II 

112TH CONGRESS 

2D SESSION S. 3673 

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

IN THE SENATE OF THE UNITED STATES 

DECEMBER 12, 2012 

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

to the Committee on Finance 

A BILL 

To provide a comprehensive deficit reduction plan, and for 

other purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘The Dollar for Dollar Act of 2012’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MEDICAID 

Sec. 1101. Comprehensive Medicaid Waivers. 

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

TITLE II—MEDICARE 


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

Program Reforms; Reports 

Sec. 2000. Short title; purpose. 

PART I—MEDICARE TOTAL HEALTH PROGRAM

Sec. 2001. Establishment of Medicare Total Health program. 

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

PART II—MEDICARE FEE-FOR-SERVICE REFORMS

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

Sec. 2012. Unified Medicare deductible. 

Sec. 2013. Uniform Medicare coinsurance rate. 

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

PART III—ANNUAL REPORT TO CONGRESS

Sec. 2021. Annual report to Congress. 

Subtitle B—Elimination of Exemption of Medicare Payments to Physicians 

Under Statutory PAYGO 

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

statutory PAYGO. 

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

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

beneficiaries. 

Subtitle D—Increase in the Medicare Eligibility Age 

Sec. 2301. Increase in the Medicare eligibility age. 

Subtitle E—Other Provisions 

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

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

payments. 

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

home health prospective payment amounts. 

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

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

TITLE III—SOCIAL SECURITY 

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

amount. 

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

Sec. 3103. Minimum social security benefit. 


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

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

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

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

62. 

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

Sec. 3109. Inclusion in annual social security account statement of estimated 

present value of taxes and benefits for Social Security and 

Medicare and projected deficit as a percent of lifetime earnings. 

Sec. 3110. Retirement information campaign. 

TITLE IV—CONVERSION TO CHAINED CPI 

Sec. 4101. Conversion to chained CPI. 

TITLE V—PUBLIC DEBT LIMIT 

Sec. 5101. Increase in public debt limit. 

1 TITLE I—MEDICAID 

2 SEC. 1101. COMPREHENSIVE MEDICAID WAIVERS. 

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

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

5 ‘‘(g) COMPREHENSIVE MEDICAID WAIVERS.— 

6 ‘‘(1) AUTHORITY.— 

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

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

11 under this subsection in lieu of providing such 

12 assistance under a State plan approved under 

13 title XIX or a waiver approved under subsection 

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

15 shall make such an election by submitting a 

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1 cation that the application satisfies the require2 ments of paragraph (2). 

3 ‘‘(B) WAIVER OF STATE MEDICAID PRO4 GRAM REQUIREMENTS.—Any requirements ap5 plicable under this title or title XIX that would 

6 prevent a State from carrying out a comprehen7 sive Medicaid waiver in accordance with the 

8 State’s certified application and the require9 ments of this subsection are deemed waived. 

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

11 conducting a comprehensive Medicaid waiver 

12 under this subsection shall be eligible for a 

13 shared savings bonus in accordance with para14 graph (4). 

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

16 INDIVIDUALS.—A State may elect to treat indi17 viduals eligible for child health assistance under 

18 the State child health plan under title XXI as 

19 eligible individuals under a comprehensive Med20 icaid waiver. The waiver application and deter21 mination of the aggregate spending cap for the 

22 State for the waiver period shall take into ac23 count the inclusion of such individuals in the 

24 comprehensive Medicaid waiver. Any require25 ments applicable under this title, title XIX, or 


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1 title XXI that would prevent a State from in2 cluding such individuals in the comprehensive 

3 Medicaid waiver in accordance with the State’s 

4 certified application and the requirements of 

5 this subsection are deemed waived. 

6 ‘‘(2) COMPREHENSIVE MEDICAID WAIVER AP7 PLICATION.—An application for a comprehensive 

8 Medicaid waiver under this subsection shall contain 

9 the following: 

10 ‘‘(A) GENERAL DESCRIPTION OF PRO11 POSED BENEFIT DELIVERY MODELS, ELIGI12 BILITY CRITERIA, AND BENEFITS.—A brief de13 scription, which may be in outline form, of the 

14 eligibility criteria and medical assistance to be 

15 provided that includes the methods for delivery 

16 of such assistance, the criteria for the deter17 mination of eligibility for such assistance, and 

18 the amount, duration, and scope of such assist19 ance, including a description of the amount (if 

20 any) of premiums, deductibles, coinsurance, or 

21 other cost-sharing. 

22 ‘‘(B) HEDIS MEASURES TO EVALUATE

23 PERFORMANCE.— 

24 ‘‘(i) IN GENERAL.—A description of 

25 not less than 20 of the standard Medicaid 


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1 Healthcare Effectiveness Data and Infor2 mation Set (HEDIS) measures established 

3 by the National Committee for Quality As4 surance selected by the State to annually 

5 evaluate the quality and cost-effectiveness 

6 of the medical assistance provided under 

7 the waiver, and for each such measure 

8 (and, if applicable, the distinct rates asso9 ciated with the measure), the baseline data 

10 and the target performance goal applicable 

11 for each such measure or rate. The State 

12 shall select HEDIS measures that are 

13 closely aligned with the health care items 

14 and services that are provided to eligible 

15 individuals as medical assistance under the 

16 waiver. 

17 ‘‘(ii) EVALUATION.—The description 

18 under this subparagraph shall specify the 

19 independent entity that the State will use 

20 to evaluate the waiver. The State shall pro21 vide an assurance that the State will sub22 mit a copy of the annual evaluation to the 

23 Secretary. 


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1 ‘‘(C) PROGRAM INTEGRITY.—A brief de2 scription of the State’s program to prevent 

3 waste, fraud, and abuse under the waiver. 

4 ‘‘(D) AGGREGATE SPENDING CAP.—An as5 surance that the State agrees— 

6 ‘‘(i) to establish categories that accu7 rately account for each of the distinct pop8 ulation groups that will qualify as eligible 

9 individuals under the waiver (such as chil10 dren, parents, pregnant women, and the 

11 blind or disabled) based on such criteria as 

12 are determined appropriate by the State 

13 (referred to in this subsection as a ‘popu14 lation category’); 

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

16 data relevant to the determination of the 

17 aggregate spending cap for the State for 

18 the waiver period, as determined by the 

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

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

21 which the waiver is approved, to not re22 ceive any Federal payments from the Sec23 retary for amounts expended during such 

24 period that exceed the aggregate spending 

25 cap. 


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1 ‘‘(3) DETERMINATION OF AGGREGATE SPEND2 ING CAP.— 

3 ‘‘(A) ESTABLISHMENT OF SPENDING TEM4 PLATE.— 

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

6 coordination with the Director of the Of7 fice of Management and Budget (referred 

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

9 shall establish a template for determining, 

10 with respect to each State, the aggregate 

11 spending cap for each period for which the 

12 State conducts a comprehensive Medicaid 

13 waiver under this subsection. The Sec14 retary shall— 

15 ‘‘(I) publish a proposed template 

16 not later than 60 days after the date 

17 of enactment of this subsection; 

18 ‘‘(II) provide for a period for 

19 public comment on the proposed tem20 plate; and 

21 ‘‘(III) promulgate a final tem22 plate not later than 120 days after 

23 such date of enactment. 

24 ‘‘(ii) REVISIONS.— 


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1 ‘‘(I) IN GENERAL.—Subject to 

2 subclause (II), the Secretary, in co3 ordination with the Director, shall re4 vise the template, as appropriate, not 

5 less than every 5 years pursuant to a 

6 process that allows for public com7 ment prior to publication of the re8 vised template. 

9 ‘‘(II) TECHNICAL CHANGES.— 

10 The Secretary or the Director may 

11 make any necessary technical or con12 forming changes to the template at 

13 such times and in such manner as is 

14 determined appropriate. 

15 ‘‘(B) DETERMINATION OF AGGREGATE

16 SPENDING CAP FOR EACH STATE.— 

17 ‘‘(i) IN GENERAL.—Subject to sub18 paragraph (C), the aggregate spending cap 

19 applicable to a State for a waiver period 

20 shall be equal to 99 percent of the amount 

21 determined under clause (ii). 

22 ‘‘(ii) TOTAL AMOUNT OF PROJECTED

23 FEDERAL PAYMENTS.—The amount de24 scribed in this clause is equal to the sum 

25 of— 


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1 ‘‘(I) the total amount of Federal 

2 payments that would otherwise be 

3 made to the State during the waiver 

4 period with respect to any dispropor5 tionate share payment adjustment 

6 made under section 1923; and 

7 ‘‘(II) the sum of the amounts de8 termined under clause (iii) for each 

9 population category. 

10 ‘‘(iii) PROJECTED FEDERAL PAY11 MENTS FOR MEDICAL ASSISTANCE PRO12 VIDED TO POPULATION CATEGORIES.—For 

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

14 and the Director shall calculate the 

15 amount of projected expenditures for the 

16 provision of medical assistance to eligible 

17 individuals in each population category 

18 during the waiver period (as determined 

19 based upon the population categories es20 tablished and the data provided by the 

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

22 well as the annual baseline estimates sup23 plied by the Director and such other data 

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1 retary), which shall be equal to the product 

2 of— 

3 ‘‘(I) subject to clause (iv), the 

4 monthly per capita amount of Federal 

5 payments that were made to the State 

6 under the State plan under title XIX 

7 (or under a waiver approved under 

8 subsection (d) or extended under sub9 section (e)) for an individual in such 

10 population category during the fiscal 

11 year prior to the State application for 

12 the waiver (referred to in this para13 graph as the ‘population category per 

14 capita baseline’); 

15 ‘‘(II) the number of individuals 

16 within such population category that 

17 are projected to be eligible to receive 

18 medical assistance during the waiver 

19 period; and 

20 ‘‘(III) the number of months in 

21 the waiver period. 

22 ‘‘(iv) POPULATION CATEGORIES WITH

23 NO BASELINE DATA.—For purposes of any 

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

25 population category that lacks sufficient 


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1 data to calculate the population category 

2 per capita baseline and that consists of in3 dividuals for which the State would other4 wise be required to provide medical assist5 ance to pursuant to section 

6 1902(a)(10)(A)(i)(VIII), the population 

7 category per capita baseline shall be equal 

8 to the monthly per capita amount of Fed9 eral payments that would otherwise have 

10 been made to the State under the State 

11 plan under title XIX (or under a waiver 

12 approved under subsection (d) or extended 

13 under subsection (e)) during the preceding 

14 fiscal year for an individual who is under 

15 65 years of age, not pregnant, not entitled 

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

17 title XVIII, or enrolled for benefits under 

18 part B of title XVIII. 

19 ‘‘(v) BUDGET NEUTRALITY.—In no 

20 event shall the aggregate spending cap es21 tablished for a State for a waiver period 

22 allow for Federal payments to the State 

23 during the waiver period that exceed the 

24 amount of Federal payments to the State 

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1 riod if the State had not elected to conduct 

2 a comprehensive Medicaid waiver under 

3 this subsection during the period. 

4 ‘‘(C) ADJUSTMENT OF AGGREGATE SPEND5 ING CAP FOR HIGH UNEMPLOYMENT.—For pur6 poses of subparagraph (B)(i), if the average 

7 monthly unemployment rate (as defined in 

8 paragraph (8)(A)) for a State exceeds 10 per9 cent for any consecutive period of at least 6 

10 months occurring during the waiver period, the 

11 aggregate spending cap applicable to the State 

12 for such waiver period shall be equal to 100 

13 percent of the amount determined under sub14 paragraph (B)(ii). 

15 ‘‘(4) SHARED SAVINGS BONUSES.— 

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

17 annually pay each State conducting a com18 prehensive Medicaid waiver under this sub19 section an amount equal to 25 percent of the 

20 waiver savings determined with respect to a 

21 State and a waiver period under subparagraph 

22 (C). 

23 ‘‘(B) DEDICATED TO HEALTH CARE.—A 

24 State that receives a payment under this para25 graph shall spend not less than 80 percent of 


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1 the payment on health care services or health2 related activities for eligible individuals. 

3 ‘‘(C) DETERMINATION OF WAIVER SAV4 INGS.—The Secretary and the Director shall es5 tablish a process for determining with respect 

6 to a State and a waiver period the amount of 

7 savings achieved by a State for the period. The 

8 process shall take into account the difference 

9 between the aggregate spending cap applicable 

10 to the State for the waiver period and the total 

11 amount expended by the State under the waiver 

12 for the period. 

13 ‘‘(D) PAYMENT; RETROSPECTIVE ADJUST14 MENT.—The Secretary shall make annual pay15 ments under this paragraph on the basis of 

16 claims submitted by the State for expenses paid 

17 by the State for medical assistance provided 

18 under the waiver, and such other investigation 

19 as the Secretary or the Director may find nec20 essary, and may reduce or increase the pay21 ments as necessary to adjust for prior overpay22 ments or under payments under this paragraph. 

23 ‘‘(5) DURATION.— 

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

25 a comprehensive Medicaid waiver under this 


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1 subsection for a 5-year period. Subject to sub2 paragraph (B), a comprehensive Medicaid waiv3 er may be renewed for additional 3-year periods 

4 upon the request of the State, unless within 90 

5 days after receipt of a State request for a re6 newal of a waiver, the Secretary and the Direc7 tor determine, based on the State evaluations 

8 required under paragraph (2)(B), that the waiv9 er should not be renewed. 

10 ‘‘(B) STATE EVALUATIONS AND TARGET

11 PERFORMANCE GOALS.—For purposes of sub12 paragraph (A), the Secretary and the Director 

13 may not renew a waiver unless each of the 

14 measures or rates selected by the State pursu15 ant to paragraph (2)(B) has improved or re16 mained constant during the waiver period. 

17 ‘‘(6) LIMITED SECRETARIAL AUTHORITY; AD18 MINISTRATIVE AND JUDICIAL REVIEW.— 

19 ‘‘(A) CERTIFICATION OF WAIVER APPLICA20 TIONS.— 

21 ‘‘(i) IN GENERAL.—Except as pro22 vided under clause (ii), the Secretary and 

23 the Director shall have 90 days from re24 ceipt of an application by a State for a 

25 comprehensive Medicaid waiver to certify 


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1 the application as satisfying the require2 ments of paragraph (2). 

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

4 the Director may submit a single set of in5 quiries for additional information to the 

6 State during the initial 90-day period de7 scribed under clause (i). If a State receives 

8 a set of inquires, the State shall have up 

9 to 60 days to respond. The Secretary and 

10 the Director shall have an additional 30- 

11 day period, starting on the date the Sec12 retary receives a State response to a set of 

13 inquiries, to make a final determination as 

14 to whether the State’s waiver application 

15 may be certified as complying with the re16 quirements of paragraph (2). 

17 ‘‘(iii) FAILURE TO RESPOND BY THE

18 SECRETARY.—An application by a State 

19 for a comprehensive Medicaid waiver shall 

20 be deemed certified by the Secretary if the 

21 Secretary does not submit any inquiries 

22 during the initial 90-day review period. 

23 ‘‘(iv) EFFECTIVE DATE.—A waiver 

24 that has been certified by the Secretary (or 

25 deemed to be certified) may be effective, at 


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1 the discretion of the State, as of the first 

2 day of the calendar quarter in which the 

3 application for the waiver was submitted 

4 by the State. 

5 ‘‘(B) DENIAL OF WAIVER APPLICATIONS

6 OR RENEWAL REQUESTS.— 

7 ‘‘(i) IN GENERAL.—If the Secretary 

8 and the Director determine that an appli9 cation for a comprehensive Medicaid waiv10 er, or a request for extension of an existing 

11 comprehensive Medicaid waiver, does not 

12 satisfy the requirements of paragraph (2), 

13 the Secretary shall notify the State of the 

14 disapproval by written notification, not 

15 later than 10 days following the issuance 

16 of such determination and shall provide a 

17 detailed description of the reasons for the 

18 denial of the waiver to— 

19 ‘‘(I) the State that submitted the 

20 waiver application or extension re21 quest; 

22 ‘‘(II) the members of Congress 

23 representing such State; and 

24 ‘‘(III) the Committee on Finance 

25 of the Senate and the Committee on 


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1 Energy and Commerce of the House 

2 of Representatives. 

3 ‘‘(ii) ADMINISTRATIVE AND JUDICIAL

4 REVIEW.— 

5 ‘‘(I) ADMINISTRATIVE REVIEW.— 

6 Within 60 days after the date that a 

7 State receives notice of the denial of a 

8 waiver application or extension re9 quest, the State may appeal the deter10 mination to the Departmental Appeals 

11 Board established in the Department 

12 of Health and Human Services. The 

13 Departmental Appeals Board shall 

14 make a final determination with re15 spect to an appeal filed under this 

16 subparagraph not less than 60 days 

17 after the date on which the appeal is 

18 filed. 

19 ‘‘(II) JUDICIAL REVIEW.—Within 

20 60 days after the date of a final deci21 sion by the Board under subclause (I) 

22 that is adverse to a State, the State 

23 may obtain judicial review of the final 

24 decision by filing an action in the dis25 trict court of the United States for 


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1 the judicial district in which the prin2 cipal or headquarters office of the 

3 State agency responsible for admin4 istering the State Medicaid program 

5 is located or the United States Dis6 trict Court for the District of Colum7 bia. 

8 ‘‘(C) REPORTS.— 

9 ‘‘(i) IN GENERAL.—Not later than 2 

10 years after the date on which the Secretary 

11 and the Director first approve an applica12 tion for a comprehensive Medicaid waiver 

13 under this subsection and every 3 years 

14 thereafter, the Comptroller General of the 

15 United States (referred to in this subpara16 graph as the ‘Comptroller’) shall submit to 

17 the Committee on Finance of the Senate 

18 and the Committee on Energy and Com19 merce of the House of Representatives a 

20 report on the waivers certified as of the 

21 date of such report. Each report shall in22 clude an evaluation of the quality and cost23 effectiveness of the comprehensive Med24 icaid waivers in effect during the reporting 

25 period in providing medical assistance to 


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1 eligible individuals, as well as the financial 

2 effort of the waiver on State and Federal 

3 budgets. 

4 ‘‘(ii) REPORTING OF INFORMATION.— 

5 A State with a comprehensive Medicaid 

6 waiver under this subsection shall provide 

7 the Comptroller, in such form and manner 

8 as the Comptroller may require, with any 

9 relevant information regarding the waiver, 

10 including total expenditures by the State 

11 under the waiver, the number of individ12 uals provided medical assistance under the 

13 waiver, and such other information as the 

14 Comptroller may require for purposes of 

15 preparing the reports required under this 

16 subparagraph. 

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

18 Medicaid waiver shall not apply to— 

19 ‘‘(A) the pediatric vaccine program under 

20 section 1928; and 

21 ‘‘(B) limitations on total payments to terri22 tories under section 1108. 

23 ‘‘(8) OUTREACH AND EDUCATION.— 

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

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1 section, the Secretary shall conduct an outreach 

2 and education campaign to States regarding the 

3 availability of comprehensive Medicaid waivers 

4 under this subsection. 

5 ‘‘(B) PUBLIC NOTICE AND COMMENT.—Be6 fore submitting an application for a comprehen7 sive Medicaid waiver, a State shall make the 

8 proposed application available to the public 

9 through such means as the State determines 

10 appropriate and allow for a reasonable public 

11 comment period of not greater than 30 days. 

12 ‘‘(C) PUBLIC AWARENESS OF APPROVED

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

14 comprehensive Medicaid waiver shall conduct an 

15 outreach and education campaign to ensure 

16 that health care providers and eligible individ17 uals within the State are provided with ade18 quate notice regarding the methods and criteria 

19 through which the State intends to provide 

20 medical assistance under the waiver. 

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

22 ‘‘(A) AVERAGE MONTHLY UNEMPLOYMENT

23 RATE.—The term ‘average monthly unemploy24 ment rate’ means the average of the monthly 

25 number unemployed in the State, divided by the 


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1 average of the monthly civilian labor force in 

2 the State, seasonally adjusted, as determined 

3 based on the most recent monthly publications 

4 of the Bureau of Labor Statistics of the De5 partment of Labor. 

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

7 ‘eligible individual’ means, for each year during 

8 the waiver period— 

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

10 the State would otherwise be required to 

11 provide medical assistance to pursuant 

12 to— 

13 ‘‘(I) section 1902(a)(10)(A)(i); 

14 ‘‘(II) paragraphs (1) or (4) of 

15 section 1902(e); 

16 ‘‘(III) section 1925; or 

17 ‘‘(IV) section 1931; 

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

19 individual who, for such year, the State 

20 would otherwise provide child health assist21 ance to under the State child health plan 

22 under title XXI; and 

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

24 individual who is not described in clause (i) 

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1 sources, health status, or other criteria as 

2 the State may establish. 

3 ‘‘(C) MEDICAL ASSISTANCE.—The term 

4 ‘medical assistance’ means— 

5 ‘‘(i) health care coverage (as deter6 mined by the State); and 

7 ‘‘(ii) rehabilitation and other services 

8 to help eligible individuals attain or retain 

9 capability for independence or self-care, 

10 such as home and community-based serv11 ices. 

