[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 325 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 325

  To provide for comprehensive health care access expansion and cost 
   control through reform and simplification of private health care 
                       insurance and other means.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             February 4 (legislative day, January 5), 1993

 Mrs. Kassebaum (for herself, Mr. Danforth, and Mr. Burns) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
  To provide for comprehensive health care access expansion and cost 
   control through reform and simplification of private health care 
                       insurance and other means.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``BasiCare Health 
Access and Cost Control Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                       TITLE I--IMMEDIATE REFORMS

       Subtitle A--Small Employer Health Insurance Market Reform

Sec. 101. General requirements.
Sec. 102. General issuance requirements.
Sec. 103. Specific contractual requirements.
Sec. 104. State compliance agreements.
Sec. 105. Definitions and other rules.
Sec. 106. Amendment to the Internal Revenue Code of 1986.
Sec. 107. Effective date.
            Subtitle B--Community Health Services Expansion

Sec. 111. Establishment of grant program.
Sec. 112. Program to provide for expansion of federally qualified 
                            health centers.
 Subtitle C--Expansion of Tax Incentives for Self-Employed Individuals

Sec. 121. Permanent increase in deductible health insurance costs for 
                            self-employed individuals.
Subtitle D--Expanding the Supply of Health Professionals in Rural Areas

Sec. 131. Expansion of National Health Service Corps.
Sec. 132. Tax incentives for practice in rural areas.
                     Subtitle E--Malpractice Reform

                          Part I--Definitions

Sec. 141. Definitions.
         Part II--Tort Reform of Health Care Liability Actions

Sec. 142. Application to civil actions.
Sec. 143. Damages.
Sec. 144. Joint and several liability.
Sec. 145. Statute of limitations.
Sec. 146. Preemption.
Sec. 147. Effective date.
            Part III--Alternative Dispute Resolution Systems

Sec. 148. Grants for alternative dispute resolution systems.
Sec. 149. Establishment of advisory panel.
Sec. 150. Authorization.
   Part IV--Demonstration Projects for No-Fault Compensation Programs

Sec. 151. Demonstration projects for no-fault compensation programs.
                       Subtitle F--Joint Ventures

Sec. 161.  Amendment of the National Cooperative Research Act of 1984. 
                      TITLE II--LONG-TERM REFORMS

       Subtitle A--Establishment of Commission and Advisory Board

Sec. 201. The Commission on National Health Care Access and Reform.
Sec. 202. National Advisory Board.
Sec. 203. Authorization of appropriations.
      Subtitle B--Reform and Standardization of Private Insurance

Sec. 211. Defining goals and guidelines of Commission.
Sec. 212. Development and submission of legislative proposal.
Sec. 213. Continuing duties and responsibilities of the Commission.
Sec. 214. BasiCare benefits package.
Sec. 215. Insurance responsibilities under BasiCare.
Sec. 216. BasiCare base premium rate.
Sec. 217. Employer responsibilities under BasiCare.
Sec. 218. Individual responsibilities under BasiCare.
Sec. 219. Self-insured plan requirements.
Sec. 220. Provider responsibilities under BasiCare.
Sec. 221. Development of standards for managed care plans.
Sec. 222. Preemption of provisions relating to managed care.
                   Subtitle C--Low-Income Assistance

Sec. 231. Transfer from medicaid to BasiCare.
Sec. 232. Low-income assistance with costs of BasiCare insurance.
  Subtitle D--Congressional Consideration of Commission Recommendation

Sec. 241. Rules governing congressional consideration.
                   Subtitle E--Enforcement Provisions

Sec. 251. Enforcement provisions for carriers, providers, and 
                            employers.
Sec. 252. Enforcement provision for individuals.
                    Subtitle F--Financial Provisions

Sec. 261. BasiCare Trust Fund.
Sec. 262. Tax treatment of costs of BasiCare insurance.
                        Subtitle G--Definitions

Sec. 271. Definitions.

                       TITLE I--IMMEDIATE REFORMS

       Subtitle A--Small Employer Health Insurance Market Reform

SEC. 101. GENERAL REQUIREMENTS.

    Any person issuing an accident and health insurance contract to any 
small employer shall meet the requirements of sections 102 and 103.

SEC. 102. GENERAL ISSUANCE REQUIREMENTS.

