I
106TH CONGRESS
2D SESSION
H. R. 4390
To amend the Social Security Act to guarantee comprehensive health care
coverage for all children born after 2001.
IN THE HOUSE OF REPRESENTATIVES
MAY 4, 2000
Mr. STARK (for himself, Mr. RANGEL, Mr. GEORGE MILLER of California, Mr.
MCDERMOTT, Mrs. JONES of Ohio, Mr. FRANK of Massachusetts, Mr.
CONYERS, and Mrs. MEEK of Florida), introduced the following bill;
which was referred to the Committee on Ways and Means, and in addi-
tion to the Committee on Commerce, 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 the Social Security Act to guarantee comprehen-
sive health care coverage for all children born after 2001.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS; FINDINGS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘MediKids Health Insurance Act of 2000’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents; findings.
Sec. 2. Benefits for all children born after 2001.
‘‘TITLE XXII—MEDIKIDS PROGRAM
‘‘Sec. 2201. Eligibility.
‘‘Sec. 2202. Benefits.
‘‘Sec. 2203. Premiums.
‘‘Sec. 2204. MediKids Trust Fund.
‘‘Sec. 2205. Oversight and accountability.
‘‘Sec. 2206. Addition of care coordination services.
‘‘Sec. 2207. Administration and miscellaneous.
Sec. 3. MediKids premium.
Sec. 4. Refundable credit for cost-sharing expenses under MediKids program.
Sec. 5. Financing from tobacco liability payments.
Sec. 6. Report on long-term revenues.
(c) FINDINGS.—Congress finds the following:
(1) More than 11 million American children are
uninsured.
(2) Children who are uninsured receive less
medical care and less preventive care and have a
poorer level of health, which result in lifetime costs
to themselves and to the entire American economy.
(3) Although SCHIP and Medicaid are success-
fully extending a health coverage safety net to a
growing portion of the vulnerable low-income popu-
lation of uninsured children, we now see that they
alone cannot achieve 100 percent health insurance
coverage for our nation’s children due to inevitable
gaps during outreach and enrollment, fluctuations in
eligibility, and variations in access to private insur-
ance at all income levels.
(4) As all segments of our society continue to
become more and more transient, with many
changes in employment over the working lifetime of
parents, the need for a reliable safety net of health
insurance which follows children across State lines,
already a major problem for the children of migrant
and seasonal farmworkers, will become a major con-
cern for all families in the United States.
(5) The Medicare program has successfully
evolved over the years to provide a stable, universal
source of health insurance for the nation’s disabled
and those over age 65, and therefore provides a test-
ed model for designing a program to reach out to
America’s children
(6) The problem of insuring 100 percent of all
American children could be gradually solved by auto-
matically enrolling all children born after December
31, 2001, in a program modeled after Medicare (and
to be known as ‘‘MediKids’’), and allowing those
children to be transferred into other equivalent or
better insurance programs, including either private
insurance, SCHIP, or Medicaid, if they are eligible
to do so, but maintaining the child’s default enroll-
ment in MediKids for any times when the child’s ac-
cess to other sources of insurance is lost.
(7) A family’s freedom of choice to use other in-
surers to cover children would not be interfered with
in any way, and children eligible for SCHIP and
Medicaid would continue to be enrolled in those pro-
grams, but the underlying safety net of MediKids
would always be available to cover any gaps in insur-
ance due to changes in medical condition, employ-
ment, income, or marital status, or other changes af-
fecting a child’s access to alternate forms of insur-
ance.
(8) The MediKids program can be administered
without impacting the finances or status of the exist-
ing Medicare program.
(9) The MediKids benefit package can be tai-
lored to the special needs of children and updated
over time.
(10) The financing of the program can be ad-
ministered without difficulty by a yearly payment of
affordable premiums through a family’s tax filing (or
adjustment of a family’s earned income tax credit).
(11) The cost of the program will gradually rise
as the number of children using MediKids as the in-
surer of last resort increases, and a future Congress
always can accelerate or slow down the enrollment
process as desired, while the societal costs for emer-
gency room usage, lost productivity and work days,
and poor health status for the next generation of
Americans will decline.
