IV
103D CONGRESS
2D SESSION
H. RES. 508
Making in order, in the consideration by the House of Representatives of
H.R. 3600 (the ‘‘Health Security Act’’), an amendment-in-the-nature-
of-a-substitute consisting of the text of H.R. 3080 and including a
title providing for assistance for the purpose of health insurance.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 4, 1994
Mr. MCMILLAN submitted the following resolution; which was referred to the
Committee on Rules
RESOLUTION
Making in order, in the consideration by the House of Rep-
resentatives of H.R. 3600 (the ‘‘Health Security Act’’),
an amendment-in-the-nature-of-a-substitute consisting of
the text of H.R. 3080 and including a title providing
for assistance for the purpose of health insurance.
Resolved,
SECTION 1. CONSIDERATION OF CERTAIN AMENDMENTS
TO H.R. 3600.
(a) IN GENERAL.—In the consideration of the bill
(H.R. 3600), to ensure individual and family security
through health care coverage for all Americans in a man-
ner that contains the rate of growth in health care costs
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and promotes responsible insurance practices, to promote
choice in health care, and to ensure and protect the health
care of all Americans, in the Committee of the Whole—
(1) an amendment-in-the-nature-of-a-substitute
consisting of the text of H.R. 3080, as introduced in
the 103d Congress and the amendments described in
subsection (b), if offered by Mr. Michel of Illinois,
(or his designee), shall be made in order,
(2) any points of order against such amend-
ment are hereby waived, and
(3) the amendment shall not be subject to
amendment or to a demand for a division of the
question in the House or in the Committee of the
Whole.
(b) AMENDMENTS DESCRIBED.—The amendments
described in this subsection are specified in the following
paragraphs:
(1) LIMITATIONS
ON
UNDERWRITING.—Strike
part 2 of subtitle A of title I and insert the follow-
ing:
‘‘PART 2—RESTRICTIONS ON UNDERWRITING
‘‘SEC. 1011. LIMITATIONS ON UNDERWRITING.
‘‘(a) GUARANTEED ISSUE.—Subject to permissible
plan restrictions based on capacity, as specified under
rules established by the Secretary, each group health plan
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or health insurance plan that provides standard coverage
described in section 1102(c) must accept for enrollment
every individual who resides in the area covered by the
plan and who seeks such enrollment, without regard to
health status or the need for health services.
‘‘(b) GUARANTEED
RENEWABILITY.—Each group
health plan and health insurance plan that provides such
coverage may not deny renewal of a policy other than on
the basis of—
‘‘(1) fraud or material misrepresentation, or
‘‘(2) nonpayment of premiums.
‘‘(c) ELIMINATION
OF PRE-EXISTING CONDITION
EXCLUSIONS.—A group health plan or health insurance
plan that provides such coverage may not restrict, limit,
or exclude coverage of items or services included in the
standard coverage because of health status, the need for
health services, or existing (or pre-existing) medical condi-
tions.’’
(2) STANDARD
BENEFIT
PACKAGE.—Insert
after section 1102 the following new sections:
‘‘SEC. 1102A. STANDARD BENEFIT PACKAGE.
‘‘(a) IN GENERAL.—Subject to the cost-sharing de-
scribed in section 1102B or section 1102C applicable to
the items and services involved, notwithstanding section
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1102(c), the standard coverage described in such section
shall include benefits for—
‘‘(1) the acute care items and services described
in subsection (b), and
‘‘(2) the long-term care services described in
subsection (c)(1) for an individual determined to be
eligible for such services under subsection (c)(2) pro-
vided pursuant to a plan of care.
‘‘(b) ACUTE CARE.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the acute care items and services described in this
subsection include the following (as specified in reg-
ulations of the Secretary):
‘‘(A) INPATIENT CARE.—
‘‘(i) Inpatient hospital care (other
than mental health and substance abuse
treatment services).
‘‘(ii) Inpatient surgical and medical
care (other than mental health and sub-
stance abuse treatment services), including
dental services required due to injury re-
quiring surgery.
‘‘(B) OUTPATIENT CARE.—
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‘‘(i) Outpatient hospital care (other
than mental health and substance abuse
treatment services).
‘‘(ii) Outpatient surgical and medical
care (other than mental health and sub-
stance abuse treatment services), including
dental services required due to injury re-
quiring surgery.
‘‘(C) OUTPATIENT
PRESCRIPTION
DRUG
BENEFITS.—Outpatient prescription drugs, in-
cluding biologicals and insulin.
‘‘(D) DENTAL CARE.—Periodic teeth clean-
ing and preventive dental care.
‘‘(2) LIMITATIONS
ON
MENTAL
HEALTH
AND
SUBSTANCE ABUSE TREATMENT BENEFITS.—
‘‘(A) ANNUAL
LIMIT
FOR
SUBSTANCE
ABUSE TREATMENT SERVICES.—Subject to sub-
paragraph (B), a health plan providing stand-
ard coverage is not required to provide for pay-
ment for more than $3,000 in any year for any
individual for substance abuse treatment serv-
ices.
‘‘(B) LIFETIME
LIMIT.—Such a health
plan is not required to provide for payment for
either mental health or substance abuse treat-
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ment services for an individual once the plan
(or another such plan) has provided for pay-
ment of $50,000 for such services for the indi-
vidual in the individual’s lifetime.
‘‘(C) 
INDEXING.—The 
dollar 
amounts
specified in subparagraphs (A) and (B) of this
paragraph shall be increased for each year after
1994 by the same percentage as the percentage
increase in the consumer price index for all
urban consumers (U.S. city average) between
September of the previous year and September
1993. Any such increase that is not a multiple
of $10 or $100, respectively, shall be rounded
to the nearest multiple of $10 or $100.
