II 

110TH CONGRESS 

1ST SESSION S. 158 

To expand access to affordable health care and to strengthen the health 

care safety net and make health care services more available in rural 

and underserved areas. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 4, 2007 

Ms. COLLINS (for herself and Ms. LANDRIEU) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To expand access to affordable health care and to strengthen 

the health care safety net and make health care services 

more available in rural and underserved areas. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Access to Affordable Health Care Act’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—EXPANSION OF ACCESS TO AFFORDABLE HEALTH 

CARE FOR SMALL BUSINESSES 


bajohnson on PROD1PC77 with BILLS
2 

•S 158 IS

Subtitle A—Small Business Tax Credit 

Sec. 101. Credit for employee health insurance expenses. 

Subtitle B—Grants to States for Small Business Purchasing Groups 

Sec. 121. Grants for small employer purchasing groups. 

Sec. 122. Qualified small employer purchasing groups. 

Subtitle C—Health Benefits Information for Small Employers 

Sec. 131. Grant program to facilitate health benefits information for small employers. 

Subtitle D—Grant Program to Encourage State Innovation 

Sec. 141. Grant program to encourage State innovation. 

TITLE II—EXPANSION OF ACCESS TO AFFORDABLE HEALTH 

CARE FOR INDIVIDUALS AND FAMILIES 

Subtitle A—Internal Revenue Code Provisions 

Sec. 201. Refundable health insurance costs credit. 

Sec. 202. Advance Payment of credit to issuers of qualified health insurance. 

Subtitle B—Elimination of SCHIP Funding Shortfalls 

Sec. 206. Elimination of SCHIP funding shortfalls for fiscal year 2007. 

Subtitle C—FamilyCare 

Sec. 211. Renaming of title XXI program. 

Sec. 212. FamilyCare coverage of parents under the medicaid program and title 

XXI. 

Sec. 213. Optional coverage of children through age 20 under the medicaid program and title XXI. 

Sec. 214. Sense of the Senate Regarding Authority To Use SCHIP Funds To 

Purchase Family Coverage. 

Subtitle D—Simplified Enrollment 

Sec. 221. Automatic enrollment of children born to title XXI parents. 

Sec. 222. Application of simplified title XXI procedures under the medicaid 

program. 

Subtitle E—State Option to Extend Medicaid Coverage to Certain LowIncome Individuals 

Sec. 231. State option to extend medicaid coverage to certain low-income individuals. 

Subtitle F—Grants to Promote Innovative Outreach and Enrollment Under 

Medicaid and SCHIP 

Sec. 251. Grants to promote innovative outreach and enrollment under medicaid and SCHIP. 

Sec. 252. State option to provide for simplified determinations of a child’s financial eligibility for medical assistance under medicaid or 

child health assistance under SCHIP. 


bajohnson on PROD1PC77 with BILLS
3 

•S 158 IS

Subtitle G—Demonstration Programs to Improve Medicaid and SCHIP 

Outreach to Homeless Individuals and Families 

Sec. 261. Demonstration programs to improve medicaid and SCHIP outreach 

to homeless individuals and families. 

TITLE III—STRENGTHENING THE HEALTH CARE SAFETY NET 

Sec. 301. Increase in funding for the consolidated health Centers program. 

TITLE IV—EXPANSION OF ACCESS TO HEALTH CARE IN RURAL 

AND UNDERSERVED AREAS 

Sec. 401. Expansion of funding. 

Sec. 402. Loan repayment and scholarship programs. 

TITLE V—EXPANDED ACCESS TO AFFORDABLE LONG-TERM 

CARE 

Sec. 501. Treatment of premiums on qualified Long-Term care insurance contracts. 

Sec. 502. Credit for taxpayers with Long-Term care needs. 

Sec. 503. Additional consumer protections for Long-Term care insurance. 

TITLE VI—PROMOTING HEALTHIER LIFESTYLES 

Sec. 601. Community partnerships to promote healthy lifestyles. 

Sec. 602. Worksite wellness grant program. 

Sec. 603. Comprehensive school health education. 

TITLE VII—MEDICARE FAIRNESS 

Subtitle A—Medicare Value and Quality Demonstration 

Sec. 701. Findings. 

Sec. 702. Demonstration project to encourage the provision of high-quality, 

cost-effective inpatient hospital services. 

Sec. 703. Demonstration project to encourage the provision of high-quality, 

cost-effective physicians’ services. 

Subtitle B—Graduate Medical Education Demonstration 

Sec. 711. Clinical rotation demonstration project. 


bajohnson on PROD1PC77 with BILLS
4 

•S 158 IS

1 TITLE I—EXPANSION OF ACCESS 

2 TO AFFORDABLE HEALTH 

3 CARE FOR SMALL BUSI4 NESSES 

5 Subtitle A—Small Business Tax 

6 Credit 

7 SEC. 101. CREDIT FOR EMPLOYEE HEALTH INSURANCE EX8 PENSES. 

9 (a) IN GENERAL.—Subpart D of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of 

11 1986 (relating to business-related credits) is amended by 

12 inserting after section 45M the following: 

13 ‘‘SEC. 45N. EMPLOYEE HEALTH INSURANCE EXPENSES. 

14 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

15 in the case of an employer, the employee health insurance 

16 expenses credit determined under this section is an 

17 amount equal to the applicable percentage of the amount 

18 paid by the taxpayer during the taxable year for qualified 

19 employee health insurance expenses. 

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

21 subsection (a), the applicable percentage is equal to— 

22 ‘‘(1) 50 percent in the case of an employer with 

23 less than 10 employees, 

24 ‘‘(2) 30 percent in the case of an employer with 

25 more than 9 but less than 26 employees, and 


bajohnson on PROD1PC77 with BILLS
5 

•S 158 IS

1 ‘‘(3) zero percent for any other employer. 

2 ‘‘(c) PER EMPLOYEE DOLLAR LIMITATION.—The 

3 amount of qualified employee health insurance expenses 

4 taken into account under subsection (a) with respect to 

5 any qualified employee for any taxable year shall not ex6 ceed— 

7 ‘‘(1) $2,000 in the case of self-only coverage, 

8 and 

9 ‘‘(2) $4,000 in the case of family coverage (as 

10 defined in section 223(c)(4)). 

11 ‘‘(d) SPECIAL RULES AND DEFINITIONS.—For pur12 poses of this section— 

13 ‘‘(1) ELIGIBILITY FOR CREDIT.—No credit shall 

14 be allowed under subsection (a) with respect to any 

15 employer for any period if more than 20 percent of 

16 the number of employees employed by the employer 

17 during the period are highly compensated employees 

18 (within the meaning of section 414(q)). 

19 ‘‘(2) DETERMINATION OF EMPLOYMENT.— 

20 ‘‘(A) IN GENERAL.—An employer shall be 

21 considered an employer described in paragraph 

22 (1) or (2) of subsection (b) if such employer 

23 employed an average of the number of employ24 ees described in such paragraph on business 

25 days during either of the 2 preceding calendar 


bajohnson on PROD1PC77 with BILLS
6 

•S 158 IS

1 years. For purposes of the preceding sentence, 

2 a preceding calendar year may be taken into ac3 count only if the employer was in existence 

4 throughout such year. 

5 ‘‘(B) EMPLOYERS NOT IN EXISTENCE IN

6 PRECEDING YEAR.—In the case of an employer 

7 which was not in existence throughout the 1st 

8 preceding calendar year, the determination 

9 under subparagraph (A) shall be based on the 

10 average number of employees that it is reason11 ably expected such employer will employ on 

12 business days in the current calendar year. 

13 ‘‘(3) QUALIFIED EMPLOYEE HEALTH INSUR14 ANCE EXPENSES.— 

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

16 employee health insurance expenses’ means any 

17 amount paid by an employer for health insur18 ance coverage to the extent such amount— 

19 ‘‘(i) is attributable to coverage pro20 vided to any employee while such employee 

21 is a qualified employee; and 

22 ‘‘(ii) is at least 50 percent of the pre23 mium for such coverage. 

24 ‘‘(B) EXCEPTION FOR AMOUNTS PAID

25 UNDER SALARY REDUCTION ARRANGEMENTS.— 


bajohnson on PROD1PC77 with BILLS
7 

•S 158 IS

1 No amount paid or incurred for health insur2 ance coverage pursuant to a salary reduction 

3 arrangement shall be taken into account under 

4 subparagraph (A). 

5 ‘‘(C) HEALTH INSURANCE COVERAGE.— 

6 The term ‘health insurance coverage’ has the 

7 meaning given such term by section 9832(b)(1). 

8 ‘‘(4) QUALIFIED EMPLOYEE.— 

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

10 employee’ means, with respect to any period, an 

11 employee of an employer if the total amount of 

12 wages paid or incurred by such employer to 

13 such employee at an annual rate during the 

14 taxable year is not less than $5,000. 

15 ‘‘(B) TREATMENT OF CERTAIN EMPLOY16 EES.—For purposes of subparagraph (A), the 

17 term ‘employee’— 

18 ‘‘(i) shall not include an employee 

19 within the meaning of section 401(c)(1), 

20 but 

21 ‘‘(ii) shall include a leased employee 

22 within the meaning of section 414(n). 

23 ‘‘(C) WAGES.—The term ‘wages’ has the 

24 meaning given such term by section 3121(a) 


bajohnson on PROD1PC77 with BILLS
8 

•S 158 IS

1 (determined without regard to any dollar limita2 tion contained in such section). 

3 ‘‘(e) CERTAIN RULES MADE APPLICABLE.—For pur4 poses of this section, rules similar to the rules of section 

5 52 shall apply. 

6 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction 

7 or credit under any other provision of this chapter shall 

8 be allowed with respect to qualified employee health insur9 ance expenses taken into account under subsection (a).’’. 

10 (b) CREDIT TO BE PART OF GENERAL BUSINESS

11 CREDIT.—Section 38(b) of the Internal Revenue Code of 

12 1986 (relating to current year business credit) is amended 

13 by striking ‘‘plus’’ at the end of paragraph (29), by strik14 ing the period at the end of paragraph (30) and inserting 

15 ‘‘, plus’’, and by inserting after paragraph (30) the fol16 lowing: 

17 ‘‘(31) the employee health insurance expenses 

18 credit determined under section 45N.’’. 

19 (c) CLERICAL AMENDMENT.—The table of sections 

20 for subpart D of part IV of subchapter A of chapter 1 

21 of the Internal Revenue Code of 1986 is amended by add22 ing at the end the following: 

‘‘Sec. 45N. Employee health insurance expenses.’’. 

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

24 this section shall apply to amounts paid or incurred in tax25 able years beginning after December 31, 2007. 


bajohnson on PROD1PC77 with BILLS
9 

•S 158 IS

1 Subtitle B—Grants to States for 

2 Small Business Purchasing Groups 

3 SEC. 121. GRANTS FOR SMALL EMPLOYER PURCHASING 

4 GROUPS. 

5 (a) IN GENERAL.—The Secretary of Labor (referred 

6 to in this section as the ‘‘Secretary’’) shall award grants 

7 to States to assist such States in planning, developing, and 

8 operating qualified small employer purchasing groups. 

9 (b) APPLICATION REQUIREMENTS.—To be eligible to 

10 receive a grant under this section, a State shall prepare 

11 and submit to the Secretary an application in such form, 

12 at such time, and containing such information, certifi13 cations, and assurances as the Secretary shall reasonably 

14 require. 

15 (c) USE OF FUNDS.—Amounts awarded under this 

16 section may be used to finance the costs associated with 

17 planning, developing, and operating a qualified small em18 ployer purchasing group that meets the requirements of 

19 section 122. Such costs may include the costs associated 

20 with— 

21 (1) engaging in education and outreach efforts 

22 to inform small employers, insurers, and the public 

23 about the small employer purchasing group; 

24 (2) soliciting bids and negotiating with insurers 

25 to make available group health plans; 


bajohnson on PROD1PC77 with BILLS
10 

•S 158 IS

1 (3) preparing the documentation required to re2 ceive certification by the Secretary as a qualified 

3 small employer purchasing group; and 

4 (4) such other activities determined appropriate 

5 by the Secretary. 

6 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated to carry out this section, 

8 such sums as may be necessary for each of fiscal years 

9 2008 through 2012. 

10 SEC. 122. QUALIFIED SMALL EMPLOYER PURCHASING 

11 GROUPS. 

12 (a) QUALIFIED SMALL EMPLOYER PURCHASING

13 GROUPS DESCRIBED.— 

14 (1) IN GENERAL.—A qualified small employer 

15 purchasing group is an entity that— 

16 (A) is a nonprofit entity certified under 

17 State law; 

18 (B) has a membership consisting solely of 

19 small employers; 

20 (C) is administered solely under the au21 thority and control of its member employers; 

22 (D) with respect to each State in which its 

23 members are located, consists of not fewer than 

24 the number of small employers established by 

25 the State as appropriate for such a group; 


bajohnson on PROD1PC77 with BILLS
11 

•S 158 IS

1 (E) offers a program under which group 

2 health plans are offered to eligible employees 

3 and eligible individuals (including the depend4 ents of such employees and individuals) through 

5 its member employers; and 

6 (F) an insurer, agent, broker, or any other 

7 individual or entity engaged in the sale of insur8 ance— 

9 (i) does not form or underwrite; and 

10 (ii) does not hold or control any right 

11 to vote with respect to. 

12 (2) SPECIAL RULE.—Notwithstanding para13 graph (1)(B), an employer member of a small em14 ployer purchasing group that has been certified by 

15 the State as meeting the requirements of paragraph 

16 (1) may retain its membership in the group if the 

17 number of employees of the employer increases such 

18 that the employer is no longer a small employer. 

19 (b) BOARD OF DIRECTORS.—Each qualified small 

20 employer purchasing group established under this section 

21 shall be governed by a board of directors or have active 

22 input from an advisory board consisting of individuals and 

23 businesses participating in the group. 

24 (c) MEMBERSHIP.— 


bajohnson on PROD1PC77 with BILLS
12 

•S 158 IS

1 (1) IN GENERAL.—A qualified small employer 

2 purchasing group shall accept all small employers re3 siding within the area served by the group as mem4 bers if such employers request such membership. 

5 (2) VOTING.—Members of a qualified small em6 ployer purchasing group shall have voting rights 

7 consistent with the rules established by the State. 

8 (d) DUTIES OF QUALIFIED SMALL EMPLOYER PUR9 CHASING GROUPS.—Each qualified small employer pur10 chasing group shall— 

11 (1) enter into agreements with insurers offering 

12 qualified group health plans; 

13 (2) enter into agreements with small employers 

14 for the purchase of health insurance; 

15 (3) enroll only eligible employees, eligible indi16 viduals, and the dependents of such employees and 

17 individuals in group health plans; and 

18 (4) provide enrollee information to the State. 

19 (e) LIMITATION ON ACTIVITIES.—A qualified small 

20 employer purchasing group shall not— 

21 (1) perform any activity involving approval or 

22 enforcement of payment rates for providers; 

23 (2) assume financial risk in relation to any such 

24 health plan; or 


bajohnson on PROD1PC77 with BILLS
13 

•S 158 IS

1 (3) perform other activities identified by the 

2 State as being inconsistent with the performance of 

3 its duties. 

4 (f) RULES OF CONSTRUCTION.— 

5 (1) ESTABLISHMENT NOT REQUIRED.—Nothing 

6 in this section shall be construed as requiring that 

7 a State organize, operate, or otherwise establish a 

8 qualified small employer purchasing group, or other9 wise require the establishment of purchasing groups. 

10 (2) VOLUNTARY PARTICIPATION.—Nothing in 

11 this section shall be construed as requiring any indi12 vidual or small employer to purchase a group health 

13 plan exclusively through a qualified small employer 

14 purchasing group. 

15 (g) DEFINITION.—In this subtitle, the term ‘‘small 

16 employer’’ means an employer that employs at least 1, but 

17 not more than 50, employees. Such term shall include sole 

18 proprietorships and self-employed individuals. 

19 Subtitle C—Health Benefits 

20 Information for Small Employers 

21 SEC. 131. GRANT PROGRAM TO FACILITATE HEALTH BENE22 FITS INFORMATION FOR SMALL EMPLOYERS. 

23 (a) IN GENERAL.—The Small Business Administra24 tion shall award grants to 1 or more States, local govern25 ments, and nonprofit organizations for the purposes of— 


bajohnson on PROD1PC77 with BILLS
14 

•S 158 IS

1 (1) demonstrating new and effective ways to 

2 provide information about the benefits of health in3 surance to small employers, including tax benefits, 

4 increased productivity of employees, and decreased 

5 turnover of employees; 

6 (2) making small employers aware of their cur7 rent rights in the marketplace under Federal and 

8 State health insurance reform laws; and 

9 (3) making small employers aware of the tax 

10 treatment of insurance premiums. 

11 (b) AUTHORIZATION.—There is authorized to be ap12 propriated to carry out this section, such sums as may 

13 be necessary for each of fiscal years 2008 through 2012. 

14 Subtitle D—Grant Program To 

15 Encourage State Innovation 

16 SEC. 141. GRANT PROGRAM TO ENCOURAGE STATE INNO17 VATION. 

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

19 Human Services (in this section referred to as the ‘‘Sec20 retary’’) shall establish a program (in this section referred 

21 to as the ‘‘program’’) to award demonstration grants 

22 under this section to States to allow States to demonstrate 

23 the effectiveness of innovative ways to increase access to 

24 health insurance through market reforms and other innoVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
15 

•S 158 IS

1 vative means. Such innovative means may include any of 

2 the following: 

3 (1) Alternative group purchasing or pooling ar4 rangements, such as purchasing cooperatives for 

5 small businesses, reinsurance pools, or high risk 

6 pools. 

7 (2) Individual or small group market reforms. 

8 (3) Consumer education and outreach. 

9 (4) Subsidies to individuals, employers, or both, 

10 in obtaining health insurance. 

11 (b) SCOPE; DURATION.—The program shall be lim12 ited to not more than 10 States and to a total period of 

13 5 years, beginning on the date the first demonstration 

14 grant is made. 

