To amend the Social Security Act and the Internal Revenue Code of 1986 to assure comprehensive, affordable health insurance coverage for all Americans through an American Health Benefits Program.

November 8, 2005

Mr. LANGEVIN introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, 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

To amend the Social Security Act and the Internal Revenue Code of 1986 to assure comprehensive, affordable health insurance coverage for all Americans through an American Health Benefits Program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `American Health Benefits Program Act of 2005'.

(b) Findings- Congress finds the following:

(1) UNINSURED AMERICANS AND LACK OF ACCESS TO CHOICES- (A) In 2002, 43.6 million Americans were uninsured, 80 percent of whom were employed (or dependents of individuals who were employed).

(B) Health care providers provided to uninsured Americans $35 billion in care for which they were not compensated by the individuals or through insurance.

(C) Only 8 percent of employers providing health benefits are able to offer their employees a choice between two or more health plans.

(2) DOUBLE-DIGIT GROWTH IN EMPLOYER COSTS- In 2003 the average per capita cost for employers to provide health benefits coverage increased by almost 14 percent. This was the third consecutive year of double-digit increases in such cost.

(3) ADMINISTRATIVE EFFICIENCY OF USING FEHBP MODEL FOR PROVIDING HEALTH INSURANCE COVERAGE- (A) The private insurance market presents increasing administrative challenges for employers in seeking out, contracting with, and administering health benefits.

(B) The Federal Employee Health Benefits Program (FEHBP) currently manages negotiations with health insurers over premiums and benefits on behalf of 8.6 million Federal employees and retirees and their dependents.

(C) Overhead costs for employers providing health benefits coverage can be over 30 percent for employers with fewer than 10 employees and about 12 percent for employers with more than 500 employees.

(D) In comparison, the overhead cost of coverage provided under FEHBP is about 3 percent.

(4) EXPANSION OF FEHBP MODEL TO COVER UNINSURED AND OTHER AMERICANS- Requiring participation in an FEHBP-style program would expand consumer choice, ensure portability and continuity of coverage, improve incentives for cost containment, and stabilize the burden on businesses

(5) PERSONAL RESPONSIBILITY- A recent survey indicates that a clear majority of Americans sees securing health insurance coverage as a personal responsibility for themselves and others.

(c) Table of Contents- The table of contents of this Act is as follows:

Sec. 1. Short title; findings; table of contents.

Sec. 2. Establishment of American Health Benefits Program.

`TITLE XXII--AMERICAN HEALTH BENEFITS PROGRAM

Sec. 3. Collection of premiums, subsidies, and employer funding.

`Part VIII--American Health Benefits Program premiums

`Chapter 25--American Health Benefits Program

Sec. 4. Amendments to the medicaid program and SCHIP.

Sec. 5. Studies.

SEC. 2. ESTABLISHMENT OF AMERICAN HEALTH BENEFITS PROGRAM.

(a) In General- The Social Security Act is amended by adding at the end the following new title:

`TITLE XXII--AMERICAN HEALTH BENEFITS PROGRAM

`SEC. 2201. ESTABLISHMENT OF PROGRAM.

`There is established under this title a program (to be known as the `American Health Benefits Program') to provide comprehensive health insurance coverage to all Americans who are not covered under certain Federal health insurance programs and who are not eligible for employer-provided insurance coverage. The coverage shall be provided in a manner similar to the manner in which coverage has been provided to Members of Congress and Federal Government employees and retirees and their dependents under the Federal Employees Health Benefits Program (FEHBP).

`SEC. 2202. ELIGIBILITY; REQUIREMENT OF COVERAGE.

`(a) Eligibility-

`(1) IN GENERAL- Each AHBP-eligible individual is eligible to enroll in a qualified health plan offered under this title.

`(2) AHBP-ELIGIBLE INDIVIDUAL DEFINED-

`(A) IN GENERAL- For purposes of this title, the term `AHBP-eligible individual' means an individual residing in the United States who is--

`(i) a citizen or national of the United States;

`(ii) an alien lawfully admitted to the United States for permanent residence;

`(iii) an alien admitted into the United States under section 207 of the Immigration and Nationality Act (relating to refugees);

`(iv) an alien otherwise permanently residing in the United States under color of law (as specified by the Commissioner); or

`(v) an alien with the status of a nonimmigrant who is within a class of long-term nonimmigrants under section 101(a)(15) of the Immigration and Nationality Act that the Commissioner determines, in consultation with the Secretary of Homeland Security, to be appropriate.

`(B) EXCEPTIONS- Such term does not include the following individuals:

`(i) INDIVIDUALS ELIGIBLE FOR QUALIFIED EMPLOYER-PROVIDED COVERAGE- An individual who is eligible for employer-provided coverage, as defined in section 2207(6), whether an employee, dependent, or otherwise.

`(ii) INCARCERATED INDIVIDUALS- An individual who is incarcerated (as specified by the Commissioner).

`(b) Requirement of Coverage-

`(1) IN GENERAL- Except as provided in this subsection, each AHBP-eligible individual shall be enrolled in a qualified health plan under this title.