12 ‘‘(D) STATE MEDICAID PROGRAM.—The 

13 term ‘State Medicaid program’ means the State 

14 program for medical assistance provided under 

15 a State plan under title XIX, including any 

16 waiver that has been approved with respect to 

17 a State plan prior to an application by the 

18 State for a comprehensive Medicaid waiver 

19 under this subsection.’’. 

20 SEC. 1102. PHASED-IN ELIMINATION OF ALLOWABLE PRO21 VIDER TAXES UNDER MEDICAID. 

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

23 1903(w)(4)(C) of the Social Security Act (42 U.S.C. 

24 1396b(w)(4)(C)) is amended to read as follows: 


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

2 of the existence of an indirect guarantee shall be 

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

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

5 November 1, 2006, except that— 

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

7 on or after January 1, 2008, and before Octo8 ber 1, 2011, ‘5.5 percent’ shall be substituted 

9 for ‘6 percent’ each place it appears; 

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

11 percentage specified under such paragraph shall 

12 apply; 

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

14 the percentage determined under clause (iii) for 

15 the fiscal year shall be substituted for ‘6 per16 cent’ each place it appears; and 

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

18 year thereafter, ‘0 percent’ shall be substituted 

19 for ‘6 percent’ each place it appears. 

20 ‘‘(iii) For purposes of clause (ii)(III), the per21 centage determined under this clause shall be equal 

22 to the percentage applicable under subclause (II) or 

23 (III) of clause (ii) for the preceding fiscal year, re24 duced by 0.6 percentage points.’’. 


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

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

3 TITLE II—MEDICARE 

4 Subtitle A—Medicare Total Health 

5 Program; Medicare Fee-for6 Service Program Reforms; Re7 ports 

8 SEC. 2000. SHORT TITLE; PURPOSE. 

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

10 ‘‘Medicare Total Health Act of 2012’’. 

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

12 amend title XVIII of the Social Security Act to improve 

13 the sustainability of the Medicare program by establishing 

14 a Total Health system, reforming the Medicare fee-for15 service program, and for other purposes. 

16 PART I—MEDICARE TOTAL HEALTH PROGRAM 

17 SEC. 2001. ESTABLISHMENT OF MEDICARE TOTAL HEALTH 

18 PROGRAM. 

19 (a) SUNSET OF MEDICARE ADVANTAGE PLANS.— 

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

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

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

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

24 subject to’’. 


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

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

3 amended— 

4 (1) in the part heading, by striking 

5 ‘‘MEDICARE+CHOICE PROGRAM’’ and inserting 

6 ‘‘MEDICARE ADVANTAGE PROGRAM; MEDICARE

7 TOTAL HEALTH PROGRAM’’; 

8 (2) by inserting before section 1851 the fol9 lowing: 

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

11 (3) by adding at the end the following new sub12 part: 

13 ‘‘Subpart 2—Medicare Total Health Program 

14 ‘‘ELIGIBILITY, ENROLLMENT, AND INFORMATION

15 ‘‘SEC. 1860C–1. (a) ELIGIBILITY.— 

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

17 1851(a)(1) and subject to the succeeding provisions 

18 of this subpart, each Total Health eligible individual 

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

20 benefits under this title— 

21 ‘‘(A) through the original medicare fee-for22 service program under parts A and B, including 

23 the option to elect qualified prescription drug 

24 coverage in accordance with section 1860D–1; 

25 or 


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

2 plan under this subpart. 

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

4 2017.—Coverage under the Medicare Total Health 

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

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

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

8 eligible individual’ means an individual who is enti9 tled to benefits under part A and enrolled under 

10 part B who resides in a Total Health region. 

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

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

13 any of the types of plans of health insurance de14 scribed in section 1851(a)(2)(A), including a plan 

15 for special needs individuals described in clause (ii) 

16 of such section. 

17 ‘‘(b) ENROLLMENT PROCESS FOR TOTAL HEALTH

18 PLANS.— 

19 ‘‘(1) ESTABLISHMENT OF PROCESS.— 

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

21 establish a process for the enrollment, 

22 disenrollment, termination, and change of en23 rollment of Total Health eligible individuals in 

24 Total Health plans in a manner similar to (and 


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1 coordinated with) the process established under 

2 section 1860D–1(b)(1). 

3 ‘‘(B) REQUIREMENTS.—Except as other4 wise provided in this subsection, the process es5 tablished under subparagraph (A) shall include 

6 a residency requirement similar to the residency 

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

8 and shall take into account the process for exer9 cising choice described in section 1851(c). 

10 ‘‘(2) INITIAL ENROLLMENT PERIOD.— 

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

12 of an individual who is a Total Health eligible 

13 individual as of November 15, 2016, there shall 

14 be an initial enrollment period beginning on Oc15 tober 15, 2016, and ending on December 7, 

16 2016. 

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

18 of an individual who first becomes a Total 

19 Health eligible individual after November 15, 

20 2016, there shall be an initial enrollment period 

21 which is the same as the period under section 

22 1851(e)(1). 

23 ‘‘(3) ANNUAL, COORDINATED ELECTION PE24 RIOD.— 


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

2 established under paragraph (1), each indi3 vidual who is eligible to make an election under 

4 this section may change such election during an 

5 annual, coordinated election period. 

6 ‘‘(B) ANNUAL, COORDINATED ELECTION

7 PERIOD.—For purposes of this section, the 

8 term ‘annual, coordinated election period’ 

9 means, with respect to 2017 and succeeding 

10 years, the period beginning on October 15 and 

11 ending on December 7 of the year before such 

12 year. 

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

14 Secretary shall establish special enrollment periods 

15 that are similar to the special enrollment periods es16 tablished under section 1851(e)(4). 

17 ‘‘(5) SPECIAL RULE.— 

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

19 other provision of law, the process established 

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

21 of a Total Health eligible individual who has 

22 failed to enroll in either the original medicare 

23 fee-for-service program option or a Total 

24 Health plan prior to the beginning of a plan 

25 year (including a full-benefit dual eligible indiVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 vidual (as defined in section 1935(c)(6))), for 

2 the enrollment in a Total Health plan with a 

3 monthly beneficiary premium under section 

4 1860C–7(a) (taking into account any adjust5 ment under subparagraph (B) or (C) of section 

6 1860C–7(a)(2) and without regard to any ad7 justment under subparagraph (D) or (E) of 

8 such section) that does not exceed the base ben9 eficiary premium computed under section 

10 1860C–7(a)(1). 

11 ‘‘(B) SELECTION OF PLAN BY THE SEC12 RETARY.—In selecting a plan for the enrollment 

13 of a Total Health eligible individual under sub14 paragraph (A), the Secretary shall first attempt 

15 to identify the Total Health plan in which the 

16 cost-sharing and health benefits are most simi17 lar to the coverage the individual had in the 

18 preceding plan year. If there is more than one 

19 such plan available, the Secretary shall enroll 

20 such an individual on a random basis among all 

21 such plans in the Total Health region. Nothing 

22 in the previous sentence shall prevent such an 

23 individual from declining or changing such en24 rollment. 


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1 ‘‘(C) INDIVIDUALS WHO ARE NOT TOTAL

2 HEALTH ELIGIBLE INDIVIDUALS.—The Sec3 retary shall establish procedures under which 

4 individuals who are entitled to, or enrolled for, 

5 coverage under part A or enrolled for coverage 

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

7 receive benefits with deductible and coinsurance 

8 amounts comparable to the benefits, deductible, 

9 and coinsurance amounts they would have re10 ceived if this subpart had not been enacted. 

11 ‘‘(c) PROVIDING INFORMATION TO BENE12 FICIARIES.— 

13 ‘‘(1) IN GENERAL.—The Secretary shall con14 duct activities that are designed to broadly dissemi15 nate information to Total Health eligible individuals 

16 (and prospective Total Health eligible individuals) 

17 regarding the coverage provided under this subpart. 

18 Such activities shall ensure that such information is 

19 first made available at least 30 days prior to the ini20 tial enrollment period described in subsection 

21 (b)(2)(A). 

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

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

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

25 and contain comparative information similar to the 


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1 information described in paragraph (3) of such sec2 tion. 

3 ‘‘TOTAL HEALTH PLAN BENEFITS

4 ‘‘SEC. 1860C–2. (a) REQUIREMENTS.— 

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

6 Each Total Health plan shall provide to individuals 

7 enrolled under this subpart, through providers and 

8 other persons that meet the applicable requirements 

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

10 Health benefits package and qualified prescription 

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

12 ‘‘(2) DEFINITION OF QUALIFIED TOTAL

13 HEALTH BENEFITS PACKAGE.—For purposes of this 

14 subpart, the term ‘qualified Total Health benefits 

15 package’ means either of the following: 

16 ‘‘(A) STANDARD HEALTH BENEFITS COV17 ERAGE WITH ACCESS TO NEGOTIATED

18 PRICES.—Standard health benefits coverage (as 

19 defined in subsection (b)) and access to nego20 tiated prices under subsection (d). 

21 ‘‘(B) ALTERNATIVE TOTAL HEALTH BENE22 FITS COVERAGE WITH AT LEAST ACTUARIALLY

23 EQUIVALENT BENEFITS AND ACCESS TO NEGO24 TIATED PRICES.—Coverage of health benefits 

25 which meets the alternative health benefits cov26 erage requirements under subsection (c) and acVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 cess to negotiated prices under subsection (d), 

2 but only if the benefit design of such coverage 

3 is approved by the Secretary, as provided under 

4 subsection (c). 

5 ‘‘(3) PERMITTING SUPPLEMENTAL HEALTH

6 BENEFITS COVERAGE.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B), a qualified Total Health benefits 

9 package may include supplemental health bene10 fits coverage consisting of either or both of the 

11 following: 

12 ‘‘(i) CERTAIN REDUCTIONS IN COST13 SHARING.— 

14 ‘‘(I) IN GENERAL.—A reduction 

15 in the annual deductible or a reduc16 tion in the coinsurance percentage, or 

17 any combination thereof, insofar as 

18 such a reduction or increase increases 

19 the actuarial value of benefits above 

20 the actuarial value of a basic Total 

21 Health benefits package. 

22 ‘‘(II) CONSTRUCTION.—Nothing 

23 in this clause shall be construed as af24 fecting the application of subsection 

25 (c)(3). 


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1 ‘‘(ii) ADDITIONAL BENEFITS.—Cov2 erage of any health care item or service 

3 that is not covered under the original 

4 medicare fee-for-service program option or 

5 that is eligible for coverage under part D, 

6 subject to the approval of the Secretary. 

7 ‘‘(B) REQUIREMENT FOR AT LEAST ONE

8 BASIC BENEFITS PLAN.—A Total Health spon9 sor may not offer a Total Health plan that pro10 vides supplemental health benefits coverage 

11 pursuant to subparagraph (A) in an area unless 

12 the sponsor also offers a Total Health plan in 

13 the area that only provides a basic Total Health 

14 benefits package. 

15 ‘‘(4) BASIC TOTAL HEALTH BENEFITS PACK16 AGE.—For purposes of this subpart, the term ‘basic 

17 Total Health benefits package’ means either of the 

18 following: 

19 ‘‘(A) Coverage that meets the requirements 

20 of paragraph (2)(A). 

21 ‘‘(B) Coverage that meets the requirements 

22 of paragraph (2)(B) but does not have any sup23 plemental health benefits coverage described in 

24 paragraph (3)(A). 


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1 ‘‘(5) APPLICATION OF SECONDARY PAYER PRO2 VISIONS.—The provisions of section 1852(a)(4) shall 

3 apply under this subpart in the same manner as 

4 such provisions applied to a Medicare Advantage 

5 plan. 

6 ‘‘(6) CONSTRUCTION.—Nothing in this sub7 section shall be construed as changing the computa8 tion of incurred costs under subsection (b)(3). 

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

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

11 benefits coverage’ means coverage of benefits under the 

12 original medicare fee-for-service program option (as de13 fined in section 1852(a)(1)(B)), including the following re14 quirements: 

15 ‘‘(1) DEDUCTIBLE.—The coverage has an an16 nual deductible that is equal to the amount of the 

17 unified deductible for the year under section 1899C. 

18 ‘‘(2) 20 PERCENT COINSURANCE.—The cov19 erage has coinsurance (for costs above the annual 

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

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

22 paragraph (3)(B)(i)) that is— 

23 ‘‘(A) equal to 20 percent; or 

24 ‘‘(B) actuarially equivalent (using proc25 esses and methods established by the Secretary) 


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1 to an average expected payment of 20 percent 

2 of such costs. 

3 ‘‘(3) PROTECTION AGAINST HIGH OUT-OF-POCK4 ET EXPENDITURES.— 

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

6 benefits, after the Total Health eligible indi7 vidual has incurred costs (as described in sub8 paragraph (C)) for health benefits in a year 

9 equal to— 

10 ‘‘(i) the first threshold annual out-of11 pocket limit specified in subparagraph 

12 (B)(i) for that year but less than the sec13 ond threshold annual out-of-pocket limit 

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

15 year, with coinsurance that is equal to 5 

16 percent; and 

17 ‘‘(ii) the second threshold annual out18 of-pocket limit specified in subparagraph 

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

20 ‘‘(B) ANNUAL OUT-OF-POCKET LIMITS

21 SPECIFIED.—For purposes of this subpart: 

22 ‘‘(i) FIRST THRESHOLD ANNUAL OUT23 OF-POCKET LIMIT SPECIFIED.—The ‘first 

24 threshold annual out-of-pocket limit’ speci25 fied in this clause is equal to the first 


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1 threshold annual out-of-pocket limit for the 

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

3 ‘‘(ii) SECOND THRESHOLD ANNUAL

4 OUT-OF-POCKET LIMIT SPECIFIED.—The 

5 ‘second threshold annual out-of-pocket 

6 limit’ specified in this clause is equal to the 

7 second threshold annual out-of-pocket limit 

8 for the year specified in section 

9 1899B(b)(2). 

10 ‘‘(C) APPLICATION.—In applying subpara11 graph (A), incurred costs shall only include 

12 costs incurred with respect to health benefits 

13 for the annual deductible described in para14 graph (1) and for cost-sharing described in 

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

16 benefits that would have otherwise been covered 

17 under the plan but for the exhaustion of those 

18 benefits. Incurred costs do not include any costs 

19 incurred for health benefits which are not in20 cluded (or treated as being included) under the 

21 plan. 

22 ‘‘(c) ALTERNATIVE TOTAL HEALTH BENEFITS COV23 ERAGE REQUIREMENTS.—A Total Health plan may pro24 vide a different benefit design from standard health bene25 fits coverage so long as the Secretary determines that the 


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1 following requirements are met and the plan applies for, 

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

3 design: 

4 ‘‘(1) ASSURING AT LEAST ACTUARIALLY EQUIV5 ALENT COVERAGE.— 

6 ‘‘(A) ASSURING EQUIVALENT VALUE OF

7 TOTAL COVERAGE.—The actuarial value of the 

8 total coverage is at least equal to the actuarial 

9 value of standard health benefits coverage. 

10 ‘‘(B) ASSURING EQUIVALENT UNSUB11 SIDIZED VALUE OF COVERAGE.—The unsub12 sidized value of the coverage is at least equal to 

13 the unsubsidized value of standard health bene14 fits coverage. For purposes of this subpara15 graph, the unsubsidized value of coverage is the 

16 amount by which the actuarial value of the cov17 erage exceeds the subsidy payments with re18 spect to such coverage. 

19 ‘‘(C) ASSURING STANDARD PAYMENT FOR

20 COSTS BELOW FIRST THRESHOLD ANNUAL OUT21 OF-POCKET LIMIT.—The coverage is designed, 

22 based upon an actuarially representative pat23 tern of utilization, to provide for the payment, 

24 with respect to costs incurred up to the first 

25 threshold annual out-of-pocket limit specified in 


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

2 at least the product of— 

3 ‘‘(i) the amount by which the costs in4 curred exceed the deductible described in 

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

6 ‘‘(ii) 100 percent minus the coinsur7 ance percentage specified in subsection 

8 (b)(2). 

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

10 benefit package is approved by the Secretary as con11 taining a comparable range of benefits to standard 

12 health benefits coverage and meets such other re13 quirements of this subpart as the Secretary may 

14 specify. 

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

16 deductible under the coverage shall not exceed the 

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

18 for the year. 

19 ‘‘(4) SAME PROTECTION AGAINST HIGH OUT-OF20 POCKET EXPENDITURES.—The coverage provides the 

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

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

23 ‘‘(1) ACCESS.— 

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

25 Total Health benefits package offered by a 


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1 Total Health sponsor offering a Total Health 

2 plan, the sponsor shall provide enrollees with 

3 access to negotiated prices used for payment for 

4 covered health benefits, regardless of the fact 

5 that no benefits may be payable under the cov6 erage with respect to such benefits because of 

7 the application of a deductible or other cost8 sharing. 

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

10 of this subpart, negotiated prices shall take into 

11 account negotiated price concessions, such as 

12 discounts, direct or indirect subsidies, rebates, 

13 and direct or indirect remunerations, for cov14 ered health benefits. 

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

16 abuse and to ensure proper disclosures and account17 ing under this part and in accordance with section 

18 1857(d)(2)(B), the Secretary may conduct periodic 

19 audits, directly or through contracts, of the financial 

20 statements and records of Total Health sponsors 

21 with respect to Total Health Plans. 

22 ‘‘(3) APPLICATION OF GENERAL EXCLUSION

23 PROVISIONS.— 


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

2 may exclude from a qualified Total Health ben3 efits package any health care item or service— 

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

5 made if section 1862(a) applied to this 

6 subpart; or 

7 ‘‘(ii) which is not prescribed in ac8 cordance with the Total Health plan or 

9 this subpart. 

10 ‘‘(B) RECONSIDERATION AND APPEAL.— 

11 Any exclusion under subparagraph (A) is a de12 termination subject to reconsideration and ap13 peal under this subpart. 

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

15 Health plan satisfies the requirements of subsection (a) 

16 in the same way a Medicare Advantage plan satisfied the 

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

18 ‘‘ACCESS TO A CHOICE OF QUALIFIED TOTAL HEALTH

19 BENEFITS PLANS

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

21 OF PLANS.— 

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

23 AREA.—The Secretary shall ensure that each Total 

24 Health eligible individual has available, consistent 

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


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

2 individual resides. 

3 ‘‘(2) REQUIREMENT FOR DIFFERENT PLAN

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

5 not satisfied with respect to an area if only one enti6 ty offers all of the qualifying plans in the area. 

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

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

9 Secretary may approve limited risk plans under section 

10 1860C–5(g) for the area. 

11 ‘‘BENEFICIARY PROTECTIONS FOR TOTAL HEALTH PLAN

12 ENROLLEES

13 ‘‘SEC. 1860C–4. (a) DISSEMINATION OF INFORMA14 TION.— 

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

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

17 standardized form to each enrollee with a Total 

18 Health plan offered by the sponsor under this sub19 part at the time of enrollment and at least annually 

20 thereafter, the information described in section 

21 1852(c)(1) relating to such plan, insofar as the Sec22 retary determines appropriate with respect to bene23 fits provided under this subpart, and including the 

24 information described in section 1860D–4 relating to 

25 qualified prescription drug coverage under the plan. 


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1 ‘‘(2) DISCLOSURE UPON REQUEST OF GENERAL

2 COVERAGE, UTILIZATION, AND GRIEVANCE INFORMA3 TION.—Upon request of a Total Health eligible indi4 vidual who is eligible to enroll in a Total Health 

5 plan, the Total Health sponsor offering such plan 

6 shall provide information similar (as determined by 

7 the Secretary) to the information described in sec8 tion 1852(c)(2) to such individual. 

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

10 Each Total Health sponsor offering a Total Health 

11 plan shall have a mechanism for providing specific 

12 information on a timely basis to enrollees upon re13 quest. Such mechanism shall include access to infor14 mation through the use of a toll-free telephone num15 ber and, upon request, the provision of such infor16 mation in writing. 

17 ‘‘(4) CLAIMS INFORMATION.— 

18 ‘‘(A) IN GENERAL.—A Total Health spon19 sor offering a Total Health plan must furnish 

20 to each enrollee in a form easily understandable 

21 to such enrollees— 

22 ‘‘(i) an explanation of benefits (in ac23 cordance with section 1806(a) or in a com24 parable manner); and 


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1 ‘‘(ii) when Total Health benefits are 

2 provided under this subpart, a notice of 

3 the benefits in relation to— 

4 ‘‘(I) the deductible described in 

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

6 for the current year; and 

7 ‘‘(II) the annual out-of-pocket 

8 limits under paragraph (3) of such 

9 section for the current year. 

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

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

12 often than as specified by the Secretary. 

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

14 ‘‘(1) ASSURING PROVIDER ACCESS.— 

15 ‘‘(A) DISCOUNTS ALLOWED FOR NETWORK

16 PROVIDERS.—For health benefits furnished 

17 through in-network providers, a Total Health 

18 plan may reduce coinsurance or copayments for 

19 Total Health eligible individuals enrolled in the 

20 plan below the level otherwise required. In no 

21 case shall such a reduction result in an increase 

22 in payments made by the Secretary under sec23 tion 1860C–8 to the Total Health sponsor of 

24 the plan. 


