II 

109TH CONGRESS 

2D SESSION S. 3776 

To ensure the provision of high-quality health care coverage for uninsured 

individuals through State health care initiatives that expand coverage 

and access and improve quality and efficiency in the health care system. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 2, 2006 

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

referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To ensure the provision of high-quality health care coverage 

for uninsured individuals through State health care initiatives that expand coverage and access and improve 

quality and efficiency in the health care system. 

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. 

4 This Act may be cited as the ‘‘State-Based Health 

5 Care Reform Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 


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1 (1) Health care remains one of the most impor2 tant domestic issues for Americans. 

3 (2) According to the Census Bureau, 

4 45,800,000 Americans were uninsured in 2004. Over 

5 8,000,000 of these individuals were children. The 

6 number of uninsured has increased by 6,000,000 

7 since 2000. 

8 (3) According to the Commonwealth Fund, 

9 many of the uninsured are employed, and an in10 creasing number are from middle-income families: 

11 (A) Two in five working-age Americans 

12 with annual incomes between $20,000 and 

13 $40,000 were uninsured for at least part of 

14 2005. In 2001, just over one-quarter of those 

15 with moderate incomes were uninsured. 

16 (B) Of the estimated 48,000,000 American 

17 adults who spent any time uninsured in 2005, 

18 two-thirds were in families where at least one 

19 person was working full time. 

20 (4) The uninsured face serious financial prob21 lems, and often have to choose between medical care 

22 and other basic necessities. According to the Com23 monwealth Fund, more than half of uninsured 

24 adults reported medical debt or problems paying 

25 bills. Of those, nearly half used up all their savings 


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1 to pay their bills. Two of five were unable to pay for 

2 basic necessities like food, heat, or rent because of 

3 medical bills. 

4 (5) Health outcomes for the uninsured are 

5 worse than health outcomes for those who are cov6 ered. According to the Institute of Medicine, the 

7 number of excess deaths among uninsured adults 

8 ages 25 to 64 is estimated at around 18,000 a year. 

9 Fifty-nine percent of uninsured adults who had a 

10 chronic illness, such as diabetes or asthma, did not 

11 fill a prescription or skipped their medications be12 cause they could not afford them. 

13 (6) The cost of providing care to the uninsured 

14 weighs heavily on the United States economy. The 

15 United States spends twice as much as any other in16 dustrialized nation on health care, and more than 

17 the United Kingdom’s entire gross domestic product. 

18 According to the Kaiser Family Foundation, 

19 $124,600,000,000 was spent on care provided to in20 dividuals who were uninsured for all or part of 2004. 

21 Despite this spending, the United States ranks sec22 ond to last among industrialized countries in infant 

23 mortality rates. 


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1 SEC. 3. PURPOSE. 

2 It is the purpose of this Act to establish a program 

3 to award grants to States for the establishment of State4 based projects to— 

5 (1) increase health care coverage for uninsured 

6 individuals in selected States within the 5-year pe7 riod beginning on the date of enactment of this Act; 

8 (2) ensure high-quality health care coverage 

9 that provides adequate access to providers, services, 

10 and benefits; 

11 (3) improve the efficiency of health care spend12 ing and lower the cost of health care for the partici13 pating State; and 

14 (4) encourage universal health care coverage 

15 within States. 

16 TITLE I—HEALTH CARE 

17 COVERAGE 

18 SEC. 101. STATE-BASED HEALTH CARE COVERAGE PRO19 GRAM. 

20 (a) APPLICATIONS BY STATES, MULTI-STATE RE21 GIONS, LOCAL GOVERNMENTS, AND TRIBES.— 

22 (1) STATE APPLICATION.—A State, in consulta23 tion with local governments, Indian tribes, and In24 dian organizations involved in the provision of health 

25 care (referred to in this Act as a ‘‘State’’), may 

26 apply for a State health care reform grant for the 


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1 entire State (or for regions of two or more States) 

2 under paragraph (2). 

3 (2) SUBMISSION OF APPLICATION.—In accord4 ance with this section, each State desiring to imple5 ment a State health care reform program shall sub6 mit an application to the Health Care Reform Task 

7 Force established under subsection (b) (referred to 

8 in this section as the ‘‘Task Force’’) for approval. 

9 (3) LOCAL GOVERNMENT AND OTHER APPLICA10 TIONS.— 

11 (A) IN GENERAL.—Where a State fails to 

12 submit an application under this section, a unit 

13 of local government of such State, or a consor14 tium of such units of local governments, may 

15 submit an application directly to the Task 

16 Force for programs or projects under this sec17 tion. Such an application shall be subject to the 

18 requirements of this section. 

