I
105TH CONGRESS
1ST SESSION
H. R. 1766
To amend title 10, United States Code, to establish a demonstration project
to evaluate the feasibility of using the Federal Employees Health Benefits
program to ensure the availability of adequate health care for Medicare-
eligible beneficiaries under the military health care system.
IN THE HOUSE OF REPRESENTATIVES
JUNE 3, 1997
Mr. MORAN of Virginia (for himself, Mrs. CLAYTON, Mr. FILNER, Mr. HALL
of Ohio, Mr. HINCHEY, Mr. MANTON, Mr. METCALF, Mrs. MINK of Ha-
waii, Mrs. MORELLA, Mr. OLVER, Mr. ENGLISH of Pennsylvania, and Mr.
WELDON of Florida) introduced the following bill; which was referred to
the Committee on Government Reform and Oversight, and in addition to
the Committee on National Security, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend title 10, United States Code, to establish a dem-
onstration project to evaluate the feasibility of using
the Federal Employees Health Benefits program to en-
sure the availability of adequate health care for Medi-
care-eligible beneficiaries under the military health care
system.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. DEMONSTRATION PROJECT TO INCLUDE CER-
TAIN COVERED BENEFICIARIES WITHIN FED-
ERAL EMPLOYEES HEALTH BENEFITS PRO-
GRAM.
(a) DEMONSTRATION PROJECT.—(1) Chapter 55 of
title 10, United States Code, is amended by adding at the
end the following new section:
‘‘§ 1107. Health care coverage through Federal Em-
ployees Health Benefits program: dem-
onstration project
‘‘(a) FEHBP OPTION DEMONSTRATION.—(1) Sub-
ject to paragraph (2), the Secretary of Defense, after con-
sulting with the other administering Secretaries, shall
enter into an agreement with the Office of Personnel Man-
agement to conduct a demonstration project under which
covered beneficiaries described in subsection (b) and resid-
ing within the area covered by the demonstration project
will be eligible to enroll in health benefits plans offered
through the Federal Employees Health Benefits program
under chapter 89 of title 5.
‘‘(2) The authority to enter into the agreement de-
scribed in paragraph (1) and to conduct the demonstration
project provided for by the agreement shall be subject to
the availability of appropriations to carry out the dem-
onstration project.
‘‘(b) ELIGIBLE COVERED BENEFICIARIES.—(1) A
covered beneficiary referred to in subsection (a) is a mem-
ber or former member of the uniformed services described
in section 1074(b) of this title, or a dependent of the mem-
ber described in section 1076(b) of this title, who 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.).
‘‘(2) A covered beneficiary described in paragraph (1)
shall not be required to satisfy any eligibility criteria speci-
fied in chapter 89 of title 5 as a condition for enrollment
in health benefits plans offered through the Federal Em-
ployee Health Benefits program under the demonstration
project. However, if the covered beneficiary is enrolled in
the supplemental medical insurance program under part
B of title XVIII of the Social Security Act (42 U.S.C.
1395j et seq.) before the covered beneficiary enrolls in a
health benefits plan offered pursuant to subsection (a), the
covered beneficiary shall be required to remain enrolled
in such supplemental medical insurance program during
the term of the demonstration project.
‘‘(c) AREA OF DEMONSTRATION PROJECT.—The Sec-
retary of Defense shall carry out the demonstration
project in two geographic areas as follows:
‘‘(1) One area shall include the catchment area
of one or more military medical treatment facilities,
within which not more than 25,000 eligible covered
beneficiaries reside.
‘‘(2) The other area shall not include the
catchment area of any military medical treatment
facility and not more than 25,000 eligible covered
beneficiaries may reside in the area.
‘‘(d) TIME
FOR DEMONSTRATION PROJECT.—The
Secretary of Defense shall conduct the demonstration
project during at least two, but not more than three, con-
tract years under the Federal Employees Health Benefits
program.
‘‘(e) MANAGEMENT
OF PARTICIPATION.—The au-
thority responsible for approving retired or retainer pay
or equivalent pay in the case of a member or former mem-
ber shall manage the participation of the member or
former member, or dependents of the member or former
member, who enroll in health benefits plans offered
through the Federal Employee Health Benefits program
pursuant to subsection (a). Such authority shall distribute
program information to eligible covered beneficiaries,
process enrollment applications, forward all required con-
tributions to the Employees Health Benefits Fund estab-
lished under section 8909 of title 5 in a timely manner,
assist in the reconciliation of enrollment records with
health plans, and prepare such reports as the Office of
Personnel Management may require in its administration
of chapter 89 of title 5.
‘‘(f) SEPARATE RISK POOLS; CHARGES.—(1) The Of-
fice of Personnel Management shall require health benefits
plans under chapter 89 of title 5 that participate in the
demonstration project to maintain a separate risk pool for
purposes of establishing premium rates for covered bene-
ficiaries who enroll in such a plan in accordance with this
section.
‘‘(2) The Office shall determine total subscription
charges for self only or for family coverage for covered
beneficiaries who enroll in a health benefits plan under
chapter 89 of title 5 in accordance with this section, which
shall include premium charges paid to the plan and
amounts described in section 8906(c) of title 5 for admin-
istrative expenses and contingency reserves.
‘‘(g) GOVERNMENT CONTRIBUTIONS.—The Secretary
of Defense shall be responsible for the Government con-
tribution for an eligible covered beneficiary who enrolls in
a health benefits plan under chapter 89 of title 5 in ac-
cordance with this section, except that the amount of the
contribution may not exceed the amount of the Govern-
ment contribution which would be payable if the electing
individual were an employee enrolled in the same health
benefits plan and level of benefits.
‘‘(h) EFFECT OF CANCELLATION.—The cancellation
by a covered beneficiary of coverage under the Federal
Employee Health Benefits program shall be irrevocable
during the term of the demonstration project.
‘‘(i) REPORTING REQUIREMENTS.—Not later than
May 31 of each year in which the demonstration project
is conducted, the Secretary of Defense and the Director
of the Office of Personnel Management shall jointly sub-
mit a report to Congress describing the provision of health
care services to covered beneficiaries under this section
during the preceding calendar year. The report shall ad-
dress or contain the following:
‘‘(1) The number of covered beneficiaries en-
rolled in health benefits plans offered through the
Federal Employee Health Benefits program pursu-
ant to subsection (a), both in terms of total number
and as a percentage of all covered beneficiaries re-
ceiving health care through the health care system
of the uniformed services.
‘‘(2) Any changes in enrollment patterns and
numbers compared to previous open seasons under
the demonstration project.
(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 the Secretary of Defense de-
termines is an eligible covered beneficiary under sub-
section (b) of section 1107 of title 10 may enroll, as part
of the demonstration project under such section, in a
health benefits plan under this chapter in accordance with
the agreement under subsection (a) of such section be-
tween the Secretary and the Office and applicable regula-
tions 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, as part
of the demonstration project under section 1107 of title
10, in a health benefits plan in accordance with section
8905(d) of this title, the Government contribution shall
be determined in accordance with section 1107(g) 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, as part of the
demonstration project under section 1107 of title 10, in
accordance with section 8905(d) of this title shall be paid
as provided in section 1107(g) of title 10.’’.
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