I 

111TH CONGRESS 

1ST SESSION H. R. 464 

To provide for a 5-year SCHIP reauthorization for coverage of low-income 

children, an expansion of child health care insurance coverage through 

tax fairness, and a health care Federalism initiative, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 13, 2009 

Mr. PRICE of Georgia (for himself, Mr. BLUNT, Mr. BISHOP of Utah, Mr. 

BARTLETT, Mr. SESSIONS, Mr. GOHMERT, Mrs. BLACKBURN, Mr. 

BROWN of South Carolina, Mr. CRENSHAW, Mr. KLINE of Minnesota, 

Mr. FRANKS of Arizona, Mr. BURTON of Indiana, Mr. SOUDER, Mr. 

CASSIDY, Mr. SHUSTER, Mrs. BACHMANN, Mr. GINGREY of Georgia, Mr. 

COBLE, Mr. SMITH of Texas, Mr. THORNBERRY, Mr. ROSKAM, and Mr. 

FLEMING) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on 

Ways and Means and Rules, for a period to be subsequently determined 

by the Speaker, in each case for consideration of such provisions as fall 

within the jurisdiction of the committee concerned 

A BILL 

To provide for a 5-year SCHIP reauthorization for coverage 

of low-income children, an expansion of child health care 

insurance coverage through tax fairness, and a health 

care Federalism initiative, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘More Children, More Choices Act of 2009’’. 

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

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—SCHIP REAUTHORIZATION 

Sec. 101. Requiring outreach and coverage before expansion of eligibility. 

Sec. 102. Application of citizenship documentation requirements; increased 

Federal matching rate for citizenship documentation enforcement under Medicaid and SCHIP. 

Sec. 103. Limitations on eligibility based on substantial net assets. 

Sec. 104. Clarification of State authorities. 

Sec. 105. Easing administrative barriers to State cooperation with employersponsored insurance coverage. 

Sec. 106. Improving beneficiary choice in SCHIP. 

Sec. 107. Allotment distribution formula. 

Sec. 108. Five-year reauthorization. 

Sec. 109. Enhancing the programmatic focus on children and pregnant women. 

Sec. 110. Grants for outreach and enrollment. 

TITLE II—CHILD HEALTH INSURANCE COVERAGE THROUGH TAX 

FAIRNESS 

Sec. 201. Expansion of child health care insurance coverage through tax fairness. 

TITLE III—STATE HEALTH REFORM PROJECTS 

Sec. 301. State health reform projects. 

TITLE IV—SENSE OF THE HOUSE OF REPRESENTATIVES 

Sec. 401. Medicare and Medicaid reform and savings. 

6 TITLE I—SCHIP 

7 REAUTHORIZATION 

8 SEC. 101. REQUIRING OUTREACH AND COVERAGE BEFORE 

9 EXPANSION OF ELIGIBILITY. 

10 (a) STATE PLAN REQUIRED TO SPECIFY HOW IT

11 WILL ACHIEVE COVERAGE FOR 90 PERCENT OF TAR12 GETED LOW-INCOME CHILDREN.— 


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1 (1) IN GENERAL.—Section 2102(a) of the So2 cial Security Act (42 U.S.C. 1397bb(a)) is amend3 ed— 

4 (A) in paragraph (6), by striking ‘‘and’’ at 

5 the end; 

6 (B) in paragraph (7), by striking the pe7 riod at the end and inserting ‘‘; and’’; and 

8 (C) by adding at the end the following new 

9 paragraph: 

10 ‘‘(8) how the eligibility and benefits provided 

11 for under the plan for each fiscal year (beginning 

12 with fiscal year 2010) will allow for the State’s an13 nual funding allotment to cover at least 90 percent 

14 of the eligible targeted low-income children in the 

15 State.’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by paragraph (1) shall apply to State child health 

18 plans for fiscal years beginning with fiscal year 

19 2010. 

20 (b) LIMITATION ON PROGRAM EXPANSIONS UNTIL

21 LOWEST INCOME ELIGIBLE INDIVIDUALS ENROLLED.— 

22 Section 2105(c) of such Act (42 U.S.C. 1397dd(c)) is 

23 amended by adding at the end the following new para24 graph: 


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1 ‘‘(8) LIMITATION ON INCREASED COVERAGE OF

2 HIGHER INCOME CHILDREN.—For child health as3 sistance furnished in a fiscal year beginning with fis4 cal year 2010: 

5 ‘‘(A) NO PAYMENT FOR CHILDREN WITH

6 FAMILY INCOME ABOVE 250 PERCENT OF POV7 ERTY LINE.—Payment shall not be made under 

8 this section for child health assistance for a tar9 geted low-income child in a family the income 

10 of which exceeds 250 percent of the poverty line 

11 applicable to a family of the size involved. 

12 ‘‘(B) SPECIAL RULES FOR PAYMENT FOR

13 CHILDREN WITH FAMILY INCOME ABOVE 200

14 PERCENT OF POVERTY LINE.—In the case of 

15 child health assistance for a targeted low-in16 come child in a family the income of which ex17 ceeds 200 percent (but does not exceed 250 

18 percent) of the poverty line applicable to a fam19 ily of the size involved no payment shall be 

20 made under this section for such assistance un21 less the State demonstrates to the satisfaction 

22 of the Secretary that— 

23 ‘‘(i) the State has met the 90 percent 

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1 paragraph (C)(i) for the previous fiscal 

2 year; and 

3 ‘‘(ii) the State will meet the 90 per4 cent prospective coverage test specified in 

5 subparagraph (C)(ii) for the fiscal year. 

6 ‘‘(C) 90 PERCENT COVERAGE TESTS.— 

7 ‘‘(i) RETROSPECTIVE TEST.—The 90 

8 percent retrospective coverage test speci9 fied in this clause is, for a State for a fis10 cal year, that on average during the fiscal 

11 year, the State has enrolled under this title 

12 or title XIX at least 90 percent of the indi13 viduals residing in the State who— 

14 ‘‘(I) are children under 19 years 

15 of age (or are pregnant women) and 

16 are eligible for medical assistance 

17 under title XIX; or 

18 ‘‘(II) are targeted low-income 

19 children whose family income does not 

20 exceed 200 percent of the poverty line 

21 and who are eligible for child health 

22 assistance under this title. 

23 ‘‘(ii) PROSPECTIVE TEST.—The 90 

24 percent prospective test specified in this 

25 clause is, for a State for a fiscal year, that 


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1 on average during the fiscal year, the State 

2 will enroll under this title or title XIX at 

3 least 90 percent of the individuals residing 

4 in the State who— 

5 ‘‘(I) are children under 19 years 

6 of age (or are pregnant women) and 

7 are eligible for medical assistance 

8 under title XIX; or 

9 ‘‘(II) are targeted low-income 

10 children whose family income does not 

11 exceed such percent of the poverty 

12 line (in excess of 200 percent) as the 

13 State elects consistent with this para14 graph and who are eligible for child 

15 health assistance under this title. 

16 ‘‘(D) GRANDFATHER.—Subparagraphs (A) 

17 and (B) shall not apply to the provision of child 

18 health assistance— 

19 ‘‘(i) to a targeted low-income child 

20 who is enrolled for child health assistance 

21 under this title as of September 30, 2007; 

22 ‘‘(ii) to a pregnant woman who is en23 rolled for assistance under this title as of 

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1 tion of the post-partum period following 

2 completion of her pregnancy; and 

3 ‘‘(iii) for items and services furnished 

4 before October 1, 2009, to an individual 

5 who is not a targeted low-income child and 

6 who is enrolled for assistance under this 

7 title as of September 30, 2008. 

8 ‘‘(E) TREATMENT OF PREGNANT

9 WOMEN.—In this paragraph and sections 

10 2102(a)(8) and 2104(a)(2), the term ‘targeted 

11 low-income child’ includes an individual under 

12 age 19, including the period from conception to 

13 birth, who is eligible for child health assistance 

14 under this title by virtue of the definition of the 

15 term ‘child’ under section 457.10 of title 42, 

16 Code of Federal Regulations.’’. 

17 (c) STANDARDIZATION OF INCOME DETERMINA18 TIONS.— 

19 (1) IN GENERAL.—Section 2110(d) of such Act 

20 (42 U.S.C. 1397jj) is amended by adding at the end 

21 the following new subsection: 

22 ‘‘(d) STANDARDIZATION OF INCOME DETERMINA23 TIONS.—In determining family income under this title (in24 cluding in the case of a State child health plan that pro25 vides health benefits coverage in the manner described in 


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1 section 2101(a)(2)), a State shall base such determination 

2 on gross income (including amounts that would be in3 cluded in gross income if they were not exempt from in4 come taxation) and may only take into consideration such 

5 income disregards as the Secretary shall develop.’’. 

6 (2) EFFECTIVE DATE.—(A) Subject to subpara7 graph (B), the amendment made by paragraph (1) 

8 shall apply to determinations (and redeterminations) 

9 of income made on or after April 1, 2009. 

10 (B) In the case of a State child health plan 

11 under title XXI of the Social Security Act which the 

12 Secretary of Health and Human Services determines 

13 requires State legislation (other than legislation ap14 propriating funds) in order for the plan to meet the 

15 additional requirement imposed by the amendment 

16 made by paragraph (1), the State child health plan 

17 shall not be regarded as failing to comply with the 

18 requirements of such title solely on the basis of its 

19 failure to meet this additional requirement before 

20 the first day of the first calendar quarter beginning 

21 after the close of the first regular session of the 

22 State legislature that begins after the date of the en23 actment of this Act. For purposes of the previous 

24 sentence, in the case of a State that has a 2-year 

25 legislative session, each year of such session shall be 


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1 deemed to be a separate regular session of the State 

2 legislature. 

3 SEC. 102. APPLICATION OF CITIZENSHIP DOCUMENTATION 

4 REQUIREMENTS; INCREASED FEDERAL 

5 MATCHING RATE FOR CITIZENSHIP DOCU6 MENTATION ENFORCEMENT UNDER MED7 ICAID AND SCHIP. 

8 (a) APPLICATION OF REQUIREMENTS.— 

9 (1) IN GENERAL.—Section 2105(c) of the So10 cial Security Act (42 U.S.C. 1397dd(c)), as amended 

11 by section 101(b), is amended by adding at the end 

12 the following new paragraph: 

13 ‘‘(9) APPLICATION OF CITIZENSHIP DOCU14 MENTATION REQUIREMENTS.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), no payment may be made under this 

17 section to a State with respect to amounts ex18 pended for child health assistance for an indi19 vidual who declares under section 

20 1137(d)(1)(A) to be a citizen or national of the 

21 United States for purposes of establishing eligi22 bility for benefits under this title, unless the re23 quirement of section 1903(x) is met. 

24 ‘‘(B) TREATMENT OF PREGNANT

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1 graph (A) in the case of a pregnant woman who 

2 qualifies for child health assistance by virtue of 

3 the application of section 457.10 of title 42, 

4 Code of Federal Regulations, the requirement 

5 of such section shall be deemed to be satisfied 

6 by the presentation of documentation of per7 sonal identity described in section 

8 274A(b)(1)(D) of the Immigration and Nation9 ality Act or any other documentation of per10 sonal identity of such other type as the Sec11 retary finds, by regulation, provides a reliable 

12 means of identification.’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by paragraph (1) shall apply to eligibility determina15 tions and redeterminations made on or after April 1, 

16 2009. 

