I 

111TH CONGRESS 

1ST SESSION H. R. 956 

To expand the number of individuals and families with health insurance 

coverage, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 10, 2009 

Ms. KAPTUR (for herself and Mr. LATOURETTE) introduced the following bill; 

which was referred to the Committee on Energy and Commerce, and in 

addition to the Committees on Ways and Means, Education and Labor, 

and Rules, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To expand the number of individuals and families with health 

insurance coverage, 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 ‘‘Health Coverage, Affordability, Responsibility, and Eq6 uity Act of 2009’’ or the ‘‘HealthCARE Act of 2009’’. 

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

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—STATE WAIVERS 

Sec. 101. State waivers. 

TITLE II—IMPROVING QUALITY AND SAFETY THROUGH PREVENTIVE SERVICES, CARE COORDINATION, AND THE USE OF 

HEALTH INFORMATION TECHNOLOGY 

Sec. 201. Additional waiver authority. 

TITLE III—INCREASING HEALTH CARE COVERAGE 

Subtitle A—Medicaid and SCHIP 

Sec. 301. State option to offer medicaid coverage based on need. 

Sec. 302. State option to provide coverage of children under SCHIP in excess 

of the State’s allotment. 

Subtitle B—Refundable Tax Credit for Health Insurance Costs of LowIncome Individuals and Families 

Sec. 311. Credit for health insurance costs of certain low-income individuals. 

Sec. 312. Advance payment of credit for health insurance costs of eligible lowincome individuals. 

TITLE IV—IMPROVING ACCESS TO HEALTH PLANS 

Sec. 401. Definitions. 

Sec. 402. Establishment of health insurance purchasing pools. 

Sec. 403. Purchasing pools. 

Sec. 404. Purchasing pool operators. 

Sec. 405. Contracts with participating insurers. 

Sec. 406. Options for health benefits coverage. 

Sec. 407. Enrollment process for eligible individuals. 

Sec. 408. Plan premiums. 

Sec. 409. Enrollee premium share. 

Sec. 410. Payments to purchasing pool operators and payments to participating 

insurers. 

Sec. 411. State-based reinsurance programs. 

Sec. 412. Coverage under individual health insurance. 

Sec. 413. Use of premium subsidies to unify family coverage with members enrolled in medicaid and SCHIP. 

Sec. 414. Coverage through employer-sponsored health insurance. 

Sec. 415. Participation by small employers. 

Sec. 416. Report. 

Sec. 417. Authorization of appropriations. 

TITLE V—NATIONAL ADVISORY COMMISSION ON EXPANDED 

ACCESS TO HEALTH CARE 

Sec. 501. National Advisory Commission on Expanded Access to Health Care. 

Sec. 502. Congressional action. 


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1 TITLE I—STATE WAIVERS 

2 SEC. 101. STATE WAIVERS. 

3 (a) IN GENERAL.—Notwithstanding any other provi4 sion of law, a State may apply to the Secretary of Health 

5 and Human Services (in this Act referred to as the ‘‘Sec6 retary’’) for waivers of such provisions of law as may be 

7 necessary for the State to implement policies that make 

8 comprehensive, affordable health coverage available for all 

9 State residents, including access to essential benefits with 

10 limits on cost-sharing, as provided in the most recent re11 port under section 501(e)(2). 

12 (b) REQUIREMENTS.—In order to ensure that waivers 

13 under this section benefit rather than harm health care 

14 consumers, a State shall not be eligible for a waiver under 

15 this section unless— 

16 (1) the State reasonably expects to achieve a 

17 level of enrollment in coverage described in sub18 section (a) that is at least equal to the level of cov19 erage (taking into account the number of insured in20 dividuals, covered benefits, and premium and out-of21 pocket costs to the consumer for such coverage) that 

22 the State would have achieved if the State had fully 

23 implemented the coverage options available under ti24 tles III and IV of this Act; 


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1 (2) no individual who would have qualified for 

2 assistance under the State medicaid program under 

3 title XIX of the Social Security Act or the State 

4 children’s health insurance program under title XXI 

5 of such Act, as of either the date of the waiver re6 quest or the date of enactment of this Act, will be 

7 denied eligibility for such program, have a reduction 

8 in benefits under such program, have reduced access 

9 to geographically and linguistically appropriate care 

10 or essential community providers, or be subject to 

11 increased premiums or cost-sharing under the waiver 

12 program under this section; and 

13 (3) the State agrees to comply with such stand14 ards or guidelines as the Secretary of Health and 

15 Human Services may require to ensure that the re16 quirements of paragraphs (1) and (2) are satisfied. 

17 (c) FEDERAL PAYMENTS.— 

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

19 Human Services shall pay a State with a waiver ap20 proved under this section an amount each quarter 

21 equal to the sum of— 

22 (A) the Federal payments the State and 

23 residents of the State (including, but not lim24 ited to, through the credit allowed under section 

25 36A of the Internal Revenue Code of 1986 for 


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1 health insurance costs) would have received if 

2 the State had exercised the coverage options 

3 under titles III and IV of this Act with respect 

4 to residents of the State who have not attained 

5 age 65; and 

6 (B) the amount of any grants authorized 

7 by this Act that the State would have received 

8 if the State had applied for such grants. 

9 (2) ADDITIONAL PAYMENT FOR MEDICARE

10 BENEFICIARIES UNDER AGE 65.— 

11 (A) IN GENERAL.—In the case of a State 

12 that elects to enroll an individual described in 

13 subparagraph (B) in coverage described in sub14 section (a), the amount described in paragraph 

15 (1) with respect to a quarter shall be increased 

16 by the amount described in subparagraph (C). 

17 (B) INDIVIDUAL DESCRIBED.—An indi18 vidual is described in this subparagraph if the 

19 individual— 

20 (i) has not attained age 65; 

21 (ii) is eligible for coverage under title 

22 XVIII of the Social Security Act; and 

23 (iii) voluntarily elects to enroll in cov24 erage described in subsection (a). 


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1 (C) AMOUNT DESCRIBED.—The amount 

2 described in this subparagraph is the amount 

3 equal to the amount that the Federal Govern4 ment would have incurred with respect to a 

5 quarter for providing coverage to an individual 

6 described in subparagraph (B) under title 

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

8 1395 et seq.). 

9 (d) IMPLEMENTATION DATE.—No State may submit 

10 a request for a waiver under this section before October 

11 1, 2011. 

12 TITLE II—IMPROVING QUALITY 

13 AND SAFETY THROUGH PRE14 VENTIVE SERVICES, CARE CO15 ORDINATION, AND THE USE 

16 OF HEALTH INFORMATION 

17 TECHNOLOGY 

18 SEC. 201. ADDITIONAL WAIVER AUTHORITY. 

19 (a) IN GENERAL.—Notwithstanding the require20 ments to submit a state waiver under title I, the Secretary 

21 shall establish a process by which States may apply for 

22 a waiver to implement policies that emphasize the use of 

23 preventive services, care coordination by a personal physi24 cian, and health information technology (in this section 

25 referred to as a qualified patient-centered medical home). 


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1 (b) DEFINITIONS.—For purposes of this title: 

2 (1) QUALIFIED PATIENT-CENTERED MEDICAL

3 HOME.—The term ‘‘qualified patient-centered med4 ical home’’ or ‘‘PC–MH’’ means a physician-directed 

5 practice that has voluntarily participated in a quali6 fication process to demonstrate it has the capabili7 ties to achieve improvements in the management and 

8 coordination of care of eligible beneficiaries, includ9 ing those with multiple chronic diseases, by incor10 porating attributes of the care management model. 

11 (2) CARE MANAGEMENT MODEL.—The term 

12 ‘‘care management model’’ means a model that uses 

13 health information and other physician practice in14 novations to improve the management and coordina15 tion of care provided to patients with one or more 

16 chronic illnesses. Attributes of the model include the 

17 following: 

18 (A) Practices advocate for their patients to 

19 support the attainment of optimal, patient-cen20 tered outcomes that are defined by a care plan21 ning process driven by a compassionate, robust 

22 partnership between physicians, patients, and 

23 the patient’s family. 

24 (B) Evidence-based medicine and clinical 

25 decision-support tools guide decision making. 


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1 (C) Physicians in the practice accept ac2 countability for continuous quality improvement 

3 through voluntary engagement in performance 

4 measurement and improvement. 

5 (D) Patients actively participate in deci6 sion-making and feedback is sought to ensure 

7 patients’ expectations are being met. 

8 (E) Information technology is utilized ap9 propriately to support optimal patient care, per10 formance measurement, patient education, and 

11 enhanced communication. 

12 (F) Practices go through a voluntary rec13 ognition process by an appropriate non-govern14 mental entity to demonstrate that they have the 

15 capabilities to provide patient centered services 

16 consistent with the medical home model. 

17 (G) Patients and families participate in 

18 quality improvement activities at the practice 

19 level. 

20 (3) PATIENT CENTERED MEDICAL HOME REIM21 BURSEMENT METHODOLOGY.—The patient centered 

22 medical home reimbursement methodology is a 

23 methodology to reimburse physicians in qualified 

24 PC–MH practices based on the value of the services 


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1 provided by such practices. Such methodology shall 

2 include, at a minimum the following: 

3 (A) Recognition of the value of physician 

4 and clinical staff work associated with patient 

5 care that falls outside the face-to-face visit, 

6 such as the time and effort spent on educating 

7 family caregivers and arranging appropriate fol8 low-up services with other health care profes9 sionals, such as nurse educators. 

10 (B) Services associated with coordination 

11 of care both within a given practice and be12 tween consultants, ancillary providers, and com13 munity resources. 

14 (C) Recognition of expenses that the PC– 

15 MH practices will incur to acquire and utilize 

16 health information technology, such as clinical 

17 decision support tools, patient registries and/or 

18 electronic medical records. 

19 (D) Reimbursement for separately identifi20 able email and telephonic consultations, either 

21 as separately billable services or as part of a 

22 global management fee. 

23 (E) Recognition of the value of physician 

24 work associated with remote monitoring of clin25 ical data using technology. 


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1 (F) Allowance for separate fee-for-service 

2 payments for face-to-face visits. 

3 (G) Recognition of case mix differences in 

4 the patient population being treated within the 

5 practice. 

6 (H) Recognition and sharing of savings 

7 from reduced hospitalizations associated with 

8 physician-guided care management in the office 

9 setting. 

10 (I) Allowance for additional payments for 

11 achieving measurable and continuous quality 

12 improvements. 

13 (4) PERSONAL PHYSICIAN.—The term ‘‘per14 sonal physician’’ means a physician who practices in 

15 a qualified PC–MH and whom the practice has de16 termined has the training to provide first contact, 

17 continuous and comprehensive care for the whole 

18 person, not limited to a specific disease condition or 

19 organ system. 

20 (5) ELIGIBLE BENEFICIARY.—The term ‘‘eligi21 ble beneficiary’’ means a beneficiary enrolled under 

22 the Medicaid or SCHIP program or other State resi23 dent who selects a primary care or principal care 

24 physician in a qualified PC–MH as their personal 

25 physician. 


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1 (6) PATIENT-CENTERED MEDICAL HOME QUALI2 FICATION.—The PC–MH qualification is a process 

3 whereby an interested practice will voluntarily sub4 mit information to an objective external private-sec5 tor entity that is recognized and deemed by the state 

6 or by the Secretary to make the determination as to 

7 whether the practice has the attributes of a qualified 

8 PC–MH based on standards the Secretary shall es9 tablish. 

10 (c) REPORT AND EVALUATION.—States shall submit 

11 an annual report to the Secretary that describes initiatives 

12 it has taken to encourage the provision of care through 

13 a patient-centered medical home as described in this sec14 tion. 