‘‘(c) LONG-TERM CARE SERVICES.—
‘‘(1) SERVICES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the long-term care services described
in this paragraph include the following (as spec-
ified in regulations of the Secretary):
‘‘(i) NURSING FACILITY SERVICES.—
‘‘(I) IN GENERAL.—Nursing fa-
cility services.
‘‘(II) BED
RESERVATION.—Pay-
ment for reservation of a bed in a
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nursing facility during a period of
temporary hospitalization (not to ex-
ceed 21 days of continuous hos-
pitalization).
‘‘(ii) HOME
CARE
SERVICES.—Home
care services, including—
‘‘(I) home health services pro-
vided by a registered nursing or li-
censed practical nurse,
‘‘(II) professional services of a li-
censed physical, occupational, res-
piratory, or speech therapist,
‘‘(III) adult day care,
‘‘(IV) home health aide and per-
sonal care attendant services,
‘‘(V) homemaker services, and
‘‘(VI) chore services.
‘‘(B) BENEFIT PERIOD AND LIMITATION.—
Benefits for long-term care services are limited
to—
‘‘(i) a consecutive period of 2 years
(beginning on the first date benefits are
first covered),
‘‘(ii) $150 per day, and
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‘‘(iii) $60,000 for an individual in a
lifetime.
Subsection (b)(2)(C) shall apply to the dollar
amounts under clauses (ii) and (iii) of this sub-
paragraph in the same manner as it applies to
the dollar amounts under subparagraphs (A)
and (B) of subsection (b)(2), except that for
this purpose any reference to $10 is deemed a
reference to $1.
‘‘(2) ELIGIBILITY.—An individual is eligible for
long-term care services described in paragraph (1)
only if a physician certifies that the individual—
‘‘(A) cannot perform at least 2 of 5 of the
following activities of daily living without on-
hand help from some else when performing the
activity: dressing, eating, continence, toileting,
and transferring from a chair or bed; or
‘‘(B) is dependent upon another person be-
cause of cognitive impairment.
‘‘SEC. 1102B. COST-SHARING FOR LONG-TERM CARE SERV-
ICES.
‘‘(a) REQUIRED DEDUCTIBLE.—No benefits are pay-
able under standard coverage with respect to long-term
care services for an individual until the individual has sat-
isfied a deductible under subsection (b). Once such deduct-
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ible has been satisfied, benefits are covered for long-term
care services until there has elapsed 180 consecutive days
on which no covered long-term care benefits are provided.
Not more than $150 per day may be counted toward the
deductible and only expenses incurred in a consecutive pe-
riod of 90 days may be counted toward the deductible.
The dollar amount under the previous sentence is subject
to annual increases in the same manner as the dollar
amount under section 1102A(c)(1)(B)(ii) is subject to an-
nual increases under section 1102A(c)(1)(B).
‘‘(b) DEDUCTIBLE.—The amount of the long-term
care deductible shall be based on the income of the family
of which the individual is a member (expressed as a per-
centage of the applicable poverty line) as follows:
‘‘(1) $450, if family income is less than 100
percent of the applicable poverty line.
‘‘(2) $1,250, if family income is at least 100
percent, but less than 200 percent, of the applicable
poverty line.
‘‘(3) $4,500, if family income is at least 200
percent, but less than 300 percent, of the applicable
poverty line.
‘‘(4) $6,750, if family income is at least 300
percent of the applicable poverty line.
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‘‘(c) INDEXING.—The dollar amounts specified in
subsection (b) shall be increased for each year after 1994
by the same percentage as the percentage increase in the
consumer price index for all urban consumers (U.S. city
average) between September of the previous year and Sep-
tember 1993. Any such increase that is not a multiple of
$10 shall be rounded to the nearest multiple of $10.
‘‘SEC. 1102C. INCOME RELATED COST SHARING FOR ACUTE
CARE SERVICES.
‘‘(a) DEDUCTIBLE.—Subject to subsections (d) and
(e)—
‘‘(1) INDIVIDUAL DEDUCTIBLE.—The individual
deductible under a health plan that provides stand-
ard coverage for an individual shall be based on the
income of the family of which the individual is a
member (expressed as a percentage of the applicable
poverty line) in accordance with the following table
(subject to subsection (e)):
‘‘INDIVIDUAL DEDUCTIBLE
‘‘[Based on Family Income (Expressed as a Percent of Poverty Line)]
‘‘Income (Expressed as a Percent of Applicable Pov-
erty Line):
Individual Deductible
Less than 100% of Applicable Poverty Line
$100
At least 100%, but less than 120%, of Applicable Poverty Line
$140
At least 120%, but less than 140%, of Applicable Poverty Line
$180
At least 140%, but less than 160%, of Applicable Poverty Line
$220
At least 160%, but less than 180%, of Applicable Poverty Line
$260
At least 180%, but less than 200%, of Applicable Poverty Line
$300
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‘‘INDIVIDUAL DEDUCTIBLE—Continued
‘‘[Based on Family Income (Expressed as a Percent of Poverty Line)]
‘‘Income (Expressed as a Percent of Applicable Pov-
erty Line):
Individual Deductible
At least 200%, but less than 220%, of Applicable Poverty Line
$340
At least 220%, but less than 240%, of Applicable Poverty Line
$380
At least 240%, but less than 260%, of Applicable Poverty Line
$420
At least 260%, but less than 280%, of Applicable Poverty Line
$460
At least 280%, but less than 300%, of Applicable Poverty Line
$500
At least 300%, but less than 320%, of Applicable Poverty Line
$540
At least 320%, but less than 340%, of Applicable Poverty Line
$580
At least 340%, but less than 360%, of Applicable Poverty Line
$620
At least 360%, but less than 380%, of Applicable Poverty Line
$660
At least 380%, but less than 400%, of Applicable Poverty Line
$700
At least 400% of Applicable Poverty Line
$740
‘‘(2) MAXIMUM OF 2 DEDUCTIBLES FOR A FAM-
ILY.—The deductible shall be considered to have
been met with respect to a family when the family
has incurred expenses, that are countable with re-
spect to covered items and services, equal to twice
the individual deductible described in paragraph (1).
