II

106TH CONGRESS

2D SESSION S. 2515

To amend the Social Security Act to guarantee comprehensive health care

coverage for all children born after 2001.

IN THE SENATE OF THE UNITED STATES

MAY 4, 2000

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

referred to the Committee on Finance

A BILL

To amend the Social Security Act to guarantee comprehensive health care coverage for all children born after 2001.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS; FINDINGS.

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

5 ‘‘MediKids Health Insurance Act of 2000’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents; findings.

Sec. 2. Benefits for all children born after 2001.

‘‘TITLE XXII—MEDIKIDS PROGRAM

‘‘Sec. 2201. Eligibility.

‘‘Sec. 2202. Benefits.
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‘‘Sec. 2203. Premiums.

‘‘Sec. 2204. MediKids Trust Fund.

‘‘Sec. 2205. Oversight and accountability.

‘‘Sec. 2206. Addition of care coordination services.

‘‘Sec. 2207. Administration and miscellaneous.

Sec. 3. MediKids premium.

Sec. 4. Refundable credit for cost-sharing expenses under MediKids program.

Sec. 5. Financing from tobacco liability payments.

Sec. 6. Report on long-term revenues.

1 (c) FINDINGS.—Congress finds the following:

2 (1) More than 11 million American children are

3 uninsured.

4 (2) Children who are uninsured receive less

5 medical care and less preventive care and have a

6 poorer level of health, which result in lifetime costs

7 to themselves and to the entire American economy.

8 (3) Although SCHIP and Medicaid are success9 fully extending a health coverage safety net to a

10 growing portion of the vulnerable low-income popu11 lation of uninsured children, we now see that they

12 alone cannot achieve 100 percent health insurance

13 coverage for our nation’s children due to inevitable

14 gaps during outreach and enrollment, fluctuations in

15 eligibility, and variations in access to private insur16 ance at all income levels.

17 (4) As all segments of our society continue to

18 become more and more transient, with many

19 changes in employment over the working lifetime of

20 parents, the need for a reliable safety net of health

21 insurance which follows children across State lines,
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1 already a major problem for the children of migrant

2 and seasonal farmworkers, will become a major con3 cern for all families in the United States.

4 (5) The Medicare program has successfully

5 evolved over the years to provide a stable, universal

6 source of health insurance for the nation’s disabled

7 and those over age 65, and therefore provides a test8 ed model for designing a program to reach out to

9 America’s children

10 (6) The problem of insuring 100 percent of all

11 American children could be gradually solved by auto12 matically enrolling all children born after December

13 31, 2001, in a program modeled after Medicare (and

14 to be known as ‘‘MediKids’’), and allowing those

15 children to be transferred into other equivalent or

16 better insurance programs, including either private

17 insurance, SCHIP, or Medicaid, if they are eligible

18 to do so, but maintaining the child’s default enroll19 ment in MediKids for any times when the child’s ac20 cess to other sources of insurance is lost.

21 (7) A family’s freedom of choice to use other in22 surers to cover children would not be interfered with

23 in any way, and children eligible for SCHIP and

24 Medicaid would continue to be enrolled in those pro25 grams, but the underlying safety net of MediKids
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1 would always be available to cover any gaps in insur2 ance due to changes in medical condition, employ3 ment, income, or marital status, or other changes af4 fecting a child’s access to alternate forms of insur5 ance.

6 (8) The MediKids program can be administered

7 without impacting the finances or status of the exist8 ing Medicare program.

9 (9) The MediKids benefit package can be tai10 lored to the special needs of children and updated

11 over time.

12 (10) The financing of the program can be ad13 ministered without difficulty by a yearly payment of

14 affordable premiums through a family’s tax filing (or

15 adjustment of a family’s earned income tax credit).

16 (11) The cost of the program will gradually rise

17 as the number of children using MediKids as the in18 surer of last resort increases, and a future Congress

19 always can accelerate or slow down the enrollment

20 process as desired, while the societal costs for emer21 gency room usage, lost productivity and work days,

22 and poor health status for the next generation of

23 Americans will decline.

24 (12) Over time 100 percent of American chil25 dren will always have basic health insurance, and we
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1 can therefore expect a healthier, more equitable, and

2 more productive society.

3 SEC. 2. BENEFITS FOR ALL CHILDREN BORN AFTER 2001.

4 (a) IN GENERAL.—The Social Security Act is amend5 ed by adding at the end the following new title:

6 ‘‘TITLE XXII—MEDIKIDS PROGRAM

7 ‘‘SEC. 2201. ELIGIBILITY.

8 ‘‘(a) ELIGIBILITY OF INDIVIDUALS BORN AFTER DE9 CEMBER 31, 2001.—An individual who meets the fol10 lowing requirements with respect to a month is eligible to

11 enroll under this title with respect to such month:

12 ‘‘(1) AGE.—The individual is born after Decem13 ber 31, 2001, and has not attained 23 years of age.

