(2) LIMITATION.—Nothing in this title shall be
construed as encroaching on or otherwise affecting
the collective bargaining rights of workers and their
representatives.
(d) CONSTRUCTION.—Nothing in this title shall be
construed as preventing a State from providing for admin-
istration of its comprehensive health insurance plan in a
manner similar to that provided under the State’s child
health insurance plan under title XXI of the Social Secu-
rity Act.
SEC. 203. REQUIRING OPERATION OF CERTIFIED PLAN TO
RECEIVE MEDICAID PAYMENTS.
Section 1903 of the Social Security Act (42 U.S.C.
1396b) is amended by adding at the end the following new
subsection:
‘‘(x)(1) In order to receive payments under this title
for any quarter beginning on or after January 1, 2002,
a State must have in effect a comprehensive health insur-
ance plan certified for the fiscal year in which the quarter
occurs by the Secretary under section 201(b) of the Amer-
ican Health Security Partnership Act of 1998.
‘‘(2)(A) The provisions of this subsection shall not
apply to a State for any quarter—
‘‘(i) that follows the quarter during which the
State meets the requirements of this subsection; or
‘‘(ii) with respect to which the Secretary deter-
mines that the State is unable to comply with the
relevant requirements of this subsection—
‘‘(I) for good cause (but such a waiver may
not be for a period in excess of 4 quarters), or
‘‘(II) due to circumstances beyond the con-
trol of such State.
‘‘(B) For purposes of determining deadlines imposed
under this subsection, any time period during which a
State was found under subparagraph (A)(ii)(II) to be un-
able to comply with the requirements of this subsection
shall not be taken into account, and the Secretary shall
modify all such deadlines with respect to such State ac-
cordingly.’’.
TITLE III—TAX DEDUCTIBILITY
OF HEALTH INSURANCE
SEC. 301. TAX DEDUCTIBILITY OF HEALTH INSURANCE.
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
additional itemized deductions) is amended by redesignat-
ing section 222 as section 223 and by inserting after sec-
tion 221 the following new section:
‘‘SEC. 222. HEALTH INSURANCE COSTS.
‘‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a deduction an amount equal to
100 percent of the amount paid during the taxable year
for insurance which constitutes medical care for the tax-
payer, his spouse, and dependents.
‘‘(b) LIMITATION BASED ON EARNED INCOME.—No
deduction shall be allowed under subsection (a) to the ex-
tent that the amount of such deduction exceeds the sum
of—
‘‘(1) the taxpayer’s wages, salaries, tips, and
other employee compensation includible in gross in-
come, plus
‘‘(2) the taxpayer’s earned income (as defined
in section 401(c)(2)).
‘‘(c) OTHER COVERAGE.—
‘‘(1) IN
GENERAL.—Subsection (a) shall not
apply to any taxpayer for any calendar month for
which the taxpayer is eligible to participate in any
subsidized health plan maintained by any employer
of the taxpayer or of the spouse of the taxpayer. The
preceding sentence shall be applied separately with
respect to—
‘‘(A) plans which include coverage for
qualified long-term care services (as defined in
section 7702B(c)) or are qualified long-term
care insurance contracts (as defined in section
7702B(b)), and
‘‘(B) plans which do not include such cov-
erage and are not such contracts.
‘‘(2) LONG-TERM
CARE
PREMIUMS.—In the
case of a qualified long-term care insurance contract
(as defined in section 7702B(b)), only eligible long-
term 
care 
premiums 
(as 
defined 
in 
section
213(d)(10)) shall be taken into account under sub-
section (a).
‘‘(3) MEDICARE
PREMIUMS.—Subsection (a)
shall not apply to amounts paid as premiums under
part B of title XVIII of the Social Security Act.
‘‘(d) SPECIAL RULES.—
‘‘(1) COORDINATION
WITH
MEDICAL
DEDUC-
TION, ETC.—Any amount paid by a taxpayer for in-
surance to which subsection (a) applies shall not be
taken into account in computing the amount allow-
able to the taxpayer as a deduction under section
213(a).
‘‘(2) DEDUCTION NOT ALLOWED FOR SELF-EM-
PLOYMENT
TAX
PURPOSES.—The deduction allow-
able by reason of this section shall not be taken into
account in determining an individual’s net earnings
from self-employment (within the meaning of section
1402(a)) for purposes of chapter 2.
‘‘(3) DEDUCTION NOT ALLOWED FOR AMOUNTS
PAID
FROM
MEDICAL
SAVINGS
ACCOUNTS.—Sub-
section (a) shall not apply to amounts paid from a
medical savings account (as defined in section
220(d)).’’
(b) CONFORMING AMENDMENTS.—
(1) Subsection (l) of section 162 of such Code
is hereby repealed.
(2) Subsection (a) of section 62 of such Code
is amended by inserting after paragraph (17) the
following new item:
‘‘(18) HEALTH INSURANCE COSTS.—The deduc-
tion allowed by section 222.’’
(3) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by
striking the last item and inserting the following
new items:
‘‘Sec. 222. Health insurance costs.
‘‘Sec. 223. Cross reference.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.