15 (c) CONDITIONS FOR DEMONSTRATION GRANTS.— 

16 (1) IN GENERAL.—The Secretary may not pro17 vide for a demonstration grant to a State under the 

18 program unless the Secretary finds that under the 

19 proposed demonstration grant— 

20 (A) the State will provide for demonstrated 

21 increase of access for some portion of the exist22 ing uninsured population through a market in23 novation (other than merely through a financial 

24 expansion of a program initiated before the 

25 date of enactment of this Act); 


bajohnson on PROD1PC77 with BILLS
16 

•S 158 IS

1 (B) the State will comply with applicable 

2 Federal laws; 

3 (C) the State will not discriminate among 

4 participants on the basis of any health status5 related factor (as defined in section 2791(d)(9) 

6 of the Public Health Service Act (42 U.S.C. 

7 300gg–91(d)(9)), except to the extent a State 

8 wishes to focus on populations that otherwise 

9 would not obtain health insurance because of 

10 such factors; and 

11 (D) the State will provide for such evalua12 tion, in coordination with the evaluation re13 quired under subsection (d), as the Secretary 

14 may specify. 

15 (2) APPLICATION.—The Secretary shall not 

16 provide a demonstration grant under the program to 

17 a State unless— 

18 (A) the State submits to the Secretary 

19 such an application, in such a form and man20 ner, as the Secretary specifies; 

21 (B) the application includes information 

22 regarding how the demonstration grant will ad23 dress issues such as governance, targeted popu24 lation, expected cost, and the continuation after 


bajohnson on PROD1PC77 with BILLS
17 

•S 158 IS

1 the completion of the demonstration grant pe2 riod; and 

3 (C) the Secretary determines that the dem4 onstration grant will be used consistent with 

5 this section. 

6 (3) FOCUS.—A demonstration grant proposal 

7 under this section need not cover all uninsured indi8 viduals in a State or all health care benefits with re9 spect to such individuals. 

10 (d) EVALUATION.—The Secretary shall enter into a 

11 contract with an appropriate entity outside the Depart12 ment of Health and Human Services to conduct an overall 

13 evaluation of the program at the end of the program pe14 riod. Such evaluation shall include an analysis of improve15 ments in access, costs, quality of care, or choice of cov16 erage, under different demonstration grants. 

17 (e) OPTION TO PROVIDE FOR INITIAL PLANNING

18 GRANTS.—Notwithstanding the previous provisions of this 

19 section, under the program the Secretary may provide for 

20 a portion of the amounts appropriated under subsection 

21 (f) (not to exceed $5,000,000) to be made available to any 

22 State for initial planning grants to permit States to de23 velop demonstration grant proposals under the previous 

24 provisions of this section. 


bajohnson on PROD1PC77 with BILLS
18 

•S 158 IS

1 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated such sums as may be 

3 necessary to carry out this section. Amounts appropriated 

4 under this subsection shall remain available until ex5 pended. 

6 (g) STATE DEFINED.—In this section, the term 

7 ‘‘State’’ has the meaning given such term for purposes of 

8 title XIX of the Social Security Act (42 U.S.C. 1396 et 

9 seq.). 

10 TITLE II—EXPANSION OF AC11 CESS TO AFFORDABLE 

12 HEALTH CARE FOR INDIVID13 UALS AND FAMILIES 

14 Subtitle A—Internal Revenue Code 

15 Provisions 

16 SEC. 201. REFUNDABLE HEALTH INSURANCE COSTS CRED17 IT. 

18 (a) ALLOWANCE OF CREDIT.— 

19 (1) IN GENERAL.—Subpart C of part IV of sub20 chapter A of chapter 1 of the Internal Revenue Code 

21 of 1986 (relating to refundable personal credits) is 

22 amended by redesignating section 36 as section 37 

23 and inserting after section 35 the following: 


bajohnson on PROD1PC77 with BILLS
19 

•S 158 IS

1 ‘‘SEC. 36. HEALTH INSURANCE COSTS FOR UNINSURED ELI2 GIBLE INDIVIDUALS. 

3 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an un4 insured eligible individual, there shall be allowed as a cred5 it against the tax imposed by this subtitle for the taxable 

6 year an amount equal to the amount paid by the taxpayer 

7 during such taxable year for qualified health insurance for 

8 the taxpayer and the taxpayer’s spouse and dependents. 

9 ‘‘(b) LIMITATIONS.— 

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

11 credit under subsection (a) to the taxpayer for the 

12 taxable year shall not exceed the lesser of— 

13 ‘‘(A) the sum of the monthly limitations 

14 for coverage months during such taxable year 

15 for the individuals referred to in subsection (a) 

16 for whom the taxpayer paid during the taxable 

17 year any amount for coverage under qualified 

18 health insurance, or 

19 ‘‘(B) 90 percent of the amount paid by the 

20 taxpayer during such taxable year for qualified 

21 health insurance for such individuals. 

22 ‘‘(2) MONTHLY LIMITATION.— 

23 ‘‘(A) IN GENERAL.—The monthly limita24 tion for an individual for each coverage month 

25 of such individual during the taxable year is the 

amount equal to 1 26 ⁄12 of— 


bajohnson on PROD1PC77 with BILLS
20 

•S 158 IS

1 ‘‘(i) $1,000 if such individual is the 

2 taxpayer, 

3 ‘‘(ii) $1,000 if— 

4 ‘‘(I) such individual is the spouse 

5 of the taxpayer, 

6 ‘‘(II) the taxpayer and such 

7 spouse are married as of the first day 

8 of such month, and 

9 ‘‘(III) the taxpayer files a joint 

10 return for the taxable year, and 

11 ‘‘(iii) $500 if such individual is an in12 dividual for whom a deduction under sec13 tion 151(c) is allowable to the taxpayer for 

14 such taxable year. 

15 ‘‘(B) LIMITATION TO 2 DEPENDENTS.— 

16 Not more than 2 individuals may be taken into 

17 account by the taxpayer under subparagraph 

18 (A)(iii). 

19 ‘‘(C) SPECIAL RULE FOR MARRIED INDI20 VIDUALS.—In the case of an individual— 

21 ‘‘(i) who is married (within the mean22 ing of section 7703) as of the close of the 

23 taxable year but does not file a joint return 

24 for such year, and 


bajohnson on PROD1PC77 with BILLS
21 

•S 158 IS

1 ‘‘(ii) who does not live apart from 

2 such individual’s spouse at all times during 

3 the taxable year, 

4 the limitation imposed by subparagraph (B) 

5 shall be divided equally between the individual 

6 and the individual’s spouse unless they agree on 

7 a different division. 

8 ‘‘(3) PHASEOUT OF CREDIT.— 

9 ‘‘(A) IN GENERAL.—The amount which 

10 would (but for this paragraph) be taken into ac11 count under subsection (a) shall be reduced 

12 (but not below zero) by the amount determined 

13 under subparagraph (B). 

14 ‘‘(B) AMOUNT OF REDUCTION.—The 

15 amount determined under this subparagraph is 

16 the amount which bears the same ratio to the 

17 amount which would be so taken into account 

18 for the taxable year as— 

19 ‘‘(i) the excess of— 

20 ‘‘(I) the taxpayer’s modified ad21 justed gross income for the preceding 

22 taxable year, over 

23 ‘‘(II) $15,000 ($25,000 in the 

24 case of family coverage), bears to 


bajohnson on PROD1PC77 with BILLS
22 

•S 158 IS

1 ‘‘(ii) $15,000 ($35,000 in the case of 

2 family coverage). 

3 ‘‘(C) MODIFIED ADJUSTED GROSS IN4 COME.—The term ‘modified adjusted gross in5 come’ means adjusted gross income deter6 mined— 

7 ‘‘(i) without regard to this section and 

8 sections 911, 931, and 933, and 

9 ‘‘(ii) after application of sections 86, 

10 135, 137, 219, 221, and 469. 

11 ‘‘(4) COVERAGE MONTH.—For purposes of this 

12 subsection— 

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

14 month’ means, with respect to an individual, 

15 any month if— 

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

17 such individual is covered by qualified 

18 health insurance, and 

19 ‘‘(ii) the premium for coverage under 

20 such insurance for such month is paid by 

21 the taxpayer. 

22 ‘‘(B) EMPLOYER-SUBSIDIZED COV23 ERAGE.— 

24 ‘‘(i) IN GENERAL.—Such term shall 

25 not include any month for which such indiVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
23 

•S 158 IS

1 vidual is eligible to participate in any sub2 sidized health plan (within the meaning of 

3 section 162(l)(2)) maintained by any em4 ployer of the taxpayer or of the spouse of 

5 the taxpayer. 

6 ‘‘(ii) PREMIUMS TO NONSUBSIDIZED

7 PLANS.—If an employer of the taxpayer or 

8 the spouse of the taxpayer maintains a 

9 health plan which is not a subsidized 

10 health plan (as so defined) and which con11 stitutes qualified health insurance, em12 ployee contributions to the plan shall be 

13 treated as amounts paid for qualified 

14 health insurance. 

15 ‘‘(C) CAFETERIA PLAN AND FLEXIBLE

16 SPENDING ACCOUNT BENEFICIARIES.—Such 

17 term shall not include any month during a tax18 able year if any amount is not includible in the 

19 gross income of the taxpayer for such year 

20 under section 106 with respect to— 

21 ‘‘(i) a benefit chosen under a cafeteria 

22 plan (as defined in section 125(d)), or 

23 ‘‘(ii) a benefit provided under a flexi24 ble spending or similar arrangement. 


bajohnson on PROD1PC77 with BILLS
24 

•S 158 IS

1 ‘‘(D) MEDICARE AND MEDICAID.—Such 

2 term shall not include any month with respect 

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

4 month, such individual— 

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

6 title XVIII of the Social Security Act, or 

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

8 under title XIX or XXI of such Act. 

9 ‘‘(E) CERTAIN OTHER COVERAGE.—Such 

10 term shall not include any month during a tax11 able year with respect to an individual if, at any 

12 time during such year, any benefit is provided 

13 to such individual under— 

14 ‘‘(i) chapter 89 of title 5, United 

15 States Code, 

16 ‘‘(ii) chapter 55 of title 10, United 

17 States Code, 

18 ‘‘(iii) chapter 17 of title 38, United 

19 States Code, or 

20 ‘‘(iv) any medical care program under 

21 the Indian Health Care Improvement Act. 

22 ‘‘(F) PRISONERS.—Such term shall not in23 clude any month with respect to an individual 

24 if, as of the first day of such month, such indiVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
25 

•S 158 IS

1 vidual is imprisoned under Federal, State, or 

2 local authority. 

3 ‘‘(G) INSUFFICIENT PRESENCE IN UNITED

4 STATES.—Such term shall not include any 

5 month during a taxable year with respect to an 

6 individual if such individual is present in the 

7 United States on fewer than 183 days during 

8 such year (determined in accordance with sec9 tion 7701(b)(7)). 

10 ‘‘(5) COORDINATION WITH DEDUCTION FOR

11 HEALTH INSURANCE COSTS OF SELF-EMPLOYED IN12 DIVIDUALS.—In the case of a taxpayer who is eligi13 ble to deduct any amount under section 162(l) for 

14 the taxable year, this section shall apply only if the 

15 taxpayer elects not to claim any amount as a deduc16 tion under such section for such year. 

17 ‘‘(c) QUALIFIED HEALTH INSURANCE.—For pur18 poses of this section, the term ‘qualified health insurance’ 

19 means health insurance coverage (as defined in section 

20 9832(b)(1)), including coverage under a COBRA continu21 ation provision (as defined in section 9832(d)(1)). 

22 ‘‘(d) ARCHER MSA CONTRIBUTIONS.—If a deduction 

23 would be allowed under section 220 to the taxpayer for 

24 a payment for the taxable year to the Archer MSA of an 


bajohnson on PROD1PC77 with BILLS
26 

•S 158 IS

1 individual, subsection (a) shall not apply to the taxpayer 

2 for such taxable year. 

3 ‘‘(e) SPECIAL RULES.— 

4 ‘‘(1) COORDINATION WITH MEDICAL EXPENSE

5 DEDUCTION.—The amount which would (but for this 

6 paragraph) be taken into account by the taxpayer 

7 under section 213 for the taxable year shall be re8 duced by the credit (if any) allowed by this section 

9 to the taxpayer for such year. 

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

11 credit shall be allowed under this section to any indi12 vidual with respect to whom a deduction under sec13 tion 151 is allowable to another taxpayer for a tax14 able year beginning in the calendar year in which 

15 such individual’s taxable year begins. 

16 ‘‘(3) COORDINATION WITH ADVANCE PAY17 MENT.—Rules similar to the rules of section 32(g) 

18 shall apply to any credit to which this section ap19 plies. 

20 ‘‘(f) EXPENSES MUST BE SUBSTANTIATED.—A pay21 ment for insurance to which subsection (a) applies may 

22 be taken into account under this section only if the tax23 payer substantiates such payment in such form as the Sec24 retary may prescribe. 


bajohnson on PROD1PC77 with BILLS
27 

•S 158 IS

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

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

4 (b) INFORMATION REPORTING.— 

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

6 subchapter A of chapter 61 of the Internal Revenue 

7 Code of 1986 (relating to information concerning 

8 transactions with other persons) is amended by in9 serting after section 6050V the following: 

10 ‘‘SEC. 6050W. RETURNS RELATING TO PAYMENTS FOR 

11 QUALIFIED HEALTH INSURANCE. 

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

13 with a trade or business conducted by such person, re14 ceives payments during any calendar year from any indi15 vidual for coverage of such individual or any other indi16 vidual under creditable health insurance, shall make the 

17 return described in subsection (b) (at such time as the 

18 Secretary may by regulations prescribe) with respect to 

19 each individual from whom such payments were received. 

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

21 is described in this subsection if such return— 

22 ‘‘(1) is in such form as the Secretary may pre23 scribe, and 

24 ‘‘(2) contains— 


bajohnson on PROD1PC77 with BILLS
28 

•S 158 IS

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

2 individual from whom payments described in 

3 subsection (a) were received, 

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

5 individual who was provided by such person 

6 with coverage under creditable health insurance 

7 by reason of such payments and the period of 

8 such coverage, 

9 ‘‘(C) the aggregate amount of payments 

10 described in subsection (a), 

11 ‘‘(D) the qualified health insurance credit 

12 advance amount (as defined in section 

13 7527A(e)) received by such person with respect 

14 to the individual described in subparagraph (A), 

15 and 

16 ‘‘(E) such other information as the Sec17 retary may reasonably prescribe. 

18 ‘‘(c) CREDITABLE HEALTH INSURANCE.—For pur19 poses of this section, the term ‘creditable health insurance’ 

20 means qualified health insurance (as defined in section 

21 36(c)). 

22 ‘‘(d) STATEMENTS TO BE FURNISHED TO INDIVID23 UALS WITH RESPECT TO WHOM INFORMATION IS RE24 QUIRED.—Every person required to make a return under 

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


bajohnson on PROD1PC77 with BILLS
29 

•S 158 IS

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

2 such return a written statement showing— 

3 ‘‘(1) the name and address of the person re4 quired to make such return and the phone number 

5 of the information contact for such person, 

6 ‘‘(2) the aggregate amount of payments de7 scribed in subsection (a) received by the person re8 quired to make such return from the individual to 

9 whom the statement is required to be furnished, 

10 ‘‘(3) the information required under subsection 

11 (b)(2)(B) with respect to such payments, and 

12 ‘‘(4) the qualified health insurance credit ad13 vance amount (as defined in section 7528(e)) re14 ceived by such person with respect to the individual 

15 described in paragraph (2). 

16 The written statement required under the preceding sen17 tence shall be furnished on or before January 31 of the 

18 year following the calendar year for which the return 

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

20 ‘‘(e) RETURNS WHICH WOULD BE REQUIRED TO BE

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

22 provided in regulations prescribed by the Secretary, in the 

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

24 another person, only the person first receiving such 


bajohnson on PROD1PC77 with BILLS
30 

•S 158 IS

1 amount shall be required to make the return under sub2 section (a).’’. 

3 (2) ASSESSABLE PENALTIES.— 

4 (A) Subparagraph (B) of section 

5 6724(d)(1) of such Code (relating to defini6 tions) is amended by striking ‘‘and’’ at the end 

7 of clause (xx) and by inserting after clause (xx) 

8 the following: 

9 ‘‘(xxi) section 6050U (relating to re10 turns relating to payments for qualified 

11 health insurance), and’’. 

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

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

14 end of subparagraph (BB), by striking the pe15 riod at the end of the subparagraph (CC) and 

16 inserting ‘‘, or’’, and by adding at the end the 

17 following: 

18 ‘‘(DD) section 6050U(d) (relating to re19 turns relating to payments for qualified health 

20 insurance).’’. 

21 (3) CLERICAL AMENDMENT.—The table of sec22 tions for subpart B of part III of subchapter A of 

23 chapter 61 of such Code is amended by inserting 

24 after the item relating to section 6050V the fol25 lowing: 

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


bajohnson on PROD1PC77 with BILLS
31 

•S 158 IS

1 (c) CRIMINAL PENALTY FOR FRAUD.—Subchapter B 

2 of chapter 75 of the Internal Revenue Code of 1986 (relat3 ing to other offenses) is amended by adding at the end 

4 the following: 

5 ‘‘SEC. 7276. PENALTIES FOR OFFENSES RELATING TO 

6 HEALTH INSURANCE TAX CREDIT. 

7 ‘‘Any person who knowingly misuses Department of 

8 the Treasury names, symbols, titles, or initials to convey 

9 the false impression of association with, or approval or en10 dorsement by, the Department of the Treasury of any in11 surance products or group health coverage in connection 

12 with the credit for health insurance costs under section 

13 36 shall on conviction thereof be fined not more than 

14 $10,000, or imprisoned not more than 1 year, or both.’’. 

15 (d) CONFORMING AMENDMENTS.— 

16 (1) Section 162(l) of the Internal Revenue Code 

17 of 1986 is amended by adding at the end the fol18 lowing: 

19 ‘‘(6) ELECTION TO HAVE SUBSECTION

20 APPLY.—No deduction shall be allowed under para21 graph (1) for a taxable year unless the taxpayer 

22 elects to have this subsection apply for such year.’’. 

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

24 31, United States Code, is amended by inserting be25 fore the period ‘‘, or from section 36 of such Code’’. 


bajohnson on PROD1PC77 with BILLS
32 

•S 158 IS

1 (3) The table of sections for subpart C of part 

2 IV of subchapter A of chapter 1 of the Internal Rev3 enue Code of 1986 is amended by striking the last 

4 item and inserting the following: 

‘‘Sec. 36. Health insurance costs for uninsured eligible individuals. 