15 TITLE III—INCREASING HEALTH 

16 CARE COVERAGE 

17 Subtitle A—Medicaid and SCHIP 

18 SEC. 301. STATE OPTION TO OFFER MEDICAID COVERAGE 

19 BASED ON NEED. 

20 (a) STATE OPTION.—Section 1902(a)(10)(A)(ii) of 

21 the Social Security Act (42 U.S.C. 1396a) is amended— 

22 (1) by striking ‘‘or’’ at the end of subclause 

23 (XVIII); 

24 (2) by adding ‘‘or’’ at the end of subclause 

25 (XIX); and 


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1 (3) by adding at the end the following: 

2 ‘‘(XX) who are not otherwise eli3 gible for medical assistance under this 

4 title and whose income does not ex5 ceed such income level as the State 

6 may establish, expressed as a percent7 age (not to exceed 100) of the income 

8 official poverty line (as defined by the 

9 Office of Management and Budget, 

10 and revised annually in accordance 

11 with section 673(2) of the Omnibus 

12 Budget Reconciliation Act of 1981) 

13 applicable to a family of the size in14 volved;’’. 

15 (b) INCREASED FMAP.—Section 1905 of the Social 

16 Security Act (42 U.S.C. 1396d) is amended— 

17 (1) in the first sentence of subsection (b)— 

18 (A) by striking ‘‘and (4)’’ and inserting 

19 ‘‘(4)’’; and 

20 (B) by inserting before the period the fol21 lowing: ‘‘, and (5) in the case of a State that 

22 meets the conditions described in paragraph (1) 

23 of subsection (y), the Federal medical assist24 ance percentage shall be equal to the needVerDate Nov 24 2008 00:09 Feb 12, 2009 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H956.IH H956

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1 based enhanced FMAP described in paragraph 

2 (2) of subsection (y)’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(y)(1) For purposes of clause (5) of the first sen5 tence of subsection (b), the conditions described in this 

6 subsection are the following: 

7 ‘‘(A) The State provides medical assistance to 

8 individuals described in subsection 

9 (a)(10)(A)(ii)(XX). 

10 ‘‘(B) The State uses streamlined enrollment 

11 and outreach measures to all individuals described in 

12 subparagraph (A) including— 

13 ‘‘(i) the same application and retention 

14 procedures (such as 1-page enrollment forms 

15 and enrollment by mail) used by the majority of 

16 State programs under title XXI during the pre17 ceding year; and 

18 ‘‘(ii) outreach efforts proportional in scope 

19 and reasonably expected effectiveness to those 

20 employed by the State during a comparable 

21 stage of implementation of the State’s program 

22 under title XXI. 

23 ‘‘(C) The State applies eligibility standards and 

24 methodologies under this title with respect to indi25 viduals residing in the State who have not attained 


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1 age 65 that are not more restrictive (as determined 

2 under section 1902(a)(10)(C)(i)(III)) than the 

3 standards and methodologies that applied under this 

4 title with respect to such individuals as of July 1, 

5 2009. 

6 ‘‘(2)(A) For purposes of clause (5) of the first sen7 tence of subsection (b), the need-based enhanced FMAP 

8 for a State for a fiscal year, is equal to the Federal med9 ical assistance percentage (as defined in the first sentence 

10 of subsection (b)) for the State increased, subject to sub11 paragraph (B), by such percentage increase as would com12 pensate all States for the additional expenditures that 

13 would be incurred by all States if the States were to pro14 vide medical assistance to all individuals whose income 

15 does not exceed 100 percent of the income official poverty 

16 line (as defined by the Office of Management and Budget, 

17 and revised annually in accordance with section 673(2) of 

18 the Omnibus Budget Reconciliation Act of 1981) applica19 ble to a family of the size involved and who are eligible 

20 for such assistance only on the basis of section 

21 1902(a)(10)(A)(ii)(XX). 

22 ‘‘(B) In the case of a State that provides medical as23 sistance to individuals described in section 

24 1902(a)(10)(A)(ii)(XX) but limits such assistance to indi25 viduals with income at or below a percentage of the income 


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1 official poverty line (as defined by the Office of Manage2 ment and Budget, and revised annually in accordance with 

3 section 673(2) of the Omnibus Budget Reconciliation Act 

4 of 1981) applicable to a family of the size involved that 

5 is less than 100, the Secretary shall reduce the need-based 

6 enhanced FMAP otherwise determined for the State under 

7 subparagraph (A) by a proportion based on the national 

8 income distribution of all individuals in all States who are 

9 (regardless of whether such individuals are enrolled under 

10 this title) eligible for medical assistance only on the basis 

11 of section 1902(a)(10)(A)(ii)(XX).’’. 

12 (c) CONFORMING AMENDMENTS.—Section 1905(a) of 

13 the Social Security Act (42 U.S.C. 1396d(a)) is amended 

14 in the matter preceding paragraph (1)— 

15 (1) by striking ‘‘or’’ at the end of clause (xii); 

16 (2) by adding ‘‘or’’ at the end of clause (xiii); 

17 and 

18 (3) by inserting after clause (xiii) the following: 

19 ‘‘(xiv) individuals who are eligible for medical 

20 assistance on the basis of section 

21 1902(a)(10)(A)(ii)(XX);’’. 

22 (d) EFFECTIVE DATE.—The amendments made by 

23 this section take effect on October 1, 2010, and apply to 

24 medical assistance provided on or after that date, without 


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1 regard to whether final regulations to carry out such 

2 amendments have been promulgated by such date. 

3 SEC. 302. STATE OPTION TO PROVIDE COVERAGE OF CHIL4 DREN UNDER SCHIP IN EXCESS OF THE 

5 STATE’S ALLOTMENT. 

6 (a) IN GENERAL.—Title XXI of the Social Security 

7 Act (42 U.S.C. 1397aa et seq.), as amended by sections 

8 111(a) and 112 of the Children’s Health Insurance Pro9 gram Reauthorization Act of 2009 (Public Law 111–3), 

10 is amended by adding at the end the following: 

11 ‘‘SEC. 2113. STATE OPTION TO PROVIDE COVERAGE OF 

12 CHILDREN IN EXCESS OF THE STATE’S AL13 LOTMENT. 

14 ‘‘(a) STATE OPTION.—In the case of a State that 

15 meets the condition described in subsection (b), the fol16 lowing shall apply: 

17 ‘‘(1) Notwithstanding section 2105 and without 

18 regard to the State’s allotment under section 2104, 

19 the Secretary shall pay the State an amount for 

20 each quarter equal to the enhanced FMAP of ex21 penditures incurred in the quarter that are described 

22 in section 2105(a)(1). 

23 ‘‘(2) The Secretary shall reduce the State’s al24 lotment under section 2104, for the first fiscal year 

25 for which the State amendment described in subVerDate Nov 24 2008 00:09 Feb 12, 2009 Jkt 079200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H956.IH H956

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1 section (b) applies, and for each fiscal year there2 after, by an amount equal to the amount that the 

3 Secretary determines the State would have expended 

4 to provide child health assistance to targeted low-in5 come children during that fiscal year if that State 

6 had not elected the State option to provide such as7 sistance in accordance with this section. 

8 ‘‘(3) Subsections (f) and (g) of section 2104 

9 shall not apply to the State’s reduced allotment 

10 (after the application of paragraph (2)). 

11 ‘‘(b) CONDITION DESCRIBED.—For purposes of sub12 section (a), the condition described in this subsection is 

13 that the State has made an irrevocable election, through 

14 a plan amendment, to provide child health assistance to 

15 all targeted low-income children residing in the State 

16 (without regard to date of application for assistance) and 

17 to cover health services listed in the State plan whenever 

18 medically necessary.’’. 

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

20 this section takes effect on October 1, 2010, and applies 

21 to child health assistance provided on or after that date, 

22 without regard to whether final regulations to carry out 

23 such amendment have been promulgated by such date. 


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1 Subtitle B—Refundable Tax Credit 

2 for Health Insurance Costs of 

3 Low-Income Individuals and 

4 Families 

5 SEC. 311. CREDIT FOR HEALTH INSURANCE COSTS OF CER6 TAIN LOW-INCOME INDIVIDUALS. 

7 (a) IN GENERAL.—Subpart C of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 (relating to refundable credits) is amended by insert10 ing after section 36 the following new section: 

11 ‘‘SEC. 36A. HEALTH INSURANCE COSTS OF ELIGIBLE LOW12 INCOME INDIVIDUALS. 

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

14 there shall be allowed as a credit against the tax imposed 

15 by this subtitle for the taxable year an amount equal to 

16 the applicable percentage of the amount paid by the tax17 payer (or on behalf of the taxpayer) for coverage of the 

18 taxpayer or qualifying family members under qualified 

19 health insurance for eligible coverage months beginning in 

20 such taxable year. 

21 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

22 this section— 

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

24 the term ‘applicable percentage’ means the standard 

25 Government contribution (determined for full-time 


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1 Federal employees enrolling in coverage for which 

2 such contribution is not limited by section 

3 8906(b)(1) of title 5, United States Code) for an 

4 employee enrolled in a health benefits plan under 

5 chapter 89 of title 5, United States Code, for the 

6 calendar year in which the taxable year begins, ex7 pressed as a percentage of the total premium for 

8 such plan. 

9 ‘‘(2) INCREASED PERCENTAGE FOR CERTAIN

10 TAXPAYERS.— 

11 ‘‘(A) IN GENERAL.—In the case of a tax12 payer whose adjusted gross income for the pre13 ceding taxable year does not exceed 150 percent 

14 of the poverty level, the applicable percentage 

15 determined under paragraph (1) shall be in16 creased by such percentage points as the Sec17 retary determines will fully compensate such an 

18 individual for the individual’s limited pur19 chasing power in comparison to individuals 

20 whose adjusted gross income equals the average 

21 adjusted gross income for all Federal employ22 ees, to the extent that the amount of the result23 ing increase in the credit amount for all such 

24 eligible low-income individuals for the taxable 

25 year is not reasonably expected to exceed the 5 


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1 percentage point dollar amount for that year, as 

2 determined under subparagraph (B). 

3 ‘‘(B) DETERMINATION OF 5 PERCENTAGE

4 POINT DOLLAR AMOUNT.—For purposes of sub5 paragraph (A), the 5 percentage point dollar 

6 amount for any taxable year is the product of— 

7 ‘‘(i) the total number of individuals 

8 receiving credits under this section for 

9 such year; and 

10 ‘‘(ii) the amount equal to 5 percent of 

11 the average health insurance premium 

12 amount to which such credits are applied. 

13 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

14 in this paragraph shall be construed to prevent 

15 the Secretary from establishing more than 1 

16 level of supplemental assistance that provides 

17 greater assistance to individuals with lower in18 come, determined as a percentage of poverty. 

19 ‘‘(3) APPLICATION OF FEHBP COVERAGE CAT20 EGORIES TO DETERMINATION OF CREDIT.—The per21 centages described in paragraphs (1) and (2) shall 

22 be applied to a taxpayer consistent with the coverage 

23 categories (such as self or family coverage) applied 

24 with respect to a health benefits plan under chapter 

25 89 of title 5, United States Code. 


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1 ‘‘(c) MAXIMUM PREMIUM AMOUNT.—The amount 

2 paid for qualified health insurance taken into account 

3 under subsection (a) for any taxable year shall not exceed 

4 an amount equal to the capped premium established for 

5 the applicable State under section 404(c)(10) of the 

6 Health Coverage, Affordability, Responsibility, and Equity 

7 Act of 2009 for the calendar year in which the such tax8 able year begins. 

9 ‘‘(d) ELIGIBLE COVERAGE MONTH.—For purposes of 

10 this section— 

11 ‘‘(1) IN GENERAL.—The term ‘eligible coverage 

12 month’ means any month if during such month the 

13 taxpayer or a qualifying family member— 

14 ‘‘(A) is an eligible low-income individual; 

15 ‘‘(B) is covered by qualified health insur16 ance, the premium for which is paid by the tax17 payer (or on behalf of the taxpayer); 

18 ‘‘(C) does not have other specified cov19 erage; and 

20 ‘‘(D) is not imprisoned under Federal, 

21 State, or local authority. 

22 ‘‘(2) JOINT RETURNS.—In the case of a joint 

23 return, the requirement of paragraph (1)(A) shall be 

24 treated as met with respect to any month if at least 

25 1 spouse satisfies such requirement. 


