I 

108TH CONGRESS 

2D SESSION H. R. 4964

To amend the Social Security Act and the Internal Revenue Code of 1986 

to assure comprehensive, affordable health insurance coverage for all 

Americans through an American Health Benefits Program. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 22, 2004

Mr. LANGEVIN introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy 

and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL

To amend the Social Security Act and the Internal Revenue 

Code of 1986 to assure comprehensive, affordable health 

insurance coverage for all Americans through an American Health Benefits Program.

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; FINDINGS; TABLE OF CONTENTS. 

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

5 ‘‘American Health Benefits Program Act of 2004’’. 

6 (b) FINDINGS.—Congress finds the following: 
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1 (1) UNINSURED AMERICANS AND LACK OF AC2 CESS TO CHOICES.—

3 (A) In 2002, 43.6 million Americans were 

4 uninsured, 80 percent of whom were employed 

5 (or dependents of individuals who were em6 ployed). 

7 (B) Health care providers provided to un8 insured Americans $35 billion in care for which 

9 they were not compensated by the individuals or 

10 through insurance. 

11 (C) Only 8 percent of employers providing 

12 health benefits are able to offer their employees 

13 a choice between two or more health plans. 

14 (2) DOUBLE-DIGIT GROWTH IN EMPLOYER

15 COSTS.—In 2003 the average per capita cost for em16 ployers to provide health benefits coverage increased 

17 by almost 14 percent. This was the third consecutive 

18 year of double-digit increases in such cost. 

19 (3) ADMINISTRATIVE EFFICIENCY OF USING

20 FEHBP MODEL FOR PROVIDING HEALTH INSURANCE

21 COVERAGE.—

22 (A) The private insurance market presents 

23 increasing administrative challenges for employ24 ers in seeking out, contracting with, and admin25 istering health benefits. 
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1 (B) The Federal Employee Health Bene2 fits Program (FEHBP) currently manages ne3 gotiations with health insurers over premiums 

4 and benefits on behalf of 8.6 million Federal 

5 employees and retirees and their dependents. 

6 (C) Overhead costs for employers providing 

7 health benefits coverage can be over 30 percent 

8 for employers with fewer than 10 employees 

9 and about 12 percent for employers with more 

10 than 500 employees. 

11 (D) In comparison, the overhead cost of 

12 coverage provided under FEHBP is about 3 

13 percent. 

14 (4) EXPANSION OF FEHBP MODEL TO COVER

15 UNINSURED AND OTHER AMERICANS.—Requiring 

16 participation in an FEHBP-style program would ex17 pand consumer choice, ensure portability and con18 tinuity of coverage, improve incentives for cost con19 tainment, and stabilize the burden on businesses 

20 (5) PERSONAL RESPONSIBILITY.—A recent sur21 vey indicates that a clear majority of Americans see 

22 securing health insurance coverage as a personal re23 sponsibility for themselves and others. 

24 (c) TABLE OF CONTENTS.—The table of contents of 

25 this Act is as follows:

Sec. 1. Short title; findings; table of contents. 
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Sec. 2. Establishment of American Health Benefits Program. 

‘‘TITLE XXII—AMERICAN HEALTH BENEFITS PROGRAM 

‘‘Sec. 2201. Establishment of program. 

‘‘Sec. 2202. Eligibility; requirement of coverage. 

‘‘Sec. 2203. Qualified health plans; benefits; premiums. 

‘‘Sec. 2204. Government contribution; American Health Benefits Program 

Trust Fund. 

‘‘Sec. 2205. Premium and cost-sharing subsidies for lower income individuals. 

‘‘Sec. 2206. Administration. 

‘‘Sec. 2207. Definitions. 

Sec. 3. Collection of premiums, subsidies, and employer funding. 

Sec. 4. Amendments to the medicaid and SCHIP program. 

Sec. 5. Studies.

1 SEC. 2. ESTABLISHMENT OF AMERICAN HEALTH BENEFITS 

2 PROGRAM. 

3 (a) IN GENERAL.—The Social Security Act is amend4 ed by adding at the end the following new title: 

5 ‘‘TITLE XXII—AMERICAN 

6 HEALTH BENEFITS PROGRAM 

7 ‘‘SEC. 2201. ESTABLISHMENT OF PROGRAM. 

8 ‘‘There is established under this title a program (to 

9 be known as the ‘American Health Benefits Program’) to 

10 provide comprehensive health insurance coverage to all 

11 Americans who are not covered under certain Federal 

12 health insurance programs. The coverage is provided in 

13 a manner similar to the manner in which coverage has 

14 been provided to Members of Congress and Federal gov15 ernment employees and retirees and their dependents 

16 under the Federal Employees Health Benefits Program 

17 (FEHBP). 
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1 ‘‘SEC. 2202. ELIGIBILITY; REQUIREMENT OF COVERAGE. 

2 ‘‘(a) ELIGIBILITY.—

3 ‘‘(1) IN GENERAL.—Each AHBP-eligible indi4 vidual is eligible to enroll in a qualified health plan 

5 offered under this title. 

6 ‘‘(2) AHBP-ELIGIBLE INDIVIDUAL DEFINED.—

7 ‘‘(A) IN GENERAL.—For purposes of this 

8 title, the term ‘AHBP-eligible individual’ means 

9 an individual residing in the United States who 

10 is—

11 ‘‘(i) a citizen or national of the United 

12 States; 

13 ‘‘(ii) an alien lawfully admitted to the 

14 United States for permanent residence; 

15 ‘‘(iii) an alien admitted into the 

16 United States under section 207 of the Im17 migration and Nationality Act (relating to 

18 refugees); 

19 ‘‘(iv) an alien otherwise permanently 

20 residing in the United States under color 

21 of law (as specified by the Commissioner); 

22 and 

23 ‘‘(v) an alien with the status of a non24 immigrant who is within a class of long25 term nonimmigrants under section 

26 101(a)(15) of the Immigration and Nation-
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1 ality Act that the Commissioner deter2 mines, in consultation with the Secretary 

3 of Homeland Security, to be appropriate. 

4 ‘‘(B) EXCEPTION.—Such term does not in5 clude an individual who is incarcerated (as 

6 specified by the Commissioner). 

7 ‘‘(b) REQUIREMENT OF COVERAGE.—

8 ‘‘(1) IN GENERAL.—Except as provided in this 

9 subsection, each AHBP-eligible individual shall be 

10 enrolled in a qualified health plan under this title. 

11 ‘‘(2) EXCEPTION FOR INDIVIDUALS DEM12 ONSTRATING PUBLIC HEALTH INSURANCE COV13 ERAGE.—The requirement of paragraph (1) shall 

14 not apply to an individual who demonstrates cov15 erage under any of the following: 

16 ‘‘(A) MEDICARE.—Coverage under parts A 

17 and B (or under part C) of title XVIII. 