`(2) EXCEPTION FOR INDIVIDUALS DEMONSTRATING PUBLIC HEALTH INSURANCE COVERAGE- The requirement of paragraph (1) shall not apply to an individual who demonstrates coverage under any of the following:

`(A) MEDICARE- Coverage under parts A and B (or under part C) of title XVIII.

`(B) MEDICAID- Coverage under a State plan under title XIX.

`(C) TRICARE/CHAMPUS- Coverage under the TRICARE program under chapter 55, of title 10, United States Code.

`(D) INDIAN HEALTH SERVICES- Coverage under a medical care program of the Indian Health Service or of a tribal organization.

`(E) VETERANS HEALTH- Coverage under the veterans health care program under chapter 17 of title 38, United States Code, if the coverage for the individual involved is determined to be not less than the coverage provided under a qualified health plan, based on the individual's priority for services as provided under section 1705(a) of such title.

`(3) EXCEPTION FOR NONIMMIGRANTS- The requirement of paragraph (1) shall not apply to an individual described in subsection (a)(2)(A)(v).

`(c) Enrollment; Default Enrollment-

`(1) IN GENERAL- The Commissioner shall establish a process for AHBP-eligible individuals to enroll in qualified health plans. Such process shall be based on the enrollment process used under FEHBP and shall provide for the dissemination of information to AHBP-eligible individuals on qualified health plans being offered.

`(2) DEFAULT ENROLLMENT-

`(A) IN GENERAL- The Commissioner shall establish a procedure under which an AHBP-eligible individual who is required under subsection (b) to enroll, but is not enrolled, in a qualified health plan will be assigned to, and enrolled in, such a plan.

`(B) RULES- In carrying out subparagraph (A), the Commissioner shall assign AHBP-eligible individuals and families to plans the premium of which is below the average premium for the AHBP region or other area in which the individuals or families reside.

`(3) CHANGES IN ENROLLMENT- The Commissioner shall establish enrollment procedures that include an annual open season and permit changes in enrollment with qualified health plans at other times (such as by reason of changes in marital or dependent status). Such procedures shall be based on the enrollment procedures established under FEHBP.

`(d) Treatment of Family Members- Enrollment under this title shall include both individual and family enrollment, in a manner similar to that provided under FEHBP. To the extent consistent with eligibility under subsection (a), the Commissioner shall provide rules similar to the rules under FEHBP for the enrollment of family members who are AHBP-eligible individuals in the same plan, except that such rules shall permit a family consisting only of a married couple to elect to enroll each spouse in a different qualified health plan.

`(e) Changes in Plan Enrollment- The Commissioner shall provide for and permit changes in the qualified health plan in which an individual or family is enrolled under this section in a manner similar to the manner in which such changes are provided or permitted under FEHBP. The Commissioner shall provide for termination of such enrollment for an individual at the time the individual is no longer an AHBP-eligible individual.

`(f) Enrollment Guides- The Commissioner shall provide for the broad dissemination of information on qualified health plans offered under this title. Such information shall be provided in a comparative manner, similar to that used under FEHBP, and shall include information, collected through surveys of enrollees, on measures of enrollee satisfaction with the different plans.

`SEC. 2203. QUALIFIED HEALTH PLANS; BENEFITS; PREMIUMS.

`(a) Offering of Plans-

`(1) CONTRACTS- The Commissioner shall enter into contracts with entities for the offering of qualified health plans in accordance with this title. Such contracts shall be entered into in a manner similar to the process by which the Director of the Office of Personnel Management is authorized to enter into contracts with health benefits plans under FEHBP.

`(2) REQUIREMENTS FOR ENTITIES OFFERING PLANS- No such contract shall be entered into with an entity for the offering of a qualified health plan in a region unless the entity--

`(A) is licensed as a health maintenance organization in that State or is licensed to sell group health insurance coverage in that State;

`(B) meets such requirements, similar to requirements under FEHBP, as the Commissioner may establish relating to solvency, organization, structure, governance, access, and quality; and

`(C) agrees to participate in the high-risk reinsurance pool described in subsection (d).

`(3) CONTRACTING WITH LIMITED NUMBER OF PLANS IN A REGION WITHIN TYPES OF PLANS-

`(A) IN GENERAL- The Commissioner shall contract with only a limited number of qualified health plans of each type (as specified under subparagraph (B)) in each AHBP region.

`(B) TYPES OF PLANS- For purposes of subparagraph (A), the Commissioner shall classify the different types of qualified health plans, such as fee-for-service plans, health maintenance plans, preferred provider plans, and other types of plans.

`(b) FEHBP Scope of Benefits-

`(1) COMPREHENSIVE BENEFITS- Qualified health plans shall provide for the same scope and type of comprehensive benefits that have been provided under FEHBP, including the types of benefits described in section 8904 of title 5, United States Code and including benefits previously required by regulation or direction (such as preventive benefits, including childhood immunization and cancer screening, and mental health parity) under FEHBP.

`(2) NO EXCLUSION FOR PRE-EXISTING CONDITIONS- Qualified health plans shall not impose pre-existing condition exclusions or otherwise discriminate against any enrollee based on the health status of such enrollee (including genetic information relating to such enrollee) .

