[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1057 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1057

  To provide for the establishment of a nationwide, universal access 
            health coverage program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                May 27 (legislative day, April 19), 1993

 Mr. Jeffords introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To provide for the establishment of a nationwide, universal access 
            health coverage program, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``MediCORE Health Act of 1993''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings.
Sec. 4. Definitions.
            (1) Board.
            (2) CORE services.
            (3) Secretary.
            (4) State.
            (5) State plan.
            (6) State program.

                  TITLE I--ELIGIBILITY AND ENROLLMENT

Sec. 101. Eligibility.
        (a) In general.
        (b) Lawful resident alien defined.
        (c) Overseas residents and travelers.
            (1) Overseas residents.
            (2) Travelers.
        (d) Non-resident aliens and illegal immigrants.
        (e) Primary residence.
Sec. 102. Enrollment in State programs.
        (a) Enrollment process.
            (1) Automatic enrollment.
            (2) Enrollment process for other individuals.
            (3) Default enrollment.
        (b) MediCORE cards.

           TITLE II--ADMINISTRATION BY FEDERAL MEDICORE BOARD

Sec. 201. Establishment and composition. 
        (a) Establishment.
        (b) Composition.
            (1) Appointment.
            (2) Terms.
            (3) Vacancies.
            (4) Chairperson.
            (5) Compensation.
        (c) Staff.
            (1) Authority.
            (2) Applicability of civil service provisions.
Sec. 202. Duties of MediCORE Board.
        (a) General administration.
        (b) CORE services.
        (c) Federal MediCORE guidelines.
        (d) Approval and oversight of State programs.
        (e) Model MediCORE Administration Manual.
            (1) In general.
            (2) Contents.
            (3) Time for provision of manuals.
        (f) National data bank system.
            (1) Establishment.
            (2) Functions.
        (g) Studies.
            (1) In general.
            (2) Immigrants and early retirees.
            (3) Veterans affairs.
            (4) Malpractice reform.
            (5) Coordination of programs.
        (h) Annual report.
Sec. 203. Organization.
        (a) In general.
        (b) Subcommittees.
        (c) Advisory panels.

                        TITLE III--CORE SERVICES

Sec. 301. CORE services.
        (a) Review.
        (b) Scope and content of CORE services.
        (c) Specific components.
            (1) Medically necessary services.
            (2) Medicare services.
            (3) Supplemental benefits.
            (4) Preventive health care services.
            (5) Long-term health, custodial or personal 
            assistance.
            (6) Catastrophic care.
        (d) Adjustment or expansion of CORE services.
Sec. 302. Special supplemental food program.
        (a) In general.
        (b) Appropriation.

                 TITLE IV--FEDERAL MEDICORE GUIDELINES

Sec. 401. Federal MediCORE guidelines.
        (a) Procedure.
            (1) Submission to States.
            (2) Adjustment of guidelines.
        (b) Requirements.
            (1) Universality.
            (2) Portability.
            (3) Single administrator.
            (4) Choice and managed competition.
            (5) Rural and underserved areas.
            (6) Private health insurance.
            (7) Cost sharing.
            (8) Mental health.
            (9) Primary care.

           TITLE V--APPROVAL AND OVERSIGHT OF STATE PROGRAMS

Sec. 501. Approval and oversight of State programs.
        (a) In general.
        (b) Submission of programs.
            (1) In general.
            (2) Regional programs.
        (c) Review and approval of programs.
        (d) Annual review.
        (e) Failure of approval.
            (1) Resubmission.
            (2) Sanctions.
        (f) Payments, premiums, copayments, deductibles, 
            etc.
            (1) Reimbursements.
            (2) Mandatory assignment.
        (g) Administration by State.
            (1) In general.
            (2) Administration by contract.

                       TITLE VI--MEDICORE BUDGET

Sec. 601. MediCORE budget.
        (a) Budgetary requirement.
        (b) National average per capita costs.
            (1) In general.
            (2) Adjustments for risk groups.
            (3) State adjustments to national average per 
            capita costs.
        (c) State total expenditures.
        (d) Federal contributions.
            (1) In general.
            (2) State share.
            (3) State protection.
        (e) Subsequent calculations.
Sec. 602. Health care revenue share payments to States.
        (a) In general.
        (b) Use of funds.
Sec. 603. MediCORE trust fund.
        (a) Trust fund established.
            (1) In general.
            (2) Transfer of amounts equivalent to certain 
            taxes.
            (3) Transfer of funds.
            (4) Appropriation of additional sums.
            (5) Incorporation of trust fund provisions.
        (b) Expenditures.
            (1) To States.
            (2) Administrative expenses.
        (c) Trust fund off-budget.
Sec. 604. Health care revenue sharing provisions.
        (a) Payroll taxes.
            (1) Tax on employees.
            (2) Tax on employers.
            (3) Tax on self-employment income.
            (4) Elimination of limit on employer-portion of 
            wages or self-employment income subject to 
            MediCORE tax.
            (5) Additional Federal, State, and local 
            employees subject to MediCORE taxes.
            (6) Effective date.
        (b) Individual tax on certain adjusted gross 
            income.
            (1) In general.
            (2) Conforming amendment.
            (3) Effective date.
        (d) Treatment of health care deductions, 
            exclusions, and credits.
            (1) Limitation on exclusion of compensation for 
            injuries or sickness.
            (2) Termination of exclusion for amounts 
            received under accident and health plans.
            (3) Termination of exclusion for contributions 
            by employer to accident and health plans.
            (4) Limitation on cafeteria plans.
            (5) Prohibition on use of MediCORE expenses as 
            business expense deduction for employer.
            (6) Deduction for medical expenses limited to 
            uncompensated expenses and employee MediCORE 
            tax.
            (7) Termination of pension payment of medical 
            benefits.
            (8) Termination of child health insurance 
            credit.
            (9) Effective date.

  TITLE VII--PREPARATION AND SUBMISSION OF MEDICORE BUDGET TO CONGRESS

Sec. 701. Preparation and submission.
Sec. 702. Publication and comment.
Sec. 703. Submission to Congress.
        (a) In general.
        (b) Income requirements.
Sec. 704. Action by Congress.
   TITLE VIII--EFFECTIVE DATE; REPEALS; TRANSITION; RELATION TO ERISA

Sec. 801. Effective date.
Sec. 802. Repeals.
        (a) In general.
        (b) Repeal of CHAMPUS provisions.
            (1) Amendments to chapter 55 of title 10.
            (2) Table of sections.
            (3) Conforming amendments.
        (c) Health care financing administration.
        (d) Effective date.
Sec. 803. Authorization of appropriations and transition.
        (a) Authorization of appropriations.
        (b) Regulations.
Sec. 804. Relation to ERISA.
Sec. 805. Relation to other laws.
        (a) In general.
        (b) Definition.

SEC. 3. FINDINGS.

    Congress finds the following:
            (1) The rate of growth in health care costs in the United 
        States in both the public and private sectors is excessive and 
        destructive, and more specifically--
                    (A)(i) between 1980 and 1992, health care spending 
                in the United States increased from 9 percent of the 
                Gross Domestic Product to 14 percent and in 1993 it is 
                expected to rise to 15 percent, a higher percentage of 
                Gross Domestic Product than that of any other 
                industrialized nation; and
                    (ii) by the year 2000 health care spending in the 
                United States will exceed 18 percent of the Gross 
                Domestic Product if left at current spending levels;
                    (B) expenditures for health care in the United 
                States will total approximately $885,000,000,000 in 
                1993, a rise of 13 percent since 1992, while Gross 
                Domestic Product rose at only a 4.6-percent rate over 
                the same period;
                    (C)(i) health care costs for an average family in 
                the United States grew by 147 percent while average 
                family income rose by 88 percent during the 1980s;
                    (ii) average family cost for health care was $1,742 
                in 1980 and has grown to $4,887 in 1992; and
                    (iii) 50 percent of all personal bankruptcies are 
                caused by unmanageable health care costs;
                    (D) the average cost of private employer health 
                plans rose approximately 119 percent between 1984 and 
                1991, badly eroding company profits and international 
                competitiveness;
                    (E)(i) the cost of Medicare grew from 
                $34,000,000,000 in 1980 to $104,000,000,000 in fiscal 
                year 1990; and
                    (ii) 27 percent of Medicare costs are paid for from 
                general funds from the Treasury and not from 
                specifically dedicated taxes;
                    (F)(i) the cost of Medicaid is expected to increase 
                38 percent between 1991 and 1993 and Medicaid has grown 
                from 10.2 percent of State health budgets in 1987 to 
                approximately 46 percent in 1992;
                    (ii) all Federal expenditures for Medicaid are 
                financed from general funds from the Treasury; and
                    (iii) by the year 2000 under current spending 
                levels, State Medicaid will have grown to 56 percent of 
                State health care budgets;
                    (G) the cost of medical care in general in the 
                United States continues to rise at approximately three 
                times the rate of the Consumer Price Index;
                    (H) these disproportionate rises in health care 
                costs are inflicting undue burdens on the United States 
                economy, business and citizens in recessionary and 
                deficit ridden times;
                    (I) the Congressional Budget Office estimates that 
                unless costs are stabilized, medical care cost 
                increases in Federal programs above increases in 
                Federal revenues, will by themselves increase the 
                Federal debt by over $1,500,000,000,000 by the middle 
                of the next decade, and will result in an increase in 
                annual Federal medical care costs over baseline by 
                $190,000,000,000 at the end of a decade; and
                    (J) unless Federal health care cost increases are 
                halted it will take Draconian measures to bring the 
                Federal deficit under control.
            (2) Structural defects in the organization of the health 
        care system in the United States are leading to excessive 
        costs, to unequal and limited access, and to fragmentation, 
        complexity, and confusion in the delivery of health care 
        because--
                    (A) an anachronism in tax policy carried forward 
                from World War II has led to great inequities in health 
                care between those employed in firms paying for health 
                care of employees, and those working for companies 
                without such coverage and all others paying for health 
                care coverage;
                    (B) the employer-based system, due to inherent 
                limitations, has been ineffective in providing 
                affordable health care to large segments of the 
                population including the poor and elderly;
                    (C) the costs of ``uncompensated care'' are shifted 
                in concealed and indirect ways to providers, employers 
                and the insured, and ultimately to governments and 
                taxpayers;
                    (D) the widespread coverage gaps caused by the 
                employer-based health care system have been 
                inadequately compensated for by public programs, in 
                terms of the number of people covered, the scope of 
                services provided, and the efficiency of providing 
                services;
                    (E) private and public insurance alike have adopted 
                reimbursement policies which encourage providers to 
                maximize income with unnecessary services and consumers 
                to overutilize;
                    (F)(i) attempts to reduce costs of overburdened and 
                under funded public programs have caused increasing 
                cost shifting back to employers, further diminishing 
                the ability of employers to provide adequate health 
                insurance and to be competitive internationally;
                    (ii) for these reasons and others retiree health 
                benefits are being curtailed dramatically; and
                    (iii) such shifts are also limiting the 
                availability and affordability of adequate coverage to 
                others;
                    (G) piecemeal attempts to control cost escalation 
                in both the private and public sectors, including the 
                use of managed care and other alternative delivery 
                systems, by themselves are not succeeding in 
                significantly controlling cost or cost shifting;
                    (H) cost escalation has left gaps is coverage, 
                especially with respect to preventive, primary and 
                long-term care, and protection against catastrophic 
                costs;
                    (I)(i) increasing costs and cost shifts have 
                resulted in insurers reducing cost by reducing risks 
                with the result that more and more individuals are left 
                uncovered;
                    (ii) this has substantially reduced the 
                effectiveness of private health insurance as a adequate 
                answer to health care problems because--
                            (I) insurance companies use defensive 
                        practices such as pre-existing conditions 
                        exclusions and ``cherry-picking'' which reduce 
                        access rather than promote cost efficient 
                        competition on the basis of price and product 
                        design;
                            (II) short-term ``experience ratings'' are 
                        depriving Americans of consistent protection 
                        against catastrophic health care occurrences; 
                        and
                            (III) employer-group organized health care 
                        has spawned excessive numbers of commercial 
                        insurers causing undue advertising costs, 
                        administrative expense and confusion, and 
                        redtape for employers, providers and consumers;
                    (J) tax induced employer-based health care has 
                diminished the market role of both employers and 
                employees in making prudent and thrifty choices for 
                efficient and cost conscious health care coverage; and
                    (K) the administrative difficulties, payment 
                inequities, regional differences in cost of services, 
                and the cost containment problems of Medicare exemplify 
                the difficulties of a federally run program.
            (3) Other factors, as well, demonstrate the need for 
        comprehensive reform in the nations health care systems. These 
        include:
                    (A) Current health care spending with proper cost 
                sharing and resource allocation is sufficient to cover 
                presently uncovered benefits, such as preventative 
                health, long-term health care, pharmaceutical costs, 
                and catastrophic protection.
                    (B) The reduction of present administrative 
                inefficiencies, defensive medical costs, and increased 
                use of outcome research will accommodate improved 
                coverage and care.
                    (C) State run programs, with single or 
                administrative agencies, but federally structured and 
                coordinated will result in a less costly, more 
                efficient and diversified system.
                    (D) Present tax inequities can only be corrected at 
                the Federal level, and only Federal funds can provide 
                sufficient funding for comprehensive change.
                    (E) A coordinated global cost containment structure 
                can only be provided by the Federal Government.
                    (F) States are best placed to create efficient 
                competition among health care providers for 
                administrative and service cost reductions.