14 ‘‘(2) CITIZENSHIP.—The individual is a citizen

15 or national of the United States or is permanently

16 residing in the United States under color of law.

17 ‘‘(b) ENROLLMENT PROCESS.—An individual may

18 enroll in the program established under this title only in

19 such manner and form as may be prescribed by regula20 tions, and only during an enrollment period prescribed by

21 the Secretary consistent with the provisions of this section.

22 Such regulations shall provide a process under which—

23 ‘‘(1) individuals who are born in the United

24 States after December 31, 2001, are deemed to be

25 enrolled at the time of birth and a parent or guard-
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1 ian of such an individual is permitted to pre-enroll

2 in the month prior to the expected month of birth;

3 ‘‘(2) individuals who are born outside the

4 United States after such date and who become eligi5 ble to enroll by virtue of immigration into (or an ad6 justment of immigration status in) the United

7 States are deemed enrolled at the time of entry or

8 adjustment of status;

9 ‘‘(3) eligible individuals may otherwise be en10 rolled at such other times and manner as the Sec11 retary shall specify, including the use of outstationed

12 eligibility sites as described in section

13 1902(a)(55)(A) and the use of presumptive eligi14 bility provisions like those described in section

15 1920A; and

16 ‘‘(4) at the time of automatic enrollment of a

17 child, the Secretary provides for issuance to a parent

18 or custodian of the individual a card evidencing cov19 erage under this title and for a description of such

20 coverage.

21 The provisions of section 1837(h) apply with respect to

22 enrollment under this title in the same manner as they

23 apply to enrollment under part B of title XVIII.

24 ‘‘(c) DATE COVERAGE BEGINS.—
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1 ‘‘(1) IN GENERAL.—The period during which

2 an individual is entitled to benefits under this title

3 shall begin as follows, but in no case earlier than

4 January 1, 2002:

5 ‘‘(A) In the case of an individual who is

6 enrolled under paragraph (1) or (2) of sub7 section (b), the date of birth or date of obtain8 ing appropriate citizenship or immigration sta9 tus, as the case may be.

10 ‘‘(B) In the case of an another individual

11 who enrolls (including pre-enrolls) before the

12 month in which the individual satisfies eligi13 bility for enrollment under subsection (a), the

14 first day of such month of eligibility.

15 ‘‘(C) In the case of an another individual

16 who enrolls during or after the month in which

17 the individual first satisfies eligibility for enroll18 ment under such subsection, the first day of the

19 following month.

20 ‘‘(2) AUTHORITY TO PROVIDE FOR PARTIAL

21 MONTHS OF COVERAGE.—Under regulations, the

22 Secretary may, in the Secretary’s discretion, provide

23 for coverage periods that include portions of a

24 month in order to avoid lapses of coverage.
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1 ‘‘(3) LIMITATION ON PAYMENTS.—No payments

2 may be made under this title with respect to the ex3 penses of an individual enrolled under this title un4 less such expenses were incurred by such individual

5 during a period which, with respect to the individual,

6 is a coverage period under this section.

7 ‘‘(d) EXPIRATION OF ELIGIBILITY.—An individual’s

8 coverage period under this part shall continue until the

9 individual’s enrollment has been terminated because the

10 individual no longer meets the requirements of subsection

11 (a) (whether because of age or change in immigration sta12 tus).

13 ‘‘(e) ENTITLEMENT TO MEDIKIDS BENEFITS FOR

14 ENROLLED INDIVIDUALS.—An individual enrolled under

15 this section is entitled to the benefits described in section

16 2202.

17 ‘‘(f) LOW-INCOME INFORMATION.—At the time of en18 rollment of a child under this title, the Secretary shall

19 make an inquiry as to whether or not the family income

20 of the family that includes the child is less than 150 per21 cent of the poverty line for a family of the size involved.

22 If the family income is below such level, the Secretary shall

23 encode in the identification card issued in connection with

24 eligibility under this title a code indicating such fact. The

25 Secretary also shall provide for a toll-free telephone line
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1 at which providers can verify whether or not such a child

2 is in a family the income of which is below such level.

3 ‘‘(g) CONSTRUCTION.—Nothing in this title shall be

4 construed as requiring (or preventing) an individual who

5 is enrolled under this section from seeking medical assist6 ance under a State medicaid plan under title XIX or child

7 health assistance under a State child health plan under

8 title XXI.

9 ‘‘SEC. 2202. BENEFITS.

10 ‘‘(a) SECRETARIAL SPECIFICATION OF BENEFIT

11 PACKAGE.—

12 ‘‘(1) IN GENERAL.—The Secretary shall specify

13 the benefits to be made available under this title

14 consistent with the provisions of this section and in

15 a manner designed to meet the health needs of chil16 dren.

17 ‘‘(2) UPDATING.—The Secretary shall update

18 the specification of benefits over time to ensure the

19 inclusion of age-appropriate benefits as the enrollee

20 population gets older.

