I 
113TH CONGRESS 
1ST SESSION H. R. 2900 
To repeal the Patient Protection and Affordable Care Act and the Health 
Care and Education Reconciliation Act of 2010; to amend the Internal 
Revenue Code of 1986 to repeal the percentage floor on medical expense 
deductions, expand the use of tax-preferred health care accounts, and 
establish a charity care credit; to amend the Social Security Act to 
create a Medicare Premium Assistance Program, reform EMTALA re-
quirements, and to replace the Medicaid program and the Children’s 
Health Insurance program with a block grant to the States; to amend 
the Public Health Service Act to provide for cooperative governing of 
individual and group health insurance coverage offered in interstate com-
merce; and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 1, 2013 
Mr. BROUN of Georgia introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees 
on Ways and Means, Education and the Workforce, Natural Resources, 
the Judiciary, House Administration, Appropriations, and Rules, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To repeal the Patient Protection and Affordable Care Act 
and the Health Care and Education Reconciliation Act 
of 2010; to amend the Internal Revenue Code of 1986 
to repeal the percentage floor on medical expense deduc-
tions, expand the use of tax-preferred health care ac-
counts, and establish a charity care credit; to amend 
the Social Security Act to create a Medicare Premium 
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Assistance Program, reform EMTALA requirements, and 
to replace the Medicaid program and the Children’s 
Health Insurance program with a block grant to the 
States; to amend the Public Health Service Act to pro-
vide for cooperative governing of individual and group 
health insurance coverage offered in interstate commerce; 
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; TABLE OF CONTENTS; CON-
STRUCTION. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Offering Patients True Individualized Options Now Act 
of 2013’’ or the ‘‘OPTION Act of 2013’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents; construction. 
TITLE I—REPEAL OF PPACA AND HCERA 
Sec. 101. Repeal of PPACA and HCERA. 
TITLE II—HEALTH CARE TAX REFORM 
Subtitle A—HSA Reform 
Sec. 201. Repeal of high deductible health plan requirement. 
Sec. 202. Increase in deductible HSA contribution limitations. 
Sec. 203. Medicare eligible individuals eligible to contribute to HSA. 
Sec. 204. HSA Rollover to Medicare Advantage MSA. 
Sec. 205. Repeal of additional tax on distributions not used for qualified med-
ical expenses. 
Subtitle B—Other Health Care Tax Reform 
Sec. 206. Elimination of 10-percent floor on medical expense deductions. 
Sec. 207. Repeal of prescribed drug limitation on certain tax benefits for med-
ical expenses. 
Sec. 208. Repeal of 2-percent miscellaneous itemized deduction floor for med-
ical expense deductions. 
Sec. 209. Charity care credit. 
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Sec. 210. Credit for contributions made for purpose of providing medical care 
to the indigent. 
Sec. 211. COBRA continuation coverage extended. 
Sec. 212. HSA charitable contributions. 
TITLE III—MEDICARE PREMIUM ASSISTANCE PROGRAM 
Sec. 301. Replacement of Medicare part A entitlement with Medicare Reform 
Premium Assistance Program. 
Sec. 302. Gradual phasing out of CMS and transfer of functions to Department 
of the Treasury. 
TITLE IV—EMTALA REFORMS 
Sec. 401. EMTALA reforms. 
TITLE V—COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP 
HEALTH INSURANCE COVERAGE 
Sec. 501. Cooperative governing of individual and group health insurance cov-
erage. 
Sec. 502. Continuing State authority. 
TITLE VI—STATE HEALTH FLEXIBILITY 
Sec. 601. Short title. 
Sec. 602. Health grants to the States for health care services to indigent indi-
viduals. 
Sec. 603. Repeal of Federal requirements of Medicaid and CHIP. 
Sec. 604. Severability. 
Sec. 605. Effective date. 
(c) CONSTRUCTION.—Nothing in this Act shall be 
construed to preclude or prohibit a health care provider 
or health insurance issuer from publicly disclosing any 
pricing of services provided or covered. 
TITLE I—REPEAL OF PPACA AND 
HCERA 
SEC. 101. REPEAL OF PPACA AND HCERA. 
The Patient Protection and Affordable Care Act and 
the Health Care and Education Reconciliation Act of 2010 
are each repealed, effective as of the respective date of 
enactment of each such Act, and the provisions of law 
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amended or repealed by such Acts are restored or revived 
as if such Acts had not been enacted. 
TITLE II—HEALTH CARE TAX 
REFORM 
Subtitle A—HSA Reform 
SEC. 201. REPEAL OF HIGH DEDUCTIBLE HEALTH PLAN RE-
QUIREMENT. 
(a) IN GENERAL.—Section 223 of the Internal Rev-
enue Code of 1986 is amended by striking subsection (c) 
and redesignating subsections (d) through (h) as sub-
sections (c) through (g), respectively. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 223 of such Code 
is amended to read as follows: 
‘‘(a) DEDUCTION ALLOWED.—In the case of an indi-
vidual, there shall be allowed as a deduction for a taxable 
year an amount equal to the aggregate amount paid in 
cash during such taxable year by or on behalf of such indi-
vidual to a health savings account of such individual.’’. 
(2) Subsection (b) of section 223 of such Code 
is amended by striking paragraph (8). 
(3) Subparagraph (A) of section 223(c)(1) of 
the Internal Revenue Code of 1986 (as redesignated 
by subsection (b)(1)) is amended— 
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(A) by striking ‘‘subsection (f)(5)’’ and in-
serting ‘‘subsection (e)(5)’’, and 
(B) in clause (ii)— 
(i) by striking ‘‘the sum of—’’ and all 
that follows and inserting ‘‘the dollar 
amount in effect under subsection (b)(1).’’. 
(4) Section 223(f)(1) of such Code (as redesig-
nated by subsection (b)(1)) is amended by striking 
‘‘Each dollar amount in subsections (b)(2) and 
(c)(2)(A)’’ and inserting ‘‘In the case of a taxable 
year beginning after December 31, 2010, each dollar 
amount in subsection (b)(1)’’. 
(5) Section 26(b)(U) of such Code is amended 
by striking ‘‘section 223(f)(4)’’ and inserting ‘‘sec-
tion 223(e)(4)’’. 
(6) 
Sections 
35(g)(3), 
220(f)(5)(A), 
848(e)(1)(v), 4973(a)(5), and 6051(a)(12) of such 
Code are each amended by striking ‘‘section 223(d)’’ 
each place it appears and inserting ‘‘section 223(c)’’. 
(7) Section 106(d)(1) of such Code is amend-
ed— 
(A) by striking ‘‘who is an eligible indi-
vidual (as defined in section 223(c)(1))’’, and 
(B) by striking ‘‘section 223(d)’’ and in-
serting ‘‘section 223(c)’’. 
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(8) Section 408(d)(9) of such Code is amend-
ed— 
(A) in subparagraph (A) by striking ‘‘who 
is an eligible individual (as defined in section 
223(c)) and’’, and 
(B) in subparagraph (C) by striking ‘‘com-
puted on the basis of the type of coverage under 
the high deductible health plan covering the in-
dividual at the time of the qualified HSA fund-
ing distribution’’. 
(9) Section 877A(g)(6) of such Code is amend-
ed 
by 
striking 
‘‘223(f)(4)’’ 
and 
inserting 
‘‘223(e)(4)’’. 
(10) Section 4973(g) of such Code is amend-
ed— 
(A) by striking ‘‘section 223(d)’’ and in-
serting ‘‘section 223(c)’’, 
(B) in paragraph (2), by striking ‘‘section 
223(f)(2)’’ and inserting ‘‘section 223(e)(2)’’, 
and 
(C) by striking ‘‘section 223(f)(3)’’ and in-
serting ‘‘section 223(e)(3)’’. 
