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‘‘(1) CHILDREN’S SERVICES.—In applying sec-
tion 1862(a) with respect to services described in
section 2111(b)(1) (relating to well-child services),
payment shall not be denied under paragraph (1),
(7), or (12) of such section 1862(a) if the services
are provided in accordance with the periodicity
schedule described in section 2111(b)(2).
‘‘(2) SERVICES
FOR
PREGNANT
WOMEN.—In
applying section 1862(a) with respect to services de-
scribed in section 2112(a) (other than paragraph (2)
thereof), payment shall not be denied under para-
graph (1) or (7) of such section 1862(a) if the serv-
ices are provided in accordance with the periodicity
schedule described in section 2112(b).
‘‘(c) COORDINATION OF PAYMENTS.—Payment shall
not be made under this title with respect to benefits to
the extent that payment for such benefits may be made
under title XVIII.
‘‘PART C—PAYMENT FOR BENEFITS AND FINANCING
‘‘SEC. 2121. PAYMENTS FOR BENEFITS.
‘‘(a) IN GENERAL.—Except as otherwise provided in
this section—
‘‘(1) payment of benefits under this title with
respect to benefits shall be made in the same
amounts and on the same basis as payment may be
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made with respect to such benefits under title
XVIII, and
‘‘(2) the provisions of sections 1814, 1833,
1842, 1848, and 1886 shall apply to payment of
benefits under this title in the same manner as they
apply to benefits under title XVIII.
‘‘(b) NO COST-SHARING FOR CERTAIN SERVICES.—
No deductibles, coinsurance, copayments, or other cost-
sharing shall be imposed with respect to—
‘‘(1) well-child care services described in section
2111(b)(1), and
‘‘(2) items and services for which an individual
is entitled under this title as a pregnant woman.
‘‘(c) ADJUSTMENT OF PAYMENTS.—
‘‘(1) ESTABLISHMENT
OF
NEW
DRGS
AND
WEIGHTS.—In making payment under this title with
respect to inpatient hospital services, the Secretary
shall make such adjustments in the diagnosis-related
groups and weighting factors with respect to dis-
charges within such groups, otherwise established
under section 1886(d)(4) as may be necessary—
‘‘(A) to reflect the types of discharges oc-
curring under this title which are not occurring
under title XVIII, and
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‘‘(B) to provide for a weighting factor, for
cesarean section deliveries, which is 95 percent
of the weighting factor that otherwise would be
established.
‘‘(2) PAYMENT FOR OBSTETRICAL SERVICES.—
‘‘(A) GLOBAL FEE.—In making payment
under this title with respect to the group of ob-
stetrical services typical of treatment through-
out a course of pregnancy, the Secretary shall
establish, as a schedule under section 1848, a
global fee with respect to such group of serv-
ices.
‘‘(B) 
BONUS
FOR
EARLY
PRESEN-
TATION.—The fee schedule amount with respect
to obstetrical services under this title shall be
increased by 5 percent in the case of services
furnished to women who have presented for pre-
natal care during the first trimester.
‘‘(C) DISINCENTIVE FOR CESAREAN SEC-
TIONS.—The fee schedule amount otherwise es-
tablished with respect to a cesarean section
shall be 95 percent of the fee schedule amount
otherwise established.
‘‘(c) CONDITIONS
OF
AND LIMITATIONS
ON PAY-
MENTS.—The provisions of sections 1814 and 1835 shall
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apply to payment for services under this title in the same
manner as they apply t±o payment for services under
parts A and B, respectively, of title XVIII.
‘‘(d) USE OF TRUST FUND.—In carrying out this
section, any reference in title XVIII to a trust fund shall
be treated as a reference to the Children Health Insurance
Trust Fund established under section 2122.
‘‘SEC. 2122. CHILDREN HEALTH INSURANCE TRUST FUND.
‘‘(a) ESTABLISHMENT.—(1) There is hereby created
on the books of the Treasury of the United States a trust
fund to be known as the ‘Children Health Insurance Trust
Fund’ (in this section referred to as the ‘Trust Fund’).
The Trust Fund shall consist of such gifts and bequests
as may be made as provided in section 201(i)(1) and
amounts appropriated under paragraph (2).
‘‘(2) There are hereby appropriated to the Trust
Fund amounts equivalent to 100 percent of the premium
taxes imposed by section 59B of the Internal Revenue
Code of 1986, and such additional amounts as the Con-
gress provides. The amounts appropriated by the preced-
ing sentence in relation to premium taxes shall be trans-
ferred from time to time from the general fund in the
Treasury to the Trust Fund, such amounts to be deter-
mined on the basis of estimates by the Secretary of the
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Treasury of the taxes, paid to or deposited into the Treas-
ury; and proper adjustments shall be made in amounts
subsequently transferred to the extent prior estimates
were in excess of or were less than the taxes specified in
such sentence.