18 ‘‘(B) MEDICAID.—Coverage under a State 

19 plan under title XIX. 

20 ‘‘(C) TRICARE/CHAMPUS.—Coverage 

21 under the TRICARE program under chapter 

22 55, of title 10, United States Code. 

23 ‘‘(D) INDIAN HEALTH SERVICES.—Cov24 erage under a medical care program of the In25 dian Health Service or of a tribal organization. 
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1 ‘‘(E) VETERANS HEALTH.—Coverage 

2 under the veterans health care program under 

3 chapter 17 of title 38, United States Code, if 

4 the coverage for the individual involved is deter5 mined to be not less than the coverage provided 

6 under a qualified health plan, based on the indi7 vidual’s priority for services as provided under 

8 section 1705(a) of such title. 

9 ‘‘(3) EXCEPTION FOR NONIMMIGRANTS.—The 

10 requirement of paragraph (1) shall not apply to an 

11 individual described in subsection (a)(2)(A)(v). 

12 ‘‘(c) ENROLLMENT; DEFAULT ENROLLMENT.—

13 ‘‘(1) IN GENERAL.—The Commissioner shall es14 tablish a process for AHBP-eligible individuals to 

15 enroll in qualified health plans. Such process shall 

16 be based on the enrollment process used under 

17 FEHBP and shall provide for the dissemination in18 formation to AHBP-eligible individuals on qualified 

19 health plans being offered. 

20 ‘‘(2) DEFAULT ENROLLMENT.—

21 ‘‘(A) IN GENERAL.—The Commissioner 

22 shall establish a procedure under which an 

23 AHBP-eligible individual who is required under 

24 subsection (b) to enroll, but is not enrolled, in 
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1 a qualified health plan will be assigned to, and 

2 enrolled in, such a plan. 

3 ‘‘(B) RULES.—In carrying out subpara4 graph (A), the Commissioner shall assign 

5 AHBP-eligible individuals and families to plans 

6 the premium of which is below the average pre7 mium for the AHBP region or other area in 

8 which the individuals or families reside. 

9 ‘‘(3) CHANGES IN ENROLLMENT.—The Com10 missioner shall establish enrollment procedures that 

11 include an annual open season and permitting 

12 changes in enrollment with qualified health plans at 

13 other times (such as by reason of changes in marital 

14 or dependent status). Such procedures shall be based 

15 on the enrollment procedures established under 

16 FEHBP. 

17 ‘‘(d) TREATMENT OF FAMILY MEMBERS.—The en18 rollment under this title shall include both individual and 

19 family enrollment, in a manner similar to that provided 

20 under FEHBP. To the extent consistent with eligibility 

21 under subsection (a), the Commissioner shall provide rules 

22 similar to the rules under FEHBP for the enrollment of 

23 family members who are AHBP-eligible individuals in the 

24 same plan, except that such rules shall permit a family 
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1 consisting only of a married couple to elect to enroll each 

2 spouse in a different qualified health plan. 

3 ‘‘(e) CHANGES IN PLAN ENROLLMENT.—The Com4 missioner shall provide for and permit changes in the 

5 qualified health plan in which an individual or family is 

6 enrolled under this section in a manner similar to the 

7 manner in which such changes are provided or permitted 

8 under FEHBP. The Commissioner shall provide for termi9 nation of such enrollment for an individual at the time 

10 the individual is no longer an AHBP-eligible individual. 

11 ‘‘(f) ENROLLMENT GUIDES.—The Commissioner 

12 shall provide for the broad dissemination of information 

13 on qualified health plans offered under this title. Such in14 formation shall be provided in a comparative manner, 

15 similar to that used under FEHBP, and shall include in16 formation, collected through surveys of enrollees, on meas17 ures of enrollee satisfaction with the different plans. 

18 ‘‘SEC. 2203. QUALIFIED HEALTH PLANS; BENEFITS; PRE19 MIUMS. 

20 ‘‘(a) OFFERING OF PLANS.—

21 ‘‘(1) CONTRACTS.—The Commissioner shall 

22 enter into contracts with entities for the offering of 

23 qualified health plans in accordance with this title. 

24 Such contracts shall be entered into in a manner 

25 similar to the process by which the Director of the 
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1 Office of Personnel Management is authorized to 

2 enter into contracts with health benefits plans under 

3 FEHBP. 

4 ‘‘(2) REQUIREMENTS FOR ENTITIES OFFERING

5 PLANS.— No such contract shall be entered into 

6 with an entity for the offering of a qualified health 

7 plan in a region unless the entity—

8 ‘‘(A) is licensed as a health maintenance 

9 organization in that State or is licensed or to 

10 sell group health insurance in that State; 

11 ‘‘(B) meets such requirements, similar to 

12 requirements under FEHBP, as the Commis13 sioner may establish relating to solvency, orga14 nization, structure, governance, access, and 

15 quality; and 

16 ‘‘(C) agrees to participate in the high-risk 

17 reinsurance pool described in subsection (d). 

18 ‘‘(3) CONTRACTING WITH LIMITED NUMBER OF

19 PLANS IN A REGION WITHIN TYPES OF PLANS.—

20 ‘‘(A) IN GENERAL.—The Commissioner 

21 shall contract with only a limited number of 

22 qualified health plans of each type (as specified 

23 under subparagraph (B)) in each AHBP region. 

24 ‘‘(B) TYPES OF PLANS.—For purposes of 

25 subparagraph (A), the Commissioner shall clas-
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1 sify the different types of qualified health plans, 

2 such as fee-for-service plans, health mainte3 nance plans, preferred provider plans, and other 

4 types of plans. 

5 ‘‘(b) FEHBP SCOPE OF BENEFITS.—

6 ‘‘(1) COMPREHENSIVE BENEFITS.—Qualified 

7 health plans shall provide for the same scope and 

8 type of comprehensive benefits that have been pro9 vided under FEHBP, including the types of benefits 

10 described in section 8904 of title 5, United States 

11 Code and including benefits previously required by 

12 regulation or direction (such as preventive benefits, 

13 including childhood immunization and cancer screen14 ing, and mental health parity) under FEHBP. 

15 ‘‘(2) NO EXCLUSION FOR PRE-EXISTING CONDI16 TIONS.—Qualified health plans shall not impose pre17 existing condition exclusions or otherwise discrimi18 nate against any enrollee based on the health status 

19 of such enrollee (including genetic information relat20 ing to such enrollee) . 

21 ‘‘(3) OTHER CONSUMER PROTECTIONS.—Quali22 fied health plans also shall meet consumer and pa23 tient protection requirements that the Commissioner 

24 establishes, based on similar requirements previously 

25 imposed under FEHBP, including protections of pa-
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1 tients’ rights previously effected pursuant to Execu2 tive Memorandum. 