17 (b) TEMPORARY INCREASE IN FEDERAL MATCHING

18 RATE FOR ADMINISTRATIVE COSTS UNDER MEDICAID

19 AND SCHIP.—— 

20 (1) MEDICAID.— 

21 (A) IN GENERAL.—With respect to admin22 istrative costs incurred on or after July 1, 

23 2006, and before October 1, 2009, in imple24 menting the amendments made by section 6036 

25 of the Deficit Reduction Act of 2005 (Public 


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1 Law 109–171), 75 percent shall be substituted 

2 for 50 per centum in section 1903(a)(7) of the 

3 Social Security Act (42 U.S.C. 1396b(a)(7)). 

4 (B) RETROACTIVE ADJUSTMENT.—The 

5 Secretary of Health and Human Services shall 

6 take such steps as may be necessary to provide 

7 for the adjustment of payments under section 

8 1903(a) of the Social Security Act (42 U.S.C. 

9 1396b(a)) to take into account the application 

10 of subparagraph (A) for periods before the date 

11 of the enactment of this Act. 

12 (2) SCHIP.—With respect to administrative 

13 costs incurred on or after April 1, 2009, and before 

14 October 1, 2009, in implementing the amendment 

15 made by subsection (a)(1), the enhanced FMAP ap16 plied under section 2105(a)(1)(D)(iv) of the Social 

17 Security Act (42 U.S.C. 1397d(a)(1)(D)(iv)) shall 

18 not be less than 75 percent. 

19 SEC. 103. LIMITATIONS ON ELIGIBILITY BASED ON SUB20 STANTIAL NET ASSETS. 

21 (a) IN GENERAL.—Section 2110(b) of the Social Se22 curity Act (42 U.S.C. 1397jj(b)) is amended— 

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

24 (2)’’ and inserting ‘‘paragraphs (2) and (5)’’; and 


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1 (2) by adding at the end the following new 

2 paragraph: 

3 ‘‘(5) DISQUALIFICATION FOR INDIVIDUALS IN

4 FAMILIES WITH SUBSTANTIAL NET ASSETS.—An in5 dividual in a family is not eligible for child health 

6 assistance under this title if the individual’s family 

7 has net assets (including the equity interest in any 

8 home) that exceeds $500,000 or unless there is pro9 vided a document (in such a form and manner as 

10 the Secretary shall specify) signed under penalty of 

11 perjury by an applicant for child health assistance 

12 on behalf of the individual that the net assets of the 

13 individual’s family (including the equity interest in 

14 the any home) does not exceed $500,000. The Sec15 retary may increase the dollar amount specified in 

16 the previous sentence from year to year beginning 

17 with 2014 based on the percentage increase in the 

18 consumer price index for all urban consumers (all 

19 items; United States city average), rounded to the 

20 nearest $1,000.’’. 

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

22 subsection (a) shall apply to eligibility determinations and 

23 redeterminations made on or after April 1, 2009. 


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1 SEC. 104. CLARIFICATION OF STATE AUTHORITIES. 

2 Section 2102 of the Social Security Act (42 U.S.C. 

3 1397bb) is amended by adding at the end the following 

4 new subsection: 

5 ‘‘(d) CLARIFICATION OF STATE AUTHORITIES.— 

6 Nothing in this title shall be construed as preventing a 

7 State, under its child health plan, from doing any of the 

8 following: 

9 ‘‘(1) USE OF WAITING PERIODS TO PREVENT

10 CROWD OUT.—From using waiting periods and other 

11 tools to prevent crowding out private sector insur12 ance coverage. 

13 ‘‘(2) USE OF PRIVATE PROVIDERS AND

14 PLANS.—From cooperating or contracting with pri15 vate sector providers and plans in order to provide 

16 care to targeted low-income children. 

17 ‘‘(3) USE OF STATE FUNDS FOR INELIGIBLE

18 INDIVIDUALS.—From providing medical benefits for 

19 individuals who are not targeted low-income children 

20 with State funds.’’. 

21 SEC. 105. EASING ADMINISTRATIVE BARRIERS TO STATE 

22 COOPERATION WITH EMPLOYER-SPONSORED 

23 INSURANCE COVERAGE. 

24 (a) REQUIRING SOME COVERAGE FOR EMPLOYER25 SPONSORED INSURANCE.— 


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1 (1) IN GENERAL.—Section 2102(a) of the So2 cial Security Act (42 U.S.C. 1397b(a)), as amended 

3 by section 101(a), is amended— 

4 (A) in paragraph (7), by striking ‘‘and’’ at 

5 the end; 

6 (B) in paragraph (8), by striking the pe7 riod at the end and inserting ‘‘; and’’; and 

8 (C) by adding at the end the following new 

9 paragraph: 

10 ‘‘(9) effective for plan years beginning on or 

11 after October 1, 2009, how the plan will provide for 

12 child health assistance with respect to targeted low13 income children covered under a group health 

14 plan.’’. 

15 (2) EFFECTIVE DATE.—The amendment made 

16 by paragraph (1) shall apply beginning with fiscal 

17 year 2010. 

18 (b) FEDERAL FINANCIAL PARTICIPATION FOR EM19 PLOYER-SPONSORED INSURANCE.—Section 2105 of such 

20 Act (42 U.S.C. 1397d) is amended— 

21 (1) in subsection (a)(1)(C), by inserting before 

22 the semicolon at the end the following: ‘‘and, subject 

23 to paragraph (3)(C), in the form of payment of the 

24 premiums for coverage under a group health plan 

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1 dren and benefits supplemental to such coverage’’; 

2 and 

3 (2) paragraph (3) of subsection (c) is amended 

4 to read as follows: 

5 ‘‘(3) PURCHASE OF EMPLOYER-SPONSORED IN6 SURANCE.— 

7 ‘‘(A) IN GENERAL.—Payment may be 

8 made to a State under subsection (a)(1)(C), 

9 subject to the provisions of this paragraph, for 

10 the purchase of family coverage under a group 

11 health plan that includes coverage of targeted 

12 low-income children unless such coverage would 

13 otherwise substitute for coverage that would be 

14 provided to such children but for the purchase 

15 of family coverage. 

16 ‘‘(B) WAIVER OF CERTAIN PROVISIONS.— 

17 With respect to coverage described in subpara18 graph (A)— 

19 ‘‘(i) notwithstanding section 2102, no 

20 minimum benefits requirement (other than 

21 those otherwise applicable with respect to 

22 services referred to in section 2102(a)(7)) 

23 under this title shall apply; and 


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1 ‘‘(ii) no limitation on beneficiary cost2 sharing otherwise applicable under this 

3 title or title XIX shall apply. 

4 ‘‘(C) REQUIRED PROVISION OF SUPPLE5 MENTAL BENEFITS.—If the coverage described 

6 in subparagraph (A) does not provide coverage 

7 for the services referred to in section 

8 2102(a)(7), the State child health plan shall 

9 provide coverage of such services as supple10 mental benefits. 

11 ‘‘(D) LIMITATION ON FFP.—The amount 

12 of the payment under paragraph (1)(C) for cov13 erage described in subparagraph (A) (and sup14 plemental benefits under subparagraph (C) for 

15 individuals so covered) during a fiscal year may 

16 not exceed the product of— 

17 ‘‘(i) the national per capita expendi18 ture under this title (taking into account 

19 both Federal and State expenditures) for 

20 the previous fiscal year (as determined by 

21 the Secretary using the best available 

22 data); 

23 ‘‘(ii) the enhanced FMAP for the 

24 State and fiscal year involved; and 


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1 ‘‘(iii) the number of targeted low-in2 come children for whom such coverage is 

3 provided. 

4 ‘‘(E) VOLUNTARY ENROLLMENT.—A State 

5 child health plan— 

6 ‘‘(i) may not require a targeted low7 income child to enroll in coverage described 

8 in subparagraph (A) in order to obtain 

9 child health assistance under this title; 

10 ‘‘(ii) before providing such child 

11 health assistance for such coverage of a 

12 child, shall make available (which may be 

13 through an Internet website or other 

14 means) to the parent or guardian of the 

15 child information on the coverage available 

16 under this title, including benefits and 

17 cost-sharing; and 

18 ‘‘(iii) shall provide at least one oppor19 tunity per fiscal year for beneficiaries to 

20 switch coverage under this title from cov21 erage described in subparagraph (A) to the 

22 coverage that is otherwise made available 

23 under this title. 

24 ‘‘(F) INFORMATION ON COVERAGE OP25 TIONS.—A State child health plan shall— 


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1 ‘‘(i) describe how the State will notify 

2 potential beneficiaries of coverage de3 scribed in subparagraph (A); 

4 ‘‘(ii) provide such notification in writ5 ing at least during the initial application 

6 for enrollment under this title and during 

7 redeterminations of eligibility if the indi8 vidual was enrolled before October 1, 2009; 

9 and 

10 ‘‘(iii) post a description of these cov11 erage options on any official website that 

12 may be established by the State in connec13 tion with the plan. 

14 ‘‘(G) SEMIANNUAL VERIFICATION OF COV15 ERAGE.—If coverage described in subparagraph 

16 (A) is provided under a group health plan with 

17 respect to a targeted low-income child, the 

18 State child health plan shall provide for the col19 lection, at least once every six months, of proof 

20 from the plan that the child is enrolled in such 

21 coverage. 

22 ‘‘(H) RULE OF CONSTRUCTION.—Nothing 

23 in this section is to be construed to prohibit a 

24 State from— 


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1 ‘‘(i) offering wrap around benefits in 

2 order for a group health plan to meet any 

3 State-established minimum benefit require4 ments; 

5 ‘‘(ii) establishing a cost-effectiveness 

6 test to qualify for coverage under such a 

7 plan; 

8 ‘‘(iii) establishing limits on beneficiary 

9 cost-sharing under such a plan; 

10 ‘‘(iv) paying all or part of a bene11 ficiary’s cost-sharing requirements under 

12 such a plan; 

13 ‘‘(v) paying less than the full cost of 

14 the employee’s share of the premium under 

15 such a plan, including prorating the cost of 

16 the premium to pay for only what the 

17 State determines is the portion of the pre18 mium that covers targeted low-income chil19 dren; 

20 ‘‘(vi) using State funds to pay for 

21 benefits above the Federal upper limit es22 tablished under subparagraph (C); 

23 ‘‘(vii) allowing beneficiaries enrolled in 

24 group health plans from changing plans to 


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1 another coverage option available under 

2 this title at any time; or 

3 ‘‘(viii) providing any guidance or in4 formation it deems appropriate in order to 

5 help beneficiaries make an informed deci6 sion regarding the option to enroll in cov7 erage described in subparagraph (A). 

8 ‘‘(I) GROUP HEALTH PLAN DEFINED.—In 

9 this paragraph, the term ‘group health plan’ 

10 has the meaning given such term in section 

11 2791(a)(1) of the Public Health Service Act (42 

12 U.S.C. 300gg–91(a)(1)).’’. 

13 SEC. 106. IMPROVING BENEFICIARY CHOICE IN SCHIP. 

14 (a) REQUIRING OFFERING OF ALTERNATIVE COV15 ERAGE OPTIONS.—Section 2102 of the Social Security Act 

16 (42 U.S.C. 1397b), as amended by sections 101(a), 104, 

17 and 105(a), is amended— 

18 (1) in subsection (a)— 

19 (A) in paragraph (8), by striking ‘‘and’’ at 

20 the end; 

21 (B) in paragraph (9), by striking the pe22 riod at the end and inserting ‘‘; and’’; and 

23 (C) by adding at the end the following new 

24 paragraph: 


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1 ‘‘(10) effective for plan years beginning on or 

2 after October 1, 2009, how the plan will provide for 

3 child health assistance with respect to targeted low4 income children through alternative coverage options 

5 in accordance with subsection (e).’’; and 

6 (2) by adding at the end the following new sub7 section: 

8 ‘‘(e) ALTERNATIVE COVERAGE OPTIONS.— 

9 ‘‘(1) IN GENERAL.—Effective October 1, 2009, 

10 a State child health plan shall provide for the offer11 ing of any qualified alternative coverage that a 

12 qualified entity seeks to offer to targeted low-income 

13 children through the plan in the State. 

