II 

110TH CONGRESS 

1ST SESSION S. 334 

To provide affordable, guaranteed private health coverage that will make 

Americans healthier and can never be taken away. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 18, 2007 

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

to the Committee on Finance 

A BILL 

To provide affordable, guaranteed private health coverage 

that will make Americans healthier and can never be 

taken away. 

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 ‘‘Healthy Americans Act’’. 

6 (b) TABLE OF CONTENTS.— 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

Sec. 3. Definitions. 

TITLE I—HEALTHY AMERICANS PRIVATE INSURANCE PLANS 

Subtitle A—Guaranteed Private Coverage 


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Sec. 101. Guarantee of Healthy Americans Private Insurance coverage. 

Sec. 102. Individual responsibility to enroll in a Healthy Americans Private Insurance plan. 

Subtitle B—Standards for Healthy Americans Private Insurance Coverage 

Sec. 111. Healthy Americans Private Insurance plans. 

Sec. 112. Specific coverage requirements. 

Sec. 113. Updating Healthy Americans Private Insurance plan requirements. 

Subtitle C—Eligibility for Premium and Personal Responsibility Contribution 

Subsidies 

Sec. 121. Eligibility for premium subsidies. 

Sec. 122. Eligibility for personal responsibility contribution subsidies. 

Sec. 123. Definitions and special rules. 

Subtitle D—Wellness Programs 

Sec. 131. Requirements for wellness programs. 

TITLE II—HEALTHY START FOR CHILDREN 

Subtitle A—Benefits and Eligibility 

Sec. 201. General goal and authorization of appropriations for HAPI plan coverage for children. 

Sec. 202. Coordination of supplemental coverage under the Medicaid program 

to HAPI plan coverage for children. 

Subtitle B—Service Providers 

Sec. 211. Inclusion of providers under HAPI plans. 

Sec. 212. Use of, and grants for, school-based health centers. 

TITLE III—BETTER HEALTH FOR OLDER AND DISABLED 

AMERICANS 

Subtitle A—Assurance of Supplemental Medicaid Coverage 

Sec. 301. Coordination of supplemental coverage under the Medicaid program 

for elderly and disabled individuals. 

Subtitle B—Empowering Individuals and States To Improve Long-Term Care 

Choices 

Sec. 311. New, automatic Medicaid option for State choices for long-term care 

program. 

Sec. 312. Simpler and more affordable long-term care insurance coverage. 

TITLE IV—HEALTHIER MEDICARE 

Subtitle A—Authority To Adjust Amount of Part B Premium To Reward 

Positive Health Behavior 

Sec. 401. Authority to adjust amount of Medicare part B premium to reward 

positive health behavior. 

Subtitle B—Promoting Primary Care for Medicare Beneficiaries 


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Sec. 411. Primary care services management payment. 

Subtitle C—Chronic Care Disease Management 

Sec. 421. Chronic care disease management. 

Sec. 422. Chronic Care Education Centers. 

Subtitle D—Part D Improvements 

Sec. 431. Negotiating fair prices for Medicare prescription drugs. 

Sec. 432. Process for individuals entering the Medicare coverage gap to switch 

to a plan that provides coverage in the gap. 

Subtitle E—Improving Quality in Hospitals for All Patients 

Sec. 441. Improving quality in hospitals for all patients. 

Subtitle F—End-of-Life Care Improvements 

Sec. 451. Patient empowerment and following a patient’s health care wishes. 

Sec. 452. Permitting hospice beneficiaries to receive curative care. 

Sec. 453. Providing beneficiaries with information regarding end-of-life care 

clearinghouse. 

Sec. 454. Clearinghouse. 

Subtitle G—Additional Provisions 

Sec. 461. Additional cost information. 

Sec. 462. Reducing Medicare paperwork and regulatory burdens. 

TITLE V—STATE HEALTH HELP AGENCIES 

Sec. 501. Establishment. 

Sec. 502. Responsibilities and authorities. 

Sec. 503. Appropriations for transition to State Health Help Agencies. 

TITLE VI—SHARED RESPONSIBILITIES 

Subtitle A—Individual Responsibilities 

Sec. 601. Individual responsibility to ensure HAPI plan coverage. 

Subtitle B—Employer Responsibilities 

Sec. 611. Health care responsibility payments. 

Sec. 612. Distribution of individual responsibility payments to HHAs. 

Subtitle C—Insurer Responsibilities 

Sec. 621. Insurer responsibilities. 

Subtitle D—State Responsibilities 

Sec. 631. State responsibilities. 

Sec. 632. Empowering States to innovate through waivers. 

Subtitle E—Federal Fallback Guarantee Responsibility 

Sec. 641. Federal guarantee of access to coverage. 

Subtitle F—Federal Financing Responsibilities 


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Sec. 651. Appropriation for subsidy payments. 

Sec. 652. Recapture of Medicare and 90 percent of Medicaid Federal DSH 

funds to strengthen Medicare and ensure continued support for 

public health programs. 

Subtitle G—Tax Treatment of Health Care Coverage Under Healthy Americans Program; Termination of Coverage Under Other Governmental Programs and Transition Rules for Medicaid and SCHIP 

PART I—TAX TREATMENT OF HEALTH CARE COVERAGE UNDER HEALTHY

AMERICANS PROGRAM

Sec. 661. Limited employee income and payroll tax exclusion for employer 

shared responsibility payments, historic retiree health contributions, and transitional coverage contributions. 

Sec. 662. Exclusion for limited employer-provided health care fringe benefits. 

Sec. 663. Limited employer deduction for employer shared responsibility payments, historic retiree health contributions, and other health 

care expenses. 

Sec. 664. Health care standard deduction. 

Sec. 665. Modification of other tax incentives to complement Healthy Americans program. 

Sec. 666. Termination of certain employer incentives when replaced by lower 

health care costs. 

PART II—TERMINATION OF COVERAGE UNDER OTHER GOVERNMENTAL

PROGRAMS AND TRANSITION RULES FOR MEDICAID AND SCHIP 

Sec. 671. Group and individual health plan requirements not applicable to 

HAPI plans. 

Sec. 672. Federal Employees Health Benefits Plan. 

Sec. 673. Medicaid and SCHIP. 

TITLE VII—PURCHASING HEALTH SERVICES AND PRODUCTS 

THAT ARE MOST EFFECTIVE 

Subtitle A—Effective Health Services and Products 

Sec. 701. One time disallowance of deduction for advertising and promotional 

expenses for certain prescription pharmaceuticals. 

Sec. 702. Enhanced new drug and device approval. 

Sec. 703. Medical schools and finding what works in health care. 

Sec. 704. Finding affordable health care providers nearby. 

Subtitle B—Other Provisions to Improve Health Care Services and Quality 

Sec. 711. Individual medical records. 

Sec. 712. Bonus payment for medical malpractice reform. 

TITLE VIII—CONTAINING MEDICAL COSTS AND GETTING MORE 

VALUE FOR THE HEALTH CARE DOLLAR 

Sec. 801. Cost-containment results of the Healthy Americans Act. 

1 SEC. 2. FINDINGS. 

2 Congress makes the following findings: 


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1 (1) Americans want affordable, guaranteed pri2 vate health coverage that makes them healthier and 

3 can never be taken away. 

4 (2) American health care provides primarily 

5 ‘‘sick care’’ and does not do enough to prevent 

6 chronic illnesses like heart disease, stroke, and dia7 betes. This results in significantly higher health 

8 costs for all Americans. 

9 (3) Staying as healthy as possible often requires 

10 an individual to change behavior and assume more 

11 personal responsibility for his or her health. 

12 (4) Personal responsibility for one’s health 

13 should include purchasing one’s own private health 

14 care coverage. 

15 (5) To accompany this new focus on staying 

16 healthy and personal responsibility, our government 

17 must guarantee that all Americans receive private 

18 affordable health coverage that can never be taken 

19 away. 

20 (6) Financing this guarantee should be a 

21 shared responsibility between individuals, the Gov22 ernment, and employers. 

23 (7) The $2,200,000,000,000 spent annually on 

24 American health care must be spent more effectively 

25 in order to meet this guarantee. 


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1 (8) This guarantee must include easier access 

2 to understandable information about the quality, 

3 cost, and effectiveness of health care providers, prod4 ucts, and services. 

5 (9) The fact that businesses in the United 

6 States compete globally against businesses whose 

7 governments pay for health care, coupled with the 

8 aging of the American population and the explosive 

9 growth of preventable health problems, makes the 

10 status quo in American health care unacceptable. 

11 SEC. 3. DEFINITIONS. 

12 In this Act: 

13 (1) ADULT INDIVIDUAL.—The term ‘‘adult indi14 vidual’’ means an individual who— 

15 (A) is— 

16 (i) age 19 or older; 

17 (ii) a resident of a State; 

18 (iii)(I) a United States citizen; or 

19 (II) an alien with permanent resi20 dence; 

21 (iv) not a dependent child; and 

22 (v) not an alien unlawfully present in 

23 the United States; and 


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1 (B) in the case of an incarcerated indi2 vidual, such an individual who is incarcerated 

3 for less than 1 month. 

4 (2) ALIEN WITH PERMANENT RESIDENCE.— 

5 The term ‘‘alien with permanent residence’’ has the 

6 meaning given the term ‘‘qualified alien’’ in section 

7 431 of the Personal Responsibility and Work Oppor8 tunity Reconciliation Act of 1996 (8 U.S.C. 1641). 

9 (3) COVERED INDIVIDUAL.—The term ‘‘covered 

10 individual’’ means an individual who is enrolled in a 

11 HAPI plan. 

12 (4) DEPENDENT CHILD.—The term ‘‘dependent 

13 child’’ has the meaning given the term ‘‘qualifying 

14 child’’ in section 152(c) of the Internal Revenue 

15 Code of 1986. 

16 (5) HAPI PLAN.—The term ‘‘HAPI plan’’ 

17 means a Healthy Americans Private Insurance plan 

18 described under subtitle B of title I. 

19 (6) HHA.—The term ‘‘HHA’’ means the 

20 Health Help Agency of a State as described under 

21 title V. 

22 (7) HEALTH INSURANCE ISSUER.—The term 

23 ‘‘health insurance issuer’’ means an insurance com24 pany, insurance service, or insurance organization 

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1 fined in paragraph (7)) which is licensed to engage 

2 in the business of insurance in a State and which is 

3 subject to State law which regulates insurance (with4 in the meaning of section 514(b)(2) of the Employee 

5 Retirement Income Security Act of 1974). Such 

6 term does not include a group health plan. 

7 (8) HEALTH MAINTENANCE ORGANIZATION.— 

8 The term ‘‘health maintenance organization’’ 

9 means— 

10 (A) a federally qualified health mainte11 nance organization (as defined in section 

12 1301(a)), 

13 (B) an organization recognized under State 

14 law as a health maintenance organization, or 

15 (C) a similar organization regulated under 

16 State law for solvency in the same manner and 

17 to the same extent as such a health mainte18 nance organization. 

19 (9) PERSONAL RESPONSIBILITY CONTRIBU20 TION.—The term ‘‘personal responsibility contribu21 tion’’ means a payment made by a covered individual 

22 to a health care provider or a health insurance 

23 issuer with respect to the provision of health care 

24 services under a HAPI plan, not including any 

25 health insurance premium payment. 


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1 (10) QUALIFIED COLLECTIVE BARGAINING

2 AGREEMENT.— 

3 (A) IN GENERAL.—The term ‘‘qualified 

4 collective bargaining agreement’’ means an 

5 agreement between a qualified collective bar6 gaining employer and an employee organization 

7 that represents the employees of such employer 

8 that is in effect until the date that is the earlier 

9 of— 

10 (i) January 1 of the first year which 

11 is more than 7 years after the date of en12 actment of this Act, or 

13 (ii) the date the collective bargaining 

14 agreement expires. 

15 (B) QUALIFIED COLLECTIVE BARGAINING

16 EMPLOYER.—The term ‘‘qualified collective bar17 gaining employer’’ means an employer who pro18 vides health insurance to employees under the 

19 terms of a collective bargaining agreement 

20 which is entered into before the date of the en21 actment of this Act. 

22 (11) SECRETARY.—The term ‘‘Secretary’’ 

23 means the Secretary of Health and Human Services. 

24 (12) STATE.—The term ‘‘State’’ means each of 

25 the several States of the United States, the District 


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1 of Columbia, the Commonwealth of Puerto Rico, the 

2 Virgin Islands, American Samoa, Guam, the Com3 monwealth of the Northern Mariana Islands, and 

4 other territories of the United States. 

5 (13) STATE OF RESIDENCE.—The term ‘‘State 

6 of residence’’, with respect to an individual, means 

7 the State in which the individual has primary resi8 dence. 

9 TITLE I—HEALTHY AMERICANS 

10 PRIVATE INSURANCE PLANS 

11 Subtitle A—Guaranteed Private 

12 Coverage 

13 SEC. 101. GUARANTEE OF HEALTHY AMERICANS PRIVATE 

14 INSURANCE COVERAGE. 

15 Not later than the date that is 2 years after the date 

16 of enactment of this Act, each adult individual shall have 

17 the opportunity to purchase a Healthy Americans Private 

18 Insurance plan that meets the requirements of subtitle B, 

19 (referred to in this Act as ‘‘HAPI plan’’) for such indi20 vidual and the dependent children of such individual. 

21 SEC. 102. INDIVIDUAL RESPONSIBILITY TO ENROLL IN A 

22 HEALTHY AMERICANS PRIVATE INSURANCE 

23 PLAN. 

24 (a) INDIVIDUAL RESPONSIBILITY.— 


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1 (1) ADULT INDIVIDUALS.—Each adult indi2 vidual shall have the responsibility to enroll in a 

3 HAPI plan offered through the HHA of the adult 

4 individual’s State of residence, unless the adult indi5 vidual— 

6 (A) provides evidence of receipt of coverage 

7 under, or enrollment in a health plan offered 

8 through— 

9 (i) the Medicare program under title 

10 XVIII of the Social Security Act; 

11 (ii) a health insurance plan offered by 

12 the Department of Defense; 

13 (iii) an employee benefit plan through 

14 a former employer; 

15 (iv) a qualified collective bargaining 

16 agreement; 

17 (v) the Department of Veterans Af18 fairs; or 

19 (vi) the Indian Health Service; or 

20 (B) is opposed to health plan coverage for 

21 religious reasons, including an individual who 

22 declines health plan coverage due to a reliance 

23 on healing using spiritual means through prayer 

24 alone. 


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1 (2) DEPENDENT CHILDREN.—Each adult indi2 vidual shall have the responsibility to enroll each de3 pendent child of the adult individual in a HAPI plan 

4 offered through the HHA of the adult individual’s 

5 State of residence, unless the adult individual— 

6 (A) provides evidence that the dependent 

7 child is enrolled in a health plan offered 

8 through a program described in paragraph 

9 (1)(A); or 

10 (B) is described in paragraph (1)(B). 

11 (3) VERIFICATION OF RELIGIOUS EXCEPTION.— 

12 Each State shall develop guidelines for determining 

13 and verifying the individuals who qualify for the ex14 ception under paragraph (1)(B). 

15 (b) PENALTY FOR FAILURE TO PURCHASE COV16 ERAGE.— 

17 (1) PENALTY.— 

18 (A) IN GENERAL.—In the case of an indi19 vidual described in subparagraph (B), such in20 dividual shall be subject to a late enrollment 

21 penalty in an amount determined under sub22 paragraph (C). 

23 (B) INDIVIDUALS SUBJECT TO PENALTY.— 

24 An individual described in this subparagraph is 

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1 uous period of 63 days or longer, beginning on 

2 the applicable date (as defined in subparagraph 

3 (E)) and ending on the date of enrollment in a 

4 HAPI plan, during all of which the individual— 

5 (i) was not covered under a HAPI 

6 plan or a health plan offered through a 

7 program described in paragraph (1)(A) of 

8 section 102(a); and 

9 (ii) was not described in paragraph 

10 (1)(B) of such section. 

11 (C) AMOUNT OF PENALTY.— 

12 (i) IN GENERAL.—The amount deter13 mined under this subparagraph for an in14 dividual is an amount equal to the sum 

15 of— 

16 (I) the number of uncovered 

17 months multiplied by the weighted av18 erage of the monthly premium for 

19 HAPI plans of the same class of cov20 erage as the individual’s in the appli21 cable coverage area (determined with22 out regard to any subsidy under sec23 tion 121); and 

24 (II) 15 percent of the amount de25 termined under subclause (I). 


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1 (ii) UNCOVERED MONTH DEFINED.— 

2 For purposes of this subsection, the term 

3 ‘‘uncovered month’’ means, with respect to 

4 an individual, any month beginning on or 

5 after the applicable date (as defined in 

6 subparagraph (E)) unless the individual 

7 can demonstrate that the individual— 

8 (I) was covered under a HAPI 

9 plan or a health plan offered through 

10 a program described in paragraph 

11 (1)(A) of section 102(a) for any por12 tion of such month; or 

13 (II) was described in paragraph 

14 (1)(B) of such section for any portion 

15 of such month. 

16 A month shall not be treated as an uncov17 ered month if the individual has already 

18 paid a late enrollment penalty under this 

19 subsection for such month or if the indi20 vidual was incarcerated for the entire 

21 month. 

22 (D) PAYMENT.—Payment of any late en23 rollment penalty by an individual under this 

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1 dividual’s State of residence under procedures 

2 established by the State. 

3 (E) APPLICABLE DATE.—In this para4 graph, the term ‘‘applicable date’’ means the 

5 earlier of— 

6 (i) the day after the end of the State’s 

7 first open enrollment period for HAPI 

8 plans (during which all adult individuals 

9 are eligible to enroll); and 

10 (ii) the day after the end of the first 

11 enrollment period for a fallback HAPI plan 

12 in the State. 

13 (2) WAIVER.—An HHA of a State may reduce 

14 or waive the amount of any late enrollment penalty 

15 applicable to an individual under this subsection if 

16 payment of such penalty would constitute a hardship 

17 (determined under procedures established by the 

18 State). 

19 (3) ENFORCEMENT.—Each State shall deter20 mine appropriate mechanisms, which may not in21 clude revocation or ineligibility for coverage under a 

22 HAPI plan, to enforce the responsibility of each 

23 adult individual to purchase HAPI plan coverage for 

24 such individual and any dependent children of such 

25 individual under subsection (a). 


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1 (c) OTHER INSURANCE COVERAGE.—Nothing in this 

2 Act shall be construed to prohibit an individual from en3 rolling in a health insurance plan that is not a HAPI plan. 

4 Subtitle B—Standards for Healthy 

5 Americans Private Insurance 

6 Coverage 

7 SEC. 111. HEALTHY AMERICANS PRIVATE INSURANCE 

8 PLANS. 

9 (a) OPTIONS.—A State HHA— 

10 (1) shall require that at least 2 HAPI plans 

11 that comply with the requirements of subsection (b), 

12 be offered through the HHA to each individual in 

13 the State; 

14 (2) may require the offering of 1 or more HAPI 

15 plans that include coverage for benefits, items, or 

16 services required by the State in addition to the 

17 standardized benefits, items, or services required 

18 under subsection (b) for HAPI plans if— 

19 (A) such additional benefits, items, and 

20 services build upon the standardized benefits 

21 package; 

22 (B) a list of such additional benefits, 

23 items, or services, and the prices applicable to 

24 such additional benefits, items, and services, is 

25 displayed in a manner that is separate from the 


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1 description of the standardized benefits, items, 

2 or services required under the plan under this 

3 section (and consistent with the manner in 

4 which such items are displayed by medigap poli5 cies) and that enables a consumer to identify 

6 such additional benefits, items, and services and 

7 the cost associated with such; and 

8 (C) no premium subsidies are available 

9 under subtitle C for any portion of the pre10 miums for a HAPI plan that are attributable to 

11 such additional benefits, items, or services; and 

12 (3) may permit the offering of 1 or more actu13 arially equivalent HAPI plans through the HHA as 

14 provided for in subsection (c). 

15 (b) STANDARDIZED COVERAGE REQUIREMENTS FOR

16 HAPI PLANS.— 

17 (1) IN GENERAL.—Each HAPI plan offered 

18 through an HHA shall— 

19 (A) provide benefits for health care items 

20 and services that are actuarially equivalent or 

21 greater in value than the benefits offered as of 

22 January 1, 2007, under the Blue Cross/Blue 

23 Shield Standard Plan provided under the Fed24 eral Employees Health Benefit Program under 

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1 cluding coverage of an initial primary care as2 sessment and annual physical examinations; 

3 (B) provide benefits for wellness programs 

4 and incentives to promote the use of such pro5 grams; 

6 (C) provide coverage for catastrophic med7 ical events that result in out-of-pocket costs for 

8 an individual or family if lifetime limits are ex9 hausted; 

10 (D) designate a health care provider, such 

11 as a primary care physician, nurse practitioner, 

12 or other qualified health provider, to monitor 

13 the health and health care of a covered individ14 uals (such provider shall be known as the 

15 ‘‘health home’’ of the covered individual); 

16 (E) ensure that, as part of the first visit 

17 with a primary care physician or the health 

18 home of a covered individual, such provider and 

19 individual determine a care plan to maximize 

20 the health of the individual through wellness 

21 and prevention activities; 

22 (F) provide benefits for comprehensive dis23 ease prevention, early detection, disease man24 agement, and chronic condition management 


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1 that meets minimum standards developed by 

2 the Secretary; 

3 (G) provide for the application of personal 

4 responsibility contribution requirements with re5 spect to covered benefits in a manner that may 

6 be similar to the cost sharing requirements ap7 plied as of January 1, 2007, under the Blue 

8 Cross/Blue Shield Standard Plan provided 

9 under the Federal Employees Health Benefit 

10 Program under chapter 89 of title 5, United 

11 States Code, except that no contributions shall 

12 be required for— 

13 (i) preventive items or services; and 

14 (ii) early detection, disease manage15 ment, or chronic pain treatment items or 

16 services; and 

17 (H) comply with the requirements of sec18 tion 112. 

19 (2) DETERMINATION OF BENEFITS BY SEC20 RETARY.—Not later than 1 year after the date of 

21 enactment of this Act, the Secretary shall promul22 gate guidelines concerning the benefits, items, and 

23 services that are covered under paragraph (1). 

24 (3) COVERAGE FOR FAMILY PLANNING.— 


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1 (A) IN GENERAL.—Except as provided in 

2 subparagraph (B), a health insurance issuer 

3 shall make available supplemental coverage for 

4 abortion services that may be purchased in con5 junction with enrollment in a HAPI plan or an 

6 actuarially equivalent healthy American plan. 

7 (B) RELIGIOUS AND MORAL EXCEPTION.— 

8 Nothing in this paragraph shall be construed to 

9 require a health insurance issuer affiliated with 

10 a religious institution to provide the coverage 

11 described in subparagraph (A). 

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

13 subsection shall be construed to prohibit a HAPI 

14 plan from providing coverage for benefits, items, and 

15 services in addition to the coverage required under 

16 this subsection. No premium subsidies shall be avail17 able under subtitle C for any portion of the pre18 miums for a HAPI plan that are attributable to 

19 such additional benefits, items, or services. 