    (a) General Rule.--The requirements of this section are met if any 
person issuing an accident and health insurance contract to any small 
employer meets--
            (1) the mandatory policy requirements of subsection (b), 
        and
            (2) the guaranteed issue requirements of subsection (c).
    (b) Mandatory Policy Requirements.--
            (1) In general.--The requirements of this subsection are 
        met if any person issuing an accident and health insurance 
        contract to any small employer makes available to such small 
        employer an accident and health insurance contract which 
        provides benefits which are identical to the core benefits 
        described in subsection (d).
            (2) Pricing and marketing requirements.--The requirements 
        of paragraph (1) are not met unless--
                    (A) the price at which the accident and health 
                insurance contract is made available is not greater 
                than the price for such contract determined on the same 
                basis as prices for other accident and health insurance 
                contracts within the same class of business made 
                available by the person to small employers, and
                    (B) the accident and health insurance contract is 
                made available to small employers using substantially 
                the same marketing methods and other sales practices 
                which are used in selling such other contracts.
    (c) Guaranteed Issue.--
            (1) In general.--The requirements of this subsection are 
        met--
                    (A) if the person offering accident and health 
                insurance contracts to small employers issues such 
                contracts to any small employer seeking to enter into 
                such a contract, and
                    (B) if the person offers a managed care arrangement 
                in a State, or a geographic area within a State, to 
                employers that are not small employers, the person 
                offers such managed care arrangement to small employers 
                in the State or geographic area.
            (2) Financial capacity exception.--Paragraph (1)(A) shall 
        not require any person to issue an accident and health 
        insurance contract to the extent that the issuance of such 
        contract would result in such person violating any financial 
        solvency standards established by the State in which such 
        contract is to be issued.
            (3) Exceptions for certain employers.--Paragraph (1)(A) 
        shall not apply to a failure to issue an accident and health 
        insurance contract to a small employer if--
                    (A) the small employer is unable to pay the premium 
                for such contract, or
                    (B) in the case of a small employer with fewer than 
                15 employees, such employer fails to enroll at least 60 
                percent of the employer's eligible employees for 
                coverage under such contract.
            (4) Size limits for managed care arrangements.--Paragraph 
        (1)(B) shall not apply to any person who ceases to enroll new 
        small employer groups in a managed care arrangement if it 
        ceases to enroll any new employer groups in such arrangement.
    (d) Benefits.--
            (1) Core benefits.--For purposes of this section, the term 
        ``core benefits'' means benefits which are the same benefits 
        provided as of the date of the enactment of this Act under 
        title XVIII of the Social Security Act to individuals entitled 
        to benefits under part A, and enrolled for benefits under part 
        B of such title.
            (2) Deductibles and copayments.--An accident and health 
        insurance contract shall not be treated as providing the core 
        benefits described in paragraph (1) unless the following 
        requirements are met:
                    (A) Deductible.--The accident and health insurance 
                contract does not require a deductible amount for any 
                contract year in excess of $500 per individual or 
                $1,000 per family with respect to the core benefits.
                    (B) Limit on out-of-pocket expenses.--The accident 
                and health insurance contract does not require out-of-
                pocket expenses for any contract year in excess of 
                $2,000 per individual or $3,000 per family for the core 
                benefits.
                    (C) Children.--
                            (i) No deductibles or coinsurance.--In the 
                        case of children, there shall be no 
                        coinsurance, deductibles, or copayments 
                        applicable to covered benefits described in 
                        clause (ii).
                            (ii) Additional preventive benefits.--
                        Subject to the periodicity schedule established 
                        under clause (iii), benefits shall be available 
                        for children under the accident and health 
                        insurance contract for the following items and 
                        services:
                                    (I) Newborn and well-baby care, 
                                including normal newborn care and 
                                pediatrician services for high-risk 
                                deliveries.
                                    (II) Well-child care, including 
                                routine office visits, routine 
                                immunizations (including the vaccine 
                                itself), routine laboratory tests, and 
                                preventive dental care.
                            (iii) Periodicity schedule.--The Secretary, 
                        in consultation with the American Academy of 
                        Pediatrics, shall establish a schedule of 
                        periodicity which reflects the general, 
                        appropriate frequency with which services 
                        listed in clause (ii) should be provided to 
                        healthy children.
                            (iv) Child defined.--For purposes of this 
                        subparagraph, the term ``child'' means an 
                        individual who has not attained age 23.
                    (D) Pregnancy-related services.--
                            (i) No deductibles or coinsurance.--In the 
                        case of a pregnant woman, there shall be no 
                        coinsurance, deductibles, or copayments 
                        applicable to covered benefits described in 
                        clause (ii).
                            (ii) Additional benefits.--Subject to the 
                        periodicity schedule established under clause 
                        (iii), benefits shall be available for pregnant 
                        women under the accident and health insurance 
                        contract for the following items and services:
                                    (I) Prenatal care, including care 
                                for all complications of pregnancy.
                                    (II) Inpatient labor and delivery 
                                services.
                                    (III) Postnatal care.
                                    (IV) Postnatal family planning 
                                services.
                            (iii) Periodicity schedule.--The Secretary, 
                        in consultation with the American College of 
                        Obstetrics and Gynecology, shall establish a 
                        schedule of periodicity which reflects the 
                        general, appropriate frequency with which 
                        services listed in clause (ii) should be 
                        provided to pregnant women without 
                        complications of pregnancy.
                            (iv) Pregnant woman.--For purposes of this 
                        subparagraph, the term ``pregnant woman'' means 
                        a woman who has been certified by a physician 
                        (in a manner specified by the Secretary) as 
                        being pregnant and such woman shall be a 
                        pregnant woman for the purposes of this 
                        subparagraph until the last day of the month in 
                        which the 60-day period beginning on the date 
                        of termination of the pregnancy ends.
            (3) Preemption.--To the extent that the laws of any State 
        or local government regulate or otherwise provide any 
        requirement relating to the benefits to be provided under an 
        accident and health insurance contract which are inconsistent 
        with the provisions of this Act, they are preempted.

