treatment.
                    ``(C) The risk and benefits associated with the 
                procedure or treatment.
                    ``(D) The success rate for the procedure or 
                treatment generally, and for the provider.
                    ``(E) The provider's cost range for the procedure 
                or treatment.
                    ``(F) Any alternative treatment which may be 
                available to such individual.
                    ``(G) Any known side effects of any medications 
                required in connection with the procedure or treatment.
                    ``(H) The interactive effect of the complete 
                regimen of medications associated with the procedure.
                    ``(I) The availability of the information under 
                this subsection and under subsections (a) and (c).
                    ``(J) Such other information as the Secretary shall 
                require.
            ``(3) Emergencies.--The Secretary shall issue regulations 
        with respect to the waiver of any requirement established under 
        paragraphs (1) and (2) in a case where emergency health care is 
        needed.
    ``(c) Patient's Right To Refuse Information and Treatment.--The 
Secretary shall issue regulations requiring each institutional and 
noninstitutional health care provider receiving payment for services 
provided under title XVIII or XIX to inform any individual receiving 
services under such title of such individual's right--
            ``(1) to refuse any information which is available to such 
        individual under the regulations described in subsections (a) 
        and (b);
            ``(2) to refuse any procedure or treatment;
            ``(3) to refuse attendance by any such provider; or
            ``(4) to leave the premises of any such provider.
    ``(d) Definitions.--As used in this section--
            ``(1) Institutional health care provider.--The term 
        `institutional health care provider' means any hospital, 
        clinic, skilled nursing facility, comprehensive outpatient 
        rehabilitation facility, home health agency, hospice program, 
        or other facility receiving payment for services provided under 
        title XVIII or XIX, as determined by the Secretary.
            ``(2) Noninstitutional health care provider.--The term 
        `noninstitutional health care provider' means any physician, 
        physician assistant, nurse practitioner, certified nurse 
        midwife, certified registered nurse anesthetist, or other 
        individual receiving payment for services provided under title 
        XVIII or XIX, as determined by the Secretary.
    ``(e) Compliance.--
            ``(1) Penalties for failure to comply.--The Secretary shall 
        issue regulations establishing appropriate penalties for any 
        failure to comply with the regulations issued under this 
        section.
            ``(2) Waiver of compliance.--The Secretary may waive any of 
        the requirements under the regulations issued under this 
        section if a health care provider demonstrates that such 
        requirements will result in an undue burden on such 
        provider.''.

SEC. 302. OUTREACH ACTIVITIES.

    (a) Medicare Program.--
            (1) Grants to nonprofit private entities for outreach 
        activities.--
                    (A) Authority.--The Secretary of Health and Human 
                Services (hereafter referred to in this paragraph as 
                the ``Secretary''), is authorized to award grants, on a 
                competitive basis, to nonprofit private entities to 
                enable such entities to develop outreach activities to 
                inform beneficiaries under title XVIII of the Social 
                Security Act of the information available to such 
                beneficiaries pursuant to regulations issued by the 
                Secretary under section 1144 of the Social Security Act 
                as added by section 311 of this Act.
                    (B) Application.--To be eligible to receive a grant 
                under subparagraph (A), an entity shall prepare and 
                submit to the Secretary an application at such time, in 
                such manner, and containing such information as the 
                Secretary may require.
                    (C) Authorization of appropriations.--There are 
                authorized to be appropriated to carry out this 
                section, $5,000,000 for fiscal year 1994, $5,000,000 
                for fiscal year 1995, and $5,000,000 for fiscal year 
                1996.
            (2) Outreach through notice of medicare benefits.--Section 
        1804 of the Social Security Act (42 U.S.C. 1395b-2) is 
        amended--
                    (A) in paragraph (2), by striking ``, and'' and 
                inserting a comma,
                    (B) in paragraph (3), by striking the period and 
                inserting ``, and'', and
                    (C) by inserting after paragraph (3), the following 
                new paragraph:
            ``(4) a description of the information available to 
        beneficiaries under this title pursuant to regulations issued 
        by the Secretary under section 1144.''.
    (b) Medicaid Program.--
            (1) In general.--Section 1902(a) of the Social Security Act 
        (42 U.S.C. 1396a(a)), is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (54),
                    (B) by striking the period at the end of paragraph 
                (58) (as added by section 4751(a)(1)(C) of the Omnibus 
                Budget Reconciliation Act of 1990) and inserting a 
                semicolon,
                    (C) by redesignating the second paragraph (58) (as 
                added by section 4752(c)(1)(C) of the Omnibus Budget 
                Reconciliation Act of 1990) as paragraph (59) and by 
                striking the period at the end and inserting ``; and'', 
                and
                    (D) by adding at the end the following new 
                paragraph:
            ``(60) provide for an outreach program informing 
        individuals who receive medical assistance under this title of 
        the information available to such individuals pursuant to 
        regulations issued by the Secretary under section 1144.''.
            (2) Effective date.--
                    (A) In general.--Paragraph (1) shall apply to 
                calendar quarters beginning on or after January 1, 
                1994.
                    (B) General rule.--In the case of a State which the 
                Secretary determines requires State legislation (other 
                than legislation authorizing or appropriating funds) in 
                order to comply with paragraph (1), the State shall not 
                be regarded as failing to comply with such paragraph 
                solely on the basis of its failure to meet the 
                requirements of such paragraph before the first day of 
                the first calendar quarter beginning after the close of 
                the first regular session of the State legislature that 
                begins after the date of the enactment of this Act. For 
                purposes of the previous sentence, in the case of a 
                State that has a 2-year legislative session, each year 
                of such session shall be deemed to be a separate 
                regular session of the State legislature.

         TITLE IV--PATIENT'S RIGHT TO DECLINE MEDICAL TREATMENT

SEC. 401. RIGHT TO DECLINE MEDICAL TREATMENT.

    (a) Rights of Competent Adults.--
            (1) In general.--Except as provided in paragraph (2), a 
        State may not restrict the right of a competent adult to 
        consent to, or to decline, medical treatment.
            (2) Limitations.--
                    (A) Affect on third parties.--A State may impose 
                limitations on the right of a competent adult to 
                decline treatment if such limitations protect third 
                parties (including minor children) from harm.
                    (B) Treatment which is not medically indicated.--
                Nothing in this section shall be construed to require 
                that any individual be offered, or that any individual 
                may demand, medical treatment which the health care 
                provider does not have available, or which is futile, 
                or which is otherwise not medically indicated.
    (b) Rights of Incapacitated Adults.--
            (1) In general.--Notwithstanding incapacity, each adult has 
        a right to consent to, or to decline, medical treatment. Except 
        as provided in subsection (a)(2)(A), States may not restrict 
        the right to consent to, or to decline, medical treatment as 
        exercised by an adult through the documents specified in this 
        subsection, or through similar documents or other written 
        methods of directive which clearly and convincingly evidence 
        the adult's treatment choices.
            (2) Advance directives and powers of attorney.--
                    (A) In general.--In order to facilitate the 
                communication, despite incapacity, of an adult's 
                treatment choices, the Secretary of Health and Human 
                Services (hereafter in this title referred to as the 
                ``Secretary''), in consultation with the Attorney 
                General, shall develop a national advance directive 
                form that--
                            (i) shall not limit or otherwise restrict, 
                        except as provided in subsection (a)(2)(A), an 
                        adult's right to consent to, or to decline, 
                        medical treatment; and
                            (ii) shall, at minimum--
                                    (I) provide the means for an adult 
                                to declare such adult's own treatment 
                                choices in the event of a terminal 
                                condition;
                                    (II) provide the means for an adult 
                                to declare, at such adult's option, 
                                treatment choices in the event of other 
                                conditions (such as persistent 
                                vegetative state) which are chronic and 
                                debilitating, which are medically 
                                incurable, and from which such adult 
                                likely will not recover; and
                                    (III) provide the means by which an 
                                adult may, at such adult's option, 
                                declare such adult's wishes with 
                                respect to all forms of medical 
                                treatment, including forms of medical 
                                treatment such as the provision of 
                                nutrition and hydration by artificial 
                                means which may be, in some 
                                circumstances, relatively 
                                nonburdensome.
                    (B)  National durable power of attorney form.--The 
                Secretary, in consultation with the Attorney General, 
                shall develop a national durable power of attorney form 
                for health care decisionmaking. The form shall provide 
                a means for any adult to designate another adult or 
                adults to exercise the same decisionmaking powers which 
                would, under State law, otherwise be exercised by next 
                of kin.
                    (C) Honored by all health care providers.--The 
                national advance directive and durable power of 
                attorney forms developed by the Secretary shall be 
                honored by all health care providers.
                    (D) Limitations.--No individual shall be required 
                to execute an advance directive. This title makes no 
                presumption concerning the intention of an individual 
                who has not executed an advance directive. An advance 
                directive shall be sufficient, but not necessary, proof 
                of an adult's treatment choices with respect to the 
                circumstances addressed in the advance directive.
            (3) Definition.--For purposes of this subsection, the term 
        ``incapacity'' means the inability to understand the nature and 
        consequences of health care decisions (including the intended 
        benefits and foreseeable risks of, and alternatives to, 
        proposed treatment options), and to reach informed decisions 
        concerning health care. Individuals who are incapacitated 
        include adjudicated incompetents and individuals who have not 
        been adjudicated incompetent but who, nonetheless, lack the 
        capacity to formulate or communicate decisions concerning 
        health care.
    (c) Health Care Providers.--
            (1) In general.--No health care provider may provide 
        treatment to an adult contrary to the adult's wishes as 
        expressed personally, by an advance directive as provided for 
        in subsection (b)(2), or by a similar written advance directive 
        form or another written method of directive which clearly and 
        convincingly evidence the adult's treatment choices. A health 
        provider who acts in good faith pursuant to the preceding 
        sentence shall be immune from criminal or civil liability or 
        discipline for professional misconduct.
            (2) Health care providers under the medicare and medicaid 
        programs.--Any health care provider who knowingly provides 
        services to an adult contrary to the adult's wishes as 
        expressed personally, by an advance directive as provided for 
        in subsection (b)(2), or by a similar written advance directive 
        form or another written method of directive which clearly and 
        convincingly evidence the adult's treatment choices, shall be 
        denied payment for such services under titles XVIII and XIX of 
        the Social Security Act.
            (3) Transfers.--Health care providers who object to the 
        provision of medical care in accordance with an adult's wishes 
        shall transfer the adult to the care of another health care 
        provider.
    (d)  Definition.--For purposes of this section, the term ``adult'' 
means an individual who is 18 years of age or older.