‘‘(b) COPAYMENTS AND COINSURANCE.—Subject to
subsections (d) and (e)—
‘‘(1) SMALL COPAYMENTS FOR FAMILIES WITH
INCOME BELOW THE POVERTY LINE.—In the case of
an individual with family income that is less than
the applicable poverty line, a health plan that pro-
vides standard coverage shall only impose cost-shar-
ing for acute care benefits in the form of a
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copayment of $5 for each item or service provided
(as identified in accordance with rules established by
the Secretary).
‘‘(2) COINSURANCE FOR OTHER FAMILIES.—In
the case of any other individual, such a plan shall
impose cost-sharing for acute care benefits in the
form of coinsurance, based on the income of the
family of which the individual is a member (ex-
pressed as a percentage of the applicable poverty
line) in accordance with the percentage specified in
the following table:
‘‘COINSURANCE PERCENTAGE
‘‘[Based on Family Income (Expressed as a Percent of Applicable
Poverty Line)]
‘‘Income (Expressed as a Percent of Applicable Pov-
erty Line):
Coinsurance
At least 100%, but less than 200%, of Applicable Poverty Line
10 percent
At least 200%, but less than 300%, of Applicable Poverty Line
15 percent
At least 300%, but less than 400%, of Applicable Poverty Line
20 percent
At least 400% of Applicable Poverty Line
25 percent
‘‘(c) CATASTROPHIC LIMIT ON OUT-OF-POCKET EX-
PENSES.—The catastrophic limit on out-of-pocket ex-
penses under a health plan that provides standard cov-
erage for an individual shall be based on the income of
the family of which the individual is a member (expressed
as a percentage of the applicable poverty line) in accord-
ance with the following table (subject to subsection (e)):
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‘‘CATASTROPHIC LIMIT ON OUT-OF-POCKET EXPENSES
‘‘[Based on Family Income (Expressed as a Percent of Applicable
Poverty Line)]
‘‘Income (Expressed as a Percent of Applicable Pov-
erty Line):
Catastrophic Limit on Out-of-
Pocket Expenses
Less than 100% of Applicable Poverty Line
$2,000
At least 100%, but less than 120%, of Applicable Poverty Line
$2,400
At least 120%, but less than 140%, of Applicable Poverty Line
$2,800
At least 140%, but less than 160%, of Applicable Poverty Line
$3,200
At least 160%, but less than 180%, of Applicable Poverty Line
$3,600
At least 180%, but less than 200%, of Applicable Poverty Line
$4,000
At least 200%, but less than 220%, of Applicable Poverty Line
$4,400
At least 220%, but less than 240%, of Applicable Poverty Line
$4,800
At least 240%, but less than 260%, of Applicable Poverty Line
$5,200
At least 260%, but less than 280%, of Applicable Poverty Line
$5,600
At least 280%, but less than 300%, of Applicable Poverty Line
$6,000
At least 300%, but less than 320%, of Applicable Poverty Line
$6,400
At least 320%, but less than 340%, of Applicable Poverty Line
$6,800
At least 340%, but less than 360%, of Applicable Poverty Line
$7,200
At least 360%, but less than 380%, of Applicable Poverty Line
$7,600
At least 380%, but less than 400%, of Applicable Poverty Line
$8,000
At least 400% of Applicable Poverty Line
$8,400
‘‘(d) SPECIAL RULES.—Under a plan providing
standard coverage:
‘‘(1) NO COPAYMENTS OR COINSURANCE FOR
INPATIENT HOSPITAL SERVICES.—There shall be no
copayments or coinsurance imposed for inpatient
hospital services.
‘‘(2) NO COST-SHARING FOR MATERNITY SERV-
ICES.—There shall be no cost-sharing imposed for
maternity services.
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‘‘(3) NO
COST-SHARING
FOR
HOSPITAL
AND
PHYSICIAN EMERGENCY CARE FOR TREATMENT OF
INJURIES
WITHIN
HOURS
OF
ONSET
OF
IN-
JURY.—There shall be no cost-sharing imposed for
hospital and physician emergency care for treatment
of injuries within 72 hours of onset of injury.
‘‘(4) NO
DEDUCTIBLE
FOR
DENTAL
CARE.—
The deductible under subsection (a) shall not apply
to coverage of dental services described in section
1102A(b)(1)(D) (relating to periodic dental cleaning
and dental preventive care).
‘‘(5) MENTAL HEALTH SERVICES.—In the case
of mental health and substance abuse treatment
services (whether inpatient or outpatient):
‘‘(A) SEPARATE PER PERSON ANNUAL DE-
DUCTIBLE.—There shall be a separate calendar
year deductible of $250 per individual, without
regard to the income of the family of which the
individual is a member.
‘‘(B) HIGHER COINSURANCE.—A plan pro-
viding standard coverage may impose coinsur-
ance of 40 percent, without regard to the in-
come of the family of which the individual is a
member.
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‘‘(e) INDEXING VALUES.—The dollar amounts speci-
fied in subsections (a), (c), and (d)(5)(A) shall be in-
creased for each year after 1994 by the same percentage
as the percentage increase in the consumer price index for
all urban consumers (U.S. city average) between Septem-
ber of the previous year and September 1993. Any such
increase that is not a multiple of $10, $100, or $10, re-
spectively, shall be rounded to the nearest multiple of $10,
$100, or $10.’’
(3) PREMIUMS.—Strike sections 1104 and 1005
and insert the following:
‘‘SEC. 1104. ESTABLISHMENT OF PREMIUMS.
‘‘(a) IN GENERAL.—Each group health plan or
health insurance plan that provides coverage of standard
benefits described in section 1102(c) shall establish pre-
miums on a per capita basis that vary within a premium
rating area (as defined by the Secretary) only based on
age of the individual and income classification (within the
same classes of age and income used for the reference per
person annual premium amount under section 1703(a))
and may vary among such classes only in the same ratios
as the reference amounts under such section vary among
such classes.