21 ‘‘(3) ANNUAL UPDATING.—The Secretary shall

22 establish procedures for the annual review and up23 dating of such benefits to account for changes in

24 medical practice, new information from medical re-
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1 search, and other relevant developments in health

2 science.

3 ‘‘(4) INPUT.—The Secretary shall seek the

4 input of the pediatric community in specifying and

5 updating such benefits.

6 ‘‘(b) INCLUSION OF CERTAIN BENEFITS.—

7 ‘‘(1) MEDICARE CORE BENEFITS.—Such bene8 fits shall include (to the extent consistent with other

9 provisions of this section) at least the same benefits

10 (including coverage, access, availability, duration,

11 and beneficiary rights) that are available under

12 parts A and B of title XVIII.

13 ‘‘(2) ALL REQUIRED MEDICAID BENEFITS.—

14 Such benefits shall also include all items and serv15 ices for which medical assistance is required to be

16 provided under section 1902(a)(10)(A) to individuals

17 described in such section, including early and peri18 odic screening, diagnostic services, and treatment

19 services.

20 ‘‘(3) INCLUSION OF PRESCRIPTION DRUGS.—

21 Such benefits also shall include (as specified by the

22 Secretary) prescription drugs and biologicals.

23 ‘‘(4) COST-SHARING.—

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B), such benefits also shall include the
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1 cost-sharing (in the form of deductibles, coin2 surance, and copayments) applicable under title

3 XVIII with respect to comparable items and

4 services, except that no cost-sharing shall be

5 imposed with respect to early and periodic

6 screening and diagnostic services included

7 under paragraph (2).

8 ‘‘(B) NO COST-SHARING FOR LOWEST IN9 COME CHILDREN.—Such benefits shall not in10 clude any cost-sharing for children in families

11 the income of which (as determined for pur12 poses of section 1905(p)) does not exceed 150

13 percent of the official income poverty line (re14 ferred to in such section) applicable to a family

15 of the size involved.

16 ‘‘(C) REFUNDABLE CREDIT FOR COST17 SHARING FOR OTHER LOW-INCOME CHIL18 DREN.—For a refundable credit for cost-shar19 ing in the case of children in certain families,

20 see section 35 of the Internal Revenue Code of

21 1986.

22 ‘‘(c) PAYMENT SCHEDULE.—The Secretary, with the

23 assistance of the Medicare Payment Advisory Commission,

24 shall develop and implement a payment schedule for bene25 fits covered under this title. To the extent feasible, such
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1 payment schedule shall be consistent with comparable pay2 ment schedules and reimbursement methodologies applied

3 under parts A and B of title XVIII.

4 ‘‘(d) INPUT.—The Secretary shall specify such bene5 fits and payment schedules only after obtaining input from

6 appropriate child health providers and experts.

7 ‘‘(e) ENROLLMENT IN HEALTH PLANS.—The Sec8 retary shall provide for the offering of benefits under this

9 title through enrollment in a health benefit plan that

10 meets the same (or similar) requirements as the require11 ments that apply to Medicare+Choice plans under part

12 C of title XVIII. In the case of individuals enrolled under

13 this title in such a plan, the Medicare+Choice capitation

14 rate described in section 1853(c) shall be adjusted in an

15 appropriate manner to reflect differences between the pop16 ulation served under this title and the population under

17 title XVIII.

18 ‘‘SEC. 2203. PREMIUMS.

19 ‘‘(a) AMOUNT OF MONTHLY PREMIUMS.—

20 ‘‘(1) IN GENERAL.—The Secretary shall, during

21 September of each year (beginning with 2001), es22 tablish a monthly MediKids premium. Subject to

23 paragraph (2), the monthly MediKids premium for

a year is equal to 1 24 ⁄12 of the annual premium rate

25 computed under subsection (b).
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1 ‘‘(2) ELIMINATION OF MONTHLY PREMIUM FOR

2 DEMONSTRATION OF EQUIVALENT COVERAGE (IN3 CLUDING COVERAGE UNDER LOW-INCOME PRO4 GRAMS).—The amount of the monthly premium im5 posed under this section for an individual for a

6 month shall be zero in the case of an individual who

7 demonstrates to the satisfaction of the Secretary

8 that the individual has basic health insurance cov9 erage for that month the actuarial value of which,

10 as determined by the Secretary, is at least actuari11 ally equivalent to the benefits available under this

12 title. For purposes of the previous sentence enroll13 ment in a medicaid plan under title XIX, a State

14 child health insurance plan under title XXI, or

15 under the medicare program under title XVIII is

16 deemed to constitute basic health insurance coverage

17 described in such sentence.

18 ‘‘(b) ANNUAL PREMIUM.—

19 ‘‘(1) NATIONAL, PER CAPITA AVERAGE.—The

20 Secretary shall estimate the average, annual per

21 capita amount that would be payable under this title

22 with respect to individuals residing in the United

23 States who meet the requirement of section

24 2201(a)(1) as if all such individuals were eligible for

25 (and enrolled) under this title during the entire year
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1 (and assuming that section 1862(b)(2)(A)(i) did not

2 apply).