`(3) OTHER CONSUMER PROTECTIONS- Qualified health plans also shall meet consumer and patient protection requirements that the Commissioner establishes, based on similar requirements previously imposed under FEHBP, including protections of patients' rights previously effected pursuant to Executive Memorandum.

`(c) Community-Rated Premiums-

`(1) IN GENERAL- The premiums established for a qualified health plan under this title for individual or family coverage shall be community-rated and shall not vary based on age, gender, health status (including genetic information), or other factors.

`(2) COLLECTION PROCESS- The Commissioner shall establish a process for the timely and accurate collection of premiums owed by enrollees, taking into account any Government contribution under section 2204(a) and any premium subsidy referred to in section 2205(a). Such process shall include methods for payment through payroll withholding, as well as payment through automatic debiting of accounts with financial institutions, and shall be coordinated with the application of section 59B of the Internal Revenue Code of 1986. Such premiums shall be deposited into the American Health Benefits Program Trust Fund established under section 2204(c).

`(d) High-Risk Reinsurance Pool- The Commissioner shall establish an arrangement among the entities offering qualified health plans under which such entities contribute in an equitable manner (as determined by the Commissioner) into a fund that provides payment to plans for a percentage (specified by the Commissioner and not to exceed 90 percent) of the costs that they incur for enrollees beyond a predetermined threshold specified from time to time by the Commissioner.

`(e) Marketing Practices and Costs- The Commissioner shall monitor marketing practices with respect to qualified health plans in order to assure--

`(1) the accuracy of the information disseminated regarding such plans; and

`(2) that costs of marketing are reasonable and do not exceed a percentage of total costs that is specified by the Commissioner and that takes into account costs of market entry for new qualified health plans.

`SEC. 2204. GOVERNMENT CONTRIBUTION; AMERICAN HEALTH BENEFITS PROGRAM TRUST FUND.

`(a) Government Contribution-

`(1) IN GENERAL- The Commissioner shall provide each year for a contribution under this subsection towards the coverage provided under this title for those AHBP-eligible individuals who are required to be enrolled in a qualified health plan under section 2202(b). Except as provided in this subsection, the amount of such contribution shall be determined using the same methodology that is applied for purposes of determining the Government contribution under section 8906 of title 5, United States Code and shall not exceed 75 percent of the premium for the plan selected.

`(2) USE OF REGIONAL WEIGHTED AVERAGE- Instead of computing the Government contribution using methodology under section 8906(b)(1) of title 5, United States Code, based on 72 percent of the weighted average premium for qualified health plans nationally, the Commissioner shall compute such contribution based on 72 percent of the weighted average premium for qualified health plans in each region involved (as identified by the Commissioner).

`(b) Plan Payment-

`(1) IN GENERAL- The Commissioner shall provide for payment of qualified health plans of the premiums for such plans, as adjusted under this subsection.

`(2) RISK ADJUSTED PAYMENT- The payment to a qualified health plan under this subsection shall be adjusted in a budget-neutral manner specified by the Commissioner to reflect the actuarial risk of the enrollees in the plan compared to an average actuarial risk.

`(3) REDUCTION FOR ADMINISTRATIVE EXPENSES AND CONTINGENCY RESERVE- The Commissioner shall provide for a uniform percentage reduction in payment otherwise made to a qualified health plan under this subsection. Such percentage shall consist of the following:

`(A) CONTINGENCY RESERVE- A percentage (not to exceed 3 percent) to provide for a contingency reserve described in section 2206(h)(1).

`(B) FEDERAL ADMINISTRATIVE COSTS- A percentage (not to exceed 5 percent) to cover Federal administrative costs in implementing this title.

`(c) Trust Fund-

`(1) ESTABLISHMENT- There is hereby established a trust fund, to be known as the `American Health Benefits Program Trust Fund' (in this subsection referred to as the `Trust Fund') .

`(2) DEPOSITS- The Trust Fund shall consist of such gifts and bequests as may be provided in section 201(i)(1) and such amounts as may be deposited in, or appropriated to, such fund as provided in this title. There are hereby appropriated to the Trust Fund, out of any moneys in the Treasury not otherwise appropriated, amounts equivalent to 100 percent of--

`(A) the taxes imposed by section 3451 of the Internal Revenue Code of 1986 with respect to wages reported to the Secretary of the Treasury or the Secretary 's delegate pursuant to subtitle F of such Code, as determined by the Secretary of the Treasury by applying the applicable rates of tax under such section to such wages, which wages shall be certified by the Commissioner of Social Security on the basis of records of wages established and maintained by such Commissioner in accordance with such reports;

`(B) the taxes imposed by section 1401(c) of the Internal Revenue Code of 1986 with respect to self-employment income reported to the Secretary of the Treasury or the Secretary's delegate pursuant to subtitle F of such Code, as determined by the Secretary of the Treasury by applying the applicable rates of tax under such section to such self-employment income, which self-employment income shall be certified by the Commissioner of Social Security on the basis of records of self-employment established and maintained by such Commissioner in accordance with such returns; and

`(C) the excess of the amounts imposed under section 59B of the Internal Revenue Code of 1986 over the amounts of credits allowed under section 36.

