110 HR 6444 IH: Enhanced Health Care Value for

U.S. House of Representatives
2008-07-09
text/xml
EN
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		I
		110th CONGRESS
		2d Session
		H. R. 6444
		IN THE HOUSE OF REPRESENTATIVES

			July 9, 2008
			Ms. Wasserman Schultz
			 (for herself, Mrs. Emerson,
			 Mr. Baird,
			 Mr. Blumenauer,
			 Mr. Cooper,
			 Mr. Davis of Alabama,
			 Mr. English of Pennsylvania,
			 Ms. Eshoo,
			 Ms. Harman,
			 Mr. Hastings of Florida,
			 Mr. Hinojosa,
			 Ms. Hooley,
			 Mr. Lipinski,
			 Mr. Meek of Florida,
			 Mr. Moran of Virginia,
			 Mr. Snyder,
			 Ms. Tsongas,
			 Mr. Welch of Vermont,
			 Mr. Wu, Mr. Dicks, and Ms.
			 Ros-Lehtinen) 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 Labor, and
			 Oversight and Government
			 Reform, for a period to be subsequently determined by the
			 Speaker, in each case for consideration of such provisions as fall within the
			 jurisdiction of the committee concerned

		A BILL
		To provide affordable, guaranteed private health coverage
		  that will make Americans healthier and can never be taken
		  away.

		1.Short title; table of contents
			(a)Short titleThis Act may be cited as the
			 Healthy Americans
			 Act.
			(b)Table of contentsThe table
			 of contents of this Act is as follows:

					Sec. 1. Short title; table of contents.
					Sec. 2. Findings.
					Sec. 3. Definitions.
					Title I—Healthy Americans Private Insurance Plans
					Subtitle A—Guaranteed private coverage
					Sec. 101. Guarantee of Healthy Americans Private Insurance
				coverage.
					Sec. 102. Individual responsibility to enroll in a Healthy
				Americans Private Insurance plan.
					Sec. 103. Health coverage plans offered by
				employers.
					Subtitle B—Standards for Healthy Americans Private Insurance
				Coverage
					Sec. 111. Healthy Americans Private Insurance
				plans.
					Sec. 112. Specific coverage requirements.
					Sec. 113. Updating Healthy Americans Private Insurance plan
				requirements.
					Subtitle C—Eligibility for premium and personal responsibility
				contribution subsidies
					Sec. 121. Eligibility for premium subsidies.
					Sec. 122. Eligibility for personal responsibility contribution
				subsidies.
					Sec. 123. Definitions and special rules.
					Subtitle D—Wellness programs
					Sec. 131. Requirements for wellness programs.
					Title II—Healthy Start for Children
					Subtitle A—Benefits and Eligibility
					Sec. 201. HAPI plan coverage for children.
					Sec. 202. Coordination of supplemental coverage under the
				Medicaid program to HAPI plan coverage for children.
					Subtitle B—Service Providers
					Sec. 211. Inclusion of providers under HAPI plans.
					Sec. 212. Use of, and grants for, school-based health
				centers.
					Title III—Better Health for Older and Disabled
				Americans
					Subtitle A—Assurance of Supplemental Medicaid
				Coverage
					Sec. 301. Coordination of supplemental coverage under the
				Medicaid program for elderly and disabled individuals.
					Subtitle B—Enpowering Individuals and State To Improve
				Long-Term Care Choices
					Sec. 311. New, automatic Medicaid option for State choices for
				long-term care program.
					Sec. 312. Simpler and more affordable long-term care insurance
				coverage.
					Title IV—Healthier Medicare
					Subtitle A—Authority To adjust amount of part B premium To
				reward positive health behavior
					Sec. 401. Authority to adjust amount of Medicare part B premium
				to reward positive health behavior.
					Subtitle B—Promoting primary care for Medicare
				beneficiaries
					Sec. 411. Primary care services management payment.
					Subtitle C—Chronic care disease management
					Sec. 421. Chronic care disease management.
					Sec. 422. Chronic Care Education Centers.
					Subtitle D—Improving quality in hospitals for all
				patients
					Sec. 431. Improving quality in hospitals for all
				patients.
					Subtitle E—Additional Provisions
					Sec. 441. Additional cost information.
					Sec. 442. Reducing Medicare paperwork and regulatory
				burdens.
					Title V—State Health Help Agencies
					Sec. 501. Establishment.
					Sec. 502. Responsibilities and authorities.
					Sec. 503. Appropriations for Transition to State Health Help
				Agencies.
					Title VI—Shared Responsibilities
					Subtitle A—Individual Responsibilities
					Sec. 601. Individual responsibility to ensure HAPI plan
				coverage.
					Subtitle B—Employer Responsibilities
					Sec. 611. Health care responsibility payments.
					Sec. 612. Distribution of individual responsibility payments to
				HHAs.
					Subtitle C—Insurer Responsibilities
					Sec. 621. Insurer responsibilities.
					Subtitle D—State Responsibilities
					Sec. 631. State responsibilities.
					Sec. 632. Empowering States to innovate through
				waivers.
					Subtitle E—Federal Fallback Guarantee
				Responsibility
					Sec. 641. Federal guarantee of access to coverage.
					Subtitle F—Federal Financing Responsibilities
					Sec. 651. Appropriation for subsidy payments.
					Sec. 652. Recapture of Medicare and 90 percent of Medicaid
				Federal DSH funds to strengthen Medicare and ensure continued support for
				public health programs.
					Subtitle G—Tax treatment of health care coverage under Healthy
				Americans program; termination of coverage under other governmental programs
				and transition rules for medicaid and SCHIP
					Part 1—Tax treatment of health care coverage under Healthy
				Americans program
					Sec. 661. Limited employee income and payroll tax exclusion for
				employer shared responsibility payments, historic retiree health contributions,
				and transitional coverage contributions.
					Sec. 662. Exclusion for limited employer-provided health care
				fringe benefits.
					Sec. 663. Limited employer deduction for employer shared
				responsibility payments, historic retiree health contributions, and other
				health care expenses.
					Sec. 664. Refundable credit for individual shared
				responsibility payments.
					Sec. 665. Modification of other tax incentives to complement
				Healthy Americans program.
					Sec. 666. Termination of certain employer incentives when
				replaced by lower health care costs.
					Part 2—Termination of coverage under other governmental programs
				and transition rules for medicaid and schip
					Sec. 671. Group and individual health plan requirements not
				applicable to HAPI plans.
					Sec. 672. Federal Employees Health Benefits Plan.
					Sec. 673. Medicaid and SCHIP.
					Title VII—Purchasing Health Services and Products That Are Most
				Effective
					Sec. 701. One time disallowance of deduction for advertising
				and promotional expenses for certain prescription pharmaceuticals.
					Sec. 702. Enhanced new drug and device approval.
					Sec. 703. Medical schools and finding what works in health
				care.
					Sec. 704. Finding affordable health care providers
				nearby.
					Title VIII—Enhanced Health Care Value
					Sec. 801. Short title.
					Sec. 802. Research on comparative effectiveness of health care
				items and services.
					Sec. 803. Health Care Comparative Effectiveness Research Trust
				Fund; financing for Trust Fund.
					Sec. 804. Coordination of Health Services Research.
					Title IX—Containing Medical Costs and Getting More Value for the
				Health Care Dollar
					Sec. 901. Cost-containment results of the Healthy Americans
				Act.