3 ‘‘(2) ANNUAL PREMIUM.—Subject to subsection

4 (d), the annual premium under this subsection for

5 months in a year is equal to the average, annual per

6 capita amount estimated under paragraph (1) for

7 the year.

8 ‘‘(c) PAYMENT OF MONTHLY PREMIUM.—

9 ‘‘(1) PERIOD OF PAYMENT.—In the case of an

10 individual who participates in the program estab11 lished by this title, subject to subsection (d), the

12 monthly premium shall be payable for the period

13 commencing with the first month of the individual’s

14 coverage period and ending with the month in which

15 the individual’s coverage under this title terminates.

16 ‘‘(2) COLLECTION THROUGH TAX RETURN.—

17 For provisions providing for the payment of monthly

18 premiums under this subsection, see section 59B of

19 the Internal Revenue Code of 1986.

20 ‘‘(3) PROTECTIONS AGAINST FRAUD AND

21 ABUSE.—The Secretary shall develop, in coordina22 tion with States and other health insurance issuers,

23 administrative systems to ensure that claims which

24 are submitted to more than one payor are coordi25 nated and duplicate payments are not made.
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1 ‘‘(d) REDUCTION IN PREMIUM FOR CERTAIN LOW2 INCOME FAMILIES.—For provisions reducing the premium

3 under this section for certain low-income families, see sec4 tion 59B(c) of the Internal Revenue Code of 1986.

5 ‘‘SEC. 2204. MEDIKIDS TRUST FUND.

6 ‘‘(a) ESTABLISHMENT OF TRUST FUND.—

7 ‘‘(1) IN GENERAL.—There is hereby created on

8 the books of the Treasury of the United States a

9 trust fund to be known as the ‘MediKids Trust

10 Fund’ (in this section referred to as the ‘Trust

11 Fund’). The Trust Fund shall consist of such gifts

12 and bequests as may be made as provided in section

13 201(i)(1) and such amounts as may be deposited in,

14 or appropriated to, such fund as provided in this

15 title.

16 ‘‘(2) PREMIUMS.—Premiums collected under

17 section 2203 shall be transferred to the Trust Fund.

18 ‘‘(b) INCORPORATION OF PROVISIONS.—

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

20 subsections (b) through (i) of section 1841 shall

21 apply with respect to the Trust Fund and this title

22 in the same manner as they apply with respect to

23 the Federal Supplementary Medical Insurance Trust

24 Fund and part B, respectively.
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1 ‘‘(2) MISCELLANEOUS REFERENCES.—In apply2 ing provisions of section 1841 under paragraph

3 (1)—

4 ‘‘(A) any reference in such section to ‘this

5 part’ is construed to refer to title XXII;

6 ‘‘(B) any reference in section 1841(h) to

7 section 1840(d) and in section 1841(i) to sec8 tions 1840(b)(1) and 1842(g) are deemed ref9 erences to comparable authority exercised under

10 this title;

11 ‘‘(C) payments may be made under section

12 1841(g) to the Trust Funds under sections

13 1817 and 1841 as reimbursement to such funds

14 for payments they made for benefits provided

15 under this title; and

16 ‘‘(D) the Board of Trustees of the

17 MediKids Trust Fund shall be the same as the

18 Board of Trustees of the Federal Supple19 mentary Medical Insurance Trust Fund.

20 ‘‘SEC. 2205. OVERSIGHT AND ACCOUNTABILITY.

21 ‘‘(a) THROUGH ANNUAL REPORTS OF TRUSTEES.—

22 The Board of Trustees of the MediKids Trust Fund under

23 section 2204(b)(1) shall report on an annual basis to Con24 gress concerning the status of the Trust Fund and the

25 need for adjustments in the program under this title to
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1 maintain financial solvency of the program under this

2 title.

3 ‘‘(b) PERIODIC GAO REPORTS.—The Comptroller

4 General of the United States shall periodically submit to

5 Congress reports on the adequacy of the financing of cov6 erage provided under this title. The Comptroller General

7 shall include in such report such recommendations for ad8 justments in such financing and coverage as the Comp9 troller General deems appropriate in order to maintain fi10 nancial solvency of the program under this title.

11 ‘‘SEC. 2206. INCLUSION OF CARE COORDINATION SERVICES.

12 ‘‘(a) IN GENERAL.—

13 ‘‘(1) PROGRAM AUTHORITY.—The Secretary,

14 beginning in 2002, may implement a care coordina15 tion services program in accordance with the provi16 sions of this section under which, in appropriate cir17 cumstances, eligible individuals may elect to have

18 health care services covered under this title managed

19 and coordinated by a designated care coordinator.

20 ‘‘(2) ADMINISTRATION BY CONTRACT.—The

21 Secretary may administer the program under this

22 section through a contract with an appropriate pro23 gram administrator.