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1 ‘‘(e) ELIGIBLE LOW-INCOME INDIVIDUAL.—For pur2 poses of this section— 

3 ‘‘(1) IN GENERAL.—The term ‘eligible low-in4 come individual’ means an individual— 

5 ‘‘(A) who has not attained age 65; 

6 ‘‘(B) whose adjusted gross income does not 

7 exceed 200 percent of the poverty level; 

8 ‘‘(C) who is ineligible for the medicaid pro9 gram or the State children’s health insurance 

10 program under title XIX or XXI of the Social 

11 Security Act (other than under section 1928 of 

12 such Act); 

13 ‘‘(D) who has limited access to health in14 surance coverage through the employer of the 

15 individual or a member of the individual’s fam16 ily (either because the employer does not offer 

17 such coverage to the individual or because the 

18 employee contribution for such coverage would 

19 exceed an amount equal to 5 percent of the 

20 household income of such individual, as deter21 mined in accordance with paragraph (2)); 

22 ‘‘(E) who applies for a credit under this 

23 section not later than 60 days after receiving 

24 notice of potential eligibility for such credit, 


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1 under procedures established by the Secretary; 

2 and 

3 ‘‘(F) who resides in a State where the eli4 gibility standards and methodologies applied 

5 under the medicaid and State children’s health 

6 insurance programs with respect to individuals 

7 residing in the State who have not attained age 

8 65 are not more restrictive (as determined 

9 under section 1902(a)(10)(C)(i)(III) of the So10 cial Security Act) than the standards and meth11 odologies that applied under such programs 

12 with respect to such individuals as of July 1, 

13 2009. 

14 ‘‘(2) DETERMINATION OF ELIGIBILITY.— 

15 ‘‘(A) SCHIP AGENCY.— 

16 ‘‘(i) IN GENERAL.—The determination 

17 of whether an individual is an eligible low18 income individual for purposes of this sec19 tion shall be made by the State agency 

20 with responsibility for determining the eli21 gibility of individuals for assistance under 

22 the State children’s health insurance pro23 gram under title XXI of the Social Secu24 rity Act. 


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1 ‘‘(ii) APPLICATION OF SCREEN AND

2 ENROLL REQUIREMENTS.— 

3 ‘‘(I) IN GENERAL.—The State 

4 agency referred to in clause (i) shall 

5 ensure that individuals applying for a 

6 certificate of eligibility are screened 

7 for potential eligibility under the med8 icaid and State children’s health in9 surance programs and that individuals 

10 found through screening to be eligible 

11 for assistance under such a program 

12 are enrolled for assistance under the 

13 appropriate program. To the max14 imum extent possible pursuant to 

15 State options under title XIX of the 

16 Social Security Act, and notwith17 standing any otherwise applicable pro18 vision of, or State plan provision 

19 under, such title, screening and enroll20 ment activities described in the pre21 vious sentence shall use the proce22 dures employed by the State chil23 dren’s health insurance program oper24 ated under title XXI of the Social Se25 curity Act, if such procedures differ 


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1 from those ordinarily employed by the 

2 State program operated under title 

3 XIX of such Act. 

4 ‘‘(II) NO DELAY OF ISSUANCE OF

5 CERTIFICATE.—The application of the 

6 screen and enroll requirements of 

7 clause (i) shall not delay the issuance 

8 of a certificate of eligibility to an indi9 vidual for purposes of this section. 

10 The State agency referred to in clause 

11 (i) shall adopt procedures to ensure 

12 that an individual issued a certificate 

13 of eligibility under this paragraph who 

14 is subsequently determined to be eligi15 ble for the State medicaid program 

16 under title XIX of the Social Security 

17 Act or the State children’s health in18 surance program under XXI of such 

19 Act shall be enrolled in the appro20 priate program without an interrup21 tion in the individual’s health insur22 ance coverage. 

23 ‘‘(B) STANDARDS.— 


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1 ‘‘(i) IN GENERAL.—An individual is 

2 an eligible low-income individual for pur3 poses of this section if— 

4 ‘‘(I) on the basis of the individ5 ual’s tax return for the preceding tax6 able year, the individual meets the re7 quirements of paragraph (1)(B), and 

8 the individual otherwise satisfies the 

9 requirements of paragraph (1), or 

10 ‘‘(II) the individual is determined 

11 to satisfy the requirements of para12 graph (1) after the application of the 

13 same eligibility methodologies as 

14 would apply for purposes of deter15 mining the eligibility of an individual 

16 for assistance under the State chil17 dren’s health insurance program 

18 under title XXI of the Social Security 

19 Act. 

20 ‘‘(ii) APPLICATION OF SCHIP INCOME

21 DETERMINATION METHODOLOGIES.—For 

22 purposes of clause (i)(II), determinations 

23 of income levels shall be made using the 

24 methodologies described in that clause, to 

25 the extent such methodologies for 


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1 ascertaining household income differ from 

2 any otherwise applicable method for deter3 mining adjusted gross income or the defini4 tion of adjusted gross income. 

5 ‘‘(C) CERTIFICATE OF ELIGIBILITY.— 

6 ‘‘(i) IN GENERAL.—An individual who 

7 is determined to be an eligible low-income 

8 individual shall be issued a certificate of 

9 eligibility by the State agency referred to 

10 in subparagraph (A). 

11 ‘‘(ii) CERTIFICATE AMOUNT.—Such 

12 certificate shall indicate the applicable per13 centage of the amount paid for coverage 

14 under qualified health insurance that the 

15 individual is eligible for under this section 

16 (including any supplemental assistance 

17 which the individual may be eligible for 

18 under subsection (b)(2), unless the indi19 vidual elects to not receive such supple20 mental assistance). 

21 ‘‘(iii) 12-MONTH PERIOD OF ISSUE.— 

22 The certificate of eligibility shall apply for 

23 a 12-month period from the date of issue, 

24 notwithstanding any changes in household 

25 circumstances following the individual’s apVerDate Nov 24 2008 00:09 Feb 12, 2009 Jkt 079200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\H956.IH H956

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1 plication for a credit under this section or 

2 supplemental assistance. 

3 ‘‘(D) SUPPLEMENTAL ASSISTANCE.—The 

4 State agency described in subparagraph (A) 

5 shall determine an individual’s eligibility for 

6 supplemental assistance under subsection (b)(2) 

7 based on the methodologies referred to in sub8 paragraph (B)(ii). 

9 ‘‘(f) QUALIFYING FAMILY MEMBER.—For purposes 

10 of this section— 

11 ‘‘(1) IN GENERAL.—The term ‘qualifying family 

12 member’ means the taxpayer’s spouse and any de13 pendent of the taxpayer. Such term does not include 

14 any individual who is not an eligible low-income indi15 vidual under subsection (e)(1). 

16 ‘‘(2) SPECIAL DEPENDENCY TEST IN CASE OF

17 DIVORCED PARENTS, ETC.—If paragraph (2) of sec18 tion 152(e) applies to any child with respect to any 

19 calendar year, in the case of any taxable year begin20 ning in such calendar year, such child shall be treat21 ed as described in paragraph (1)(B) with respect to 

22 the custodial parent (within the meaning of section 

23 152(e)(3)) and not with respect to the noncustodial 

24 parent. 


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1 ‘‘(g) QUALIFIED HEALTH INSURANCE.—For pur2 poses of this section— 

3 ‘‘(1) IN GENERAL.—The term ‘qualified health 

4 insurance’ means any of the following: 

5 ‘‘(A) Coverage under an insurance plan 

6 participating in a purchasing pool established 

7 pursuant to section 403 of the Health Cov8 erage, Affordability, Responsibility, and Equity 

9 Act of 2009. 

10 ‘‘(B) Coverage under individual health in11 surance pursuant to section 412 of such Act. 

12 ‘‘(C) Coverage, pursuant to section 413 of 

13 such Act, under the medicaid program or the 

14 State children’s health insurance program if 1 

15 or more family members qualifies for coverage 

16 under such program. 

17 ‘‘(D) Coverage, pursuant to section 414 of 

18 such Act, under an employer-sponsored insur19 ance plan, including— 

20 ‘‘(i) coverage under a COBRA con21 tinuation provision (as defined in section 

22 9832(d)(1)); 

23 ‘‘(ii) State-based continuation cov24 erage provided under a State law that re25 quires such coverage; 


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1 ‘‘(iii) coverage voluntarily offered by a 

2 former employer of the individual or family 

3 member; or 

4 ‘‘(iv) coverage under a group health 

5 plan that is available through the employ6 ment of the individual or a family member. 

7 ‘‘(2) EXCEPTION.—The term ‘qualified health 

8 insurance’ shall not include— 

9 ‘‘(A) a flexible spending or similar ar10 rangement; and 

11 ‘‘(B) any insurance if substantially all of 

12 its coverage is of excepted benefits described in 

13 section 9832(c). 

14 ‘‘(3) DEFINITIONS.—For purposes of this sub15 section— 

16 ‘‘(A) EMPLOYER-SPONSORED INSUR17 ANCE.— 

18 ‘‘(i) IN GENERAL.—The term ‘em19 ployer-sponsored insurance’ means any in20 surance which covers medical care under 

21 any health plan maintained by any em22 ployer (or former employer) of the tax23 payer or the taxpayer’s spouse. 

24 ‘‘(ii) TREATMENT OF CAFETERIA

25 PLANS.—For purposes of clause (i), the 


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1 cost of coverage shall be treated as paid or 

2 incurred by an employer to the extent the 

3 coverage is in lieu of a right to receive cash 

4 or other qualified benefits under a cafe5 teria plan (as defined in section 125(d)). 

6 ‘‘(B) INDIVIDUAL HEALTH INSURANCE.— 

7 The term ‘individual health insurance’ means 

8 any insurance which constitutes medical care 

9 offered to individuals other than in connection 

10 with a group health plan and does not include 

11 Federal- or State-based health insurance cov12 erage. 

13 ‘‘(h) OTHER SPECIFIED COVERAGE.—For purposes 

14 of this section, an individual has other specified coverage 

15 for any month if, as of the first day of such month— 

16 ‘‘(1) COVERAGE UNDER MEDICARE.—Such indi17 vidual is entitled to benefits under part A of title 

18 XVIII of the Social Security Act or is enrolled under 

19 part B of such title. 

20 ‘‘(2) CERTAIN OTHER COVERAGE.—Such indi21 vidual— 

22 ‘‘(A) is enrolled in a health benefits plan 

23 under chapter 89 of title 5, United States Code; 

24 or 


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1 ‘‘(B) is entitled to receive benefits under 

2 chapter 55 of title 10, United States Code. 

3 ‘‘(i) FEDERAL POVERTY LEVEL; POVERTY LEVEL; 

4 POVERTY.—For purposes of this section, the terms ‘Fed5 eral poverty level’, ‘poverty level’, and ‘poverty’ mean the 

6 income official poverty line (as defined by the Office of 

7 Management and Budget, and revised annually in accord8 ance with section 673(2) of the Omnibus Budget Rec9 onciliation Act of 1981) applicable to a family of the size 

10 involved. 

11 ‘‘(j) SPECIAL RULES.— 

12 ‘‘(1) COORDINATION WITH ADVANCE PAYMENTS

13 OF CREDIT.—With respect to any taxable year, the 

14 amount which would (but for this subsection) be al15 lowed as a credit to the taxpayer under subsection 

16 (a) shall be reduced (but not below zero) by the ag17 gregate amount paid on behalf of such taxpayer 

18 under section 7527A for months beginning in such 

19 taxable year. 

20 ‘‘(2) COORDINATION WITH OTHER DEDUCTIONS

21 AND CREDITS.—Amounts taken into account under 

22 subsection (a) shall not be taken into account in de23 termining any deduction allowed under section 

24 162(l) or 213. The amount of any credit otherwise 


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1 allowed under this section shall be reduced by the 

2 amount of any credit allowed under section 35. 

3 ‘‘(3) HEALTH SAVINGS ACCOUNT DISTRIBU4 TIONS.—Amounts distributed from a health savings 

5 account (as defined in section 223(d)) or an Archer 

6 MSA (as defined in section 220(d)) shall not be 

7 taken into account under subsection (a). 

