tion without intervening motion, order, or other 
business, and the resolution shall remain the 
unfinished business of the Senate until disposed 
of. 
(3) RULES OF THE SENATE AND HOUSE OF 
REPRESENTATIVES.—This subsection is enacted by 
Congress— 
(A) as an exercise of the rulemaking power 
of the Senate and House of Representatives, re-
spectively, and is deemed to be part of the rules 
of each House, respectively, but applicable only 
with respect to the procedure to be followed in 
that House in the case of a resolution under 
this subsection, and it supersedes other rules 
only to the extent that it is inconsistent with 
such rules; and 
(B) with full recognition of the constitu-
tional right of either House to change the rules 
(so far as they relate to the procedure of that 
House) at any time, in the same manner, and 
to the same extent as in the case of any other 
rule of that House. 
(4) FEDERAL
BUDGET
NEUTRALITY.—Except 
insofar as it allots appropriations made pursuant to 
subsection (k), the legislative proposal submitted 
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pursuant to subsection (d)(4)(C) may not increase 
the cumulative, net Federal budget deficit during the 
multi-year operation of all the State applications 
contained therein, taking into account such applica-
tions’ impact on Federal mandatory and discre-
tionary spending, Federal revenue, and Federal tax 
expenditures. 
(f) FUNDING.— 
(1) IN GENERAL.—The Secretary shall provide 
a grant to a State that has an application approved 
under subsection (e) to enable such State to carry 
out an innovative State health program in the State, 
to the extent that such a grant is included in the 
recommendation of the Commission. 
(2) AMOUNT
OF
GRANT.—The amount of a 
grant provided to a State under paragraph (1) shall 
be determined based upon the recommendations of 
the Commission, subject to the amount appropriated 
under subsection (k). 
(3) PERFORMANCE-BASED
FUNDING
ALLOCA-
TION.—In awarding grants under paragraph (1), the 
Commission shall direct the Secretary to— 
(A) fund a balanced diversity of ap-
proaches as provided for by the Commission in 
subsection (c)(1)(B); and 
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(B) link allocations to the State to the 
meeting of the goals and performance measures 
relating to health care coverage and health care 
costs established under this title through the 
State project application process. 
(4) REPORT.—One year before the end of the 
5-year period beginning on the date on which the 
first State begins to implement a plan approved 
under subsection (e), the Commission shall prepare 
and submit to the appropriate committees of Con-
gress, a report on the progress made by States in 
meeting the goals of expanded coverage and cost 
containment through performance measures estab-
lished during the 5-year period of the State plan. 
Such report may contain the recommendation of the 
Commission concerning any future action that Con-
gress should take concerning health care reform, in-
cluding whether or not to extend the program estab-
lished under this subsection. 
(g) MONITORING AND EVALUATION.— 
(1) ANNUAL REPORTS AND PARTICIPATION BY 
STATES.—Each State that has received a program 
approval shall— 
(A) submit to the Commission an annual 
report based on the period representing the re-
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spective State’s fiscal year, detailing compliance 
with the requirements established by the Com-
mission and the Secretary in the approval and 
in this section; and 
(B) participate in the annual meeting 
under subsection (c)(4)(C). 
(2) EVALUATIONS BY COMMISSION.—The Com-
mission shall prepare and submit to Congress annual 
reports that shall contain— 
(A) a description of the effects of the re-
forms undertaken in States receiving approvals 
under this section; 
(B) a description of the recommendations 
of the Commission and actions taken based on 
these recommendations; 
(C) an independent evaluation of the effec-
tiveness of such reforms in— 
(i) expanding health care coverage for 
State residents; and 
(ii) reducing or containing health care 
costs in the States, 
as well as other relevant or significant findings; 
(D) recommendations regarding the advis-
ability of increasing Federal financial assistance 
for State ongoing or future health program ini-
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tiatives, including the amount and source of 
such assistance; and 
(E) as required by the Commission or the 
Secretary under this section, a periodic, inde-
pendent evaluation of the program. 