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1 ‘‘(B) CONVENIENT ACCESS FOR NETWORK

2 PROVIDERS.— 

3 ‘‘(i) IN GENERAL.—The Total Health 

4 sponsor of the Total Health plan shall se5 cure the participation in its network of a 

6 sufficient number of health care providers 

7 that furnish health care items and services 

8 under the plan directly to patients to en9 sure convenient access (consistent with 

10 rules established by the Secretary). 

11 ‘‘(ii) ADEQUATE EMERGENCY AC12 CESS.—Such rules shall include adequate 

13 emergency access for enrollees. 

14 ‘‘(C) LEVEL PLAYING FIELD.—Such a 

15 sponsor shall permit enrollees to receive benefits 

16 through any health care provider participating 

17 in the program under this title with any dif18 ferential in charge paid by such enrollees. 

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

20 ‘‘(A) IN GENERAL.—The Total Health 

21 sponsor of a Total Health plan shall issue (and 

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

23 technology) that may be used by an enrollee to 

24 assure access to health benefits under this sub25 part. 


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1 ‘‘(B) STANDARDS.— 

2 ‘‘(i) IN GENERAL.—The Secretary 

3 shall provide for the development, adop4 tion, or recognition of standards relating to 

5 a standardized format for the card or 

6 other technology required under subpara7 graph (A). Such standards shall be com8 patible with part C of title XI and may be 

9 based on standards developed by an appro10 priate standard setting organization. 

11 ‘‘(ii) CONSULTATION.—In developing 

12 the standards under clause (i), the Sec13 retary shall consult with standard setting 

14 organizations determined appropriate by 

15 the Secretary. 

16 ‘‘(iii) IMPLEMENTATION.—The Sec17 retary shall develop, adopt, or recognize 

18 the standards under clause (i) by such date 

19 as the Secretary determines shall be suffi20 cient to ensure that Total Health sponsors 

21 utilize such standards beginning January 

22 1, 2017. 

23 ‘‘(c) COST AND UTILIZATION MANAGEMENT; QUAL24 ITY ASSURANCE; WELLNESS PROGRAM.— 


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

2 shall have in place, directly or through appropriate 

3 arrangements, the following: 

4 ‘‘(A) A cost-effective health benefits man5 agement program, including incentives to re6 duce costs when medically appropriate. 

7 ‘‘(B) Quality assurance measures and sys8 tems to reduce errors and improve the use of 

9 health benefits. 

10 ‘‘(C) A wellness program described in 

11 paragraph (2). 

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

13 and waste. 

14 Nothing in this section shall be construed as impair15 ing a Total Health sponsor from utilizing cost man16 agement tools (including differential payments) 

17 under all methods of operation. 

18 ‘‘(2) WELLNESS PROGRAM.— 

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

20 described in this paragraph is a program fo21 cused on health improvement, disease preven22 tion, and management of chronic conditions for 

23 Total Health eligible individuals enrolled in a 

24 plan under this part to optimize health out25 comes through improved use of health care 


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1 items and services and to reduce the risk of ad2 verse events. 

3 ‘‘(B) ELEMENTS.—Such program may in4 clude elements that promote— 

5 ‘‘(i) enhanced enrollee understanding 

6 to promote the appropriate use of health 

7 care items and services by enrollees and to 

8 reduce the risk of potential adverse events 

9 and to improve health outcomes through 

10 beneficiary education, counseling, and 

11 other appropriate means; 

12 ‘‘(ii) increased enrollee adherence with 

13 recommended regimens through compliance 

14 programs and other appropriate means; 

15 and 

16 ‘‘(iii) detection of adverse events and 

17 patterns of overuse and underuse of health 

18 care items and services. 

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

20 sponsor shall have in place a process to assess, 

21 at least on a quarterly basis, the health benefits 

22 use of individuals who are not enrolled in the 

23 wellness program. 


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1 ‘‘(D) WELLNESS PROGRAM ENROLL2 MENT.—The Total Health sponsor shall have in 

3 place a process to— 

4 ‘‘(i) subject to clause (ii), automati5 cally enroll plan enrollees in the wellness 

6 program required under this subsection; 

7 and 

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

9 enrollment in the wellness program. 

10 ‘‘(E) DEVELOPMENT OF PROGRAM IN CO11 OPERATION WITH PHYSICIANS.—Such program 

12 shall be developed in cooperation with physi13 cians. 

14 ‘‘(F) COORDINATION WITH CARE MANAGE15 MENT PLANS.—The Secretary shall establish 

16 guidelines for the coordination of any wellness 

17 program under this paragraph with respect to 

18 a targeted beneficiary described in section 

19 1860D–4(c)(2)(A)(i) (applied by substituting 

20 ‘Total Health eligible individual’ for ‘part D eli21 gible individual’) with any care management 

22 plan established with respect to such beneficiary 

23 under a chronic care improvement program 

24 under section 1807. 


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1 ‘‘(G) CONSIDERATIONS IN PROVIDER

2 FEES.—The Total Health sponsor of a Total 

3 Health plan shall take into account, in estab4 lishing fees for entities providing services under 

5 such plan, the resources used, and time re6 quired to, implement the wellness program 

7 under this paragraph. Each such sponsor shall 

8 disclose to the Secretary upon request the 

9 amount of any such fees. 

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

11 to provide for comparative information under section 

12 1860C–1(c), the Secretary shall conduct consumer satis13 faction surveys with respect to Total Health sponsors and 

14 Total Health plans in a manner similar to the manner 

15 such surveys were conducted for MA organizations and 

16 MA plans under subpart 1. 

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

18 sponsor shall provide meaningful procedures for hearing 

19 and resolving grievances between the sponsor (including 

20 any entity or individual through which the sponsor pro21 vides covered benefits) and enrollees with Total Health 

22 plans of the sponsor under this part in accordance with 

23 section 1852(f). 

24 ‘‘(f) COVERAGE DETERMINATIONS AND RECONSID25 ERATIONS.—A Total Health sponsor shall meet the reVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 quirements of paragraphs (1) through (3) of section 

2 1852(g) with respect to covered benefits under the Total 

3 Health plan offered by the sponsor under this subpart in 

4 the same manner as such requirements applied to an MA 

5 organization with respect to covered benefits under an MA 

6 plan offered by the organization under subpart 1. 

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

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

9 1852(g) with respect to benefits in a manner similar (as 

10 determined by the Secretary) to the manner such require11 ments applied to an MA organization with respect to bene12 fits under the original medicare fee-for-service program 

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

14 the Total Health eligible individual shall be entitled to 

15 bring such an appeal. 

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

17 OF ENROLLEE RECORDS.—The provisions of section 

18 1852(h) shall apply to a Total Health sponsor and Total 

19 Health plan in the same manner as such provisions ap20 plied to an MA organization and an MA plan. 

21 ‘‘(i) TREATMENT OF ACCREDITATION.—Subpara22 graph (A) of section 1852(e)(4) (relating to treatment of 

23 accreditation) shall apply to a Total Health sponsor under 

24 this part in the same manner as such subparagraph ap25 plied to an MA organization. 


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

2 MARKETING ACTIVITIES.—The following provisions shall 

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

4 and other third parties representing such sponsor) in the 

5 same manner as such provisions applied to a Medicare Ad6 vantage organization (and the agents, brokers, and other 

7 third parties representing such organization): 

8 ‘‘(1) The prohibition under section 

9 1851(h)(4)(C) on conducting activities described in 

10 section 1851(j)(1). 

11 ‘‘(2) The requirement under section 

12 1851(h)(4)(D) to conduct activities described in 

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

14 the limitations established under such section. 

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

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

17 ‘‘(4) The requirements regarding the appoint18 ment of agents and brokers and compliance with 

19 State information requests under subparagraphs (A) 

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

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

22 HEALTH PLAN APPROVAL

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

24 HEALTH REGIONS; SERVICE AREAS.— 

25 ‘‘(1) COVERAGE OF ENTIRE TOTAL HEALTH RE26 GION.— 


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

2 Total Health plan shall consist of an entire 

3 Total Health region established under para4 graph (2). 

5 ‘‘(B) NO USE OF SEGMENTS OF SERVICE

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

7 serve only segments of the service area. 

8 ‘‘(2) ESTABLISHMENT OF TOTAL HEALTH RE9 GIONS.— 

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

11 establish, and may revise, Total Health regions 

12 in accordance with the requirements of this 

13 paragraph. 

14 ‘‘(B) REGIONS TO BE LARGER THAN A SIN15 GLE COUNTY.—Total Health regions shall in16 clude more than one county. 

17 ‘‘(C) REGIONS WITHIN MSAS.—Among 

18 counties in a metropolitan statistical area, a 

19 Total Health region shall include all of the 

20 counties located in the same State in that met21 ropolitan statistical area. 

22 ‘‘(D) REGIONS OUTSIDE MSAS.—Among 

23 counties outside a metropolitan statistical area, 

24 a Total Health region shall include all of the 

25 counties in the same State that the Secretary 


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1 determines are accurate reflections of health 

2 care market areas, such as health service areas. 

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

4 Secretary shall establish, and may revise, Total 

5 Health regions for areas in States that are not 

6 within the 50 States or the District of Colum7 bia. 

8 ‘‘(3) NATIONAL PLAN.—Nothing in this sub9 section shall be construed as preventing a Total 

10 Health plan from being offered in more than one 

11 Total Health region (including all Total Health re12 gions). 

13 ‘‘(b) SUBMISSION OF BIDS, PREMIUMS, AND RE14 LATED INFORMATION.— 

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

16 shall submit to the Secretary information described 

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

18 plan it offers. Such information shall be submitted 

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

20 manner in which information described in paragraph 

21 (6) of section 1854(a) was submitted by an MA or22 ganization under paragraph (1) of such section. 

23 ‘‘(2) INFORMATION DESCRIBED.—The informa24 tion described in this paragraph is information on 

25 the following: 


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

2 qualified Total Health benefits package pro3 vided under the plan, including the deductible 

4 and other cost-sharing. 

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

6 value of the qualified Total Health benefits 

7 package in the Total Health region for a Total 

8 Health eligible individual with a national aver9 age risk profile for the factors described in sec10 tion 1860C–8(b)(1)(A) (as specified by the Sec11 retary). 

12 ‘‘(C) BID.—Information on the bid, includ13 ing an actuarial certification of— 

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

15 described in subparagraph (B) assumed in 

16 such bid; 

17 ‘‘(ii) the portion of such bid attrib18 utable to a basic Total Health benefits 

19 package and, if applicable, the portion of 

20 such bid attributable to supplemental bene21 fits; and 

22 ‘‘(iii) administrative expenses assumed 

23 in the bid. 

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

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


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

2 the Total Health sponsor requires a modifica3 tion of risk level and, if so, the extent of such 

4 modification. Any such modification shall apply 

5 with respect to all Total Health plans offered 

6 by a Total Health sponsor in a Total Health re7 gion. 

8 ‘‘(F) ADDITIONAL INFORMATION.—Such 

9 other information as the Secretary may require 

10 to carry out this subpart. 

11 ‘‘(3) PAPERWORK REDUCTION FOR OFFERING

12 OF TOTAL HEALTH PLANS NATIONALLY OR IN

13 MULTI-REGION AREAS.—The Secretary shall estab14 lish requirements for the submission of information 

15 under this subsection in a manner that promotes the 

16 offering of such plans in more than one Total 

17 Health region (including all regions) through the fil18 ing of consolidated information. 

19 ‘‘(c) MEDICARE FEE-FOR-SERVICE BID.—For pur20 poses of this subpart, the bid for benefits under the origi21 nal medicare fee-for-service program option (as defined in 

22 section 1852(a)(1)(B)) is the dollar amount of the actu23 arial valuation of the benefits under that option for each 

24 Total Health region (as determined and submitted by the 

25 Chief Actuary of the Centers for Medicare & Medicaid 


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1 Services using the same processes used to value Total 

2 Health plans under subsection (d)). 

3 ‘‘(d) ACTUARIAL VALUATION.— 

4 ‘‘(1) PROCESSES.—For purposes of this sub5 part, the Secretary shall establish processes and 

6 methods for determining the actuarial valuation of a 

7 Total Health benefits package, including— 

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

9 under the original medicare fee-for-service pro10 gram option (as defined in section 

11 1852(a)(1)(B)) in each service area; 

12 ‘‘(B) actuarial valuations relating to the 

13 qualified Total Health benefits package under 

14 section 1860C–2(a)(1); 

15 ‘‘(C) the use of generally accepted actu16 arial principles and methodologies; and 

17 ‘‘(D) applying the same methodology for 

18 determinations of actuarial valuations under 

19 subparagraphs (A) and (B). 

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

21 processes and methods for determining actuarial 

22 valuation shall take into account the effect that pro23 viding a qualified Total Health benefits package 

24 (rather than benefits under the original medicare 


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

2 of health care items and services. 

3 ‘‘(3) RESPONSIBILITIES.— 

4 ‘‘(A) PLAN RESPONSIBILITIES.—Total 

5 Health sponsors are responsible for the prepa6 ration and submission of actuarial valuations 

7 required under this subpart for the Total 

8 Health plans offered by the sponsor. 

9 ‘‘(B) USE OF OUTSIDE ACTUARIES.— 

10 Under the processes and methods established 

11 under paragraph (1), Total Health sponsors of12 fering a Total Health benefits package may use 

13 actuarial opinions certified by independent, 

14 qualified actuaries to establish actuarial values. 

15 ‘‘(e) REVIEW OF INFORMATION AND NEGOTIA16 TION.— 

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

18 shall review the information submitted under sub19 section (b) for the purpose of conducting negotia20 tions under paragraph (2). 

21 ‘‘(2) NEGOTIATION REGARDING TERMS AND

22 CONDITIONS.—Subject to subsection (i), in exer23 cising the authority under paragraph (1), the Sec24 retary— 


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

2 terms and conditions of the proposed bid sub3 mitted and other terms and conditions of a pro4 posed plan; and 

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

6 of the Director of the Office of Personnel Man7 agement with respect to health benefits plans 

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

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

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

11 submitted by a Total Health sponsor under sub12 section (b) in the same manner as such paragraph 

13 applied to bids submitted by an MA organization 

14 under such section 1854(a). 

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

16 ‘‘(1) IN GENERAL.—After review and negotia17 tion under subsection (e), the Secretary shall ap18 prove or disapprove the Total Health plan. 

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

20 Secretary may approve a Total Health plan only if 

21 the Secretary determines the following requirements 

22 are met: 

23 ‘‘(A) COMPLIANCE WITH REQUIRE24 MENTS.—The plan and the Total Health spon25 sor offering the plan comply with the requireVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 ments under this subpart, including the provi2 sion of a qualified Total Health benefits pack3 age. 

4 ‘‘(B) ACTUARIAL DETERMINATIONS.—The 

5 plan and Total Health sponsor offering the plan 

6 meet the requirements under this subpart relat7 ing to actuarial determinations, including such 

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

9 ‘‘(C) APPLICATION OF FEHBP STAND10 ARD.— 

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

12 bid submitted under subsection (b) that is 

13 attributable to basic health benefits cov14 erage is supported by the actuarial bases 

15 provided under such subsection and rea16 sonably and equitably reflects the revenue 

17 requirements (as used for purposes of sec18 tion 1302(8)(C) of the Public Health Serv19 ice Act) for benefits provided under that 

20 plan. 

21 ‘‘(ii) SUPPLEMENTAL COVERAGE.— 

22 The portion of the bid submitted under 

23 subsection (b) that is attributable to sup24 plemental health benefits coverage pursu25 ant to section 1860C–2(a)(3) is supported 


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1 by the actuarial bases provided under such 

2 subsection and reasonably and equitably 

3 reflects the revenue requirements (as used 

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

5 Public Health Service Act) for such cov6 erage under the plan. 

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

8 plan and covered benefits under the plan are 

9 not likely to substantially discourage enrollment 

10 by certain Total Health eligible individuals in 

11 the plan. 

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

13 ‘‘(1) CONDITIONS FOR APPROVAL OF LIMITED

14 RISK PLANS.—The Secretary may only approve a 

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

16 for a Total Health region if the access requirements 

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

18 region but for the approval of such a plan. 

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

20 with respect to the approval of a limited risk plan 

21 in a Total Health region: 

22 ‘‘(A) LIMITED EXERCISE OF AUTHOR23 ITY.—Only the minimum number of such plans 

24 may be approved in order to meet the access re25 quirements under section 1860C–3(a). 


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

2 The Secretary shall provide priority in approval 

3 for those plans bearing the highest level of risk 

4 (as computed by the Secretary), but the Sec5 retary may take into account the level of the 

6 bids submitted by such plans. 

7 ‘‘(C) NO FULL UNDERWRITING FOR LIM8 ITED RISK PLANS.—In no case may the Sec9 retary approve a limited risk plan under which 

10 the modification of risk level provides for no (or 

11 a de minimis) level of financial risk. 

12 ‘‘(3) ACCEPTANCE OF ALL FULL RISK CON13 TRACTS.—There shall be no limit on the number of 

14 full risk plans that are approved under subsection 

15 (e). 

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

17 this subsection: 

18 ‘‘(A) LIMITED RISK PLAN.—The term ‘lim19 ited risk plan’ means a Total Health plan that 

20 provides a basic Total Health benefits package 

21 and for which the Total Health sponsor in22 cludes a modification of risk level described in 

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

24 bid submitted for the plan under such sub25 section. 


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

2 risk plan’ means a Total Health plan that is 

3 not a limited risk plan. 

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

5 PLANS.—The Secretary shall submit to Congress an an6 nual report that describes instances in which limited risk 

7 plans were approved under this section. The Secretary 

8 shall include in such report such recommendations as may 

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

10 plans and to maximize the assumption of financial risk 

11 under such subsection. 

12 ‘‘(i) NONINTERFERENCE.—In order to promote com13 petition under this part and in carrying out this part, the 

14 Secretary— 

15 ‘‘(1) may not interfere with the negotiations be16 tween physicians or other health professionals, pro17 viders, suppliers, drug manufacturers, pharmacies, 

18 and Total Health sponsors; and 

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

20 or formulary, or institute a price structure for the 

21 reimbursement of covered items and services. 

22 ‘‘REQUIREMENTS FOR AND CONTRACTS WITH TOTAL

23 HEALTH SPONSORS

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

25 Each sponsor of a Total Health plan shall meet the fol26 lowing requirements: 


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

2 the sponsor is organized and licensed under State 

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

4 insurance or health benefits coverage in each State 

5 in which it offers a Total Health plan. 

6 ‘‘(2) ASSUMPTION OF FINANCIAL RISK FOR UN7 SUBSIDIZED COVERAGE.— 

8 ‘‘(A) IN GENERAL.—Subject to subpara9 graph (B), to the extent that the entity is at 

10 risk the entity assumes financial risk on a pro11 spective basis for benefits that it offers under 

12 a Total Health plan. 

13 ‘‘(B) REINSURANCE PERMITTED.—The 

14 plan sponsor may obtain insurance or make 

15 other arrangements for the cost of coverage 

16 provided to any enrollee to the extent that the 

17 sponsor is at risk for providing such coverage. 

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

19 In the case of a Total Health sponsor that is not de20 scribed in paragraph (1) and for which a waiver has 

21 been approved under subsection (c), such sponsor 

22 shall meet solvency standards established by the Sec23 retary under subsection (d). 

24 ‘‘(b) CONTRACT REQUIREMENTS.— 


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

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

3 Total Health plan offered by a Total Health sponsor 

4 under this subpart, and the sponsor shall not be eli5 gible for payments under section 1860C–8, unless 

6 the Secretary has entered into a contract under this 

7 subsection with the sponsor with respect to the of8 fering of such plan. Such a contract with a sponsor 

9 may cover more than one Total Health plan. Such 

10 contract shall provide that the sponsor agrees to 

11 comply with the applicable requirements and stand12 ards of this subpart and the terms and conditions of 

13 payment as provided for in this subpart. 

14 ‘‘(2) INCORPORATION OF CERTAIN MEDICARE

15 ADVANTAGE CONTRACT REQUIREMENTS.—Except as 

16 otherwise provided, the following provisions of sec17 tion 1857 shall apply to contracts under this section 

18 in the same manner as such provisions applied to 

19 contracts under section 1857(a): 

20 ‘‘(A) MINIMUM ENROLLMENT.—Para21 graphs (1) and (3) of section 1857(b), except 

22 that— 

23 ‘‘(i) the Secretary may increase the 

24 minimum number of enrollees required 


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1 under such paragraph (1) as the Secretary 

2 determines appropriate; and 

3 ‘‘(ii) the requirement of such para4 graph (1) shall be waived during the first 

5 contract year with respect to an organiza6 tion in a region. 

7 ‘‘(B) CONTRACT PERIOD AND EFFECTIVE8 NESS.—Section 1857(c), except that in applying 

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

10 to payment amounts under section 1853 is 

11 deemed a reference to payment amounts under 

12 section 1860C–8. 