8 ‘‘(4) DENIAL OF CREDIT TO DEPENDENTS.—No 

9 credit shall be allowed under this section to any indi10 vidual with respect to whom a deduction under sec11 tion 151 is allowable to another taxpayer for a tax12 able year beginning in the calendar year in which 

13 such individual’s taxable year begins. 

14 ‘‘(5) BOTH SPOUSES ELIGIBLE LOW-INCOME IN15 DIVIDUALS.—The spouse of the taxpayer shall not 

16 be treated as a qualifying family member for pur17 poses of subsection (a), if— 

18 ‘‘(A) the taxpayer is married at the close 

19 of the taxable year; 

20 ‘‘(B) the taxpayer and the taxpayer’s 

21 spouse are both eligible low-income individuals 

22 during the taxable year; and 

23 ‘‘(C) the taxpayer files a separate return 

24 for the taxable year. 


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1 ‘‘(6) MARITAL STATUS; CERTAIN MARRIED IN2 DIVIDUALS LIVING APART.—Rules similar to the 

3 rules of paragraphs (3) and (4) of section 21(e) 

4 shall apply for purposes of this section. 

5 ‘‘(7) INSURANCE WHICH COVERS OTHER INDI6 VIDUALS.—For purposes of this section, rules simi7 lar to the rules of section 213(d)(6) shall apply with 

8 respect to any contract for qualified health insurance 

9 under which amounts are payable for coverage of an 

10 individual other than the taxpayer and qualifying 

11 family members. 

12 ‘‘(8) TREATMENT OF PAYMENTS.—For pur13 poses of this section: 

14 ‘‘(A) PAYMENTS BY SECRETARY.—Any 

15 payment made by the Secretary on behalf of 

16 any individual under section 7527A (relating to 

17 advance payment of credit for health insurance 

18 costs of eligible low-income individuals) shall be 

19 treated as having been made by the taxpayer 

20 (or on behalf of the taxpayer) on the first day 

21 of the month for which such payment was 

22 made. 

23 ‘‘(B) PAYMENTS BY TAXPAYER.—Any pay24 ment made by the taxpayer (or on behalf of the 

25 taxpayer) for eligible coverage months shall be 


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1 treated as having been so made on the first day 

2 of the month for which such payment was 

3 made. 

4 ‘‘(9) REGULATIONS.— 

5 ‘‘(A) IN GENERAL.—The Secretary, in con6 sultation with the Secretary of Health and 

7 Human Services, shall administer the credit al8 lowed under this section and shall prescribe 

9 such regulations and other guidance as may be 

10 necessary or appropriate to carry out this sec11 tion, section 6050W, and section 7527A. 

12 ‘‘(B) ELIGIBILITY DETERMINATIONS.— 

13 Such regulations shall include such standards 

14 as the Secretary of Health and Human Services 

15 may specify with respect to the requirements 

16 for eligibility determinations under subsection 

17 (e)(2). 

18 ‘‘(C) MEASURES TO COMBAT FRAUD AND

19 ABUSE.—Such regulations shall include appro20 priate procedures to deter, detect, and penalize 

21 fraudulent efforts to obtain a credit under this 

22 section by individuals, providers of qualified 

23 health insurance, and others.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) Paragraph (2) of section 1324(b) of title 

2 31, United States Code, is amended by inserting 

3 ‘‘36A,’’ after ‘‘36,’’. 

4 (2) The table of sections for subpart C of part 

5 IV of chapter 1 of the Internal Revenue Code of 

6 1986 is amended by inserting after the item relating 

7 to section 36 the following new item: 

‘‘Sec. 36A. Health insurance costs of eligible low-income individuals.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2011. 

11 (d) REIMBURSEMENT FOR ADMINISTRATIVE COSTS

12 INCURRED IN DETERMINING ELIGIBILITY FOR CREDIT.— 

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

14 Human Services shall reimburse States for the rea15 sonable administrative costs incurred in making eli16 gibility determinations in accordance with section 

17 36A(e) of the Internal Revenue Code of 1986 (as 

18 added by subsection (a)). Such reimbursement shall 

19 not apply to State costs required under the medicaid 

20 or State children’s health insurance programs. 

21 (2) APPLICATION.—A State desiring reimburse22 ment under this subsection shall submit an applica23 tion to the Secretary of Health and Human Services 

24 in such manner, at such time, and containing such 

25 information as the Secretary may require. 


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1 (3) APPROPRIATION.—Out of any money in the 

2 Treasury of the United States not otherwise appro3 priated, there are appropriated such sums as may be 

4 necessary to carry out this subsection. 

5 SEC. 312. ADVANCE PAYMENT OF CREDIT FOR HEALTH IN6 SURANCE COSTS OF ELIGIBLE LOW-INCOME 

7 INDIVIDUALS. 

8 (a) IN GENERAL.—Chapter 77 of the Internal Rev9 enue Code of 1986 (relating to miscellaneous provisions) 

10 is amended by inserting after section 7527 the following 

11 new section: 

12 ‘‘SEC. 7527A. ADVANCE PAYMENT OF CREDIT FOR HEALTH 

13 INSURANCE COSTS OF ELIGIBLE LOW-IN14 COME INDIVIDUALS. 

15 ‘‘(a) GENERAL RULE.—Not later than August 1, 

16 2011, the Secretary shall establish a program for making 

17 payments on behalf of certified individuals to providers of 

18 qualified health insurance (as defined in section 36A(g)) 

19 for such individuals. 

20 ‘‘(b) LIMITATION ON ADVANCE PAYMENTS DURING

21 ANY TAXABLE YEAR.—The Secretary may make pay22 ments under subsection (a) only to the extent that the 

23 total amount of such payments made on behalf of any indi24 vidual during the taxable year is not reasonably expected 

25 to exceed the applicable percentage (as defined in section 


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1 36A(b)) of the amount paid by the taxpayer (or on behalf 

2 of the taxpayer) for coverage of the taxpayer and quali3 fying family members under qualified health insurance for 

4 eligible coverage months beginning in the taxable year. 

5 ‘‘(c) CERTIFIED INDIVIDUAL.—For purposes of this 

6 section, the term ‘certified individual’ means any indi7 vidual for whom a health coverage eligibility certificate is 

8 in effect. 

9 ‘‘(d) HEALTH COVERAGE ELIGIBILITY CERTIFI10 CATE.—For purposes of this section, the term ‘health cov11 erage eligibility certificate’ means any written statement 

12 that an individual is an eligible low-income individual (as 

13 defined in section 36A(e)) if such statement provides such 

14 information as the Secretary may require for purposes of 

15 this section and is issued by the State agency responsible 

16 for administering the State children’s health insurance 

17 program under title XXI of the Social Security Act.’’. 

18 (b) DISCLOSURE OF RETURN INFORMATION FOR

19 PURPOSES OF CARRYING OUT A PROGRAM FOR ADVANCE

20 PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF

21 ELIGIBLE LOW-INCOME INDIVIDUALS.— 

22 (1) IN GENERAL.—Subsection (l) of section 

23 6103 of the Internal Revenue Code of 1986 (relating 

24 to disclosure of returns and return information for 


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1 purposes other than tax administration) is amended 

2 by adding at the end the following new paragraph: 

3 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

4 FOR PURPOSES OF CARRYING OUT A PROGRAM FOR

5 ADVANCE PAYMENT OF CREDIT FOR HEALTH INSUR6 ANCE COSTS OF ELIGIBLE LOW-INCOME INDIVID7 UALS.—The Secretary may disclose to providers of 

8 health insurance for any certified individual (as de9 fined in section 7527A(c)) return information with 

10 respect to such certified individual only to the extent 

11 necessary to carry out the program established by 

12 section 7527A (relating to advance payment of cred13 it for health insurance costs of eligible low-income 

14 individuals).’’. 

15 (2) PROCEDURES AND RECORDKEEPING RE16 LATED TO DISCLOSURES.—Paragraph (4) of section 

17 6103(p) of such Code is amended by striking ‘‘or 

18 (20)’’ each place it appears and inserting ‘‘(20), or 

19 (21)’’. 

20 (3) UNAUTHORIZED INSPECTION OR DISCLO21 SURE OF RETURNS OR RETURN INFORMATION.—Sec22 tion 7213(a)(2) of such Code is amended by striking 

23 ‘‘or (20)’’ and inserting ‘‘(20), or (21)’’. 

24 (c) INFORMATION REPORTING.— 


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1 (1) IN GENERAL.—Subpart B of part III of 

2 subchapter A of chapter 61 of the Internal Revenue 

3 Code of 1986 (relating to information concerning 

4 transactions with other persons) is amended by in5 serting after section 6050W the following new sec6 tion: 

7 ‘‘SEC. 6050X. RETURNS RELATING TO CREDIT FOR HEALTH 

8 INSURANCE COSTS OF ELIGIBLE LOW-IN9 COME INDIVIDUALS. 

10 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

11 who is entitled to receive payments for any month of any 

12 calendar year under section 7527A (relating to advance 

13 payment of credit for health insurance costs of eligible 

14 low-income individuals) with respect to any certified indi15 vidual (as defined in section 7527A(c)) shall, at such time 

16 as the Secretary may prescribe, make the return described 

17 in subsection (b) with respect to each such individual. 

18 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

19 is described in this subsection if such return— 

20 ‘‘(1) is in such form as the Secretary may pre21 scribe; and 

22 ‘‘(2) contains— 

23 ‘‘(A) the name, address, and TIN of each 

24 individual referred to in subsection (a); 


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1 ‘‘(B) the number of months for which 

2 amounts were entitled to be received with re3 spect to such individual under section 7527A 

4 (relating to advance payment of credit for 

5 health insurance costs of eligible low-income in6 dividuals); 

7 ‘‘(C) the amount entitled to be received for 

8 each such month; and 

9 ‘‘(D) such other information as the Sec10 retary may prescribe. 

11 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID12 UALS WITH RESPECT TO WHOM INFORMATION IS RE13 QUIRED.—Every person required to make a return under 

14 subsection (a) shall furnish to each individual whose name 

15 is required to be set forth in such return a written state16 ment showing— 

17 ‘‘(1) the name and address of the person re18 quired to make such return and the phone number 

19 of the information contact for such person; and 

20 ‘‘(2) the information required to be shown on 

21 the return with respect to such individual. 

22 The written statement required under the preceding sen23 tence shall be furnished on or before January 31 of the 

24 year following the calendar year for which the return 

25 under subsection (a) is required to be made.’’. 


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1 (2) ASSESSABLE PENALTIES.— 

2 (A) Subparagraph (B) of section 

3 6724(d)(1) of such Code (relating to defini4 tions) is amended by striking ‘‘or’’ at the end 

5 of clause (xxii), by striking ‘‘, and’’ at the end 

6 of clause (xxiii) and inserting ‘‘, or’’, and by 

7 adding at the end the following new clause: 

8 ‘‘(xxiv) section 6050X (relating to re9 turns relating to credit for health insur10 ance costs of eligible low-income individ11 uals), and’’. 

12 (B) Paragraph (2) of section 6724(d) of 

13 such Code is amended by striking ‘‘or’’ at the 

14 end of subparagraph (EE), by striking the pe15 riod at the end of subparagraph (FF) and in16 serting ‘‘, or’’, and by adding after subpara17 graph (FF) the following new subparagraph: 

18 ‘‘(GG) section 6050X (relating to returns 

19 relating to credit for health insurance costs of 

20 eligible low-income individuals).’’. 

21 (d) CLERICAL AMENDMENTS.— 

22 (1) ADVANCE PAYMENT.—The table of sections 

23 for chapter 77 of the Internal Revenue Code of 1986 

24 is amended by inserting after the item relating to 

25 section 7527 the following new item: 


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‘‘Sec. 7527A. Advance payment of credit for health insurance costs of eligible 

low-income individuals.’’. 

1 (2) INFORMATION REPORTING.—The table of 

2 sections for subpart B of part III of subchapter A 

3 of chapter 61 of such Code is amended by inserting 

4 after the item relating to section 6050W the fol5 lowing new item: 

‘‘Sec. 6050X. Returns relating to credit for health insurance costs of eligible 

low-income individuals.’’. 

