A bill to promote the development of health care cooperatives that will help businesses to pool the health care purchasing power of employers, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Health Care Purchasing 
Cooperatives Act''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress makes the following findings:
            (1) Health care spending in the United States has reached 
        15 percent of the Gross Domestic Product of the United States, 
        yet 45,000,000 people, or 15.6 percent of the population, 
        remains uninsured.
            (2) After nearly a decade of manageable increases in 
        commercial insurance premiums, many employers are now faced 
        with consecutive years of double digit premium increases.
            (3) Purchasing cooperatives owned by participating 
        businesses are a proven method of achieving the bargaining 
        power necessary to manage the cost and quality of employer-
        sponsored health plans and other employee benefits.
            (4) The Employer Health Care Alliance Cooperative has 
        provided its members with health care purchasing power through 
        provider contracting, data collection, activities to enhance 
        quality improvements in the health care community, and 
        activities to promote employee health care consumerism.
            (5) According to the National Business Coalition on Health, 
        there are nearly 80 employer-led coalitions across the United 
        States that collectively purchase health care, proactively 
        challenge high costs and the inefficient delivery of health 
        care, and share information on quality. These coalitions 
        represent more than 10,000 employers.
    (b) Purpose.--It is the purpose of this Act to build off of 
successful local employer-led health insurance initiatives by improving 
the value of their employees' health care.

SEC. 3. GRANTS TO SELF INSURED BUSINESSES TO FORM HEALTH CARE 
              COOPERATIVES.

    (a) Authorization.--The Secretary of Health and Human Services (in 
this Act referred to as the ``Secretary''), acting through the Director 
of the Agency for Healthcare Research and Quality, is authorized to 
award grants to eligible groups that meet the criteria described in 
subsection (d), for the development of health care purchasing 
cooperatives. Such grants may be used to provide support for the 
professional staff of such cooperatives, and to obtain contracted 
services for planning, development, and implementation activities for 
establishing such health care purchasing cooperatives.
    (b) Eligible Group Defined.--
            (1) In general.--In this section, the term ``eligible 
        group'' means a consortium of 2 or more self-insured employers, 
        including agricultural producers, each of which are responsible 
        for their own health insurance risk pool with respect to their 
        employees.
            (2) No transfer of risk.--Individual employers who are 
        members of an eligible group may not transfer insurance risk to 
        such group.
    (c) Application.--An eligible group desiring a grant under this 
section shall submit to the Secretary an application at such time, in 
such manner, and accompanied by such information as the Secretary may 
require.
    (d) Criteria.--
            (1) Feasibility study grants.--
                    (A) In general.--An eligible group may submit an 
                application under subsection (c) for a grant to conduct 
                a feasibility study concerning the establishment of a 
                health insurance purchasing cooperative. The Secretary 
                shall approve applications submitted under the 
                preceding sentence if the study will consider the 
                criteria described in paragraph (2).
                    (B) Report.--After completion of a feasibility 
                study under a grant under this section, an eligible 
                group shall submit to the Secretary a report describing 
                the results of such study.
            (2) Grant criteria.--The criteria described in this 
        paragraph include the following with respect to the eligible 
        group:
                    (A) The ability of the group to effectively pool 
                the health care purchasing power of employers.
                    (B) The ability of the group to provide data to 
                employers to enable such employers to make data-based 
                decisions regarding their health plans.
                    (C) The ability of the group to drive quality 
                improvement in the health care community.
                    (D) The ability of the group to promote health care 
                consumerism through employee education, self-care, and 
                comparative provider performance information.
                    (E) The ability of the group to meet any other 
                criteria determined appropriate by the Secretary.
    (e) Cooperative Grants.--After the submission of a report by an 
eligible group under subsection (d)(1)(B), the Secretary shall 
determine whether to award the group a grant for the establishment of a 
cooperative under subsection (a). In making a determination under the 
preceding sentence, the Secretary shall consider the criteria described 
in subsection (d)(2) with respect to the group.
    (f) Cooperatives.--
            (1) In general.--An eligible group awarded a grant under 
        subsection (a) shall establish or expand a health insurance 
        purchasing cooperative that shall--
                    (A) be a nonprofit organization;
                    (B) be wholly owned, and democratically governed by 
                its member-employers;
                    (C) exist solely to serve the membership base;
                    (D) be governed by a board of directors that is 
                democratically elected by the cooperative membership 
                using a 1-member, 1-vote standard; and
                    (E) accept any new member in accordance with 
                specific criteria, including a limitation on the number 
                of members, determined by the Secretary.
            (2) Authorized cooperative activities.--A cooperative 
        established under paragraph (1) shall--
                    (A) assist the members of the cooperative in 
                pooling their health care insurance purchasing power;
                    (B) provide data to improve the ability of the 
                members of the cooperative to make data-based decisions 
                regarding their health plans;
                    (C) conduct activities to enhance quality 
                improvement in the health care community;
                    (D) work to promote health care consumerism through 
                employee education, self-care, and comparative provider 
                performance information; and
                    (E) conduct any other activities determined 
                appropriate by the Secretary.
    (g) Review.--
            (1) In general.--Not later than 1 year after the date on 
        which grants are awarded under this section, and every 2 years 
        thereafter, the Secretary shall study programs funded by grants 
        under this section and provide to the appropriate committees of 
        Congress a report on the progress of such programs in improving 
        the access of employees to quality, affordable health 
        insurance.
            (2) Sliding scale funding.--The Secretary shall use the 
        information included in the report under paragraph (1) to 
        establish a schedule for scaling back payments under this 
        section with the goal of ensuring that programs funded with 
        grants under this section are self sufficient within 10 years.

SEC. 4. GRANTS TO SMALL BUSINESSES TO FORM HEALTH CARE COOPERATIVES.

    The Secretary shall carry out a grant program that is identical to 
the grant program provided in section 3, except that an eligible group 
for a grant under this section shall be a consortium of 2 or more 
employers, including agricultural producers, each of which--
            (1) have 99 employees or less; and
            (2) are purchasers of health insurance (are not self-
        insured) for their employees.

SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

    From the administrative funds provided to the Secretary, the 
Secretary may use not more than a total of $60,000,000 for fiscal years 
2006 through 2015 to carry out this Act.

Summary: Promoting Health Care Purchasing Cooperatives Act - Authorizes the Secretary of Health and Human Services, acting through the Director of the Agency for Healthcare Research and Quality (AHRQ), to award grants for the development of health care purchasing cooperatives by two or more self-insured employers.

 Sets forth requirements for cooperatives, including that they: (1) are nonprofit, wholly owned, and democratically governed by its member-employers; (2) exist solely to serve the membership base; (3) assist members in pooling their health care insurance purchasing power; (4) provide data to improve the ability of the members to make data-based decisions regarding their health plans; and (5) conduct activities to enhance quality improvement in the health care community. Requires the Secretary to carry out an identical grant program for eligible groups of two or more employers that have 99 employees or less and purchase health insurance for their employees.