			2.FindingsCongress makes the following
			 findings:
			(1)Americans want affordable, guaranteed
			 private health coverage that makes them healthier and can never be taken
			 away.
			(2)American health care provides primarily
			 sick care and does not do enough to prevent chronic illnesses
			 like heart disease, stroke, and diabetes. This results in significantly higher
			 health costs for all Americans.
			(3)Staying as healthy as possible often
			 requires an individual to change behavior and assume more personal
			 responsibility for his or her health.
			(4)Personal responsibility for one’s health
			 should include purchasing one’s own private health care coverage.
			(5)To accompany this new focus on staying
			 healthy and personal responsibility, our government must guarantee that all
			 Americans receive private affordable health coverage that can never be taken
			 away.
			(6)Financing this guarantee should be a shared
			 responsibility between individuals, the Government, and employers.
			(7)The $2,200,000,000,000 spent annually on
			 American health care must be spent more effectively in order to meet this
			 guarantee.
			(8)This guarantee must include easier access
			 to understandable information about the quality, cost, and effectiveness of
			 health care providers, products, and services.
			(9)The fact that businesses in the United
			 States compete globally against businesses whose governments pay for health
			 care, coupled with the aging of the American population and the explosive
			 growth of preventable health problems, makes the status quo in American health
			 care unacceptable.
			3.DefinitionsIn this Act:
			(1)Adult individualThe term adult individual
			 means an individual who—
				(A)is—
					(i)age 19 or older;
					(ii)a resident of a State;
					(iii)(I)a United States citizen; or
						(II)an alien with permanent residence;
						(iv)not a dependent child; and
					(v)not an alien unlawfully present in the
			 United States; and
					(B)in the case of an incarcerated individual,
			 such an individual who is incarcerated for less than 1 month.
				(2)Alien with permanent
			 residenceThe term
			 alien with permanent residence has the meaning given the term
			 qualified alien in section 431 of the Personal Responsibility and
			 Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641).
			(3)Covered individualThe term covered individual
			 means an individual who is enrolled in a HAPI plan.
			(4)Dependent childThe term dependent child has
			 the meaning given the term qualifying child in section 152(c) of
			 the Internal Revenue Code of 1986.
			(5)HAPI planThe term HAPI plan means a
			 Healthy Americans Private Insurance plan described under subtitle B of title I
			 or an employer-sponsored health coverage plan described under section 103
			 offered by an employer.
			(6)HHAThe term HHA means the Health
			 Help Agency of a State as described under title V.
			(7)Health insurance issuerThe term health insurance
			 issuer means an insurance company, insurance service, or insurance
			 organization (including a health maintenance organization, as defined in
			 paragraph (8)) which is licensed to engage in the business of insurance in a
			 State and which is subject to State law which regulates insurance (within the
			 meaning of section 514(b)(2) of the Employee Retirement Income Security Act of
			 1974). Such term does not include a group health plan.
			(8)Health maintenance
			 organizationThe term
			 health maintenance organization means—
				(A)a federally qualified health maintenance
			 organization (as defined in section 1301(a)),
				(B)an organization recognized under State law
			 as a health maintenance organization, or
				(C)a similar organization regulated under
			 State law for solvency in the same manner and to the same extent as such a
			 health maintenance organization.
				(9)Personal responsibility
			 contributionThe term
			 personal responsibility contribution means a payment made by a
			 covered individual to a health care provider or a health insurance issuer with
			 respect to the provision of health care services under a HAPI plan, not
			 including any health insurance premium payment.
			(10)Qualified collective bargaining
			 agreement
				(A)In generalThe term qualified collective
			 bargaining agreement means an agreement between a qualified collective
			 bargaining employer and an employee organization that represents the employees
			 of such employer, including an agreement under section 302(c)(5) of the
			 Labor-Management Relations Act, 1947, that is entered into before the date of
			 the enactment of this Act and that is in effect until the date that is the
			 earlier of—
					(i)January 1 of the first year which is more
			 than 9 years after the date of enactment of this Act, or
					(ii)the date the agreement expires.
					(B)Qualified collective bargaining
			 employerThe term
			 qualified collective bargaining employer means an employer who
			 provides health insurance to employees under the terms of a collective
			 bargaining agreement which is entered into before the date of the enactment of
			 this Act.
				(11)SecretaryThe term Secretary means the
			 Secretary of Health and Human Services.
			(12)StateThe term State means each of
			 the several States of the United States, the District of Columbia, the
			 Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, Guam, the
			 Commonwealth of the Northern Mariana Islands, and other territories of the
			 United States.
			(13)State of residenceThe term State of residence,
			 with respect to an individual, means the State in which the individual has
			 primary residence.
			IHealthy Americans Private Insurance
			 Plans
			AGuaranteed private coverage
				101.Guarantee of Healthy Americans Private
			 Insurance coverageNot later
			 than the date that is 4 years after the date of enactment of this Act, each
			 adult individual shall have the opportunity to purchase a Healthy Americans
			 Private Insurance plan that meets the requirements of subtitle B, (referred to
			 in this Act as HAPI plan) for such individual and the dependent
			 children of such individual.
				102.Individual responsibility to enroll in a
			 Healthy Americans Private Insurance plan
					(a)Individual responsibility
						(1)Adult individualsEach adult individual shall have the
			 responsibility to enroll in a HAPI plan, unless the adult individual—
							(A)provides evidence of receipt of coverage
			 under, or enrollment in a health plan offered through—
								(i)the Medicare program under title XVIII of
			 the Social Security Act;
								(ii)a health insurance plan offered by the
			 Department of Defense;
								(iii)an employee benefit plan through a former
			 employer;
								(iv)a qualified collective bargaining
			 agreement;
								(v)the Department of Veterans Affairs;
			 or
								(vi)the Indian Health Service; or
								(B)is opposed to health plan coverage for
			 religious reasons, including an individual who declines health plan coverage
			 due to a reliance on healing using spiritual means through prayer alone.
							(2)Dependent childrenEach adult individual shall have the
			 responsibility to enroll each dependent child of the adult individual in a HAPI
			 plan, unless the adult individual—
							(A)provides evidence that the dependent child
			 is receiving coverage under any program described in paragraph (1)(A);
			 or
							(B)is described in paragraph (1)(B).
							(3)Verification of religious
			 exceptionEach State shall
			 develop guidelines for determining and verifying the individuals who qualify
			 for the exception under paragraph (1)(B).
						(b)Penalty for failure To purchase
			 coverage
						(1)Penalty
							(A)In generalIn the case of an individual described in
			 subparagraph (B), such individual shall be subject to a late enrollment penalty
			 in an amount determined under subparagraph (C).
							(B)Individuals subject to
			 penaltyAn individual
			 described in this subparagraph is an adult individual for whom there is a
			 continuous period of 63 days or longer, beginning on the applicable date (as
			 defined in subparagraph (E)) and ending on the date of enrollment in a HAPI
			 plan, during all of which the individual—
								(i)was not covered under a HAPI plan or a
			 health plan offered through a program described in paragraph (1)(A) of section
			 102(a); and
								(ii)was not described in paragraph (1)(B) of
			 such section.
								(C)Amount of penalty
								(i)In generalThe amount determined under this
			 subparagraph for an individual is an amount equal to the sum of—
									(I)the number of uncovered months multiplied
			 by the weighted average of the monthly premium for HAPI plans of the same class
			 of coverage as the individual's in the applicable coverage area (determined
			 without regard to any subsidy under section 121); and
									(II)15 percent of the amount determined under
			 subclause (I).
									(ii)Uncovered month definedFor purposes of this subsection, the term
			 uncovered month means, with respect to an individual, any month
			 beginning on or after the applicable date (as defined in subparagraph (E))
			 unless the individual can demonstrate that the individual—
									(I)was covered under a HAPI plan or a health
			 plan offered through a program described in paragraph (1)(A) of section 102(a)
			 for any portion of such month; or
									(II)was described in paragraph (1)(B) of such
			 section for any portion of such month.
									A month shall not be treated as an
			 uncovered month if the individual has already paid a late enrollment penalty
			 under this subsection for such month or if the individual was incarcerated for
			 the entire month.(D)PaymentPayment of any late enrollment penalty by
			 an individual under this subsection shall be made to the HHA of the
			 individual's State of residence under procedures established by the
			 State.
							(E)Applicable dateIn this paragraph, the term
			 applicable date means the earlier of—
								(i)the day after the end of the State’s first
			 open enrollment period for HAPI plans (during which all adult individuals are
			 eligible to enroll); and
								(ii)the day after the end of the first
			 enrollment period for a fallback HAPI plan in the State.
								(2)WaiverAn HHA of a State may reduce or waive the
			 amount of any late enrollment penalty applicable to an individual under this
			 subsection if payment of such penalty would constitute a hardship (determined
			 under procedures established by the State).
						(3)EnforcementEach State shall determine appropriate
			 mechanisms, which may not include revocation or ineligibility for coverage
			 under a HAPI plan, to enforce the responsibility of each adult individual to
			 purchase HAPI plan coverage for such individual and any dependent children of
			 such individual under subsection (a).
						(c)Other insurance coverageNothing in this Act shall be construed to
			 prohibit an individual from enrolling in a health insurance plan that is not a
			 HAPI plan.
					103.Health coverage
			 plans offered by employers
					(a)Plan
			 requirements
						(1)In
			 generalA health coverage plan described in section 105(h)(6) of
			 the Internal Revenue Code of 1986 (relating to self-insured plans) that is
			 offered by an employer shall be subject to—
							(A)the requirements
			 of subtitle B, other than subsections (a), (d)(2), and (d)(4) of section 111;
			 and
							(B)a risk-adjustment
			 mechanism used to spread risks across all health plans.
							(2)Other
			 plansA health coverage plan that is not described in section
			 105(h)(6) of the Internal Revenue Code of 1986 that is offered by an employer
			 shall be subject to the requirements of subtitle B, other than section
			 111(a).
						(b)Distribution of
			 informationEmployers that offer an employer-sponsored health
			 coverage plan shall distribute to employees standardized, unbiased information
			 on HAPI plans and supplemental health insurance options provided by the State
			 HAA under section 502(b).
					(c)Plans offered
			 through employersAn employer-sponsored health coverage plan
			 shall be offered by an employer and not through the applicable State
			 HHA.
					BStandards for Healthy Americans Private
			 Insurance Coverage
				111.Healthy Americans Private Insurance
			 plans
					(a)OptionsA State HHA—
						(1)shall require that at least 2 HAPI plans
			 that comply with the requirements of subsection (b), be offered through the HHA
			 to each individual in the State;
						(2)shall require the offering of 1 or more
			 HAPI plans that include coverage for benefits, items, or services in addition
			 to the standardized benefits, items, or services required under subsection (b)
			 for HAPI plans if—
							(A)such additional benefits, items, and
			 services build upon the standardized benefits package;
							(B)a list of such additional benefits, items,
			 or services, and the prices applicable to such additional benefits, items, and
			 services, is displayed in a manner that is separate from the description of the
			 standardized benefits, items, or services required under the plan under this
			 section (and consistent with the manner in which such items are displayed by
			 medigap policies) and that enables a consumer to identify such additional
			 benefits, items, and services and the cost associated with such; and
							(C)no premium subsidies are available under
			 subtitle C for any portion of the premiums for a HAPI plan that are
			 attributable to such additional benefits, items, or services; and
							(3)may permit the offering of 1 or more
			 actuarially equivalent HAPI plans through the HHA as provided for in subsection
			 (c).
						(b)Standardized coverage requirements for HAPI
			 plans
						(1)In generalEach HAPI plan offered through an HHA
			 shall—
							(A)provide benefits for—
								(i)health care items
			 and services that are actuarially equivalent or greater in value than the
			 benefits offered as of January 1, 2008, under the Blue Cross/Blue Shield
			 Standard Plan provided under the Federal Employees Health Benefit Program under
			 chapter 89 of title 5, United States Code, including coverage of an initial
			 primary care assessment and annual physical examinations;
								(ii)catastrophic medical events that result in
			 out-of-pocket costs for an individual or family if lifetime limits are
			 exhausted; and
								(iii)comprehensive disease prevention, early
			 detection, disease management, and chronic condition management that meets
			 minimum standards developed by the Secretary;
								(B)designate a health care provider, such as a
			 primary care physician, nurse practitioner, or other qualified health provider,
			 to monitor the health and health care of a covered individuals (such provider
			 shall be known as the health home of the covered
			 individual);
							(C)ensure that, as part of the first visit
			 with a primary care physician or the health home of a covered individual, such
			 provider and individual determine a care plan to maximize the health of the
			 individual through wellness and prevention activities;
							(D)provide for the application of personal
			 responsibility contribution requirements with respect to covered benefits in a
			 manner that may be similar to the cost sharing requirements applied as of
			 January 1, 2008, under the Blue Cross/Blue Shield Standard Plan provided under
			 the Federal Employees Health Benefit Program under chapter 89 of title 5,
			 United States Code, except that no contributions shall be required for—
								(i)preventive items or services; and
								(ii)early detection, disease management, or
			 chronic pain treatment items or services; and
								(E)comply with the requirements of section
			 112.
							(2)Determination of benefits by
			 SecretaryNot later than 1
			 year after the date of enactment of this Act, the Secretary shall promulgate
			 guidelines concerning the benefits, items, and services that are covered under
			 paragraph (1).
						(3)Coverage for
			 family planning
							(A)In
			 generalExcept as provided in subparagraph (B), a health
			 insurance issuer shall make available supplemental coverage for abortion
			 services that may be purchased in conjunction with enrollment in a HAPI plan or
			 an actuarially equivalent healthy American plan.
							(B)Religious and
			 moral exceptionNothing in this paragraph shall be construed to
			 require a health insurance issuer affiliated with a religious institution to
			 provide the coverage described in subparagraph (A).
							(4)Rule of constructionNothing in this subsection shall be
			 construed to prohibit a HAPI plan from providing coverage for benefits, items,
			 and services in addition to the coverage required under this subsection. No
			 premium subsidies shall be available under subtitle C for any portion of the
			 premiums for a HAPI plan that are attributable to such additional benefits,
			 items, or services.
						(c)Actuarially equivalent healthy American
			 plansEach actuarially
			 equivalent HAPI plan offered through an HHA—
						(1)shall cover all treatments, items,
			 services, and providers at least to the same extent as those covered under a
			 HAPI plan that—
							(A)preventive items and services (including
			 well baby care and well child care and appropriate immunizations);
							(B)disease management
			 services;
							(C)inpatient and outpatient hospital
			 services;
							(D)physicians' surgical and medical services;
			 and
							(E)laboratory and x-ray services;
							(2)may include additional supplemental
			 benefits to the extent approved by the State and provided for in advance in the
			 plan contract; and
						(3)ensure that no personal responsibility
			 contribution requirements are applied for prevention and chronic disease
			 management benefits, items, or services.
						(d)Classes of coverageWith respect to a HAPI plan, a health
			 insurance issuer shall provide for the following classes of coverage:
						(1)Coverage of an individual.
						(2)Coverage of a married couple or domestic
			 partnership (as determined by a State) without dependent children.
						(3)Coverage of an adult individual with 1 or
			 more dependent children.
						(4)Coverage of a married couple or domestic
			 partnership (as determined by a State) with 1 or more dependent
			 children.
						(e)Premiums and
			 rating requirements
						(1)Determinations of premiumsWith respect to each class of coverage
			 described in subsection (d), a health insurance issuer shall determine the
			 premium amount for a HAPI plan using adjusted community rating principles,
			 including a risk-adjustment mechanism, as described in paragraphs (2) and (3)
			 established by the State. States may permit premium variations based only on
			 geography, tobacco use, and family size. A State may determine to have no
			 variation.
						(2)RewardsA State shall permit a health insurance
			 issuer to provide premium discounts and other incentives to enrollees based on
			 the participation of such enrollees in wellness, chronic disease management,
			 and other programs designed to improve the health of the enrollees.
						(3)LimitationA health insurance issuer shall not
			 consider age, gender, industry, health status, or claims experience in
			 determining premiums under this subsection.
						(f)Application of State mandate
			 lawsState benefit mandate
			 laws that would otherwise be applicable to HAPI plans shall be
			 preempted.
					112.Specific coverage requirements
					(a)In generalEach HAPI plan offered through a HHA
			 shall—
						(1)provide for increased portability through
			 limitations on the application of preexisting condition exclusions, in a manner
			 similar to that provided for under section 2701 of the Public Health Service
			 Act (42 U.S.C. 300gg), as such section existed on the day before the date of
			 enactment of this Act, except that the State shall develop procedures to ensure
			 that preexisting exclusion limitations do not apply to new enrollees who had no
			 applicable creditable coverage immediately prior to the first enrollment
			 period;
						(2)provide for the guaranteed availability of
			 coverage to prospective enrollees in a manner similar to that provided for
			 under section 2711 of the Public Health Service Act (42 U.S.C. 300gg–11), as
			 such section existed on the day before the date of enactment of this
			 Act;
						(3)provide for the guaranteed renewability of
			 coverage in a manner similar to that provided for under section 2712 of the
			 Public Health Service Act (42 U.S.C. 300gg–12), as such section existed on the
			 day before the date of enactment of this Act, except that the prohibition on
			 market reentry provided for under such section shall be deemed to be 2
			 years;
						(4)prohibit discrimination against individual
			 enrollees and prospective enrollees based on health status in a manner similar
			 to that provided for under section 2702 of the Public Health Service Act (42
			 U.S.C. 300gg–1), as such section existed on the day before the date of
			 enactment of this Act;
						(5)provide coverage protections for enrollees
			 who are mothers and newborns in a manner similar to that provided for under
			 section 2704 of the Public Health Service Act (42 U.S.C. 300gg–3), as such
			 section existed on the day before the date of enactment of this Act;
						(6)provide for full parity in the application
			 of certain limits to mental health benefits in a manner similar to that
			 provided for under section 2705 of the Public Health Service Act (42 U.S.C.
			 300gg–4), as such section existed on the day before the date of the enactment
			 of this Act; and
						(7)provide coverage for reconstructive surgery
			 following a mastectomy in a manner similar to that provided for under section
			 2706 of the Public Health Service Act (42 U.S.C. 300gg–5), as such section
			 existed on the day before the date of enactment of this Act.
						(b)GuidelinesNot later than 1 year after the date of
			 enactment of this Act, the Secretary shall develop guidelines for the
			 application of the requirements of this section.
					113.Updating Healthy Americans Private
			 Insurance plan requirements
					(a)In generalThe Secretary shall establish the Healthy
			 America Advisory Committee (referred to in this section as the Advisory
			 Committee) to provide recommendations to the Secretary and Congress
			 concerning modifications to the benefits, items, and services required under
			 section 111(a)(1).
					(b)Composition
						(1)In generalThe Advisory Committee shall be composed of
			 15 members to be appointed by the Comptroller General, of which—
							(A)at least 1 such member shall be a health
			 economist;
							(B)at least 1 such member shall be an
			 ethicist;
							(C)at least 1 such member shall be a
			 representative of health care providers, including nurses and other
			 nonphysician providers;
							(D)at least 1 such member shall be a
			 representative of health insurance issuers;
							(E)at least 1 such member shall be a health
			 care consumer;
							(F)at least 1 such member shall be a
			 representative of the United States Preventive Services Task Force; and
							(G)at least 1 such member shall be an
			 actuary.
							(2)Geographic balanceThe Comptroller General shall ensure the
			 geographic diversity of the members appointed under paragraph (1).
						(c)Terms, vacanciesMembers of the Advisory Committee shall be
			 appointed for a term of 3 years and may be reappointed for 1 additional term.
			 In appointing members, the Comptroller General shall stagger the terms of the
			 initial members so that the terms of one-third of the members expire each year.
			 Vacancies in the membership of the Advisory Committee shall not affect the
			 Committee’s ability to carry out its functions. The Comptroller General shall
			 appoint an individual to fill the remaining term of a vacant member within 2
			 months of being notified of such vacancy.
					(d)Compensation and expensesEach member of the Advisory Committee who
			 is not otherwise employed by the United States Government shall receive
			 compensation at a rate equal to the daily rate prescribed for GS–18 under the
			 General Schedule under section 5332 of title 5, United States Code, for each
			 day, including travel time, such member is engaged in the actual performance of
			 duties as a member of the Committee. A member of the Advisory Committee who is
			 an officer or employee of the United States Government shall serve without
			 additional compensation. All members of the Advisory Committee shall be
			 reimbursed for travel, subsistence, and other necessary expenses incurred by
			 them in the performance of their duties.
					(e)Reports
						(1)Annual
			 reportsNot later than December 31 of the fourth full calendar
			 year following the date of enactment of this Act, and each December 31
			 thereafter, the Advisory Committee shall provide to Congress and the Secretary
			 a report that—
							(A)describes any recommendations for
			 modifications to the benefits, items, and services that are required to be
			 covered under a HAPI plan; and
							(B)includes any recommendations to modify HAPI
			 plans to improve the quality of life for United States citizens and to ensure
			 that benefits in such plans are medically- and cost-effective.
							(2)Report on
			 standardization of enrollmentNot later than December 31 of the second
			 full calendar year following the date of enactment of this Act, the Advisory
			 Committee, in consultation with the States, shall provide to Congress and the
			 Secretary a report that includes recommendations relating to the
			 standardization of enrollment forms for HAPI plans throughout the country and
			 the transfer of basic information (such as identity and basic health
			 information) from one HAPI plan to another HAPI plan, including across State
			 lines.
						(f)Application of FACAThe Federal Advisory Committee Act (5
			 U.S.C. App.) shall apply to the Advisory Committee, except that section 14 of
			 such Act shall not apply.
					CEligibility for premium and personal
			 responsibility contribution subsidies
				121.Eligibility for premium subsidies
					(a)Individuals and families At or below the
			 poverty lineFor any calendar
			 year, in the case of a covered individual who is determined to have a modified
			 adjusted gross income that is at or below 100 percent of the poverty line, as
			 applicable to a family of the size involved, the covered individual is entitled
			 under this section to an income-related premium subsidy equal to the basic
			 premium subsidy amount.
					(b)Partial subsidy for other individuals and
			 families
						(1)In generalFor any calendar year, in the case of a
			 covered individual who is determined to have a modified adjusted gross income
			 that is greater than 100 percent of the poverty line, as applicable to a family
			 of the size involved, but below 400 percent of the poverty line, as applicable
			 to a family of the size involved, the covered individual is entitled under this
			 section to an income-related premium subsidy equal to the basic premium subsidy
			 amount reduced by the amount determined under paragraph (2).
						(2)Amount of reductionThe amount of the reduction determined
			 under this paragraph is the amount that bears the same ratio to the basic
			 premium subsidy amount as—
							(A)the excess of—
								(i)such individual's modified adjusted gross
			 income, over
								(ii)an amount equal to 100 percent of the
			 poverty line as applicable to a family of the size involved, bears to
								(B)the excess of—
								(i)an amount equal to 400 percent of the
			 poverty line as applicable to a family of the size involved, over
								(ii)an amount equal to 100 percent of the
			 poverty line as applicable to a family of the size involved.
								(c)Basic premium subsidy amountFor purposes of this section, the term
			 basic premium subsidy amount means, with respect to any
			 individual, the lesser of—
						(1)the annual premium for the HAPI plan under
			 which the individual is a covered individual; or
						(2)the weighted average of the premium for
			 HAPI plans of the same class of coverage (as described in section 111(d)) as in
			 the individual’s class of coverage in the applicable coverage area.
						(d)Change in status notification
						(1)In generalIf an individual’s modified adjusted income
			 changes such that the individual becomes eligible or ineligible for a subsidy
			 under this section, the individual shall report that change to the HHA of the
			 individual's State of residence not more than 60 days after the change takes
			 effect. If an individual reports the change within 60 days under the preceding
			 sentence, the individual's HAPI plan coverage shall be deemed credible coverage
			 for the purposes of maintaining coverage for preexisting conditions.
						(2)AdjustmentThe HHA shall adjust the premium subsidy of
			 such individual to take effect on the first month after the date of the
			 notification under paragraph (1) for which the next premium payment would be
			 due from the individual.
						(e)Catastrophic eventA State may develop mechanisms to ensure
			 that covered individuals do not have a break in coverage due to a catastrophic
			 financial event.
					122.Eligibility for personal responsibility
			 contribution subsidies
					(a)Full subsidyTo meet the eligibility requirements under
			 subtitle B for an HHA, for any taxable year, in the case of a covered
			 individual who is determined to have a modified adjusted gross income that is
			 below 100 percent of the poverty line as applicable to a family of the size
			 involved, an HHA shall provide to such an individual a subsidy equal to the
			 full amount of any personal responsibility contributions applicable to such
			 individual.
					(b)Partial subsidyTo meet the eligibility requirements under
			 subtitle B for an HHA, for any taxable year, in the case of a covered
			 individual who is determined to have a modified adjusted gross income that is
			 at or above 100 percent of the poverty line as applicable to a family of the
			 size involved, an HHA may provide to such an individual a subsidy equal to part
			 of the amount of any personal responsibility contributions applicable to such
			 individual.
					123.Definitions and special rules
					(a)Determination of modified adjusted gross
			 income
						(1)In generalIn this subtitle, the term modified
			 adjusted gross income means adjusted gross income (as defined in section
			 62 of the Internal Revenue Code of 1986)—
							(A)determined without regard to sections 86,
			 135, 137, 199, 221, 222, 911, 931, and 933 of such Code; and
							(B)increased by—
								(i)the amount of interest received or accrued
			 during the taxable year which is exempt from tax under such Code; and
								(ii)the amount of any social security benefits
			 (as defined in section 86(d) of such Code) received or accrued during the
			 taxable year.
								(2)Taxable year to be used to determine
			 modified adjusted gross incomeIn applying this subtitle to determine an
			 individual's annual premiums, the covered individual's modified adjusted gross
			 income shall be such income determined using the individual's most recent
			 income tax return or other information furnished to the Secretary by such
			 individual, as the Secretary may require.
						(b)Poverty lineIn this subtitle, the term poverty
			 line has the meaning given such term in section 673(2) of the Community
			 Health Services Block Grant Act (42 U.S.C. 9902(2)), including any revision
			 required by such section.
					(c)Other procedures To determine
			 subsidiesThe Secretary shall
			 promulgate regulations to be used by HHAs to calculate the premium subsidies
			 under section 121 and personal responsibility subsidies under section 122 for
			 individuals whose modified adjusted gross income described in subsection (a)(2)
			 is significantly lower than the modified adjusted gross income of the year
			 involved.
					(d)Special rule for unlawfully present
			 aliensA health insurance
			 issuer shall remit to the Federal Government any funding, including any subsidy
			 payments, received by such issuer from the Federal Government on behalf of any
			 adult alien who is unlawfully present in the United States.
					(e)Special rule for aliensThe Secretary of Homeland Security may not
			 extend or renew an alien's eligibility for status in the United States or
			 adjust the status of an alien in the United States if the alien owes—
						(1)a premium payment for a HAPI plan that is
			 past due; or
						(2)a penalty incurred for failing to pay such
			 a premium.
						(f)No discharge in bankruptcyIn the case of any bankruptcy filed by or
			 on behalf of any person after the date that is 4 years after the date of
			 enactment of this Act, under title 11, United States Code, any penalty imposed
			 with respect to such person for failure to pay a HAPI plan premium shall not be
			 subject to discharge under such title.
					DWellness
			 programs
				131.Requirements for wellness programs
					(a)DefinitionIn this Act, the term wellness
			 program means a program that consists of a combination of activities
			 that are designed to increase awareness, assess risks, educate, and promote
			 voluntary behavior change to improve the health of an individual, modify his or
			 her consumer health behavior, enhance his or her personal well-being and
			 productivity, and prevent illness and injury.
					(b)Discounts
						(1)EligibilityWith respect to a HAPI plan that is offered
			 in a State that permits premium discounts for enrollees who participate in a
			 wellness program, to be eligible to receive such a discount, the administrator
			 of the wellness program, on behalf of the enrollee, shall certify in writing to
			 the plan that—
							(A)the enrollee, or the dependent child of the
			 enrollee, is participating in an approved wellness program; and
							(B)the wellness program meets the requirements
			 of this subsection.
							(2)RequirementsA wellness program meets the requirements
			 of this paragraph if such program—
							(A)is reasonably designed (as determined by
			 the HAPI plan) to promote good health and prevent disease for program
			 participants;
							(B)has been determined by the HAPI plan to be
			 eligible for participation discounts;
							(C)is offered to all enrollees in a HAPI plan
			 regardless of health status;
							(D)permits any enrollee for whom it is
			 unreasonably difficult to meet the initial program standard for participation
			 due to a medical condition, or for whom it is medically inadvisable to attempt,
			 an opportunity to meet a reasonable alternative participation standard—
								(i)that is developed prior to enrollment of
			 the enrollee or, after a determination has been made that the enrollee cannot
			 safely meet the program participation standard, in consultation with the
			 enrollee after enrollment of the enrollee; and
								(ii)the availability of which is disclosed in
			 the original documents relating to participation in the program;
								(E)applies procedures for determining whether
			 an enrollee is participating in a meaningful manner in the program, including
			 procedures to determine if such participation is resulting in lifestyle changes
			 that are indicative of an improved health outcome or outcomes; and
							(F)meets any other requirements imposed by the
			 HAPI plan.
							(3)Relation to health statusParticipation in a wellness program may not
			 be used by a HAPI plan to make rate or discount determinations with respect to
			 the health status of an enrollee.
						(4)Availability of discounts
							(A)Offering of enrollmentA HAPI plan shall provide enrollees with
			 the opportunity to participate in a wellness program (for purposes of
			 qualifying for premium discounts) at least once each year.
							(B)DeterminationsDeterminations with respect to the
			 successful participation by an enrollee in a wellness program for purposes of
			 qualifying for premium discounts shall be made by the HAPI plan based on a
			 retrospective review of the scope of activities of the enrollee under the
			 program. The HAPI plan may require a minimum level of successful participation
			 in such a program prior to applying any premium discount.
							(C)Participation in multiple
			 programsAn enrollee may
			 participate in multiple wellness programs to reach the maximum premium discount
			 permitted by the HAPI plan under applicable State law.
							(5)Personal responsibility contribution
			 discountA HAPI plan may
			 elect to provide discounts in the amount of the personal responsibility
			 contribution that is required of an enrollee if the enrollee participates in an
			 approved wellness program.
						(c)Employer incentive for wellness
			 programsFor provisions
			 relating to employers deducting the costs of offering wellness programs or
			 worksite health centers see section 162(l) of the Internal Revenue Code of
			 1986.
					IIHealthy Start for Children
			ABenefits and
			 Eligibility
				201.HAPI plan coverage for children
					(a)Authorization of
			 appropriationsThere is
			 authorized to be appropriated, such sums as may be necessary for each fiscal
			 year to enable the Secretary to provide assistance to States to enable such
			 States to ensure that each child who is a member of a family with a modified
			 adjusted gross income that is below 300 percent of the poverty line as
			 applicable to a family of the size involved, who is not otherwise eligible for
			 coverage as a dependent under a HAPI plan maintained by his or her parents, is
			 covered under a HAPI plan provided through the State HHA.
					(b)Policies and proceduresThe Secretary shall develop policies and
			 procedures to be applied by the States to identify children described in
			 subsection (a) and to provide such children with coverage under a HAPI plan.
			 States shall determine, in consultation with health insurance issuers, a
			 separate class of coverage to assure affordable child coverage.
					(c)DefinitionIn this title, the term child
			 means an individual who is under the age of 19 years or, in the case of an
			 individual in foster care, under the age of 21 years.
					202.Coordination of supplemental coverage under
			 the Medicaid program to HAPI plan coverage for children
					(a)Assurance of supplemental
			 coverageThe Secretary shall
			 provide guidance to States and health insurance issuers that ensures that any
			 child covered under a HAPI plan who was receiving medical assistance under
			 State Medicaid plans on December 31 of the last calendar year ending before the
			 first calendar year in which coverage under a HAPI plan begins continues to
			 receive such assistance in a matter that—
						(1)allows for the assistance to be provided in
			 coordination with, and as a supplement to, the coverage provided under the HAPI
			 plan in which the child is enrolled;
						(2)does not supplant the child's coverage
			 under a HAPI plan; and
						(3)ensures that the child receives any items
			 or services that are not available under the HAPI plan in which they are
			 enrolled but that the child would have received under the Medicaid program of
			 the State in which the child resides if the Healthy Americans Act had not been
			 enacted, including items and services described in section 1905(a)(4)(B)
			 (relating to early and periodic screening, diagnostic, and treatment services
			 defined in section 1905(r) and provided in accordance with the requirements of
			 section 1902(a)(43)).
						(b)DefinitionIn this section, the term
			 child, in addition to the meaning given that term under section
			 201(c), includes any individual who would be considered a child under the
			 Medicaid program of the State in which the individual resides.
					BService
			 Providers
				211.Inclusion of providers under HAPI
			 plans
					(a)In generalTo ensure that children have access to
			 health care in their communities, and that such care is provided to such
			 children for no cost or on a reimbursable basis, a HAPI plan shall ensure that
			 health care items and services may be obtained by such children from, at a
			 minimum, the providers described in subsection (b) if available in the area
			 involved.
					(b)Providers describedThe providers described in this subsection
			 include the following:
						(1)A school-based health center (in accordance
			 with section 212).
						(2)A health center funded under section 330 of
			 the Public Health Service Act (42 U.S.C. 254b).
						(3)A federally qualified health center.
						(4)A rural health clinic under title XVIII of
			 the Social Security Act (42 U.S.C. 1395 et seq.).
						(5)An Indian Health Service facility.
						212.Use of, and grants for, school-based health
			 centers
					(a)DefinitionIn this section, the term
			 school-based health center means a health center that—
						(1)is located within an elementary or
			 secondary school facility;
						(2)is operated in collaboration with the
			 school in which such center is located;
						(3)is administered by a community-based
			 organization including a hospital, public health department, community health
			 center, or nonprofit health care agency;
						(4)at a minimum, provides to school-aged
			 children—
							(A)primary health care services, including
			 comprehensive health assessments, and diagnosis and treatment of minor, acute,
			 and chronic medical conditions; and
							(B)mental health services, including crisis
			 intervention, counseling, and emergency psychiatric care at the school or by
			 referral;
							(5)provides
			 services—
							(A)at the school when the school is open and
			 24-hour coverage through an on-call system with other providers to ensure
			 access when the school or health center is closed; and
							(B)through the use of a qualified and
			 appropriately credentialed individual, including a nurse practitioner or
			 physician assistant, a mental health professional, a physician, and a health
			 assistant;
							(6)provides an electronic medical record
			 relating to the school-aged child by not later than January 1, 2012; and
						(7)may provide optional preventive dental
			 services, consistent with State licensure law, through the use of dental
			 hygienists or dental assistants that provide preventive services such as basic
			 oral exams, cleanings, and sealants.
						(b)Access to school-based health
			 centers
						(1)In generalA school-based health center may provide
			 services to students in more than 1 school if the school district or other
			 supervising State entity determine that capacity and geographic location make
			 such provision of services appropriate.
						(2)EnrollmentUpon the enrollment of a student in a
			 school with a school-based health center, the center will provide the student
			 with the opportunity to enroll, after parental consent, to receive health care
			 from the center.
						(3)Reimbursement for services
							(A)In generalA school-based health center may seek
			 reimbursement from a third party payer if available, including a HAPI plan, if
			 a child receives health care items or services through the center.
							(B)Use of fundsAmounts received from a third party payer
			 under subparagraph (A) shall be allocated to the school-based health center
			 that provided the care for which the reimbursement was provided for use by that
			 center for providing additional health care items and services.
							(c)Developmental
			 grants
						(1)In
			 generalThe Secretary shall award grants to local school
			 districts and communities for the establishment and operation of school-based
			 health centers.
						(2)EligibilityTo
			 be eligible for a grant under paragraph (1), a local school district or local
			 community shall submit to the Secretary an application at such time, in such
			 manner, and containing such information as the Secretary may require.
						(3)Selection
			 criteriaIn awarding grants under this subsection, the Secretary
			 shall give priority to—
							(A)an applicant that
			 will use amounts under the grant to establish a school-based health center in a
			 medically underserved area, or an area for which there are extended distances
			 between the school involved and appropriate providers of care for school-aged
			 children in the geographic area involved;
							(B)an applicant that
			 will use amounts under the grant to establish a school-based health center in a
			 school that serves students with the highest incidence of unmet medical and
			 psycho-social needs; and
							(C)an applicant that
			 can demonstrate that State, local, or community partners, or any combination of
			 such entities, have provided at least 50 percent of the funding for the
			 school-based health center involved to ensure the ongoing operation of the
			 center.
							(4)Use of
			 fundsA grantee shall use amounts received under a grant under
			 this subsection to establish and operate a school-based health center. Not less
			 than 50 percent of the amounts received under the grant shall be used for the
			 ongoing operations of the center.
						(d)Coverage by Federal Tort Claims
			 ActIn providing health care
			 items and services to students through a school-based health care center, a
			 health care provider shall be deemed to be an employee of the government for
			 purposes of the application of chapter 171 of title 28, United States Code (the
			 Federal Tort Claims Act) if such provider was acting within the scope of his or
			 her license.
					IIIBetter Health for Older and Disabled
			 Americans
			AAssurance of
			 Supplemental Medicaid Coverage
				301.Coordination of supplemental coverage under
			 the Medicaid program for elderly and disabled individuals
					(a)Coordination of careThe Secretary shall provide guidance to
			 States and insurers that—
						(1)takes into account the special health care
			 needs of elderly and disabled individuals who are eligible for medical
			 assistance under State Medicaid programs, particularly with respect to
			 institutionalized care or home and community-based services; and
						(2)ensures that any individual covered under a
			 HAPI plan who was receiving medical assistance under a State Medicaid program
			 on December 31 of the last calendar year ending before the first calendar year
			 in which coverage under a HAPI plan begins continues to receive such assistance
			 in a manner that—
							(A)is provided in coordination with, and as a
			 supplement to, the coverage provided under the HAPI plan in which the
			 individual is enrolled;
							(B)does not supplant the individual's coverage
			 under a HAPI plan; and
							(C)ensures that the individual receives any
			 items or services that are not available under the HAPI plan in which the
			 individual is enrolled but that the individual would have received under the
			 Medicaid program of the State in which the individual resides if the Healthy
			 Americans Act had not been enacted.
							(b)DefinitionsIn this section—
						(1)the term institutionalized
			 care means the health care provided under the Medicaid plan of the State
			 of residence of an elderly or disabled individual who is a patient in a
			 hospital, nursing facility, intermediate care facility for the mentally
			 retarded, or an institution for mental diseases (as such terms are defined for
			 purposes of such plan); and
						(2)the term home and community-based
			 services means any services which may be offered under the Medicaid plan
			 of the State of residence of an elderly or disabled individual under a home and
			 community-based waiver authorized for a State under section 1115 of the Social
			 Security Act (42 U.S.C. 1315) or under subsection (c), (d), or (i) of section
			 1915 of such Act (42 U.S.C. 1396n).
						BEnpowering
			 Individuals and State To Improve Long-Term Care Choices
				311.New, automatic
			 Medicaid option for State choices for long-term care program
					(a)In
			 generalTitle XIX of the Social Security Act is amended by adding
			 at the end the following new section:

							1940.State choices
				for long-term care program
								(a)In
				generalNotwithstanding any
				other provision of this title, the Secretary shall permit a State to establish
				and operate under the State plan under this title (including such a plan
				operating under a statewide waiver under section 1115) a State Choices for
				Long-Term Care Program in accordance with this section.
								(b)Program
				RequirementsA program established under the authority of this
				section shall satisfy the following requirements:
									(1)Individualized
				benefit packageEach individual enrolled in the program shall be
				provided with long-term care coverage consisting of medical assistance for
				long-term care services that are provided according to the specific needs of
				the individual and that best reflect the individual’s needs and preferences,
				based on a clinical assessment of the individual.
									(2)Personal case
				managersEach individual enrolled in the program shall be
				provided with a personal case manager who shall assist the individual
				in—
										(A)determining the
				individual’s needs and preferences for the long-term care services that are
				contained within the individual’s benefit package, including the selection of
				the service providers for such services;
										(B)identifying
				community resources that are available to provide support for the individual;
				and
										(C)addressing issues
				related to ensuring the safety and quality of the long-term care services
				provided to the individual.
										(3)Informed
				choiceThe program shall have procedures to ensure that each
				individual that is likely to satisfy the eligibility criteria established for
				the program under paragraph (6) who is discharged from a hospital or who
				resides in a nursing facility, intermediate care facility for the mentally
				retarded, or institution for mental diseases and who requires long-term care
				services is informed of the options available to the individual under the
				program for obtaining such services.
									(4)Self-directed
				optionThe program shall provide an individual enrolled in the
				program with the option to elect to plan and purchase the long-term care
				services that are contained in the individual’s benefit package under the
				direction and control of the individual (or the individual’s authorized
				representative), subject to an individualized budget developed for, and with
				the involvement of, the individual (or the individual’s authorized
				representative).
									(5)Equal access to
				institutional care and home and community-based servicesThe
				program shall provide an individual enrolled in the program who, because of the
				individual’s mental or physical condition, requires a level of care for long
				term care services that is above a level of care for such services that can
				appropriately be provided solely through home and community-based providers (as
				defined by the State and approved by the Secretary), with equal access to
				long-term care services provided through institutional facilities and long-term
				care services provided through home and community-based providers.
									(6)Eligibility;
				prioritization of needThe program shall apply eligibility
				criteria for individuals desiring to enroll in the program that is established
				by the State and approved by the Secretary. The eligibility criteria
				established by the State shall—
										(A)require that an
				individual enrolled in the program—
											(i)be
				eligible for medical assistance under the State plan (or under a statewide
				waiver of such plan) for nursing facility services, services in an intermediate
				care facility for the mentally retarded, services in an institution for mental
				diseases, or services provided under a home and community-based waiver approved
				for the State; and
											(ii)satisfy such
				other criteria as the State shall establish; and
											(B)be based on a
				strategy for prioritizing and allocating expenditures so that those individuals
				with the highest level of need for long-term care services are assured of
				receiving such services through an institutional facility or through a home and
				community-based provider, based on the individual’s needs and
				preferences.
										(c)Additional
				RequirementsA State may not establish and operate a program
				under this section unless it satisfies the following requirements:
									(1)Agreement to
				limit federal expenditures
										(A)In
				generalThe State agrees to an aggregate limit for a 5-year
				period for Federal payments under section 1903(a) for expenditures for medical
				assistance for long-term care services under the State plan and administrative
				expenditures related to the provision of such assistance.
										(B)Calculation of
				aggregate limitThe 5-year aggregate limit applicable to a State
				under subparagraph (A) shall be determined by the State and the Secretary based
				on the following:
											(i)Historical and
				projected caseloadsThe historical and projected State caseloads
				(determined for a 5-year period, respectively) of individuals receiving nursing
				facility services, services in an intermediate care facility for the mentally
				retarded, services in an institution for mental diseases, or services provided
				under a home and community-based waiver approved for the State under the State
				plan, based on data from the Secretary, the Bureau of the Census, the
				Commissioner of Social Security, and such other sources as the Secretary may
				approve.
											(ii)Historical and
				projected expendituresThe historical and projected expenditures
				(determined for a 5-year period, respectively) for the services identified in
				clause (i). Projected expenditures shall be determined without regard to the
				program established under this section and shall take into account the
				percentage change (if any) in the medical care component of the consumer price
				index for all urban consumers (U.S. city average) for each year of the
				period.
											(C)Rule of
				constructionNothing in this paragraph shall be construed as
				affecting the requirement for a State to incur State expenditures for medical
				assistance for long-term care services in order to be paid the Federal medical
				assistance percentage determined for the State for such expenditures (not to
				exceed the aggregate 5-year limit on Federal payments for such expenditures
				applicable under subparagraph (A)).
										(2)Plan for
				capacity building and skills enhancementThe State establishes a
				plan for building the capacity of the long-term care services system within the
				State, particularly with respect to the delivery of home and community-based
				services, and for enhancing the skill levels of the caregivers for individuals
				eligible for medical assistance for such services under the State plan.
									(3)Dedication of
				program savings for prevention or early intervention servicesThe
				State agrees that for each fiscal year in which the program is operated, the
				State will expend an amount equal to the State share of the expenditures that
				the State would have made under the State plan for providing medical assistance
				for long-term care services for individuals enrolled in the program but for the
				operation of such program, for the provision of prevention or early
				intervention services for nonenrolled individuals residing in the State who
				require a level of long-term care services that is below the level that
				individuals enrolled in the program require (regardless of whether such
				nonenrolled individuals are eligible for medical assistance under the State
				plan).
									(d)Option To
				operate program through a managed care planA State may operate a
				program under this section through an arrangement on a capitated basis with a
				medicaid managed care organization (as defined in section
				1903(m)(1)(A)).
								(e)Independent
				Evaluation and Report
									(1)In
				generalThe Secretary shall contract with a nongovernmental
				organization or academic institution to conduct an ongoing independent
				evaluation of the program that assesses—
										(A)the quality of the
				long-term care services provided under the program;
										(B)the
				cost-effectiveness of such services;
										(C)consumer
				satisfaction; and
										(D)the consistency
				and accuracy with which the prioritization of need criteria required under
				subsection (b)(6)(B) is applied.
										(2)Biennial
				reportsThe organization or institution conducting the evaluation
				required under this subsection shall submit biennial reports to the Secretary
				regarding the results of the evaluation.
									(f)Definition of
				Long-Term Care ServicesFor purposes of this section, the term
				long-term care services has the meaning given such term by a State
				establishing and operating a program under this section, subject to approval by
				the
				Secretary.
								.
					(b)Effective
			 dateThe amendment made by
			 subsection (a) takes effect on the date of enactment of this Act.
					312.Simpler and more affordable long-term care
			 insurance coverage
					(a)Qualified long-term care insurance contract
			 must satisfy qualified long-term care plan requirementsSection 7702B(b)(1)(A) of the Internal
			 Revenue Code of 1986 (defining qualified long-term care insurance contract) is
			 amended by inserting through a qualified long-term care plan
			 after qualified long-term care services.
					(b)Qualified long-term care planSection 7702B of such Code is amended by
			 adding at the end the following new subsection:

							(h)Qualified long-term care planFor purposes of this section—
								(1)In generalThe term qualified long-term care
				plan means an insurance plan that meets the standards and requirements
				set forth in paragraph (2) (including the 2009 NAIC Model Regulation or 2009
				Federal Regulation (as the case may be)) on or after the date specified in
				paragraph (5).
								(2)Development of standards and requirements
				for qualified long-term care plans
									(A)In generalIf, within 9 months after the date of the
				enactment of this subsection, the National Association of Insurance
				Commissioners (in this subsection referred to as the
				Association) adopts a model regulation (in this section referred
				to as the 2009 NAIC Model Regulation) to incorporate—
										(i)limitations on the groups or packages of
				benefits that may be offered under a long-term care insurance policy consistent
				with paragraphs (3) and (4),
										(ii)uniform language and definitions to be used
				with respect to such benefits,
										(iii)uniform format to be used in the policy
				with respect to such benefits, and
										(iv)other standards required by the Secretary
				of Health and Human Services
										paragraph (1) shall be applied in
				each State, effective for policies issued to policyholders on and after the
				date specified in paragraph (5).(B)Secretarial responsibilityIf the Association does not adopt the 2009
				NAIC Model Regulation within the 9-month period specified in subparagraph (A),
				the Secretary shall promulgate, not later than 9 months after the end of such
				period, a regulation (in this section referred to as the 2009 Federal
				Regulation) and paragraph (1) shall be applied in each State, effective
				for policies issued to policyholders on and after the date specified in
				paragraph (5).
									(C)ConsultationIn promulgating standards and requirements
				under this paragraph, the Association or Secretary shall consult with a working
				group composed of representatives of issuers of long-term care insurance
				policies, consumer groups, long-term care insurance beneficiaries, and other
				qualified individuals. Such representatives shall be selected in a manner so as
				to insure balanced representation among the interested groups.
									(3)Limitations of groups or packages of
				benefitsThe benefits under
				the 2009 NAIC Model Regulation or 2009 Federal Regulation shall provide—
									(A)for such groups or packages of benefits as
				may be appropriate taking into account the considerations specified in
				paragraph (4) and the requirements of the succeeding subparagraphs,
									(B)for identification of a core group of basic
				benefits common to all policies, and
									(C)that the total number of different benefit
				packages (counting the core group of basic benefits described in subparagraph
				(B) and each other combination of benefits that may be offered as a separate
				benefit package) that may be established in all the States and by all issuers
				shall not exceed 10.
									(4)Specific considerationsThe benefits under paragraph (3) shall, to
				the extent possible—
									(A)provide for benefits that offer consumers
				the ability to purchase the benefits that are available in the market as of
				November 5, 2008, and
									(B)balance the objectives of—
										(i)simplifying the market to facilitate
				comparisons among policies,
										(ii)avoiding adverse selection,
										(iii)providing consumer choice,
										(iv)providing market stability, and
										(v)promoting competition.
										(5)Effective date
									(A)In generalSubject to subparagraph (B), the date
				specified in this paragraph shall be the date the State adopts the 2009 NAIC
				Model Regulation or 2009 Federal Regulation or 1 year after the date the
				Association or the Secretary first adopts such standards, whichever is
				earlier.
									(B)Required state legislationIn the case of a State which the Secretary
				identifies, in consultation with the Association, as—
										(i)requiring State legislation (other than
				legislation appropriating funds) in order for long-term care insurance policies
				to meet the 2009 NAIC Model Regulation or 2009 Federal Regulation, but
										(ii)having a legislature which is not scheduled
				to meet in 2009 in a legislative session in which such legislation may be
				considered,
										the date specified in this
				paragraph is the first day of the first calendar quarter beginning after the
				close of the first legislative session of the State legislature that begins on
				or after January 1, 2010. For purposes of the preceding sentence, in the case
				of a State that has a 2-year legislative session, each year of such session
				shall be deemed to be a separate regular session of the State
				legislature..
					(c)Additional consumer protections
						(1)In generalSection 7702B(g)(1) of such Code (relating
			 to consumer protection provisions) is amended—
							(A)by striking subparagraph (A) and inserting
			 the following new paragraph:

									(1)the requirements of the 1993 NAIC model
				regulation and model Act described in paragraph (2) and the 2000 NAIC model
				regulation and model Act described in paragraph
				(5),
									,
							(B)by striking and at the end
			 of subparagraph (B),
							(C)by striking the period at the end of
			 subparagraph (C) and inserting , and, and
							(D)by adding at the end the following new
			 subparagraph:

									(D)the requirements relating to mandatory
				offer and information under paragraph
				(6).
									.
							(2)NAIC model regulation and ActSection 7702B(g) of such Code is
			 amended—
							(A)by inserting 1993 naic after
			 Requirements
			 of in the heading for paragraph (2),
							(B)by redesignating paragraph (5) as paragraph
			 (7), and
							(C)by inserting after paragraph (4) the
			 following new paragraph:

									(5)Requirements of 2000 naic model regulation
				and act
										(A)In generalThe requirements of this paragraph are met
				with respect to any contract if such contract meets—
											(i)Model regulationThe following requirements of the model
				regulation:
												(I)Section 6A (other than paragraph (5)
				thereof) and the requirements of section 6B of the model Act relating to such
				section 6A.
												(II)Section 6B (other than paragraph (7)
				thereof).
												(III)Sections 6C, 6D, 6E, and 7.
												(IV)Section 8 (other than sections 8F, 8G, 8H,
				and 8I thereof).
												(V)Sections 9, 11, 12, 14, 15, and 22.
												(VI)Section 23, including inaccurate completion
				of medical histories (other than paragraphs (1), (6), and (9) of section
				23C).
												(VII)Sections 24 and 25.
												(VIII)The provisions of section 26 relating to
				contingent nonforfeiture benefits, if the policyholder declines the offer of a
				nonforfeiture provision described in paragraph (4).
												(IX)Sections 29 and 30.
												(ii)Model actThe following requirements of the model
				Act:
												(I)Sections 6C and 6D.
												(II)The provisions of section 8 relating to
				contingent nonforfeiture benefits.
												(III)Sections 6F, 6G, 6H, 6J, 6K, and 7.
												(B)DefinitionsFor purposes of this paragraph—
											(i)Model provisionsThe terms model regulation and
				model Act mean the long-term care insurance model regulation, and
				the long-term care insurance model Act, respectively, promulgated by the
				National Association of Insurance Commissioners (as adopted as of October
				2000).
											(ii)CoordinationAny provision of the model regulation or
				model Act listed under clause (i) or (ii) of subparagraph (A) shall be treated
				as including any other provision of such regulation or Act necessary to
				implement the provision.
											(iii)DeterminationFor purposes of this section and section
				4980C, the determination of whether any requirement of a model regulation or
				the model Act has been met shall be made by the
				Secretary.
											.
							(d)Mandatory offer and
			 informationSection 7702B(g)
			 of such Code, as amended by subsection (c), is amended by inserting after
			 paragraph (5) the following new paragraph:

							(6)Mandatory offer and
				informationThe requirements
				of this paragraph are met if—
								(A)Mandatory offerAny person who sells a long-term care
				insurance policy to an individual shall make available for sale to the
				individual a long-term care insurance policy with only the core group of basic
				benefits (described in subsection (h)(3)(B)).
								(B)InformationAny person who sells a long-term care
				insurance policy to an individual shall provide the individual, before the sale
				of the policy, an outline of coverage which describes the benefits under the
				policy. Such outline shall be on a standard form approved by the State
				regulatory program or the Secretary (as the case may be) consistent with the
				2009 NAIC Model Regulation or 2009 Federal
				Regulation.
								.
					(e)State regulation of out-of-State
			 contractsSection 7702B of
			 such Code is amended by adding at the end the following new subsection:

							(i)State regulation of out-of-State
				contractsNothing in this
				section shall be construed so as to affect the right of any State to regulate
				long-term care insurance policies which, under the provisions of this section,
				are considered to be issued in another
				State.
							.
					(f)Effective
			 dateThe amendments made by
			 this section shall apply to contracts issued after December 31, 2008.
					IVHealthier Medicare
			AAuthority
			 To adjust amount of part B premium To reward positive health behavior
				401.Authority to adjust amount of Medicare part
			 B premium to reward positive health behaviorSection 1839 of the Social Security Act (42
			 U.S.C. 1395r) is amended—
					(1)in subsection (a)(2), by striking
			 and (i) and inserting (i), and (j); and
					(2)by adding at the end the following new
			 subsection:

							(j)(1)With respect to the monthly premium amount
				for months after December 2009, the Secretary may adjust (under procedures
				established by the Secretary) the amount of such premium for an individual
				based on whether or not the individual participates in certain healthy
				behaviors, such as weight management, exercise, nutrition counseling,
				refraining from tobacco use, designating a health home, and other behaviors
				determined appropriate by the Secretary.
								(2)In making the adjustments under paragraph
				(1) for a month, the Secretary shall ensure that the total amount of premiums
				to be paid under this part for the month is equal to the total amount of
				premiums that would have been paid under this part for the month if no such
				adjustments had been made, as estimated by the
				Secretary.
								.
					BPromoting primary care for Medicare
			 beneficiaries
				411.Primary care services management
			 paymentTitle XVIII of the
			 Social Security Act (42 U.S.C. 1395 et seq.) is amended by inserting after
			 section 1807 the following new section:

						1807A.Primary care management payment for
				coordinating care
							(a)Payment
								(1)In generalNot later than January 1, 2009, the
				Secretary, subject to paragraph (2), shall establish procedures for providing
				primary care and participating providers with a management fee (as determined
				appropriate by the Secretary, in consultation with the Medicare Payment
				Advisory Commission established under section 1805) that reflects the amount of
				time spent with a Medicare beneficiary, and the family of such beneficiary,
				providing chronic care disease management services or other services in
				assisting in coordinating care.
								(2)Requirement for designation as health
				homeThe management fee under
				paragraph (1) shall not be provided to a primary care provider with respect to
				a Medicare beneficiary unless the provider has been designated (under
				procedures established by the Secretary) as the health home by the
				beneficiary.
								(b)DefinitionsIn this section:
								(1)Health homeThe term health home means a
				health care provider that a Medicare beneficiary has designated to monitor the
				health and health care of the beneficiary.
								(2)Medicare beneficiaryThe term Medicare beneficiary
				means an individual who is entitled to, or enrolled for, benefits under part A,
				enrolled under part B, or both.
								(3)Primary care provider
									(A)In generalThe term primary care provider
				means a primary care physician (as defined in subparagraph (B)), a nurse
				practitioner (as defined in section 1861aa(5)(A)), or a physician assistant (as
				so defined).
									(B)Primary care physicianIn subparagraph (A), the term primary
				care physician means a physician, such as a family practitioner or
				internist, who is chosen by an individual to provide continuous medical care,
				who is able to give a wide range of care, including prevention and treatment,
				and who can refer the individual to a
				specialist.
									.
				CChronic care disease management
				421.Chronic care disease
			 managementTitle XVIII of the
			 Social Security Act (42 U.S.C. 1395 et seq.), as amended by section 411, is
			 amended by inserting after section 1807A the following new section:

						1807B.Chronic care disease management
				program
							(a)Establishment
								(1)In generalNot later than January 1, 2009, the
				Secretary shall develop and implement a chronic care disease management program
				(in this section referred to as the program). The program shall
				be designed to provide chronic care disease management to all Medicare
				beneficiaries with respect to at least the 5 most prevalent diseases within the
				population of such beneficiaries (as determined by the Secretary).
								(2)DevelopmentIn developing and implementing the program
				under paragraph (1), the Secretary shall—
									(A)take into consideration—
										(i)the results of chronic care improvement
				programs conducted under section 1807, including the independent evaluations of
				such programs conducted under section 1807(b)(5) and any outcomes reports
				submitted under section 1807(e)(4)(A); and
										(ii)the results of the payments to primary care
				providers under section 1807A; and
										(B)consult individuals with expertise in
				chronic care disease management.
									(b)Identification and enrollmentThe Secretary shall establish procedures
				for identifying and enrolling Medicare beneficiaries who may benefit from
				participation in the program.
							(c)Chronic care disease management payment for
				non-primary care physicians
								(1)In generalUnder the program, a non-primary care
				physician shall receive a chronic care disease management payment if the
				physician serves the Medicare beneficiary by assuring the beneficiary receives
				appropriate and comprehensive care, including referral of the individual to
				specialists, and assuring the beneficiary receives preventive services.
								(2)Amount of paymentThe amount of the management payment under
				the program shall be an amount determined appropriate by the Secretary, in
				consultation with the Medicare Payment Advisory Commission established under
				section 1805. Such amount shall reflect the amount of time spent with a
				Medicare beneficiary, and the family of such beneficiary, providing chronic
				care disease management services.
								(d)DefinitionsIn this section:
								(1)Medicare beneficiaryThe term Medicare beneficiary
				means an individual who is entitled to, or enrolled for, benefits under part A,
				enrolled under part B, or both.
								(2)Non-primary care physicianThe term non-primary care
				physician means a physician who—
									(A)is not a primary care physician (as defined
				in section 1807A (b)(3)(B)); and
									(B)provides chronic care disease management
				services to a Medicare beneficiary under the
				program.
									.
				422.Chronic Care Education Centers
					(a)EstablishmentThe Secretary shall establish Chronic Care
			 Education Centers.
					(b)PurposeThe Chronic Care Education Centers
			 established under subsection (a) shall serve as clearinghouses for information
			 on health care providers who have expertise in the management of chronic
			 disease.
					(c)Use of certain informationIn developing the information described in
			 subsection (b), the Secretary shall utilize—
						(1)information on the performance of providers
			 in chronic disease demonstration projects and pay for performance efforts;
			 and
						(2)additional information determined
			 appropriate by the Secretary.
						DImproving quality in hospitals for all
			 patients
				431.Improving quality in hospitals for all
			 patients
					(a)Improving healthcare quality for all
			 patients
						(1)In generalSection 1866(a)(1) of the Social Security
			 Act (42 U.S.C. 1395cc(a)(1)) is amended—
							(A)in subparagraph (U), by striking
			 and at the end;
							(B)in subparagraph (V), by striking the period
			 at the end and inserting , and; and
							(C)by inserting after subparagraph (V) the
			 following new subparagraph:

									(W)in the case of hospitals, to demonstrate to
				accrediting bodies measurable improvement in quality control with respect to
				all patients and to have in place quality control programs that are directed at
				care for all patients and that include—
										(i)rapid response teams that can assist
				patients with unstable vital signs;
										(ii)heart attack treatments with proven
				reliability;
										(iii)procedures that reduce medication
				errors;
										(iv)aggressive infection prevention, with
				special focus on surgeries and infections with the highest death rates;
										(v)procedures that reduce the threat of
				pneumonia, with special focus on the incidence of ventilator-related illness;
				and
										(vi)such other elements as the Secretary
				determines
				appropriate.
										.
							(2)Effective
			 dateThe amendments made by
			 paragraph (1) shall apply to hospitals as of the date that is 2 years after the
			 date of enactment of this Act.
						(b)Panel of independent expertsBeginning not later than the date that is 4
			 years after the date of enactment of this Act, in order to ensure that
			 hospitals practice state-of-the-art quality control, the Secretary shall
			 convene a panel of independent experts to update the measures of quality
			 control and the types of quality control programs, including the elements of
			 such programs, required under section 1866(a)(1)(W) of the Social Security Act,
			 as added by subsection (a), not less frequently than on an annual basis.
					EAdditional
			 Provisions
				441.Additional cost information
					(a)In generalSection 1857(e) of the Social Security Act
			 (42 U.S.C. 1395w–27(e)) is amended by adding at the end the following new
			 paragraph:

							(4)Additional cost informationA contract under this section shall require
				a Medicare Advantage Organization to aggregate claims information into episodes
				of care and to provide such information to the Secretary so that costs for
				specific hospitals and physicians may be measured and compared. The Secretary
				shall make such information public on an annual
				basis.
							.
					(b)Effective
			 dateThe amendment made by
			 subsection (a) shall apply to contracts entered into on or after the date of
			 enactment of this Act.
					442.Reducing Medicare paperwork and regulatory
			 burdensNot later than 18
			 months after the date of enactment of this Act, the Secretary shall provide to
			 Congress a plan for reducing regulations and paperwork in the Medicare program
			 under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). Such
			 plan shall focus initially on regulations that do not directly enhance the
			 quality of patient care provided under such program.
				VState Health Help Agencies
			501.EstablishmentAs a condition of receiving payment under
			 section 503, a State shall, not later than the date that is 4 years after the
			 date of enactment of this Act, establish or designate a State agency, to be
			 known as the Health Help Agency (referred to in this Act as a
			 HHA) to—
				(1)carry out the administration of HAPI plans
			 to individuals in such State; and
				(2)carry out the functions described in
			 section 502.
				502.Responsibilities and authorities
				(a)Promotion of prevention and
			 wellnessEach HHA shall
			 promote prevention and wellness for all State residents, including through the
			 implementation of programs that—
					(1)educate residents about responsibility for
			 individual health and the health of children;
					(2)upon request, distribute information to
			 covered individuals regarding the availability of wellness programs;
					(3)make available to the public, with respect
			 to each health insurance issuer and each HAPI plan, the number of covered
			 individuals who have designated a health home described in section 111(b);
			 and
					(4)promote the use and understanding of health
			 information technology.
					(b)Enrollment oversightEach HHA shall oversee enrollment in HAPI
			 plans by—
					(1)providing standardized, unbiased
			 information on HAPI plans and supplemental health insurance options;
					(2)not less than once per year, administering
			 open enrollment periods for individuals;
					(3)allowing a covered individual to make
			 enrollment changes during a 30-day period following marriage, divorce, birth,
			 adoption or placement for adoption, and other circumstances;
					(4)establish procedures for health insurance
			 issuers to report to the HHA of each State in which the issuer offers a HAPI
			 plan, the health insurance status of State residents in order for the HHA to
			 report annual on the number of uninsured and other relevant data;
					(5)establish procedures for default enrollment
			 of uninsured individuals into low-cost HAPI plans for individuals or families
			 who do not enroll, are not covered under a health plan offered through a
			 program described in paragraphs (1)(A) of section 102(a), and are not described
			 in paragraph (1)(B) of such section;
					(6)establish procedures for hospitals and
			 other providers to report to the HHA if an individual seeks care and is
			 uninsured or does not know his or her health insurance status;
					(7)ensure that the enrollment of all
			 individuals into HAPI plans, including those individuals assisted by an
			 employer, insurance agent, or other person, is administered by the HHA;
					(8)develop standardized language for HAPI plan
			 terms and conditions and require participating health insurance issuers to use
			 such language in plan information documents;
					(9)provide prospective enrollees with a
			 comparative document that describes all the HAPI plans in which the individual
			 may enroll; and
					(10)to assist consumers in choosing a HAPI
			 plan, publish information that includes loss ratios, outcome data regarding
			 wellness programs, disease detection and chronic care management programs
			 categorized by health insurance issuer, and other data as the HHA determines
			 appropriate.
					(c)Determination and administration of HAPI
			 plan subsidiesEach HHA shall
			 oversee the determination and administration of HAPI plan subsidies by—
					(1)informing State residents about how subsidy
			 eligibility determinations are made;
					(2)obtaining necessary information about
			 income from individuals and Federal and State agencies;
					(3)making eligibility determinations on an
			 individual basis and informing individuals of such determinations;
					(4)establishing a process by which an
			 individual may appeal an eligibility determination;
					(5)collecting from health insurance issuers an
			 administrative fee for joining the HHA system and offering a HAPI plan in a
			 State;
					(6)collecting premium payments made by, or on
			 behalf of, covered individuals, and remitting such payments to the HAPI plans;
			 and
					(7)collecting Federal premium subsidies for
			 covered individuals and remitting such subsidies to HAPI plans.
					(d)Premium rating rulesEach HHA shall ensure that the premium
			 payments for each HAPI plan are determined in accordance with the rating rules
			 described in section 111(e).
				(e)Determination of plan coverage
			 areasEach HHA shall
			 establish, and may revise, HAPI plan coverage areas for the State in which the
			 HHA is located. The service area of a HAPI plan shall consist of an entire
			 coverage area established under the preceding sentence.
				(f)Cooperation among StatesStates that share 1 or more metropolitan
			 statistical area may enter into agreements to share administrative
			 responsibilities described under this section.
				(g)Transition from medicaid and SCHIP;
			 coordination of supplemental medical assistance for elderly and disabled
			 medicaid eligiblesEach HHA
			 shall work with the Secretary to ensure that the requirements of section 301 of
			 this Act, section 1941 of the Social Security Act (as added by section 673(a)
			 of this Act), and subsections (a) and (b) of section 1940 of the Social
			 Security Act (as added by section 311 of this Act) are met.
				503.Appropriations for Transition to State
			 Health Help Agencies
				(a)AppropriationThere is authorized to be appropriated and
			 there is appropriated, for each of the 4 full fiscal years immediately
			 following the date of enactment of this Act, such sums as may be necessary for
			 the purpose of enabling each State to carry out the purposes of this title. The
			 sums made available under this section shall be used for making payments to
			 States that have submitted, and had approved by the Secretary, an HHA plan
			 under this section.
				(b)Submission of State HHA planEach HHA plan submitted by a State shall
			 provide for—
					(1)the establishment of an HHA within such
			 State by the date that is 4 years after the date of enactment of this
			 Act;
					(2)the administration by State of such HHA in
			 accordance with the requirements described under this Act; and
					(3)the compliance by the State of the
			 requirements described under section 631.
					(c)Payment to StatesFrom the sums appropriated under subsection
			 (a), the Secretary shall pay to each State that has an HHA plan approved under
			 this section, an amount necessary for the State to implement such plan for the
			 applicable fiscal year.
				VIShared Responsibilities
			AIndividual Responsibilities
				601.Individual responsibility to ensure HAPI
			 plan coverage
					(a)Open seasonAn adult individual, on behalf of such
			 individual and the dependent children of such individual, shall—
						(1)enroll in a HAPI plan through the HHA of
			 the individual's State of residence during an open enrollment period;
			 and
						(2)submit necessary documentation to the
			 applicable HHA so that such HHA may determine individual eligibility for
			 premium and personal responsibility contribution subsidies.
						An adult individual may carry out
			 the activities described under paragraphs (1) and (2) on behalf of the spouse
			 of such adult individual.(b)During plan yearA covered individual shall—
						(1)submit any required monthly premium
			 payments;
						(2)submit any personal responsibility
			 contributions as required; and
						(3)inform such HHA of any changes in the
			 family status or residence of such individual.
						BEmployer Responsibilities
				611.Health care responsibility
			 payments
					(a)Payment requirements
						(1)In generalSubtitle C of the Internal Revenue Code of
			 1986 is amended by inserting after chapter 24 the following new chapter:

								24AHealth Care Responsibility
				Payments

										SUBCHAPTER A—Employer shared responsibility
				  payments
										SUBCHAPTER B—Individual shared responsibility
				  payments
										SUBCHAPTER C—General provisions

									AEmployer Shared Responsibility
				Payments

											Sec. 3411. Payment requirement.
											Sec. 3412. Instrumentalities of the United States.

										3411.Payment requirement
											(a)Employer shared responsibility
				paymentsEvery employer shall
				pay an employer shared responsibility payment for each calendar year in an
				amount equal to the product of—
												(1)the number of full-time equivalent
				employees employed by the employer during the preceding calendar year,
				multiplied by
												(2)the applicable percentage of the average
				HAPI plan premium amount for such calendar year.
												(b)Applicable percentageFor purposes of subsection (a)(2)—
												(1)In generalThe applicable percentage shall be
				determined as follows:

																Revenue per employee national percentile of
						the taxpayer for the preceding calendar year:Large employer:Small
						employer:

																0–20th percentile 18% 3%

																21st–40th percentile 20% 5%

																41st–60th percentile 22% 7%

																61st–80th percentile 24% 9%

																81st–99th percentile 26%11%.