14 ‘‘(2) APPLICATION OF UNIFORM FINANCIAL

15 LIMITATION FOR ALL ALTERNATIVE COVERAGE OP16 TIONS.—With respect to all qualified alternative cov17 erage offered in a State, the State child health plan 

18 shall establish a uniform dollar limitation on the per 

19 capita monthly amount that will be paid by the 

20 State to the qualified entity with respect to such 

21 coverage provided to a targeted low-income child. 

22 Such limitation may not be less than 90 percent of 

23 the per capita monthly payment made for coverage 

24 offered under the State child health plan that is not 


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1 in the form of an alternative coverage option. Noth2 ing in this paragraph shall be construed— 

3 ‘‘(A) as requiring a State to provide for 

4 the full payment of premiums for qualified al5 ternative coverage; 

6 ‘‘(B) as preventing a State from charging 

7 additional premiums to cover the difference be8 tween the cost of qualified alternative coverage 

9 and the amount of such payment limitation; 

10 ‘‘(C) as preventing a State from using its 

11 own funds to provide a dollar limitation that ex12 ceeds the Federal financial participation as lim13 ited under section 2105(c)(10). 

14 ‘‘(3) QUALIFIED ALTERNATIVE COVERAGE DE15 FINED.—In this section, the term ‘qualified alter16 native coverage’ means health insurance coverage 

17 that— 

18 ‘‘(A) meets the coverage requirements of 

19 section 2103 (other than cost-sharing require20 ments of such section); and 

21 ‘‘(B) is offered by a qualified insurer, and 

22 not directly by the State. 

23 ‘‘(4) QUALIFIED INSURER DEFINED.—In this 

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1 spect to a State, an entity that is licensed to offer 

2 health insurance coverage in the State.’’. 

3 (b) FEDERAL FINANCIAL PARTICIPATION FOR

4 QUALIFIED ALTERNATIVE COVERAGE.—Section 2105 of 

5 such Act (42 U.S.C. 1397d) is amended— 

6 (1) in subsection (a)(1)(C), as amended by sec7 tion 105(b), by inserting before the semicolon at the 

8 end the following: ‘‘and, subject to paragraph 

9 (8)(C), in the form of payment of the premiums for 

10 coverage for qualified alternative coverage’’; and 

11 (2) in subsection (c), as amended by sections 

12 101(b) and 102(a)(1), by adding at the end the fol13 lowing new paragraph: 

14 ‘‘(10) PURCHASE OF QUALIFIED ALTERNATIVE

15 COVERAGE.— 

16 ‘‘(A) IN GENERAL.—Payment may be 

17 made to a State under subsection (a)(1)(C), 

18 subject to the provisions of this paragraph, for 

19 the purchase of qualified alternative coverage. 

20 ‘‘(B) WAIVER OF CERTAIN PROVISIONS.— 

21 With respect to coverage described in subpara22 graph (A), no limitation on beneficiary cost23 sharing otherwise applicable under this title or 

24 title XIX shall apply. 


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1 ‘‘(C) LIMITATION ON FFP.—The amount of 

2 the payment under paragraph (1)(C) for cov3 erage described in subparagraph (A) during a 

4 fiscal year in the aggregate for all such cov5 erage in the State may not exceed the product 

6 of— 

7 ‘‘(i) the national per capita expendi8 ture under this title (taking into account 

9 both Federal and State expenditures) for 

10 the previous fiscal year (as determined by 

11 the Secretary using the best available 

12 data); 

13 ‘‘(ii) the enhanced FMAP for the 

14 State and fiscal year involved; and 

15 ‘‘(iii) the number of targeted low-in16 come children for whom such coverage is 

17 provided. 

18 ‘‘(D) VOLUNTARY ENROLLMENT.—A State 

19 child health plan— 

20 ‘‘(i) may not require a targeted low21 income child to enroll in coverage described 

22 in subparagraph (A) in order to obtain 

23 child health assistance under this title; 

24 ‘‘(ii) before providing such child 

25 health assistance for such coverage of a 


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1 child, shall make available (which may be 

2 through an Internet website or other 

3 means) to the parent or guardian of the 

4 child information on the coverage available 

5 under this title, including benefits and 

6 cost-sharing; and 

7 ‘‘(iii) shall provide at least one oppor8 tunity per fiscal year for beneficiaries to 

9 switch coverage under this title from cov10 erage described in subparagraph (A) to the 

11 coverage that is otherwise made available 

12 under this title. 

13 ‘‘(E) INFORMATION ON COVERAGE OP14 TIONS.—A State child health plan shall— 

15 ‘‘(i) describe how the State will notify 

16 potential beneficiaries of coverage de17 scribed in subparagraph (A); 

18 ‘‘(ii) provide such notification in writ19 ing at least during the initial application 

20 for enrollment under this title and during 

21 redeterminations of eligibility if the indi22 vidual was enrolled before October 1, 2009; 

23 and 

24 ‘‘(iii) post a description of these cov25 erage options on any official website that 


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1 may be established by the State in connec2 tion with the plan. 

3 ‘‘(F) RULE OF CONSTRUCTION.—Nothing 

4 in this section is to be construed to prohibit a 

5 State from— 

6 ‘‘(i) establishing limits on beneficiary 

7 cost-sharing under such alternative cov8 erage; 

9 ‘‘(ii) paying all or part of a bene10 ficiary’s cost-sharing requirements under 

11 such coverage; 

12 ‘‘(iii) paying less than the full cost of 

13 a child’s share of the premium under such 

14 coverage, insofar as the premium for such 

15 coverage exceeds the limitation established 

16 by the State under subparagraph (C); 

17 ‘‘(iv) using State funds to pay for 

18 benefits above the Federal upper limit es19 tablished under subparagraph (C); or 

20 ‘‘(v) providing any guidance or infor21 mation it deems appropriate in order to 

22 help beneficiaries make an informed deci23 sion regarding the option to enroll in cov24 erage described in subparagraph (A).’’. 


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1 SEC. 107. ALLOTMENT DISTRIBUTION FORMULA. 

2 (a) ALLOTMENTS TO 50 STATES AND THE DISTRICT

3 OF COLUMBIA.— 

4 (1) IN GENERAL.—Section 2104(b) of the So5 cial Security Act (42 U.S.C. 1397dd(b)) is amend6 ed— 

7 (A) in paragraph (1), by striking ‘‘the 

8 same proportion’’ and all that follows and in9 serting ‘‘the product of the number of SCHIP 

10 targeted children, as determined under para11 graph (2) for the second preceding fiscal year, 

12 the State and Federal per capita SCHIP ex13 penditures for the second preceding fiscal year, 

14 as determined under such paragraph, and the 

15 enhanced FMAP for the State for the second 

16 preceding fiscal year.’’; 

17 (B) by amending paragraph (2) to read as 

18 follows: 

19 ‘‘(2) NUMBER OF SCHIP TARGETED CHILDREN

20 AND PREGNANT WOMEN AND NATIONAL PER CAPITA

21 SCHIP EXPENDITURES.— 

22 ‘‘(A) IN GENERAL.—By not later than 

23 September 30 of each year (beginning with 

24 2009), the Secretary (in consultation with the 

25 Director of the Bureau of the Census and using 

26 the best available data for the fiscal year ending 


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1 in the previous year) shall determine and pub2 lish in the Federal Register— 

3 ‘‘(i) the average number of low-income 

4 targeted children (described in subpara5 graph (B)) for any month during such pre6 ceding fiscal year; and 

7 ‘‘(ii) the combined State and Federal 

8 per capita SCHIP expenditures (described 

9 in subparagraph (C)) for such preceding 

10 fiscal year. 

11 ‘‘(B) LOW-INCOME SCHIP TARGETED CHIL12 DREN.—Low-income targeted children described 

13 in this subparagraph with respect to a sub14 section (b) State are children (including preg15 nant women described in section 2105(c)(8)(E)) 

16 residing in the State who are not covered under 

17 a group health plan or health insurance cov18 erage (as defined for purposes of section 

19 2110(b)(1)(C)) and whose family income— 

20 ‘‘(i) exceeds the lesser of— 

21 ‘‘(I) the Medicaid applicable in22 come level (as defined in section 

23 2110(b)(4)); or 

24 ‘‘(II) 150 percent of the poverty 

25 line; but 


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1 ‘‘(ii) does not exceed 200 percent of 

2 the poverty line. 

3 ‘‘(C) STATE AND FEDERAL PER CAPITA

4 SCHIP EXPENDITURES.—The State and Federal 

5 per capita SCHIP expenditures for a fiscal year 

6 is equal to— 

7 ‘‘(i) the aggregate Federal and State 

8 expenditures made that are attributable to 

9 allotments under this title for subsection 

10 (b) States for the fiscal year; divided by 

11 ‘‘(ii) the average total number of tar12 geted low-income children (including preg13 nant women described in section 

14 2105(c)(8)(E)) for whom health assistance 

15 was made available from such allotments 

16 for such fiscal year.’’; and 

17 (C) by striking paragraphs (3) and (4) and 

18 inserting the following: 

19 ‘‘(3) SUBSECTION (b) STATE DEFINED.—In this 

20 subsection, the term ‘subsection (b) State’ means 

21 one of the 50 States or the District of Columbia. 

22 ‘‘(4) PROPORTIONAL REDUCTION IF TOTAL AL23 LOTMENTS EXCEED AMOUNT AVAILABLE.—If the 

24 Secretary estimates that the total of the allotments 

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1 tion with allotments made under subsection (c)) will 

2 exceed the aggregate amount available for allotments 

3 for such fiscal year under subsection (a), the Sec4 retary shall reduce the amount of each allotment 

5 under this subsection in a pro-rata manner so that 

6 such total does not exceed the aggregate amount 

7 available for allotments.’’. 

8 (2) EFFECTIVE DATE.—The amendment made 

9 by paragraph (1) shall apply to allotments for fiscal 

10 years beginning with fiscal year 2010. 

11 (b) NO REDISTRIBUTION OF UNUSED ALLOT12 MENTS.— 

13 (1) IN GENERAL.—Section 2104(f) of such Act 

14 (42 U.S.C. 1397dd) is amended to read as follows: 

15 ‘‘(f) NO REDISTRIBUTION OF UNUSED ALLOT16 MENTS.—There shall be no redistribution of allotments 

17 from States that are not expended within the period of 

18 availability under subsection (e).’’. 

19 (2) EFFECTIVE DATE.—The amendment made 

20 by paragraph (1) shall apply to allotments for fiscal 

21 years beginning with fiscal year 2007. 

22 SEC. 108. FIVE-YEAR REAUTHORIZATION. 

23 (a) IN GENERAL.—Section 2104(a) of the Social Se24 curity Act (42 U.S.C. 1397dd(a)) is amended— 


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1 (1) by striking ‘‘and’’ at the end of paragraph 

2 (10); 

3 (2) by striking the period at the end of para4 graph (11) and inserting a semicolon; and 

5 (3) by adding at the end the following new 

6 paragraphs: 

7 ‘‘(12) for fiscal year 2010, $7,000,000,000; 

8 ‘‘(13) for fiscal year 2011, $7,000,000,000; 

9 ‘‘(14) for fiscal year 2012, $7,000,000,000; 

10 ‘‘(15) for fiscal year 2013, $7,500,000,000; and 

11 ‘‘(16) for fiscal year 2014, $8,000,000,000.’’. 

12 (b) CONTINUATION OF ADDITIONAL ALLOTMENTS TO

13 TERRITORIES.—Section 2104(c)(4)(B) of the Social Secu14 rity Act (42 U.S.C. 1397dd(c)(4)(B)) is amended by strik15 ing ‘‘2009’’ and inserting ‘‘2014’’. 