13 ‘‘(C) PROTECTIONS AGAINST FRAUD AND

14 BENEFICIARY PROTECTIONS.—Section 1857(d). 

15 ‘‘(D) ADDITIONAL CONTRACT TERMS.— 

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

17 shall apply as specified to Total Health spon18 sors and payments to a Total Health plan 

19 under this subpart shall be treated as expendi20 tures made under this subpart. Notwith21 standing any other provision of law, information 

22 provided to the Secretary under the application 

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

24 section under the preceding sentence— 


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

2 carrying out this subpart, improving public 

3 health through research on the utilization, 

4 safety, effectiveness, quality, and efficiency 

5 of health care services (as the Secretary 

6 determines appropriate); and 

7 ‘‘(ii) shall be made available to Con8 gressional support agencies (in accordance 

9 with their obligations to support Congress 

10 as set out in their authorizing statutes) for 

11 the purposes of conducting Congressional 

12 oversight, monitoring, making rec13 ommendations, and analysis of the pro14 gram under this title. 

15 ‘‘(E) INTERMEDIATE SANCTIONS.—Section 

16 1857(g) (other than paragraph (1)(F) of such 

17 section), except that in applying such section 

18 the reference in section 1857(g)(1)(B) to sec19 tion 1854 is deemed a reference to this subpart. 

20 ‘‘(F) PROCEDURES FOR TERMINATION.— 

21 Section 1857(h). 

22 ‘‘(c) WAIVER OF CERTAIN REQUIREMENTS TO EX23 PAND CHOICE.— 

24 ‘‘(1) AUTHORIZING WAIVER.— 


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1 ‘‘(A) IN GENERAL.—In the case of an enti2 ty that seeks to offer a Total Health plan in a 

3 State, the Secretary shall waive the requirement 

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

5 in that State if the Secretary determines, based 

6 on the application and other evidence presented 

7 to the Secretary, that any of the grounds for 

8 approval of the application described in para9 graph (2) have been met. 

10 ‘‘(B) APPLICATION OF REGIONAL PLAN

11 WAIVER RULE.—In addition to the waiver avail12 able under subparagraph (A), the provisions of 

13 section 1858(d) shall apply to Total Health 

14 sponsors under this part in a manner similar to 

15 the manner in which such provisions applied to 

16 MA organizations. 

17 ‘‘(2) GROUNDS FOR APPROVAL.— 

18 ‘‘(A) IN GENERAL.—The grounds for ap19 proval under this paragraph are— 

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

21 grounds for approval described in subpara22 graphs (B), (C), and (D) of section 

23 1855(a)(2); and 


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

2 grounds other than those required under 

3 Federal law. 

4 ‘‘(B) SPECIAL RULES.—In applying sub5 paragraph (A)(i)— 

6 ‘‘(i) the ground of approval described 

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

8 been met if the State does not have a li9 censing process in effect with respect to 

10 the Total Health sponsor; and 

11 ‘‘(ii) for plan years beginning before 

12 January 1, 2019, if the State does have 

13 such a licensing process in effect, such 

14 ground for approval described in such sec15 tion is deemed to have been met upon sub16 mission of an application described in such 

17 section. 

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

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

20 waiver granted) under paragraph (1)(A) of this sub21 section, the provisions of subparagraphs (E), (F), 

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

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

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


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1 have a licensing process described in paragraph 

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

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

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

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

6 Health plans and Total Health sponsors— 

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

8 under section 1855 shall be treated as a ref9 erence to a waiver application under paragraph 

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

11 ‘‘(B) any reference to solvency standards 

12 shall be treated as a reference to solvency 

13 standards established under subsection (d) of 

14 this section. 

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

16 ENTITIES.— 

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

18 Secretary, in consultation with the National Associa19 tion of Insurance Commissioners, shall establish and 

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

21 solvency and capital adequacy standards for entities 

22 described in paragraph (2). 

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

24 Health sponsor that is not licensed by a State under 

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


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1 has been approved under subsection (c) shall meet 

2 solvency and capital adequacy standards established 

3 under paragraph (1). The Secretary shall establish 

4 certification procedures for such sponsors with re5 spect to such solvency standards in the manner de6 scribed in section 1855(c)(2). 

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

8 CONSTITUTE CERTIFICATION.—The fact that a Total 

9 Health sponsor is licensed in accordance with subsection 

10 (a)(1) or has a waiver application approved under sub11 section (c) does not deem the sponsor to meet other re12 quirements imposed under this subpart for a sponsor. 

13 ‘‘(f) PERIODIC REVIEW AND REVISION OF STAND14 ARDS.— 

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

16 the Secretary may periodically review the standards 

17 established under this section and, based on such re18 view, may revise such standards if the Secretary de19 termines such revision to be appropriate. 

20 ‘‘(2) PROHIBITION OF MIDYEAR IMPLEMENTA21 TION OF SIGNIFICANT NEW REGULATORY REQUIRE22 MENTS.—The Secretary may not implement, other 

23 than at the beginning of a calendar year, regulations 

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1 latory requirements on a Total Health sponsor or a 

2 Total Health plan. 

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

6 respect to Total Health sponsors and Total Health plans 

7 under this part in the same manner as such provisions 

8 applied to MA organizations and MA plans. 

9 ‘‘TOTAL HEALTH PREMIUMS

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

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

13 beneficiary premium under this paragraph for a 

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

16 ‘‘(A) 15 percent; and 

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

19 monthly standardized bid amounts (as defined 

20 in subsection (c), weighted under subsection 

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

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

23 ‘‘(2) COMPUTATION OF MONTHLY BENEFICIARY

24 PREMIUM.— 

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


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

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

6 AMOUNT.— 

7 ‘‘(i) ABOVE 40TH PERCENTILE.—If 

8 the beneficiary enrolls in a plan with a 

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

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

14 ‘‘(ii) BELOW 40TH PERCENTILE.—If 

15 the beneficiary enrolls in a plan with a 

16 monthly standardized bid amount that is 

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

19 beneficiary premium for the month shall be 

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

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

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


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

3 benefits. 

4 ‘‘(D) INCREASE FOR LATE ENROLLMENT

5 PENALTY.—The base beneficiary premium shall 

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

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

9 monthly beneficiary premium shall be increased 

10 pursuant to subsection (f). 

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

13 monthly beneficiary premium for a Total 

14 Health plan in a Total Health region is the 

15 same for all Total Health eligible individuals 

16 enrolled in the plan. 

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

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

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

21 area shall be equal to the average number of Total 

22 Health eligible individuals enrolled in such plan in 

23 the reference month (as defined in section 

24 1858(f)(4)). 


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

2 applying this paragraph for 2017, the Secretary 

3 shall establish procedures for determining the 

4 weighted average under paragraph (1) for 2016. 

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

6 purposes of this subsection, the term ‘standardized bid 

7 amount’ means the following: 

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

9 Total Health plan that provides basic health benefits 

10 coverage, the Total Health approved bid (as defined 

11 in subsection (d)). 

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

14 provides supplemental health benefits coverage, only 

15 the portion of the Total Health approved bid that is 

16 attributable to basic health benefits coverage. 

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

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

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

21 bid amount approved for the plan under section 

22 1860C–5; and 

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


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

2 beneficiary premium established under subsection (a) shall 

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

4 B monthly beneficiary premium computed under section 

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

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

8 of the individual shall be the enrollment period under 

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

11 ‘‘(f) INCREASE IN BASE BENEFICIARY PREMIUM

12 BASED ON INCOME.— 

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

14 whose modified adjusted gross income (as defined in 

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

18 Secretary shall substitute the applicable percentage 

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

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

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

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

23 For purposes of this subsection, the term ‘modified 

24 adjusted gross income’ has the meaning given such 

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

3 ‘‘(3) DETERMINATION BY COMMISSIONER OF

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

6 carry out the income-related increase in the base 

7 beneficiary premium under this subsection. 

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

10 PREMIUM.— 

11 ‘‘(A) DISCLOSURE OF BASE BENEFICIARY

12 PREMIUM.—Not later than September 15 of 

13 each year beginning with 2016, the Secretary 

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

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

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

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

22 than October 15 of each year beginning with 

23 2016, the Secretary shall disclose to the Com24 missioner of Social Security the following infor25 mation for the purpose of carrying out the inVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00077 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 come-related increase in the base beneficiary 

2 premium under this subsection with respect to 

3 the following year: 

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

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

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

10 1839(i) (including application of paragraph 

11 (5) of such section). 

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

14 necessary to carry out the income-related 

15 increase in the base beneficiary premium 

16 under this subsection. 

17 ‘‘PREMIUM AND COST-SHARING SUPPORT FOR TOTAL

18 HEALTH ELIGIBLE INDIVIDUALS

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

20 The Secretary shall provide for payment to a Total Health 

21 sponsor that offers a Total Health plan a direct subsidy 

22 for each Total Health eligible individual enrolled in a 

23 Total Health plan for a month equal to— 

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

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

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


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

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

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

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

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

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

13 on the differences in actuarial risk of different 

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

16 to result in a change in the aggregate amounts 

17 payable to such plans under subsection (a) and 

18 through that portion of the monthly beneficiary 

19 Total Health premiums described in subsection 

20 (a)(2). 

21 ‘‘(B) CONSIDERATIONS.—In establishing 

22 the methodology under subparagraph (A), the 

23 Secretary may take into account the similar 

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

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1 fits under the original medicare fee-for-service 

2 program option. 

3 ‘‘(C) DATA COLLECTION.—In order to 

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

8 other information as the Secretary determines 

9 necessary. 

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

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

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

15 ‘‘(2) GEOGRAPHIC ADJUSTMENT.— 

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

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

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

22 benefits among Total Health regions. 

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

24 determines that the price variations described 

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1 gions are de minimis, the Secretary shall not 

2 provide for adjustment under this paragraph. 

3 ‘‘(C) BUDGET NEUTRAL ADJUSTMENT.— 

4 Any adjustment under this paragraph shall be 

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

6 change in the aggregate payments made under 

7 this subpart that would have been made if the 

8 Secretary had not applied such adjustment. 

9 ‘‘(c) PAYMENT METHODS.— 

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

13 payment method by which interim payments of 

14 amounts under this section are made during a year 

15 based on the Secretary’s best estimate of amounts 

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

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

20 ‘‘(A) REQUIREMENT.—Payments under 

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

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

25 to carry out this section. 


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

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

7 carrying out this section. 

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

9 this section shall be made from the Federal Hospital 

10 Insurance Trust Fund under section 1817 and the 

11 Federal Supplementary Medical Insurance Trust 

12 Fund under section 1841, in such proportion as the 

13 Secretary determines appropriate. 

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

16 apply to payments to Total Health sponsors under 

17 this section in the same manner as they applied to 

18 payments to MA organizations under section 

19 1853(a). 

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

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

23 of benefits under such plan. 

24 ‘‘(e) DISCLOSURE OF INFORMATION.— 


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

2 subpart shall provide that— 

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

4 Total Health plan shall provide the Secretary 

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

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

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

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

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

15 Information disclosed or obtained pursuant to the 

16 provisions of this section may be used— 

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

19 Services for the purposes of, and to the extent 

20 necessary in— 

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

22 ‘‘(ii) conducting oversight, evaluation, 

23 and enforcement under this title; and 

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

25 Comptroller General of the United States for 


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

2 carrying out health oversight activities. 

3 ‘‘EXEMPTION FOR MSA PLANS

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

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

7 be a Total Health plan. 

8 ‘‘(b) CONTINUING AVAILABILITY.—Notwithstanding 

9 any other provision of law, the Secretary shall establish 

10 procedures under which— 

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

12 and after January 1, 2017; and 

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

14 enroll in those plans prior to such date continue to 

15 be eligible to enroll in such a plan. 

16 ‘‘SPECIAL RULES FOR EMPLOYER-SPONSORED PROGRAMS

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

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

19 in accordance with this subsection for payment to 

20 the sponsor of a qualified retiree health benefits plan 

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

22 payment equal to the amount specified in paragraph 

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

24 (as defined in paragraph (4)). This subsection con25 stitutes budget authority in advance of appropria26 tions Acts and represents the obligation of the SecVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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

3 ‘‘(2) QUALIFIED RETIREE HEALTH BENEFITS

4 PLAN DEFINED.—For purposes of this subsection, 

5 the term ‘qualified retiree health benefits plan’ 

6 means employment-based retiree health coverage (as 

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

8 Total Health eligible individual who is a participant 

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

11 ‘‘(A) ATTESTATION OF ACTUARIAL

12 EQUIVALENCE TO STANDARD COVERAGE.—The 

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

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

17 plan (as determined using the processes and 

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

19 least equal to the actuarial value of standard 

20 health benefits coverage. 

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

22 an administrator of the plan designated by the 

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

25 may require for purposes of audits and other 


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

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

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

7 manner similar to the manner in which they 

8 apply to financial records of Total Health spon9 sors. 

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

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

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

15 form, manner, and time consistent with 

16 standards established by the Secretary, to 

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

19 the requirement of subparagraph (A) or 

20 whether such coverage is changed so it no 

21 longer meets such requirement. 

22 ‘‘(ii) DISCLOSURE OF NON-QUALIFIED

23 COVERAGE.—In the case of such coverage 

24 that does not meet such requirement, the 

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1 uals under this subparagraph shall include 

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

6 may enroll under a Total Health plan. 

7 ‘‘(iii) WAIVER OF REQUIREMENT.—In 

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

11 not meet the requirement of subparagraph 

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

14 qualified retiree health benefits plan if the 

15 individual establishes that the individual 

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

18 ‘‘(3) EMPLOYER AND UNION SPECIAL SUBSIDY

19 AMOUNTS.— 

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

21 subsection, the special subsidy payment amount 

22 under this paragraph for a qualifying covered 

23 retiree for a coverage year enrolled with the 

24 sponsor of a qualified retiree health benefits 

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


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1 covered retiree plan-related health benefits costs 

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

3 year that exceeds the cost threshold amount 

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

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

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

10 ‘‘(B) COST THRESHOLD AND COST LIMIT

11 APPLICABLE.— 

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

13 (ii)— 

14 ‘‘(I) the cost threshold under this 

15 subparagraph is equal to $250 for 

16 plan years that end in 2017; and 

17 ‘‘(II) the cost limit under this 

18 subparagraph is equal to $5,000 for 

19 plan years that end in 2017. 

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

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

23 year that ends after 2017 shall be adjusted 

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


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1 respectively, are annually adjusted under 

2 sections 1899B and 1899C. 

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

4 paragraph: 

5 ‘‘(i) ALLOWABLE RETIREE COSTS.— 

6 The term ‘allowable retiree costs’ means, 

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

9 benefits plan by a plan sponsor, the part of 

10 such costs that are actually paid (net of 

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

13 on behalf of a qualifying covered retiree 

14 under the plan. 

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

17 term ‘gross covered retiree plan-related 

18 health benefits costs’ means, with respect 

19 to a qualifying covered retiree enrolled in 

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

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

25 items and services during the year. Such 


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1 costs shall be determined whether they are 

2 paid by the retiree or under the plan. 

3 ‘‘(iii) COVERAGE YEAR.—The term 

4 ‘coverage year’ has the meaning given such 

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

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

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

12 plan but is covered under a qualified retiree health 

13 benefits plan. 

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

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

17 such section, relating to requirement for provision of 

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

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

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

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1 based retiree health coverage from enrolling in 

2 a Total Health plan; 

3 ‘‘(B) precluding such employment-based 

4 retiree health coverage or an employer or other 

5 person from paying all or any portion of any 

6 premium required for coverage under a Total 

7 Health plan on behalf of such an individual; 

8 ‘‘(C) preventing such employment-based 

9 retiree health coverage from providing cov10 erage— 

11 ‘‘(i) that is better than standard 

12 health benefits coverage to retirees who are 

13 covered under a qualified retiree health 

14 benefits plan; or 

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

17 including benefits to retirees who are not 

18 covered under a qualified retiree health 

19 benefits plan but who are enrolled in such 

20 a Total Health plan; or 

21 ‘‘(D) preventing employers from providing 

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


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1 long as the actuarial equivalence requirement of 

2 paragraph (2)(A) is met. 

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

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

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

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

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

14 ‘‘(1) EMPLOYMENT-BASED RETIREE HEALTH

15 COVERAGE.—The term ‘employment-based retiree 

16 health coverage’ means health insurance or other 

17 coverage of health care costs (whether provided by 

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

21 spouses and dependents) under a group health plan 

22 based on their status as retired participants in such 

23 plan. 

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

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


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1 Employee Retirement Income Security Act of 1974, 

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

3 case of a plan maintained jointly by one employer 

4 and an employee organization and with respect to 

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

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

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

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

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

15 of any State or political subdivision thereof, or 

16 by any agency or instrumentality of any of the 

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

19 Code. 

20 ‘‘(B) COLLECTIVELY BARGAINED PLANS.— 

21 Such a plan established or maintained under or 

22 pursuant to one or more collective bargaining 

23 agreements. 

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


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

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

5 ‘‘COORDINATION WITH STATE MEDICAID PROGRAMS

6 ‘‘SEC. 1860C–11. (a) APPLICATION.— 

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

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

9 waiver of any or all requirements described in this 

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

14 to ensure— 

15 ‘‘(A) dually eligible individuals have full 

16 access to the services to which they are entitled; 

17 ‘‘(B) the development of innovative care 

18 coordination and integration models; and 

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

22 ‘‘(2) REQUIREMENTS.—Such application 

23 shall— 

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

25 manner as the Secretary may require; 


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

3 ‘‘(i) a comprehensive description of 

4 the proposal and program to implement a 

5 plan meeting the requirements for a waiver 

6 under this section; and 

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

9 Federal Government expenditures; and 

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

12 plan that is the subject of the proposal. 

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

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

16 waiver under this section shall be considered by 

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

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

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

22 relating to waivers under this section that pro23 vide— 


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

2 comment sufficient to ensure a meaningful 

3 level of public input; 

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

5 an application for the waiver; 

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

7 the Secretary of periodic reports by the 

8 State concerning the implementation of the 

9 program under the waiver; and 

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

12 the waiver. 

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

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

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

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

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

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

23 Health plan in the State. 

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

25 Secretary shall develop a process for coordinating 


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1 and consolidating the waiver processes applicable 

2 under the provisions of this section to ensure that 

3 individuals eligible to enroll in a plan offered under 

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

6 ‘‘(b) GRANTING OF WAIVERS.— 

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

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

9 the Secretary determines that the proposed Total 

10 Health plan— 

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

12 as comprehensive as the coverage described in 

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

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

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

17 protections against excessive out-of-pocket 

18 spending that are at least as affordable as the 

19 provisions of this subtitle would provide; and 

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

21 ‘‘(c) SCOPE OF WAIVER.— 

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

23 the Secretary shall determine the scope of a waiver 

24 granted with respect to a Total Health plan under 

25 subsection (a)(1). 


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

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

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

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

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

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

8 an application from a State under such subsection. 

9 ‘‘(2) EFFECT OF DETERMINATION.— 

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

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

15 such waiver. 

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

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

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

24 such waiver, and such request shall be deemed granted 

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


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1 submission of the request to the Secretary, either denies 

2 such request in writing or informs the State in writing 

3 with respect to any additional information that is needed 

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

5 request. 

6 ‘‘DEFINITIONS AND MISCELLANEOUS PROVISIONS

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

8 of this subpart: 

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

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

12 payment may be made under the original medicare 

13 fee-for-service program option. 

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

15 risk’ means, with respect to a participating health 

16 care provider, risk of the type commonly assumed 

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

20 control of the health care provider. 

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

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

23 have the meaning given such terms in section 

24 1859(b)(1). 

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

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

3 as modified by this subpart. 

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

7 1860C–2(b). 

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

9 The term ‘Total Health eligible individual’ has the 

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

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

12 Health plan’ means health benefits coverage that is 

13 offered— 

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

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

16 and 

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

18 to, and in accordance with, a contract between 

19 the Secretary and the sponsor under section 

20 1860C–6(b). 

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

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

24 the requirements and standards of this subpart for 

25 such a sponsor. 


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1 ‘‘(b) APPLICATION OF SUBPART 1 PROVISIONS AND

2 REGULATIONS UNDER THIS SUBPART.—For purposes of 

3 applying provisions of subpart 1 under this subpart (and 

4 regulations implementing such provisions) with respect to 

5 a Total Health plan and a Total Health sponsor, unless 

6 otherwise provided in this subpart, and to the extent con7 sistent with this subpart, such provisions (and regulations 

8 implementing such provisions) shall be applied as the pro9 visions (and regulations) applied for plan years beginning 

10 prior to January 1, 2017, and as if— 

11 ‘‘(1) any reference to a Medicare Advantage 

12 plan or an MA plan included a reference to a Total 

13 Health plan; 

14 ‘‘(2) any reference to an MA organization or a 

15 provider-sponsored organization included a reference 

16 to a Total Health sponsor; 

17 ‘‘(3) any reference to a contract under section 

18 1857 included a reference to a contract under sec19 tion 1860C–6(b); 

20 ‘‘(4) any reference to subpart 1 included a ref21 erence to this subpart; and 

22 ‘‘(5) any reference to an election period under 

23 section 1851 were a reference to an enrollment pe24 riod under section 1860C–1.’’. 