19 (B) OTHER APPLICATIONS.—Subject to 

20 such additional regulations as the Secretary 

21 may prescribe, a unit of local government, In22 dian tribe, or Indian health organization may 

23 submit an application under this section, wheth24 er or not the State submits such an application, 

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1 onstrate unique demographic needs or a signifi2 cant population size that warrants a substate 

3 program under this subsection. 

4 (b) HEALTH CARE REFORM TASK FORCE.— 

5 (1) ESTABLISHMENT.—Not later than 180 days 

6 after the date of the enactment of this Act, the Sec7 retary shall establish a Health Care Reform Task 

8 Force in accordance with this subsection. 

9 (2) MEMBERSHIP.— 

10 (A) IN GENERAL.—The Task Force shall 

11 be comprised of not less than 20 members to be 

12 appointed by the Comptroller General in ac13 cordance with subparagraph (B) and the Sec14 retary. 

15 (B) APPOINTED MEMBERS.—With respect 

16 to the members appointed by the Comptroller 

17 General under subparagraph (A)— 

18 (i) such members shall include con19 sumers of health services who represent in20 dividuals who have not had health insur21 ance coverage during the 2-year period 

22 prior to the appointment and who have 

23 had a chronic illness and are disabled; 

24 (ii) such members shall include indi25 viduals— 


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1 (I) with expertise in the financ2 ing of, and paying for, benefits and 

3 access to care; 

4 (II) representing business and 

5 labor; and 

6 (III) who are health care pro7 viders; 

8 (iii) such members shall include indi9 viduals with expertise and experience in 

10 State health policy, State government, and 

11 local government; 

12 (iv) such members shall have a broad 

13 geographic representation and be balanced 

14 between urban and rural areas; and 

15 (v) such members shall not include 

16 elected officials or paid employees or rep17 resentatives of associations or advocacy or18 ganizations involved in the health care sys19 tem. 

20 (3) GENERAL DUTIES.—The Task Force 

21 shall— 

22 (A) formally approve the application of a 

23 State for a grant under this section and the ad24 ministration of a reform program within the 

25 State; 


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1 (B) establish minimum performance meas2 ures with respect to coverage, quality, and cost 

3 of State programs, as described under sub4 section (c)(1); 

5 (C) conduct a thorough review of the grant 

6 application from a State and carry on a dia7 logue with such State applicants concerning 

8 possible modifications and adjustments; 

9 (D) be responsible for monitoring the sta10 tus and progress achieved under programs and 

11 projects granted under this section; and 

12 (E) report to the public concerning 

13 progress made by States with respect to the 

14 performance measures and goals established 

15 under this Act, the periodic progress of the 

16 State relative to its State performance meas17 ures and goals, and the State program applica18 tion procedures, by region and State jurisdic19 tion. 

20 (4) PERIOD OF APPOINTMENT; REPRESENTA21 TION REQUIREMENTS; VACANCIES.—Members shall 

22 be appointed for the life of the Task Force. In ap23 pointing members under paragraph (1)(A), the 

24 Comptroller General shall ensure the representation 

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1 graphic distribution of such members. Any vacancy 

2 on the Task Force shall not affect its powers, but 

3 shall be filled within a reasonable period of time and 

4 in the same manner as the original appointment. 

5 (5) CHAIRPERSON, MEETINGS.— 

6 (A) CHAIRPERSON.—The Task Force shall 

7 select a Chairperson from among its members. 

8 (B) QUORUM.—A majority of the members 

9 of the Task Force shall constitute a quorum, 

10 but a lesser number of members may hold hear11 ings. 

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

13 after the date on which all members of the 

14 Task Force have been appointed, the Task 

15 Force shall hold its first meeting. The Task 

16 Force shall meet at the call of the Chairperson. 

17 (6) POWERS OF THE TASK FORCE.— 

18 (A) NEGOTIATIONS WITH STATES.—The 

19 Task Force may conduct detailed discussions 

20 and negotiations with States submitting appli21 cations under this section, either individually or 

22 in groups, to facilitate a final set of rec23 ommendations for purposes of subsection 

24 (c)(4)(B). Such negotiations shall be conducted 

25 in a public forum. 


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1 (B) SUBCOMMITTEES.—The Task Force 

2 may establish such subcommittees as the Task 

3 Force determines are necessary to increase the 

4 efficiency of the Task Force. 

5 (C) HEARINGS.—The Task Force may 

6 hold hearings, so long as the Task Force deter7 mines such meetings to be necessary in order to 

8 carry out the purposes of this Act, sit and act 

9 at such times and places, take such testimony, 

10 and receive such evidence as the Task Force 

11 considers advisable to carry out the purposes of 

12 this subsection. 