3 ‘‘(c) COMMUNITY-RATED PREMIUMS.—

4 ‘‘(1) IN GENERAL.—The premiums established 

5 for a qualified health plan under this title for indi6 vidual or family coverage shall be community-rated 

7 and shall not vary based on age, gender, health sta8 tus (including genetic information), or other factors. 

9 ‘‘(2) COLLECTION PROCESS.—The Commis10 sioner shall establish a process for the timely and 

11 accurate collection of premiums owed by enrollees, 

12 taking into account any Government contribution 

13 under section 2204(a) and any premium subsidy re14 ferred to in section 2205(a). Such process shall in15 clude methods for payment through payroll with16 holding, as well as payment through automatic deb17 iting of accounts with financial institutions, and 

18 shall be coordinated with the application of section 

19 59B of the Internal Revenue Code of 1986. Such 

20 premiums shall be deposited into the American 

21 Health Benefits Program Trust Fund established 

22 under section 2204(c). 

23 ‘‘(d) HIGH-RISK REINSURANCE POOL.—The Com24 missioner shall establish an arrangement among the enti25 ties offering qualified health plans under which such enti-
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1 ties contribute in an equitable manner (as determined by 

2 the Commissioner) into a fund that provides payment to 

3 plans for a percentage (specified by the Commissioner and 

4 not to exceed 90 percent) of the costs that they incur for 

5 enrollees beyond a predetermined threshold specified from 

6 time to time by the Commissioner. 

7 ‘‘(e) MARKETING PRACTICES AND COSTS.—The 

8 Commissioner shall monitor marketing practices with re9 spect to qualified health plans in order to assure—

10 ‘‘(1) the accuracy of the information dissemi11 nated regarding such plans; and 

12 ‘‘(2) that costs of marketing are reasonable and 

13 do not exceed a percentage of total costs that is 

14 specified by the Commissioner and that takes into 

15 account costs of market entry for new qualified 

16 health plans. 

17 ‘‘SEC. 2204. GOVERNMENT CONTRIBUTION; AMERICAN 

18 HEALTH BENEFITS PROGRAM TRUST FUND. 

19 ‘‘(a) GOVERNMENT CONTRIBUTION.—

20 ‘‘(1) IN GENERAL.—The Commissioner shall 

21 provide each year for a contribution under this sub22 section towards the coverage provided under this 

23 title for those AHBP-eligible individuals who are re24 quired to be enrolled in a qualified health plan under 

25 section 2202(b). Except as provided in this sub-
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1 section, the amount of such contribution shall be de2 termined using the same methodology that is applied 

3 for purposes of determining the Government con4 tribution under section 8906 of title 5, United 

5 States Code and shall not exceed 75 percent of the 

6 premium for the plan selected. 

7 ‘‘(2) USE OF REGIONAL WEIGHTED AVERAGE.—

8 Instead of computing the Government contribution 

9 using methodology under section 8906(b)(1) of title 

10 5, United States Code, based on 72 percent of the 

11 weighted average premium for qualified health plans 

12 nationally, the Commissioner shall compute such 

13 contribution based on 72 percent of the weighted av14 erage premium for qualified health plans in each re15 gion involved (as identified by the Commissioner). 

16 ‘‘(b) PLAN PAYMENT.—

17 ‘‘(1) IN GENERAL.—The Commissioner shall 

18 provide for payment of qualified health plans of the 

19 premiums for such plans, as adjusted under this 

20 subsection. 

21 ‘‘(2) RISK ADJUSTED PAYMENT.—The payment 

22 to a qualified health plan under this subsection shall 

23 be adjusted in a budget-neutral manner specified the 

24 Commissioner to reflect the actuarial risk of the en-
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1 rollees in the plan compared to an average actuarial 

2 risk. 

3 ‘‘(3) REDUCTION FOR ADMINISTRATIVE EX4 PENSES AND CONTINGENCY RESERVE.—The Com5 missioner shall provide for a uniform percentage re6 duction in payment otherwise made to a qualified 

7 health plan under this subsection. Such percentage 

8 shall consist of the following: 

9 ‘‘(A) CONTINGENCY RESERVE.—A percent10 age (not to exceed 3 percent) to provide for a 

11 contingency reserve described in section 

12 2206(h)(1). 

13 ‘‘(B) FEDERAL ADMINISTRATIVE COSTS.—

14 A percentage (not to exceed 5 percent) to cover 

15 Federal administrative costs in implementing 

16 this title. 

17 ‘‘(c) TRUST FUND.—

18 ‘‘(1) ESTABLISHMENT.—There is hereby estab19 lished a trust fund, to be known as the ‘American 

20 Health Benefits Program Trust Fund’ (in this sub21 section referred to as the ‘Trust Fund’) . 

22 ‘‘(2) DEPOSITS.—The Trust Fund shall consist 

23 of such gifts and bequests as may be provided in 

24 section 201(i)(1) and such amounts as may be de25 posited in, or appropriated to, such fund as provided 
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1 in this title. There are hereby appropriated to the 

2 Fund, out of any moneys in the Treasury not other3 wise appropriated, amounts equivalent to 100 per4 cent of—

5 ‘‘(A) the taxes imposed by section 3451 of 

6 the Internal Revenue Code of 1986 with respect 

7 to wages reported to the Secretary of the 

8 Treasury or the Secretary ’s delegate pursuant 

9 to subtitle F of such Code, as determined by 

10 the Secretary of the Treasury by applying the 

11 applicable rates of tax under such sections to 

12 such wages, which wages shall be certified by 

13 the Commissioner of Social Security on the 

14 basis of records of wages established and main15 tained by such Commissioner in accordance 

16 with such reports; 

17 ‘‘(B) the taxes imposed by section 1401(c) 

18 of the Internal Revenue Code of 1986 with re19 spect to self-employment income reported to the 

20 Secretary of the Treasury or the Secretary ’s 

21 delegate pursuant to subtitle F of such Code, as 

22 determined by the Secretary of the Treasury by 

23 applying the applicable rates of tax under such 

24 sections to such self-employment income, which 

25 self-employment income shall be certified by the 
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1 Commissioner of Social Security on the basis of 

2 records of self-employment established and 

3 maintained by such Commissioner in accord4 ance with such returns; and 

5 ‘‘(C) the excess of the amounts imposed 

6 under section 59B of the Internal Revenue 

7 Code of 1986 over the amounts of credits al8 lowed under section 36. 

9 The amounts appropriated by the preceding sentence 

10 shall be transferred from time to time from the gen11 eral fund in the Treasury to the Trust Fund, such 

12 amounts to be determined on the basis of estimates 

13 by the Secretary of the Treasury of the taxes, speci14 fied in the preceding sentence, paid to or deposited 

15 into the Treasury; and proper adjustments shall be 

16 made in amounts subsequently transferred to the ex17 tent prior estimates were in excess of or were less 

18 than the taxes specified in such sentence. 