20 (c) ACTUARIALLY EQUIVALENT HEALTHY AMERICAN

21 PLANS.—Each actuarially equivalent healthy American 

22 plan offered through an HHA shall— 

23 (1) cover all treatments, items, services, and 

24 providers at least to the same extent as those cov25 ered under a HAPI plan that— 


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1 (A) shall include coverage for— 

2 (i) preventive items and services (in3 cluding well baby care and well child care 

4 and appropriate immunizations) and dis5 ease management services; 

6 (ii) inpatient and outpatient hospital 

7 services; 

8 (iii) physicians’ surgical and medical 

9 services; and 

10 (iv) laboratory and x-ray services; and 

11 (B) may include additional supplemental 

12 benefits to the extent approved by the State 

13 and provided for in advance in the plan con14 tract; and 

15 (2) ensure that no personal responsibility con16 tribution requirements are applied for prevention 

17 and chronic disease management benefits, items, or 

18 services. 

19 (d) PREMIUMS AND RATING REQUIREMENTS.— 

20 (1) CLASSES OF COVERAGE.—With respect to a 

21 HAPI plan, a health insurance issuer shall provide 

22 for the following classes of coverage: 

23 (A) Coverage of an individual. 


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1 (B) Coverage of a married couple or do2 mestic partnership (as determined by a State) 

3 without dependent children. 

4 (C) Coverage of an adult individual with 1 

5 or more dependent children. 

6 (D) Coverage of a married couple or do7 mestic partnership (as determined by a State) 

8 with 1 or more dependent children. 

9 (2) DETERMINATIONS OF PREMIUMS.—With re10 spect to each class of coverage described in para11 graph (1), a health insurance issuer shall determine 

12 the premium amount for a HAPI plan using ad13 justed community rating principals, as described in 

14 paragraphs (3) and (4) established by the State. 

15 States may permit premium variations based only on 

16 geography, tobacco use, and family size. A State 

17 may determine to have no variation. 

18 (3) REWARDS.—A State shall permit a health 

19 insurance issuer to provide premium discounts and 

20 other incentives to enrollees based on the participa21 tion of such enrollees in wellness, chronic disease 

22 management, and other programs designed to im23 prove the health of the enrollees. 

24 (4) LIMITATION.—A health insurance issuer 

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1 tus, or claims experience in determining premiums 

2 under this subsection. 

3 (e) APPLICATION OF STATE MANDATE LAWS.—State 

4 benefit mandate laws that would otherwise be applicable 

5 to HAPI plans shall be preempted. 

6 SEC. 112. SPECIFIC COVERAGE REQUIREMENTS. 

7 (a) IN GENERAL.—Each HAPI plan offered through 

8 a HHA shall— 

9 (1) provide for increased portability through 

10 limitations on the application of preexisting condi11 tion exclusions, in a manner similar to that provided 

12 for under section 2701 of the Public Health Service 

13 Act (42 U.S.C. 300gg), as such section existed on 

14 the day before the date of enactment of this Act, ex15 cept that the State shall develop procedures to en16 sure that preexisting exclusion limitations do not 

17 apply to new enrollees who had no applicable cred18 itable coverage immediately prior to the first enroll19 ment period; 

20 (2) provide for the guaranteed availability of 

21 coverage to prospective enrollees in a manner similar 

22 to that provided for under section 2711 of the Pub23 lic Health Service Act (42 U.S.C. 300gg–11), as 

24 such section existed on the day before the date of 

25 enactment of this Act; 


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1 (3) provide for the guaranteed renewability of 

2 coverage in a manner similar to that provided for 

3 under section 2712 of the Public Health Service Act 

4 (42 U.S.C. 300gg–12), as such section existed on 

5 the day before the date of enactment of this Act, ex6 cept that the prohibition on market reentry provided 

7 for under such section shall be deemed to be 2 years; 

8 (4) prohibit discrimination against individual 

9 enrollees and prospective enrollees based on health 

10 status in a manner similar to that provided for 

11 under section 2702 of the Public Health Service Act 

12 (42 U.S.C. 300gg–1), as such section existed on the 

13 day before the date of enactment of this Act; 

14 (5) provide coverage protections for enrollees 

15 who are mothers and newborns in a manner similar 

16 to that provided for under section 2704 of the Pub17 lic Health Service Act (42 U.S.C. 300gg–3), as such 

18 section existed on the day before the date of enact19 ment of this Act; 

20 (6) provide for full parity in the application of 

21 certain limits to mental health benefits in a manner 

22 similar to that provided for under section 2705 of 

23 the Public Health Service Act (42 U.S.C. 300gg–4), 

24 as such section existed on the day before the date 

25 of enactment of this Act; 


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1 (7) provide coverage for reconstructive surgery 

2 following a mastectomy in a manner similar to that 

3 provided for under section 2706 of the Public 

4 Health Service Act (42 U.S.C. 300gg–5), as such 

5 section existed on the day before the date of enact6 ment of this Act; and 

7 (8) prohibit discrimination on the basis of ge8 netic information, as provided for under subsection 

9 (b). 

10 (b) GENETIC NONDISCRIMINATION.— 

11 (1) PROHIBITION ON GENETIC INFORMATION AS

12 A CONDITION OF ELIGIBILITY.—A HAPI plan shall 

13 not establish rules for the eligibility (including con14 tinued eligibility) of any individual to enroll in cov15 erage under the plan based on genetic information 

16 (including information about a request for or receipt 

17 of genetic services by an individual or family mem18 ber of such individual). 

19 (2) PROHIBITION ON GENETIC INFORMATION IN

20 SETTING PREMIUM RATES.—A HAPI plan shall not 

21 adjust premium or personal responsibility contribu22 tion amounts for an individual on the basis of ge23 netic information concerning the individual or a fam24 ily member of the individual (including information 


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1 about a request for or receipt of genetic services by 

2 an individual or family member of such individual). 

3 (3) GENETIC TESTING.— 

4 (A) LIMITATION ON REQUESTING OR RE5 QUIRING GENETIC TESTING.—A HAPI plan 

6 shall not request or require an individual or a 

7 family member of such individual to undergo a 

8 genetic test. 

9 (B) RULE OF CONSTRUCTION.—Nothing in 

10 this subsection shall be construed to— 

11 (i) limit the authority of a health care 

12 professional who is providing health care 

13 services with respect to an individual to re14 quest that such individual or a family 

15 member of such individual undergo a ge16 netic test; 

17 (ii) limit the authority of a health care 

18 professional who is employed by or affili19 ated with a HAPI plan and who is pro20 viding health care services to an individual 

21 as part of a bona fide wellness program to 

22 notify such individual of the availability of 

23 a genetic test or to provide information to 

24 such individual regarding such genetic test; 

25 or 


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1 (iii) authorize or permit a health care 

2 professional to require that an individual 

3 undergo a genetic test. 

4 (c) GUIDELINES.—Not later than 1 year after the 

5 date of enactment of this Act, the Secretary shall develop 

6 guidelines for the application of the requirements of this 

7 section. 

8 SEC. 113. UPDATING HEALTHY AMERICANS PRIVATE IN9 SURANCE PLAN REQUIREMENTS. 

10 (a) IN GENERAL.—The Secretary shall establish the 

11 Healthy America Advisory Committee (referred to in this 

12 section as the ‘‘Advisory Committee’’) to provide annual 

13 recommendations to the Secretary and Congress con14 cerning modifications to the benefits, items, and services 

15 required under section 111(a)(1). 

16 (b) COMPOSITION.— 

17 (1) IN GENERAL.—The Advisory Committee 

18 shall be composed of 15 members to be appointed by 

19 the Comptroller General, of which— 

20 (A) at least 1 such member shall be a 

21 health economist; 

22 (B) at least 1 such member shall be an 

23 ethicist; 


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1 (C) at least 1 such member shall be a rep2 resentative of health care providers, including 

3 nurses and other nonphysician providers; 

4 (D) at least 1 such member shall be a rep5 resentative of health insurance issuers; 

6 (E) at least 1 such member shall be a 

7 health care consumer; 

8 (F) at least 1 such member shall be a rep9 resentative of the United States Preventive 

10 Services Task Force; and 

11 (G) at least 1 such member shall be an ac12 tuary. 

13 (2) GEOGRAPHIC BALANCE.—The Comptroller 

14 General shall ensure the geographic diversity of the 

15 members appointed under paragraph (1). 

16 (c) TERMS, VACANCIES.—Members of the Advisory 

17 Committee shall be appointed for a term of 3 years and 

18 may be reappointed for 1 additional term. In appointing 

19 members, the Comptroller General shall stagger the terms 

20 of the initial members so that the terms of one-third of 

21 the members expire each year. Vacancies in the member22 ship of the Advisory Committee shall not affect the Com23 mittee’s ability to carry out its functions. The Comptroller 

24 General shall appoint an individual to fill the remaining 


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1 term of a vacant member within 2 months of being noti2 fied of such vacancy. 

3 (d) COMPENSATION AND EXPENSES.—Each member 

4 of the Advisory Committee who is not otherwise employed 

5 by the United States Government shall receive compensa6 tion at a rate equal to the daily rate prescribed for GS7 18 under the General Schedule under section 5332 of title 

8 5, United States Code, for each day, including travel time, 

9 such member is engaged in the actual performance of du10 ties as a member of the Committee. A member of the Advi11 sory Committee who is an officer or employee of the 

12 United States Government shall serve without additional 

13 compensation. All members of the Advisory Committee 

14 shall be reimbursed for travel, subsistence, and other nec15 essary expenses incurred by them in the performance of 

16 their duties. 

17 (e) ACTION BY SECRETARY.—Not later than Decem18 ber 31 of the second full calendar year following the date 

19 of enactment of this Act, and each December 31 there20 after, the Advisory Committee shall provide to Congress 

21 and the Secretary a report that— 

22 (1) describes any recommendations for modi23 fications to the benefits, items, and services that are 

24 required to be covered under a HAPI plan; and 


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1 (2) includes any recommendations to modify 

2 HAPI plans to improve the quality of life for United 

3 States citizens and to ensure that benefits in such 

4 plans are medically- and cost-effective. 

5 (f) APPLICATION OF FACA.—The Federal Advisory 

6 Committee Act (5 U.S.C. App.) shall apply to the Advisory 

7 Committee, except that section 14 of such Act shall not 

8 apply. 

9 Subtitle C—Eligibility for Premium 

10 and Personal Responsibility 

11 Contribution Subsidies 

12 SEC. 121. ELIGIBILITY FOR PREMIUM SUBSIDIES. 

13 (a) INDIVIDUALS AND FAMILIES AT OR BELOW THE

14 POVERTY LINE.—For any calendar year, in the case of 

15 a covered individual who is determined to have a modified 

16 adjusted gross income that is at or below 100 percent of 

17 the poverty line, as applicable to a family of the size in18 volved, the covered individual is entitled under this section 

19 to an income-related premium subsidy equal to the basic 

20 premium subsidy amount. 

21 (b) PARTIAL SUBSIDY FOR OTHER INDIVIDUALS AND

22 FAMILIES.— 

23 (1) IN GENERAL.—For any calendar year, in 

24 the case of a covered individual who is determined 

25 to have a modified adjusted gross income that is 


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1 greater than 100 percent of the poverty line, as ap2 plicable to a family of the size involved, but below 

3 the applicable percentage of the poverty line, as ap4 plicable to a family of the size involved, the covered 

5 individual is entitled under this section to an in6 come-related premium subsidy equal to the basic 

7 premium subsidy amount reduced by the amount de8 termined under paragraph (2). 

9 (2) AMOUNT OF REDUCTION.—The amount of 

10 the reduction determined under this paragraph is 

11 the amount that bears the same ratio to the basic 

12 premium subsidy amount as— 

13 (A) the excess of— 

14 (i) such individual’s modified adjusted 

15 gross income, over 

16 (ii) an amount equal to 100 percent of 

17 the poverty line as applicable to a family of 

18 the size involved, bears to 

19 (B) the excess of— 

20 (i) an amount equal to the applicable 

21 percentage of the poverty line as applicable 

22 to a family of the size involved, over 

23 (ii) an amount equal to 100 percent of 

24 the poverty line as applicable to a family of 

25 the size involved. 


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1 (3) APPLICABLE PERCENTAGE.—For purposes 

2 of this subsection, the applicable percentage is 400 

3 percent. 

4 (c) BASIC PREMIUM SUBSIDY AMOUNT.—For pur5 poses of this section, the term ‘‘basic premium subsidy 

6 amount’’ means, with respect to any individual, the lesser 

7 of— 

8 (1) the annual premium for the HAPI plan 

9 under which the individual is a covered individual; or 

10 (2) the weighted average of the premium for 

11 HAPI plans of the same class of coverage (as de12 scribed in section 111(d)(1)) as the individual’s in 

13 the applicable coverage area. 

14 (d) CHANGE IN STATUS NOTIFICATION.— 

15 (1) IN GENERAL.—If an individual’s modified 

16 adjusted income changes such that the individual be17 comes eligible or ineligible for a subsidy under this 

18 section, the individual shall report that change to 

19 the HHA of the individual’s State of residence not 

20 more than 60 days after the change takes effect. If 

21 an individual reports the change within 60 days 

22 under the preceding sentence, the individual’s HAPI 

23 plan coverage shall be deemed credible coverage for 

24 the purposes of maintaining coverage for preexisting 

25 conditions. 


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1 (2) ADJUSTMENT.—The HHA shall adjust the 

2 premium subsidy of such individual to take effect on 

3 the first month after the date of the notification 

4 under paragraph (1) for which the next premium 

5 payment would be due from the individual. 

6 (e) CATASTROPHIC EVENT.—A State may develop 

7 mechanisms to ensure that covered individuals do not have 

8 a break in coverage due to a catastrophic financial event. 

9 SEC. 122. ELIGIBILITY FOR PERSONAL RESPONSIBILITY 

10 CONTRIBUTION SUBSIDIES. 

11 (a) FULL SUBSIDY.—To meet the eligibility require12 ments under subtitle B for an HHA, for any taxable year, 

13 in the case of a covered individual who is determined to 

14 have a modified adjusted gross income that is below 100 

15 percent of the poverty line as applicable to a family of 

16 the size involved, an HHA shall provide to such an indi17 vidual a subsidy equal to the full amount of any personal 

18 responsibility contributions applicable to such individual. 

19 (b) PARTIAL SUBSIDY.—To meet the eligibility re20 quirements under subtitle B for an HHA, for any taxable 

21 year, in the case of a covered individual who is determined 

22 to have a modified adjusted gross income that is at or 

23 above 100 percent of the poverty line as applicable to a 

24 family of the size involved, an HHA may provide to such 

25 an individual a subsidy equal to the part of the amount 


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1 of any personal responsibility contributions applicable to 

2 such individual. 

3 SEC. 123. DEFINITIONS AND SPECIAL RULES. 

4 (a) DETERMINATION OF MODIFIED ADJUSTED

5 GROSS INCOME.— 

6 (1) IN GENERAL.—In this subtitle, the term 

7 ‘‘modified adjusted gross income’’ means adjusted 

8 gross income (as defined in section 62 of the Inter9 nal Revenue Code of 1986)— 

10 (A) determined without regard to sections 

11 86, 135, 137, 199, 221, 222, 911, 931, and 

12 933 of such Code; and 

13 (B) increased by— 

14 (i) the amount of interest received or 

15 accrued during the taxable year which is 

16 exempt from tax under such Code; and 

17 (ii) the amount of any social security 

18 benefits (as defined in section 86(d) of 

19 such Code) received or accrued during the 

20 taxable year. 

21 (2) TAXABLE YEAR TO BE USED TO DETER22 MINE MODIFIED ADJUSTED GROSS INCOME.—In ap23 plying this subtitle to determine an individual’s an24 nual premiums, the covered individual’s modified ad25 justed gross income shall be such income determined 


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1 using the individual’s most recent income tax return 

2 or other information furnished to the Secretary by 

3 such individual, as the Secretary may require. 

4 (b) POVERTY LINE.—In this subtitle, the term ‘‘pov5 erty line’’ has the meaning given such term in section 

6 673(2) of the Community Health Services Block Grant 

7 Act (42 U.S.C. 9902(2)), including any revision required 

8 by such section. 

9 (c) OTHER PROCEDURES TO DETERMINE SUB10 SIDIES.—The Secretary shall promulgate regulations to be 

11 used by HHAs to calculate the premium subsidies under 

12 section 121 and personal responsibility subsidies under 

13 section 122 for individuals whose modified adjusted gross 

14 income described in subsection (a)(2) is significantly lower 

15 than the modified adjusted gross income of the year in16 volved. 

17 (d) SPECIAL RULE FOR UNLAWFULLY PRESENT

18 ALIENS.—A health insurance issuer shall remit to the 

19 Federal Government any funding, including any subsidy 

20 payments, received by such issuer from the Federal Gov21 ernment on behalf of any adult alien who is unlawfully 

22 present in the United States. 

23 (e) SPECIAL RULE FOR ALIENS.—The Secretary of 

24 Homeland Security may not extend or renew an alien’s 


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1 eligibility for status in the United States or adjust the sta2 tus of an alien in the United States if the alien owes— 

3 (1) a premium payment for a HAPI plan that 

4 is past due; or 

5 (2) a penalty incurred for failing to pay such a 

6 premium. 

7 (f) NO DISCHARGE IN BANKRUPTCY.—In the case of 

8 any bankruptcy filed by or on behalf of any person after 

9 the date that is 2 years after the date of enactment of 

10 this Act, under title 11, United States Code, any penalty 

11 imposed with respect to such person for failure to pay a 

12 HAPI plan premium shall not be subject to discharge 

13 under such title. 

14 Subtitle D—Wellness Programs 

15 SEC. 131. REQUIREMENTS FOR WELLNESS PROGRAMS. 

16 (a) DEFINITION.—In this Act, the term ‘‘wellness 

17 program’’ means a program that consists of a combination 

18 of activities that are designed to increase awareness, as19 sess risks, educate, and promote voluntary behavior 

20 change to improve the health of an individual, modify his 

21 or her consumer health behavior, enhance his or her per22 sonal well-being and productivity, and prevent illness and 

23 injury. 

24 (b) DISCOUNTS.— 


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1 (1) ELIGIBILITY.—With respect to a HAPI 

2 plan that is offered in a State that permits premium 

3 discounts for enrollees who participate in a wellness 

4 program, to be eligible to receive such a discount, 

5 the administrator of the wellness program, on behalf 

6 of the enrollee, shall certify in writing to the plan 

7 that— 

8 (A)(i) the enrollee is participating in an 

9 approved wellness program; or 

10 (ii) the dependent child of the enrollee is 

11 participating in an approved wellness program; 

12 and 

13 (B) the wellness program meets the re14 quirements of this subsection. 

15 (2) REQUIREMENTS.—A wellness program 

16 meets the requirements of this paragraph if such 

17 program— 

18 (A) is reasonably designed (as determined 

19 by the HAPI plan) to promote good health and 

20 prevent disease for program participants; 

21 (B) has been approved by the HAPI plan 

22 for purposes of applying participation discounts; 

23 (C) is offered to all enrollees in a HAPI 

24 plan regardless of health status; 


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1 (D) permits any enrollee for whom it is un2 reasonably difficult to meet the initial program 

3 standard for participation due to a medical con4 dition (or for whom it is medically inadvisable 

5 to attempt) an opportunity to meet a reason6 able alternative participation standard— 

7 (i)(I) that is developed prior to enroll8 ment of the enrollee; or 

9 (II) that is developed in consultation 

10 with the enrollee after enrollment of the 

11 enrollee, after a determination has been 

12 made that the enrollee cannot safely meet 

13 the program participation standard; and 

14 (ii) the availability of which is dis15 closed in the original documents relating to 

16 participation in the program; 

17 (E) applies procedures for determining 

18 whether an enrollee is participating in a mean19 ingful manner in the program, including proce20 dures to determine if such participation is re21 sulting in lifestyle changes that are indicative of 

22 an improved health outcome or outcomes; and 

23 (F) meets any other requirements imposed 

24 by the HAPI plan. 


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1 (3) RELATION TO HEALTH STATUS.—Participa2 tion in a wellness program may not be used by a 

3 HAPI plan to make rate or discount determinations 

4 with respect to the health status of an enrollee. 

5 (4) AVAILABILITY OF DISCOUNTS.— 

6 (A) OFFERING OF ENROLLMENT.—A 

7 HAPI plan shall provide enrollees with the op8 portunity to participate in a wellness program 

9 (for purposes of qualifying for premium dis10 counts) at least once each year. 

11 (B) DETERMINATIONS.—Determinations 

12 with respect to the successful participation by 

13 an enrollee in a wellness program for purposes 

14 of qualifying for discounts shall be made by the 

15 HAPI plan based on a retrospective review of 

16 the scope of activities of the enrollee under the 

17 program. The HAPI plan may require a min18 imum level of successful participation in such a 

19 program prior to applying any premium dis20 count. 

21 (C) PARTICIPATION IN MULTIPLE PRO22 GRAMS.—An enrollee may participate in mul23 tiple wellness programs to reach the maximum 

24 premium discount permitted by the HAPI plan 

25 under applicable State law. 


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1 (5) PERSONAL RESPONSIBILITY CONTRIBUTION

2 DISCOUNT.—A HAPI plan may elect to provide dis3 counts in the amount of the personal responsibility 

4 contribution that is required of an enrollee if the en5 rollee participates in an approved wellness program. 

6 (c) EMPLOYER INCENTIVE FOR WELLNESS PRO7 GRAMS.—For provisions relating to employers deducting 

8 the costs of offering wellness programs or worksite health 

9 centers see section 162(l) of the Internal Revenue Code 

10 of 1986. 

11 TITLE II—HEALTHY START FOR 

12 CHILDREN 

13 Subtitle A—Benefits and Eligibility 

14 SEC. 201. GENERAL GOAL AND AUTHORIZATION OF APPRO15 PRIATIONS FOR HAPI PLAN COVERAGE FOR 

16 CHILDREN. 

17 (a) GENERAL GOAL.—It is the general goal of this 

18 Act to provide essential, good quality, affordable, and pre19 vention-oriented health care coverage for all children in 

20 the United States. 

21 (b) AUTHORIZATION OF APPROPRIATIONS.—There is 

22 authorized to be appropriated, such sums as may be nec23 essary for each fiscal year to enable the Secretary to pro24 vide assistance to States to enable such States to ensure 

25 that each child who is a member of a family with a modiVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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1 fied adjusted gross income that is below 300 percent of 

2 the poverty line as applicable to a family of the size in3 volved, who is not otherwise eligible for coverage as a de4 pendent under a HAPI plan maintained by his or her par5 ents, is covered under a HAPI plan provided through the 

6 State HHA. 

7 (c) POLICIES AND PROCEDURES.—The Secretary 

8 shall develop policies and procedures to be applied by the 

9 States to identify children described in subsection (a) and 

10 to provide such children with coverage under a HAPI plan. 

11 States shall determine, in consultation with health insur12 ance issuers, a separate class of coverage to assure afford13 able child coverage. 

14 (d) DEFINITION.—In this title, the term ‘‘child’’ 

15 means an individual who is under the age of 19 years or, 

16 in the case of an individual in foster care, under the age 

17 of 21 years. 