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1 SEC. 2002. REPLACEMENT OF PART B PREMIUM WITH 

2 MEDICARE TOTAL HEALTH PROGRAM PLAN 

3 PREMIUM; OTHER TECHNICAL AND CON4 FORMING AMENDMENTS. 

5 (a) REPLACEMENT OF PART B PREMIUM WITH

6 MEDICARE TOTAL HEALTH PROGRAM PLAN PREMIUM.— 

7 Section 1839 of the Social Security Act (42 U.S.C. 1395r) 

8 is amended— 

9 (1) in subsection (a)(2), by striking ‘‘The 

10 monthly premium’’ and inserting ‘‘Subject to sub11 section (j),’’; and 

12 (2) by adding at the end the following new sub13 section: 

14 ‘‘(j) REPLACEMENT OF PART B PREMIUM WITH

15 MEDICARE TOTAL HEALTH PROGRAM PLAN PREMIUM.— 

16 ‘‘(1) IN GENERAL.—Notwithstanding the pre17 ceding provisions of this section, except as provided 

18 in paragraph (2), on and after January 1, 2017, in 

19 lieu of the premium otherwise applicable under this 

20 section, the monthly premium of each Total Health 

21 eligible individual (as defined in section 1860C– 

22 1(a)(3)) shall be the monthly beneficiary premium 

23 determined under section 1860C–7 for the Total 

24 Health plan or the original medicare fee-for-service 

25 program option and the plan year involved. 


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1 ‘‘(2) INDIVIDUALS ENROLLED FOR COVERAGE

2 UNDER PART B ONLY.—Individuals enrolled under 

3 this part only (and not entitled to, or enrolled for, 

4 benefits under part A) shall pay the premium that 

5 would have been calculated under this section but 

6 for the enactment of this subsection. 

7 ‘‘(3) CREDITING OF PREMIUMS.—Premiums 

8 paid by each Total Health eligible individual enrolled 

9 in the original medicare fee-for-service program op10 tion (as defined in section 1860E–13(a)(4)), shall be 

11 deposited in the Treasury to the credit of the Fed12 eral Supplementary Medical Insurance Trust Fund 

13 under section 1841.’’. 

14 (b) OTHER TECHNICAL AND CONFORMING AMEND15 MENTS.—Not later than 6 months after the date of the 

16 enactment of this Act, the Secretary of Health and 

17 Human Services shall submit to the appropriate commit18 tees of Congress a legislative proposal providing for such 

19 technical and conforming amendments in the law as are 

20 required by the provisions of this part and part II. 


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1 PART II—MEDICARE FEE-FOR-SERVICE REFORMS 

2 SEC. 2011. MEDICARE PROTECTION AGAINST HIGH OUT-OF3 POCKET EXPENDITURES FOR FEE-FOR-SERV4 ICE BENEFITS. 

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

6 1395 et seq.) is amended by adding at the end the fol7 lowing new section: 

8 ‘‘PROTECTION AGAINST HIGH OUT-OF-POCKET

9 EXPENDITURES

10 ‘‘SEC. 1899B. (a) IN GENERAL.—Notwithstanding 

11 any other provision of this title, in the case of an indi12 vidual entitled to, or enrolled for, benefits under part A 

13 or enrolled in part B, if the amount of the out-of-pocket 

14 cost-sharing of such individual for a year (beginning with 

15 2015) equals or exceeds— 

16 ‘‘(1) the first threshold annual out-of-pocket 

17 limit under subsection (b)(1) but is less than the 

18 second threshold annual out-of-pocket limit under 

19 subsection (b)(2) for that year, section 1899D(a) 

20 shall be applied by substituting ‘5 percent’ for ‘20 

21 percent’; and 

22 ‘‘(2) the second threshold annual out-of-pocket 

23 limit under subsection (b)(2) for that year, there 

24 shall not be any additional reduction under section 

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1 vidual shall not be responsible for additional out-of2 pocket cost-sharing incurred during that year). 

3 ‘‘(b) AMOUNT OF ANNUAL OUT-OF-POCKET LIM4 ITS.— 

5 ‘‘(1) FIRST THRESHOLD ANNUAL OUT-OF-POCK6 ET LIMIT.—The amount of the first threshold an7 nual out-of-pocket limit under this subsection shall 

8 be— 

9 ‘‘(A) for 2015, $5,500; or 

10 ‘‘(B) for a subsequent year, the amount 

11 specified in this subsection for the preceding 

12 year increased or decreased by the percentage 

13 change in the Chained Consumer Price Index 

14 for All Urban Consumers for the 12-month pe15 riod ending with June of such preceding year 

16 (as published in its initial form by the Bureau 

17 of Labor Statistics of the Department of Labor 

18 as of the end of such period). 

19 ‘‘(2) SECOND THRESHOLD ANNUAL OUT-OF20 POCKET LIMIT.—The amount of the second thresh21 old annual out-of-pocket limit under this subsection 

22 shall be— 

23 ‘‘(A) for 2015, $7,500; or 

24 ‘‘(B) for a subsequent year, the amount 

25 specified in this subsection for the preceding 


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1 year increased or decreased by the percentage 

2 change in the Chained Consumer Price Index 

3 for All Urban Consumers for the 12-month pe4 riod ending with June of such preceding year 

5 (as published in its initial form by the Bureau 

6 of Labor Statistics of the Department of Labor 

7 as of the end of such period). 

8 ‘‘(3) ROUNDING.—If any amount determined 

9 under subparagraph (A) or (B) is not a multiple of 

10 $5, such amount shall be rounded to the nearest 

11 multiple of $5. 

12 ‘‘(c) OUT-OF-POCKET COST-SHARING DEFINED.— 

13 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

14 and (3), in this section, the term ‘out-of-pocket cost15 sharing’ means, with respect to an individual, the 

16 amount of the expenses incurred by the individual 

17 that are attributable to— 

18 ‘‘(A) deductibles, coinsurance and copay19 ments applicable under part A or B; or 

20 ‘‘(B) for items and services that would 

21 have otherwise been covered under part A or B 

22 but for the exhaustion of those benefits. 

23 ‘‘(2) CERTAIN COSTS NOT INCLUDED.— 

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1 ices which are not included (or treated as being 

2 included) under part A or B shall not be con3 sidered incurred expenses for purposes of deter4 mining out-of-pocket cost-sharing under para5 graph (1). 

6 ‘‘(B) ITEMS AND SERVICES NOT FUR7 NISHED ON AN ASSIGNMENT-RELATED BASIS.— 

8 If an item or service is furnished to an indi9 vidual under this title and is not furnished on 

10 an assignment-related basis, any additional ex11 penses the individual incurs above the amount 

12 the individual would have incurred if the item 

13 or service was furnished on an assignment-re14 lated basis shall not be considered incurred ex15 penses for purposes of determining out-of-pock16 et cost-sharing under paragraph (1). 

17 ‘‘(3) SOURCE OF PAYMENT.—For purposes of 

18 paragraph (1), the Secretary shall consider expenses 

19 to be incurred by the individual without regard to 

20 whether the individual or another person, including 

21 a State program or other third-party coverage, has 

22 paid for such expenses. 

23 ‘‘(d) ANNOUNCEMENT OF ANNUAL OUT-OF-POCKET

24 LIMIT AND UNIFIED DEDUCTIBLE.—The Secretary shall 

25 (beginning in 2014) announce (in a manner intended to 


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1 provide notice to all interested parties) the annual out2 of-pocket limit under this section and the unified deduct3 ible under section 1899C that will be applicable for the 

4 succeeding year.’’. 

5 SEC. 2012. UNIFIED MEDICARE DEDUCTIBLE. 

6 (a) IN GENERAL.—Title XVIII of the Social Security 

7 Act (42 U.S.C. 1395 et seq.), as amended by section 2011, 

8 is amended by adding at the end the following new section: 

9 ‘‘UNIFIED PART A AND B DEDUCTIBLE

10 ‘‘SEC. 1899C. (a) IN GENERAL.—Notwithstanding 

11 any other provision of this title, subject to subsection (d), 

12 for a year (beginning with 2015), in the case of an indi13 vidual entitled to, or enrolled for, benefits under part A 

14 or enrolled in part B— 

15 ‘‘(1) the amount otherwise payable under part 

16 A and the total amount of expenses incurred by the 

17 individual during a year which would (except for this 

18 section) constitute incurred expenses for which bene19 fits payable under section 1833(a) are determinable, 

20 shall be reduced by the amount of the unified de21 ductible under subsection (b); and 

22 ‘‘(2) the individual shall be responsible for pay23 ment of such amount. 

24 ‘‘(b) AMOUNT OF UNIFIED DEDUCTIBLE.— 

25 ‘‘(1) IN GENERAL.—The amount of the unified 

26 deductible under this section shall be— 


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1 ‘‘(A) for 2015, $550; or 

2 ‘‘(B) for a subsequent year, the amount 

3 specified in this subsection for the preceding 

4 year increased or decreased by the percentage 

5 change in the Chained Consumer Price Index 

6 for All Urban Consumers for the 12-month pe7 riod ending with June of such preceding year 

8 (as published in its initial form by the Bureau 

9 of Labor Statistics of the Department of Labor 

10 as of the end of such period). 

11 ‘‘(2) ROUNDING.—If any amount determined 

12 under paragraph (1) is not a multiple of $5, such 

13 amount shall be rounded to the nearest multiple of 

14 $5. 

15 ‘‘(c) APPLICATION TO ALL ITEMS AND SERVICES.— 

16 The unified deductible under this section for a year shall 

17 be applied as follows: 

18 ‘‘(1) With respect to items and services covered 

19 under part A, such unified deductible shall be ap20 plied on the basis of the amount that is payable for 

21 such items and services without regard to any copay22 ments or coinsurance and before the application of 

23 any such copayments or coinsurance. 

24 ‘‘(2) With respect to items and services covered 

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1 plied on the basis of the total amount of the ex2 penses incurred by the individual during a year 

3 which would, except for the application of the unified 

4 deductible, constitute incurred expenses for which 

5 items and services are payable under part B, without 

6 regard to any copayments or coinsurance and before 

7 the application of any such copayments or coinsur8 ance. 

9 ‘‘(3)(A) Except as provided in subparagraph 

10 (B), such unified deductible shall be applied with re11 spect to all items and services covered under parts 

12 A and B and in lieu of the deductibles described in 

13 sections 1813(b) and 1833(b) or otherwise. 

14 ‘‘(B) The deductible applicable to blood under 

15 sections 1813 and 1833 shall apply to blood instead 

16 of such unified deductible. 

17 ‘‘(d) TREATMENT OF INDIVIDUALS NOT ENROLLED

18 IN BOTH PARTS A AND B.—The Secretary shall establish 

19 procedures under which an individual who entitled to, or 

20 enrolled for, benefits under part A or enrolled in part B 

21 (but not both) will continue to be subject to a deductible 

22 under this title that is comparable to the deductible the 

23 individual would have been subject to if this section had 

24 not been enacted.’’. 


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1 (b) CLARIFICATION REGARDING APPLICATION

2 UNDER MEDICARE ADVANTAGE.—Section 

3 1852(a)(1)(B)(iii) of the Social Security Act (42 U.S.C. 

4 1395w–22(a)(1)(B)(iii)) is amended by adding at the end 

5 the following new sentence: ‘‘For plan years 2015 and 

6 2016, the preceding sentence shall be applied to take into 

7 account the application of sections 1899B, 1899C, and 

8 1899D.’’. 

9 SEC. 2013. UNIFORM MEDICARE COINSURANCE RATE. 

10 (a) IN GENERAL.—Title XVIII of the Social Security 

11 Act (42 U.S.C. 1395 et seq.), as amended by sections 

12 2011 and 2012, is amended by adding at the end the fol13 lowing new section: 

14 ‘‘UNIFORM PART A AND B COINSURANCE RATE

15 ‘‘SEC. 1899D. (a) IN GENERAL.—Notwithstanding 

16 any other provision of this title, in the case of an indi17 vidual entitled to, or enrolled for, benefits under part A 

18 or enrolled in part B, after the application of the unified 

19 deductible under section 1899C and subject to the limit 

20 on annual out-of-pocket expenses under section 1899B, 

21 the amount otherwise payable under part A and the total 

22 amount of expenses incurred by the individual during a 

23 year (beginning in 2015) which would (except for this sec24 tion) constitute incurred expenses for which benefits are 

25 payable under part B, shall be reduced by a coinsurance 

26 of 20 percent of such amount. 


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1 ‘‘(b) APPLICATION TO ALL ITEMS AND SERVICES.— 

2 The uniform coinsurance under this section for a year 

3 shall be applied as follows: 

4 ‘‘(1) With respect to items and services covered 

5 under part A, such uniform coinsurance shall be ap6 plied on the basis of the amount that is payable for 

7 such items and services. 

8 ‘‘(2) With respect to items and services covered 

9 under part B, such uniform coinsurance shall be ap10 plied on the basis of the total amount of the ex11 penses incurred by the individual during a year 

12 which would, except for the application of the unified 

13 deductible, constitute incurred expenses from which 

14 items and services are payable under part B. 

15 ‘‘(3)(A) Except as provided in subparagraph 

16 (B), such uniform coinsurance shall be applied with 

17 respect to all items and services covered under parts 

18 A and B and in lieu of any other copayments or co19 insurance under such parts. 

20 ‘‘(B) Coinsurance for blood under this title 

21 shall be determined under the rules that were appli22 cable to blood on December 31, 2014, rather than 

23 under this section.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Section 1813 of the Social Security Act (42 

2 U.S.C. 1395e) is amended— 

3 (A) in subsection (a), by inserting ‘‘Subject 

4 to sections 1899B, 1899C, and 1899D:’’ before 

5 paragraph (1); and 

6 (B) in subsection (b), by inserting ‘‘Sub7 ject to sections 1899B, 1899C, and 1899D:’’ 

8 before paragraph (1). 

9 (2) Section 1833 of the Social Security Act (42 

10 U.S.C. 1395l) is amended— 

11 (A) in subsection (a), in the matter pre12 ceding paragraph (1), by inserting ‘‘and sec13 tions 1899B, 1899C, and 1899D’’ after ‘‘suc14 ceeding provisions of this section’’; 

15 (B) in subsection (b), in the first sentence, 

16 by striking ‘‘Before applying’’ and inserting 

17 ‘‘Subject to sections 1899B, 1899C, and 

18 1899D, before applying’’; 

19 (C) in subsection (c)(1), in the matter pre20 ceding subparagraph (A), by inserting ‘‘subject 

21 to sections 1899B, 1899C, and 1899D,’’ after 

22 ‘‘this part,’’; 

23 (D) in subsection (f), by striking ‘‘In es24 tablishing’’ and inserting ‘‘Subject to sections 


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1 1899B, 1899C, and 1899D, in establishing’’; 

2 and 

3 (E) in subsection (g)(1), by inserting ‘‘and 

4 sections 1899B, 1899C, and 1899D’’ and 

5 ‘‘paragraphs (4) and (5)’’. 

6 (3) Section 1905(p)(3) of the Social Security 

7 Act (42 U.S.C. 1396d(p)(3)) is amended— 

8 (A) in subparagraph (B), striking ‘‘section 

9 1813’’ and inserting ‘‘sections 1813 and 

10 1899C’’; and 

11 (B) in subparagraph (C), by striking ‘‘and 

12 section 1833(b)’’ and inserting ‘‘, 1833(b), and 

13 1899C’’. 

14 SEC. 2014. PROHIBITION ON FIRST-DOLLAR COVERAGE 

15 UNDER MEDIGAP POLICIES AND DEVELOP16 MENT OF NEW STANDARDS FOR MEDIGAP 

17 POLICIES. 

18 Section 1882 of the Social Security Act (42 U.S.C. 

19 1395ss) is amended by adding at the end the following 

20 new subsections: 

21 ‘‘(z) PROHIBITION ON FIRST-DOLLAR COVERAGE

22 AND DEVELOPMENT OF NEW STANDARDS FOR MEDICARE

23 SUPPLEMENTAL POLICIES.— 

24 ‘‘(1) DEVELOPMENT.—The Secretary shall re25 quest the National Association of Insurance ComVerDate Mar 15 2010 06:08 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00114 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 missioners to review and revise the standards for 

2 benefit packages under subsection (p)(1), taking into 

3 account the changes in benefits resulting from the 

4 enactment of the The Dollar for Dollar Act of 2012 

5 and to otherwise update standards to include the re6 quirements for cost-sharing described in paragraph 

7 (2). Such revisions shall be made consistent with the 

8 rules applicable under subsection (p)(1)(E) with the 

9 reference to the ‘1991 NAIC Model Regulation’ 

10 deemed a reference to the NAIC Model Regulation 

11 as published in the Federal Register on December 4, 

12 1998, and as subsequently updated by the National 

13 Association of Insurance Commissioners to reflect 

14 previous changes in law and the reference to ‘date 

15 of enactment of this subsection’ deemed a reference 

16 to the date of enactment of the The Dollar for Dol17 lar Act of 2012. To the extent practicable, such revi18 sion shall provide for the implementation of revised 

19 standards for benefit packages as of January 1, 

20 2015. 

21 ‘‘(2) COST-SHARING REQUIREMENTS.—The 

22 cost-sharing requirements described in this para23 graph are that, notwithstanding any other provision 

24 of law, no medicare supplemental policy may provide 

25 for coverage of— 


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1 ‘‘(A) any portion of the unified deductible 

2 under section 1899C(b) for the year; and 

3 ‘‘(B) more than 50 percent of the cost4 sharing (excluding premiums) otherwise appli5 cable under parts A and B after the individual 

6 has met the unified deductible under section 

7 1899C(b) for the year and before the individual 

8 has reached the first threshold annual out-of9 pocket limit under section 1899B(b)(1) for the 

10 year. 

11 ‘‘(3) RENEWABILITY.—The renewability re12 quirement under subsection (q)(1) shall be satisfied 

13 with the renewal of the revised package under para14 graph (1) that most closely matches the policy in 

15 which the individual was enrolled prior to such revi16 sion. 

17 ‘‘(aa) LIMITATION ON ISSUING NEW MEDICARE SUP18 PLEMENTAL POLICIES AFTER 2016.— 

19 ‘‘(1) IN GENERAL.—Notwithstanding any other 

20 provision of law, a medicare supplemental policies 

21 may not be issued to an individual after December 

22 31, 2016, unless the individual was covered under a 

23 medicare supplemental policy as of such date. 


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1 ‘‘(2) RENEWALS AND NEW POLICIES.—Nothing 

2 in this subsection shall be construed as prohib3 iting— 

4 ‘‘(A) the renewal after December 31, 2016, 

5 of a medicare supplemental policy that was 

6 issued on or before such date; or 

7 ‘‘(B) the issuance of a new medicare sup8 plemental policy after such date as long as the 

9 individual was covered under any medicare sup10 plemental policy as of such date.’’. 

11 PART III—ANNUAL REPORT TO CONGRESS 

12 SEC. 2021. ANNUAL REPORT TO CONGRESS. 

13 (a) IN GENERAL.—Not later than July 1, 2016, and 

14 annually thereafter, the Secretary of Health and Human 

15 Services shall submit to the Committee on Finance and 

16 the Special Committee on Aging of the Senate and to the 

17 Committee on Ways and Means and the Committee on En18 ergy and Commerce of the House of Representatives a re19 port on the provisions of, and amendments made by, parts 

20 I and II. 

21 (b) CONTENTS.—The report submitted under sub22 section (a) shall contain the following information: 

23 (1) An evaluation of the financial impact of 

24 such provisions and amendments. 


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1 (2) An evaluation of changes in access to physi2 cians and other health care providers as a result of 

3 such provisions and amendments. 

4 (3) An evaluation of changes in beneficiary sat5 isfaction under the Medicare program as a result of 

6 such provisions and amendments. 

7 (4) Such other information as the Secretary de8 termines to be appropriate. 

9 Subtitle B—Elimination of Exemp10 tion of Medicare Payments to 

11 Physicians Under Statutory 

12 PAYGO 

13 SEC. 2101. ELIMINATION OF EXEMPTION OF MEDICARE 

14 PAYMENTS TO PHYSICIANS UNDER STATU15 TORY PAYGO. 

16 (a) IN GENERAL.—Section 7 of the Statutory Pay17 As-You-Go Act of 2010 (2 U.S.C. 936) is amended— 

18 (1) in subsection (a), by striking paragraph (1); 

19 and 

20 (2) by striking subsection (c). 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 subsection (a) shall take effect on the date of the enact23 ment of this Act. 


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1 Subtitle C—Adjustments to Medi2 care Part B and D Premiums for 

3 High-Income Beneficiaries 

4 SEC. 2201. ADJUSTMENTS TO MEDICARE PART B AND D 

5 PREMIUMS FOR HIGH-INCOME BENE6 FICIARIES. 

7 (a) IN GENERAL.—Section 1839(i) of the Social Se8 curity Act (42 U.S.C. 1395r(i)) is amended— 

9 (1) in paragraph (2)(A), by inserting (or, in the 

10 case of 2013 or a subsequent year, $50,000) after 

11 ‘‘$80,000’’; and 

12 (2) in paragraph (3)— 

13 (A) in subparagraph (A)(i)— 

14 (i) by inserting ‘‘applicable’’ before 

15 ‘‘table’’; and 

16 (ii) by inserting ‘‘and year’’ after ‘‘in17 dividual’’; and 

18 (B) in subparagraph (C)(i)— 

19 (i) by striking ‘‘(i) IN GENERAL.—’’ 

20 and inserting ‘‘(i)(I) FOR 2007 THROUGH

21 2012.—For each of 2007 through 2012:’’; 

22 and 

23 (ii) by adding at the end the following 

24 new subclause: 


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1 ‘‘(II) FOR 2013 AND SUBSEQUENT

2 YEARS.—For 2013 or a subsequent year: 

‘‘If the modified adjusted gross income is: The applicable 

percentage is: 

More than $50,000 but not more than $85,000 ........................ 35 percent

More than $85,000 but not more than $107,000 ...................... 40 percent

More than $107,000 but not more than $160,000 .................... 55 percent

More than $160,000 but not more than $214,000 .................... 70 percent

More than $214,000 but not more than $250,000 .................... 85 percent

More than $250,000 ................................................................... 100 percent.’’. 