19 ‘‘(3) APPLICATION OF TRUST FUND PROVI20 SIONS.—The provisions of subsections (b) through 

21 (f) of section 1817 shall apply to the Trust Fund in 

22 the same manner as they apply to the Federal Hos23 pital Insurance Trust Fund, except that, for pur24 poses of this paragraph, any reference in such sub25 sections to a provision of the Internal Revenue Code 
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1 of 1986 is deemed a reference to the corresponding 

2 provision of such Code referred to in paragraph (2) 

3 of this subsection. 

4 ‘‘SEC. 2205. PREMIUM AND COST-SHARING SUBSIDIES FOR 

5 LOWER INCOME INDIVIDUALS. 

6 ‘‘(a) PREMIUM SUBSIDIES.—The Commissioner, in 

7 consultation with the Secretary of the Treasury, shall as8 sist individuals in estimating the amount of the premium 

9 subsidy which will be allowed to such individual under sec10 tion 36 of the Internal Revenue Code of 1986 with respect 

11 to any month, and shall take the estimated amount of such 

12 premium subsidy into account for purposes of collecting 

13 any premium under section 2203(b)(2). 

14 ‘‘(b) COST-SHARING SUBSIDIES.—

15 ‘‘(1) NO COST-SHARING FOR INDIVIDUALS WITH

16 FAMILY INCOME BELOW LOWEST INCOME THRESH17 OLD.—In the case of a cost-sharing subsidy-eligible 

18 individual whose family income is less than the low19 est income threshold, there shall be a cost-sharing 

20 subsidy so the cost-sharing is reduced to zero. 

21 ‘‘(2) NO COST-SHARING FOR PREGNANT WOMEN

22 AND CHILDREN.—In the case of a cost-sharing sub23 sidy-eligible individual who is under 18 years of age 

24 or who is a pregnant woman, there shall be a cost-
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1 sharing subsidy so the cost-sharing is reduced to 

2 zero. 

3 ‘‘(3) SLIDING SCALE FOR OTHER INDIVID4 UALS.—In the case of cost-sharing subsidy-eligible 

5 individuals not described in paragraph (1) or (2), 

6 the Commissioner of Health Benefits, in consulta7 tion with the Secretary of the Treasury, shall estab8 lish a schedule of cost-sharing subsidies consistent 

9 with this paragraph. Under such schedule the 

10 amount of cost-sharing subsidy for such individuals 

11 shall—

12 ‘‘(A) be such that the cost-sharing is nomi13 nal (as defined for purposes of section 

14 1916(a)(3)) for individuals whose family income 

15 is at the lowest income threshold; and 

16 ‘‘(B) be such that, as the family income in17 creases from such lowest income threshold to 

18 twice such threshold, the cost-sharing subsidy is 

19 reduced in a ratable matter to zero. 

20 ‘‘(4) APPLICATION OF A PREVIOUS YEAR’S FAM21 ILY INCOME.—In applying this subsection for cost22 sharing subsidies for expenses incurred for services 

23 furnished in a year, family income shall be deter24 mined based on the modified AGI for taxable years 

25 ending in or with the previous year (or, if informa-
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1 tion on such modified AGI for such taxable years is 

2 not available on a timely basis, for the most recent 

3 taxable years for which such information is so avail4 able). 

5 ‘‘(5) APPLICATION FOR SUBSIDIES.—A cost6 sharing subsidy shall not be available to a cost-shar7 ing subsidy-eligible individual under this subsection 

8 unless there has been an application, in a form and 

9 manner and containing such information and in such 

10 frequency as the Commissioner shall specify, has 

11 been made for such subsidy. 

12 ‘‘(6) PAYMENT OF SUBSIDIES TO PLANS.—The 

13 Commissioner shall establish the form of additional 

14 payments to qualified health plans to compensate 

15 such plans for cost-sharing subsidies provided to en16 rollees under this subsection. Such payments may be 

17 in such form as the Commissioner specifies and may 

18 include—

19 ‘‘(A) a capitation payment, in an amount 

20 that reflects the per capita actuarial value of 

21 such subsidies; 

22 ‘‘(B) reimbursement for the reductions in 

23 cost-sharing made to carry out this subsection; 

24 or 
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1 ‘‘(C) a combination of the methodologies 

2 under paragraphs (1) and (2). 

3 ‘‘(7) DEFINITIONS.—For purposes of this sub4 section: 

5 ‘‘(A) COST-SHARING SUBSIDY-ELIGIBLE IN6 DIVIDUAL DEFINED.—The term ‘cost-sharing 

7 subsidy-eligible individual’ means an AHBP-eli8 gible individual—

9 ‘‘(i) who is enrolled, and required 

10 under section 2202(b) to be enrolled, in a 

11 qualified health plan under this title; 

12 ‘‘(ii) whose family income does not ex13 ceed twice the lowest income threshold (as 

14 defined in subparagraph (B)); and 

15 ‘‘(iii) who does not have in effect (and 

16 any of whose family members does not 

17 have in effect), in a form and manner 

18 specified by the Commissioner in consulta19 tion with the Secretary of the Treasury, 

20 for any portion of the year involved an ob21 jection to the release of information under 

22 section 6103(l)(21) of the Internal Rev23 enue Code of 1986. 
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1 ‘‘(B) LOWEST INCOME THRESHOLD.—The 

2 term ‘lowest income threshold’ means, with re3 spect to coverage consisting of—

4 ‘‘(i) only an individual, 125 percent of 

5 the poverty line (as defined in section 

6 673(2) of the Community Services Block 

7 Grant Act (42 U.S.C. 9902(2)), including 

8 any revision required by such section) for 

9 a single individual; or 

10 ‘‘(ii) a family of two or more individ11 uals, 150 percent of the poverty line (as so 

12 defined) for a family of the size involved. 

13 ‘‘(C) FAMILY INCOME.—The term ‘family 

14 income’ means, with respect to an AHBP-eligi15 ble individual who is enrolled in a qualified 

16 health plan—

17 ‘‘(i) for individual-only coverage, the 

18 modified AGI of the individual; or 

19 ‘‘(ii) for coverage that includes other 

20 family members, the sum of the modified 

21 AGI of the individual and of each other in22 dividual covered under the plan as a family 

23 member of the individual. 

