(B) The table of section for subpart C of 
part IV of subchapter A of chapter 1 of the In-
ternal Revenue Code of 1986 is amended by 
striking the item relating to section 36 and in-
serting the following new items: 
‘‘Sec. 36. Subsidy and prepayment of American Health Benefits premiums. 
‘‘Sec. 37. Overpayments of tax.’’. 
(c) EMPLOYER FUNDING.— 
(1) IN GENERAL.—Subtitle C of the Internal 
Revenue Code of 1986 (relating to employment 
taxes) is amended by redesignating chapter 25 as 
chapter 26 and by inserting after chapter 24 the fol-
lowing new chapter: 
‘‘CHAPTER 25—AMERICAN HEALTH 
BENEFITS PROGRAM 
‘‘Sec. 3451. Tax on employers. 
‘‘Sec. 3452. Refund of tax in case of qualified employer-provided coverage. 
‘‘Sec. 3453. Instrumentalities of the United States. 
‘‘SEC. 3451. TAX ON EMPLOYERS. 
‘‘(a) IMPOSITION
OF TAX.—In addition to other 
taxes, there is hereby imposed on every employer an excise 
tax, with respect to having individuals in his employ, equal 
to the applicable percentage of the wages paid by him with 
respect to employment. 
‘‘(b) APPLICABLE PERCENTAGE.—The term ‘applica-
ble percentage’ means, with respect to wages paid during 
any period, the percentage determined by the Commis-
sioner of Health Benefits, in consultation with the Sec-
retary, with respect to such period which, in the estimation 
of such Commissioner, will provide revenue to the Federal 
Government equal to the excess of the cost to the Federal 
Government of providing coverage under under title XXII 
of the Social Security Act over the aggregate premiums 
(reduced by any premium subsidies) established under 
such title with respect to such coverage. 
‘‘(c) NO COVER OVER TO POSSESSIONS.—Notwith-
standing any other provision of law, no amount collected 
under this chapter shall be covered over to any possession 
of the United States. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
chapter, the terms ‘wages’, ‘employer’, and ‘employment’ 
have the same respective meanings as when used in chap-
ter 21: except that, for purposes of this chapter, section 
3121(a)(1) shall not apply. 
‘‘SEC. 3452. REFUND OF TAX IN CASE OF QUALIFIED EM-
PLOYER-PROVIDED COVERAGE. 
‘‘(a) IN GENERAL.—In the case of a person subject 
to tax under section 3451 or section 1401(c), there shall 
be allowed as a credit against the tax imposed by such 
section an amount equal to the tax imposed under such 
section with respect to the wages or self-employment in-
come of individuals for periods during which the individual
is covered by qualified employer-provided coverage (which 
is provided by such person). 
‘‘(b) 
QUALIFIED
EMPLOYER-PROVIDED
COV-
ERAGE.—For purposes of subsection (a), the term ‘quali-
fied employer-provided coverage’ has the meaning given 
that term in section 2207(6) of the Social Security Act. 
‘‘SEC. 3453. INSTRUMENTALITIES OF THE UNITED STATES. 
‘‘Notwithstanding any other provision of law (wheth-
er enacted before or after the enactment of this section) 
which grants to any instrumentality of the United States 
an exemption from taxation, such instrumentality shall 
not be exempt from the tax imposed by section 3451 un-
less such other provision of law grants a specific exemp-
tion, by reference to section 3451, from the tax imposed 
by such section.’’. 
(2) SELF-EMPLOYMENT.—Section 1401 of such 
Code is amended by redesignating subsection (c) as 
subsection (d) and by inserting after subsection (b) 
the following new subsection: 
‘‘(c) AMERICAN HEALTH BENEFITS PROGRAM.—In 
addition to other taxes, there shall be imposed for each 
taxable year, on the self-employment income of every indi-
vidual, a tax equal to the applicable percentage (as defined 
in section 3451(b))) of the amount of the self-employment 
income for such taxable year.’’.
(3) CLERICAL
AMENDMENT.—The table of 
chapters for subtitle C of such Code is amended by 
striking the item relating to chapter 25 and insert-
ing the following: 
‘‘CHAPTER 25. AMERICAN HEALTH BENEFITS PROGRAM 
‘‘CHAPTER 26. GENERAL PROVISIONS RELATING TO EMPLOYMENT TAXES’’ 
(d) DISCLOSURE OF TAXPAYER RETURN INFORMA-
TION TO CARRY OUT COST-SHARING SUBSIDIES.— 
(1) IN GENERAL.—Section 6103(l) of the Inter-
nal Revenue Code of 1986 is amended by adding at 
the end the following new paragraph: 
‘‘(21) DISCLOSURE OF RETURN INFORMATION 
TO CARRY OUT AMERICAN HEALTH BENEFITS PRO-
GRAM.— 
‘‘(A) IN GENERAL.—The Secretary shall, 
upon written request from the Commissioner of 
Health Benefits, disclose to officers, employees, 
and contractors of the Health Benefits Admin-
istration return information of a taxpayer who 
is, according to the records of the Secretary, a 
cost-sharing subsidy-eligible individual (as de-
fined in section 2205(b)(7)(A) of the Social Se-
curity Act) or a family member of such an indi-
vidual. Such return information shall be limited 
to—
‘‘(i) taxpayer identity information 
with respect to such taxpayer, 
‘‘(ii) the filing status of such tax-
payer, 
‘‘(iii) the adjusted gross income of 
such taxpayer, 
‘‘(iv) the amounts excluded from such 
taxpayer’s gross income under sections 135 
and 911 to the extent such information is 
available, 
‘‘(v) the interest received or accrued 
during the taxable year which is exempt 
from the tax imposed by chapter 1 to the 
extent such information is available, 
‘‘(vi) the amounts excluded from such 
taxpayer’s gross income by sections 931 
and 933 to the extent such information is 
available, and 
‘‘(vii) the taxable year with respect to 
which the preceding information relates. 