16 (c) APPLICATION TO OTHER SCHIP FUNDING FOR

17 FISCAL YEAR 2010.—Notwithstanding any other provi18 sion of law, if funds are appropriated under any law (other 

19 than this Act) to provide allotments to States under title 

20 XXI of the Social Security Act for all (or any portion) 

21 of fiscal year 2010— 

22 (1) any amounts that are so appropriated that 

23 are not so allotted and obligated before the date of 

24 the enactment of this Act are rescinded; and 


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1 (2) any amount provided for such title XXI al2 lotments to a State under this Act (and the amend3 ments made by this Act) for such fiscal year shall 

4 be reduced by the amount of such appropriations so 

5 allotted and obligated before such date. 

6 SEC. 109. ENHANCING THE PROGRAMMATIC FOCUS ON 

7 CHILDREN AND PREGNANT WOMEN. 

8 (a) IN GENERAL.—Section 2107(f) of the Social Se9 curity Act (42 U.S.C. 1397gg(f)) is amended by striking 

10 ‘‘childless’’. 

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

12 subsection (a) shall take effect on the date of the enact13 ment of this Act but shall not apply to projects, including 

14 extensions, amendments, or renewals to such projects, that 

15 are in effect or have been approved on the date of the 

16 enactment of this Act. 

17 SEC. 110. GRANTS FOR OUTREACH AND ENROLLMENT. 

18 (a) GRANTS.—Title XXI of the Social Security Act 

19 (42 U.S.C. 1397aa et seq.) is amended by adding at the 

20 end the following: 

21 ‘‘SEC. 2111. GRANTS TO IMPROVE OUTREACH AND ENROLL22 MENT. 

23 ‘‘(a) OUTREACH AND ENROLLMENT GRANTS; NA24 TIONAL CAMPAIGN.— 


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1 ‘‘(1) IN GENERAL.—From the amounts appro2 priated for a fiscal year under subsection (f), subject 

3 to paragraph (2), the Secretary shall award grants 

4 to eligible entities to conduct outreach and enroll5 ment efforts that are designed to increase the enroll6 ment and participation of eligible children under this 

7 title and title XIX. 

8 ‘‘(2) 10 PERCENT SET ASIDE FOR NATIONAL

9 ENROLLMENT CAMPAIGN.—An amount equal to 10 

10 percent of such amounts for the fiscal year shall be 

11 used by the Secretary for expenditures during the 

12 fiscal year to carry out a national enrollment cam13 paign in accordance with subsection (g). 

14 ‘‘(b) AWARD OF GRANTS.— 

15 ‘‘(1) PRIORITY FOR AWARDING.— 

16 ‘‘(A) IN GENERAL.—In awarding grants 

17 under subsection (a), the Secretary shall give 

18 priority to eligible entities that— 

19 ‘‘(i) propose to target geographic 

20 areas with high rates of— 

21 ‘‘(I) eligible but unenrolled chil22 dren, including such children who re23 side in rural areas; or 

24 ‘‘(II) racial and ethnic minorities 

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1 cluding those proposals that address 

2 cultural and linguistic barriers to en3 rollment; and 

4 ‘‘(ii) submit the most demonstrable 

5 evidence required under paragraphs (1) 

6 and (2) of subsection (c). 

7 ‘‘(B) 10 PERCENT SET ASIDE FOR OUT8 REACH TO INDIAN CHILDREN.—An amount 

9 equal to 10 percent of the funds appropriated 

10 under subsection (f) for a fiscal year shall be 

11 used by the Secretary to award grants to In12 dian Health Service providers and urban Indian 

13 organizations receiving funds under title V of 

14 the Indian Health Care Improvement Act (25 

15 U.S.C. 1651 et seq.) for outreach to, and en16 rollment of, children who are Indians. 

17 ‘‘(2) 2-YEAR AVAILABILITY.—A grant awarded 

18 under this section for a fiscal year shall remain 

19 available for expenditure through the end of the suc20 ceeding fiscal year. 

21 ‘‘(c) APPLICATION.—An eligible entity that desires to 

22 receive a grant under subsection (a) shall submit an appli23 cation to the Secretary in such form and manner, and con24 taining such information, as the Secretary may decide. 

25 Such application shall include— 


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1 ‘‘(1) evidence demonstrating that the entity in2 cludes members who have access to, and credibility 

3 with, ethnic or low-income populations in the com4 munities in which activities funded under the grant 

5 are to be conducted; 

6 ‘‘(2) evidence demonstrating that the entity has 

7 the ability to address barriers to enrollment, such as 

8 lack of awareness of eligibility, stigma concerns and 

9 punitive fears associated with receipt of benefits, 

10 and other cultural barriers to applying for and re11 ceiving child health assistance or medical assistance; 

12 ‘‘(3) specific quality or outcomes performance 

13 measures to evaluate the effectiveness of activities 

14 funded by a grant awarded under this section; and 

15 ‘‘(4) an assurance that the eligible entity 

16 shall— 

17 ‘‘(A) conduct an assessment of the effec18 tiveness of such activities against the perform19 ance measures; 

20 ‘‘(B) cooperate with the collection and re21 porting of enrollment data and other informa22 tion in order for the Secretary to conduct such 

23 assessments; and 

24 ‘‘(C) in the case of an eligible entity that 

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1 ment data and other information as necessary 

2 for the State to make necessary projections of 

3 eligible children and pregnant women. 

4 ‘‘(d) SUPPLEMENT, NOT SUPPLANT.—Federal funds 

5 awarded under this section shall be used to supplement, 

6 not supplant, non-Federal funds that are otherwise avail7 able for activities funded under this section. 

8 ‘‘(e) DEFINITIONS.—In this section: 

9 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en10 tity’ means any of the following: 

11 ‘‘(A) A State with an approved child health 

12 plan under this title. 

13 ‘‘(B) A local government. 

14 ‘‘(C) An Indian tribe or tribal consortium, 

15 a tribal organization, an urban Indian organiza16 tion receiving funds under title V of the Indian 

17 Health Care Improvement Act (25 U.S.C. 1651 

18 et seq.), or an Indian Health Service provider. 

19 ‘‘(D) A Federal health safety net organiza20 tion. 

21 ‘‘(E) A State, national, local, or commu22 nity-based public or nonprofit private organiza23 tion. 

24 ‘‘(F) A faith-based organization or con25 sortia, to the extent that a grant awarded to 


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1 such an entity is consistent with the require2 ments of section 1955 of the Public Health 

3 Service Act (42 U.S.C. 300x–65) relating to a 

4 grant award to non-governmental entities. 

5 ‘‘(G) An elementary or secondary school. 

6 ‘‘(H) A national, local, or community-based 

7 public or nonprofit private organization, includ8 ing organizations that use community health 

9 workers or community-based doula programs. 

10 ‘‘(2) FEDERAL HEALTH SAFETY NET ORGANI11 ZATION.—The term ‘Federal health safety net orga12 nization’ means— 

13 ‘‘(A) a federally qualified health center (as 

14 defined in section 1905(l)(2)(B)); 

15 ‘‘(B) a hospital defined as a dispropor16 tionate share hospital for purposes of section 

17 1923; 

18 ‘‘(C) a covered entity described in section 

19 340B(a)(4) of the Public Health Service Act 

20 (42 U.S.C. 256b(a)(4)); and 

21 ‘‘(D) any other entity or consortium that 

22 serves children under a federally funded pro23 gram, including the special supplemental nutri24 tion program for women, infants, and children 

25 (WIC) established under section 17 of the Child 


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1 Nutrition Act of 1966 (42 U.S.C. 1786), the 

2 head start and early head start programs under 

3 the Head Start Act (42 U.S.C. 9801 et seq.), 

4 the school lunch program established under the 

5 Richard B. Russell National School Lunch Act, 

6 and an elementary or secondary school. 

7 ‘‘(3) INDIANS; INDIAN TRIBE; TRIBAL ORGANI8 ZATION; URBAN INDIAN ORGANIZATION.—The terms 

9 ‘Indian’, ‘Indian tribe’, ‘tribal organization’, and 

10 ‘urban Indian organization’ have the meanings given 

11 such terms in section 4 of the Indian Health Care 

12 Improvement Act (25 U.S.C. 1603). 

13 ‘‘(4) COMMUNITY HEALTH WORKER.—The term 

14 ‘community health worker’ means an individual who 

15 promotes health or nutrition within the community 

16 in which the individual resides— 

17 ‘‘(A) by serving as a liaison between com18 munities and health care agencies; 

19 ‘‘(B) by providing guidance and social as20 sistance to community residents; 

21 ‘‘(C) by enhancing community residents’ 

22 ability to effectively communicate with health 

23 care providers; 


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1 ‘‘(D) by providing culturally and linguis2 tically appropriate health or nutrition edu3 cation; 

4 ‘‘(E) by advocating for individual and com5 munity health or nutrition needs; and 

6 ‘‘(F) by providing referral and followup 

7 services. 

8 ‘‘(f) APPROPRIATION.— 

9 ‘‘(1) IN GENERAL.—There is appropriated, out 

10 of any money in the Treasury not otherwise appro11 priated, for the purpose of awarding grants under 

12 this section $100,000,000 for each of fiscal years 

13 2010 through 2014. 

14 ‘‘(2) GRANTS IN ADDITION TO OTHER AMOUNTS

15 PAID.—Amounts appropriated and paid under the 

16 authority of this section shall be in addition to 

17 amounts appropriated under section 2104 and paid 

18 to States in accordance with section 2105, including 

19 with respect to expenditures for outreach activities 

20 in accordance with subsections (a)(1)(D)(iii) and 

21 (c)(2)(C) of that section. 

22 ‘‘(g) NATIONAL ENROLLMENT CAMPAIGN.—From 

23 the amounts made available under subsection (a)(2) for 

24 a fiscal year, the Secretary shall develop and implement 

25 a national enrollment campaign to improve the enrollment 


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1 of underserved child populations in the programs estab2 lished under this title and title XIX. Such campaign may 

3 include— 

4 ‘‘(1) the establishment of partnerships with the 

5 Secretary of Education and the Secretary of Agri6 culture to develop national campaigns to link the eli7 gibility and enrollment systems for the assistance 

8 programs each Secretary administers that often 

9 serve the same children; 

10 ‘‘(2) the integration of information about the 

11 programs established under this title and title XIX 

12 in public health awareness campaigns administered 

13 by the Secretary; 

14 ‘‘(3) increased financial and technical support 

15 for enrollment hotlines maintained by the Secretary 

16 to ensure that all States participate in such hotlines; 

17 ‘‘(4) the establishment of joint public awareness 

18 outreach initiatives with the Secretary of Education 

19 and the Secretary of Labor regarding the impor20 tance of health insurance to building strong commu21 nities and the economy; 

22 ‘‘(5) the development of special outreach mate23 rials for Native Americans or for individuals with 

24 limited English proficiency; and 


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1 ‘‘(6) such other outreach initiatives as the Sec2 retary determines would increase public awareness of 

3 the programs under this title and title XIX.’’. 

4 (b) NONAPPLICATION OF ADMINISTRATIVE EXPENDI5 TURES CAP.—Section 2105(c)(2) of the Social Security 

6 Act (42 U.S.C. 1397ee(c)(2)) is amended by adding at the 

7 end the following: 

8 ‘‘(C) NONAPPLICATION TO EXPENDITURES

9 FOR OUTREACH AND ENROLLMENT.—The limi10 tation under subparagraph (A) shall not apply 

11 with respect to expenditures for outreach activi12 ties under section 2102(c)(1), or for enrollment 

13 activities, for children eligible for child health 

14 assistance under the State child health plan or 

15 medical assistance under the State plan under 

16 title XIX.’’. 