SEC. 103. SPECIFIC CONTRACTUAL REQUIREMENTS.

    (a) General Rule.--The requirements of this section are met if any 
person issuing an accident and health insurance contract to any small 
employer meets--
            (1) the coverage requirements of subsection (b), and
            (2) the rating requirements of subsection (c).
    (b) Coverage Requirements.--
            (1) In general.--The requirements of this subsection are 
        met with respect to any accident and health contract if, under 
        the terms and operation of the contract, the following 
        requirements are met:
                    (A) Guaranteed eligibility.--No eligible employee 
                (and the spouse or any dependent child (as defined in 
                section 102(d)(2)(C)(iv)) of the employee eligible for 
                coverage) may be excluded from coverage under the 
                contract.
                    (B) Limitations on coverage of preexisting 
                conditions.--Any limitation under the contract on any 
                preexisting condition--
                            (i) may not extend beyond the 6-month 
                        period beginning with the date an insured 
                        individual is first covered by the contract, 
                        and
                            (ii) may only apply to preexisting 
                        conditions which manifested themselves, or for 
                        which medical care or advice was sought or 
                        recommended, during the 3-month period 
                        preceding the date an insured individual is 
                        first covered by the contract.
                    (C) Guaranteed renewability.--
                            (i) In general.--The contract must be 
                        renewed at the election of the small employer 
                        unless the contract is terminated for cause.
                            (ii) Cause.--For purposes of this 
                        subparagraph, the term ``cause''--
                                    (I) includes nonpayment of 
                                premiums, fraud or misrepresentation, 
                                noncompliance with contract provisions 
                                (including participation requirements), 
                                or misuse of network provisions, but
                                    (II) does not include any reason 
                                related to risk characteristics.
            (2) Waiting periods.--Paragraph (1)(A) shall not apply to 
        any period an eligible employee is excluded from coverage under 
        the contract solely by reason of a requirement applicable to 
        all employees that a minimum period of service with the 
        employer is required before the employee is eligible for such 
        coverage.
            (3) Determination of periods for rules relating to 
        preexisting conditions.--For purposes of paragraph (1)(B), the 
        date on which an insured individual is first covered by an 
        accident and health insurance contract shall be the earlier 
        of--
                    (A) the date on which coverage under such contract 
                begins, or
                    (B) the first day of any continuous period--
                            (i) during which the insured individual was 
                        covered under 1 or more other health insurance 
                        arrangements, and
                            (ii) which does not end more than 120 days 
                        before the date employment for the employer 
                        begins.
            (4) Cessation of small employer health insurance 
        business.--
                    (A) In general.--Except as otherwise provided in 
                this paragraph, a person shall not be treated as 
                failing to meet the requirements of paragraph (1)(C) if 
                such person terminates the class of business which 
                includes the accident and health insurance contract.
                    (B) Notice requirement.--Subparagraph (A) shall 
                apply only if the person gives notice of the decision 
                to terminate at least 90 days before the expiration of 
                the contract.
                    (C) 5-year moratorium.--If, within 5 years of the 
                year in which a person terminates a class of business 
                under subparagraph (A), such person establishes a new 
                class of business which includes contracts within the 
                class of business so terminated, the issuance of such 
                contracts in that year shall be treated as a failure to 
                meet the requirements of paragraph (1)(C).
                    (D) Transfers.--If, upon a failure to renew a 
                contract to which subparagraph (A) applies, a person 
                transfers such contract to another class of business, 
                such transfer must be made without regard to any risk 
                characteristic.
    (c) Rating Requirements.--The requirements of this subsection are 
met with respect to any accident and health contract if the following 
requirements are met:
            (1) Limitation on variation of premiums between classes of 
        business.--
                    (A) In general.--The base premium rate for any 
                class of business of a person issuing an accident and 
                health insurance contract to a small employer may not 
                exceed the base premium rate for any other class of 
                business by more than 20 percent.
                    (B) Exceptions.--Subparagraph (A) shall not apply 
                to a class of business if the applicable regulatory 
                authority determines that--
                            (i) the class is one for which the person 
                        does not reject, and never has rejected, small 
                        employers included within the definition of 
                        employers eligible for the class of business or 
                        otherwise eligible employees and dependents who 
                        enroll on a timely basis, based upon their 
                        claims experience, health status, industry, or 
                        occupation,
                            (ii) the person does not transfer, and 
                        never has transferred, an accident and health 
