I 
111TH CONGRESS 
1ST SESSION H. R. 3218 
To provide a refundable tax credit for medical costs, to expand access to 
health insurance coverage through individual membership associations 
(IMAs), and to assist in the establishment of high risk pools. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 14, 2009 
Mr. SHADEGG (for himself, Mr. GINGREY of Georgia, Mr. BISHOP of Utah, 
Mr. BOUSTANY, Mr. HOEKSTRA, Mrs. BLACKBURN, Mr. FLEMING, Mr. 
FRANKS of Arizona, Mr. BUYER, and Mr. BURGESS) introduced the fol-
lowing bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committee on Ways and Means, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To provide a refundable tax credit for medical costs, to 
expand access to health insurance coverage through indi-
vidual membership associations (IMAs), and to assist 
in the establishment of high risk pools. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Improving Health Care for All Americans Act’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title, etc. 
Sec. 2. Statement of constitutional authority. 
Sec. 3. Findings. 
TITLE I—REFUNDABLE AND ADVANCEABLE CREDIT FOR 
MEDICAL COSTS 
Sec. 101. Refundable and advanceable credit for medical costs. 
TITLE II—EXPANSION OF ACCESS AND CHOICE OF HEALTH IN-
SURANCE COVERAGE THROUGH INDIVIDUAL MEMBERSHIP AS-
SOCIATIONS (IMAS) 
Sec. 201. Expansion of access and choice of health insurance coverage through 
individual membership associations (IMAs). 
TITLE III—FEDERAL MATCHING FUNDING FOR STATE 
INSURANCE EXPENDITURES 
Sec. 301. Federal matching funding for StatFederal matching funding for 
State insurance expenditurese insurance expenditures. 
SEC. 2. STATEMENT OF CONSTITUTIONAL AUTHORITY. 
Congress enacts this Act pursuant to its authority 
under article I of the Constitution to regulate commerce. 
SEC. 3. FINDINGS. 
The Congress finds the following: 
(1) Approximately 180 million Americans re-
ceive health care through employer-sponsored cov-
erage. 
(2) Surveys indicate that 8 in 10 Americans are 
satisfied with the current employer-sponsored health 
care plan. 
(3) Taxing employer-sponsored health care ben-
efits, creating a new government-run health care 
plan, and expanding existing entitlement programs 
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will result in the loss of private health care coverage 
for an estimated 120 million Americans. 
TITLE 
I—REFUNDABLE 
AND 
ADVANCEABLE CREDIT FOR 
MEDICAL COSTS 
SEC. 101. REFUNDABLE AND ADVANCEABLE CREDIT FOR 
MEDICAL COSTS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to refundable credits) is amended by insert-
ing after section 36A the following new section: 
‘‘SEC. 36B. MEDICAL COSTS. 
‘‘(a) IN GENERAL.—In the case of an eligible indi-
vidual, there shall be allowed as a credit against the tax 
imposed by this subtitle an amount equal to the sum of— 
‘‘(1) the amount paid by the taxpayer during 
the taxable year for qualified health insurance for 
coverage of the taxpayer, his spouse, and depend-
ents, and 
‘‘(2) the amount paid by the taxpayer during 
the taxable year for medical care for the taxpayer, 
his spouse, and his dependents. 
‘‘(b) LIMITATION.—The amount allowed as a credit 
under subsection (a) for a taxable year shall not exceed 
$2,500 ($5,000 in the case of a joint return). 
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‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 
section, the term ‘eligible individual’ means an individual 
who is— 
‘‘(1) a citizen or national of the United States, 
or 
‘‘(2) lawfully present in the United States. 
‘‘(d) MEDICAL CARE.—For purposes of this section, 
the term ‘medical care’ has the meaning given such term 
by section 213(d), determined without regard to subpara-
graphs (C) and (D) of paragraph (1) thereof. 
‘‘(e) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified health 
insurance’ means insurance which constitutes med-
ical care. 
‘‘(2) EMPLOYER SUBSIDIZED COVERAGE.—Such 
term shall not include amounts paid for coverage of 
any individual for any month for which such indi-
vidual participates in any subsidized health plan 
maintained by any employer of the taxpayer or of 
the spouse of the taxpayer. For purposes of the pre-
ceding sentence, the rule of the last sentence of sec-
tion 162(l)(2)(B) shall apply and health care flexible 
spending accounts and health reimbursement ar-
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tion 151 is allowable to another taxpayer for a tax-
able year beginning in the calendar year in which 
such individual’s taxable year begins. 