The amounts appropriated by the preceding sentence shall be transferred from time to time from the general fund in the Treasury to the Trust Fund, such amounts to be determined on the basis of estimates by the Secretary of the Treasury of the taxes, specified in the preceding sentence, paid to or deposited into the Treasury; and proper adjustments shall be made in amounts subsequently transferred to the extent prior estimates were in excess of or were less than the taxes specified in such sentence.

`(3) APPLICATION OF TRUST FUND PROVISIONS- The provisions of subsections (b) through (f) of section 1817 shall apply to the Trust Fund in the same manner as they apply to the Federal Hospital Insurance Trust Fund, except that, for purposes of this paragraph, any reference in such subsections to a provision of the Internal Revenue Code of 1986 is deemed a reference to the corresponding provision of such Code referred to in paragraph (2) of this subsection.

`SEC. 2205. PREMIUM AND COST-SHARING SUBSIDIES FOR LOWER INCOME INDIVIDUALS.

`(a) Premium Subsidies- The Commissioner, in consultation with the Secretary of the Treasury, shall assist individuals in estimating the amount of the premium subsidy which will be allowed to such individuals under section 36 of the Internal Revenue Code of 1986 with respect to any month, and shall take the estimated amount of such premium subsidy into account for purposes of collecting any premium under section 2203(c)(2).

`(b) Cost-Sharing Subsidies-

`(1) NO COST-SHARING FOR INDIVIDUALS WITH FAMILY INCOME BELOW LOWEST INCOME THRESHOLD- In the case of a cost-sharing subsidy-eligible individual whose family income is less than the lowest income threshold, there shall be a cost-sharing subsidy so the cost-sharing is reduced to zero.

`(2) NO COST-SHARING FOR PREGNANT WOMEN AND CHILDREN- In the case of a cost-sharing subsidy-eligible individual who is under 18 years of age or who is a pregnant woman, there shall be a cost-sharing subsidy so the cost-sharing is reduced to zero.

`(3) SLIDING SCALE FOR OTHER INDIVIDUALS- In the case of cost-sharing subsidy-eligible individuals not described in paragraph (1) or (2), the Commissioner, in consultation with the Secretary of the Treasury, shall establish a schedule of cost-sharing subsidies consistent with this paragraph. Under such schedule the amount of a cost-sharing subsidy for such individuals shall be such that--

`(A) the cost-sharing is nominal (as defined for purposes of section 1916(a)(3)) for individuals whose family income is at the lowest income threshold; and

`(B) as the family income increases from such lowest income threshold to twice such threshold, the cost-sharing subsidy is reduced in a ratable matter to zero.

`(4) APPLICATION OF A PREVIOUS YEAR'S FAMILY INCOME- In applying this subsection for cost-sharing subsidies for expenses incurred for services furnished in a year, family income shall be determined based on the modified AGI, as defined in paragraph (7)(D), for taxable years ending in or with the previous year (or, if information on such modified AGI for such taxable years is not available on a timely basis, for the most recent taxable years for which such information is so available).

`(5) APPLICATION FOR SUBSIDIES- A cost-sharing subsidy shall not be available to a cost-sharing subsidy-eligible individual under this subsection unless an application, in a form and manner and containing such information and in such frequency as the Commissioner shall specify, has been made for such subsidy.

`(6) PAYMENT OF SUBSIDIES TO PLANS- The Commissioner shall establish the form of additional payments to qualified health plans to compensate such plans for cost-sharing subsidies provided to enrollees under this subsection. Such payments may be in such form as the Commissioner specifies and may include--

`(A) a capitation payment, in an amount that reflects the per capita actuarial value of such subsidies;

`(B) reimbursement for the reductions in cost-sharing made to carry out this subsection; or

`(C) a combination of the methodologies under subparagraphs (A) and (B).

`(7) DEFINITIONS- For purposes of this subsection:

`(A) COST-SHARING SUBSIDY-ELIGIBLE INDIVIDUAL DEFINED- The term `cost-sharing subsidy-eligible individual' means an AHBP-eligible individual--

`(i) who is enrolled, and required under section 2202(b) to be enrolled, in a qualified health plan under this title;

`(ii) whose family income does not exceed twice the lowest income threshold (as defined in subparagraph (B)); and

`(iii) who does not have in effect (and any of whose family members does not have in effect), in a form and manner specified by the Commissioner, in consultation with the Secretary of the Treasury, for any portion of the year involved an objection to the release of information under section 6103(l)(21) of the Internal Revenue Code of 1986.

`(B) LOWEST INCOME THRESHOLD- The term `lowest income threshold' means--

`(i) in the case of coverage consisting of only an individual, 125 percent of the poverty line (as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by such section) for a single individual; or

`(ii) in the case of coverage consisting of a family of two or more individuals, 150 percent of the poverty line (as so defined) for a family of the size involved.

`(C) FAMILY INCOME- The term `family income' means, with respect to an AHBP-eligible individual who is enrolled in a qualified health plan--

`(i) for individual-only coverage, the modified AGI of the individual; or

`(ii) for coverage that includes other family members, the sum of the modified AGI of the individual and of each other individual covered under the plan as a family member of the individual.

The Commissioner, in consultation with the Secretary of the Treasury, may provide for exclusion from family income under subparagraph (B) of family members (such as children) who have de minimis income (as specified by the Commissioner).