3 (b) EXTENSION OF TEMPORARY ADJUSTMENT TO IN4 COME THRESHOLDS.— 

5 (1) IN GENERAL.—Section 1839(i)(6) of the 

6 Social Security Act (42 U.S.C. 1395r(i)(6)) is 

7 amended— 

8 (A) in the matter preceding subparagraph 

9 (A), by striking ‘‘December 31, 2019’’ and in10 serting ‘‘December 31, 2021’’; 

11 (B) in subparagraph (A), by striking 

12 ‘‘equal to such amount for 2010; and’’ and in13 serting the following: ‘‘equal to— 

14 ‘‘(i) in the case of each of 2011 and 

15 2012, such amount for 2010; and 

16 ‘‘(ii) in the case of each of 2013 

17 through 2021, such amount for 2013; 

18 and’’; and 


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1 (C) in subparagraph (B), by striking 

2 ‘‘equal to such dollar amounts for 2010.’’ and 

3 inserting the following: ‘‘equal to— 

4 ‘‘(i) in the case of each of 2011 and 

5 2012, such dollar amounts for 2010; and 

6 ‘‘(ii) in the case of each of 2013 

7 through 2021, such dollar amounts for 

8 2013.’’. 

9 (2) CONFORMING AMENDMENT.—Section 

10 1839(i)(5)(A) of the Social Security Act (42 U.S.C. 

11 1395r(i)(5)(A)) is amended by inserting ‘‘for such 

12 year’’ after ‘‘paragraph (2) or (3)’’. 

13 Subtitle D—Increase in the 

14 Medicare Eligibility Age 

15 SEC. 2301. INCREASE IN THE MEDICARE ELIGIBILITY AGE. 

16 Section 226 of the Social Security Act (42 U.S.C. 

17 426) is amended by adding at the end the following new 

18 subsection: 

19 ‘‘(k) INCREASING MEDICARE QUALIFYING AGE.— 

20 ‘‘(1) IN GENERAL.—Notwithstanding any other 

21 provision of law, any reference in this section, title 

22 XVIII, or title XIX (insofar as it relates to the eligi23 bility age for Medicare benefits under title XVIII) to 

24 ‘age 65’ shall be deemed a reference to the Medicare 

25 qualifying age specified in paragraph (2). 


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1 ‘‘(2) MEDICARE QUALIFYING AGE SPECIFIED.— 

2 The Medicare qualifying age specified in this para3 graph is determined as follows: 

4 ‘‘(A) In the case of an individual who at5 tains 65 years of age before January 1, 2014, 

6 the Medicare qualifying age is 65 years of age. 

7 ‘‘(B) In the case of an individual who at8 tains 65 years of age in a year after 2013, and 

9 before 2025, the Medicare qualifying age is the 

10 Medicare qualifying age specified in this para11 graph for the previous year increased by 2 

12 months. 

13 ‘‘(C) In the case of an individual who at14 tains 65 years of age in a year after 2024, the 

15 Medicare qualifying age is 67 years of age.’’. 

16 Subtitle E—Other Provisions 

17 SEC. 2401. LIMITATION ON MEDICARE PAYMENTS FOR DI18 RECT GRADUATE MEDICAL EDUCATION 

19 (DGME). 

20 Section 1886(h)(2)(D) of the Social Security Act (42 

21 U.S.C. 1395ww(h)(2)(D)) is amended by adding at the 

22 end the following new clause: 

23 ‘‘(v) CAP ON APPROVED FTE RESI24 DENT AMOUNT.— 


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1 ‘‘(I) IN GENERAL.—The ap2 proved FTE resident amount for a 

3 hospital for a cost reporting period be4 ginning during fiscal year 2013 or a 

5 subsequent fiscal year shall not be 

6 more than the applicable amount for 

7 the year. 

8 ‘‘(II) APPLICABLE AMOUNT.— 

9 For purposes of subclause (I), the ap10 plicable amount for a year shall be an 

11 amount equal to 120 percent of the 

12 national average salary paid to resi13 dents in 2010, updated through the 

14 year involved by the Chained Con15 sumer Price Index. 

16 ‘‘(III) CHAINED CONSUMER

17 PRICE INDEX.—In subclause (II), the 

18 term ‘Chained Consumer Price Index’ 

19 means the initial Chained Consumer 

20 Price Index for all-urban consumers 

21 published by the Department of 

22 Labor.’’. 


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1 SEC. 2402. REDUCTION IN MEDICARE INDIRECT GRADUATE 

2 MEDICAL EDUCATION (IME) PAYMENTS. 

3 (a) IN GENERAL.—Section 1886(d)(5)(B)(ii) of the 

4 Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(ii)) is 

5 amended— 

6 (1) in subclause (XI), by striking ‘‘and’’ at the 

7 end; 

8 (2) in subclause (XII)— 

9 (A) by inserting ‘‘and before October 1, 

10 2012,’’ after ‘‘2007,’’; and 

11 (B) by striking the period at the end and 

12 inserting ‘‘; and’’; and 

13 (3) by adding at the end the following new sub14 clause: 

15 ‘‘(XIII) on or after October 1, 2012, ‘c’ is 

16 equal to 0.54.’’. 

17 (b) CONFORMING AMENDMENT RELATING TO DE18 TERMINATION OF STANDARDIZED AMOUNT.—Section 

19 1886(d)(2)(C)(i) of the Social Security Act (42 U.S.C. 

20 1395ww(d)(2)(C)(i)) is amended by inserting ‘‘or of sec21 tion 2402(a) of the The Dollar for Dollar Act of 2012’’ 

22 after ‘‘Act of 1997’’. 


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1 SEC. 2403. ACCELERATION OF APPLICATION OF PRODUC2 TIVITY ADJUSTMENT TO MEDICARE HOME 

3 HEALTH PROSPECTIVE PAYMENT AMOUNTS. 

4 Section 1895(b)(3)(B)(vi)(I) of the Social Security 

5 Act (42 U.S.C. 1395fff(b)(3)(B)(vi)(I)) is amended by 

6 striking ‘‘2015’’ and inserting ‘‘2013’’. 

7 SEC. 2404. ACCELERATION OF REBASING OF MEDICARE 

8 HOME HEALTH PROSPECTIVE PAYMENT 

9 AMOUNTS. 

10 Section 1895(b)(3)(A)(iii)(II) of the Social Security 

11 Act (42 U.S.C. 1395fff(b)(3)(A)(iii)(II)) is amended— 

12 (1) in the first sentence— 

13 (A) by striking ‘‘4-year’’ and inserting ‘‘2- 

14 year’’; and 

15 (B) by striking ‘‘2017’’ and inserting 

16 ‘‘2015’’; and 

17 (2) by striking the second sentence. 

18 SEC. 2405. REDUCTION OF BAD DEBT TREATED AS AN AL19 LOWABLE COST. 

20 (a) HOSPITALS.—Section 1861(v)(1)(T) of the Social 

21 Security Act (42 U.S.C. 1395x(v)(1)(T)) is amended— 

22 (1) in clause (iv), by striking ‘‘and’’ at the end; 

23 (2) in clause (v)— 

24 (A) by striking ‘‘or a subsequent fiscal 

25 year’’; and 


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1 (B) by striking the period at the end and 

2 inserting a comma; and 

3 (3) by adding at the end the following: 

4 ‘‘(vi) for cost reporting periods beginning dur5 ing fiscal year 2014, by 48 percent of such amount 

6 otherwise allowable, 

7 ‘‘(vii) for cost reporting periods beginning dur8 ing fiscal year 2015, by 61 percent of such amount 

9 otherwise allowable, 

10 ‘‘(viii) for cost reporting periods beginning dur11 ing fiscal year 2016, by 74 percent of such amount 

12 otherwise allowable, 

13 ‘‘(ix) for cost reporting periods beginning dur14 ing fiscal year 2017, by 87 percent of such amount 

15 otherwise allowable, and 

16 ‘‘(x) for cost reporting periods beginning during 

17 fiscal year 2018 or a subsequent fiscal year, by 100 

18 percent of such amount otherwise allowable.’’. 

19 (b) SKILLED NURSING FACILITIES.—Section 

20 1861(v)(1)(V) of the Social Security Act (42 U.S.C. 

21 1395x(v)(1)(V)) is amended— 

22 (1) by moving subclauses (I) and (II) of clause 

23 (i) and subclauses (I) through (IV) of clause (ii) two 

24 ems to the right; and 

25 (2) in clause (i)— 


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1 (A) in subclause (I), by striking ‘‘and’’ at 

2 the end; 

3 (B) in subclause (II)— 

4 (i) by striking ‘‘or a subsequent fiscal 

5 year’’; and 

6 (ii) by striking the period at the end 

7 and inserting a semicolon; and 

8 (C) by adding at the end the following: 

9 ‘‘(III) for cost reporting periods beginning 

10 during fiscal year 2014, by 48 percent of such 

11 amount otherwise allowable; 

12 ‘‘(IV) for cost reporting periods beginning 

13 during fiscal year 2015, by 61 percent of such 

14 amount otherwise allowable; 

15 ‘‘(V) for cost reporting periods beginning 

16 during fiscal year 2016, by 74 percent of such 

17 amount otherwise allowable; 

18 ‘‘(VI) for cost reporting periods beginning 

19 during fiscal year 2017, by 87 percent of such 

20 amount otherwise allowable; and 

21 ‘‘(VII) for cost reporting periods beginning 

22 during fiscal year 2018 or a subsequent fiscal 

23 year, by 100 percent of such amount otherwise 

24 allowable.’’. 


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1 (c) CERTAIN OTHER PROVIDERS.—Section 

2 1861(v)(1)(W)(i) of the Social Security Act (42 U.S.C. 

3 1395x(v)(1)(W)(i)) is amended— 

4 (1) in subclause (II), by striking ‘‘and’’ at the 

5 end; 

6 (2) in subclause (III)— 

7 (A) by striking ‘‘a subsequent fiscal year’’ 

8 and inserting ‘‘fiscal year 2015’’; and 

9 (B) by striking the period at the end and 

10 inserting a semicolon; and 

11 (3) by adding at the end the following: 

12 ‘‘(IV) for cost reporting periods beginning dur13 ing fiscal year 2016, by 48 percent of such amount 

14 otherwise allowable; 

15 ‘‘(V) for cost reporting periods beginning dur16 ing fiscal year 2017, by 61 percent of such amount 

17 otherwise allowable; 

18 ‘‘(VI) for cost reporting periods beginning dur19 ing fiscal year 2018, by 74 percent of such amount 

20 otherwise allowable; 

21 ‘‘(VII) for cost reporting periods beginning dur22 ing fiscal year 2019, by 87 percent of such amount 

23 otherwise allowable; and 

24 ‘‘(VIII) for cost reporting periods beginning 

25 during fiscal year 2020 or a subsequent fiscal year, 


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1 by 100 percent of such amount otherwise allow2 able.’’. 

3 TITLE III—SOCIAL SECURITY 

4 SEC. 3101. ADJUSTMENTS TO BEND POINTS IN DETER5 MINING PRIMARY INSURANCE AMOUNT. 

6 Section 215(a)(1) of the Social Security Act (42 

7 U.S.C. 415(a)(1)) is amended— 

8 (1) in subparagraph (A), in the matter pre9 ceding clause (i), by inserting ‘‘who initially becomes 

10 eligible for old-age or disability insurance benefits, 

11 or who dies (before becoming eligible for such bene12 fits), in any calendar year after 1979 and before 

13 2017’’ after ‘‘individual’’; 

14 (2) in subparagraph (B)(ii), in the matter pre15 ceding subclause (I), by inserting ‘‘and before 2017’’ 

16 after ‘‘after 1979’’; 

17 (3) in subparagraph (C)(i), by inserting ‘‘or 

18 (E)’’ after ‘‘(A)’’; and 

19 (4) by adding at the end the following: 

20 ‘‘(E)(i) The primary insurance amount of an indi21 vidual who initially becomes eligible for old-age or dis22 ability insurance benefits, or who dies (before becoming 

23 eligible for such benefits), in any calendar year after 2016 

24 shall (except as otherwise provided in this section) be 

25 equal to the sum of— 


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1 ‘‘(I) 90 percent of the individual’s average in2 dexed monthly earnings (determined under sub3 section (b)) to the extent that such earnings do not 

4 exceed the amount established for purposes of this 

5 subclause by clause (ii), 

6 ‘‘(II) 30 percent of the individual’s average in7 dexed monthly earnings to the extent that such 

8 earnings exceed the amount established for purposes 

9 of subclause (I) but do not exceed the amount estab10 lished for purposes of this subclause by clause (ii), 

11 ‘‘(III) 10 percent of the individual’s average in12 dexed monthly earnings to the extent that such 

13 earnings exceed the amount established for purposes 

14 of subclause (II) but do not exceed the amount es15 tablished for purposes of this subclause by clause 

16 (ii), and 

17 ‘‘(IV) 5 percent of the individual’s average in18 dexed monthly earnings to the extent that such 

19 earnings exceed the amount established for purposes 

20 of subclause (III), 

21 rounded, if not a multiple of $0.10, to the next lower mul22 tiple of $0.10, and thereafter increased as provided in sub23 section (i). 

24 ‘‘(ii) For individuals who initially become eligible for 

25 old-age or disability insurance benefits, or who die (before 


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1 becoming eligible for such benefits) in the calendar year 

2 2017 or later, the amount established for purposes of sub3 clauses (I), (II), and (III) of subparagraph (E)(i) shall 

4 be $180, $736, and $1,085, respectively, as if such 

5 amount was applicable with respect to 1979 and was ad6 justed for years after 1979 in the same manner as pro7 vided under subparagraph (B)(ii), without regard to the 

8 limitation that such adjustment only applies to individuals 

9 who initially become eligible for old-age benefits or dis10 ability insurance benefits, or who die (before becoming eli11 gible for benefits) before 2017. 

12 ‘‘(iii)(I) Notwithstanding clauses (i) and (ii), in the 

13 case of any individual who becomes eligible for old-age or 

14 disability insurance benefits, or who dies (before becoming 

15 eligible for such benefits) in any calendar year after 2016 

16 and before 2051, the primary insurance amount of the in17 dividual shall be equal to the sum of— 

18 ‘‘(aa) the primary insurance amount determined 

19 for the individual under subparagraphs (A) and (B) 

20 (without regard to the limitation that such subpara21 graphs apply only to individuals who initially become 

22 eligible for old-age benefits or disability insurance 

23 benefits, or who die (before becoming eligible for 

24 benefits) before 2017) multiplied by the applicable 


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1 phase-in factor for the calendar year under sub2 clause (II); and 

3 ‘‘(bb) the primary insurance amount deter4 mined for the individual under this subparagraph 

5 (other than under this clause) multiplied by the ap6 plicable phase-in factor for the calendar year under 

7 subclause (II). 

8 ‘‘(II) For purposes of— 

9 ‘‘(aa) subclause (I)(aa), the applicable phase-in 

10 factor for calendar year 2017, is the quotient of 33 

11 divided by 34, and for each year thereafter is the 

12 quotient of— 

13 ‘‘(AA) the numerator applicable for the 

14 preceding year reduced by 1, divided by 

15 ‘‘(BB) 34; and 

16 ‘‘(bb) subclause (I)(bb), the applicable phase-in 

17 factor for calendar year 2017 is the quotient of 1 di18 vided by 34, and for each year thereafter is the 

19 quotient of— 

20 ‘‘(AA) the numerator applicable for the 

21 preceding year increased by 1, divided by 

22 ‘‘(BB) 34.’’. 


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1 SEC. 3102. ADJUSTMENT TO CALCULATION OF BENEFIT 

2 COMPUTATION YEARS. 

3 (a) IN GENERAL.—Clause (i) of section 215(b)(2)(A) 

4 of the Social Security Act (42 U.S.C. 415(b)(2)(A)) is 

5 amended to read as follows: 

6 ‘‘(i) in the case of an individual who is entitled 

7 to old-age insurance benefits (except as provided in 

8 the second sentence of this subparagraph), or who 

9 has died— 

10 ‘‘(I) before January 1, 2014, by 5 years; 

11 ‘‘(II) after December 31, 2013, and before 

12 January 1, 2015, by 4 years; 

13 ‘‘(III) after December 31, 2014, and be14 fore January 1, 2016, by 3 years; and 

15 ‘‘(IV) after December 31, 2015, and before 

16 January 1, 2017, by 2 years; and’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to benefits payable for months be19 ginning after December 31, 2013. 

20 SEC. 3103. MINIMUM SOCIAL SECURITY BENEFIT. 

21 (a) IN GENERAL.—Section 215 of the Social Security 

22 Act (42 U.S.C. 415) is amended by adding at the end the 

23 following: 

24 ‘‘Minimum Monthly Insurance Benefit 

25 ‘‘(j)(1) Notwithstanding the preceding provisions of 

26 this section— 


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1 ‘‘(A) subject to paragraph (3), the primary in2 surance amount of any individual who is credited 

3 with at least 10 years of coverage and who initially 

4 becomes eligible for old-age or disability insurance 

5 benefits or dies (before becoming eligible for such 

6 benefits) for a month beginning after December 31, 

7 2016 (in this subsection referred to as a ‘qualified 

8 individual’), shall be equal to the greater of— 

9 ‘‘(i) the primary insurance amount deter10 mined under this section (without regard to this 

11 subsection), or 

12 ‘‘(ii) the minimum monthly insurance ben13 efit determined under paragraph (2), and 

14 ‘‘(B) any recomputation of the primary insur15 ance amount of a qualified individual shall not result 

16 in a primary insurance amount less than the pri17 mary insurance amount as in effect immediately 

18 prior to such recomputation. 

19 ‘‘(2) For purposes of this subsection, the term ‘minimum monthly insurance benefit’ means 1 20 ⁄12 of the appli21 cable percentage of the adjusted minimum benefit level (as 

22 defined in paragraph (5)). 

23 ‘‘(3)(A) For purposes of this subsection, subject to 

24 subparagraph (B), the applicable percentage shall be 125 

25 percent reduced by the number of percentage points deterVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 mined under subparagraph (B)(ii) for each year of cov2 erage of the qualified individual less than 30. 

3 ‘‘(B)(i) In the case of an individual who initially be4 comes eligible for disability insurance benefits under sec5 tion 223 before attaining age 62, or who dies before at6 taining age 62, in a month beginning after December 31, 

7 2016, and who is credited with at least 5 years of cov8 erage, the individual shall be treated as a qualified indi9 vidual and the applicable percentage shall be 125 reduced 

10 by the number of percentage points determined under 

11 clause (ii) for each year of coverage of the qualified indi12 vidual less than the number as determined under clause 

13 (iii). 

14 ‘‘(ii) The number of percentage points under this 

15 clause shall be determined by— 

16 ‘‘(I) dividing the number of the qualifying indi17 vidual’s elapsed years (as defined in subsection 

18 (b)(2)(B)(iii)) by 40; 

19 ‘‘(II) multiplying the result under subclause (I) 

20 by 20; and 

21 ‘‘(III) dividing 125 by the result under sub22 clause (II) and rounding to the nearest one hun23 dredth of 1 percentage point. 

24 ‘‘(iii) The number of years of coverage under this 

25 clause shall be determined by multiplying the ratio deterVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00135 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 mined under clause (ii)(I) by 30 and rounding to the next 

2 lower whole number. 

3 ‘‘(4) For purposes of this subsection, a year of cov4 erage is a calendar year for which an individual is credited 

5 with 4 quarters of coverage. 

6 ‘‘(5) For purposes of this subsection— 

7 ‘‘(A) for individuals who initially become eligible 

8 for old-age or disability insurance benefits or die 

9 (before becoming eligible for such benefits) in 2017, 

10 the term ‘adjusted minimum benefit level’ means the 

11 weighted average of the Federal poverty threshold 

12 applicable to a family of 1 for 2009 (as determined 

13 by the Bureau of the Census), increased for each 

14 year occurring after 2009 and before 2018, by the 

15 percentage increase (rounded to the nearest one16 tenth of 1 percent) in the Chained Consumer Price 

17 Index for All Urban Consumers (as published by the 

18 Bureau of Labor Statistics of the Department of 

19 Labor) for each such year; and 

20 ‘‘(B) for individuals who initially become eligi21 ble for old-age or disability insurance benefits or die 

22 (before becoming eligible for such benefits) in a year 

23 after 2017, the term ‘adjusted minimum benefit 

24 level’ means the amount specified in subparagraph 

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1 section (b)(3)(A)(ii), except that the reference to 

2 ‘the computation base year for which the determina3 tion is made’ in such subsection shall be deemed in4 stead to be a reference to ‘2009’. 