SEC. 402. FEDERAL RIGHT ENFORCEABLE IN FEDERAL COURTS.

    The rights recognized in this title may be enforced by filing a 
civil action in an appropriate district court of the United States.

SEC. 403. SUICIDE AND HOMICIDE.

    Nothing in this title shall be construed to permit, condone, 
authorize, or approve suicide or mercy killing, or any affirmative act 
to end a human life.

SEC. 404. RIGHTS GRANTED BY STATES.

    Nothing in this title shall impair or supersede rights granted by 
State law which exceed the rights recognized by this title.

SEC. 405. EFFECT ON OTHER LAWS.

    (a) In General.--Except as specified in subsection (b), written 
policies and written information adopted by health care providers 
pursuant to sections 4206 and 4751 of the Omnibus Budget Reconciliation 
Act of 1990 (Public Law 101-508), shall be modified within 6 months of 
enactment of this title to conform to the provisions of this title.
    (b) Delay Period for Uniform Forms.--Health care providers shall 
modify any written forms distributed as written information under 
sections 4206 and 4751 of the Omnibus Budget Reconciliation Act of 1990 
(Public Law 101-508) not later than 6 months after promulgation of the 
forms referred to in subparagraphs (A) and (B) of section 401(b)(2) by 
the Secretary.

SEC. 406. INFORMATION PROVIDED TO CERTAIN INDIVIDUALS.

    The Secretary shall provide on a periodic basis written information 
regarding an individual's right to consent to, or to decline, medical 
treatment as provided in this title to individual's who are 
beneficiaries under titles II, XVI, XVIII, and XIX of the Social 
Security Act.

SEC. 407. RECOMMENDATIONS TO THE CONGRESS ON ISSUES RELATING TO A 
              PATIENT'S RIGHT OF SELF-DETERMINATION.

    Not later than 180 days after the date of the enactment of this Act 
the Secretary shall provide recommendations to the Congress concerning 
the medical, legal, ethical, social, and educational issues related to 
this title. In developing recommendations under this section the 
Secretary shall address the following issues:
            (1) the contents of the forms referred to in subparagraphs 
        (A) and (B) of section 401(b)(2);
            (2) issues pertaining to the education and training of 
        health care professionals concerning patients' self-
        determination rights;
            (3) issues pertaining to health care professionals' duties 
        with respect to patients' rights, and health care 
        professionals' roles in identifying, assessing, and presenting 
        for patient consideration medically indicated treatment 
        options; and
            (4) such other issues as the Secretary may identify.

SEC. 408. EFFECTIVE DATE.

    This title shall take effect on the date that is 6 months after the 
date of enactment of this Act.

             TITLE V--PRIMARY AND PREVENTIVE CARE PROVIDERS

SEC. 501. INCREASING PAYMENTS TO CERTAIN NONPHYSICIAN PROVIDERS UNDER 
              THE MEDICARE PROGRAM.

    (a) Increase in Payments to Nurse Practitioners, Clinical Nurse 
Specialists, Certified Nurse Midwives, and Physician Assistants.--
            (1) In general.--Section 1833(a)(1) of the Social Security 
        Act (42 U.S.C. 1395l(a)(1)) is amended--
                    (A) in subparagraph (K), by striking ``80 percent'' 
                and all that follows through ``physician)'' and 
                inserting ``97 percent of the fee schedule amount 
                provided under section 1848 for the same service 
                performed by a physician'';
                    (B) by redesignating subparagraph (M) the second 
                place it appears and subparagraph (N), as subparagraphs 
                (N) and (O), respectively; and
                    (C) by amending subparagraph (N), as redesignated, 
                to read as follows: ``(N) with respect to services 
                described in section 1861(s)(2)(K) (relating to 
                services provided by a nurse practitioner, clinical 
                nurse specialist, or physician assistant) the amounts 
                paid shall be 97 percent of the fee schedule amount 
                provided under section 1848 for the same service 
                performed by a physician,''.
            (2) Nurse practitioners and physician assistants.--Section 
        1842(b)(12) of such Act (42 U.S.C. 1395u(b)(12)) is amended to 
        read as follows:
    ``(12) With respect to services described in clauses (i), (ii), or 
(iv) of section 1861(s)(2)(K) (relating to physician assistants and 
nurse practitioners)--
            ``(A) payment under this part may only be made on an 
        assignment-related basis; and
            ``(B) the prevailing charges determined under paragraph (3) 
        shall not exceed--
                    ``(i) in the case of services performed as an 
                assistant at surgery, 97 percent of the amount that 
                would otherwise be recognized if performed by a 
                physician who is serving as an assistant at surgery, or
                    ``(ii) in other cases, 97 percent of the fee 
                schedule amount specified in section 1848 for such 
                services performed by physicians who are not 
                specialists.''.
            (3) Direct payment for all nurse practitioners or clinical 
        nurse specialists.--Section 1832(a)(2)(B)(iv) of such Act (42 
        U.S.C. 1395k(a)(2)(B)(iv)) is amended by striking ``provided in 
        a rural area (as defined in section 1886(d)(2)(D))''.
            (4) Removal of restrictions on settings.--Section 
        1861(s)(2)(K) of such Act (42 U.S.C. 1395x(s)(2)(K)) is 
        amended--
                    (A) in clause (i), by striking ``(I) in a 
                hospital'' and all that follows through ``professional 
                shortage area,'';
                    (B) in clause (ii), by striking ``in a skilled'' 
                and all that follows through ``1919(a)''; and
                    (C) in clause (iii), by striking ``in a rural'' and 
                all that follows through ``(d)(2)(D))''.
    (b) Bonus Payment for Services Provided in Health Professional 
Shortage Areas.--Section 1833(m) of the Social Security Act (42 U.S.C. 
1395l(m)) is amended--
            (1) by inserting ``(1)'' after ``(m)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) In the case of services of a nurse practitioner, clinical 
nurse specialist, physician assistant, certified nurse midwife, or 
certified registered nurse anesthetist furnished to an individual 
described in paragraph (1) in an area that is a health professional 
shortage area as described in such paragraph, in addition to the amount 
otherwise paid under this part, there shall also be paid to such 
service provider (or to an employer in the cases described in 
subparagraph (C) of section 1842(b)(6)) (on a monthly or quarterly 
basis) from the Federal Supplementary Medical Trust Fund an amount 
equal to 10 percent of the payment amount for such services under this 
part.''.