(12) Over time 100 percent of American chil-
dren will always have basic health insurance, and we
can therefore expect a healthier, more equitable, and
more productive society.
SEC. 2. BENEFITS FOR ALL CHILDREN BORN AFTER 2001.
(a) IN GENERAL.—The Social Security Act is amend-
ed by adding at the end the following new title:
‘‘TITLE XXII—MEDIKIDS PROGRAM
‘‘SEC. 2201. ELIGIBILITY.
‘‘(a) ELIGIBILITY OF INDIVIDUALS BORN AFTER DE-
CEMBER 31, 2001.—An individual who meets the fol-
lowing requirements with respect to a month is eligible to
enroll under this title with respect to such month:
‘‘(1) AGE.—The individual is born after Decem-
ber 31, 2001, and has not attained 23 years of age.
‘‘(2) CITIZENSHIP.—The individual is a citizen
or national of the United States or is permanently
residing in the United States under color of law.
‘‘(b) ENROLLMENT PROCESS.—An individual may
enroll in the program established under this title only in
such manner and form as may be prescribed by regula-
tions, and only during an enrollment period prescribed by
the Secretary consistent with the provisions of this section.
Such regulations shall provide a process under which—
‘‘(1) individuals who are born in the United
States after December 31, 2001, are deemed to be
enrolled at the time of birth and a parent or guard-
ian of such an individual is permitted to pre-enroll
in the month prior to the expected month of birth;
‘‘(2) individuals who are born outside the
United States after such date and who become eligi-
ble to enroll by virtue of immigration into (or an ad-
justment of immigration status in) the United
States are deemed enrolled at the time of entry or
adjustment of status;
‘‘(3) eligible individuals may otherwise be en-
rolled at such other times and manner as the Sec-
retary shall specify, including the use of outstationed
eligibility 
sites 
as 
described 
in 
section
1902(a)(55)(A) and the use of presumptive eligi-
bility provisions like those described in section
1920A; and
‘‘(4) at the time of automatic enrollment of a
child, the Secretary provides for issuance to a parent
or custodian of the individual a card evidencing cov-
erage under this title and for a description of such
coverage.
The provisions of section 1837(h) apply with respect to
enrollment under this title in the same manner as they
apply to enrollment under part B of title XVIII.
‘‘(c) DATE COVERAGE BEGINS.—
‘‘(1) IN GENERAL.—The period during which
an individual is entitled to benefits under this title
shall begin as follows, but in no case earlier than
January 1, 2002:
‘‘(A) In the case of an individual who is
enrolled under paragraph (1) or (2) of sub-
section (b), the date of birth or date of obtain-
ing appropriate citizenship or immigration sta-
tus, as the case may be.
‘‘(B) In the case of an another individual
who enrolls (including pre-enrolls) before the
month in which the individual satisfies eligi-
bility for enrollment under subsection (a), the
first day of such month of eligibility.
‘‘(C) In the case of an another individual
who enrolls during or after the month in which
the individual first satisfies eligibility for enroll-
ment under such subsection, the first day of the
following month.
‘‘(2) AUTHORITY
TO
PROVIDE
FOR
PARTIAL
MONTHS
OF
COVERAGE.—Under regulations, the
Secretary may, in the Secretary’s discretion, provide
for coverage periods that include portions of a
month in order to avoid lapses of coverage.
‘‘(3) LIMITATION ON PAYMENTS.—No payments
may be made under this title with respect to the ex-
penses of an individual enrolled under this title un-
less such expenses were incurred by such individual
during a period which, with respect to the individual,
is a coverage period under this section.
‘‘(d) EXPIRATION OF ELIGIBILITY.—An individual’s
coverage period under this part shall continue until the
individual’s enrollment has been terminated because the
individual no longer meets the requirements of subsection
(a) (whether because of age or change in immigration sta-
tus).
‘‘(e) ENTITLEMENT TO MEDIKIDS BENEFITS FOR
ENROLLED INDIVIDUALS.—An individual enrolled under
this section is entitled to the benefits described in section
2202.