`(D) MODIFIED AGI DEFINED- The term `modified AGI' means adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986)--

`(i) determined without regard to sections 135, 911, 931, and 933 of such Code; and

`(ii) increased by the amount of interest received or accrued during the taxable year which is exempt from tax under such Code.

In the case of an individual filing a joint return, any reference in this subsection to the modified adjusted gross income of such individual shall be 1/2 such return's modified adjusted gross income.

`SEC. 2206. ADMINISTRATION.

`(a) Application of FEHBP Rules-

`(1) IN GENERAL- Except as otherwise provided in this title, the program under this title shall be administered in the same manner as FEHBP.

`(2) SPECIFIC PROVISIONS- In carrying out this title, the Commissioner pursuant to paragraph (1) shall provide for the following:

`(A) Approval and disapproval of plans as qualified health plans.

`(B) Negotiation of plan benefits (including cost-sharing) and plan premiums.

`(b) Establishment of Health Benefits Administration- There is hereby established, as an independent agency in the executive branch of Government, a Health Benefits Administration (in this title referred to as the `Administration').

`(c) Duties-

`(1) IN GENERAL- The Administration shall administer the program under this title and, with respect to application of any provision of FEHBP under this title, any reference in FEHBP to the Director of the Office of Management and Budget is deemed a reference to the Commissioner of Health Benefits.

`(2) ESTABLISHMENT OF AHBP REGIONS- For purposes of carrying out this title, the Commissioner shall divide the United States into, and establish, AHBP regions.

`(d) Officers-

`(1) COMMISSIONER OF HEALTH BENEFITS-

`(A) IN GENERAL- There shall be in the Administration a Commissioner of Health Benefits who shall be appointed by the President, by and with the advice and consent of the Senate.

`(B) COMPENSATION- The Commissioner shall be compensated at the rate provided for level I of the Executive Schedule.

`(C) TERM- The provisions of section 702(a)(3) shall apply to the Commissioner of Health Benefits in the same manner as they apply to the Commissioner of Social Security, except that any reference to January 19, 2001, shall be treated as a reference to the date that is January 19 of the fifth year that begins after the date of the enactment of this title.

`(2) DEPUTY COMMISSIONER-

`(A) IN GENERAL- There shall be in the Administration a Deputy Commissioner for Health Benefits, who shall be appointed by the President, by and with the advice and consent of the Senate.

`(B) APPLICATION OF SSA PROVISIONS- The provisions of paragraphs (2) through (4) of section 702(b) shall apply to the Deputy Commissioner in the same manner as they apply to the Deputy Commissioner of Social Security, except that any reference to January 19, 2001, shall be treated as a reference to the date specified under paragraph (1)(C).

`(3) OTHER OFFICERS- There shall be in the Administration a Chief Actuary, Chief Financial Officer, and Inspector General. The provisions of subsections (c) through (e) of section 702 shall apply with respect to such officers in the same manner as they apply with respect to comparable officers in the Social Security Administration.

`(4) PERSONNEL; BUDGETARY MATTERS; SEAL OF OFFICE- The provisions of subsections (a)(1), (a)(2), (b), and (d) of section 704 shall apply to the Commissioner and the Administration in the same manner as they apply to the Commissioner of Social Security and the Social Security Administration, respectively.

`(e) Authority and Rulemaking- The provisions of paragraphs (4) through (7) of section 702(a) shall apply to the Administration and Commissioner in the same manner as they apply to the Social Security Administration and the Commissioner of Social Security.

`(f) Use of Regional and Field Offices- The Commissioner shall establish such regional and field offices as may be appropriate for the convenient and efficient administration of this title.

`(g) Coverage of Administration Costs- The Commissioner shall provide for the collection of administrative costs of offering coverage under this title from entities offering qualified health plans in the same manner as FEHBP provides for coverage of its administrative costs.

`(h) Contingency Reserves-

`(1) AHBP CONTINGENCY RESERVE- The Commissioner is authorized to establish and maintain a contingency reserve for purposes of carrying out this title and is authorized to impose under section 2204(b)(3)(A) a premium surcharge of up to three percent in order to provide financing for such reserve.

`(2) PLAN RESERVES- A qualified health plan may establish contingency reserves, that are in addition to the reserve described in paragraph (1), in a manner similar to that permitted under FEHBP.

`SEC. 2207. DEFINITIONS.

`For purposes of this title, except as otherwise provided:

`(1) The term `Administration' means the Health Benefits Administration established under section 2206(b).

`(2) The term `AHBP-eligible individual' means an individual described in section 2202(a)(2).

`(3) The term `AHBP region' means a region as specified by the Commissioner under section 2206(c)(2).

`(4) The term `Commissioner' means the Commissioner of Health Benefits appointed under section 2206(d)(1).

`(5) The term `FEHBP' means the program under chapter 89 of title 5, United States Code, as in effect before the date of the enactment of this title.

`(6) The term `qualified employer-provided coverage' means health coverage that is provided on the basis of employment and that the Commissioner has certified as being equivalent to the coverage under qualified health plans. For purposes of the previous sentence, coverage provided on the basis of employment is not equivalent to coverage under a qualified health plan unless the employer's share of the cost of such coverage is is not less than the Government's share of the cost of coverage under qualified health plans.

