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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1033 Introduced in House (IH)]

107th CONGRESS
  1st Session
                                H. R. 1033

  To amend the Social Security Act to provide grants and flexibility 
    through demonstration projects for States to provide universal, 
  comprehensive, cost-effective systems of health care coverage, with 
                              simplified 
                            administration.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 14, 2001

   Mr. Tierney (for himself, Mr. Bonior, Mr. Capuano, Ms. Carson of 
  Indiana, Mr. Conyers, Mr. DeFazio, Mr. Hilliard, Mr. McDermott, Mr. 
Nadler, Ms. Norton, Mr. Olver, Ms. Rivers, Mr. Sanders, Mr. Weiner, Mr. 
 Stark, Mr. Fattah, Mr. McGovern, Ms. Lee, Ms. Schakowsky, Ms. Waters, 
 Mr. Baldacci, Mr. Kucinich, Mr. Gutierrez, Mrs. Meek of Florida, Mr. 
 Kildee, Ms. Millender-McDonald, Mr. George Miller of California, Mrs. 
 Christensen, Mr. Hinchey, Mr. Lantos, Mrs. Jones of Ohio, Mr. Filner, 
 Mr. Lewis of Georgia, Mr. Evans, Mr. Hastings of Florida, Ms. Jackson-
 Lee of Texas, Mr. Brady of Pennsylvania, Mr. Payne, Ms. Baldwin, Mr. 
   Markey, Mr. Thompson of Mississippi, Mr. Owens, and Mr. Davis of 
  Illinois) introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
  To amend the Social Security Act to provide grants and flexibility 
    through demonstration projects for States to provide universal, 
  comprehensive, cost-effective systems of health care coverage, with 
                       simplified administration.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``States' Right To 
Innovate in Health Care Act of 2001''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Amendment to Social Security Act.
  ``TITLE XXII--STATE COMPREHENSIVE HEALTH CARE AND COST CONTAINMENT 
                         DEMONSTRATION PROJECTS

        ``Sec. 2201. Planning grants.
        ``Sec. 2202. Demonstration grants.
        ``Sec. 2203. State plan requirements.
        ``Sec. 2204. Interstate arrangements.
        ``Sec. 2205. Definitions.''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) In 1998, annual health care expenditures in the United 
        States totaled $1.15 trillion, or $4,094 per person.
            (2) In 1998, health care expenditures represented 13.5 
        percent of the gross domestic product (GDP) in the United 
        States and grew at the rate of 5.6 percent while the gross 
        domestic product grew only at the rate of 4.9 percent.
            (3) Businesses, and consumers, would save approximately 
        $562.8 billion over 7 years if health care expenditures were 
        increasing at the same rate as GDP growth.
            (4) Because many individuals do not have health insurance 
        coverage, they may incur health care costs which they do not 
        fully reimburse, resulting in cost-shifting to others.
            (5) As a consequence of the piecemeal health care system in 
        the United States, administrative overhead costs approximately 
        $1,000 per person annually while other Western industrialized 
        nations with universal health care systems spend approximately 
        $200 per person annually for administrative overhead.
    (b) Purpose.--It is the purpose of this Act to encourage States--
            (1) to develop plans for universal, comprehensive, cost-
        effective systems of health care with simplified administration 
        to individuals residing in such States; and
            (2) to implement such plans by offering transitional grants 
        and by removing Federal statutory and administrative barriers 
        that may inhibit or discourage efforts by States to provide 
        such health care while maintaining Federal payments for health 
        care under Federal health care programs.

SEC. 3. AMENDMENT TO SOCIAL SECURITY ACT.

    The Social Security Act (42 U.S.C. 301 et seq.) is amended by 
adding at the end the following new title:

  ``TITLE XXII--STATE COMPREHENSIVE HEALTH CARE AND COST CONTAINMENT 
                         DEMONSTRATION PROJECTS

``SEC. 2201. PLANNING GRANTS.