13 (D) ANNUAL MEETING.—In addition to 

14 other meetings the Task Force may hold, the 

15 Task Force shall hold an annual meeting with 

16 the participating States under this section for 

17 the purpose of having States report progress to18 ward the purposes in section 3 and for an ex19 change of information. 

20 (E) INFORMATION.—The Task Force may 

21 obtain information directly from any Federal 

22 department or agency as the Task Force con23 siders necessary to carry out the provisions of 

24 this subsection. Upon request of the Chair25 person of the Task Force, the head of such deVerDate Aug 31 2005 05:03 Aug 04, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3776.IS S3776

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1 partment or agency shall furnish such informa2 tion to the Task Force. 

3 (F) CONTRACTING.—The Task Force may 

4 enter into contracts with qualified independent 

5 organizations (such as Mathematica or the In6 stitute of Medicine) to obtain necessary infor7 mation for the development of the performance 

8 standards, reporting requirements, financing 

9 mechanisms, or any other matters determined 

10 by the Task Force to be appropriate and rea11 sonable. 

12 (G) POSTAL SERVICES.—The Task Force 

13 may use the United States mails in the same 

14 manner and under the same conditions as other 

15 departments and agencies of the Federal Gov16 ernment. 

17 (7) PERSONNEL MATTERS.— 

18 (A) COMPENSATION.—Each member of the 

19 Task Force who is not an officer or employee 

20 of the Federal Government shall be com21 pensated at a rate equal to the daily equivalent 

22 of the annual rate of basic pay prescribed for 

23 level IV of the Executive Schedule under section 

24 5315 of title 5, United States Code, for each 

25 day (including travel time) during which such 


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1 member is engaged in the performance of the 

2 duties of the Task Force. All members of the 

3 Task Force who are officers or employees of the 

4 United States shall serve without compensation 

5 in addition to that received for their services as 

6 officers or employees of the United States. 

7 (B) TRAVEL EXPENSES.—The members of 

8 the Task Force shall be allowed travel expenses, 

9 including per diem in lieu of subsistence, at 

10 rates authorized for employees of agencies 

11 under subchapter I of chapter 57 of title 5, 

12 United States Code, while away from their 

13 homes or regular places of business in the per14 formance of services for the Task Force. 

15 (C) STAFF.—The Chairperson of the Task 

16 Force may, without regard to the civil service 

17 laws and regulations, appoint and terminate 

18 personnel as may be necessary to enable the 

19 Task Force to perform its duties. 

20 (D) DETAIL OF GOVERNMENT EMPLOY21 EES.—Any Federal Government employee may 

22 be detailed to the Task Force without reim23 bursement, and such detail shall be without 

24 interruption or loss of civil service status or 

25 privilege. 


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1 (E) TEMPORARY AND INTERMITTENT

2 SERVICES.—The Chairperson of the Task Force 

3 may procure temporary and intermittent serv4 ices under section 3109(b) of title 5, United 

5 States Code, at rates for individuals which do 

6 not exceed the daily equivalent of the annual 

7 rate of basic pay prescribed for level V of the 

8 Executive Schedule under section 5316 of such 

9 title. 

10 (8) FUNDING.—For the purpose of carrying out 

11 this subsection, there are authorized to be appro12 priated $4,000,000 for fiscal year 2007 and each fis13 cal year thereafter. 

14 (c) STATE PLAN.— 

15 (1) IN GENERAL.—A State that seeks to receive 

16 a grant to operate a program under this section 

17 shall prepare and submit to the Task Force, as part 

18 of the application under subsection (a), a State 

19 health care plan that— 

20 (A) designates the lead State entity that 

21 will be responsible for administering the State 

22 program; 

23 (B) contains a list of the minimum benefits 

24 that will be provided to all individuals covered 

25 under the State program, which shall, at a minVerDate Aug 31 2005 05:03 Aug 04, 2006 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S3776.IS S3776

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1 imum, provide for coverage that is comparable 

2 to the coverage provided for benefits under any 

3 of the plans offered under the Federal Employ4 ees Health Benefits Program under chapter 89 

5 of title 5, United States Code or the minimum 

6 benefits required under the program under title 

7 XXI of the Social Security Act (42 U.S.C. 

8 1397aa et seq.); 

9 (C) includes specific target dates for de10 creasing the number of uninsured individuals in 

11 the State; and 

12 (D) otherwise complies with this sub13 section. 