6 (e) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect on January 1, 2012. 

8 TITLE IV—IMPROVING ACCESS 

9 TO HEALTH PLANS 

10 SEC. 401. DEFINITIONS. 

11 In this title: 

12 (1) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible 

13 individual’’ means an individual with respect to 

14 whom a tax credit is allowed under section 36A of 

15 the Internal Revenue Code of 1986 (as added by 

16 section 311). 

17 (2) EMPLOYER.—The term ‘‘employer’’ includes 

18 a not-for-profit employer. 

19 (3) PARTICIPATING INSURER.—The term ‘‘par20 ticipating insurer’’ means an entity with a contract 

21 under section 405(a). 

22 (4) PRIVATE GROUP HEALTH INSURANCE

23 PLAN.—The term ‘‘private group health insurance 


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1 plan’’ means a plan offered by a participating in2 surer that provides health benefits coverage to eligi3 ble individuals and that meets the requirements of 

4 this title. 

5 (5) PURCHASING POOL OPERATOR.—The term 

6 ‘‘purchasing pool operator’’ means the entity des7 ignated by the State under section 404. 

8 (6) SECRETARY.—The term ‘‘Secretary’’ means 

9 the Secretary of Health and Human Services. 

10 (7) SMALL EMPLOYER.—The term ‘‘small em11 ployer’’ means an employer with not less than 2 and 

12 not more than 100 employees. 

13 SEC. 402. ESTABLISHMENT OF HEALTH INSURANCE PUR14 CHASING POOLS. 

15 There is established a program under which the Sec16 retary shall ensure that each eligible individual has the 

17 opportunity to enroll, through a purchasing pool operator, 

18 in a private group health insurance plan offered by a par19 ticipating insurer under this title. 

20 SEC. 403. PURCHASING POOLS. 

21 (a) ESTABLISHMENT OF PURCHASING POOLS.—Each 

22 State participating in the program under this title shall 

23 establish a purchasing pool that is available to each eligi24 ble individual who resides in the State. 

25 (b) TYPES OF PURCHASING POOLS.— 


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1 (1) IN GENERAL.—A purchasing pool estab2 lished under subsection (a) shall be 1 of the fol3 lowing: 

4 (A) A statewide purchasing pool operated 

5 by the State. 

6 (B) A statewide purchasing pool operated 

7 on behalf of the State by the Director of the 

8 Office of Personnel Management, or the des9 ignee of such Director. 

10 (2) OPM OPERATED POOL.—In the case of a 

11 statewide purchasing pool described in paragraph 

12 (1)(B), the Director of the Office of Personnel Man13 agement or the Director’s designee, may limit par14 ticipating insurers in such pool to those described in 

15 section 405(e), except that the Director or such des16 ignee shall ensure that additional private group 

17 health insurance plans participate in such a pool to 

18 the extent necessary to meet the requirements of 

19 section 404(c)(9). 

20 (c) STATE ELECTION PROCESS.— 

21 (1) IN GENERAL.—Each State participating in 

22 the program under this title shall notify the Sec23 retary, not later than January 4, 2011, of the type 

24 of purchasing pool that applies to residents of the 

25 State. 


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1 (2) DEFAULT CHOICE.—If a State participating 

2 in the program under this title fails to notify the 

3 Secretary of the type of purchasing pool elected by 

4 the State by the date described in paragraph (1), 

5 the State shall be deemed to have elected the type 

6 of purchasing pool described in subsection (b)(1)(B). 

7 (3) CHANGE OF ELECTION.—The Secretary 

8 shall establish procedures under which a State par9 ticipating in the program under this title may 

10 change the election of the type of purchasing pool 

11 applicable to residents of the State. 

12 SEC. 404. PURCHASING POOL OPERATORS. 

13 (a) DESIGNATION.—Each State shall designate a 

14 purchasing pool operator that shall be responsible for op15 erating the purchasing pool established under section 

16 403(a). A purchasing pool operator may be (or, to have 

17 1 or more of its functions performed, may contract with) 

18 a private entity that has entered into a contract with the 

19 State if such entity meets requirements established by the 

20 Secretary for purposes of the program under this title. 

21 (b) OPERATION SIMILAR TO FEHBP.—Each pur22 chasing pool operator shall operate the purchasing pool 

23 established under section 403(a) in a manner that is simi24 lar to the manner in which the Director of the Office of 

25 Personnel Management operates the Federal employees’ 


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1 health benefits program under chapter 89 of title 5, 

2 United States Code, including (but not limited to) the per3 formance of the specific functions described in subsection 

4 (c). 

5 (c) SPECIFIC FUNCTIONS DESCRIBED.—The specific 

6 functions described in this subsection include the fol7 lowing: 

8 (1) Each purchasing pool operator shall offer 

9 one-stop shopping for eligible individuals to enroll 

10 for health benefits coverage under private, group 

11 health insurance plans offered by participating in12 surers. 

13 (2) Each purchasing pool operator shall limit 

14 participating insurers to those that meet the condi15 tions for participation described in this title. 

16 (3) Each purchasing pool operator shall nego17 tiate (or, in the case of a purchasing pool described 

18 in section 403(b)(1)(B), shall negotiate or otherwise 

19 determine) bids and terms of coverage with insurers. 

20 (4) Each purchasing pool operator shall provide 

21 eligible individuals with comparative information on 

22 private group health insurance plans offered by par23 ticipating insurers. 

24 (5) Each purchasing pool operator shall assist 

25 eligible individuals in enrolling with a private group 


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1 health insurance plan offered by a participating in2 surer. 

3 (6) Each purchasing pool operator shall collect 

4 private group health insurance plan premium pay5 ments for participating insurers and process such 

6 premium payments. 

7 (7) Each purchasing pool operator shall rec8 oncile from year to year aggregate premium pay9 ments and claims costs of private group health in10 surance plans consistent with practices under the 

11 Federal employees’ health benefits program under 

12 chapter 89 of title 5, United States Code. 

13 (8) Each purchasing pool operator shall offer 

14 customer service to eligible individuals enrolled for 

15 health benefits coverage under a private group 

16 health insurance plan offered by a participating in17 surer. 

18 (9) Each purchasing pool operator shall ensure 

19 that each eligible individual has the option of enroll20 ing in either of at least 2 benchmark or benchmark21 equivalent plans with— 

22 (A) a premium at or below a cap estab23 lished by the pool operator for purposes of this 

24 title; and 


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1 (B) coverage of essential services included 

2 in the report required under section 501(e)(2), 

3 with cost-sharing consistent with such report. 

4 (10) Each purchasing pool operator shall estab5 lish a premium cap for purposes of determining the 

6 credit limitation under section 36A(c) of the Internal 

7 Revenue Code of 1986, as added by section 311(a). 

8 The cap required under this paragraph may not be 

9 less than the premium charged to Federal employees 

10 by the most highly enrolled health plan under the 

11 Federal employees’ health benefits program under 

12 chapter 89 of title 5, United States Code. If the 

13 most highly enrolled plan in that program differs for 

14 Federal enrollees in the State and all Federal enroll15 ees nationally in such plan, the minimum permitted 

16 premium cap shall be the lower of such premiums. 

17 SEC. 405. CONTRACTS WITH PARTICIPATING INSURERS. 

18 (a) IN GENERAL.—Each purchasing pool operator 

19 shall negotiate and enter into contracts for the provision 

20 of health benefits coverage under the program under this 

21 title with entities that meet the conditions of participation 

22 described in subsection (b) and other applicable require23 ments of this Act. 

24 (b) CONSUMER INFORMATION.—In carrying out its 

25 duty under section 404(c)(4) to inform eligible individuals 


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1 about private group health plans, the purchasing pool op2 erator shall provide information that meets the require3 ments of section 412(b)(2). 

4 (c) STATE LICENSURE.— 

5 (1) IN GENERAL.—Subject to paragraph (2), a 

6 health plan shall not be a participating insurer un7 less the plan has a State license to provide State 

8 residents with the private group coverage health in9 surance plans that it offers through the pool. 

10 (2) EXCEPTION.—A pool operator may enter 

11 into a contract under subsection (a) to cover pool 

12 participants through a health plan without a State 

13 license described in paragraph (1) if such plan is of14 fered to Federal employees nationwide and, with re15 spect to such employees, is exempt from State health 

16 insurance regulation. Nothing in this paragraph 

17 shall be construed to permit coverage of pool partici18 pants through such a plan except with groups, con19 tracts, and premium rates that are entirely distinct 

20 from those used for individuals covered under the 

21 Federal employee’s health benefits program under 

22 chapter 89 of title 5, United States Code. 

23 (d) ADDITIONAL STOP-LOSS COVERAGE AND REIN24 SURANCE.—Purchasing pool operators are authorized to 

25 encourage participation in the program under this title, 


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1 improve covered benefits, reduce out-of-pocket cost-shar2 ing, limit premiums, or achieve other objectives of this Act 

3 by— 

4 (1) funding stop-loss coverage above levels oth5 erwise offered in the purchasing pool; or 

6 (2) providing or subsidizing reinsurance in ad7 dition to that provided under section 411. 

8 (e) PARTICIPATION OF FEHBP PLANS.— 

9 (1) IN GENERAL.—Each entity with a contract 

10 under section 8902 of title 5, United States Code, 

11 shall be a participating insurer unless such entity 

12 notifies the Secretary in writing of its intention not 

13 to participate in the program under this title prior 

14 to such time as is designated by the Secretary so as 

15 to allow such decisions to be taken into account with 

16 respect to eligible individuals’ choice of a private 

17 group health insurance plan under such program. 

18 Such participation in the program under this title 

19 shall include at least the covered benefits and pro20 vider networks available through such an entity and 

21 shall not involve greater out-of-pocket cost-sharing 

22 than the plan offered by such entity pursuant to its 

23 contract under section 8902 of title 5, United States 

24 Code. 


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1 (2) NO EFFECT ON FEHBP COVERAGE.—The 

2 Director of Office of Personnel Management shall 

3 take such steps as are necessary to ensure that each 

4 individual enrolled for health benefits coverage under 

5 the program under chapter 89 of title 5, United 

6 States Code, is not adversely affected by eligible in7 dividuals or others enrolled for coverage under the 

8 program under this title. Such steps shall include 

9 (but need not be limited to) the establishment of 

10 separate risk pools, separate contracts with partici11 pating insurers, and separately negotiated pre12 miums. 

13 SEC. 406. OPTIONS FOR HEALTH BENEFITS COVERAGE. 

14 (a) SCOPE OF HEALTH BENEFITS COVERAGE.—The 

15 health benefits coverage provided to an eligible individual 

16 under a private group health insurance plan offered by 

17 a participating insurer shall consist of any of the fol18 lowing: 

19 (1) BENCHMARK COVERAGE.—Health benefits 

20 coverage that is equivalent to the benefits coverage 

21 in a benchmark benefit package described in sub22 section (b). 

23 (2) BENCHMARK-EQUIVALENT COVERAGE.— 

24 Health benefits coverage that meets the following re25 quirements: 


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1 (A) INCLUSION OF ESSENTIAL SERV2 ICES.—The coverage includes each of the essen3 tial services identified by the National Advisory 

4 Commission on Expanded Access to Health 

5 Care and adopted by Congress under title III. 

6 (B) AGGREGATE ACTUARIAL VALUE EQUIV7 ALENT TO BENCHMARK PACKAGE.—The cov8 erage has an aggregate actuarial value that is 

9 equal to or greater than the actuarial value of 

10 one of the benchmark benefit packages. 

11 (3) ALTERNATIVE COVERAGE.—Any other 

12 health benefits coverage that the Secretary deter13 mines, upon application by a State, offers health 

14 benefits coverage equivalent to or greater than a 

15 plan described in and offered under section 8903(1) 

16 of title 5, United States Code. 