24 The Commissioner, in consultation with the 

25 Secretary of the Treasury, may provide for ex-
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1 clusion from family income under subparagraph 

2 (B) of family members (such as children) who 

3 have de minimis income (as specified by such 

4 Commissioner). 

5 ‘‘(D) MODIFIED AGI DEFINED.—The term 

6 ‘modified AGI’ means adjusted gross income 

7 (as defined in section 62 of the Internal Rev8 enue Code of 1986)—

9 ‘‘(i) determined without regard to sec10 tions 135, 911, 931, and 933 of such 

11 Code; and 

12 ‘‘(ii) increased by the amount of inter13 est received or accrued during the taxable 

14 year which is exempt from tax under such 

15 Code. 

16 In the case of an individual filing a joint return, 

17 any reference in this subsection to the modified 

18 adjusted gross income of such individual shall 

be to 1 19 ⁄2 such return’s modified adjusted gross 

20 income. 

21 ‘‘SEC. 2206. ADMINISTRATION. 

22 ‘‘(a) APPLICATION OF FEHBP RULES.—

23 ‘‘(1) IN GENERAL.—Except as otherwise pro24 vided in this title, the program under this title shall 

25 be administered in the same manner as FEHBP. 
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1 ‘‘(2) SPECIFIC PROVISIONS.—In carrying out 

2 this title, the Commissioner pursuant to paragraph 

3 (1) shall provide for the following: 

4 ‘‘(A) Approval and disapproval of plans as 

5 qualified health plans. 

6 ‘‘(B) Negotiation of plan benefits (includ7 ing cost-sharing) and plan premiums. 

8 ‘‘(b) ESTABLISHMENT OF HEALTH BENEFITS AD9 MINISTRATION.—There is hereby established, as an inde10 pendent agency in the executive branch of Government, 

11 a Health Benefits Administration (in this title referred to 

12 as the ‘Administration’). 

13 ‘‘(c) DUTIES.—

14 ‘‘(1) IN GENERAL.—It shall be the duty of the 

15 Administration to administer the program under this 

16 title and, with respect to application of any provi17 sions of FEHBP under this title, any reference in 

18 FEHBP to the Director of the Office of Manage19 ment and Budget is deemed a reference to the Com20 missioner of Health Benefits appointed under sub21 section (d)(1). 

22 ‘‘(2) ESTABLISHMENT OF AHBP REGIONS.—For 

23 purposes of carrying out this title, the Commissioner 

24 shall divide the United States into, and establish, 

25 AHBP regions. 
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1 ‘‘(d) OFFICERS.—

2 ‘‘(1) COMMISSIONER OF HEALTH BENEFITS.—

3 ‘‘(A) IN GENERAL.—There shall be in the 

4 Administration a Commissioner of Health Ben5 efits who shall be appointed by the President, 

6 by and with the advice and consent of the Sen7 ate. 

8 ‘‘(B) COMPENSATION.—The Commissioner 

9 shall be compensated at the rate provided for 

10 level I of the Executive Schedule. 

11 ‘‘(C) TERM.—The provisions of section 

12 702(b)(2) shall apply to the Commissioner in 

13 the same manner as they apply to the Commis14 sioner of Social Security, except that any ref15 erence to January 19, 2001, shall be treated as 

16 a reference to the date that is January 19 of 

17 the fifth year that begins after the date of the 

18 enactment of this title. 

19 ‘‘(2) DEPUTY COMMISSIONER.—

20 ‘‘(A) IN GENERAL.—There shall be in the 

21 Administration a Deputy Commissioner for 

22 Health Benefits, who shall be appointed by the 

23 President, by and with the advice and consent 

24 of the Senate. 
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1 ‘‘(B) APPLICATION OF SSA PROVISIONS.—

2 The provisions of paragraphs (2) through (4) of 

3 section 701(c) shall apply to the Deputy Com4 missioner in the same manner as they apply to 

5 the Deputy Commissioner of Social Security, 

6 except that any reference to January 19, 2001, 

7 shall be treated as a reference to the date speci8 fied under paragraph (3). 

9 ‘‘(3) OTHER OFFICERS.—There shall be in the 

10 Administration a Chief Actuary, Chief Financial Of11 ficer, and Inspector General. The provisions of sub12 sections (c) through (e) of section 701 shall apply 

13 with respect to such officers in the same manner as 

14 they apply with respect to comparable officers in the 

15 Social Security Administration. 

16 ‘‘(4) PERSONNEL; BUDGETARY MATTERS; SEAL

17 OF OFFICE.—The provisions of subsections (a)(1), 

18 (a)(2), (b), and (d) of section 704 shall apply to the 

19 Commissioner and Administration in the same man20 ner as they apply to the Commissioner of Social Se21 curity and the Social Security Administration, re22 spectively. 

23 ‘‘(e) AUTHORITY AND RULEMAKING.—The provisions 

24 of paragraphs (4) through (7) of section 701(b) and sec25 tion 704 shall apply to the Administration and Commis-
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1 sioner in the same manner as they apply to the Social Se2 curity Administration and the Commissioner of Social Se3 curity. 

4 ‘‘(f) USE OF REGIONAL AND FIELD OFFICES.—The 

5 Commissioner shall establish such regional and field of6 fices as may be appropriate for the convenient and effi7 cient administration of this title. 

8 ‘‘(g) COVERAGE OF ADMINISTRATION COSTS.—The 

9 Commissioner shall provide for the collection of adminis10 trative costs of offering coverage under this title from enti11 ties offering qualified health plans in the same manner 

12 as FEHBP provides for coverage of its administrative 

13 costs. 

14 ‘‘(h) CONTINGENCY RESERVES.—

15 ‘‘(1) AHBP CONTINGENCY RESERVE.—The 

16 Commissioner is authorized to establish and main17 tain a contingency reserve for purposes of carrying 

18 out this title and is authorized to impose a premium 

19 surcharge of up to 3 percent in order to provide fi20 nancing for such reserve. 

21 ‘‘(2) PLAN RESERVES.—A qualified health plan 

22 may establish contingency reserves, that are in addi23 tion to the reserve described in paragraph (1), in a 

24 manner similar to that permitted under FEHBP. 
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1 ‘‘SEC. 2207. DEFINITIONS. 

2 ‘‘For purposes of this title: 

3 ‘‘(1) The term ‘Administration’ means the 

4 Health Benefits Administration established under 

5 section 2206(a). 

6 ‘‘(2) The term ‘AHBP-eligible individual’ 

7 means an individual described in section 2202(a). 

8 ‘‘(3) The term ‘AHBP region’ means a region 

9 as specified by the Commissioner under section 

10 2206(c)(2). 

11 ‘‘(4) The term ‘Commissioner’ means the Com12 missioner of Health Benefits appointed under sec13 tion 2206(c). 

14 ‘‘(5) The term ‘FEHBP’ means the program 

15 under chapter 89 of title 5, United States Code, as 

16 in effect before the date of the enactment of this 

17 title. 

18 ‘‘(6) The term ‘qualified health plan’ means 

19 such a plan offered under this title.’’. 