‘‘(B) RESTRICTION ON USE OF DISCLOSED 
INFORMATION.—Return information disclosed 
under subparagraph (A) may be used by offi-
cers, employees, and contractors of the Health 
Benefits Administration only for the purposes
of, and to the extent necessary in, establishing 
the appropriate amount of any cost-sharing 
subsidies under section 2205 of the Social Secu-
rity Act.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Paragraph (3) of section 6103(a) of 
such Code is amended by striking ‘‘or (20)’’ 
and inserting ‘‘(20), or (21)’’. 
(B) Paragraph (4) of section 6103(p) of 
such Code is amended by striking ‘‘(l)(16), 
(17), (19), or (20)’’ each place it appears and 
inserting ‘‘(l)(16), (17), (19), (20), or (21)’’. 
(C) Paragraph (2) of section 7213(a) of 
such Code is amended by striking ‘‘or (20)’’ 
and inserting ‘‘(20), or (21)’’. 
(e) DISCLOSURE OF TAXPAYER RETURN INFORMA-
TION
TO CARRY OUT PREMIUM SUBSIDIES.—Section 
6103(k) of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new paragraph: 
‘‘(10) DISCLOSURE OF INFORMATION TO AD-
MINISTER PREMIUM SUBSIDY UNDER SECTION 36.— 
To the extent that Secretary determines that disclo-
sure is necessary to permit the effective administra-
tion of section 36, the Secretary may disclose the 
modified adjusted gross income (as defined in sec-
tion 36) of any individual whose modified adjusted 
gross income is taken into account in determining 
the amount of any credit under such section. ’’. 
(f) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall take effect on January 1, 2008. 
(2) SUBSECTIONS (a) AND (b).—The amend-
ments made by subsections (a) and (b) shall apply 
to months beginning after December 31, 2007, in 
taxable years ending after such date. 
SEC. 4. AMENDMENTS TO THE MEDICAID PROGRAM AND 
SCHIP. 
(a) INCREASE IN FMAP UNDER MEDICAID FOR FOR 
AHBP-COVERED SERVICES.—Section 1905 of the Social 
Security Act (42 U.S.C. 1396d) is amended— 
(1) in subsection (b), by inserting ‘‘subsection 
(y) and’’ after ‘‘Subject to’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(y)(1) Subject to the succeeding provisions of this 
subsection, the Federal medical assistance percentage 
under this title for calendar quarters in a fiscal year (be-
ginning with the calendar quarter that begins on the effec-
tive date of the American Health Benefits Program under
title XXII) shall be increased by a number of percentage 
points (rounded to the nearest 1/100th of a percentage 
point) equal to 40 percent of the number of percentage 
points by which 100 percent exceeds the Federal medical 
assistance percentage otherwise determined for the State 
without regard to this subsection. 
‘‘(2) Paragraph (1) shall only apply with respect to 
medical assistance for AHBP-eligible individuals (as de-
fined in section 2207(2)) and only for items and services 
for which benefits are generally provided under qualified 
health plans under title XXII, as determined by the Sec-
retary in consultation with the Commissioner of Health 
Benefits. 
‘‘(3) The Secretary shall provide for such special 
rules concerning the application of this subsection to the 
territories as the Secretary finds appropriate and equi-
table.’’. 
(b) SUNSET OF SCHIP FUNDING.—Section 2105 of 
such Act (42 U.S.C. 1397ee) is amended by adding at the 
end the following new subsection: 
‘‘(h) SUNSET OF PROGRAM UPON INITIATION OF 
AMERICAN HEALTH BENEFITS PROGRAM.—No payment 
shall be made under this title to a State for items and 
services furnished after the effective date of the American 
Health Benefits Program under title XXII.’’.
SEC. 5. STUDIES. 
(a) STUDIES.—The Comptroller General of the 
United States shall provide for the following studies: 
(1) 
INTEGRATION
WITH
OTHER
PUBLIC 
HEALTH
INSURANCE
COVERAGE.—A study of the 
cost effectiveness and quality of care under the 
American Health Benefits Program under title XXII 
of the Social Security Act compared to the public 
health insurance programs described in section 
2202(b)(2) of such Act and the feasibility and desir-
ability of integrating such programs with the Pro-
gram under such title. Such study shall be con-
ducted in consultation with the Federal officials 
overseeing such programs. 
(2) GROWTH OF PRESCRIPTION DRUG COSTS.— 
A study of the rate of growth of prescription drug 
costs under such Program compared to such rate of 
growth under such public health insurance pro-
grams. 
(b) REPORTS.—Not later than January 1, 2010, the 
Comptroller General shall submit to Congress a report on 
the studies conducted under subsection (a). 
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