SEC. 502. REQUIRING COVERAGE OF CERTAIN NONPHYSICIAN PROVIDERS UNDER 
              THE MEDICAID PROGRAM.

    Section 1905(a) of the Social Security Act (42 U.S.C. 1396d(a)) is 
amended--
            (1) in paragraph (21), by striking ``; and'' and inserting 
        a semicolon;
            (2) in paragraph (24), by striking the period at the end 
        and inserting a semicolon;
            (3) by redesignating paragraphs (22), (23), and (24) as 
        paragraphs (25), (22), and (23), respectively;
            (4) by inserting after paragraph (23) the following new 
        paragraph:
            ``(24) services furnished by a physician assistant, nurse 
        practitioner, clinical nurse specialist (as defined in section 
        1861(aa)(5)), and certified registered nurse anesthetist (as 
        defined in section 1861(bb)(2)); and'';
            (5) by striking the semicolon at the end of paragraph (25), 
        as redesignated, and inserting a period; and
            (6) by transferring and inserting paragraph (25), as 
        redesignated, after paragraph (24).

SEC. 503. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

    Part C of title VII of the Public Health Service Act is amended by 
adding at the end thereof the following new section:

``SEC. 753. MEDICAL STUDENT TUTORIAL PROGRAM GRANTS.

    ``(a) Establishment.--The Secretary shall establish a program to 
award grants to eligible schools of medicine or osteopathic medicine to 
enable such schools to provide medical students for tutorial programs 
or as participants in clinics designed to interest high school or 
college students in careers in general medical practice.
    ``(b) Application.--To be eligible to receive a grant under this 
section, a school of medicine or osteopathic medicine shall prepare and 
submit to the Secretary an application at such time, in such manner, 
and containing such information as the Secretary may require, including 
assurances that the school will use amounts received under the grant in 
accordance with subsection (c).
    ``(c) Use of Funds.--
            ``(1) In general.--Amounts received under a grant awarded 
        under this section shall be used to--
                    ``(A) fund programs under which students of the 
                grantee are provided as tutors for high school and 
                college students in the areas of math, science, health 
                promotion and prevention, first aide, nutrition and 
                prenatal care;
                    ``(B) fund programs under which students of the 
                grantee are provided as participants in clinics and 
                seminars in the areas described in paragraph (1); and
                    ``(C) conduct summer institutes for high school and 
                college students to promote careers in medicine.
            ``(2) Design of programs.--The programs, institutes and 
        other activities conducted by grantees under paragraph (1) 
        shall be designed to--
                    ``(A) give medical students desiring to practice 
                general medicine access to the local community;
                    ``(B) provide information to high school and 
                college students concerning medical school and the 
                general practice of medicine; and
                    ``(C) promote careers in general medicine.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $5,000,000 for fiscal year 
1994, and such sums as may be necessary for fiscal year 1995.''.

SEC. 504. GENERAL MEDICAL PRACTICE GRANTS.

    Part C of title VII of the Public Health Service Act (as amended by 
section 503) is further amended by adding at the end thereof the 
following new section:

``SEC. 754. GENERAL MEDICAL PRACTICE GRANTS.

    ``(a) Establishment.--The Secretary shall establish a program to 
award grants to eligible public or private nonprofit schools of 
medicine or osteopathic medicine, hospitals, residency programs in 
family medicine or pediatrics, or to a consortium of such entities, to 
enable such entities to develop effective strategies for recruiting 
medical students interested in the practice of general medicine and 
placing such students into general practice positions upon graduation.
    ``(b) Application.--To be eligible to receive a grant under this 
section, an entity of the type described in subsection (a) shall 
prepare and submit to the Secretary an application at such time, in 
such manner, and containing such information as the Secretary may 
require, including assurances that the entity will use amounts received 
under the grant in accordance with subsection (c).
    ``(c) Use of Funds.--Amounts received under a grant awarded under 
this section shall be used to fund programs under which effective 
strategies are developed and implemented for recruiting medical 
students interested in the practice of general medicine and placing 
such students into general practice positions upon graduation.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $25,000,000 for each of the 
fiscal years 1994 through 1998, and such sums as may be necessary for 
fiscal years thereafter.''.

SEC. 505. PAYMENTS FOR DIRECT AND INDIRECT GRADUATE MEDICAL EDUCATION 
              COSTS.

    (a) Direct Medical Education Costs.--Section 1886(h) of the Social 
Security Act (42 U.S.C. 1395ww(h)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``hospitals for direct medical 
                education costs'' and inserting ``hospitals and public 
                and private nonprofit entities with approved medical 
                residency training programs for direct medical 
                education costs''; and
                    (B) by striking ``hospitals associated'' and 
                inserting ``hospitals and public and private nonprofit 
                entities with approved medical residency training 
                programs associated'';
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A) by 
                striking ``each hospital'' and inserting ``each 
                hospital or public or private nonprofit entity'';
                    (B) in subparagraph (A)--
                            (i) in the heading, by striking 
                        ``hospital's '';
                            (ii) by striking ``the hospital's'' and 
                        inserting ``the hospital's or entity's''; and
                            (iii) by striking ``the hospital'' and 
                        inserting ``the hospital or entity'';
                    (C) in clause (ii) of subparagraph (B), by striking 
                ``a hospital if the hospital's'' and inserting ``a 
                hospital or entity if the hospital's or entity's'';
                    (D) in subparagraph (C), by striking ``the 
                hospital'' each place it appears and inserting ``the 
                hospital or the entity'';
                    (E) in subparagraph (D), by striking ``the 
                hospital'' and inserting ``the hospital or the 
                entity''; and
                    (F) in subparagraph (E), by striking ``a hospital'' 
                and inserting ``a hospital or entity'';
            (3) in paragraph (3)--
                    (A) in the heading, by striking ``Hospital'';
                    (B) in subparagraph (A),
                            (i) in the matter preceding clause (i), by 
                        striking ``hospital cost reporting period'' and 
                        inserting ``cost reporting period of a hospital 
                        or a public or private nonprofit entity''; and
                            (ii) in clause (ii), by striking ``the 
                        hospital's'' and inserting ``the hospital's or 
                        entity's'';
                    (C) in subparagraph (B),
                            (i) in the matter preceding clause (i), by 
                        striking ``hospital cost reporting period'' and 
                        inserting ``cost reporting period of a hospital 
                        or a public or private nonprofit entity''; and
                            (ii) in clauses (i) and (ii), by striking 
                        ``hospital's'' each place it appears and 
                        inserting ``hospital's or entity's''; and
                    (D) in subparagraph (C), by striking ``hospital's 
                cost reporting period'' and inserting ``cost reporting 
                period of a hospital or a public or private nonprofit 
                entity''; and
            (4) in paragraph (4)--
                    (A) in subparagraph (B), by striking ``hospital'' 
                each place it appears and inserting ``hospital or 
                public or private nonprofit entity''; and
                    (B) in subparagraph (E), by striking ``hospital'' 
                and inserting ``hospital or public or private nonprofit 
                entity''.
    (b) Indirect Medical Education Costs.--
            (1) In general.--Section 1848 of such Act (42 U.S.C. 1395w-
        4) is amended--
                    (A) by redesignating subsection (j) as subsection 
                (k); and
                    (B) by inserting after subsection (i) the following 
                new subsection:
    ``(j) Payments For Indirect Graduate Medical Education Costs.--
            ``(1) In general.--The Secretary shall provide for an 
        additional payment for indirect costs of medical education in 
        an amount equal to the product of--
                    ``(A) the amount determined under subsection (a)(1) 
                for qualified physician's services (as defined in 
                paragraph (2)), and
                    ``(B) the indirect teaching adjustment factor 
                determined in accordance with section 1886(d)(5)(B)(ii) 
                with `r' equal to .2.
            ``(2) Qualified physician's services.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `qualified physician's services' means 
                physician's services (as defined in subsection (k)(3)) 
                that are--
                            ``(i) provided during the course of 
                        clinical training by medical residents in the 
                        initial 3 years of postgraduate medical 
                        training in approved medical residency training 
                        programs in the fields of family medicine (as 
                        defined by the Secretary), general internal 
                        medicine (as defined by the Secretary), and 
                        general pediatrics (as defined by the 
                        Secretary), and
                            ``(ii) provided at clinical training sites 
                        affiliated with approved medical residency 
                        training programs in family medicine, general 
                        internal medicine, and general pediatrics.
                    ``(B) Certain services excluded.--For purposes of 
                paragraph (1), the term `qualified physician's 
                services' shall not include services provided during an 
                inpatient hospital stay for which payment is made under 
                part A of this title.''.
            (2) Conforming amendments.--Section 1848 of such Act (42 
        U.S.C. 1395w-4) is amended--
                    (A) in subsection (a)(1), by striking ``subsection 
                (j)(3)'' and inserting ``subsection (k)(3)'';
                    (B) in subsection (b)(1), by striking ``subsection 
                (j)(2)'' and inserting ``(k)(2)''; and
                    (C) in subparagraphs (C) and (D) of subsection 
                (d)(2), by striking ``subsection (j)(1)'' and inserting 
                ``subsection (k)(1)''.
    (c) Subsection (d) hospitals.--Section 1886(d)(5)(B) of such Act 
(42 U.S.C. 1395ww(d)(5)(B)) is amended by adding at the end the 
following new clause:
            ``(v) In determining such adjustment the Secretary shall 
        count only those interns and residents who are in the initial 3 
        years of postgraduate medical training.''.
    (d) Effective Date.--The amendments made by this section shall be 
effective for cost reporting periods beginning on or after October 1, 
1993.