(h) NONCOMPLIANCE.— 
(1) CORRECTIVE ACTION PLANS.—If a State is 
not in compliance with a requirement of this section, 
the Commission, on recommendation of the Sec-
retary, shall develop a corrective action plan for such 
State. 
(2) TERMINATION.—The Commission, on rec-
ommendation of the Secretary, may revoke any pro-
gram granted under this section. Such decisions 
shall be subject to a petition for reconsideration and 
appeal pursuant to regulations established by the 
Secretary. 
(i) RELATIONSHIP TO FEDERAL PROGRAMS.— 
(1) IN GENERAL.—Nothing in this title, or in 
section 1115 of the Social Security Act (42 U.S.C. 
1315) shall be construed as authorizing the Sec-
retary, the Commission, a State, or any other person 
or entity to alter or affect in any way— 
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(A) the provisions of title XIX of such Act 
(42 U.S.C. 1396 et seq.) or the regulations im-
plementing such title or, 
(B) except as authorized in subsection 
(j)(4), the provisions of the Employee Retire-
ment Income Security Act of 1974 (as amended 
by this Act) or the regulations implementing 
such Act. 
(2) MAINTENANCE OF EFFORT.—No payment 
may be made under subsection (f)(1) if the State 
adopts criteria for benefits or criteria for standards 
and methodologies for purposes of determining an 
individual’s eligibility for medical assistance under 
the State plan under title XIX that are more restric-
tive than those required under Federal law and ap-
plied as of the date of enactment of this Act. 
(j) MISCELLANEOUS PROVISIONS.— 
(1) 
APPLICATION
OF
CERTAIN
REQUIRE-
MENTS.— 
(A) RESTRICTION
ON
APPLICATION
OF 
PREEXISTING CONDITION EXCLUSIONS.— 
(i) IN GENERAL.—Subject to subpara-
graph (B), a State shall not permit the im-
position of any preexisting condition exclu-
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sion for covered benefits under a program 
or project under this section. 
(ii) GROUP
HEALTH
PLANS
AND 
GROUP HEALTH INSURANCE COVERAGE.— 
If the State program or project provides 
for benefits through payment for, or a con-
tract with, a group health plan or group 
health insurance coverage, the program or 
project may permit the imposition of a pre-
existing condition exclusion but only inso-
far and to the extent that such exclusion is 
permitted under the applicable provisions 
of part 7 of subtitle B of title I of the Em-
ployee Retirement Income Security Act of 
1974 and title XXVII of the Public Health 
Service Act. 
(B) COMPLIANCE WITH OTHER REQUIRE-
MENTS.—Coverage offered under the program 
or project shall comply with the requirements of 
subpart 2 of part A of title XXVII of the Public 
Health Service Act insofar as such require-
ments apply with respect to a health insurance 
issuer that offers group health insurance cov-
erage. 
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(2) 
PREVENTION
OF
DUPLICATIVE
PAY-
MENTS.— 
(A) OTHER HEALTH PLANS.—No payment 
shall be made to a State under subsection (f)(1) 
for expenditures for health assistance provided 
for an individual to the extent that a private in-
surer (as defined by the Secretary by regulation 
and including a group health plan (as defined 
in section 607(1) of the Employee Retirement 
Income Security Act of 1974), a service benefit 
plan, and a health maintenance organization) 
would have been obligated to provide such as-
sistance but for a provision of its insurance con-
tract which has the effect of limiting or exclud-
ing such obligation because the individual is eli-
gible for or is provided health assistance under 
the plan. 
