‘‘(b) MEDICARE-ELIGIBLE COVERED BENEFICIARY
DESCRIBED.—A Medicare-eligible covered beneficiary re-
ferred to in subsection (a) is a covered beneficiary under
this chapter who for any reason is or becomes entitled to
hospital insurance benefits under part A of title XVIII of
the Social Security Act (42 U.S.C. 1395c et seq.). The
covered beneficiary shall not be required to satisfy any eli-
gibility criteria specified in chapter 89 of title 5 as a condi-
tion for enrollment in a health benefits plan offered
through the Federal Employee Health Benefits program
pursuant to subsection (a).
‘‘(c) CONTINUED PARTICIPATION
IN UNIFORMED
SERVICES HEALTH SYSTEM.—A Medicare-eligible covered
beneficiary who enrolls in a health benefits plan offered
through the Federal Employee Health Benefits program
pursuant to subsection (a) may continue, after such enroll-
ment, to receive health care services through a treatment
facility of the uniformed services, the Civilian Health and
Medical Program of the Uniformed Services, or the
TRICARE program. Section 1095 of this title, relating
to collection from third-party payers, shall apply with re-
spect to the costs of health care services incurred by the
United States on behalf of an enrolled covered beneficiary
through a treatment facility of the uniformed services, the
Civilian Health and Medical Program of the Uniformed
Services, or the TRICARE program.
‘‘(d) CONTRIBUTIONS.—(1) In the case of a Medi-
care-eligible covered beneficiary who enrolls in a health
benefits plan offered through the Federal Employee
Health Benefits program pursuant to subsection (a), the
administering Secretary concerned shall be responsible for
Government contributions that the Office of Personnel
Management determines are necessary to cover all costs
in excess of beneficiary contributions under paragraph (2).
‘‘(2) The contribution required from the enrolled cov-
ered beneficiary shall be equal to the amount that would
be withheld from the pay of a similarly situated Federal
employee who enrolls in a health benefits plan under chap-
ter 89 of title 5.
‘‘(e) MANAGEMENT OF PARTICIPATION.—If the en-
rolled covered beneficiary is a member or former member
of the uniformed services described in section 1074(b) of
this title, the authority responsible for approving retired
or retainer pay or equivalent pay for the member or
former member shall manage the participation of the en-
rolled member or former member in a health benefits plan
offered through the Federal Employee Health Benefits
program pursuant to subsection (a). If the enrolled cov-
ered beneficiary is a dependent of a member or former
member, the authority that is, or would be, responsible
for approving retired or retainer pay or equivalent pay for
the member or former member shall manage the participa-
tion of the enrolled dependent in a health benefits plan
offered through the Federal Employee Health Benefits
program under subsection (a). The Office of Personnel
Management shall maintain separate risk pools for en-
rolled covered beneficiaries until such time as the Director
of the Office of Personnel Management determines that
complete inclusion of enrolled covered beneficiaries under
chapter 89 of title 5 will not adversely affect Federal em-
ployees and annuitants enrolled in health benefits plans
under such chapter.
‘‘(f) EFFECT OF CANCELLATION.—The cancellation
by a Medicare-eligible covered beneficiary of coverage
under the Federal Employee Health Benefits program
shall be irrevocable for purposes of this section.
‘‘(g) REPORTING REQUIREMENTS.—Not later than
November 1 of each year, the administering Secretaries
and the Director of the Office of Personnel Management
shall jointly submit a report to Congress describing the
provision of health care services to Medicare-eligible cov-
ered beneficiaries under this section during the preceding
fiscal year. The report shall address or contain the follow-
ing:
‘‘(1) The number of Medicare-eligible covered
beneficiaries enrolled in health benefits plans offered
through the Federal Employee Health Benefits pro-
gram pursuant to subsection (a), both in terms of
total number and as a percentage of all Medicare-
eligible covered beneficiaries receiving health care
through the health care system of the uniformed
services.
‘‘(2) The out-of-pocket cost to enrolled covered
beneficiaries under such health benefits plans.
‘‘(3) The cost to the Government (including the
Department of Defense, the Department of Trans-
portation, and the Department of Health and
Human Services) of providing care under such
health benefits plans as a result of this section.
‘‘(4) A comparison of the costs determined
under paragraphs (2) and (3) and the costs that
would have otherwise been incurred by the Govern-
ment and enrolled covered beneficiaries under alter-
native health care options available to the admin-
istering Secretaries.
‘‘(5) The effect of this section on the cost, ac-
cess, and utilization rates of other health care op-
tions under the health care system of the uniformed
services.
‘‘(h) TIME FOR OPTION.—The Secretary of Defense
shall begin to offer the health benefits option under sub-
section (a) not later than January 1, 1998.’’.
(2) The table of sections at the beginning of such
chapter is amended by adding at the end the following
new item:
‘‘1107. Health care coverage through Federal Employees Health Benefits pro-
gram.’’.
(b) CONFORMING AMENDMENTS.—Chapter 89 of
title 5, United States Code, is amended—
(1) in section 8905—
(A) 
by 
redesignating 
subsections 
(d)
through (f) as subsections (e) through (g), re-
spectively; and
(B) by inserting after subsection (c) the
following new subsection:
‘‘(d) An individual whom an administering Secretary
described in section 1073 of title 10 determines is a medi-
care-eligible covered beneficiary under subsection (b) of
section 1107 of such title may enroll in a health benefits
plan under this chapter in accordance with the agreement
entered into under subsection (a) of such section between
the Secretary of Defense and the Office and in accordance
with applicable regulations under this chapter.’’;
(2) in section 8906(b)—
(A) in paragraph (1), by striking ‘‘para-
graphs (2) and (3)’’ and inserting in lieu there-
of ‘‘paragraphs (2), (3), and (4)’’; and
(B) by adding at the end the following new
paragraph:
‘‘(4) In the case of individuals who enroll in a health
plan in accordance with section 8905(d) of this title, the
Government contribution shall be determined under sec-
tion 1107(d) of title 10.’’; and
(3) in section 8906(g)—
(A) in paragraph (1), by striking ‘‘para-
graph (2)’’ and inserting in lieu thereof ‘‘para-
graphs (2) and (3)’’; and
(B) by adding at the end the following new
paragraph:
‘‘(3) The Government contribution described in sub-
section (b)(4) for beneficiaries who enroll in accordance
with section 8905(d) of this title shall be paid as provided
in section 1107(d) of title 10.’’.
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