‘‘(f) LOW-INCOME INFORMATION.—At the time of en-
rollment of a child under this title, the Secretary shall
make an inquiry as to whether or not the family income
of the family that includes the child is less than 150 per-
cent of the poverty line for a family of the size involved.
If the family income is below such level, the Secretary shall
encode in the identification card issued in connection with
eligibility under this title a code indicating such fact. The
Secretary also shall provide for a toll-free telephone line
at which providers can verify whether or not such a child
is in a family the income of which is below such level.
‘‘(g) CONSTRUCTION.—Nothing in this title shall be
construed as requiring (or preventing) an individual who
is enrolled under this section from seeking medical assist-
ance under a State medicaid plan under title XIX or child
health assistance under a State child health plan under
title XXI.
‘‘SEC. 2202. BENEFITS.
‘‘(a) SECRETARIAL
SPECIFICATION
OF
BENEFIT
PACKAGE.—
‘‘(1) IN GENERAL.—The Secretary shall specify
the benefits to be made available under this title
consistent with the provisions of this section and in
a manner designed to meet the health needs of chil-
dren.
‘‘(2) UPDATING.—The Secretary shall update
the specification of benefits over time to ensure the
inclusion of age-appropriate benefits as the enrollee
population gets older.
‘‘(3) ANNUAL UPDATING.—The Secretary shall
establish procedures for the annual review and up-
dating of such benefits to account for changes in
medical practice, new information from medical re-
search, and other relevant developments in health
science.
‘‘(4) INPUT.—The Secretary shall seek the
input of the pediatric community in specifying and
updating such benefits.
‘‘(b) INCLUSION OF CERTAIN BENEFITS.—
‘‘(1) MEDICARE CORE BENEFITS.—Such bene-
fits shall include (to the extent consistent with other
provisions of this section) at least the same benefits
(including coverage, access, availability, duration,
and beneficiary rights) that are available under
parts A and B of title XVIII.
‘‘(2) ALL
REQUIRED
MEDICAID
BENEFITS.—
Such benefits shall also include all items and serv-
ices for which medical assistance is required to be
provided under section 1902(a)(10)(A) to individuals
described in such section, including early and peri-
odic screening, diagnostic services, and treatment
services.
‘‘(3) INCLUSION
OF
PRESCRIPTION
DRUGS.—
Such benefits also shall include (as specified by the
Secretary) prescription drugs and biologicals.
‘‘(4) COST-SHARING.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), such benefits also shall include the
cost-sharing (in the form of deductibles, coin-
surance, and copayments) applicable under title
XVIII with respect to comparable items and
services, except that no cost-sharing shall be
imposed with respect to early and periodic
screening and diagnostic services included
under paragraph (2).
‘‘(B) NO COST-SHARING FOR LOWEST IN-
COME CHILDREN.—Such benefits shall not in-
clude any cost-sharing for children in families
the income of which (as determined for pur-
poses of section 1905(p)) does not exceed 150
percent of the official income poverty line (re-
ferred to in such section) applicable to a family
of the size involved.
‘‘(C) REFUNDABLE
CREDIT
FOR
COST-
SHARING
FOR
OTHER
LOW-INCOME
CHIL-
DREN.—For a refundable credit for cost-shar-
ing in the case of children in certain families,
see section 35 of the Internal Revenue Code of
1986.
‘‘(c) PAYMENT SCHEDULE.—The Secretary, with the
assistance of the Medicare Payment Advisory Commission,
shall develop and implement a payment schedule for bene-
fits covered under this title. To the extent feasible, such
payment schedule shall be consistent with comparable pay-
ment schedules and reimbursement methodologies applied
under parts A and B of title XVIII.
‘‘(d) INPUT.—The Secretary shall specify such bene-
fits and payment schedules only after obtaining input from
appropriate child health providers and experts.
‘‘(e) ENROLLMENT IN HEALTH PLANS.—The Sec-
retary shall provide for the offering of benefits under this
title through enrollment in a health benefit plan that
meets the same (or similar) requirements as the require-
ments that apply to Medicare+Choice plans under part
C of title XVIII. In the case of individuals enrolled under
this title in such a plan, the Medicare+Choice capitation
rate described in section 1853(c) shall be adjusted in an
appropriate manner to reflect differences between the pop-
ulation served under this title and the population under
title XVIII.