18 SEC. 202. COORDINATION OF SUPPLEMENTAL COVERAGE 

19 UNDER THE MEDICAID PROGRAM TO HAPI 

20 PLAN COVERAGE FOR CHILDREN. 

21 (a) ASSURANCE OF SUPPLEMENTAL COVERAGE.— 

22 The Secretary shall provide guidance to States and health 

23 insurance issuers that ensures that, after December 31 of 

24 the last calendar year ending before the first calendar year 

25 in which coverage under a HAPI plan begins, any child 


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1 covered under a HAPI plan provided through the State 

2 HHA continues to receive medical assistance under State 

3 Medicaid plans in a manner that— 

4 (1) is provided in coordination with, and as a 

5 supplement to, the coverage provided the child under 

6 the HAPI plan in which the child is enrolled; 

7 (2) does not supplant the child’s coverage under 

8 a HAPI plan; and 

9 (3) ensures that the child receives any items or 

10 services that are not available under the HAPI plan 

11 in which they are enrolled but that the child would 

12 have received under the Medicaid program of the 

13 State in which the child resides if the Healthy Amer14 icans Act had not been enacted, including items and 

15 services described in section 1905(a)(4)(B) (relating 

16 to early and periodic screening, diagnostic, and 

17 treatment services defined in section 1905(r) and 

18 provided in accordance with the requirements of sec19 tion 1902(a)(43)). 

20 (b) DEFINITION.—In this section, the term ‘‘child’’, 

21 in addition to the meaning given that term under section 

22 201(d), includes any individual who would be considered 

23 a child under the Medicaid program of the State in which 

24 the individual resides. 


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1 Subtitle B—Service Providers 

2 SEC. 211. INCLUSION OF PROVIDERS UNDER HAPI PLANS. 

3 (a) IN GENERAL.—To ensure that children have ac4 cess to health care in their communities, and that such 

5 care is provided to such children for no cost or on a reim6 bursable basis, a HAPI plan shall ensure that health care 

7 items and services may be obtained by such children from, 

8 at a minimum, the providers described in subsection (b) 

9 if available in the area involved. 

10 (b) PROVIDERS DESCRIBED.—The providers de11 scribed in this subsection include the following: 

12 (1) A school-based health center (in accordance 

13 with section 212). 

14 (2) A health center funded under section 330 of 

15 the Public Health Service Act (42 U.S.C. 254b). 

16 (3) A federally qualified health center. 

17 (4) A rural health clinic under title XVIII of 

18 the Social Security Act (42 U.S.C. 1395 et seq.). 

19 (5) An Indian health service facility. 

20 SEC. 212. USE OF, AND GRANTS FOR, SCHOOL-BASED 

21 HEALTH CENTERS. 

22 (a) DEFINITION.—In this section, the term ‘‘school23 based health center’’ means a health center that— 

24 (1) is located within an elementary or secondary 

25 school facility; 


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1 (2) is operated in collaboration with the school 

2 in which such center is located; 

3 (3) is administered by a community-based orga4 nization including a hospital, public health depart5 ment, community health center, or nonprofit health 

6 care agency; 

7 (4) at a minimum, provides to school-aged chil8 dren— 

9 (A) primary health care services, including 

10 comprehensive health assessments, and diag11 nosis and treatment of minor, acute, and chron12 ic medical conditions and Healthy Start bene13 fits; 

14 (B) mental health services, including crisis 

15 intervention, counseling, and emergency psy16 chiatric care at the school or by referral; 

17 (C) the availability of services at the school 

18 when the school is open and 24-hour coverage 

19 through an on-call system with other providers 

20 to ensure access when the school or health cen21 ter is closed; 

22 (D) services through the use of a qualified 

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1 ant, a mental health professional, a physician, 

2 and a health assistant; and 

3 (E) by not later than January 1, 2010, an 

4 electronic medical record relating to the indi5 vidual; and 

6 (5) may provide optional preventive dental serv7 ices, consistent with State licensure law, through the 

8 use of dental hygienists or dental assistants that 

9 provide preventive services such as basic oral exams, 

10 cleanings, and sealants. 

11 (b) ACCESS TO SCHOOL-BASED HEALTH CEN12 TERS.— 

13 (1) IN GENERAL.—A school-based health center 

14 may provide services to students in more than 1 

15 school if the school district or other supervising 

16 State entity determined that capacity and geo17 graphic location make such provision of services ap18 propriate. 

19 (2) ENROLLMENT.—Upon the enrollment of a 

20 student in a school with a school-based health cen21 ter, the center will provide the student with the op22 portunity to enroll, after parental consent, to receive 

23 health care from the center. 

24 (3) REIMBURSEMENT FOR SERVICES.— 


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1 (A) IN GENERAL.—A school-based health 

2 center may seek reimbursement from a third 

3 party payer if available, including a HAPI plan, 

4 if a child receives health care items or services 

5 through the center. 

6 (B) USE OF FUNDS.—Amounts received 

7 from a third party payer under subparagraph 

8 (A) shall be allocated to the school-based health 

9 center that provided the care for which the re10 imbursement was provided for use by that cen11 ter for providing additional health care items 

12 and services. 

13 (c) DEVELOPMENTAL GRANTS.— 

14 (1) IN GENERAL.—The Secretary shall award 

15 grants to local school districts and communities for 

16 the establishment and operation of school-based 

17 health centers. 

18 (2) ELIGIBILITY.—To be eligible for a grant 

19 under paragraph (1), a local school district or local 

20 community shall submit to the Secretary an applica21 tion at such time, in such manner, and containing 

22 such information as the Secretary may require. 

23 (3) SELECTION CRITERIA.—In awarding grants 

24 under this subsection, the Secretary shall give pri25 ority to— 


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1 (A) an applicant that will use amounts 

2 under the grant to establish a school-based 

3 health center in a medically underserved area, 

4 or an area for which there are extended dis5 tances between the school involved and appro6 priate providers of care for school-aged children 

7 in the geographic area involved; 

8 (B) an applicant that will use amounts 

9 under the grant to establish a school-based 

10 health center in a school that serves students 

11 with the highest incidence of unmet medical 

12 and psycho-social needs; and 

13 (C) an applicant that can demonstrate that 

14 State, local, or community partners, or any 

15 combination of such entities, have provided at 

16 least 50 percent of the funding for the school17 based health center involved to ensure the ongo18 ing operation of the center. 

19 (4) USE OF FUNDS.—A grantee shall use 

20 amounts received under a grant under this sub21 section to establish and operate a school-based 

22 health center. Not less than 50 percent of the 

23 amounts received under the grant shall be used for 

24 the ongoing operations of the center. 


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1 (d) COVERAGE BY FEDERAL TORT CLAIMS ACT.— 

2 In providing health care items and services to students 

3 through a school-based health care center, a health care 

4 provider shall be deemed to be an employee of the govern5 ment for purposes of the application of chapter 171 of 

6 title 28, United States Code (the Federal Tort Claims Act) 

7 if such provider was acting within the scope of his or her 

8 license. 

9 (e) AUTHORIZATION OF APPROPRIATIONS.—There is 

10 authorized to be appropriated, such sums as may be nec11 essary for each fiscal year to carry out this section. 

12 TITLE III—BETTER HEALTH FOR 

13 OLDER AND DISABLED AMER14 ICANS 

15 Subtitle A—Assurance of 

16 Supplemental Medicaid Coverage 

17 SEC. 301. COORDINATION OF SUPPLEMENTAL COVERAGE 

18 UNDER THE MEDICAID PROGRAM FOR EL19 DERLY AND DISABLED INDIVIDUALS. 

20 (a) COORDINATION OF CARE.—The Secretary shall 

21 provide guidance to States and insurers that— 

22 (1) takes into account the special health care 

23 needs of elderly and disabled individuals who are eli24 gible for medical assistance under State Medicaid 

25 programs, particularly with respect to institutionalVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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1 ized care or home and community-based services; 

2 and 

3 (2) ensures that, after December 31 of the last 

4 calendar year ending before the first calendar year 

5 in which coverage under a HAPI plan begins, each 

6 such individual continues to receive medical assist7 ance under State Medicaid programs in a manner 

8 that— 

9 (A) is provided in coordination with, and 

10 as a supplement to, the coverage provided the 

11 individual under the HAPI plans in which the 

12 individual is enrolled; 

13 (B) does not supplant the individual’s cov14 erage under a HAPI plan; and 

15 (C) ensures that the individual receives 

16 any items or services that are not available 

17 under the HAPI plan in which the individual is 

18 enrolled but that the individual would have re19 ceived under the Medicaid program of the State 

20 in which the individual resides if the Healthy 

21 Americans Act had not been enacted. 

22 (b) DEFINITIONS.—In this section— 

23 (1) the term ‘‘institutionalized care’’ means the 

24 health care provided under the Medicaid plan of the 

25 State of residence of an elderly or disabled individual 


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1 who is a patient in a hospital, nursing facility, inter2 mediate care facility for the mentally retarded, or an 

3 institution for mental diseases (as such terms are 

4 defined for purposes of such plan); and 

5 (2) the term ‘‘home and community-based serv6 ices’’ means any services which may be offered 

7 under the Medicaid plan of the State of residence of 

8 an elderly or disabled individual under a home and 

9 community-based waiver authorized for a State 

10 under section 1115 of the Social Security Act (42 

11 U.S.C. 1315) or under subsection (c), (d), or (i) of 

12 section 1915 of such Act (42 U.S.C. 1396n). 

13 Subtitle B—Empowering Individ14 uals and States To Improve 

15 Long-Term Care Choices 

16 SEC. 311. NEW, AUTOMATIC MEDICAID OPTION FOR STATE 

17 CHOICES FOR LONG-TERM CARE PROGRAM. 

18 (a) IN GENERAL.—Title XIX of the Social Security 

19 Act is amended by adding at the end the following new 

20 section: 

21 ‘‘STATE CHOICES FOR LONG-TERM CARE PROGRAM

22 ‘‘SEC. 1940. (a) IN GENERAL.—Notwithstanding any 

23 other provision of this title, the Secretary shall permit a 

24 State to establish and operate under the State plan under 

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1 wide waiver under section 1115) a State Choices for Long2 Term Care Program in accordance with this section. 

3 ‘‘(b) PROGRAM REQUIREMENTS.—A program estab4 lished under the authority of this section shall satisfy the 

5 following requirements: 

6 ‘‘(1) INDIVIDUALIZED BENEFIT PACKAGE.— 

7 Each individual enrolled in the program shall be pro8 vided with long-term care coverage consisting of 

9 medical assistance for long-term care services that 

10 are provided according to the specific needs of the 

11 individual and that best reflect the individual’s needs 

12 and preferences, based on a clinical assessment of 

13 the individual. 

14 ‘‘(2) PERSONAL CASE MANAGERS.—Each indi15 vidual enrolled in the program shall be provided with 

16 a personal case manager who shall assist the indi17 vidual in— 

18 ‘‘(A) determining the individual’s needs 

19 and preferences for the long-term care services 

20 that are contained within the individual’s ben21 efit package, including the selection of the serv22 ice providers for such services; 

23 ‘‘(B) identifying community resources that 

24 are available to provide support for the indi25 vidual; and 


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1 ‘‘(C) addressing issues related to ensuring 

2 the safety and quality of the long-term care 

3 services provided to the individual. 

4 ‘‘(3) INFORMED CHOICE.—The program shall 

5 have procedures to ensure that each individual that 

6 is likely to satisfy the eligibility criteria established 

7 for the program under paragraph (6) who is dis8 charged from a hospital or who resides in a nursing 

9 facility, intermediate care facility for the mentally 

10 retarded, or institution for mental diseases and who 

11 requires long-term care services is informed of the 

12 options available to the individual under the pro13 gram for obtaining such services. 

14 ‘‘(4) SELF-DIRECTED OPTION.—The program 

15 shall provide an individual enrolled in the program 

16 with the option to elect to plan and purchase the 

17 long-term care services that are contained in the in18 dividual’s benefit package under the direction and 

19 control of the individual (or the individual’s author20 ized representative), subject to an individualized 

21 budget developed for, and with the involvement of, 

22 the individual (or the individual’s authorized rep23 resentative). 

24 ‘‘(5) EQUAL ACCESS TO INSTITUTIONAL CARE

25 AND HOME AND COMMUNITY-BASED SERVICES.—The 


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1 program shall provide an individual enrolled in the 

2 program who, because of the individual’s mental or 

3 physical condition, requires a level of care for long 

4 term care services that is above a level of care for 

5 such services that can appropriately be provided 

6 solely through home and community-based providers 

7 (as defined by the State and approved by the Sec8 retary), with equal access to long-term care services 

9 provided through institutional facilities and long10 term care services provided through home and com11 munity-based providers. 

12 ‘‘(6) ELIGIBILITY; PRIORITIZATION OF NEED.— 

13 The program shall apply eligibility criteria for indi14 viduals desiring to enroll in the program that is es15 tablished by the State and approved by the Sec16 retary. The eligibility criteria established by the 

17 State shall— 

18 ‘‘(A) require that an individual enrolled in 

19 the program— 

20 ‘‘(i) be eligible for medical assistance 

21 under the State plan (or under a statewide 

22 waiver of such plan) for nursing facility 

23 services, services in an intermediate care 

24 facility for the mentally retarded, services 

25 in an institution for mental diseases, or 


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1 services provided under a home and com2 munity-based waiver approved for the 

3 State; and 

4 ‘‘(ii) satisfy such other criteria as the 

5 State shall establish; and 

6 ‘‘(B) be based on a strategy for prioritizing 

7 and allocating expenditures so that those indi8 viduals with the highest level of need for long9 term care services are assured of receiving such 

10 services through an institutional facility or 

11 through a home and community-based provider, 

12 based on the individual’s needs and preferences. 

13 ‘‘(c) ADDITIONAL REQUIREMENTS.—A State may not 

14 establish and operate a program under this section unless 

15 it satisfies the following requirements: 

16 ‘‘(1) AGREEMENT TO LIMIT FEDERAL EXPENDI17 TURES.— 

18 ‘‘(A) IN GENERAL.—The State agrees to 

19 an aggregate limit for a 5-year period for Fed20 eral payments under section 1903(a) for ex21 penditures for medical assistance for long-term 

22 care services under the State plan and adminis23 trative expenditures related to the provision of 

24 such assistance. 


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1 ‘‘(B) CALCULATION OF AGGREGATE

2 LIMIT.—The 5-year aggregate limit applicable 

3 to a State under subparagraph (A) shall be de4 termined by the State and the Secretary based 

5 on the following: 

6 ‘‘(i) HISTORICAL AND PROJECTED

7 CASELOADS.—The historical and projected 

8 State caseloads (determined for a 5-year 

9 period, respectively) of individuals receiving 

10 nursing facility services, services in an in11 termediate care facility for the mentally re12 tarded, services in an institution for men13 tal diseases, or services provided under a 

14 home and community-based waiver ap15 proved for the State under the State plan, 

16 based on data from the Secretary, the Bu17 reau of the Census, the Commissioner of 

18 Social Security, and such other sources as 

19 the Secretary may approve. 

20 ‘‘(ii) HISTORICAL AND PROJECTED

21 EXPENDITURES.—The historical and pro22 jected expenditures (determined for a 5- 

23 year period, respectively) for the services 

24 identified in clause (i). Projected expendi25 tures shall be determined without regard to 


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1 the program established under this section 

2 and shall take into account the percentage 

3 change (if any) in the medical care compo4 nent of the consumer price index for all 

5 urban consumers (U.S. city average) for 

6 each year of the period. 

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

8 in this paragraph shall be construed as affect9 ing the requirement for a State to incur State 

10 expenditures for medical assistance for long11 term care services in order to be paid the Fed12 eral medical assistance percentage determined 

13 for the State for such expenditures (not to ex14 ceed the aggregate 5-year limit on Federal pay15 ments for such expenditures applicable under 

16 subparagraph (A)). 

17 ‘‘(2) PLAN FOR CAPACITY BUILDING AND

18 SKILLS ENHANCEMENT.—The State establishes a 

19 plan for building the capacity of the long-term care 

20 services system within the State, particularly with 

21 respect to the delivery of home and community22 based services, and for enhancing the skill levels of 

23 the caregivers for individuals eligible for medical as24 sistance for such services under the State plan. 


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1 ‘‘(3) DEDICATION OF PROGRAM SAVINGS FOR

2 PREVENTION OR EARLY INTERVENTION SERVICES.— 

3 The State agrees that for each fiscal year in which 

4 the program is operated, the State will expend an 

5 amount equal to the State share of the expenditures 

6 that the State would have made under the State 

7 plan for providing medical assistance for long-term 

8 care services for individuals enrolled in the program 

9 but for the operation of such program, for the provi10 sion of prevention or early intervention services for 

11 nonenrolled individuals residing in the State who re12 quire a level of long-term care services that is below 

13 the level that individuals enrolled in the program re14 quire (regardless of whether such nonenrolled indi15 viduals are eligible for medical assistance under the 

16 State plan). 

17 ‘‘(d) OPTION TO OPERATE PROGRAM THROUGH A

18 MANAGED CARE PLAN.—A State may operate a program 

19 under this section through an arrangement on a capitated 

20 basis with a medicaid managed care organization (as de21 fined in section 1903(m)(1)(A)). 

22 ‘‘(e) INDEPENDENT EVALUATION AND REPORT.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall con24 tract with a nongovernmental organization or acaVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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1 demic institution to conduct an ongoing independent 

2 evaluation of the program that assesses— 

3 ‘‘(A) the quality of the long-term care serv4 ices provided under the program; 

5 ‘‘(B) the cost-effectiveness of such services; 

6 ‘‘(C) consumer satisfaction; and 

7 ‘‘(D) the consistency and accuracy with 

8 which the prioritization of need criteria required 

9 under subsection (b)(6)(B) is applied. 

10 ‘‘(2) BIENNIAL REPORTS.—The organization or 

11 institution conducting the evaluation required under 

12 this subsection shall submit biennial reports to the 

13 Secretary regarding the results of the evaluation. 

14 ‘‘(f) DEFINITION OF LONG-TERM CARE SERVICES.— 

15 For purposes of this section, the term ‘long-term care 

16 services’ has the meaning given such term by a State es17 tablishing and operating a program under this section, 

18 subject to approval by the Secretary.’’. 

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

20 subsection (a) takes effect on the date of enactment of 

21 this Act. 

22 SEC. 312. SIMPLER AND MORE AFFORDABLE LONG-TERM 

23 CARE INSURANCE COVERAGE. 

24 (a) QUALIFIED LONG-TERM CARE INSURANCE CON25 TRACT MUST SATISFY QUALIFIED LONG-TERM CARE


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1 PLAN REQUIREMENTS.—Section 7702B(b)(1)(A) (defin2 ing qualified long-term care insurance contract) is amend3 ed by inserting ‘‘through a qualified long-term care plan’’ 

4 after ‘‘qualified long-term care services’’. 

5 (b) QUALIFIED LONG-TERM CARE PLAN.—Section 

6 7702B is amended by adding at the end the following new 

7 subsection: 

8 ‘‘(h) QUALIFIED LONG-TERM CARE PLAN.—For pur9 poses of this section— 

10 ‘‘(1) IN GENERAL.—The term ‘qualified long11 term care plan’ means an insurance plan that meets 

12 the standards and requirements set forth in para13 graph (2) (including the 2009 NAIC Model Regula14 tion or 2009 Federal Regulation (as the case may 

15 be)) on or after the date specified in paragraph (5). 

16 ‘‘(2) DEVELOPMENT OF STANDARDS AND RE17 QUIREMENTS FOR QUALIFIED LONG-TERM CARE

18 PLANS.— 

19 ‘‘(A) IN GENERAL.—If, within 9 months 

20 after the date of the enactment of this sub21 section, the National Association of Insurance 

22 Commissioners (in this subsection referred to as 

23 the ‘Association’) adopts a model regulation (in 

24 this section referred to as the ‘2009 NAIC 

25 Model Regulation’) to incorporate— 


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1 ‘‘(i) limitations on the groups or pack2 ages of benefits that may be offered under 

3 a long-term care insurance policy con4 sistent with paragraphs (3) and (4), 

5 ‘‘(ii) uniform language and definitions 

6 to be used with respect to such benefits, 

7 ‘‘(iii) uniform format to be used in the 

8 policy with respect to such benefits, and 

9 ‘‘(iv) other standards required by the 

10 Secretary of Health and Human Services 

11 paragraph (1) shall be applied in each State, ef12 fective for policies issued to policyholders on 

13 and after the date specified in paragraph (5). 

14 ‘‘(B) SECRETARIAL RESPONSIBILITY.—If 

15 the Association does not adopt the 2009 NAIC 

16 Model Regulation within the 9-month period 

17 specified in subparagraph (A), the Secretary 

18 shall promulgate, not later than 9 months after 

19 the end of such period, a regulation (in this sec20 tion referred to as the ‘2009 Federal Regula21 tion’) and paragraph (1) shall be applied in 

22 each State, effective for policies issued to pol23 icyholders on and after the date specified in 

24 paragraph (5). 


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1 ‘‘(C) CONSULTATION.—In promulgating 

2 standards and requirements under this para3 graph, the Association or Secretary shall con4 sult with a working group composed of rep5 resentatives of issuers of long-term care insur6 ance policies, consumer groups, long-term care 

7 insurance beneficiaries, and other qualified indi8 viduals. Such representatives shall be selected 

9 in a manner so as to insure balanced represen10 tation among the interested groups. 

11 ‘‘(3) LIMITATIONS OF GROUPS OR PACKAGES OF

12 BENEFITS.—The benefits under the 2009 NAIC 

13 Model Regulation or 2009 Federal Regulation shall 

14 provide— 

15 ‘‘(A) for such groups or packages of bene16 fits as may be appropriate taking into account 

17 the considerations specified in paragraph (4) 

18 and the requirements of the succeeding sub19 paragraphs, 

20 ‘‘(B) for identification of a core group of 

21 basic benefits common to all policies, and 

22 ‘‘(C) that the total number of different 

23 benefit packages (counting the core group of 

24 basic benefits described in subparagraph (B) 

25 and each other combination of benefits that 


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1 may be offered as a separate benefit package) 

2 that may be established in all the States and by 

3 all issuers shall not exceed 10. 

4 ‘‘(4) SPECIFIC CONSIDERATIONS.—The benefits 

5 under paragraph (3) shall, to the extent possible— 

6 ‘‘(A) provide for benefits that offer con7 sumers the ability to purchase the benefits that 

8 are available in the market as of November 5, 

9 2008, and 

10 ‘‘(B) balance the objectives of— 

11 ‘‘(i) simplifying the market to facili12 tate comparisons among policies, 

13 ‘‘(ii) avoiding adverse selection, 

14 ‘‘(iii) providing consumer choice, 

15 ‘‘(iv) providing market stability, and 

16 ‘‘(v) promoting competition. 

17 ‘‘(5) EFFECTIVE DATE.— 

18 ‘‘(A) IN GENERAL.—Subject to subpara19 graph (B), the date specified in this paragraph 

20 shall be the date the State adopts the 2009 

21 NAIC Model Regulation or 2009 Federal Regu22 lation or 1 year after the date the Association 

23 or the Secretary first adopts such standards, 

24 whichever is earlier. 


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1 ‘‘(B) REQUIRED STATE LEGISLATION.—In 

2 the case of a State which the Secretary identi3 fies, in consultation with the Association, as— 

4 ‘‘(i) requiring State legislation (other 

5 than legislation appropriating funds) in 

6 order for long-term care insurance policies 

7 to meet the 2009 NAIC Model Regulation 

8 or 2009 Federal Regulation, but 

9 ‘‘(ii) having a legislature which is not 

10 scheduled to meet in 2009 in a legislative 

11 session in which such legislation may be 

12 considered, 

13 the date specified in this paragraph is the first 

14 day of the first calendar quarter beginning after 

15 the close of the first legislative session of the 

16 State legislature that begins on or after Janu17 ary 1, 2010. For purposes of the preceding sen18 tence, in the case of a State that has a 2-year 

19 legislative session, each year of such session 

20 shall be deemed to be a separate regular session 

21 of the State legislature.’’. 