‘‘(b) INCORPORATION OF PROVISIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the provisions of subsections (b) through (e) and (g)
through (j) of section 1817 shall apply to the Trust
Fund in the same manner as they apply to the Fed-
eral Hospital Insurance Trust Fund.
‘‘(2) EXCEPTIONS.—In applying paragraph
(1)—
‘‘(A) the Board of Trustees and Managing
Trustee of the Trust Fund shall be composed of
the members of the Board of Trustees and the
Managing Trustee, respectively, of the Federal
Hospital Insurance Trust Fund; and
‘‘(B) any reference in section 1817 to the
Federal Hospital Insurance Trust Fund or to
title XVIII (or part A thereof) is deemed a ref-
erence to the Trust Fund under this section
and this title, respectively.
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benefits under this title only as pregnant
women.
‘‘(B) REPORT.—Not later than January 1,
1997, the Secretary shall submit to the Con-
gress a report concerning recommendations on
how the provisions of section 1876 relating to
risk-sharing contracts may be adapted to apply
to benefits provided under this title to pregnant
women.
‘‘(3) APPLICATION.—In applying section 1876
under this section—
‘‘(A) the provisions of such section relating
only to individuals enrolled under part B of title
XVIII shall not apply;
‘‘(B) any reference to a Trust Fund estab-
lished under title XVIII and to benefits under
such title is deemed a reference to the Children
Health Insurance Trust Fund and to benefits
under this title;
‘‘(C) the adjusted average per capita cost
and the adjusted community rate shall be deter-
mined on the basis of benefits under this title;
and
‘‘(D) subsection (f) shall not apply.
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‘‘SEC. 2132. INCORPORATION OF PEER REVIEW PROVISIONS
AND FRAUD AND ABUSE PROVISIONS.
‘‘The provisions of sections 1121 through 1126, sec-
tions 1128 through 1128B, section 1134, section 1138,
and part B of title XI shall apply to this title in the same
manner as they apply to title XVIII.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 201(g)(1)(A) of the Social Security
Act (42 U.S.C. 401(g)(1)(A)) is amended by striking
‘‘and the Federal Supplementary Medical Insurance
Trust Fund’’ and inserting ‘‘, Federal Supple-
mentary Medical Insurance Trust Fund, and the
Children Health Insurance Trust Fund’’.
(2) Section 201(i)(1) of such Act (42 U.S.C.
401(i)(1)) is amended by striking ‘‘and the Federal
Supplementary Medical Insurance Trust Fund’’ and
inserting ‘‘, Federal Supplementary Medical Insur-
ance Trust Fund, and the Children Health Insur-
ance Trust Fund’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act, except that no benefits shall be available under
title XXI of the Social Security Act for items or services
furnished before January 1, 1999.
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SEC. 3. PREMIUM FOR COVERAGE OF UNINSURED CHIL-
DREN AND MOTHERS-TO-BE.
(a) GENERAL RULE.—Subchapter A of chapter 1 of
the Internal Revenue Code of 1986 (relating to determina-
tion of tax liability) is amended by adding at the end the
following new part:
‘‘PART VIII—PREMIUM FOR COVERAGE OF
UNINSURED CHILDREN AND MOTHERS-TO-BE
‘‘Sec. 59B. Premium for coverage of uninsured children and
mothers-to-be.
‘‘SEC. 59B. PREMIUM FOR COVERAGE OF UNINSURED CHIL-
DREN AND MOTHERS-TO-BE.
‘‘(a) IMPOSITION OF TAX.—In the case of an individ-
ual, there is hereby imposed (in addition to any other tax
imposed by this subtitle) a tax for the taxable year in the
amount equal to the title XXI premium liability (if any)
of such individual for such taxable year.
‘‘(b) EXEMPTION FOR LOW-INCOME INDIVIDUALS.—
‘‘(1) IN GENERAL.—No tax shall be imposed by
subsection (a) on any taxpayer whose modified ad-
justed gross income for the taxable year does not ex-
ceed the threshold amount.
‘‘(2) PHASE-IN OF TAX.—
‘‘(A) IN
GENERAL.—If the modified ad-
justed gross income of the taxpayer for the tax-
able year exceeds the threshold amount by less
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than $10,000, the amount of the tax imposed
by subsection (a) for such taxable year shall be
the phase-in percentage of the title XXI pre-
mium liability of such taxpayer for such taxable
year.
‘‘(B) PHASE-IN
PERCENTAGE.—For pur-
poses of subparagraph (A), the phase-in per-
centage shall be determined under tables pre-
scribed by the Secretary which—
‘‘(i) shall have income brackets of not
more than $50, and
‘‘(ii) provide for a ratable increase in
the amount of tax imposed by subsection
(a) for modified adjusted gross incomes be-
tween the threshold amount and the sum
of the threshold amount and $10,000.