(11) Section 4975 of such Code is amended— 
(A) in subsection (c)(6)— 
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(i) by striking ‘‘section 223(d)’’ and 
inserting ‘‘section 223(c)’’, and 
(ii) by striking ‘‘section 223(e)(2)’’ 
and inserting ‘‘section 223(d)(2)’’, and 
(B) in subsection (e)(1)(E), by striking 
‘‘section 
223(d)’’ 
and 
inserting 
‘‘section 
223(c)’’. 
(12) Section 6693(a)(2)(C) of such Code is 
amended by striking ‘‘section 223(h)’’ and inserting 
‘‘section 223(g)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
SEC. 202. INCREASE IN DEDUCTIBLE HSA CONTRIBUTION 
LIMITATIONS. 
(a) IN GENERAL.—Paragraph (1) of section 223(b) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘the sum of the monthly’’ and all that follows through 
‘‘eligible individual’’ and inserting ‘‘$10,000 ($20,000 in 
the case of a joint return)’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (b) of such Code is amended by 
striking paragraphs (2), (3), and (5) and by redesig-
nating paragraphs (4), (6), and (7) as paragraphs 
(2), (3), and (4), respectively. 
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(2) Paragraph (2) of section 223(b) of such 
Code (as redesignated by paragraph (1)) is amended 
by striking the last sentence. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
SEC. 203. MEDICARE ELIGIBLE INDIVIDUALS ELIGIBLE TO 
CONTRIBUTE TO HSA. 
(a) Subsection (b) of section 223 of the Internal Rev-
enue Code of 1986 is amended by striking paragraph (7). 
(b) Paragraph (1) of section 223(c) of such Code is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) SPECIAL RULE FOR INDIVIDUALS EN-
TITLED TO BENEFITS UNDER MEDICARE.—In 
the case of an individual— 
‘‘(i) who is entitled to benefits under 
title XVIII of the Social Security Act, and 
‘‘(ii) with respect to whom a health 
savings account is established in a month 
before the first month such individual is 
entitled to such benefits, 
such individual shall be deemed to be an eligible 
individual.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
SEC. 204. HSA ROLLOVER TO MEDICARE ADVANTAGE MSA. 
(a) IN GENERAL.—Paragraph (2) of section 138(b) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘or’’ at the end of subparagraph (A), by adding ‘‘or’’ 
at the end of subparagraph (C), and by adding at the end 
the following new subparagraph: 
‘‘(C) a HSA rollover contribution described 
in subsection (d)(5),’’. 
(b) HSA ROLLOVER CONTRIBUTION.—Subsection (c) 
of section 138 of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 
described in this paragraph as a rollover contribu-
tion if it meets the requirement of subparagraphs 
(A) and (B). 
‘‘(A) IN GENERAL.—The requirements of 
this subparagraph are met in the case of an 
amount paid or distributed from a health sav-
ings to the account beneficiary to the extent the 
amount is received is paid into a Medicare Ad-
vantage MSA of such beneficiary not later than 
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the 60th day after the day on which the bene-
ficiary receives the payment or distribution. 
‘‘(B) LIMITATION.—This paragraph shall 
not apply to any amount described in subpara-
graph (A) received by an individual from a 
health savings account if, at any time during 
the 1-year period ending on the day of such re-
ceipt, such individual received any other amount 
described in subparagraph (A) from a health 
savings account which was not includible in the 
individual’s gross income because of the appli-
cation of section 223(f)(5)(A).’’. 
(c) CONFORMING AMENDMENT.—Subparagraph (A) 
of section 223(f)(5) of such Code is amended by inserting 
‘‘or Medicare Advantage MSA’’ after ‘‘into a health sav-
ings account’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
SEC. 205. REPEAL OF ADDITIONAL TAX ON DISTRIBUTIONS 
NOT USED FOR QUALIFIED MEDICAL EX-
PENSES. 
(a) IN GENERAL.—Subsection (f) of section 223 of 
the Internal Revenue Code of 1986 is amended by striking 
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paragraph (4) and redesignating paragraphs (5), (6), and 
(7) and paragraphs (4), (5), and (6), respectively. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 25(b) of such Code 
is amended by striking subparagraph (U) and by re-
designating subparagraphs (V), (W), and (X) as 
subparagraphs (U), (V), and (W). 
(2) Subparagraph (C) of section 106(e)(4) of 
such Code is amended by striking ‘‘223(f)(5)’’ and 
inserting ‘‘223(f)(4)’’. 
(3) Paragraph (6) of section 877A(g) of such 
Code is amended by striking ‘‘223(f)(4),’’. 
(4) Paragraph (1) of section 4973(g) of such 
Code is amended by striking ‘‘223(f)(5)’’ and insert-
ing ‘‘223(f)(4)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
Subtitle B—Other Health Care Tax 
Reform 
SEC. 206. ELIMINATION OF 10-PERCENT FLOOR ON MED-
ICAL EXPENSE DEDUCTIONS. 
(a) IN GENERAL.—Subsection (a) of section 213 of 
the Internal Revenue Code of 1986 is amended by striking 
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‘‘, to the extent that such expenses exceed 10 percent of 
adjusted gross income’’. 
(b) CONFORMING AMENDMENT.—Paragraph (1) of 
section 56(b) of such Code is amended by striking sub-
paragraph (B). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
SEC. 207. REPEAL OF PRESCRIBED DRUG LIMITATION ON 
CERTAIN TAX BENEFITS FOR MEDICAL EX-
PENSES. 
(a) DEDUCTION FOR MEDICAL EXPENSES.— 
(1) IN GENERAL.—Section 213 of the Internal 
Revenue Code of 1986 is amended by striking sub-
section (b). 
(2) CONFORMING AMENDMENT.—Subsection (d) 
of section 213 of such Code is amended by striking 
paragraph (3). 
(b) TREATMENT OF REIMBURSEMENTS UNDER ACCI-
DENT OR HEALTH PLANS.—Section 106 of such Code is 
amended by striking subsection (f). 
(c) HEALTH SAVINGS ACCOUNTS.—Subparagraph 
(A) of section 223(d)(2) of such Code is amended by strik-
ing the last sentence thereof. 
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(d) ARCHER MSAS.—Subparagraph (A) of section 
220(d)(2) of such Code is amended by striking the last 
sentence thereof. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
SEC. 
208. 
REPEAL 
OF 
2-PERCENT 
MISCELLANEOUS 
ITEMIZED DEDUCTION FLOOR FOR MEDICAL 
EXPENSE DEDUCTIONS. 
(a) IN GENERAL.—Subsection (b) of section 67 of the 
Internal Revenue Code of 1986 is amended by striking 
paragraph (5). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the December 31, 2012. 
SEC. 209. CHARITY CARE CREDIT. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to nonrefundable personal credits) is 
amended by inserting after section 25D the following new 
section: 
‘‘SEC. 25E. CHARITY CARE CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a phy-
sician, there shall be allowed as a credit against the tax 
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imposed by this chapter for a taxable year the amount 
determined in accordance with the following table: 
‘‘If the physician has provided during such 
taxable year: 
The amount of 
the credit is: 
At least 25 but less than 30 qualified hours of 
charity care .........................................................
$2,000. 
At least 30 but less than 35 qualified hours of 
charity care .........................................................
$2,400. 
At least 35 but less than 40 qualified hours of 
charity care .........................................................
$2,800. 
At least 40 but less than 45 qualified hours of 
charity care .........................................................
$3,200. 
At least 45 but less than 50 qualified hours of 
charity care .........................................................
$3,600. 
At least 50 but less than 55 qualified hours of 
charity care .........................................................
$4,000. 
At least 55 but less than 60 qualified hours of 
charity care .........................................................
$4,400. 
At least 60 but less than 65 qualified hours of 
charity care .........................................................
$4,800. 
At least 65 but less than 70 qualified hours of 
charity care .........................................................
$5,200. 
At least 70 but less than 75 qualified hours of 
charity care .........................................................
$5,600. 
At least 75 but less than 80 qualified hours of 
charity care .........................................................