`(7) The term `qualified health plan' means such a plan offered under this title.'.

(b) Effective Date; Collective Bargaining Agreements-

(1) BENEFITS- Title XXII of the Social Security Act shall first apply to benefits for items and services furnished on or after January 1, 2008.

(2) EFFECT ON COLLECTIVE BARGAINING AGREEMENTS- Nothing in this Act shall be construed as preventing a collectively bargained agreement from providing coverage that is additional to, or supplementary of, benefits provided under the American Health Benefits Program.

SEC. 3. COLLECTION OF PREMIUMS, SUBSIDIES, AND EMPLOYER FUNDING.

(a) Premium Collection-

(1) IN GENERAL- Subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to determination of tax liability) is amended by adding at the end the following new part:

`PART VIII--AMERICAN HEALTH BENEFITS PROGRAM PREMIUMS

`Sec. 59B. American Health Benefits Program premiums.

`SEC. 59B. AMERICAN HEALTH BENEFITS PROGRAM PREMIUMS.

`(a) In General- In the case of a specified individual who is enrolled in a qualified health plan under title XXII of the Social Security Act (including by reason of a default enrollment under section 2202(c)(2)), there is hereby imposed (in addition to any other amount imposed by this subtitle) for the taxable year an amount equal to the aggregate premiums established under such title with respect to the coverage under such title which covers such individual for months beginning in such taxable year. The amount imposed under this subsection shall be reduced by the amount of any government contribution under section 2204(a) of such Act which relates to such coverage.

`(b) Specified Individual- For purposes of this section, the term `specified individual' means, with respect to coverage under title XXII of the Social Security Act for any month beginning in a taxable year--

`(1) in the case of self-only coverage, the individual covered under such coverage, and

`(2) in the case of family coverage, each individual covered under such coverage unless such individual is covered under such coverage by reason of being a member of the family (other than a spouse).

`(c) Joint and Several Liability- In the case of an individual and such individual's spouse covered under family coverage--

`(1) each such individual shall be jointly and severally liable for the amount imposed under subsection (a), and

`(2) the aggregate amount imposed under subsection (a) with respect to such coverage may not exceed the amount imposed with respect to either such individual.

`(d) Coordination With Other Provisions-

`(1) NOT TREATED AS MEDICAL EXPENSE- For purposes of section 213, the amount imposed by this section for any taxable year shall not be treated as an expense paid for medical care.

`(2) NOT TREATED AS TAX FOR CERTAIN PURPOSES- The amount imposed by this section shall not be treated as a tax imposed by this chapter for purposes of determining--

`(A) the amount of any credit allowable under this chapter, or

`(B) the amount of the minimum tax imposed by section 55.

`(3) TREATMENT UNDER SUBTITLE F- For purposes of subtitle F, the amount imposed by this section shall be treated as if it were a tax imposed by section 1.

`(4) SECTION 15 NOT TO APPLY- Section 15 shall not apply to the amount imposed by this section.

`(5) SECTION NOT TO AFFECT LIABILITY OF POSSESSIONS, ETC- This section shall not apply for purposes of determining liability to any possession of the United States. For purposes of section 932 and 7654, the amount imposed under this section shall not be treated as a tax imposed by this chapter.

`(e) Regulations- The Secretary may prescribe such regulations as may be appropriate to carry out the purposes of this section.'.

(2) ADJUSTMENTS TO WITHHOLDING- Subsection (a) of section 3402 of such Code (relating to income tax collected at source) is amended by adding at the end the following new paragraph:

`(3) SPECIAL RULE FOR AMOUNTS IMPOSED BY SECTION 59B-

`(A) IN GENERAL- In determining the amount required to be deducted and withheld from wages paid to an individual during any month by such individual's employer, the amount imposed by section 59B shall be taken into account.

`(B) WAGES NOT REDUCED BY EXEMPTIONS- In determining the amount to be deducted and withheld by reason of subparagraph (A), the amount of wages shall not be reduced as provided in paragraph (2).'.

(3) CLERICAL AMENDMENT- The table of parts for subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

`Part VIII. American Health Benefits Program premiums'.

(b) Credit for Subsidy and Prepayments of American Health Benefits Premiums-

(1) IN GENERAL- Subpart 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:

`SEC. 36. SUBSIDY AND PREPAYMENT OF AMERICAN HEALTH BENEFITS PREMIUMS.

`(a) In General- In the case of a specified individual (as defined in section 59B(b)), there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the sum of--

`(1) the aggregate amount of premiums paid (other than any government contribution under section 2204(a) of the Social Security Act) with respect to the coverage of such individual under title XXII of the Social Security Act, and

`(2) in the case of any premium subsidy-eligible individual, the applicable premium subsidy.

`(b) Applicable Premium Subsidy-

`(1) IN GENERAL- For purposes of this section, the term `applicable premium subsidy' means, with respect to any premium subsidy-eligible individual, the weighted average premium in effect for the calendar year in which the taxable year begins (for the type of coverage involved) for plans in the AHBP region involved, as determined by the Commissioner of Health Benefits.