5 ‘‘(6) The provisions of this subsection shall not apply 

6 in the case of an individual whose primary insurance 

7 amount would otherwise be computed under subsection 

8 (a)(7).’’. 

9 (b) CONFORMING AMENDMENT.—Section 202(a) of 

10 such Act (42 U.S.C. 402(a)) is amended in the last sen11 tence by striking ‘‘section 215(a)’’ and inserting ‘‘section 

12 215’’. 

13 SEC. 3104. INCREASE IN BENEFITS STARTING 20 YEARS 

14 AFTER INITIAL ELIGIBILITY. 

15 (a) IN GENERAL.—Section 215 of the Social Security 

16 Act (42 U.S.C. 415), as amended by this Act, is amended 

17 by adding at the end the following new subsection: 

18 ‘‘Increased Monthly Insurance Benefit After 20 Years of 

19 Initial Eligibility 

20 ‘‘(k)(1) Notwithstanding the preceding provisions of 

21 this section, in the case of an individual who is a 20-year 

22 beneficiary, the primary insurance amount of the indi23 vidual (as determined before the application of this sub24 section) shall be increased for months beginning with the 

25 first month for which the individual attains such status 


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1 by the amount equal to the applicable percentage of the 

2 applicable average primary insurance amount. 

3 ‘‘(2) For purposes of this subsection, the term ‘20- 

4 year beneficiary’ means an individual who has been eligible 

5 for old-age insurance benefits or disability insurance bene6 fits under this title for at least 240 months. 

7 ‘‘(3) For purposes of paragraph (1), the term ‘appli8 cable average primary insurance amount’ means, with re9 spect to a 20-year beneficiary, the primary insurance 

10 amount determined by the Commissioner of Social Secu11 rity that would apply to an individual of the same age as 

12 the age at which the 20-year beneficiary first attains such 

13 status, if the individual had earnings for each calendar 

14 year in which the individual would have attained ages 20 

15 through the year prior to the age of eligibility, respectively, 

16 equal to the national average earnings for all such individ17 uals for each such year. 

18 ‘‘(4) For purposes of paragraph (1), the applicable 

19 percentage is— 

20 ‘‘(A) for each month occurring during the first 

21 12-month period for which an individual is a 20-year 

22 beneficiary, 1 percent; 

23 ‘‘(B) for each month occurring during the sec24 ond 12-month period for which an individual is such 

25 a beneficiary, 2 percent; 


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1 ‘‘(C) for each month occurring during the third 

2 12-month period for which an individual is such a 

3 beneficiary, 3 percent; 

4 ‘‘(D) for each month occurring during the 

5 fourth 12-month period for which an individual is 

6 such a beneficiary, 4 percent; and 

7 ‘‘(E) for each month occurring thereafter, 5 

8 percent.’’. 

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

10 this section shall apply to benefits payable for months be11 ginning after December 31, 2013. 

12 SEC. 3105. ADJUSTMENT TO NORMAL AND EARLY RETIRE13 MENT AGES. 

14 Section 216(l) of the Social Security Act (42 U.S.C. 

15 416(l)) is amended— 

16 (1) in paragraph (1)— 

17 (A) in subparagraph (D), by striking ‘‘; 

18 and’’ and inserting a semicolon; and 

19 (B) by striking subparagraph (E) and in20 serting the following new subparagraphs: 

21 ‘‘(E) with respect to an individual who at22 tains early retirement age after December 31, 

23 2021, and before January 1, 2023, 67 years of 

24 age; 


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1 ‘‘(F) with respect to an individual who, 

2 during the period after December 31, 2022, 

3 and before January 1, 2070— 

4 ‘‘(i) for purposes of paragraph 

5 (2)(A)(ii), attains 62 years of age, such in6 dividual’s early retirement age plus 60 

7 months; or 

8 ‘‘(ii) attains early retirement age pur9 suant to paragraph (2)(B), 67 years plus 

10 the number of months determined under 

11 the age increase factor for the calendar 

12 year in which such individual attains early 

13 retirement age; and 

14 ‘‘(G) with respect to an individual who— 

15 ‘‘(i) for purposes of paragraph 

16 (2)(A)(iii), attains 62 years of age after 

17 December 31, 2069, 69 years of age; or 

18 ‘‘(ii) attains early retirement age pur19 suant to paragraph (2)(B) after December 

20 31, 2069, 69 years of age.’’; 

21 (2) by amending paragraph (2) to read as fol22 lows: 

23 ‘‘(2) The term ‘early retirement age’ means— 

24 ‘‘(A) in the case of an old-age, wife’s, or 

25 husband’s insurance benefit— 


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1 ‘‘(i) 62 years of age with respect to an 

2 individual who attains such age before 

3 January 1, 2023; 

4 ‘‘(ii) with respect to an individual who 

5 attains 62 years of age after December 31, 

6 2022, and before January 1, 2070, 62 

7 years of age plus the number of months 

8 determined under the age increase factor 

9 for the calendar year in which such indi10 vidual attains 62 years of age; and 

11 ‘‘(iii) with respect to an individual 

12 who attains age 62 after December 31, 

13 2069, 64 years of age; or 

14 ‘‘(B) in the case of a widow’s or widower’s 

15 insurance benefit, 60 years of age.’’; and 

16 (3) by adding at the end the following new 

17 paragraph: 

18 ‘‘(4) The age increase factor shall be equal to 

1 19 ⁄24 of the number of months (rounded down to a 

20 full month) in the period beginning with January 

21 2023 and ending with December of the year in 

22 which— 

23 ‘‘(A) for purposes of paragraph (1)(F)(ii), 

24 the individual attains 60 years of age; or 


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1 ‘‘(B) for purposes of paragraph (2)(A)(ii), 

2 the individual attains 62 years of age.’’. 

3 SEC. 3106. APPLICATION OF ACTUARIAL REDUCTION FOR 

4 DISABLED BENEFICIARIES WHO ATTAIN 

5 EARLY RETIREMENT AGE. 

6 (a) IN GENERAL.—Section 202(k)(4) of the Social 

7 Security Act (42 U.S.C. 402(k)(4)) is amended to read 

8 as follows: 

9 ‘‘(4)(A) Subject to subparagraph (B), any individual 

10 who, under this section and section 223, is entitled for 

11 any month to both an old-age insurance benefit and a dis12 ability insurance benefit under this title shall be entitled 

13 to only the larger of such benefits for such month, except 

14 that, if such individual so elects, he shall instead be enti15 tled to only the smaller of such benefits for such month. 

16 ‘‘(B) An individual described in subparagraph (A) 

17 who has attained transitional retirement age (as deter18 mined under subparagraph (C)) shall only be entitled to 

19 the old-age insurance benefit for such month, as reduced 

20 for such month pursuant to subsection (q)(1). 

21 ‘‘(C) For purposes of subparagraph (B), the term 

22 ‘transitional retirement age’ means— 

23 ‘‘(i) with respect to an individual who attains 

24 62 years of age before January 1, 2014, 66 years 

25 of age; 


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1 ‘‘(ii) with respect to an individual who attains 

2 62 years of age after December 31, 2013, and before 

3 January 1, 2025, 66 years of age reduced by the 

4 number of months determined under the transition 

5 factor (as determined under subparagraph (D)) for 

6 the calendar year in which such individual attains 62 

7 years of age; and 

8 ‘‘(iii) with respect to an individual who attains 

9 62 years of age after December 31, 2024, 64 years 

10 of age. 

11 ‘‘(D) For purposes of subparagraph (C)(ii), the tran12 sition factor shall be equal to two-twelfths of the number 

13 of months in the period beginning with January 2014 and 

14 ending with December of the year in which the individual 

15 attains 62 years of age.’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) PERIOD OF DISABILITY.—Clause (i) of sec18 tion 216(i)(2)(D) of the Social Security Act (42 

19 U.S.C. 416(i)(2)(D)) is amended by striking ‘‘retire20 ment age (as defined in subsection (l))’’ and insert21 ing ‘‘transitional retirement age (as defined in sec22 tion 216(k)(4))’’. 

23 (2) DISABILITY INSURANCE BENEFIT PAY24 MENTS.—Section 223(a)(1) of the Social Security 

25 (42 U.S.C. 423(a)(1)) is amended— 


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1 (A) in subparagraph (B), by striking ‘‘re2 tirement age (as defined in section 216(l))’’ and 

3 inserting ‘‘transitional retirement age (as de4 fined in section 216(k)(4))’’; and 

5 (B) in the flush matter at the end, by 

6 striking ‘‘retirement age (as defined in section 

7 216(l))’’ and inserting ‘‘transitional retirement 

8 age (as defined in section 216(k)(4))’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to benefits payable for months be11 ginning after December 31, 2013. 

12 SEC. 3107. OPTION TO COLLECT UP TO ONE-HALF OF OLD13 AGE INSURANCE BENEFIT AT AGE 62. 

14 (a) IN GENERAL.—Section 202 of the Social Security 

15 Act (42 U.S.C. 402) is amended by adding at the end the 

16 following: 

17 ‘‘Option To Collect up to One-Half of Old-Age Insurance 

18 Benefit Beginning at Age 62 

19 ‘‘(z)(1) Not later than January 1, 2014, the Commis20 sioner of Social Security shall establish an option, subject 

21 to such regulations as are prescribed by the Commissioner 

22 under paragraph (2), for a fully insured individual (as de23 fined in section 214) to elect to receive a reduced monthly 

24 benefit after such individual attains 62 years of age, con25 sisting of the following: 


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1 ‘‘(A) Subject to paragraph (3), for months be2 ginning with the month in which the individual at3 tains age 62, a monthly benefit equal to such per4 centage as is elected by the individual, but which 

5 shall not be greater than 50 percent, of the primary 

6 insurance amount determined for the individual at 

7 age 62. 

8 ‘‘(B) For months beginning with the month in 

9 which the individual attains early retirement age, a 

10 monthly benefit equal to the sum of— 

11 ‘‘(i) the monthly benefit payable to the in12 dividual under subparagraph (A); and 

13 ‘‘(ii) the amount equal to the applicable 

14 percentage (as determined under subparagraph 

15 (C)) of primary insurance amount determined 

16 for the individual under section 215 for such 

17 month (determined without regard to any elec18 tion under this subsection). 

19 ‘‘(C) For purposes of subparagraph (B)(ii), the 

20 applicable percentage shall be equal to the difference 

21 between— 

22 ‘‘(i) 100 percent; and 

23 ‘‘(ii) the percentage elected by the indi24 vidual under subparagraph (A). 


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1 ‘‘(2) An individual shall elect the option under this 

2 subsection in accordance with regulations prescribed by 

3 the Commissioner of Social Security. 

4 ‘‘(3) The monthly benefit payable to an individual 

5 under paragraph (1)(A) shall be subject to reduction as 

6 provided in subsection (q).’’. 

7 (b) CONFORMING AMENDMENT.—Section 202(a) of 

8 the Social Security Act (42 U.S.C. 402(a)) is amended 

9 in the last sentence, by striking ‘‘subsection (q) and sub10 section (w)’’ and inserting ‘‘subsections (q), (w), and (z)’’. 

11 SEC. 3108. COVERAGE OF NEWLY HIRED STATE AND LOCAL 

12 EMPLOYEES. 

13 (a) AMENDMENTS TO THE SOCIAL SECURITY ACT.— 

14 (1) IN GENERAL.—Paragraph (7) of section 

15 210(a) of the Social Security Act (42 U.S.C. 

16 410(a)(7)) is amended to read as follows: 

17 ‘‘(7) Excluded State or local government em18 ployment (as defined in subsection (s));’’. 

19 (2) EXCLUDED STATE OR LOCAL GOVERNMENT

20 EMPLOYMENT.— 

21 (A) IN GENERAL.—Section 210 of such 

22 Act (42 U.S.C. 410) is amended by adding at 

23 the end the following new subsection: 

24 ‘‘(s) EXCLUDED STATE OR LOCAL GOVERNMENT

25 EMPLOYMENT.—(1) IN GENERAL.—The term ‘excluded 


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1 State or local government employment’ means any service 

2 performed in the employ of a State, of any political sub3 division thereof, or of any instrumentality of any one or 

4 more of the foregoing which is wholly owned thereby, if— 

5 ‘‘(A)(i) such service would be excluded from the 

6 term ‘employment’ for purposes of this title if the 

7 preceding provisions of this section as in effect in 

8 December 2020 had remained in effect, and (ii) the 

9 requirements of paragraph (2) are met with respect 

10 to such service, or 

11 ‘‘(B) the requirements of paragraph (3) are met 

12 with respect to such service. 

13 ‘‘(2) EXCEPTION FOR CURRENT EMPLOYMENT

14 WHICH CONTINUES.— 

15 ‘‘(A) IN GENERAL.—The requirements of this 

16 paragraph are met with respect to service for any 

17 employer if— 

18 ‘‘(i) such service is performed by an indi19 vidual— 

20 ‘‘(I) who was performing substantial 

21 and regular service for remuneration for 

22 that employer before January 1, 2021, 

23 ‘‘(II) who is a bona fide employee of 

24 that employer on December 31, 2020, and 


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1 ‘‘(III) whose employment relationship 

2 with that employer was not entered into 

3 for purposes of meeting the requirements 

4 of this subparagraph, and 

5 ‘‘(ii) the employment relationship with that 

6 employer has not been terminated after Decem7 ber 31, 2020. 

8 ‘‘(B) TREATMENT OF MULTIPLE AGENCIES AND

9 INSTRUMENTALITIES.—For purposes of subpara10 graph (A), under regulations (consistent with regula11 tions established under section 3121(t)(2)(B) of the 

12 Internal Revenue Code of 1986)— 

13 ‘‘(i) all agencies and instrumentalities of a 

14 State (as defined in section 218(b)) or of the 

15 District of Columbia shall be treated as a single 

16 employer, and 

17 ‘‘(ii) all agencies and instrumentalities of a 

18 political subdivision of a State (as so defined) 

19 shall be treated as a single employer and shall 

20 not be treated as described in clause (i). 

21 ‘‘(3) EXCEPTION FOR CERTAIN SERVICES.— 

22 ‘‘(A) IN GENERAL.—The requirements of this 

23 paragraph are met with respect to service if such 

24 service is performed— 


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1 ‘‘(i) by an individual who is employed by a 

2 State or political subdivision thereof to relieve 

3 such individual from unemployment, 

4 ‘‘(ii) in a hospital, home, or other institu5 tion by a patient or inmate thereof as an em6 ployee of a State or political subdivision thereof 

7 or of the District of Columbia, 

8 ‘‘(iii) by an individual, as an employee of 

9 a State or political subdivision thereof or of the 

10 District of Columbia, serving on a temporary 

11 basis in case of fire, storm, snow, earthquake, 

12 flood, or other similar emergency, 

13 ‘‘(iv) by any individual as an employee in14 cluded under section 5351(2) of title 5, United 

15 States Code (relating to certain interns, student 

16 nurses, and other student employees of hos17 pitals of the District of Columbia Government), 

18 other than as a medical or dental intern or a 

19 medical or dental resident in training, 

20 ‘‘(v) by an election official or election 

21 worker if the remuneration paid in a calendar 

22 year for such service is less than $1,000 with 

23 respect to service performed during 2021, and 

24 the adjusted amount determined under sub25 paragraph (C) for any subsequent year with reVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00149 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 spect to service performed during such subse2 quent year, except to the extent that service by 

3 such election official or election worker is in4 cluded in employment under an agreement 

5 under section 218, or 

6 ‘‘(vi) by an employee in a position com7 pensated solely on a fee basis which is treated 

8 pursuant to section 211(c)(2)(E) as a trade or 

9 business for purposes of inclusion of such fees 

10 in net earnings from self-employment. 

11 ‘‘(B) DEFINITIONS.—As used in this para12 graph, the terms ‘State’ and ‘political subdivision’ 

13 have the meanings given those terms in section 

14 218(b). 

15 ‘‘(C) ADJUSTMENTS TO DOLLAR AMOUNT FOR

16 ELECTION OFFICIALS AND ELECTION WORKERS.— 

17 For each year after 2021, the Commissioner of So18 cial Security shall adjust the amount referred to in 

19 subparagraph (A)(v) at the same time and in the 

20 same manner as is provided under section 

21 215(a)(1)(B)(ii) with respect to the amounts re22 ferred to in section 215(a)(1)(B)(i), except that— 

23 ‘‘(i) for purposes of this subparagraph, 

24 2018 shall be substituted for the calendar year 

25 referred to in section 215(a)(1)(B)(ii)(II), and 


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1 ‘‘(ii) such amount as so adjusted, if not a 

2 multiple of $100, shall be rounded to the next 

3 higher multiple of $100 where such amount is 

4 a multiple of $50 and to the nearest multiple 

5 of $100 in any other case. 

6 The Commissioner of Social Security shall determine and 

7 publish in the Federal Register each adjusted amount de8 termined under this subparagraph not later than Novem9 ber 1 preceding the year for which the adjustment is 

10 made.’’. 

11 (B) CONFORMING AMENDMENTS.— 

12 (i) Subsection (k) of section 210 of 

13 such Act (42 U.S.C. 410(k)) (relating to 

14 covered transportation service) is repealed. 

15 (ii) Section 210(p) of such Act (42 

16 U.S.C. 410(p)) is amended— 

17 (I) in paragraph (2), by striking 

18 ‘‘service is performed’’ and all that 

19 follows and inserting ‘‘service is serv20 ice described in subsection (s)(3)(A).’’; 

21 and 

22 (II) in paragraph (3)(A), by in23 serting ‘‘under subsection (a)(7) as in 

24 effect in December 2020’’ after ‘‘sec25 tion’’. 


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1 (iii) Section 218(c)(6) of such Act (42 

2 U.S.C. 418(c)(6)) is amended— 

3 (I) by striking subparagraph (C); 

4 (II) by redesignating subpara5 graphs (D) and (E) as subparagraphs 

6 (C) and (D), respectively; and 

7 (III) by striking subparagraph 

8 (F) and inserting the following: 

9 ‘‘(E) service which is included as employment 

10 under section 210(a).’’. 

11 (b) AMENDMENTS TO THE INTERNAL REVENUE

12 CODE OF 1986.— 

13 (1) IN GENERAL.—Paragraph (7) of section 

14 3121(b) of the Internal Revenue Code of 1986 (re15 lating to employment) is amended to read as follows: 

16 ‘‘(7) excluded State or local government em17 ployment (as defined in subsection (t));’’. 

18 (2) EXCLUDED STATE OR LOCAL GOVERNMENT

19 EMPLOYMENT.—Section 3121 of such Code is 

20 amended by inserting after subsection (s) the fol21 lowing new subsection: 

22 ‘‘(t) EXCLUDED STATE OR LOCAL GOVERNMENT EM23 PLOYMENT.— 

24 ‘‘(1) IN GENERAL.—For purposes of this chap25 ter, the term ‘excluded State or local government 


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1 employment’ means any service performed in the 

2 employ of a State, of any political subdivision there3 of, or of any instrumentality of any one or more of 

4 the foregoing which is wholly owned thereby, if— 

5 ‘‘(A)(i) such service would be excluded 

6 from the term ‘employment’ for purposes of this 

7 chapter if the provisions of subsection (b)(7) as 

8 in effect in December 2020 had remained in ef9 fect, and (ii) the requirements of paragraph (2) 

10 are met with respect to such service, or 

11 ‘‘(B) the requirements of paragraph (3) 

12 are met with respect to such service. 

13 ‘‘(2) EXCEPTION FOR CURRENT EMPLOYMENT

14 WHICH CONTINUES.— 

15 ‘‘(A) IN GENERAL.—The requirements of 

16 this paragraph are met with respect to service 

17 for any employer if— 

18 ‘‘(i) such service is performed by an 

19 individual— 

20 ‘‘(I) who was performing sub21 stantial and regular service for remu22 neration for that employer before Jan23 uary 1, 2021, 


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1 ‘‘(II) who is a bona fide employee 

2 of that employer on December 31, 

3 2020, and 

4 ‘‘(III) whose employment rela5 tionship with that employer was not 

6 entered into for purposes of meeting 

7 the requirements of this subpara8 graph, and 

9 ‘‘(ii) the employment relationship with 

10 that employer has not been terminated 

11 after December 31, 2020. 

12 ‘‘(B) TREATMENT OF MULTIPLE AGENCIES

13 AND INSTRUMENTALITIES.—For purposes of 

14 subparagraph (A), under regulations— 

15 ‘‘(i) all agencies and instrumentalities 

16 of a State (as defined in section 218(b) of 

17 the Social Security Act) or of the District 

18 of Columbia shall be treated as a single 

19 employer, and 

20 ‘‘(ii) all agencies and instrumentalities 

21 of a political subdivision of a State (as so 

22 defined) shall be treated as a single em23 ployer and shall not be treated as de24 scribed in clause (i). 