SEC. 4. DEFINITIONS.

    As used in this Act:
            (1) Board.--The term ``Board'' means the Federal MediCORE 
        Board established under section 201.
            (2) CORE services.--The term ``CORE SERVICES'' means those 
        health care services specified in section 301.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (4) State.--
                    (A) In general.--The term ``State'' includes the 
                District of Columbia, the Commonwealth of Puerto Rico, 
                the United States Virgin Islands, Guam, American Samoa, 
                and the Commonwealth of the Northern Mariana Islands.
                    (B) Region.--A reference to a State under this Act 
                shall be considered to include a region implementing a 
                regional program under the authority of this Act.
            (5) State plan.--The term ``State plan'' means a health 
        delivery plan approved under a State program.
            (6) State program.--
                    (A) In general.--The term ``State program'' means a 
                State health care program approved under section 501.
                    (B) Regional program.--A reference to a State 
                program under this Act shall be considered to include a 
                regional program implemented under the authority of 
                this Act.

                  TITLE I--ELIGIBILITY AND ENROLLMENT

SEC. 101. ELIGIBILITY.

    (a) In General.--Except as otherwise provided in this section, each 
individual who is a legal resident of the United States, including 
lawful resident aliens, is eligible for CORE SERVICES under the State 
program in the State in which the individual maintains a primary 
residence.
    (b) Lawful Resident Alien Defined.--For purposes of this section, 
the term ``lawful resident alien'' means an alien lawfully admitted for 
permanent residence or for educational purposes and any other alien 
lawfully residing permanently in the United States under color of law, 
including an alien with lawful temporary resident status under section 
210, 210A, or 245A of the Immigration and Nationality Act (8 U.S.C. 
1160, 1161, or 1255a).
    (c) Overseas Residents and Travelers.--
            (1) Overseas residents.--As used in subsection (a), the 
        term ``legal resident of the United States'' does not include a 
        United States citizen or lawful resident alien who has 
        established a primary residence outside of the United States.
            (2) Travelers.--An individual described in subsection (a) 
        who is traveling at the time at which CORE SERVICES are 
        provided to such individual shall be covered under the State 
        program in the State in which the individual maintains a 
        primary residence.
    (d) Non-Resident Aliens and Illegal Immigrants.--The Board shall 
develop and implement special procedures with respect to the 
eligibility of non-resident aliens and illegal immigrants for CORE 
SERVICES under a State program. In developing such procedures, the 
Board shall ensure that those States with the highest incidence of 
illegal immigrants receive some type of additional payment under this 
Act for the provision of CORE SERVICES to such aliens and immigrants.
    (e) Primary Residence.--As used in this title, the term ``primary 
residence'' means that State in which the individual resides for the 
greatest period of time (not necessarily a consecutive period of time) 
during the calendar year. With respect to individuals who are 
unemancipated students, the primary residence of such individuals shall 
be the primary residence of their parents or legal guardians. With 
respect to a homeless individual, the State of primary residence shall 
be the State in which such individual applies for CORE benefits.

SEC. 102. ENROLLMENT IN STATE PROGRAMS.

    (a) Enrollment Process.--
            (1) Automatic enrollment.--Each State program shall provide 
        for the automatic enrollment of an individual described in 
        section 101 who is born after the effective date described in 
        section 801, on the date on which such individual is born.
            (2) Enrollment process for other individuals.--With respect 
        to individuals described in section 101 who are not 
        automatically enrolled under paragraph (1), each State program 
        shall develop and utilize an understandable and readily 
        available process for the enrollment of such individuals in the 
        State program.
            (3) Default enrollment.--In the case of an individual 
        described in section 101 who otherwise is not enrolled in a 
        State program, such individual shall be covered by the State 
        program in the State in which such individual maintains a 
        primary residence. The State shall provide a process for 
        enrollment of the individual at the time and place in which the 
        individual first is provided (after the effective date 
        described in section 801) CORE SERVICES under a State program.
    (b) MediCORE Cards.--Upon enrollment in a State program, an 
individual shall be issued a MediCORE card that shall--
            (1) indicate the State program in which the individual is 
        enrolled;
            (2) contain a brief description of any cost-sharing, 
        benefit or delivery features of the program in which such 
        individual is enrolled;
            (3) where feasible, and if privacy interests can be 
        maintained, contain the health record of the individual; and
            (4) indicate any other information determined appropriate 
        by the Board.

           TITLE II--ADMINISTRATION BY FEDERAL MEDICORE BOARD

SEC. 201. ESTABLISHMENT AND COMPOSITION.

    (a) Establishment.--There is established within the Department of 
Health and Human Services a Federal MediCORE Board.
    (b) Composition.--
            (1) Appointment.--The Board shall be composed of nine 
        members to be appointed by the President not later than 60 days 
        after the date of enactment of this Act, by and with the advice 
        and consent of the Senate, from among individuals who will, as 
        a whole, represent the interests of the following--
                    (A) Federal and State governments;
                    (B) employers;
                    (C) employees and labor unions;
                    (D) health care providers;
                    (E) consumers;
                    (F) academic and industry experts in health care 
                delivery; and
                    (G) cost containment and quality improvement 
                experts.
            (2) Terms.--Individuals appointed to the Board under 
        paragraph (1) shall serve for a term of 5 years, except that 
        the terms of individuals initially appointed shall be as 
        follows--
                    (A) three of such individuals shall be appointed 
                for a term of 2 years;
                    (B) three of such individuals shall be appointed 
                for a term of 3 years; and
                    (C) three of such individuals shall be appointed 
                for a term of 4 years.
            (3) Vacancies.--The President shall fill any vacancy in the 
        membership of the Board in the same manner as the original 
        appointment and such members shall serve for the remainder of 
        the term for which the predecessor of the member was appointed. 
        The vacancy shall not affect the power of the remaining members 
        to execute the duties of the Board.
            (4) Chairperson.--
                    (A) Initial chairperson.--The initial chairperson 
                of the Board shall be selected by the President and 
                serve for a term of 3 years.
                    (B) Subsequent chairpersons.--Except as provided in 
                subparagraph (A), the members of the Board shall select 
                a chairperson of the Board from among such members and 
                such chairperson shall serve for a term of 3 years.
            (5) Compensation.--Members of the Board shall be 
        compensated at a level comparable to level II of the Executive 
        Schedule, in accordance with section 5313 of title 5, United 
        States Code. Amounts for such compensation shall be derived 
        from the MediCORE Trust Fund.
    (c) Staff.--
            (1) Authority.--The Board shall employ such staff as the 
        Board may determine necessary and such staff shall be 
        compensated in accordance with paragraph (2).
            (2) Applicability of civil service provisions.--The staff 
        of the Board may be appointed without regard to the provisions 
        of title 5, United States Code, governing appointments in the 
        competitive service and be compensated without regard to the 
        provisions of chapter 51, and subchapter III of chapter 53 of 
        title 5 relating to classification and General Schedule pay 
        rates, except that no individual may receive pay more than the 
        rate of basic pay payable for level IV of the Executive 
        Schedule. Amounts for such compensation shall be derived from 
        the MediCORE Trust Fund.

SEC. 202. DUTIES OF MEDICORE BOARD.

