II

105TH CONGRESS

1ST SESSION S. 1334

To amend title 10, United States Code, to establish a demonstration project

to evaluate the feasibility of using the Federal Employees Health Benefits

Program to ensure the availability of adequate health care for Medicareeligible beneficiaries under the military health care system.

IN THE SENATE OF THE UNITED STATES

OCTOBER 29, 1997

Mr. BOND (for himself, Mr. SHELBY, Mr. WARNER, Mr. REID, Mr. JOHNSON,

Mr. HOLLINGS, Mr. HUTCHINSON, Mr. MACK, Mrs. MURRAY, Mr.

ASHCROFT, Mr. CRAIG, Mr. BUMPERS, Mr. LEAHY, Mrs. COLLINS, Mr.

SESSIONS, Mr. ALLARD, Mr. BAUCUS, and Mrs. FEINSTEIN) introduced

the following bill; which was read twice and referred to the Committee

on Armed Services

A BILL

To amend title 10, United States Code, to establish a demonstration project to evaluate the feasibility of using

the Federal Employees Health Benefits Program to ensure the availability of adequate health care for Medicare-eligible beneficiaries under the military health care

system.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. DEMONSTRATION PROJECT TO INCLUDE CER2 TAIN COVERED BENEFICIARIES WITHIN FED3 ERAL EMPLOYEES HEALTH BENEFITS PRO4 GRAM.

5 (a) DEMONSTRATION PROJECT.—(1) Chapter 55 of

6 title 10, United States Code, is amended by adding at the

7 end the following new section:

8 ‘‘§ 1107. Health care coverage through Federal Em9 ployees Health Benefits program: dem10 onstration project

11 ‘‘(a) FEHBP OPTION DEMONSTRATION.—(1) Sub12 ject to paragraph (2), the Secretary of Defense, after con13 sulting with the other administering Secretaries, shall

14 enter into an agreement with the Office of Personnel Man15 agement to conduct a demonstration project under which

16 covered beneficiaries described in subsection (b) and resid17 ing within the area covered by the demonstration project

18 will be eligible to enroll in health benefits plans offered

19 through the Federal Employees Health Benefits program

20 under chapter 89 of title 5.

21 ‘‘(2) The authority to enter into the agreement de22 scribed in paragraph (1) and to conduct the demonstration

23 project provided for by the agreement shall be subject to

24 the availability of appropriations to carry out the dem25 onstration project.
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1 ‘‘(b) ELIGIBLE COVERED BENEFICIARIES.—(1) A

2 covered beneficiary referred to in subsection (a) is a mem3 ber or former member of the uniformed services described

4 in section 1074(b) of this title, or a dependent of the mem5 ber described in section 1076(b) of this title, who is or

6 becomes entitled to hospital insurance benefits under part

7 A of title XVIII of the Social Security Act (42 U.S.C.

8 1395c et seq.).

9 ‘‘(2) A covered beneficiary described in paragraph (1)

10 shall not be required to satisfy any eligibility criteria speci11 fied in chapter 89 of title 5 as a condition for enrollment

12 in health benefits plans offered through the Federal Em13 ployee Health Benefits program under the demonstration

14 project. However, if the covered beneficiary is enrolled in

15 the supplemental medical insurance program under part

16 B of title XVIII of the Social Security Act (42 U.S.C.

17 1395j et seq.) before the covered beneficiary enrolls in a

18 health benefits plan offered pursuant to subsection (a), the

19 covered beneficiary shall be required to remain enrolled

20 in such supplemental medical insurance program during

21 the term of the demonstration project.

22 ‘‘(c) AREA OF DEMONSTRATION PROJECT.—The Sec23 retary of Defense shall carry out the demonstration

24 project in two geographic areas as follows:
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1 ‘‘(1) One area shall include the catchment area

2 of one or more military medical treatment facilities,

3 within which not more than 25,000 eligible covered

4 beneficiaries reside.

5 ‘‘(2) The other area shall not include the

6 catchment area of any military medical treatment

7 facility and not more than 25,000 eligible covered

8 beneficiaries may reside in the area.

9 ‘‘(d) TIME FOR DEMONSTRATION PROJECT.—The

10 Secretary of Defense shall conduct the demonstration

11 project during at least two, but not more than three, con12 tract years under the Federal Employees Health Benefits

13 program.

14 ‘‘(e) MANAGEMENT OF PARTICIPATION.—The au15 thority responsible for approving retired or retainer pay

16 or equivalent pay in the case of a member or former mem17 ber shall manage the participation of the member or

18 former member, or dependents of the member or former

19 member, who enroll in health benefits plans offered

20 through the Federal Employee Health Benefits program

21 pursuant to subsection (a). Such authority shall distribute

22 program information to eligible covered beneficiaries,

23 process enrollment applications, forward all required con24 tributions to the Employees Health Benefits Fund estab25 lished under section 8909 of title 5 in a timely manner,
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1 assist in the reconciliation of enrollment records with

2 health plans, and prepare such reports as the Office of

3 Personnel Management may require in its administration

4 of chapter 89 of title 5.