‘‘SEC. 2203. PREMIUMS.
‘‘(a) AMOUNT OF MONTHLY PREMIUMS.—
‘‘(1) IN GENERAL.—The Secretary shall, during
September of each year (beginning with 2001), es-
tablish a monthly MediKids premium. Subject to
paragraph (2), the monthly MediKids premium for
a year is equal to 1⁄12 of the annual premium rate
computed under subsection (b).
‘‘(2) ELIMINATION OF MONTHLY PREMIUM FOR
DEMONSTRATION
OF
EQUIVALENT
COVERAGE
(IN-
CLUDING
COVERAGE
UNDER
LOW-INCOME
PRO-
GRAMS).—The amount of the monthly premium im-
posed under this section for an individual for a
month shall be zero in the case of an individual who
demonstrates to the satisfaction of the Secretary
that the individual has basic health insurance cov-
erage for that month the actuarial value of which,
as determined by the Secretary, is at least actuari-
ally equivalent to the benefits available under this
title. For purposes of the previous sentence enroll-
ment in a medicaid plan under title XIX, a State
child health insurance plan under title XXI, or
under the medicare program under title XVIII is
deemed to constitute basic health insurance coverage
described in such sentence.
‘‘(b) ANNUAL PREMIUM.—
‘‘(1) NATIONAL, PER
CAPITA
AVERAGE.—The
Secretary shall estimate the average, annual per
capita amount that would be payable under this title
with respect to individuals residing in the United
States who meet the requirement of section
2201(a)(1) as if all such individuals were eligible for
(and enrolled) under this title during the entire year
(and assuming that section 1862(b)(2)(A)(i) did not
apply).
‘‘(2) ANNUAL PREMIUM.—Subject to subsection
(d), the annual premium under this subsection for
months in a year is equal to the average, annual per
capita amount estimated under paragraph (1) for
the year.
‘‘(c) PAYMENT OF MONTHLY PREMIUM.—
‘‘(1) PERIOD OF PAYMENT.—In the case of an
individual who participates in the program estab-
lished by this title, subject to subsection (d), the
monthly premium shall be payable for the period
commencing with the first month of the individual’s
coverage period and ending with the month in which
the individual’s coverage under this title terminates.
‘‘(2) COLLECTION
THROUGH
TAX
RETURN.—
For provisions providing for the payment of monthly
premiums under this subsection, see section 59B of
the Internal Revenue Code of 1986.
‘‘(3) 
PROTECTIONS
AGAINST
FRAUD
AND
ABUSE.—The Secretary shall develop, in coordina-
tion with States and other health insurance issuers,
administrative systems to ensure that claims which
are submitted to more than one payor are coordi-
nated and duplicate payments are not made.
‘‘(d) REDUCTION IN PREMIUM FOR CERTAIN LOW-
INCOME FAMILIES.—For provisions reducing the premium
under this section for certain low-income families, see sec-
tion 59B(c) of the Internal Revenue Code of 1986.
‘‘SEC. 2204. MEDIKIDS TRUST FUND.
‘‘(a) ESTABLISHMENT OF TRUST FUND.—
‘‘(1) IN GENERAL.—There is hereby created on
the books of the Treasury of the United States a
trust fund to be known as the ‘MediKids 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 such amounts as may be deposited in,
or appropriated to, such fund as provided in this
title.
‘‘(2) PREMIUMS.—Premiums collected under
section 2203 shall be transferred to the Trust Fund.
‘‘(b) INCORPORATION OF PROVISIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
subsections (b) through (i) of section 1841 shall
apply with respect to the Trust Fund and this title
in the same manner as they apply with respect to
the Federal Supplementary Medical Insurance Trust
Fund and part B, respectively.