‘‘(b) FAMILY
RATE
AS
SUM
OF
INDIVIDUAL
RATES.—The premium imposed by such a plan with re-
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spect to members of a family shall be the sum of the per
capita rates established under subsection (a) with respect
to all the members of the family.’’
(4) INCOME-RELATED
TAX
DEDUCTIONS.—
Amend subtitle D of title I to read as follows:
‘‘Subtitle B—Tax Provisions
‘‘SEC. 1301. ELIMINATION OF EXCLUSION FROM INCOME
FOR EMPLOYER-PROVIDED HEALTH CARE.
‘‘(a) IN GENERAL.—The text of section 106 of the
Internal Revenue Code of 1986 (relating to contributions
by employer to accident and health plans) is amended to
read as follows:
‘‘ ‘(a) IN GENERAL.—Gross income of an employee
does not include employer-provided coverage under an ac-
cident or health plan.
‘‘ ‘(b) TERMINATION.—Gross income of an employee
shall include employer-provided coverage under an acci-
dent or health plan if such coverage is provided after De-
cember 31, 1995.’
‘‘(b) EMPLOYMENT TAX TREATMENT.—
‘‘(1) SOCIAL SECURITY TAX.—
‘‘(A) Subsection (a) of section 3121 of
such Code is amended by inserting after para-
graph (21) the following new sentence:
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‘Nothing in paragraph (2) shall exclude from the term
‘‘wages’’ any amount which is required to be included in
gross income under section 106(b).’
‘‘(B) Subsection (a) of section 209 of the
Social Security Act is amended by inserting
after paragraph (21) the following new sen-
tence:
‘Nothing in paragraph (2) shall exclude from the term
‘‘wages’’ any amount which is required to be included in
gross income under section 106(b) of the Internal Revenue
Code of 1986.’
‘‘(2) RAILROAD RETIREMENT TAX.—Paragraph
(1) of section 3231(e) of such Code is amended by
adding at the end thereof the following new sen-
tence: ‘Nothing in clause (i) of the second sentence
of this paragraph shall exclude from the term ‘‘com-
pensation’’ any amount which is required to be in-
cluded in gross income under section 106(b).’
‘‘(3) UNEMPLOYMENT TAX.—Subsection (b) of
section 3306 of such Code is amended by inserting
after paragraph (16) the following new sentence:
‘Nothing in paragraph (2) shall exclude from the term
‘‘wages’’ any amount which is required to be included in
gross income under section 106(b).’
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‘‘(4) WAGE WITHHOLDING.—Subsection (a) of
section 3401 of such Code is amended by adding at
the end thereof the following new sentence:
‘Nothing in the preceding provisions of this subsection
shall exclude from the term ‘‘wages’’ any amount which
is required to be included in gross income under section
106(b).’
‘‘(c) EFFECTIVE DATE.—
‘‘(1) INCOME TAX.—The amendment made by
subsection (a) shall apply to taxable years ending
after December 31, 1995.
‘‘(2) EMPLOYMENT
TAX.—The amendments
made by subsection (b) shall apply to remuneration
paid after December 31, 1995.
‘‘SEC. 1302. LIMITATION ON EMPLOYER DEDUCTION FOR
HEALTH CARE PROVIDED TO EMPLOYEES.
‘‘(a) IN GENERAL.—Section 162 of the Internal Rev-
enue Code of 1986 (relating to trade or business expenses)
is amended by redesignating subsection (o) as subsection
(p) and by inserting after subsection (n) the following new
subsection:
‘‘ ‘(o) DENIAL
OF
DEDUCTION
FOR
CERTAIN
HEALTH CARE COVERAGE PROVIDED TO EMPLOYEE.—
No deduction shall be allowed under this chapter to an
employer for coverage provided to an employee (or the
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spouse or any dependent of an employee) under an acci-
dent or health plan unless such plan provides standard
coverage in accordance with the applicable provisions of
the Affordable Health Care Now Act of 1993.’
‘‘(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to coverage for periods after De-
cember 31, 1995, in taxable years ending after such date.
‘‘SEC. 1303. NON-ITEMIZED DEDUCTION FOR PREMIUMS
FOR QUALIFIED HEALTH PLANS AND FOR
CONTRIBUTIONS TO MEDICAL SAVINGS AC-
COUNTS BY TAXPAYERS COVERED UNDER
CATASTROPHIC COVERAGE HEALTH PLANS.
‘‘(a) IN GENERAL.—Part VII of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 (relating
to additional itemized deductions for individuals), as
amended by section 2202, is amended by redesignating
section 221 as section 222 and by inserting after section
220 the following new section:
‘‘ ‘SEC. 221. CERTAIN PAYMENTS FOR HEALTH COVERAGE.
‘‘ ‘(a) IN GENERAL.—In the case of an individual,
there shall be allowed as a deduction for the taxable year
an amount equal to the qualified health expenses paid by
the taxpayer during the taxable year.
‘‘ ‘(b) QUALIFIED HEALTH EXPENSES.—For pur-
poses of this section:
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‘‘ ‘(2) the voucher amount provided to the tax-
payer under such subtitle A for such calendar year.
‘‘ ‘(d) DEFINITIONS.—For purposes of this section—
‘‘ ‘(1) the term ‘‘qualified health plan’’ means a
MedAccess plan or other health plan that provides
standard coverage consistent with the applicable re-
quirements of the Affordable Health Care Now Act
of 1993; and
‘‘ ‘(2) the term ‘‘catastrophic coverage health
plan’’ has the meaning given such term in section
220(c)(2).’
‘‘(b) CLERICAL AMENDMENT.—The table of sections
for part VII is amended by striking the last item and in-
serting the following new items:
‘‘ ‘Sec. 221. Certain payments for health coverage.