14 (2) COVERAGE.—With respect to coverage for 

15 uninsured individuals in the State, the State plan 

16 shall— 

17 (A) provide and describe the manner in 

18 which the State will ensure that an increased 

19 number of such individuals residing within the 

20 State will have expanded access to health care 

21 coverage with a specific 5-year target for reduc22 tion in the number of uninsured individuals 

23 through either private or public program expan24 sion, or both, such description to include the 

25 manner in which the State will ensure expanded 


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1 access to health care coverage for low-income 

2 individuals within the 5-year target period; 

3 (B) provide for improvements in the avail4 ability of appropriate health care services that 

5 will increase access to care in urban, rural, and 

6 frontier areas of the State with medically un7 derserved populations or where there is an inad8 equate supply of health care providers; and 

9 (C) describe the minimum benefits package 

10 that will be provided to every beneficiary, in11 cluding information on affordability for bene12 ficiaries. 

13 (3) EFFECTIVENESS AND EFFICIENCY.—The 

14 State plan shall include provisions to improve the ef15 fectiveness and efficiency of health care in the State, 

16 including provisions to attempt to reduce the overall 

17 health care costs within the State. 

18 (4) COSTS.— 

19 (A) IN GENERAL.—With respect to the 

20 costs of health care provided under the pro21 gram, the State plan shall— 

22 (i) describe the public and private sec23 tor financing to be provided for the State 

24 health program; 


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1 (ii) estimate the amount of Federal, 

2 State, and local expenditures, as well as 

3 the costs to business and individuals under 

4 the State health program; 

5 (iii) describe how the State plan will 

6 ensure the financial solvency of the State 

7 health program; and 

8 (iv) contain assurances that the State 

9 will comply with the premium and cost 

10 sharing limitations described in subpara11 graph (B). 

12 (B) PREMIUM AND COST SHARING LIMITA13 TIONS.— 

14 (i) PREMIUMS.—In providing health 

15 care coverage under a State program 

16 under this Act, the State shall ensure 

17 that— 

18 (I) with respect to an individual 

19 whose family income is at or below 

20 100 percent of the poverty line, the 

21 State program shall not require— 

22 (aa) the payment of pre23 miums for such coverage; or 

24 (bb) the payment of cost 

25 sharing for such coverage in an 


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1 amount that exceeds .5 percent 

2 of the family’s income for the 

3 year involved; 

4 (II) with respect to an individual 

5 whose family income is greater than 

6 100 percent, but at or below 200 per7 cent, of the poverty line, the State 

8 program shall not require— 

9 (aa) the payment of pre10 miums for such coverage in ex11 cess of 20 percent of the average 

12 cost of providing benefits to an 

13 individual or family or 3 percent 

14 of the amount of the family’s in15 come for the year involved; or 

16 (bb) the payment of cost 

17 sharing for such coverage in an 

18 amount that, together with the 

19 premium amount, does not ex20 ceed 5 percent of the family’s in21 come for the year involved; and 

22 (III) with respect to an individual 

23 whose family income is greater than 

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1 cent, of the poverty line, the State 

2 program shall not require— 

3 (aa) the payment of pre4 miums for such coverage in ex5 cess of 20 percent of the average 

6 cost of providing benefits to an 

7 individual or family or 5 percent 

8 of the amount of the family’s in9 come for the year involved; or 

10 (bb) the payment of cost 

11 sharing for such coverage in an 

12 amount that, together with the 

13 premium amount, does not ex14 ceed 7 percent of the family’s in15 come for the year involved. 

16 (ii) DEFINITION.—For purposes of 

17 this subparagraph, the term ‘‘poverty line’’ 

18 has the meaning given such term in section 

19 2110(c)(5) of the Social Security Act (42 

20 U.S.C. 1397jj(c)(5)). 

21 (5) PROTECTION FOR LOWER INCOME INDIVID22 UALS.—The State plan may only vary premiums, 

23 deductibles, coinsurance, and other cost sharing 

24 under the plan based on the family income of the 

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1 viduals from families with higher income over indi2 viduals from families with lower income. 

3 (d) REVIEW; DETERMINATION; AND PROJECT PE4 RIOD.— 

5 (1) INITIAL REVIEW.—With respect to a State 

6 application for a grant under subsection (a), the 

7 Secretary and the Task Force shall, not later than 

8 90 days after receipt of such application, complete 

9 an initial review of such State application, an anal10 ysis of the scope of the proposal, and a determina11 tion of whether additional information is needed 

12 from the State. The Task Force shall advise the 

13 State within such 90-day period of the need to sub14 mit additional information. 

15 (2) FINAL DETERMINATION.—Not later than 90 

16 days after completion of the initial review under 

17 paragraph (1), the Task Force shall determine 

18 whether to approve such application. Such application may be approved only if 2 19 ⁄3 of the members of 

20 the Task Force vote to approve such application. 