17 (b) BENCHMARK BENEFIT PACKAGES.—The bench18 mark benefit packages are as follows: 

19 (1) FEHBP-EQUIVALENT HEALTH BENEFITS

20 COVERAGE.—The plan described in and offered 

21 under chapter 89 of title 5, United States Code with 

22 the highest number of enrollees under such section 

23 for the year preceding the year in which the private 

24 group health insurance plan is proposed to be of25 fered. 


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1 (2) PUBLIC PROGRAM-EQUIVALENT HEALTH

2 BENEFITS COVERAGE.—Coverage provided under the 

3 State plan approved under the medicaid program 

4 under title XIX of the Social Security Act or the 

5 State children’s health insurance program under 

6 title XXI of such Act (42 U.S.C. 1396 et seq., 

7 1397aa et seq.) (without regard to coverage provided 

8 under a waiver of the requirements of either such 

9 program). 

10 (3) COVERAGE OFFERED THROUGH HMO.—The 

11 health insurance coverage plan that— 

12 (A) is offered by a health maintenance or13 ganization (as defined in section 2791(b)(3) of 

14 the Public Health Service Act (42 U.S.C. 33gg– 

15 91(b)(3))); and 

16 (B) has the largest insured commercial, 

17 nonmedicaid enrollment of covered lives of such 

18 coverage plans offered by such a health mainte19 nance organization in the State. 

20 (4) STATE EMPLOYEE COVERAGE.—The health 

21 insurance plan that is offered to State employees 

22 and has the largest enrollment of covered lives of 

23 any such plan. 

24 (5) APPLICATION OF BENCHMARK STAND25 ARDS.—A private group health plan offers benchVerDate Nov 24 2008 00:09 Feb 12, 2009 Jkt 079200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\H956.IH H956

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1 mark benefits if, with respect to a benchmark plan 

2 described in paragraph (1), (2), (3), or (4), the pri3 vate group health plan covers all items and services 

4 offered by the benchmark plan, with out-of-pocket 

5 cost-sharing for such items and services that is not 

6 greater than under the benchmark plan. Nothing in 

7 this title shall be construed to forbid a private group 

8 health plan from offering additional items and serv9 ices not covered by such a benchmark plan or reduc10 ing out-of-pocket cost-sharing below levels applicable 

11 under such plan. 

12 SEC. 407. ENROLLMENT PROCESS FOR ELIGIBLE INDIVID13 UALS. 

14 (a) IN GENERAL.—The Secretary shall establish a 

15 process through which an eligible individual— 

16 (1) may make an annual election to enroll in 

17 any private group health insurance plan offered by 

18 a participating insurer that has been awarded a con19 tract under section 405(a) and serves the geographic 

20 area in which the individual resides, provided that 

21 such insurer’s geographic area of service and guar22 anteed issuance under this section is conterminous 

23 with, or includes all of, a geographic area served 

24 pursuant to an entity’s contact under section 8902 

25 of title 5, United States Code; and 


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1 (2) may make an annual election to change the 

2 election under this clause. 

3 (b) RULES.—In establishing the process under sub4 section (a), the Secretary shall use rules similar to the 

5 rules for enrollment, disenrollment, and termination of en6 rollment under the Federal employees health benefits pro7 gram under chapter 89 of title 5, United States Code, in8 cluding the application of the guaranteed issuance provi9 sion described in subsection (c). 

10 (c) GUARANTEED ISSUANCE.—An eligible individual 

11 who is eligible to enroll for health benefits coverage under 

12 a private group health insurance plan that has been 

13 awarded a contract under section 405(a) at a time during 

14 which elections are accepted under this title with respect 

15 to the plan shall not be denied enrollment based on any 

16 health status-related factor (described in section 

17 2702(a)(1) of the Public Health Service Act (42 U.S.C. 

18 300gg–1(a)(1))) or any other factor. 

19 SEC. 408. PLAN PREMIUMS. 

20 (a) IN GENERAL.—Each purchasing pool operator 

21 shall negotiate (or, in the case of a purchasing pool oper22 ated pursuant to section 403(b)(1)(B), shall otherwise de23 termine) a premium for each private group health insur24 ance plan offered by a participating insurer. 

25 (b) PERMITTED PROFIT MARGINS.— 


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1 (1) IN GENERAL.—Each premium negotiated 

2 under subsection (a) may not permit a profit margin 

3 that exceeds the applicable percentage (as defined in 

4 paragraph (2)). 

5 (2) APPLICABLE PERCENTAGE DEFINED.—In 

6 this subsection, the term ‘‘applicable percentage’’ 

7 means— 

8 (A) for the first 3 years that a purchasing 

9 pool is operated, 2 percent; 

10 (B) for any subsequent year, the percent11 age determined by the purchasing pool oper12 ator, which may not be— 

13 (i) less than the profit margin per14 mitted under the Federal employees health 

15 benefits program under chapter 89 of title 

16 5, United States Code; or 

17 (ii) more than a multiple, established 

18 by the Secretary for purposes of this sub19 section, of profit margins permitted under 

20 such program. 

21 SEC. 409. ENROLLEE PREMIUM SHARE. 

22 (a) IN GENERAL.—A participating insurer offering a 

23 private group health insurance plan that has been awarded 

24 a contract under section 405(a) in which the eligible indi25 vidual is enrolled may not deny, limit, or condition the 


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1 coverage (including out-of-pocket cost-sharing) or provi2 sion of health benefits coverage or vary or increase the 

3 enrollee premium share under the plan based on any 

4 health status-related factor described in section 

5 2702(a)(1) of the Public Health Service Act (42 U.S.C. 

6 300gg–1(a)(1)) or any other factor. 

7 (b) RISK-ADJUSTED PLAN PAYMENTS AND PRE8 MIUMS CHARGED TO ENROLLEES.— 

9 (1) IN GENERAL.—For each private group 

10 health insurance plan operated by a participating in11 surer, the pool operator shall adjust premium pay12 ments to compensate for the difference in health risk 

13 factors between plan enrollees and State residents as 

14 a whole (including residents who are not eligible in15 dividuals). Such adjustments shall employ risk-ad16 justment mechanisms promulgated by the Secretary. 

17 (2) ADDITIONAL ADJUSTMENTS.—The pool op18 erator shall also provide additional adjustments to 

19 premium payments that compensate participating in20 surers for the cost of keeping out-of-pocket cost21 sharing amounts consistent with section 

22 404(c)(9)(B). 

23 (3) ENROLLEE PREMIUM COSTS.—The adjust24 ments described in this subsection shall not affect 

25 enrollee premium shares, which shall be based on the 


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1 premium that would be charged for enrollees with 

2 health risk factors for State residents as a whole (as 

3 described in paragraph (1)), without taking into ac4 count cost-sharing adjustments under section 

5 404(c)(9)(B). 

6 (c) AMOUNT OF PREMIUM.—The amount of the en7 rollee premium share shall be equal to premium amounts 

8 (if any) above the applicable cap set pursuant to section 

9 404(c)(10), plus 100 percent of the remainder minus the 

10 applicable percentage (as defined in section 36A(b) of the 

11 Internal Revenue Code of 1986, as added by section 311). 

12 SEC. 410. PAYMENTS TO PURCHASING POOL OPERATORS 

13 AND PAYMENTS TO PARTICIPATING INSUR14 ERS. 

15 The Secretary shall establish procedures for making 

16 payments to each purchasing pool operator as follows: 

17 (1) RISK-ADJUSTMENT PAYMENT.—The Sec18 retary shall pay each purchasing pool operator for 

19 the net costs of risk-adjusted payments to plans 

20 under section 409(b), to the extent the sum of up21 ward adjustments exceeds the sum of downward ad22 justments for the pool operator. 

23 (2) STOP-LOSS AND REINSURANCE PAY24 MENTS.— 


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1 (A) IN GENERAL.—The Secretary shall pay 

2 each purchasing pool operator for the applicable 

3 percentage (as defined in subparagraph (B)) 

4 of— 

5 (i) the costs of any stop-loss coverage 

6 funded by the purchasing pool operator 

7 under section 405(d)(1); and 

8 (ii) any reinsurance provided in ac9 cordance with section 405(d)(2). 

10 (B) APPLICABLE PERCENTAGE DE11 FINED.—In this paragraph, the term ‘‘applica12 ble percentage’’ means— 

13 (i) for the first 3 years that a pur14 chasing pool is operated, 100 percent; 

15 (ii) for the next 2 years that such 

16 purchasing pool is operated, 50 percent; 

17 and 

18 (iii) for any subsequent year, 0 per19 cent. 

20 (3) PAYMENTS NECESSARY TO KEEP COST21 SHARING WITHIN APPLICABLE LIMITS.—The Sec22 retary shall make payments to purchasing pool oper23 ators to reimburse purchasing pool operators for the 

24 amount paid by such operators to participating in25 surers necessary to keep out-of-pocket cost-sharing 


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1 for individuals with limited ability to pay within ap2 plicable limits. 

3 (4) PAYMENT FOR ADMINISTRATIVE COSTS.— 

4 The Secretary shall make payments to each pur5 chasing pool operator for necessary pool administra6 tive expenses. 

7 (5) PAYMENTS TO OPM.—In the case of a pur8 chasing pool described in section 403(b)(1)(B), pay9 ments under this section shall be made to the Direc10 tor of the Office of Personnel Management. 

11 SEC. 411. STATE-BASED REINSURANCE PROGRAMS. 

12 (a) ESTABLISHMENT.—The Secretary shall establish 

13 standards for State-based reinsurance programs for eligi14 ble individuals to guard against adverse selection and to 

15 improve the functioning of the individual health insurance 

16 market. 

17 (b) GRANTS FOR STATEWIDE REINSURANCE PRO18 GRAMS.— 

19 (1) IN GENERAL.—The Secretary may award 

20 grants to States for the reasonable costs incurred in 

21 providing reinsurance under this section, consistent 

22 with standards developed by the Secretary, for cov23 erage offered in the individual health insurance mar24 ket and through State-based purchasing pools de25 scribed in section 403. 


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1 (2) LIMITATION.—Such grants may not pay for 

2 reinsurance extending beyond individuals in the top 

3 3 percent of the national health care spending dis4 tribution, as determined by the Secretary. 

5 (3) APPLICATION.—A State desiring a grant 

6 under this section shall submit an application to the 

7 Secretary in such manner, at such time, and con8 taining such information as the Secretary may re9 quire. 

10 (4) AUTHORIZATION OF APPROPRIATIONS.— 

11 There are authorized to be appropriated to the Sec12 retary such sums as may be necessary for making 

13 grants under this section. 

14 SEC. 412. COVERAGE UNDER INDIVIDUAL HEALTH INSUR15 ANCE. 

16 (a) IN GENERAL.—Eligible individuals may use cred17 its allowed under the Internal Revenue Code of 1986 (in18 cluding supplemental assistance provided under such 

19 Code) for the purchase of health insurance coverage to en20 roll in State-licensed individual health insurance meeting 

21 the conditions of participation described in subsection (b). 

22 (b) CONDITIONS OF PARTICIPATION.—The Secretary 

23 shall promulgate regulations that establish the terms and 

24 conditions under which an entity may participate in the 

25 program under this section and that include the following: 


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1 (1) PLAN MARKETING.—Conditions of partici2 pation for plans in the individual market (as devel3 oped by the Secretary) that— 

4 (A) ensure that consumers receive the con5 sumer information described in paragraph (2) 

6 before selecting a plan; and 

7 (B) detect, deter, and penalize marketing 

8 fraud by entities offering or purporting to offer 

9 individual insurance. 

10 (2) CONSUMER INFORMATION.—Requirements 

11 for each entity offering individual insurance to pro12 vide eligible individuals with information in a uni13 form and easily comprehensible manner that allows 

14 for informed comparisons by eligible individuals and 

15 that includes information regarding the health bene16 fits coverage, costs, provider networks, quality, the 

17 amount and proportion of health insurance premium 

18 payments that go directly to patient care, and the 

19 plan’s coverage rules (including amount, duration, 

20 and scope limits) and out-of-pocket cost-sharing 

21 (both inside and outside plan networks) for each es22 sential service recommended by the National Advi23 sory Commission on Expanded Access to Health 

24 Care and adopted by Congress under title III (which 

25 shall be prominently identified as an essential servVerDate Nov 24 2008 00:09 Feb 12, 2009 Jkt 079200 PO 00000 Frm 00063 Fmt 6652 Sfmt 6201 E:\BILLS\H956.IH H956

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1 ice, including by reference to the Commission rec2 ommendation denoting the service as essential). To 

3 the maximum extent feasible, such requirements 

4 shall specify that the content and presentation of the 

5 information shall be provided in the same manner as 

6 similar information is presented to enrollees in the 

7 Federal employees health benefits program under 

8 chapter 89 of title 5, United States Code. 