17 TITLE II—CHILD HEALTH INSUR18 ANCE COVERAGE THROUGH 

19 TAX FAIRNESS 

20 SEC. 201. EXPANSION OF CHILD HEALTH CARE INSURANCE 

21 COVERAGE THROUGH TAX FAIRNESS. 

22 (a) IN GENERAL.—Subpart C of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of 

24 1986 (relating to refundable credits) is amended by redesVerDate Nov 24 2008 01:15 Jan 15, 2009 Jkt 079200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\H464.IH H464

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1 ignating section 37 as section 38 and by inserting after 

2 section 36 the following new section: 

3 ‘‘SEC. 37. CHILD HEALTH INSURANCE COSTS. 

4 ‘‘(a) IN GENERAL.—In the case of an eligible tax5 payer, there shall be allowed as a credit against the tax 

6 imposed by this subtitle an amount equal to the amount 

7 paid by the taxpayer during the taxable year for qualified 

8 health insurance for any dependent child of such taxpayer. 

9 ‘‘(b) LIMITATIONS.— 

10 ‘‘(1) IN GENERAL.—The amount allowed as a 

11 credit under subsection (a) to an eligible taxpayer 

12 for the taxable year shall not exceed the sum of the 

13 monthly limitations for coverage months during such 

14 taxable year for the individual referred to in sub15 section (a) for whom such taxpayer paid during the 

16 taxable year any amount for coverage under quali17 fied health insurance. 

18 ‘‘(2) MONTHLY LIMITATION.—The monthly lim19 itation for an individual for each coverage month of 

20 such individual during the taxable year is the 

amount equal to 1 21 ⁄12 of $1,400. 

22 ‘‘(3) COVERAGE MONTH.—For purposes of this 

23 subsection— 


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1 ‘‘(A) IN GENERAL.—The term ‘coverage 

2 month’ means, with respect to an individual, 

3 any month if— 

4 ‘‘(i) as of the first day of such month 

5 such individual is covered by qualified 

6 health insurance, and 

7 ‘‘(ii) the premium for coverage under 

8 such insurance for such month is paid by 

9 an eligible taxpayer. 

10 ‘‘(B) MEDICARE AND MEDICAID.—Such 

11 term shall not include any month with respect 

12 to an individual if, as of the first day of such 

13 month, such individual— 

14 ‘‘(i) is entitled to any benefits under 

15 title XVIII of the Social Security Act, or 

16 ‘‘(ii) is a participant in the program 

17 under title XIX or XXI of such Act. 

18 ‘‘(C) CERTAIN OTHER COVERAGE.—Such 

19 term shall not include any month during a tax20 able year with respect to an individual if, at any 

21 time during such year, any benefit is provided 

22 to such individual under chapter 89 of title 5, 

23 United States Code. 

24 ‘‘(D) INSUFFICIENT PRESENCE IN UNITED

25 STATES.—Such term shall not include any 


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1 month during a taxable year with respect to an 

2 individual if such individual is present in the 

3 United States on fewer than 183 days during 

4 such year (determined in accordance with sec5 tion 7701(b)(7)). 

6 ‘‘(4) INDEXING.—For each taxable year begin7 ning after December 31, 2009, the dollar amount in 

8 paragraph (2) (as adjusted for the preceding taxable 

9 year by reason of this paragraph) shall be increased 

10 or decreased by the percentage change in the aver11 age cost of private health insurance for family cov12 erage for such taxable year as compared to such pre13 ceding taxable year as computed by the Office of the 

14 Actuary of the Centers for Medicare and Medicaid 

15 Services, rounded to the nearest whole dollar 

16 amount. 

17 ‘‘(c) QUALIFIED HEALTH INSURANCE.—For pur18 poses of this section— 

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

20 insurance’ means insurance which constitutes med21 ical care as defined in section 213(d) without regard 

22 to— 

23 ‘‘(A) paragraph (1)(C) thereof, and 


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1 ‘‘(B) so much of paragraph (1)(D) thereof 

2 as relates to qualified long-term care insurance 

3 contracts. 

4 ‘‘(2) EXCLUSION OF CERTAIN OTHER CON5 TRACTS.—Such term shall not include insurance if a 

6 substantial portion of its benefits are excepted bene7 fits (as defined in section 9832(c)). 

8 ‘‘(d) ELIGIBLE TAXPAYER; DEPENDENT; CHILD.— 

9 For purposes of this section— 

10 ‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible 

11 taxpayer’ means any taxpayer whose income exceeds 

12 200 percent but not 300 percent of the poverty level 

13 applicable to a family of the size involved, as deter14 mined in accordance with criteria established by the 

15 Director of the Office of Management and Budget. 

16 ‘‘(2) DEPENDENT.—The term ‘dependent’ has 

17 the meaning given such term by section 152. An in18 dividual to whom section 152(e) applies shall be 

19 treated as a dependent of the custodial parent for a 

20 coverage month unless the custodial and noncusto21 dial parent provide otherwise. 

22 ‘‘(3) CHILD.—The term ‘child’ means a quali23 fying child (as defined in section 152(c). 

24 ‘‘(e) SPECIAL RULES.— 


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1 ‘‘(1) COORDINATION WITH MEDICAL DEDUC2 TION, ETC.—Any amount paid by an eligible tax3 payer for insurance to which subsection (a) applies 

4 shall not be taken into account in computing the 

5 amount allowable to such taxpayer as a credit under 

6 section 35, as a deduction under section 213(a) or 

7 162(l), or as an exclusion from gross income under 

8 section 106 or 125. 

9 ‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.—No 

10 credit shall be allowed under this section to any indi11 vidual with respect to whom a deduction under sec12 tion 151 is allowable to another taxpayer for a tax13 able year beginning in the calendar year in which 

14 such individual’s taxable year begins. 

15 ‘‘(3) MARRIED COUPLES MUST FILE JOINT RE16 TURN.— 

17 ‘‘(A) IN GENERAL.—If an eligible taxpayer 

18 is married at the close of the taxable year, the 

19 credit shall be allowed under subsection (a) only 

20 if the taxpayer and his spouse file a joint return 

21 for the taxable year. 

22 ‘‘(B) MARITAL STATUS; CERTAIN MARRIED

23 INDIVIDUALS LIVING APART.—Rules similar to 

24 the rules of paragraphs (3) and (4) of section 


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1 21(e) shall apply for purposes of this para2 graph. 

3 ‘‘(4) VERIFICATION OF COVERAGE, ETC.—No 

4 credit shall be allowed under this section with re5 spect to any individual unless such individual’s cov6 erage (and such related information as the Secretary 

7 may require) is verified in such manner as the Sec8 retary may prescribe. 

9 ‘‘(5) INSURANCE WHICH COVERS OTHER INDI10 VIDUALS; TREATMENT OF PAYMENTS.—Rules similar 

11 to the rules of paragraphs (7) and (8) of section 

12 35(g) shall apply for purposes of this section. 

13 ‘‘(6) ELECTION NOT TO CLAIM CREDIT.—This 

14 section shall not apply to an eligible taxpayer for 

15 any taxable year if such taxpayer elects to have this 

16 section not apply for such taxable year. 

17 ‘‘(f) COORDINATION WITH ADVANCE PAYMENTS.— 

18 With respect to any taxable year, the amount which would 

19 (but for this subsection) be allowed as a credit to an eligi20 ble taxpayer under subsection (a) shall be reduced (but 

21 not below zero) by the aggregate amount paid on behalf 

22 of such taxpayer under section 7527A for months begin23 ning in such taxable year.’’. 

24 (b) INFORMATION REPORTING.— 


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

2 subchapter A of chapter 61 of the Internal Revenue 

3 Code of 1986 (relating to information concerning 

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

7 ‘‘SEC. 6050X. RETURNS RELATING TO PAYMENTS FOR 

8 QUALIFIED HEALTH INSURANCE. 

9 ‘‘(a) IN GENERAL.—Any person who, in connection 

10 with a trade or business conducted by such person, re11 ceives payments during any calendar year from any indi12 vidual for coverage of such individual or any other indi13 vidual under qualified health insurance (as defined in sec14 tion 37(c)), shall make the return described in subsection 

15 (b) (at such time as the Secretary may by regulations pre16 scribe) with respect to each individual from whom such 

17 payments were received. 

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

19 is described in this subsection if such return— 

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

22 ‘‘(2) contains— 

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

24 individual from whom payments described in 

25 subsection (a) were received, 


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1 ‘‘(B) the name, address, and TIN of each 

2 individual who was provided by such person 

3 with coverage under qualified health insurance 

4 (as so defined) by reason of such payments and 

5 the period of such coverage, and 

6 ‘‘(C) such other information as the Sec7 retary may reasonably prescribe. 

8 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID9 UALS WITH RESPECT TO WHOM INFORMATION IS RE10 QUIRED.—Every person required to make a return under 

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

12 is required under subsection (b)(2)(A) to be set forth in 

13 such return a written statement showing— 

14 ‘‘(1) the name and address of the person re15 quired to make such return and the phone number 

16 of the information contact for such person, 

17 ‘‘(2) the aggregate amount of payments de18 scribed in subsection (a) received by the person re19 quired to make such return from the individual to 

20 whom the statement is required to be furnished, and 

21 ‘‘(3) the information required under subsection 

22 (b)(2)(B) with respect to such payments. 

23 The written statement required under the preceding sen24 tence shall be furnished on or before January 31 of the 


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1 year following the calendar year for which the return 

2 under subsection (a) is required to be made. 

3 ‘‘(d) RETURNS WHICH WOULD BE REQUIRED TO BE

4 MADE BY 2 OR MORE PERSONS.—Except to the extent 

5 provided in regulations prescribed by the Secretary, in the 

6 case of any amount received by any person on behalf of 

7 another person, only the person first receiving such 

8 amount shall be required to make the return under sub9 section (a).’’. 

10 (2) ASSESSABLE PENALTIES.— 

11 (A) Subparagraph (B) of section 

12 6724(d)(1) of such Code (relating to defini13 tions) is amended by redesignating clauses (xxi) 

14 through (xxii) as clauses (xxii) through (xxv), 

15 respectively, and by inserting after clause (xxi) 

16 the following new clause: 

17 ‘‘(xxii) section 6050X (relating to re18 turns relating to payments for qualified 

19 health insurance),’’. 

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

21 such Code is amended by redesignating sub22 paragraphs (EE) and (FF) as subparagraphs 

23 (FF) and (GG), respectively, and by inserting 

24 after subparagraph (DD) the following new 

25 subparagraph: 


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1 ‘‘(EE) section 6050X(c) (relating to re2 turns relating to payments for qualified health 

3 insurance).’’. 

4 (3) CLERICAL AMENDMENT.—The table of sec5 tions for subpart B of part III of subchapter A of 

6 chapter 61 of such Code is amended by inserting 

7 after the item relating to section 6050W the fol8 lowing new item: 

‘‘Sec. 6050X. Returns relating to payments for qualified health insurance.’’. 

9 (c) ADVANCE PAYMENT OF CREDIT FOR PUR10 CHASERS OF QUALIFIED HEALTH INSURANCE.— 

11 (1) IN GENERAL.—Chapter 77 of the Internal 

12 Revenue Code of 1986 (relating to miscellaneous 

13 provisions) is amended by adding at the end the fol14 lowing new section: 

15 ‘‘SEC. 7529. ADVANCE PAYMENT OF HEALTH INSURANCE 

16 CREDIT FOR PURCHASERS OF QUALIFIED 

17 HEALTH INSURANCE. 

18 ‘‘(a) GENERAL RULE.—In the case of an eligible indi19 vidual, the Secretary shall make payments to the provider 

20 of such individual’s qualified health insurance equal to 

21 such individual’s qualified health insurance credit advance 

22 amount with respect to such provider. 

23 ‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this 

24 section, the term ‘eligible individual’ means any indi25 vidual— 


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1 ‘‘(1) who purchases qualified health insurance 

2 (as defined in section 37(c)), and 

3 ‘‘(2) for whom a qualified health insurance 

4 credit eligibility certificate is in effect. 