    (a) General Administration.--The Board shall be responsible for the 
overall administration of this Act and for the oversight of State 
compliance with this Act, as well as the development of CORE SERVICES 
and of specific guidelines to permit States to carry out this Act.
    (b) CORE SERVICES.--The Board shall, in accordance with title III, 
determine a basic, comprehensive package of health care services 
(referred to in this Act as ``CORE SERVICES'') that shall be provided 
under this Act.
    (c) Federal MediCORE Guidelines.--The Board shall, in accordance 
with title IV, develop and implement Federal guidelines for the 
equitable and efficient delivery of CORE SERVICES through State 
programs operating under this Act.
    (d) Approval and Oversight of State Programs.--Not later than 16 
months after the date of enactment of this Act, the Board shall, in 
accordance with title V, develop and administer procedures for the 
approval of State programs under this Act and for the monitoring of 
State compliance with the requirements of this Act. Such procedures 
shall be published in the Federal Register and made available to 
States.
    (e) Model MediCORE Administration Manual.--
            (1) In general.--The Board shall develop, publish and make 
        available to each State a Model MediCORE Administration Manual.
            (2) Contents.--The Manual developed under paragraph (1) 
        shall contain--
                    (A) recommendations, models, policies and 
                procedures, in sufficient detail, concerning all 
                aspects of the administration required for a State 
                program covering CORE SERVICES so as to avoid any 
                unnecessary duplication of development effort by 
                States;
                    (B) sample requests for proposals and model 
                selection criteria for a claims administrator, managed 
                care vendors, health care provider networks and 
                regional or areawide providers of highly specialized or 
                tertiary health services;
                    (C) model fee schedules with respect to all 
                professional and ancillary health services (such 
                schedules shall allow for regional cost differences);
                    (D) model payment systems with respect to 
                hospitals, skilled nursing facilities and other health 
                care facilities, developed in a manner that would 
                encourage the efficient bundling of services;
                    (E) outcome review procedures that may be 
                implemented by the States through the establishment of 
                a State outcome review panel;
                    (F) ethical consideration policies that may be 
                implemented by the States through the establishment of 
                a State Medical Ethics Panel; and
                    (G) any other information determined appropriate by 
                the Board.
            (3) Time for provision of manuals.--With respect to the 
        Manual developed under paragraph (1)--
                    (A) an initial draft of such Manual shall be 
                provided to the States for comment not later than 12 
                months after the date of enactment of this Act; and
                    (B) the final draft of such Manual shall be 
                provided to the States not later than 14 months after 
                the date of enactment of this Act.
    (f) National Data Bank Data System.--
            (1) Establishment.--Not later than 12 months after the date 
        of enactment of this Act, the Board, in consultation with the 
        National Institutes of Health and the Health Care Financing 
        Administration, shall establish and administer the operation of 
        a National Data Bank System.
            (2) Functions.--The National Data Bank System shall--
                    (A) function as the nationwide repository for 
                health care data and information collected under this 
                Act;
                    (B) collect information, with respect to State 
                programs, concerning--
                            (i) comprehensive individual medical 
                        records, available health insurance and 
                        delivery plans and health services under such 
                        plans, and administrative data including 
                        claims, billing and electronic billing 
                        information; and
                            (ii) outcomes analyses that detail the 
                        effectiveness, efficiency, viability and 
                        ethical considerations involved in medical 
                        treatments, technology and practice; and
                    (C) assist in conducting and supervising the 
                studies required under subsection (g).
    (g) Studies.--
            (1) In general.--
                    (A) General report.--Not later than 18 months after 
                the date of enactment of this Act, the Board, acting 
                through the National Data Bank System, if appropriate, 
                shall prepare and submit to the Secretary and the 
                appropriate committees of Congress, a report concerning 
                the studies conducted under this paragraph.
                    (B) National service and home health care.--The 
                Board, acting through the National Data Bank System, if 
                appropriate, either directly or in consultation and 
                cooperation with the Commission on National and 
                Community Service, shall conduct studies or 
                demonstration projects concerning--
                            (i) the feasibility and desirability of 
                        instituting a national service program under 
                        which individuals under the age of 25 who are 
                        not serving in the armed forces would 
                        coordinate with other home health service 
                        providers to provide assistance to disabled or 
                        older individuals in their homes; and
                            (ii) the feasibility and desirability of 
                        providing financial assistance to families that 
                        care for and provide financial assistance to 
                        disabled or older individuals in their homes, 
                        evaluated both as a cost savings measure and as 
                        an avenue to improve the quality of care and 
                        quality of life of such individuals.
                    (C) Other studies.--The Board, acting through the 
                National Data Bank System, if appropriate, shall 
                conduct, either directly or through grant or contract, 
                studies to determine the feasibility and desirability 
                of--
                            (i) authorizing certain States to implement 
                        statewide demonstration health delivery 
                        programs, consistent with the MediCORE program, 
                        prior to the full implementation of this Act as 
                        models for the MediCORE program;
                            (ii) implementing a program to provide for 
                        reduced deductibles or other cost-sharing 
                        mechanisms with respect to CORE SERVICES for 
                        individuals or families certified as being free 
                        of substance use or as abiding by a specified 
                        physical fitness program; and
                            (iii) including health information on a 
                        MediCORE card pursuant to section 102(b)(3), 
                        particularly as it relates to the privacy 
                        interests of individuals.
            (2) Immigrants and early retirees.--Not later than 14 
        months after the date of enactment of this Act, the Board, 
        acting through the National Data Bank System, if appropriate, 
        shall conduct a study, and prepare and submit to the Secretary 
        and the appropriate committees of Congress a report, 
        concerning--
                    (A) the provision of CORE SERVICES to illegal 
                immigrants and, if appropriate, the implementation of a 
                system to compensate those States with the highest 
                incidence of resident illegal immigrants for such 
                services; and
                    (B) the implementation of procedures for the 
                appropriate recapture of the costs of coverage of CORE 
                SERVICES provided to employees retired on the date 
                described in section 801, and those who retire after 
                such date, and further procedures, to be developed with 
                the Secretary of the Treasury, for the equitable 
                treatment of those retirees who have contractual 
                agreements with their former employers for the 
                provision of such health care to ensure that the 
                employees are treated fairly with respect to taxation 
                on their retirement income under this Act.
            (3) Veterans affairs.--
                    (A) Study.--The Board shall, either directly or 
                through grant or contract, conduct a study of the role 
                of the Department of Veterans Affairs, and its 
                independent medical care system for veterans under 
                title 38, United States Code, as it relates to the 
                MediCORE program under this Act.
                    (B) Conduct.--In conducting the study under 
                subparagraph (A), the Board shall--
                            (i) recognize and maintain the independent 
                        responsibility of the Department of Veterans 
                        Affairs for the special health care needs and 
                        rights of veterans, its unique and long-
                        standing contributions to the health of the 
                        United States through medical and mental health 
                        care, medical research and health professional 
                        education, and its function as the primary 
                        back-up to military medicine in time of war;
                            (ii) identify opportunities for entering 
                        into health care, research and education 
                        sharing arrangements with the Department of 
                        Veterans Affairs to optimize the use of medical 
                        and mental health resources in the United 
                        States;
                            (iii) consider the manner in which the cost 
                        containment features of the MediCORE program 
                        under this Act and of the Department of 
                        Veterans Affairs may be coordinated and 
                        integrated in the interest of containing 
                        national health care costs; and
                            (iv) review the findings of the Department 
                        of Veterans Affairs Commission on the Future 
                        Structure of Veterans Health Care, the 
                        Paralyzed Veterans of America, study entitled 
                        ``The VA: Responsibility in Tomorrow's National 
                        Health Care System,'' and such other 
                        publications as it considers appropriate.
                    (C) Study.--Not later than 36 months after the date 
                of enactment of this Act, the Board shall prepare and 
                submit to the Secretary and the appropriate committees 
                of Congress a report, concerning the results of the 
                study conducted under this paragraph.
            (4) Malpractice reform.--
                    (A) Study and model legislation.--The Board shall 
                conduct a study of Federal and State medical 
                malpractice laws and proposals for the reform of such 
                laws. Not later than 24 months after the date of 
                enactment of this Act, the Board shall develop a model 
                malpractice alternative dispute/claims dispute 
                resolution reform law or laws for the guidance of the 
                States. In developing such model law or laws, the Board 
                shall consider--
                            (i) alternative dispute resolution systems 
                        and coordination with State claims dispute 
                        resolution systems;
                            (ii) State tort reforms;
                            (iii) payments of future damages;
                            (iv) caps on noneconomic damages;
                            (v) caps on punitive damages and payment of 
                        punitive damages to States for use in 
                        monitoring, disciplining and educating of 
                        health care providers;
                            (vi) collateral source rules;
                            (vii) restrictions on attorney fees, 
                        including contingency fees, and costs;
                            (viii) statutes of limitations;
                            (ix) patient protection and disciplinary 
                        reforms and coordination with professional 
                        self-regulation;
                            (x) joint and several liability;
                            (xi) community and migrant health care 
                        centers and risk retention groups;
                            (xii) practice guidelines and quality 
                        assurance;
                            (xiii) products liability protections for 
                        medical products; and
                            (xiv) others matters determined 
                        appropriate.
                    (B) Grants.--The Board shall award grants to 
                selected States from amounts available under the 
                MediCORE Trust Fund for the development or 
                implementation of State malpractice alternative 
                dispute/claims dispute resolution systems under 
                regulations to be adopted by the Board. The Board shall 
                monitor and evaluate the effectiveness of State systems 
                and prepare reports concerning such systems to be 
                included in the annual report required under subsection 
                (h).
                    (C) Implementation.--Not later than 2 years after 
                the development of the model law or laws under 
                subparagraph (A), a State shall enact and implement a 
                malpractice alternative dispute/claims dispute 
                resolution system that the Board determined is in 
                substantial conformity with the requirements and 
                guidelines of the Board as developed under 
                subparagraphs (A) and (B).
                    (D) Enforcement.--If the Board determines that a 
                State has not complied with the requirements of 
                subparagraph (C), the Board may not grant the approval 
                required in title V.
            (5) Coordination of programs.--
                    (A) In general.--The Board shall conduct a study of 
                any agencies of the Department of Health and Human 
                Services, including the Health Care Financing 
                Administration and the Agency for Health Care Policy 
                and Research, and any other department and agency of 
                the Federal Government, to calculate the various 
                programs and activities of such department and 
                agencies, and to recommend how best to coordinate any 
                of such programs and activities with the MediCORE Board 
                and the MediCORE program under this Act. Such study 
                shall determine which activities and programs should be 
                retained, repealed or reorganized, and which should be 
                consigned to State responsibility. Within such study, 
                the Board shall review any ongoing studies being 
                conducted by such departments and agencies, and in 
                particular the debit/credit card study of the Health 
                Care Finance Administration, to determine the 
                feasibility and desirability of such within the 
                MediCORE program.
                    (B) Report.--Not later than 14 months after the 
                date of enactment of this Act, the Board shall prepare 
                and submit to the Secretary and the appropriate 
                committees of Congress a report concerning the results 
                of the study completed under this subparagraph (A).
            (6) Ethical guidelines.--
                    (A) In general.--The Board shall conduct a study 
                concerning the feasibility and desirability of 
                establishing ethical guidelines on medical and 
                biomedical issues (such as cutting edge lifesaving 
                techniques and biotechnology procedures) that are 
                consistent with the MediCORE program. Such study shall 
                focus on whether the guidelines can be established 
                prior to the full implementation of this Act and be 
                utilized as an ethical model for the MediCORE program. 
                In conducting such study, the Board shall conduct a 
                review of existing medical ethical studies completed or 
                currently being done within the United States and 
                foreign nations (such as France).
                    (B) Report.--Not later than 18 months after the 
                date of enactment of this Act, the Board shall prepare 
                and submit to the Secretary and the appropriate 
                committees of Congress a report concerning the results 
                of the study completed under this subparagraph (A).
            (7) Primary care.--
                    (A) In general.--The Board shall conduct a study 
                concerning the feasibility and desirability of 
                establishing, consistent with the MediCORE program and 
                prior to the full implementation of this Act--
                            (i) recruitment guidelines to encourage or 
                        provide incentives for medical students to 
                        enter into primary care services; and
                            (ii) guidelines to attract the physician 
                        manpower necessary to insure Americans have 
                        access to continued health care and preliminary 
                        health care, which may include guidelines for--
                                    (I) expanding the National Health 
                                Service Corps;
                                    (II) providing increased funding 
                                for innovative training schedules;
                                    (III) developing recruitment 
                                policies to increase the number of 
                                minority primary care physicians; and
                                    (IV) the development of flexible 
                                loan and loan repayment policies.
                In conducting such study the Board shall review primary 
                care physician shortages in inner-city and rural areas.
                    (B) Report.--Not later than 18 months after the 
                date of enactment of this Act, the Board shall prepare 
                and submit to the Secretary and the appropriate 
                committees of Congress a report concerning the results 
                of the study completed under this subparagraph (A).
    (h) Annual Report.--The Board shall annually prepare and submit to 
the appropriate committees of Congress a report entitled ``The State of 
the Nation's Health Care Services'' which shall concern the 
effectiveness of the MediCORE program and the improvement in health 
care quality and cost effectiveness of CORE SERVICES provided under 
such program.