24 ‘‘(3) COVERAGE.—Care coordination services

25 furnished in accordance with this section shall be
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1 treated under this title as if they were included in

2 the definition of medical and other health services

3 under section 1861(s) and benefits shall be available

4 under this title with respect to such services without

5 the application of any deductible or coinsurance.

6 ‘‘(b) ELIGIBILITY CRITERIA; IDENTIFICATION AND

7 NOTIFICATION OF ELIGIBLE INDIVIDUALS.—

8 ‘‘(1) INDIVIDUAL ELIGIBILITY CRITERIA.—The

9 Secretary shall specify criteria to be used in making

10 a determination as to whether an individual may ap11 propriately be enrolled in the care coordination serv12 ices program under this section, which shall include

13 at least a finding by the Secretary that for cohorts

14 of individuals with characteristics identified by the

15 Secretary, professional management and coordina16 tion of care can reasonably be expected to improve

17 processes or outcomes of health care and to reduce

18 aggregate costs to the programs under this title.

19 ‘‘(2) PROCEDURES TO FACILITATE ENROLL20 MENT.—The Secretary shall develop and implement

21 procedures designed to facilitate enrollment of eligi22 ble individuals in the program under this section.

23 ‘‘(c) ENROLLMENT OF INDIVIDUALS.—

24 ‘‘(1) SECRETARY’S DETERMINATION OF ELIGI25 BILITY.—The Secretary shall determine the eligi-
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1 bility for services under this section of individuals

2 who are enrolled in the program under this section

3 and who make application for such services in such

4 form and manner as the Secretary may prescribe.

5 ‘‘(2) ENROLLMENT PERIOD.—

6 ‘‘(A) EFFECTIVE DATE AND DURATION.—

7 Enrollment of an individual in the program

8 under this section shall be effective as of the

9 first day of the month following the month in

10 which the Secretary approves the individual’s

11 application under paragraph (1), shall remain

12 in effect for one month (or such longer period

13 as the Secretary may specify), and shall be

14 automatically renewed for additional periods,

15 unless terminated in accordance with such pro16 cedures as the Secretary shall establish by regu17 lation. Such procedures shall permit an indi18 vidual to disenroll for cause at any time and

19 without cause at re-enrollment intervals.

20 ‘‘(B) LIMITATION ON REENROLLMENT.—

21 The Secretary may establish limits on an indi22 vidual’s eligibility to reenroll in the program

23 under this section if the individual has

24 disenrolled from the program more than once

25 during a specified time period.
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1 ‘‘(d) PROGRAM.—The care coordination services pro2 gram under this section shall include the following ele3 ments:

4 ‘‘(1) BASIC CARE COORDINATION SERVICES.—

5 ‘‘(A) IN GENERAL.—Subject to the cost-ef6 fectiveness criteria specified in subsection

7 (b)(1), except as otherwise provided in this sec8 tion, enrolled individuals shall receive services

9 described in section 1905(t)(1) and may receive

10 additional items and services as described in

11 subparagraph (B).

12 ‘‘(B) ADDITIONAL BENEFITS.—The Sec13 retary may specify additional benefits for which

14 payment would not otherwise be made under

15 this title that may be available to individuals

16 enrolled in the program under this section (sub17 ject to an assessment by the care coordinator of

18 an individual’s circumstance and need for such

19 benefits) in order to encourage enrollment in, or

20 to improve the effectiveness of, such program.

21 ‘‘(2) CARE COORDINATION REQUIREMENT.—

22 Notwithstanding any other provision of this title, the

23 Secretary may provide that an individual enrolled in

24 the program under this section may be entitled to

25 payment under this title for any specified health
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1 care items or services only if the items or services

2 have been furnished by the care coordinator, or co3 ordinated through the care coordination services pro4 gram. Under such provision, the Secretary shall pre5 scribe exceptions for emergency medical services as

6 described in section 1852(d)(3), and other excep7 tions determined by the Secretary for the delivery of

8 timely and needed care.

9 ‘‘(e) CARE COORDINATORS.—

10 ‘‘(1) CONDITIONS OF PARTICIPATION.—In order

11 to be qualified to furnish care coordination services

12 under this section, an individual or entity shall—

13 ‘‘(A) be a health care professional or entity

14 (which may include physicians, physician group

15 practices, or other health care professionals or

16 entities the Secretary may find appropriate)

17 meeting such conditions as the Secretary may

18 specify;

19 ‘‘(B) have entered into a care coordination

20 agreement; and

21 ‘‘(C) meet such criteria as the Secretary

22 may establish (which may include experience in

23 the provision of care coordination or primary

24 care physician’s services).

25 ‘‘(2) AGREEMENT TERM; PAYMENT.—
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1 ‘‘(A) DURATION AND RENEWAL.—A care

2 coordination agreement under this subsection

3 shall be for one year and may be renewed if the

4 Secretary is satisfied that the care coordinator

5 continues to meet the conditions of participa6 tion specified in paragraph (1).

7 ‘‘(B) PAYMENT FOR SERVICES.—The Sec8 retary may negotiate or otherwise establish pay9 ment terms and rates for services described in

10 subsection (d)(1).