5 ‘‘(c) QUALIFIED HEALTH INSURANCE CREDIT ELIGI6 BILITY CERTIFICATE.—For purposes of this section, a 

7 qualified health insurance credit eligibility certificate is a 

8 statement furnished by an individual to the Secretary 

9 which— 

10 ‘‘(1) certifies that the individual will be eligible 

11 to receive the credit provided by section 37 for the 

12 taxable year, 

13 ‘‘(2) estimates the amount of such credit for 

14 such taxable year, and 

15 ‘‘(3) provides such other information as the 

16 Secretary may require for purposes of this section. 

17 ‘‘(d) QUALIFIED HEALTH INSURANCE CREDIT AD18 VANCE AMOUNT.—For purposes of this section, the term 

19 ‘qualified health insurance credit advance amount’ means, 

20 with respect to any provider of qualified health insurance, 

21 the Secretary’s estimate of the amount of credit allowable 

22 under section 37 to the individual for the taxable year 

23 which is attributable to the insurance provided to the indi24 vidual by such provider. 


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1 ‘‘(e) REGULATIONS.—The Secretary shall prescribe 

2 such regulations as may be necessary to carry out the pur3 poses of this section.’’. 

4 (2) CLERICAL AMENDMENT.—The table of sec5 tions for chapter 77 of such Code is amended by 

6 adding at the end the following new item: 

‘‘Sec. 7529. Advance payment of health insurance credit for purchasers of 

qualified health insurance.’’. 

7 (d) CONFORMING AMENDMENTS.— 

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

9 31, United States Code, is amended by inserting be10 fore the period ‘‘, or from section 37 of such Code’’. 

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

12 IV of subchapter A of chapter 1 of the Internal Rev13 enue Code of 1986 is amended by striking the last 

14 item and inserting the following new items: 

‘‘Sec. 37. Health insurance costs. 

‘‘Sec. 38. Overpayments of tax.’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2008. 

18 TITLE III—STATE HEALTH 

19 REFORM PROJECTS 

20 SEC. 301. STATE HEALTH REFORM PROJECTS. 

21 (a) PURPOSES; ESTABLISHMENT OF STATE HEALTH

22 CARE EXPANSION AND IMPROVEMENT PROGRAM.— 


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1 (1) PURPOSES.—The purposes of the programs 

2 approved under this section shall include, but not be 

3 limited to— 

4 (A) achieving the goals of increased health 

5 coverage and access; and 

6 (B) testing alternative reforms, such as 

7 building on the public or private health systems, 

8 or creating new systems, to achieve the objec9 tives of this Act. 

10 (2) INTENT OF CONGRESS.—It is the intent of 

11 Congress that— 

12 (A) the programs approved under this sec13 tion each comprise significant coverage expan14 sions; 

15 (B) taken as a whole, such programs 

16 should be diverse and balanced in their ap17 proaches to covering the uninsured; and 

18 (C) each such program should be rigor19 ously and objectively evaluated, so that the 

20 State programs developed pursuant to this sec21 tion may guide the development of future State 

22 and national policy. 

23 (b) APPLICATIONS BY STATES AND LOCAL GOVERN24 MENTS.— 

25 (1) ENTITIES THAT MAY APPLY.— 


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1 (A) IN GENERAL.—A State may apply for 

2 a State health care expansion and improvement 

3 program for the entire State (or for regions of 

4 the State) under paragraph (2). 

5 (B) REGIONAL AND SUB-STATE GROUPS.— 

6 A regional entity consisting of more than one 

7 State or one or more local governments within 

8 a State may apply for a multi-State or a sub9 State health care expansion and improvement 

10 program for the region or area involved. 

11 (C) DEFINITION.—In this section, the 

12 term ‘‘State’’ means the 50 States, the District 

13 of Columbia, and the Commonwealth of Puerto 

14 Rico. Such term shall include a regional entity 

15 described in subparagraph (B). 

16 (2) SUBMISSION OF APPLICATION.—In accord17 ance with this section, each State or regional entity 

18 desiring to implement a State health care expansion 

19 and improvement program may submit an applica20 tion to the State Health Coverage Innovation Com21 mission under subsection (c) (referred to in this sec22 tion as the ‘‘Commission’’) for approval. 

23 (3) LOCAL GOVERNMENT APPLICATIONS.— 

24 Where a State fails to submit an application under 

25 this section, a unit of local government of such 


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1 State, or a consortium of such units of local govern2 ments, may submit an application directly to the 

3 Commission for programs or projects under this sub4 section. Such an application shall be subject to the 

5 requirements of this section. 

6 (c) STATE HEALTH COVERAGE INNOVATION COM7 MISSION.— 

8 (1) IN GENERAL.—Within 90 days after the 

9 date of the enactment of this Act, the Secretary of 

10 Health and Human Services (in this section referred 

11 to as the ‘‘Secretary’’) shall establish a State Health 

12 Coverage Innovation Commission that— 

13 (A) shall be comprised of— 

14 (i) the Secretary; 

15 (ii) four State governors to be ap16 pointed by the National Governors Associa17 tion on a bipartisan basis; 

18 (iii) two members of a State legisla19 ture to be appointed, on a joint and bipar20 tisan basis, by the National Conference of 

21 State Legislators and the American Legis22 lative Exchange Council; 

23 (iv) two county officials to be ap24 pointed by the National Association of 

25 Counties on a bipartisan basis; 


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1 (v) two mayors to be appointed, on a 

2 joint and bipartisan basis, by the National 

3 League of Cities and by the United States 

4 Conference of Mayors; 

5 (vi) two individuals to be appointed by 

6 the Speaker of the House of Representa7 tives; 

8 (vii) two individuals to be appointed 

9 by the minority leader of the House of 

10 Representatives; 

11 (viii) two individuals to be appointed 

12 by the majority leader of the Senate; and 

13 (ix) two individuals to be appointed by 

14 the minority leader of the Senate; 

15 (B) shall request States to submit pro16 posals, which may include a variety of reform 

17 options such as tax credit approaches, expan18 sions of public programs such as Medicaid and 

19 the State Children’s Health Insurance Pro20 gram, the creation of purchasing pooling ar21 rangements similar to the Federal Employees 

22 Health Benefits Program, individual market 

23 purchasing options, single risk pool or single 

24 payer systems, health savings accounts, a com25 bination of the options described in this subVerDate Nov 24 2008 01:15 Jan 15, 2009 Jkt 079200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H464.IH H464

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1 paragraph, or other alternatives determined ap2 propriate by the Commission, including options 

3 suggested by States or the public, and nothing 

4 in this subparagraph shall be construed to pre5 vent the Commission from approving a reform 

6 proposal not included in this subparagraph; 

7 (C) shall conduct a thorough review of the 

8 grant application from a State and carry on a 

9 dialogue with all State applicants concerning 

10 possible modifications and adjustments; 

11 (D) shall submit the recommendations and 

12 legislative proposal described in subsection 

13 (d)(4)(C); 

14 (E) shall be responsible for receiving infor15 mation to determine the status and progress 

16 achieved under program or projects granted 

17 under this section; 

18 (F) shall report to the public concerning 

19 progress made by States with respect to the 

20 performance measures and goals established 

21 under this section, the periodic progress of the 

22 State relative to its State performance meas23 ures and goals, and the State program applica24 tion procedures, by region and State jurisdic25 tion; 


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1 (G) shall promote information exchange 

2 between States and the Federal Government; 

3 (H) shall be responsible for making rec4 ommendations to the Secretary and the Con5 gress, using equivalency or minimum standards, 

6 for minimizing the negative effect of State pro7 gram on national employer groups, provider or8 ganizations, and insurers because of differing 

9 State requirements under the programs; and 

10 (I) may require States to submit additional 

11 information or reports concerning the status 

12 and progress achieved under health care expan13 sion and improvement programs granted under 

14 this section, as needed. 

15 (2) PERIOD OF APPOINTMENT; REPRESENTA16 TION REQUIREMENTS; VACANCIES.—Members shall 

17 be appointed for a term of 5 years. In appointing 

18 such members under paragraph (1)(A), the des19 ignated appointing individuals shall ensure the rep20 resentation of urban and rural areas and an appro21 priate geographic distribution of such members. Any 

22 vacancy in the Commission shall not affect its pow23 ers, but shall be filled in the same manner as the 

24 original appointment. 

25 (3) CHAIRPERSON, MEETINGS.— 


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1 (A) CHAIRPERSON.—The Commission shall 

2 select a Chairperson from among its members. 

3 (B) QUORUM.—Two-thirds of the members 

4 of the Commission shall constitute a quorum, 

5 but a lesser number of members may hold hear6 ings. 

7 (C) MEETINGS.—Not later than 30 days 

8 after the date on which all members of the 

9 Commission have been appointed, the Commis10 sion shall hold its first meeting. The Commis11 sion shall meet at the call of the Chairperson. 

12 (4) POWERS OF THE COMMISSION.— 

13 (A) NEGOTIATIONS WITH STATES.—The 

14 Commission may conduct detailed discussions 

15 and negotiations with States submitting appli16 cations under this section, either individually or 

17 in groups, to facilitate a final set of rec18 ommendations for purposes of subsection 

19 (d)(4)(C). 

20 (B) HEARINGS.—The Commission may 

21 hold such hearings, sit and act at such times 

22 and places, take such testimony, and receive 

23 such evidence as the Commission considers ad24 visable to carry out the purposes of this sub25 section. 


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1 (C) MEETINGS.—In addition to other 

2 meetings the Commission may hold, the Com3 mission shall hold an annual meeting with the 

4 participating States under this section for the 

5 purpose of having States report progress to6 ward the purposes in subsection (a) and for an 

7 exchange of information. 

8 (D) INFORMATION.—The Commission may 

9 secure directly from any Federal department or 

10 agency such information as the Commission 

11 considers necessary to carry out the provisions 

12 of this subsection. Upon request of the Chair13 person of the Commission, the head of such de14 partment or agency shall furnish such informa15 tion to the Commission if the head of the de16 partment or agency involved determines it ap17 propriate. 

18 (E) POSTAL SERVICES.—The Commission 

19 may use the United States mails in the same 

20 manner and under the same conditions as other 

21 departments and agencies of the Federal Gov22 ernment. 

23 (5) PERSONNEL MATTERS.— 

24 (A) COMPENSATION.—Each member of the 

25 Commission who is not an officer or employee 


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1 of the Federal Government or of a State or 

2 local government shall be compensated at a rate 

3 equal to the daily equivalent of the annual rate 

4 of basic pay prescribed for level IV of the Exec5 utive Schedule under section 5315 of title 5, 

6 United States Code, for each day (including 

7 travel time) during which such member is en8 gaged in the performance of the duties of the 

9 Commission. All members of the Commission 

10 who are officers or employees of the United 

11 States shall serve without compensation in addi12 tion to that received for their services as offi13 cers or employees of the United States. 

14 (B) TRAVEL EXPENSES.—The members of 

15 the Commission shall be allowed travel ex16 penses, including per diem in lieu of subsist17 ence, at rates authorized for employees of agen18 cies under subchapter I of chapter 57 of title 5, 

19 United States Code, while away from their 

20 homes or regular places of business in the per21 formance of services for the Commission. 

22 (C) STAFF.—The Chairperson of the Com23 mission may, without regard to the civil service 

24 laws and regulations, appoint and terminate an 

25 executive director and such other additional 


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1 personnel as may be necessary to enable the 

2 Commission to perform its duties. The employ3 ment of an executive director shall be subject to 

4 confirmation by the Commission. 

5 (D) DETAIL OF GOVERNMENT EMPLOY6 EES.—Any Federal Government employee may 

7 be detailed to the Commission without reim8 bursement, and such detail shall be without 

9 interruption or loss of civil service status or 

10 privilege. 

