month during a taxable year with respect to an 
individual if such individual is present in the 
United States on fewer than 183 days during 
such year (determined in accordance with sec-
tion 7701(b)(7)). 
‘‘(4) INDEXING.—For each taxable year begin-
ning after December 31, 2009, the dollar amount in 
paragraph (2) (as adjusted for the preceding taxable 
year by reason of this paragraph) shall be increased 
or decreased by the percentage change in the aver-
age cost of private health insurance for family cov-
erage for such taxable year as compared to such pre-
ceding taxable year as computed by the Office of the 
Actuary of the Centers for Medicare and Medicaid 
Services, rounded to the nearest whole dollar 
amount. 
‘‘(c) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified health 
insurance’ means insurance which constitutes med-
ical care as defined in section 213(d) without regard 
to— 
‘‘(A) paragraph (1)(C) thereof, and 
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‘‘(B) so much of paragraph (1)(D) thereof 
as relates to qualified long-term care insurance 
contracts. 
‘‘(2) EXCLUSION
OF
CERTAIN
OTHER
CON-
TRACTS.—Such term shall not include insurance if a 
substantial portion of its benefits are excepted bene-
fits (as defined in section 9832(c)). 
‘‘(d) ELIGIBLE TAXPAYER; DEPENDENT; CHILD.— 
For purposes of this section— 
‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible 
taxpayer’ means any taxpayer whose income exceeds 
200 percent but not 300 percent of the poverty level 
applicable to a family of the size involved, as deter-
mined in accordance with criteria established by the 
Director of the Office of Management and Budget. 
‘‘(2) DEPENDENT.—The term ‘dependent’ has 
the meaning given such term by section 152. An in-
dividual to whom section 152(e) applies shall be 
treated as a dependent of the custodial parent for a 
coverage month unless the custodial and noncusto-
dial parent provide otherwise. 
‘‘(3) CHILD.—The term ‘child’ means a quali-
fying child (as defined in section 152(c). 
‘‘(e) SPECIAL RULES.— 
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‘‘(1) COORDINATION
WITH
MEDICAL
DEDUC-
TION, ETC.—Any amount paid by an eligible tax-
payer for insurance to which subsection (a) applies 
shall not be taken into account in computing the 
amount allowable to such taxpayer as a credit under 
section 35, as a deduction under section 213(a) or 
162(l), or as an exclusion from gross income under 
section 106 or 125. 
‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.—No 
credit shall be allowed under this section to any indi-
vidual with respect to whom a deduction under sec-
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. 
‘‘(3) MARRIED COUPLES MUST FILE JOINT RE-
TURN.— 
‘‘(A) IN GENERAL.—If an eligible 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 
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21(e) shall apply for purposes of this para-
graph. 
‘‘(4) VERIFICATION
OF
COVERAGE, ETC.—No 
credit shall be allowed under this section with re-
spect to any individual unless such individual’s cov-
erage (and such related information as the Secretary 
may require) is verified in such manner as the Sec-
retary may prescribe. 
‘‘(5) INSURANCE WHICH COVERS OTHER INDI-
VIDUALS; TREATMENT OF PAYMENTS.—Rules similar 
to the rules of paragraphs (7) and (8) of section 
35(g) shall apply for purposes of this section. 
‘‘(6) ELECTION NOT TO CLAIM CREDIT.—This 
section shall not apply to an eligible taxpayer for 
any taxable year if such taxpayer elects to have this 
section not apply for such taxable year. 
‘‘(f) COORDINATION WITH ADVANCE PAYMENTS.— 
With respect to any taxable year, the amount which would 
(but for this subsection) be allowed as a credit to an eligi-
ble taxpayer under subsection (a) shall be reduced (but 
not below zero) by the aggregate amount paid on behalf 
of such taxpayer under section 7527A for months begin-
ning in such taxable year.’’. 
(b) INFORMATION REPORTING.— 
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(1) IN GENERAL.—Subpart B of part III of 
subchapter A of chapter 61 of the Internal Revenue 
Code of 1986 (relating to information concerning 
transactions with other persons) is amended by in-
serting after section 6050W the following new sec-
tion: 
‘‘SEC. 6050X. RETURNS RELATING TO PAYMENTS FOR 
QUALIFIED HEALTH INSURANCE. 
‘‘(a) IN GENERAL.—Any person who, in connection 
with a trade or business conducted by such person, re-
ceives payments during any calendar year from any indi-
vidual for coverage of such individual or any other indi-
vidual under qualified health insurance (as defined in sec-
tion 37(c)), shall make the return described in subsection 
(b) (at such time as the Secretary may by regulations pre-
scribe) with respect to each individual from whom such 
payments were received. 
‘‘(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 the 
individual from whom payments described in 
subsection (a) were received, 
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‘‘(B) the name, address, and TIN of each 
individual who was provided by such person 
with coverage under qualified health insurance 
(as so defined) by reason of such payments and 
the period of such coverage, and 
‘‘(C) such other information as the Sec-
retary may reasonably prescribe. 
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
QUIRED.—Every person required to make a return under 
subsection (a) shall furnish to each individual whose name 
is required under subsection (b)(2)(A) to be set forth in 
such return a written statement 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, 
‘‘(2) the aggregate amount of payments de-
scribed in subsection (a) received by the person re-
quired to make such return from the individual to 
whom the statement is required to be furnished, and 
‘‘(3) the information required under subsection 
(b)(2)(B) with respect to such payments. 
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the 
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year following the calendar year for which the return 
under subsection (a) is required to be made. 
‘‘(d) RETURNS WHICH WOULD BE REQUIRED TO BE 
MADE BY 2 OR MORE PERSONS.—Except to the extent 
provided in regulations prescribed by the Secretary, in the 
case of any amount received by any person on behalf of 
another person, only the person first receiving such 
amount shall be required to make the return under sub-
section (a).’’. 