      TITLE VI--MEDICARE PREFERRED PROVIDER DEMONSTRATION PROJECTS

SEC. 601. ESTABLISHMENT OF MEDICARE PRIMARY AND SPECIALTY PREFERRED 
              PROVIDER ORGANIZATION DEMONSTRATION PROJECTS.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act the Secretary of Health and Human Services 
(hereafter referred to in this section as the ``Secretary'') shall 
provide for up to 10 demonstration projects to test the effectiveness 
of providing payment under the medicare program under title XVIII of 
the Social Security Act for primary and specialty procedures and 
services (as determined appropriate by the Secretary) furnished by 
preferred provider organizations. The demonstration projects provided 
for under this section by the Secretary shall--
            (1) test the cost-effectiveness of preferred provider 
        organizations furnishing primary and specialty services in 
        controlling the volume of such services performed or ordered by 
        physicians, and nonphysician providers such as nurse 
        practitioners, clinical nurse specialists, certified nurse 
        midwives, certified registered nurse anesthetists, and 
        physician assistants, for which payment is made under title 
        XVIII of the Social Security Act;
            (2) gather information on factors which may encourage 
        medicare beneficiaries to participate in a preferred provider 
        organizational network;
            (3) examine the efficacy of permanently establishing 
        managed care networks of primary and specialty service 
        providers; and
            (4) examine the factors necessary to increase the quality 
        and efficiency of primary and specialty services furnished by 
        preferred provider networks in order to realize increased 
        savings under the medicare program and to increase medicare 
        beneficiary participation in such networks.
    (b) Waiver of Medicare Requirements.--The Secretary may waive such 
requirements of title XVIII of the Social Security Act as the Secretary 
determines necessary in conducting demonstration programs under this 
section, including--
            (1) coinsurance requirements;
            (2) provider payment arrangements;
            (3) beneficiary deductibles; and
            (4) reimbursement for nonphysician providers.
    (c) Duration of Projects.--The demonstration projects provided for 
under this section shall be conducted for a period not to exceed 3 
years from the date of the enactment of this Act.
    (d) Report.--Not later than 180 days after the date of expiration 
of the demonstration projects conducted under this section the 
Secretary shall report to the Congress on the results of the 
demonstration projects including recommendations for modifications in 
the medicare program to increase the utilization of preferred provider 
organizations in providing primary and specialty services under such 
program.

                      TITLE VII--COST CONTAINMENT

SEC. 701. NEW DRUG CLINICAL TRIALS PROGRAM.

    Part B of title IV of the Public Health Service Act (42 U.S.C. 284 
et seq.) is amended by adding at the end the following new section:

``SEC. 409A. NEW DRUG CLINICAL TRIALS PROGRAM.

    ``(a) In General.--The Director of the National Institutes of 
Health (hereafter referred to in this section as the `Director') is 
authorized to establish and implement a program for the conduct of 
clinical trials with respect to new drugs and disease treatments 
determined to be promising by the Director. In determining the drugs 
and disease treatments that are to be the subject of such clinical 
trials, the Director shall give priority to those drugs and disease 
treatments targeted toward the diseases determined--
            ``(1) to be the most costly to treat;
            ``(2) to have the highest mortality; or
            ``(3) to affect the greatest number of individuals.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $120,000,000 for fiscal year 
1994, and such sums as may be necessary in each of the fiscal years 
1995 through 1998.''.

SEC. 702. MEDICAL TREATMENT EFFECTIVENESS.

    (a) Research on Cost-Effective Methods of Health Care.--Section 926 
of the Public Health Service Act (42 U.S.C. 299c-5) is amended--
            (1) in subsection (a), by striking ``and $115,000,000 for 
        fiscal year 1993'' and inserting ``$115,000,000 for fiscal year 
        1993, and such sums as may be necessary for each of the fiscal 
        years 1994 through 1997''; and
            (2) by adding at the end the following new subsection:
    ``(f) Use of Additional Appropriations.--Within amounts 
appropriated under subsection (a) for each of the fiscal years 1993 
through 1996 that are in excess of the amounts appropriated under such 
subsection for fiscal year 1992, the Secretary shall give priority to 
expanding research conducted to determine the most cost-effective 
methods of health care and for developing and disseminating new 
practice guidelines related to such methods. In utilizing such amounts, 
the Secretary shall give priority to diseases and disorders that the 
Secretary determines are the most costly to the United States and 
evidence a wide variation in current medical practice.''.
    (b) Research on Medical Treatment Outcomes.--
            (1) Imposition of tax on health insurance policies.--
                    (A) In general.--Chapter 36 of the Internal Revenue 
                Code of 1986 (relating to certain other excise taxes) 
                is amended by adding at the end thereof the following 
                new subchapter:

            ``Subchapter G--Tax on Health Insurance Policies

                              ``Sec. 4501. Imposition of tax.
                              ``Sec. 4502. Liability for tax.

``SEC. 4501. IMPOSITION OF TAX.

    ``(a) General Rule.--There is hereby imposed a tax equal to .001 
cent on each dollar, or fractional part thereof, of the premium paid on 
a policy of health insurance.
    ``(b) Definition.--For purposes of subsection (a), the term `policy 
of health insurance' means any policy or other instrument by whatever 
name called whereby a contract of insurance is made, continued, or 
renewed with respect to the health of an individual or group of 
individuals.

``SEC. 4502. LIABILITY FOR TAX.

    ``The tax imposed by this subchapter shall be paid, on the basis of 
a return, by any person who makes, signs, issues, or sells any of the 
documents and instruments subject to the tax, or for whose use or 
benefit the same are made, signed, issued or sold. The United States or 
any agency or instrumentality thereof shall not be liable for the 
tax.''.
                    (B) Conforming amendment.--The table of subchapters 
                for chapter 36 of the Internal Revenue Code of 1986 is 
                amended by adding at the end thereof the following new 
                item:

                              ``Subchapter G. Tax on health insurance 
                                        policies.''.
            (2) Establishment of trust fund.--
                    (A) In general.--Subchapter A of chapter 98 of such 
                Code (relating to trust fund code) is amended by adding 
                at the end thereof the following new section:

``SEC. 9512. TRUST FUND FOR MEDICAL TREATMENT OUTCOMES RESEARCH.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Trust Fund for 
Medical Treatment Outcomes Research' (hereafter referred to in this 
section as the `Trust Fund'), consisting of such amounts as may be 
appropriated or credited to the Trust Fund as provided in this section 
or section 9602(b).
    ``(b) Transfers to Trust Fund.--There is hereby appropriated to the 
Trust Fund an amount equivalent to the taxes received in the Treasury 
under section 4501 (relating to tax on health insurance policies).
    ``(c) Distribution of Amounts in Trust Fund.--On an annual basis 
the Secretary shall distribute the amounts in the Trust Fund to the 
Secretary of Health and Human Services. Such amounts shall be available 
to the Secretary of Health and Human Services to pay for research 
activities related to medical treatment outcomes.''.
                    (B) Conforming amendment.--The table of sections 
                for subchapter A of chapter 98 of such Code is amended 
                by adding at the end thereof the following new item:

                              ``Sec. 9512. Trust Fund for Medical 
                                        Treatment Outcomes Research.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to policies issued after December 31, 1993.