‘‘(2) MISCELLANEOUS REFERENCES.—In apply-
ing provisions of section 1841 under paragraph
(1)—
‘‘(A) any reference in such section to ‘this
part’ is construed to refer to title XXII;
‘‘(B) any reference in section 1841(h) to
section 1840(d) and in section 1841(i) to sec-
tions 1840(b)(1) and 1842(g) are deemed ref-
erences to comparable authority exercised under
this title;
‘‘(C) payments may be made under section
1841(g) to the Trust Funds under sections
1817 and 1841 as reimbursement to such funds
for payments they made for benefits provided
under this title; and
‘‘(D) the Board of Trustees of the
MediKids Trust Fund shall be the same as the
Board of Trustees of the Federal Supple-
mentary Medical Insurance Trust Fund.
‘‘SEC. 2205. OVERSIGHT AND ACCOUNTABILITY.
‘‘(a) THROUGH ANNUAL REPORTS OF TRUSTEES.—
The Board of Trustees of the MediKids Trust Fund under
section 2204(b)(1) shall report on an annual basis to Con-
gress concerning the status of the Trust Fund and the
need for adjustments in the program under this title to
maintain financial solvency of the program under this
title.
‘‘(b) PERIODIC GAO REPORTS.—The Comptroller
General of the United States shall periodically submit to
Congress reports on the adequacy of the financing of cov-
erage provided under this title. The Comptroller General
shall include in such report such recommendations for ad-
justments in such financing and coverage as the Comp-
troller General deems appropriate in order to maintain fi-
nancial solvency of the program under this title.
‘‘SEC. 2206. INCLUSION OF CARE COORDINATION SERVICES.
‘‘(a) IN GENERAL.—
‘‘(1) PROGRAM
AUTHORITY.—The Secretary,
beginning in 2002, may implement a care coordina-
tion services program in accordance with the provi-
sions of this section under which, in appropriate cir-
cumstances, eligible individuals may elect to have
health care services covered under this title managed
and coordinated by a designated care coordinator.
‘‘(2) ADMINISTRATION
BY
CONTRACT.—The
Secretary may administer the program under this
section through a contract with an appropriate pro-
gram administrator.
‘‘(3) COVERAGE.—Care coordination services
furnished in accordance with this section shall be
treated under this title as if they were included in
the definition of medical and other health services
under section 1861(s) and benefits shall be available
under this title with respect to such services without
the application of any deductible or coinsurance.
‘‘(b) ELIGIBILITY CRITERIA; IDENTIFICATION AND
NOTIFICATION OF ELIGIBLE INDIVIDUALS.—
‘‘(1) INDIVIDUAL ELIGIBILITY CRITERIA.—The
Secretary shall specify criteria to be used in making
a determination as to whether an individual may ap-
propriately be enrolled in the care coordination serv-
ices program under this section, which shall include
at least a finding by the Secretary that for cohorts
of individuals with characteristics identified by the
Secretary, professional management and coordina-
tion of care can reasonably be expected to improve
processes or outcomes of health care and to reduce
aggregate costs to the programs under this title.
‘‘(2) PROCEDURES
TO
FACILITATE
ENROLL-
MENT.—The Secretary shall develop and implement
procedures designed to facilitate enrollment of eligi-
ble individuals in the program under this section.
‘‘(c) ENROLLMENT OF INDIVIDUALS.—
‘‘(1) SECRETARY’S DETERMINATION OF ELIGI-
BILITY.—The Secretary shall determine the eligi-
bility for services under this section of individuals
who are enrolled in the program under this section
and who make application for such services in such
form and manner as the Secretary may prescribe.
‘‘(2) ENROLLMENT PERIOD.—
‘‘(A) EFFECTIVE DATE AND DURATION.—
Enrollment of an individual in the program
under this section shall be effective as of the
first day of the month following the month in
which the Secretary approves the individual’s
application under paragraph (1), shall remain
in effect for one month (or such longer period
as the Secretary may specify), and shall be
automatically renewed for additional periods,
unless terminated in accordance with such pro-
cedures as the Secretary shall establish by regu-
lation. Such procedures shall permit an indi-
vidual to disenroll for cause at any time and
without cause at re-enrollment intervals.