												(2)Applicable percentage for certain
				non-revenue producing entitiesIn the case of an employer which is a
				nonprofit entity, a State or local government, or any other type of entity for
				which the Secretary determines that calculating revenue per employee is not
				appropriate, the applicable percentage shall be—
													(A)in the case of a large employer, 18
				percent, and
													(B)in the case of a small employer, 3
				percent.
													(3)Applicable
				percentage for certain large employersIn the case of any large employer which did
				not provide health insurance coverage for employees on the day before the date
				of enactment of the Healthy Americans Act, the table contained in paragraph (1)
				shall be applied by substituting 30% for 24% and
				by substituting 32% for 26% with respect the each
				of the first 4 calendar years to which this section applies.
												(4)Additional rate for certain small
				employers
													(A)In generalIn the case of a small employer, the
				applicable percentage determined under paragraph (1) shall be increased by 0.1
				percent for each full-time equivalent employee employed by the employer during
				the preceding calendar year in excess of 50.
													(B)Maximum additional rateThe increase in the applicable percentage
				determined under this paragraph shall not exceed 15 percent.
													(5)Revenue per employee national percentile
				rankAt the beginning of each
				calendar year, the Secretary, in consultation with the Secretary of Labor,
				shall publish a table, based on sampling of employers, to be used in
				determining the national percentile for revenue per employee amounts for the
				preceding calendar year.
												(c)Transition
				rates
												(1)Transition rate for employers not
				previously providing health insurance
													(A)In
				generalIn the case of the
				first four calendar years to which this section applies, in the case of any
				employer who provided health insurance coverage for employees on the day before
				the date of enactment of the Healthy Americans Act, the employer shared
				responsibility payment shall be, in lieu of the amount determined under
				subsection (a), an amount equal to—
														(i)100 percent of the
				designated employee health insurance premium amount of such employer,
				minus
														(ii)the employee
				salary investment amount.
														(B)Employee salary investment
				amountFor purposes of this
				paragraph—
														(i)In generalThe term employee salary investment
				amount means the lesser of—
															(I)the excess of the amount of average yearly
				wages paid to all employees for such year over the amount of average yearly
				wages paid to such employee for the year before the first year this section
				applies, or
															(II)the designated employee health insurance
				premium amount of such employer.
															(ii)Nondiscrimination rulesNo amount paid by an employer shall be
				treated as an employee salary investment amount unless such amount is
				distributed to all employees on a basis that is proportional to the amount of
				wages paid to such employee before such distribution.
														(iii)Notice requirementNo amount paid by an employer shall be
				treated as an employee salary investment amount unless the employer gives each
				employee notice of the amount of the designated employee health insurance
				premium amount paid by the employer with respect to the employee.
														(iv)Treatment of
				amountAn employee salary investment amount shall not be treated
				as income or otherwise taken into account for purposes of determining any
				individual’s eligibility for benefits or assistance under any governmental
				assistance program.
														(C)Employer shared responsibility
				creditThe Secretary may
				provide a credit to private employers who provided health insurance benefits
				greater than the 80th percentile of the national average in the 2 years prior
				to enactment of the Healthy Americans Act, if such employer can demonstrate the
				benefits provided encouraged prevention and wellness activities as defined in
				such Act, and that the employer continues to provide wellness programs.
													(D)Special rule for self-insured
				employersIn the case of any
				employer who provided health care coverage for employees through
				self-insurance, average HAPI plan premium amount for the first year this
				section applies shall be substituted for designated employee
				health insurance premium amount of such employer in subparagraphs
				(A)(i) and (B)(i)(II).
													(E)RegulationsThe Secretary may establish such rules and
				regulations as necessary to carry out the purposes of this paragraph.
													(2)Transition rate
				for other employers
													(A)In
				generalIn the case of an employer who did not provide health
				insurance to employees on the day before the date of enactment of the Healthy
				Americans Act—
														(i)the employer
				shared responsibility payment for the first year this section applies shall be
				an amount equal to 1/3 of the amount otherwise required
				under this section (determined without regard to this subsection), and
														(ii)the employer shared responsibility payment
				for the second year this section applies shall be an amount equal to
				2/3 of the amount otherwise required under this section
				(determined without regard to this subsection).
														(B)Transition rate
				does not apply to certain large employersSubparagraph (A) shall
				not apply to any large employer covered by subsection (b)(3).
													3412.Instrumentalities of the United
				StatesNotwithstanding any
				other provision of law (whether enacted before or after the enactment of this
				section) which grants to any instrumentality of the United States an exemption
				from taxation, such instrumentality shall not be exempt from the payment
				required by section 3411 unless such provision of law grants a specific
				exemption, by reference to section 3111 from the payment required by such
				section.
										BIndividual Shared Responsibility
				Payments

											Sec. 3421. Amount of payment.
											Sec. 3422. Deduction of tax from wages.

										3421.Amount of payment
											(a)In generalEvery individual shall pay an individual
				shared responsibility payment in an amount equal to the HAPI plan premium
				amount of such individual.
											(b)ExceptionThis section shall not apply to any
				individual—
												(1)who is covered under a HAPI plan of another
				individual, or
												(2)who provides such documentation as required
				by the Secretary demonstrating that such individual has paid such HAPI plan
				premium amount, but only for the period with respect to which such amount is
				shown to be paid.
												3422.Deduction of individual shared
				responsibility payment from wages
											(a)In generalThe individual shared responsibility
				payment imposed by section 3421 shall be collected by the employer by deducting
				the amount of the payment from the wages as and when paid. The preceding
				sentence shall not apply to any employer who has fewer than 10 employees.
											(b)Nondeductibility by employerThe individual shared responsibility
				payment deducted and withheld by the employer under subsection (a) shall not be
				allowed as a deduction to the employer in computing taxable income under
				subtitle A.
											(c)Indemnification of employer; special rule
				for tipsRules similar to the
				rules of subsections (b) and (c) of section 3102 shall apply for purposes of
				this section.
											CGeneral Provisions

											Sec. 3431. Definitions and special rules.
											Sec. 3432. Labor contracts.

										3431.Definitions and special rules
											(a)DefinitionsFor purposes of this chapter—
												(1)Average HAPI plan premium
				amountThe term average
				HAPI plan premium amount means the national average yearly premium for
				HAPI plans with standard coverage (as determined under section 111(b) of the
				Healthy Americans Act), determined without regard to differing classes of
				coverage.
												(2)Designated employee health insurance
				premium amountThe term
				designated employee health insurance premium amount means the
				greater of—
													(A)the yearly premium paid by an employer for
				health insurance coverage for employees for the most recent calendar year
				ending before the date of enactment of the Healthy Americans Act, or
													(B)the yearly premium paid by an employer for
				health insurance coverage for employees for the year before the first year this
				section applies.
													(3)Employer
													(A)In generalThe term employer has the
				meaning given such term under section 3401(d).
													(B)Aggregation rulesFor purposes of this chapter, all persons
				treated as a single employer under subsection (a) or (b) of section 52 shall be
				treated as 1 person.
													(4)EmploymentThe term employment has the
				meaning given such term under section 3121(b).
												(5)Full-time equivalent employeeThe term full-time equivalent
				employee means the equivalent number of full-time employees of an
				employer determined for any year under the following formula:
													(A)The sum of the number of full-time
				employees employed by the employer for more than 3 months during such year,
				plus
													(B)The quotient of—
														(i)the sum of the average weekly hours worked
				during such year for each employee of the employer (including common law
				employees) who—
															(I)was employed by such employer during such
				year for more than 3 months, and
															(II)is not a full-time employee, divided
				by
															(ii)40.
														(6)Full-time employeeThe term full-time employee
				means an employee (including a common law employee) who during an average
				workweek performs, or can reasonably be expected to perform, at least 40 hours
				of work. The Secretary may prescribe alternative rules for determining
				full-time equivalent employees in occupations or industries not using a
				standard workweek.
												(7)HAPI planThe term HAPI plan has the
				meaning given such term under section 3 of the Healthy Americans Act.
												(8)HAPI plan premium amountThe term HAPI plan premium
				amount means, with respect to any individual, the monthly premium for
				the HAPI plan under which such individual is enrolled, determined after taking
				into account any subsidy provided to such individual under section 131 of the
				Healthy Americans Act.
												(9)Large
				employerThe term large
				employer means, with respect to any year, an employer who employs an
				average of over 200 full-time equivalent employees during such year.
												(10) Revenue per employeeThe term revenue per employee
				means, with respect to any employer for any year, the gross receipts of the
				employer for such year divided by the number of full-time equivalent employees
				employed by such employer for such year.
												(11)Small
				employerThe term small
				employer means, with respect to any year, an employer who employs an
				average of 200 or fewer full-time equivalent employees during such year.
												(12)WagesThe term wages has the meaning
				given such term under section 3401(a).
												(b)Special rules
												(1)Special rule for self-employed
				individualsFor purposes of
				this chapter, a self-employed individual (as defined by section 401(c)(1)(B))
				shall be treated as both a full-time equivalent employee and as an
				employer.
												(2)Treatment of paymentsFor purposes of this title, the payments
				required by sections 3411 and 3421 shall be treated as a tax imposed by such
				sections, respectively.
												(3)Other special rulesFor purposes of this chapter, rules similar
				to rules under the following provisions shall apply:
													(A)Section 3122 (relating to Federal
				service).
													(B)Section 3123 (relating to deductions as
				constructive payments).
													(C)Section 3125 (relating to returns in the
				case of governmental employees in States, Guam, American Samoa, and the
				District of Columbia).
													(D)Section 3126 (relating to return and
				payment by government employer).
													(E)Section 3127 (relating to exemption for
				employers and their employees where both are members of religious faiths
				opposed to participation in Social Security Act programs).
													3432.Labor contracts
											(a)In generalThis chapter shall not apply with respect
				to any qualified collective bargaining employee of any qualified collective
				bargaining employer before the earlier of—
												(1)January 1 of the first year which is more
				than 9 years after the date of the enactment of this chapter, or
												(2)the date the collective bargaining
				agreement expires.
												(b)DefinitionsFor purposes of this section—
												(1)Qualified collective bargaining
				employerThe term
				qualified collective bargaining employer means an employer who
				provides health insurance to employees under the terms of a collective
				bargaining agreement which is entered into before the date of the enactment of
				this chapter.
												(2)Qualified collective bargaining
				employeeThe term
				qualified collective bargaining employee means an employee of a
				qualified collective bargaining employer who is covered by a collective
				bargaining agreement governing the employee's health
				insurance.
												.
						(2)Conforming amendmentThe table of chapters of the Internal
			 Revenue Code of 1986 is amended by inserting after the item relating to chapter
			 24 the following new item:

									CHAPTER 24A—Health
				care responsibility
				payments

								.
						(b)Collection of individual shared
			 responsibility payments through estimated taxesSection 6654 of the Internal Revenue Code
			 of 1986 (relating to failure by individual to pay estimated tax) is
			 amended—
						(1)in subsection (a), by striking and
			 the tax under chapter 2 and inserting , the tax under chapter 2,
			 and the individual shared responsibility payment required under subchapter B of
			 chapter 24A, and
						(2)in subsection (f)—
							(A)by striking minus at the end
			 of paragraph (2) and inserting plus,
							(B)by redesignating paragraph (3) as paragraph
			 (5), and
							(C)by inserting after paragraph (2) the
			 following new paragraphs:

									(3)the individual shared responsibility
				payment required under subchapter B of chapter 24A, minus
									(4)the amount withheld as an individual shared
				responsibility payment under section 3422,
				minus
									.
							(c)Effective
			 dateThe amendments made by
			 this section shall apply to calendar years beginning at least 4 years after the
			 date of the enactment of this Act.
					612.Distribution of individual responsibility
			 payments to HHAs
					(a)In generalThe Secretary of the Treasury shall pay to
			 the HHA in each State an amount equal to the amount of individual shared
			 responsibility payments received under section 3421 of the Internal Revenue
			 Code of 1986 with respect to each individual residing in such State.
					(b)Treatment of paymentsAny amount paid to a State under subsection
			 (a) shall be treated as an amount paid by the individual as a premium for the
			 HAPI plan in which such individual is enrolled.
					CInsurer Responsibilities
				621.Insurer responsibilities
					(a)In generalTo offer a HAPI plan through an HHA, a
			 State shall require that a health insurance issuer meet the requirements of
			 this section.
					(b)RequirementsA health insurance issuer offering a HAPI
			 plan in a State shall—
						(1)implement and emphasize prevention, early
			 detection and chronic disease management;
						(2)ensure that a wellness program as described
			 in section 131 is available to all covered individuals so long as such a
			 wellness program meets the requirements of the health insurance issuers and
			 other relevant requirements;
						(3)demonstrate how the provider reimbursement
			 methodology used by such an issuer has been adjusted to reward providers for
			 achieving quality and cost efficiency in prevention, early detection of
			 disease, and chronic care management;
						(4)ensure enrollees have the opportunity to
			 designate a health home as described in section 111(b) and make public how many
			 enrollees per policy have designated a health home;
						(5)upon enrollment, make available to each
			 covered individual an initial physical and a care plan;
						(6)create and implement an electronic medical
			 record for each covered individual, unless the individual submits a
			 notification to the issuer that the individual declines to have such a
			 record;
						(7)contribute to the financing of the HHAs by
			 incorporating into the administration component of premiums an additional
			 amount to reimburse HHAs for administrative costs;
						(8)comply with loss ratios as established by
			 the Secretary under subsection (e);
						(9)use standardized common claims forms and
			 uniform billing practices as provided for under subsection (c);
						(10)require that hospitals, as a condition of
			 receiving payment, send bills that are in an amount more than $5,000 to the
			 covered individual (without regard to whether the covered individual is
			 responsible for full or partial payment of the bill) and provide the individual
			 the contact information of a person who can discuss the bill with the
			 individual;
						(11)provide incentives such as premium
			 discounts—
							(A)for parents, if a covered child
			 participates in wellness activities and the health of such child improves;
			 and
							(B)for covered adults for participation in
			 prevention, wellness and chronic disease management programs;
							(12)report to the HHA of the State in which the
			 issuer offers HAPI plans outcome data regarding wellness program, disease
			 detection and chronic care management, and loss ratio information, so that the
			 HHAs may make such data available to the public in a consumer-friendly
			 format;
						(13)work with the Agency for Healthcare
			 Research and Quality, medical experts, and patient groups to make information
			 on high quality affordable health providers available to all Americans within 4
			 years of the date of enactment of this Act through a Web site searchable by zip
			 code;
						(14)provide to the HHA of each State in which
			 the issuer offers a HAPI plan, detailed information on the HAPI plans offered
			 by such issuer, using standardized language as required by the HHA, so that the
			 HHA may compile a document that compares the HAPI plans for use by prospective
			 enrollees;
						(15)pay to the HHA of each State in which the
			 issuer seeks to offer a HAPI plan the amount of the administrative fee assessed
			 by the HHA under section 502(c)(5) to enter the HHA system of that State;
			 and
						(16)provide for prompt payment of providers for
			 claims received in accordance with State law, but in no case later than 45 days
			 after the date of receipt of a claim that has no defect or impropriety or
			 particular circumstance requiring special treatment that prevents timely
			 payment from being made on the claim under the plan.
						(c)Uniform billing practices
						(1)In generalA health insurance issuer offering a HAPI
			 plan in a State shall agree to use standardized common claim forms prescribed
			 by the applicable State HHA consistent with paragraph (2) and to provide a copy
			 of such form to the insured.
						(2)Contents of
			 claim formEach common claims form shall show—
							(A)the cost of the
			 entire episode of care provided to the insured;
							(B)the percentage of
			 the cost covered by the issuer; and
							(C)the percentage of
			 the cost paid by the insured.
							(3)ExceptionParagraph (1) shall not apply to any State
			 worker's compensation system.
						(d)Chronic care programs offered by
			 issuers
						(1)In generalA health insurance issuer offering a HAPI
			 plan in a State shall provide a chronic care program to provide early
			 identification and management of chronic diseases.
						(2)Determination of chronic care
			 programEach State HHA shall
			 determine what constitutes a chronic care program under this subsection and
			 whether to collect and report financial information related to chronic care
			 programs.
						(3)Uniform clinical performance
			 standardsEach chronic care
			 program offered by a health insurance issuer shall use a uniform set of
			 clinical performance standards prescribed by the HHA of the State in which the
			 issuer offers a HAPI plan (in consultation with the State Medicare quality
			 improvement organizations and patient and physician organizations) which should
			 include encouragement that the issuers not require personal responsibility
			 contributions for clinically-needed services to treat or manage a covered
			 individual's chronic disease, particularly if the individual is taking an
			 active management role in working with their provider to manage any such
			 disease.
						(4)Reporting by issuersSeven years after the date of enactment of
			 this Act and on an annual basis thereafter, each health insurance issuer shall
			 report to the applicable State Insurance Commissioner, State Secretary of
			 Health or other State entity selected by the State HHA, the chronic care
			 management performance of the issuer as measured by the uniform clinical
			 performance standards described in paragraph (3). The issuer shall make such
			 performance public in a manner accessible to the public.
						(e)Private insurance company loss
			 ratio
						(1)In generalThe Secretary, in consultation with
			 consumer and patient organizations, the National Association of Insurance
			 Commissioners, and health insurance issuers (including health maintenance
			 organizations) shall establish a loss ratio for issuers of HAPI plans.
						(2)Determination of loss ratioIn determining the loss ratio,
			 administrative costs shall be defined as expenses consisting of all actual,
			 allowable, allocable, and reasonable expenses incurred in the adjudication of
			 subscriber benefit claims or incurred in the health insurance issuer's overall
			 operation of the business.
						(3)Administrative expenses
							(A)In generalUnless otherwise determined by an agreement
			 between a State HHA and a health insurance issuer, the administrative expenses
			 of an issuer shall—
								(i)include all taxes (excluding premium taxes)
			 reinsurance premiums, medical and dental consultants used in the adjudication
			 process, concurrent or managed care review when not billed by a health care
			 provider and other forms of utilization review, the cost of maintaining
			 eligibility files, legal expenses incurred in the litigation of benefit
			 payments, and bank charges for letters of credit; and
								(ii)not include the cost of personnel,
			 equipment, and facilities directly used in the delivery of health care services
			 (benefit costs), payments to HHAs for establishment and administration of HHAs,
			 and the cost of overseeing chronic disease management programs and wellness
			 programs.
								DState
			 Responsibilities
				631.State responsibilities
					(a)General requirementsAs a condition of receiving payment under
			 section 503, each State shall—
						(1)designate or create a Health Help Agency as
			 described in title V;
						(2)ensure that the HAPI plans offered in the
			 State—
							(A)are sold only through the State HHA (except
			 for employer-sponsored health coverage plans described under section 103
			 offered by employers); and
							(B)comply with the requirements of this
			 Act;
							(3)ensure that health insurance issuers
			 offering a HAPI plan in such State comply with the requirements described in
			 section 621;
						(4)make risk-adjusted payments to all health
			 insurance issuers and employers offering a HAPI plan in such State to account
			 for the specific population covered by the plan, in accordance with guidelines
			 established by the Secretary;
						(5)ensure that HAPI plans offer premium
			 discounts and incentives for participation in wellness programs;
						(6)implement mechanisms to collect premium
			 payments not otherwise collected under chapter 24A of the Internal Revenue Code
			 of 1986 (as added by this Act);
						(7)continue to apply State law with respect
			 to—
							(A)solvency and financial standards for health
			 insurance issuers;
							(B)fair marketing practices for health
			 insurance issuers;
							(C)grievances and appeals for covered
			 individuals; and
							(D)patient protection;
							(8)ensure that providers receiving payment
			 from the State HHA, when appropriate, provide information to patients seeking
			 treatment on the different treatment options, the costs of these treatment
			 options, and any comparative effectiveness information available through the
			 research on comparative effectiveness conducted under the amendments made by
			 title VIII; and
						(9)comply with subsections (b) and (c).
						(b)Ensuring maximum enrollmentEach State shall—
						(1)collect and exchange data with Federal and
			 other public agencies as necessary to maintain a database containing
			 information on the health insurance enrollment status of all State
			 residents;
						(2)implement methods to check enrollment
			 status and enroll individuals in HAPI plans, such as through the Department of
			 Motor Vehicles of the State, the enrollment of children in elementary and
			 secondary schools, the voter registration authority of the State, and other
			 checkpoints determined appropriate by the State;
						(3)implement mechanisms, which may not include
			 revocation or ineligibility for coverage under a HAPI plan, to enforce the
			 responsibility of each adult individual to purchase HAPI plan coverage for such
			 individual and any dependent children of such individual; and
						(4)implement a mechanism to automatically
			 enroll individuals in a HAPI plan who present in emergency departments without
			 health insurance.
						(c)Maintenance of effortEach State shall submit an annual report to
			 the Secretary that demonstrates that, for each State fiscal year that begins on
			 or after January 1 of the first calendar year in which HAPI coverage begins
			 under this Act, State expenditures for health services (as defined by the
			 Secretary) are not less than the amount equal to—
						(1)in the case of the first State fiscal year
			 for which such a report is submitted, 100 percent of the total amount of the
			 State share of expenditures for such services under all public health programs
			 operated in the State that are funded in whole or in part with State
			 expenditures (including the Medicaid program) for the most recent State fiscal
			 year ending before January 1 of the first calendar year in which HAPI coverage
			 begins under this Act; and
						(2)in the case of any subsequent State fiscal
			 year for which such a report is submitted, the amount applicable under this
			 subsection for the preceding State fiscal year increased by the percentage
			 change, if any, in the consumer price index for all urban consumers over the
			 previous Federal fiscal year.
						632.Empowering States to innovate through
			 waivers
					(a)In generalA State that meets the requirements of
			 subsection (b) shall be eligible for a waiver of applicable Federal
			 health-related program requirements.
					(b)Eligibility requirementsA State shall be eligible to receive a
			 waiver under this section if—
						(1)the legislature of such State enacts
			 legislation, or the State through a publically approved ballot measure approves
			 a plan, to provide health care coverage to it's residents that is at least as
			 comprehensive as the coverage required under a HAPI plan; and
						(2)the State submits to the Secretary an
			 application at such time, in such manner, and containing such information as
			 the Secretary may require, including a comprehensive description of the State
			 legislation or plan for implementing the State-based health plan.
						(c)Determinations by Secretary
						(1)In generalNot later than 180 days after the receipt
			 of an application from a State under subsection (b)(2), the Secretary shall
			 make a determination with respect to the granting of a waiver under this
			 section to such State.
						(2)Granting of waiverIf the Secretary determines that a waiver
			 should be granted under this section, the Secretary shall notify the State
			 involved of such determination and the terms and effectiveness of such
			 waiver.
						(3)Refusal to grant waiverIf the Secretary refuses to grant a waiver
			 under this section, the Secretary shall—
							(A)notify the State involved of such
			 determination, and the reasons therefore; and
							(B)notify the appropriate committees of
			 Congress of such determination and the reasons therefore.
							(d)Scope of waiversThe Secretary shall determine the scope of
			 a waiver granted to a State under this section, including which Federal laws
			 and requirements will not apply to the State under the waiver.
					EFederal Fallback Guarantee
			 Responsibility
				641.Federal guarantee of access to
			 coverage
					(a)Federal guarantee
						(1)In generalIf a State does not establish an HHA in
			 compliance with title V by the date that is 4 years after the date of enactment
			 of this Act, the Secretary shall ensure that each individual has available,
			 consistent with paragraph (2), a choice of enrollment in at least 2 HAPI plans
			 in the coverage area in which the individual resides. In any such case in which
			 such plans are not available, the individual shall be given the opportunity to
			 enroll in a fallback HAPI plan.
						(2)Requirement for different plan
			 sponsorsThe requirement in
			 paragraph (1) is not satisfied with respect to a coverage area if only 1 entity
			 offers all the HAPI plans in the area.
						(b)Contracts
						(1)In generalThe Secretary shall enter into contracts
			 under this subsection with entities for the offering of fallback HAPI plans in
			 coverage areas in which the guarantee under subsection (a) is not met.
						(2)Competitive proceduresCompetitive procedures (as defined in
			 section 4(5) of the Office of Federal Procurement Policy Act (41 U.S.C.
			 403(5))) shall be used to enter into a contract under this subsection.
						(c)Fallback HAPI planFor purposes of this section, the term
			 fallback HAPI plan means a HAPI plan that—
						(1)meets the requirements described in section
			 111(b) and does not provide actuarially equivalent coverage described in
			 section 111(c); and
						(2)meets such other requirements as the
			 Secretary may specify.
						FFederal Financing Responsibilities
				651.Appropriation for subsidy
			 paymentsThere is authorized
			 to be appropriated and there is appropriated for each fiscal year such sums as
			 may be necessary to fund the insurance premium subsidies under section
			 121.
				652.Recapture of Medicare and 90 percent of
			 Medicaid Federal DSH funds to strengthen Medicare and ensure continued support
			 for public health programs
					(a)Recapture of medicare DSH funds
						(1)In generalSection 1886(d)(5)(F)(i) of the Social
			 Security Act (42 U.S.C. 1395ww(d)(5)(F)(i)) is amended by inserting and
			 before January 1 of the first calendar year in which coverage under a HAPI plan
			 begins under the Healthy Americans Act, after May 1,
			 1986,.
						(2)Savings to part A Trust FundThe savings to the Federal Hospital
			 Insurance Trust Fund by reason of the amendment made by paragraph (1) shall be
			 used to strengthen the financial solvency of such Trust Fund.
						(b)Recapture of 90 percent of medicaid DSH
			 funds
						(1)Healthy Americans public health trust
			 fundSubchapter A of chapter
			 98 of the Internal Revenue Code of 1986 (relating to Trust Fund code) is
			 amended by adding at the end the following new section:

								9511.Healthy Americans Public Health Trust
				Fund
									(a)Creation of Trust FundThere is established in the Treasury of the
				United States a Trust Fund to be known as the Healthy Americans Public
				Health Trust Fund, consisting of any amount appropriated or credited to
				the Trust Fund as provided in this section or section 9602(b).
									(b)Transfer to Trust Fund of 90 percent of
				Medicaid DSH FundsThere are
				hereby appropriated to the Healthy Americans Public Health Trust Fund the
				following amounts:
										(1)In the case of the second, third, and
				fourth quarters of the first fiscal year in which coverage under a HAPI plan
				begins under the Healthy Americans Act, an amount equal to 90 percent of the
				amount that would otherwise have been appropriated for the purpose of making
				payments to States under section 1903(a) of the Social Security Act for the
				Federal share of disproportionate share hospital payments made under section
				1923 of such Act for such quarters of that fiscal year but for subsections
				(c)(2) and (d)(2)(D) of section 1941 of the such Act, as determined by the
				Secretary of Health and Human Services.
										(2)In the case of each succeeding fiscal year,
				an amount equal to 90 percent of the amount that would otherwise have been
				appropriated for the purpose of making payments to States under section 1903(a)
				of the Social Security Act for the Federal share of disproportionate share
				hospital payments made under section 1923 of such Act for that fiscal year but
				for subsections (c)(1) and (d)(2)(D) of section 1941 of such Act, as determined
				by the Secretary of Health and Human Services, taking into account the
				percentage change, if any, in the consumer price index for all urban consumers
				(U.S. city average) for the preceding fiscal year.
										(c)Expenditures From Trust FundWith respect to each fiscal year for which
				transfers are made under subsection (b), amounts in the Healthy Americans
				Public Health Trust Fund shall be available for that fiscal year for the
				following purposes:
										(1)Providing premium and personal
				responsibility contribution subsidiesFor making appropriations authorized under
				section 651 of the Healthy Americans Act for providing premium and personal
				responsibility contribution subsidies in accordance with section 122 of such
				Act.
										(2)Reducing the federal budget
				deficitThe Secretary shall
				transfer any amounts in the Trust Fund that are not expended as of September 30
				of a fiscal year for a purpose described in paragraph (1) to the general
				revenues account of the
				Treasury.
										.
						(2)Clerical amendmentThe table of sections for such subchapter
			 is amended by adding at the end the following new item:

									Sec. 9511. Healthy
				Americans Public Health Trust
				Fund.

								.
						GTax treatment of health care coverage under
			 Healthy Americans program; termination of coverage under other governmental
			 programs and transition rules for medicaid and SCHIP
				1Tax treatment of health care coverage under
			 Healthy Americans program
					661.Limited employee income and payroll tax
			 exclusion for employer shared responsibility payments, historic retiree health
			 contributions, and transitional coverage contributions
						(a)Income tax exclusion
							(1)In generalSubsection (a) of section 106 of the
			 Internal Revenue Code of 1986 (relating to contributions by employer to
			 accident and health plans) is amended to read as follows:

									(a)General ruleGross income of an individual does not
				include—
										(1)if such individual is an employee, shared
				responsibility payments made by an employer under section 3411,
										(2)if such individual is a former employee
				before the first calendar year beginning 4 years after the date of the
				enactment of the Healthy Americans Act, employer-provided coverage under an
				accident or health plan,
										(3)if such individual is a qualified
				collective bargaining employee under an accident or health plan in effect on
				January 1 of the first calendar year beginning 4 years after the date of the
				enactment of the Healthy Americans Act, employer-provided coverage under such
				plan during any transition period described in section 3432, and
										(4)employer-provided coverage for qualified
				long-term care services (as defined in section
				7702B(c)).
										.
							(2)Conforming amendmentsSection 106 of such Code is amended—
								(A)by adding at the end of subsection (b) the
			 following new paragraph:

										(8)TerminationThis subsection shall not apply to
				contributions made in any calendar year beginning at least 4 years after the
				date of the enactment of the Healthy Americans
				Act.
										,
								(B)by inserting and before the first
			 calendar year beginning 4 years after the date of the enactment of the Healthy
			 Americans Act, after January 1, 1997, in subsection
			 (c)(1), and
								(C)by striking shall be treated as
			 employer-provided coverage for medical expenses under an accident or health
			 plan in subsection (d)(1) and inserting shall not be included in
			 such employee's gross income.
								(b)Payroll taxes
							(1)In generalSection 3121(a) (defining wages) is amended
			 by adding at the end the following new sentence: In the case of any
			 calendar year beginning at least 4 years after the date of the enactment of the
			 Healthy Americans Act, paragraphs (2) and (3) shall apply to payments on
			 account of sickness only if such payments are described in section
			 106(a)..
							(2)Railroad retirementSection 3231(e)(1) (defining wages) is
			 amended by adding at the end the following new sentence: In the case of
			 any calendar year beginning at least 4 years after the date of the enactment of
			 the Healthy Americans Act, this paragraph shall apply to payments on account of
			 sickness only if such payments are described in section 106(a)..
							(3)UnemploymentSection 3306(b) (defining wages) is amended
			 by adding at the end the following new sentence: In the case of any
			 calendar year beginning at least 4 years after the date of the enactment of the
			 Healthy Americans Act, paragraphs (2) and (4) shall apply to payments on
			 account of sickness only if such payments are described in section
			 106(a)..
							(c)Effective
			 dateThe amendments made by
			 this section shall apply to calendar years beginning at least 4 years after the
			 date of the enactment of the Healthy Americans Act.
						662.Exclusion for limited employer-provided
			 health care fringe benefits
						(a)In generalSection 132(a) of the Internal Revenue Code
			 of 1986 (relating to certain fringe benefits) is amended by striking
			 or at the end of paragraph (7), by striking the period at the
			 end of paragraph (8) and inserting , or, and by adding at the
			 end the following new paragraph:

								(9)qualified health care
				fringe.
								.
						(b)Qualified health care fringe
							(1)In generalSection 132 of the Internal Revenue Code of
			 1986 is amended by redesignating subsection (o) as subsection (p) and by
			 inserting after subsection (n) the following new subsection:

									(o)Qualified health care fringeFor purposes of this section, the term
				qualified health care fringe means—
										(1)any wellness program described in section
				131 of the Healthy Americans Act, and
										(2)any on-site first aid coverage for
				employees.
										.
							(2)Nondiscriminatory treatmentSection 132(j)(1) of such Code (relating to
			 exclusions under subsection (a)(1) and (2) apply to highly compensated
			 employees only if no discrimination) is amended—
								(A)by striking Paragraphs (1) and (2)
			 of subsection (a) and inserting Paragraphs (1), (2), and (9) of
			 subsection (a), and
								(B)by striking subsection
			 (a)(1)
			 and(2) in the heading
			 and inserting subsections
			 (a)(1), (2),
			 and(9).
								(c)Effective
			 dateThe amendments made by
			 this section shall apply to calendar years beginning at least 4 years after the
			 date of the enactment of the Healthy Americans Act.
						663.Limited employer deduction for employer
			 shared responsibility payments, historic retiree health contributions, and
			 other health care expenses
						(a)In generalSubsection (l) of section 162 of the
			 Internal Revenue Code of 1986 (relating to trade or business expenses) is
			 amended to read as follows:

								(l)Limitation on deductible employer health
				care expendituresNo
				deduction shall be allowed under this chapter for any employer contribution to
				an accident or health plan other than—
									(1)any shared responsibility payment made
				under section 3411,
									(2)any accident or health plan coverage for
				individuals who are former employees before the first calendar year beginning 4
				years after the date of the enactment of the Healthy Americans Act,
									(3)any accident or health plan in effect on
				January 1 of the first calendar year beginning 4 years after the date of the
				enactment of the Healthy Americans Act with respect to coverage for qualified
				collective bargaining employees during a transition period described in section
				3432,
									(4)any accident or health plan which qualifies
				as a wellness program described in section 131 of such Act,
									(5)any accident or health plan which
				constitutes on-site first aid coverage for employees, and
									(6)any accident or health plan which is a
				qualified long-term care insurance
				contract.
									.
						(b)Conforming amendmentSection 162 of the Internal Revenue Code of
			 1986 is amended by striking subsection (n).
						(c)Effective
			 dateThe amendments made by
			 this section shall apply to calendar years beginning at least 4 years after the
			 date of the enactment of the Healthy Americans Act.
						664.Refundable
			 credit for individual shared responsibility payments
						(a)In
			 generalSubpart C of part IV of subchapter A of chapter 1 of the
			 Internal Revenue Code of 1986 is amended by redesignating section 36 as section
			 37 and by inserting after section 35 the following new section:

								36.Refundable credit
				for individual shared responsibility payments
									(a)In generalIn the case of an individual, if the
				taxpayer has gross income for the taxable year exceeding 100 percent of the
				poverty line (adjusted for the size of the family involved) for the calendar
				year in which such taxable year begins and is enrolled in a HAPI plan under the
				Healthy Americans Act, there shall be allowed as a credit against the tax
				imposed by this chapter an amount equal to the applicable fraction times, in
				the case of—
										(1)coverage of an individual, $1,810,
										(2)coverage of a
				married couple or domestic partnership (as determined by a State) without
				dependent children, $3,615,
										(3)coverage of an
				unmarried individual with 1 or more dependent children, $2,585, plus $600 for
				each dependent child, and
										(4)coverage of a
				married couple or domestic partnership (as determined by a State) with 1 or
				more dependent children, $4,565, plus $600 for each dependent child.
										(b)Applicable fractionFor purposes of subsection (a), the
				applicable fraction is the fraction (not to exceed 1)—
										(1)the numerator of which is the gross income
				of the taxpayer for the taxable year expressed as a percentage of the poverty
				line (adjusted for the size of the family involved) minus such poverty line for
				the calendar year in which such taxable year begins, and
										(2)the denominator of which is 400 percent of
				the poverty line (adjusted for the size of the family involved) minus such
				poverty line.
										(c)Phaseout of credit amount
										(1)In generalThe amount otherwise determined under
				subsection (a) for any taxable year shall be reduced by the amount determined
				under paragraph (2).
										(2)Amount of reductionThe amount determined under this paragraph
				shall be the amount which bears the same ratio to the amount determined under
				subsection (a) as—
											(A)the excess of the taxpayer’s modified
				adjusted gross income for such taxable year, over $62,500 (twice such amount in
				the case of a joint return), bears to
											(B)$62,500 (twice such amount in the case of a
				joint return).
											Any amount determined under this
				paragraph which is not a multiple of $50 shall be rounded to the next lowest
				$50.(d)Inflation adjustmentIn the case of any taxable year beginning
				in a calendar year after 2009, each dollar amount contained in subsection (a)
				and subparagraphs (A) and (B) of subsection (c)(2) shall be increased by an
				amount equal to—
										(1)such dollar
				amount, multiplied by
										(2)the cost-of-living
				adjustment determined under section 1(f)(3) for the calendar year in which the
				taxable year begins, determined by substituting calendar year
				2008 for calendar year 1992 in subparagraph (B)
				thereof.
										Any
				increase determined under the preceding sentence shall be rounded to the
				nearest multiple of $50.(e)Determination of modified adjusted gross
				income
										(1)In generalFor purposes of this section, the term
				modified adjusted gross income means adjusted gross income—
											(A)determined without regard to this section
				and sections 86, 135, 137, 199, 221, 222, 911, 931, and 933, and
											(B)increased by—
												(i)the amount of interest received or accrued
				during the taxable year which is exempt from tax under this title, and
												(ii)the amount of any social security benefits
				(as defined in section 86(d)) received or accrued during the taxable
				year.
												(2)Poverty lineFor purposes of this paragraph, the term
				poverty line has the meaning given such term in section 673(2) of
				the Community Health Services Block Grant Act (42 U.S.C. 9902(2)), including
				any revision required by such
				section.
										.
						(b)Conforming
			 amendments
							(1)Paragraph (2) of
			 section 1324(b) of title 31, United States Code, is amended by inserting
			 or 36 after section 35.
							(2)The table of
			 sections for subpart C of part IV of subchapter A of chapter 1 of the Internal
			 Revenue Code of 1986 is amended by striking the last item and inserting the
			 following new items:

										Sec. 36. Refundable credit for individual
				shared responsibility payments.
										Sec. 37. Overpayments of
				tax.

									.
							(c)Effective
			 dateThe amendments made by
			 this section shall apply to payments made in calendar years beginning at least
			 4 years after the date of the enactment of this Act.
						665.Modification of other tax incentives to
			 complement Healthy Americans program
						(a)Termination of credit for health insurance
			 costs of eligible individualsSection 35 of the Internal Revenue Code of
			 1986 (relating to health insurance costs of eligible individuals) is amended by
			 adding at the end the following new subsection:

								(h)TerminationThis section shall not apply to payments
				made in any calendar year beginning at least 4 years after the date of the
				enactment of the Healthy Americans
				Act.
								.
						(b)Termination of health care expense
			 reimbursement under cafeteria plans
							(1)In generalSection 125 of the Internal Revenue Code of
			 1986 (relating to cafeteria plans) is amended by redesignating subsection (h)
			 as subsection (i) and by inserting after subsection (g) the following new
			 subsection:

									(h)TerminationThis section shall not apply to health
				benefits coverage in any calendar year beginning at least 4 years after the
				date of the enactment of the Healthy Americans
				Act.
									.
							(2)Long-term care allowed under cafeteria
			 plans
								(A)In generalSection 125(f) of such Code (defining
			 qualified benefits) is amended by striking the last sentence.
								(B)Effective
			 dateThe amendment made by
			 this paragraph shall apply to contracts issued with respect to any calendar
			 year beginning at least 4 years after the date of the enactment of this
			 Act.
								(c)Termination of Archer MSA
			 contributionsSection 220 of
			 the Internal Revenue Code of 1986 (relating to Archer MSAs) is amended—
							(1)by inserting and made before the
			 first calendar year beginning 4 years after the date of the enactment of the
			 Healthy Americans Act after in cash in subsection
			 (d)(1)(A)(i), and
							(2)by adding at the end the following new
			 subsection:

									(k)TerminationThis section shall not apply to
				contributions made in any calendar year beginning at least 4 years after the
				date of the enactment of the Healthy Americans
				Act.
									.
							(d)Health savings accounts allowed in
			 conjunction with high deductible HAPI plans
							(1)In generalSection 223 of the Internal Revenue Code of
			 1986 (relating to health savings accounts) is amended—
								(A)by inserting qualified
			 before high deductible health plan each place it appears in the
			 text (other than subsection (c)(2)(A)),
								(B)by striking The term high
			 deductible health plan means a health plan in subsection
			 (c)(2)(A) and inserting The term qualified high deductible health
			 plan means a HAPI plan under the Healthy Americans Act,
								(C)by striking subparagraphs (B) and (C) of
			 subsection (c)(2) and by redesignating subparagraph (D) of subsection (c)(2) as
			 subparagraph (B), and
								(D)by striking High in the heading for
			 paragraph (2) of subsection (c) and inserting Qualified high.
								(2)Effective
			 dateThe amendments made by
			 this subsection shall apply to payments made in calendar years beginning at
			 least 4 years after the date of the enactment of this Act.
							666.Termination of certain employer incentives
			 when replaced by lower health care costs
						(a)In generalSubchapter C of chapter 90 of the Internal
			 Revenue Code of 1986 (relating to provisions affecting more than one subtitle)
			 is amended by adding at the end the following new section:

								7875.Termination of certain
				provisionsThe following
				provisions shall not apply to taxable years beginning (or transactions in the
				case of sections referred to in paragraph (3)) in any calendar year beginning
				at least 4 years after the date of the enactment of the Healthy Americans
				Act:
									(1)Section 199 (relating to income
				attributable to domestic production activities).
									(2)Section 501(c)(9) (relating to tax-exempt
				status of voluntary employees' beneficiary associations).
									(3)Sections 861(a)(6), 862(a)(6), 863(b)(2),
				863(b)(3), and 865(b) (relating to inventory property sales source rule
				exception).
									.
						(b)Deferral of active income of controlled
			 foreign corporationsSection
			 952 of the Internal Revenue Code of 1986 (relating to subpart F income defined)
			 is amended by adding at the end the following new subsection:

								(e)Special application of subpart
									(1)In generalFor taxable years beginning in any calendar
				year beginning at least 4 years after the date of the enactment of the Healthy
				Americans Act, notwithstanding any other provision of this subpart, the term
				subpart F income means, in the case of any controlled foreign
				corporation, the income of such corporation derived from any foreign
				country.
									(2)Applicable rulesRules similar to the rules under the last
				sentence of subsection (a) and subsection (d) shall apply to this
				subsection.
									.
						(c)Conforming amendmentThe table of sections for subchapter C of
			 chapter 90 of the Internal Revenue Code of 1986 is amended by adding at the end
			 the following new item:

									Sec. 7875. Termination of
				certain
				provisions.