SEC. 203. ORGANIZATION.

    (a) In General.--The Board may organize itself into such 
subcommittees as the Board determines are appropriate for the efficient 
and effective administration of the requirements of this Act.
    (b) Subcommittees.--In addition to any subcommittees established 
under subsection (a), the Board shall establish--
            (1) a MediCORE Fund Administration Subcommittee that shall 
        be responsible for the day to day administration of this Act 
        and the development of policies and guidelines for such 
        administration, including revenue, payment and reimbursement 
        policies, with special emphasis being placed on the 
        administration of the MediCORE Trust Fund; and
            (2) a MediCORE Health Policy Subcommittee that shall be 
        responsible for--
                    (A) the development of health policy 
                recommendations;
                    (B) performance outcomes analyses that are based on 
                medical appropriateness determinations and the issuance 
                of guidelines concerning such determinations, with 
                special consideration placed on the ethical 
                implications of the implementation of this Act;
                    (C) the development of CORE SERVICES 
                interpretations and access and quality guidelines; and
                    (D) any other aspects determined appropriate by the 
                Board.
    (c) Advisory Panels.--The Board may establish such advisory panels 
as the Board determines appropriate to assist the Board in its duties, 
projects or studies.

                        TITLE III--CORE SERVICES

SEC. 301. CORE SERVICES.

    (a) Review.--The Board shall conduct a detailed review of the 
health services and benefits provided or assisted under--
            (1) Federal health programs (including programs under 
        titles XVIII and XIX of the Social Security Act);
            (2) health insurance plans available to Federal and State 
        employees;
            (3) other private health insurance plans in general (such 
        as Blue Cross/Blue Shield); and
            (4) such other programs or plans determined appropriate by 
        the Board;
that are operating or provided on the date of enactment of this Act.
    (b) Scope and Content of CORE SERVICES.--The Board shall define the 
content and scope of the CORE SERVICES to be as comprehensive as 
practicable taking into consideration the monetary constraints of the 
MediCORE Trust Fund. In making such definition, the Board shall 
consider the estimated costs of the CORE SERVICES and coordinate the 
content and scope of such SERVICES to the extent necessary to reconcile 
such costs, as outlined in the MediCORE Budget, with the amount of 
funds expected to be available with respect to the year involved from 
the MediCORE Trust Fund. The MediCORE Budget Report shall contain a 
detailed description of the CORE SERVICES as required by title VII.
    (c) Specific Components.--In defining the CORE SERVICES to be 
provided under this Act under subsection (b), the Board shall include, 
subject to such limitations, schedules, formularies, appropriateness 
criteria and cost sharing requirements as the Board shall determine 
appropriate, the following components:
            (1) Medically necessary services.--The CORE SERVICES shall 
        include those services determined by the Board as being 
        medically necessary, including prescription drugs, mental 
        health and substance abuse and rehabilitative services.
            (2) Medicare services.--The CORE SERVICES shall include 
        those services that otherwise would have been provided to 
        individuals under title XVIII of the Social Security Act prior 
        to the effective date of the amendments made by section 702 as 
        reconfigured by the Board in consideration of the MediCORE 
        budget.
            (3) Preventive health care services.--
                    (A) Specifications.--The CORE SERVICES shall 
                include minimum preventive health care services 
                determined appropriate under specifications developed 
                by the Board taking into consideration the cost-
                effectiveness of such services in significantly 
                reducing preventable illnesses and the administrative 
                efficiency of providing such services within the scope 
                of appropriate State programs.
                    (B) Transition.--Prior to the publication of the 
                specifications referred to in subparagraph (A), the 
                preventive health care services that shall be covered 
                under a State program shall include:
                            (i) Health screening and immunization 
                        services.--Those screening and immunization 
                        services recommended in the document entitled 
                        ``Guide to Clinical Preventive Services'' 
                        published by the Preventive Services Task Force 
                        for asyptomatic low-risk pregnant women, 
                        infants and all other age groups. Screening 
                        services shall include the medical history, 
                        physical exam and laboratory or diagnostic 
                        procedures described in the Guide, and dental 
                        screening for individuals under the age of 18.
                            (ii) Education and counseling services.--
                        Those education services provided as part of a 
                        public education program administered by the 
                        State that are designed to educate individuals, 
                        including school-aged children, concerning 
                        taking personal responsibility for their 
                        health. Such services shall include the health 
                        aspects of those counseling topics recommended 
                        in the Guide referred to in clause (i) such as 
                        nutrition, exercise, sexual behavior, tobacco 
                        use, substance abuse, injury prevention and the 
                        value of periodic preventive health and dental 
                        care.
                    (C) State election.--Services required under this 
                paragraph shall be delivered under a State program in a 
                manner determined appropriate by the Board. In addition 
                to the services required under subparagraph (B), a 
                State may elect to provide enhanced preventive services 
                for high-risk individuals until such time as such 
                services are mandated under the guidelines developed 
                under subparagraph (A). Individual counseling 
                concerning preventive health care behavior and 
                intervention should be made available as part of a 
                State education or public health program or otherwise 
                incorporated into the delivery of other CORE SERVICES 
                under the State program.
            (4) Long-term health, custodial or personal assistance.--
        The Board shall establish specifications and eligibility 
        criteria with respect to long-term health, custodial or 
        personal assistance services that may be provided under this 
        Act. Benefits such as home health, skilled and unskilled care, 
        respite care and adult day care shall be evaluated by the Board 
        as options to prevent institutionalization and to reduce stress 
        on families. Guidance will be provided to States with respect 
        to supplemental insurance and sliding scale supplemental 
        payments for nursing home care or other additional long-term 
        care benefits that may not be covered initially under the 
        MediCORE program.
            (5) Catastrophic care.--The Board shall impose a limitation 
        concerning the amount of expenses for catastrophic care that an 
        individual shall be liable for with respect to CORE SERVICES 
        provided under the MediCORE program.
    (d) Exclusion of Services.--The Board may not include as part of 
CORE SERVICES the hospital care, medical services and domiciliary care 
provided to veterans for service-connected disabilities pursuant to 
chapter 17 of title 38, United States Code.
    (e) Adjustment or Expansion of CORE SERVICES.--The Board shall 
annually review the type and level of CORE SERVICES that are required 
to be provided under this Act and adjust such SERVICES if the Board 
determines that a more efficient or effective use of available 
resources is desirable. In undertaking such review and making any 
adjustments, the Board shall make available to the States a description 
of such adjustments and provide such States with an appropriate period 
in which to comment on such adjustments.

SEC. 302. SPECIAL SUPPLEMENTAL FOOD PROGRAM.

    (a) In General.--Section 17(c)(1) of the Child Nutrition Act of 
1966 (42 U.S.C. 1786(c)(1)) is amended--
            (1) in the first sentence, by striking ``may'' and 
        inserting ``shall''; and
            (2) by inserting after the first sentence the following new 
        sentence: ``Subject to the other provisions of this section, an 
        eligible individual shall be entitled to receive the full 
        amount of benefits authorized under this section, except for 
        those benefits that would otherwise be covered under the 
        MediCORE Health Act of 1993.''.
    (b) Appropriation.--Section 17(g)(1) of such Act is amended by 
striking the first sentence and inserting the following new sentences: 
``For purposes of providing benefits (except for those benefits that 
would otherwise be covered under the MediCORE Health Act of 1993) to 
all eligible individuals in the program and otherwise carrying out this 
section, there are authorized to be appropriated, and there are 
appropriated, to carry out this section such sums as may be necessary 
for fiscal year 1992 and each succeeding fiscal year. The Secretary 
shall make available the sums described in the previous sentence to 
carry out this section.''.

