I
103D CONGRESS
2D SESSION
H. R. 4550
To provide Americans with secure, portable health insurance benefits through
tax credits, medical savings accounts, and greater choice of health insur-
ance plans without mandates, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 8, 1994
Mr. STEARNS (for himself, Mr. ARMEY, Mr. BAKER of California, Mr. CRANE,
Mr. DELAY, Mr. DORNAN, Mr. DUNCAN, Mr. GEKAS, Mr. GINGRICH, Mr.
GOSS, Mr. GRAMS, Mr. HANCOCK, Mr. HASTERT, Mr. HUNTER, Mr.
HUTCHINSON, Mr. HYDE, Mr. KYL, Mr. LEWIS of Florida, Mr. LINDER,
Mr. ROHRABACHER, Mr. SHAYS, and Mrs. VUCANOVICH) introduced the
following bill; which was referred jointly to the Committees on Ways and
Means, Energy and Commerce, Education and Labor, Rules, the Judici-
ary, Agriculture, and Banking, Finance and Urban Affairs
A BILL
To provide Americans with secure, portable health insurance
benefits through tax credits, medical savings accounts,
and greater choice of health insurance plans without
mandates, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Consumer Choice Health Security Act of 1994’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
TITLE I—TAX AND INSURANCE PROVISIONS
Subtitle A—Tax Treatment of Health Care Expenses
Sec. 101. Refundable health care expenses tax credit.
Sec. 102. Medical savings accounts.
Sec. 103. Other tax provisions.
Subtitle B—Insurance Provisions
PART I—FEDERALLY QUALIFIED HEALTH INSURANCE PLAN
Sec. 111. Federally qualified health insurance plan.
Sec. 112. Family security benefits package.
Sec. 113. Rating practices.
Sec. 114. Guaranteed issue.
Sec. 115. Guaranteed renewability.
PART II—CERTIFICATION OF FEDERALLY QUALIFIED HEALTH INSURANCE
PLANS
Sec. 117. Establishment of regulatory program for certification of plans.
Sec. 118. Standards for regulatory programs.
Subtitle C—Employer Provisions
Sec. 121. General provisions relating to employers.
Sec. 122. Conversion of non-self-insured plans.
Sec. 123. Provisions relating to existing self-insured plans.
Sec. 124. Continuation of employer-provided health coverage required until ef-
fective date of new coverage under this Act.
Sec. 125. Requirements with respect to cashing out employer-sponsored plans.
Sec. 126. Enforcement.
Subtitle D—Federal Preemption
Sec. 131. Federal preemption of certain State laws.
Subtitle E—Report
Sec. 141. Report on health insurance coverage.
TITLE II—MEDICARE AND MEDICAID REFORMS
Subtitle A—Medicare
Sec. 201. Study of medicare private health insurance program.
Sec. 202. Elimination of medicare hospital disproportionate share adjustment
payments.
Sec. 203. Reduction in adjustment for indirect medical education.
Sec. 204. Imposition of copayment for skilled nursing facility services.
Sec. 205. Shift payment updates to January for all payment rates under hos-
pital insurance program.
Sec. 206. Acceleration of transition to prospective rates for facility costs in hos-
pital outpatient departments.
Subtitle B—Medicaid
Sec. 211. Cap on Federal payments made for acute medical services under the
medicaid program.
Sec. 212. Waivers for the furnishing of acute medical services under the medic-
aid program.
Sec. 213. Termination of disproportionate share payments.
Sec. 214. Grants for health insurance coverage, acute medical services, preven-
tive care, and disease prevention.
TITLE III—HEALTH CARE LIABILITY REFORM
Sec. 301. Short title.
Sec. 302. Definitions.
Sec. 303. Health care malpractice.
Sec. 304. Health care product liability of manufacturer or seller.
Sec. 305. General provisions relating to health care liability.
Sec. 306. Punitive damages.
Sec. 307. Exceptions.
Sec. 308. Rules of construction.
TITLE IV—ADMINISTRATIVE COST SAVINGS
Subtitle A—Standardization of Claims Processing
Sec. 401. Adoption of data elements, uniform claims, and uniform electronic
transmission standards.
Sec. 402. Application of standards.
Sec. 403. Periodic review and revision of standards.
Sec. 404. Health insurance plan defined.
Subtitle B—Electronic Medical Data Standards
Sec. 411. Medical data standards for hospitals and other providers.
Sec. 412. Application of electronic data standards to certain hospitals.
Sec. 413. Electronic transmission to Federal agencies.