								.
						2Termination of coverage under other
			 governmental programs and transition rules for medicaid and schip
					671.Group and individual health plan
			 requirements not applicable to HAPI plans
						(a)ERISASection 3(1) of Employee Retirement Income
			 Security Act of 1974 (29 U.S.C. 1002(1)) is amended by adding at the end the
			 following new sentence: Such terms shall not include the provision of
			 medical, surgical, or hospital care or benefits through HAPI plans under the
			 Healthy Americans Act..
						(b)Internal Revenue Code of 1986Section 5000 of the Internal Revenue Code
			 of 1986 (relating to certain group health plans) is amended by adding at the
			 end the following new subsection:

								(e)HAPI plansFor purposes of this section, the terms
				group health plan and large group health plan shall
				not include any HAPI plan under the Healthy Americans
				Act.
								.
						(c)Public health service actSection 2791(b)(5) of the Public Health
			 Service Act (42 U.S.C. 300gg–91(b)(5)) is amended by adding at the end the
			 following new sentence: Such term shall not include health insurance
			 coverage offered to individuals through a HAPI plan under the Healthy Americans
			 Act..
						672.Federal Employees Health Benefits
			 Plan
						(a)In generalChapter 89 of title 5, United States Code,
			 is amended by adding at the end the following new section:

								8915.TerminationNo contract shall be entered into under this
				chapter or chapters 89A and 89B with respect to any coverage period occurring
				in any calendar year beginning at least 4 years after the date of the enactment
				of the Healthy Americans
				Act.
								.
						(b)Conforming amendmentThe table of sections for such chapter 89
			 is amended by adding at the end the following new item:

									8915.
				Termination.

								.
						673.Medicaid and SCHIP
						(a)In generalTitle XIX of the Social Security Act, as
			 amended by section 311, is amended by adding at the end the following new
			 section:

								1941.Transition to coverage under HAPI Plans; requirement to
		  provide supplemental coverage; termination of unnecessary
		  provisions(a)Transition and supplemental coverage
				requirementsThe Secretary
				shall provide technical assistance to States and health insurance issuers of
				HAPI plans to ensure that individuals receiving medical assistance under State
				Medicaid plans under this title or child health assistance under child health
				plans under title XXI are—
										(1)informed of—
											(A)the guarantee of private coverage for
				essential services for all Americans established by the Healthy Americans Act;
				and
											(B)each individual's personal
				responsibility—
												(i)for health care prevention;
												(ii)to enroll (or to be enrolled on their
				behalf) in a HAPI plan through the applicable State HHA during an open
				enrollment period; and
												(iii)to submit necessary documentation to their
				State HHA so that the HHA may determine the individual's eligibility for
				premium and personal responsibility contribution subsidies;
												(2)provided with appropriate assistance in
				transitioning from receiving medical assistance under State Medicaid plans or
				child health assistance under child health plans for their primary health
				coverage to obtaining such coverage through enrollment in HAPI plans in a
				manner that ensures continuation of coverage for such individuals; and
										(3)notwithstanding any other provision of this
				title, after December 31 of the last calendar year ending before the first
				calendar year in which coverage under a HAPI plan begins in accordance with the
				Healthy Americans Act, provided with medical assistance that consists of
				supplemental coverage that meets the requirements of sections 202 and 301 of
				such Act.
										(b)Maintenance of medicare
				cost-sharingFor each month
				beginning after the last month of the last calendar year ending before the
				first calendar year in which coverage under a HAPI plan begins in accordance
				with the Healthy Americans Act—
										(1)a State shall continue to provide medical
				assistance for medicare cost-sharing to individuals described in section
				1902(a)(10)(E) as if the Healthy Americans Act had not been enacted; and
										(2)the Secretary shall continue to reimburse
				the State for the provision of such medical assistance.
										(c)Continued support for DSH
				expenditures
										(1)In generalNotwithstanding any other provision of this
				title, with respect to each fiscal year that begins after the first calendar
				year in which coverage under a HAPI plan begins in accordance with the Healthy
				Americans Act, the DSH allotment for each State otherwise applicable under
				section 1923(f) for that fiscal year shall be reduced by 90 percent and no
				payment shall be made under section 1903(a) to a State with respect to any
				payment adjustment made under section 1923 for hospitals in the State for
				quarters in the fiscal year in excess of the reduced DSH allotment for the
				State applicable for such year.
										(2)Special rule for last 3 quarters of first
				fiscal year in which coverage under a hapi plan beginsWith respect to the first fiscal year in
				which coverage under a HAPI plan begins in accordance with the Healthy
				Americans Act, the Secretary shall reduce the DSH allotment for each State that
				is otherwise applicable under section 1923(f) for that fiscal year so that each
				such DSH allotment reflects a 90 percent reduction in the allotment for the
				second, third, and fourth quarters of that fiscal year.
										(d)Termination of all federal payments under
				this title other than for medicare cost-sharing or supplemental medical
				assistanceNotwithstanding
				any other provision of this title:
										(1)no individual other than an individual to
				which section 202 or 301 of the Healthy Americans Act applies is entitled to
				medical assistance under a State plan approved under this title for any item or
				service furnished after December 31 of the last calendar year ending before the
				first calendar year in which coverage under a HAPI plan begins in accordance
				with such Act;
										(2)no payment shall be made to a State under
				section 1903(a) for any item or service furnished after that date or for any
				other sums expended by a State for which a payment would have been made under
				such section, other than for the Federal medical assistance percentage of the
				total amount expended by a State for each fiscal year quarter beginning after
				that date for providing—
											(A)medical assistance for the maintenance of
				medicare cost-sharing in accordance with subsection (b);
											(B)medical assistance for individuals who are
				eligible for supplemental medical assistance under this title after such date
				in accordance with section 202 or 301 of the Healthy Americans Act; and
											(C)payment adjustments under section 1923 for
				hospitals in the State that do not exceed the reduced DSH allotment for the
				State determined under subsection
				(c)
											.
						(b)Application to SCHIP
							(1)Application of transition
			 requirementsSection
			 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended by
			 adding at the end the following:

									(E)Section 1941(a) (relating to transition to
				coverage under HAPI plans and, in the case of paragraph (3) of such section,
				the requirement to provide supplemental medical assistance for targeted
				low-income children who are provided child health assistance as optional
				targeted low-income children under title
				XIX).
									.
							(2)TerminationTitle XXI of the Social Security Act is
			 amended by adding at the end the following new section:

									2111.TerminationNotwithstanding any other provision of this
				title, no payment shall be made to a State under section 2105(a) with respect
				to child health assistance for any item or service furnished after December 31
				of the last calendar year ending before the first calendar year in which
				coverage under a HAPI plan begins in accordance with the Healthy Americans
				Act.
									.
							VIIPurchasing Health Services and
			 Products That Are Most Effective
			701.One time disallowance of deduction for
			 advertising and promotional expenses for certain prescription
			 pharmaceuticals
				(a)In generalPart IX of subchapter B of chapter 1 of
			 subtitle A of the Internal Revenue Code of 1986 (relating to items not
			 deductible) is amended by adding at the end the following new section:

						280I.One time disallowance of deduction for
				certain prescription pharmaceuticals advertising and promotional
				expenses
							(a)In generalNo deduction shall be allowed under this
				chapter for expenses relating to advertising or promoting the sale and use of
				prescription pharmaceuticals other than drugs for rare diseases or conditions
				(within the meaning of section 45C) for any taxable year which includes any
				portion of—
								(1)the 3-year period which begins on the date
				of a new drug application approval with respect to such a pharmaceutical,
				unless the manufacturer of such pharmaceutical is subject to a comparison
				effectiveness study, including over-the-counter medication (if appropriate),
				or
								(2)the 1-year period which ends with the
				availability of a generic drug substitute, unless such advertising or promotion
				includes a statement that a lower cost alternative may soon be available and
				includes the chemical name of such alternative.
								(b)Advertising or promotingFor purposes of this section, the term
				advertising or promoting includes direct-to-consumer advertising
				and any activity designed to promote the use of a prescription pharmaceutical
				directed to providers or others who may make decisions about the use of
				prescription pharmaceuticals (including the provision of product samples, free
				trials, and starter
				kits).
							.
				(b)Conforming amendmentThe table of sections for such part IX is
			 amended by adding after the item relating to section 280H the following new
			 item:

							Sec. 280I. One time
				disallowance of deduction for certain prescription pharmaceuticals advertising
				and promotional
				expenses.

						.
				(c)Effective
			 dateThe amendments made by
			 this section shall apply to taxable years beginning with or within calendar
			 years beginning at least 4 years after the date of the enactment of this
			 Act.
				702.Enhanced new drug and device
			 approval
				(a)In general
					(1)New drugsSection 505 of the Federal Food, Drug, and
			 Cosmetic Act (21 U.S.C. 355) is amended by adding at the end the
			 following:

							(o)(1)The sponsor of a new drug application under
				subsection (b) may include as part of such application a full report of an
				investigation which has been made to show, with respect to the new drug that is
				the subject of the application—
									(A)the population for whom the drug is
				appropriate; and
									(B)the effectiveness of the drug when compared
				to the effectiveness of drugs on the market as of the date that the application
				is submitted.
									(2)If a sponsor of a new drug application
				under subsection (b) includes in such application the report described under
				paragraph (1) then, notwithstanding any other provision of law, the Secretary
				shall apply section 505A(b) to the drug that is the subject of such application
				in the same manner as the Secretary applies such section to a new drug in the
				pediatric population that is the subject of a study described in such
				section.
								(3)If a sponsor of a new drug application
				under subsection (b) does not include in such application the report described
				under paragraph (1) then, notwithstanding any other provision of law, the
				Secretary shall require that—
									(A)all promotional material with respect to
				such drug include the following disclosure: This drug has not been
				proven to be more effective than other drugs on the market for any condition or
				illness mentioned in this advertisement.; and
									(B)such disclosure—
										(i)appears at the beginning and end of any
				audio and visual promotional material;
										(ii)constitutes not less than 20 percent of the
				time of any audio and visual promotional material; and
										(iii)(I)in any promotional material, includes a
				clear and conspicuous printed statement that is larger than other print used in
				such promotional material; and
											(II)in any audio and visual promotional
				material, includes such statement in audio as well as visual
				format.
											.
					(2)New devicesSection 515(c) of the Federal Food, Drug,
			 and Cosmetic Act (21 U.S.C. 360e) is amended by adding at the end the
			 following:

							(5)(A)A person that files a report seeking
				premarket approval under this subsection may include as part of such report a
				full description of an investigation which has been made to show, with respect
				to the device that is the subject of the report—
									(i)the population for whom the device is
				appropriate; and
									(ii)the effectiveness of the device when
				compared to the effectiveness of devices on the market as of the date that the
				report is submitted.
									(B)If a person that files a report seeking
				premarket approval under this subsection includes in such report the
				description referred to under subparagraph (A), then the Secretary shall
				certify to the Director of the United States Patent and Trademark Office that
				such person included such description in such report so that the Director may
				extend the patent with respect to such device under section 702(b) of the
				Healthy Americans Act.
								(C)If a person that files a report seeking
				premarket approval under this subsection does not include in such report the
				description referred to under subparagraph (A) then, notwithstanding any other
				provision of law, the Secretary shall require that—
									(i)all promotional material with respect to
				such device include the following disclosure: This device has not been
				proven to be more effective than other devices on the market for any condition
				or illness mentioned in this advertisement.; and
									(ii)such disclosure—
										(I)appears at the beginning and end of any
				audio and visual promotional material;
										(II)constitutes not less than 20 percent of the
				time of any audio and visual promotional material; and
										(III)(aa)in any promotional material, includes a
				clear and conspicuous printed statement that is larger than other print used in
				such promotional material; and
											(bb)in any audio and visual promotional
				material, includes such statement in audio as well as visual
				format.
											.
					(b)Extension of device patentsIf the Director of the United States Patent
			 and Trademark Office receives a certification from the Secretary pursuant to
			 section 515(c)(5) of the Federal Food, Drug, and Cosmetic Act (as added under
			 subsection (a)), the Director shall extend, for a period of 2 years, the patent
			 in effect with respect to such device under title 35 of the United States
			 Code.
				(c)Effective
			 dateThis section shall apply
			 to new drug applications filed under section 505(b) of the Federal Food, Drug,
			 and Cosmetic Act (21 U.S.C. 355(b) and to applications for premarket approval
			 of devices under section 515 of such Act (21 U.S.C. 350e) 180 days after the
			 date of enactment of this Act.
				703.Medical schools and finding what works in
			 health carePart B of title IX
			 of the Public Health Service Act (42 U.S.C. 299b et seq.) is amended by adding
			 at the end the following:

					918.Medical schools and finding what works in
				health care
						(a)Establishment of Web siteNot later than 1 year after the date of
				enactment of the Healthy Americans Act, the Agency shall establish an Internet
				Web site—
							(1)on which researchers at medical schools and
				other institutions may post the results of their research concerning
				evidence-informed best practices for improving the quality and efficiency of
				care; and
							(2)that—
								(A)includes a description on how to implement
				such best practices; and
								(B)clearly identifies the funding source for
				the research.
								(b)Pilot program
							(1)EstablishmentUsing the information about
				evidence-informed best practices from the Web site under subsection (a) and
				other sources, the Agency, through the National Research Training Program and
				in consultation with medical schools, shall develop a pilot program to
				establish methods by which medical school curricula and training may be updated
				regularly to reflect best practices to improve quality and efficiency in
				medical practice.
							(2)Application to participateTo participate in the pilot program, an
				entity shall—
								(A)be an accredited medical school; and
								(B)submit an application at such time, in such
				manner, and containing such information as the Secretary may require.
								(3)ParticipantsThe Secretary shall ensure that not less
				than 28 medical schools shall be included in the pilot program.
							(4)Duration; publication of
				resultsThe Agency
				shall—
								(A)operate the pilot program for 3
				years;
								(B)not later than 180 days after the date of
				the completion of the pilot program, publish and make public the results of the
				pilot program; and
								(C)include, as part of the published results
				under subparagraph (B), recommendations on how to assure that all medical
				school curricula is updated on a regular basis to reflect best practices to
				improve quality and efficiency in medical
				practice.
								.
			704.Finding affordable health care providers
			 nearby
				(a)In generalNot later than 2 years after the date of
			 enactment of this Act, the Secretary, in consultation with each HHA and health
			 insurance issuers that offer a HAPI plan, shall establish an Internet Web site
			 to assist covered individuals with locating health care providers in their
			 State of residence who provide affordable, high-quality health care
			 services.
				(b)Quality of care standardTo develop the information displayed on the
			 Web site with respect to the quality of care of a health care provider, the
			 Secretary shall—
					(1)on the date of establishment of the Web
			 site, use information on the performance of providers in quality initiatives
			 under the Medicare program, including demonstration projects, reporting
			 initiatives, and pay for performance efforts; and
					(2)not later than 3 years after the date of
			 establishment of the Web site, in addition to the information used under
			 paragraph (1), use quality of care standards developed in consultation with,
			 and similar to standards used by, Medicare quality improvement organizations of
			 each State.
					(c)Affordability standardNot later than 2 years after the date of
			 enactment of this Act, the Secretary shall, in consultation with health
			 insurance issuers that offer a HAPI plan, develop guidelines by which each
			 health care provider reports to the Secretary with respect to the affordability
			 of services by such provider. The Secretary shall ensure that such
			 guidelines—
					(1)on the date of establishment of such
			 guidelines, provide for the reporting of affordability of primary care
			 services; and
					(2)by a date that is no later than 3 years
			 after the date of enactment of this Act, provide for the reporting of other
			 services.
					VIIIEnhanced Health
			 Care Value
			801.Short
			 titleThis title may be cited
			 as the Enhanced Health Care Value for
			 All Act of 2007.
			802.Research on
			 comparative effectiveness of health care items and services
				(a)Expansion of
			 scope of researchSubsection
			 (a) of section 1013 of the Medicare Prescription Drug, Improvement, and
			 Modernization Act of 2003 (Public Law 108–173) is amended—
					(1)in paragraph
			 (1)—
						(A)in subparagraph
			 (A)—
							(i)by
			 striking programs established under titles XVIII, XIX, and XXI of the
			 Social Security Act and inserting Federal health care programs
			 (as defined in subparagraph (C));
							(ii)by
			 striking shall conduct and support research and inserting
			 shall conduct and support research, which may include clinical
			 research,;
							(iii)in
			 clause (i), by striking and at the end;
							(iv)in
			 clause (ii), by striking the period at the end and inserting ;
			 and; and
							(v)by
			 adding at the end the following:

									(iii)gaps in current research which may
				necessitate research beyond systematic reviews of existing
				evidence.
									;
							(B)by adding at the
			 end the following new subparagraph:

								(C)Federal health
				care programs definedFor purposes of this section, the term
				Federal health care program means each of the following:
									(i)Any program
				established under title XVIII, XIX, or XXI of the Social Security Act.
									(ii)The Federal employees health benefits
				program under chapter 89 of title 5, United States Code.
									(iii)A health program
				operated under title 38, United States Code, by the Department of Veterans
				Affairs.
									(iv)The TRICARE
				program under chapter 55 of title 10, United States Code.
									(v)A
				medical care program of the Indian Health Service or of a tribal
				organization.
									(vi)A
				HAPI plan under the Healthy Americans
				Act.
									;
						(2)in paragraph
			 (2)—
						(A)in subparagraph
			 (C)(i), by striking the programs established and inserting
			 Federal health care programs, including the programs
			 established;
						(B)in subparagraph
			 (C)(ii), by striking and at the end;
						(C)in subparagraph
			 (C)(iii), by striking the period at the end and inserting ;
			 and;
						(D)by inserting after
			 subparagraph (C) the following:

								(iv)shall provide for
				education to physicians, other health care providers, and the public (including
				patients and consumers) about the information on comparative effectiveness that
				is available as a result of research funded under this
				section.
								;
				and
						(E)by adding at the
			 end the following:

								(D)Comparative
				Effectiveness Advisory Board
									(i)In
				generalEffective as of the date of the enactment of the Enhanced
				Health Care Value for All Act of 2007, the stakeholder group consulted for
				purposes of subparagraph (C)(1) shall be known as the Comparative Effectiveness
				Advisory Board. Any reference in a law, map, regulation, document, paper, or
				other record of the United States to such stakeholder group shall be deemed to
				be a reference to the Comparative Effectiveness Advisory Board.
									(ii)Composition of
				BoardThe members of the
				Comparative Effectiveness Advisory Board shall consist of—
										(I)the Director of the
				Agency for Healthcare Research and Quality; and
										(II)up to 14
				additional members who shall represent broad constituencies of stakeholders
				including clinicians, patients, researchers, third-party payers, consumers of
				Federal and State beneficiary programs, and health care industry
				professionals.
										(iii)Appointment;
				termsThe Comptroller General
				of the United States shall appoint the members of the Comparative Effectiveness
				Advisory Board. Each member shall be appointed for a term of 2 years. The
				members appointed for the first term following the date of the enactment of the
				Enhanced Health Care Value for All Act of 2007 shall be appointed not later
				than 90 days after such date of enactment. Any member serving on the Advisory
				Board as of the date of the enactment of the Enhanced Health Care Value for All
				Act of 2007 may continuing serving through the end of the member’s term.
									(iv)Conflicts of
				interestIn appointing the members of the Comparative
				Effectiveness Advisory Board (and the members of any panel that reports to the
				Board), the Comptroller General of the United States shall take into
				consideration any financial conflicts of interest.
									(E)Additional
				authoritiesIn addition to any authorities vested in the
				Comparative Effectiveness Advisory Board as of the day before the date of the
				enactment of the Enhanced Health Care Value for All Act of 2007, the
				Comparative Effectiveness Advisory Board shall have the following
				authorities:
									(i)To provide input on research
				priorities.
									(ii)To recommend how
				to organize research funded under this section taking into consideration the
				full range of appropriate methodologies, including randomized control trials,
				practical clinical trials, observation studies, and synthesis of existing
				research.
									(iii)To make recommendations on how findings
				resulting from research funded under this section should be described,
				presented, and disseminated.
									(iv)To make recommendations to the Congress and
				the Secretary, not later than 2 years after the date of the enactment of the
				Enhanced Health Care Value for All Act of 2007, regarding the establishment of
				one or more federally funded research and development centers.
									(v)To
				identify, consistent with subparagraph (C)(i), highest priorities (such as
				treatments that are highly utilized or are for high-cost, chronic illnesses)
				for research, demonstrations, and evaluations to support and improve Federal
				health care programs.
									(vi)To ensure that
				such priorities are in accordance with the principles described in subparagraph
				(F).
									(vii)To establish a clinical peer review
				advisory panel (comprised of methodologists, health service researchers, and
				medical experts) for each such priority to advise the Secretary on validating
				the science and methods used to conduct comparative effectiveness
				studies.
									(F)PrinciplesResearch
				conducted or supported under this section shall be in accordance with the
				following principles:
									(i)IndependenceThe
				setting of the agenda and use of the research shall be insulated from
				inappropriate political or stakeholder influence.
									(ii)Scientific
				credibilityThe methods for conducting the research shall be
				scientifically based.
									(iii)TransparencyAll
				aspects of the prioritization of research, the conduct of the research, and any
				recommendations based on the research shall be carried out in a transparent
				manner.
									(iv)Inclusion of
				input from stakeholdersPatients, providers, health care consumer
				representatives, health industry representatives, and lawmakers shall be
				consulted regarding priorities and dissemination of the
				research.
									;
						(3)in paragraph
			 (3)(C), by adding at the end the following:

							(iii)UpdatesThe
				Secretary shall make available and disseminate updated evaluations, syntheses,
				and findings under this subparagraph not less than every 6
				months.
							;
				and
					(4)in paragraph
			 (4)(A), by striking the programs established under titles XVIII, XIX,
			 and XXI of the Social Security Act and inserting the Federal
			 health care programs.
					(b)Reports to
			 CongressSuch section is
			 further amended—
					(1)by redesignating
			 subsection (e) as subsection (f); and
					(2)by inserting after
			 subsection (d) the following:

							(e)ReportsNot later than 1 year after the date of the
				enactment of the Enhanced Health Care Value for All Act of 2007, and annually
				thereafter, the Secretary, in consultation with the Comparative Effectiveness
				Advisory Board, shall submit to Congress a report on the activities conducted
				under this section. The report submitted under this subsection in 2012 shall
				include a description of the total activities conducted under this section
				since the date of the enactment of the Enhanced Health Care Value for All Act
				of 2007, including—
								(1)an evaluation of the return on the
				investment in the program conducted under this section, including the overall
				cost of the program, the scientific knowledge created through the program, and
				the ways in which such knowledge has been used;
								(2)an evaluation of
				any backlog of unfunded research projects; and
								(3)an assessment
				of—
									(A)how the program is
				working;
									(B)the governance
				structure of the program;
									(C)the ability of the
				program to include public comment and patient perspectives in priority setting;
				and
									(D)the ability of the
				program to disseminate findings and
				conclusions.
									.
					803.Health Care
			 Comparative Effectiveness Research Trust Fund; financing for Trust
			 Fund
				(a)Establishment of
			 trust fund
					(1)In
			 GeneralSubchapter A of chapter 98 of the Internal Revenue Code
			 of 1986 (relating to Trust Fund code) is amended by adding at the end the
			 following new section:

							9511.Health Care
				Comparative Effectiveness Research Trust Fund
								(a)Creation of
				Trust FundThere is established in the Treasury of the United
				States a Trust Fund to be known as the Health Care Comparative
				Effectiveness Research Trust Fund (hereinafter in this section referred
				to as the Trust Fund), consisting of such amounts as may be
				appropriated or credited to such Trust Fund as provided in this section and
				section 9602(b).
								(b)Transfers to
				FundThere are hereby appropriated to the Trust Fund the
				following:
									(1)Amounts equivalent
				to the net revenues received in the Treasury from the fees imposed under
				subchapter B of chapter 34 (relating to fees on health insurance and
				self-insured plans).
									(2)Subject to subsection (c)(2), for each
				fiscal year beginning with fiscal year 2008, amounts determined by the
				Secretary of Health and Human Services to be equivalent to fair share amount
				determined under subsection (c) multiplied by the average number of individuals
				entitled to benefits under part A, or enrolled under part B, of title XVIII of
				the Social Security Act during such fiscal year.
									The
				amounts appropriated under paragraph (2) shall be transferred from the Federal
				Hospital Insurance Trust Fund (established under section 1817 of the
				Social Security Act) and from the
				Federal Supplementary Medical Insurance Trust Fund (established under section
				1841 of such Act), and from the Medicare Prescription Drug Account within such
				Trust Fund, in proportion (as estimated by the Secretary) to the total
				expenditures during such fiscal year that are made under title XVIIII of such
				Act from the respective Trust Fund or account.(c)Fair share
				amount
									(1)In
				generalThe Secretary of Health and Human Services shall compute
				for each fiscal year (beginning with fiscal year 2008) a fair share amount
				under this subsection that is an amount that, when applied under this section
				and subchapter B of chapter 34 of the Internal Revenue Code of 1986, will
				result in revenues to the Trust Fund (taking into account any outstanding
				balance in the Trust Fund) for the fiscal year as follows:
										(A)for fiscal year
				2008, $100,000,000;
										(B)for fiscal year
				2009, $200,000,000; and
										(C)for each of fiscal
				years 2010 through 2012, $900,000,000.
										(2)Limitation on
				Medicare fundingIn no case shall the amount transferred under
				subsection (b)(2) for any fiscal year exceed $200,000,000.
									(d)Expenditures
				From FundAmounts in the Trust Fund are available to the
				Secretary of Health and Human Services for carrying out section 1013 of the
				Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
								(e)Net
				RevenuesFor purposes of this section, the term net
				revenues means the amount estimated by the Secretary based on the excess
				of—
									(1)the fees received
				in the Treasury under subchapter B of chapter 34, over
									(2)the decrease in
				the tax imposed by chapter 1 resulting from the fees imposed by such
				subchapter.
									.

					(2)Clerical
			 AmendmentThe table of sections for such subchapter A is amended
			 by adding at the end thereof the following new item:

								Sec. 9511. Health Care Comparative
				Effectiveness Research Trust
				Fund.

							.
					(b)Financing for
			 Fund from fees on insured and Self-Insured health plans
					(1)General
			 RuleChapter 34 of the Internal Revenue Code of 1986 is amended
			 by adding at the end the following new subchapter:

							BInsured Health
				Plans

									Sec. 4375. Health insurance.
									Sec. 4376. Definitions and special
				  rules.

								4375.Health
				insurance
									(a)Imposition of
				FeeThere is hereby imposed
				on each specified health insurance policy for each policy year a fee equal to
				the fair share amount determined under section 9511(c)(1) multiplied by the
				average number of lives covered under the policy.
									(b)Liability for
				FeeThe fee imposed by subsection (a) shall be paid by the issuer
				of the policy.
									(c)Specified Health
				Insurance PolicyFor purposes of this section—
										(1)In
				generalExcept as otherwise provided in this section, the term
				specified health insurance policy means any accident or health
				insurance policy issued with respect to individuals residing in the United
				States.
										(2)Exemption of
				certain policiesThe term specified health insurance
				policy does not include any insurance policy if substantially all of the
				coverage provided under such policy relates to—
											(A)liabilities
				incurred under workers’ compensation laws,
											(B)tort
				liabilities,
											(C)liabilities
				relating to ownership or use of property,
											(D)credit
				insurance,
											(E)medicare
				supplemental coverage, or
											(F)such other similar
				liabilities as the Secretary may specify by regulations.
											(3)Treatment of
				prepaid health coverage arrangements
											(A)In
				generalIn the case of any arrangement described in subparagraph
				(B)—
												(i)such arrangement
				shall be treated as a specified health insurance policy, and
												(ii)the person
				referred to in such subparagraph shall be treated as the issuer.
												(B)Description of
				arrangementsAn arrangement is described in this subparagraph if
				under such arrangement fixed payments or premiums are received as consideration
				for any person’s agreement to provide or arrange for the provision of accident
				or health coverage to residents of the United States, regardless of how such
				coverage is provided or arranged to be provided.
											4376.Definitions
				and special rules
									(a)DefinitionsFor
				purposes of this subchapter—
										(1)Accident and
				health coverageThe term accident and health
				coverage means any coverage which, if provided by an insurance policy,
				would cause such policy to be a specified health insurance policy (as defined
				in section 4375(c)).
										(2)Insurance
				policyThe term insurance policy means any policy or
				other instrument whereby a contract of insurance is issued, renewed, or
				extended.
										(3)United
				StatesThe term United States includes any
				possession of the United States.
										(b)Treatment of
				Governmental Entities
										(1)In
				generalFor purposes of this subchapter—
											(A)the term
				person includes any governmental entity, and
											(B)notwithstanding
				any other law or rule of law, governmental entities shall not be exempt from
				the fees imposed by this subchapter except as provided in paragraph (2).
											(2)Treatment of
				exempt governmental programsIn the case of an exempt governmental
				program, no fee shall be imposed under section 4375 or section 4376 on any
				covered life under such program.
										(3)Exempt
				governmental program definedFor purposes of this subchapter, the
				term exempt governmental program means—
											(A)any insurance
				program established under title XVIII of the Social Security Act,
											(B)the medical
				assistance program established by title XIX or XXI of the
				Social Security Act,
											(C)any program
				established by Federal law for providing medical care (other than through
				insurance policies) to individuals (or the spouses and dependents thereof) by
				reason of such individuals being—
												(i)members of the
				Armed Forces of the United States, or
												(ii)veterans,
				and
												(D)any program
				established by Federal law for providing medical care (other than through
				insurance policies) to members of Indian tribes (as defined in section 4(d) of
				the Indian Health Care Improvement
				Act).
											(c)Treatment as
				TaxFor purposes of subtitle F, the fees imposed by this
				subchapter shall be treated as if they were taxes.
									(d)No Cover Over to
				PossessionsNotwithstanding any other provision of law, no amount
				collected under this subchapter shall be covered over to any possession of the
				United States.

					(2)Clerical
			 AmendmentChapter 34 of such Code is amended by striking the
			 chapter heading and inserting the following:

							34TAXES ON CERTAIN
				INSURANCE POLICIES

									Subchapter A. Policies issued by
				  foreign insurers
									Subchapter B. Insured health
				  plans

								APolicies Issued By
				Foreign
				Insurers
								.
					(3)Effective
			 DateThe amendments made by this section shall apply with respect
			 to policies and plans for portions or policy or plan years beginning on or
			 after October 1, 2007.
					804.Coordination of
			 Health Services Research
				(a)EstablishmentThe
			 Secretary of Health and Human Services shall establish a permanent council (in
			 this section referred to as the Council) for the purpose of
			 assisting the offices and agencies of the Department of Health and Human
			 Services, the Department of Veterans Affairs, the Department of Defense, and
			 any other department or agency to coordinate the conduct or support of health
			 services research. Such coordination shall include advising each such office
			 and agency—
					(1)on clarifying its
			 policies regarding public access to data resulting from research conducted or
			 supported by the office or agency, including the provision of reasons for not
			 permitting any such data to be publicly disclosed;
					(2)on
			 making such policies, as clarified, publicly available; and
					(3)on updating the
			 publicly available versions of such policies to reflect any subsequent
			 modifications.
					(b)Membership
					(1)Number and
			 appointmentThe Council shall be composed of 20 members. One
			 member shall be the Director of the Agency for Healthcare Research and Quality.
			 The Director shall appoint the other members not later than 30 days after the
			 enactment of this Act.
					(2)Qualifications
						(A)In
			 generalThe members of the Council shall include one senior
			 official from each of the following agencies:
							(i)The
			 Veterans Health Administration.
							(ii)The
			 Department of Defense Military Health Care System.
							(iii)The Centers for
			 Disease Control and Prevention.
							(iv)The
			 National Center for Health Statistics.
							(v)The
			 National Institutes of Health.
							(vi)The
			 Center for Medicare & Medicaid Services.
							(vii)The Federal
			 Employees Health Benefits Program.
							(B)National,
			 philanthropic foundationsThe members of the Council shall
			 include 4 senior leaders from major national, philanthropic foundations that
			 fund and use health services research.
						(C)StakeholdersThe
			 remaining members of the Council shall be representatives of other stakeholders
			 in health services research, including private purchasers, health plans,
			 hospitals and other health facilities, and health consumer groups.
						(D)Period of
			 appointmentMembers of the Council shall be appointed for the
			 life of the Council. Any vacancies shall not affect the power and duties of the
			 Council and shall be filled in the same manner as the original
			 appointment.
						(c)LeadershipThe
			 Secretary of Health and Human Services shall appoint the chair of the Council.
			 Not later than 15 days after the date on which all members of the Council have
			 been appointed under section (b)(1), the Council chair shall designate a
			 co-chair of the Council. The co-chair shall be the leader of a national
			 foundation that funds health services research.
				(d)SubcommitteesThe
			 Council may establish subcommittees to assist in carrying out its
			 duties.
				(e)Duties
					(1)Public
			 meetingsNot later than 120 days after the designation of a
			 co-chairperson under subsection (c), the Council shall hold public meetings
			 with producers and users of health services research to examine—
						(A)the major
			 infrastructure challenges facing the field of health services research;
						(B)the field’s
			 research priorities over the next 5 years;
						(C)the current
			 portfolio of health services research being funded;
						(D)ways to stimulate
			 innovation in the field of health services research; and
						(E)ways in which the
			 field of health services research might help to transform the health care
			 system by 2020.
						(2)Additional
			 meetingsThe Council may hold additional public meetings on
			 subjects other than those listed in the paragraph (1) so long as the meetings
			 are determined to be necessary by the Council in carrying out its duties.
			 Additional meetings are not required to be completed within the time period
			 specified in paragraph (1).
					(3)Develop a
			 strategic planNot later than 2 years after the meetings
			 described in paragraph (1) and (2) are completed, the Council shall prepare and
			 make public through the Internet and other channels a strategic plan for the
			 field of health services research, which plan shall include the
			 following:
						(A)A health services
			 research agenda to address the Nation’s evolving health care priorities.
						(B)A plan for
			 addressing the infrastructure needs of the field of health services research,
			 including professional development for the next generation of researchers and
			 improved methods and data.
						(C)A plan for
			 fostering innovation in the field of health services research.
						(D)A uniform
			 definition of health services research and standard research categories to be
			 used across the funders of health services research in developing research
			 budgets and reporting research expenditures.
						(f)Annual
			 reportNot later than 1 year after the publication of the
			 Council’s strategic plan under subsection (e)(3), and annually thereafter, the
			 Council shall report to the Congress on, and make public a detailed description
			 of, the following:
					(1)The Council’s
			 progress in implementing the strategic plan.
					(2)Organizational
			 expenditures in health services research by the Federal agencies specified in
			 subsection (b)(2)(A) according to the uniform definition and standard research
			 categories developed by the Council.
					(g)Detail of
			 employeesEach Federal agency represented on the Council may, on
			 a non-reimbursable basis, detail one employee to the Council. Each such detail
			 shall last no more than 2 years. Any detail of an employee shall be without
			 interruption or loss of civil services status or privilege.
				(h)ContractingThe
			 Director of the Agency for Healthcare Research and Quality may contract with an
			 outside entity to assist the Council in holding public meetings, developing the
			 strategic plan for the field of health services research, and fulfilling annual
			 reporting requirements.
				IXContaining
			 Medical Costs and Getting More Value for the Health Care Dollar
			901.Cost-containment results of the Healthy
			 Americans ActCongress finds
			 that the Healthy Americans Act will result in the following:
				(1)Private insurance companies will be forced
			 to hold down costs and will slow the rate of growth because they are required
			 to offer standardized Healthy American Private Insurance plans.
				(2)Administrative savings will be derived from
			 decoupling employers from the health care infrastructure and reducing
			 employers' and insurers' administrative costs.
				(3)Private insurance companies will implement
			 uniform billing and common claims forms.
				(4)Congress will reclaim Medicare and Medicaid
			 disproportionate share hospital (DSH) payments because previously uninsured
			 persons will go to providers on an outpatient basis instead of an emergency
			 department.
				(5)State and local governments will save money
			 on programs they operated for the uninsured before enactment of this
			 Act.
				(6)The Federal Government will save money on
			 Federal tax subsidies that reward inefficient care and are regressive.
				(7)The Federal Government and the private
			 sector will save money if the Food and Drug Administration determines whether
			 products provide new value.
				(8)Reducing medical errors will save the
			 government and the private sector money.
				(9)Requiring hospitals to send large bills to
			 patients for their review will reduce errors in medical billing and force major
			 providers to be more cost conscious.
				(10)Requiring insurers to reimburse for quality
			 and cost effective services will hold down private sector costs.
				(11)Reduction of Medicare’s restriction on
			 bargaining power for prescription drugs will reduce costs for sole source drugs
			 and other medications.
				(12)Establishment of electronic medical records
			 by insurers will create savings.
				(13)Publication of cost and quality data will
			 enable people to look up by zip code affordable high-quality providers.