    ``(a) Application.--A State may apply to the Secretary for a State 
planning grant under this section to develop a State plan to offer 
universal comprehensive health care, with simplified administration, 
and to improve the cost-effectiveness of the health care delivery 
system.
    ``(b) Contents.--The Secretary may not approve such a State 
planning grant for a State unless the application for the grant 
includes or provides for the following:
            ``(1) Budget.--A budget and a budget justification.
            ``(2) Planning process.--A description of how under the 
        grant the State shall--
                    ``(A) identify options to provide a universal, 
                comprehensive, and cost-effective system of health 
                care, with simplified administration, that is 
                affordable and accessible to all eligible beneficiaries 
                in the State; and
                    ``(B) conduct an analysis that compares projected 
                overall health expenditures over a 7-year period under 
                the proposed system with the projected overall health 
                expenditures that would otherwise occur during such 
                period.
            ``(3) Opportunity for public participation.--Assurances 
        that the State will include a process for public contribution 
        and participation in the planning process.
    ``(c) Number of States; Period of Grant.--The Secretary may not 
award State planning grants under this section to more than 10 States. 
A State planning grant under this section shall be effective for a 
period of up to 30 months. In awarding State planning grants under this 
section the Secretary shall give preference to States from a variety of 
geographic areas in the United States.
    ``(d) Amount.--The amount of a State planning grant under this 
section to a State may not exceed $3,750,000.
    ``(e) Technical Assistance.--The Secretary shall provide States 
with technical assistance in applying for and implementing State 
planning grants under this section. At the request of the Secretary, 
other Departments and Offices of the Federal Government shall provide 
States with such technical assistance.

``SEC. 2202. DEMONSTRATION GRANTS.