‘‘ ‘Sec. 222. Cross reference.’
‘‘(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to coverage for periods after De-
cember 31, 1995, in taxable years ending after such date.’’
(5) INDIVIDUAL MANDATE AND INCOME-RELAT-
ED VOUCHERS.—Strike subtitles G and H of title I
and insert the following:
‘‘Subtitle G—Individual Mandate
‘‘SEC. 1601. REQUIREMENT.
‘‘(a) IN GENERAL.—Each individual who is lawfully
in the United States shall obtain health insurance cov-
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erage under a health plan that is a MedAccess plan or
a plan that benefits equivalent to the benefits provided in
a MedAccess plan.
‘‘(b) EXCEPTIONS.—An individual who is a member
of the Uniformed Services of the United States on active
duty or is entitled to benefits under the CHAMPUS pro-
gram or title 38, United States Code, is deemed to have
satisfied the requirement of subsection (a).
‘‘(c) ENFORCEMENT.—Each individual who fails to
meet the requirement of subsection (a) shall be enrolled,
in a manner specified by the Secretary, in a plan described
in such subsection and is liable for the premiums other-
wise payable during the period in which the individual
failed to be enrolled, plus a penalty or interest as specified
by the Secretary. Amounts so owed may be collected by
the Secretary through garnishment, withholding of tax re-
funds owed, or other appropriate means.
‘‘Subtitle H—Income-Related
Vouchers
‘‘SEC. 1701. ELIGIBILITY.
‘‘(a) ELIGIBILITY.—
‘‘(1) IN GENERAL.—Each qualified family (as
defined in subsection (b)) is entitled to be provided
financial assistance toward the cost of the premium
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for a health plan that provides standard coverage ei-
ther—
‘‘(A) in the form of a voucher under para-
graph (2) in the amount specified in section
1702(a), or
‘‘(B) in the form of a non-itemized deduc-
tion against taxes otherwise payable, in accord-
ance with section 221 of the Internal Revenue
Code of 1986.
‘‘(2) USE OF VOUCHER.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a voucher provided to a family
under this subtitle shall be remitted by any in-
dividual in such family to the health plan, the
exempted multiple employer health plan (as de-
fined in section 701 of the Employee Retire-
ment Income Security Act of 1974), or, in the
case of an employment-related health plan, to
the employee’s employer, as the case may be,
for payment by the Secretary. The health plan,
multiple employer health plan, or employer shall
make proper adjustments in billing statements
to reflect such family’s remaining premium obli-
gations (if any).
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‘‘(B) ELECTION OF TAX CREDIT.—A fam-
ily may elect, in a manner specified by the Sec-
retary in consultation with the Secretary of the
Treasury, to be provided the voucher in the
form of a credit against income taxes payable
by members of the family.
‘‘(b) QUALIFIED FAMILY.—For purposes of this sub-
title, except as provided in subsection (c), the term ‘quali-
fied family’ means an individual and dependents (as de-
fined in section 1023).
‘‘(c) SPECIAL TREATMENT
OF MEDICARE BENE-
FICIARIES.—
‘‘(1) INDIVIDUALS
CURRENTLY
YEARS
OF
AGE OR OLDER.—In the case of individuals who are
60 years of age or older on the date of the enact-
ment of this Act, the individual shall only be consid-
ered to be a member of a qualified family if the indi-
vidual elects to be eligible for benefits under this
subtitle instead of any entitlement to benefits under
the medicare program under title XVIII of the So-
cial Security Act. Such election shall be made at
such time and in such manner as the Secretary
specifies. Once such an election is made with respect
to an individual it is irrevocable.
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‘‘(2) OTHER INDIVIDUALS.—In the case of eligi-
ble individuals not described in paragraph (1), the
individuals are entitled to benefits under this title
instead of entitlement to benefits under the medicare
program under title XVIII of the Social Security
Act.
‘‘(3) MEDICARE PAYMENTS.—In the case of an
individual who, under paragraph (1) or (2), is enti-
tled to benefits under this title instead of entitle-
ment to benefits under the medicare program, the
Secretary shall provide for payment on behalf of the
individual for premiums under health plans that pro-
vide benefits for the individual in an amount equal
to the amount that would be payable under section
1876 of the Social Security Act if the individual had
been enrolled under a risk-sharing contract with an
eligible organization under such section (but sub-
stituting 100 percent for 95 percent in subsection
(a)(2)(C) of such section).
‘‘(d) SPECIAL TREATMENT
OF MEDICAID BENE-
FICIARIES.—
‘‘(1) STATE OPTIONS FOR ACUTE CARE.—Each
State that has a medicaid plan approved under title
XIX of the Social Security Act shall elect one of the
following options in relation to such plan with re-
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spect to medical assistance with respect to acute
care services:
‘‘(A) CONTRIBUTION OPTION.—The State
may pay an amount equivalent to the product
of—
‘‘(i) 1 minus the Federal medical as-
sistance percentage for the State (as de-
fined in section 1905(b) of the Social Secu-
rity Act), and
‘‘(ii) the Federal subsidies provided
under this subtitle for individuals residing
in the State who have family incomes
below the applicable poverty line for a fam-
ily of the size involved.
‘‘(B) CAPITATION
OPTION.—The State
may 
assume 
responsibility 
for 
providing
(through capitated plans or otherwise) benefits
under standard coverage (described in section
1102A) for all individuals described in subpara-
graph (A) and the State is entitled to receive
from the Federal Government an amount equal
to the Federal subsidies that otherwise would
have been provided under this subtitle for such
individuals reduced by the amount the State
would have been required to pay under subpara-
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graph (A) if the option under such subpara-
graph had been elected.