‘‘Sec. 37. Overpayments of tax.’’. 

5 (4) The table of sections for subchapter B of 

6 chapter 75 of such Code is amended by adding at 

7 the end the following: 

‘‘Sec. 7276. Penalties for offenses relating to health insurance tax credit.’’. 

8 (e) EFFECTIVE DATES.— 

9 (1) IN GENERAL.—Except as provided in para10 graph (2), the amendments made by this section 

11 shall apply to taxable years beginning after Decem12 ber 31, 2006, without regard to whether final regu13 lations to carry out such amendments have been pro14 mulgated by such date. 

15 (2) PENALTIES.—The amendments made by 

16 subsections (c) and (d)(4) shall take effect on the 

17 date of the enactment of this Act. 

18 SEC. 202. ADVANCE PAYMENT OF CREDIT TO ISSUERS OF 

19 QUALIFIED HEALTH INSURANCE. 

20 (a) IN GENERAL.—Chapter 77 of the Internal Rev21 enue Code of 1986 (relating to miscellaneous provisions) 

22 is amended by inserting after section 7527 the following: 


bajohnson on PROD1PC77 with BILLS
33 

•S 158 IS

1 ‘‘SEC. 7527A. ADVANCE PAYMENT OF HEALTH INSURANCE 

2 CREDIT FOR PURCHASERS OF QUALIFIED 

3 HEALTH INSURANCE. 

4 ‘‘(a) GENERAL RULE.—Every plan sponsor of a 

5 group health plan providing, or qualified health insurance 

6 issuer of, qualified health insurance to an eligible indi7 vidual shall— 

8 ‘‘(1) make qualified premium payments with re9 spect to such individual in an amount equal to the 

10 qualified health insurance credit advance amount, 

11 and 

12 ‘‘(2) treat such payments in the manner pro13 vided in subsection (g). 

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

15 section, the term ‘eligible individual’ means any indi16 vidual— 

17 ‘‘(1) who purchases qualified health insurance 

18 (as defined in section 36(c)), and 

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

20 credit eligibility certificate is in effect. 

21 ‘‘(c) DEFINITIONS.—For purposes of this section— 

22 ‘‘(1) QUALIFIED HEALTH INSURANCE

23 ISSUER.—The term ‘qualified health insurance 

24 issuer’ means a health insurance issuer described in 

25 section 9832(b)(2) (determined without regard to 


bajohnson on PROD1PC77 with BILLS
34 

•S 158 IS

1 the last sentence thereof) offering coverage in con2 nection with a group health plan. 

3 ‘‘(2) GROUP HEALTH PLAN.—The term ‘group 

4 health plan’ has the meaning given such term by 

5 section 5000(b)(1) (determined without regard to 

6 subsection (d) thereof). 

7 ‘‘(3) QUALIFIED PREMIUM PAYMENTS.—The 

8 term ‘qualified premium payments’ means any 

9 amount paid or incurred, cost incurred, or health 

10 coverage value provided, with respect to qualified 

11 health insurance for an eligible individual and the 

12 individual’s spouse and dependents. For purposes of 

13 the preceding sentence, in the case of a group health 

14 plan, the health coverage value is equal to the appli15 cable premium under the plan for the qualified 

16 health insurance coverage provided to an eligible in17 dividual and the individual’s spouse and dependents, 

18 as determined under section 4980B. 

19 ‘‘(d) QUALIFIED HEALTH INSURANCE CREDIT ELI20 GIBILITY CERTIFICATE.—For purposes of this section, a 

21 qualified health insurance credit eligibility certificate is a 

22 statement furnished by an individual to a plan sponsor 

23 of a group health plan or qualified health insurance issuer 

24 which— 


bajohnson on PROD1PC77 with BILLS
35 

•S 158 IS

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

2 to receive the credit provided by section 36 for the 

3 taxable year, 

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

5 such taxable year, and 

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

7 Secretary may require for purposes of this section. 

8 ‘‘(e) QUALIFIED HEALTH INSURANCE CREDIT AD9 VANCE AMOUNT.—For purposes of this section, the term 

10 ‘qualified health insurance credit advance amount’ means, 

11 with respect to any plan sponsor of a group health plan 

12 providing, or qualified health insurance issuer of, qualified 

13 health insurance, the amount of credit allowable under 

14 section 36 to the individual for the taxable year which is 

15 attributable to the insurance provided to the individual by 

16 such sponsor or issuer. 

17 ‘‘(f) REQUIRED DOCUMENTATION FOR RECEIPT OF

18 PAYMENTS OF ADVANCE AMOUNT.—No payment of a 

19 qualified health insurance credit advance amount with re20 spect to any eligible individual may be made under sub21 section (a) unless the plan sponsor of the group health 

22 plan or qualified health insurance issuer provides to the 

23 Secretary— 

24 ‘‘(1) the qualified health insurance credit eligi25 bility certificate of such individual, and 


bajohnson on PROD1PC77 with BILLS
36 

•S 158 IS

1 ‘‘(2) the return relating to such individual 

2 under section 6050W. 

3 ‘‘(g) QUALIFIED PREMIUM PAYMENTS TO BE

4 TREATED AS PAYMENTS OF WITHHOLDING AMOUNTS

5 AND CERTAIN EMPLOYER TAX.— 

6 ‘‘(1) IN GENERAL.—For purposes of this title, 

7 qualified premium payments made or costs incurred 

8 by the sponsor of a group health plan, or any entity 

9 designated by the sponsor to make such payments or 

10 incur such costs— 

11 ‘‘(A) shall not be treated as compensation, 

12 and 

13 ‘‘(B) shall be treated, in such manner as 

14 provided by the Secretary, as made out of— 

15 ‘‘(i) amounts required to be deposited 

16 by the taxpayer as estimated income tax 

17 under section 6654 or 6655, 

18 ‘‘(ii) amounts required to be deducted 

19 and withheld under section 3401 (relating 

20 to wage withholding), 

21 ‘‘(iii) amounts of the taxes imposed 

22 under section 3111(a) or 50 percent of 

23 taxes imposed under section 1401(a) (re24 lating to FICA employer taxes), or 


bajohnson on PROD1PC77 with BILLS
37 

•S 158 IS

1 ‘‘(iv) amounts required to be deducted 

2 under section 3102 with respect to taxes 

3 imposed under section 3101(a) or 50 per4 cent of taxes imposed under section 

5 1401(a) (relating to FICA employee 

6 taxes), 

7 as if such sponsor, or such designated entity, 

8 had paid to the Secretary an amount equal to 

9 such payments. 

10 ‘‘(2) QUALIFIED PREMIUM PAYMENTS EXCEED

11 TAXES DUE.—In the case of any entity, if for any 

12 time period the aggregate qualified premium pay13 ments exceed the amounts described in paragraph 

14 (1)(B), the Secretary shall reduce amounts described 

15 in such paragraph for any succeeding time period as 

16 necessary to reflect such excess. 

17 ‘‘(3) FAILURE TO MAKE QUALIFIED PREMIUM

18 PAYMENTS.—For purposes of this title (including 

19 penalties), failure to make a qualified premium pay20 ment with respect to an eligible individual at the 

21 time provided therefor shall be treated as the failure 

22 at such time to deduct and withhold under chapter 

23 24 of such Code in an amount equal to the amount 

24 of such qualified premium payments. 


bajohnson on PROD1PC77 with BILLS
38 

•S 158 IS

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

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

4 (b) CLERICAL AMENDMENT.—The table of sections 

5 for chapter 77 of the Internal Revenue Code of 1986 is 

6 amended by inserting after the item relating to section 

7 7527 the following: 

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

qualified health insurance.’’. 

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

9 this section shall take effect on January 1, 2008, without 

10 regard to whether final regulations to carry out such 

11 amendments have been promulgated by such date. 

12 Subtitle B—Elimination of SCHIP 

13 Funding Shortfalls 

14 SEC. 206. ELIMINATION OF SCHIP FUNDING SHORTFALLS 

15 FOR FISCAL YEAR 2007. 

16 (a) IN GENERAL.—Section 2104(h) of the Social Se17 curity Act (42 U.S.C. 1397dd(h)), as added by section 201 

18 of the National Institutes of Health Reform Act of 2006, 

19 is amended to read as follows: 

20 ‘‘(h) SPECIAL RULE FOR REDISTRIBUTION OF

21 UNSPENT FISCAL YEAR 2004 ALLOTMENTS AND ADDI22 TIONAL ALLOTMENTS TO ELIMINATE FISCAL YEAR 2007 

23 FUNDING SHORTFALLS.— 


bajohnson on PROD1PC77 with BILLS
39 

•S 158 IS

1 ‘‘(1) SPECIAL RULE FOR REDISTRIBUTION OF

2 FISCAL YEAR 2004 ALLOTMENTS.— 

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

4 that expends all of its allotment under sub5 section (b) or (c) of this section for fiscal year 

6 2004 by the end of fiscal year 2006 and is an 

7 initial shortfall State described in subparagraph 

8 (B), the Secretary shall redistribute to the 

9 State under subsection (f) of this section (from 

10 the fiscal year 2004 allotments of other States) 

11 the following amount: 

12 ‘‘(i) STATE.—In the case of one of the 

13 50 States or the District of Columbia, the 

14 amount specified in subparagraph (C)(i) 

15 (less the total of the amounts under clause 

16 (ii)), multiplied by the ratio of the amount 

17 specified in subparagraph (C)(ii) for the 

18 State to the amount specified in subpara19 graph (C)(iii). 

20 ‘‘(ii) TERRITORY.—In the case of a 

21 commonwealth or territory described in 

22 subsection (c)(3), an amount that bears 

23 the same ratio to 1.05 percent of the 

24 amount specified in subparagraph (C)(i) as 

25 the ratio of the commonwealth’s or terriVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
40 

•S 158 IS

1 tory’s fiscal year 2004 allotment under 

2 subsection (c) bears to the total of all such 

3 allotments for such fiscal year under such 

4 subsection. 

5 ‘‘(B) INITIAL SHORTFALL STATE DE6 SCRIBED.—For purposes of subparagraph (A), 

7 an initial shortfall State is a State with a State 

8 child health plan approved under this title for 

9 which the Secretary estimates, on the basis of 

10 the most recent data available to the Secretary 

11 as of the date of the enactment of this sub12 section, that the projected Federal expenditures 

13 under such plan for such State for fiscal year 

14 2007 will exceed the sum of— 

15 ‘‘(i) the amount of the State’s allot16 ments for each of fiscal years 2005 and 

17 2006 that will not be expended by the end 

18 of fiscal year 2006; and 

19 ‘‘(ii) the amount of the State’s allot20 ment for fiscal year 2007. 

21 ‘‘(C) AMOUNTS USED IN COMPUTING RE22 DISTRIBUTIONS FOR FISCAL YEAR 2004 ALLOT23 MENTS.—For purposes of subparagraph 

24 (A)(i)— 


bajohnson on PROD1PC77 with BILLS
41 

•S 158 IS

1 ‘‘(i) the amount specified in this 

2 clause is the total amount of unspent fiscal 

3 year 2004 allotments available for redis4 tribution under subsection (f); 

5 ‘‘(ii) the amount specified in this 

6 clause for an initial shortfall State is the 

7 amount the Secretary determines will 

8 eliminate the estimated shortfall described 

9 in subparagraph (B) for the State; and 

10 ‘‘(iii) the amount specified in this 

11 clause is the total sum of the amounts 

12 specified in clause (ii) for all initial short13 fall States. 

14 ‘‘(2) ADDITIONAL ALLOTMENTS TO ELIMINATE

15 FISCAL YEAR 2007 FUNDING SHORTFALLS REMAIN16 ING AFTER REDISTRIBUTION OF UNSPENT FISCAL

17 YEAR 2004 ALLOTMENTS.— 

18 ‘‘(A) IN GENERAL.—In addition to the al19 lotments provided under subsection (b) and (c) 

20 for fiscal year 2007, the Secretary shall allot to 

21 each remaining shortfall State described in sub22 paragraph (B) such amount as the Secretary 

23 determines will eliminate the estimated shortfall 

24 described in such subparagraph for the State. 


bajohnson on PROD1PC77 with BILLS
42 

•S 158 IS

1 ‘‘(B) REMAINING SHORTFALL STATE DE2 SCRIBED.—For purposes of subparagraph (A), 

3 a remaining shortfall State is a State (including 

4 a commonwealth or territory described in sub5 section (c)(3)) with a State child health plan 

6 approved under this title for which the Sec7 retary estimates, on the basis of the most re8 cent data available to the Secretary as of the 

9 date of the enactment of this subsection, that 

10 the projected Federal expenditures under such 

11 plan for such State for fiscal year 2007 will ex12 ceed the sum of— 

13 ‘‘(i) the amount of the State’s allot14 ments for each of fiscal years 2005 and 

15 2006 that will not be expended by the end 

16 of fiscal year 2006; 

17 ‘‘(ii) the amount of the State’s allot18 ment for fiscal year 2007; and 

19 ‘‘(iii) the amount, if any, of unspent 

20 allotments for fiscal year 2004 that are to 

21 be redistributed to the State during fiscal 

22 year 2007 in accordance with subsection 

23 (f) and paragraph (1). 

24 ‘‘(C) 1-YEAR AVAILABILITY; NO REDIS25 TRIBUTION OF UNEXPENDED ADDITIONAL ALVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
43 

•S 158 IS

1 LOTMENTS.—Notwithstanding subsections (e) 

2 and (f), amounts allotted to a remaining short3 fall State pursuant to this paragraph shall only 

4 remain available for expenditure by the State 

5 through September 30, 2007. Any amounts of 

6 such allotments that remain unexpended as of 

7 such date shall not be subject to redistribution 

8 under subsection (f) and shall revert to the 

9 Treasury on October 1, 2007. 

10 ‘‘(D) APPROPRIATION; ALLOTMENT AU11 THORITY.—For the purpose of providing addi12 tional allotments to remaining shortfall States 

13 under this paragraph there is appropriated, out 

14 of any funds in the Treasury not otherwise ap15 propriated, such sums as are necessary for fis16 cal year 2007.’’. 

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

18 this section apply to items and services furnished on or 

19 after October 1, 2006, without regard to whether or not 

20 regulations implementing such amendments have been 

21 issued. 

22 (c) PERIOD OF EFFECTIVENESS.—Section 

23 2104(h)(2) of the Social Security Act (as added by sub24 section (a)) shall terminate on September 30, 2007, and 

25 shall be considered to have expired notwithstanding secVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
44 

•S 158 IS

1 tion 257 of the Balanced Budget and Emergency Deficit 

2 Control Act of 1985 (2 U.S.C. 907). 

3 (d) EFFECT ON PROVISIONS ADDED BY THE NA4 TIONAL INSTITUTES OF HEALTH REFORM ACT OF

5 2006.—The Social Security Act shall be administered as 

6 if section 2104(h) of such Act, as added by section 201(a) 

7 of the National Institutes of Health Reform Act, had not 

8 been enacted. 

9 Subtitle C—FamilyCare 

10 SEC. 211. RENAMING OF TITLE XXI PROGRAM. 

11 (a) IN GENERAL.—The heading of title XXI of the 

12 Social Security Act (42 U.S.C. 1397aa et seq.) is amended 

13 to read as follows: 

14 ‘‘TITLE XXI—FAMILYCARE 

15 PROGRAM’’. 

16 (b) PROGRAM REFERENCES.—Any reference in any 

17 provision of Federal law or regulation to ‘‘SCHIP’’ or 

18 ‘‘State children’s health insurance program’’ under title 

19 XXI of the Social Security Act shall be deemed a reference 

20 to the FamilyCare program under such title. 

21 SEC. 212. FAMILYCARE COVERAGE OF PARENTS UNDER 

22 THE MEDICAID PROGRAM AND TITLE XXI. 

23 (a) INCENTIVES TO IMPLEMENT FAMILYCARE COV24 ERAGE.— 

25 (1) UNDER MEDICAID.— 


bajohnson on PROD1PC77 with BILLS
45 

•S 158 IS

1 (A) ESTABLISHMENT OF NEW OPTIONAL

2 ELIGIBILITY CATEGORY.—Section 

3 1902(a)(10)(A)(ii) of the Social Security Act 

4 (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended— 

5 (i) by striking ‘‘or’’ at the end of sub6 clause (XVIII); 

7 (ii) by adding ‘‘or’’ at the end of sub8 clause (XIX); and 

9 (iii) by adding at the end the fol10 lowing: 

11 ‘‘(XX) who are individuals de12 scribed in subsection (k)(1) (relating 

13 to parents of categorically eligible chil14 dren);’’. 

15 (B) PARENTS DESCRIBED.—Section 1902 

16 of the Social Security Act is further amended 

17 by inserting after subsection (j) the following: 

18 ‘‘(k)(1)(A) Individuals described in this paragraph 

19 are individuals— 

20 ‘‘(i) who are the parents of an individual who 

21 is under 19 years of age (or such higher age as the 

22 State may have elected under section 1902(l)(1)(D)) 

23 and who is eligible for medical assistance under sub24 section (a)(10)(A); 


bajohnson on PROD1PC77 with BILLS
46 

•S 158 IS

1 ‘‘(ii) who are not otherwise eligible for medical 

2 assistance under such subsection, under section 

3 1931, or under a waiver approved under section 

4 1115 or otherwise (except under subsection 

5 (a)(10)(A)(ii)(XX)); and 

6 ‘‘(iii) whose family income exceeds the income 

7 level applicable under the State plan under part A 

8 of title IV as in effect as of July 16, 1996, but does 

9 not exceed the highest income level applicable to a 

10 child in the family under this title. 

11 ‘‘(B) In establishing an income eligibility level for in12 dividuals described in this paragraph, a State may vary 

13 such level consistent with the various income levels estab14 lished under subsection (l)(2) based on the ages of chil15 dren described in subsection (l)(1) in order to ensure, to 

16 the maximum extent possible, that such individuals shall 

17 be enrolled in the same program as their children. 

18 ‘‘(C) An individual may not be treated as being de19 scribed in this paragraph unless, at the time of the individ20 ual’s enrollment under this title, the child referred to in 

21 subparagraph (A)(i) of the individual is also enrolled 

22 under this title. 