(B) OTHER
FEDERAL
GOVERNMENTAL 
PROGRAMS.—Except as provided in any other 
provision of law, no payment shall be made to 
a State under subsection (f)(1) for expenditures 
for health assistance provided for an individual 
to the extent that payment has been made or 
can reasonably be expected to be made prompt-
ly (as determined in accordance with regula-
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tions) under any other federally operated or fi-
nanced health care insurance program. For 
purposes of this paragraph, rules similar to the 
rules 
for 
overpayments 
under 
section 
1903(d)(2) of the Social Security Act shall 
apply. 
(3) APPLICATION OF CERTAIN GENERAL PROVI-
SIONS.—The following provisions of the Social Secu-
rity Act shall apply to States under subsection (f)(1) 
in the same manner as they apply to a State under 
such title XIX: 
(A) TITLE XIX PROVISIONS.— 
(i) Section 1902(a)(4)(C) (relating to 
conflict of interest standards). 
(ii) Paragraphs (2), (16), and (17) of 
section 1903(i) (relating to limitations on 
payment). 
(iii) Section 1903(w) (relating to limi-
tations on provider taxes and donations). 
(iv) Section 1920A (relating to pre-
sumptive eligibility for children). 
(B) TITLE XI PROVISIONS.— 
(i) Section 1116 (relating to adminis-
trative and judicial review), but only inso-
far as consistent with this title. 
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(ii) Section 1124 (relating to disclo-
sure of ownership and related informa-
tion). 
(iii) Section 1126 (relating to disclo-
sure of information about certain convicted 
individuals). 
(iv) Section 1128A (relating to civil 
monetary penalties). 
(v) Section 1128B(d) (relating to 
criminal penalties for certain additional 
charges). 
(vi) Section 1132 (relating to periods 
within which claims must be filed). 
(4) RELATION TO HIPAA.—Health benefits cov-
erage provided under a State program or project 
under this section shall be treated as creditable cov-
erage for purposes of part 7 of subtitle B of title I 
of the Employee Retirement Income Security Act of 
1974, title XXVII of the Public Health Service Act, 
and subtitle K of the Internal Revenue Code of 
1986. 
(k) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
(other than subsection (c)), such sums as may be nec-
essary for each of fiscal years 2009 through 2013. 
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Amounts appropriated for a fiscal year under this sub-
section and not expended may be used in subsequent fiscal 
years to carry out this section. 
SEC. 203. EFFECTIVE DATE. 
The provisions of this title shall take effect as of the 
date of the enactment of this Act. 
TITLE 
III—DEMONSTRATION 
PROJECT 
FOR 
EMPLOYER 
BUY-IN 
SEC. 301. DEMONSTRATION PROJECT FOR EMPLOYER BUY- 
IN. 
Title XXI of the Social Security Act is amended by 
adding at the end the following new section: 
‘‘SEC. 2111. DEMONSTRATION PROJECT FOR EMPLOYER 
BUY-IN. 
‘‘(a) AUTHORITY.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a demonstration project under which up to 10 
States (each referred to in this section as a ‘partici-
pating State’) that meet the conditions of paragraph 
(2) may provide, under its State child health plan 
(notwithstanding section 2102(b)(3)(C)) for a period 
of 5 years, for child health assistance in relation to 
family coverage described in subsection (d) for chil-
dren who would be targeted low-income children but 
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for coverage as beneficiaries under a group health 
plan as the children of participants by virtue of a 
qualifying employer’s contribution under subsection 
(b)(2). 
‘‘(2) CONDITIONS.—The conditions described in 
this paragraph for a State are as follows: 
‘‘(A) NO WAITING LISTS.—The State does 
not impose any waiting list, enrollment cap, or 
similar limitation on enrollment of targeted low- 
income children under the State child health 
plan. 
‘‘(B) ELIGIBILITY
OF
ALL
CHILDREN 
UNDER 200 PERCENT OF POVERTY LINE.—The 
State is applying an income eligibility level 
under section 2110(b)(1)(B)(ii)(I) that is at 
least 200 percent of the poverty line. 