                        insurance contract involuntarily into or out of 
                        the class of business, and
                            (iii) accident and health insurance 
                        contracts offered under the class of business 
                        are currently available for purchase by small 
                        employers at the time an exception to 
                        subparagraph (A) is sought by the person.
            (2) Limit on variation in premium rates within a class of 
        business.--For a class of business of a person issuing an 
        accident and health insurance contract to a small employer, the 
        highest premium rates charged during a rating period to small 
        employers with similar demographic characteristics (including 
        age, sex, and geography and not relating to claims experience, 
        health status, industry, occupation, or duration of coverage 
        since issue) for the same or similar coverage, or the highest 
        rates which could be charged to such employers under the rating 
        system for that class of business, shall not exceed an amount 
        that is 1.5 times the base premium rate for the class of 
        business for a rating period (or portion thereof) that occurs 
        in the first 3 years in which this subsection is in effect, and 
        1.35 times the base premium rate thereafter.
            (3) Consistent application of rating factors.--In 
        establishing premium rates for any accident and health 
        insurance contract offered to small employers--
                    (A) the person making adjustments with respect to 
                age, sex, or geography must apply such adjustments 
                consistently across small employers, and
                    (B) no person may use a geographic area that is 
                smaller than a county or smaller than an area that 
                includes all areas in which the first three digits of 
                the zip code are identical, whichever is smaller.
            (4) Limit on transfer of employers among classes of 
        business.--
                    (A) In general.--A person issuing an accident and 
                health insurance contract to a small employer may not 
                transfer a small employer from one class of business to 
                another without the consent of the employer.
                    (B) Offers to transfer.--The person may not offer 
                to transfer a small employer from one class of business 
                to another unless--
                            (i) the offer is made without regard to 
                        age, sex, geography, claims experience, health 
                        status, industry, occupation or the date on 
                        which the policy was issued, and
                            (ii) the same offer is made to all other 
                        small employers in the same class of business.
            (5) Limits on variation in premium increases.--The 
        percentage increase in the premium rate charged to a small 
        employer for a new rating period (determined on an annual 
        basis) may not exceed the sum of the percentage change in the 
        base premium rate plus 5 percentage points.
            (6) Full disclosure of rating practices.--
                    (A) In general.--At the time a person offers an 
                accident and health insurance contract to a small 
                employer, the person shall fully disclose to the 
                employer all of the following:
                            (i) Rating practices for small employer 
                        accident and health insurance contracts, 
                        including rating practices for different 
                        populations and benefit designs.
                            (ii) The extent to which premium rates for 
                        the small employer are based on risk 
                        characteristics and on factors other than risk 
                        characteristics.
                            (iii) The provisions concerning the 
                        person's right to change premium rates, the 
                        extent to which premiums can be modified, and 
                        the factors which affect changes in premium 
                        rates.
                            (iv) The class of business within which the 
                        contract falls, including a description of the 
                        grouping of contracts within a class of 
                        business.
                    (B) Notice on expiration.--A person issuing 
                accident and health insurance contracts to small 
                employers shall provide for notice, at least 60 days 
                before the date of expiration of the accident and 
                health insurance contract, of the terms for renewal of 
                the contract. Such notice shall include an explanation 
                of the extent to which any increase in premiums is due 
                to actual or expected claims experience of the 
                individuals covered under the small employer's accident 
                and health insurance contract.
            (7) Actuarial certification.--Each person issuing an 
        accident and health contract to a small employer shall file 
        annually with the applicable regulatory authority a written 
        statement by a qualified health actuary (or other individual 
        acceptable to such authority) that, based upon an examination 
        by the individual which includes a review of the appropriate 
        records and of the actuarial assumptions of the person and 
        methods used by the person in establishing premium rates for 
        small employer accident and health insurance contracts--
                    (A) the person is in compliance with the applicable 
                provisions of this subsection, and
                    (B) the rating methods are actuarially sound.
            (8) Recordkeeping.--Each person issuing an accident and 
        health insurance contract to a small employer shall retain for 
        examination at its principal place of business a complete and 
        detailed description of its rating and renewal underwriting 
        practices and the information on which such practices are 
        based, including the statement described in paragraph (7).