23 ‘‘(D) In this subsection, the term ‘parent’ includes 

24 an individual treated as a caregiver for purposes of car25 rying out section 1931. 


bajohnson on PROD1PC77 with BILLS
47 

•S 158 IS

1 ‘‘(2) In the case of a parent described in paragraph 

2 (1) who is also the parent of a child who is eligible for 

3 child health assistance under title XXI, the State may 

4 elect (on a uniform basis) to cover all such parents under 

5 section 2111 or under this title.’’. 

6 (C) ENHANCED MATCHING FUNDS AVAIL7 ABLE IF CERTAIN CONDITIONS MET.—Section 

8 1905 of the Social Security Act (42 U.S.C. 

9 1396d) is amended— 

10 (i) in the fourth sentence of sub11 section (b), by striking ‘‘or subsection 

12 (u)(3)’’ and inserting ‘‘, (u)(3), or (u)(4)’’; 

13 and 

14 (ii) in subsection (u)— 

15 (I) by redesignating paragraph 

16 (4) as paragraph (6), and 

17 (II) by inserting after paragraph 

18 (3) the following: 

19 ‘‘(4) For purposes of subsection (b) and section 

20 2105(a)(1)— 

21 ‘‘(A) FAMILYCARE PARENTS.—The expendi22 tures described in this subparagraph are the expend23 itures described in the following clauses (i) and (ii): 

24 ‘‘(i) PARENTS.—If the conditions described 

25 in clause (iii) are met, expenditures for medical 


bajohnson on PROD1PC77 with BILLS
48 

•S 158 IS

1 assistance for parents described in section 

2 1902(k)(1) and for parents who would be de3 scribed in such section but for the fact that 

4 they are eligible for medical assistance under 

5 section 1931 or under a waiver approved under 

6 section 1115. 

7 ‘‘(ii) CERTAIN PREGNANT WOMEN.—Ex8 penditures for medical assistance for pregnant 

9 women under section 1902(l)(1)(A) in a family 

10 the income of which exceeds the income level 

11 applicable under section 1902(l)(2)(A) to a 

12 family of the size involved as of January 1, 

13 2007. 

14 ‘‘(iii) CONDITIONS.—The conditions de15 scribed in this clause are the following: 

16 ‘‘(I) The State has a State child 

17 health plan under title XXI which (wheth18 er implemented under such title or under 

19 this title) has an effective income level for 

20 children that is at least 200 percent of the 

21 poverty line. 

22 ‘‘(II) Such State child health plan 

23 does not limit the acceptance of applica24 tions, does not use a waiting list for chil25 dren who meet eligibility standards to 


bajohnson on PROD1PC77 with BILLS
49 

•S 158 IS

1 qualify for assistance, and provides bene2 fits to all children in the State who apply 

3 for and meet eligibility standards. 

4 ‘‘(III) The State plans under this title 

5 and title XXI do not provide coverage for 

6 parents with higher family income without 

7 covering parents with a lower family in8 come. 

9 ‘‘(IV) The State does not apply an in10 come level for parents that is lower than 

11 the effective income level (expressed as a 

12 percent of the poverty line) that has been 

13 specified under the State plan under title 

14 XIX (including under a waiver authorized 

15 by the Secretary or under section 

16 1902(r)(2)), as of January 1, 2007, to be 

17 eligible for medical assistance as a parent 

18 under this title. 

19 ‘‘(iv) DEFINITIONS.—For purposes of this 

20 subsection: 

21 ‘‘(I) The term ‘parent’ has the mean22 ing given such term for purposes of section 

23 1902(k)(1). 


bajohnson on PROD1PC77 with BILLS
50 

•S 158 IS

1 ‘‘(II) The term ‘poverty line’ has the 

2 meaning given such term in section 

3 2110(c)(5).’’. 

4 (D) APPROPRIATION FROM TITLE XXI AL5 LOTMENT FOR CERTAIN MEDICAID EXPANSION

6 COSTS.—Section 2105(a)(1) of the Social Secu7 rity Act is amended by striking ‘‘and’’ at the 

8 end of subparagraph (C), by striking the period 

9 at the end of subparagraph (D) and inserting 

10 ‘‘; and’’, and by adding at the end the fol11 lowing: 

12 ‘‘(E) for making expenditures for medical 

13 assistance that is attributable to expenditures 

14 described in section 1905(u)(4)(A).’’. 

15 (E) ONLY COUNTING ENHANCED PORTION

16 FOR COVERAGE OF ADDITIONAL PREGNANT

17 WOMEN.—Section 1905 of the Social Security 

18 Act (42 U.S.C. 1396d) is amended— 

19 (i) in the fourth sentence of sub20 section (b), by inserting ‘‘(except in the 

21 case of expenditures described in sub22 section (u)(5))’’ after ‘‘do not exceed’’; and 

23 (ii) in subsection (u), by inserting 

24 after paragraph (4) (as inserted by sub25 paragraph (C)), the following: 


bajohnson on PROD1PC77 with BILLS
51 

•S 158 IS

1 ‘‘(5) For purposes of the fourth sentence of sub2 section (b) and section 2105(a), the following payments 

3 under this title do not count against a State’s allotment 

4 under section 2104: 

5 ‘‘(A) REGULAR FMAP FOR EXPENDITURES FOR

6 PREGNANT WOMEN WITH INCOME ABOVE JANUARY

7 1, 2007 INCOME LEVEL AND BELOW 185 PERCENT OF

8 POVERTY.—The portion of the payments made for 

9 expenditures described in paragraph (4)(A)(ii) that 

10 represents the amount that would have been paid if 

11 the enhanced FMAP had not been substituted for 

12 the Federal medical assistance percentage.’’. 

13 (2) UNDER TITLE XXI.— 

14 (A) FAMILYCARE COVERAGE.—Title XXI 

15 of the Social Security Act (42 U.S.C. 1397aa et 

16 seq.) is amended by adding at the end the fol17 lowing: 

18 ‘‘SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PAR19 ENTS OF TARGETED LOW-INCOME CHILDREN. 

20 ‘‘(a) OPTIONAL COVERAGE.—Notwithstanding any 

21 other provision of this title, a State child health plan may 

22 provide for coverage, through an amendment to its State 

23 child health plan under section 2102, of FamilyCare as24 sistance for individuals who are targeted low-income par25 ents in accordance with this section, but only if— 


bajohnson on PROD1PC77 with BILLS
52 

•S 158 IS

1 ‘‘(1) the State meets the conditions described in 

2 section 1905(u)(4)(A)(iii); and 

3 ‘‘(2) the State elects to provide medical assist4 ance under section 1902(a)(10)(A)(ii)(XX), under 

5 section 1931, or under a waiver under section 1115 

6 to individuals described in section 1902(k)(1)(A)(i) 

7 and elects an applicable income level for such indi8 viduals that consistent with paragraphs (1)(B) and 

9 (2) of section 1902(k), ensures to the maximum ex10 tent possible, that those individuals shall be enrolled 

11 in the same program as their children if their chil12 dren are eligible for coverage under title XIX (in13 cluding under a waiver authorized by the Secretary 

14 or under section 1902(r)(2)).’’. 

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

16 ‘‘(1) FAMILYCARE ASSISTANCE.—The term 

17 ‘FamilyCare assistance’ has the meaning given the 

18 term child health assistance in section 2110(a) as if 

19 any reference to targeted low-income children were 

20 a reference to targeted low-income parents. 

21 ‘‘(2) TARGETED LOW-INCOME PARENT.—The 

22 term ‘targeted low-income parent’ has the meaning 

23 given the term targeted low-income child in section 

24 2110(b) as if the reference to a child were deemed 


bajohnson on PROD1PC77 with BILLS
53 

•S 158 IS

1 a reference to a parent (as defined in paragraph (3)) 

2 of the child; except that in applying such section— 

3 ‘‘(A) there shall be substituted for the in4 come level described in paragraph (1)(B)(ii)(I) 

5 the applicable income level in effect for a tar6 geted low-income child; 

7 ‘‘(B) in paragraph (3), January 1, 2007, 

8 shall be substituted for July 1, 1997; and 

9 ‘‘(C) in paragraph (4), January 1, 2007, 

10 shall be substituted for March 31, 1997. 

11 ‘‘(3) PARENT.—The term ‘parent’ includes an 

12 individual treated as a caregiver for purposes of car13 rying out section 1931. 

14 ‘‘(4) OPTIONAL TREATMENT OF PREGNANT

15 WOMEN AS PARENTS.—A State child health plan 

16 may treat a pregnant woman who is not otherwise 

17 a parent as a targeted low-income parent for pur18 poses of this section but only if the State has estab19 lished an income level under section 1902(l)(2)(A)(i) 

20 for pregnant women that is at least 185 percent of 

21 the income official poverty line described in such sec22 tion. 

23 ‘‘(c) REFERENCES TO TERMS AND SPECIAL

24 RULES.—In the case of, and with respect to, a State pro25 viding for coverage of FamilyCare assistance to targeted 


bajohnson on PROD1PC77 with BILLS
54 

•S 158 IS

1 low-income parents under subsection (a), the following 

2 special rules apply: 

3 ‘‘(1) Any reference in this title (other than sub4 section (b)) to a targeted low-income child is deemed 

5 to include a reference to a targeted low-income par6 ent. 

7 ‘‘(2) Any such reference to child health assist8 ance with respect to such parents is deemed a ref9 erence to FamilyCare assistance. 

10 ‘‘(3) In applying section 2103(e)(3)(B) in the 

11 case of a family provided coverage under this sec12 tion, the limitation on total annual aggregate cost13 sharing shall be applied to the entire family. 

14 ‘‘(4) In applying section 2110(b)(4), any ref15 erence to ‘section 1902(l)(2) or 1905(n)(2) (as se16 lected by a State)’ is deemed a reference to the in17 come level applicable to parents under section 1931 

18 or under a waiver approved under section 1115, or, 

19 in the case of a pregnant woman described in sub20 section (b)(4), the income level established under 

21 section 1902(l)(2)(A). 

22 ‘‘(5) In applying section 2102(b)(3)(B), any 

23 reference to children is deemed a reference to par24 ents.’’. 


bajohnson on PROD1PC77 with BILLS
55 

•S 158 IS

1 (B) ADDITIONAL ALLOTMENT FOR STATES

2 PROVIDING FAMILYCARE.— 

3 (i) IN GENERAL.—Section 2104 of the 

4 Social Security Act (42 U.S.C. 1397dd), as 

5 amended by this Act, is amended by insert6 ing after subsection (h) the following: 

7 ‘‘(i) ADDITIONAL ALLOTMENTS FOR STATE PRO8 VIDING FAMILYCARE.— 

9 ‘‘(1) APPROPRIATION; TOTAL ALLOTMENT.— 

10 For the purpose of providing additional allotments 

11 to States to provide FamilyCare coverage under sec12 tion 2111, there is appropriated, out of any money 

13 in the Treasury not otherwise appropriated— 

14 ‘‘(A) such sums as may be necessary to 

15 provide such coverage for fiscal year 2008, and 

16 ‘‘(B) for fiscal year 2008 and each fiscal 

17 year thereafter, the amount of the allotment 

18 provided under this paragraph for the preceding 

19 fiscal year increased by the percentage increase 

20 (if any) in the medical care expenditure cat21 egory of the Consumer Price Index for All 

22 Urban Consumers (United States city average). 

23 ‘‘(2) STATE AND TERRITORIAL ALLOTMENTS.— 

24 ‘‘(A) IN GENERAL.—In addition to the al25 lotments provided under subsections (b), (c), 


bajohnson on PROD1PC77 with BILLS
56 

•S 158 IS

1 (d), and (h), subject to paragraphs (3) and (4), 

2 of the amount available for the additional allot3 ments under paragraph (1) for a fiscal year, 

4 the Secretary shall allot to each State with a 

5 State child health plan approved under this 

6 title— 

7 ‘‘(i) in the case of such a State other 

8 than a commonwealth or territory de9 scribed in clause (ii), the same proportion 

10 as the proportion of the State’s allotment 

11 under subsection (b) (determined without 

12 regard to subsection (f)) to 98.95 percent 

13 of the total amount of the allotments 

14 under such section for such States eligible 

15 for an allotment under this subparagraph 

16 for such fiscal year; and 

17 ‘‘(ii) in the case of a commonwealth or 

18 territory described in subsection (c)(3), the 

19 same proportion as the proportion of the 

20 commonwealth’s or territory’s allotment 

21 under subsection (c) (determined without 

22 regard to subsection (f)) to 1.05 percent of 

23 the total amount of the allotments under 

24 such section for commonwealths and terriVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
57 

•S 158 IS

1 tories eligible for an allotment under this 

2 subparagraph for such fiscal year. 

3 ‘‘(B) AVAILABILITY AND REDISTRIBUTION

4 OF UNUSED ALLOTMENTS.—In applying sub5 sections (e) and (f) with respect to additional 

6 allotments made available under this subsection, 

7 the procedures established under such sub8 sections shall ensure such additional allotments 

9 are only made available to States which have 

10 elected to provide coverage under section 2111. 

11 ‘‘(3) USE OF ADDITIONAL ALLOTMENT.—Addi12 tional allotments provided under this subsection are 

13 not available for amounts expended before October 

14 1, 2007. Such amounts are available for amounts ex15 pended on or after such date for child health assist16 ance for targeted low-income children, as well as for 

17 FamilyCare assistance. 

18 ‘‘(4) REQUIRING ELECTION TO PROVIDE

19 FAMILYCARE COVERAGE.—No payments may be 

20 made to a State under this title from an allotment 

21 provided under this subsection unless the State has 

22 made an election to provide FamilyCare assist23 ance.’’. 


bajohnson on PROD1PC77 with BILLS
58 

•S 158 IS

1 (ii) CONFORMING AMENDMENTS.— 

2 Section 2104 of the Social Security Act 

3 (42 U.S.C. 1397dd) is amended— 

4 (I) in subsection (a), by inserting 

5 ‘‘or subsection (i),’’ after ‘‘subsection 

6 (d),’’; 

7 (II) in subsection (b)(1), by 

8 striking ‘‘subsection (d)’’ and insert9 ing ‘‘subsections (d) and (i)’’; and 

10 (III) in subsection (c)(1), by in11 serting ‘‘or subsection (i),’’ after 

12 ‘‘subsection (d)’’. 

13 (C) NO COST-SHARING FOR PREGNANCY14 RELATED BENEFITS.—Section 2103(e)(2) of 

15 the Social Security Act (42 U.S.C. 

16 1397cc(e)(2)) is amended— 

17 (i) in the heading, by inserting ‘‘AND

18 PREGNANCY-RELATED SERVICES’’ after 

19 ‘‘PREVENTIVE SERVICES’’; and 

20 (ii) by inserting before the period at 

21 the end the following: ‘‘and for pregnancy22 related services’’. 

23 (3) EFFECTIVE DATE.—The amendments made 

24 by this subsection apply to items and services fur25 nished on or after October 1, 2007, whether or not 


bajohnson on PROD1PC77 with BILLS
59 

•S 158 IS

1 regulations implementing such amendments have 

2 been issued. 

3 (b) OPTIONAL APPLICATION OF PRESUMPTIVE ELI4 GIBILITY PROVISIONS TO PARENTS.—Section 1920A of 

5 the Social Security Act (42 U.S.C. 1396r–1a) is amended 

6 by adding at the end the following: 

7 ‘‘(e) A State may elect to apply the previous provi8 sions of this section to provide for a period of presumptive 

9 eligibility for medical assistance for a parent (as defined 

10 for purposes of section 1902(k)(1)) of a child with respect 

11 to whom such a period is provided under this section.’’. 

12 (c) CONFORMING AMENDMENTS.— 

13 (1) ELIGIBILITY CATEGORIES.—Section 

14 1905(a) of the Social Security Act (42 U.S.C. 

15 1396d(a)) is amended, in the matter before para16 graph (1)— 

17 (A) by striking ‘‘or’’ at the end of clause 

18 (xii); 

19 (B) by inserting ‘‘or’’ at the end of clause 

20 (xiii); and 

21 (C) by inserting after clause (xiii) the fol22 lowing: 

23 ‘‘(xiv) who are parents described (or treated as 

24 if described) in section 1902(k)(1),’’. 


bajohnson on PROD1PC77 with BILLS
60 

•S 158 IS

1 (2) INCOME LIMITATIONS.—Section 1903(f)(4) 

2 of the Social Security Act (42 U.S.C. 1396b(f)(4)) 

3 is amended by inserting ‘‘1902(a)(10)(A)(ii)(XX),’’ 

4 after ‘‘1902(a)(10)(A)(ii)(XVIII),’’. 

5 (3) CONFORMING AMENDMENT RELATING TO

6 NO WAITING PERIOD FOR PREGNANT WOMEN.—Sec7 tion 2102(b)(1)(B) of the Social Security Act (42 

8 U.S.C. 1397bb(b)(1)(B)) is amended— 

9 (A) by striking ‘‘, and’’ at the end of 

10 clause (i) and inserting a semicolon; 

11 (B) by striking the period at the end of 

12 clause (ii) and inserting ‘‘; and’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(iii) may not apply a waiting period 

15 (including a waiting period to carry out 

16 paragraph (3)(C)) in the case of a targeted 

17 low-income parent who is pregnant.’’. 

18 SEC. 213. OPTIONAL COVERAGE OF CHILDREN THROUGH 

19 AGE 20 UNDER THE MEDICAID PROGRAM AND 

20 TITLE XXI. 

21 (a) MEDICAID.— 

22 (1) IN GENERAL.—Section 1902(l)(1)(D) of the 

23 Social Security Act (42 U.S.C. 1396a(l)(1)(D)) is 

24 amended by inserting ‘‘(or, at the election of a 


bajohnson on PROD1PC77 with BILLS
61 

•S 158 IS

1 State, 20 or 21 years of age)’’ after ‘‘19 years of 

2 age’’. 

3 (2) CONFORMING AMENDMENTS.— 

4 (A) Section 1902(e)(3)(A) of the Social Se5 curity Act (42 U.S.C. 1396a(e)(3)(A)) is 

6 amended by inserting ‘‘(or 1 year less than the 

7 age the State has elected under subsection 

8 (l)(1)(D))’’ after ‘‘18 years of age’’. 