‘‘(B) LIMITATION
ON
REENROLLMENT.—
The Secretary may establish limits on an indi-
vidual’s eligibility to reenroll in the program
under this section if the individual has
disenrolled from the program more than once
during a specified time period.
‘‘(d) PROGRAM.—The care coordination services pro-
gram under this section shall include the following ele-
ments:
‘‘(1) BASIC CARE COORDINATION SERVICES.—
‘‘(A) IN GENERAL.—Subject to the cost-ef-
fectiveness criteria specified in subsection
(b)(1), except as otherwise provided in this sec-
tion, enrolled individuals shall receive services
described in section 1905(t)(1) and may receive
additional items and services as described in
subparagraph (B).
‘‘(B) ADDITIONAL
BENEFITS.—The Sec-
retary may specify additional benefits for which
payment would not otherwise be made under
this title that may be available to individuals
enrolled in the program under this section (sub-
ject to an assessment by the care coordinator of
an individual’s circumstance and need for such
benefits) in order to encourage enrollment in, or
to improve the effectiveness of, such program.
‘‘(2) CARE
COORDINATION
REQUIREMENT.—
Notwithstanding any other provision of this title, the
Secretary may provide that an individual enrolled in
the provision of care coordination or primary
care physician’s services).
‘‘(2) AGREEMENT TERM; PAYMENT.—
‘‘(A) DURATION AND RENEWAL.—A care
coordination agreement under this subsection
shall be for one year and may be renewed if the
Secretary is satisfied that the care coordinator
continues to meet the conditions of participa-
tion specified in paragraph (1).
‘‘(B) PAYMENT FOR SERVICES.—The Sec-
retary may negotiate or otherwise establish pay-
ment terms and rates for services described in
subsection (d)(1).
‘‘(C) LIABILITY.—Case coordinators shall
be subject to liability for actual health damages
which may be suffered by recipients as a result
of the care coordinator’s decisions, failure or
delay in making decisions, or other actions as
a care coordinator.
‘‘(D) TERMS.—In addition to such other
terms as the Secretary may require, an agree-
ment under this section shall include the terms
specified in subparagraphs (A) through (C) of
section 1905(t)(3).
‘‘SEC. 2207. ADMINISTRATION AND MISCELLANEOUS.
‘‘(a) IN GENERAL.—Except as otherwise provided in
this title—
‘‘(1) the Secretary shall enter into appropriate
contracts with providers of services, other health
care providers, carriers, and fiscal intermediaries,
taking into account the types of contracts used
under title XVIII with respect to such entities, to
administer the program under this title;
‘‘(2) individuals enrolled under this title shall
be treated for purposes of title XVIII as though the
individual were entitled to benefits under part A and
enrolled under part B of such title;
‘‘(3) benefits described in section 2202 that are
payable under this title to such individuals shall be
paid in a manner specified by the Secretary (taking
into account, and based to the greatest extent prac-
ticable upon, the manner in which they are provided
under title XVIII);
‘‘(4) provider participation agreements under
title XVIII shall apply to enrollees and benefits
under this title in the same manner as they apply
to enrollees and benefits under title XVIII; and
‘‘(5) individuals entitled to benefits under this
title may elect to receive such benefits under health
plans in a manner, specified by the Secretary, simi-
lar to the manner provided under part C of title
XVIII.
‘‘(b) 
COORDINATION
WITH
MEDICAID
AND
SCHIP.—Notwithstanding any other provision of law, in-
dividuals entitled to benefits for items and services under
this title who also qualify for benefits under title XIX or
XXI or any other Federally funded program may continue
to qualify and obtain benefits under such other title or
program, and in such case such an individual shall elect
either—
‘‘(1) such other title or program to be primary
payor to benefits under this title, in which case no
benefits shall be payable under this title and the
monthly premium under section 2203 shall be zero;
or
‘‘(2) benefits under this title shall be primary
payor to benefits provided under such program or
title, in which case the Secretary shall enter into
agreements with States as may be appropriate to
provide that, in the case of such individuals, the ben-
efits under titles XIX and XXI or such other pro-
gram (including reduction of cost-sharing) are pro-
vided on a ‘wrap-around’ basis to the benefits under
this title.’’.