                 TITLE IV--FEDERAL MEDICORE GUIDELINES

SEC. 401. FEDERAL MEDICORE GUIDELINES.

    (a) Procedure.--
            (1) Submission to states.--Not later than 14 months after 
        the date of enactment of this Act, the Board shall publish in 
        the Federal Register a description of the preliminary Federal 
        MediCORE guidelines to be implemented by the Board under 
        section 202(c). Subsequent to such publication, the Board shall 
        solicit comments from the States concerning the preliminary 
        guidelines. Not later than 19 months after the date of 
        enactment of this Act, the Board shall publish in the Federal 
        Register the final initial Federal guidelines to be implemented 
        by the Board under section 202(c).
            (2) Adjustment of guidelines.--The Board shall periodically 
        review the Federal MediCORE guidelines developed under this 
        section and adjust such guidelines as the Board determines 
        appropriate. In undertaking such review and making any 
        adjustments, the Board shall make available to the States a 
        description of such adjustments and provide the States with an 
        appropriate period in which to comment on such adjustments.
    (b) Requirements.--Federal guidelines shall be developed and 
implemented by the Board under section 202(c) for the delivery of CORE 
SERVICES to ensure that:
            (1) Universality.--CORE SERVICES are universally accessible 
        and delivered in a nondiscriminatory manner.
            (2) Portability.--CORE SERVICES, with respect to those 
        services and benefits provided by the State of primary 
        residence (as such term is defined in section 101(d)), will be 
        portable across State lines, except that preventive health care 
        services and other specific services may be limited to the 
        State of primary residence.
            (3) Single administrator.--With respect to each State with 
        a program approved under section 501, a single agency is 
        designated as being responsible for the administration of the 
        State program, including ensuring that services and payments to 
        providers are equitably and efficiently delivered under such 
        programs.
            (4) Choice and managed competition.--
                    (A) Choice of delivery plans.--A State is 
                encouraged to include two or more CORE SERVICES 
                delivery plans within the State program to permit 
                market forces to operate within such State with respect 
                to health care delivery through managed competition 
                between such plans.
                    (B) Consideration by state.--A State should 
                consider the inclusion of at least one CORE SERVICES 
                delivery plan that would permit a significant freedom 
                of choice by consumers with respect to health care 
                providers (including physicians) for which additional 
                fees may be assessed by the State. Other plans may 
                include managed care programs (such as health 
                maintenance organizations or community health centers) 
                and health care provider contracts that share 
                responsibility for cost and outcome management with 
                health care providers or provider networks.
                    (C) Provision of information.--A State annually 
                shall provide information to residents of the State 
                concerning the CORE SERVICES delivery plans available 
                within that State. Such information shall be in such 
                form and contain information of such a nature so as to 
                permit State residents to seek the highest health care 
                value within the State for the lowest prices.
            (5) Rural and underserved areas.--Rural and underserved 
        areas, and the disability community, are provided with fair 
        access to CORE SERVICES on equitable terms.
            (6) Private health insurance.--Private insurance covering 
        health care services that are not otherwise covered under this 
        Act may be sold in a State.
            (7) Cost sharing.--A State program may require or permit 
        the assessment of premiums, copayments, coinsurance, or annual 
        deductibles with respect to expenses incurred in the provision 
        of CORE SERVICES under a program to the extent and in a manner 
        consistent with specific guidelines to be developed by the 
        Board. In no event shall cost sharing be permitted with respect 
        to preventive health care CORE SERVICES. Total cost sharing may 
        not exceed 15 percent of the cost of CORE SERVICES as 
        determined in the MediCORE Budget pursuant to section 601. The 
        cost sharing permitted by this paragraph may be income 
        sensitive and should decrease as the cost of the care 
        increases.
            (8) Mental health.--A State program shall ensure that CORE 
        SERVICES include benefits covering medically and 
        psychologically necessary treatments for mental health services 
        that are equitable and comparable to benefits offered for any 
        other illness.
            (9) Primary care.--A State program shall ensure that 
        primary care benefits and services are emphasized and focused 
        within the State program in accordance with the results of the 
        study conducted under section 202(g)(7). In complying with this 
        paragraph, a State shall be encouraged and guided by the Board 
        in order to develop programs to attract, educate and train more 
        primary care physicians, and other primary care providers, and 
        to give the support necessary to retain them in primary care.

           TITLE V--APPROVAL AND OVERSIGHT OF STATE PROGRAMS

SEC. 501. APPROVAL AND OVERSIGHT OF STATE PROGRAMS

    (a) In General.--The Board shall administer this Act, with respect 
to the approval of, and oversight over, State programs, in accordance 
with this section.
    (b) Submission of Programs.--
            (1) In general.--Not later than 19 months after the date of 
        enactment of this Act, each State shall prepare and submit to 
        the Board the State program in the State.
            (2) Regional programs.--Any State may join with neighboring 
        States to prepare and submit to the Board a regional program to 
        operate in all States so joined in lieu of a State program.
    (c) Review and Approval of Programs.--Not later than 20 months 
after the date of enactment of this Act, the Board shall review the 
programs submitted under subsection (b) and determine whether such 
programs meet the requirements and guidelines of the Board for 
approval. The Board shall not approve such a program unless it 
determines that the program provides, consistent with the provisions of 
this Act, for the following:
            (1) The equitable and efficient delivery of CORE SERVICES 
        within the State or for the delivery of a defined set of health 
        care services determined by the Board to be substantially 
        equivalent to the CORE SERVICES, except that no diminution 
        shall be permitted with respect to the MediCORE guidelines 
        concerning preventive health care services included in the CORE 
        SERVICES. A State may provide additional services and benefits 
        to supplement CORE SERVICES but the cost of any such additional 
        services or benefits shall be borne solely by such State and a 
        State may use demonstrated savings from its MediCORE program to 
        supplement its CORE SERVICES on terms to be approved by the 
        Board.
            (2) Adequate financing of CORE SERVICES under the program, 
        including the annual submission of the State program budget to 
        the Board.
            (3) A system by which the State program shall provide all 
        enrolled individuals within the State with standardized 
        information about CORE SERVICES under the State program.
            (4) Effective cost containment measures and payment 
        methodologies consistent with the guidelines developed by the 
        Board.
            (5) Adequate administration, including the designation of a 
        single agency responsible for administration of the program 
        consistent with the guidelines developed by the Board. 
        Administrative costs of a State may not exceed 5 percent of the 
        cost of CORE SERVICES co-determined in the MediCORE Budget 
        pursuant to section 601.
            (6) Adequate quality assurance mechanisms.
            (7) Organization of a State procedure to determine capital 
        needs and recommend allocation of capital to localities and 
        institutions consistent with the guidelines developed by the 
        Board.
            (8) An organized grievance procedure available to consumers 
        through which complaints about the organization and 
        administration of the State program and delivery of CORE 
        SERVICES covered by the State program may be filed, heard, and 
        resolved.
            (9) A process for developing the State's annual health 
        budget, fee schedules, cost containment measures, payment 
        practices, quality assurance mechanisms, grievance procedures, 
        outcomes review procedures, ethical analyses procedures, and 
        other relevant aspects of the State program, which process 
        shall include regular and adequate opportunities in diverse 
        geographical settings for the citizens of the State to have 
        their opinions solicited and heard, consistent with the 
        guidelines developed by the Board.
            (10) An agreement, if sufficient capacity exists, with 
        veterans hospitals to reimburse the hospitals for care, not 
        required under Federal law, provided to veterans and their 
        dependents (any such agreement shall not be for charges in 
        excess of these charged other providers under the State 
        program).
            (11) A process under which self-insured groups may seek 
        State certification if such groups are made up of at least 
        1,000 participants and if such groups are provided with health 
        care benefits, including quality of care, that is at least 
        equal to that otherwise required under the State program. The 
        State may require such groups to meet other requirements, 
        including data collection or surcharge requirements. Self-
        insured groups certified by the State shall be reimbursed by 
        the State in an amount that equals the actual costs incurred in 
        self-insuring, or 6 percent of the amount the State receives 
        under section 602 for the fiscal year involved, whichever is 
        less.
            (12) Any other matter determined appropriate by the Board.
In assessing the cost containment measures and payment methodologies of 
a State for purposes of paragraph (4), the Board shall consider whether 
the State program includes different CORE SERVICES delivery plans as 
described in section 401(4)(A) that permit enrollees to be presented 
with a choice of delivery plans and allow for health care efficiencies 
and effectiveness to result from the competition of such plans.
    (d) Annual Review.--Beginning the second year after a State program 
under this Act is in operation, and annually thereafter, the Board 
shall review such State program and determine whether such program 
continues to meet the requirements of this Act. At least 3 months prior 
to the conduct of each such review, the Board shall publish a 
description of the criteria to be used by the Board in determining 
whether a State program complies with the requirements of this Act.
    (e) Failure of Approval.--
            (1) Resubmission.--If the Board determines that the initial 
        State program submitted under subsection (b) does not meet the 
        requirements for approval under subsection (c), the Board shall 
        provide notice to the State of such failure and the State 
        shall, not later than 21 months after the date of enactment of 
        this Act, resubmit such program with the modifications required 
        by the Board.
            (2) Sanctions.--
                    (A) Resubmission.--If the Board determines that a 
                State program resubmitted under paragraph (1) does not 
                meet the requirements for approval under subsection 
                (c), the Board shall provide notice to the State of 
                such failure and may place the State program in 
                receivership under the jurisdiction of the Board or 
                impose the other sanctions described in subparagraph 
                (C).
                    (B) Other failures.--If under a review conducted 
                under subsection (d) the Board determines that a State 
                program previously approved under subsection (c) no 
                longer meets the requirements of such section, the 
                Board shall provide notice to the State of such failure 
                and that unless corrective action is taken within a 
                period of 90 days the sanctions described in 
                subparagraph (C) may be applied, effective 30 days 
                after the end of such 90-day period.
                    (C) Sanctions.--The sanctions described in 
                subparagraph (B) are--
                            (i) censure;
                            (ii) reductions in the future amounts 
                        otherwise payable by the Federal Government 
                        under this Act to the State, but in no event 
                        shall such amount be reduced by more than 5 
                        percent; and
                            (iii) placing the State program in 
                        receivership under the jurisdiction of the 
                        Board.
                    For purposes of clause (ii), no reduction shall 
                result in the contraction of primary or essential CORE 
                SERVICES as determined appropriate by the Board.
            (3) Receivership.--In the event that a State program is 
        placed in receivership under paragraph (2)(C)(iii), the Board 
        shall ensure that such program is administered using managed 
        competition networks determined appropriate by the Board in all 
        areas in the State except those areas determined to lack 
        sufficient health care providers.
    (f) Payments, Premiums, Copayments, Deductibles, Etc.
            (1) Payments.--A State program shall provide for the 
        payment of CORE service providers according to procedures 
        established under the State program consistent with the 
        guidelines developed by the Board.
            (2) Mandatory assignment.--Each provider of services or 
        other practitioner, institution or facility that receives 
        reimbursement related to CORE SERVICES provided under this Act 
        shall be considered to have agreed to accept the reimbursement 
        amount recognized under the State program for the CORE SERVICES 
        covered under such program as payment in full for such services 
        and may not impose any charges for such services other than 
        those permitted with respect to such services under the 
        procedures established by the State consistent with the 
        guidelines developed by the Board.
    (g) Administration by State.--
            (1) In general.--On the January 1 referred to in section 
        801, and subject to the approval of a State program under 
        subsection (c), the State shall begin the administration, 
        management, and supervision of its program under this Act.
            (2) Administration by contract.--A State may contract with 
        a third party or parties (including private health insurance 
        carriers, claims administrations, and managed care 
        organizations) or with the MediCORE Fund Administration for the 
        administration, management, and supervision of its program, but 
        in no event shall more than one entity be responsible for such 
        duties with respect to CORE SERVICES provided under the State 
        program. The Board may waive the single entity claims 
        processing requirement of the preceding sentence if the Board 
        determines such action appropriate.