20 (b) EFFECTIVE DATE; COLLECTIVE BARGAINING

21 AGREEMENTS.—

22 (1) BENEFITS.—Title XXII of the Social Secu23 rity Act shall first apply to benefits for items and 

24 services furnished on or after January 1, 2007. 

25 (2) EFFECT ON COLLECTIVE BARGAINING

26 AGREEMENTS.—Nothing in this Act shall be con-
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1 strued as preventing a collectively bargained agree2 ment from providing coverage that is additional to, 

3 or supplementary of, benefits provided under the 

4 American Health Benefits Program. 

5 SEC. 3. COLLECTION OF PREMIUMS, SUBSIDIES, AND EM6 PLOYER FUNDING. 

7 (a) PREMIUM COLLECTION.—

8 (1) IN GENERAL.—Subchapter A of chapter 1 

9 of the Internal Revenue Code of 1986 (relating to 

10 determination of tax liability) is amended by adding 

11 at the end the following new part: 

12 ‘‘PART VIII—AMERICAN HEALTH BENEFITS 

13 PROGRAM PREMIUMS

‘‘Sec. 59B. American Health Benefits Program premiums.

14 ‘‘SEC. 59B. AMERICAN HEALTH BENEFITS PROGRAM PRE15 MIUMS. 

16 ‘‘(a) IN GENERAL.—In the case of a specified indi17 vidual who is enrolled in a qualified health plan under title 

18 XXII of the Social Security Act (including by reason of 

19 a default enrollment under section 2202(c)(2)), there is 

20 hereby imposed (in addition to any other amount imposed 

21 by this subtitle) for the taxable year an amount equal to 

22 the aggregate premiums established under such title with 

23 respect to the coverage under such title which covers such 

24 individual for months beginning in such taxable year. The 
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1 amount imposed under this subsection shall be reduced by 

2 the amount of any government contribution under section 

3 2204(a) of such Act which relates to such coverage. 

4 ‘‘(b) SPECIFIED INDIVIDUAL.—For purposes of this 

5 section, the term ‘specified individual’ means, with respect 

6 to coverage under title XXII of the Social Security Act 

7 for any month beginning in a taxable year—

8 ‘‘(1) in the case of self-only coverage, the indi9 vidual covered under such coverage, and 

10 ‘‘(2) in the case of family coverage, each indi11 vidual covered under such coverage unless such indi12 vidual is covered under such coverage by reason of 

13 being a member of the family (other than a spouse). 

14 ‘‘(c) JOINT AND SEVERAL LIABILITY.—In the case 

15 of an individual and such individual’s spouse covered 

16 under family coverage—

17 ‘‘(1) each such individual shall be jointly and 

18 severally liable for the amount imposed under sub19 section (a), and 

20 ‘‘(2) the aggregate amount imposed under sub21 section (a) with respect to such coverage may not 

22 exceed the amount imposed with respect to either 

23 such individual. 

24 ‘‘(d) COORDINATION WITH OTHER PROVISIONS.—
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1 ‘‘(1) NOT TREATED AS MEDICAL EXPENSE.—

2 For purposes of section 213, the amount imposed by 

3 this section for any taxable year shall not be treated 

4 as an expense paid for medical care. 

5 ‘‘(2) NOT TREATED AS TAX FOR CERTAIN PUR6 POSES.—The amount imposed by this section shall 

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

8 purposes of determining—

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

10 under this chapter, or 

11 ‘‘(B) the amount of the minimum tax im12 posed by section 55. 

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

14 purposes of subtitle F, the amount imposed by this 

15 section shall be treated as if it were a tax imposed 

16 by section 1. 

17 ‘‘(4) SECTION 15 NOT TO APPLY.—Section 15 

18 shall not apply to the amount imposed by this sec19 tion. 

20 ‘‘(5) SECTION NOT TO AFFECT LIABILITY OF

21 POSSESSIONS, ETC.—This section shall not apply for 

22 purposes of determining liability to any possession of 

23 the United States. For purposes of section 932 and 

24 7654, the amount imposed under this section shall 

25 not be treated as a tax imposed by this chapter. 
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1 ‘‘(e) REGULATIONS.—The Secretary may prescribe 

2 such regulations as may be appropriate to carry out the 

3 purposes of this section.’’. 

4 (2) ADJUSTMENTS TO WITHHOLDING.—Sub5 section (a) of section 3402 of such Code (relating to 

6 income tax collected at source) is amended by add7 ing at the end the following new paragraph: 

8 ‘‘(3) SPECIAL RULE FOR AMOUNTS IMPOSED BY

9 SECTION 59B.—

10 ‘‘(A) IN GENERAL.—In determining the 

11 amount required to be deducted and withheld 

12 from wages paid to an individual during any 

13 month by such individual’s employer, the 

14 amount imposed by section 59B shall be taken 

15 into account. 

16 ‘‘(B) WAGES NOT REDUCED BY EXEMP17 TIONS.—In determining the amount to be de18 ducted and withheld by reason of subparagraph 

19 (A), the amount of wages shall not be reduced 

20 as provided in paragraph (2).’’. 

21 (3) CLERICAL AMENDMENT.—The table of 

22 parts for subchapter A of chapter 1 of such Code is 

23 amended by adding at the end the following new 

24 item:

‘‘PART VIII. AMERICAN HEALTH BENEFITS PROGRAM PREMIUMS’’.
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1 (b) CREDIT FOR SUBSIDY AND PREPAYMENTS OF

2 AMERICAN HEALTH BENEFITS PREMIUMS.—

3 (1) IN GENERAL.—Subpart C of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code 

5 of 1986 is amended by redesignating section 36 as 

6 section 37 and by inserting after section 35 the fol7 lowing new section: 

8 ‘‘SEC. 36. SUBSIDY AND PREPAYMENT OF AMERICAN 

9 HEALTH BENEFITS PREMIUMS. 

10 ‘‘(a) IN GENERAL.—In the case of a specified indi11 vidual (as defined in section 59B(b)), there shall be al12 lowed as a credit against the tax imposed by this subtitle 

13 for the taxable year an amount equal to the sum of—

14 ‘‘(1) the aggregate amount of premiums paid 

15 (other than any government contribution under sec16 tion 2204(a) of the Social Security Act) with respect 

17 to the coverage of such individual under title XXII 

18 of the Social Security Act, and 

19 ‘‘(2) in the case of any premium subsidy-eligible 

20 individual, the applicable premium subsidy. 