(b) CONFORMING AMENDMENTS TO SOCIAL SECU-
RITY ACT PROVISIONS.—
(1) Section 201(i)(1) of the Social Security Act
(42 U.S.C. 401(i)(1)) is amended by striking ‘‘or the
Federal Supplementary Medical Insurance Trust
Fund’’ and inserting ‘‘the Federal Supplementary
Medical Insurance Trust Fund, and the MediKids
Trust Fund’’.
(2) Section 201(g)(1)(A) of such Act (42
U.S.C. 401(g)(1)(A)) is amended by striking ‘‘ and
the Federal Supplementary Medical Insurance Trust
Fund established by title XVIII’’ and inserting ‘‘,
the Federal Supplementary Medical Insurance Trust
Fund, and the MediKids Trust Fund established by
title XVIII’’.
(3) Section 1853(c) of such Act (42 U.S.C.
1395w–23(c)) is amended—
(A) in paragraph (1), by striking ‘‘or (7)’’
and inserting ‘‘, (7), or (8)’’, and
(B) by adding at the end the following:
‘‘(8) ADJUSTMENT FOR MEDIKIDS.—In apply-
ing this subsection with respect to individuals enti-
tled to benefits under title XXII, the Secretary shall
provide for an appropriate adjustment in the
Medicare+Choice capitation rate as may be appro-
priate to reflect differences between the population
served under such title and the population under
parts A and B.’’.
(c) MAINTENANCE OF MEDICAID ELIGIBILITY AND
BENEFITS FOR CHILDREN.—
(1) IN GENERAL.—In order for a State to con-
tinue to be eligible for payments under section
1903(a) of the Social Security Act (42 U.S.C.
1396b(a))—
(A) the State may not reduce standards of
eligibility, or benefits, provided under its State
medicaid plan under title XIX of the Social Se-
curity Act or under its State child health plan
under title XXI of such Act for individuals
under 23 years of age below such standards of
eligibility, and benefits, in effect on the date of
the enactment of this Act; and
(B) the State shall demonstrate to the sat-
isfaction of the Secretary of Health and Human
Services that any savings in State expenditures
under title XIX or XXI of the Social Security
Act that results from children from enrolling
under title XXII of such Act shall be used in
a manner that improves services to beneficiaries
under title XIX of such Act, such as through
increases in provider payment rates, expansion
of eligibility, improved nurse and nurse aide
staffing and improved inspections of nursing fa-
cilities, and coverage of additional services.
(2) MEDIKIDS AS PRIMARY PAYOR.—In apply-
ing title XIX of the Social Security Act, the
MediKids program under title XXII of such Act
shall be treated as a primary payor in cases in which
the election described in section 2207(b)(2) of such
Act, as added by subsection (a), has been made.
(d) EXPANSION OF MEDPAC MEMBERSHIP TO 19.—
(1) IN GENERAL.—Section 1805(c) of the So-
cial Security Act (42 U.S.C. 1395b–6(c)) is
amended—
(A) in paragraph (1), by striking ‘‘17’’ and
inserting ‘‘19’’; and
(B) in paragraph (2)(B), by inserting ‘‘ex-
perts in children’s health,’’ after ‘‘other health
professionals,’’.
(2) INITIAL
TERMS
OF
ADDITIONAL
MEM-
BERS.—
(A) IN GENERAL.—For purposes of stag-
gering the initial terms of members of the
Medicare Payment Advisory Commission under
section 1805(c)(3) of the Social Security Act
(42 U.S.C. 1395b–6(c)(3)), the initial terms of
the 2 additional members of the Commission
provided for by the amendment under sub-
section (a)(1) are as follows:
(i) One member shall be appointed for
1 year.
(ii) One member shall be appointed
for 2 years.
(B) COMMENCEMENT
OF
TERMS.—Such
terms shall begin on January 1, 2001.
SEC. 3. MEDIKIDS PREMIUM.
(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—MEDIKIDS PREMIUM
‘‘Sec. 59B. MediKids premium.
‘‘SEC. 59B. MEDIKIDS PREMIUM.