21 (3) PROGRAM OR PROJECT PERIOD.—A State 

22 program or project may be approved for a period of 

23 not to exceed 5 years and may be extended for sub24 sequent 5-year periods upon approval by the Task 

25 Force and the Secretary, based upon achievement of 


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1 targets, except that a shorter period may be re2 quested by a State and granted by the Secretary. 

3 (e) REQUIRED CONGRESSIONAL ACTION.—It is the 

4 sense of the Senate that, not later than 45 days after re5 ceiving the report submitted under subsection (g)(2), each 

6 committee to which such report is submitted should hold 

7 at least 1 hearing concerning such report and the rec8 ommendations contained in such report. 

9 (f) FUNDING.— 

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

11 a grant to a State that has an application approved 

12 under subsection (d)(2) to enable such State to 

13 carry out the State health program under the grant. 

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

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

16 be determined based upon the recommendations of 

17 the Task Force, subject to the amount appropriated 

18 under subsection (k). 

19 (3) MATCHING REQUIREMENT.—To be eligible 

20 to receive a grant under paragraph (1), a State shall 

21 provide assurances to the Secretary that the State 

22 shall contribute to the costs of carrying out activities 

23 under the grant an amount equal to not less than 

24 the product of— 

25 (A) the amount of the grant; and 


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1 (B) the sum of the enhanced FMAP for 

2 the State (as defined in section 2105(b) of the 

3 Social Security Act (42 U.S.C. 1397ee(b))) and 

4 5 percent. 

5 (4) MAINTENANCE OF EFFORT.—A State, in 

6 utilizing the proceeds of a grant received under 

7 paragraph (1), shall maintain the expenditures of 

8 the State for health care coverage purposes for the 

9 support of direct health care delivery at a level equal 

10 to not less than the level of such expenditures main11 tained by the State for the fiscal year preceding the 

12 fiscal year for which the grant is received. 

13 (g) REPORTS.— 

14 (1) BY STATES.—Each State that has received 

15 a grant under subsection (f)(1) shall submit to the 

16 Task Force an annual report for the period rep17 resenting the respective State’s fiscal year, that shall 

18 contain a description of the results, with respect to 

19 health care coverage, quality, and costs, of the State 

20 program. 

21 (2) BY TASK FORCE.—At the end of the 5-year 

22 period beginning on the date on which the Secretary 

23 awards the first grant under paragraph (1), the 

24 Task Force established under subsection (b) shall 

25 prepare and submit to the appropriate committees of 


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1 Congress, a report on the progress made by States 

2 receiving grants under paragraph (1) in meeting the 

3 goals of expanded coverage, improved quality, and 

4 cost containment through performance measures es5 tablished during the 5-year period of the grant. Such 

6 report shall contain— 

7 (A) the recommendation of the Task Force 

8 concerning any future action that Congress 

9 should take concerning health care reform, in10 cluding whether or not to extend the program 

11 established under this subsection; 

12 (B) an evaluation of the effectiveness of 

13 State health care coverage reforms in— 

14 (i) expanding health care coverage for 

15 State residents; 

16 (ii) improving the quality of health 

17 care provided in the States; and 

18 (iii) reducing or containing health 

19 care costs in the States; 

20 (C) recommendations regarding the advis21 ability of increasing Federal financial assistance 

22 for State ongoing or future health program ini23 tiatives, including the amount and source of 

24 such assistance; and 


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1 (D) recommendations concerning whether 

2 any particular State program should serve as a 

3 model for implementation as a national health 

4 care reform program. 

5 (h) PROTECTIONS FOR FEDERAL PROGRAMS.— 

6 (1) IN GENERAL.—Nothing in this Act, or in 

7 section 1115 of the Social Security Act (42 U.S.C. 

8 1315) shall be construed as authorizing the Sec9 retary, the Task Force, a State, or any other person 

10 or entity to alter or affect in any way the provisions 

11 of titles XIX and XXI of such Act (42 U.S.C. 1396 

12 et seq. and 1397 et seq.) or the regulations imple13 menting such titles. 

14 (2) MAINTENANCE OF EFFORT.—No payment 

15 may be made under this section if the State adopts 

16 criteria for benefits, income, and resource standards 

17 and methodologies for purposes of determining an 

18 individual’s eligibility for medical assistance under 

19 the State plan under title XIX that are more restric20 tive than those applied as of the date of enactment 

21 of this Act. 