22 (c) ADDITIONAL CONSUMER PROTECTIONS.— 

23 (1) IN GENERAL.—Section 7702B(g)(1) (relat24 ing to consumer protection provisions) is amended— 


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1 (A) by striking subparagraph (A) and in2 serting the following new paragraph: 

3 ‘‘(1) the requirements of the 1993 NAIC model 

4 regulation and model Act described in paragraph (2) 

5 and the 2000 NAIC model regulation and model Act 

6 described in paragraph (5),’’, 

7 (B) by striking ‘‘and’’ at the end of sub8 paragraph (B), 

9 (C) by striking the period at the end of 

10 subparagraph (C) and inserting ‘‘, and’’, and 

11 (D) by adding at the end the following new 

12 subparagraph: 

13 ‘‘(D) the requirements relating to manda14 tory offer and information under paragraph 

15 (6).’’. 

16 (2) NAIC MODEL REGULATION AND ACT.—Sec17 tion 7702B(g) is amended— 

18 (A) by inserting ‘‘1993 NAIC’’ after ‘‘RE19 QUIREMENTS OF’’ in the heading for paragraph 

20 (2), 

21 (B) by redesignating paragraph (5) as 

22 paragraph (7), and 

23 (C) by inserting after paragraph (4) the 

24 following new paragraph: 


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1 ‘‘(5) REQUIREMENTS OF 2000 NAIC MODEL REG2 ULATION AND ACT.— 

3 ‘‘(A) IN GENERAL.—The requirements of 

4 this paragraph are met with respect to any con5 tract if such contract meets— 

6 ‘‘(i) MODEL REGULATION.—The fol7 lowing requirements of the model regula8 tion: 

9 ‘‘(I) Section 6A (other than para10 graph (5) thereof) and the require11 ments of section 6B of the model Act 

12 relating to such section 6A. 

13 ‘‘(II) Section 6B (other than 

14 paragraph (7) thereof). 

15 ‘‘(III) Sections 6C, 6D, 6E, and 

16 7. 

17 ‘‘(IV) Section 8 (other than sec18 tions 8F, 8G, 8H, and 8I thereof). 

19 ‘‘(V) Sections 9, 11, 12, 14, 15, 

20 and 22. 

21 ‘‘(VI) Section 23, including inac22 curate completion of medical histories 

23 (other than paragraphs (1), (6), and 

24 (9) of section 23C). 

25 ‘‘(VII) Sections 24 and 25. 


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1 ‘‘(VIII) The provisions of section 

2 26 relating to contingent nonforfeiture 

3 benefits, if the policyholder declines 

4 the offer of a nonforfeiture provision 

5 described in paragraph (4). 

6 ‘‘(IX) Sections 29 and 30. 

7 ‘‘(ii) MODEL ACT.—The following re8 quirements of the model Act: 

9 ‘‘(I) Sections 6C and 6D. 

10 ‘‘(II) The provisions of section 8 

11 relating to contingent nonforfeiture 

12 benefits. 

13 ‘‘(III) Sections 6F, 6G, 6H, 6J, 

14 6K, and 7. 

15 ‘‘(B) DEFINITIONS.—For purposes of this 

16 paragraph— 

17 ‘‘(i) MODEL PROVISIONS.—The terms 

18 ‘model regulation’ and ‘model Act’ mean 

19 the long-term care insurance model regula20 tion, and the long-term care insurance 

21 model Act, respectively, promulgated by 

22 the National Association of Insurance 

23 Commissioners (as adopted as of October 

24 2000). 


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1 ‘‘(ii) COORDINATION.—Any provision 

2 of the model regulation or model Act listed 

3 under clause (i) or (ii) of subparagraph 

4 (A) shall be treated as including any other 

5 provision of such regulation or Act nec6 essary to implement the provision. 

7 ‘‘(iii) DETERMINATION.—For pur8 poses of this section and section 4980C, 

9 the determination of whether any require10 ment of a model regulation or the model 

11 Act has been met shall be made by the 

12 Secretary.’’. 

13 (d) MANDATORY OFFER AND INFORMATION.—Sec14 tion 7702B(g), as amended by subsection (c), is amended 

15 by inserting after paragraph (5) the following new para16 graph: 

17 ‘‘(6) MANDATORY OFFER AND INFORMATION.— 

18 The requirements of this paragraph are met if— 

19 ‘‘(A) MANDATORY OFFER.—Any person 

20 who sells a long-term care insurance policy to 

21 an individual shall make available for sale to 

22 the individual a long-term care insurance policy 

23 with only the core group of basic benefits (de24 scribed in subsection (h)(3)(B)). 


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1 ‘‘(B) INFORMATION.—Any person who sells 

2 a long-term care insurance policy to an indi3 vidual shall provide the individual, before the 

4 sale of the policy, an outline of coverage which 

5 describes the benefits under the policy. Such 

6 outline shall be on a standard form approved by 

7 the State regulatory program or the Secretary 

8 (as the case may be) consistent with the 2009 

9 NAIC Model Regulation or 2009 Federal Regu10 lation.’’. 

11 (e) STATE REGULATION OF OUT-OF-STATE CON12 TRACTS.—Section 7702B is amended by adding at the end 

13 the following new subsection: 

14 ‘‘(i) STATE REGULATION OF OUT-OF-STATE CON15 TRACTS.—Nothing in this section shall be construed so as 

16 to affect the right of any State to regulate long-term care 

17 insurance policies which, under the provisions of this sec18 tion, are considered to be issued in another State.’’. 

19 (f) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to contracts issued after December 

21 31, 2008. 


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1 TITLE IV—HEALTHIER 

2 MEDICARE 

3 Subtitle A—Authority To Adjust 

4 Amount of Part B Premium To 

5 Reward Positive Health Behav6 ior 

7 SEC. 401. AUTHORITY TO ADJUST AMOUNT OF MEDICARE 

8 PART B PREMIUM TO REWARD POSITIVE 

9 HEALTH BEHAVIOR. 

10 Section 1839 of the Social Security Act (42 U.S.C. 

11 1395r) is amended— 

12 (1) in subsection (a)(2), by striking ‘‘and (i)’’ 

13 and inserting ‘‘(i), and (j)’’; and 

14 (2) by adding at the end the following new sub15 section: 

16 ‘‘(j)(1) With respect to the monthly premium amount 

17 for months after December 2008, the Secretary may ad18 just (under procedures established by the Secretary) the 

19 amount of such premium for an individual based on 

20 whether or not the individual participates in certain 

21 healthy behaviors, such as weight management, exercise, 

22 nutrition counseling, refraining from tobacco use, desig23 nating a health home, and other behaviors determined ap24 propriate by the Secretary. 


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1 ‘‘(2) In making the adjustments under paragraph (1) 

2 for a month, the Secretary shall ensure that the total 

3 amount of premiums to be paid under this part for the 

4 month is equal to the total amount of premiums that 

5 would have been paid under this part for the month if 

6 no such adjustments had been made, as estimated by the 

7 Secretary.’’. 

8 Subtitle B—Promoting Primary 

9 Care for Medicare Beneficiaries 

10 SEC. 411. PRIMARY CARE SERVICES MANAGEMENT PAY11 MENT. 

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

13 1395 et seq.) is amended by inserting after section 1807 

14 the following new section: 

15 ‘‘SEC. 1807A. PRIMARY CARE MANAGEMENT PAYMENT FOR 

16 COORDINATING CARE. 

17 ‘‘(a) PAYMENT.— 

18 ‘‘(1) IN GENERAL.—Not later than January 1, 

19 2008, the Secretary, subject to paragraph (2), shall 

20 establish procedures for providing primary care and 

21 participating providers with a management fee (as 

22 determined appropriate by the Secretary, in con23 sultation with the Medicare Payment Advisory Com24 mission established under section 1805) that reflects 

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1 ficiary, and the family of such beneficiary, providing 

2 chronic care disease management services or other 

3 services in assisting in coordinating care. 

4 ‘‘(2) REQUIREMENT FOR DESIGNATION AS

5 HEALTH HOME.—The management fee under para6 graph (1) shall not be provided to a primary care 

7 provider with respect to a Medicare beneficiary un8 less the provider has been designated (under proce9 dures established by the Secretary) as the health 

10 home by the beneficiary. 

11 ‘‘(b) DEFINITIONS.—In this section: 

12 ‘‘(1) HEALTH HOME.—The term ‘health home’ 

13 means a health care provider that a Medicare bene14 ficiary has designated to monitor the health and 

15 health care of the beneficiary. 

16 ‘‘(2) MEDICARE BENEFICIARY.—The term 

17 ‘Medicare beneficiary’ means an individual who is 

18 entitled to, or enrolled for, benefits under part A, 

19 enrolled under part B, or both. 

20 ‘‘(3) PRIMARY CARE PROVIDER.— 

21 ‘‘(A) IN GENERAL.—The term ‘primary 

22 care provider’ means a primary care physician 

23 (as defined in subparagraph (B), a nurse prac24 titioner (as defined in section 1861aa(5)(A)), or 

25 a physician assistant (as so defined). 


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1 ‘‘(B) PRIMARY CARE PHYSICIAN.—In sub2 paragraph (A), the term ‘primary care physi3 cian’ means a physician, such as a family prac4 titioner or internist, who is chosen by an indi5 vidual to provide continuous medical care, who 

6 is able to give a wide range of care, including 

7 prevention and treatment, and who can refer 

8 the individual to a specialist.’’. 

9 Subtitle C—Chronic Care Disease 

10 Management 

11 SEC. 421. CHRONIC CARE DISEASE MANAGEMENT. 

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

13 1395 et seq.), as amended by section 411, is amended by 

14 inserting after section 1807A the following new section: 

15 ‘‘SEC. 1807B. CHRONIC CARE DISEASE MANAGEMENT PRO16 GRAM. 

17 ‘‘(a) ESTABLISHMENT.— 

18 ‘‘(1) IN GENERAL.—Not later than January 1, 

19 2008, the Secretary shall develop and implement a 

20 chronic care disease management program (in this 

21 section referred to as the ‘program’). The program 

22 shall be designed to provide chronic care disease 

23 management to all Medicare beneficiaries with re24 spect to at least the 5 most prevalent diseases within 


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1 the population of such beneficiaries (as determined 

2 by the Secretary). 

3 ‘‘(2) DEVELOPMENT.—In developing and imple4 menting the program under paragraph (1), the Sec5 retary shall— 

6 ‘‘(A) take into consideration— 

7 ‘‘(i) the results of chronic care im8 provement programs conducted under sec9 tion 1807, including the independent eval10 uations of such programs conducted under 

11 section 1807(b)(5) and any outcomes re12 ports submitted under section 

13 1807(e)(4)(A); and 

14 ‘‘(ii) the results of the payments to 

15 primary care providers under section 

16 1807A; and 

17 ‘‘(B) consult individuals with expertise in 

18 chronic care disease management. 

19 ‘‘(b) IDENTIFICATION AND ENROLLMENT.—The Sec20 retary shall establish procedures for identifying and enroll21 ing Medicare beneficiaries who may benefit from participa22 tion in the program. 

23 ‘‘(c) CHRONIC CARE DISEASE MANAGEMENT PAY24 MENT FOR NON-PRIMARY CARE PHYSICIANS.— 


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1 ‘‘(1) IN GENERAL.—Under the program, a non2 primary care physician shall receive a chronic care 

3 disease management payment if the physician serves 

4 the Medicare beneficiary by assuring the beneficiary 

5 receives appropriate and comprehensive care, includ6 ing referral of the individual to specialists, and as7 suring the beneficiary receives preventive services. 

8 ‘‘(2) AMOUNT OF PAYMENT.—The amount of 

9 the management payment under the program shall 

10 be an amount determined appropriate by the Sec11 retary, in consultation with the Medicare Payment 

12 Advisory Commission established under section 

13 1805. Such amount shall reflect the amount of time 

14 spent with a Medicare beneficiary, and the family of 

15 such beneficiary, providing chronic care disease man16 agement services. 

17 ‘‘(d) DEFINITIONS.—In this section: 

18 ‘‘(1) MEDICARE BENEFICIARY.—The term 

19 ‘Medicare beneficiary’ means an individual who is 

20 entitled to, or enrolled for, benefits under part A, 

21 enrolled under part B, or both. 

22 ‘‘(2) NON-PRIMARY CARE PHYSICIAN.—The 

23 term ‘non-primary care physician’ means a physician 

24 who— 


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1 ‘‘(A) is not a primary care physician (as 

2 defined in section 1807A (b)(3)(B)); and 

3 ‘‘(B) provides chronic care disease manage4 ment services to a Medicare beneficiary under 

5 the program.’’. 

6 SEC. 422. CHRONIC CARE EDUCATION CENTERS. 

7 (a) ESTABLISHMENT.—The Secretary shall establish 

8 Chronic Care Education Centers. 

9 (b) PURPOSE.—The Chronic Care Education Centers 

10 established under subsection (a) shall serve as clearing11 houses for information on health care providers who have 

12 expertise in the management of chronic disease. 

13 (c) USE OF CERTAIN INFORMATION.—In developing 

14 the information described in subsection (b), the Secretary 

15 shall utilize— 

16 (1) information on the performance of providers 

17 in chronic disease demonstration projects and pay 

18 for performance efforts; and 

19 (2) additional information determined appro20 priate by the Secretary. 

21 Subtitle D—Part D Improvements 

22 SEC. 431. NEGOTIATING FAIR PRICES FOR MEDICARE PRE23 SCRIPTION DRUGS. 

24 (a) IN GENERAL.—Section 1860D–11 of the Social 

25 Security Act (42 U.S.C. 1395w–111) is amended by strikVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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1 ing subsection (i) (relating to noninterference) and by in2 serting the following: 

3 ‘‘(i) AUTHORITY TO NEGOTIATE PRICES WITH MAN4 UFACTURERS.— 

5 ‘‘(1) IN GENERAL.—Subject to paragraph (4), 

6 in order to ensure that beneficiaries enrolled under 

7 prescription drug plans and MA–PD plans pay the 

8 lowest possible price, the Secretary shall have au9 thority similar to that of other Federal entities that 

10 purchase prescription drugs in bulk to negotiate con11 tracts with manufacturers of covered part D drugs, 

12 consistent with the requirements and in furtherance 

13 of the goals of providing quality care and containing 

14 costs under this part. 

15 ‘‘(2) MANDATORY RESPONSIBILITIES.—The 

16 Secretary shall be required to— 

17 ‘‘(A) negotiate contracts with manufactur18 ers of covered part D drugs for each fallback 

19 prescription drug plan under subsection (g); 

20 and 

21 ‘‘(B) participate in negotiation of contracts 

22 of any covered part D drug upon request of an 

23 approved prescription drug plan or MA–PD 

24 plan. 


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1 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in 

2 paragraph (2) shall be construed to limit the author3 ity of the Secretary under paragraph (1) to the man4 datory responsibilities under paragraph (2). 

5 ‘‘(4) NO PARTICULAR FORMULARY OR PRICE

6 STRUCTURE.—In order to promote competition 

7 under this part and in carrying out this part, the 

8 Secretary may not require a particular formulary or 

9 institute a price structure for the reimbursement of 

10 covered part D drugs. 

11 ‘‘(5) USE OF SAVINGS TO REDUCE COVERAGE

12 GAP.—The Secretary shall establish a process for 

13 using the savings to the Medicare Prescription Drug 

14 Account through the use of the authority provided 

15 under this subsection (including the mandatory re16 sponsibilities under paragraph (2)) to reduce the 

17 coverage gap under section 1860D–2.’’. 

18 (b) CONFORMING AMENDMENT.—Section 1860D– 

19 2(b) of the Social Security Act (42 U.S.C. 1395w–102(b)) 

20 is amended in the matter preceding paragraph (1) by 

21 striking ‘‘For purposes’’ and inserting ‘‘Subject to section 

22 1860D–11(i)(5), for purposes’’. 

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

24 this section shall take effect on the date of enactment of 

25 this Act. 


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1 SEC. 432. PROCESS FOR INDIVIDUALS ENTERING THE 

2 MEDICARE COVERAGE GAP TO SWITCH TO A 

3 PLAN THAT PROVIDES COVERAGE IN THE 

4 GAP. 

5 (a) PROCESS.—Notwithstanding any other provision 

6 of law, by not later than 30 days after the date of enact7 ment of this Act, the Secretary of Health and Human 

8 Services (in this section referred to as the ‘‘Secretary’’) 

9 shall establish a process under which an applicable indi10 vidual may terminate enrollment in the prescription drug 

11 plan or the MA–PD plan in which they are enrolled and 

12 enroll in any prescription drug plan or MA–PD plan— 

13 (1) that provides some coverage of covered part 

14 D drugs (as defined in subsection (e) of section 

15 1860D–2 of the Social Security Act (42 U.S.C. 

16 1395w–102)) after the individual has reached the 

17 initial coverage limit under the plan but has not 

18 reached the annual out-of-pocket threshold under 

19 subsection (b)(4)(B) of such section; and 

20 (2) subject to subsection (b), that serves the 

21 area in which the individual resides. 

22 (b) SPECIAL RULE PERMITTING APPLICABLE INDI23 VIDUALS TO ENROLL IN A PRESCRIPTION DRUG PLAN

24 OUTSIDE OF THE REGION IN WHICH THE INDIVIDUAL

25 RESIDES.—In the case of an applicable individual who re26 sides in a PDP region under section 1860D–11(a)(2) of 


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1 the Social Security Act (42 U.S.C. 1395w–111(a)(2)) in 

2 which there is no prescription drug plan available that pro3 vides some coverage of brand name covered part D drugs 

4 (as so defined) after the individual has reached the initial 

5 coverage limit under the plan but before the individual has 

6 reached such annual out-of-pocket threshold, the Sec7 retary shall ensure that the process established under sub8 section (a) permits the individual to enroll in a prescrip9 tion drug plan that provides such coverage but is in an10 other PDP region. The Secretary shall determine the PDP 

11 region in which the individual may enroll in such a pre12 scription drug plan. 

13 (c) NOTIFICATION OF APPLICABLE INDIVIDUALS.— 

14 Under the process established under subsection (a), the 

15 Secretary shall notify, or require sponsors of prescription 

16 drug plans and organizations offering MA–PD plans to 

17 notify, applicable individuals of the option to change plans 

18 under such process. Such notice shall be provided to an 

19 applicable individual within 30 days of meeting the defini20 tion of such an individual. 

21 (d) PROCESS IN EFFECT THROUGH 2012.—The 

22 process established under subsection (a) shall remain in 

23 effect through December 31, 2012. 

24 (e) DEFINITIONS.—In this section: 


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1 (1) APPLICABLE INDIVIDUAL.—The term ‘‘ap2 plicable individual’’ means a part D eligible indi3 vidual (as defined in section 1860D–1(a)(3)(A) of 

4 the Social Security Act (42 U.S.C. 1395w– 

5 101(a)(3)(A)) who, with respect to a year— 

6 (A) is enrolled in a prescription drug plan 

7 or an MA–PD plan that does not provide any 

8 coverage of covered part D drugs (as so de9 fined) after the individual has reached the ini10 tial coverage limit under the plan but has not 

11 reached such annual out-of-pocket threshold; 

12 and 

13 (B) has reached such initial coverage limit 

14 or is within $750 of reaching such limit. 

15 (2) PRESCRIPTION DRUG PLAN; MA–PD PLAN.— 

16 The terms ‘‘prescription drug plan’’ and ‘‘MA–PD 

17 plan’’ have the meanings given those terms in sec18 tion 1860D–41(a)(14) of the Social Security Act (42 

19 U.S.C. 1395w–151(a)(14)) and section 1860D– 

20 1(a)(3)(C) of such Act (42 U.S.C. 1395w– 

21 101(a)(3)(C)), respectively. 


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1 Subtitle E—Improving Quality in 

2 Hospitals for All Patients 

3 SEC. 441. IMPROVING QUALITY IN HOSPITALS FOR ALL PA4 TIENTS. 

5 (a) IMPROVING HEALTHCARE QUALITY FOR ALL PA6 TIENTS.— 

7 (1) IN GENERAL.—Section 1866(a)(1) of the 

8 Social Security Act (42 U.S.C. 1395cc(a)(1)) is 

9 amended— 

10 (A) in subparagraph (U), by striking 

11 ‘‘and’’ at the end; 

12 (B) in subparagraph (V), by striking the 

13 period at the end and inserting ‘‘, and’’; and 

14 (C) by inserting after subparagraph (V) 

15 the following new subparagraph: 

16 ‘‘(W) in the case of hospitals, to demonstrate to 

17 accrediting bodies measurable improvement in qual18 ity control with respect to all patients and to have 

19 in place quality control programs that are directed 

20 at care for all patients and that include— 

21 ‘‘(i) rapid response teams that can assist 

22 patients with unstable vital signs; 

23 ‘‘(ii) heart attack treatments with proven 

24 reliability; 


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1 ‘‘(iii) procedures that reduce medication 

2 errors; 

3 ‘‘(iv) aggressive infection prevention, with 

4 special focus on surgeries and infections with 

5 the highest death rates; 

6 ‘‘(v) procedures that reduce the threat of 

7 pneumonia, with special focus on the incidence 

8 of ventilator-related illness; and 

9 ‘‘(vi) such other elements as the Secretary 

10 determines appropriate.’’. 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by paragraph (1) shall apply to hospitals as of the 

13 date that is 2 years after the date of enactment of 

14 this Act. 

15 (b) PANEL OF INDEPENDENT EXPERTS.—Beginning 

16 not later than the date that is 2 years after the date of 

17 enactment of this Act, in order to ensure that hospitals 

18 practice state-of-the-art quality control, the Secretary 

19 shall convene a panel of independent experts to update the 

20 measures of quality control and the types of quality con21 trol programs, including the elements of such programs, 

22 required under section 1866(a)(1)(W) of the Social Secu23 rity Act, as added by subsection (a), not less frequently 

24 than on an annual basis. 


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1 Subtitle F—End-of-Life Care 

2 Improvements 

3 SEC. 451. PATIENT EMPOWERMENT AND FOLLOWING A PA4 TIENT’S HEALTH CARE WISHES. 

5 (a) IN GENERAL.—Section 1866(a)(1) of the Social 

6 Security Act (42 U.S.C. 1395cc(a)(1)), as amended by 

7 section 441(a), is amended— 

8 (1) in subparagraph (V), by striking ‘‘and’’ at 

9 the end; 

10 (2) in subparagraph (W), by striking the period 

11 at the end and inserting ‘‘, and’’; and 

12 (3) by inserting after subparagraph (W) the fol13 lowing new subparagraph: 

14 ‘‘(X) to provide each patient with a document 

15 designed to promote patient autonomy by docu16 menting the patient’s treatment preferences (and co17 ordinating these preferences with physician orders) 

18 that at a minimum— 

19 ‘‘(i) transfers with the patient from one 

20 setting to another; 

21 ‘‘(ii) provides a summary of treatment 

22 preferences in multiple scenarios by the patient 

23 or the patient’s guardian and a physician or 

24 other practitioner’s order for care; 


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1 ‘‘(iii) is easy to read in an emergency situ2 ation; 

3 ‘‘(iv) reduces repetitive activities in com4 plying with the Patient Self Determination Act; 

5 ‘‘(v) ensures that the use of the document 

6 is voluntary by the patient or the patient’s 

7 guardian; 

8 ‘‘(vi) is easily accessible in a patient’s med9 ical chart; and 

10 ‘‘(vii) does not supplant State health care 

11 proxy, living wills, or other end-of-life care 

12 forms.’’. 