11 ‘‘(C) LIABILITY.—Case coordinators shall

12 be subject to liability for actual health damages

13 which may be suffered by recipients as a result

14 of the care coordinator’s decisions, failure or

15 delay in making decisions, or other actions as

16 a care coordinator.

17 ‘‘(D) TERMS.—In addition to such other

18 terms as the Secretary may require, an agree19 ment under this section shall include the terms

20 specified in subparagraphs (A) through (C) of

21 section 1905(t)(3).

22 ‘‘SEC. 2207. ADMINISTRATION AND MISCELLANEOUS.

23 ‘‘(a) IN GENERAL.—Except as otherwise provided in

24 this title—
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1 ‘‘(1) the Secretary shall enter into appropriate

2 contracts with providers of services, other health

3 care providers, carriers, and fiscal intermediaries,

4 taking into account the types of contracts used

5 under title XVIII with respect to such entities, to

6 administer the program under this title;

7 ‘‘(2) individuals enrolled under this title shall

8 be treated for purposes of title XVIII as though the

9 individual were entitled to benefits under part A and

10 enrolled under part B of such title;

11 ‘‘(3) benefits described in section 2202 that are

12 payable under this title to such individuals shall be

13 paid in a manner specified by the Secretary (taking

14 into account, and based to the greatest extent prac15 ticable upon, the manner in which they are provided

16 under title XVIII);

17 ‘‘(4) provider participation agreements under

18 title XVIII shall apply to enrollees and benefits

19 under this title in the same manner as they apply

20 to enrollees and benefits under title XVIII; and

21 ‘‘(5) individuals entitled to benefits under this

22 title may elect to receive such benefits under health

23 plans in a manner, specified by the Secretary, simi24 lar to the manner provided under part C of title

25 XVIII.
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1 ‘‘(b) COORDINATION WITH MEDICAID AND

2 SCHIP.—Notwithstanding any other provision of law, in3 dividuals entitled to benefits for items and services under

4 this title who also qualify for benefits under title XIX or

5 XXI or any other Federally funded program may continue

6 to qualify and obtain benefits under such other title or

7 program, and in such case such an individual shall elect

8 either—

9 ‘‘(1) such other title or program to be primary

10 payor to benefits under this title, in which case no

11 benefits shall be payable under this title and the

12 monthly premium under section 2203 shall be zero;

13 or

14 ‘‘(2) benefits under this title shall be primary

15 payor to benefits provided under such program or

16 title, in which case the Secretary shall enter into

17 agreements with States as may be appropriate to

18 provide that, in the case of such individuals, the ben19 efits under titles XIX and XXI or such other pro20 gram (including reduction of cost-sharing) are pro21 vided on a ‘wrap-around’ basis to the benefits under

22 this title.’’.

23 (b) CONFORMING AMENDMENTS TO SOCIAL SECU24 RITY ACT PROVISIONS.—
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1 (1) Section 201(i)(1) of the Social Security Act

2 (42 U.S.C. 401(i)(1)) is amended by striking ‘‘or the

3 Federal Supplementary Medical Insurance Trust

4 Fund’’ and inserting ‘‘the Federal Supplementary

5 Medical Insurance Trust Fund, and the MediKids

6 Trust Fund’’.

7 (2) Section 201(g)(1)(A) of such Act (42

8 U.S.C. 401(g)(1)(A)) is amended by striking ‘‘ and

9 the Federal Supplementary Medical Insurance Trust

10 Fund established by title XVIII’’ and inserting ‘‘,

11 the Federal Supplementary Medical Insurance Trust

12 Fund, and the MediKids Trust Fund established by

13 title XVIII’’.

14 (3) Section 1853(c) of such Act (42 U.S.C.

15 1395w–23(c)) is amended—

16 (A) in paragraph (1), by striking ‘‘or (7)’’

17 and inserting ‘‘, (7), or (8)’’, and

18 (B) by adding at the end the following:

19 ‘‘(8) ADJUSTMENT FOR MEDIKIDS.—In apply20 ing this subsection with respect to individuals enti21 tled to benefits under title XXII, the Secretary shall

22 provide for an appropriate adjustment in the

23 Medicare+Choice capitation rate as may be appro24 priate to reflect differences between the population
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1 served under such title and the population under

2 parts A and B.’’.

3 (c) MAINTENANCE OF MEDICAID ELIGIBILITY AND

4 BENEFITS FOR CHILDREN.—

5 (1) IN GENERAL.—In order for a State to con6 tinue to be eligible for payments under section

7 1903(a) of the Social Security Act (42 U.S.C.