22 (i) MISCELLANEOUS PROVISIONS.— 

23 (1) APPLICATION OF CERTAIN REQUIRE24 MENTS.— 


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1 (A) RESTRICTION ON APPLICATION OF

2 PREEXISTING CONDITION EXCLUSIONS.— 

3 (i) IN GENERAL.—Subject to subpara4 graph (B), a State shall not permit the im5 position of any preexisting condition exclu6 sion for covered benefits under a program 

7 or project under this section. 

8 (ii) GROUP HEALTH PLANS AND

9 GROUP HEALTH INSURANCE COVERAGE.— 

10 If the State program or project provides 

11 for benefits through payment for, or a con12 tract with, a group health plan or group 

13 health insurance coverage, the program or 

14 project may permit the imposition of a pre15 existing condition exclusion but only inso16 far and to the extent that such exclusion is 

17 permitted under the applicable provisions 

18 of part 7 of subtitle B of title I of the Em19 ployee Retirement Income Security Act of 

20 1974 and title XXVII of the Public Health 

21 Service Act. 

22 (B) COMPLIANCE WITH OTHER REQUIRE23 MENTS.—Coverage offered under the program 

24 or project shall comply with the requirements of 

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


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1 Health Service Act insofar as such require2 ments apply with respect to a health insurance 

3 issuer that offers group health insurance cov4 erage. 

5 (2) PREVENTION OF DUPLICATIVE PAY6 MENTS.— 

7 (A) OTHER HEALTH PLANS.—No payment 

8 shall be made to a State under this section for 

9 expenditures for health assistance provided for 

10 an individual to the extent that a private in11 surer (as defined by the Secretary by regulation 

12 and including a group health plan (as defined 

13 in section 607(1) of the Employee Retirement 

14 Income Security Act of 1974), a service benefit 

15 plan, and a health maintenance organization) 

16 would have been obligated to provide such as17 sistance but for a provision of its insurance con18 tract which has the effect of limiting or exclud19 ing such obligation because the individual is eli20 gible for or is provided health assistance under 

21 the plan. 

22 (B) OTHER FEDERAL GOVERNMENTAL

23 PROGRAMS.—Except as provided in any other 

24 provision of law, no payment shall be made to 

25 a State under this section for expenditures for 


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1 health assistance provided for an individual to 

2 the extent that payment has been made or can 

3 reasonably be expected to be made promptly (as 

4 determined in accordance with regulations) 

5 under any other federally operated or financed 

6 health care insurance program, other than an 

7 insurance program operated or financed by the 

8 Indian Health Service, as identified by the Sec9 retary. For purposes of this paragraph, rules 

10 similar to the rules for overpayments under sec11 tion 1903(d)(2) of the Social Security Act shall 

12 apply. 

13 (3) APPLICATION OF CERTAIN GENERAL PROVI14 SIONS.—The following sections of the Social Security 

15 Act shall apply to States under this section in the 

16 same manner as they apply to a State under such 

17 title XIX: 

18 (A) TITLE XIX PROVISIONS.— 

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

20 conflict of interest standards). 

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

22 section 1903(i) (relating to limitations on 

23 payment). 

24 (iii) Section 1903(w) (relating to limi25 tations on provider taxes and donations). 


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1 (iv) Section 1920A (relating to pre2 sumptive eligibility for children). 

3 (B) TITLE XI PROVISIONS.— 

4 (i) Section 1116 (relating to adminis5 trative and judicial review), but only inso6 far as consistent with this title. 

7 (ii) Section 1124 (relating to disclo8 sure of ownership and related informa9 tion). 

10 (iii) Section 1126 (relating to disclo11 sure of information about certain convicted 

12 individuals). 

13 (iv) Section 1128A (relating to civil 

14 monetary penalties). 

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

16 criminal penalties for certain additional 

17 charges). 

18 (vi) Section 1132 (relating to periods 

19 within which claims must be filed). 

20 (4) RELATION TO OTHER LAWS.— 

21 (A) HIPAA.—Health benefits coverage 

22 provided under a State program or project 

23 under this section shall be treated as creditable 

24 coverage for purposes of part 7 of subtitle B of 

25 title I of the Employee Retirement Income SeVerDate Aug 31 2005 05:03 Aug 04, 2006 Jkt 049200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S3776.IS S3776

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1 curity Act of 1974, title XXVII of the Public 

2 Health Service Act, and subtitle K of the Inter3 nal Revenue Code of 1986. 

4 (B) ERISA.—Nothing in this section shall 

5 be construed as affecting or modifying section 

6 514 of the Employee Retirement Income Secu7 rity Act of 1974 (29 U.S.C. 1144) with respect 

8 to a group health plan (as defined in section 

9 2791(a)(1) of the Public Health Service Act (42 

10 U.S.C. 300gg–91(a)(1))). 

11 (j) AUTHORIZATIONS.— 

12 (1) IN GENERAL.—There are appropriated in 

13 each of fiscal years 2007 through 2016 to carry out 

14 this Act, an amount equal to the amount of savings 

15 to the Federal Government in each such fiscal year 

16 as a result of the enactment of the provisions of title 

17 II. 

18 (2) USE OF FUNDS.—Amounts appropriated for 

19 a fiscal year under paragraph (1) and not expended 

20 may be used in subsequent fiscal years to carry out 

21 this section. 