9 (B) Section 1902(e)(12) of the Social Se10 curity Act (42 U.S.C. 1396a(e)(12)) is amend11 ed by inserting ‘‘or such higher age as the State 

12 has elected under subsection (l)(1)(D)’’ after 

13 ‘‘19 years of age’’. 

14 (C) Section 1920A(b)(1) of the Social Se15 curity Act (42 U.S.C. 1396r–1a(b)(1)) is 

16 amended by inserting ‘‘or such higher age as 

17 the State has elected under section 

18 1902(l)(1)(D)’’ after ‘‘19 years of age’’. 

19 (D) Section 1928(h)(1) of the Social Secu20 rity Act (42 U.S.C. 1396s(h)(1)) is amended by 

21 inserting ‘‘or 1 year less than the age the State 

22 has elected under section 1902(l)(1)(D)’’ before 

23 the period at the end. 

24 (E) Section 1932(a)(2)(A) of the Social 

25 Security Act (42 U.S.C. 1396u–2(a)(2)(A)) is 


bajohnson on PROD1PC77 with BILLS
62 

•S 158 IS

1 amended by inserting ‘‘(or such higher age as 

2 the State has elected under section 

3 1902(l)(1)(D))’’ after ‘‘19 years of age’’. 

4 (b) TITLE XXI.—Section 2110(c)(1) of the Social 

5 Security Act (42 U.S.C. 1397jj(c)(1)) is amended by in6 serting ‘‘(or such higher age as the State has elected under 

7 section 1902(l)(1)(D))’’. 

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

9 this section take effect on October 1, 2007, and apply to 

10 medical assistance and child health assistance provided on 

11 or after such date, whether or not regulations imple12 menting such amendments have been issued. 

13 SEC. 214. SENSE OF THE SENATE REGARDING AUTHORITY 

14 TO USE SCHIP FUNDS TO PURCHASE FAMILY 

15 COVERAGE. 

16 It is the sense of the Senate that section 2105(c)(3) 

17 of the Social Security Act (42 U.S.C. 1397ee(c)(3)) per18 mits States to use funds provided under the State chil19 dren’s health insurance program established under title 

20 XXI of that Act (42 U.S.C. 1397aa et seq.) to help low21 income working families and pregnant women eligible for 

22 assistance under that program pay their share of em23 ployer-sponsored health insurance coverage. 


bajohnson on PROD1PC77 with BILLS
63 

•S 158 IS

1 Subtitle D—Simplified Enrollment 

2 SEC. 221. AUTOMATIC ENROLLMENT OF CHILDREN BORN 

3 TO TITLE XXI PARENTS. 

4 Section 2102(b)(1) of the Social Security Act (42 

5 U.S.C. 1397bb(b)(1)) is amended by adding at the end 

6 the following: 

7 ‘‘(C) AUTOMATIC ELIGIBILITY OF CHIL8 DREN BORN TO A PARENT BEING PROVIDED

9 FAMILYCARE.—Such eligibility standards shall 

10 provide for automatic coverage of a child born 

11 to an individual who is provided assistance 

12 under this title in the same manner as medical 

13 assistance would be provided under section 

14 1902(e)(4) to a child described in such sec15 tion.’’. 

16 SEC. 222. APPLICATION OF SIMPLIFIED TITLE XXI PROCE17 DURES UNDER THE MEDICAID PROGRAM. 

18 (a) APPLICATION UNDER MEDICAID.— 

19 (1) IN GENERAL.—Section 1902(l) of the Social 

20 Security Act (42 U.S.C. 1396a(l)) is amended— 

21 (A) in paragraph (3), by inserting ‘‘subject 

22 to paragraph (5),’’, after ‘‘Notwithstanding 

23 subsection (a)(17),’’; and 

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


bajohnson on PROD1PC77 with BILLS
64 

•S 158 IS

1 ‘‘(5) With respect to determining the eligibility of in2 dividuals under 19 years of age (or such higher age as 

3 the State has elected under paragraph (1)(D)) for medical 

4 assistance under subsection (a)(10)(A) and, separately, 

5 with respect to determining the eligibility of individuals 

6 for medical assistance under subsection 

7 (a)(10)(A)(ii)(XX), notwithstanding any other provision 

8 of this title, if the State has established a State child 

9 health plan under title XXI— 

10 ‘‘(A) the State may not apply a resource stand11 ard; 

12 ‘‘(B) the State shall use the same simplified eli13 gibility form (including, if applicable, permitting ap14 plication other than in person) as the State uses 

15 under such State child health plan with respect to 

16 such individuals; 

17 ‘‘(C) the State shall provide for initial eligibility 

18 determinations and redeterminations of eligibility 

19 using verification policies, forms, and frequency that 

20 are no less restrictive than the policies, forms, and 

21 frequency the State uses for such purposes under 

22 such State child health plan with respect to such in23 dividuals; and 

24 ‘‘(D) the State shall not require a face-to-face 

25 interview for purposes of initial eligibility determinaVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
65 

•S 158 IS

1 tions and redeterminations unless the State requires 

2 such an interview for such purposes under such child 

3 health plan with respect to such individuals.’’. 

4 (2) EFFECTIVE DATE.—The amendments made 

5 by paragraph (1) apply to determinations of eligi6 bility made on or after the date that is 1 year after 

7 the date of enactment of this Act, whether or not 

8 regulations implementing such amendments have 

9 been issued. 

10 (b) PRESUMPTIVE ELIGIBILITY.— 

11 (1) IN GENERAL.—Section 1920A(b)(3)(A)(i) of 

12 the Social Security Act (42 U.S.C. 1396r– 

13 1a(b)(3)(A)(i)) is amended by inserting ‘‘a child care 

14 resource and referral agency,’’ after ‘‘a State or trib15 al child support enforcement agency,’’. 

16 (2) APPLICATION TO PRESUMPTIVE ELIGIBILITY

17 FOR PREGNANT WOMEN UNDER MEDICAID.—Section 

18 1920(b) of the Social Security Act (42 U.S.C. 

19 1396r–1(b)) is amended by adding at the end after 

20 and below paragraph (2) the following flush sen21 tence: 

22 ‘‘The term ‘qualified provider’ includes a qualified entity 

23 as defined in section 1920A(b)(3).’’. 

24 (3) APPLICATION UNDER TITLE XXI.— 


bajohnson on PROD1PC77 with BILLS
66 

•S 158 IS

1 (A) IN GENERAL.—Section 2107(e)(1)(D) 

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

3 1397gg(e)(1)) is amended to read as follows: 

4 ‘‘(D) Sections 1920 and 1920A (relating to 

5 presumptive eligibility).’’. 

6 (B) CONFORMING ELIMINATION OF RE7 SOURCE TEST.—Section 2102(b)(1)(A) of such 

8 Act (42 U.S.C. 1397bb(b)(1)(A)) is amended— 

9 (i) by striking ‘‘and resources (includ10 ing any standards relating to spenddowns 

11 and disposition of resources)’’; and 

12 (ii) by adding at the end the fol13 lowing: ‘‘Effective 1 year after the date of 

14 enactment of the Access to Affordable 

15 Health Care Act, such standards may not 

16 include the application of a resource stand17 ard or test.’’. 

18 (c) AUTOMATIC REASSESSMENT OF ELIGIBILITY FOR

19 TITLE XXI AND MEDICAID BENEFITS FOR CHILDREN

20 LOSING MEDICAID OR TITLE XXI ELIGIBILITY.— 

21 (1) LOSS OF MEDICAID ELIGIBILITY.—Section 

22 1902(a) of the Social Security Act (42 U.S.C. 

23 1396a(a)) is amended— 

24 (A) by striking ‘‘and’’ at the end of para25 graph (69), 


bajohnson on PROD1PC77 with BILLS
67 

•S 158 IS

1 (B) by striking the period at the end of 

2 paragraph (70) and inserting ‘‘; and’’, and 

3 (C) by inserting after paragraph (70) the 

4 following: 

5 ‘‘(71) provide, in the case of a State with a 

6 State child health plan under title XXI, that before 

7 medical assistance to a child (or a parent of a child) 

8 is discontinued under this title, a determination of 

9 whether the child (or parent) is eligible for benefits 

10 under title XXI shall be made and, if determined to 

11 be so eligible, the child (or parent) shall be auto12 matically enrolled in the program under such title 

13 without the need for a new application.’’. 

14 (2) LOSS OF TITLE XXI ELIGIBILITY AND CO15 ORDINATION WITH MEDICAID.—Section 2102(b) (42 

16 U.S.C. 1397bb(b)) is amended— 

17 (A) in paragraph (3), by redesignating 

18 subparagraphs (D) and (E) as subparagraphs 

19 (E) and (F), respectively, and by inserting after 

20 subparagraph (C) the following: 

21 ‘‘(D) that before health assistance to a 

22 child (or a parent of a child) is discontinued 

23 under this title, a determination of whether the 

24 child (or parent) is eligible for benefits under 

25 title XIX is made and, if determined to be so 


bajohnson on PROD1PC77 with BILLS
68 

•S 158 IS

1 eligible, the child (or parent) is automatically 

2 enrolled in the program under such title with3 out the need for a new application;’’; 

4 (B) by redesignating paragraph (4) as 

5 paragraph (5); and 

6 (C) by inserting after paragraph (3) the 

7 following new paragraph: 

8 ‘‘(4) COORDINATION WITH MEDICAID.—The 

9 State shall coordinate the screening and enrollment 

10 of individuals under this title and under title XIX 

11 consistent with the following: 

12 ‘‘(A) Information that is collected under 

13 this title or under title XIX which is needed to 

14 make an eligibility determination under the 

15 other title shall be transmitted to the appro16 priate administering entity under such other 

17 title in a timely manner so that coverage is not 

18 delayed and families do not have to submit the 

19 same information twice. Families shall be pro20 vided the information they need to complete the 

21 application process for coverage under both ti22 tles and be given appropriate notice of any de23 terminations made on their applications for 

24 such coverage. 


bajohnson on PROD1PC77 with BILLS
69 

•S 158 IS

1 ‘‘(B) If a State does not use a joint appli2 cation under this title and such title, the State 

3 shall— 

4 ‘‘(i) promptly inform a child’s parent 

5 or caretaker in writing and, if appropriate, 

6 orally, that a child has been found likely to 

7 be eligible under title XIX; 

8 ‘‘(ii) provide the family with an appli9 cation for medical assistance under such 

10 title and offer information about what (if 

11 any) further information, documentation, 

12 or other steps are needed to complete such 

13 application process; 

14 ‘‘(iii) offer assistance in completing 

15 such application process; and 

16 ‘‘(iv) promptly transmit the separate 

17 application under this title or the informa18 tion obtained through such application, 

19 and all other relevant information and doc20 umentation, including the results of the 

21 screening process, to the State agency 

22 under title XIX for a final determination 

23 on eligibility under such title. 

24 ‘‘(C) Applicants are notified in writing 

25 of— 


bajohnson on PROD1PC77 with BILLS
70 

•S 158 IS

1 ‘‘(i) benefits (including restrictions on 

2 cost-sharing) under title XIX; and 

3 ‘‘(ii) eligibility rules that prohibit chil4 dren who have been screened eligible for 

5 medical assistance under such title from 

6 being enrolled under this title, other than 

7 provisional temporary enrollment while a 

8 final eligibility determination is being made 

9 under such title. 

10 ‘‘(D) If the agency administering this title 

11 is different from the agency administering a 

12 State plan under title XIX, such agencies shall 

13 coordinate the screening and enrollment of ap14 plicants for such coverage under both titles. 

15 ‘‘(E) The coordination procedures estab16 lished between the program under this title and 

17 under title XIX shall apply not only to the ini18 tial eligibility determination of a family but also 

19 to any renewals or redeterminations of such eli20 gibility.’’. 

21 (3) EFFECTIVE DATE.—The amendments made 

22 by paragraphs (1) and (2) apply to individuals who 

23 lose eligibility under the medicaid program under 

24 title XIX, or under a State child health insurance 

25 plan under title XXI, respectively, of the Social SeVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
71 

•S 158 IS

1 curity Act on or after October 1, 2007 (or, if later, 

2 60 days after the date of enactment of this Act), 

3 whether or not regulations implementing such 

4 amendments have been issued. 

5 (d) PROVISION OF MEDICAID AND CHIP APPLICA6 TIONS AND INFORMATION UNDER THE SCHOOL LUNCH

7 PROGRAM.—Section 9(b)(2)(B)(iii) of the Richard B. 

8 Russell National School Lunch Act (42 U.S.C. 

9 1758(b)(2)(B)(iii)) is amended by adding at the end the 

10 following: 

11 ‘‘(III) NOTICE OF AVAILABILITY

12 OF HEALTH BENEFITS UNDER MED13 ICAID AND CHIP.—Descriptive mate14 rial distributed in accordance with 

15 clause (i) shall also contain informa16 tion (provided on a form separate 

17 from the application form for free and 

18 reduced price lunches) on the avail19 ability of medical assistance under 

20 title XIX of the Social Security Act 

21 (42 U.S.C. 1396 et seq.) and of child 

22 health and FamilyCare assistance 

23 under title XXI of such Act, including 

24 information on how to obtain an apVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
72 

•S 158 IS

1 plication for assistance under such 

2 programs.’’. 

3 (e) 12 MONTHS OF CONTINUOUS ELIGIBILITY.— 

4 (1) MEDICAID.—Section 1902(e)(12) of the So5 cial Security Act (42 U.S.C. 1396a(e)(12)) is 

6 amended— 

7 (A) by striking ‘‘At the option of the State, 

8 the plan may’’ and inserting ‘‘The plan shall’’; 

9 (B) by striking ‘‘an age specified by the 

10 State (not to exceed 19 years of age)’’ and in11 serting ‘‘19 years of age (or such higher age as 

12 the State has elected under subsection 

13 (l)(1)(D)) or, at the option of the State, who is 

14 eligible for medical assistance as the parent of 

15 such a child’’; and 

16 (C) in subparagraph (A), by striking ‘‘a 

17 period (not to exceed 12 months)’’ and insert18 ing ‘‘the 12-month period beginning on the 

19 date’’. 

20 (2) TITLE XXI.—Section 2102(b)(2) of such 

21 Act (42 U.S.C. 1397bb(b)(2)) is amended by adding 

22 at the end the following: ‘‘Such methods shall pro23 vide 12 months of continuous eligibility for children 

24 under this title in the same manner that section 

25 1902(e)(12) provides 12 months of continuous eligiVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
73 

•S 158 IS

1 bility for children described in such section under 

2 title XIX. If a State has elected to apply section 

3 1902(e)(12) to parents, such methods may provide 

4 12 months of continuous eligibility for parents under 

5 this title in the same manner that such section pro6 vides 12 months of continuous eligibility for parents 

7 described in such section under title XIX.’’. 

8 (3) EFFECTIVE DATE.— 

9 (A) IN GENERAL.—The amendments made 

10 by this subsection take effect on October 1, 

11 2007 (or, if later, 60 days after the date of en12 actment of this Act), whether or not regulations 

13 implementing such amendments have been 

14 issued. 

15 Subtitle E—State Option To Extend 

16 Medicaid Coverage to Certain 

17 Low-Income Individuals 

18 SEC. 231. STATE OPTION TO EXTEND MEDICAID COVERAGE 

19 TO CERTAIN LOW-INCOME INDIVIDUALS. 

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

21 the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)), 

22 as amended by section 212(a)(1)(A), is amended— 

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

24 (XIX); 


bajohnson on PROD1PC77 with BILLS
74 

•S 158 IS

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

2 (XX); and 

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

4 ‘‘(XXI) who are individuals who 

5 are not otherwise eligible for medical 

6 assistance under this subparagraph, 

7 or under a waiver approved under sec8 tion 1115, or otherwise, as of the date 

9 of enactment of this subclause and 

10 whose family income does not exceed 

11 125 percent of the income official pov12 erty line (as defined by the Office of 

13 Management and Budget and revised 

14 annually in accordance with section 

15 673(2) of the Omnibus Budget Rec16 onciliation Act of 1981) applicable to 

17 a family of the size involved;’’. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) MEDICAL ASSISTANCE ELIGIBILITY CAT20 EGORIES.—Section 1905(a) of such Act (42 U.S.C. 

21 1396d(a)), as amended by section 212(e)(1), is 

22 amended in the matter preceding paragraph (1)— 

23 (A) by striking ‘‘or’’ at the end of clause 

24 (xiii); 


bajohnson on PROD1PC77 with BILLS
75 

•S 158 IS

1 (B) by adding ‘‘or’’ at the end of clause 

2 (xiv); and 

3 (C) by inserting after clause (xiv) the fol4 lowing: 

5 ‘‘(xv) who are individuals described in section 

6 1902(a)(10)(A)(ii)(XX),’’. 

7 (2) EXEMPTION FROM UPPER INCOME LIMITA8 TION.—Section 1903(f)(4) of such Act (42 U.S.C. 

9 1396b(f)(4)), as amended by section 212(e)(2)(B), is 

10 amended by inserting ‘‘1902(a)(10)(A)(ii)(XXI),’’ 

11 after ‘‘1902(a)(10)(A)(ii)(XX),’’. 

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

13 this subsection take effect on October 1, 2007. 

14 Subtitle F—Grants to Promote In15 novative Outreach and Enroll16 ment Under Medicaid and 

17 SCHIP 

18 SEC. 251. GRANTS TO PROMOTE INNOVATIVE OUTREACH 

19 AND ENROLLMENT UNDER MEDICAID AND 

20 SCHIP. 

21 (a) GRANTS FOR EXPANDED OUTREACH ACTIVI22 TIES.—Title XXI of the Social Security Act (42 U.S.C. 

23 1397aa et seq.), as amended by section 212(a)(2), is 

24 amended by adding at the end the following: 


bajohnson on PROD1PC77 with BILLS
76 

•S 158 IS

1 ‘‘SEC. 2112. EXPANDED OUTREACH ACTIVITIES. 

2 ‘‘(a) IN GENERAL.—The Secretary shall award 

3 grants to eligible entities to— 

4 ‘‘(1) conduct innovative 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; and 

8 ‘‘(2) promote understanding of the importance 

9 of health insurance coverage for prenatal care and 

10 children. 