                       TITLE VI--MEDICORE BUDGET

SEC. 601. MEDICORE BUDGET.

    (a) Budgetary Requirement.--The Board shall prepare an annual 
MediCORE Budget containing estimates of--
            (1) the total expenditures the Board expects to be made 
        during the calendar year for which the budget is being prepared 
        by States and the Federal Government for CORE SERVICES under 
        this Act (including administrative costs); and
            (2) the total amount that the Board expects to be available 
        in the MediCORE Trust Fund for the calendar year for which the 
        budget is being prepared.
    (b) National Average Per Capita Costs.--
            (1) In general.--The Board shall compute the national 
        average per capita cost for each category of the CORE SERVICES 
        described in section 301(b) using data from the national health 
        accounts of the Office of National Cost Estimates of the Office 
        of the Actuary of the Health Care Financing Administration, and 
        other available data. On the effective date of the repeals 
        under section 702, the National Data Bank System established 
        under section 202(f) shall compile and maintain the data 
        previously collected by the Office of National Cost Estimates 
        of the Office of the Actuary of the Health Care Financing 
        Administration.
            (2) Adjustments for risk groups.--
                    (A) In general.--The Board shall develop an 
                adjustment factor to the national average per capita 
                costs computed under paragraph (1) for each risk group 
                (as designated under subparagraph (B)) to reflect the 
                national average per capita costs for that risk group.
                    (B) Risk groups.--The Board shall designate a 
                series of risk groups, determined by age, sex, and 
                other factors that represent distinct patterns of 
                health care services and long-term care services 
                utilization and costs.
            (3) State adjustments to national average per capita 
        costs.--The Board shall develop for each State a factor to 
        adjust the national average per capita costs for each risk 
        group to reflect the differing circumstances with respect to 
        each such State, including--
                    (A) the number of illegal immigrants in such State;
                    (B) the number of homeless individuals in such 
                State;
                    (C) the overall poverty level of the State;
                    (D) the percentage of the State that is determined 
                to be rural and the percentage determined to be urban;
                    (E) the overall health status of the State; and
                    (F) other factors determined appropriate by the 
                Board.
    (c) State Total Expenditures.--The Board shall compute for each 
State total projected expenditures for each of the CORE SERVICES 
described in subsection (a) by multiplying the national average per 
capita costs of each risk group designated in subsection (b)(2)(B) by 
the State adjustment factors described in subsection (b)(3) by the 
number of persons in the State estimated by the Bureau of the Census to 
be resident members of each risk group.
    (d) Federal Contributions.--
            (1) In general.--The Board shall determine the appropriate 
        Federal health care revenue contribution for each State. The 
        Federal health care revenue contribution shall be determined by 
        subtracting the State share from 100 percent of the total State 
        expenditures for such State for the calendar year involved (as 
        described under subsection (c)).
            (2) State share.--The State share referred to in paragraph 
        (1) shall not be less than an amount that equals--
                    (A) the revenue generated under section 3101(c) of 
                the Internal Revenue Code of 1986 with respect to a 
                State; and
                    (B) the State's share of spending under title XVIII 
                of the Social Security Act in 1995, as adjusted for 
                each subsequent fiscal year based on the increase in 
                the Gross Domestic Product for such year and 
                demographic changes determined relevant by the Board.
            (3) State protection.--In determining the amount of the 
        State share under paragraph (2), the Board shall consider the 
        ability of the State to provide for the continued operation of 
        the State program at a level sufficient to provide individuals 
        within such State with the CORE SERVICES under such program.
    (e) Subsequent Calculations.--For each subsequent calendar year 
during which a program is in effect in a State, the Board shall make 
recomputations under subsections (a), (b), (c), and (d) for the State 
at least 7 months before the beginning of such calendar year.

SEC. 602. HEALTH CARE REVENUE SHARE PAYMENTS TO STATES.

    (a) In General.--Each State with an approved State program is 
entitled to receive, from amounts in the Trust Fund, an amount equal to 
the annual Federal share determined under section 601(d) with respect 
to each such State.
    (b) Use of Funds.--Amounts provided to a State under subsection (a) 
and the State share, as defined in section 601(d)(2) shall be used to 
carry out the State program in such State.

SEC. 603. MEDICORE TRUST FUND.

    (a) Trust Fund Established.--
            (1) In general.--There is hereby created on the books of 
        the Treasury of the United States a trust fund to be known as 
        the ``MediCORE Trust Fund''. The Trust Fund shall consist of 
        such gifts and bequests as may be made and such amounts as may 
        be deposited in, or appropriated to, such Trust Fund as 
        provided in this Act.
            (2) Transfer of amounts equivalent to certain taxes.--
                    (A) In general.--There are hereby appropriated to 
                the Trust Fund amounts equivalent to 100 percent of the 
                taxes imposed under sections 59B, 1401(b), 1401(c), 
                3101(b), 3101(c), 3111(b), and 3111(c) of the Internal 
                Revenue Code of 1986.
                    (B) Additional revenues.--There are appropriated to 
                the Trust Fund amounts equivalent to the additional 
                revenues received in the Treasury as the result of the 
                amendments made by section 604(d) of this Act.
                    (C) Transfers based on estimates.--The amounts 
                appropriated by subparagraphs (A) and (B) shall be 
                transferred from time to time (not less frequently than 
                monthly) 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 such subparagraphs, 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 subparagraphs.
            (3) Transfer of funds.--All amounts, not otherwise 
        obligated, that remain in the Federal Hospital Insurance Trust 
        Fund and the Federal Supplemental Medical Insurance Trust Fund 
        on the first day of the year described in section 801 shall be 
        transferred to the Trust Fund.
            (4) Appropriation of additional sums.--There is hereby 
        appropriated to the Trust Fund--
                    (A) on January 1 of the year described in section 
                801 of MediCORE Health Act of 1992, an amount equal to 
                the amounts appropriated with respect to titles XVIII 
                and XIX of the Social Security Act, section 1079 of 
                title 10, United States Code (CHAMPUS), and chapter 89 
                of title 5, United States Code, for the fiscal year 
                ending before such year,
                    (B) on January 1 of each succeeding year, an amount 
                equal to the amount determined under this paragraph for 
                the preceding year increased by the percentage increase 
                (if any) in Gross Domestic Product.
            (5) Incorporation of trust fund provisions.--The provisions 
        of subsections (b) through (e) of section 1841 of the Social 
        Security Act (42 U.S.C. 1395t), as in effect on the day before 
        the date of the enactment of this Act, shall apply to the Trust 
        Fund in the same manner as such provisions apply to the Federal 
        Supplemental Medical Insurance Trust Fund, except that any 
        reference to the Secretary of Health and Human Services or the 
        Administrator of the Health Care Financing Administration shall 
        be deemed a reference to the Board.
    (b) Expenditures.--
            (1) Reservation.--The Board shall reserve 2 percent of 
        amounts contained in the Trust Fund each fiscal year to provide 
        supplemental payments to States determined by the Board to be 
        in need of such supplemental payments. Such payments may be 
        made by the Board where the Board determines that the amount of 
        payment to which a State is entitled under section 602 is 
        inadequate as a result of an unforeseen health emergency or 
        other increase in health care demand in such State.
            (2) To states.--Payments in each calendar year to each 
        State from the Trust Fund as determined under section 602 are 
        hereby authorized and appropriated.
            (3) Administrative expenses.--There are hereby authorized 
        and appropriated such sums as are necessary for the 
        administrative expenses of the Board for each year, not to 
        exceed 1 percent of the total payments made to the States for 
        such year as determined under section 602.
    (c) Trust Fund Off-Budget.--The receipts and disbursements of the 
Trust Fund and the taxes described in subsection (a)(2) shall not be 
included in the totals of the budget of the United States Government as 
submitted by the President or of the congressional budget and shall be 
exempt from any general budget limitation imposed by statute on 
expenditures and net lending (budget outlays) of the United States 
Government.

SEC. 604. HEALTH CARE REVENUE SHARING PROVISIONS.