25 ‘‘(3) EXCEPTION FOR CERTAIN SERVICES.— 


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1 ‘‘(A) IN GENERAL.—The requirements of 

2 this paragraph are met with respect to service 

3 if such service is performed— 

4 ‘‘(i) by an individual who is employed 

5 by a State or political subdivision thereof 

6 to relieve such individual from unemploy7 ment, 

8 ‘‘(ii) in a hospital, home, or other in9 stitution by a patient or inmate thereof as 

10 an employee of a State or political subdivi11 sion thereof or of the District of Columbia, 

12 ‘‘(iii) by an individual, as an employee 

13 of a State or political subdivision thereof 

14 or of the District of Columbia, serving on 

15 a temporary basis in case of fire, storm, 

16 snow, earthquake, flood, or other similar 

17 emergency, 

18 ‘‘(iv) by any individual as an employee 

19 included under section 5351(2) of title 5, 

20 United States Code (relating to certain in21 terns, student nurses, and other student 

22 employees of hospitals of the District of 

23 Columbia Government), other than as a 

24 medical or dental intern or a medical or 

25 dental resident in training, 


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1 ‘‘(v) by an election official or election 

2 worker if the remuneration paid in a cal3 endar year for such service is less than 

4 $1,000 with respect to service performed 

5 during 2021, and the adjusted amount de6 termined under section 210(s)(3)(C) of the 

7 Social Security Act for any subsequent 

8 year with respect to service performed dur9 ing such subsequent year, except to the ex10 tent that service by such election official or 

11 election worker is included in employment 

12 under an agreement under section 218 of 

13 the Social Security Act, or 

14 ‘‘(vi) by an employee in a position 

15 compensated solely on a fee basis which is 

16 treated pursuant to section 1402(c)(2)(E) 

17 as a trade or business for purposes of in18 clusion of such fees in net earnings from 

19 self-employment. 

20 ‘‘(B) DEFINITIONS.—As used in this para21 graph, the terms ‘State’ and ‘political subdivi22 sion’ have the meanings given those terms in 

23 section 218(b) of the Social Security Act.’’. 

24 (3) CONFORMING AMENDMENTS.— 


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1 (A) Subsection (j) of such section 3121 

2 (relating to covered transportation service) is 

3 repealed. 

4 (B) Paragraph (2) of section 3121(u) of 

5 such Code (relating to application of hospital 

6 insurance tax to Federal, State, and local em7 ployment) is amended— 

8 (i) in subparagraph (B), by striking 

9 ‘‘service is performed’’ in clause (ii) and all 

10 that follows through the end of such sub11 paragraph and inserting ‘‘service is service 

12 described in subsection (t)(3)(A).’’; and 

13 (ii) in subparagraph (C)(i), by insert14 ing ‘‘under subsection (b)(7) as in effect in 

15 December 2020’’ after ‘‘chapter’’. 

16 (c) EFFECTIVE DATE.—Except as otherwise provided 

17 in this section, the amendments made by this section shall 

18 apply with respect to service performed after December 

19 31, 2020. 


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1 SEC. 3109. INCLUSION IN ANNUAL SOCIAL SECURITY AC2 COUNT STATEMENT OF ESTIMATED PRESENT 

3 VALUE OF TAXES AND BENEFITS FOR SOCIAL 

4 SECURITY AND MEDICARE AND PROJECTED 

5 DEFICIT AS A PERCENT OF LIFETIME EARN6 INGS. 

7 (a) IN GENERAL.—Section 1143(a)(2) of the Social 

8 Security Act (42 U.S.C. 1320b–13(a)(2)) is amended— 

9 (1) in subparagraph (E), by striking ‘‘benefits.’’ 

10 and inserting ‘‘benefits;’’; and 

11 (2) by adding after subparagraph (E) the fol12 lowing new subparagraphs: 

13 ‘‘(F) an estimate, as determined by the Com14 missioner, in consultation with the Secretary of 

15 Health and Human Services, on the basis of avail16 able records of the Commissioner and projections 

17 based on reasonable assumptions, of— 

18 ‘‘(i) the present value of potential lifetime 

19 aggregate employer, employee, and self-employ20 ment contributions of the eligible individual for 

21 old-age, survivors, and disability insurance 

22 (under title II) and for hospital insurance 

23 (under part A of title XVIII); 

24 ‘‘(ii) the present value of potential lifetime 

25 premiums payable (under parts B and D of title 

26 XVIII); and 


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1 ‘‘(iii) the present value of potential lifetime 

2 aggregate retirement, disability, survivor, and 

3 auxiliary benefits payable on the eligible individ4 ual’s account under title II and per capita bene5 fits payable under the Medicare program of title 

6 XVIII; and 

7 ‘‘(G) an estimate, as determined by the Com8 missioner, in consultation with the Secretary of 

9 Health and Human Services, on the basis of avail10 able records of the Commissioner and projections 

11 based on reasonable assumptions, of the ratio (ex12 pressed as a percentage) of— 

13 ‘‘(i) the sum of the projected deficit-fi14 nanced benefits under the old-age, survivors, 

15 and disability insurance program with respect 

16 to the eligible individual and the projected def17 icit-financed benefits under part A of the Medi18 care program under title XVIII with respect to 

19 the eligible individual, to 

20 ‘‘(ii) projected lifetime earnings of the eli21 gible individual.’’. 

22 (b) DEFINITIONS.—Section 1143(a) of such Act (42 

23 U.S.C. 1320b–13(a)) is amended— 

24 (1) by redesignating paragraph (3) as para25 graph (4); and 


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1 (2) by inserting after paragraph (2) the fol2 lowing new paragraph: 

3 ‘‘(3) For purposes of paragraph (2)(G)— 

4 ‘‘(A) The term ‘projected deficit-financed bene5 fits’ means— 

6 ‘‘(i) with respect to an eligible individual in 

7 connection with the old-age, survivors, and dis8 ability insurance program, the product of— 

9 ‘‘(I) the benefits described in subpara10 graph (F)(ii) of such individual under such 

11 program, and 

12 ‘‘(II) the ratio of future annual defi13 cits, excluding interest, of the Federal Old14 Age and Survivors Insurance Trust Fund 

15 and the Federal Disability Insurance Trust 

16 Fund over the eligible individual’s lifetime 

17 to future annual outlays from such Trust 

18 Funds over such lifetime; and 

19 ‘‘(ii) with respect to an eligible individual 

20 in connection with the Medicare program under 

21 title XVIII, the product of— 

22 ‘‘(I) the benefits for hospital insur23 ance (under part A of title XVIII) de24 scribed in subparagraph (F)(ii) of such in25 dividual under such program, and 


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1 ‘‘(II) the ratio of future annual defi2 cits of the Federal Hospital Insurance 

3 Trust Fund over the eligible individual’s 

4 lifetime to future annual outlays from such 

5 Trust Fund over such lifetime. 

6 ‘‘(B) The term ‘projected lifetime earnings’ of 

7 the eligible individual means the present value of the 

8 potential total wages paid to, and self-employment 

9 income derived by, the eligible individual over the eli10 gible individual’s lifetime, as determined without re11 gard to the contribution and benefit base under sec12 tion 230.’’. 

13 (c) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply with respect to annual statements 

15 issued after 2013. 

16 SEC. 3110. RETIREMENT INFORMATION CAMPAIGN. 

17 The Commissioner of Social Security shall establish 

18 a public information campaign to provide information and 

19 education regarding the implications on personal financial 

20 security of early and other retirement decisions and the 

21 need for greater retirement savings. The information cam22 paign should be designed to encourage individuals to delay 

23 retirement so as to build enhanced levels of social security 

24 benefits and personal retirement savings. To the extent 

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1 priate, the information provided through the campaign 

2 should utilize behavioral economics approaches, such as 

3 structured choice, and other scientific approaches. 

4 TITLE IV—CONVERSION TO 

5 CHAINED CPI 

6 SEC. 4101. CONVERSION TO CHAINED CPI. 

7 (a) CONSUMER PRICE INDEX ADJUSTMENTS APPLI8 CABLE TO THE INTERNAL REVENUE CODE PROVI9 SIONS.— 

10 (1) IN GENERAL.—Paragraph (3) of section 

11 1(f) of the Internal Revenue Code of 1986 is amend12 ed to read as follows: 

13 ‘‘(3) COST-OF-LIVING ADJUSTMENT.— 

14 ‘‘(A) IN GENERAL.—For purposes of para15 graph (2), the cost-of-living adjustment for any 

16 calendar year is— 

17 ‘‘(i) for adjustments first beginning 

18 before 2014, the product of— 

19 ‘‘(I) the CPI fraction for cal20 endar years before 2014, multiplied 

21 by 

22 ‘‘(II) the Chained CPI fraction 

23 for calendar years after 2013, 

24 reduced by 1, and 


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1 ‘‘(ii) for adjustments first beginning 

2 after 2013, the Chained CPI fraction for 

3 years after 2013. 

4 ‘‘(B) CPI FRACTION FOR CALENDAR

5 YEARS BEFORE 2014.—The CPI fraction for cal6 endar years before 2014 is the fraction— 

7 ‘‘(i) the numerator of which is the 

8 CPI for the calendar year 2012; and 

9 ‘‘(ii) the denominator of which is the 

10 CPI for the calendar year 1992. 

11 ‘‘(C) CHAINED CPI FRACTION FOR CAL12 ENDAR YEARS AFTER 2013.—The Chained CPI 

13 fraction for calendar years after 2013 is the 

14 fraction— 

15 ‘‘(i) the numerator of which is the 

16 Chained CPI for the preceding calendar 

17 year, and 

18 ‘‘(ii) the denominator of which is the 

19 Chained CPI for the calendar year 2012.’’. 

20 (2) CONFORMING AMENDMENTS.— 

21 (A) Paragraph (4) of section 1(f) of such 

22 Code is amended to read as follows: 

23 ‘‘(4) CPI AND CHAINED CPI FOR ANY CAL24 ENDAR YEAR.—For purposes of paragraph (3)— 


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1 ‘‘(A) CPI.—The CPI for any calendar year 

2 is the average of the Consumer Price Index as 

3 of the close of the 12-month period ending on 

4 August 31 of such calendar year. 

5 ‘‘(B) CHAINED CPI.—The Chained CPI for 

6 any calendar year is the average of the Chained 

7 Consumer Price Index as of the close of the 12- 

8 month period ending on August 31 of such cal9 endar year.’’. 

10 (B) Paragraph (5) of section 1(f) of such 

11 Code is amended to read as follows: 

12 ‘‘(5) CONSUMER PRICE INDEX AND CHAINED

13 CONSUMER PRICE INDEX.—For purposes of para14 graph (4)— 

15 ‘‘(A) CONSUMER PRICE INDEX.—The term 

16 ‘Consumer Price Index’ means the last Con17 sumer Price Index for all urban consumers pub18 lished by the Department of Labor. For pur19 poses of the preceding sentence, the revision of 

20 the Consumer Price Index which is most con21 sistent with the Consumer Price Index for cal22 endar year 1986 shall be used. 

23 ‘‘(B) CHAINED CONSUMER PRICE INDEX.— 

24 The term ‘Chained Consumer Price Index’ 

25 means the most recent estimate of the Chained 


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1 Consumer Price Index for all urban consumers 

2 published by the Department of Labor.’’. 

3 (C) Subclause (II) of section 

4 36B(b)(3)(A)(ii) of such Code is amended by 

5 striking ‘‘consumer price index’’ and inserting 

6 ‘‘Chained Consumer Price Index (as defined in 

7 section 1(f)(5)(B))’’. 

8 (D) Subclause (II) of section 

9 36B(f)(2)(B)(ii) of such Code is amended by 

10 striking ‘‘by substituting ‘calendar year 2013’ 

11 for ‘calendar year 1992’ in subparagraph (B) 

12 thereof’’ and inserting ‘‘by substituting ‘cal13 endar year 2013’ for ‘calendar year 2012’ in 

14 subparagraph (C) thereof’’. 

15 (E) Clause (ii) of section 45R(d)(3)(B) of 

16 such Code is amended by striking ‘‘determined 

17 by substituting ‘calendar year 2012’ for ‘cal18 endar year 1992’ in subparagraph (B) thereof’’. 

19 (F) Subparagraph (B) of section 125(i)(2) 

20 of such Code is amended by striking ‘‘deter21 mined by substituting ‘calendar year 2012’ for 

22 ‘calendar year 1992’ in subparagraph (B) 

23 thereof’’. 

24 (G) Subclause (II) of section 

25 4980I(b)(3)(C)(v) of such Code is amended by 


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1 striking ‘‘for ‘1992’ in subparagraph (B) there2 of’’ and inserting ‘‘for ‘2012’ in subparagraph 

3 (C) thereof’’. 

4 (H) Clause (ii) of section 5000A(c)(3)(D) 

5 of such Code is amended by striking ‘‘by sub6 stituting ‘calendar year 2015’ for ‘calendar year 

7 1992’ in subparagraph (B) thereof’’ and insert8 ing ‘‘by substituting ‘calendar year 2015’ for 

9 ‘calendar year 2012’ in subparagraph (C) there10 of’’. 

11 (3) EFFECTIVE DATE.—The amendments made 

12 by this subsection shall apply to taxable years begin13 ning after December 31, 2013. 

14 (b) MODIFICATIONS TO COST-OF-LIVING INDEX15 ATION OF SOCIAL SECURITY BENEFITS.— 

16 (1) IN GENERAL.—Section 215(i)(1)(D) of the 

17 Social Security Act (42 U.S.C. 415(i)(1)(D)) is 

18 amended to read as follows: 

19 ‘‘(D) the term ‘CPI increase percentage’, with 

20 respect to a base quarter or cost-of-living computa21 tion quarter in any calendar year, means the per22 centage (rounded to the nearest one-tenth of 1 per23 cent) by which the Chained Consumer Price Index 

24 for All Urban Consumers (as published in its initial 

25 form by the Bureau of Labor Statistics of the DeVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00166 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 partment of Labor) for such base quarter or cost-of2 living computation quarter exceeds such index for 

3 the later of— 

4 ‘‘(i) the most recent calendar quarter 

5 (prior to such base quarter or cost-of-living 

6 computation quarter) which was a base quarter 

7 under subparagraph (A)(ii); or 

8 ‘‘(ii) the most recent cost-of-living com9 putation quarter under subparagraph (B);’’. 

10 (2) DEFINITIONS.—Section 215(i)(1)(G) of 

11 such Act (42 U.S.C. 415(i)(1)(G)) is amended to 

12 read as follows: 

13 ‘‘(G) the Chained Consumer Price Index for All 

14 Urban Consumers for a base quarter, a cost-of-living 

15 computation quarter, or any other calendar quarter 

16 shall be the arithmetical mean of such index (as 

17 published in its initial form by the Bureau of Labor 

18 Statistics of the Department of Labor as of the end 

19 of such quarter) for the 12-month period ending 

20 with such quarter.’’. 

21 (3) CONFORMING CHANGES FOR PRE-1977

22 LAW.— 

23 (A) Section 215(i)(1) of such Act, as in ef24 fect in December 1978, and as applied in cerVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00167 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 tain cases under the provisions of such Act as 

2 in effect after December 1978, is amended— 

3 (i) in subparagraph (B), by striking 

4 ‘‘and’’ after the semicolon; 

5 (ii) in subparagraph (C), by striking 

6 ‘‘for the 3 months in such quarter.’’ and 

7 inserting ‘‘for the 12 months in the 12- 

8 month period ending with such quarter; 

9 and’’; and 

10 (iii) by adding at the end the fol11 lowing new subparagraph: 

12 ‘‘(D) the term ‘Consumer Price Index’ means 

13 the Chained Consumer Price Index for All Urban 

14 Consumers (C–CPI–U), as published in its initial 

15 form by the Bureau of Labor Statistics of the De16 partment of Labor.’’. 

17 (B) Section 215(i)(4) of the Social Secu18 rity Act (42 U.S.C. 415(i)(4)) is amended by 

19 inserting ‘‘and by section 4101(b) of the The 

20 Dollar for Dollar Act of 2012’’ after ‘‘1986,’’. 

21 (4) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall apply with respect to in23 creases described in section 215(i) of the Social Se24 curity Act, and to increases under programs depend25 ent on Social Security cost-of-living adjustments, efVerDate Mar 15 2010 01:34 Dec 19, 2012 Jkt 029200 PO 00000 Frm 00168 Fmt 6652 Sfmt 6201 E:\BILLS\S3673.IS S3673

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1 fective with the month of December for years after 

2 2012. 

3 (c) ADJUSTMENTS OF PROVISIONS UTILIZING THE

4 CONSUMER PRICE INDEX.— 

5 (1) IN GENERAL.—Notwithstanding any other 

6 provision of law, and except as provided in this sec7 tion, for purposes of determining the amount of any 

8 cost-of-living increase or similar adjustment under a 

9 Federal program or law effective in the month of 

10 December 2013 and thereafter, any such increase 

11 for the period for which the percentage change is de12 termined shall be deemed to be, in lieu of the in13 crease otherwise determined under applicable law, 

14 the increase determined under such applicable law 

15 by substituting the Chained CPI for the CPI. 

16 (2) INCREASES DETERMINED FROM A CON17 STANT BASE YEAR.— 

18 (A) IN GENERAL.—In any case in which 

19 the amount of a cost-of-living increase effective 

20 in the month of December 2012 and thereafter 

21 is determined under applicable law by reference 

22 to a change in the CPI over a period which is 

23 determined by reference to a base period which 

24 remains constant from year to year, any such 

25 increase for any period shall be deemed to be, 


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1 in lieu of the increase otherwise determined 

2 under applicable law, the increase, expressed as 

3 a percentage increase, equal to the product of— 

4 (i) the CPI fraction prior to 2014; 

5 multiplied by 

6 (ii) the Chained CPI fraction after 

7 2013, 

8 reduced by 1. 

9 (B) CPI FRACTION PRIOR TO 2014.—The 

10 CPI fraction prior to 2014 is the fraction— 

11 (i) the numerator of which is the CPI 

12 for the period, ending with or during 2012, 

13 which corresponds to the base period; and 

14 (ii) the denominator of which is the 

15 CPI for the base period. 

16 (C) CHAINED CPI FRACTION AFTER 2013.— 

17 The Chained CPI fraction after 2013 is the 

18 fraction— 

19 (i) the numerator of which is the 

20 Chained CPI for the period, ending with or 

21 during the year preceding the year in 

22 which the determination takes effect, which 

23 corresponds to the base period; and 

24 (ii) the denominator of which is the 

25 most recently published estimate of the 


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1 Chained CPI for the period, ending with or 

2 during 2012, which corresponds to the 

3 base period. 

4 (3) SPECIAL PROVISIONS AND EXCEPTIONS.— 

5 (A) PROGRAMS TIED TO SOCIAL SECU6 RITY.—Subject to subparagraph (B) and the ef7 fective date under subsection (b)(4), this section 

8 and the amendments made by this section shall 

9 apply to any cost-of-living increase or other ad10 justment which is determined by reference to an 

11 adjustment made under section 215(i) of the 

12 Social Security Act (42 U.S.C. 415(i)). 

13 (B) POVERTY LINE.—This subsection shall 

14 apply to revisions to the poverty line made pur15 suant to 42 U.S.C. 9902(2), and any programs 

16 for which adjustments or eligibility thresholds 

17 are based upon the poverty line as defined in 

18 that section. 

19 (4) CPI AND CHAINED CPI.—For purposes of 

20 this subsection— 

21 (A) the CPI for any period means the av22 erage monthly Consumer Price Index for such 

23 period, or a component thereof, as determined 

24 under the applicable law in connection with any 

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1 quired for such period (without regard to this 

2 subsection); and 

3 (B) the Chained CPI for any period 

4 means, except as provided in paragraph 

5 (2)(C)(ii), the Chained Consumer Price Index 

6 for all urban consumers (as published in its ini7 tial form by the Bureau of Labor Statistics of 

8 the Department of Labor) for such period, or a 

9 component thereof, determined under applicable 

10 law in the same manner as the CPI for such pe11 riod would be determined. 

12 (d) CHANGE TO 12-MONTH PERIOD FOR COST-OF13 LIVING INDEXATION FOR FEDERAL CIVIL SERVICE AND

14 MILITARY RETIREMENT PROGRAMS.— 

15 (1) IN GENERAL.— 

16 (A) FEDERAL CIVIL SERVICE.—Sections 

17 8340(a)(2) and 8462(a)(2) of title 5, United 

18 States Code, are each amended by striking ‘‘3 

19 months comprising such quarter’’ and inserting 

20 ‘‘12-month period ending with such quarter’’. 

21 (B) MILITARY.—Section 1401a(h) of title 

22 10, United States Code, is amended by striking 

23 ‘‘three months comprising that quarter’’ and in24 serting ‘‘12-month period ending with such 

25 quarter’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply with respect to cost3 of-living increases effective with the month of De4 cember of years after 2012. 

5 TITLE V—PUBLIC DEBT LIMIT 

6 SEC. 5101. INCREASE IN PUBLIC DEBT LIMIT. 

7 Section 3101 of title 31, United States Code, is 

8 amended— 

9 (1) in subsection (b)— 

10 (A) by inserting ‘‘the sum of’’ after ‘‘shall 

11 not be more than’’, and 

12 (B) by inserting ‘‘the amount determined 

13 under subsection (d)’’ before ‘‘, outstanding at 

14 one time’’, and 

15 (2) by adding at the end the following new sub16 section: 

17 ‘‘(d) ADDITIONAL INCREASE.—The amount deter18 mined under this subsection is the amount of spending 

19 reduction attributable to the The Dollar for Dollar Act 

20 of 2012, as estimated by the Office of Management and 

21 Budget.’’. 

Æ 


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