13 (b) EFFECTIVE DATE.—The amendments made by 

14 subsection (a) shall apply to entities as of the date that 

15 is 2 years after the date of enactment of this Act. 

16 SEC. 452. PERMITTING HOSPICE BENEFICIARIES TO RE17 CEIVE CURATIVE CARE. 

18 (a) IN GENERAL.—Section 1812 of the Social Secu19 rity Act (42 U.S.C. 1395d) is amended— 

20 (1) in subsection (a)(4), by striking ‘‘in lieu of 

21 certain other benefits,’’; and 

22 (2) in subsection (d)— 

23 (A) in paragraph (1), by striking ‘‘instead 

24 of certain other benefits under this title’’; and 


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1 (B) in paragraph (2)(A), by striking ‘‘to 

2 be—’’ and all that follows before the period and 

3 inserting ‘‘to be equivalent to (or duplicative of) 

4 hospice care’’. 

5 (b) CONFORMING AMENDMENT.—Section 1862(a)(1) 

6 of the Social Security Act (42 U.S.C. 1395y(a)(1)) is 

7 amended by striking subparagraph (C). 

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

9 this section shall apply to services furnished on or after 

10 the date of enactment of this Act. 

11 SEC. 453. PROVIDING BENEFICIARIES WITH INFORMATION 

12 REGARDING END-OF-LIFE CARE CLEARING13 HOUSE. 

14 Section 1804 of the Social Security Act (42 U.S.C. 

15 1395b–2) is amended— 

16 (1) in the heading, by inserting ‘‘; END-OF-LIFE

17 CARE INFORMATION’’ after ‘‘INFORMATION’’; and 

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(d) Not later than 1 year after the date of enact21 ment of the Healthy Americans Act, the Secretary shall 

22 establish procedures to ensure that each individual, at the 

23 time the individual applies for benefits under part A or 

24 enrolls under part B, is provided with contact information 


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1 for the clearinghouse described in section 454 of such 

2 Act.’’. 

3 SEC. 454. CLEARINGHOUSE. 

4 (a) IN GENERAL.—Not later than 1 year after the 

5 date of enactment of this Act, the Secretary shall provide 

6 for the establishment of a national, toll-free, information 

7 clearinghouse that the public may access to find out about 

8 State-specific information regarding advance directive and 

9 end-of-life care decisions. If the Secretary determines that 

10 such a clearinghouse exists and is administered by a not11 for-profit organization and meets standards developed by 

12 the Secretary to assure the easy access of the public to 

13 State-specific information and forms concerning advance 

14 directives and end-of-life care decisions through the Inter15 net and a national toll free information line, the Secretary 

16 shall support such clearinghouse. 

17 (b) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated $1,000,000 for fiscal 

19 year 2007 and each subsequent fiscal year to carry out 

20 this section. 

21 Subtitle G—Additional Provisions 

22 SEC. 461. ADDITIONAL COST INFORMATION. 

23 (a) IN GENERAL.—Section 1857(e) of the Social Se24 curity Act (42 U.S.C. 1395w–27(e)) is amended by adding 

25 at the end the following new paragraph: 


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1 ‘‘(4) ADDITIONAL COST INFORMATION.—A con2 tract under this section shall require a Medicare Ad3 vantage Organization to aggregate claims informa4 tion into episodes of care and to provide such infor5 mation to the Secretary so that costs for specific 

6 hospitals and physicians may be measured and com7 pared. The Secretary shall make such information 

8 public on an annual basis.’’. 

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

10 subsection (a) shall apply to contracts entered into on or 

11 after the date of enactment of this Act. 

12 SEC. 462. REDUCING MEDICARE PAPERWORK AND REGU13 LATORY BURDENS. 

14 Not later than 18 months after the date of enactment 

15 of this Act, the Secretary shall provide to Congress a plan 

16 for reducing regulations and paperwork in the Medicare 

17 program under title XVIII of the Social Security Act (42 

18 U.S.C. 1395 et seq.). Such plan shall focus initially on 

19 regulations that do not directly enhance the quality of pa20 tient care provided under such program. 

21 TITLE V—STATE HEALTH HELP 

22 AGENCIES 

23 SEC. 501. ESTABLISHMENT. 

24 As a condition of receiving payment under section 

25 503, a State shall, not later than the date that is 2 years 


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1 after the date of enactment of this Act, establish or des2 ignate a State agency, to be known as the State ‘‘Health 

3 Help Agency’’ (referred to in this Act as a ‘‘HHA’’) to— 

4 (1) carry out the administration of HAPI plans 

5 to individuals in such State; and 

6 (2) carry out the functions described in section 

7 502. 

8 SEC. 502. RESPONSIBILITIES AND AUTHORITIES. 

9 (a) PROMOTION OF PREVENTION AND WELLNESS.— 

10 Each HHA shall promote prevention and wellness for all 

11 State residents, including through the implementation of 

12 programs that— 

13 (1) educate residents about responsibility for in14 dividual health and the health of children; 

15 (2) upon request, distribute information to cov16 ered individuals regarding the availability of wellness 

17 programs; 

18 (3) make available to the public, with respect to 

19 each health insurance issuer and each HAPI plan, 

20 the number of covered individuals who have des21 ignated a health home described in section 111(b); 

22 and 

23 (4) promote the use and understanding of 

24 health information technology. 


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1 (b) ENROLLMENT OVERSIGHT.—Each HHA shall 

2 oversee enrollment in HAPI plans by— 

3 (1) providing standardized, unbiased informa4 tion on HAPI plans and supplemental health insur5 ance options; 

6 (2) not less than once per year, administering 

7 open enrollment periods for individuals; 

8 (3) allowing a covered individual to make en9 rollment changes during a 30-day period following 

10 marriage, divorce, birth, adoption or placement for 

11 adoption, and other circumstances; 

12 (4) establish procedures for health insurance 

13 issuers to report to the HHA of each State in which 

14 the issuer offers a HAPI plan, the health insurance 

15 status of State residents in order for the HHA to 

16 report annual on the number of uninsured and other 

17 relevant data; 

18 (5) establish procedures for default enrollment 

19 of uninsured individuals into low-cost HAPI plans 

20 for individuals or families who do not enroll, are not 

21 covered under a health plan offered through a pro22 gram described in paragraphs (1)(A) of section 

23 102(a), and are not described in paragraph (1)(B) 

24 of such section; 


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1 (6) establish procedures for hospitals and other 

2 providers to report to the HHA if an individual 

3 seeks care and is uninsured or does not know his or 

4 her health insurance status; 

5 (7) ensure that the enrollment of all individuals 

6 into HAPI plans, including those individuals assisted 

7 by an employer, insurance agent, or other person, is 

8 administered by the HHA; 

9 (8) develop standardized language for HAPI 

10 plan terms and conditions and require participating 

11 health insurance issuers to use such language in 

12 plan information documents; 

13 (9) provide prospective enrollees with a com14 parative document that describes all the HAPI plans 

15 in which the individual may enroll; and 

16 (10) to assist consumers in choosing a HAPI 

17 plan, publish information that includes loss ratios, 

18 outcome data regarding wellness programs, disease 

19 detection and chronic care management programs 

20 categorized by health insurance issuer, and other 

21 data as the HHA determines appropriate. 

22 (c) DETERMINATION AND ADMINISTRATION OF

23 HAPI PLAN SUBSIDIES.—Each HHA shall oversee the 

24 determination and administration of HAPI plan subsidies 

25 by— 


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1 (1) informing State residents about how subsidy 

2 eligibility determinations are made; 

3 (2) obtaining necessary information about in4 come from individuals and Federal and State agen5 cies; 

6 (3) making eligibility determinations on an indi7 vidual basis and informing individuals of such deter8 minations; 

9 (4) establishing a process by which an indi10 vidual may appeal an eligibility determination; 

11 (5) collecting from health insurance issuers an 

12 administrative fee for joining the HHA system and 

13 offering a HAPI plan in a State; 

14 (6) collecting premium payments made by, or 

15 on behalf of, covered individuals, and remitting such 

16 payments to the HAPI plans; and 

17 (7) collecting Federal premium subsidies for 

18 covered individuals and remitting such subsidies to 

19 HAPI plans. 

20 (d) PREMIUM RATING RULES.—Each HHA shall en21 sure that the premium payments for each HAPI plan are 

22 determined in accordance with the rating rules described 

23 in section 111(d). 

24 (e) EMPOWERMENT OF INDIVIDUALS TO MAKE

25 HEALTH CARE DECISIONS.—Each HHA shall, upon enVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00091 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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1 rollment of an individual in a HAPI plan, provide such 

2 individual with information regarding— 

3 (1) the right of individuals to refuse treatment 

4 and to make end-of-life care decisions; 

5 (2) State laws relating to end-of-life care, in6 cluding applicable State law with respect to health 

7 care proxies, advanced directives, living wills, and 

8 other documentation by which individuals may make 

9 their care decisions known; 

10 (3) contact information for any State end-of-life 

11 care advocates; and 

12 (4) applicable State forms on health proxies, 

13 advanced directives, living wills, and other such doc14 umentation. 

15 (f) DETERMINATION OF PLAN COVERAGE AREAS.— 

16 Each HHA shall establish, and may revise, HAPI plan 

17 coverage areas for the State in which the HHA is located. 

18 The service area of a HAPI plan shall consist of an entire 

19 coverage area established under the preceding sentence. 

20 (g) COOPERATION AMONG STATES.—States that 

21 share 1 or more metropolitan statistical area may enter 

22 into agreements to share administrative responsibilities 

23 described under this section. 

24 (h) TRANSITION FROM MEDICAID AND SCHIP; CO25 ORDINATION OF SUPPLEMENTAL MEDICAL ASSISTANCE


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1 FOR ELDERLY AND DISABLED MEDICAID ELIGIBLES.— 

2 Each HHA shall work with the Secretary to ensure that 

3 the requirements of section 301 of this Act, section 1941 

4 of the Social Security Act (as added by section 673(a) of 

5 this Act), and subsections (a) and (b) of section 1940 of 

6 the Social Security Act (as added by section 311 of this 

7 Act) are met. 

8 SEC. 503. APPROPRIATIONS FOR TRANSITION TO STATE 

9 HEALTH HELP AGENCIES. 

10 (a) APPROPRIATION.—There is authorized to be ap11 propriated and there is appropriated, for each of the 2 

12 full fiscal years immediately following the date of enact13 ment of this Act, such sums as may be necessary for the 

14 purpose of enabling each State to carry out the purposes 

15 of this title. The sums made available under this section 

16 shall be used for making payments to States that have 

17 submitted, and had approved by the Secretary, an HHA 

18 plan under this section. 

19 (b) SUBMISSION OF STATE HHA PLAN.—Each HHA 

20 plan submitted by a State shall provide for— 

21 (1) the establishment of an HHA within such 

22 State by the date that is 2 years after the date of 

23 enactment of this Act; 


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1 (2) the administration by with State of such 

2 HHA in accordance with the requirements described 

3 under this Act; and 

4 (3) the compliance by the State of the require5 ments described under section 631. 

6 (c) PAYMENT TO STATES.—From the sums appro7 priated under subsection (a), the Secretary shall pay to 

8 each State that has an HHA plan approved under this 

9 section, an amount necessary for the State to implement 

10 such plan for the applicable fiscal year. 

11 TITLE VI—SHARED 

12 RESPONSIBILITIES 

13 Subtitle A—Individual 

14 Responsibilities 

15 SEC. 601. INDIVIDUAL RESPONSIBILITY TO ENSURE HAPI 

16 PLAN COVERAGE. 

17 (a) OPEN SEASON.—An adult individual, on behalf 

18 of such individual and the dependent children of such indi19 vidual, shall— 

20 (1) enroll in a HAPI plan through the HHA of 

21 the individual’s State of residence during an open 

22 enrollment period; and 

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1 dividual eligibility for premium and personal respon2 sibility contribution subsidies. 

3 An adult individual may carry out the activities described 

4 under paragraphs (1) and (2) on behalf of the spouse of 

5 such adult individual. 

6 (b) DURING PLAN YEAR.—A covered individual 

7 shall— 

8 (1) submit any required monthly premium pay9 ments; 

10 (2) submit any personal responsibility contribu11 tions as required; and 

12 (3) inform such HHA of any changes in the 

13 family status or residence of such individual. 

14 Subtitle B—Employer 

15 Responsibilities 

16 SEC. 611. HEALTH CARE RESPONSIBILITY PAYMENTS. 

17 (a) PAYMENT REQUIREMENTS.— 

18 (1) IN GENERAL.—Subtitle C of the Internal 

19 Revenue Code of 1986 is amended by inserting after 

20 chapter 24 the following new chapter: 

21 ‘‘CHAPTER 24A—HEALTH CARE 

22 RESPONSIBILITY PAYMENTS 

‘‘SUBCHAPTER A—EMPLOYER SHARED RESPONSIBILITY PAYMENTS

‘‘SUBCHAPTER B—INDIVIDUAL SHARED RESPONSIBILITY PAYMENTS

‘‘SUBCHAPTER C—GENERAL PROVISIONS


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1 ‘‘Subchapter A—Employer Shared 

2 Responsibility Payments 

‘‘Sec. 3411. Payment requirement. 

‘‘Sec. 3412. Instrumentalities of the United States. 

3 ‘‘SEC. 3411. PAYMENT REQUIREMENT. 

4 ‘‘(a) EMPLOYER SHARED RESPONSIBILITY PAY5 MENTS.—Every employer shall pay an employer shared re6 sponsibility payment for each calendar year in an amount 

7 equal to the product of— 

8 ‘‘(1) the number of full-time equivalent employ9 ees employed by the employer during the preceding 

10 calendar year, multiplied by 

11 ‘‘(2) the applicable percentage of the average 

12 HAPI plan premium amount for such calendar year. 

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

14 subsection (a)(2)— 

15 ‘‘(1) IN GENERAL.—The applicable percentage 

16 shall be determined as follows: 

Revenue per employee national percentile of the 

taxpayer for the preceding calendar year: 

Large employer: Small employer: 

0–20th percentile .................................................... 17% 2%

21st–40th percentile ............................................... 19% 4%

41st–60th percentile ............................................... 21% 6%

61st–80th percentile ............................................... 23% 8%

81st–99th percentile ............................................... 25% 10%. 

17 ‘‘(2) APPLICABLE PERCENTAGE FOR CERTAIN

18 NON-REVENUE PRODUCING ENTITIES.—In the case 

19 of an employer which is a nonprofit entity, a State 


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1 or local government, or any other type of entity for 

2 which the Secretary determines that calculating rev3 enue per employee is not appropriate, the applicable 

4 percentage shall be— 

5 ‘‘(A) in the case of a large employer, 17 

6 percent, and 

7 ‘‘(B) in the case of a small employer, 2 

8 percent. 

9 ‘‘(3) ADDITIONAL RATE FOR CERTAIN SMALL

10 EMPLOYERS.— 

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

12 employer, the applicable percentage determined 

13 under paragraph (1) shall be increased by 0.1 

14 percent for each full-time equivalent employee 

15 employed by the employer during the preceding 

16 calendar year in excess of 50. 

17 ‘‘(B) MAXIMUM ADDITIONAL RATE.—The 

18 increase in the applicable percentage deter19 mined under this paragraph shall not exceed 15 

20 percent. 

21 ‘‘(4) REVENUE PER EMPLOYEE NATIONAL PER22 CENTILE RANK.—At the beginning of each calendar 

23 year, the Secretary, in consultation with the Sec24 retary of Labor, shall publish a table, based on sam25 pling of employers, to be used in determining the naVerDate Aug 31 2005 21:57 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00097 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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1 tional percentile for revenue per employee amounts 

2 for the preceding calendar year. 

3 ‘‘(c) TRANSITION RATES.— 

4 ‘‘(1) TRANSITION RATE FOR EMPLOYERS PRE5 VIOUSLY PROVIDING HEALTH INSURANCE.— 

6 ‘‘(A) IN GENERAL.—In the case of the first 

7 and second calendar years to which this section 

8 applies, in the case of any employer who pro9 vided health insurance coverage for employees 

10 on the day before the date of enactment of the 

11 Healthy Americans Act, the employer shared 

12 responsibility payment shall be, in lieu of the 

13 amount determined under subsection (a), an 

14 amount equal to— 

15 ‘‘(i) 100 percent of the designated em16 ployee health insurance premium amount 

17 of such employer, minus 

18 ‘‘(ii) the employee salary investment 

19 amount. 

20 ‘‘(B) EMPLOYEE SALARY INVESTMENT

21 AMOUNT.—For purposes of this paragraph— 

22 ‘‘(i) IN GENERAL.—The term ‘em23 ployee salary investment amount’ means 

24 the lesser of— 


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1 ‘‘(I) the excess of the amount of 

2 average yearly wages paid to all em3 ployees for such year over the amount 

4 of average yearly wages paid to such 

5 employee for the year before the first 

6 year this section applies, or 

7 ‘‘(II) the designated employee 

8 health insurance premium amount of 

9 such employer. 

10 ‘‘(ii) NONDISCRIMINATION RULES.— 

11 No amount paid by an employer shall be 

12 treated as an employee salary investment 

13 amount unless such amount is distributed 

14 to all employees on a basis that is propor15 tional to the amount of wages paid to such 

16 employee before such distribution. 

17 ‘‘(iii) NOTICE REQUIREMENT.—No 

18 amount paid by an employer shall be treat19 ed as an employee salary investment 

20 amount unless the employer gives each em21 ployee notice of the amount of the des22 ignated employee health insurance pre23 mium amount paid by the employer with 

24 respect to the employee. 


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1 ‘‘(C) EMPLOYER SHARED RESPONSIBILITY

2 CREDIT.—The Secretary may provide a credit 

3 to private employers who provided health insur4 ance benefits greater than the 80th percentile 

5 of the national average in the 2 years prior to 

6 enactment of this Act, can demonstrate the 

7 benefits provided encouraged prevention and 

8 wellness activities as defined in this Act, and 

9 continue to provide wellness programs 

10 ‘‘(D) SPECIAL RULE FOR SELF-INSURED

11 EMPLOYERS.—In the case of any employer who 

12 provided health care coverage for employees 

13 through self-insurance, ‘average HAPI plan 

14 premium amount for the first year this section 

15 applies’ shall be substituted for ‘designated em16 ployee health insurance premium amount of 

17 such employer’ in subparagraphs (A)(i) and 

18 (B)(i)(II). 

19 ‘‘(E) REGULATIONS.—The Secretary may 

20 establish such rules and regulations as nec21 essary to carry out the purposes of this para22 graph. 

23 ‘‘(2) TRANSITION RATE FOR OTHER EMPLOY24 ERS.—In the case of any employer who did not pro25 vide health insurance to employees on the day before 


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1 the date of enactment of the Healthy Americans 

2 Act— 

3 ‘‘(A) the employer shared responsibility 

4 payment for the first year this section applies 

shall be an amount equal 1 5 ⁄3 of the amount oth6 erwise required under this section (determined 

7 without regard to this subsection), and 

8 ‘‘(B) the employer shared responsibility 

9 payment for the second year this section applies 

shall be an amount equal 2 10 ⁄3 of the amount oth11 erwise required under this section (determined 

12 without regard to this subsection). 

13 ‘‘SEC. 3412. INSTRUMENTALITIES OF THE UNITED STATES. 

14 ‘‘Notwithstanding any other provision of law (wheth15 er enacted before or after the enactment of this section) 

16 which grants to any instrumentality of the United States 

17 an exemption from taxation, such instrumentality shall 

18 not be exempt from the payment required by section 3411 

19 unless such provision of law grants a specific exemption, 

20 by reference to section 3111 from the payment required 

21 by such section. 

22 ‘‘Subchapter B—Individual Shared 

23 Responsibility Payments 

‘‘Sec. 3421. Amount of payment. 

‘‘Sec. 3422. Deduction of tax from wages. 


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1 ‘‘SEC. 3421. AMOUNT OF PAYMENT. 

2 ‘‘(a) IN GENERAL.—Every individual shall pay an in3 dividual shared responsibility payment in an amount equal 

4 to the HAPI plan premium amount of such individual. 

5 ‘‘(b) EXCEPTION.—This section shall not apply to 

6 any individual— 

7 ‘‘(1) who is covered under a HAPI plan of an8 other individual, or 

9 ‘‘(2) who provides such documentation as re10 quired by the Secretary demonstrating that such in11 dividual has paid such HAPI plan premium amount, 

12 but only for the period with respect to which such 

13 amount is shown to be paid. 

14 ‘‘SEC. 3422. DEDUCTION OF INDIVIDUAL SHARED RESPON15 SIBILITY PAYMENT FROM WAGES. 

16 ‘‘(a) IN GENERAL.—The individual shared responsi17 bility payment imposed by section 3421 shall be collected 

18 by the employer by deducting the amount of the payment 

19 from the wages as and when paid. 

20 ‘‘(b) NONDEDUCTIBILITY BY EMPLOYER.—The indi21 vidual shared responsibility payment deducted and with22 held by the employer under subsection (a) shall not be al23 lowed as a deduction to the employer in computing taxable 

24 income under subtitle A. 

25 ‘‘(c) INDEMNIFICATION OF EMPLOYER; SPECIAL

26 RULE FOR TIPS.—Rules similar to the rules of subsections 


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1 (b) and (c) of section 3102 shall apply for purposes of 

2 this section. 

3 ‘‘Subchapter C—General Provisions 

‘‘Sec. 3431. Definitions and special rules. 

‘‘Sec. 3432. Labor contracts. 

4 ‘‘SEC. 3431. DEFINITIONS AND SPECIAL RULES. 

5 ‘‘(a) DEFINITIONS.—For purposes of this chapter— 

6 ‘‘(1) AVERAGE HAPI PLAN PREMIUM

7 AMOUNT.—The term ‘average HAPI plan premium 

8 amount’ means the national average yearly premium 

9 for HAPI plans with standard coverage (as deter10 mined under section 103(b) of the Healthy Ameri11 cans Act), determined without regard to differing 

12 classes of coverage. 

13 ‘‘(2) DESIGNATED EMPLOYEE HEALTH INSUR14 ANCE PREMIUM AMOUNT.—The term ‘designated 

15 employee health insurance premium amount’ means 

16 the greater of— 

17 ‘‘(A) the yearly premium paid by an em18 ployer for health insurance coverage for employ19 ees for the most recent calendar year ending be20 fore the date of enactment of the Healthy 

21 Americans Act, or 

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1 ees for the year before the first year this section 

2 applies. 

3 ‘‘(3) EMPLOYER.— 

4 ‘‘(A) IN GENERAL.—The term ‘employer’ 

5 has the meaning given such term under section 

6 3401(d). 

7 ‘‘(B) AGGREGATION RULES.—For purposes 

8 of this chapter, all persons treated as a single 

9 employer under subsection (a) or (b) of section 

10 52 shall be treated as 1 person. 

11 ‘‘(4) EMPLOYMENT.—The term ‘employment’ 

12 has the meaning given such term under section 

13 3121(b). 

14 ‘‘(5) FULL-TIME EQUIVALENT EMPLOYEE.— 

15 The term ‘full-time equivalent employee’ means the 

16 equivalent number of full-time employees of an em17 ployer determined for any year under the following 

18 formula: 

19 ‘‘(A) The sum of the number of full-time 

20 employees employed by the employer for more 

21 than 3 months during such year, plus 

22 ‘‘(B) The quotient of— 

23 ‘‘(i) the sum of the average weekly 

24 hours worked during such year for each 


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1 employee of the employer (including com2 mon law employees) who— 

3 ‘‘(I) was employed by such em4 ployer during such year for more than 

5 3 months, and 

6 ‘‘(II) is not a full-time employee, 

7 divided by 

8 ‘‘(ii) 40. 