$6,000. 
At least 80 but less than 85 qualified hours of 
charity care .........................................................
$6,400. 
At least 85 but less than 90 qualified hours of 
charity care .........................................................
$6,800. 
At least 90 but less than 95 qualified hours of 
charity care .........................................................
$7,200. 
At least 95 but less than 100 qualified hours of 
charity care .........................................................
$7,600. 
At least 100 hours of charity care .........................
$8,000. 
‘‘(b) QUALIFIED HOURS OF CHARITY CARE.—For 
purposes of this section— 
‘‘(1) QUALIFIED HOURS OF CHARITY CARE.— 
The term ‘qualified hours of charity care’ means the 
hours that a physician provides medical care (as de-
fined in section 213(d)(1)(A)) on a volunteer or pro 
bono basis. 
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‘‘(2) PHYSICIAN.—The term ‘physician’ has the 
meaning given to such term in section 1861(r) of the 
Social Security Act (42 U.S.C. 1395x(r)).’’. 
(b) CONFORMING AMENDMENT.—The table of sec-
tions for subpart A of part IV of subchapter A of chapter 
1 of such Code is amended by inserting after the item 
relating to section 25D the following new item: 
‘‘Sec. 25E. Charity care credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
SEC. 210. CREDIT FOR CONTRIBUTIONS MADE FOR PUR-
POSE OF PROVIDING MEDICAL CARE TO THE 
INDIGENT. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 30E. CONTRIBUTIONS FOR PROVIDING MEDICAL 
CARE TO THE INDIGENT. 
‘‘(a) IN GENERAL.—There shall be allowed as a cred-
it against the tax imposed by this chapter for the taxable 
year an amount equal to the indigent care contributions 
made by the taxpayer during the taxable year. 
‘‘(b) INDIGENT CARE CONTRIBUTION.—For purposes 
of this section, the term ‘indigent care contribution’ means 
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any contribution or gift of money or other property to or 
for the use of any person if such contribution or gift is 
used (or the proceeds from which are used) by such person 
for the purpose of providing medical care to indigent indi-
viduals in the United States. 
‘‘(c) VALUATION
AND SUBSTANTIATION
OF CON-
TRIBUTIONS, ETC.—Rules similar to the rules of sub-
sections (e) and (f) of section 170 shall apply for purposes 
of this section. 
‘‘(d) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to indigent care con-
tributions made by— 
‘‘(A) any corporation or partnership, or 
‘‘(B) any other person if such contribution 
was made in connection with a trade or busi-
ness carried on by such person, 
shall be treated as a credit listed in section 38(b) for 
such taxable year (and not allowed under subsection 
(a)). 
‘‘(2) PERSONAL CREDIT.—For purposes of this 
title, the credit allowed under subsection (a) for any 
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taxable year (determined after application of para-
graph (1)) shall be treated as a credit allowable 
under subpart A for such taxable year. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—The amount of 
any deduction or other credit allowable under this chapter 
for any indigent care contribution shall be reduced by the 
amount of credit allowable under this section for such con-
tribution.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b) of such Code is amended by 
striking ‘‘plus’’ at the end of paragraph (35), by 
striking the period at the end of paragraph (36) and 
inserting ‘‘, plus’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(37) the portion of the credit described in sec-
tion 30E(d)(1) (relating to credit for contributions 
for providing medical care to the indigent).’’. 
(2) Section 38(c)(4)(B) of such Code is amend-
ed by striking ‘‘and’’ at the end of clause (viii), by 
striking the period at the end of clause (ix) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new clause: 
‘‘(x) the portion of the credit de-
scribed in section 30E(d)(1) (relating to 
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credit for contributions for providing med-
ical care to the indigent).’’. 
(3) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 30E. Contributions for providing medical care to the indigent.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made after the 
date of the enactment of this Act. 
SEC. 211. COBRA CONTINUATION COVERAGE EXTENDED. 
(a) UNDER IRC.—Subparagraph (B) of section 
4980B(f)(2) of the Internal Revenue Code of 1986 is 
amended by striking clauses (i) and (v) and by redesig-
nating clauses (ii), (iii), and (iv) as clauses (i), (ii), and 
(iii), respectively. 
(b) UNDER ERISA.—Paragraph (2) of section 602 
of the Employee Retirement Income Security Act of 2009 
(29 U.S.C. 1162) is amended by striking subparagraphs 
(A) and (E) and by redesignating subparagraphs (B), (C), 
and (D) as subparagraphs (A), (B), and (C), respectively. 
(c) UNDER
PHSA.—Paragraph (2) of section 
2202(2) of the Public Health Service Act (42 U.S.C. 
300bb–2(2)) is amended by striking subparagraphs (A) 
and (E) and by redesignating subparagraphs (B), (C), and 
(D) as subparagraphs (A), (B), and (C), respectively. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to group health plans, 
and health insurance coverage offered in connection with 
group health plans, for plan years beginning after the date 
of the enactment of this Act. 
SEC. 212. HSA CHARITABLE CONTRIBUTIONS. 
(a) IN GENERAL.—Subsection (f) of section 223 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
‘‘(9) DISTRIBUTIONS
FOR
CHARITABLE
PUR-
POSES.—For purposes of this subsection— 
‘‘(A) IN
GENERAL.—Paragraph (2) shall 
not apply to any qualified charitable distribu-
tions with respect to a taxpayer made during 
any taxable year. 
‘‘(B) QUALIFIED
CHARITABLE
DISTRIBU-
TION.—For purposes of this paragraph, the 
term ‘qualified charitable distribution’ means 
any distribution from a health savings account 
which is made directly by the trustee to an or-
ganization described in section 170(b)(1)(A) 
(other than any organization described in sec-
tion 509(a)(3) or any fund or account described 
in section 4966(d)(2)). A distribution shall be 
treated as a qualified charitable distribution 
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only to the extent that the distribution would be 
includible in gross income without regard to 
subparagraph (A). 
‘‘(C) CONTRIBUTIONS
MUST
BE
OTHER-
WISE DEDUCTIBLE.—For purposes of this para-
graph, a distribution to an organization de-
scribed in subparagraph (B) shall be treated as 
a qualified charitable distribution only if a de-
duction for the entire distribution would be al-
lowable under section 170 (determined without 
regard to subsection (b) thereof and this para-
graph). 
‘‘(D) DENIAL OF DEDUCTION.—Qualified 
charitable distributions which are not includible 
in gross income pursuant to subparagraph (A) 
shall not be taken into account in determining 
the deduction under section 170.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2012. 
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TITLE III—MEDICARE PREMIUM 
ASSISTANCE PROGRAM 
SEC. 301. REPLACEMENT OF MEDICARE PART A ENTITLE-
MENT WITH MEDICARE REFORM PREMIUM 
ASSISTANCE PROGRAM. 
(a) IN GENERAL.—Section 226 of the Social Security 
Act (42 U.S.C. 426) is amended by adding at the end the 
following new subsections: 
‘‘(k) REPLACEMENT OF ENTITLEMENT WITH PRE-
MIUM ASSISTANCE PROGRAM.— 
‘‘(1) IN GENERAL.—Notwithstanding the pre-
vious provisions of this section, beginning the first 
January 1 after the date of the enactment of the Of-
fering Patients True Individualized Options Now Act 
of 2013, the Secretary shall establish procedures 
under which— 
‘‘(A) in the case of an individual who, but 
for the application of this paragraph, would 
otherwise become entitled under subsection (a) 
on or after such January 1 to benefits under 
part A of title XVIII, subject to paragraph (4), 
the individual shall in lieu of such entitlement 
be automatically enrolled in the Medicare Re-
form Premium Assistance Program established 
under subsection (l); and 
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‘‘(B) in the case of an individual who be-
fore such January 1 is entitled under sub-
section (a) to benefits under part A of title 
XVIII, the individual may in lieu of such enti-
tlement elect on or after such January 1 to en-
roll in the Medicare Reform Premium Assist-
ance Program established under subsection (l). 