    ``(a) Application.--A State that has developed a State plan may 
apply to the Secretary for approval of a demonstration grant under this 
section to achieve a cost-effective delivery system of universal, 
comprehensive health care with simplified administration. The Secretary 
shall notify the chief executive officer of all States of the 
availability of demonstration grants under this section.
    ``(b) Approval.--The Secretary shall approve the applications of 
not more than 5 States under this section. In approving grants under 
this section the Secretary shall give preference to States from a 
variety of geographic areas in the United States. If the Secretary 
determines that a State no longer meets the conditions for approval of 
the grant, the Secretary shall notify the State of such determination 
and provide the State with an opportunity to correct deficiencies in a 
timely manner. If the Secretary further determines that a State has not 
corrected such deficiencies in a timely manner, the Secretary shall 
terminate the grant (including waivers authorized under the grant).
    ``(c) Period.--A demonstration grant approved under this section 
shall be effective for 7 years from the date of final approval of the 
demonstration grant application under subsection (b).
    ``(d) State Plan Required.--The Secretary may not approve a 
demonstration grant under this section unless the State has a State 
plan to carry out the grant consistent with the requirements of section 
2203.
    ``(e) Funding.--
            ``(1) Transitional grant amount.--The amount awarded under 
        this section to a State with a demonstration grant approved 
        under this section may not exceed an aggregate amount of 
        $10,000,000 plus $3 multiplied by the number of eligible State 
        residents of the State, to assist the State in the transition 
        of the health care delivery and financing infrastructure. Such 
        amount shall be made available to a State during the period of 
        transition, as provided in the State plan. The number of 
        eligible State residents of a State shall be determined based 
        on the best available Census Bureau data as of the July 1 
        before the date the grant under this section is approved.
            ``(2) Maintenance of federal funds under waivers.--Pursuant 
        to the waivers under subsection (f), the Federal Government 
        shall pay to a State amounts for health care under Federal 
        health care programs that would otherwise have been payable by 
        the Federal Government but for the State's universal, 
        comprehensive health care system under this section.
    ``(f) Waiver of ERISA Preemption and Waivers To Pool Funds.--As 
part of a demonstration grant under this section and subject to the 
benefit maintenance requirements applicable under section 2203(b), a 
State may request (and the Secretary may grant) the following waivers 
of requirements and provisions to the extent necessary to carry out the 
State plan under section 2203:
            ``(1) ERISA.--Waiving application of section 514 of the 
        Employee Retirement Income Security Act of 1974.
            ``(2) Medicare.--Waiving provisions necessary to permit the 
        State--
                    ``(A) to use funds otherwise paid under title XVIII 
                for beneficiaries residing in the State; and
                    ``(B) to permit the State to enter into an 
                arrangement with the Secretary under which eligible 
                State residents who are not otherwise enrolled for 
                benefits under parts A and B of such title are enrolled 
                for such benefits under such title and the State 
                provides for such actuarially appropriate reimbursement 
                to the Secretary with respect to coverage of such 
                benefits for such residents as is necessary to assure 
                that the Trust Funds under such title are not adversely 
                affected by virtue of such waiver, such reimbursement 
                subject to--
                            ``(i) an independent audit, to be reviewed 
                        by the Comptroller General of the United 
                        States, assuring that such reimbursement does 
                        not adversely affect in any way the Trust Funds 
                        for medicare eligible beneficiaries, and
                            ``(ii) in the case that the audit 
                        determines that additional reimbursement to the 
                        Secretary is required, such additional 
                        reimbursement, with appropriate adjustments for 
                        interest attributable to the late 
                        reimbursement.
            ``(3) Medicaid.--Waiving provisions necessary to permit the 
        State to use funds otherwise paid to the State under title XIX.
            ``(4) SCHIP.--Waiving provisions necessary to permit the 
        State to use funds otherwise paid to the State under title XXI.
            ``(5) FEHBP.--Waiving provisions necessary to permit the 
        State to use funds otherwise paid under chapter 89 of title 5, 
        United States Code, or allowing the Office of Personnel 
        Management to purchase health care coverage for Federal 
        employees and retirees in the State under the State plan.
            ``(6) Use of other funds.--Waiving provisions necessary to 
        permit the State to use funds otherwise provided under other 
        Federal programs for the provision of health care coverage or 
        services, identified by the State.
            ``(7) Other laws.--Waiving of other provisions of Federal 
        law identified by the State under section 2203(e)(3) only if 
        the Secretary determines such a waiver to be appropriate after 
        consultation with the head of the Federal agency or department 
        concerned.
The Secretary may grant a waiver under this subsection only if the 
State provides the Secretary with satisfactory assurances that 
necessary safeguards have been taken to protect the health and welfare 
of individuals provided services under the waiver and that financial 
accountability is maintained for any funds expended under the waiver. 
The Secretary may grant a waiver under paragraph (1) only with the 
concurrence of the Secretary of Labor.
    ``(g) Reenrollment of Eligible State Residents Who Move From a 
Participating State.--In the case of an eligible State resident who is 
covered under a State plan under section 2203, who (but for such 
coverage) is eligible to be enrolled in a program described in 
subsection (f) (including the medicare and medicaid programs), and who 
is not enrolled in such a program because of such coverage, if the 
resident leaves the State to reside in a State that does not have such 
a State plan in effect, the resident shall be permitted, 
notwithstanding any other provision of law, to enroll immediately in 
such a program if the resident is still otherwise eligible to be so 
enrolled. In the case of such enrollment in the medicare program, the 
resident shall be treated for purposes of section 1882(s)(2) (relating 
to availability of medigap policies without underwriting) as if the 
resident had turned 65 years of age on the date the resident enrolls in 
the medicare program.
    ``(h) Duties of the Secretary.--
            ``(1) Guidance and information.--The Secretary shall--
                    ``(A) provide guidance to State health care 
                authorities regarding applications for grants under 
                this title and exchange information with, and otherwise 
                assist, such authorities upon the request of the 
                authorities;
                    ``(B) set application procedures;
                    ``(C) review and approve applications for 
                demonstration grants under this section, including 
                providing for appropriate waivers described in 
                subsection (f);
                    ``(D) provide appropriate levels of funding for 
                such approved applications consistent with such 
                section;
                    ``(E) conduct such evaluation, monitoring, 
                compliance, and other review functions as may be 
                appropriate;
                    ``(F) develop guidelines, standards, and formats 
                for States to follow in evaluating, reporting, and 
                collecting data in order to enable the Commission to 
                monitor State plan administration and compliance, and 
                to evaluate and compare the effectiveness of State 
                plans; and
                    ``(G) implement any other requirements or 
                activities necessary and appropriate under this title.
            ``(2) Annual report.--The Secretary shall submit to the 
        President and the Congress an annual report. Such report shall 
        be submitted not later than March 30 of each year and shall 
        include information concerning States that receive grants under 
        this title and the effectiveness of any health care programs 
        assisted by such grants during the previous year.
            ``(3) Approval process.--The provisions of section 2106(c) 
        shall apply to State plans and the Secretary under this title 
        in the same manner as they apply to State plans and the 
        Secretary under such section.

``SEC. 2203. STATE PLAN REQUIREMENTS.