11 ‘‘(b) PRIORITY FOR AWARD OF GRANTS.—In making 

12 grants under subsection (a), the Secretary shall give pri13 ority to— 

14 ‘‘(1) eligible entities that propose to target geo15 graphic areas with high rates of— 

16 ‘‘(A) eligible but unenrolled children, in17 cluding such children who reside in rural areas; 

18 or 

19 ‘‘(B) racial and ethnic minorities and 

20 health disparity populations, including those 

21 proposals that address cultural and linguistic 

22 barriers to enrollment; and 

23 ‘‘(2) eligible entities that plan to engage in out24 reach efforts with respect to individuals described in 

25 paragraph (1) and that are— 


bajohnson on PROD1PC77 with BILLS
77 

•S 158 IS

1 ‘‘(A) Federal health safety net organiza2 tions; or 

3 ‘‘(B) faith-based organizations or con4 sortia. 

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

6 receive a grant under this section shall submit an applica7 tion to the Secretary in such form and manner, and con8 taining such information, as the Secretary may decide. 

9 Such application shall include— 

10 ‘‘(1) quality and outcomes performance meas11 ures to evaluate the effectiveness of activities funded 

12 by a grant awarded under this section to ensure that 

13 the activities are meeting their goals; and 

14 ‘‘(2) an assurance that the entity shall— 

15 ‘‘(A) conduct an assessment of the effec16 tiveness of such activities against such perform17 ance measures; and 

18 ‘‘(B) collect and report enrollment data 

19 and other information determined as a result of 

20 conducting such assessments to the Secretary, 

21 in such form and manner as the Secretary shall 

22 require. 

23 ‘‘(d) DISSEMINATION OF ENROLLMENT DATA AND

24 INFORMATION DETERMINED FROM EFFECTIVENESS AS25 SESSMENTS; ANNUAL REPORT.—The Secretary shall— 


bajohnson on PROD1PC77 with BILLS
78 

•S 158 IS

1 ‘‘(1) disseminate to eligible entities and make 

2 publicly available the enrollment data and informa3 tion reported in accordance with subsection 

4 (c)(2)(B); and 

5 ‘‘(2) submit an annual report to Congress on 

6 the outreach activities funded by grants awarded 

7 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. 

12 ‘‘(B) A Federal health safety net organiza13 tion. 

14 ‘‘(C) A national, local, or community-based 

15 public or nonprofit private organization. 

16 ‘‘(D) A faith-based organization or con17 sortia, to the extent that a grant awarded to 

18 such an entity is consistent with the require19 ments of section 1955 of the Public Health 

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

21 grant award to nongovernmental entities. 

22 ‘‘(E) An elementary or secondary school. 

23 ‘‘(2) FEDERAL HEALTH SAFETY NET ORGANI24 ZATION.—The term ‘Federal health safety net orga25 nization’ means— 


bajohnson on PROD1PC77 with BILLS
79 

•S 158 IS

1 ‘‘(A) an Indian tribe, tribal organization, 

2 or an urban Indian organization receiving funds 

3 under title V of the Indian Health Care Im4 provement Act (25 U.S.C. 1651 et seq.); 

5 ‘‘(B) a federally-qualified health center (as 

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

7 ‘‘(C) a hospital defined as a dispropor8 tionate share hospital for purposes of section 

9 1923; 

10 ‘‘(D) a covered entity described in section 

11 340B(a)(4) of the Public Health Service Act 

12 (42 U.S.C. 256b(a)(4)); and 

13 ‘‘(E) any other entity or a consortium that 

14 serves children under a federally-funded pro15 gram, including the special supplemental nutri16 tion program for women, infants, and children 

17 (WIC) established under section 17 of the Child 

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

19 head start and early head start programs under 

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

21 the school lunch program established under the 

22 Richard B. Russell National School Lunch Act, 

23 and an elementary or secondary school. 

24 ‘‘(3) INDIANS; INDIAN TRIBE; TRIBAL ORGANI25 ZATION; URBAN INDIAN ORGANIZATION; SERVICE


bajohnson on PROD1PC77 with BILLS
80 

•S 158 IS

1 UNIT.—The terms ‘Indian’, ‘Indian tribe’, ‘tribal or2 ganization’, ‘urban Indian organization’, and ‘Serv3 ice Unit’ have the meanings given such terms in sec4 tion 4 of the Indian Health Care Improvement Act 

5 (25 U.S.C. 1603). 

6 ‘‘(f) APPROPRIATION.—There is appropriated, out of 

7 any money in the Treasury not otherwise appropriated, 

8 $50,000,000 for each of fiscal years 2008 and 2009 for 

9 the purpose of awarding grants under this section. 

10 Amounts appropriated and paid under the authority of 

11 this section shall be in addition to amounts appropriated 

12 under section 2104 and paid to States in accordance with 

13 section 2105.’’. 

14 (b) EXTENDING USE OF OUTSTATIONED WORKERS

15 TO ACCEPT TITLE XXI APPLICATIONS.—Section 

16 1902(a)(55) of the Social Security Act (42 U.S.C. 

17 1396a(a)(55)) is amended by inserting ‘‘, and applications 

18 for child health assistance under title XXI’’ after 

19 ‘‘(a)(10)(A)(ii)(IX)’’. 


bajohnson on PROD1PC77 with BILLS
81 

•S 158 IS

1 SEC. 252. STATE OPTION TO PROVIDE FOR SIMPLIFIED DE2 TERMINATIONS OF A CHILD’S FINANCIAL ELI3 GIBILITY FOR MEDICAL ASSISTANCE UNDER 

4 MEDICAID OR CHILD HEALTH ASSISTANCE 

5 UNDER SCHIP. 

6 (a) MEDICAID.—Section 1902(e) of the Social Secu7 rity Act (42 U.S.C. 1396a(e)) is amended by adding at 

8 the end the following: 

9 ‘‘(13)(A) At the option of the State, the plan 

10 may provide that financial eligibility requirements 

11 for medical assistance are met for an individual who 

12 is under an age specified by the State (except as 

13 provided in subparagraph (C), not to exceed 21 

14 years of age) by using a determination made within 

15 a reasonable period (as determined by the State) be16 fore its use for this purpose, of the individual’s fam17 ily or household income, or if applicable for purposes 

18 of determining eligibility under this title or title 

19 XXI, assets or resources, by a Federal or State 

20 agency, or a public or private entity making such de21 termination on behalf of such agency, specified by 

22 the plan, including (but not limited to) an agency 

23 administering the State program funded under part 

24 A of title IV, the Food Stamp Act of 1977, the 

25 Richard B. Russell National School Lunch Act, or 

26 the Child Nutrition Act of 1966, notwithstanding 


bajohnson on PROD1PC77 with BILLS
82 

•S 158 IS

1 any differences in budget unit, disregard, deeming, 

2 or other methodology, but only if— 

3 ‘‘(i) the agency has fiscal liabilities or re4 sponsibilities affected or potentially affected by 

5 such determination; and 

6 ‘‘(ii) any information furnished by the 

7 agency pursuant to this subparagraph is used 

8 solely for purposes of determining eligibility for 

9 medical assistance under this title or for child 

10 health assistance under title XXI. 

11 ‘‘(B) Nothing in subparagraph (A) shall be con12 strued— 

13 ‘‘(i) to authorize the denial of medical as14 sistance under this title or of child health as15 sistance under title XXI to an individual who, 

16 without the application of this paragraph, would 

17 qualify for such assistance; 

18 ‘‘(ii) to relieve a State of the obligation 

19 under subsection (a)(8) to furnish medical as20 sistance with reasonable promptness after the 

21 submission of an initial application that is eval22 uated or for which evaluation is requested pur23 suant to this paragraph; or 

24 ‘‘(iii) to relieve a State of the obligation to 

25 determine eligibility for medical assistance 


bajohnson on PROD1PC77 with BILLS
83 

•S 158 IS

1 under this title or for child health assistance 

2 under title XXI on a basis other than family or 

3 household income (or, if applicable, assets or re4 sources) if an individual is determined ineligible 

5 for such assistance on the basis of information 

6 furnished pursuant to this paragraph. 

7 ‘‘(C) At the option of a State, the financial eli8 gibility process described in subparagraph (A) may 

9 apply to an individual who is older than age 21 if 

10 the individual’s eligibility for medical assistance 

11 under this title is based on pregnancy or if the indi12 vidual is a parent, guardian, or other caretaker rel13 ative of an individual found eligible under subpara14 graph (A).’’. 

15 (b) SCHIP.—Section 2107(e)(1) of the Social Secu16 rity Act (42 U.S.C. 1397gg(e)(1)) is amended by adding 

17 at the end the following: 

18 ‘‘(E) Section 1902(e)(13) (relating to the 

19 State option to base an individual’s eligibility 

20 for assistance on financial determinations made 

21 by a program providing nutrition or other pub22 lic assistance (except that the State option 

23 under subparagraph (C) of such section shall 

24 apply under this title only if an individual is 

25 pregnant)).’’. 


bajohnson on PROD1PC77 with BILLS
84 

•S 158 IS

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

2 this section take effect on October 1, 2007. 

3 Subtitle G—Demonstration Pro4 grams To Improve Medicaid and 

5 SCHIP Outreach to Homeless 

6 Individuals and Families 

7 SEC. 261. DEMONSTRATION PROGRAMS TO IMPROVE MED8 ICAID AND SCHIP OUTREACH TO HOMELESS 

9 INDIVIDUALS AND FAMILIES. 

10 (a) AUTHORITY.—The Secretary of Health and 

11 Human Services may award demonstration grants to not 

12 more than 7 States (or other qualified entities) to conduct 

13 innovative programs that are designed to improve out14 reach to homeless individuals and families under the pro15 grams described in subsection (b) with respect to enroll16 ment of such individuals and families under such pro17 grams and the provision of services (and coordinating the 

18 provision of such services) under such programs. 

19 (b) PROGRAMS FOR HOMELESS DESCRIBED.—The 

20 programs described in this subsection are as follows: 

21 (1) MEDICAID.—The program under title XIX 

22 of the Social Security Act (42 U.S.C. 1396 et seq.). 

23 (2) SCHIP.—The program under title XXI of 

24 the Social Security Act (42 U.S.C. 1397aa et seq.). 


bajohnson on PROD1PC77 with BILLS
85 

•S 158 IS

1 (3) TANF.—The program under part A of title 

2 IV of the Social Security Act (42 U.S.C. 601 et 

3 seq.). 

4 (4) SAMHSA BLOCK GRANTS.—The program 

5 of grants under part B of title XIX of the Public 

6 Health Service Act (42 U.S.C. 300x–1 et seq.). 

7 (5) FOOD STAMP PROGRAM.—The program 

8 under the Food Stamp Act of 1977 (7 U.S.C. 2011 

9 et seq.). 

10 (6) WORKFORCE INVESTMENT ACT.—The pro11 gram under the Workforce Investment Act of 1999 

12 (29 U.S.C. 2801 et seq.). 

13 (7) WELFARE-TO-WORK.—The welfare-to-work 

14 program under section 403(a)(5) of the Social Secu15 rity Act (42 U.S.C. 603(a)(5)). 

16 (8) OTHER PROGRAMS.—Other public and pri17 vate benefit programs that serve low-income individ18 uals. 

19 (c) APPROPRIATIONS.—For the purposes of carrying 

20 out this section, there is appropriated for fiscal year 2008, 

21 out of any funds in the Treasury not otherwise appro22 priated, $10,000,000, to remain available until expended. 


bajohnson on PROD1PC77 with BILLS
86 

•S 158 IS

1 TITLE III—STRENGTHENING THE 

2 HEALTH CARE SAFETY NET 

3 SEC. 301. INCREASE IN FUNDING FOR THE CONSOLIDATED 

4 HEALTH CENTERS PROGRAM. 

5 It is the sense of the Senate that the amounts appro6 priated for consolidated health centers under section 330 

7 of the Public Health Service Act (42 U.S.C. 254b) should 

8 be doubled over the 5-fiscal year period beginning with fis9 cal year 2008. 

10 TITLE IV—EXPANSION OF AC11 CESS TO HEALTH CARE IN 

12 RURAL AND UNDERSERVED 

13 AREAS 

14 SEC. 401. EXPANSION OF FUNDING. 

15 It is the sense of the Senate that the amounts appro16 priated for National Health Service Corps under subpart 

17 II of part D of title III of the Public Health Service Act 

18 (42 U.S.C. 254d et seq.) should be doubled over the 5- 

19 fiscal year period beginning with fiscal year 2008 to assist 

20 in provide support for physicians, dentists, and other 

21 health care clinicians who serve in rural and inner city 

22 areas. 


bajohnson on PROD1PC77 with BILLS
87 

•S 158 IS

1 SEC. 402. LOAN REPAYMENT AND SCHOLARSHIP PRO2 GRAMS. 

3 Section 338C of the Public Health Service Act (42 

4 U.S.C. 254m) is amended by adding at the end the fol5 lowing: 

6 ‘‘(e) Notwithstanding any other provision of this title, 

7 periods of obligated service may be served and fulfilled on 

8 a part time basis if— 

9 ‘‘(1) such part time service is agreed to by both 

10 the placement site or sites and the recipient of the 

11 scholarship or loan repayment; and 

12 ‘‘(2) the recipient’s total obligation is fulfilled.’’. 

13 TITLE V—EXPANDED ACCESS TO 

14 AFFORDABLE LONG-TERM CARE 

15 SEC. 501. TREATMENT OF PREMIUMS ON QUALIFIED LONG16 TERM CARE INSURANCE CONTRACTS. 

17 (a) IN GENERAL.—Part VII of subchapter B of chap18 ter 1 of the Internal Revenue Code of 1986 (relating to 

19 additional itemized deductions) is amended by redesig20 nating section 224 as section 225 and by inserting after 

21 section 223 the following new section: 

22 ‘‘SEC. 224. PREMIUMS ON QUALIFIED LONG-TERM CARE IN23 SURANCE CONTRACTS. 

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

25 there shall be allowed as a deduction an amount equal to 

26 the applicable percentage of the amount of eligible longVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
88 

•S 158 IS

1 term care premiums (as defined in section 213(d)(10)) 

2 paid during the taxable year for coverage for the taxpayer, 

3 his spouse, and dependents under a qualified long-term 

4 care insurance contract (as defined in section 7702B(b)). 

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

6 subsection (a)— 

7 ‘‘(1) IN GENERAL.—Except as otherwise pro8 vided in this subsection, the applicable percentage 

9 shall be determined in accordance with the following 

10 table based on the number of years of continuous 

11 coverage (as of the close of the taxable year) of the 

12 individual under any qualified long-term care insur13 ance contracts (as defined in section 7702B(b)): 

‘‘If the number of years of The applicable long-term 

continuous coverage is— care percentage is—

Less than 1 .................................................................. 60

At least 1 but less than 2 ............................................. 70

At least 2 but less than 3 ............................................. 80

At least 3 but less than 4 ............................................. 90

At least 4 ...................................................................... 100. 

14 ‘‘(2) SPECIAL RULES FOR INDIVIDUALS WHO

15 HAVE ATTAINED AGE 55.—In the case of an indi16 vidual who has attained age 55 as of the close of the 

17 taxable year, the following table shall be substituted 

18 for the table in paragraph (1). 

‘‘If the number of years of The applicable long-term 

continuous coverage is— care percentage is—

Less than 1 .................................................................. 70

At least 1 but less than 2 ............................................. 85

At least 2 ...................................................................... 100. 


bajohnson on PROD1PC77 with BILLS
89 

•S 158 IS

1 ‘‘(3) ONLY COVERAGE AFTER 2006 TAKEN INTO

2 ACCOUNT.—Only coverage for periods after Decem3 ber 31, 2006, shall be taken into account under this 

4 subsection. 

5 ‘‘(4) CONTINUOUS COVERAGE.—An individual 

6 shall not fail to be treated as having continuous cov7 erage if the aggregate breaks in coverage during any 

8 1-year period are less than 60 days. 

9 ‘‘(c) COORDINATION WITH OTHER DEDUCTIONS.— 

10 Any amount paid by a taxpayer for any qualified long11 term care insurance contract to which subsection (a) ap12 plies shall not be taken into account in computing the 

13 amount allowable to the taxpayer as a deduction under 

14 section 162(l) or 213(a).’’. 

15 (b) LONG-TERM CARE INSURANCE PERMITTED TO

16 BE OFFERED UNDER CAFETERIA PLANS AND FLEXIBLE

17 SPENDING ARRANGEMENTS.— 

18 (1) CAFETERIA PLANS.—Section 125(f) of the 

19 Internal Revenue Code of 1986 (defining qualified 

20 benefits) is amended by inserting before the period 

21 at the end ‘‘; except that such term shall include the 

22 payment of premiums for any qualified long-term 

23 care insurance contract (as defined in section 

24 7702B) to the extent the amount of such payment 

25 does not exceed the eligible long-term care premiums 


bajohnson on PROD1PC77 with BILLS
90 

•S 158 IS

1 (as defined in section 213(d)(10)) for such con2 tract’’. 

3 (2) FLEXIBLE SPENDING ARRANGEMENTS.— 

4 Section 106 of such Code (relating to contributions 

5 by an employer to accident and health plans) is 

6 amended by striking subsection (c). 

7 (c) CONFORMING AMENDMENTS.— 

8 (1) Section 62(a) of the Internal Revenue Code 

9 of 1986 is amended by inserting after paragraph 

10 (20) the following new item: 

11 ‘‘(21) PREMIUMS ON QUALIFIED LONG-TERM

12 CARE INSURANCE CONTRACTS.—The deduction al13 lowed by section 224.’’. 

14 (2) The table of sections for part VII of sub15 chapter B of chapter 1 of such Code is amended by 

16 striking the last item and inserting the following 

17 new items: 

‘‘Sec. 224. Premiums on qualified long-term care insurance contracts. 

‘‘Sec. 225. Cross reference.’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2006. 

21 SEC. 502. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE 

22 NEEDS. 

23 (a) IN GENERAL.—Subpart A of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of 


bajohnson on PROD1PC77 with BILLS
91 

•S 158 IS

1 1986 (relating to nonrefundable personal credits) is 

2 amended by inserting after section 25D the following new 

3 section: 

4 ‘‘SEC. 25E. CREDIT FOR TAXPAYERS WITH LONG-TERM 

5 CARE NEEDS. 

6 ‘‘(a) ALLOWANCE OF CREDIT.— 

7 ‘‘(1) IN GENERAL.—There shall be allowed as a 

8 credit against the tax imposed by this chapter for 

9 the taxable year an amount equal to the applicable 

10 credit amount multiplied by the number of applica11 ble individuals with respect to whom the taxpayer is 

12 an eligible caregiver for the taxable year. 