SEC. 104. STATE COMPLIANCE AGREEMENTS.

    (a) Agreements.--The Secretary may, in the discretion of the 
Secretary, enter into an agreement with any State--
            (1) to apply the standards set by the laws of such State 
        for accident and health insurance contracts issued by any 
        person to any small employer in lieu of the requirements of 
        section 102, or
            (2) to provide for the State to make the initial 
        determination as to whether a person is in compliance with the 
        provisions of section 102.
    (b) Standards.--An agreement may be entered into under subsection 
(a)(1) only if--
            (1) the chief executive officer of the State requests such 
        agreement be entered into,
            (2) the Secretary determines that the State standards to be 
        applied under the agreement will apply to substantially all 
        accident and health insurance contracts issued to small 
        employers in such State, and
            (3) the Secretary determines that the application of the 
        State standards will carry out the purposes of section 102.
    (c) Limitation on Waiver.--Any agreement entered into under 
subsection (a)(1) shall not waive the mandatory policy requirements 
under section 102(b).
    (d) Termination.--The Secretary shall terminate any agreement if 
the Secretary determines that the application of State standards ceases 
to carry out the purposes of this section.

SEC. 105. DEFINITIONS AND OTHER RULES.

    For purposes of this subtitle:
            (1) Accident and health insurance contract.--
                    (A) In general.--The term ``accident and health 
                insurance contract'' means a contract under which a 
                person authorized under applicable State insurance laws 
                provides a health insurance plan or arrangement to a 
                small employer. Such term does not include any self-
                insured plan of an employer.
                    (B) Certain contracts not covered.--The term 
                ``accident and health insurance contract'' does not 
                include any contract--
                            (i) which provides for accident only, 
                        dental only, or disability only coverage,
                            (ii) which provides coverage as a 
                        supplement to liability insurance,
                            (iii) which provides insurance arising out 
                        of a workmen's compensation or similar law, or 
                        automobile medical-payment insurance, or
                            (iv) which provides insurance which is 
                        required by law to be contained under any self-
                        insured plan of an employer.
            (2) Base premium rate.--The term ``base premium rate'' 
        means, for each class of business for each rating period, the 
        lowest premium rate which could have been charged under a 
        rating system for that class of business by the person issuing 
        accident and health insurance contracts to small employers with 
        similar demographic or other relevant characteristics 
        (including age, sex, and geography and not relating to claims 
        experience, health status, industry, occupation or duration of 
        coverage since issue) for accident and health insurance 
        contracts with the same or similar coverage.
            (3) Class of business.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``class of business'' means, with respect 
                to a person, all of the small employers with an 
                accident and health insurance contract issued by the 
                person.
                    (B)  Distinct groups.--
                            (i) In general.--Subject to clause (ii), a 
                        distinct group of small employers with accident 
                        and health insurance contracts issued by a 
                        person may be treated as a class of business by 
                        such person if all of the contracts in such 
                        group--
                                    (I) are marketed and sold through 
                                individuals and organizations that do 
                                not participate in the marketing or 
                                sale of other distinct groups by the 
                                person,
                                    (II) have been acquired from 
                                another person as a distinct group, or
                                    (III) are provided through an 
                                association with membership of not less 
                                than 25 small employers that has been 
                                formed for purposes other than 
                                obtaining health insurance.
                            (ii) Exception allowed.--Except as provided 
                        in subparagraph (C), a person may not establish 
                        more than one distinct group of small employers 
                        for each category specified in clause (i).
                    (C) Special rule.--A person may establish up to 2 
                groups under each category in subparagraph (A) or (B) 
                to account for differences in characteristics (other 
                than differences in contract benefits) of accident and 
                health insurance contracts that are expected to produce 
                substantial variation in health care costs.
            (4) Managed health care arrangement.--The term ``managed 
        health care arrangement'' means an arrangement which integrates 
        the financing and delivery of health care services to covered 
        individuals by employing the following:
                    (A) Contracts with selected health care providers 
                to furnish health care services to members.
                    (B) The adoption of explicit standards for the 
                selection and recertification of providers.
                    (C) An explicit, formal program for ongoing quality 
                assurance and utilization review.
                    (D) Significant financial incentives for members to 
                use the providers and procedures associated with the 
                arrangement.
            (5) Characteristics.--
                    (A) In general.--The term ``characteristics'' 
                means, with respect to any insurance rating system, the 
                factors used in determining rates.
                    (B) Risk characteristics.--The term ``risk 
                characteristics'' means factors related to the health 
                risks of individuals, including health status, prior 
                claims experience, the duration since the date of issue 
                of a health insurance plan or arrangement, industry, 
                and occupation.
                    (C) Geographic factors.--In applying geographic 
                location as a characteristic, a person may not use for 
                purposes of this subtitle areas smaller than Census 
                Bureau designations of metropolitan statistical areas 
                and nonmetropolitan statistical areas.
            (6) Eligible employee.--The term ``eligible employee'' 
        means, with respect to an employer, any employee who normally 
        works at least 30 hours per week for that employer. For 
        purposes of this paragraph, the term ``employee'' includes a 
        self-employed individual as defined in section 401(c)(1) of the 
        Internal Revenue Code of 1986.
            (7) Person.--The term ``person'' includes a licensed 
        insurance company, a prepaid hospital or medical service plan, 
        a health maintenance organization, or in States which have 
        distinct insurance licensure requirements, a multiple employer 
        welfare arrangement.
            (8) Qualified health actuary.--The term ``qualified health 
        actuary'' means a member of the American Academy of Actuaries 
        who is qualified by reason of prior and continuing education 
        and relevant experience to render the actuarial opinion.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services, or the delegate of the Secretary.
            (10) Small employer.--The term ``small employer'' means, 
        with respect to a calendar year, an employer who normally 
        employs more than 1 but less than 51 eligible employees on a 
        typical business day. For purposes of the preceding sentence, 
        all employers covered under the same health insurance plan or 
        arrangement covered by a contract shall be treated as 1 
        employer.