‘‘(4) MARRIED COUPLES MUST FILE JOINT RE-
TURN.— 
‘‘(A) IN
GENERAL.—If the taxpayer is 
married at the close of the taxable year, the 
credit shall be allowed under subsection (a) only 
if the taxpayer and his spouse file a joint return 
for the taxable year. 
‘‘(B) MARITAL STATUS; CERTAIN MARRIED 
INDIVIDUALS LIVING APART.—Rules similar to 
the rules of paragraphs (3) and (4) of section 
21(e) shall apply for purposes of this para-
graph. 
‘‘(5) VERIFICATION
OF
COVERAGE, ETC.—No 
credit shall be allowed under this section to any indi-
vidual unless such individual’s coverage under quali-
fied health insurance, and the amount paid for such 
coverage, are verified in such manner as the Sec-
retary may prescribe. 
‘‘(6) COST-OF-LIVING
ADJUSTMENT.—In the 
case of any taxable year beginning in a calendar 
year after 2010, each dollar amount contained in 
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subsection (b) shall be increased by an amount equal 
to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins by sub-
stituting ‘calendar year 2009’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
Any increase determined under the preceding sen-
tence shall be rounded to the nearest multiple of 
$10.’’. 
(b) ADVANCE PAYMENT.— 
(1) IN GENERAL.—Chapter 77 of the Internal 
Revenue Code of 1986 (relating to miscellaneous 
provisions) is amended by adding at the end the fol-
lowing: 
‘‘SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR MEDICAL 
COSTS. 
‘‘The Secretary shall establish a program for— 
‘‘(1) making payments to providers of qualified 
health insurance (as defined in section 36B(e)) on 
behalf of taxpayers eligible for the credit under sec-
tion 36B, and 
‘‘(2) making payments relating to medical care 
for which a credit is allowable under such section.’’. 
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(2) INFORMATION REPORTING.— 
(A) IN GENERAL.—Subpart B of part III 
of subchapter A of chapter 61 of such Code (re-
lating to information concerning transactions 
with other persons) is amended by adding at 
the end the following new section: 
‘‘SEC. 6050X. RETURNS RELATING TO CREDIT FOR MEDICAL 
COSTS. 
‘‘(a) REQUIREMENT OF REPORTING.—Every person 
who receives payments for any month of any calendar year 
under section 7529 with respect to any individual shall, 
at such time as the Secretary may prescribe, make the 
return described in subsection (b) with respect to each 
such individual. 
‘‘(b) FORM AND MANNER OF RETURNS.—A return 
is described in this subsection if such return— 
‘‘(1) is in such form as the Secretary may pre-
scribe, and 
‘‘(2) contains— 
‘‘(A) the name, address, and TIN of each 
individual referred to in subsection (a), and 
‘‘(B) such other information as the Sec-
retary may prescribe. 
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
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QUIRED.—Every person required to make a return under 
subsection (a) shall furnish to each individual whose name 
is required to be set forth in such return a written state-
ment showing— 
‘‘(1) the name and address of the person re-
quired to make such return and the phone number 
of the information contact for such person, and 
‘‘(2) the information required to be shown on 
the return with respect to such individual. 
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the 
year following the calendar year for which the return 
under subsection (a) is required to be made.’’. 
(B) ASSESSABLE PENALTIES.— 
(i) Subparagraph (B) of section 
6724(d)(1) of such Code (relating to defi-
nitions) is amended by striking ‘‘or’’ at the 
end of clause (xxii), by striking ‘‘and’’ at 
the end of clause (xxiii) and inserting ‘‘or’’, 
and by inserting after clause (xxiii) the fol-
lowing new clause: 
‘‘(xxiv) section 6050X (relating to re-
turns relating to credit for medical costs), 
and’’. 
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(ii) Paragraph (2) of section 6724(d) 
of such Code is amended by striking the 
period at the end of subparagraph (EE) 
and inserting a comma, by striking the pe-
riod at the end of subparagraph (FF) and 
inserting ‘‘, or’’, and by adding after sub-
paragraph (FF) the following new sub-
paragraph: 
‘‘(GG) section 6050X (relating to returns 
relating to credit for medical costs).’’. 
(3) CLERICAL AMENDMENTS.— 
(A) The table of sections for chapter 77 of 
such Code is amended by adding at the end the 
following new item: 
‘‘Sec. 7529. Advance payment of credit for medical costs.’’. 