`(2) REDUCTION BASED ON FAMILY INCOME- The amount otherwise determined under paragraph (1) shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so determined as--

`(A) the amount (if any) by which the taxpayer's family income for the taxable year exceeds the lowest income threshold, bears to

`(B) the lowest income threshold.

`(c) Premium Subsidy-Eligible Individual- For purposes of this section, the term `premium subsidy-eligible individual' means an individual--

`(1) who is enrolled, and required to be enrolled, in a qualified health plan under title XXII of the Social Security Act,

`(2) whose family income does not exceed twice the lowest income threshold, and

`(3) who does not have in effect (and, in the case of family coverage, each other individual covered under such coverage does not have in effect), in a form and manner specified by the Secretary of the Treasury in consultation with the Commissioner of Health Benefits, for any portion of the taxable year of such individual an objection to the release of information under section 6103(k)(10)).

`(d) Lowest Income Threshold- For purposes of this section, the term `lowest income threshold' means, with respect to coverage consisting of--

`(1) only an individual, 125 percent of the poverty line (as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by such section) for a single individual for the calendar year which includes the close of the taxable year, or

`(2) a family of two or more individuals, 150 percent of the poverty line (as so defined) for a family of the size involved for the calendar year which includes the close of the taxable year.

`(e) Family Income- For purposes of this section--

`(1) IN GENERAL- The term `family income' means, with respect to a specified individual (as defined in section 59B(b)) covered under coverage consisting of--

`(A) only such individual, the modified adjusted gross income of such individual, or

`(B) two or more individuals, the sum of the modified adjusted gross income of the specified individual and the modified adjusted gross income of each other individual covered under the plan for the taxable year that ends in or with the taxable year of the specified individual.

`(2) MODIFIED ADJUSTED GROSS INCOME- The term `modified adjusted gross income' means adjusted gross income--

`(A) determined without regard to sections 135, 911, 931, and 933, and

`(B) increased by the amount of interest received or accrued during the taxable year which is exempt from tax under this title.

`(f) Regulations- The Secretary may prescribe such regulations as are necessary or appropriate to carry out this section, including regulations which provide for not taking into account individuals with de minimis income for purposes of determining family income for purposes of this section.'.

(2) CONFORMING AMENDMENTS-

(A) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting `or 36' after `section 35'.

(B) The table of section for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 36 and inserting the following new items:

`Sec. 36. Subsidy and prepayment of American Health Benefits premiums.

`Sec. 37. Overpayments of tax.'.

(c) Employer Funding-

(1) IN GENERAL- Subtitle C of the Internal Revenue Code of 1986 (relating to employment taxes) is amended by redesignating chapter 25 as chapter 26 and by inserting after chapter 24 the following new chapter:

`CHAPTER 25--AMERICAN HEALTH BENEFITS PROGRAM

`Sec. 3451. Tax on employers.

`Sec. 3452. Refund of tax in case of qualified employer-provided coverage.

`Sec. 3453. Instrumentalities of the United States.

`SEC. 3451. TAX ON EMPLOYERS.

`(a) Imposition of Tax- In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the applicable percentage of the wages paid by him with respect to employment.

`(b) Applicable Percentage- The term `applicable percentage' means, with respect to wages paid during any period, the percentage determined by the Commissioner of Health Benefits, in consultation with the Secretary, with respect to such period which, in the estimation of such Commissioner, will provide revenue to the Federal Government equal to the excess of the cost to the Federal Government of providing coverage under under title XXII of the Social Security Act over the aggregate premiums (reduced by any premium subsidies) established under such title with respect to such coverage.

`(c) No Cover Over to Possessions- Notwithstanding any other provision of law, no amount collected under this chapter shall be covered over to any possession of the United States.

`(d) Other Definitions- For purposes of this chapter, the terms `wages', `employer', and `employment' have the same respective meanings as when used in chapter 21: except that, for purposes of this chapter, section 3121(a)(1) shall not apply.

`SEC. 3452. REFUND OF TAX IN CASE OF QUALIFIED EMPLOYER-PROVIDED COVERAGE.

`(a) In General- In the case of a person subject to tax under section 3451 or section 1401(c), there shall be allowed as a credit against the tax imposed by such section an amount equal to the tax imposed under such section with respect to the wages or self-employment income of individuals for periods during which the individual is covered by qualified employer-provided coverage (which is provided by such person).

`(b) Qualified Employer-Provided Coverage- For purposes of subsection (a), the term `qualified employer-provided coverage' has the meaning given that term in section 2207(6) of the Social Security Act.

`SEC. 3453. INSTRUMENTALITIES OF THE UNITED STATES.

`Notwithstanding 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 tax imposed by section 3451 unless such other provision of law grants a specific exemption, by reference to section 3451, from the tax imposed by such section.'.

(2) SELF-EMPLOYMENT- Section 1401 of such Code is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:

`(c) American Health Benefits Program- In addition to other taxes, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax equal to the applicable percentage (as defined in section 3451(b))) of the amount of the self-employment income for such taxable year.'.