21 ‘‘(b) APPLICABLE PREMIUM SUBSIDY.—

22 ‘‘(1) IN GENERAL.—For purposes of this sec23 tion, the term ‘applicable premium subsidy’ means, 

24 with respect to any premium subsidy-eligible indi25 vidual, the weighted average premium in effect for 
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1 the calendar year in which the taxable year begins 

2 (for the type of coverage involved) for plans in the 

3 AHBP region involved, as determined by the Com4 missioner of Health Benefits. 

5 ‘‘(2) REDUCTION BASED ON FAMILY INCOME.—

6 The amount otherwise determined under paragraph 

7 (1) shall be reduced (but not below zero) by an 

8 amount which bears the same ratio to the amount 

9 so determined as—

10 ‘‘(A) the amount (if any) by which the tax11 payer’s family income for the taxable year ex12 ceeds the lowest income threshold, bears to 

13 ‘‘(B) the lowest income threshold. 

14 ‘‘(c) PREMIUM SUBSIDY-ELIGIBLE INDIVIDUAL.—

15 For purposes of this section, the term ‘premium subsidy16 eligible individual’ means an individual—

17 ‘‘(1) who is enrolled, and required to be en18 rolled, in a qualified health plan under title XXII of 

19 the Social Security Act, 

20 ‘‘(2) whose family income does not exceed twice 

21 the lowest income threshold, and 

22 ‘‘(3) who does not have in effect (and, in the 

23 case of family coverage, each other individual cov24 ered under such coverage does not have in effect), 

25 in a form and manner specified by the Secretary of 
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1 the Treasury in consultation with the Commissioner 

2 of Health Benefits, for any portion of the taxable 

3 year of such individual an objection to the release of 

4 information under section 6103(k)(10)). 

5 ‘‘(d) LOWEST INCOME THRESHOLD.—For purposes 

6 of this section, the term ‘lowest income threshold’ means, 

7 with respect to coverage consisting of—

8 ‘‘(1) only an individual, 125 percent of the pov9 erty line (as defined in section 673(2) of the Com10 munity Services Block Grant Act (42 U.S.C. 

11 9902(2)), including any revision required by such 

12 section) for a single individual for the calendar year 

13 which includes the close of the taxable year, or 

14 ‘‘(2) a family of two or more individuals, 150 

15 percent of the poverty line (as so defined) for a fam16 ily of the size involved for the calendar year which 

17 includes the close of the taxable year. 

18 ‘‘(e) FAMILY INCOME.—For purposes of this sec19 tion—

20 ‘‘(1) IN GENERAL.—The term ‘family income’ 

21 means, with respect to a specified individual (as de22 fined in section 59B(b)) covered under coverage con23 sisting of—

24 ‘‘(A) only such individual, the modified ad25 justed gross income of such individual, or 
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1 ‘‘(B) two or more individuals, the sum of 

2 the modified adjusted gross income of the speci3 fied individual and the modified adjusted gross 

4 income of each other individual covered under 

5 the plan for the taxable year that ends in or 

6 with the taxable year of the specified individual. 

7 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.—

8 The term ‘modified adjusted gross income’ means 

9 adjusted gross income—

10 ‘‘(A) determined without regard to sections 

11 135, 911, 931, and 933, and 

12 ‘‘(B) increased by the amount of interest 

13 received or accrued during the taxable year 

14 which is exempt from tax under this title. 

15 ‘‘(f) REGULATIONS.—The Secretary may prescribe 

16 such regulations as are necessary or appropriate to carry 

17 out this section, including regulations which provide for 

18 not taking into account individuals with de minimis in19 come for purposes of determining family income for pur20 poses of this section.’’. 

21 (2) CONFORMING AMENDMENTS.—

22 (A) Paragraph (2) of section 1324(b) of 

23 title 31, United States Code, is amended by in24 serting ‘‘or 36’’ after ‘‘section 35’’. 
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1 (B) The table of section for subpart C of 

2 part IV of subchapter A of chapter 1 of the In3 ternal Revenue Code of 1986 is amended by 

4 striking the item relating to section 36 and in5 serting the following new items:

‘‘Sec. 36. Subsidy and prepayment of American Health Benefits premiums. 

‘‘Sec. 37. Overpayments of tax.’’.

6 (c) EMPLOYER FUNDING.—

7 (1) IN GENERAL.—Subtitle C of the Internal 

8 Revenue Code of 1986 (relating to employment 

9 taxes) is amended by redesignating chapter 25 as 

10 chapter 26 and by inserting after chapter 24 the fol11 lowing new chapter: 

12 ‘‘CHAPTER 25—AMERICAN HEALTH 

13 BENEFITS PROGRAM

‘‘Sec. 3451. Tax on employers. 

‘‘Sec. 3452. Instrumentalities of the United States.

14 ‘‘SEC. 3451. TAX ON EMPLOYERS. 

15 ‘‘(a) IMPOSITION OF TAX.—In addition to other 

16 taxes, there is hereby imposed on every employer an excise 

17 tax, with respect to having individuals in his employ, equal 

18 to 6 percent of the wages paid by him with respect to em19 ployment. 

20 ‘‘(b) NO COVER OVER TO POSSESSIONS.—Notwith21 standing any other provision of law, no amount collected 

22 under this chapter shall be covered over to any possession 

23 of the United States. 
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1 ‘‘(c) OTHER DEFINITIONS.—For purposes of this 

2 chapter, the terms ‘wages’, ‘employer’, and ‘employment’ 

3 have the same respective meanings as when used in chap4 ter 21: except that, for purposes of this chapter, section 

5 3121(a)(1) shall not apply. 

6 ‘‘SEC. 3452. INSTRUMENTALITIES OF THE UNITED STATES. 

7 ‘‘Notwithstanding any other provision of law (wheth8 er enacted before or after the enactment of this section) 

9 which grants to any instrumentality of the United States 

10 an exemption from taxation, such instrumentality shall 

11 not be exempt from the tax imposed by section 3451 un12 less such other provision of law grants a specific exemp13 tion, by reference to section 3451, from the tax imposed 

14 by such section.’’. 

15 (2) SELF-EMPLOYMENT.—Section 1401 of such 

16 Code is amended by redesignating subsection (c) as 

17 subsection (d) and by inserting after subsection (b) 

18 the following new subsection: 

19 ‘‘(c) AMERICAN HEALTH BENEFITS PROGRAM.—In 

20 addition to other taxes, there shall be imposed for each 

21 taxable year, on the self-employment income of every indi22 vidual, a tax equal to 6 percent of the amount of the self23 employment income for such taxable year.’’. 