Sec. 414. Limitation on data requirements where standards in effect.
Sec. 415. Advisory commission.
Subtitle C—Development and Distribution of Comparative Value Information
Sec. 421. State comparative value information programs for health care pur-
chasing.
Sec. 422. Federal implementation.
Sec. 423. Comparative value information concerning Federal programs.
Subtitle D—Preemption of State Quill Pen Laws
Sec. 431. Preemption of State quill pen laws.
TITLE V—ANTI-FRAUD
Subtitle A—Criminal Prosecution of Health Care Fraud
Sec. 501. Penalties for health care fraud.
Sec. 502. Rewards for information leading to prosecution and conviction.
Subtitle B—Coordination of Health Care Anti-Fraud and Abuse Activities
Sec. 511. Application of Federal health anti-fraud and abuse sanctions to all
fraud and abuse against any health insurance plan.
TITLE VI—ANTITRUST PROVISIONS
Sec. 601. Exemption from antitrust laws for certain competitive and collabo-
rative activities.
Sec. 602. Safe harbors.
Sec. 603. Designation of additional safe harbors.
Sec. 604. Certificates of review.
Sec. 605. Notifications providing reduction in certain penalties under antitrust
law for health care cooperative ventures.
Sec. 606. Review and reports on safe harbors and certificates of review.
Sec. 607. Rules, regulations, and guidelines.
Sec. 608. Definitions.
TITLE VII—LONG-TERM CARE
Sec. 701. Exclusion from gross income for amounts withdrawn from individual
retirement plans or 401(k) plans for long-term care insurance.
Sec. 702. Certain exchanges of life insurance contracts for long-term care in-
surance contracts not taxable.
Sec. 703. Tax treatment of accelerated death benefits under life insurance con-
tracts.
Sec. 704. Effective date.
TITLE VIII—WELFARE RESTRICTIONS FOR ALIENS
Sec. 801. Ineligibility of aliens for public welfare assistance.
Sec. 802. State AFDC agencies required to provide information on illegal aliens
to the Immigration and Naturalization Service.
TITLE IX—INCREASE IN ASSISTANCE TO COMMUNITY AND
MIGRANT HEALTH CENTERS FROM RESIDUAL SAVINGS
Sec. 901. Grant program to promote primary health care services for under-
served populations.
SEC. 2. PURPOSES.
The purposes of this Act are to—
(1) provide Americans with secure, portable
health insurance benefits and greater choice of
health insurance plans,
(2) make the American health care system re-
sponsive to consumer needs and encourage the provi-
sion of quality medical care at reasonable prices
through enhanced competition,
(3) provide more equitable tax treatment of
health insurance and medical care expenses, and
(4) assist low-income and uninsured Americans
in purchasing health insurance and receiving pri-
mary medical care.
TITLE I—TAX AND INSURANCE
PROVISIONS
Subtitle A—Tax Treatment of
Health Care Expenses
SEC. 101. REFUNDABLE HEALTH CARE EXPENSES TAX
CREDIT.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to refundable personal credits) is amended
by inserting after section 34 the following new section:
‘‘SEC. 34A. HEALTH CARE EXPENSES.
‘‘(a) ALLOWANCE
OF CREDIT.—In the case of a
qualified individual, there shall be allowed as a credit
against the tax imposed by this subtitle for the taxable
year an amount equal to the applicable percentage of the
sum of—
‘‘(1) 25 percent of the sum of the qualified
health insurance premiums and the unreimbursed
expenses for medical care paid by such individual
during the taxable year which does not exceed 10
percent of the adjusted gross income of such individ-
ual for such year, plus
‘‘(2) 50 percent of the sum of such premiums
and such unreimbursed expenses so paid which ex-
ceeds 10 percent but does not exceed 20 percent of
such adjusted gross income, plus
‘‘(3) 75 percent of the sum of such premiums
and such unreimbursed expenses so paid which ex-
ceeds 20 percent of such adjusted gross income.
‘‘(b) QUALIFIED INDIVIDUALS.—For purposes of this
section:
‘‘(1) IN GENERAL.—The term ‘qualified individ-
ual’ means the taxpayer, the spouse of the taxpayer,
and each dependent of the taxpayer (as defined in
section 152) who is enrolled in a federally qualified
health insurance plan.
‘‘(2) FEDERALLY COVERED INDIVIDUALS.—The
term ‘qualified individual’ does not include any indi-
vidual whose medical care is covered under—
‘‘(A) title XVIII or XIX of the Social Se-
curity Act,
‘‘(B) chapter 55 of title 10, United States
Code,