SEC. 703. HEALTH CARE COST CONTROL--EXPENDITURE TARGETS.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and Human Services 
(hereafter referred to in this section as the ``Secretary''), after 
considering the recommendations of the Health Care Cost Control 
Advisory Committee established under subsection (b), shall prepare and 
submit to the appropriate committees of the Congress a report 
concerning the establishment of national spending targets for health 
care and health care services. Such report shall contain the 
recommendations of the Secretary concerning the feasibility--
            (1) for controlling the cost of health care, reducing cost 
        shifting and maintaining the quality of care;
            (2) of establishing national targets for health 
        expenditures;
            (3) of establishing national reimbursement targets for 
        hospital services;
            (4) of establishing national reimbursement targets for 
        physicians' services; and
            (5) of establishing national reimbursement targets for 
        prescription drug services.
    (b) Health Care Cost Control Advisory Committee.--
            (1) Establishment.--There shall be established a Health 
        Care Cost Control Advisory Committee (hereafter referred to in 
        this subsection as the ``Committee'').
            (2) Membership.--The Committee shall be composed of 8 
        individuals appointed by the Secretary, representing--
                    (A) physicians;
                    (B) hospitals;
                    (C) pharmacies;
                    (D) private insurers;
                    (E) State and local governments;
                    (F) employers;
                    (G) organized labor; and
                    (H) academia with expertise as a health economist.
            (3) Compensation.--
                    (A) In general.--Members of the Committee shall 
                serve without compensation.
                    (B) Expenses reimbursed.--While away from their 
                homes or regular places of business on the business of 
                the Committee, the members of the Committee may be 
                allowed travel expenses, including per diem in lieu of 
                subsistence, as authorized by section 5703 of title 5, 
                United States Code, for persons employed intermittently 
                in Government service.
                    (C) Application of the act.--The provisions of the 
                Federal Advisory Committee Act (5 U.S.C. App.) shall 
                not apply with respect to the Committee.
                    (D) Support.--The Secretary shall supply such 
                necessary office facilities, office supplies, support 
                services, and related expenses as necessary to carry 
                out the functions of the Committee.

                       TITLE VIII--LONG-TERM CARE

    Subtitle A--Tax Treatment of Qualified Long-Term Care Insurance 
                                Policies

SEC. 801. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Internal Revenue Code of 
1986.

SEC. 802. DEFINITIONS OF QUALIFIED LONG-TERM CARE INSURANCE AND 
              PREMIUMS.

    (a) In General.--Chapter 79 (relating to definitions) is amended by 
adding at the end the following new section:

``SEC. 7705. QUALIFIED LONG-TERM CARE INSURANCE AND PREMIUMS.

    ``(a) Qualified Long-Term Care Insurance.--
            ``(1) In general.--For purposes of this title, the term 
        `qualified long-term care insurance' means insurance under a 
        policy or rider, issued by a qualified issuer, which--
                    ``(A) provides coverage for not less than 12 
                consecutive months for each covered person,
                    ``(B) provides benefits on an expense incurred, 
                indemnity, disability, prepaid, capitation, or other 
                basis,
                    ``(C) provides benefits for--
                            ``(i) medically necessary diagnostic, 
                        preventive, therapeutic, rehabilitation, or 
                        maintenance services,
                            ``(ii) personal care services necessitated 
                        by physical disability, or
                            ``(iii) preventive, therapeutic, 
                        rehabilitation, maintenance, or personal care 
                        services necessitated by cognitive impairment 
                        or the loss of functional capacity,
                when provided in a nursing home, a respite care 
                facility, the home of the covered individual, or any 
                other setting which is not an acute care unit of a 
                hospital or a medical clinic, and
                    ``(D) provides coverage for care described in 
                subparagraph (C) (other than nursing home care) equal 
                to not less than 47.5 percent of the national median 
                cost of nursing care coverage, as determined by the 
                Secretary.
            ``(2) Qualified issuer.--For purposes of paragraph (1), the 
        term `qualified issuer' means any of the following, if subject 
        to the jurisdiction and regulation of at least 1 State 
        insurance department:
                    ``(A) Private insurance company.
                    ``(B) Fraternal benefit society.
                    ``(C) Nonprofit health corporation.
                    ``(D) Nonprofit hospital corporation.
                    ``(E) Nonprofit medical service corporation.
                    ``(F) Prepaid health plan.
    ``(b) Qualified Long-Term Care Premiums.--
            ``(1) In general.--For purposes of this title, the term 
        `qualified long-term care premiums' means the amount paid 
        during a taxable year for qualified long-term care insurance 
        covering an individual, to the extent such amount does not 
        exceed the limitation determined under the following table:

        ``In the case of an individual
                                                                       
        with an attained age before the
                                                         The limitation
        close of the taxable year of:
                                                                    is:
        40 or less...................................              $200
        More than 40 but not more than 50............               375
        More than 50 but not more than 60............               750
        More than 60 but not more than 70............             1,600
        More than 70.................................            2,000.
            ``(2) Indexing.--
                    ``(A) In general.--In the case of any taxable year 
                beginning after December 31, 1993, each dollar amount 
                contained in paragraph (1) shall be increased by the 
                medical care cost adjustment for such taxable year. If 
                any increase determined under the preceding sentence is 
                not a multiple of $10, such increase shall be rounded 
                to the nearest multiple of $10.
                    ``(B) Medical care cost adjustment.--For purposes 
                of subparagraph (A), the medical care cost adjustment 
                for any taxable year is the percentage (if any) by 
                which--
                            ``(i) the medical care component of the 
                        Consumer Price Index (as defined in section 
                        1(f)(5)) for August of the calendar year 
                        preceding the calendar year in which the 
                        taxable year begins, exceeds
                            ``(ii) such component for August of 
                        1992.''.
    (b) Clerical Amendment.--The table of sections for chapter 79 is 
amended by inserting after the item relating to section 7704 the 
following new item:

                              ``Sec. 7705. Qualified long-term care 
                                        insurance and premiums.''.

SEC. 803. TREATMENT OF QUALIFIED LONG-TERM CARE INSURANCE AS ACCIDENT 
              AND HEALTH INSURANCE FOR PURPOSES OF TAXATION OF 
              INSURANCE COMPANIES.

    (a) In General.--Section 818 (relating to other definitions and 
special rules) is amended by adding at the end the following new 
subsection:
    ``(g) Qualified Long-Term Care Insurance Treated as Accident or 
Health Insurance.--For purposes of this subchapter, any reference to 
noncancellable accident or health insurance contracts shall be treated 
as including a reference to qualified long-term care insurance.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1992.

SEC. 804. TREATMENT OF ACCELERATED DEATH BENEFITS UNDER LIFE INSURANCE 
              CONTRACTS.