9 ‘‘(6) FULL-TIME EMPLOYEE.—The term ‘full10 time employee’ means an employee (including a com11 mon law employee) who during an average workweek 

12 performs, or can reasonably be expected to perform, 

13 at least 40 hours of work. The Secretary may pre14 scribe alternative rules for determining full-time 

15 equivalent employees in occupations or industries not 

16 using a standard workweek. 

17 ‘‘(7) HAPI PLAN.—The term ‘HAPI plan’ has 

18 the meaning given such term under section 3 of the 

19 Healthy Americans Act. 

20 ‘‘(8) HAPI PLAN PREMIUM AMOUNT.—The 

21 term ‘HAPI plan premium amount’ means, with re22 spect to any individual, the monthly premium for the 

23 HAPI plan under which such individual is enrolled, 

24 determined after taking into account any subsidy 


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1 provided to such individual under section 131 of the 

2 Healthy Americans Act. 

3 ‘‘(9) LARGE EMPLOYER.—The term ‘large em4 ployer’ means, with respect to any year, an employer 

5 who employs an average of over 200 full-time equiv6 alent employees during such year. 

7 ‘‘(10) REVENUE PER EMPLOYEE.—The term 

8 ‘revenue per employee’ means, with respect to any 

9 employer for any year, the gross receipts of the em10 ployer for such year divided by the number of full11 time equivalent employees employed by such em12 ployer for such year. 

13 ‘‘(11) SMALL EMPLOYER.—The term ‘small em14 ployer’ means, with respect to any year, an employer 

15 who employs an average of 200 or fewer full-time 

16 equivalent employees during such year. 

17 ‘‘(12) WAGES.—The term ‘wages’ has the 

18 meaning given such term under section 3401(a). 

19 ‘‘(b) SPECIAL RULES.— 

20 ‘‘(1) SPECIAL RULE FOR SELF-EMPLOYED INDI21 VIDUALS.—For purposes of this chapter, a self-em22 ployed individual (as defined by section 

23 401(c)(1)(B)) shall be treated as both a full-time 

24 equivalent employee and as an employer. 


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1 ‘‘(2) TREATMENT OF PAYMENTS.—For pur2 poses of this title, the payments required by sections 

3 3411 and 3421 shall be treated as a tax imposed by 

4 such sections, respectively. 

5 ‘‘(3) OTHER SPECIAL RULES.—For purposes of 

6 this chapter, rules similar to rules under the fol7 lowing provisions shall apply: 

8 ‘‘(A) Section 3122 (relating to Federal 

9 service). 

10 ‘‘(B) Section 3123 (relating to deductions 

11 as constructive payments). 

12 ‘‘(C) Section 3125 (relating to returns in 

13 the case of governmental employees in States, 

14 Guam, American Samoa, and the District of 

15 Columbia). 

16 ‘‘(D) Section 3126 (relating to return and 

17 payment by government employer). 

18 ‘‘(E) Section 3127 (relating to exemption 

19 for employers and their employees where both 

20 are members of religious faiths opposed to par21 ticipation in social security act programs). 

22 ‘‘SEC. 3432. LABOR CONTRACTS. 

23 ‘‘(a) IN GENERAL.—This chapter shall not apply with 

24 respect to any qualified collective bargaining employee of 


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1 any qualified collective bargaining employer before the 

2 earlier of— 

3 ‘‘(1) January 1 of the first year which is more 

4 than 7 years after the date of the enactment of this 

5 chapter, or 

6 ‘‘(2) the date the collective bargaining agree7 ment expires. 

8 ‘‘(b) DEFINITIONS.—For purposes of this section— 

9 ‘‘(1) QUALIFIED COLLECTIVE BARGAINING EM10 PLOYER.—The term ‘qualified collective bargaining 

11 employer’ means an employer who provides health 

12 insurance to employees under the terms of a collec13 tive bargaining agreement which is entered into be14 fore the date of the enactment of this chapter. 

15 ‘‘(2) QUALIFIED COLLECTIVE BARGAINING EM16 PLOYEE.—The term ‘qualified collective bargaining 

17 employee’ means an employee of a qualified collec18 tive bargaining employer who is covered by a collec19 tive bargaining agreement governing the employee’s 

20 health insurance.’’. 

21 (2) CONFORMING AMENDMENT.—The table of 

22 chapters of the Internal Revenue Code of 1986 is 

23 amended by inserting after the item relating to 

24 chapter 24 the following new item: 

‘‘CHAPTER 24A—HEALTH CARE RESPONSIBILITY PAYMENTS’’. 


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1 (b) COLLECTION OF INDIVIDUAL SHARED RESPONSI2 BILITY PAYMENTS THROUGH ESTIMATED TAXES.—Sec3 tion 6654 of the Internal Revenue Code of 1986 (relating 

4 to failure by individual to pay estimated tax) is amended— 

5 (1) in subsection (a), by striking ‘‘and the tax 

6 under chapter 2’’ and inserting ‘‘, the tax under 

7 chapter 2, and the individual shared responsibility 

8 payment required under subchapter B of chapter 

9 24A’’, and 

10 (2) in subsection (f)— 

11 (A) by striking ‘‘minus’’ at the end of 

12 paragraph (2) and inserting ‘‘plus’’, 

13 (B) by redesignating paragraph (3) as 

14 paragraph (5), and 

15 (C) by inserting after paragraph (2) the 

16 following new paragraphs: 

17 ‘‘(3) the individual shared responsibility pay18 ment required under subchapter B of chapter 24A, 

19 minus 

20 ‘‘(4) the amount withheld as an individual 

21 shared responsibility payment under section 3422, 

22 minus’’. 

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

24 this section shall apply to calendar years beginning at 

25 least 2 years after the date of the enactment of this Act. 


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1 SEC. 612. DISTRIBUTION OF INDIVIDUAL RESPONSIBILITY 

2 PAYMENTS TO HHAS. 

3 (a) IN GENERAL.—The Secretary of the Treasury 

4 shall pay to the HHA in each State an amount equal to 

5 the amount of individual shared responsibility payments 

6 received under section 3421 of the Internal Revenue Code 

7 of 1986 with respect to each individual residing in such 

8 State. 

9 (b) TREATMENT OF PAYMENTS.—Any amount paid 

10 to a State under subsection (a) shall be treated as an 

11 amount paid by the individual as a premium for the HAPI 

12 plan in which such individual is enrolled. 

13 Subtitle C—Insurer 

14 Responsibilities 

15 SEC. 621. INSURER RESPONSIBILITIES. 

16 (a) IN GENERAL.—To offer a HAPI plan through an 

17 HHA, a State shall require that a health insurance issuer 

18 meet the requirements of this section. 

19 (b) REQUIREMENTS.—A health insurance issuer of20 fering a HAPI plan in a State shall— 

21 (1) implement and emphasize prevention, early 

22 detection and chronic disease management; 

23 (2) ensure that a wellness program as described 

24 in section 131 is available to all covered individuals 

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1 quirements of the health insurance issuers and other 

2 relevant requirements; 

3 (3) demonstrate how the provider reimburse4 ment methodology used by such an issuer has been 

5 adjusted to reward providers for achieving quality 

6 and cost efficiency in prevention, early detection of 

7 disease, and chronic care management; 

8 (4) ensure enrollees have the opportunity to 

9 designate a health home as described in section 

10 111(b) and make public how many enrollees per pol11 icy have designated a health home; 

12 (5) upon enrollment, make available to each 

13 covered individual an initial physical and a care 

14 plan; 

15 (6) create and implement an electronic medical 

16 record for each covered individual, unless the indi17 vidual submits a notification to the issuer that the 

18 individual declines to have such a record; 

19 (7) contribute to the financing of the HHAs by 

20 incorporating into the administration component of 

21 premiums an additional amount to reimburse HHAs 

22 for administrative costs; 

23 (8) comply with loss ratios as established by the 

24 Secretary under subsection (e); 


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1 (9) use standardized common claims forms and 

2 uniform billing practices as provided for under sub3 section (c); 

4 (10) require that hospitals, as a condition of re5 ceiving payment, send bills that are in an amount 

6 more than $5,000 to the covered individual (without 

7 regard to whether the covered individual is respon8 sible for full or partial payment of the bill) and pro9 vide the individual the contact information of a per10 son who can discuss the bill with the individual; 

11 (11) provide incentives such as premium dis12 counts— 

13 (A) for parents, if a covered child partici14 pates in wellness activities and the health of 

15 such child improves; and 

16 (B) for adults covered by a plan to partici17 pate in prevention, wellness and chronic disease 

18 management programs; 

19 (12) report to the HHA of the State in which 

20 the issuer offers HAPI plans, outcome data regard21 ing wellness program, disease detection and chronic 

22 care management, and loss ratio information, so 

23 that the HHAs may make such data available to the 

24 public in a consumer-friendly format; 


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1 (13) work with the Agency for Healthcare Re2 search and Quality, medical experts, and patient 

3 groups to make information on high quality afford4 able health providers available to all Americans with5 in 2 years of the date of enactment of this Act 

6 through a website searchable by zip code; 

7 (14) provide to the HHA of each State in which 

8 the issuer offers a HAPI plan, detailed information 

9 on the HAPI plans offered by such issuer, using 

10 standardized language as required by the HHA, so 

11 that the HHA may compile a document that com12 pares the HAPI plans for use by prospective enroll13 ees; and 

14 (15) paying to the HHA of each State in which 

15 the issuer seeks to offer a HAPI plan the amount 

16 of the administrative fee assessed by the HHA 

17 under section 502(c)(5) to enter the HHA system of 

18 that State. 

19 (c) UNIFORM BILLING PRACTICES.— 

20 (1) IN GENERAL.—A health insurance issuer of21 fering a HAPI plan in a State shall not receive sub22 sidy payments from the applicable State HHA un23 less such issuer agrees to use standardized common 

24 claim forms prescribed by the applicable State HHA. 


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1 (2) EXCEPTION.—Paragraph (1) shall not 

2 apply to any State worker’s compensation system. 

3 (d) CHRONIC CARE PROGRAMS OFFERED BY

4 ISSUERS.— 

5 (1) IN GENERAL.—A health insurance issuer of6 fering a HAPI plan in a State shall provide a chron7 ic care program to provide early identification and 

8 management of chronic diseases. 

9 (2) DETERMINATION OF CHRONIC CARE PRO10 GRAM.—Each State HHA shall determine what con11 stitutes a chronic care program under this sub12 section and whether to collect and report financial 

13 information related to chronic care programs. 

14 (3) UNIFORM CLINICAL PERFORMANCE STAND15 ARDS.—Each chronic care program offered by a 

16 health insurance issuer shall use a uniform set of 

17 clinical performance standards prescribed by the 

18 HHA of the State in which the issuer offers a HAPI 

19 plan (in consultation with the State Medicare quality 

20 improvement organizations and patient and physi21 cian organizations) which should include encourage22 ment that the issuers not require personal responsi23 bility contributions for clinically-needed services to 

24 treat or manage a covered individual’s chronic dis25 ease, particularly if the individual is taking an active 


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1 management role in working with their provider to 

2 manage any such disease. 

3 (4) REPORTING BY ISSUERS.—Five years after 

4 the date of enactment of this Act and on an annual 

5 basis thereafter, each health insurance issuer shall 

6 report to the applicable State Insurance Commis7 sioner, State Secretary of Health or other state enti8 ty selected by the State HHA, the chronic care man9 agement performance of the issuer as measured by 

10 the uniform clinical performance standards described 

11 in paragraph (3). The issuer shall make such per12 formance public in a manner accessible to the public. 

13 (e) PRIVATE INSURANCE COMPANY LOSS RATIO.— 

14 (1) IN GENERAL.—The Secretary, in consulta15 tion with consumer and patient organizations, the 

16 National Association of Insurance Commissioners, 

17 and health insurance issuers (including health main18 tenance organizations) shall establish a loss ratio for 

19 issuers of HAPI plans. 

20 (2) DETERMINATION OF LOSS RATIO.—In de21 termining the loss ratio, administrative costs shall be 

22 defined as expenses consisting of all actual, allow23 able, allocable, and reasonable expenses incurred in 

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1 curred in the health insurance issuer’s overall oper2 ation of the business. 

3 (3) ADMINISTRATIVE EXPENSES.— 

4 (A) IN GENERAL.—Unless otherwise deter5 mined by an agreement between a State HHA 

6 and a health insurance issuer, the administra7 tive expenses of an issuer shall— 

8 (i) include all taxes (excluding pre9 mium taxes) reinsurance premiums, med10 ical and dental consultants used in the ad11 judication process, concurrent or managed 

12 care review when not billed by a health 

13 care provider and other forms of utilization 

14 review, the cost of maintaining eligibility 

15 files, legal expenses incurred in the litiga16 tion of benefit payments, and bank charges 

17 for letters of credit; and 

18 (ii) not include the cost of personnel, 

19 equipment, and facilities directly used in 

20 the delivery of health care services (benefit 

21 costs), payments to HHAs for establish22 ment and administration of HHAs, and 

23 the cost of overseeing chronic disease man24 agement programs and wellness programs. 


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1 Subtitle D—State Responsibilities 

2 SEC. 631. STATE RESPONSIBILITIES. 

3 (a) GENERAL REQUIREMENTS.—As a condition of re4 ceiving payment under section 503, each State shall— 

5 (1) designate or create a Health Help Agency 

6 as described in title V; 

7 (2) ensure that the HAPI plans offered in the 

8 State— 

9 (A) are sold only through the State HHA; 

10 and 

11 (B) comply with the requirements of this 

12 Act; 

13 (3) ensure that health insurance issuers offer14 ing a HAPI plan in such State comply with the re15 quirements described in section 621; 

16 (4) ensure that HAPI plans offer premium dis17 counts and incentives for participation in wellness 

18 programs; 

19 (5) implement mechanisms to collect premium 

20 payments not otherwise collected under chapter 24A 

21 of the Internal Revenue Code of 1986 (as added by 

22 this Act); 

23 (6) continue to apply State law with respect 

24 to— 


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1 (A) solvency and financial standards for 

2 health insurance issuers; 

3 (B) fair marketing practices for health in4 surance issuers; 

5 (C) grievances and appeals for covered in6 dividuals; and 

7 (D) patient protection; 

8 (7) eliminate fictitious group prohibitions; and 

9 (8) comply with subsections (b) and (c). 

10 (b) ENSURING MAXIMUM ENROLLMENT.—Each 

11 State shall— 

12 (1) collect and exchange data with Federal and 

13 other public agencies as necessary to maintain a 

14 database containing information on the health insur15 ance enrollment status of all State residents; 

16 (2) implement methods to check enrollment sta17 tus and enroll individuals in HAPI plans, such as 

18 through the Department of Motor Vehicles of the 

19 State, the enrollment of children in elementary and 

20 secondary schools, the voter registration authority of 

21 the State, and other checkpoints determined appro22 priate by the State; 

23 (3) implement mechanisms, which may not in24 clude revocation or ineligibility for coverage under a 

25 HAPI plan, to enforce the responsibility of each 


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1 adult individual to purchase HAPI plan coverage for 

2 such individual and any dependent children of such 

3 individual; and 

4 (4) implement a mechanism to automatically 

5 enroll individuals in a HAPI plan who present in 

6 emergency departments without health insurance. 

7 (c) MAINTENANCE OF EFFORT.—Each State shall 

8 submit an annual report to the Secretary that dem9 onstrates that, for each State fiscal year that begins on 

10 or after January 1 of the first calendar year in which 

11 HAPI coverage begins under this Act, State expenditures 

12 for health services (as defined by the Secretary) are not 

13 less than the amount equal to— 

14 (1) in the case of the first State fiscal year for 

15 which such a report is submitted, 100 percent of the 

16 total amount of the State share of expenditures for 

17 such services under all public health programs oper18 ated in the State that are funded in whole or in part 

19 with State expenditures (including the Medicaid pro20 gram) for the most recent State fiscal year ending 

21 before January 1 of the first calendar year in which 

22 HAPI coverage begins under this Act ; and 

23 (2) in the case of any subsequent State fiscal 

24 year for which such a report is submitted, the 

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1 ceding State fiscal year increased by the percentage 

2 change, if any, in the consumer price index for all 

3 urban consumers over the previous Federal fiscal 

4 year. 

5 SEC. 632. EMPOWERING STATES TO INNOVATE THROUGH 

6 WAIVERS. 

7 (a) IN GENERAL.—A State that meets the require8 ments of subsection (b) shall be eligible for a waiver of 

9 applicable Federal health-related program requirements. 

10 (b) ELIGIBILITY REQUIREMENTS.—A State shall be 

11 eligible to receive a waiver under this section if— 

12 (1) the legislature of such State enacts legisla13 tion, or the State through a publically approved bal14 lot measure approves a plan, to provide health care 

15 coverage to it’s residents that is at least as com16 prehensive as the coverage required under a HAPI 

17 plan; and 

18 (2) the State submits to the Secretary an appli19 cation at such time, in such manner, and containing 

20 such information as the Secretary may require, in21 cluding a comprehensive description of the State leg22 islation or plan for implementing the State-based 

23 health plan. 

24 (c) DETERMINATIONS BY SECRETARY.— 


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1 (1) IN GENERAL.—Not later than 180 days 

2 after the receipt of an application from a State 

3 under subsection (b)(2), the Secretary shall make a 

4 determination with respect to the granting of a waiv5 er under this section to such State. 

6 (2) GRANTING OF WAIVER.—If the Secretary 

7 determines that a waiver should be granted under 

8 this section, the Secretary shall notify the State in9 volved of such determination and the terms and ef10 fectiveness of such waiver. 

11 (3) REFUSAL TO GRANT WAIVER.—If the Sec12 retary refuses to grant a waiver under this section, 

13 the Secretary shall— 

14 (A) notify the State involved of such deter15 mination, and the reasons therefore; and 

16 (B) notify the appropriate committees of 

17 Congress of such determination and the reasons 

18 therefore. 

19 (d) SCOPE OF WAIVERS.—The Secretary shall deter20 mine the scope of a waiver granted to a State under this 

21 section, including which Federal laws and requirements 

22 will not apply to the State under the waiver. 


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1 Subtitle E—Federal Fallback 

2 Guarantee Responsibility 

3 SEC. 641. FEDERAL GUARANTEE OF ACCESS TO COVERAGE. 

4 (a) FEDERAL GUARANTEE.— 

5 (1) IN GENERAL.—If a State does not establish 

6 an HHA in compliance with title V by the date that 

7 is 2 years after the date of enactment of this Act, 

8 the Secretary shall ensure that each individual has 

9 available, consistent with paragraph (2), a choice of 

10 enrollment in at least 2 HAPI plans in the coverage 

11 area in which the individual resides. In any such 

12 case in which such plans are not available, the indi13 vidual shall be given the opportunity to enroll in a 

14 fallback HAPI plan. 

15 (2) REQUIREMENT FOR DIFFERENT PLAN

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

17 not satisfied with respect to a coverage area if only 

18 1 entity offers all the HAPI plans in the area. 

19 (b) CONTRACTS.— 

20 (1) IN GENERAL.—The Secretary shall enter 

21 into contracts under this subsection with entities for 

22 the offering of fallback HAPI plans in coverage 

23 areas in which the guarantee under subsection (a) is 

24 not met. 


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1 (2) COMPETITIVE PROCEDURES.—Competitive 

2 procedures (as defined in section 4(5) of the Office 

3 of Federal Procurement Policy Act (41 U.S.C. 

4 403(5))) shall be used to enter into a contract under 

5 this subsection. 

6 (c) FALLBACK HAPI PLAN.—For purposes of this 

7 section, the term ‘‘fallback HAPI plan’’ means a HAPI 

8 plan that— 

9 (1) meets the requirements described in section 

10 111(b) and does not provide actuarially equivalent 

11 coverage described in section 111(c); and 

12 (2) meets such other requirements as the Sec13 retary may specify. 

14 Subtitle F—Federal Financing 

15 Responsibilities 

16 SEC. 651. APPROPRIATION FOR SUBSIDY PAYMENTS. 

17 There is authorized to be appropriated and there is 

18 appropriated for each fiscal year such sums as may be 

19 necessary to fund the insurance premium subsidies under 

20 section 121. 


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1 SEC. 652. RECAPTURE OF MEDICARE AND 90 PERCENT OF 

2 MEDICAID FEDERAL DSH FUNDS TO 

3 STRENGTHEN MEDICARE AND ENSURE CON4 TINUED SUPPORT FOR PUBLIC HEALTH PRO5 GRAMS. 

6 (a) RECAPTURE OF MEDICARE DSH FUNDS.— 

7 (1) IN GENERAL.—Section 1886(d)(5)(F)(i) of 

8 the Social Security Act (42 U.S.C. 

9 1395ww(d)(5)(F)(i)) is amended by inserting ‘‘and 

10 before January 1 of the first calendar year in which 

11 coverage under a HAPI plan begins under the 

12 Healthy Americans Act,’’ after ‘‘May 1, 1986,’’. 

13 (2) SAVINGS TO PART A TRUST FUND.—The 

14 savings to the Federal Hospital Insurance Trust 

15 Fund by reason of the amendment made by para16 graph (1) shall be used to strengthen the financial 

17 solvency of such Trust Fund. 

18 (b) RECAPTURE OF 90 PERCENT OF MEDICAID DSH 

19 FUNDS.— 

20 (1) HEALTHY AMERICANS PUBLIC HEALTH

21 TRUST FUND.—Subchapter A of chapter 98 of the 

22 Internal Revenue Code of 1986 (relating to trust 

23 fund code) is amended by adding at the end the fol24 lowing new section: 


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1 ‘‘SEC. 9511. HEALTHY AMERICANS PUBLIC HEALTH TRUST 

2 FUND. 

3 ‘‘(a) CREATION OF TRUST FUND.—There is estab4 lished in the Treasury of the United States a trust fund 

5 to be known as the ‘Healthy Americans Public Health 

6 Trust Fund’, consisting of any amount appropriated or 

7 credited to the Trust Fund as provided in this section or 

8 section 9602(b). 

9 ‘‘(b) TRANSFER TO TRUST FUND OF 90 PERCENT

10 OF MEDICAID DSH FUNDS.—There are hereby appro11 priated to the Healthy Americans Public Health Trust 

12 Fund the following amounts: 

13 ‘‘(1) In the case of the second, third, and 

14 fourth quarters of the first fiscal year in which cov15 erage under a HAPI plan begins under the Healthy 

16 Americans Act, an amount equal to 90 percent of 

17 the amount that would otherwise have been appro18 priated for the purpose of making payments to 

19 States under section 1903(a) of the Social Security 

20 Act for the Federal share of disproportionate share 

21 hospital payments made under section 1923 of such 

22 Act for such quarters of that fiscal year but for sub23 sections (c)(2) and (d)(2)(D) of section 1941 of the 

24 such Act, as determined by the Secretary of Health 

25 and Human Services. 