5 ‘‘(f) SEPARATE RISK POOLS; CHARGES.—(1) The Of6 fice of Personnel Management shall require health benefits

7 plans under chapter 89 of title 5 that participate in the

8 demonstration project to maintain a separate risk pool for

9 purposes of establishing premium rates for covered bene10 ficiaries who enroll in such a plan in accordance with this

11 section.

12 ‘‘(2) The Office shall determine total subscription

13 charges for self only or for family coverage for covered

14 beneficiaries who enroll in a health benefits plan under

15 chapter 89 of title 5 in accordance with this section, which

16 shall include premium charges paid to the plan and

17 amounts described in section 8906(c) of title 5 for admin18 istrative expenses and contingency reserves.

19 ‘‘(g) GOVERNMENT CONTRIBUTIONS.—The Secretary

20 of Defense shall be responsible for the Government con21 tribution for an eligible covered beneficiary who enrolls in

22 a health benefits plan under chapter 89 of title 5 in ac23 cordance with this section, except that the amount of the

24 contribution may not exceed the amount of the Govern25 ment contribution which would be payable if the electing
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1 individual were an employee enrolled in the same health

2 benefits plan and level of benefits.

3 ‘‘(h) EFFECT OF CANCELLATION.—The cancellation

4 by a covered beneficiary of coverage under the Federal

5 Employee Health Benefits program shall be irrevocable

6 during the term of the demonstration project.

7 ‘‘(i) REPORTING REQUIREMENTS.—Not later than

8 May 31 of each year in which the demonstration project

9 is conducted, the Secretary of Defense and the Director

10 of the Office of Personnel Management shall jointly sub11 mit a report to Congress describing the provision of health

12 care services to covered beneficiaries under this section

13 during the preceding calendar year. The report shall ad14 dress or contain the following:

15 ‘‘(1) The number of covered beneficiaries en16 rolled in health benefits plans offered through the

17 Federal Employee Health Benefits program pursu18 ant to subsection (a), both in terms of total number

19 and as a percentage of all covered beneficiaries re20 ceiving health care through the health care system

21 of the uniformed services.

22 ‘‘(2) Any changes in enrollment patterns and

23 numbers compared to previous open seasons under

24 the demonstration project.
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1 ‘‘(3) The out-of-pocket cost to enrollees under

2 such health benefits plans and a comparison of those

3 costs to the costs incurred by other enrollees under

4 the Federal Employee Health Benefits program.

5 ‘‘(4) The cost to the Government (including the

6 Department of Defense, the Department of Trans7 portation, and the Department of Health and

8 Human Services) of providing care under such

9 health benefits plans.

10 ‘‘(5) A comparison of the costs determined

11 under paragraphs (3) and (4) and the costs that

12 would have otherwise been incurred by the Govern13 ment and enrollees under alternative health care op14 tions available to the administering Secretaries.

15 ‘‘(6) The effect of this section on the cost, ac16 cess, and utilization rates of other health care op17 tions under the health care system of the uniformed

18 services.’’.

19 (2) The table of sections at the beginning of such

20 chapter is amended by adding at the end the following

21 new item:

‘‘1107. Health care coverage through Federal Employees Health Benefits program: demonstration project.’’.

22 (b) CONFORMING AMENDMENTS TO TITLE 5, UNIT23 ED STATES CODE.—Chapter 89 of title 5, United States

24 Code, is amended—
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1 (1) in section 8905—

2 (A) by redesignating subsections (d)

3 through (f) as subsections (e) through (g), re4 spectively; and

5 (B) by inserting after subsection (c) the

6 following new subsection:

7 ‘‘(d) An individual whom the Secretary of Defense de8 termines is an eligible covered beneficiary under sub9 section (b) of section 1107 of title 10 may enroll, as part

10 of the demonstration project under such section, in a

11 health benefits plan under this chapter in accordance with

12 the agreement under subsection (a) of such section be13 tween the Secretary and the Office and applicable regula14 tions under this chapter.’’;

15 (2) in section 8906(b)—

16 (A) in paragraph (1), by striking ‘‘para17 graphs (2) and (3)’’ and inserting in lieu there18 of ‘‘paragraphs (2), (3), and (4)’’; and

19 (B) by adding at the end the following new

20 paragraph:

21 ‘‘(4) In the case of individuals who enroll, as part

22 of the demonstration project under section 1107 of title

23 10, in a health benefits plan in accordance with section

24 8905(d) of this title, the Government contribution shall
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1 be determined in accordance with section 1107(g) of title

2 10.’’; and

3 (3) in section 8906(g)—

4 (A) in paragraph (1), by striking ‘‘para5 graph (2)’’ and inserting in lieu thereof ‘‘para6 graphs (2) and (3)’’; and

7 (B) by adding at the end the following new

8 paragraph:

9 ‘‘(3) The Government contribution described in sub10 section (b)(4) for beneficiaries who enroll, as part of the

11 demonstration project under section 1107 of title 10, in

12 accordance with section 8905(d) of this title shall be paid

13 as provided in section 1107(g) of title 10.’’.

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