    (a) Exclusion of Amounts Received.--Section 101 (relating to 
certain death benefits) is amended by adding at the end the following 
new subsection:
    ``(g) Treatment of Certain Accelerated Death Benefits.--
            ``(1) In general.--For purposes of this section, any amount 
        paid to an individual under a life insurance contract on the 
        life of an insured who is a terminally ill individual, who has 
        a dread disease, or who has been permanently confined to a 
        nursing home shall be treated as an amount paid by reason of 
        the death of such insured.
            ``(2) Terminally ill individual.--For purposes of this 
        subsection, the term `terminally ill individual' means an 
        individual who has been certified by a physician, licensed 
        under State law, as having an illness or physical condition 
        which can reasonably be expected to result in death in 12 
        months or less.
            ``(3) Dread disease.--For purposes of this subsection, the 
        term `dread disease' means a medical condition which has 
        required or requires extraordinary medical intervention without 
        which the insured would die, or a medical condition which 
        would, in the absence of extensive or extraordinary medical 
        treatment, result in a drastically limited life span.
            ``(4) Permanently confined to a nursing home.--For purposes 
        of this subsection, an individual has been permanently confined 
        to a nursing home if the individual is presently confined to a 
        nursing home and has been certified by a physician, licensed 
        under State law, as having an illness or physical condition 
        which can reasonably be expected to result in the individual 
        remaining in a nursing home for the rest of the individual's 
        life.''.
    (b) Treatment of Qualified Accelerated Death Benefit Riders as Life 
Insurance.--
            (1) In general.--Section 818 (relating to other definitions 
        and special rules), as amended by section 803, is amended by 
        adding at the end the following new subsection:
    ``(h) Qualified Accelerated Death Benefit Riders Treated as Life 
Insurance.--For purposes of this part--
            ``(1) In general.--Any reference to a life insurance 
        contract shall be treated as including a reference to a 
        qualified accelerated death benefit rider on such contract.
            ``(2) Qualified accelerated death benefit rider.--For 
        purposes of this subsection, the term `qualified accelerated 
        death benefit rider' means any rider or addendum on, or other 
        provision of, a life insurance contract which provides for 
        payments to an individual on the life of an insured upon such 
        insured becoming a terminally ill individual (as defined in 
        section 101(g)(2)), incurring a dread disease (as defined in 
        section 101(g)(3)), or being permanently confined to a nursing 
        home (as defined in section 101(g)(4)).''.
            (2) Definitions of life insurance and modified endowment 
        contracts.--
                    (A) Rider treated as qualified additional 
                benefit.--Subparagraph (A) of section 7702(f)(5) 
                (relating to definition of life insurance contract) is 
                amended by striking ``or'' at the end of clause (iv), 
                by redesignating clause (v) as clause (vi), and by 
                inserting after clause (iv) the following new clause:
                            ``(v) any qualified accelerated death 
                        benefit rider (as defined in section 
                        818(h)(2)), or any qualified long-term care 
                        insurance which reduces the death benefit, 
                        or''.
                    (B) Transitional rule.--For purposes of applying 
                section 7702 or 7702A of the Internal Revenue Code of 
                1986 to any contract (or determining whether either 
                such section applies to such contract), the issuance of 
                a rider or addendum on, or other provision of, a life 
                insurance contract permitting the acceleration of death 
                benefits (as described in section 101(g)) or for 
                qualified long-term care insurance shall not be treated 
                as a modification or material change of such contract.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

  Subtitle B--Tax Incentives for Purchase of Qualified Long-Term Care 
                               Insurance

SEC. 811. CREDIT FOR QUALIFIED LONG-TERM CARE PREMIUMS.

    (a) General Rule.--Subpart C of part IV of subchapter A of chapter 
1 (relating to refundable credits) is amended by redesignating section 
35 as section 36 and by inserting after section 34 the following new 
section:

``SEC. 35. LONG-TERM CARE INSURANCE CREDIT.

    ``(a) General Rule.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this subtitle for the 
taxable year an amount equal to the applicable percentage of the 
qualified long-term care premiums (as defined in section 7705(b)) paid 
during such taxable year for such individual or the spouse of such 
individual.
    ``(b) Applicable Percentage.--
            ``(1) In general.--For purposes of this section, the term 
        `applicable percentage' means 28 percent reduced (but not below 
        zero) by 1 percentage point for each $1,000 (or fraction 
        thereof) by which the taxpayer's adjusted gross income for the 
        taxable year exceeds the base amount.
            ``(2) Base amount.--For purposes of paragraph (1) the term 
        `base amount' means--
                    ``(A) except as otherwise provided in this 
                paragraph, $25,000,
                    ``(B) $40,000 in the case of a joint return, and
                    ``(C) zero in the case of a taxpayer who--
                            ``(i) is married at the close of the 
                        taxable year (within the meaning of section 
                        7703) but does not file a joint return for such 
                        taxable year, and
                            ``(ii) does not live apart from his or her 
                        spouse at all times during the taxable year.
    ``(c) Coordination With Medical Expense Deduction.--Any amount 
allowed as a credit under this section shall not be taken into account 
under section 213.''.
    (b) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 is amended by striking the item 
relating to section 35 and inserting the following:

                              ``Sec. 35. Long-term care insurance 
                                        credit.
                              ``Sec. 36. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 812. DEDUCTION FOR EXPENSES RELATING TO QUALIFIED LONG-TERM CARE.

    (a) Deduction for Qualified Long-Term Care Premiums.--Subparagraph 
(C) of section 213(d)(1) (relating to the definition of medical care) 
is amended by striking ``aged)'' and inserting the following: ``aged, 
and amounts paid as qualified long-term care premiums (as defined in 
section 7705(b))''.
    (b) Deduction for Long-Term Care Expenses for Parent or 
Grandparent.--Section 213 (relating to deduction for medical expenses) 
is amended by adding at the end the following new subsection:
    ``(g) Special Rule for Certain Long-Term Care Expenses.--For 
purposes of subsection (a), the term `dependent' shall include any 
parent or grandparent of the taxpayer for whom the taxpayer has long-
term care expenses described in section 7705(a)(1)(C), but only to the 
extent of such expenses.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 813. EXCLUSION FROM GROSS INCOME OF BENEFITS RECEIVED UNDER 
              QUALIFIED LONG-TERM CARE INSURANCE.

    (a) In General.--Section 105 (relating to amounts received under 
accident and health plans) is amended by adding at the end the 
following new subsection:
    ``(j) Special Rules Relating to Qualified Long-Term Care 
Insurance.--For purposes of section 104, this section, and section 
106--
            ``(1) Benefits treated as payable for sickness, etc.--Any 
        benefit received through qualified long-term care insurance 
        shall be treated as amounts received through accident or health 
        insurance for personal injuries or sickness.
            ``(2) Expenses for which reimbursement provided under 
        qualified long-term care insurance treated as incurred for 
        medical care or functional loss.--
                    ``(A) Expenses.--Expenses incurred by the taxpayer 
                or spouse, or by the dependent, parent, or grandparent 
                of either, to the extent of benefits paid under 
                qualified long-term care insurance shall be treated for 
                purposes of subsection (b) as incurred for medical care 
                (as defined in section 213(d)).
                    ``(B) Benefits.--Benefits received under qualified 
                long-term care insurance shall be treated for purposes 
                of subsection (c) as payment for the permanent loss or 
                loss of use of a member or function of the body or the 
                permanent disfigurement of the taxpayer or spouse, or 
                the dependent, parent, or grandparent of either.
            ``(3) References to accident and health plans.--
                    ``(A) In general.--Any reference to an accident or 
                health plan shall be treated as including a reference 
                to a plan providing qualified long-term care insurance.
                    ``(B) Limitation.--Subparagraph (A) shall apply for 
                purposes of section 106 only to the extent of qualified 
                long-term care premiums (as defined in section 
                7705(b)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1992.

SEC. 814. EMPLOYER DEDUCTION FOR CONTRIBUTIONS MADE FOR LONG-TERM CARE 
              INSURANCE.

    (a) In General.--Subparagraph (B) of section 404(b)(2) (relating to 
plans providing certain deferred benefits) is amended to read as 
follows:
                    ``(B) Exceptions.--Subparagraph (A) shall not apply 
                to--
                            ``(i) any benefit provided through a 
                        welfare benefit fund (as defined in section 
                        419(e)), or
                            ``(ii) any benefit provided under qualified 
                        long-term care insurance through the payment 
                        (in whole or in part) of qualified long-term 
                        care premiums (as defined in section 7705(b)) 
                        by an employer pursuant to a plan for its 
                        active or retired employees, but only if any 
                        refund or premium is applied to reduce the 
                        future costs of the plan or increase benefits 
                        under the plan.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1992.

SEC. 815. INCLUSION OF QUALIFIED LONG-TERM CARE INSURANCE IN CAFETERIA 
              PLANS.