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•S 334 IS

1 ‘‘(2) In the case of each succeeding fiscal year, 

2 an amount equal to 90 percent of the amount that 

3 would otherwise have been appropriated for the pur4 pose of making payments to States under section 

5 1903(a) of the Social Security Act for the Federal 

6 share of disproportionate share hospital payments 

7 made under section 1923 of such Act for that fiscal 

8 year but for subsections (c)(1) and (d)(2)(D) of sec9 tion 1941 of such Act, as determined by the Sec10 retary of Health and Human Services, taking into 

11 account the percentage change, if any, in the con12 sumer price index for all urban consumers (U.S. city 

13 average) for the preceding fiscal year. 

14 ‘‘(c) EXPENDITURES FROM TRUST FUND.—With re15 spect to each fiscal year for which transfers are made 

16 under subsection (b), amounts in the Healthy Americans 

17 Public Health Trust Fund shall be available for that fiscal 

18 year for the following purposes: 

19 ‘‘(1) PROVIDING PREMIUM AND PERSONAL RE20 SPONSIBILITY CONTRIBUTION SUBSIDIES.—For 

21 making appropriations authorized under section 651 

22 of the Healthy Americans Act for providing pre23 mium and personal responsibility contribution sub24 sidies in accordance with section 122 of such Act. 


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1 ‘‘(2) MAKING BONUS PAYMENTS TO STATES

2 FOR IMPLEMENTING MEDICAL MALPRACTICE RE3 FORM.—For making appropriations for bonus pay4 ments to States in accordance with section 802 of 

5 such Act for implementing a State medical mal6 practice reform law that complies with subsection 

7 (b) of such section. 

8 ‘‘(3) REDUCING THE FEDERAL BUDGET DEF9 ICIT.—The Secretary shall transfer any amounts in 

10 the Trust Fund that are not expended as of Sep11 tember 30 of a fiscal year for a purpose described 

12 in paragraph (1), (2), or (3) to the general revenues 

13 account of the Treasury.’’. 

14 (2) CLERICAL AMENDMENT.—The table of sec15 tions for such subchapter is amended by adding at 

16 the end the following new item: 

‘‘Sec. 9511. Healthy Americans Public Health Trust Fund.’’. 


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1 Subtitle G—Tax Treatment of 

2 Health Care Coverage Under 

3 Healthy Americans Program; 

4 Termination of Coverage Under 

5 Other Governmental Programs 

6 and Transition Rules for Med7 icaid and SCHIP 

8 PART I—TAX TREATMENT OF HEALTH CARE COV9 ERAGE UNDER HEALTHY AMERICANS PRO10 GRAM 

11 SEC. 661. LIMITED EMPLOYEE INCOME AND PAYROLL TAX 

12 EXCLUSION FOR EMPLOYER SHARED RE13 SPONSIBILITY PAYMENTS, HISTORIC RE14 TIREE HEALTH CONTRIBUTIONS, AND TRAN15 SITIONAL COVERAGE CONTRIBUTIONS. 

16 (a) INCOME TAX EXCLUSION.— 

17 (1) IN GENERAL.—Subsection (a) of section 

18 106 of the Internal Revenue Code of 1986 (relating 

19 to contributions by employer to accident and health 

20 plans) is amended to read as follows: 

21 ‘‘(a) GENERAL RULE.—Gross income of an individual 

22 does not include— 

23 ‘‘(1) if such individual is an employee, shared 

24 responsibility payments made by an employer under 

25 section 3411, 


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•S 334 IS

1 ‘‘(2) if such individual is a former employee be2 fore the first calendar year beginning 2 years after 

3 the date of the enactment of the Healthy Americans 

4 Act, employer-provided coverage under an accident 

5 or health plan, 

6 ‘‘(3) if such individual is a qualified collective 

7 bargaining employee under an accident or health 

8 plan in effect on January 1 of the first calendar year 

9 beginning 2 years after the date of the enactment of 

10 the Healthy Americans Act, employer-provided cov11 erage under such plan during any transition period 

12 described in section 3432, and 

13 ‘‘(4) employer-provided coverage for qualified 

14 long-term care services (as defined in section 

15 7702B(c)).’’. 

16 (2) CONFORMING AMENDMENTS.—Section 106 

17 of such Code is amended— 

18 (A) by adding at the end of subsection (b) 

19 the following new paragraph: 

20 ‘‘(8) TERMINATION.—This subsection shall not 

21 apply to contributions made in any calendar year be22 ginning at least 2 years after the date of the enact23 ment of the Healthy Americans Act.’’, 

24 (B) by inserting ‘‘and before the first cal25 endar year beginning 2 years after the date of 


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•S 334 IS

1 the enactment of the Healthy Americans Act,’’ 

2 after ‘‘January 1, 1997,’’ in subsection (c)(1), 

3 and 

4 (C) by striking ‘‘shall be treated as em5 ployer-provided coverage for medical expenses 

6 under an accident or health plan’’ in subsection 

7 (d)(1) and inserting ‘‘shall not be included in 

8 such employee’s gross income’’. 

9 (b) PAYROLL TAXES.— 

10 (1) IN GENERAL.—Section 3121(a) (defining 

11 wages) is amended by adding at the end the fol12 lowing new sentence: ‘‘In the case of any calendar 

13 year beginning at least 2 years after the date of the 

14 enactment of the Healthy Americans Act, para15 graphs (2) and (3) shall apply to payments on ac16 count of sickness only if such payments are de17 scribed in section 106(a).’’. 

18 (2) RAILROAD RETIREMENT.—Section 

19 3231(e)(1) (defining wages) is amended by adding 

20 at the end the following new sentence: ‘‘In the case 

21 of any calendar year beginning at least 2 years after 

22 the date of the enactment of the Healthy Americans 

23 Act, this paragraph shall apply to payments on ac24 count of sickness only if such payments are de25 scribed in section 106(a).’’. 


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1 (3) UNEMPLOYMENT.—Section 3306(b) (defin2 ing wages) is amended by adding at the end the fol3 lowing new sentence: ‘‘In the case of any calendar 

4 year beginning at least 2 years after the date of the 

5 enactment of the Healthy Americans Act, para6 graphs (2) and (4) shall apply to payments on ac7 count of sickness only if such payments are de8 scribed in section 106(a).’’. 

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

10 this section shall apply to calendar years beginning at 

11 least 2 years after the date of the enactment of the 

12 Healthy Americans Act. 

13 SEC. 662. EXCLUSION FOR LIMITED EMPLOYER-PROVIDED 

14 HEALTH CARE FRINGE BENEFITS. 

15 (a) IN GENERAL.—Section 132(a) of the Internal 

16 Revenue Code of 1986 (relating to certain fringe benefits) 

17 is amended by striking ‘‘or’’ at the end of paragraph (7), 

18 by striking the period at the end of paragraph (8) and 

19 inserting ‘‘, or’’, and by adding at the end the following 

20 new paragraph: 

21 ‘‘(9) qualified health care fringe.’’. 

22 (b) QUALIFIED HEALTH CARE FRINGE.— 

23 (1) IN GENERAL.—Section 132 of the Internal 

24 Revenue Code of 1986 is amended by redesignating 


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•S 334 IS

1 subsection (o) as subsection (p) and by inserting 

2 after subsection (n) the following new subsection: 

3 ‘‘(o) QUALIFIED HEALTH CARE FRINGE.—For pur4 poses of this section, the term ‘qualified health care fringe’ 

5 means— 

6 ‘‘(1) any wellness program described in section 

7 131 of the Healthy Americans Act, and 

8 ‘‘(2) any on-site first aid coverage for employ9 ees.’’. 

10 (2) NONDISCRIMINATORY TREATMENT.—Sec11 tion 132(j)(1) of such Code (relating to exclusions 

12 under subsection (a)(1) and (2) apply to highly com13 pensated employees only if no discrimination) is 

14 amended— 

15 (A) by striking ‘‘Paragraphs (1) and (2) of 

16 subsection (a)’’ and inserting ‘‘Paragraphs (1), 

17 (2), and (9) of subsection (a)’’, and 

18 (B) by striking ‘‘SUBSECTION (a)(1) AND

19 (2)’’ in the heading and inserting ‘‘SUB20 SECTIONS (a)(1), (2), AND (9)’’. 

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

22 this section shall apply to calendar years beginning at 

23 least 2 years after the date of the enactment of the 

24 Healthy Americans Act. 


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1 SEC. 663. LIMITED EMPLOYER DEDUCTION FOR EMPLOYER 

2 SHARED RESPONSIBILITY PAYMENTS, HIS3 TORIC RETIREE HEALTH CONTRIBUTIONS, 

4 AND OTHER HEALTH CARE EXPENSES. 

5 (a) IN GENERAL.—Subsection (l) of section 162 of 

6 the Internal Revenue Code of 1986 (relating to trade or 

7 business expenses) is amended to read as follows: 

8 ‘‘(l) LIMITATION ON DEDUCTIBLE EMPLOYER

9 HEALTH CARE EXPENDITURES.—No deduction shall be 

10 allowed under this chapter for any employer contribution 

11 to an accident or health plan other than— 

12 ‘‘(1) any shared responsibility payment made 

13 under section 3411, 

14 ‘‘(2) any accident or health plan coverage for 

15 individuals who are former employees before the first 

16 calendar year beginning 2 years after the date of the 

17 enactment of the Healthy Americans Act, 

18 ‘‘(3) any accident or health plan in effect on 

19 January 1 of the first calendar year beginning 2 

20 years after the date of the enactment of the Healthy 

21 Americans Act with respect to coverage for qualified 

22 collective bargaining employees during a transition 

23 period described in section 3432, 

24 ‘‘(4) any accident or health plan which qualifies 

25 as a wellness program described in section 131 of 

26 such Act, 


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•S 334 IS

1 ‘‘(5) any accident or health plan which con2 stitutes on-site first aid coverage for employees, and 

3 ‘‘(6) any accident or health plan which is a 

4 qualified long-term care insurance contract.’’. 

5 (b) CONFORMING AMENDMENT.—Section 162 of the 

6 Internal Revenue Code of 1986 is amended by striking 

7 subsection (n). 

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

9 this section shall apply to calendar years beginning at 

10 least 2 years after the date of the enactment of the 

11 Healthy Americans Act. 

12 SEC. 664. HEALTH CARE STANDARD DEDUCTION. 

13 (a) IN GENERAL.—Section 62(a) of the Internal Rev14 enue Code of 1986 (defining adjusted gross income) is 

15 amended by inserting after paragraph (20) the following 

16 new paragraph: 

17 ‘‘(21) INDIVIDUAL SHARED RESPONSIBILITY

18 PAYMENTS.— 

19 ‘‘(A) IN GENERAL.—In the case of a tax20 payer with gross income for the taxable year ex21 ceeding 100 percent of the poverty line (ad22 justed for the size of the family involved) for 

23 the calendar year in which such taxable year 

24 begins and who is enrolled in a HAPI plan 

25 under the Healthy Americans Act, the deducVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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•S 334 IS

1 tion allowable under section 213 by reason of 

2 subsection (d)(1)(D) thereof (determined with3 out regard to any income limitation under sub4 section (a) thereof) in an amount equal to the 

5 lesser of— 

6 ‘‘(i) the amount paid under section 

7 3421 with respect to such plan by such 

8 taxpayer for such taxable year, or 

9 ‘‘(ii) the applicable fraction times, in 

10 the case of— 

11 ‘‘(I) coverage of an individual, 

12 $6,025, 

13 ‘‘(II) coverage of a married cou14 ple or domestic partnership (as deter15 mined by a State) without dependent 

16 children, $12,050, 

17 ‘‘(III) coverage of an unmarried 

18 individual with 1 or more dependent 

19 children, $8,610, plus $2,000 for each 

20 dependent child, and 

21 ‘‘(IV) coverage of a married cou22 ple or domestic partnership (as deter23 mined by a State) with 1 or more de24 pendent children, $15,210, plus 

25 $2,000 for each dependent child. 


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•S 334 IS

1 ‘‘(B) APPLICABLE FRACTION.—For pur2 poses of subparagraph (A)(ii), the applicable 

3 fraction is the fraction (not to exceed 1)— 

4 ‘‘(i) the numerator of which is the 

5 gross income of the taxpayer for the tax6 able year expressed as a percentage of the 

7 poverty line (adjusted for the size of the 

8 family involved) minus such poverty line 

9 for the calendar year in which such taxable 

10 year begins, and 

11 ‘‘(ii) the denominator of which is 400 

12 percent of the poverty line (adjusted for 

13 the size of the family involved) minus such 

14 poverty line. 

15 ‘‘(C) PHASEOUT OF DEDUCTION

16 AMOUNT.— 

17 ‘‘(i) IN GENERAL.—The amount oth18 erwise determined under subparagraph (A) 

19 for any taxable year shall be reduced by 

20 the amount determined under clause (ii). 

21 ‘‘(ii) AMOUNT OF REDUCTION.—The 

22 amount determined under this clause shall 

23 be the amount which bears the same ratio 

24 to the amount determined under subpara25 graph (A) as— 


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•S 334 IS

1 ‘‘(I) the excess of the taxpayer’s 

2 modified adjusted gross income for 

3 such taxable year, over $62,500 

4 ($125,000 in the case of a joint re5 turn), bears to 

6 ‘‘(II) $62,500 ($125,000 in the 

7 case of a joint return). 

8 Any amount determined under this clause 

9 which is not a multiple of $1,000 shall be 

10 rounded to the next lowest $1,000. 

11 ‘‘(D) INFLATION ADJUSTMENT.—In the 

12 case of any taxable year beginning in a calendar 

13 year after 2009, each dollar amount contained 

14 in subparagraph (A)(ii) and subparagraph 

15 (C)(ii)(I) shall be increased by an amount equal 

16 to such dollar amount, multiplied by the cost17 of-living adjustment determined under section 

18 1(f)(3) for the calendar year in which the tax19 able year begins, determined by substituting 

20 ‘calendar year 2008’ for ‘calendar year 1992’ in 

21 subparagraph (B) thereof. Any increase deter22 mined under the preceding sentence shall be 

23 rounded to the nearest multiple of $50 ($1,000 

24 in the case of the dollar amount contained in 

25 subparagraph (C)(ii)(I)). 


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1 ‘‘(E) DETERMINATION OF MODIFIED AD2 JUSTED GROSS INCOME.— 

3 ‘‘(i) IN GENERAL.—For purposes of 

4 this paragraph, the term ‘modified ad5 justed gross income’ means adjusted gross 

6 income— 

7 ‘‘(ii) determined without regard to 

8 this section and sections 86, 135, 137, 

9 199, 221, 222, 911, 931, and 933, and 

10 ‘‘(iii) increased by— 

11 ‘‘(I) the amount of interest re12 ceived or accrued during the taxable 

13 year which is exempt from tax under 

14 this title, and 

15 ‘‘(II) the amount of any social se16 curity benefits (as defined in section 

17 86(d)) received or accrued during the 

18 taxable year. 

19 ‘‘(F) POVERTY LINE.—For purposes of 

20 this paragraph, the term ‘poverty line’ has the 

21 meaning given such term in section 673(2) of 

22 the Community Health Services Block Grant 

23 Act (42 U.S.C. 9902(2)), including any revision 

24 required by such section.’’. 


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•S 334 IS

1 (b) CONFORMING AMENDMENT.—Section 

2 213(d)(1)(D) of the Internal Revenue Code of 1986 is 

3 amended by inserting ‘‘amounts paid under section 3421 

4 and’’ after ‘‘including’’. 

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

6 this section shall apply to payments made in calendar 

7 years beginning at least 2 years after the date of the en8 actment of this Act. 

9 SEC. 665. MODIFICATION OF OTHER TAX INCENTIVES TO 

10 COMPLEMENT HEALTHY AMERICANS PRO11 GRAM. 

12 (a) TERMINATION OF CREDIT FOR HEALTH INSUR13 ANCE COSTS OF ELIGIBLE INDIVIDUALS.—Section 35 of 

14 the Internal Revenue Code of 1986 (relating to health in15 surance costs of eligible individuals) is amended by adding 

16 at the end the following new subsection: 

17 ‘‘(h) TERMINATION.—This section shall not apply to 

18 payments made in any calendar year beginning at least 

19 2 years after the date of the enactment of the Healthy 

20 Americans Act.’’. 

21 (b) TERMINATION OF HEALTH CARE EXPENSE RE22 IMBURSEMENT UNDER CAFETERIA PLANS.— 

23 (1) IN GENERAL.—Section 125 of the Internal 

24 Revenue Code of 1986 (relating to cafeteria plans) 

25 is amended by redesignating subsection (h) as subVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00139 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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•S 334 IS

1 section (i) and by inserting after subsection (g) the 

2 following new subsection: 

3 ‘‘(h) TERMINATION.—This section shall not apply to 

4 health benefits coverage in any calendar year beginning 

5 at least 2 years after the date of the enactment of the 

6 Healthy Americans Act.’’. 

7 (2) LONG-TERM CARE ALLOWED UNDER CAFE8 TERIA PLANS.— 

9 (A) IN GENERAL.—Section 125(f) of such 

10 Code (defining qualified benefits) is amended by 

11 striking the last sentence. 

12 (B) EFFECTIVE DATE.—The amendment 

13 made by this paragraph shall apply to contracts 

14 issued with respect to any calendar year begin15 ning at least 2 years after the date of the en16 actment of this Act. 

17 (c) TERMINATION OF ARCHER MSA CONTRIBU18 TIONS.—Section 220 of the Internal Revenue Code of 

19 1986 (relating to Archer MSAs) is amended— 

20 (1) by inserting ‘‘and made before the first cal21 endar year beginning 2 years after the date of the 

22 enactment of the Healthy Americans Act’’ after ‘‘in 

23 cash’’ in subsection (d)(1)(A)(i), and 

24 (2) by adding at the end the following new sub25 section: 


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•S 334 IS

1 ‘‘(k) TERMINATION.—This section shall not apply to 

2 contributions made in any calendar year beginning at least 

3 2 years after the date of the enactment of the Healthy 

4 Americans Act.’’. 

5 (d) HEALTH SAVINGS ACCOUNTS ALLOWED IN CON6 JUNCTION WITH HIGH DEDUCTIBLE HAPI PLANS.— 

7 (1) IN GENERAL.—Section 223 of the Internal 

8 Revenue Code of 1986 (relating to health savings ac9 counts) is amended— 

10 (A) by inserting ‘‘qualified’’ before ‘‘high 

11 deductible health plan’’ each place it appears in 

12 the text (other than subsection (c)(2)(A)), 

13 (B) by striking ‘‘The term ‘high deductible 

14 health plan’ means a health plan’’ in subsection 

15 (c)(2)(A) and inserting ‘‘The term ‘qualified 

16 high deductible health plan’ means a HAPI 

17 plan under the Healthy Americans Act’’, 

18 (C) by striking subparagraphs (B) and (C) 

19 of subsection (c)(2) and by redesignating sub20 paragraph (D) of subsection (c)(2) as subpara21 graph (B), and 

22 (D) by striking ‘‘HIGH’’ in the heading for 

23 paragraph (2) of subsection (c) and inserting 

24 ‘‘QUALIFIED HIGH’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to payments made in 

3 calendar years beginning at least 2 years after the 

4 date of the enactment of this Act. 

5 SEC. 666. TERMINATION OF CERTAIN EMPLOYER INCEN6 TIVES WHEN REPLACED BY LOWER HEALTH 

7 CARE COSTS. 

8 (a) IN GENERAL.—Subchapter C of chapter 90 of the 

9 Internal Revenue Code of 1986 (relating to provisions af10 fecting more than one subtitle) is amended by adding at 

11 the end the following new section: 

12 ‘‘SEC. 7875. TERMINATION OF CERTAIN PROVISIONS. 

13 ‘‘The following provisions shall not apply to taxable 

14 years beginning (or transactions in the case of sections 

15 referred to in paragraph (3)) in any calendar year begin16 ning at least 2 years after the date of the enactment of 

17 the Healthy Americans Act: 

18 ‘‘(1) Section 199 (relating to income attrib19 utable to domestic production activities). 

20 ‘‘(2) Section 501(c)(9) (relating to tax-exempt 

21 status of voluntary employees’ beneficiary associa22 tions). 

23 ‘‘(3) Sections 861(a)(6), 862(a)(6), 863(b)(2), 

24 863(b)(3), and 865(b) (relating to inventory prop25 erty sales source rule exception).’’. 


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•S 334 IS

1 (b) DEFERRAL OF ACTIVE INCOME OF CONTROLLED

2 FOREIGN CORPORATIONS.—Section 952 of the Internal 

3 Revenue Code of 1986 (relating to subpart F income de4 fined) is amended by adding at the end the following new 

5 subsection: 

6 ‘‘(e) SPECIAL APPLICATION OF SUBPART.— 

7 ‘‘(1) IN GENERAL.—For taxable years begin8 ning in any calendar year beginning at least 2 years 

9 after the date of the enactment of the Healthy 

10 Americans Act, notwithstanding any other provision 

11 of this subpart, the term ‘subpart F income’ means, 

12 in the case of any controlled foreign corporation, the 

13 income of such corporation derived from any foreign 

14 country. 

15 ‘‘(2) APPLICABLE RULES.—Rules similar to the 

16 rules under the last sentence of subsection (a) and 

17 subsection (d) shall apply to this subsection.’’. 

18 (c) CONFORMING AMENDMENT.—The table of sec19 tions for subchapter C of chapter 90 of the Internal Rev20 enue Code of 1986 is amended by adding at the end the 

21 following new item: 

‘‘Sec. 7875. Termination of certain provisions.’’. 


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•S 334 IS

1 PART II—TERMINATION OF COVERAGE UNDER 

2 OTHER GOVERNMENTAL PROGRAMS AND 

3 TRANSITION RULES FOR MEDICAID AND 

4 SCHIP 

5 SEC. 671. GROUP AND INDIVIDUAL HEALTH PLAN REQUIRE6 MENTS NOT APPLICABLE TO HAPI PLANS. 

7 (a) ERISA.—Section 3(1) of Employee Retirement 

8 Income Security Act of 1974 (29 U.S.C. 1002(1)) is 

9 amended by adding at the end the following new sentence: 

10 ‘‘Such terms shall not include the provision of medical, 

11 surgical, or hospital care or benefits through HAPI plans 

12 under the Healthy Americans Act.’’. 

13 (b) INTERNAL REVENUE CODE OF 1986.—Section 

14 5000 of the Internal Revenue Code of 1986 (relating to 

15 certain group health plans) is amended by adding at the 

16 end the following new subsection: 

17 ‘‘(e) HAPI PLANS.—For purposes of this section, the 

18 terms ‘group health plan’ and ‘large group health plan’ 

19 shall not include any HAPI plan under the Healthy Amer20 icans Act.’’. 

21 (c) PUBLIC HEALTH SERVICE ACT.—Section 

22 2791(b)(5) of the Public Health Service Act (42 U.S.C. 

23 300gg–91(b)(5)) is amended by adding at the end the fol24 lowing new sentence: ‘‘Such term shall not include health 

25 insurance coverage offered to individuals through a HAPI 

26 plan under the Healthy Americans Act.’’. 


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1 SEC. 672. FEDERAL EMPLOYEES HEALTH BENEFITS PLAN. 

2 (a) IN GENERAL.—Chapter 89 of title 5, United 

3 States Code, is amended by adding at the end the fol4 lowing new section: 

5 ‘‘§ 8915. Termination 

6 ‘‘No contract shall be entered into under this chapter 

7 or chapters 89A and 89B with respect to any coverage 

8 period occurring in any calendar year beginning at least 

9 2 years after the date of the enactment of the Healthy 

10 Americans Act.’’. 

11 (b) CONFORMING AMENDMENT.—The table of sec12 tions for such chapter 89 is amended by adding at the 

13 end the following new item: 

‘‘8915. Termination.’’. 