(B) The table of sections for subpart B of 
part III of subchapter A of chapter 61 of such 
Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 6050X. Returns relating to credit for medical costs.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting 
‘‘36B,’’ after ‘‘35A,’’. 
(2) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
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enue Code of 1986 is amended by striking the item 
relating to section 36 and inserting the following 
new items: 
‘‘Sec. 36B. Medical costs.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009. 
TITLE 
II—EXPANSION 
OF 
AC-
CESS 
AND 
CHOICE 
OF 
HEALTH 
INSURANCE 
COV-
ERAGE 
THROUGH 
INDI-
VIDUAL MEMBERSHIP ASSO-
CIATIONS (IMAS) 
SEC. 201. EXPANSION OF ACCESS AND CHOICE OF HEALTH 
INSURANCE 
COVERAGE 
THROUGH 
INDI-
VIDUAL MEMBERSHIP ASSOCIATIONS (IMAS). 
The Public Health Service Act is amended by adding 
at the end the following new title: 
‘‘TITLE XXXI—INDIVIDUAL 
MEMBERSHIP ASSOCIATIONS 
‘‘SEC. 3101. DEFINITION OF INDIVIDUAL MEMBERSHIP AS-
SOCIATION (IMA). 
‘‘(a) IN GENERAL.—For purposes of this title, the 
terms ‘individual membership association’ and ‘IMA’ 
mean a legal entity that meets the following requirements: 
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‘‘(1) ORGANIZATION.—The IMA is an organiza-
tion operated under the direction of an association 
(as defined in section 3104(1)). 
‘‘(2) 
OFFERING
HEALTH
BENEFITS
COV-
ERAGE.— 
‘‘(A) DIFFERENT GROUPS.—The IMA, in 
conjunction with those health insurance issuers 
that offer health benefits coverage through the 
IMA, makes available health benefits coverage 
in the manner described in subsection (b) to all 
members of the IMA and the dependents of 
such members in the manner described in sub-
section (c)(2) at rates that are established by 
the health insurance issuer on a policy or prod-
uct specific basis and that may vary only as 
permissible under State law. 
‘‘(B) NONDISCRIMINATION
IN
COVERAGE 
OFFERED.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the IMA may not offer health benefits 
coverage to a member of an IMA unless 
the same coverage is offered to all such 
members of the IMA. 
‘‘(ii) 
CONSTRUCTION.—Nothing 
in 
this title shall be construed as requiring or 
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permitting a health insurance issuer to 
provide coverage outside the service area of 
the issuer, as approved under State law, or 
requiring a health insurance issuer from 
excluding or limiting the coverage on any 
individual, subject to the requirement of 
section 2741. 
‘‘(C) NO FINANCIAL UNDERWRITING.—The 
IMA provides health benefits coverage only 
through contracts with health insurance issuers 
and does not assume insurance risk with re-
spect to such coverage. 
‘‘(3) GEOGRAPHIC AREAS.—Nothing in this title 
shall be construed as preventing the establishment 
and operation of more than one IMA in a geographic 
area or as limiting the number of IMAs that may 
operate in any area. 
‘‘(4) PROVISION OF ADMINISTRATIVE SERVICES 
TO PURCHASERS.— 
‘‘(A) IN GENERAL.—The IMA may provide 
administrative services for members. Such serv-
ices may include accounting, billing, and enroll-
ment information. 
‘‘(B) CONSTRUCTION.—Nothing in this 
subsection shall be construed as preventing an 
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IMA from serving as an administrative service 
organization to any entity. 
‘‘(5) FILING
INFORMATION.—The IMA files 
with the Secretary information that demonstrates 
the IMA’s compliance with the applicable require-
ments of this title. 
‘‘(b) HEALTH
BENEFITS
COVERAGE
REQUIRE-
MENTS.— 
‘‘(1) COMPLIANCE
WITH
CONSUMER
PROTEC-
TION REQUIREMENTS.—Any health benefits coverage 
offered through an IMA shall— 
‘‘(A) be underwritten by a health insurance 
issuer that— 
‘‘(i) is licensed (or otherwise regu-
lated) under State law, 
‘‘(ii) meets all applicable State stand-
ards relating to consumer protection, sub-
ject to section 3002(b), and 
‘‘(B) subject to paragraph (2), be approved 
or otherwise permitted to be offered under 
State law. 