‘‘(2) TRANSITIONAL
LONG-TERM
CARE
SERV-
ICES.—
‘‘(A) ELIMINATION OF CURRENT MEDICAID
COVERAGE FOR TRANSITIONAL SERVICES.—An
individual who first becomes entitled to and re-
ceives transitional long-term care services under
a State medicaid plan on or after the effective
date of this subtitle shall not be entitled to
medical assistance with respect to such services
under the plan, but shall receive benefits with
respect to such services under the standard
benefit package or under the State option de-
scribed in paragraph (1)(B).
‘‘(B) GRANDFATHERING
OF
LONG-TERM
CARE
MEDICAID
RECIPIENTS.—An individual
who is entitled to and is receiving, as of the ef-
fective date of this subtitle, transitional long-
term care services under a State medicaid plan
shall continue to be entitled to medical assist-
ance with respect to such services and States
may not change the benefits made available
under such plans with respect to such individ-
uals.
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‘‘(C) TRANSITIONAL
LONG-TERM
CARE
SERVICES.—In this subsection, the term ‘transi-
tional long-term care services’ means, with re-
spect to an individual, long-term care services
furnished to the individual during the 2-year
period beginning on the date such services are
first furnished to the individual.
‘‘(3) EXTENDED LONG-TERM CARE SERVICES.—
With respect to coverage of long-term care services
other than transitional long-term care services under
a State medicaid plan, on and after the effective
date of this subtitle the Federal medical assistance
percentage shall be equal to 100 percent.
‘‘(e) ADDITIONAL SPECIAL RULES.—
‘‘(1) ACTIVE DUTY MILITARY NOT ELIGIBLE.—
An individual who is a member of the Uniformed
Services of the United States on active duty is not
eligible for benefits under this section.
‘‘(2) ELECTION BY INDIVIDUALS ELIGIBLE FOR
CHAMPUS AND VETERANS BENEFITS.—An individual
who is receiving benefits under the CHAMPUS pro-
gram or under title 38, United States Code, as of
the effective date of this subtitle shall only be eligi-
ble for benefits under this section if the individual
elects, on a 1-time basis, to waive the rights to bene-
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fits under such program or title and instead receive
benefits described in subsection (a).
‘‘SEC. 1702. AMOUNT OF VOUCHER.
‘‘(a) IN GENERAL.—The amount of a voucher speci-
fied in this subsection for a qualified family for a year
is the sum of the voucher amounts for each member of
the family in the year. The voucher amount for each mem-
ber of a family in the year is the lesser of—
‘‘(1) the annual premium paid by or on behalf
of the family member for such year for coverage
under a health plan that provides standard coverage
in which the member is enrolled, or
‘‘(2) the voucher percentage (specified in sub-
section (b)) of the sum, for all months in the year,
of 1⁄12 of the reference per person annual premium
amount (specified under section 1703) for that
member for that year.
Paragraph (2) shall be applied to a member based on the
age, income class, family status, and geographic location
of the member as of the first day of the month.
‘‘(b) VOUCHER PERCENTAGE.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
for a qualified family, the voucher percentage is the
percentage specified in the following table, based on
the income (expressed as a percent of the applicable
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poverty line for a family of the size involved) of the
family of which the individual is a member:
‘‘VOUCHER PERCENTAGE
‘‘[Based on Family Income (Expressed as a Percent of Applicable
Poverty Line)]
‘‘Income (Expressed as a Percent of Applicable Pov-
erty Line):
Voucher Percentage
Less than 100% of Applicable Poverty Line
100%
At least 100%, but less than 110%, of Applicable Poverty Line
90%
At least 110%, but less than 120%, of Applicable Poverty Line
80%
At least 120%, but less than 130%, of Applicable Poverty Line
70%
At least 130%, but less than 140%, of Applicable Poverty Line
60%
At least 140%, but less than 160%, of Applicable Poverty Line
60%
At least 160%, but less than 160%, of Applicable Poverty Line
60%
At least 160%, but less than 170%, of Applicable Poverty Line
55%
At least 170%, but less than 220%, of Applicable Poverty Line
50%
At least 220%, but less than 240%, of Applicable Poverty Line
40%
At least 240% of Applicable Poverty Line
0%
‘‘(2) TREATMENT OF ELDERLY INDIVIDUALS.—
In the case of an individual who is 65 years of age
or older as of the first day of a month and whose
family income (expressed as a percent of applicable
poverty line) is at least 240 percent of the applicable
poverty line, the voucher percentage is 20 percent.
‘‘(c) DEFINITIONS
AND DETERMINATION
OF IN-
COME.—For purposes of this subtitle:
‘‘(1) APPLICABLE
POVERTY
LINE.—The term
‘applicable poverty line’ means the income official
poverty line (as defined by the Office of Manage-
ment and Budget, and revised annually in accord-
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ance with section 673(2) of the Omnibus Budget
Reconciliation Act of 1981) applicable to a family of
the size involved. Such poverty line shall be revised
as of October 1 of each year for the next succeeding
year.
‘‘(2) DETERMINATIONS OF INCOME.—
‘‘(A) IN GENERAL.—Subject to paragraph
(3), the term ‘income’ means adjusted gross in-
come (as defined in section 62(a) of the Inter-
nal Revenue Code of 1986)—
‘‘(i) determined without regard to sec-
tions 135, 162(l), 911, 931, and 933 of
such Code; and
‘‘(ii) increased by—
‘‘(I) the amount of interest re-
ceived or accrued which is exempt
from tax, plus
‘‘(II) the amount of social secu-
rity benefits (described in section
86(d) of such Code) which is not in-
cludible in gross income under section
86 of such Code.
‘‘(B) FAMILY INCOME.—The term ‘family
income’ means, with respect to a family, the
sum of the income for all members of the fam-
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ily, not including the income of a dependent
child with respect to which no return is re-
quired under the Internal Revenue Code of
1986.
‘‘(C) FAMILY SIZE.—The family size to be
applied under this section, with respect to fam-
ily income, is the number of individuals in-
cluded in the family for purposes of coverage
under a health plan that provides standard cov-
erage.