‘‘(c) TITLE XXI PREMIUM LIABILITY.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—The title XXI premium li-
ability of any individual for any taxable year is the
sum of—
‘‘(A) the applicable title XXI premiums for
each month of the taxable year as of the first
day of which any dependent of the individual is
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a title XXI covered individual who has not at-
tained age 13, and
‘‘(B) the applicable title XXI premium for
the month of the taxable year during which the
taxpayer (or spouse of the taxpayer) gives birth
to any child if for such month the individual
giving birth is a title XXI covered individual.
‘‘(2) APPLICABLE TITLE XXI PREMIUM.—The
term ‘applicable title XXI premium’ means, with re-
spect to a month, such premium as determined
under section 2123 of the Social Security Act for
that month.
‘‘(d) TITLE XXI COVERED INDIVIDUAL.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—A dependent shall be treat-
ed as a title XXI covered individual for any month
unless—
‘‘(A) for such month, such dependent is
covered under a qualified health plan, and
‘‘(B) the taxpayer furnishes to the Sec-
retary (at such time and in such manner as the
Secretary may prescribe) the required certifi-
cation of such coverage for such month.
A similar rule shall apply to a woman for the month
in which such woman gives birth to a child.
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‘‘(B) CERTAIN SEPARATE RETURNS.—The
threshold amount shall be zero in the case of a
taxpayer who—
‘‘(i) is married as of the close of the
taxable year but does not file a joint return
for such taxable year, and
‘‘(ii) does not live apart from his
spouse at all times during the last 6
months of the taxable year.
‘‘(C) INFLATION
ADJUSTMENTS.—In the
case of a taxable year beginning in a calendar
year after 1999, each dollar amount contained
in subparagraph (A) shall be increased by an
amount equal to—
‘‘(i) such dollar amount, multiplied by
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, by substituting ‘calendar year 1998’
for ‘calendar year 1992’ in subparagraph
(B) thereof.
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.—
The term ‘modified adjusted gross income’ means
adjusted gross income—
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‘‘(A) determined without regard to sections
911, 931, and 933, and
‘‘(B) increased by the amount of interest
received or accrued by the individual during the
taxable year which is exempt from tax.
The determination under the preceding sentence
shall be made without regard to any carryover or
carryback.
‘‘(3) 
DEPENDENT.—The 
term 
‘dependent’
means, with respect to periods in any calendar year,
any individual if an exemption is allowable under
section 151(c) with respect to such individual to the
taxpayer for a taxable year beginning in such cal-
endar year.
‘‘(4) REQUIRED CERTIFICATION.—The term ‘re-
quired certification’ means the statement required to
be provided under section 6050Q(b) (or a copy
thereof) or any other statement approved by the
Secretary for purposes of this section.
‘‘(f) COORDINATION WITH OTHER PROVISIONS.—
‘‘(1) TREATMENT AS MEDICAL EXPENSE.—For
purposes of section 213, the tax imposed by this sec-
tion for any taxable year shall be treated as an ex-
pense paid during such taxable year for medical care
of the taxpayer.
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‘‘(2) NOT TREATED AS TAX FOR CERTAIN PUR-
POSES.—The tax imposed by this section shall not
be treated as a tax imposed by this chapter for pur-
poses of determining—
‘‘(A) the amount of any credit allowable
under this chapter, or
‘‘(B) the amount of the minimum tax im-
posed by section 55.
‘‘(3) TREATMENT
UNDER
SUBTITLE
F.—For
purposes of subtitle F, the tax imposed by this sec-
tion shall be treated as if it were a tax imposed by
section 1.
‘‘(g) EXEMPTIONS.—
‘‘(1) IN GENERAL.—No tax shall be imposed by
this section on any individual for any taxable year
if such individual is a nonresident alien.
‘‘(2) CERTAIN INDIVIDUALS NOT TAKEN INTO
ACCOUNT IN DETERMINING AMOUNT OF TAX.—For
purposes of this section, an individual shall be treat-
ed as not being a title XXI covered individual for
any month if—
‘‘(A) the principal place of abode of such
individual as of the first day of such month is
outside the United States, or
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‘‘(B) as of the first day of such month,
there is in effect for such individual a qualified
religious exemption.
‘‘(3) QUALIFIED RELIGIOUS EXEMPTION.—For
purposes of paragraph (2)—
‘‘(A) IN
GENERAL.—The term ‘qualified
religious exemption’ means an exemption grant-
ed by the Secretary of Health and Human
Services to an individual—
‘‘(i) who is a member of a recognized
religious sect or division thereof with re-
spect to which such Secretary makes the
findings referred to in subparagraphs (C),
(D), and (E) of section 1402(g)(1),
‘‘(ii) who is an adherent of established
tenets or teachings of such sect or division
as described in such section, and
‘‘(iii) who submits an application for
such exemption which contains or is ac-
companied by the evidence described in
section 1402(g)(1)(A) and a waiver de-
scribed in section 1402(g)(1)(B).