SEC. 106. AMENDMENT TO THE INTERNAL REVENUE CODE OF 1986.

    (a) In General.--Chapter 47 of the Internal Revenue Code of 1986 
(relating to excise taxes on qualified pension, etc. plans) is amended 
by adding at the end thereof the following new section:

``SEC. 5000A. FAILURE TO SATISFY CERTAIN STANDARDS FOR HEALTH 
              INSURANCE.

    ``(a) General Rule.--In the case of any person issuing an accident 
and health insurance contract to a small employer, there is hereby 
imposed a tax on the failure of such person to meet at any time during 
any taxable year the applicable requirements of section 101 of the 
BasiCare Health Access and Cost Control Act. The Secretary of Health 
and Human Services shall determine whether any person meets the 
requirements of such section.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of tax imposed by subsection 
        (a) by reason of 1 or more failures during a taxable year shall 
        be equal to 35 percent of the gross premiums received during 
        such taxable year with respect to all accident and health 
        insurance contracts issued to a small employer by the person on 
        whom such tax is imposed.
            ``(2) Gross premiums.--For purposes of paragraph (1), gross 
        premiums shall include any consideration received with respect 
        to any accident and health insurance contract.
            ``(3) Controlled groups.--For purposes of paragraph (1)--
                    ``(A) Controlled group of corporations.--All 
                corporations which are members of the same controlled 
                group of corporations shall be treated as 1 person. For 
                purposes of the preceding sentence, the term 
                `controlled group of corporations' has the meaning 
                given to such term by section 1563(a), except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears in section 1563(a)(1), and
                            ``(ii) the determination shall be made 
                        without regard to subsections (a)(4) and 
                        (e)(3)(C) of section 1563.
                    ``(B) Partnerships, proprietorships, etc., which 
                are under common control.--Under regulations prescribed 
                by the Secretary, all trades or business (whether or 
                not incorporated) which are under common control shall 
                be treated as 1 person. The regulations prescribed 
                under this subparagraph shall be based on principles 
                similar to the principles which apply in the case of 
                subparagraph (A).
    ``(c) Limitation on Tax.--
            ``(1) Tax not to apply where failure not discovered 
        exercising reasonable diligence.--No tax shall be imposed by 
        subsection (a) with respect to any failure for which it is 
        established to the satisfaction of the Secretary that the 
        person on whom the tax is imposed did not know, and exercising 
        reasonable diligence would not have known, that such failure 
        existed.
            ``(2) Tax not to apply where failures corrected within 30 
        days.--No tax shall be imposed by subsection (a) with respect 
        to any failure if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected during the 30-day 
                period beginning on the first date any of the persons 
                on whom the tax is imposed knew, or exercising 
                reasonable diligence would have known, that such 
                failure existed.
            ``(3) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive relative to the failure involved.
    ``(d) Definitions.--For purposes of this section the terms 
`accident and health insurance contract', `small employer', `eligible 
employee', and `person' shall have the same meanings given such terms 
under section 105 of the BasiCare Health Access and Cost Control 
Act.''.
    (b) Nondeductibility of tax.--Paragraph (6) of section 275(a) of 
such Code (relating to nondeductibility of certain taxes) is amended by 
inserting ``47,'' after ``46,''.
    (c) Clerical amendments.--The table of sections for such chapter 47 
is amended by adding at the end thereof the following new item:

                              ``Sec. 5000A. Failure to satisfy certain 
                                        standards for health 
                                        insurance.''.
    (d) Effective dates.--
            (1) In general.--The amendments made by subsections (a) and 
        (c) shall take effect on the date of the enactment of this Act.
            (2) Nondeductibility of tax.--The amendment made by 
        subsection (b) shall apply to taxable years beginning after 
        December 31, 1993.

SEC. 107. EFFECTIVE DATE.

    (a) In General.--Except as provided in section 106 and subsection 
(b), this subtitle shall apply to contracts issued, or renewed, after 
the date of the enactment of this Act and before the effective date of 
the legislation described in section 212(a) or 213(a) of this Act.
    (b) Guaranteed Issue.--The provisions of section 102(c) shall apply 
to contracts which are issued, or renewed, after the date which is 12 
months after the date of the enactment of this Act and before the 
effective date of the legislation described in section 212(a) or 213(a) 
of this Act.

            Subtitle B--Community Health Services Expansion

SEC. 111. ESTABLISHMENT OF GRANT PROGRAM.

    Subpart I of part D of title III of the Public Health Service Act 
(42 U.S.C. 254b et seq.) is amended by adding at the end thereof the 
following new section:

``SEC. 330A. COMMUNITY-BASED PRIMARY HEALTH CARE GRANT PROGRAM.