‘‘(3) SPECIAL RULE WHERE LOSS OF EARNED
INCOME DURING A YEAR.—
‘‘(A) IN GENERAL.—In the case of a fam-
ily described in subparagraph (B), the family
may elect to have the voucher amount under
this subtitle computed based only on other,
nonearned income (and attributable amounts
described in subparagraph (C)).
‘‘(B) FAMILY DESCRIBED.—A family de-
scribed in this subparagraph is a family—
‘‘(i) that has a significant loss of
wages or earned income (as defined by the
Secretary) during a year, and
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‘‘(ii) has net assets (as determined in
accordance with rules specified by the Sec-
retary) of less than $500,000.
‘‘(C) ATTRIBUTABLE AMOUNTS.—In apply-
ing subparagraph (A), any nonexempt assets of
a family shall be deemed to provide income at
a rate of not less than the interest rate applica-
ble to long-term obligations of the United
States (as determined by the Secretary of the
Treasury).
‘‘SEC. 1703. REFERENCE PER PERSON ANNUAL PREMIUM
AMOUNT.
‘‘(a) IN GENERAL.—Subject to the succeeding provi-
sions of this section, for purposes of this subtitle, the ref-
erence per person annual premium amount for an individ-
ual is the following amount for standard coverage, based
on the age of the individual and the income (expressed
as a percent of the applicable poverty line for a family
of the size involved) of the family of which the individual
is a member in accordance with the following table:
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‘‘REFERENCE PER PERSON ANNUAL PREMIUM AMOUNT FOR STANDARD COVERAGE
‘‘[Based on Family Income (Expressed as a Percent of Applicable Poverty Line) and Based on Age of Individual]
‘‘Income Expressed as a
Percent of Applicable
Poverty Line):
Under 18
18–34
35–49
50–64
Over 64
Less than 100% of Applicable
Poverty Line
$1,568
$2,613
$3,714
$5,057
$13,233
At least 100%, but less than
200%, of Applicable Poverty
Line
$776
$1,293
$1,839
$2,503
$8,537
At least 200% of Applicable
Poverty Line
$644
$1,074
$1,526
$2,078
$7,086
‘‘(b) UPDATE.—The reference per person annual pre-
mium amounts specified in subsection (a) shall be updated
annually by the Secretary, based on estimates of changes
in the actuarial value for the different classes based on
income and age of the standard benefit package between
1993 and the year involved.
‘‘(c) GEOGRAPHIC ADAPTATION.—
‘‘(1) IN GENERAL.—The reference per person
annual premium amounts specified in subsection (a)
and updated under subsection (b) shall be adjusted
by the Secretary for each geographic area so they re-
flect variations in costs of the standard benefit pack-
age in different areas.
‘‘(2) METHODOLOGY.—The 
Secretary 
shall
make such adjustment using methodology (and
areas) similar to the methodology and areas used for
establishing the average annual per capita cost for
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payments to eligible organizations under section
1876 of the Social Security Act.
‘‘(d) APPLICATION ON MONTHLY BASIS.—The ref-
erence per person annual premium amounts under this
section shall be computed for a family on a monthly basis,
to take into account the age, income class, and family sta-
tus as of the first day of the month involved.
‘‘SEC. 1704. APPLICATION FOR VOUCHER.
‘‘(a) TIME OF FILING.—
‘‘(1) NOVEMBER 1 OF PREVIOUS YEAR.—Not
later than November 1 of each year (beginning with
1995), each family desiring to obtain a voucher
under this subtitle shall submit to the Secretary (in
such form and manner as the Secretary may require,
in consultation with the Secretary of the Treasury)
an estimate of the individual’s family income antici-
pated for the taxable year ending with or within the
following calendar year, to be used to determine ini-
tially whether the individual is eligible for a voucher
under this subtitle, and the amount of such a vouch-
er, for such following calendar year.
‘‘(2) SPECIAL RULE FOR FIRST YEAR OF COV-
ERAGE.—For the first year in which an individual is
eligible for such a voucher, the individual shall sub-
mit to the Secretary (at such time and in such form
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and manner as the Secretary may require, in con-
sultation with the Secretary of the Treasury) an es-
timate of the individual’s family income anticipated
for the taxable year ending with December 31 of
such year, to be used to determine initially whether
the individual is eligible for a voucher under this
subtitle, and the amount of such a voucher, for such
following calendar year.
‘‘(3) 
SUBSEQUENT
APPLICATIONS.—Under
rules established by the Secretary, applications for a
voucher may also be filed at other times during a
year.
‘‘(b) FORM.—
‘‘(1) USE
OF
SIMPLE
FORM.—The Secretary
shall use an application which shall be as simple in
form as possible and understandable to the average
individual. The application may require attachment
of such documentation as deemed necessary by the
Secretary in order to ensure eligibility for assistance.
The Secretary shall use, as deemed practicable by
the Secretary, any existing forms employed for Fed-
eral income tax filings as an application for assist-
ance.
‘‘(2) AVAILABILITY OF FORMS.—The Secretary
shall make application forms available through
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health care providers and plans, public assistance of-
fices, public libraries, and at other locations (includ-
ing post offices) accessible to a broad cross-section
of families.
‘‘(3) SUBMISSION OF APPLICATION FORM.—An
application form under this section may be submit-
ted in such manner as the Secretary shall provide.
‘‘(c) PERMITTING SUBMISSION OF REVISED APPLI-
CATION.—During a year, a family may submit a revised
application to reflect changes in the estimated income of
the family, including changes in employment status of
family members, during the year. The voucher amount
shall be revised to reflect such a revised application.
‘‘(d) ENROLLMENT AT POINT OF APPLICATION.—To
the extent practicable, the Secretary shall provide for the
option of enrollment in a health plan that provides stand-
ard coverage as part of the application and approval proc-
ess for assistance under this subtitle. In providing for such
an option, the Secretary may require the State of resi-
dence to provide such information and assistance regard-
ing such plans as may be necessary.