(2) ASSESSABLE PENALTIES.— 
(A) 
Subparagraph 
(B) 
of 
section 
6724(d)(1) of such Code (relating to defini-
tions) is amended by redesignating clauses (xxi) 
through (xxii) as clauses (xxii) through (xxv), 
respectively, and by inserting after clause (xxi) 
the following new clause: 
‘‘(xxii) section 6050X (relating to re-
turns relating to payments for qualified 
health insurance),’’. 
(B) Paragraph (2) of section 6724(d) of 
such Code is amended by redesignating sub-
paragraphs (EE) and (FF) as subparagraphs 
(FF) and (GG), respectively, and by inserting 
after subparagraph (DD) the following new 
subparagraph: 
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‘‘(EE) section 6050X(c) (relating to re-
turns relating to payments for qualified health 
insurance).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart B of part III of subchapter A of 
chapter 61 of such Code is amended by inserting 
after the item relating to section 6050W the fol-
lowing new item: 
‘‘Sec. 6050X. Returns relating to payments for qualified health insurance.’’. 
(c) ADVANCE
PAYMENT
OF
CREDIT
FOR
PUR-
CHASERS OF QUALIFIED HEALTH INSURANCE.— 
(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 new section: 
‘‘SEC. 7529. ADVANCE PAYMENT OF HEALTH INSURANCE 
CREDIT FOR PURCHASERS OF QUALIFIED 
HEALTH INSURANCE. 
‘‘(a) GENERAL RULE.—In the case of an eligible indi-
vidual, the Secretary shall make payments to the provider 
of such individual’s qualified health insurance equal to 
such individual’s qualified health insurance credit advance 
amount with respect to such provider. 
‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this 
section, the term ‘eligible individual’ means any indi-
vidual— 
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‘‘(1) who purchases qualified health insurance 
(as defined in section 37(c)), and 
‘‘(2) for whom a qualified health insurance 
credit eligibility certificate is in effect. 
‘‘(c) QUALIFIED HEALTH INSURANCE CREDIT ELIGI-
BILITY CERTIFICATE.—For purposes of this section, a 
qualified health insurance credit eligibility certificate is a 
statement furnished by an individual to the Secretary 
which— 
‘‘(1) certifies that the individual will be eligible 
to receive the credit provided by section 37 for the 
taxable year, 
‘‘(2) estimates the amount of such credit for 
such taxable year, and 
‘‘(3) provides such other information as the 
Secretary may require for purposes of this section. 
‘‘(d) QUALIFIED HEALTH INSURANCE CREDIT AD-
VANCE AMOUNT.—For purposes of this section, the term 
‘qualified health insurance credit advance amount’ means, 
with respect to any provider of qualified health insurance, 
the Secretary’s estimate of the amount of credit allowable 
under section 37 to the individual for the taxable year 
which is attributable to the insurance provided to the indi-
vidual by such provider. 
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‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary to carry out the pur-
poses of this section.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 77 of such Code is amended by 
adding at the end the following new item: 
‘‘Sec. 7529. Advance payment of health insurance credit for purchasers of 
qualified health insurance.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 37 of such Code’’. 
(2) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by striking the last 
item and inserting the following new items: 
‘‘Sec. 37. Health insurance costs. 
‘‘Sec. 38. Overpayments of tax.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2008. 
TITLE III—STATE HEALTH 
REFORM PROJECTS 
SEC. 301. STATE HEALTH REFORM PROJECTS. 
(a) PURPOSES; ESTABLISHMENT OF STATE HEALTH 
CARE EXPANSION AND IMPROVEMENT PROGRAM.— 
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(1) PURPOSES.—The purposes of the programs 
approved under this section shall include, but not be 
limited to— 
(A) achieving the goals of increased health 
coverage and access; and 
(B) testing alternative reforms, such as 
building on the public or private health systems, 
or creating new systems, to achieve the objec-
tives of this Act. 
(2) INTENT OF CONGRESS.—It is the intent of 
Congress that— 
(A) the programs approved under this sec-
tion each comprise significant coverage expan-
sions; 
(B) taken as a whole, such programs 
should be diverse and balanced in their ap-
proaches to covering the uninsured; and 
(C) each such program should be rigor-
ously and objectively evaluated, so that the 
State programs developed pursuant to this sec-
tion may guide the development of future State 
and national policy. 
(b) APPLICATIONS BY STATES AND LOCAL GOVERN-
MENTS.— 
(1) ENTITIES THAT MAY APPLY.— 
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(A) IN GENERAL.—A State may apply for 
a State health care expansion and improvement 
program for the entire State (or for regions of 
the State) under paragraph (2). 
(B) REGIONAL AND SUB-STATE GROUPS.— 
A regional entity consisting of more than one 
State or one or more local governments within 
a State may apply for a multi-State or a sub- 
State health care expansion and improvement 
program for the region or area involved. 
(C) DEFINITION.—In this section, the 
term ‘‘State’’ means the 50 States, the District 
of Columbia, and the Commonwealth of Puerto 
Rico. Such term shall include a regional entity 
described in subparagraph (B). 
(2) SUBMISSION OF APPLICATION.—In accord-
ance with this section, each State or regional entity 
desiring to implement a State health care expansion 
and improvement program may submit an applica-
tion to the State Health Coverage Innovation Com-
mission under subsection (c) (referred to in this sec-
tion as the ‘‘Commission’’) for approval. 
(3) LOCAL
GOVERNMENT
APPLICATIONS.— 
Where a State fails to submit an application under 
this section, a unit of local government of such 
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