For purposes of the clause (iii), section
1402(g)(1)(B) shall be treated as including a
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reference to title XXI of the Social Security
Act.
‘‘(B) LIMITATION.—An exemption granted
under this paragraph shall cease to apply begin-
ning on the date such Secretary determines
that the individual, or the sect or division,
ceased to meet the requirements of subpara-
graph (A).
‘‘(4) SPECIAL RULE FOR INDIVIDUALS RESID-
ING ABROAD WHO RECEIVE TITLE XXI SERVICES.—
Paragraph (2)(A) shall not apply to any individual
for any taxable year if, at any time during such tax-
able year, such individual receives services under
title XXI of the Social Security Act.
‘‘(h) REGULATIONS.—The Secretary may prescribe
such regulations as may be appropriate to carry out the
purposes of this section, including regulations, prescribed
after consultation with the Secretary of Health and
Human Services, treating health plans of foreign govern-
ments or foreign employers outside the United States as
qualified health plans.’’
(b) TECHNICAL AMENDMENTS.—
(1) Subsection (a) of section 6012 of such Code
is amended by inserting after paragraph (9) the fol-
lowing new paragraph:
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‘‘(10) Every individual who has a title XXI pre-
mium liability (as defined in section 59B) for the
taxable year.’’
(2) Subparagraph (A) of section 1(f)(6) of such
Code 
is 
amended 
by 
inserting 
‘‘section
59B(e)(1)(C),’’ after paragraph (2)(A),’’.
(c) CLERICAL AMENDMENT.—The table of parts for
subchapter A of chapter 1 is amended by adding at the
end the following new item:
‘‘Part VIII. Individual share of title XXI premiums.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to months beginning after Decem-
ber 31, 1998, in taxable years ending after such date.
SEC. 4. REPORTING REQUIREMENTS.
(a) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 61 of the Internal Revenue Code of
1986 (relating to information concerning transactions
with others) is amended by adding at the end the following
new sections:
‘‘SEC. 6050Q. RETURNS RELATING TO QUALIFIED HEALTH
PLANS.
‘‘(a) REQUIREMENT OF REPORTING.—The adminis-
trator of any qualified health plan (as defined in section
59B(d)) shall make a return for each calendar year setting
forth—
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‘‘(1) the name and TIN of each individual cov-
ered under such plan or program at any time during
such taxable year as a primary insured or as the
spouse of a primary insured,
‘‘(2) the name and TIN (to the extent avail-
able) of each individual covered under such plan or
program at any time during such taxable year as a
dependent (as defined in section 59B(e)(3)) of a pri-
mary insured, and
‘‘(3) the months during such calendar year for
which such individuals were so covered.
Such return shall be made at such time and in such form
as the Secretary may by regulations prescribe.
‘‘(b) STATEMENTS TO PRIMARY INSURED INDIVID-
UALS.—Every administrator required to make a return
under subsection (a) shall furnish to each individual whose
name is required to be set forth in such return by reason
of being a primary insured a written statement showing—
‘‘(1) the name of the qualified health plan and
the address of its administrator, and
‘‘(2) the information required to be shown on
the return with respect to such primary insured.
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The written statement required under the preceding sen-
tence shall be furnished to the person on or before Janu-
ary 31 of the year following the calendar year for which
the return under subsection (a) was required to be made.
‘‘(c) STATEMENT TO SPOUSE OR DEPENDENTS OF
PRIMARY INSURED ON REQUEST.—At the request of an
individual who, at any time during a calendar year, was
the spouse or a dependent (as defined in section
59B(e)(3)) of a primary insured who is required to receive
a statement under subsection (b) from an administrator,
such administrator shall furnish to such individual a copy
of such statement with respect to such insured for such
calendar year.’’
(b) UNIFORM PENALTY PROVISIONS MADE APPLICA-
BLE.—
(1) Subparagraph (B) of section 6724(d)(1) of
such Code is amended by inserting after the item re-
lating to clause (viii) the following new item (and re-
designating the following clauses accordingly):
‘‘(ix) section 6050Q(a) (relating to re-
turns regarding qualified health plans),’’.
(2) Paragraph (2) of section 6724(d) of such
Code is amended by inserting after subparagraph
(P) the following new subparagraph (and by redesig-
nating the following subparagraphs accordingly):
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‘‘(Q) subsection (b) or (c) of section
6050Q (relating to returns regarding qualified
health plans),’’.
(c) CLERICAL AMENDMENT.—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 follow-
ing new item:
‘‘Sec. 6050Q. Returns relating to qualified health plans.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar years after 1998.
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