11 (E) TEMPORARY AND INTERMITTENT

12 SERVICES.—The Chairperson of the Commis13 sion may procure temporary and intermittent 

14 services under section 3109(b) of title 5, United 

15 States Code, at rates for individuals which do 

16 not exceed the daily equivalent of the annual 

17 rate of basic pay prescribed for level V of the 

18 Executive Schedule under section 5316 of such 

19 title. 

20 (6) FUNDING.—For the purpose of carrying out 

21 this subsection, there are authorized to be appro22 priated $3,000,000 for fiscal year 2008 and each fis23 cal year thereafter. 

24 (d) REQUIREMENTS FOR PROGRAMS.— 


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1 (1) STATE PLAN.—A State that seeks to oper2 ate a program under this section shall prepare and 

3 submit to the Commission, as part of the application 

4 under subsection (b), a State health care plan that 

5 shall have as its goal increased coverage, and in 

6 service of that goal such additional goals as improve7 ments in quality, efficiency, cost-effectiveness, and 

8 the appropriate use of information technology. To 

9 achieve such goal, the State plan shall comply with 

10 the following: 

11 (A) COVERAGE.— 

12 (i) IN GENERAL.—With respect to 

13 coverage, the State plan shall— 

14 (I) provide and describe the man15 ner in which the State will ensure that 

16 an increased number of individuals re17 siding within the State will have ex18 panded access to health care coverage 

19 with a specific 5-year target for reduc20 tion in the number or proportion of 

21 uninsured individuals through either 

22 private or public program expansion, 

23 or both, in accordance with or in addi24 tion to the options established by the 

25 Commission; 


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1 (II) describe the number and per2 centage of current uninsured individ3 uals who will achieve coverage under a 

4 State health program; 

5 (III) describe the coverage that 

6 will be provided to beneficiaries under 

7 a State health program; 

8 (IV) identify Federal, State, or 

9 local and private programs that cur10 rently provide health care services in 

11 the State and describe how such pro12 grams could be coordinated with a 

13 State health program, to the extent 

14 practicable; and 

15 (V) provide for improvements in 

16 the availability of appropriate health 

17 care coverage that will increase access 

18 to care in urban, suburban, rural, and 

19 frontier areas of the State with medi20 cally underserved populations or 

21 where there may be an inadequate 

22 supply of health care providers. 

23 (ii) COVERAGE OPTIONS.—The cov24 erage under the State plan may be— 


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1 (I) health insurance coverage 

2 that meets the aggregate actuarial 

3 value requirement of section 

4 2103(a)(2)(B) of the Social Security 

5 Act (42 U.S.C. 1397cc(a)(2)(B)); 

6 (II) a combination of health in7 surance coverage and a consumer-di8 rected health care spending account, if 

9 the actuarial value of such coverage 

10 plus the amount of annual deposits 

11 into such account from sources other 

12 than the beneficiary is not less than 

13 the actuarial value amount described 

14 in subclause (I); or 

15 (III) health care access not less 

16 on average than that provided 

17 through coverage described in sub18 clause (I). 

19 (iii) CONSTRUCTION.—Nothing in this 

20 clause shall be construed to limit in any 

21 way the authority of the Secretary of 

22 Health and Human Services to issue waiv23 ers under section 1115 of the Social Secu24 rity Act. 


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1 (B) QUALITY.—With respect to quality, 

2 the State plan may describe efforts to improve 

3 health care quality in the State, including an 

4 explanation of how such efforts would change 

5 (if at all) under the State plan. 

6 (C) COSTS.—With respect to costs, the 

7 State plan shall— 

8 (i) describe such steps as the State 

9 may undertake to improve the efficiency of 

10 health care; 

11 (ii) describe the public and private 

12 sector financing to be provided for the 

13 State health program; 

14 (iii) estimate the amount of Federal, 

15 State, and local expenditures, as well as, 

16 the costs to business and individuals under 

17 the State health program; and 

18 (iv) describe how the State plan will 

19 ensure the financial solvency of the State 

20 health program. 

21 (D) HEALTH INFORMATION TECH22 NOLOGY.—With respect to health information 

23 technology, the State plan may describe efforts 

24 to improve the appropriate use of health infor25 mation technology, including an explanation of 


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1 how such efforts would change (if at all) under 

2 the State plan. 

3 (E) EXCEPTIONS TO FEDERAL POLICIES.— 

4 The State plan shall describe the exceptions to 

5 otherwise applicable Federal statutes, regula6 tions, and policies that would apply within the 

7 geographic area and time period governed by 

8 the plan. 

9 (2) TECHNICAL ASSISTANCE.—The Secretary 

10 shall, if requested, provide technical assistance to 

11 States to assist such States in developing applica12 tions and plans under this section, including tech13 nical assistance by private sector entities if deter14 mined appropriate by the Commission. 

15 (3) INITIAL REVIEW.—With respect to a State 

16 application under subsection (b), the Secretary and 

17 the Commission shall complete an initial review of 

18 such State application within 60 days of the receipt 

19 of such application, analyze the scope of the pro20 posal, and determine whether additional information 

21 is needed from the State. The Commission shall ad22 vise the State within such period of the need to sub23 mit additional information. 

24 (4) FINAL DETERMINATION.— 


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1 (A) IN GENERAL.—In a timely manner 

2 consistent with subparagraph (C), the Commis3 sion shall determine whether to submit a State 

4 proposal to Congress for approval. 

5 (B) VOTING.— 

6 (i) IN GENERAL.—The determination 

7 to submit a State proposal to Congress 

8 under subparagraph (A) shall be approved 

by 2 9 ⁄3 of the members of the Commission 

10 who are present and eligible to vote and a 

11 majority of the entire Commission. 

12 (ii) ELIGIBILITY.—A member of the 

13 Commission shall not participate in a de14 termination under subparagraph (A) if— 

15 (I) in the case of a member who 

16 is a Governor, such determination re17 lates to the State of which the mem18 ber is the Governor; or 

19 (II) in the case of member not 

20 described in subclause (I), such deter21 mination relates to the geographic 

22 area of a State of which such member 

23 serves as a State or local official or as 

24 a Member of Congress. 


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1 (C) SUBMISSION.—Not later than 90 days 

2 prior to October 1 of each fiscal year, the Com3 mission may submit to Congress a list, in the 

4 form of a legislative proposal, of the State ap5 plications that the Commission recommends for 

6 approval under this section. 

7 (5) PROGRAM OR PROJECT PERIOD.—A State 

8 program or project may be approved for a period of 

9 5 years and may be extended for a subsequent pe10 riod of time upon approval by the Commission, 

11 based upon achievement of targets. 

12 (e) EXPEDITED CONGRESSIONAL CONSIDERATION.— 

13 (1) INTRODUCTION AND EXPEDITED CONSIDER14 ATION IN THE HOUSE OF REPRESENTATIVES.— 

15 (A) INTRODUCTION IN HOUSE OF REP16 RESENTATIVES.—The legislative proposal sub17 mitted pursuant to subsection (d)(4)(C) shall be 

18 in the form of a joint resolution (in this sub19 section referred to as the ‘‘resolution’’). Such 

20 resolution shall be introduced in the House of 

21 Representatives by the Speaker immediately 

22 upon receipt of the language and shall be re23 ferred non-sequentially to the appropriate com24 mittee (or committees) of House of Representa25 tives. If the resolution is not introduced in acVerDate Nov 24 2008 01:15 Jan 15, 2009 Jkt 079200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\H464.IH H464

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1 cordance with the preceding sentence, the reso2 lution may be introduced by any member of the 

3 House of Representatives. 

4 (B) COMMITTEE CONSIDERATION.—Not 

5 later than 15 calendar days after the introduc6 tion of the resolution described in subparagraph 

7 (A), each committee of House of Representa8 tives to which the resolution was referred shall 

9 report the resolution. The report may include, 

10 at the committee’s discretion, a recommenda11 tion for action by the House. If a committee 

12 has not reported such resolution (or an iden13 tical resolution) at the end of 15 calendar days 

14 after its introduction or at the end of the first 

15 day after there has been reported to the House 

16 a resolution, whichever is earlier, such com17 mittee shall be deemed to be discharged from 

18 further consideration of such resolution and 

19 such resolution shall be placed on the appro20 priate calendar of the House of Representatives. 

21 (C) EXPEDITED PROCEDURE IN HOUSE.— 

22 Not later than 5 legislative days after the date 

23 on which all committees have been discharged 

24 from consideration of a resolution, the Speaker 

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1 er’s designee, shall move to proceed to the con2 sideration of the resolution. It shall also be in 

3 order for any member of the House of Rep4 resentatives to move to proceed to the consider5 ation of the resolution at any time after the 

6 conclusion of such 5-day period. All points of 

7 order against the resolution (and against con8 sideration of the resolution) are waived. A mo9 tion to proceed to the consideration of the reso10 lution is highly privileged in the House of Rep11 resentatives and is not debatable. The motion is 

12 not subject to amendment, to a motion to post13 pone consideration of the resolution, or to a mo14 tion to proceed to the consideration of other 

15 business. A motion to reconsider the vote by 

16 which the motion to proceed is agreed to or not 

17 agreed to shall not be in order. If the motion 

18 to proceed is agreed to, the House of Rep19 resentatives shall immediately proceed to con20 sideration of the resolution without intervening 

21 motion, order, or other business, and the reso22 lution shall remain the unfinished business of 

23 the House of Representatives until disposed of. 

24 A motion to recommit the resolution shall not 

25 be in order. Upon its passage in the House, the 


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1 clerk of the House shall provide for its imme2 diate transmittal to the Senate. 

3 (2) EXPEDITED CONSIDERATION IN THE SEN4 ATE.— 

5 (A) REFERRAL TO COMMITTEE.—If the 

6 resolution is agreed to by the House of Rep7 resentatives, upon its receipt in the Senate the 

8 majority leader of the Senate, or the leader’s 

9 designee, the resolution shall be referred to the 

10 appropriate committee of Senate. 

11 (B) COMMITTEE CONSIDERATION.—Not 

12 later than 15 calendar days after the referral of 

13 the resolution under subparagraph (A), the 

14 committee of the Senate to which the resolution 

15 was referred shall report the resolution. The re16 port may include, at the committee’s discretion, 

17 a recommendation for action by the Senate. If 

18 a committee has not reported such resolution 

19 (or an identical resolution) at the end of 15 cal20 endar days after its referral or at the end of the 

21 first day after there has been reported to the 

22 Senate a resolution, whichever is earlier, such 

23 committee shall be deemed to be discharged 

24 from further consideration of such resolution 


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1 and such resolution shall be placed on the ap2 propriate calendar of the Senate. 

3 (C) EXPEDITED FLOOR CONSIDERATION.— 

4 Not later than 5 legislative days after the date 

5 on which all committees have been discharged 

6 from consideration of a resolution, the majority 

7 leader of the Senate, or the majority leader’s 

8 designee, shall move to proceed to the consider9 ation of the resolution. It shall also be in order 

10 for any member of the Senate to move to pro11 ceed to the consideration of the resolution at 

12 any time after the conclusion of such 5-day pe13 riod. All points of order against the resolution 

14 (and against consideration of the resolution) 

15 are waived. A motion to proceed to the consid16 eration of the resolution in the Senate is privi17 leged and is not debatable. The motion is not 

18 subject to amendment, to a motion to postpone 

19 consideration of the resolution, or to a motion 

20 to proceed to the consideration of other busi21 ness. A motion to reconsider the vote by which 

22 the motion to proceed is agreed to or not 

23 agreed to shall not be in order. If the motion 

24 to proceed is agreed to, the Senate shall imme25 diately proceed to consideration of the resoluVerDate Nov 24 2008 01:15 Jan 15, 2009 Jkt 079200 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 E:\BILLS\H464.IH H464

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1 tion without intervening motion, order, or other 

2 business, and the resolution shall remain the 

3 unfinished business of the Senate until disposed 

4 of. 