‘‘(2) TREATMENT UNDER THE INTERNAL REV-
ENUE CODE OF 1986.—An individual who is enrolled 
under the Medicare Reform Premium Assistance 
Program under paragraph (1) shall not be treated 
as entitled to benefits under title XVIII for purposes 
of section 223(b)(7) of the Internal Revenue Code of 
1986. 
‘‘(3) INELIGIBILITY FOR PART B OR D BENE-
FITS.—An individual shall not be eligible for benefits 
under part B or D of title XVIII once the individual 
is enrolled in the Medicare Reform Premium Assist-
ance Program under paragraph (1). 
‘‘(4) OPT OUT.— 
‘‘(A) IN GENERAL.—Any individual who is 
otherwise eligible for automatic enrollment in 
the Medicare Reform Premium Assistance Pro-
gram under paragraph (1)(A) may elect (in 
such form and manner as may be specified by 
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the Secretary of Health and Human Services) 
to not be so enrolled. 
‘‘(B) INDIVIDUALS ELECTING TO OPT OUT 
NOT
TREATED
AS
ENTITLED
TO
MEDICARE 
BENEFITS.—In the case of an individual who 
makes an election under subparagraph (A)— 
‘‘(i) such individual shall not be eligi-
ble for benefits under part A of title 
XVIII; and 
‘‘(ii) the provisions of paragraphs (2) 
and (3) shall apply to such individual in 
the same manner as such paragraphs apply 
to an individual enrolled under the Medi-
care Reform Premium Assistance Program 
under paragraph (1). 
‘‘(l) MEDICARE REFORM PREMIUM ASSISTANCE.— 
‘‘(1) ESTABLISHMENT
OF
PREMIUM
ASSIST-
ANCE
PROGRAM.—The Secretary shall establish a 
program to be known as the Medicare Reform Pre-
mium Assistance Program (in this subsection re-
ferred to as the ‘premium assistance program’) con-
sistent with this subsection. 
‘‘(2) AUTOMATIC ENROLLMENT.—An individual 
otherwise entitled under subsection (a) to benefits 
under part A of title XVIII shall, subject to sub-
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section (k)(4), be enrolled in the premium assistance 
program for the period during which such individual 
would otherwise be so entitled to benefits. 
‘‘(3) AMOUNT OF PREMIUM ASSISTANCE.— 
‘‘(A) IN GENERAL.—Subject to clause (ii), 
for each year that an individual is enrolled in 
the premium assistance program, the Secretary 
shall provide premium assistance to such indi-
vidual in an amount determined by the Sec-
retary that is based on the geographic location 
of the individual and the cost of applicable 
health insurance coverage and benefits in such 
area. 
‘‘(B) COMPUTATION OF PREMIUM ASSIST-
ANCE AMOUNTS.—The amount of premium as-
sistance provided to an individual located in a 
geographic area for a year shall be computed at 
100 percent of the sum of the median premium 
and median deductible payment for such year 
for all health insurance coverage offered by 
health insurance issuers in the individual mar-
ket serving such area. 
‘‘(4) PERMISSIBLE USE OF PREMIUM ASSIST-
ANCE.—Premium assistance under paragraph (3) 
may be used only for the following purposes: 
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‘‘(A) 
For 
payment 
of 
premiums, 
deductibles, copayments, or other cost-sharing 
for enrollment of such individual for health in-
surance coverage offered by health insurance 
issuers in the individual market. 
‘‘(B) As a contribution into a MSA plan 
established by such individual, as defined in 
section 138(b)(2) of the Internal Revenue Code 
of 1986. 
‘‘(5) MSA DEPOSITS.—The amount of the pre-
mium assistance received by an individual under this 
subsection shall be deposited, on behalf of such indi-
vidual, into the MSA plan of such individual.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the first January 1 after 
the date of the enactment of this Act. 
SEC. 302. GRADUAL PHASING OUT OF CMS AND TRANSFER 
OF FUNCTIONS TO DEPARTMENT OF THE 
TREASURY. 
(a) IN GENERAL.—Beginning on January 1 of the 
first year beginning after the date of the enactment of this 
Act, the Secretary shall provide for the gradual phasing 
out over a period (not to exceed 10 years) of the Office 
of the Administrator of the Centers for Medicare & Med-
icaid Services and such Centers and the transfer of the 
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duties and responsibilities of such Administrator and Cen-
ters to such an office and official within the Department 
of the Treasury as the Secretary of the Treasury shall 
specify. 
(b) REFERENCES.—Any reference in law to the Ad-
ministrator of the Centers for Medicare & Medicaid Serv-
ices, or to such Centers, is deemed to include a reference 
to such official and office, respectively, within the Depart-
ment of the Treasury as is specified under subsection (a). 
TITLE IV—EMTALA REFORMS 
SEC. 401. EMTALA REFORMS. 
(a) USE OF QUALIFIED EMERGENCY DEPARTMENT 
PERSONNEL IN PERFORMING INITIAL SCREENING.—Sub-
section (a) of section 1867 of the Social Security Act (42 
U.S.C. 1395dd) is amended— 
(1) by designating the sentence beginning with 
‘‘In the case of’’ as paragraph (1), with the heading 
‘‘IN GENERAL.—’’ and appropriate indentation; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) 
PERMITTING
APPLICATION
OF
ER 
TRIAGE.— 
‘‘(A) IN
GENERAL.—The requirement of 
paragraph (1) that a hospital conduct an appro-
priate medical screening examination of an indi-
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vidual is deemed to be satisfied if a qualified 
emergency screener (as defined in subparagraph 
(B)) performs a preliminary triage-type screen-
ing in which the personnel— 
‘‘(i) assesses the nature and extent of 
the individual’s illness or injury; and 
‘‘(ii) determines, based on such as-
sessment, that an emergency medical con-
dition does not exist. 
‘‘(B) QUALIFIED
EMERGENCY
SCREENER 
DEFINED.—In this paragraph, the term ‘quali-
fied emergency screener’ means a physician, li-
censed practical nurse or registered nurse, 
qualified emergency medical technician, or other 
individual with basic, health care education that 
meets standards specified by the Secretary as 
being sufficient to perform the screening de-
scribed in subparagraph (A).’’. 
(b) REVISION OF EMERGENCY MEDICAL CONDITION 
DEFINITION.—Subsection (e)(1)(A) of such section is 
amended to read as follows: 
‘‘(A) a medical condition manifesting itself 
by symptoms of sufficient severity (including se-
vere pain) and with an onset or of a course 
such that the absence of immediate medical at-
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tention could reasonably be expected to pose an 
immediate risk to life or long-term health of the 
individual (or, with respect to a pregnant 
woman, the life or long-term health of the 
woman or her unborn child); or’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act and shall apply to individuals who come to an 
emergency room on or after the date that is 30 days after 
the date of the enactment of this Act. 
TITLE 
V—COOPERATIVE 
GOV-
ERNING OF INDIVIDUAL AND 
GROUP HEALTH INSURANCE 
COVERAGE 
SEC. 501. COOPERATIVE GOVERNING OF INDIVIDUAL AND 
GROUP HEALTH INSURANCE COVERAGE. 
(a) IN GENERAL.—Title XXVII of the Public Health 
Service Act (42 U.S.C. 300gg et seq.) is amended by add-
ing at the end the following new part: 
‘‘PART D—COOPERATIVE GOVERNING OF INDI-
VIDUAL AND GROUP HEALTH INSURANCE 
COVERAGE 
‘‘SEC. 2795. DEFINITIONS. 
‘‘In this part: 
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‘‘(1) PRIMARY
STATE.—The term ‘primary 
State’ means, with respect to individual or group 
health insurance coverage offered by a health insur-
ance issuer, the State designated by the issuer as 
the State whose covered laws shall govern the health 
insurance issuer in the sale of such coverage under 
this part. An issuer, with respect to a particular pol-
icy, may only designate one such State as its pri-
mary State with respect to all such coverage it of-
fers. Such an issuer may not change the designated 
primary State with respect to individual or group 
health insurance coverage once the policy is issued, 
except that such a change may be made upon re-
newal of the policy. With respect to such designated 
State, the issuer is deemed to be doing business in 
that State. 
‘‘(2) SECONDARY STATE.—The term ‘secondary 
State’ means, with respect to individual or group 
health insurance coverage offered by a health insur-
ance issuer, any State that is not the primary State. 
In the case of a health insurance issuer that is sell-
ing a policy in, or to a resident of, a secondary 
State, the issuer is deemed to be doing business in 
that secondary State. 
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‘‘(3) HEALTH INSURANCE ISSUER.—The term 
‘health insurance issuer’ has the meaning given such 
term in section 2791(b)(2), except that such an 
issuer must be licensed in the primary State and be 
qualified to sell individual health insurance coverage 
in that State. 
‘‘(4) INDIVIDUAL
HEALTH
INSURANCE
COV-
ERAGE.—The term ‘individual health insurance cov-
erage’ means health insurance coverage offered in 
the individual market, as defined in section 
2791(e)(1). 
‘‘(5) GROUP HEALTH INSURANCE COVERAGE.— 
The term ‘group health insurance coverage’ has the 
meaning given such term in 2791(b)(4). 
‘‘(6) APPLICABLE
STATE
AUTHORITY.—The 
term ‘applicable State authority’ means, with respect 
to a health insurance issuer in a State, the State in-
surance commissioner or official or officials des-
ignated by the State to enforce the requirements of 
this title for the State with respect to the issuer. 
‘‘(7) HAZARDOUS FINANCIAL CONDITION.—The 
term ‘hazardous financial condition’ means that, 
based on its present or reasonably anticipated finan-
cial condition, a health insurance issuer is unlikely 
to be able— 
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ations, and investment activities of a 
health insurance issuer; and 
‘‘(v) the provision to an individual in 
relation to individual or group health in-
surance coverage of loss control and claims 
administration for a health insurance 
issuer with respect to liability for which 
the issuer provides insurance. 
‘‘(B) EXCEPTION.—Such term does not in-
clude any law, rule, regulation, agreement, or 
order governing the use of care or cost manage-
ment techniques, including any requirement re-
lated to provider contracting, network access or 
adequacy, health care data collection, or quality 
assurance. 
‘‘(9) STATE.—The term ‘State’ means the 50 
States and includes the District of Columbia, Puerto 
Rico, the Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. 
‘‘(10) UNFAIR
CLAIMS
SETTLEMENT
PRAC-
TICES.—The term ‘unfair claims settlement prac-
tices’ means only the following practices: 
‘‘(A) Knowingly misrepresenting to claim-
ants and insured individuals relevant facts or 
policy provisions relating to coverage at issue. 
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‘‘(B) Failing to acknowledge with reason-
able promptness pertinent communications with 
respect to claims arising under policies. 
‘‘(C) Failing to adopt and implement rea-
sonable standards for the prompt investigation 
and settlement of claims arising under policies. 
‘‘(D) Failing to effectuate prompt, fair, 
and equitable settlement of claims submitted in 
which liability has become reasonably clear. 
‘‘(E) Refusing to pay claims without con-
ducting a reasonable investigation. 
‘‘(F) Failing to affirm or deny coverage of 
claims within a reasonable period of time after 
having completed an investigation related to 
those claims. 
‘‘(G) A pattern or practice of compelling 
insured individuals or their beneficiaries to in-
stitute suits to recover amounts due under its 
policies by offering substantially less than the 
amounts ultimately recovered in suits brought 
by them. 
‘‘(H) A pattern or practice of attempting 
to settle or settling claims for less than the 
amount that a reasonable person would believe 
the insured individual or his or her beneficiary 
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was entitled by reference to written or printed 
advertising material accompanying or made 
part of an application. 
‘‘(I) Attempting to settle or settling claims 
on the basis of an application that was materi-
ally altered without notice to, or knowledge or 
consent of, the insured. 
‘‘(J) Failing to provide forms necessary to 
present claims within 15 calendar days of a re-
quests with reasonable explanations regarding 
their use. 
‘‘(K) Attempting to cancel a policy in less 
time than that prescribed in the policy or by the 
law of the primary State. 
‘‘(11) FRAUD AND ABUSE.—The term ‘fraud 
and abuse’ means an act or omission committed by 
a person who, knowingly and with intent to defraud, 
commits, or conceals any material information con-
cerning, one or more of the following: 
‘‘(A) Presenting, causing to be presented 
or preparing with knowledge or belief that it 
will be presented to or by an insurer, a rein-
surer, broker or its agent, false information as 
part of, in support of or concerning a fact ma-
terial to one or more of the following: 
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‘‘(i) An application for the issuance or 
renewal of an insurance policy or reinsur-
ance contract. 
‘‘(ii) The rating of an insurance policy 
or reinsurance contract. 
‘‘(iii) A claim for payment or benefit 
pursuant to an insurance policy or reinsur-
ance contract. 
‘‘(iv) Premiums paid on an insurance 
policy or reinsurance contract. 
‘‘(v) Payments made in accordance 
with the terms of an insurance policy or 
reinsurance contract. 
‘‘(vi) A document filed with the com-
missioner or the chief insurance regulatory 
official of another jurisdiction. 
‘‘(vii) The financial condition of an in-
surer or reinsurer. 
‘‘(viii) The formation, acquisition, 
merger, 
reconsolidation, 
dissolution 
or 
withdrawal from one or more lines of in-
surance or reinsurance in all or part of a 
State by an insurer or reinsurer. 
‘‘(ix) The issuance of written evidence 
of insurance. 
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‘‘(x) The reinstatement of an insur-
ance policy. 
‘‘(B) Solicitation or acceptance of new or 
renewal insurance risks on behalf of an insurer 
reinsurer or other person engaged in the busi-
ness of insurance by a person who knows or 
should know that the insurer or other person 
responsible for the risk is insolvent at the time 
of the transaction. 
‘‘(C) Transaction of the business of insur-
ance in violation of laws requiring a license, cer-
tificate of authority or other legal authority for 
the transaction of the business of insurance. 
‘‘(D) Attempt to commit, aiding or abet-
ting in the commission of, or conspiracy to com-
mit the acts or omissions specified in this para-
graph. 
‘‘SEC. 2796. APPLICATION OF LAW. 
‘‘(a) IN GENERAL.—The covered laws of the primary 
State shall apply to individual and group health insurance 
coverage offered by a health insurance issuer in the pri-
mary State and in any secondary State, but only if the 
coverage and issuer comply with the conditions of this sec-
tion with respect to the offering of coverage in any sec-
ondary State. 
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‘‘(b) EXEMPTIONS FROM COVERED LAWS IN A SEC-
ONDARY STATE.—Except as provided in this section, a 
health insurance issuer with respect to its offer, sale, rat-
ing (including medical underwriting), renewal, and 
issuance of individual or group health insurance coverage 
in any secondary State is exempt from any covered laws 
of the secondary State (and any rules, regulations, agree-
ments, or orders sought or issued by such State under or 
related to such covered laws) to the extent that such laws 
would— 
‘‘(1) make unlawful, or regulate, directly or in-
directly, the operation of the health insurance issuer 
operating in the secondary State, except that any 
secondary State may require such an issuer— 
‘‘(A) to pay, on a nondiscriminatory basis, 
applicable premium and other taxes (including 
high risk pool assessments) which are levied on 
insurers and surplus lines insurers, brokers, or 
policyholders under the laws of the State; 
‘‘(B) to register with and designate the 
State insurance commissioner as its agent solely 
for the purpose of receiving service of legal doc-
uments or process; 
‘‘(C) to submit to an examination of its fi-
nancial condition by the State insurance com-
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missioner in any State in which the issuer is 
doing business to determine the issuer’s finan-
cial condition, if— 
‘‘(i) the State insurance commissioner 
of the primary State has not done an ex-
amination within the period recommended 
by the National Association of Insurance 
Commissioners; and 
‘‘(ii) any such examination is con-
ducted in accordance with the examiners’ 
handbook of the National Association of 
Insurance Commissioners and is coordi-
nated to avoid unjustified duplication and 
unjustified repetition; 
‘‘(D) to comply with a lawful order 
issued— 
‘‘(i) in a delinquency proceeding com-
menced by the State insurance commis-
sioner if there has been a finding of finan-
cial impairment under subparagraph (C); 
or 
‘‘(ii) in a voluntary dissolution pro-
ceeding; 
‘‘(E) to comply with an injunction issued 
by a court of competent jurisdiction, upon a pe-
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tition by the State insurance commissioner al-
leging that the issuer is in hazardous financial 
condition; 
‘‘(F) to participate, on a nondiscriminatory 
basis, in any insurance insolvency guaranty as-
sociation or similar association to which a 
health insurance issuer in the State is required 
to belong; 
‘‘(G) to comply with any State law regard-
ing fraud and abuse (as defined in section 
2795(10)), except that if the State seeks an in-
junction regarding the conduct described in this 
subparagraph, such injunction must be obtained 
from a court of competent jurisdiction; 
‘‘(H) to comply with any State law regard-
ing unfair claims settlement practices (as de-
fined in section 2795(9)); or 
‘‘(I) to comply with the applicable require-
ments for independent review under section 
2798 with respect to coverage offered in the 
State; 
‘‘(2) require any individual or group health in-
surance coverage issued by the issuer to be counter-
signed by an insurance agent or broker residing in 
that Secondary State; or 
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‘‘(3) otherwise discriminate against the issuer 
issuing insurance in both the primary State and in 
any secondary State. 
‘‘(c) CLEAR
AND CONSPICUOUS DISCLOSURE.—A 
health insurance issuer shall provide the following notice, 
in 12-point bold type, in any insurance coverage offered 
in a secondary State under this part by such a health in-
surance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the 
name of the health insurance issuer, the name of primary 
State, the name of the secondary State, the name of the 
secondary State, and the name of the secondary State, re-
spectively, for the coverage concerned: ‘Notice: This policy 
is issued by llll and is governed by the laws and 
regulations of the State of llll, and it has met all 
the laws of that State as determined by that State’s De-
partment of Insurance. This policy may be less expensive 
than others because it is not subject to all of the insurance 
laws and regulations of the State of lllll, includ-
ing coverage of some services or benefits mandated by the 
law of the State of lllll. Additionally, this policy 
is not subject to all of the consumer protection laws or 
restrictions on rate changes of the State of lllll. 
As with all insurance products, before purchasing this pol-
icy, you should carefully review the policy and determine 
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what health care services the policy covers and what bene-
fits it provides, including any exclusions, limitations, or 
conditions for such services or benefits.’. 
‘‘(d) PROHIBITION ON CERTAIN RECLASSIFICATIONS 
AND PREMIUM INCREASES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, a health insurance issuer that provides indi-
vidual or group health insurance coverage to an indi-
vidual under this part in a primary or secondary 
State may not upon renewal— 
‘‘(A) move or reclassify the individual in-
sured under the health insurance coverage from 
the class such individual is in at the time of 
issue of the contract based on the health status- 
related factors of the individual; or 
‘‘(B) increase the premiums assessed the 
individual for such coverage based on a health 
status-related factor or change of a health sta-
tus-related factor or the past or prospective 
claim experience of the insured individual. 
‘‘(2) CONSTRUCTION.—Nothing in paragraph 
(1) shall be construed to prohibit a health insurance 
issuer— 
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‘‘(A) from terminating or discontinuing 
coverage or a class of coverage in accordance 
with subsections (b) and (c) of section 2742; 
‘‘(B) from raising premium rates for all 
policy holders within a class based on claims ex-
perience; 
‘‘(C) from changing premiums or offering 
discounted premiums to individuals who engage 
in wellness activities at intervals prescribed by 
the issuer, if such premium changes or incen-
tives— 
‘‘(i) are disclosed to the consumer in 
the insurance contract; 
‘‘(ii) are based on specific wellness ac-
tivities that are not applicable to all indi-
viduals; and 
‘‘(iii) are not obtainable by all individ-
uals to whom coverage is offered; 
‘‘(D) from reinstating lapsed coverage; or 
‘‘(E) from retroactively adjusting the rates 
charged an insured individual if the initial rates 
were set based on material misrepresentation by 
the individual at the time of issue. 
‘‘(e) PRIOR OFFERING
OF POLICY
IN PRIMARY 
STATE.—A health insurance issuer may not offer for sale 
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individual or group health insurance coverage in a sec-
ondary State unless that coverage is currently offered for 
sale in the primary State. 
‘‘(f) LICENSING
OF AGENTS
OR BROKERS
FOR 
HEALTH INSURANCE ISSUERS.—Any State may require 
that a person acting, or offering to act, as an agent or 
broker for a health insurance issuer with respect to the 
offering of individual or group health insurance coverage 
obtain a license from that State, with commissions or 
other compensation subject to the provisions of the laws 
of that State, except that a State may not impose any 
qualification or requirement which discriminates against 
a nonresident agent or broker. 
‘‘(g) DOCUMENTS FOR SUBMISSION TO STATE IN-
SURANCE COMMISSIONER.—Each health insurance issuer 
issuing individual or group health insurance coverage in 
both primary and secondary States shall submit— 
‘‘(1) to the insurance commissioner of each 
State in which it intends to offer such coverage, be-
fore it may offer individual or group health insur-
ance coverage in such State— 
‘‘(A) a copy of the plan of operation or fea-
sibility study or any similar statement of the 
policy being offered and its coverage (which 
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shall include the name of its primary State and 
its principal place of business); 
‘‘(B) written notice of any change in its 
designation of its primary State; and 
‘‘(C) written notice from the issuer of the 
issuer’s compliance with all the laws of the pri-
mary State; and 
‘‘(2) to the insurance commissioner of each sec-
ondary State in which it offers individual or group 
health insurance coverage, a copy of the issuer’s 
quarterly financial statement submitted to the pri-
mary State, which statement shall be certified by an 
independent public accountant and contain a state-
ment of opinion on loss and loss adjustment expense 
reserves made by— 
‘‘(A) a member of the American Academy 
of Actuaries; or 
‘‘(B) a qualified loss reserve specialist. 
‘‘(h) POWER OF COURTS TO ENJOIN CONDUCT.— 
Nothing in this section shall be construed to affect the 
authority of any Federal or State court to enjoin— 
‘‘(1) the solicitation or sale of individual or 
group health insurance coverage by a health insur-
ance issuer to any person or group who is not eligi-
ble for such insurance; or 
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‘‘(2) the solicitation or sale of individual or 
group health insurance coverage that violates the re-
quirements of the law of a secondary State which 
are described in subparagraphs (A) through (H) of 
section 2796(b)(1). 
‘‘(i) POWER OF SECONDARY STATES TO TAKE AD-
MINISTRATIVE ACTION.—Nothing in this section shall be 
construed to affect the authority of any State to enjoin 
conduct in violation of that State’s laws described in sec-
tion 2796(b)(1). 
‘‘(j) STATE POWERS TO ENFORCE STATE LAWS.— 
‘‘(1) IN GENERAL.—Subject to the provisions of 
subsection (b)(1)(G) (relating to injunctions) and 
paragraph (2), nothing in this section shall be con-
strued to affect the authority of any State to make 
use of any of its powers to enforce the laws of such 
State with respect to which a health insurance issuer 
is not exempt under subsection (b). 
‘‘(2) COURTS OF COMPETENT JURISDICTION.— 
If a State seeks an injunction regarding the conduct 
described in paragraphs (1) and (2) of subsection 
(h), such injunction must be obtained from a Fed-
eral or State court of competent jurisdiction. 