22 (3) LIMITATION.—Notwithstanding any other 

23 provision of this Act, the total amount of funds ap24 propriated to carry out this Act through fiscal year 

25 2016 shall not exceed $32,000,000,000. 


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1 TITLE II—OFFSETS 

2 SEC. 201. INCREASE IN REBATES FOR COVERED OUT3 PATIENT DRUGS. 

4 Section 1927(c)(1)(B)(i) of the Social Security Act 

5 (42 U.S.C. 1396r–8(c)(1)(B)(i)) is amended— 

6 (1) in subclause (IV), by striking ‘‘and’’ after 

7 the semicolon; 

8 (2) in subclause (V)— 

9 (A) by inserting ‘‘and before January 1, 

10 2007,’’ after ‘‘1995,’’; and 

11 (B) by striking the period and inserting ‘‘; 

12 and’’; and 

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

14 ‘‘(VI) after December 31, 2006, 

15 is 20 percent.’’. 

16 SEC. 202. STUDENT AID REWARD PROGRAM. 

17 Part G of title IV of the Higher Education Act of 

18 1965 is amended by inserting after section 489 (20 U.S.C. 

19 1096) the end the following: 

20 ‘‘SEC. 489A. STUDENT AID REWARD PROGRAM. 

21 ‘‘(a) PROGRAM AUTHORIZED.—The Secretary shall 

22 carry out a Student Aid Reward Program to encourage 

23 institutions of higher education to participate in the stu24 dent loan program under this title that is most cost-effec25 tive for taxpayers. 


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1 ‘‘(b) PROGRAM REQUIREMENTS.—In carrying out the 

2 Student Aid Reward Program, the Secretary shall— 

3 ‘‘(1) provide to each institution of higher edu4 cation participating in the student loan program 

5 under this title that is most cost-effective for tax6 payers a Student Aid Reward Payment, in an 

7 amount determined in accordance with subsection 

8 (c), to encourage the institution to participate in 

9 that student loan program; 

10 ‘‘(2) require each institution of higher edu11 cation receiving a payment under this section to pro12 vide student loans under that student loan program 

13 for a period of 5 years from the date the payment 

14 is made; 

15 ‘‘(3) where appropriate, require that funds paid 

16 to institutions of higher education under this section 

17 be used to award students a supplement to such stu18 dents’ Pell Grants under subpart 1 of part A; 

19 ‘‘(4) permit such funds to also be used to award 

20 lower and middle income graduate students need21 based grants; and 

22 ‘‘(5) encourage all institutions of higher edu23 cation to participate in the Student Aid Reward Pro24 gram. 


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1 ‘‘(c) AMOUNT.—The amount of a Student Aid Re2 ward Payment under this section shall be not less than 

3 50 percent, and not more than 75 percent, of the savings 

4 to the Federal Government generated by the institution’s 

5 participation in the student loan program under this title 

6 that is most cost-effective for taxpayers instead of the in7 stitution’s participation in the student loan program not 

8 cost-effective for taxpayers. 

9 ‘‘(d) TRIGGER TO ENSURE COST NEUTRALITY.— 

10 ‘‘(1) LIMIT TO ENSURE COST NEUTRALITY.— 

11 Notwithstanding subsection (c), the Secretary shall 

12 not distribute Student Aid Reward Payments under 

13 the Student Aid Reward Program that, in the aggre14 gate, exceed the Federal savings resulting from im15 plementation of the Student Aid Reward Program. 

16 ‘‘(2) FEDERAL SAVINGS.—In calculating Fed17 eral savings, as used in paragraph (1), the Secretary 

18 shall determine Federal savings on loans made to 

19 students at institutions of higher education that par20 ticipate the student loan program under this title 

21 that is most cost-effective for taxpayers and that, on 

22 the date of enactment of the Student Aid Reward 

23 Program, participated in the student loan program 

24 that is not the most cost-effective for taxpayers, re25 sulting from the difference of— 


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1 ‘‘(A) the Federal cost of loan volume made 

2 under the student loan program under this title 

3 that is most cost-effective for taxpayers; and 

4 ‘‘(B) the Federal cost of an equivalent type 

5 and amount of loan volume made, insured, or 

6 guaranteed under the student loan program 

7 under this title that is not the most cost-effec8 tive for taxpayers. 