5 (3) RULES OF THE SENATE AND HOUSE OF

6 REPRESENTATIVES.—This subsection is enacted by 

7 Congress— 

8 (A) as an exercise of the rulemaking power 

9 of the Senate and House of Representatives, re10 spectively, and is deemed to be part of the rules 

11 of each House, respectively, but applicable only 

12 with respect to the procedure to be followed in 

13 that House in the case of a resolution under 

14 this subsection, and it supersedes other rules 

15 only to the extent that it is inconsistent with 

16 such rules; and 

17 (B) with full recognition of the constitu18 tional right of either House to change the rules 

19 (so far as they relate to the procedure of that 

20 House) at any time, in the same manner, and 

21 to the same extent as in the case of any other 

22 rule of that House. 

23 (4) FEDERAL BUDGET NEUTRALITY.—Except 

24 insofar as it allots appropriations made pursuant to 

25 subsection (k), the legislative proposal submitted 


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1 pursuant to subsection (d)(4)(C) may not increase 

2 the cumulative, net Federal budget deficit during the 

3 multi-year operation of all the State applications 

4 contained therein, taking into account such applica5 tions’ impact on Federal mandatory and discre6 tionary spending, Federal revenue, and Federal tax 

7 expenditures. 

8 (f) FUNDING.— 

9 (1) IN GENERAL.—The Secretary shall provide 

10 a grant to a State that has an application approved 

11 under subsection (e) to enable such State to carry 

12 out an innovative State health program in the State, 

13 to the extent that such a grant is included in the 

14 recommendation of the Commission. 

15 (2) AMOUNT OF GRANT.—The amount of a 

16 grant provided to a State under paragraph (1) shall 

17 be determined based upon the recommendations of 

18 the Commission, subject to the amount appropriated 

19 under subsection (k). 

20 (3) PERFORMANCE-BASED FUNDING ALLOCA21 TION.—In awarding grants under paragraph (1), the 

22 Commission shall direct the Secretary to— 

23 (A) fund a balanced diversity of ap24 proaches as provided for by the Commission in 

25 subsection (c)(1)(B); and 


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1 (B) link allocations to the State to the 

2 meeting of the goals and performance measures 

3 relating to health care coverage and health care 

4 costs established under this section through the 

5 State project application process. 

6 (4) REPORT.—One year prior to the end of the 

7 5-year period beginning on the date on which the 

8 first State begins to implement a plan approved 

9 under subsection (e), the Commission shall prepare 

10 and submit to the appropriate committees of Con11 gress, a report on the progress made by States in 

12 meeting the goals of expanded coverage and cost 

13 containment through performance measures estab14 lished during the 5-year period of the State plan. 

15 Such report may contain the recommendation of the 

16 Commission concerning any future action that Con17 gress should take concerning health care reform, in18 cluding whether or not to extend the program estab19 lished under this subsection. 

20 (g) MONITORING AND EVALUATION.— 

21 (1) ANNUAL REPORTS AND PARTICIPATION BY

22 STATES.—Each State that has received a program 

23 approval shall— 

24 (A) submit to the Commission an annual 

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1 spective State’s fiscal year, detailing compliance 

2 with the requirements established by the Com3 mission and the Secretary in the approval and 

4 in this section; and 

5 (B) participate in the annual meeting 

6 under subsection (c)(4)(C). 

7 (2) EVALUATIONS BY COMMISSION.—The Com8 mission shall prepare and submit to the Congress 

9 annual reports that shall contain— 

10 (A) a description of the effects of the re11 forms undertaken in States receiving approvals 

12 under this section; 

13 (B) a description of the recommendations 

14 of the Commission and actions taken based on 

15 these recommendations; 

16 (C) an independent evaluation of the effec17 tiveness of such reforms in— 

18 (i) expanding health care coverage for 

19 State residents; and 

20 (ii) reducing or containing health care 

21 costs in the States, 

22 as well as other relevant or significant findings; 

23 (D) recommendations regarding the advis24 ability of increasing Federal financial assistance 

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1 tiatives, including the amount and source of 

2 such assistance; and 

3 (E) as required by the Commission or the 

4 Secretary under this section, a periodic, inde5 pendent evaluation of the program. 

6 (h) NONCOMPLIANCE.— 

7 (1) CORRECTIVE ACTION PLANS.—If a State is 

8 not in compliance with a requirement of this section, 

9 the Commission, on recommendation of the Sec10 retary, shall develop a corrective action plan for such 

11 State. 

12 (2) TERMINATION.—The Commission, on rec13 ommendation of the Secretary, may revoke any pro14 gram granted under this section. Such decisions 

15 shall be subject to a petition for reconsideration and 

16 appeal pursuant to regulations established by the 

17 Secretary. 

18 (i) RELATIONSHIP TO FEDERAL PROGRAMS.— 

19 (1) IN GENERAL.—Nothing in this section, or 

20 in section 1115 of the Social Security Act (42 

21 U.S.C. 1315) shall be construed as authorizing the 

22 Secretary, the Commission, a State, or any other 

23 person or entity to alter or affect in any way the 

24 provisions of title XIX of such Act (42 U.S.C. 1396 

25 et seq.) or the regulations implementing such title. 


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1 (2) MAINTENANCE OF EFFORT.—No payment 

2 may be made under subsection (f)(1) if the State 

3 adopts criteria for benefits or criteria for standards 

4 and methodologies for purposes of determining an 

5 individual’s eligibility for medical assistance under 

6 the State plan under title XIX that are more restric7 tive than those required under Federal law and ap8 plied as of the date of enactment of this Act. 

9 (j) MISCELLANEOUS PROVISIONS.— 

10 (1) APPLICATION OF CERTAIN REQUIRE11 MENTS.— 

12 (A) RESTRICTION ON APPLICATION OF

13 PREEXISTING CONDITION EXCLUSIONS.— 

14 (i) IN GENERAL.—Subject to subpara15 graph (B), a State shall not permit the im16 position of any preexisting condition exclu17 sion for covered benefits under a program 

18 or project under this section. 

19 (ii) GROUP HEALTH PLANS AND

20 GROUP HEALTH INSURANCE COVERAGE.— 

21 If the State program or project provides 

22 for benefits through payment for, or a con23 tract with, a group health plan or group 

24 health insurance coverage, the program or 

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1 existing condition exclusion but only inso2 far and to the extent that such exclusion is 

3 permitted under the applicable provisions 

4 of part 7 of subtitle B of title I of the Em5 ployee Retirement Income Security Act of 

6 1974 and title XXVII of the Public Health 

7 Service Act. 

8 (B) COMPLIANCE WITH OTHER REQUIRE9 MENTS.—Coverage offered under the program 

10 or project shall comply with the requirements of 

11 subpart 2 of part A of title XXVII of the Public 

12 Health Service Act insofar as such require13 ments apply with respect to a health insurance 

14 issuer that offers group health insurance cov15 erage. 

16 (2) PREVENTION OF DUPLICATIVE PAY17 MENTS.— 

18 (A) OTHER HEALTH PLANS.—No payment 

19 shall be made to a State under subsection (f)(1) 

20 for expenditures for health assistance provided 

21 for an individual to the extent that a private in22 surer (as defined by the Secretary by regulation 

23 and including a group health plan (as defined 

24 in section 607(1) of the Employee Retirement 

25 Income Security Act of 1974), a service benefit 


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1 plan, and a health maintenance organization) 

2 would have been obligated to provide such as3 sistance but for a provision of its insurance con4 tract which has the effect of limiting or exclud5 ing such obligation because the individual is eli6 gible for or is provided health assistance under 

7 the plan. 

8 (B) OTHER FEDERAL GOVERNMENTAL

9 PROGRAMS.—Except as provided in any other 

10 provision of law, no payment shall be made to 

11 a State under subsection (f)(1) for expenditures 

12 for health assistance provided for an individual 

13 to the extent that payment has been made or 

14 can reasonably be expected to be made prompt15 ly (as determined in accordance with regula16 tions) under any other federally operated or fi17 nanced health care insurance program. For 

18 purposes of this paragraph, rules similar to the 

19 rules for overpayments under section 

20 1903(d)(2) of the Social Security Act shall 

21 apply. 

22 (3) APPLICATION OF CERTAIN GENERAL PROVI23 SIONS.—The following provisions of the Social Secu24 rity Act shall apply to States under subsection (f)(1) 


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1 in the same manner as they apply to a State under 

2 such title XIX: 

3 (A) TITLE XIX PROVISIONS.— 

4 (i) Section 1902(a)(4)(C) (relating to 

5 conflict of interest standards). 

6 (ii) Paragraphs (2), (16), and (17) of 

7 section 1903(i) (relating to limitations on 

8 payment). 

9 (iii) Section 1903(w) (relating to limi10 tations on provider taxes and donations). 

11 (iv) Section 1920A (relating to pre12 sumptive eligibility for children). 

13 (B) TITLE XI PROVISIONS.— 

14 (i) Section 1116 (relating to adminis15 trative and judicial review), but only inso16 far as consistent with this title. 

17 (ii) Section 1124 (relating to disclo18 sure of ownership and related informa19 tion). 

20 (iii) Section 1126 (relating to disclo21 sure of information about certain convicted 

22 individuals). 

23 (iv) Section 1128A (relating to civil 

24 monetary penalties). 


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1 (v) Section 1128B(d) (relating to 

2 criminal penalties for certain additional 

3 charges). 

4 (vi) Section 1132 (relating to periods 

5 within which claims must be filed). 

6 (4) RELATION TO HIPAA.—Health benefits cov7 erage provided under a State program or project 

8 under this section shall be treated as creditable cov9 erage for purposes of part 7 of subtitle B of title I 

10 of the Employee Retirement Income Security Act of 

11 1974, title XXVII of the Public Health Service Act, 

12 and subtitle K of the Internal Revenue Code of 

13 1986. 

14 (k) AUTHORIZATION OF APPROPRIATIONS.—There is 

15 authorized to be appropriated to carry out this section, 

16 such sums as may be necessary in each fiscal year. 

17 Amounts appropriated for a fiscal year under this sub18 section and not expended may be used in subsequent fiscal 

19 years to carry out this section. 


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1 TITLE IV—SENSE OF THE HOUSE 

2 OF REPRESENTATIVES 

3 SEC. 401. MEDICARE AND MEDICAID REFORM AND SAV4 INGS. 

5 (a) IN GENERAL.—The Secretary of Health and 

6 Human Services shall implement administrative reforms 

7 with respect to— 

8 (1) the Medicare program under title XVIII of 

9 the Social Security Act in— 

10 (A) the reduction of fraud and abuse in 

11 the program, 

12 (B) health information technology, 

13 (C) comparative effectiveness, and 

14 (D) chronic disease management; and 

15 (2) the Medicaid program under title XIX of 

16 the Social Security Act, including changes in the 

17 Medicaid matching rate and changes in the pay18 ments for Medicaid administrative costs to prevent 

19 duplication of such payments under the temporary 

20 assistance for needy families program under title IV 

21 of the Social Security Act; 

22 that are sufficient to result in projected reductions in the 

23 Medicare and Medicaid Federal budget baselines for fiscal 

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1 able portion of the tax credit under section 37 of the Inter2 nal Revenue Code of 1986 (as added by title II of this 

3 Act) and the increase in the Federal budget baseline for 

4 the State children’s health insurance program under title 

5 XXI of the Social Security Act from the provisions of and 

6 amendments made by title I of this Act. 

7 (b) CONSULTATION AND CONSIDERATION.—In devel8 oping the necessary program changes under subsection 

9 (a), the Secretary of Health and Human Services shall 

10 consult with the Government Accountability Office and the 

11 Medicare Payment Advisory Commission and shall also 

12 consider any significant proposals for program changes in 

13 the specified areas that have been issued by private orga14 nizations within the last 3 years. 

Æ 


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