    (a) In General.--Paragraph (2) of section 125(d) (relating to the 
exclusion of deferred compensation) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Exception for long-term care insurance 
                contracts.--For purposes of subparagraph (A), amounts 
                paid or incurred for any long-term care insurance 
                contract shall not be treated as deferred compensation 
                to the extent section 404(b)(2)(A) does not apply to 
                such amounts by reason of section 404(b)(2)(B)(ii).''.
    (b) Conforming Amendment.--Subsection (f) of section 125 (relating 
to qualified benefits) is amended by striking ``and such term 
includes'' and inserting the following: ``, qualified long-term care 
insurance, and''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 816. EXCLUSION FROM GROSS INCOME FOR AMOUNTS WITHDRAWN FROM 
              INDIVIDUAL RETIREMENT PLANS AND SECTION 401(k) PLANS FOR 
              QUALIFIED LONG-TERM CARE PREMIUMS AND EXPENSES.

    (a) In General.--Part III of subchapter B of chapter 1 (relating to 
items specifically excluded from gross income) is amended by 
redesignating section 136 as section 137 and by inserting after section 
135 the following new section:

``SEC. 136. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS AND SECTION 
              401(k) PLANS FOR QUALIFIED LONG-TERM CARE PREMIUMS AND 
              EXPENSES.

    ``(a) General Rule.--In the case of an individual, gross income 
shall not include any qualified distribution.
    ``(b) Qualified Distribution.--For purposes of this section, the 
term `qualified distribution' means any amount distributed from an 
individual retirement plan or a section 401(k) plan during the taxable 
year if such amount is used during such year--
            ``(1) to pay qualified long-term care premiums (as defined 
        in section 7705(b)) for the benefit of the payee or distributee 
        or the spouse of the payee or distributee, if such policy may 
        not be surrendered for cash, or
            ``(2) to pay long-term care expenses (as described in 
        section 7705(a)(1)(C)) of such an individual.
    ``(c) Special Rules.--For purposes of this section--
            ``(1) Qualified distributions from ira deemed made first 
        from designated nondeductible contributions.--For purposes of 
        section 72, qualified distributions from an individual 
        retirement plan shall be treated as made from designated 
        nondeductible contributions to the extent thereof and then from 
        other amounts.
            ``(2) Special rules for section 401(k) plans.--
                    ``(A) Qualified distributions from section 401(k) 
                plan may not exceed elective deferrals.--This section 
                shall not apply to any distribution from a section 
                401(k) plan to the extent the aggregate amount of such 
                distributions for the use described in subsection (a) 
                exceeds the aggregate employer contributions made 
                pursuant to the employee's election under section 
                401(k)(2) (and the income thereon).
                    ``(B) Withdrawals not to cause disqualification.--A 
                plan shall not be treated as failing to satisfy the 
                requirements of section 401, and an arrangement shall 
                not be treated as failing to be a qualified cash or 
                deferred arrangement (as defined in section 401(k)(2)), 
                merely because under the plan or arrangement 
                distributions are permitted which are excludable from 
                gross income by reason of this section.
    ``(d) Section 401(k) Plan.--For purposes of this section, the term 
`section 401(k) plan' means any employer plan which meets the 
requirements of section 401(a) and which includes a qualified cash or 
deferred arrangement (as defined in section 401(k)).''.
    (b) Conforming Amendments.--
            (1) Subsection (k) of section 401 is amended by adding at 
        the end the following new paragraph:
            ``(11) Cross reference.--

                                ``For provision permitting tax-free 
withdrawals for qualified long-term care premiums and expenses, see 
section 136.''.
            (2) Subsection (d) of section 408 is amended by adding at 
        the end the following new paragraph:
            ``(8) Cross reference.--

                                ``For provision permitting tax-free 
withdrawals for qualified long-term care premiums and expenses, see 
section 136.''.
            (3) The table of sections for such part III is amended by 
        striking the item relating to section 136 and inserting the 
        following new items:

                              ``Sec. 136. Distributions from individual 
                                        retirement plans and section 
                                        401(k) plans for qualified 
                                        long-term care premiums and 
                                        expenses.
                              ``Sec. 137. Cross references to other 
                                        Acts.''.
    (c) Increase in Amount of Deductible Contributions to Individual 
Retirement Plans.--
            (1) In general.--Subparagraph (A) of section 219(b)(1) 
        (relating to maximum amount of deduction) is amended by 
        striking ``$2,000'' and inserting ``$4,000''.
            (2) Spousal ira.--Paragraph (2) of section 219(c) (relating 
        to special rules for certain married individuals) is amended by 
        striking ``$2,250'' and ``$2,000'' and inserting ``$4,500'' and 
        ``$4,000'', respectively.
            (3) Conforming amendments.--
                    (A) Section 408(a)(1) is amended by striking ``in 
                excess of $2,000 on behalf of any individual'' and 
                inserting ``on behalf of any individual in excess of 
                the amount in effect for such taxable year under 
                section 219(b)(1)(A)''.
                    (B) Section 408(b)(2)(B) is amended by striking 
                ``$2,000'' and inserting ``the dollar amount in effect 
                under section 219(b)(1)(A)''.
                    (C) Section 408(j) is amended by striking 
                ``$2,000''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 817. EXCLUSION FROM GROSS INCOME FOR AMOUNTS RECEIVED ON 
              CANCELLATION OF LIFE INSURANCE POLICIES AND USED FOR 
              QUALIFIED LONG-TERM CARE INSURANCE.

    (a) In General.--
            (1) Exclusion from gross income.--
                    (A) In general.--Part III of subchapter B of 
                chapter 1 (relating to items specifically excluded from 
                gross income), as amended by section 216, is further 
                amended by redesignating section 137 as section 138 and 
                by inserting after section 136 the following new 
                section:

``SEC. 137. AMOUNTS RECEIVED ON CANCELLATION, ETC. OF LIFE INSURANCE 
              CONTRACTS AND USED TO PAY PREMIUMS FOR QUALIFIED LONG-
              TERM CARE INSURANCE.

    ``No amount (which but for this section would be includible in the 
gross income of an individual) shall be included in gross income on the 
whole or partial surrender, cancellation, or exchange of any life 
insurance contract during the taxable year if--
            ``(1) such individual has attained age 59\1/2\ on or before 
        the date of the transaction, and
            ``(2) the amount otherwise includible in gross income is 
        used during such year to pay for any policy of qualified long-
        term care insurance which--
                    ``(A) is for the benefit of such individual or the 
                spouse of such individual if such spouse has attained 
                age 59\1/2\ on or before the date of the transaction, 
                and
                    ``(B) may not be surrendered for cash.''.
                    (B) Clerical amendment.--The table of sections for 
                such part III is amended by striking the last item and 
                inserting the following new items:

                              ``Sec. 137. Amounts received on 
                                        cancellation, etc. of life 
                                        insurance contracts and used to 
                                        pay premiums for qualified 
                                        long-term care insurance.
                              ``Sec. 138. Cross references to other 
                                        Acts.''.
            (2) Certain exchanges not taxable.--Subsection (a) of 
        section 1035 (relating to certain exchanges of insurance 
        contracts) is amended by striking the period at the end of 
        paragraph (3) and inserting ``; or'', and by adding at the end 
        the following new paragraph:
            ``(4) in the case of an individual who has attained age 
        59\1/2\, a contract of life insurance or an endowment or 
        annuity contract for a policy of qualified long-term care 
        insurance, if such policy may not be surrendered for cash.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 818. USE OF GAIN FROM SALE OF PRINCIPAL RESIDENCE FOR PURCHASE OF 
              QUALIFIED LONG-TERM HEALTH CARE INSURANCE.