8 1396b(a))—

9 (A) the State may not reduce standards of

10 eligibility, or benefits, provided under its State

11 medicaid plan under title XIX of the Social Se12 curity Act or under its State child health plan

13 under title XXI of such Act for individuals

14 under 23 years of age below such standards of

15 eligibility, and benefits, in effect on the date of

16 the enactment of this Act; and

17 (B) the State shall demonstrate to the sat18 isfaction of the Secretary of Health and Human

19 Services that any savings in State expenditures

20 under title XIX or XXI of the Social Security

21 Act that results from children from enrolling

22 under title XXII of such Act shall be used in

23 a manner that improves services to beneficiaries

24 under title XIX of such Act, such as through

25 increases in provider payment rates, expansion
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1 of eligibility, improved nurse and nurse aide

2 staffing and improved inspections of nursing fa3 cilities, and coverage of additional services.

4 (2) MEDIKIDS AS PRIMARY PAYOR.—In apply5 ing title XIX of the Social Security Act, the

6 MediKids program under title XXII of such Act

7 shall be treated as a primary payor in cases in which

8 the election described in section 2207(b)(2) of such

9 Act, as added by subsection (a), has been made.

10 (d) EXPANSION OF MEDPAC MEMBERSHIP TO 19.—

11 (1) IN GENERAL.—Section 1805(c) of the So12 cial Security Act (42 U.S.C. 1395b–6(c)) is

13 amended—

14 (A) in paragraph (1), by striking ‘‘17’’ and

15 inserting ‘‘19’’; and

16 (B) in paragraph (2)(B), by inserting ‘‘ex17 perts in children’s health,’’ after ‘‘other health

18 professionals,’’.

19 (2) INITIAL TERMS OF ADDITIONAL MEM20 BERS.—

21 (A) IN GENERAL.—For purposes of stag22 gering the initial terms of members of the

23 Medicare Payment Advisory Commission under

24 section 1805(c)(3) of the Social Security Act

25 (42 U.S.C. 1395b–6(c)(3)), the initial terms of
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1 the 2 additional members of the Commission

2 provided for by the amendment under sub3 section (a)(1) are as follows:

4 (i) One member shall be appointed for

5 1 year.

6 (ii) One member shall be appointed

7 for 2 years.

8 (B) COMMENCEMENT OF TERMS.—Such

9 terms shall begin on January 1, 2001.

10 SEC. 3. MEDIKIDS PREMIUM.

11 (a) GENERAL RULE.—Subchapter A of chapter 1 of

12 the Internal Revenue Code of 1986 (relating to determina13 tion of tax liability) is amended by adding at the end the

14 following new part:

15 ‘‘PART VIII—MEDIKIDS PREMIUM

‘‘Sec. 59B. MediKids premium.

16 ‘‘SEC. 59B. MEDIKIDS PREMIUM.

17 ‘‘(a) IMPOSITION OF TAX.—In the case of an indi18 vidual to whom this section applies, there is hereby im19 posed (in addition to any other tax imposed by this sub20 title) a MediKids premium for the taxable year.

21 ‘‘(b) INDIVIDUALS SUBJECT TO PREMIUM.—

22 ‘‘(1) IN GENERAL.—This section shall apply to

23 an individual if the taxpayer has a MediKid at any

24 time during the taxable year.
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1 ‘‘(2) MEDIKID.—For purposes of this section,

2 the term ‘MediKid’ means, with respect to a tax3 payer, any individual with respect to whom the tax4 payer is required to pay a premium under section

5 2203(c) of the Social Security Act for any month of

6 the taxable year.

7 ‘‘(c) AMOUNT OF PREMIUM.—For purposes of this

8 section, the MediKids premium for a taxable year is the

9 sum of the monthly premiums under section 2203 of the

10 Social Security Act for months in the taxable year.

11 ‘‘(d) EXCEPTIONS BASED ON ADJUSTED GROSS IN12 COME.—

13 ‘‘(1) EXEMPTION FOR VERY LOW-INCOME TAX14 PAYERS.—

15 ‘‘(A) IN GENERAL.—No premium shall be

16 imposed by this section on any taxpayer having

17 an adjusted gross income not in excess of the

18 exemption amount.

19 ‘‘(B) EXEMPTION AMOUNT.—For purposes

20 of this paragraph, the exemption amount is—

21 ‘‘(i) $16,300 in the case of a taxpayer

22 having 1 MediKid,

23 ‘‘(ii) $19,950 in the case of a tax24 payer having 2 MediKids,
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1 ‘‘(iii) $25,550 in the case of a tax2 payer having 3 MediKids, and

3 ‘‘(iv) $30,150 in the case of a tax4 payer having 4 or more MediKids.

5 ‘‘(C) PHASEOUT OF EXEMPTION.—In the

6 case of a taxpayer having an adjusted gross in7 come which exceeds the exemption amount but

8 does not exceed twice the exemption amount,

9 the premium shall be the amount which bears

10 the same ratio to the premium which would

11 (but for this subparagraph) apply to the tax12 payer as such excess bears to the exemption

13 amount.