13 ‘‘(2) APPLICABLE CREDIT AMOUNT.—For pur14 poses of paragraph (1), the applicable credit amount 

15 shall be determined in accordance with the following 

16 table: 

‘‘‘‘For taxable years beginning The applicable 

in calendar year— credit amount is—

2005 ..................................................................................... $1,000

2006 ..................................................................................... 1,500

2007 ..................................................................................... 2,000

2008 ..................................................................................... 2,500

2009 or thereafter ................................................................ 3,000. 

17 ‘‘(b) LIMITATION BASED ON ADJUSTED GROSS IN18 COME.— 

19 ‘‘(1) IN GENERAL.—The amount of the credit 

20 allowable under subsection (a) shall be reduced (but 

21 not below zero) by $100 for each $1,000 (or fraction 

22 thereof) by which the taxpayer’s modified adjusted 


bajohnson on PROD1PC77 with BILLS
92 

•S 158 IS

1 gross income exceeds the threshold amount. For 

2 purposes of the preceding sentence, the term ‘modi3 fied adjusted gross income’ means adjusted gross in4 come increased by any amount excluded from gross 

5 income under section 911, 931, or 933. 

6 ‘‘(2) THRESHOLD AMOUNT.—For purposes of 

7 paragraph (1), the term ‘threshold amount’ means— 

8 ‘‘(A) $150,000 in the case of a joint re9 turn, and 

10 ‘‘(B) $75,000 in any other case. 

11 ‘‘(3) INDEXING.—In the case of any taxable 

12 year beginning in a calendar year after 2007, each 

13 dollar amount contained in paragraph (2) shall be 

14 increased by an amount equal to the product of— 

15 ‘‘(A) such dollar amount, and 

16 ‘‘(B) the medical care cost adjustment de17 termined under section 213(d)(10)(B)(ii) for 

18 the calendar year in which the taxable year be19 gins, determined by substituting ‘August 2006’ 

20 for ‘August 1996’ in subclause (II) thereof. 

21 If any increase determined under the preceding sen22 tence is not a multiple of $50, such increase shall 

23 be rounded to the next lowest multiple of $50. 

24 ‘‘(c) DEFINITIONS.—For purposes of this section— 

25 ‘‘(1) APPLICABLE INDIVIDUAL.— 


bajohnson on PROD1PC77 with BILLS
93 

•S 158 IS

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

2 individual’ means, with respect to any taxable 

3 year, any individual who has been certified, be4 fore the due date for filing the return of tax for 

5 the taxable year (without extensions), by a phy6 sician (as defined in section 1861(r)(1) of the 

7 Social Security Act) as being an individual with 

8 long-term care needs described in subparagraph 

9 (B) for a period— 

10 ‘‘(i) which is at least 180 consecutive 

11 days, and 

12 ‘‘(ii) a portion of which occurs within 

13 the taxable year. 

14 Such term shall not include any individual oth15 erwise meeting the requirements of the preceding sentence unless within the 391 16 ⁄2-month 

17 period ending on such due date (or such other 

18 period as the Secretary prescribes) a physician 

19 (as so defined) has certified that such indi20 vidual meets such requirements. 

21 ‘‘(B) INDIVIDUALS WITH LONG-TERM CARE

22 NEEDS.—An individual is described in this sub23 paragraph if the individual meets any of the fol24 lowing requirements: 


bajohnson on PROD1PC77 with BILLS
94 

•S 158 IS

1 ‘‘(i) The individual is at least 6 years 

2 of age and— 

3 ‘‘(I) is unable to perform (with4 out substantial assistance from an5 other individual) at least 3 activities 

6 of daily living (as defined in section 

7 7702B(c)(2)(B)) due to a loss of 

8 functional capacity, or 

9 ‘‘(II) requires substantial super10 vision to protect such individual from 

11 threats to health and safety due to se12 vere cognitive impairment and is un13 able to perform, without reminding or 

14 cuing assistance, at least 1 activity of 

15 daily living (as so defined) or to the 

16 extent provided in regulations pre17 scribed by the Secretary (in consulta18 tion with the Secretary of Health and 

19 Human Services), is unable to engage 

20 in age appropriate activities. 

21 ‘‘(ii) The individual is at least 2 but 

22 not 6 years of age and is unable due to a 

23 loss of functional capacity to perform 

24 (without substantial assistance from anVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00094 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
95 

•S 158 IS

1 other individual) at least 2 of the following 

2 activities: eating, transferring, or mobility. 

3 ‘‘(iii) The individual is under 2 years 

4 of age and requires specific durable med5 ical equipment by reason of a severe health 

6 condition or requires a skilled practitioner 

7 trained to address the individual’s condi8 tion to be available if the individual’s par9 ents or guardians are absent. 

10 ‘‘(2) ELIGIBLE CAREGIVER.— 

11 ‘‘(A) IN GENERAL.—A taxpayer shall be 

12 treated as an eligible caregiver for any taxable 

13 year with respect to the following individuals: 

14 ‘‘(i) The taxpayer. 

15 ‘‘(ii) The taxpayer’s spouse. 

16 ‘‘(iii) An individual with respect to 

17 whom the taxpayer is allowed a deduction 

18 under section 151 for the taxable year. 

19 ‘‘(iv) An individual who would be de20 scribed in clause (iii) for the taxable year 

21 if section 151(c)(1)(A) were applied by 

22 substituting for the exemption amount an 

23 amount equal to the sum of the exemption 

24 amount, the standard deduction under sec25 tion 63(c)(2)(C), and any additional standVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
96 

•S 158 IS

1 ard deduction under section 63(c)(3) which 

2 would be applicable to the individual if 

3 clause (iii) applied. 

4 ‘‘(v) An individual who would be de5 scribed in clause (iii) for the taxable year 

6 if— 

7 ‘‘(I) the requirements of clause 

8 (iv) are met with respect to the indi9 vidual, and 

10 ‘‘(II) the requirements of sub11 paragraph (B) are met with respect to 

12 the individual in lieu of the support 

13 test of section 152(a). 

14 ‘‘(B) RESIDENCY TEST.—The require15 ments of this subparagraph are met if an indi16 vidual has as his principal place of abode the 

17 home of the taxpayer and— 

18 ‘‘(i) in the case of an individual who 

19 is an ancestor or descendant of the tax20 payer or the taxpayer’s spouse, is a mem21 ber of the taxpayer’s household for over 

22 half the taxable year, or 

23 ‘‘(ii) in the case of any other indi24 vidual, is a member of the taxpayer’s 

25 household for the entire taxable year. 


bajohnson on PROD1PC77 with BILLS
97 

•S 158 IS

1 ‘‘(C) SPECIAL RULES WHERE MORE THAN

2 1 ELIGIBLE CAREGIVER.— 

3 ‘‘(i) IN GENERAL.—If more than 1 in4 dividual is an eligible caregiver with re5 spect to the same applicable individual for 

6 taxable years ending with or within the 

7 same calendar year, a taxpayer shall be 

8 treated as the eligible caregiver if each 

9 such individual (other than the taxpayer) 

10 files a written declaration (in such form 

11 and manner as the Secretary may pre12 scribe) that such individual will not claim 

13 such applicable individual for the credit 

14 under this section. 

15 ‘‘(ii) NO AGREEMENT.—If each indi16 vidual required under clause (i) to file a 

17 written declaration under clause (i) does 

18 not do so, the individual with the highest 

19 modified adjusted gross income (as defined 

20 in section 32(c)(5)) shall be treated as the 

21 eligible caregiver. 

22 ‘‘(iii) MARRIED INDIVIDUALS FILING

23 SEPARATELY.—In the case of married indi24 viduals filing separately, the determination 

25 under this subparagraph as to whether the 


bajohnson on PROD1PC77 with BILLS
98 

•S 158 IS

1 husband or wife is the eligible caregiver 

2 shall be made under the rules of clause (ii) 

3 (whether or not one of them has filed a 

4 written declaration under clause (i)). 

5 ‘‘(d) IDENTIFICATION REQUIREMENT.—No credit 

6 shall be allowed under this section to a taxpayer with re7 spect to any applicable individual unless the taxpayer in8 cludes the name and taxpayer identification number of 

9 such individual, and the identification number of the phy10 sician certifying such individual, on the return of tax for 

11 the taxable year. 

12 ‘‘(e) TAXABLE YEAR MUST BE FULL TAXABLE

13 YEAR.—Except in the case of a taxable year closed by rea14 son of the death of the taxpayer, no credit shall be allow15 able under this section in the case of a taxable year cov16 ering a period of less than 12 months.’’. 

17 (b) CONFORMING AMENDMENTS.— 

18 (1) Section 6213(g)(2) of the Internal Revenue 

19 Code of 1986 is amended by striking ‘‘and’’ at the 

20 end of subparagraph (L), by striking the period at 

21 the end of subparagraph (M) and inserting ‘‘, and’’, 

22 and by inserting after subparagraph (M) the fol23 lowing new subparagraph: 

24 ‘‘(N) an omission of a correct TIN or phy25 sician identification required under section 


bajohnson on PROD1PC77 with BILLS
99 

•S 158 IS

1 25E(d) (relating to credit for taxpayers with 

2 long-term care needs) to be included on a re3 turn.’’. 

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

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

6 amended by inserting after the item relating to sec7 tion 25D the following new item: 

‘‘Sec. 25E. Credit for taxpayers with long-term care needs.’’. 

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2006. 

11 SEC. 503. ADDITIONAL CONSUMER PROTECTIONS FOR 

12 LONG-TERM CARE INSURANCE. 

13 (a) ADDITIONAL PROTECTIONS APPLICABLE TO

14 LONG-TERM CARE INSURANCE.—Subparagraphs (A) and 

15 (B) of section 7702B(g)(2) of the Internal Revenue Code 

16 of 1986 (relating to requirements of model regulation and 

17 Act) are amended to read as follows: 

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

19 this paragraph are met with respect to any con20 tract if such contract meets— 

21 ‘‘(i) MODEL REGULATION.—The fol22 lowing requirements of the model regula23 tion: 

24 ‘‘(I) Section 6A (relating to guar25 anteed renewal or noncancellability), 


bajohnson on PROD1PC77 with BILLS
100 

•S 158 IS

1 and the requirements of section 6B of 

2 the model Act relating to such section 

3 6A. 

4 ‘‘(II) Section 6B (relating to pro5 hibitions on limitations and exclu6 sions). 

7 ‘‘(III) Section 6C (relating to ex8 tension of benefits). 

9 ‘‘(IV) Section 6D (relating to 

10 continuation or conversion of cov11 erage). 

12 ‘‘(V) Section 6E (relating to dis13 continuance and replacement of poli14 cies). 

15 ‘‘(VI) Section 7 (relating to unin16 tentional lapse). 

17 ‘‘(VII) Section 8 (relating to dis18 closure), other than section 8F there19 of. 

20 ‘‘(VIII) Section 11 (relating to 

21 prohibitions against post claims un22 derwriting). 

23 ‘‘(IX) Section 12 (relating to 

24 minimum standards). 


bajohnson on PROD1PC77 with BILLS
101 

•S 158 IS

1 ‘‘(X) Section 13 (relating to re2 quirement to offer inflation protec3 tion), except that any requirement for 

4 a signature on a rejection of inflation 

5 protection shall permit the signature 

6 to be on an application or on a sepa7 rate form. 

8 ‘‘(XI) Section 25 (relating to pro9 hibition against preexisting conditions 

10 and probationary periods in replace11 ment policies or certificates). 

12 ‘‘(XII) The provisions of section 

13 26 relating to contingent nonforfeiture 

14 benefits, if the policyholder declines 

15 the offer of a nonforfeiture provision 

16 described in paragraph (4). 

17 ‘‘(ii) MODEL ACT.—The following re18 quirements of the model Act: 

19 ‘‘(I) Section 6C (relating to pre20 existing conditions). 

21 ‘‘(II) Section 6D (relating to 

22 prior hospitalization). 

23 ‘‘(III) The provisions of section 8 

24 relating to contingent nonforfeiture 

25 benefits, if the policyholder declines 


bajohnson on PROD1PC77 with BILLS
102 

•S 158 IS

1 the offer of a nonforfeiture provision 

2 described in paragraph (4). 

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

4 paragraph— 

5 ‘‘(i) MODEL PROVISIONS.—The terms 

6 ‘model regulation’ and ‘model Act’ mean 

7 the long-term care insurance model regula8 tion, and the long-term care insurance 

9 model Act, respectively, promulgated by 

10 the National Association of Insurance 

11 Commissioners (as adopted as of Sep12 tember 2000). 

13 ‘‘(ii) COORDINATION.—Any provision 

14 of the model regulation or model Act listed 

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

16 (A) shall be treated as including any other 

17 provision of such regulation or Act nec18 essary to implement the provision. 

19 ‘‘(iii) DETERMINATION.—For pur20 poses of this section and section 4980C, 

21 the determination of whether any require22 ment of a model regulation or the model 

23 Act has been met shall be made by the 

24 Secretary.’’. 


bajohnson on PROD1PC77 with BILLS
103 

•S 158 IS

1 (b) EXCISE TAX.—Paragraph (1) of section 

2 4980C(c) of the Internal Revenue Code of 1986 (relating 

3 to requirements of model provisions) is amended to read 

4 as follows: 

5 ‘‘(1) REQUIREMENTS OF MODEL PROVISIONS.— 

6 ‘‘(A) MODEL REGULATION.—The following 

7 requirements of the model regulation must be 

8 met: 

9 ‘‘(i) Section 9 (relating to required 

10 disclosure of rating practices to consumer). 

11 ‘‘(ii) Section 14 (relating to applica12 tion forms and replacement coverage). 

13 ‘‘(iii) Section 15 (relating to reporting 

14 requirements), except that the issuer shall 

15 also report at least annually the number of 

16 claims denied during the reporting period 

17 for each class of business (expressed as a 

18 percentage of claims denied), other than 

19 claims denied for failure to meet the wait20 ing period or because of any applicable 

21 preexisting condition. 

22 ‘‘(iv) Section 22 (relating to filing re23 quirements for marketing). 

24 ‘‘(v) Section 23 (relating to standards 

25 for marketing), including inaccurate comVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00103 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
104 

•S 158 IS

1 pletion of medical histories, other than 

2 paragraphs (1), (6), and (9) of section 

3 23C, except that— 

4 ‘‘(I) in addition to such require5 ments, no person shall, in selling or 

6 offering to sell a qualified long-term 

7 care insurance contract, misrepresent 

8 a material fact; and 

9 ‘‘(II) no such requirements shall 

10 include a requirement to inquire or 

11 identify whether a prospective appli12 cant or enrollee for long-term care in13 surance has accident and sickness in14 surance. 

15 ‘‘(vi) Section 24 (relating to suit16 ability). 

17 ‘‘(vii) Section 29 (relating to standard 

18 format outline of coverage). 

19 ‘‘(viii) Section 30 (relating to require20 ment to deliver shopper’s guide). 

21 The requirements referred to in clause (vi) shall 

22 not include those portions of the personal work23 sheet described in Appendix B relating to con24 sumer protection requirements not imposed by 

25 section 4980C or 7702B. 


bajohnson on PROD1PC77 with BILLS
105 

•S 158 IS

1 ‘‘(B) MODEL ACT.—The following require2 ments of the model Act must be met: 

3 ‘‘(i) Section 6F (relating to right to 

4 return), except that such section shall also 

5 apply to denials of applications and any re6 fund shall be made within 30 days of the 

7 return or denial. 

8 ‘‘(ii) Section 6G (relating to outline of 

9 coverage). 

10 ‘‘(iii) Section 6H (relating to require11 ments for certificates under group plans). 

12 ‘‘(iv) Section 6I (relating to policy 

13 summary). 

14 ‘‘(v) Section 6J (relating to monthly 

15 reports on accelerated death benefits). 

16 ‘‘(vi) Section 7 (relating to incontest17 ability period). 

18 ‘‘(C) DEFINITIONS.—For purposes of this 

19 paragraph, the terms ‘model regulation’ and 

20 ‘model Act’ have the meanings given such terms 

21 by section 7702B(g)(2)(B).’’. 

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

23 this section shall apply to policies issued more than 1 year 

24 after the date of the enactment of this Act. 


bajohnson on PROD1PC77 with BILLS
106 

•S 158 IS

1 TITLE VI—PROMOTING 

2 HEALTHIER LIFESTYLES 

3 SEC. 601. COMMUNITY PARTNERSHIPS TO PROMOTE 

4 HEALTHY LIFESTYLES. 

5 (a) GRANTS.—The Secretary of Health and Human 

6 Services (referred to in this title as the ‘‘Secretary’’) shall 

7 award grants to States to enable such States to provide 

8 assistance to eligible community partnerships that will 

9 carry out activities to promote healthy lifestyles. 

10 (b) ELIGIBILITY.— 

11 (1) STATE.—To be eligible to receive a grant 

12 under subsection (a), a State shall prepare and sub13 mit to the Secretary an application at such time, in 

14 such manner and containing such information as the 

15 Secretary may require. 

16 (2) COMMUNITY PARTNERSHIP.—To be eligible 

17 to receive assistance from a State under a grant 

18 under subsection (a), an entity shall— 

19 (A) be a partnership consisting of one or 

20 more public and private organizations (such as 

21 hospitals, health centers, other health care pro22 viders, employers, local educational agencies, 

23 community organizations, and public health or24 ganizations); and 


bajohnson on PROD1PC77 with BILLS
107 

•S 158 IS

1 (B) prepare and submit to the State an 

2 application at such time, in such manner and 

3 containing such information as the State may 

4 require, including a description of the activities 

5 that the partnership will carry out with assist6 ance provided under this section. 

7 (c) ACTIVITIES.—A State shall use amounts received 

8 under a grant under this section to support activities con9 ducted by an eligible community partnership to promote 

10 health lifestyles, including— 

11 (1) activities to reduce the primary risk factors 

12 for diseases, such as smoking, obesity, and sedentary 

13 lifestyles; 

14 (2) implementing employee health promotion 

15 programs in the workplace using best practices to 

16 improve health access, education, and prevention 

17 promotion and disease management; 

18 (3) activities to decrease hospital inpatient ad19 missions of individuals with chronic diseases; and 

20 (4) the development of programs relating to 

21 mental health and substance abuse. 