‘‘(3) QUALIFYING
EMPLOYER
DEFINED.—In 
this section, the term ‘qualifying employer’ means an 
employer that has a majority of its workforce com-
posed of full-time workers with family incomes rea-
sonably estimated by the employer (based on wage 
information available to the employer) at or below 
200 percent of the poverty line. In applying the pre-
vious sentence, two part-time workers shall be treat-
ed as a single full-time worker. 
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‘‘(b) FUNDING.—A demonstration project under this 
section in a participating State shall be funded, with re-
spect to assistance provided to children described in sub-
section (a)(1), consistent with the following: 
‘‘(1) LIMITED
FAMILY
CONTRIBUTION.—The 
family involved shall be responsible for providing 
payment towards the premium for such assistance of 
such amount as the State may specify, except that 
the limitations on cost-sharing (including premiums) 
under paragraphs (2) and (3) of section 2103(e) 
shall apply to all cost-sharing of such family under 
this section. 
‘‘(2) MINIMUM
EMPLOYER
CONTRIBUTION.— 
The qualifying employer involved shall be responsible 
for providing payment to the State child health plan 
in the State of at least 50 percent of the portion of 
the cost (as determined by the State) of the family 
coverage in which the employer is enrolling the fam-
ily that exceeds the amount of the family contribu-
tion under paragraph (1) applied towards such cov-
erage. 
‘‘(3) LIMITATION ON FEDERAL FINANCIAL PAR-
TICIPATION.—In no case shall the Federal financial 
participation under section 2105 with respect to a 
demonstration project under this section be made for 
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any portion of the costs of family coverage described 
in subsection (d) (including the costs of administra-
tion of such coverage) that are not attributable to 
children described in subsection (a)(1). 
‘‘(c) UNIFORM ELIGIBILITY RULES.—In providing 
assistance under a demonstration project under this sec-
tion— 
‘‘(1) a State shall establish uniform rules of eli-
gibility for families to participate; and 
‘‘(2) a State shall not permit a qualifying em-
ployer to select, within those families that meet such 
eligibility rules, which families may participate. 
‘‘(d) TERMS AND CONDITIONS.—The family coverage 
offered to families of qualifying employers under a dem-
onstration project under this section in a State shall be 
the same as the coverage and benefits provided under the 
State child health plan in the State for targeted low-in-
come children with the highest family income level per-
mitted.’’. 
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TITLE IV—ACCESS TO HEALTH 
BENEFITS 
THROUGH 
RE-
GIONAL 
STATE 
ARRANGE-
MENTS 
SEC. 401. PROMOTING ACCESS THROUGH REGIONAL STATE 
ARRANGEMENTS UNDER A DEMONSTRATION 
PROJECT. 
(a) IN GENERAL.— 
(1) REGIONAL STATE ARRANGEMENTS.—Under 
this title the Secretary of Health and Human Serv-
ices, in collaboration with the Secretary of Labor, 
shall facilitate the establishment of regional State 
arrangements (each in this title referred to as a ‘‘re-
gional State arrangement’’) under which two or 
more States ban together in order to increase their 
purchasing pooling power and offer affordable health 
insurance to citizens of those States consistent with 
paragraph (2). Such arrangements shall include the 
following components: 
(A) The appointment of a Benefits Admin-
istrator under subsection (b) 
(B) The offering of standard health benefit 
plans under subsection (c). 
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(C) The charging of premiums using a 
modified community-rated premiums under sub-
section (d). 
(D) A requirement for individual health in-
surance coverage under subsection (e). 
(E) Subsidies for financially disadvantages 
persons under subsection (f). 
(F) Employer rule in funding health ben-
efit plans under subsection (g). 
(2) 
APPLICATION
ON
A
DEMONSTRATION 
BASIS.—This title shall be implemented on a dem-
onstration basis so that— 
(A) the regional State arrangements cover 
no more than 20 States; and 
(B) implementation occurs only over a 10- 
year period. 