9 (3) OTHER CONDITIONS, INCLUDING THE

10 ELIMINATION OF BARRIERS TO AFFORDABLE COV11 ERAGE.— 

12 (A) IN GENERAL.—Requirements for each 

13 entity offering individual insurance to abide by 

14 conditions of participation that the Secretary 

15 believes are reasonable and appropriate meas16 ures to address barriers to affordable health in17 surance coverage. 

18 (B) SPECIFIC CONDITIONS.—The require19 ments developed by the Secretary under sub20 paragraph (A) shall include (but need not be 

21 limited to)— 

22 (i) guaranteed renewability, without 

23 premium increases based on changed indi24 vidual risk; and 

25 (ii) limits on risk rating. 


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1 (4) RULE OF CONSTRUCTION.—Nothing in this 

2 section shall be construed to authorize the Secretary 

3 to impose any requirements on individual insurance, 

4 except with respect to eligible individuals purchasing 

5 individual insurance using advance payment of a tax 

6 credit provided under section 36A of the Internal 

7 Revenue Code of 1986. 

8 SEC. 413. USE OF PREMIUM SUBSIDIES TO UNIFY FAMILY 

9 COVERAGE WITH MEMBERS ENROLLED IN 

10 MEDICAID AND SCHIP. 

11 Notwithstanding any other provision of law, the Sec12 retary shall establish procedures under which, in the case 

13 of a family with 1 or more members enrolled in with a 

14 managed care entity under the State medicaid program 

15 under title XIX of the Social Security Act or the State 

16 children’s health insurance program under title XXI of 

17 such Act (42 U.S.C. 1396 et seq., 1397aa et seq.) and 

18 1 or more members who are an eligible individual under 

19 this title, the family shall have the option to enroll all fam20 ily members with the managed care entity under either 

21 or both such State programs. The procedures established 

22 by the Secretary shall provide that premiums charged to 

23 eligible individuals for enrollment with such an entity shall 

24 be based on the capitated payments established for adults 

25 or children, excluding adults and children who are known 


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1 to be pregnant, blind, disabled, or (in the case of adults) 

2 elderly, under the applicable State program (except that, 

3 in the case of an eligible individual known to be pregnant, 

4 premiums shall reflect capitated payments established 

5 under such State program for individuals known to be 

6 pregnant) plus reasonable administrative costs. 

7 SEC. 414. COVERAGE THROUGH EMPLOYER-SPONSORED 

8 HEALTH INSURANCE. 

9 (a) IN GENERAL.—Eligible individuals may use cred10 its allowed under the Internal Revenue Code of 1986 and 

11 supplemental assistance to enroll in coverage offered by 

12 eligible employers. 

13 (b) ELIGIBLE EMPLOYERS.—For purposes of this 

14 section, the term ‘‘eligible employers’’ includes the fol15 lowing: 

16 (1) The current employer of the eligible indi17 vidual or a member of such individual’s family. 

18 (2) A former employer required to offer cov19 erage of the eligible individual under a COBRA con20 tinuation provision (as defined in section 9832(d)(1) 

21 of the Internal Revenue Code) or a State law requir22 ing continuation coverage. 

23 (3) A former employer voluntarily offering cov24 erage of the eligible individual. 


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1 (c) APPLICATION OF DISREGARD OF PREEXISTING

2 CONDITIONS EXCLUSIONS.—Notwithstanding any other 

3 provision of law, in the case of an individual who experi4 ences a qualifying event (as defined in section 603 of the 

5 Employee Retirement Income Security Act of 1974 (29 

6 U.S.C. 1163)) and who, not later than 6 months after 

7 such event, is determined to be an eligible individual under 

8 this title, the same rules with respect to preexisting condi9 tions as apply to a nonelecting TAA-eligible individual 

10 under section 605(b) of the Employee Retirement Income 

11 Security Act of 1974 (29 U.S.C. 1165(b)) shall apply with 

12 respect to such individual, regardless of which type of 

13 qualified coverage the individual purchases. 

14 (d) EXTENSION OF COBRA ELECTION PERIOD.— 

15 Notwithstanding any other provision of law, in the case 

16 of an individual who experiences a qualifying event (as de17 fined in section 603 of the Employee Retirement Income 

18 Security Act of 1974 (29 U.S.C. 1163)) and who, not later 

19 than 6 months after such event, is determined to be an 

20 eligible individual under this title, the same rules with re21 spect to the temporary extension of a COBRA election pe22 riod as apply to a nonelecting TAA-eligible individual 

23 under section 605(b) of the Employee Retirement Income 

24 Security Act of 1974 (29 U.S.C. 1165(b)) shall apply with 

25 respect to such individual. 


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1 (e) CURRENT EMPLOYER COVERAGE.—If an eligible 

2 individual uses the credits allowed under the Internal Rev3 enue Code of 1986 and supplemental assistance to pur4 chase coverage from an employer described in subsection 

5 (b), such credits and assistance shall apply as a percent6 age, not of the total premium amount for the eligible indi7 vidual, but of the employee’s or former employee’s share 

8 of premium payments. 

9 SEC. 415. PARTICIPATION BY SMALL EMPLOYERS. 

10 (a) IN GENERAL.—Notwithstanding any other provi11 sion of this title, the Secretary shall establish procedures 

12 under which, during annual open enrollment periods, a 

13 small employer shall have the option of purchasing group 

14 coverage for employees and dependents of employees, in15 cluding individuals who are not otherwise eligible individ16 uals under this title, through a purchasing pool established 

17 under section 403(a). 

18 (b) CONDITIONS OF PARTICIPATION.— 

19 (1) IN GENERAL.—Except as otherwise pro20 vided in this subsection, the same requirements that 

21 apply with respect to participating insurers covering 

22 eligible low-income individuals under section 403 

23 shall apply with respect to coverage offered by such 

24 insurers through a small employer. 

25 (2) RISK ADJUSTMENT.— 


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1 (A) INCREASED PAYMENTS.—If employees 

2 of a small employer who are not otherwise eligi3 ble individuals under this title enroll in a pri4 vate group health insurance plan under this 

5 title and have a collective risk level that exceeds 

6 the statewide average (as determined pursuant 

7 to risk adjustment mechanisms developed by 

8 the Secretary consistent with section 

9 409(b)(1)), the Secretary (through a pool oper10 ator) shall provide participating insurers with 

11 such small employer enrollment bonus payments 

12 as are necessary to compensate the insurers for 

13 such increased risk. The premium charged to 

14 enrollees under this section shall be the same 

15 premium that is the basis of premium charges 

16 to enrollees who are eligible low-income individ17 uals. 

18 (B) REDUCED PAYMENTS.—A pool oper19 ator shall reduce payments to any plan with a 

20 risk level that falls below the statewide average 

21 (as so determined). 

22 (3) ADMINISTRATIVE GUIDELINES.—The Sec23 retary shall develop guidelines for pool operators to 

24 use in serving small employers, which shall be mod25 eled after existing, successful, longstanding small 


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1 business purchasing cooperatives, and shall include 

2 administratively simple methods for small employers 

3 and licensed insurance brokers to participate in the 

4 program established under this title. 

5 (c) INFORMATION CAMPAIGN.— 

6 (1) IN GENERAL.—The pool operator for a 

7 State shall establish and conduct, directly or 

8 through 1 or more public or private entities (which 

9 may include licensed insurance brokers), a health in10 surance information program to inform small em11 ployers about health coverage for employees. 

12 (2) REQUIREMENTS.—The program established 

13 under paragraph (1) shall educate small employers 

14 with respect to matters that include (but are not 

15 limited to) the following: 

16 (A) The benefits of providing health insur17 ance to employees, including tax benefits to 

18 both the employer and employees, increased 

19 productivity, and decreased employee turnover. 

20 (B) The rights of small employers under 

21 Federal and State health insurance reform 

22 laws. 

23 (C) Options for purchasing coverage, in24 cluding (but not limited to) through the State’s 


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1 purchasing pool operated pursuant to section 

2 403. 

3 (d) GRANTS TO HELP STATE-BASED POOLS PRO4 MOTE SMALL BUSINESS COVERAGE.— 

5 (1) IN GENERAL.—The Secretary may award 

6 grants to a pool operator for the following: 

7 (A) The net costs of risk-adjusted pay8 ments under paragraph (b)(2), to the extent the 

9 sum of upward adjustments exceeds the sum of 

10 downward adjustments for the pool operator. 

11 (B) The reasonable cost of the information 

12 campaign under subsection (c). 

13 (C) The pool operator’s reasonable admin14 istrative costs to implement this section. 

15 (2) LIMITATION.—This section shall not apply 

16 to a State’s pool unless sufficient grant funds have 

17 been received under this subsection to implement 

18 this section on a fiscally sound basis and such re19 ceipt is certified by the pool operator. 

20 (3) APPLICATION.—A pool operator desiring a 

21 grant under this section shall submit an application 

22 to the Secretary in such manner, at such time, and 

23 containing such information as the Secretary may 

24 require. 


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1 (4) AUTHORIZATION OF APPROPRIATIONS.— 

2 There are authorized to be appropriated to the Sec3 retary such sums as may be necessary for making 

4 grants under this subsection. 

5 SEC. 416. REPORT. 

6 Not later than 1 year after the date of enactment 

7 of this Act, the Secretary shall submit to Congress a re8 port containing recommendations for such legislative and 

9 administrative changes as the Secretary determines are 

10 appropriate to permit affinity groups related for reasons 

11 other than a common employer to participate in pur12 chasing pools established under section 403. 

13 SEC. 417. AUTHORIZATION OF APPROPRIATIONS. 

14 (a) IN GENERAL.—There are authorized to be appro15 priated, such sums as may be necessary to carry out this 

16 title for fiscal year 2012 and each fiscal year thereafter. 

17 (b) RULE OF CONSTRUCTION.—Amounts appro18 priated in accordance with subsection (a) shall be in addi19 tion to other amounts appropriated directly under this 

20 title and nothing in subsection (a) shall be construed to 

21 relieve the Secretary of mandatory payment obligations re22 quired under this title. 


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1 TITLE V—NATIONAL ADVISORY 

2 COMMISSION ON EXPANDED 

3 ACCESS TO HEALTH CARE 

4 SEC. 501. NATIONAL ADVISORY COMMISSION ON EXPANDED 

5 ACCESS TO HEALTH CARE. 

6 (a) ESTABLISHMENT.—Not later than October 1, 

7 2009, the Secretary of Health and Human Services (re8 ferred to in this section as the ‘‘Secretary’’), shall estab9 lish an entity to be known as the National Advisory Com10 mission on Expanded Access to Health Care (referred to 

11 in this section as the ‘‘Commission’’). 

12 (b) APPOINTMENT OF MEMBERS.— 

13 (1) IN GENERAL.—Not later than 45 days after 

14 the date of enactment of this Act, the House and 

15 Senate majority and minority leaders shall each ap16 point 4 members of the Commission and the Sec17 retary shall appoint 1 member. 

18 (2) CRITERIA.—Members of the Commission 

19 shall include representatives of the following: 

20 (A) Consumers of health insurance. 

21 (B) Health care professionals. 

22 (C) State officials. 

23 (D) Economists. 

24 (E) Health care providers. 

25 (F) Experts on health insurance. 


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1 (G) Experts on expanding health care to 

2 individuals who are uninsured. 