‘‘SEC. 1705. DETERMINATION OF ELIGIBILITY AND AMOUNT
OF VOUCHER.
‘‘(a) IN GENERAL.—Upon receiving an application
for a voucher under section 1804, the Secretary shall pro-
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vide in a prompt manner for notice of the determination
of eligibility for, and amount of, a voucher under this sub-
title.
‘‘(b) ELECTION WITH RESPECT TO INCOME DETER-
MINATION.—As elected by a family at the time of submis-
sion of an application for a voucher under section 1804,
the family income shall be determined either—
‘‘(1) by multiplying by a factor of 4 the income
for the 3-month period immediately preceding the
month in which the application is made, or
‘‘(2) based upon estimated income for the entire
year in which the application is submitted.
‘‘(c) DISCLOSURE OF CERTAIN TAX INFORMATION
BY SECRETARY OF TREASURY.—
‘‘(1) IN
GENERAL.—Subsection (l) of section
6103 of the Internal Revenue Code of 1986 (relating
to confidentiality and disclosure of returns and re-
turn information) is amended by adding at the end
thereof the following new paragraph:
‘‘ ‘(14) DISCLOSURE
OF
RETURN
INFORMA-
TION.—
‘‘ ‘(A) IN GENERAL.—The Secretary shall,
upon written request from the Secretary of
Health and Human Services, disclose to the of-
ficers and employees of the Department of
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Health and Human Services return information
necessary to determine the family income (as
defined in section 1702(c)(2)(B) of the Afford-
able Health Care Now Act of 1993) of any indi-
vidual to be used to determine whether the indi-
vidual is eligible for a voucher under subtitle I
of title I of such Act, and the amount of such
a voucher.
‘‘ ‘(B) RESTRICTION
ON
USE
OF
DIS-
CLOSED
INFORMATION.—Any officer or em-
ployee of the Department of Health and
Human Services receiving return information
under subparagraph (A) shall use such informa-
tion only for purposes of, and to the extent nec-
essary in, establishing the family income (as so
defined) for such purpose.’
‘‘(2) CONFORMING AMENDMENTS.—Paragraphs
(3)(A) and (4) of section 6103(p) of such Code are
each amended by striking ‘or (13)’ each place it ap-
pears and inserting ‘(13), or (14)’.
‘‘(3) 
EFFECTIVE
DATE.—The 
amendments
made by paragraphs (1) and (2) shall apply with re-
spect to information for taxable years beginning
after the date of the enactment of this Act.
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‘‘SEC. 1706. RECONCILIATION.
‘‘(a) NOTICE OF VOUCHER AMOUNTS PROVIDED.—
In the case of a qualified family that has received a vouch-
er under this subtitle for any month in a year, the Sec-
retary shall, not later than January 31 of the following
year, notify such family of the total amount of the vouch-
ers that such family received during the year.
‘‘(b) FILING OF NOTICE.—
‘‘(1) IN GENERAL.—A family that receives a no-
tice under subsection (a) shall attach such notice to
the tax return filed by such family for the year in-
volved. The Secretary of the Treasury shall establish
a procedure to enable a family that is not required
to file a tax return for the year involved to file the
notice received under subsection (a).
‘‘(2) INSTRUCTIONS FOR FILING NOTICE.—The
Secretary shall provide instructions for filing the no-
tice described in paragraph (1) (in such form as the
Secretary prescribes) no later than January 31 of
the year following the year involved.
‘‘(c) RECONCILIATION
OF ASSISTANCE BASED
ON
ACTUAL INCOME.—
‘‘(1) IN GENERAL.—Based on and using the in-
formation contained in the notice filed under sub-
section (b) with respect to a family, the Secretary of
the Treasury shall compute the amount of the
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voucher that should have been provided under this
subtitle with respect to the family in the year in-
volved.
‘‘(2) OVERPAYMENT
OF
VOUCHER.—If the
amount of the voucher provided was greater than
the amount computed under paragraph (1), the ex-
cess amount shall be treated as an underpayment of
a tax imposed by chapter 1 of the Internal Revenue
Code of 1986 and paid by the Secretary of the
Treasury to the family involved.
‘‘(3) UNDERPAYMENT
OF
VOUCHER.—If the
amount computed under paragraph (1) is greater
than the amount of the voucher provided, the
amount of the difference shall be treated as an over-
payment of tax imposed by such chapter, or in the
event such family is entitled to a refund of such a
tax, subject to the provisions of section 6402(d) of
such Code.
‘‘(d) FAILURE TO FILE.—In the case of any family
that is required to file a notice under subsection (b) for
a year and that fails to file such a notice by the deadline
specified by the Secretary, the entire amount of the vouch-
er provided in such year shall be considered the excess
amount under subsection (c)(2). The Secretary shall waive
the application of this subsection if the family establishes,
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to the satisfaction of the Secretary, good cause for the
failure to file the notice on a timely basis.
‘‘SEC. 1707. PENALTIES FOR FALSE INFORMATION.
‘‘Any individual who knowingly makes a material mis-
representation of information in an application for a
voucher under this subtitle, shall be liable to the Federal
Government for excess payments made based on such mis-
representation and interest on such excess payments at
a rate specified by the Secretary, and, in addition, shall
be liable to the Federal Government for $1,000 or, if
greater, 3 times the excess payments made based on such
misrepresentation.
‘‘SEC. 1708. ADMINISTRATION.
‘‘(a) IN GENERAL.—Except as provided in this sec-
tion, this subtitle shall be administered by the Secretary
of Health and Human Services.
‘‘(b) ADMINISTRATION BY A STATE.—Upon applica-
tion of a State, the Secretary may provide for the adminis-
tration of this subtitle in a State through an appropriate
State agency.’’
Æ
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