14 ‘‘(D) INFLATION ADJUSTMENT OF EXEMP15 TION AMOUNTS.—In the case of any taxable

16 year beginning in a calendar year after 2001,

17 each dollar amount contained in subparagraph

18 (C) shall be increased by an amount equal to

19 the product of—

20 ‘‘(i) such dollar amount, and

21 ‘‘(ii) the cost-of-living adjustment de22 termined under section 1(f)(3) for the cal23 endar year in which the taxable year be24 gins, determined by substituting ‘calendar
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1 year 1999’ for ‘calendar year 1992’ in sub2 paragraph (B) thereof.

3 If any increase determined under the preceding

4 sentence is not a multiple of $50, such increase

5 shall be rounded to the nearest multiple of $50.

6 ‘‘(2) PREMIUM LIMITED TO 5 PERCENT OF AD7 JUSTED GROSS INCOME.—In no event shall any tax8 payer be required to pay a premium under this sec9 tion in excess of an amount equal to 5 percent of the

10 taxpayer’s adjusted gross income.

11 ‘‘(e) COORDINATION WITH OTHER PROVISIONS.—

12 ‘‘(1) NOT TREATED AS MEDICAL EXPENSE.—

13 For purposes of this chapter, any premium paid

14 under this section shall not be treated as expense for

15 medical care.

16 ‘‘(2) NOT TREATED AS TAX FOR CERTAIN PUR17 POSES.—The premium paid under this section shall

18 not be treated as a tax imposed by this chapter for

19 purposes of determining—

20 ‘‘(A) the amount of any credit allowable

21 under this chapter, or

22 ‘‘(B) the amount of the minimum tax im23 posed by section 55.

24 ‘‘(3) TREATMENT UNDER SUBTITLE F.—For

25 purposes of subtitle F, the premium paid under this
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1 section shall be treated as if it were a tax imposed

2 by section 1.’’.

3 (b) TECHNICAL AMENDMENTS.—

4 (1) Subsection (a) of section 6012 of such Code

5 is amended by inserting after paragraph (9) the fol6 lowing new paragraph:

7 ‘‘(10) Every individual liable for a premium

8 under section 59B.’’.

9 (2) The table of parts for subchapter A of chap10 ter 1 of such Code is amended by adding at the end

11 the following new item:

‘‘Part VIII. MediKids premium.’’.

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

13 this section shall apply to months beginning after Decem14 ber 2001, in taxable years ending after such date.

15 SEC. 4. REFUNDABLE CREDIT FOR COST-SHARING EX16 PENSES UNDER MEDIKIDS PROGRAM.

17 (a) IN GENERAL.—Subpart C of part IV of sub18 chapter A of chapter 1 of the Internal Revenue Code of

19 1986 (relating to refundable credits) is amended by redes20 ignating section 35 as section 36 and by inserting after

21 section 34 the following new section:

22 ‘‘SEC. 35. COST-SHARING EXPENSES UNDER MEDIKIDS PRO23 GRAM.

24 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in25 dividual who has a MediKid (as defined in section 59B)
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1 at any time during the taxable year, there shall be allowed

2 as a credit against the tax imposed by this subtitle an

3 amount equal to 50 percent of the amount paid by the

4 taxpayer during the taxable year as cost-sharing under

5 section 2202(b)(4) of the Social Security Act.

6 ‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN7 COME.—The amount of the credit which would (but for

8 this subsection) be allowed under this section for the tax9 able year shall be reduced (but not below zero) by an

10 amount which bears the same ratio to such amount of

11 credit as the excess of the taxpayer’s adjusted gross in12 come for such taxable year over the exemption amount (as

13 defined in section 59B(d)) bears to such exemption

14 amount.’’.

15 (b) TECHNICAL AMENDMENTS.—

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

17 31, United States Code, is amended by inserting be18 fore the period ‘‘or from section 35 of such Code’’.

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

20 IV of subchapter A of chapter 1 of such Code is

21 amended by striking the last item and inserting the

22 following new items:

‘‘Sec. 35. Cost-sharing expenses under MediKids program.

‘‘Sec. 36. Overpayments of tax.’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 2001.

4 SEC. 5. FINANCING FROM TOBACCO LIABILITY PAYMENTS.

5 Amounts that are recovered by the United States in

6 the civil action brought on September 22, 1999, under the

7 Medical Care Recovery Act, the Medicare Secondary Payer

8 provisions, and section 1962 of title 18, United States

9 Code, in the United States District Court for the District

10 of Columbia against the industry engaged in the produc11 tion and sale of tobacco products and persons engaged in

12 public relations and lobbying for such industry and that

13 are attributable to the expenditures of the Department of

14 Health and Human Services for tobacco-related illnesses

15 shall be deposited in the MediKids Trust Fund established

16 under section 2204(a) of the Social Security Act, as added

17 by section 2(a) of the MediKids Health Insurance Act of

18 2000.

19 SEC. 6. REPORT ON LONG-TERM REVENUES.

20 Within one year after the date of the enactment of

21 this Act, the Secretary of the Treasury shall propose a

22 gradual schedule of progressive tax changes to fund the

23 program under title XXII of the Social Security Act, as

24 the number of enrollees grows in the out-years.

Æ