‘‘(a) IMPOSITION OF TAX.—In the case of an indi-
vidual to whom this section applies, there is hereby im-
posed (in addition to any other tax imposed by this sub-
title) a MediKids premium for the taxable year.
‘‘(b) INDIVIDUALS SUBJECT TO PREMIUM.—
‘‘(1) IN GENERAL.—This section shall apply to
an individual if the taxpayer has a MediKid at any
time during the taxable year.
‘‘(2) MEDIKID.—For purposes of this section,
the term ‘MediKid’ means, with respect to a tax-
payer, any individual with respect to whom the tax-
payer is required to pay a premium under section
2203(c) of the Social Security Act for any month of
the taxable year.
‘‘(c) AMOUNT OF PREMIUM.—For purposes of this
section, the MediKids premium for a taxable year is the
sum of the monthly premiums under section 2203 of the
Social Security Act for months in the taxable year.
‘‘(d) EXCEPTIONS BASED ON ADJUSTED GROSS IN-
COME.—
‘‘(1) EXEMPTION FOR VERY LOW-INCOME TAX-
PAYERS.—
‘‘(A) IN GENERAL.—No premium shall be
imposed by this section on any taxpayer having
an adjusted gross income not in excess of the
exemption amount.
‘‘(B) EXEMPTION AMOUNT.—For purposes
of this paragraph, the exemption amount is—
‘‘(i) $16,300 in the case of a taxpayer
having 1 MediKid,
‘‘(ii) $19,950 in the case of a tax-
payer having 2 MediKids,
‘‘(iii) $25,550 in the case of a tax-
payer having 3 MediKids, and
‘‘(iv) $30,150 in the case of a tax-
payer having 4 or more MediKids.
‘‘(C) PHASEOUT OF EXEMPTION.—In the
case of a taxpayer having an adjusted gross in-
come which exceeds the exemption amount but
does not exceed twice the exemption amount,
the premium shall be the amount which bears
the same ratio to the premium which would
(but for this subparagraph) apply to the tax-
payer as such excess bears to the exemption
amount.
‘‘(D) INFLATION ADJUSTMENT OF EXEMP-
TION
AMOUNTS.—In the case of any taxable
year beginning in a calendar year after 2001,
each dollar amount contained in subparagraph
(C) shall be increased by an amount equal to
the product of—
‘‘(i) such dollar amount, and
‘‘(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, determined by substituting ‘calendar
year 1999’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof.
If any increase determined under the preceding
sentence is not a multiple of $50, such increase
shall be rounded to the nearest multiple of $50.
‘‘(2) PREMIUM LIMITED TO 5 PERCENT OF AD-
JUSTED GROSS INCOME.—In no event shall any tax-
payer be required to pay a premium under this sec-
tion in excess of an amount equal to 5 percent of the
taxpayer’s adjusted gross income.
‘‘(e) COORDINATION WITH OTHER PROVISIONS.—
‘‘(1) NOT TREATED AS MEDICAL EXPENSE.—
For purposes of this chapter, any premium paid
under this section shall not be treated as expense for
medical care.
‘‘(2) NOT TREATED AS TAX FOR CERTAIN PUR-
POSES.—The premium paid under this section shall
not be treated as a tax imposed by this chapter for
purposes 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 premium paid under this
section shall be treated as if it were a tax imposed
by section 1.’’.
(b) TECHNICAL AMENDMENTS.—
(1) Subsection (a) of section 6012 of such Code
is amended by inserting after paragraph (9) the fol-
lowing new paragraph:
‘‘(10) Every individual liable for a premium
under section 59B.’’.
(2) The table of parts for subchapter A of chap-
ter 1 of such Code is amended by adding at the end
the following new item:
‘‘Part VIII. MediKids premium.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to months beginning after Decem-
ber 2001, in taxable years ending after such date.
SEC. 4. REFUNDABLE CREDIT FOR COST-SHARING EX-
PENSES UNDER MEDIKIDS PROGRAM.
(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 credits) is amended by redes-
ignating section 35 as section 36 and by inserting after
section 34 the following new section: