Medicare/Medicaid Solvency Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare/Medicaid Solvency Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) illnesses and diseases that result from the use of 
        tobacco products cost Federal Government health care programs 
        billions of dollars, including $10,200,000,000 in the medicare 
        program, $5,100,000,000 in the medicaid program, and 
        $4,700,000,000 in other Federal health programs in fiscal year 
        1993;
            (2) in April 1994, the trustees of the medicare trust funds 
        concluded that such funds may be insolvent in 2001;
            (3) such insolvency would severely affect the ability of 
        the medicare trust funds to continue to protect the health of 
        America's senior citizens; and
            (4) the medicare population has a significantly higher risk 
        of contracting illnesses and diseases that result from the use 
        of tobacco products than younger age groups.
    (b) Purpose.--The purpose of this Act is to insure the long-term 
viability of the medicare, medicaid, and other federal health programs 
by establishing a dedicated trust fund to reimburse the government for 
the health care costs of individuals with diseases attributable to the 
use of tobacco products.

SEC. 3. TOBACCO PRODUCT MANUFACTURERS CONTRIBUTION TO HEALTH CARE COST 
              REIMBURSEMENT TRUST FUND.

    (a) In General.--The Internal Revenue Code of 1986 is amended by 
adding at the end the following new subtitle:

``Subtitle K--Tobacco Product Manufacturers Contribution to Health Care 
                     Cost Reimbursement Trust Fund.

                              ``Chapter 100. Tobacco Product 
                                        Manufacturers Contribution to 
                                        Health Care Cost Reimbursement 
                                        Trust Fund.

  ``CHAPTER 100--TOBACCO PRODUCT MANUFACTURERS CONTRIBUTION TO HEALTH 
                  CARE COST REIMBURSEMENT TRUST FUND.

                              ``Sec. 9801. Establishment of Tobacco 
                                        Product Health Care Cost 
                                        Reimbursement Trust Fund.
                              ``Sec. 9802. Contributions to Trust Fund.

``SEC. 9801. ESTABLISHMENT OF TOBACCO PRODUCT HEALTH CARE COST 
              REIMBURSEMENT TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Tobacco Product 
Health Care Cost Reimbursement Trust Fund' (hereafter referred to in 
this chapter as the `Trust Fund'), consisting of such amounts as may be 
appropriated or transferred to the Trust Fund as provided in this 
section or section 9602(b).
    ``(b) Transfers to Trust Fund.--The Secretary shall transfer to the 
Trust Fund an amount equivalent to contributions received in the 
Treasury under section 9802.
    ``(c) Distribution of Amounts in Trust Fund.--
            ``(1) In general.--The amounts in the Trust Fund shall be 
        available in each fiscal year (beginning with fiscal year 
        1997), as provided by appropriation Acts, to the Secretary--
                    ``(A) to distribute to each particular Secretary 
                responsible for the expenditure of Federal funds for 
                that fiscal year under title XVIII or XIX of the Social 
                Security Act or any other Federal program for the 
                payment of health care costs of individuals with 
                diseases attributable to the use of tobacco products, 
                and
                    ``(B) to pay all expenses of administration 
                incurred by the Department of the Treasury in 
                administering this chapter and the Trust Fund.
            ``(2) Determination of distribution.--Each particular 
        Secretary described in paragraph (1)(A) shall submit to the 
        Secretary of the Treasury such documentation as the Secretary 
        requires to determine the appropriate distribution under 
        paragraph (1)(A).
            ``(3) Use of distributions.--In any case in which an 
        expenditure of Federal funds described in paragraph (1)(A) was 
        made from a trust fund, the distribution under paragraph (1)(A) 
        reimbursing such expenditure shall be made to such trust fund.
            ``(4) State medicaid expenditures.--For purposes of this 
        section, the Secretary of Health and Human Services shall 
        include in the Secretary's submission under paragraph (2) the 
        expenditure of State funds under State plans under title XIX of 
        the Social Security Act for the payment of health care costs of 
        individuals with diseases attributable to the use of tobacco 
        products, and to the extent the distribution to the Secretary 
        under paragraph (1)(A) is attributable to such expenditure, 
        shall reimburse the various States for such expenditures.
    ``(d) Administrative Rules.--For purposes of this section, the 
rules of subchapter B of chapter 98 shall apply.
    ``(e) Tobacco Products.--For purposes of this chapter, the term 
`tobacco products' has the meaning given such term by section 5702(c).

``SEC. 9802. CONTRIBUTIONS TO TRUST FUND.

    ``(a) Annual Premiums.--Each manufacturer of tobacco products shall 
pay to the Trust Fund, an annual contribution equal to the product of 
the amount determined under subsection (b) for each fiscal year 
(beginning with fiscal year 1997) and the manufacturer's market share 
percentage determined under subsection (c) for the calendar year 
preceding such fiscal year.
    ``(b) Determination of Funding Levels.--
            ``(1) In general.--Not later than the date the President is 
        required to submit the budget of the United States for a fiscal 
        year to Congress, the Director of the Centers for Disease 
        Control and Prevention, after consultation with the Directors 
        of the National Institutes of Health, the National Cancer 
        Institute, and the National Heart, Lung, and Blood Institute, 
        shall make an estimate of--
                    ``(A) the amount of Federal expenditures for that 
                fiscal year under titles XVIII and XIX of the Social 
                Security Act and other Federal programs, and
                    ``(B) the amount of State expenditures for that 
                fiscal year under State plans under title XIX of the 
                Social Security Act,
        for payment of health care costs of individuals with diseases 
        attributable to the use of tobacco products.
            ``(2) Disclosure of estimate methodology.--The Director of 
        the Centers for Disease Control and Prevention shall publish in 
        the Federal Register all relevant documentation considered and 
        the methodology used in making the estimate described in 
        paragraph (1).
            ``(3) Report in budget.--The President shall include the 
        estimate described in paragraph (1) in the budget for the 
        fiscal year.
    ``(c) Market Share Percentage.--
            ``(1) In general.--Not later than July 1, the Secretary 
        shall determine and publish the market share percentage for the 
        preceding calendar year for each manufacturer of tobacco 
        products by determining such manufacturer's percentage share of 
        the total amount of tobacco products sold in the United States 
        during such calendar year.
            ``(2) Information.--Not later than April 1, each 
        manufacturer of tobacco products shall furnish to the Secretary 
        such information as the Secretary may require to determine any 
        market share percentage under this subsection for the preceding 
        calendar year.
    ``(d) Payment of Contributions.--The annual contribution under 
subsection (a) for any fiscal year shall be payable in 12 monthly 
installments, due on the twenty-fifth day of each calendar month in the 
fiscal year.
    ``(e) Enforcement.--For penalties and other general and 
administrative provisions applicable to this section, see subtitle F.
    ``(f) Manufacturer of Tobacco Products.--For purposes of this 
section, the term `manufacturer of tobacco products' has the meaning 
given such term by section 5702(d).''
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

Summary: Medicare/Medicaid Solvency Act - Amends the Internal Revenue Code to establish in the Treasury the Tobacco Product Health Care Cost Reimbursement Trust Fund.  Directs the Secretary of the Treasury to:  (1) distribute amounts in the Fund to each Secretary responsible for the expenditure of Federal funds for that fiscal year (beginning with FY 1997) under titles XXVIII (Medicare) and XIX (Medicaid) of the Social Security Act or any other Federal program for the payment of health care costs for individuals with diseases attributable to the use of tobacco products; and (2) pay administrative expenses of the Fund. 
Requires each manufacturer of tobacco products to pay to the Fund an annual contribution based on the total amount of tobacco-related Federal health care costs in proportion to that manufacturer's share of the tobacco market.