22 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

23 are authorized to be appropriated to carry out this section, 

24 such sums as may be necessary for each of fiscal years 

25 2008 through 2012. 


bajohnson on PROD1PC77 with BILLS
108 

•S 158 IS

1 SEC. 602. WORKSITE WELLNESS GRANT PROGRAM. 

2 (a) GRANTS.—The Secretary shall award grants to 

3 States (through State health departments or other State 

4 agencies working in consultation with the State health 

5 agency) to enable such States to provide assistance to em6 ployers that employ not to exceed 100 employees to enable 

7 such employers to establish and operate worksite wellness 

8 programs for their employees. 

9 (b) APPLICATION.—To be eligible to receive a grant 

10 under subsection (a), a State shall prepare and submit to 

11 the Secretary an application at such time, in such manner, 

12 and containing such information as the Secretary may re13 quire, including— 

14 (1) a description of the manner in which the 

15 State intends to use amounts received under the 

16 grant; and 

17 (2) assurances that the State will only use 

18 amounts provided under such grant to provide as19 sistance to employers that can demonstrate that they 

20 are in compliance with minimum program character21 istics (relative to scope and regularity of services of22 fered) that are developed by the Secretary in con23 sultation with experts in public health and represent24 atives of small employers. 


bajohnson on PROD1PC77 with BILLS
109 

•S 158 IS

1 (c) ALLOCATION.—Grants shall be allocated among 

2 States based on the population of individuals employed by 

3 small employers in such States. 

4 (d) PROGRAM CHARACTERISTICS.—In developing 

5 minimum program characteristics under subsection (b)(2), 

6 the Secretary shall ensure that all activities established or 

7 enhanced under a grant under this section have clearly 

8 defined goals and objectives and demonstrate how receipt 

9 of such assistance will help to achieve established State 

10 or local health objectives based on the National Health 

11 Promotion and Disease Prevention Objectives. 

12 (e) USE OF FUNDS.—Amounts received under a 

13 grant awarded under subsection (a) shall be used by a 

14 State to provide grants to employers (as described in sub15 section (a)), nonprofit organizations, or public authorities, 

16 or to operate State-based worksite wellness programs. 

17 (f) SPECIAL EMPHASIS.—In funding employer work18 site wellness projects under this section, a State shall give 

19 special emphasis to— 

20 (1) the development of joint wellness programs 

21 between employers; 

22 (2) the development of employee assistance pro23 grams dealing with substance abuse; 


bajohnson on PROD1PC77 with BILLS
110 

•S 158 IS

1 (3) maximizing the use of, and coordination 

2 with, existing community resources such as non3 profit health organizations; and 

4 (4) encouraging the participation of dependents 

5 of employees and retirees in wellness programs. 

6 (g) AUTHORIZATION OF APPROPRIATIONS.—There 

7 are authorized to be appropriated to carry out this section, 

8 such sums as may be necessary for each of fiscal years 

9 2008 through 2012. 

10 SEC. 603. COMPREHENSIVE SCHOOL HEALTH EDUCATION. 

11 (a) IN GENERAL.—The Secretary shall use amounts 

12 appropriated in each fiscal year under subsection (d) to 

13 expand comprehensive school health education programs 

14 administered by the Centers for Disease Control and Pre15 vention under sections 301 and 311 of the Public Health 

16 Service Act (42 U.S.C. 241 and 243). 

17 (b) SPECIFIED USE OF FUNDS.—In meeting the re18 quirement of subsection (a), the Secretary shall expand 

19 the number of children receiving planned, sequential kin20 dergarten through 12th grade comprehensive school edu21 cation as a component of comprehensive programs of 

22 school health, including— 

23 (1) physical education programs that provide 

24 lifelong physical activity; 

25 (2) healthy school food service selections; 


bajohnson on PROD1PC77 with BILLS
111 

•S 158 IS

1 (3) programs that promote a healthy and safe 

2 school environment; 

3 (4) schoolsite health promotion for faculty and 

4 staff; 

5 (5) integrated school and community health 

6 promotion efforts; and 

7 (6) school nursing disease prevention and 

8 health promotion services. 

9 (c) COORDINATION OF EXISTING PROGRAMS.—The 

10 Secretary of Health and Human Services, the Secretary 

11 of Education, and the Secretary of Agriculture, shall work 

12 cooperatively to coordinate existing school health edu13 cation programs within the jurisdiction of their respective 

14 Departments in a manner that maximizes the efficiency 

15 and effectiveness of Federal expenditures for such pro16 grams. 

17 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

18 are authorized to be appropriated to carry out this section, 

19 such sums as may be necessary for each of fiscal years 

20 2008 through 2012. 

21 TITLE VII—MEDICARE FAIRNESS 

22 Subtitle A—Medicare Value and 

23 Quality Demonstration 

24 SEC. 701. FINDINGS. 

25 The Senate makes the following findings: 


bajohnson on PROD1PC77 with BILLS
112 

•S 158 IS

1 (1) The United States Government should re2 ward physicians, hospitals, and other health care 

3 providers that provide high-quality, cost-effective 

4 health care to beneficiaries under the medicare pro5 gram. 

6 (2) The Journal of the American Medical Asso7 ciation has published quality indicators in an article 

8 entitled ‘‘Quality of Medical Care Delivered to Medi9 care Beneficiaries: A Profile at State and National 

10 Levels’’. 

11 (3) The cost of health care is— 

12 (A) reflected in the type and volume of 

13 physicians’ services and in physician ordering 

14 and prescribing behavior; and 

15 (B) reflected in the amount of the average 

16 payment to hospitals under the medicare pro17 gram for each medicare beneficiary in each 

18 State. 

19 (4) Physician and hospital practice patterns 

20 contribute to the total cost and quality of care for 

21 each medicare beneficiary in each State. 

22 (5) The original medicare fee-for-service pro23 gram under parts A and B of title XVIII of the So24 cial Security Act does not include a mechanism to 

25 pay for interventions designed to improve quality of 


bajohnson on PROD1PC77 with BILLS
113 

•S 158 IS

1 care. While the framework for payments to managed 

2 care organizations under the Medicare+Choice pro3 gram under part C of such title allows for the re4 allocation of capitation revenues to cover such things 

5 as disease state management and quality improve6 ment infrastructure, even the most optimistic projec7 tions for managed care enrollment leave the majority 

8 of medicare beneficiaries in the original medicare 

9 fee-for-service program. 

10 SEC. 702. DEMONSTRATION PROJECT TO ENCOURAGE THE 

11 PROVISION OF HIGH-QUALITY, COST-EFFEC12 TIVE INPATIENT HOSPITAL SERVICES. 

13 (a) PURPOSE.—The purpose of the demonstration 

14 project conducted under this section is to encourage the 

15 provision of high-quality, cost-effective health care to 

16 beneficiaries under the Medicare program under title 

17 XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 

18 by providing incentive payments to hospitals located in 

19 States in which high-quality and cost-effective services are 

20 being provided in order to finance further quality improve21 ments. 

22 (b) DEMONSTRATION PROJECT.— 

23 (1) ESTABLISHMENT.—Not later than 6 

24 months after the date of enactment of this Act, the 


bajohnson on PROD1PC77 with BILLS
114 

•S 158 IS

1 Secretary shall establish a demonstration project 

2 under which— 

3 (A) the Secretary provides bonus payments 

4 to providers of inpatient hospital services that 

5 deliver high-quality health care at low costs in 

6 accordance with the methodology established by 

7 the Agency for Healthcare Research and Qual8 ity under paragraph (2); and 

9 (B) the Secretary funds a plan at each site 

10 to increase the number of providers of inpatient 

11 hospital services that provide high-quality, low12 cost health care to beneficiaries under the Medi13 care program under title XVIII of the Social 

14 Security Act. 

15 (2) VALUE AND QUALITY RANKING METHOD16 OLOGY.— 

17 (A) IN GENERAL.—The Agency for 

18 Healthcare Research and Quality shall establish 

19 a value and quality ranking methodology under 

20 which the Secretary awards bonus payments to 

21 providers of inpatient hospital services located 

22 in those States that demonstrate that such pro23 viders in the State are providing high value be24 cause of the high-quality, cost-effective health 


bajohnson on PROD1PC77 with BILLS
115 

•S 158 IS

1 care services being provided to medicare bene2 ficiaries. 

3 (B) BASIS.—The methodology established 

4 under subparagraph (A) shall be based on the 

5 Medicare quality indicators determined by the 

6 Secretary to be appropriate. 

7 (3) SITES.—The Secretary shall select 2 States 

8 in which to conduct the demonstration project— 

9 (A) from among the top 25 States (as 

10 ranked using the methodology established under 

11 paragraph (2)) that are also among the group 

12 of 25 States with the lowest per capita cost to 

13 the Medicare program under title XVIII of the 

14 Social Security Act during the most recent 12- 

15 month period for which data are available; and 

16 (B) based upon information contained in 

17 applications submitted to the Secretary by such 

18 States at such time, in such form and manner, 

19 and containing such information as the Sec20 retary may require. 

21 (4) DURATION OF PROJECT.—The demonstra22 tion project shall be conducted over a 5-year period. 

23 (c) REPORTS.—The Secretary shall submit to the ap24 propriate committees of Congress interim reports on the 

25 demonstration project and a final report on the project 


bajohnson on PROD1PC77 with BILLS
116 

•S 158 IS

1 within 6 months after the conclusion of the project to2 gether with recommendations for such legislative or ad3 ministrative action as the Secretary determines appro4 priate. 

5 (d) WAIVER.—The Secretary shall waive such provi6 sions of titles XI and XVIII of the Social Security Act 

7 (42 U.S.C. 1301 et seq. and 1395 et seq.) as may be nec8 essary to conduct the demonstration project under this 

9 section. 

10 (e) DEFINITIONS.—In this section: 

11 (1) PROVIDER OF INPATIENT HOSPITAL SERV12 ICES.—The term ‘‘provider of inpatient hospital 

13 services’’ means any individual or entity that re14 ceives payment under the Medicare program under 

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

16 1395 et seq.) for providing an inpatient hospital 

17 service (as defined in section 1861(b) of such Act 

18 (42 U.S.C. 1395x(b))). 

19 (2) SECRETARY.—The term ‘‘Secretary’’ means 

20 the Secretary of Health and Human Services. 

21 (f) FUNDING.—There are appropriated from the Fed22 eral Hospital Insurance Trust Fund under section 1817 

23 of the Social Security Act (42 U.S.C. 1395i) such sums 

24 as the Secretary determines are necessary to conduct the 

25 demonstration project under this section. 


bajohnson on PROD1PC77 with BILLS
117 

•S 158 IS

1 SEC. 703. DEMONSTRATION PROJECT TO ENCOURAGE THE 

2 PROVISION OF HIGH-QUALITY, COST-EFFEC3 TIVE PHYSICIANS’ SERVICES. 

4 (a) PURPOSE.—The purpose of the demonstration 

5 project conducted under this section is to encourage the 

6 provision of high-quality, cost-effective health care to 

7 beneficiaries under the Medicare program under title 

8 XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) 

9 by providing incentive payments to physicians located in 

10 States in which high-quality and cost-effective services are 

11 being provided in order to finance further quality improve12 ments. 

13 (b) DEMONSTRATION PROJECT.— 

14 (1) ESTABLISHMENT.—Not later than 6 

15 months after the date of enactment of this Act, the 

16 Secretary shall establish a demonstration project 

17 under which— 

18 (A) the Secretary provides bonus payments 

19 to providers of physicians’ services that deliver 

20 high-quality, cost-effective health care in ac21 cordance with the methodology established by 

22 the Agency for Healthcare Research and Qual23 ity under paragraph (2); and 

24 (B) the Secretary funds a plan in each 

25 State to increase the number of providers of 

26 physicians’ services that provide high-quality, 


bajohnson on PROD1PC77 with BILLS
118 

•S 158 IS

1 cost-effective health care to beneficiaries under 

2 the medicare program under title XVIII of the 

3 Social Security Act. 

4 (2) VALUE AND QUALITY RANKING METHOD5 OLOGY.— 

6 (A) IN GENERAL.—The Agency for 

7 Healthcare Research and Quality shall establish 

8 a value and quality ranking methodology under 

9 which the Secretary awards bonus payments to 

10 providers of physicians’ services located in those 

11 States that demonstrate that such providers in 

12 the State are providing high value because of 

13 the high-quality, cost-effective health care serv14 ices being provided to Medicare beneficiaries. 

15 (B) BASIS.—The methodology established 

16 under subparagraph (A) shall be based on the 

17 Medicare quality indicators determnined by the 

18 Secretary to be appropriate. 

19 (3) SITES.—The Secretary shall select 2 States 

20 in which to conduct the demonstration project— 

21 (A) from among the top 25 States (as 

22 ranked using the methodology established under 

23 paragraph (2)) that are also among the 25 

24 States with the lowest per capita cost to the 

25 Medicare program under title XVIII of the SoVerDate Aug 31 2005 03:32 Jan 09, 2007 Jkt 059200 PO 00000 Frm 00118 Fmt 6652 Sfmt 6201 E:\BILLS\S158.IS S158

bajohnson on PROD1PC77 with BILLS
119 

•S 158 IS

1 cial Security Act during the most recent 12- 

2 month period for which data are available; and 

3 (B) based upon information contained in 

4 applications submitted to the Secretary by such 

5 States at such time, in such form and manner, 

6 and containing such information as the Sec7 retary may require. 

8 (4) DURATION OF PROJECT.—The demonstra9 tion project shall be conducted over a 5-year period. 

10 (c) REPORTS.—The Secretary shall submit to the ap11 propriate committees of Congress interim reports on the 

12 demonstration project and a final report on the project 

13 within 6 months after the conclusion of the project to14 gether with recommendations for such legislative or ad15 ministrative action as the Secretary determines appro16 priate. 

17 (d) WAIVER.—The Secretary shall waive such provi18 sions of titles XI and XVIII of the Social Security Act 

19 (42 U.S.C. 1301 et seq. and 1395 et seq.) as may be nec20 essary to conduct the demonstration project under this 

21 section. 

22 (e) DEFINITIONS.—In this section: 

23 (1) PROVIDER OF PHYSICIANS’ SERVICES.—The 

24 term ‘‘provider of physicians’ services’’ means any 

25 individual or entity that receives payment under the 


bajohnson on PROD1PC77 with BILLS
120 

•S 158 IS

1 Medicare program under title XVIII of the Social 

2 Security Act (42 U.S.C. 1395 et seq.) for providing 

3 physicians’ services (as defined in section 1861(q) of 

4 such Act (42 U.S.C. 1395x(q))). 

5 (2) SECRETARY.—The term ‘‘Secretary’’ means 

6 the Secretary of Health and Human Services. 

7 (f) FUNDING.—There are appropriated from the Fed8 eral Supplementary Medical Insurance Trust Fund under 

9 section 1841 of the Social Security Act (42 U.S.C. 1395t) 

10 such sums as the Secretary determines are necessary to 

11 conduct the demonstration project under this section. 

12 Subtitle B—Graduate Medical 

13 Education Demonstration 

14 SEC. 711. CLINICAL ROTATION DEMONSTRATION PROJECT. 

15 (a) ESTABLISHMENT.—Not later than 6 months after 

16 the date of enactment of this Act, the Secretary shall es17 tablish a demonstration project that provides for dem18 onstration grants designed to provide financial or other 

19 incentives to hospitals to attract educators and clinical 

20 practitioners so that hospitals that serve beneficiaries 

21 under the Medicare program under title XVIII of the So22 cial Security Act (42 U.S.C. 1395 et seq.) who are resi23 dents of underserved areas may host clinical rotations. 

24 (b) DURATION OF PROJECT.—The demonstration 

25 project shall be conducted over a 5-year period. 


bajohnson on PROD1PC77 with BILLS
121 

•S 158 IS

1 (c) FUNDING.— 

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

3 the Secretary shall pay the costs of the demonstra4 tion project conducted under this section from the 

5 Federal Hospital Insurance Trust Fund under sec6 tion 1817 of the Social Security Act (42 U.S.C. 

7 1395i). 

8 (2) CAP ON FUNDING.—The Secretary may not 

9 expend more than $20,000,000 to conduct the dem10 onstration project under this section. 

11 (3) BUDGET NEUTRALITY FOR DEMONSTRA12 TION PROJECT.—Notwithstanding any other provi13 sion of law, the Secretary shall provide for an appro14 priate reduction in the aggregate amount of addi15 tional payments made under subsection (d)(5)(B) of 

16 section 1886 of the Social Security Act (42 U.S.C. 

17 1395ww) for the indirect costs of medical education 

18 and for direct graduate medical education costs 

19 under subsection (h) of such section to reflect any 

20 increase in amounts expended from the Federal Hos21 pital Insurance Trust Fund as a result of the dem22 onstration project conducted under this section. 

23 (d) REPORTS.—The Secretary shall submit to the ap24 propriate committees of Congress interim reports on the 

25 demonstration project and a final report on such project 


bajohnson on PROD1PC77 with BILLS
122 

•S 158 IS

1 within 6 months after the conclusion of the project to2 gether with recommendations for such legislative or ad3 ministrative action as the Secretary determines appro4 priate. 

5 (e) WAIVER.—The Secretary shall waive such provi6 sions of titles XI and XVIII of the Social Security Act 

7 (42 U.S.C. 1301 et seq. and 1395 et seq.) as may be nec8 essary to conduct the demonstration project under this 

9 section. 

10 (f) DEFINITIONS.—In this section: 

11 (1) HOSPITAL.—The term ‘‘hospital’’ means 

12 any subsection (d) hospital (as defined in section 

13 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 

14 1395ww(d)(1)(B)) that had indirect or direct costs 

15 of medical education during the most recent cost re16 porting period preceding the date of enactment of 

17 this Act. 

18 (2) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of Health and Human Services. 

20 (3) UNDERSERVED AREA.—The term ‘‘under21 served area’’ means such medically underserved 

22 urban areas and medically underserved rural areas 

23 as the Secretary may specify. 

Æ 


bajohnson on PROD1PC77 with BILLS