    (a) In General.--Subsection (d) of section 121 (relating to 1-time 
exclusion of gain from sale of principal residence by individual who 
has attained age 55) is amended by adding at the end the following new 
paragraph:
            ``(10) Eligibility of home equity conversion sale-leaseback 
        transaction for exclusion.--
                    ``(A) In general.--For purposes of this section, 
                the term `sale or exchange' includes a home equity 
                conversion sale-leaseback transaction.
                    ``(B) Home equity conversion sale-leaseback 
                transaction.--For purposes of subparagraph (A), the 
                term `home equity conversion sale-leaseback' means a 
                transaction in which--
                            ``(i) the seller-lessee--
                                    ``(I) has attained the age of 55 
                                before the date of the transaction,
                                    ``(II) sells property which during 
                                the 5-year period ending on the date of 
                                the transaction has been owned and used 
                                as a principal residence by such 
                                seller-lessee for periods aggregating 3 
                                years or more,
                                    ``(III) uses a portion of the 
                                proceeds from such sale to purchase a 
                                policy of qualified long-term care 
                                insurance, which policy may not be 
                                surrendered for cash,
                                    ``(IV) obtains occupancy rights in 
                                such property pursuant to a written 
                                lease requiring a fair rental, and
                                    ``(V) receives no option to 
                                repurchase the property at a price less 
                                than the fair market price of the 
                                property unencumbered by any leaseback 
                                at the time such option is exercised, 
                                and
                            ``(ii) the purchaser-lessor--
                                    ``(I) is a person,
                                    ``(II) is contractually responsible 
                                for the risks and burdens of ownership 
                                and receives the benefits of ownership 
                                (other than the seller-lessee's 
                                occupancy rights) after the date of 
                                such transaction, and
                                    ``(III) pays a purchase price for 
                                the property that is not less than the 
                                fair market price of such property 
                                encumbered by a leaseback, and taking 
                                into account the terms of the lease.
                    ``(C) Additional definitions.--For purposes of 
                subparagraph (B)--
                            ``(i) Occupancy rights.--The term 
                        `occupancy rights' means the right to occupy 
                        the property for any period of time, including 
                        a period of time measured by the life of the 
                        seller-lessee on the date of the sale-leaseback 
                        transaction (or the life of the surviving 
                        seller-lessee, in the case of jointly held 
                        occupancy rights), or a periodic term subject 
                        to a continuing right of renewal by the seller-
                        lessee (or by the surviving seller-lessee, in 
                        the case of jointly held occupancy rights).
                            ``(ii) Fair rental.--The term `fair rental' 
                        means a rental for any subsequent year which 
                        equals or exceeds the rental for the first year 
                        of a sale-leaseback transaction.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to sales after December 31, 1992, in taxable years beginning after such 
date.

                    Subtitle C--Medicaid Amendments

SEC. 821. EXPANSION OF MEDICAID ELIGIBILITY FOR LONG-TERM CARE 
              BENEFITS.

    (a) In General.--Title XIX of the Social Security Act (42 U.S.C. 
1396 et seq.) is amended by adding at the end the following new 
section:

               ``eligibility for long-term care benefits

    ``Sec. 1931. (a) Eligibility for Nursing Facility Services.--Any 
individual--
            ``(1) who is 65 years of age or older,
            ``(2) who has resources (including resources of the 
        individual's spouse) which do not exceed the resource 
        limitation specified in subsection (c)(1),
            ``(3) who is not otherwise eligible for medical assistance 
        for nursing facility services under this title, and
            ``(4) who has been provided 30 months of nursing facility 
        services (during a period in which the individual required the 
        level of care provided in a nursing facility) during the 
        previous 48 months (or, with respect to the application of 
        subsection (e), 72 months),
is eligible, notwithstanding any other provisions of this title, for 
medical assistance under this title for nursing facility services so 
long as the individual continues to meet the requirements of this 
subsection (other than paragraph (4)) and is confined to a nursing 
facility or otherwise requires the same level of care as is provided in 
a nursing facility.
    ``(b) Eligibility for Home and Community-Based Care.--Any 
individual--
            ``(1) who is 65 years of age or older,
            ``(2) who has resources (including resources of the 
        individual's spouse) which do not exceed the resource 
        limitation specified in subsection (c)(1), and
            ``(3) who is not otherwise eligible for medical assistance 
        for home and community-based long-term care under this title,
is eligible, notwithstanding any other provisions of this title, for 
medical assistance under this title for home and community-based long-
term care so long as the individual continues to meet the requirements 
of this subsection and requires the same level of care as is provided 
in a nursing facility.
    ``(c) Resource Limitation.--
            ``(1) In general.--For purposes of this section, the 
        resource limitation specified in this subsection is $500,000, 
        increased, for each year after 1993, by the percentage increase 
        in the Consumer Price Index for All Urban Consumers (all items; 
        U.S. city average) from July 1992 to July of the previous year, 
        rounded (if not a multiple of $1,000) to the nearest $1,000.
            ``(2) Certain personal property not included.--Personal 
        property items with a fair market value less than $5,000 in the 
        aggregate shall not be included in any calculation of resources 
        under subsections (a) and (b) which are subject to the resource 
        limitation specified in paragraph (1).
    ``(d) Treatment of Level of Care.--
            ``(1) In general.--For purposes of subsections (a) and (b), 
        an individual is considered to require the level of care 
        provided in a nursing facility if the individual cannot perform 
        (without substantial human assistance) at least 3 activities of 
        daily living or needs substantial human assistance because of 
        cognitive or other mental impairment (including Alzheimer's 
        disease).
            ``(2) Activities of daily living defined.--The `activities 
        of daily living' referred to in paragraph (1) are the 
        following: eating, bathing, dressing, toileting, and 
        transferring in and out of a bed or in and out of a chair.
    ``(e) Substitution of Expenses Incurred for Qualified Home Care for 
Months in Nursing Facility.--
            ``(1) In general.--In determining whether an individual has 
        been provided 30 months of nursing facility services under 
        subsection (a)(4), expenses incurred (whether paid for by 
        insurance, themselves, or relatives but not including expenses 
        for which payment is made under this title, by the Department 
        of Veterans Affairs, the Department of Defense, or other 
        Federal programs) for qualified home care (as defined in 
        paragraph (3)) shall be taken into account in the manner 
        specified in paragraph (2).
            ``(2) Converting expenses to months.--Expenses described in 
        paragraph (1) shall be converted to months of nursing facility 
        services by dividing such expenses by the national median 
        monthly cost (as determined by the Secretary, and using a 
        weighted average for both public and private nursing 
        facilities) for nursing facility services in the month in which 
        the expenses are incurred.
            ``(3) Qualified home care defined.--In this subsection, the 
        term `qualified home care' means home and community-based 
        services described in section 1915(d).''.
    (b) Conforming Amendments.--Section 1902(a) of such Act (42 U.S.C. 
1396a(a)), as amended by section 302, is further amended--
            (1) in paragraph (10)--
                    (A) in clause (i) of subparagraph (A), by striking 
                ``or'' at the end of subclause (VI), by striking the 
                semicolon at the end of subclause (VII) and inserting 
                ``, or'', and by adding at the end the following:
                                    ``(VIII) who are described in 
                                subsections (a) and (b) of section 
                                1931;''; and
                    (B) in the matter following subparagraph (F)--
                            (i) by striking ``; and (XI)''; and 
                        inserting ``, (XI);
                            (ii) by striking ``, and (XI)'' and 
                        inserting ``, (XII); and
                            (iii) by inserting before the semicolon at 
                        the end the following: ``, and (XIII) the 
                        making available of medical assistance for 
                        certain nursing facility services and home and 
                        community-based long-term care in accordance 
                        with section 1931 shall not, by reason of this 
                        paragraph, require such assistance to be made 
                        available to other individuals'';
            (2) in paragraph (59), by striking ``; and'' and inserting 
        a semicolon,
            (3) in paragraph (60), by striking the period at the end 
        and inserting ``; and'', and
            (4) by adding at the end the following new paragraph:
            ``(61) provides for medical assistance for certain nursing 
        facility services and home and community-based long-term care 
        in accordance with section 1931.''.

SEC. 822. EFFECTIVE DATE.

    (a) In General.--The amendments made by this subtitle apply (except 
as provided under subsection (b)) to payments under title XIX of the 
Social Security Act for calendar quarters beginning on or after 1 year 
after the date of the enactment of this Act, without regard to whether 
regulations to implement such amendments are promulgated by such date.
    (b) Delay Permitted if State Legislation Required.--In the case of 
a State plan for medical assistance under title XIX of the Social 
Security Act which the Secretary of Health and Human Services 
determines requires State legislation (other than legislation 
authorizing or appropriating funds) in order for the plan to meet the 
additional requirements imposed by the amendments made by this 
subtitle, the State plan shall not be regarded as failing to comply 
with the requirements of such title solely on the basis of its failure 
to meet these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first regular session 
of the State legislature that begins after the date of the enactment of 
this Act. For purposes of the previous sentence, in the case of a State 
that has a 2-year legislative session, each year of such session shall 
be deemed to be a separate regular session of the State legislature.
    (c) Transition.--In applying the amendments made by this subtitle, 
only months beginning after the date of the enactment of this Act may 
be counted toward meeting the 30-month deductible described in section 
1931(a)(4) of the Social Security Act, as added by this subtitle.

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