9 ‘‘(3) DISTRIBUTION RULES.—If the Federal 

10 savings determined under paragraph (2) is not suffi11 cient to distribute full Student Aid Reward Pay12 ments under the Student Aid Reward Program, the 

13 Secretary shall— 

14 ‘‘(A) first make Student Aid Reward Pay15 ments to those institutions of higher education 

16 that participated in the student loan program 

17 under this title that is not the most cost-effec18 tive for taxpayers on the date of enactment of 

19 the Student Aid Reward Program; and 

20 ‘‘(B) with any remaining Federal savings 

21 after making Payments under subparagraph 

22 (A), make Student Aid Reward Payments to 

23 the institutions of higher education not de24 scribed in subparagraph (A) on a pro-rata 

25 basis. 


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1 ‘‘(4) DISTRIBUTION TO STUDENTS.—Any insti2 tution of higher education that receives a Student 

3 Aid Reward Payment under this section— 

4 ‘‘(A) shall distribute, where appropriate, 

5 part or all of such payment among the students 

6 of such institution who are Pell Grant recipi7 ents by awarding such students a supplemental 

8 grant; and 

9 ‘‘(B) may distribute part of such payment 

10 as a supplemental grant to graduate students in 

11 financial need. 

12 ‘‘(5) ESTIMATES, ADJUSTMENTS, AND CARRY

13 OVER.— 

14 ‘‘(A) ESTIMATES AND ADJUSTMENTS.— 

15 The Secretary may make Student Aid Reward 

16 Payments to institutions of higher education on 

17 the basis of estimates, using the best data avail18 able at the beginning of an academic/fiscal year. 

19 If the Secretary determines thereafter that loan 

20 program costs for that academic/fiscal year 

21 were different than such estimate, the Secretary 

22 shall adjust (reduce or increase) subsequent 

23 Student Aid Reward Payments rewards paid to 

24 such institutions of higher education to reflect 

25 such difference. 


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1 ‘‘(B) CARRY OVER.—Any institution of 

2 higher education that receives a reduced Stu3 dent Aid Reward Payment under paragraph 

4 (3)(B), shall remain eligible for the unpaid por5 tion of such institution’s financial reward pay6 ment, as well as any additional financial reward 

7 payments for which the institution is otherwise 

8 eligible, in subsequent academic or fiscal years. 

9 ‘‘(e) DEFINITION.—For purposes of this section— 

10 ‘‘(1) the student loan program under this title 

11 that is most cost-effective for taxpayers is the loan 

12 program under part B or D of this title that has the 

13 lowest overall cost to the Federal Government (in14 cluding administrative costs) for the loans author15 ized by such parts; and 

16 ‘‘(2) the student loan program under this title 

17 that is not most cost-effective for taxpayers is the 

18 loan program under part B or D of this title that 

19 does not have the lowest overall cost to the Federal 

20 Government (including administrative costs) for the 

21 loans authorized by such parts.’’. 

22 SEC. 203. AVIATION SECURITY SERVICE PASSENGER FEES. 

23 Section 44940 of title 49, United States Code, is 

24 amended— 


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1 (1) in subsection (a)(1), by inserting ‘‘in an 

2 amount equal to $5.00 per one-way trip’’ after ‘‘uni3 form fee’’; 

4 (2) by striking subsection (c); and 

5 (3) in subsection (d)— 

6 (A) in paragraph (2), by striking ‘‘sub7 section (d)’’ each place it appears and inserting 

8 ‘‘this subsection’’; and 

9 (B) in paragraph (3), by striking ‘‘in ac10 cordance with paragraph (1)’’ and inserting 

11 ‘‘under subsection (a)(2)’’. 

12 SEC. 204. EXTENSION OF FCC SPECTRUM AUCTION AU13 THORITY. 

14 Section 309(j)(11) of the Communications Act of 

15 1934 (47 U.S.C. 309(j)(11)) is amended by striking 

16 ‘‘2011’’ and inserting ‘‘2016’’. 

17 SEC. 205. EXTENSION OF FEES FOR CERTAIN CUSTOMS 

18 SERVICES. 

19 Section 13031(j)(3)(A) and (B) of the Consolidated 

20 Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 

21 58c(j)(3)(A) and (B)) is amended by striking ‘‘2014’’ each 

22 place it appears and inserting ‘‘2016’’. 

Æ 


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