(3) COLLABORATIVE
FEDERAL
IMPLEMENTA-
TION.— 
(A) IN
GENERAL.—In carrying out this 
title— 
(i) the Secretary of Labor shall be pri-
marily responsible for implementation with 
respect to employees and dependents; and 
(ii) the Secretary of Health and 
Human Services shall be primarily respon-
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sible for implementation for all other indi-
viduals. 
(B) REFERENCE TO SECRETARY.—Except 
as otherwise provided, in this title, the term 
‘‘Secretary’’ means the Secretary of Health and 
Human Services working in collaboration with 
the Secretary of Labor. 
(4) REPORT.—The Secretary shall jointly sub-
mit to Congress a biannual report on the implemen-
tation of this title and shall include in such report 
recommendations regarding the expansion and ex-
tension of the program under this title. 
(b) BENEFIT ADMINISTRATOR.— 
(1) IN
GENERAL.—Each regional State ar-
rangement shall be administered by a Benefit Ad-
ministrator who shall be responsible for the adminis-
tration of this title under the arrangement. 
(2) DISCLOSURE
OF
PERFORMANCE
OF
BEN-
EFIT ADMINISTRATORS.—The Secretary shall make 
available to the public information on the relative 
administrative performance of each Benefit Adminis-
trator. 
(c) STANDARD HEALTH BENEFIT PLANS.— 
(1) OFFERING OF STANDARD HEALTH BENEFIT 
PLANS.—Under each regional State arrangement 
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State, the Benefit Administrator shall, through a 
bidding process determined and administered by the 
Secretary, offer, directly or indirectly, three to five 
standard health benefit plans to all individuals, re-
gardless of employment, who reside in a State cov-
ered by the arrangement. 
(2) STANDARD HEALTH BENEFIT PLANS.—In 
this title, the term ‘‘standard health benefit plan’’ 
means a health benefits plan that meets standards 
relating to benefits recognized by the Secretary. The 
Secretary shall request the National Association of 
Insurance Commissioners or another appropriate en-
tity to develop such standards for such plans in a 
manner consistent with the model for standards de-
velopment used under section 1881 of the Social Se-
curity Act (42 U.S.C. 1395rr) for medicare supple-
mental policies. Such standards shall be designed to 
permit the offering of low-cost benefit options. 
(d) APPLICATION OF MODIFIED COMMUNITY-RATED 
PREMIUMS.— 
(1) IN GENERAL.—The premiums for the stand-
ard health benefit plans offered under a regional 
State arrangement within a defined service area (as 
identified under paragraph (2)) shall be established 
consistent with the following: 
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(A) All such plans in the area shall uni-
formly bear the cost of disease and injury. 
(B) Except as otherwise provided in this 
paragraph, the premiums shall be uniform with-
in such area for family coverage and for indi-
vidual coverage for each plan in such area. 
(C) In the case of a plan purchased by an 
individual and not in connection with a group 
health plan, the regional State arrangement 
may permit the variation of premiums based 
upon the age band in which an individual or 
family falls in a manner that reasonable reflects 
the health cost differences of individuals among 
such age bands. 
(D) There shall be a mechanism whereby 
there would be standardized risk adjustments to 
premiums of each plan in the area based on the 
actual claims under the respective plans during 
the previous plan year. 
(E) Adjustments related to self-imposed 
lifestyle risks, such as smoking, alcohol con-
sumption, and avoidance of personal risk, may 
be made. 
(F) Premiums may be varied among stand-
ard health benefit plans based on efficiencies 
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generated by better administrator practices, in-
cluding efficiencies derived from superior dis-
ease management, utilization management, case 
management, lifestyle management, ‘‘pay-for- 
performance’’ systems, and other innovative ini-
tiatives designed to lower costs, increase qual-
ity, and improve accountability. 