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‘‘(k) STATES’ AUTHORITY TO SUE.—Nothing in this 
section shall affect the authority of any State to bring ac-
tion in any Federal or State court. 
‘‘(l) GENERALLY APPLICABLE LAWS.—Nothing in 
this section shall be construed to affect the applicability 
of State laws generally applicable to persons or corpora-
tions. 
‘‘(m) GUARANTEED AVAILABILITY OF COVERAGE TO 
HIPAA ELIGIBLE INDIVIDUALS.—To the extent that a 
health insurance issuer is offering coverage in a primary 
State that does not accommodate residents of secondary 
States or does not provide a working mechanism for resi-
dents of a secondary State, and the issuer is offering cov-
erage under this part in such secondary State which has 
not adopted a qualified high risk pool as its acceptable 
alternative mechanism (as defined in section 2744(c)(2)), 
the issuer shall, with respect to any individual or group 
health insurance coverage offered in a secondary State 
under this part, comply with the guaranteed availability 
requirements for eligible individuals in section 2741. 
‘‘SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR 
BEFORE ISSUER MAY SELL INTO SECONDARY 
STATES. 
‘‘A health insurance issuer may not offer, sell, or 
issue individual or group health insurance coverage in a 
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secondary State if the State insurance commissioner does 
not use a risk-based capital formula for the determination 
of capital and surplus requirements for all health insur-
ance issuers. 
‘‘SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCE-
DURES. 
‘‘(a) RIGHT TO EXTERNAL APPEAL.—A health insur-
ance issuer may not offer, sell, or issue individual or group 
health insurance coverage in a secondary State under the 
provisions of this title unless— 
‘‘(1) both the secondary State and the primary 
State have legislation or regulations in place estab-
lishing an independent review process for individuals 
who are covered by individual health insurance cov-
erage or group health insurance offered by a health 
insurance issuer, respectively, or 
‘‘(2) in any case in which the requirements of 
subparagraph (A) are not met with respect to the ei-
ther of such States, the issuer provides an inde-
pendent review mechanism substantially identical (as 
determined by the applicable State authority of such 
State) to that prescribed in the ‘Health Carrier Ex-
ternal Review Model Act’ of the National Association 
of Insurance Commissioners for all individuals who 
purchase insurance coverage under the terms of this 
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part, except that, under such mechanism, the review 
is conducted by an independent medical reviewer, or 
a panel of such reviewers, with respect to whom the 
requirements of subsection (b) are met. 
‘‘(b) QUALIFICATIONS OF INDEPENDENT MEDICAL 
REVIEWERS.—In the case of any independent review 
mechanism referred to in subsection (a)(2): 
‘‘(1) IN GENERAL.—In referring a denial of a 
claim to an independent medical reviewer, or to any 
panel of such reviewers, to conduct independent 
medical review, the issuer shall ensure that— 
‘‘(A) each independent medical reviewer 
meets the qualifications described in paragraphs 
(2) and (3); 
‘‘(B) with respect to each review, each re-
viewer meets the requirements of paragraph (4) 
and the reviewer, or at least 1 reviewer on the 
panel, meets the requirements described in 
paragraph (5); and 
‘‘(C) compensation provided by the issuer 
to each reviewer is consistent with paragraph 
(6). 
‘‘(2) LICENSURE AND EXPERTISE.—Each inde-
pendent medical reviewer shall be a physician 
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(allopathic or osteopathic) or health care profes-
sional who— 
‘‘(A) is appropriately credentialed or li-
censed in 1 or more States to deliver health 
care services; and 
‘‘(B) typically treats the condition, makes 
the diagnosis, or provides the type of treatment 
under review. 
‘‘(3) INDEPENDENCE.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), each independent medical reviewer 
in a case shall— 
‘‘(i) not be a related party (as defined 
in paragraph (7)); 
‘‘(ii) not have a material familial, fi-
nancial, or professional relationship with 
such a party; and 
‘‘(iii) not otherwise have a conflict of 
interest with such a party (as determined 
under regulations). 
‘‘(B) EXCEPTION.—Nothing in subpara-
graph (A) shall be construed to— 
‘‘(i) prohibit an individual, solely on 
the basis of affiliation with the issuer, 
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an entity if the compensation is provided 
consistent with paragraph (6). 
‘‘(4) PRACTICING HEALTH CARE PROFESSIONAL 
IN SAME FIELD.— 
‘‘(A) IN
GENERAL.—In a case involving 
treatment, or the provision of items or serv-
ices— 
‘‘(i) by a physician, a reviewer shall be 
a practicing physician (allopathic or osteo-
pathic) of the same or similar specialty, as 
a physician who, acting within the appro-
priate scope of practice within the State in 
which the service is provided or rendered, 
typically treats the condition, makes the 
diagnosis, or provides the type of treat-
ment under review; or 
‘‘(ii) by a non-physician health care 
professional, the reviewer, or at least 1 
member of the review panel, shall be a 
practicing non-physician health care pro-
fessional of the same or similar specialty 
as the non-physician health care profes-
sional who, acting within the appropriate 
scope of practice within the State in which 
the service is provided or rendered, typi-
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cally treats the condition, makes the diag-
nosis, or provides the type of treatment 
under review. 
‘‘(B) PRACTICING
DEFINED.—For pur-
poses of this paragraph, the term ‘practicing’ 
means, with respect to an individual who is a 
physician or other health care professional, that 
the individual provides health care services to 
individual patients on average at least 2 days 
per week. 
‘‘(5) PEDIATRIC EXPERTISE.—In the case of an 
external review relating to a child, a reviewer shall 
have expertise under paragraph (2) in pediatrics. 
‘‘(6) LIMITATIONS
ON
REVIEWER
COMPENSA-
TION.—Compensation provided by the issuer to an 
independent medical reviewer in connection with a 
review under this section shall— 
‘‘(A) not exceed a reasonable level; and 
‘‘(B) not be contingent on the decision ren-
dered by the reviewer. 
‘‘(7) RELATED PARTY DEFINED.—For purposes 
of this section, the term ‘related party’ means, with 
respect to a denial of a claim under a coverage relat-
ing to an enrollee, any of the following: 
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‘‘(A) The issuer involved, or any fiduciary, 
officer, director, or employee of the issuer. 
‘‘(B) The enrollee (or authorized represent-
ative). 
‘‘(C) The health care professional that pro-
vides the items or services involved in the de-
nial. 
‘‘(D) The institution at which the items or 
services (or treatment) involved in the denial 
are provided. 
‘‘(E) The manufacturer of any drug or 
other item that is included in the items or serv-
ices involved in the denial. 
‘‘(F) Any other party determined under 
any regulations to have a substantial interest in 
the denial involved. 
‘‘(8) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) ENROLLEE.—The term ‘enrollee’ 
means, with respect to health insurance cov-
erage offered by a health insurance issuer, an 
individual enrolled with the issuer to receive 
such coverage. 
‘‘(B) HEALTH CARE PROFESSIONAL.—The 
term ‘health care professional’ means an indi-
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vidual who is licensed, accredited, or certified 
under State law to provide specified health care 
services and who is operating within the scope 
of such licensure, accreditation, or certification. 
‘‘SEC. 2799. ENFORCEMENT. 
‘‘(a) IN GENERAL.—Subject to subsection (b), with 
respect to specific individual or group health insurance 
coverage the primary State for such coverage has sole ju-
risdiction to enforce the primary State’s covered laws in 
the primary State and any secondary State. 
‘‘(b) SECONDARY STATE’S AUTHORITY.—Nothing in 
subsection (a) shall be construed to affect the authority 
of a secondary State to enforce its laws as set forth in 
the exception specified in section 2796(b)(1). 
‘‘(c) COURT INTERPRETATION.—In reviewing action 
initiated by the applicable secondary State authority, the 
court of competent jurisdiction shall apply the covered 
laws of the primary State. 