    (a) Payroll Taxes.--
            (1) Tax on employees.--Section 3101 of the Internal Revenue 
        Code of 1986 (relating to rate of tax on employees) is amended 
        by redesignating subsections (c) and (d) as subsections (d) and 
        (e) and by inserting after subsection (b) the following new 
        subsection:
    ``(c) MediCORE.--In addition to the taxes imposed by the preceding 
subsections, there is hereby imposed on the income of every individual 
a tax equal to 2 percent of the wages (as defined in section 3121(a)) 
received by such individual on or after January 1 of the year described 
in section 801 of MediCORE Health Act of 1992, with respect to 
employment (as defined in section 3121(b)).''.
            (2) Tax on employers.--Section 3111 of such Code (relating 
        to rate of tax on employers) is amended by redesignating 
        subsection (c) as subsection (d) and by inserting after 
        subsection (b) the following new subsection:
    ``(c) MediCORE.--In addition to the taxes imposed by the preceding 
subsections, there is hereby imposed on every employer an excise tax, 
with respect to having individuals in such employer's employ, equal to 
4 percent of the wages (as defined in section 3121(a)) paid by such 
employer during each calendar year beginning on or after January 1 of 
the year described in section 801 of MediCORE Health Act of 1992, with 
respect to employment (as defined in section 3121(b)).''.
            (3) Tax on self-employment income.--Section 1401 of such 
        Code (relating to rate of tax on self-employment income for 
        hospital insurance) is amended by redesignating subsection (c) 
        as subsection (d) and by inserting after subsection (b) the 
        following new subsection:
    ``(c) MediCORE.--In addition to the taxes imposed by the preceding 
subsections, there shall be imposed for each taxable year beginning on 
or after January 1 of the year described in section 801 of MediCORE 
Health Act of 1992, on the self-employment income of every individual, 
a tax equal to the sum of--
            ``(1) 2 percent, plus
            ``(2) 4 percent
of the amount of the self-employment income for such taxable year.''.
            (4) Elimination of limit on employer portion of wages or 
        self-employment income subject to medicore tax.--
                    (A) Wages.--Subsection (x) of section 3121 of the 
                Internal Revenue Code of 1986 (relating to applicable 
                contribution base) is amended by adding at the end 
                thereof the following new paragraph:
            ``(3) Medicore.--
                    ``(A) Employee portion.--For purposes of the taxes 
                imposed by section 3101(c), the applicable contribution 
                base is--
                            ``(i) $100,000 for the calendar year 
                        beginning on January 1 of the year described in 
                        section 801 of MediCORE Health Act of 1992, and
                            ``(ii) for any calendar year after the 
                        calendar year described in clause (i), the 
                        applicable contribution base for the preceding 
                        year adjusted in the same manner as is used in 
                        adjusting the contribution and benefit base 
                        under section 230(b) of the Social Security 
                        Act.
                    ``(B) Employer portion.--For purposes of the taxes 
                imposed by section 3111(c), the applicable contribution 
                base for any calendar year is equal to the remuneration 
                for employment paid to an individual for such calendar 
                year.''.
                    (B) Self-employment income.--Subsection (k) of 
                section 1402 of such Code (relating to applicable 
                contribution base) is amended by adding at the end 
                thereof the following new paragraph:
            ``(3) Medicore.--
                    ``(A) Employee portion.--For purposes of the taxes 
                imposed by section 1402(c)(1), the applicable 
                contribution base is--
                            ``(i) $100,000 for calendar year beginning 
                        on January 1 of the year described in section 
                        801 of MediCORE Health Act of 1992, and
                            ``(ii) for any calendar year after the 
                        calendar year described in clause (i), the 
                        applicable contribution base for the preceding 
                        year adjusted in the same manner as is used in 
                        adjusting the contribution and benefit base 
                        under section 230(b) of the Social Security 
                        Act.
                    ``(B) Employer portion.--For purposes of the tax 
                imposed by section 1401(c)(2), the applicable 
                contribution base for any calendar year is equal to the 
                individual's net earnings from self-employment for such 
                calendar year.''.
                    (C) Conforming amendment.--Subsection (c) of 
                section 6413 of such Code is amended by adding at the 
                end thereof the following new paragraph:
            ``(4) Separate application for medicore taxes.--In applying 
        this subsection with respect to--
                    ``(A) the tax imposed by section 3101(c) (or any 
                amount equivalent to such tax), and
                    ``(B) so much of the tax imposed by section 3201 as 
                is determined at a rate not greater than the rate in 
                effect under section 3101(c),
        the applicable contribution base determined under section 
        3121(x)(3)(A) for any calendar year shall be substituted for 
        `contribution and benefit base (as determined under section 230 
        of the Social Security Act)' each place it appears.''.
            (5) Additional federal, state, and local employees subject 
        to medicore taxes.--Section 3121(u) (relating to application of 
        hospital insurance tax to Federal, State, and local employment) 
        is amended--
                    (A) by striking ``sections 3101(b) and 3111(b)'' in 
                paragraph (1) and inserting ``sections 3101(b), 
                3101(c), 3111(b), and 3111(c)'',
                    (B) by striking ``Except as provided in 
                subparagraphs (B) and (C)'' in paragraph (2)(A) and 
                inserting ``Except as provided in subparagraph (B)'' , 
                and
                    (C) by striking subparagraphs (C) and (D) of 
                paragraph (2).
            (6) Effective date.--The amendments made by this subsection 
        shall apply with respect to remuneration paid on or after 
        January 1 of the year described in section 801 of MediCORE 
        Health Act of 1992, and with respect to earnings from self-
        employment attributable to taxable years beginning on or after 
        such date.
    (b) Individual Tax on Certain Adjusted Gross Income.--
            (1) In general.--Subchapter A of chapter 1 of the Internal 
        Revenue Code of 1986 (relating to normal taxes and surtaxes) is 
        amended by adding at the end thereof the following new part:

              ``PART VIII--MEDICORE REVENUE SHARING TAXES

                              ``Sec. 59B. Individual MediCORE tax.

``SEC. 59B. INDIVIDUAL MEDICORE TAX.

    ``(a) In General.--In the case of an individual, there is hereby 
imposed (in addition to any other tax imposed by this subtitle) a tax 
equal to the excess (if any) of--
            ``(1) the tax determined under subsection (b), over
            ``(2) the sum of--
                    ``(A) the tax imposed under section 3111(c) or 
                1402(c)(2) for such taxable year with respect to the 
                wages or self-employment income (as the case may be) of 
                such individual which does not exceed the applicable 
                contribution base under section 3121(x)(3)(A) or 
                1402(k)(3)(A) (as the case may be), plus
                    ``(B) the retiree health care amount available to 
                the individual for such taxable year.
    ``(b) Tax on Adjusted Gross Income.--The tax imposed under this 
subsection is as follows:
            ``(1) Married individuals filing joint returns and 
        surviving spouses.--There is hereby imposed on the adjusted 
        gross income of--
                    ``(A) every married individual (as defined in 
                section 7703) who makes a single return jointly with 
                such individual's spouse under section 6013, and
                    ``(B) every surviving spouse (as defined in section 
                2(a)),
        a tax determined in accordance with the following table:

``If adjusted gross income is:      The tax is:
    Not over $10,000...............
                                        $0.
    Over $10,000 but not over 
        $11,000.
                                        $0, plus 1% of the excess over 
                                                $10,000.
    Over $11,000 but not over 
        $12,000.
                                        $10, plus 2% of the excess over 
                                                $11,000.
    Over $12,000 but not over 
        $13,000.
                                        $30, plus 3% of the excess over 
                                                $12,000.
    Over $13,000 but not over 
        $14,000.
                                        $60, plus 4% of the excess over 
                                                $13,000.
    Over $14,000 but not over 
        $15,000.
                                        $100, plus 5% of the excess 
                                                over $14,000.
    Over $15,000 but not over 
        $162,500.
                                        $150, plus 6% of the excess 
                                                over $15,000.
            ``(2) Unmarried individuals (other than surviving 
        spouses).--There is hereby imposed on the adjusted gross income 
        of every individual (other than a surviving spouse as defined 
        in section 2(a)) who is not a married individual (as defined in 
        section 7703) a tax determined in accordance with the following 
        table:

``If adjusted gross income is:      The tax is:
    Not over $7,000................
                                        $0.
    Over $7,000 but not over $8,000
                                        $0, plus 1% of the excess over 
                                                $7,000.
    Over $8,000 but not over $9,000
                                        $10, plus 2% of the excess over 
                                                $8,000.
    Over $9,000 but not over 
        $10,000.
                                        $30, plus 3% of the excess over 
                                                $9,000.
    Over $10,000 but not over 
        $11,000.
                                        $60, plus 4% of the excess over 
                                                $10,000.
    Over $11,000 but not over 
        $12,000.
                                        $100, plus 5% of the excess 
                                                over $11,000.
    Over $12,000 but not over 
        $109,500.
                                        $150, plus 6% of the excess 
                                                over $12,000.
            ``(3) Married individuals filing separate returns.--There 
        is hereby imposed on the adjusted gross income of every married 
        individual (as defined in section 7703) who does not make a 
        single return jointly with such individual's spouse under 
        section 6013, a tax determined in accordance with the following 
        table:

``If adjusted gross income is:      The tax is:
    Not over $5,000................
                                        $0.
    Over $5,000 but not over $5,500
                                        $0, plus 1% of the excess over 
                                                $5,000.
    Over $5,500 but not over $6,000
                                        $5, plus 2% of the excess over 
                                                $5,500.
    Over $6,000 but not over $6,500
                                        $15, plus 3% of the excess over 
                                                $6,000.
    Over $6,500 but not over $7,000
                                        $30, plus 4% of the excess over 
                                                $6,500.
    Over $7,000 but not over $7,500
                                        $50, plus 5% of the excess over 
                                                $7,000.
    Over $7,500 but not over 
        $81,250.
                                        $75, plus 6% of the excess over 
                                                $7,500.
    ``(c) Retiree Health Care Amounts.--For purposes of subsection 
(a)(2)(B), and to the extent provided by regulation, an individual's 
retiree health care amount is equal to the amount deposited in the 
MediCORE Trust Fund by the individual's employer with respect to such 
individual under an agreement with the Secretary.''.
            (2) Conforming amendment.--The table of parts of subchapter 
        A of chapter 1 of such Code is amended by adding at the end 
        thereof the following new item:

                              ``Part VIII. MediCORE taxes.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning on or after January 1 of 
        the year described in section 801 of MediCORE Health Act of 
        1992.
    (c) Treatment of Health Care Deductions, Exclusions, and Credits.--
            (1) Limitation on exclusion of compensation for injuries or 
        sickness.--Subsection (a) of section 104 of the Internal 
        Revenue Code of 1986 (relating to compensation for injuries or 
        sickness) is amended--
                    (A) by striking paragraph (3) and inserting the 
                following new paragraph:
            ``(3) amounts received through MediCORE for personal 
        injuries or sickness;'', and
                    (B) by striking the second sentence thereof.
            (2) Termination of exclusion for amounts received under 
        accident and health plans.--
                    (A) In general.--Section 105 of such Code (relating 
                to amounts received under accident and health plans) is 
                amended--
                            (i) by striking ``income'' and all that 
                        follows in subsection (a) and inserting 
                        ``income.'',
                            (ii) by striking subsections (b), (e), (f), 
                        (g), and (h), and
                            (iii) by redesignating subsections (c) and 
                        (i) as subsections (b) and (c), respectively.
                    (B) Conforming amendment.--Paragraph (6) of section 
                7871(a)(6) of such Code is amended by striking 
                subparagraph (A) and by redesignating subparagraphs 
                (B), (C), and (D) as subparagraphs (A), (B), and (C), 
                respectively.
            (3) Termination of exclusion for contributions by employer 
        to accident and health plans.--
                    (A) In general.--Section 106 of such Code (relating 
                to contributions by employer to accident and health 
                plans) is repealed.
                    (B) Conforming amendments.--
                            (i) Subsection (c) of section 104 of such 
                        Code is amended to read as follows:
    ``(c) Cross Reference.--
                                ``For exclusion of part of disability 
retirement pay from the application of subsection (a)(4) of this 
section, see section 1403 of title 10, United States Code (relating to 
career compensation laws).''.
                            (ii) Sections 414(n)(3)(C), 414(t)(2), and 
                        6039D(d)(1) of such Code are each amended by 
                        striking ``106,''.
            (4) Limitation on cafeteria plans.--Subsection (g) of 
        section 125 of such Code (relating to cafeteria plans) is 
        amended by striking paragraph (2) and by redesignating 
        paragraphs (3) and (4) as paragraphs (2) and (3), respectively.
            (5) Prohibition on use of medicore expenses as business 
        expense deduction for employer.--Subsection (l) of section 162 
        of such Code (relating to trade or business expenses) is 
        amended to read as follows:
    ``(l) Employer MediCORE Expenses.--No amount paid or incurred with 
respect to MediCORE may be allowed as a deduction under this 
section.''.
            (6) Deduction for medical expenses limited to uncompensated 
        expenses and employee medicore tax.--
                    (A) In general.--Subsection (a) of section 213 of 
                such Code (relating to medical, dental, etc., expenses) 
                is amended to read as follows:
    ``(a) Allowance of Deduction.--There shall be allowed as a 
deduction the expenses paid during the taxable year, not compensated 
for by insurance or otherwise for--
            ``(1) medical care of the taxpayer, the taxpayer's spouse, 
        or a dependent of the taxpayer (as defined in section 152), to 
        the extent that such expenses exceed 7.5 percent of adjusted 
        gross income, and
            ``(2) the tax imposed under section 3101(c) or 
        1402(c)(1).''.
                    (B) Conforming amendments.--Subsection (d) of 
                section 213 of such Code (relating to definitions) is 
                amended--
                            (i) by inserting ``or'' at the end of 
                        paragraph (1)(A),
                            (ii) by striking ``, or'' at the end of 
                        paragraph (1)(B) and inserting a period,
                            (iii) by striking paragraph (1)(C),
                            (iv) by striking paragraphs (6) and (7) and 
                        by redesignating paragraphs (8) and (9) as 
                        paragraphs (6) and (7), respectively.
            (7) Termination of pension payment of medical benefits.--
        Subsection (h) of section 401 of such Code (relating to 
        qualified pension, profit-sharing, and stock bonus plans) is 
        repealed.
            (8) Termination of child health insurance credit.--Clause 
        (i) of section 32(b)(2)(A) of such Code (relating to health 
        insurance credit) is amended by inserting ``(0 percent for 
        taxable years beginning on or after January 1 of the year 
        described in section 801 of MediCORE Health Act of 1992)'' 
        after ``6 percent''.
            (9) Effective date.--The amendments made by this subsection 
        shall apply with respect to taxable years beginning on or after 
        January 1 of the year described in section 801 of MediCORE 
        Health Act of 1992.

  TITLE VII--PREPARATION AND SUBMISSION OF MEDICORE BUDGET TO CONGRESS

SEC. 701. PREPARATION AND SUBMISSION.

    The Board shall annually prepare and submit to Congress a MediCORE 
Budget Report. Such Report shall include a description of--
            (1) the content and scope of the CORE SERVICES as required 
        under title III;
            (2) the MediCORE Budget prepared under section 601(a) (1) 
        and (2);
            (3) the national average per capita cost for each category 
        of the CORE SERVICES as required under section 601(b);
            (4) the adjustments for risk groups as required under 
        section 601(b)(2) (A) and (B);
            (5) the State adjustment factor as computed under section 
        601(b)(3);
            (6) the total projected expenditures for each State for 
        each of the CORE SERVICES as computed under section 601(c); and
            (7) the recommended Federal contributions and State share 
        for each State, including the state protection required under 
        section 601(d).

SEC. 702. PUBLICATION AND COMMENT.

    In preparing the MediCORE Budget Report under section 701, the 
Board shall--
            (1) not later than 9 months prior to the first January 1 
        referred to in section 801, and each January 1 thereafter, 
        publish in the Federal Register the preliminary findings and 
        recommendations of the Board with respect to the Report;
            (2) not later than 2 months after the publication required 
        under paragraph (1) is made, solicit from each State comments 
        concerning the published preliminary findings and 
        recommendations; and
            (3) consider the comments received under paragraph (2) in 
        developing the final MediCORE Budget Report to be submitted to 
        Congress pursuant to section 703.

SEC. 703. SUBMISSION TO CONGRESS.

    (a) In General.--Not later than 4 months prior to the effective 
date of the Act referred to in section 801, and prior to January 1 of 
each succeeding calendar year, the Board shall submit the final 
MediCORE Budget Report to Congress.
    (b) Income Requirements.--With respect to a calendar year for which 
the Board determines in the MediCORE Budget Report that the Federal 
income and administrative expenses required under this Act exceed the 
amounts expected to be available from the MediCORE Trust Fund for such 
calendar year, the Board shall recommend in the MediCORE Budget Report 
one of the following:
            (1) That a reduction be made in the CORE SERVICES covered 
        under section 301 to the extent necessary to meet the 
        limitation of such Budget, with a description of the details as 
        to the manner in which such a reduction will be accomplished 
        (which may include the establishment of restrictions on the 
        availability of services so as to achieve the greatest possible 
        social benefit). The Report shall also contain guidelines for 
        the States as to the methodology of and the cost containment 
        measures for the States to accomplish the reduction.
            (2) That an increase be made in the revenues generated for 
        deposit into the MediCORE Trust Fund.
            (3) That a combination of the measures described in 
        paragraphs (1) and (2) be implemented.

SEC. 704. ACTION BY CONGRESS.

    If Congress fails to act with respect to any increase in funds 
recommended under section 703(b)(2) and (3) within 2 months of the date 
of the submission of the MediCORE Budget, the Board shall proceed to 
reduce the CORE SERVICES covered under section 301 as required by the 
recommendation referred to in section 703(b)(1).

   TITLE VIII--EFFECTIVE DATE; REPEALS; TRANSITION; RELATION TO ERISA

SEC. 801. EFFECTIVE DATE.

    The program established under this Act shall become effective in 
each State on January 1 of the first calendar year beginning after the 
date that is 24 months after the date of enactment of this Act.

SEC. 802. REPEALS.

    (a) In General.--Titles XVIII and XIX of the Social Security Act 
and chapter 89 of title 5, United States Code, are repealed.
    (b) Repeal of CHAMPUS Provisions.--
            (1) Amendments to chapter 55 of title 10.--Sections 1079 
        through 1083, 1086, and 1097 through 1100 of title 10, United 
        States Code, are repealed.
            (2) Table of sections.--The table of sections at the 
        beginning of chapter 55 of title 10, United States Code, is 
        amended by striking out the items relating to the sections 
        referred to in paragraph (1).
            (3) Conforming amendments.--Chapter 55 of title 10, United 
        States Code, is amended as follows:
                    (A) Definition.--Section 1072 is amended by 
                striking out paragraph (4).
                    (B) Reimbursement of the department of veterans 
                affairs.--Section 1104(b) is amended--
                            (i) in the subsection heading, by striking 
                        out ``from CHAMPUS funds''; and
                            (ii) by striking out ``from funds'' and all 
                        that follows and inserting in lieu thereof 
                        ``for medical care provided by the Department 
                        of Veterans Affairs pursuant to such 
                        agreement.''.
    (c) Health Care Financing Administration.--Upon the effective date 
of the repeals described in subsection (a), the duties and activities 
of the Health Care Financing Administration shall be transferred to and 
assumed by the Board.
    (d) Effective Date.--The repeals and amendments made by this 
section shall take effect on the first day of the year described in 
section 801.

SEC. 803. AUTHORIZATION OF APPROPRIATIONS AND TRANSITION.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated for each of the fiscal years beginning after the effective 
date referred to in section 801, such sums as may be necessary to 
provide for financial assistance to States in the planning and 
development of State programs.
    (b) Regulations.--The Board shall issue such regulations as are 
necessary to provide for a transition to the MediCORE health care 
program established under this Act from the programs repealed under 
section 802.

SEC. 804. RELATION TO ERISA.

    The provisions of the Employee Retirement Income Security Act are 
superseded to the extent inconsistent with the requirements of this 
Act.

SEC. 805. RELATION TO OTHER LAWS.

    (a) In General.--Notwithstanding any provision of the antitrust 
laws, it shall not be considered a violation of the antitrust laws for 
a State to develop or implement a State program under this Act.
    (b) Definition.--For purposes of subsection (a), the term 
``antitrust laws'' means--
            (1) the Act entitled ``An Act to protect trade and commerce 
        against unlawful restraints and monopolies'', approved July 2, 
        1890, commonly known as the Sherman Act (26 Stat. 209; chapter 
        647; 15 U.S.C. 1 et seq.);
            (2) the Federal Trade Commission Act, approved September 
        26, 1914 (38 Stat. 717; chapter 311; 15 U.S.C. 41 et seq.);
            (3) the Act entitled ``An Act to supplement existing laws 
        against unlawful restraints and monopolies'', and for other 
        purposes, approved October 15, 1914, commonly known as the 
        Clayton Act (38 Stat. 730; chapter 323; 15 U.S.C. 12 et seq.; 
        18 U.S.C. 402, 660, 3285, 3691; 29 U.S.C. 52, 53); and
            (4) any State antitrust laws that would prohibit the State 
        from carrying out a State program under this Act.

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