‘‘(2) EXAMPLES OF TYPES OF COVERAGE.—The 
benefits coverage made available through an IMA 
may include, but is not limited to, any of the fol-
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lowing if it meets the other applicable requirements 
of this title: 
‘‘(A) Coverage through a health mainte-
nance organization. 
‘‘(B) Coverage in connection with a pre-
ferred provider organization. 
‘‘(C) Coverage in connection with a li-
censed provider-sponsored organization. 
‘‘(D) Indemnity coverage through an insur-
ance company. 
‘‘(E) Coverage offered in connection with a 
contribution into a medical savings account, 
health savings account, or flexible spending ac-
count. 
‘‘(F) Coverage that includes a point-of- 
service option. 
‘‘(G) Any combination of such types of 
coverage. 
‘‘(3) WELLNESS BONUSES FOR HEALTH PRO-
MOTION.—Nothing in this title shall be construed as 
precluding a health insurance issuer offering health 
benefits coverage through an IMA from establishing 
premium discounts or rebates for members or from 
modifying 
otherwise 
applicable 
copayments 
or 
deductibles in return for adherence to programs of 
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health promotion and disease prevention so long as 
such programs are agreed to in advance by the IMA 
and comply with all other provisions of this title and 
do not discriminate among similarly situated mem-
bers. 
‘‘(c) MEMBERS; HEALTH INSURANCE ISSUERS.— 
‘‘(1) MEMBERS.— 
‘‘(A) IN
GENERAL.—Under rules estab-
lished to carry out this title, with respect to an 
individual who is a member of an IMA, the in-
dividual may enroll for health benefits coverage 
(including coverage for dependents of such indi-
vidual) offered by a health insurance issuer 
through the IMA. 
‘‘(B) RULES FOR ENROLLMENT.—Nothing 
in this paragraph shall preclude an IMA from 
establishing rules of enrollment and reenroll-
ment of members. Such rules shall be applied 
consistently to all members within the IMA and 
shall not be based in any manner on health sta-
tus-related factors. 
‘‘(2) HEALTH INSURANCE ISSUERS.—The con-
tract between an IMA and a health insurance issuer 
shall provide, with respect to a member enrolled with 
health benefits coverage offered by the issuer 
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through the IMA, for the payment of the premiums 
collected by the issuer. 
‘‘SEC. 3102. APPLICATION OF CERTAIN LAWS AND REQUIRE-
MENTS. 
‘‘State laws insofar as they relate to any of the fol-
lowing are superseded and shall not apply to health bene-
fits coverage made available through an IMA: 
‘‘(1) Benefit requirements for health benefits 
coverage offered through an IMA, including (but not 
limited to) requirements relating to coverage of spe-
cific providers, specific services or conditions, or the 
amount, duration, or scope of benefits, but not in-
cluding requirements to the extent required to imple-
ment title XXVII or other Federal law and to the 
extent the requirement prohibits an exclusion of a 
specific disease from such coverage. 
‘‘(2) Any other requirements (including limita-
tions on compensation arrangements) that, directly 
or indirectly, preclude (or have the effect of pre-
cluding) the offering of such coverage through an 
IMA, if the IMA meets the requirements of this 
title. 
Any State law or regulation relating to the composition 
or organization of an IMA is preempted to the extent the 
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law or regulation is inconsistent with the provisions of this 
title. 
‘‘SEC. 3103. ADMINISTRATION. 
‘‘(a) IN GENERAL.—The Secretary shall administer 
this title and is authorized to issue such regulations as 
may be required to carry out this title. Such regulations 
shall be subject to Congressional review under the provi-
sions of chapter 8 of title 5, United States Code. The Sec-
retary shall incorporate the process of ‘deemed file and 
use’ with respect to the information filed under section 
3001(a)(5)(A) and shall determine whether information 
filed by an IMA demonstrates compliance with the applica-
ble requirements of this title. The Secretary shall exercise 
authority under this title in a manner that fosters and 
promotes the development of IMAs in order to improve 
access to health care coverage and services. 
‘‘(b) PERIODIC REPORTS.—The Secretary shall sub-
mit to Congress a report every 30 months, during the 10- 
year period beginning on the effective date of the rules 
promulgated by the Secretary to carry out this title, on 
the effectiveness of this title in promoting coverage of un-
insured individuals. The Secretary may provide for the 
production of such reports through one or more contracts 
with appropriate private entities. 
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‘‘SEC. 3104. DEFINITIONS. 