    ``(a) Coverage.--
            ``(1) In general.--A State plan shall provide a process and 
        a timeline for achieving coverage of all eligible State 
        residents statewide, without regard to employment status, 
        income, health status or preexisting condition, or location of 
        residency within the State.
            ``(2) Outreach mechanisms.--A State plan shall describe the 
        outreach mechanisms to be used to assure coverage of all 
        eligible individuals, including measures to assure coverage of 
        individuals in hard-to-reach populations and to assure benefits 
        are provided to eligible individuals located in underserved 
        areas.
    ``(b) Benefits.--
            ``(1) Basic benefits.--A State plan shall provide for 
        health benefits that--
                    ``(A) are at least actuarially equivalent to the 
                standard Blue Cross/Blue Shield preferred provider 
                option service benefit plan, described in and offered 
                under section 8903(1) of title 5, United States Code; 
                and
                    ``(B) include benefits for at least the following 
                items and services:
                            ``(i) Inpatient and outpatient hospital 
                        services, including emergency services 
                        available 24 hours a day.
                            ``(ii) Long term, acute, and chronic care 
                        services, including skilled nursing facility 
                        services, intermediate care facility services 
                        home health services, home and community-based 
                        long-term care services, hospice care, and 
                        services in intermediate care facilities for 
                        individuals diagnosed with mental retardation.
                            ``(iii) Professional services of health 
                        care practitioners authorized to provide health 
                        care services under State law.
                            ``(iv) Community-based primary health care 
                        services, including rural health clinic 
                        services and Federally-qualified health center 
                        services.
                            ``(v) Laboratory, x-ray services, and 
                        diagnostic tests.
                            ``(vi) Preventive care, including prenatal, 
                        well-baby, and well-child care, appropriate 
                        immunizations, pap smears, screening 
                        mammography, colorectal cancer screening, 
                        physical examinations, and family planning.
                            ``(vii) Prescription drugs and biologicals, 
                        including insulin and medical foods.
                            ``(viii) Mental health services.
                            ``(ix) Substance abuse treatment services.
                            ``(x) Vision services, including routine 
                        eye examinations, eyeglasses, and contact 
                        lenses.
                            ``(xi) Hearing services, including hearing 
                        aids.
                            ``(xii) Dental services, including routine 
                        check ups.
                            ``(xiii) Durable medical equipment, 
                        including home dialysis supplies and equipment.
                            ``(xiv) Emergency ambulance services.
                            ``(xv) Prosthetics.
                            ``(xvi) Outpatient therapy, including 
                        physical therapy, occupational therapy, and 
                        speech language pathology services and related 
                        services.
            ``(2) Assurance that benefits are not reduced for 
        individuals covered under federal programs.--Insofar as the 
        State under the plan incorporates funding provided by Federal 
        programs described in section 2202(f), the State plan may not 
        provide for a reduction in benefits (including coverage, 
        access, availability, duration, and beneficiary rights, and, if 
        applicable, vaccine benefits under section 1928) otherwise 
        provided for under such programs or an increase in cost-sharing 
        and premiums otherwise provided for under such programs.
            ``(3) Continuation of benefits for certain aliens.--Nothing 
        in this title shall be construed as affecting the access of 
        aliens described in section 2204(1)(D) to health care services 
        provided under law for such aliens as of the date of the 
        enactment of this title.
    ``(c) Quality Assurance.--
            ``(1) In general.--A State plan shall provide, and 
        describe, mechanisms to be used to assure, monitor, and 
        maintain the quality of items and services furnished under the 
        plan.
            ``(2) Health outcomes.--A State plan shall describe the 
        plan's projected effect on health outcomes in the State, 
        including estimates of health benefits, decreased morbidity and 
        mortality, and improved productivity resulting from reduction 
        in the number of individuals without health benefits.
    ``(d) Programs for Medical Education.--A State plan shall describe 
health professions training and graduate medical education activities 
applicable under the plan, and shall provide, under the State plan, for 
payment from Federal, State, and local governments for such training 
and education activities in the amounts that would otherwise be payable 
by such governments but for the State's universal, comprehensive health 
care system under the State plan.
    ``(e) Financing.--
            ``(1) Budget.--A State plan shall incorporate a budget 
        which contains--
                    ``(A) detailed projections of health care 
                expenditures presently and under the proposed system, 
                including an identification and calculation of the 
                amount of funding to be provided by the Federal, State, 
                and local governments under the plan and an assurance 
                that the amount of expenditures made by the State and 
                local governments will not be reduced as a result of 
                the implementation of the plan; and
                    ``(B) a description (and an estimate of costs) of 
                transitional activities to be undertaken in 
                implementing the proposed system.
            ``(2) Cost containment.--A State plan shall describe the 
        means to be used to contain costs under the plan, including 
        when and how the plan will increase efficiencies.
            ``(3) Federal expenditure limit.--A State plan shall 
        contain assurances that aggregate Federal expenditures on 
        health care (including Federal expenditures under titles 5, 10, 
        and 38 of the United States Code, and under this Act) under the 
        plan will not exceed aggregate Federal expenditures that would 
        have been incurred in the absence of such plan.
    ``(f) Implementation.--
            ``(1) In general.--A State plan shall describe the method 
        (including a timetable and period of transition) for 
        implementing the plan.
            ``(2) Coordination.--A State plan shall identify all 
        Federal, State, and local programs that provide health care 
        services in the State and describe how such programs would be 
        incorporated in, or coordinated with, the health coverage 
        system under the plan.
            ``(3) Federal waivers required.--A State plan shall 
        identify any waivers of Federal law required to implement the 
        plan, including the use of any pooled Federal funds and other 
        waivers described in section 2202(f).
            ``(4) Approval of state legislature.--A State plan shall 
        provide that State approvals and commitments (including 
        approval of the State legislature) necessary for the 
        implementation of the plan will be obtained by not later than 1 
        year after the date of the Secretary's approval of the plan. 
        Any approval of a grant is conditioned upon the timely 
        completion of such approvals and commitments.
    ``(g) Evaluation.--A State plan shall provide for a process for its 
evaluation, and shall comply with any evaluation reporting or data 
collection requirements imposed by the Secretary.
    ``(h) Construction.--Nothing in this title shall be construed as 
preempting State laws that provide greater protections or benefits than 
the protections or benefits required under this title.