24 (3) CLERICAL AMENDMENT.—The table of 

25 chapters for subtitle C of such Code is amended by 
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1 striking the item relating to chapter 25 and insert2 ing the following:

‘‘CHAPTER 25. AMERICAN HEALTH BENEFITS PROGRAM

‘‘CHAPTER 26. GENERAL PROVISIONS RELATING TO EMPLOYMENT TAXES

3 (d) DISCLOSURE OF TAXPAYER RETURN INFORMA4 TION TO CARRY OUT COST-SHARING SUBSIDIES.—

5 (1) IN GENERAL.—Section 6103(l) of the Inter6 nal Revenue Code of 1986 is amended by adding at 

7 the end the following new paragraph: 

8 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

9 TO CARRY OUT AMERICAN HEALTH BENEFITS PRO10 GRAM.—

11 ‘‘(A) IN GENERAL.—The Secretary shall, 

12 upon written request from the Commissioner of 

13 Health Benefits, disclose to officers, employees, 

14 and contractors of the Health Benefits Admin15 istration return information of a taxpayer who 

16 is, according to the records of the Secretary, a 

17 cost-sharing subsidy-eligible individual (as de18 fined in section 2205(b)(7)(A) of the Social Se19 curity Act) or a family member of such an indi20 vidual. Such return information shall be limited 

21 to—

22 ‘‘(i) taxpayer identity information 

23 with respect to such taxpayer, 
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1 ‘‘(ii) the filing status of such tax2 payer, 

3 ‘‘(iii) the adjusted gross income of 

4 such taxpayer, 

5 ‘‘(iv) the amounts excluded from such 

6 taxpayer’s gross income under sections 135 

7 and 911 to the extent such information is 

8 available, 

9 ‘‘(v) the interest received or accrued 

10 during the taxable year which is exempt 

11 from the tax imposed by chapter 1 to the 

12 extent such information is available, 

13 ‘‘(vi) the amounts excluded from such 

14 taxpayer’s gross income by sections 931 

15 and 933 to the extent such information is 

16 available, and 

17 ‘‘(vii) the taxable year with respect to 

18 which the preceding information relates. 

19 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

20 INFORMATION.—Return information disclosed 

21 under subparagraph (A) may be used by offi22 cers, employees, and contractors of the Health 

23 Benefits Administration only for the purposes 

24 of, and to the extent necessary in, establishing 

25 the appropriate amount of any cost-sharing 
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1 subsidies under section 2205 of the Social Secu2 rity Act.’’. 

3 (2) CONFORMING AMENDMENTS.—

4 (A) Paragraph (3) of section 6103(a) of 

5 such Code is amended by striking ‘‘or (20)’’ 

6 and inserting ‘‘(20), or (21)’’. 

7 (B) Paragraph (4) of section 6103(p) of 

8 such Code is amended by striking ‘‘(l)(16), 

9 (17), (19), or (20)’’ each place it appears and 

10 inserting ‘‘(l)(16), (17), (19), (20), or (21)’’. 

11 (C) Paragraph (2) of section 7213(a) of 

12 such Code is amended by striking ‘‘or (20)’’ 

13 and inserting ‘‘(20), or (21)’’. 

14 (e) DISCLOSURE OF TAXPAYER RETURN INFORMA15 TION TO CARRY OUT PREMIUM SUBSIDIES.—Section 

16 6103(k) of the Internal Revenue Code of 1986 is amended 

17 by adding at the end the following new paragraph: 

18 ‘‘(10) DISCLOSURE OF INFORMATION TO AD19 MINISTER PREMIUM SUBSIDY UNDER SECTION 36.—

20 To the extent that Secretary determines that disclo21 sure is necessary to permit the effective administra22 tion of section 36, the Secretary may disclose the 

23 modified adjusted gross income (as defined in sec24 tion 36) of any individual whose modified adjusted 
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1 gross income is taken into account in determining 

2 the amount of any credit under such section.’’. 

3 (f) EFFECTIVE DATE.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section 

6 shall take effect on January 1, 2007. 

7 (2) SUBSECTIONS (a) AND (b).—The amend8 ments made by subsections (a) and (b) shall apply 

9 to months beginning after December 31, 2006, in 

10 taxable years ending after such date. 

11 SEC. 4. AMENDMENTS TO THE MEDICAID AND SCHIP PRO12 GRAM. 

13 (a) INCREASE IN FMAP UNDER MEDICAID FOR

14 AHBP-COVERED SERVICES.—Section 1905 of the Social 

15 Security Act (42 U.S.C. 1396d) is amended—

16 (1) in subsection (b), by inserting ‘‘subsection 

17 (x) and’’ after ‘‘Subject to’’; and 

18 (2) by adding at the end the following new sub19 section:: 

20 ‘‘(x)(1) Subject to the succeeding provisions of this 

21 subsection, the Federal medical assistance percentage 

22 under this title for calendar quarters in a fiscal year (be23 ginning with the calendar quarter that begins on the effec24 tive date of the American Health Benefits Program under 

25 title XXII) shall be increased by a number of percentage 
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1 points (rounded to the nearest 1/100th of a percentage 

2 point) equal to 40 percent of the number of percentage 

3 points by which 100 percent exceeds the Federal medical 

4 assistance percentage otherwise determined for the State 

5 without regard to this subsection. 

6 ‘‘(2) Paragraph (1) shall only apply with respect to 

7 medical assistance for AHBP-eligible individuals (as de8 fined in section 2207(2)) and only for items and services 

9 for which benefits are generally provided under qualified 

10 health plans under title XXII, as determined by the Sec11 retary in consultation with the Commission of Health Ben12 efits. 

13 ‘‘(3) The Secretary shall provide for such special 

14 rules concerning the application of this subsection to the 

15 territories as the Secretary finds appropriate and equi16 table.’’. 

17 (b) SUNSET OF SCHIP FUNDING.—Section 2105 of 

18 such Act (42 U.S.C. 1397ee) is amended by adding at the 

19 end the following new subsection: 

20 ‘‘(h) SUNSET OF PROGRAM UPON INITIATION OF

21 AMERICAN HEALTH BENEFITS PROGRAM.—No payment 

22 shall be made under this title to a State for items and 

23 services furnished after the effective date of the American 

24 Health Benefits Program under title XXII.’’. 
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1 SEC. 5. STUDIES. 

2 (a) STUDIES.—The Comptroller General of the 

3 United States shall provide for the following studies: 

4 (1) INTEGRATION WITH OTHER PUBLIC

5 HEALTH INSURANCE COVERAGE.—A study of the 

6 cost effectiveness and quality of care under the 

7 American Health Benefits Program under title XXII 

8 of the Social Security Act compared to the public 

9 health insurance programs described in section 

10 2202(b)(2) of such Act and the feasibility and desir11 ability of integrating such programs with the Pro12 gram under such title. Such study shall be con13 ducted in consultation with the Federal officials 

14 overseeing such programs. 

15 (2) GROWTH OF PRESCRIPTION DRUG COSTS.—

16 A study of the rate of growth of prescription drug 

17 costs under such Program compared to such rate of 

18 growth under such public health insurance pro19 grams. 

20 (b) REPORTS.—Not later than January 1, 2009, the 

21 Comptroller General shall submit to Congress a report on 

22 the studies conducted under subsection (a).

Æ