    ``(a) Establishment.--The Secretary shall establish and administer 
a program to provide allotments to States to enable such States to 
provide grants for the creation or enhancement of community-based 
primary health care entities that provide services to low-income or 
medically underserved populations.
    ``(b) Allotments to States.--
            ``(1) In general.--From the amount available for allotment 
        under subsection (h) for a fiscal year, the Secretary shall 
        allot to each State an amount equal to the product of the grant 
        share of the State (as determined under paragraph (2)) 
        multiplied by such amount available.
            ``(2) Grant share.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the grant share of a State shall be the product of the 
                need-adjusted population of the State (as determined 
                under subparagraph (B)) multiplied by the Federal 
                matching percentage of the State (as determined under 
                subparagraph (C)), expressed as a percentage of the sum 
                of the products of such factors for all States.
                    ``(B) Need-adjusted population.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the need-adjusted population 
                        of a State shall be the product of the total 
                        population of the State (as estimated by the 
                        Secretary of Commerce) multiplied by the need 
                        index of the State (as determined under clause 
                        (ii)).
                            ``(ii) Need index.--For purposes of clause 
                        (i), the need index of a State shall be the 
                        ratio of--
                                    ``(I) the weighted sum of the 
                                geographic percentage of the State (as 
                                determined under clause (iii)), the 
                                poverty percentage of the State (as 
                                determined under clause (iv)), and the 
                                multiple grant percentage of the State 
                                (as determined under clause (v)); to
                                    ``(II) the general population 
                                percentage of the State (as determined 
                                under clause (vi)).
                            ``(iii) Geographic percentage.--
                                    ``(I) In general.--For purposes of 
                                clause (ii)(I), the geographic 
                                percentage of the State shall be the 
                                estimated population of the State that 
                                is residing in nonurbanized areas (as 
                                determined under subclause (II)) 
                                expressed as a percentage of the total 
                                nonurbanized population of all States.
                                    ``(II) Nonurbanized population.--
                                For purposes of subclause (I), the 
                                estimated population of the State that 
                                is residing in nonurbanized areas shall 
                                be one minus the urbanized population 
                                of the State (as determined using the 
                                most recent decennial census), 
                                expressed as a percentage of the total 
                                population of the State (as determined 
                                using the most recent decennial 
                                census), multiplied by the current 
                                estimated population of the State.
                            ``(iv) Poverty percentage.--For purposes of 
                        clause (ii)(I), the poverty percentage of the 
                        State shall be the estimated number of people 
                        residing in the State with incomes below 200 
                        percent of the income official poverty line (as 
                        determined by the Office of Management and 
                        Budget) expressed as a percentage of the total 
                        number of such people residing in all States.
                            ``(v) Multiple grant percentage.--For 
                        purposes of clause (ii)(I), the multiple grant 
                        percentage of the State shall be the amount of 
                        Federal funding received by the State under 
                        grants awarded under sections 329, 330, and 
                        340, expressed as a percentage of the total 
                        amounts received under such grants by all 
                        States. With respect to a State, such 
                        percentage shall not exceed twice the general 
                        population percentage of the State under clause 
                        (vi) or be less than one-half of the States 
                        general population percentage.
                            ``(vi) General population percentage.--For 
                        purposes of clause (ii)(II), the general 
                        population percentage of the State shall be the 
                        total population of the State (as determined by 
                        the Secretary of Commerce) expressed as a 
                        percentage of the total population of all 
                        States.
                    ``(C) Federal matching percentage.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the Federal matching 
                        percentage of the State shall be equal to one, 
                        less the State matching percentage (as 
                        determined under clause (ii)).
                            ``(ii) State matching percentage.--For 
                        purposes of clause (i), the State matching 
                        percentage of the State shall be 0.25 
                        multiplied by the ratio of the total taxable 
                        resource percentage (as determined under clause 
                        (iii)) to the need-adjusted population of the 
                        State (as determined under subparagraph (B)).
                            ``(iii) Total taxable resource 
                        percentage.--For purposes of clause (ii), the 
                        total taxable resources percentage of the State 
                        shall be the total taxable resources of a State 
                        (as determined by the Secretary of the 
                        Treasury) expressed as a percentage of the sum 
                        of the total taxable resources of all States.
            ``(3) Annual estimates.--
                    ``(A) In general.--If the Secretary of Commerce 
                does not produce the annual estimates required under 
                paragraph (2)(B)(iv), such estimates shall be 
                determined by multiplying the percentage of the 
                population of the State that is below 200 percent of 
                the income official poverty line as determined using 
                the most recent decennial census by the most recent 