‘‘(d) NOTICE OF COMPLIANCE FAILURE.—In the case 
of individual health insurance coverage offered in a sec-
ondary State, or group health insurance coveraged offered 
by a health insurance issuer in a secondary State, that 
fails to comply with the covered laws of the primary State, 
the applicable State authority of the secondary State may 
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notify the applicable State authority of the primary 
State.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to health insurance coverage of-
fered, issued, or sold after the date that is one year after 
the date of the enactment of this Act. 
(c) GAO ONGOING STUDY AND REPORTS.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct an ongoing study con-
cerning the effect of the amendment made by sub-
section (a) on— 
(A) the number of uninsured and under-in-
sured; 
(B) the availability and cost of health in-
surance policies for individuals with pre-existing 
medical conditions; 
(C) the availability and cost of health in-
surance policies generally; 
(D) the elimination or reduction of dif-
ferent types of benefits under health insurance 
policies offered in different States; and 
(E) cases of fraud or abuse relating to 
health insurance coverage offered under such 
amendment and the resolution of such cases. 
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(2) ANNUAL REPORTS.—The Comptroller Gen-
eral shall submit to Congress an annual report, after 
the end of each of the 5 years following the effective 
date of the amendment made by subsection (a), on 
the ongoing study conducted under paragraph (1). 
SEC. 502. CONTINUING STATE AUTHORITY. 
Nothing in this title, or the amendments made by this 
title, shall be construed as preventing a State— 
(1) from permitting residents of the State to 
purchase of health insurance offered by a health in-
surance issuer located outside the State; or 
(2) from permitting groups to directly obtain, 
through an association health plan or otherwise, 
health insurance coverage for their members. 
TITLE VI—STATE HEALTH 
FLEXIBILITY 
SEC. 601. SHORT TITLE. 
This title may be cited as the ‘‘State Health Flexi-
bility Act of 2013’’. 
SEC. 602. HEALTH GRANTS TO THE STATES FOR HEALTH 
CARE SERVICES TO INDIGENT INDIVIDUALS. 
(a) HEALTH CARE BLOCK GRANT TO STATES.—The 
Social Security Act is amended by adding at the end the 
following new title: 
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‘‘TITLE XXII—BLOCK GRANTS TO 
STATES FOR HEALTH CARE 
SERVICES TO INDIGENT INDI-
VIDUALS 
‘‘SEC. 2201. PURPOSE. 
‘‘The purpose of this title is to provide Federal finan-
cial assistance to the States, in the form of a single grant, 
to allow the States maximum flexibility in providing, and 
financing the provision of, health-care-related items and 
services to indigent individuals. 
‘‘SEC. 2202. GRANTS TO STATES. 
‘‘(a) IN GENERAL.—Subject to the requirements of 
this title, each State is entitled to receive from the Sec-
retary of the Treasury a grant for each quarter of fiscal 
years 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 
2022, and 2023, in an amount that is equal to 25 percent 
of the total amount received by a State under title XIX 
and title XXI for fiscal year 2012. 
‘‘(b) APPROPRIATION.—Out of any money in the 
Treasury of the United States not otherwise appropriated, 
there are appropriated for fiscal years 2014, 2015, 2016, 
2017, 2018, 2019, 2020, 2021, 2022, and 2023 such sums 
as are necessary for grants under this section. 
‘‘(c) REQUIREMENTS RELATING TO INTERGOVERN-
MENTAL FINANCING.—The Secretary of the Treasury 
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shall make the transfer of funds under grants under sub-
section (a) directly to each State in accordance with the 
requirements of section 6503 of title 31, United States 
Code. 
‘‘(d) EXPENDITURE OF FUNDS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), amounts received by a State under this 
title for any fiscal year shall be expended by the 
State in such fiscal year or in the succeeding fiscal 
year. 
‘‘(2) USE OF RAINY DAY FUND PERMITTED.— 
Of the amounts received by a State under this title, 
the State may set aside, in a separate account, such 
amounts as the State deems necessary to provide, 
without fiscal limitation, health-care-related items 
and services for indigent individuals during— 
‘‘(A) periods of unexpectedly high rates of 
unemployment; or 
‘‘(B) periods related to circumstances that 
are not described in subparagraph (A) and that 
cause unexpected increases in the need for such 
items and services for such individuals. 
‘‘(3) FUNDS REMAINING AFTER FISCAL YEAR 
2022.—If, after fiscal year 2023, a State has funds 
in the account under paragraph (2), the State may 
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only expend such funds if such funds are used in a 
manner that is permitted under subsection (e), as 
such subsection is in effect on September 30, 2023. 
‘‘(e) USE OF FUNDS.—A State may only use the 
amounts received under subsection (a) as follows: 
‘‘(1) GENERAL
PURPOSE.—For the purpose 
under section 2201, including the provision of 
health-care-related items and services as required 
under section 2205. Nothing in this title shall be 
construed as limiting the flexibility of a State to de-
termine which providers of such items and services 
qualify to receive payment from a grant made to the 
State under this title. 
‘‘(2) FUNDING FOR RISK ADJUSTMENT MECHA-
NISMS.—To fund qualified high risk pools, reinsur-
ance pools, or other risk-adjustment mechanisms 
used for the purpose of subsidizing the purchase of 
private health insurance for the high-risk population. 
‘‘(3) AUTHORITY TO USE PORTION OF FEDERAL 
ASSISTANCE
FOR
OTHER
WELFARE-RELATED
PRO-
GRAMS.— 
‘‘(A) IN GENERAL.—Subject to the limit 
under subparagraph (B), to carry out a State 
program pursuant to any or all of the following 
provisions of law: 
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‘‘(i) Part A of title IV of this Act. 
‘‘(ii) Section 1616 of this Act. 
‘‘(iii) The Food and Nutrition Act of 
2008. 
‘‘(B) LIMITATION.—A State may not use 
more than 30 percent of the amount received 
under subsection (a) for a fiscal year to carry 
out a State program, or programs, under sub-
paragraph (A). 
‘‘(C) REQUIREMENTS
ON
FUNDS.—Any 
amounts that are used under subparagraph 
(A)— 
‘‘(i) shall not be subject to any of the 
requirements of subsection (d), subsection 
(f), section 2204, or section 2205; and 
‘‘(ii) shall be subject to— 
‘‘(I) 
the 
audit 
requirements 
under section 2203; and 
‘‘(II) 
any 
requirements 
that 
apply to Federal funds provided di-
rectly for such State program. 
‘‘(f) MAINTENANCE
OF CURRENT LAW RESTRIC-
TIONS ON USE OF FEDERAL FUNDS.— 
‘‘(1) IN GENERAL.— 
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‘‘(A) NO
FUNDING
FOR
ABORTIONS.— 
None of the funds appropriated in this title 
shall be expended for any abortion. 
‘‘(B) NO FUNDS FOR COVERAGE OF ABOR-
TION.—None of the funds appropriated in this 
title shall be expended for health benefits cov-
erage that includes coverage of abortion. 
‘‘(C) HEALTH
BENEFITS
COVERAGE
DE-
FINED.—For purposes of this subsection, the 
term ‘health benefits coverage’ means the pack-
age of services covered by a managed care pro-
vider or organization pursuant to a contract or 
other arrangement. 
‘‘(2) EXCEPTIONS.—The limitations established 
in paragraph (1) shall not apply to an abortion in 
the case where a woman suffers from a physical dis-
order, physical injury, or physical illness that would, 
as certified by a physician, place the woman in dan-
ger of death unless an abortion is performed, includ-
ing a life-endangering physical condition caused by 
or arising from the pregnancy itself. 
‘‘(3) STATE
FUNDS
USED
IN
CONJUNCTION 
WITH FEDERAL FUNDS.—The limitations established 
in paragraph (1) shall apply to any State funds used 
in conjunction with Federal funds appropriated 
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