(2) IDENTIFICATION
OF
DEFINED
SERVICE 
AREAS.—For purposes of paragraph (1), the Sec-
retary shall divide the area covered by each regional 
State arrangement into separate defined service 
areas based on major medical markets. 
(e) INDIVIDUAL COVERAGE MANDATE.— 
(1) IN GENERAL.—Subject to paragraph (3), 
each regional State arrangement shall provide that 
each uninsured individual (as defined in paragraph 
(4)) shall— 
(A) automatically be enrolled in a standard 
health benefit plan under this title; and 
(B) be liable, through payroll deduction or 
otherwise, for the payment of premiums for 
such enrollment, taking into account the 
amount of any financial subsidy offered under 
subsection (f). 
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(2) CERTIFICATION.—Each Benefit Adminis-
trator for a regional State arrangement shall develop 
a satisfactory method for certifying compliance with 
the provisions of individuals residing in the area cov-
ered by the arrangement with the requirement of 
paragraph (1). 
(3) EXCEPTIONS.—The Secretary may establish 
exceptions to the requirement of paragraph (1) in 
appropriate cases, such as in the case of individuals 
who are financially unable to afford to pay the pre-
miums required to enroll in a standard health ben-
efit plan. 
(4) UNINSURED INDIVIDUAL DEFINED.—In this 
subsection, the term ‘‘uninsured individual’’ means, 
with respect to a regional State arrangement, an in-
dividual who— 
(A) resides in a State included in a re-
gional State arrangement; 
(B) is not enrolled for benefits under— 
(i) the Medicare or Medicaid program 
or another government-sponsored health 
program (as identified by the Secretary of 
Health and Human Services); or 
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(ii) a group health plan (as defined in 
section 607(1) of the Employee Retirement 
Income Security Act of 1974); and 
(C) does not have coverage that is other-
wise found to be qualifying by the Secretary. 
(f) SUBSIDIES FOR FINANCIALLY DISADVANTAGED 
PERSONS.—The Secretary shall establish a system of sub-
sidies to assist in the payment of premiums and cost-shar-
ing for individuals who are required under subsection (e) 
(but for paragraph (3)) to be covered under a standard 
health benefit plan but who are financially unable to af-
ford to pay such premiums.. 
(g) EMPLOYER ROLE IN FUNDING HEALTH BENEFIT 
PLANS.— 
(1) IN GENERAL.—Nothing in this title shall 
prevent an employer from providing health benefits 
coverage to employees and their dependents through 
existing arrangements or through a standard health 
benefit plan offered through a regional State ar-
rangement under this title. 
(2) REQUIRED REGISTRATION WITH BENEFITS 
ADMINISTRATOR.—Each employer with employees 
residing in an area covered by a regional State ar-
rangement shall register with the Benefits Adminis-
trator for such arrangement. 
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SEC. 402. TRANSPARENCY AND ACCOUNTABILITY FOR 
HEALTH BENEFIT PLANS. 
(a) PLAN COMPARISONS.—The Secretary shall estab-
lish a method for making available, in comparative form, 
to health consumers, providers, employers, and health 
plans, how health benefit plans offered under this title 
compare to each other within a regional State arrange-
ment. 
(b) PROVIDER
TRANSPARENCY
AND
ACCOUNT-
ABILITY.— 
(1) QUALITY
STANDARDS.—Not later than 1 
year after the date of the enactment of this Act, the 
Secretary shall develop definitions and standards for 
quality care in collaboration with providers, public 
and private-sector representatives, payers, and con-
sumers. 
(2) COVERAGE.—The quality standards devel-
oped under paragraph (1) shall cover both process 
and outcome measures and shall be applied to health 
care entities, including individual physicians, groups 
of physicians, hospitals, integrated systems, and, to 
the extent specified by the Secretary, an entire en-
terprise. Such standards shall be based on evidence- 
based medicine and shall be continuously updated 
and expanded. 
VerDate Aug 31 2005 
03:45 Oct 02, 2008
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