‘‘For purposes of this title: 
‘‘(1) ASSOCIATION.—The term ‘association’ 
means, with respect to health insurance coverage of-
fered in a State, an association which— 
‘‘(A) has been actively in existence for at 
least 5 years; 
‘‘(B) has been formed and maintained in 
good faith for purposes other than obtaining in-
surance; 
‘‘(C) does not condition membership in the 
association on any health status-related factor 
relating to an individual (including an employee 
of an employer or a dependent of an employee); 
and 
‘‘(D) does not make health insurance cov-
erage offered through the association available 
other than in connection with a member of the 
association. 
‘‘(2) DEPENDENT.—The term ‘dependent’, as 
applied to health insurance coverage offered by a 
health insurance issuer licensed (or otherwise regu-
lated) in a State, shall have the meaning applied to 
such term with respect to such coverage under the 
laws of the State relating to such coverage and such 
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an issuer. Such term may include the spouse and 
children of the individual involved. 
‘‘(3) HEALTH BENEFITS COVERAGE.—The term 
‘health benefits coverage’ has the meaning given the 
term 
health 
insurance 
coverage 
in 
section 
2791(b)(1). 
‘‘(4) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning given such 
term in section 2791(b)(2). 
‘‘(5) HEALTH STATUS-RELATED FACTOR.—The 
term ‘health status-related factor’ has the meaning 
given such term in section 2791(d)(9). 
‘‘(6) IMA; INDIVIDUAL MEMBERSHIP ASSOCIA-
TION.—The terms ‘IMA’ and ‘individual membership 
association’ are defined in section 3101(a). 
‘‘(7) MEMBER.—The term ‘member’ means, 
with respect to an IMA, an individual who is a mem-
ber of the association to which the IMA is offering 
coverage.’’. 
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TITLE III—FEDERAL MATCHING 
FUNDING FOR STATE INSUR-
ANCE EXPENDITURES 
SEC. 
301. 
FEDERAL 
MATCHING 
FUNDING 
FOR 
STATFEDERAL 
MATCHING 
FUNDING 
FOR 
STATE INSURANCE EXPENDITURESE INSUR-
ANCE EXPENDITURES. 
(a) IN GENERAL.—Subject to the succeeding provi-
sions of this section, each State shall receive from the Sec-
retary of Health and Human Services an amount equal 
to 50 percent of the funds expended by the State in pro-
viding for the use, in connection with providing health ben-
efits coverage, of a high-risk pool, a reinsurance pool, or 
other risk-adjustment mechanism used for the purpose of 
subsidizing the purchase of private health insurance. 
(b) FUNDING LIMITATION.—A State shall not receive 
under this section for a fiscal year more than a total of 
50 cents multiplied by the average number of residents 
(as estimated by the Secretary) in the State in the fiscal 
year. 
(c) ADMINISTRATION.—The Secretary of Health and 
Human Services shall provide for the administration of 
this section and may establish such terms and conditions, 
including the requirement of an application, as may be ap-
propriate to carry out this section. 
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(d) CONSTRUCTION.—Nothing in this section shall be 
construed as requiring a State to operate a reinsurance 
pool (or other risk-adjustment mechanism) under this sec-
tion or as preventing a State from operating such a pool 
or mechanism through one or more private entities. 
(e) HIGH-RISK POOL.—For purposes of this section, 
the term ‘‘high-risk pool’’ means any qualified high risk 
pool (as defined in section 2744(c)(2) of the Public Health 
Service Act). 
(f) REINSURANCE POOL OR OTHER RISK-ADJUST-
MENT MECHANISM DEFINED.—For purposes of this sec-
tion, the term ‘‘reinsurance pool or other risk-adjustment 
mechanism’’ means any State-based risk spreading mecha-
nism to subsidize the purchase of private health insurance 
for the high-risk population. 
(g) HIGH-RISK POPULATION.—For purposes of this 
section, the term ‘‘high-risk population’’ means— 
(1) individuals who, by reason of the existence 
or history of a medical condition, are able to acquire 
health coverage only at rates which are at least 150 
percent of the standard risk rates for such coverage, 
and 
(2) individuals who are provided health cov-
erage by a high-risk pool. 
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(h) STATE DEFINED.—For purposes of this section, 
the term ‘‘State’’ includes the District of Columbia, Puer-
to Rico, the Virgin Islands, Guam, American Samoa, and 
the Northern Mariana Islands. 
Æ 
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