3 (3) CHAIRPERSON.—At the first meeting of the 

4 Commission, the Commission shall select a Chair5 person from among its members. 

6 (c) MEETINGS.— 

7 (1) IN GENERAL.—After the initial meeting of 

8 the Commission which shall be called by the Sec9 retary, the Commission shall meet at the call of the 

10 Chairperson. 

11 (2) QUORUM.—A majority of the members of 

12 the Commission shall constitute a quorum, but a 

13 lesser number of members may hold hearings. 

14 (3) SUPERMAJORITY VOTING REQUIREMENT.— 

15 To approve a report required under paragraph (2) 

16 or (3) of subsection (e), at least 60 percent of the 

17 membership of the Commission must vote in favor of 

18 such a report. 

19 (d) DUTIES.—The Commission shall— 

20 (1) assess the effectiveness of programs de21 signed to expand health care coverage or make 

22 health care coverage affordable to the otherwise un23 insured individuals through identifying the accom24 plishments and needed improvements of each pro25 gram; 


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1 (2) make recommendations about benefits and 

2 cost-sharing to be included in health care coverage 

3 for various groups, taking into account— 

4 (A) the special health care needs of chil5 dren and individuals with disabilities; 

6 (B) the different ability of various popu7 lations to pay out-of-pocket costs for services; 

8 (C) incentives for efficiency and cost-con9 trol; and 

10 (D) preventative care, disease management 

11 services, and other factors; 

12 (3) recommend mechanisms to discourage indi13 viduals and employers from voluntarily opting out of 

14 health insurance coverage; 

15 (4) recommend mechanisms to expand health 

16 care coverage to uninsured individuals with incomes 

17 above 200 percent of the official income poverty line 

18 (as defined by the Office of Management and Budg19 et, and revised annually in accordance with section 

20 673(2) of the Omnibus Budget Reconciliation Act of 

21 1981) applicable to a family of the size involved; 

22 (5) recommend automatic enrollment and reten23 tion procedures and other measures to increase 

24 health care coverage among those eligible for assist25 ance; 


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1 (6) review the roles, responsibilities, and rela2 tionship between Federal and State agencies with re3 spect to health care coverage and recommend im4 provements; and 

5 (7) analyze the size, effectiveness, and efficiency 

6 of current tax and other subsidies for health care 

7 coverage and recommend improvements. 

8 (e) REPORTS.— 

9 (1) ANNUAL REPORT.—The Commission shall 

10 submit annual reports to the President and Con11 gress addressing the matters identified in subsection 

12 (d). 

13 (2) BIENNIAL REPORT.— 

14 (A) IN GENERAL.—The Commission shall 

15 submit biennial reports to the President and 

16 Congress, which shall contain— 

17 (i) recommendations concerning essen18 tial benefits and maximum out-of-pocket 

19 cost-sharing (for the general population 

20 and for individuals with limited ability to 

21 pay, which shall not exceed the out-of22 pocket cost-sharing permitted under sec23 tion 2103(e) of the Social Security Act (42 

24 U.S.C. 1397cc(e))) for the coverage op25 tions described in title IV; and 


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1 (ii) proposed legislative language to 

2 implement such recommendations. 

3 (B) CONGRESSIONAL ACTION.—The legis4 lative language proposed under subparagraph 

5 (A)(ii) shall proceed to immediate consideration 

6 on the floor of the House of Representatives 

7 and the Senate and shall be approved or re8 jected, without amendment, using procedures 

9 employed for recommendations of military base 

10 closing commissions. 

11 (3) COMMISSION REPORT.—No later than Janu12 ary 15, 2013, the Commission shall submit a report 

13 to the President and Congress, which shall include— 

14 (A) recommendations on policies to provide 

15 health care coverage to uninsured individuals 

16 with incomes above 200 percent of the official 

17 income poverty line (as defined by the Office of 

18 Management and Budget, and revised annually 

19 in accordance with section 673(2) of the Omni20 bus Budget Reconciliation Act of 1981) applica21 ble to a family of the size involved; 

22 (B) recommendations on changes to poli23 cies enacted under this Act; and 

24 (C) proposed legislative language to imple25 ment such recommendations. 


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1 (f) ADMINISTRATION.— 

2 (1) POWERS.— 

3 (A) HEARINGS.—The Commission may 

4 hold such hearings, sit and act at such times 

5 and places, take such testimony, and receive 

6 such evidence as the Commission considers ad7 visable to carry out this section. 

8 (B) INFORMATION FROM FEDERAL AGEN9 CIES.—The Commission may secure directly 

10 from any Federal department or agency such 

11 information as the Commission considers nec12 essary to carry out this section. Upon request 

13 of the Chairperson of the Commission, the head 

14 of such department or agency shall furnish such 

15 information to the Commission. 

16 (C) POSTAL SERVICES.—The Commission 

17 may use the United States mails in the same 

18 manner and under the same conditions as other 

19 departments and agencies of the Federal Gov20 ernment. 

21 (D) GIFTS.—The Commission may accept, 

22 use, and dispose of gifts or donations of serv23 ices or property. 

24 (2) COMPENSATION.—While serving on the 

25 business of the Commission (including travel time), 


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1 a member of the Commission shall be entitled to 

2 compensation at the per diem equivalent of the rate 

3 provided for level IV of the Executive Schedule 

4 under section 5315 of title 5, United States Code, 

5 and while so serving away from home and the mem6 ber’s regular place of business, a member may be al7 lowed travel expenses, as authorized by the chair8 person of the Commission. All members of the Com9 mission who are officers or employees of the United 

10 States shall serve without compensation in addition 

11 to that received for their services as officers or em12 ployees of the United States. 

13 (3) STAFF.— 

14 (A) IN GENERAL.—The Chairperson of the 

15 Commission may, without regard to the civil 

16 service laws and regulations, appoint and termi17 nate an executive director and such other addi18 tional personnel as may be necessary to enable 

19 the Commission to perform its duties. The em20 ployment of an executive director shall be sub21 ject to confirmation by the Commission. 

22 (B) STAFF COMPENSATION.—The Chair23 person of the Commission may fix the com24 pensation of the executive director and other 

25 personnel without regard to chapter 51 and 


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1 subchapter III of chapter 53 of title 5, United 

2 States Code, relating to classification of posi3 tions and General Schedule pay rates, except 

4 that the rate of pay for the executive director 

5 and other personnel may not exceed the rate 

6 payable for level V of the Executive Schedule 

7 under section 5316 of such title. 

8 (C) DETAIL OF GOVERNMENT EMPLOY9 EES.—Any Federal Government employee may 

10 be detailed to the Commission without reim11 bursement, and such detail shall be without 

12 interruption or loss of civil service status or 

13 privilege. 

14 (D) PROCUREMENT OF TEMPORARY AND

15 INTERMITTENT SERVICES.—The Chairperson of 

16 the Commission may procure temporary and 

17 intermittent services under section 3109(b) of 

18 title 5, United States Code, at rates for individ19 uals which do not exceed the daily equivalent of 

20 the annual rate of basic pay prescribed for level 

21 V of the Executive Schedule under section 5316 

22 of such title. 

23 (g) TERMINATION.—Except with respect to activities 

24 in connection with the ongoing biennial report required 

25 under subsection (e)(2), the Commission shall terminate 


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1 90 days after the date on which the Commission submits 

2 the report required under subsection (e)(3). 

3 (h) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated, such sums as may be 

5 necessary to carry out this section for fiscal year 2010 

6 and each fiscal year thereafter. 

7 SEC. 502. CONGRESSIONAL ACTION. 

8 (a) BILL INTRODUCTION.— 

9 (1) IN GENERAL.—Any legislative language in10 cluded in the report required under section 

11 501(e)(3) may be introduced as a bill by request in 

12 the following manner: 

13 (A) HOUSE OF REPRESENTATIVES.—In the 

14 House of Representatives, by the majority lead15 er and the minority leader not later than 10 

16 days after receipt of the legislative language. 

17 (B) SENATE.—In the Senate, by the ma18 jority leader and the minority leader not later 

19 than 10 days after receipt of the legislative lan20 guage. 

21 (2) ALTERNATIVE BY ADMINISTRATION.—The 

22 President may submit legislative language based on 

23 the recommendations of the Commission and such 

24 legislative language may be introduced in the man25 ner described in paragraph (1). 


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1 (b) COMMITTEE CONSIDERATION.— 

2 (1) IN GENERAL.—Any legislative language 

3 submitted pursuant to paragraph (1) or (2) of sub4 section (a) (in this section referred to as ‘‘imple5 menting legislation’’) shall be referred to the appro6 priate committees of the House of Representatives 

7 and the Senate. 

8 (2) REPORTING.— 

9 (A) COMMITTEE ACTION.—If, not later 

10 than 150 days after the date on which the im11 plementing legislation is referred to a com12 mittee under paragraph (1), the committee has 

13 reported the implementing legislation or has re14 ported an original bill whose subject is related 

15 to reforming the health care system, or to pro16 viding access to affordable health care coverage 

17 for Americans, the regular rules of the applica18 ble House of Congress shall apply to such legis19 lation. 

20 (B) DISCHARGE FROM COMMITTEES.— 

21 (i) SENATE.— 

22 (I) IN GENERAL.—If the imple23 menting legislation or an original bill 

24 described in subparagraph (A) has not 

25 been reported by a committee of the 


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1 Senate within 180 days after the date 

2 on which such legislation was referred 

3 to committee under paragraph (1), it 

4 shall be in order for any Senator to 

5 move to discharge the committee from 

6 further consideration of such imple7 menting legislation. 

8 (II) SEQUENTIAL REFERRALS.— 

9 Should a sequential referral of the im10 plementing legislation be made, the 

11 additional committee has 30 days for 

12 consideration of implementing legisla13 tion before the discharge motion de14 scribed in subclause (I) would be in 

15 order. 

16 (III) PROCEDURE.—The motion 

17 described in subclause (I) shall not be 

18 in order after the implementing legis19 lation has been placed on the cal20 endar. While the motion described in 

21 subclause (I) is pending, no other mo22 tions related to the motion described 

23 in subclause (I) shall be in order. De24 bate on a motion to discharge shall be 

25 limited to not more than 10 hours, 


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1 equally divided and controlled by the 

2 majority leader and the minority lead3 er, or their designees. An amendment 

4 to the motion shall not be in order, 

5 nor shall it be in order to move to re6 consider the vote by which the motion 

7 is agreed or disagreed to. 

8 (IV) EXCEPTION.—If imple9 menting language is submitted on a 

10 date later than May 1 of the second 

11 session of a Congress, the committee 

12 shall have 90 days to consider the im13 plementing legislation before a motion 

14 to discharge under this clause would 

15 be in order. 

16 (ii) HOUSE OF REPRESENTATIVES.— 

17 If the implementing legislation or an origi18 nal bill described in subparagraph (A) has 

19 not been reported out of a committee of 

20 the House of Representatives within 180 

21 days after the date on which such legisla22 tion was referred to committee under para23 graph (1), then on any day on which the 

24 call of the calendar for motions to dis25 charge committees is in order, any member 


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1 of the House of Representatives may move 

2 that the committee be discharged from 

3 consideration of the implementing legisla4 tion, and this motion shall be considered 

5 under the same terms and conditions, and 

6 if adopted the House of Representatives 

7 shall follow the procedure described in sub8 section (c)(1). 

9 (c) FLOOR CONSIDERATION.— 

10 (1) MOTION TO PROCEED.—If a motion to dis11 charge made pursuant to subsection (b)(2)(B)(i) or 

12 (b)(2)(B)(ii) is adopted, then, not earlier than 5 leg13 islative days after the date on which the motion to 

14 discharge is adopted, a motion may be made to pro15 ceed to the bill. 

16 (2) FAILURE OF MOTION.—If the motion to dis17 charge made pursuant to subsection (b)(2)(B)(i) or 

18 (b)(2)(B)(ii) fails, such motion may be made not 

19 more than 2 additional times, but in no case more 

20 frequently than within 30 days of the previous mo21 tion. Debate on each of such motions shall be limited 

22 to 5 hours, equally divided. 


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1 (3) APPLICABLE RULES.—Once the Senate is 

2 debating the implementing legislation the regular 

3 rules of the Senate shall apply. 

Æ 


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