``SEC. 2204. INTERSTATE ARRANGEMENTS.

    ``(a) In General.--One or more contiguous States in a geographic 
region may file a joint application for planning and demonstration 
grants under this title.
    ``(B) Congressional Approval.--Congress hereby authorizes and 
approves States entering into Interstate Compacts in order to conduct 
joint health care programs under such a grant.
    ``(c) References to State.--In the case of a joint application 
described in subsection (a), any reference in this title to a State is 
deemed to refer to all of the States, and the approval of a grant with 
respect to such a joint application shall be counted as 1 State for 
purposes of applying sections 2201(c) and 2202(b).

``SEC. 2205. DEFINITIONS.

    ``As used in this title:
            ``(1) Eligible state resident.--The term `eligible State 
        resident' means any resident of the United States who is a 
        citizen or national of the United States, or lawful resident 
        alien, and who resides in any particular State. Such term may 
        include, at the option of a State, the following:
                    ``(A) State employees and dependents of such 
                employees.
                    ``(B) Employees, and dependents of such employees, 
                working in a work site of a business located in the 
                State.
                    ``(C) One or more classes of nonimmigrants (as 
                defined in section 101(a)(15) of the Immigration and 
                Nationality Act) specified in the State plan.
                    ``(D) Aliens unlawfully present in the United 
                States.
            ``(2) Lawful resident alien.--The term `lawful resident 
        alien' means an alien lawfully admitted for permanent residence 
        and any other alien lawfully residing permanently in the United 
        States under color of law, including an alien granted asylum or 
        with lawful temporary resident status under section 210, 210A, 
        or 245A of the Immigration and Nationality Act.
            ``(3) Secretary.--The term `Secretary' means the Secretary 
        of Health and Human Services.
            ``(4) State.--Subject to section 2204(c), the term `State' 
        means a State, the District of Columbia, the Commonwealth of 
        Puerto Rico, the United States Virgin Islands, Guam, American 
        Samoa, and the Commonwealth of the Northern Mariana Islands.
            ``(5) State plan.--The term `State plan' means a 
        comprehensive health care plan of a State participating in a 
        State Care demonstration project under this title that meets 
        the requirements of section 2203.''.
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