(3) CLERICAL AMENDMENT- The table of chapters for subtitle C of such Code is amended by striking the item relating to chapter 25 and inserting the following:

`Chapter 25. American Health Benefits Program

`Chapter 26. General provisions relating to employment taxes'

(d) Disclosure of Taxpayer Return Information to Carry Out Cost-Sharing Subsidies-

(1) IN GENERAL- Section 6103(l) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

`(21) DISCLOSURE OF RETURN INFORMATION TO CARRY OUT AMERICAN HEALTH BENEFITS PROGRAM-

`(A) IN GENERAL- The Secretary shall, upon written request from the Commissioner of Health Benefits, disclose to officers, employees, and contractors of the Health Benefits Administration return information of a taxpayer who is, according to the records of the Secretary, a cost-sharing subsidy-eligible individual (as defined in section 2205(b)(7)(A) of the Social Security Act) or a family member of such an individual. Such return information shall be limited to--

`(i) taxpayer identity information with respect to such taxpayer,

`(ii) the filing status of such taxpayer,

`(iii) the adjusted gross income of such taxpayer,

`(iv) the amounts excluded from such taxpayer's gross income under sections 135 and 911 to the extent such information is available,

`(v) the interest received or accrued during the taxable year which is exempt from the tax imposed by chapter 1 to the extent such information is available,

`(vi) the amounts excluded from such taxpayer's gross income by sections 931 and 933 to the extent such information is available, and

`(vii) the taxable year with respect to which the preceding information relates.

`(B) RESTRICTION ON USE OF DISCLOSED INFORMATION- Return information disclosed under subparagraph (A) may be used by officers, employees, and contractors of the Health Benefits Administration only for the purposes of, and to the extent necessary in, establishing the appropriate amount of any cost-sharing subsidies under section 2205 of the Social Security Act.'.

(2) CONFORMING AMENDMENTS-

(A) Paragraph (3) of section 6103(a) of such Code is amended by striking `or (20)' and inserting `(20), or (21)'.

(B) Paragraph (4) of section 6103(p) of such Code is amended by striking `(l)(16), (17), (19), or (20)' each place it appears and inserting `(l)(16), (17), (19), (20), or (21)'.

(C) Paragraph (2) of section 7213(a) of such Code is amended by striking `or (20)' and inserting `(20), or (21)'.

(e) Disclosure of Taxpayer Return Information to Carry Out Premium Subsidies- Section 6103(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

`(10) DISCLOSURE OF INFORMATION TO ADMINISTER PREMIUM SUBSIDY UNDER SECTION 36- To the extent that Secretary determines that disclosure is necessary to permit the effective administration of section 36, the Secretary may disclose the modified adjusted gross income (as defined in section 36) of any individual whose modified adjusted gross income is taken into account in determining the amount of any credit under such section. '.

(f) Effective Date-

(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall take effect on January 1, 2008.

(2) SUBSECTIONS (a) AND (b)- The amendments made by subsections (a) and (b) shall apply to months beginning after December 31, 2007, in taxable years ending after such date.

SEC. 4. AMENDMENTS TO THE MEDICAID PROGRAM AND SCHIP.

(a) Increase in FMAP Under Medicaid for For AHBP-Covered Services- Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended--

(1) in subsection (b), by inserting `subsection (y) and' after `Subject to'; and

(2) by adding at the end the following new subsection:

`(y)(1) Subject to the succeeding provisions of this subsection, the Federal medical assistance percentage under this title for calendar quarters in a fiscal year (beginning with the calendar quarter that begins on the effective date of the American Health Benefits Program under title XXII) shall be increased by a number of percentage points (rounded to the nearest 1/100th of a percentage point) equal to 40 percent of the number of percentage points by which 100 percent exceeds the Federal medical assistance percentage otherwise determined for the State without regard to this subsection.

`(2) Paragraph (1) shall only apply with respect to medical assistance for AHBP-eligible individuals (as defined in section 2207(2)) and only for items and services for which benefits are generally provided under qualified health plans under title XXII, as determined by the Secretary in consultation with the Commissioner of Health Benefits.

`(3) The Secretary shall provide for such special rules concerning the application of this subsection to the territories as the Secretary finds appropriate and equitable.'.

(b) Sunset of SCHIP Funding- Section 2105 of such Act (42 U.S.C. 1397ee) is amended by adding at the end the following new subsection:

`(h) Sunset of Program Upon Initiation of American Health Benefits Program- No payment shall be made under this title to a State for items and services furnished after the effective date of the American Health Benefits Program under title XXII.'.

SEC. 5. STUDIES.

(a) Studies- The Comptroller General of the United States shall provide for the following studies:

(1) INTEGRATION WITH OTHER PUBLIC HEALTH INSURANCE COVERAGE- A study of the cost effectiveness and quality of care under the American Health Benefits Program under title XXII of the Social Security Act compared to the public health insurance programs described in section 2202(b)(2) of such Act and the feasibility and desirability of integrating such programs with the Program under such title. Such study shall be conducted in consultation with the Federal officials overseeing such programs.

(2) GROWTH OF PRESCRIPTION DRUG COSTS- A study of the rate of growth of prescription drug costs under such Program compared to such rate of growth under such public health insurance programs.

(b) Reports- Not later than January 1, 2010, the Comptroller General shall submit to Congress a report on the studies conducted under subsection (a).

END