14 SEC. 673. MEDICAID AND SCHIP. 

15 (a) IN GENERAL.—Title XIX of the Social Security 

16 Act, as amended by section 311, is amended by adding 

17 at the end the following new section: 

18 ‘‘TRANSITION TO COVERAGE UNDER HAPI PLANS; RE19 QUIREMENT TO PROVIDE SUPPLEMENTAL COV20 ERAGE; TERMINATION OF UNNECESSARY PROVISIONS

21 ‘‘SEC. 1941. (a) TRANSITION AND SUPPLEMENTAL

22 COVERAGE REQUIREMENTS.—The Secretary shall provide 

23 technical assistance to States and health insurance issuers 

24 of HAPI plans to ensure that individuals receiving medical 

25 assistance under State Medicaid plans under this title or 


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1 child health assistance under child health plans under title 

2 XXI are— 

3 ‘‘(1) informed of— 

4 ‘‘(A) the guarantee of private coverage for 

5 essential services for all Americans established 

6 by the Healthy Americans Act; and 

7 ‘‘(B) each individual’s personal responsi8 bility— 

9 ‘‘(i) for health care prevention; 

10 ‘‘(ii) to enroll (or to be enrolled on 

11 their behalf) in a HAPI plan through the 

12 applicable State HHA during an open en13 rollment period; and 

14 ‘‘(iii) to submit necessary documenta15 tion to their State HHA so that the HHA 

16 may determine the individual’s eligibility 

17 for premium and personal responsibility 

18 contribution subsidies; 

19 ‘‘(2) provided with appropriate assistance in 

20 transitioning from receiving medical assistance 

21 under State Medicaid plans or child health assist22 ance under child health plans for their primary 

23 health coverage to obtaining such coverage through 

24 enrollment in HAPI plans in a manner that ensures 

25 continuation of coverage for such individuals; 


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1 ‘‘(3) notwithstanding any other provision of this 

2 title, after December 31 of the last calendar year 

3 ending before the first calendar year in which cov4 erage under a HAPI plan begins in accordance with 

5 the Healthy Americans Act, provided with medical 

6 assistance that consists of supplemental coverage 

7 that meets the requirements of sections 202 and 301 

8 of such Act; and 

9 ‘‘(4) if the State elects to establish a State 

10 Choices for Long-Term Care Program under section 

11 1940 and the individual is likely to be eligible for the 

12 program, informed of the coverage available under 

13 the program and how to enroll. 

14 ‘‘(b) MAINTENANCE OF MEDICARE COST-SHAR15 ING.—For each month beginning after the last month of 

16 the last calendar year ending before the first calendar year 

17 in which coverage under a HAPI plan begins in accord18 ance with the Healthy Americans Act— 

19 ‘‘(1) a State shall continue to provide medical 

20 assistance for medicare cost-sharing to individuals 

21 described in section 1902(a)(10)(E) as if the 

22 Healthy Americans Act had not been enacted; and 

23 ‘‘(2) the Secretary shall continue to reimburse 

24 the State for the provision of such medical assist25 ance. 


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1 ‘‘(c) CONTINUED SUPPORT FOR DSH EXPENDI2 TURES.— 

3 ‘‘(1) IN GENERAL.—Notwithstanding any other 

4 provision of this title, with respect to each fiscal year 

5 that begins after the first calendar year in which 

6 coverage under a HAPI plan begins in accordance 

7 with the Healthy Americans Act, the DSH allotment 

8 for each State otherwise applicable under section 

9 1923(f) for that fiscal year shall be reduced by 90 

10 percent and no payment shall be made under section 

11 1903(a) to a State with respect to any payment ad12 justment made under section 1923 for hospitals in 

13 the State for quarters in the fiscal year in excess of 

14 the reduced DSH allotment for the State applicable 

15 for such year. 

16 ‘‘(2) SPECIAL RULE FOR LAST 3 QUARTERS OF

17 FIRST FISCAL YEAR IN WHICH COVERAGE UNDER A

18 HAPI PLAN BEGINS.—With respect to the first fiscal 

19 year in which coverage under a HAPI plan begins 

20 in accordance with the Healthy Americans Act, the 

21 Secretary shall reduce the DSH allotment for each 

22 State that is otherwise applicable under section 

23 1923(f) for that fiscal year so that each such DSH 

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1 ment for the second, third, and fourth quarters of 

2 that fiscal year. 

3 ‘‘(d) TERMINATION OF ALL FEDERAL PAYMENTS

4 UNDER THIS TITLE OTHER THAN FOR MEDICARE COST5 SHARING, SUPPLEMENTAL MEDICAL ASSISTANCE, OR A

6 STATE CHOICES FOR LONG-TERM CARE PROGRAM.—Not7 withstanding any other provision of this title: 

8 ‘‘(1) no individual other than an individual to 

9 which section 202, 301, or 311 of the Healthy 

10 Americans Act applies is entitled to medical assist11 ance under a State plan approved under this title for 

12 any item or service furnished after December 31 of 

13 the last calendar year ending before the first cal14 endar year in which coverage under a HAPI plan be15 gins in accordance with such Act; 

16 ‘‘(2) no payment shall be made to a State 

17 under section 1903(a) for any item or service fur18 nished after that date or for any other sums ex19 pended by a State for which a payment would have 

20 been made under such section, other than for the 

21 Federal medical assistance percentage of the total 

22 amount expended by a State for each fiscal year 

23 quarter beginning after that date for providing— 


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1 ‘‘(A) medical assistance for the mainte2 nance of medicare cost-sharing in accordance 

3 with subsection (b); 

4 ‘‘(B) medical assistance for individuals who 

5 are eligible for supplemental medical assistance 

6 under this title after such date in accordance 

7 with section 202 or 301 of the Healthy Ameri8 cans Act; 

9 ‘‘(C) payments for expenditures for estab10 lishing and operating a State Choices for Long11 Term Care Program under section 1940 (sub12 ject to the aggregate 5-year limit established 

13 under subsection (c)(1) of such section); and 

14 ‘‘(D) payment adjustments under section 

15 1923 for hospitals in the State that do not ex16 ceed the reduced DSH allotment for the State 

17 determined under subsection (c)’’. 

18 (b) APPLICATION TO SCHIP.— 

19 (1) APPLICATION OF TRANSITION REQUIRE20 MENTS.—Section 2107(e)(1) of the Social Security 

21 Act (42 U.S.C. 1397gg(e)(1)) is amended by adding 

22 at the end the following: 

23 ‘‘(E) Section 1941(a) (relating to transi24 tion to coverage under HAPI plans and, in the 

25 case of paragraph (3) of such section, the reVerDate Aug 31 2005 00:00 Jan 22, 2007 Jkt 059200 PO 00000 Frm 00150 Fmt 6652 Sfmt 6201 E:\BILLS\S334.IS S334

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1 quirement to provide supplemental medical as2 sistance for targeted low-income children who 

3 are provided child health assistance as optional 

4 targeted low-income children under title 

5 XIX).’’. 

6 (2) TERMINATION.—Title XXI of the Social Se7 curity Act is amended by adding at the end the fol8 lowing new section: 

9 ‘‘TERMINATION

10 ‘‘SEC. 2111. Notwithstanding any other provision of 

11 this title, no payment shall be made to a State under sec12 tion 2105(a) with respect to child health assistance for 

13 any item or service furnished after December 31 of the 

14 last calendar year ending before the first calendar year 

15 in which coverage under a HAPI plan begins in accord16 ance with the Healthy Americans Act.’’. 


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1 TITLE VII—PURCHASING 

2 HEALTH SERVICES AND 

3 PRODUCTS THAT ARE MOST 

4 EFFECTIVE 

5 Subtitle A—Effective Health 

6 Services and Products 

7 SEC. 701. ONE TIME DISALLOWANCE OF DEDUCTION FOR 

8 ADVERTISING AND PROMOTIONAL EXPENSES 

9 FOR CERTAIN PRESCRIPTION PHARMA10 CEUTICALS. 

11 (a) IN GENERAL.—Part IX of subchapter B of chap12 ter 1 of subtitle A of the Internal Revenue Code of 1986 

13 (relating to items not deductible) is amended by adding 

14 at the end the following new section: 

15 ‘‘SEC. 280I. ONE TIME DISALLOWANCE OF DEDUCTION FOR 

16 CERTAIN PRESCRIPTION PHARMACEUTICALS 

17 ADVERTISING AND PROMOTIONAL EX18 PENSES. 

19 ‘‘(a) IN GENERAL.—No deduction shall be allowed 

20 under this chapter for expenses relating to advertising or 

21 promoting the sale and use of prescription pharma22 ceuticals other than drugs for rare diseases or conditions 

23 (within the meaning of section 45C) for any taxable year 

24 which includes any portion of— 


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1 ‘‘(1) the 3-year period which begins on the date 

2 of a new drug application approval with respect to 

3 such a pharmaceutical, unless the manufacturer of 

4 such pharmaceutical demonstrates to the satisfaction 

5 of the Secretary that such pharmaceutical is subject 

6 to a comparison effectiveness study, including over7 the-counter medication (if appropriate), or 

8 ‘‘(2) the 1-year period which ends with the 

9 availability of a generic drug substitute, unless such 

10 advertising or promotion includes a statement that 

11 a lower cost alternative may soon be available and 

12 includes the chemical name of such alternative. 

13 ‘‘(b) ADVERTISING OR PROMOTING.—For purposes of 

14 this section, the term ‘advertising or promoting’ includes 

15 direct-to-consumer advertising and any activity designed 

16 to promote the use of a prescription pharmaceutical di17 rected to providers or others who may make decisions 

18 about the use of prescription pharmaceuticals (including 

19 the provision of product samples, free trials, and starter 

20 kits).’’. 

21 (b) CONFORMING AMENDMENT.—The table of sec22 tions for such part IX is amended by adding after the 

23 item relating to section 280H the following new item: 

‘‘Sec. 280I. One time disallowance of deduction for certain prescription pharmaceuticals advertising and promotional expenses.’’. 


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

2 this section shall apply to taxable years beginning with 

3 or within calendar years beginning at least 2 years after 

4 the date of the enactment of this Act. 

5 SEC. 702. ENHANCED NEW DRUG AND DEVICE APPROVAL. 

6 (a) IN GENERAL.— 

7 (1) NEW DRUGS.—Section 505 of the Federal 

8 Food, Drug, and Cosmetic Act (21 U.S.C. 355) is 

9 amended by adding at the end the following: 

10 ‘‘(o)(1) The sponsor of a new drug application under 

11 subsection (b) may include as part of such application a 

12 full report of an investigation which has been made to 

13 show, with respect to the new drug that is the subject of 

14 the application— 

15 ‘‘(A) the population for whom the drug is ap16 propriate; and 

17 ‘‘(B) the effectiveness of the drug when com18 pared to the effectiveness of drugs on the market as 

19 of the date that the application is submitted. 

20 ‘‘(2) If a sponsor of a new drug application under 

21 subsection (b) includes in such application the report de22 scribed under paragraph (1) then, notwithstanding any 

23 other provision of law, the Secretary shall apply section 

24 505A(b) to the drug that is the subject of such application 

25 in the same manner as the Secretary applies such section 


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1 to a new drug in the pediatric population that is the sub2 ject of a study described in such section. 

3 ‘‘(3) If a sponsor of a new drug application under 

4 subsection (b) does not include in such application the re5 port described under paragraph (1) then, notwithstanding 

6 any other provision of law, the Secretary shall require 

7 that— 

8 ‘‘(A) all promotional material with respect to 

9 such drug include the following disclosure: ‘This 

10 drug has not been proven to be more effective than 

11 other drugs on the market for any condition or ill12 ness mentioned in this advertisement.’; and 

13 ‘‘(B) such disclosure— 

14 ‘‘(i) appears at the beginning and end of 

15 any audio and visual promotional material; 

16 ‘‘(ii) constitutes not less than 20 percent of 

17 the time of any audio and visual promotional 

18 material; and 

19 ‘‘(iii)(I) in any promotional material, in20 cludes a clear and conspicuous printed state21 ment that is larger than other print used in 

22 such promotional material; and 

23 ‘‘(II) in any audio and visual promotional 

24 material, includes such statement in audio as 

25 well as visual format.’’. 


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1 (2) NEW DEVICES.—Section 515(c) of the Fed2 eral Food, Drug, and Cosmetic Act (21 U.S.C. 

3 360e) is amended by adding at the end the fol4 lowing: 

5 ‘‘(5)(A) A person that files a report seeking pre6 market approval under this subsection may include as part 

7 of such report a full description of an investigation which 

8 has been made to show, with respect to the device that 

9 is the subject of the report— 

10 ‘‘(i) the population for whom the device is ap11 propriate; and 

12 ‘‘(ii) the effectiveness of the device when com13 pared to the effectiveness of devices on the market 

14 as of the date that the report is submitted. 

15 ‘‘(B) If a person that files a report seeking premarket 

16 approval under this subsection includes in such report the 

17 description referred to under subparagraph (A), then the 

18 Secretary shall certify to the Director of the United States 

19 Patent and Trademark Office that such person included 

20 such description in such report so that the Director may 

21 extend the patent with respect to such device under section 

22 702(b) of the Healthy Americans Act. 

23 ‘‘(C) If a person that files a report seeking premarket 

24 approval under this subsection does not include in such 

25 report the description referred to under subparagraph (A) 


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1 then, notwithstanding any other provision of law, the Sec2 retary shall require that— 

3 ‘‘(i) all promotional material with respect to 

4 such device include the following disclosure: ‘This 

5 device has not been proven to be more effective than 

6 other devices on the market for any condition or ill7 ness mentioned in this advertisement.’; and 

8 ‘‘(ii) such disclosure— 

9 ‘‘(I) appears at the beginning and end of 

10 any audio and visual promotional material; 

11 ‘‘(II) constitutes not less than 20 percent 

12 of the time of any audio and visual promotional 

13 material; and 

14 ‘‘(III)(aa) in any promotional material, in15 cludes a clear and conspicuous printed state16 ment that is larger than other print used in 

17 such promotional material; and 

18 ‘‘(bb) in any audio and visual promotional 

19 material, includes such statement in audio as 

20 well as visual format.’’. 

21 (b) EXTENSION OF DEVICE PATENTS.—If the Direc22 tor of the United States Patent and Trademark Office re23 ceives a certification from the Secretary pursuant to sec24 tion 515(c)(5) of the Federal Food, Drug, and Cosmetic 

25 Act (as added under subsection (a)), the Director shall 


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1 extend, for a period of 2 years, the patent in effect with 

2 respect to such device under title 35 of the United States 

3 Code. 

4 (c) EFFECTIVE DATE.—This section shall apply to 

5 new drug applications filed under section 505(b) of the 

6 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b) 

7 and to applications for premarket approval of devices 

8 under section 515 of such Act (21 U.S.C. 350e) 180 days 

9 after the date of enactment of this Act. 

10 SEC. 703. MEDICAL SCHOOLS AND FINDING WHAT WORKS 

11 IN HEALTH CARE. 

12 Part B of title IX of the Public Health Service Act 

13 (42 U.S.C. 299b et seq.) is amended by adding at the end 

14 the following: 

15 ‘‘SEC. 918. MEDICAL SCHOOLS AND FINDING WHAT WORKS 

16 IN HEALTH CARE. 

17 ‘‘(a) ESTABLISHMENT OF WEBSITE.—Not later than 

18 1 year after the date of enactment of the Healthy Ameri19 cans Act, the Agency shall establish an Internet website— 

20 ‘‘(1) on which researchers at medical schools 

21 and other institutions may post the results of their 

22 research concerning evidence-informed best practices 

23 for improving the quality and efficiency of care; and 

24 ‘‘(2) that— 


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1 ‘‘(A) includes a description on how to im2 plement such best practices; and 

3 ‘‘(B) clearly identifies the funding source 

4 for the research. 

5 ‘‘(b) PILOT PROGRAM.— 

6 ‘‘(1) ESTABLISHMENT.—Using the information 

7 about evidence-informed best practices from the 

8 website under subsection (a) and other sources, the 

9 Agency, through the National Research Training 

10 Program and in consultation with medical schools, 

11 shall develop a pilot program to establish methods 

12 by which medical school curricula and training may 

13 be updated regularly to reflect best practices to im14 prove quality and efficiency in medical practice. 

15 ‘‘(2) APPLICATION TO PARTICIPATE.—To par16 ticipate in the pilot program, an entity shall— 

17 ‘‘(A) be an accredited medical school; and 

18 ‘‘(B) submit an application at such time, 

19 in such manner, and containing such informa20 tion as the Secretary may require. 

21 ‘‘(3) PARTICIPANTS.—The Secretary shall en22 sure that not less than 28 medical schools shall be 

23 included in the pilot program. 

24 ‘‘(4) DURATION; PUBLICATION OF RESULTS.— 

25 The Agency shall— 


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1 ‘‘(A) operate the pilot program for 3 years; 

2 and 

3 ‘‘(B) not later than 180 days after the 

4 date of the completion of the pilot program, 

5 publish and make public the results of the pilot 

6 program; and 

7 ‘‘(C) include, as part of the published re8 sults under subparagraph (B), recommenda9 tions on how to assure that all medical school 

10 curricula is updated on a regular basis to re11 flect best practices to improve quality and effi12 ciency in medical practice.’’. 

13 SEC. 704. FINDING AFFORDABLE HEALTH CARE PRO14 VIDERS NEARBY. 

15 (a) IN GENERAL.—Not later than 2 years after the 

16 date of enactment of this Act, the Secretary, in consulta17 tion with each HHA and health insurance issuers that 

18 offer a HAPI plan, shall establish an Internet website to 

19 assist covered individuals with locating health care pro20 viders in their State of residence who provide affordable, 

21 high-quality health care services. 

22 (b) QUALITY OF CARE STANDARD.—To develop the 

23 information displayed on the website with respect to the 

24 quality of care of a health care provider, the Secretary 

25 shall— 


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1 (1) on the date of establishment of the website, 

2 use information on the performance of providers in 

3 quality initiatives under the Medicare program, in4 cluding demonstration projects, reporting initiatives, 

5 and pay for performance efforts; and 

6 (2) not later than 3 years after the date of es7 tablishment of the website, in addition to the infor8 mation used under paragraph (1), use quality of 

9 care standards developed in consultation with, and 

10 similar to standards used by, Medicare quality im11 provement organizations of each State. 

12 (c) AFFORDABILITY STANDARD.—Not later than 2 

13 years after the date of enactment of this Act, the Sec14 retary shall, in consultation with health insurance issuers 

15 that offer a HAPI plan, develop guidelines by which each 

16 health care provider reports to the Secretary with respect 

17 to the affordability of services by such provider. The Sec18 retary shall ensure that such guidelines— 

19 (1) on the date of establishment of such guide20 lines, provide for the reporting of affordability of 

21 primary care services; and 

22 (2) by a date that is no later than 3 years after 

23 the date of enactment of this Act, provide for the re24 porting of other services. 


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1 Subtitle B—Other Provisions to Im2 prove Health Care Services and 

3 Quality 

4 SEC. 711. INDIVIDUAL MEDICAL RECORDS. 

5 The Secretary shall establish procedures to ensure 

6 that an individual’s medical record is considered the prop7 erty of such individual. 

8 SEC. 712. BONUS PAYMENT FOR MEDICAL MALPRACTICE 

9 REFORM. 

10 (a) IN GENERAL.—Effective 3 years after the date 

11 of enactment of this Act, a State shall be eligible for bonus 

12 payments under this Act if the State has enacted and is 

13 implementing a State medical malpractice reform law that 

14 complies with subsection (b). 

15 (b) REQUIREMENTS FOR STATE REFORM LAW.—A 

16 State medical malpractice reform law complies with this 

17 subsection if such law— 

18 (1) requires that an individual who files a med19 ical malpractice action in State court have the facts 

20 of such individual’s case reviewed prior to such filing 

21 by a panel that consists of— 

22 (A) not less than 1 qualified medical ex23 pert, chosen in consultation with the State 

24 Medicare quality improvement organizations or 


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1 physician speciality society, whose expertise is 

2 appropriate for case; 

3 (B) not less than 1 legal expert; and 

4 (C) not less than 1 community representa5 tive to verify that there is reasonable cause to 

6 believe that a malpractice claim exists; 

7 (2) permits an individual to engage in voluntary 

8 non-binding mediation with respect to the mal9 practice claim involved prior to filing an action in 

10 State court; 

11 (3) imposes sanctions against plaintiffs and at12 torneys who file frivolous medical malpractice claims 

13 in State courts; 

14 (4) prohibits attorneys who file 3 frivolous med15 ical malpractice actions in State courts from filing 

16 any another medical malpractice action in such 

17 courts for a period of 10 years; and 

18 (5) provides for the application of a presump19 tion of reasonableness with respect to a medical mal20 practice action if the defendant establishes that the 

21 defendant provided the items or services involved in 

22 accordance with accepted clinical practice guidelines 

23 established by the specialty of which the defendant 

24 is board certified or listed in the National Guideline 


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1 Clearinghouse, unless such presumption is rebutted 

2 by a preponderance of the evidence. 

3 (c) USE OF BONUS PAYMENTS.—A State shall use 

4 bonus payments received under this section to carry out 

5 activities related to disease and illness prevention and for 

6 the provision of enhanced health care services for children. 

7 (d) PROCEDURES.—The Secretary, in consultation 

8 with the Attorney General, shall by regulation establish 

9 guidelines for the implementation of this section. 

10 TITLE VIII—CONTAINING MED11 ICAL COSTS AND GETTING 

12 MORE VALUE FOR THE 

13 HEALTH CARE DOLLAR 

14 SEC. 801. COST-CONTAINMENT RESULTS OF THE HEALTHY 

15 AMERICANS ACT. 

16 Congress finds that the Healthy Americans Act will 

17 result in the following: 

18 (1) Private insurance companies will be forced 

19 to hold down costs and will slow the rate of growth 

20 because they are required to offer standardized 

21 Healthy American Private Insurance plans. 

22 (2) Administrative savings will be derived from 

23 decoupling employers from the health care infra24 structure and reducing employers’ and insurers’ ad25 ministrative costs. 


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1 (3) Private insurance companies will implement 

2 uniform billing and common claims forms. 

3 (4) Congress will reclaim Medicare and Med4 icaid disproportionate share hospital (DSH) pay5 ments because previously uninsured persons will go 

6 to providers on an outpatient basis instead of an 

7 emergency department. 

8 (5) State and local governments will save 

9 money on programs they operated for the uninsured 

10 before enactment of this Act. 

11 (6) The Federal Government will save money 

12 on Federal tax subsidies that reward inefficient care 

13 and are regressive. 

14 (7) The Federal Government and the private 

15 sector will save money if the Food and Drug Admin16 istration determines whether products provide new 

17 value. 

18 (8) Reducing medical errors will save the gov19 ernment and the private sector money. 

20 (9) Requiring hospitals to send large bills to pa21 tients for their review will reduce errors in medical 

22 billing and force major providers to be more cost 

23 conscious. 


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1 (10) Requiring insurers to reimburse for quality 

2 and cost effective services will hold down private sec3 tor costs. 

4 (11) Reduction of Medicare’s restriction on bar5 gaining power for prescription drugs will reduce 

6 costs for sole source drugs and other medications. 

7 (12) Establishment of electronic medical 

8 records by insurers will create savings. 

9 (13) Publication of cost and quality data will 

10 enable people to look up by zip code affordable high11 quality providers. 

Æ 


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