                estimate of the total population of the State. Except 
                as provided in subparagraph (B), the calculations 
                required under this subparagraph shall be made based on 
                the most recent 3-year average of the total taxable 
                resources of individuals within the State.
                    ``(B) District of columbia.--Notwithstanding 
                subparagraph (A), the calculations required under such 
                subparagraph with respect to the District of Columbia 
                shall be based on the most recent 3-year average of the 
                personal income of individuals residing within the 
                District as a percentage of the personal income for all 
                individuals residing within the District, as determined 
                by the Secretary of Commerce.
            ``(4) Matching requirement.--A State that receives an 
        allotment under this section shall make available State 
        resources (either directly or indirectly) to carry out this 
        section in an amount that shall equal the State matching 
        percentage for the State (as determined under paragraph 
        (2)(C)(ii)) divided by the Federal matching percentage (as 
        determined under paragraph (2)(C)).
    ``(c) Application.--
            ``(1) In general.--To be eligible to receive an allotment 
        under this section, a State shall prepare and submit an 
        application to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may by regulation 
        require.
            ``(2) Assurances.--A State application submitted under 
        paragraph (1) shall contain an assurance that--
                    ``(A) the State will use amounts received under its 
                allotment consistent with the requirements of this 
                section; and
                    ``(B) the State will provide, from non-Federal 
                sources, the amounts required under subsection (b)(4).
    ``(d) Use of Funds.--
            ``(1) In general.--The State shall use amounts received 
        under this section to award grants to eligible public and 
        nonprofit private entities, or consortia of such entities, 
        within the State to enable such entities or consortia to 
        provide services of the type described in paragraph (2) of 
        section 329(h) to low-income or medically underserved 
        populations.
            ``(2) Eligibility.--To be eligible to receive a grant under 
        paragraph (1), an entity or consortium shall--
                    ``(A) prepare and submit to the administering 
                entity of the State, an application at such time, in 
                such manner, and containing such information as such 
                administering entity may require, including a plan for 
                the provision of services of the type described in 
                paragraph (3);
                    ``(B) provide assurances that services will be 
                provided under the grant at fee rates established or 
                determined in accordance with section 330(e)(3)(F); and
                    ``(C) provide assurances that in the case of 
                services provided to individuals with health insurance, 
                such insurance shall be used as the primary source of 
                payment for such services.
            ``(3) Services.--The services to be provided under a grant 
        awarded under paragraph (1) shall include--
                    ``(A) one or more of the types of primary health 
                services described in section 330(b)(1);
                    ``(B) one or more of the types of supplemental 
                health services described in section 330(b)(2); and
                    ``(C) any other services determined appropriate by 
                the administering entity of the State.
            ``(4) Target populations.--Entities or consortia receiving 
        grants under paragraph (1) shall, in providing the services 
        described in paragraph (3), substantially target populations of 
        low-income or medically underserved populations within the 
        State who reside in medically underserved or health 
        professional shortage areas, areas certified as underserved 
        under the rural health clinic program, or other areas 
        determined appropriate by the administering entity of the 
        State, within the State.
            ``(5) Priority.--In awarding grants under paragraph (1), 
        the State shall--
                    ``(A) give priority to entities or consortia that 
                can demonstrate through the plan submitted under 
                paragraph (2) that--
                            ``(i) the services provided under the grant 
                        will expand the availability of primary care 
                        services to the maximum number of low-income or 
                        medically underserved populations who have no 
                        access to such care on the date of the grant 
                        award; and
                            ``(ii) the delivery of services under the 
                        grant will be cost-effective; and
                    ``(B) ensure that an equitable distribution of 
                funds is achieved among urban and rural entities or 
                consortia.
    ``(e) Reports and Audits.--Each State shall prepare and submit to 
the Secretary annual reports concerning the State's activities under 
this section which shall be in such form and contain such information 
as the Secretary determines appropriate. Each such State shall 
establish fiscal control and fund accounting procedures as may be 
necessary to assure that amounts received under this section are being 
disbursed properly and are accounted for, and include the results of 
audits conducted under such procedures in the reports submitted under 
this subsection.
    ``(f) Payments.--
            ``(1) Entitlement.--Each State for which an application has 
        been approved by the Secretary under this section shall be 
        entitled to payments under this section for each fiscal year in 
        an amount not to exceed the State's allotment under subsection 
        (b) to be expended by the State in accordance with the terms of 
        the application for the fiscal year for which the allotment is 
        to be made.
            ``(2) Method of payments.--The Secretary may make payments 
        to a State in installments, and in advance or by way of 
        reimbursement, with necessary adjustments on account of 
        overpayments or underpayments, as the Secretary may determine.
            ``(3) State spending of payments.--Payments to a State from 
        the allotment under subsection (b) for any fiscal year must be 
        expended by the State in that fiscal year or in the succeeding 
        fiscal year.
    ``(g) Definition.--As used in this section, the term `administering 
entity of the State' means the agency or official designated by the 
chief executive officer of the State to administer the amounts provided 
to the State under this section.
    ``(h) Funding.--Notwithstanding any other provision of law, the 
Secretary shall use 50 percent of the amounts that the Secretary is 
required to utilize under section 330B(h) in each fiscal year to carry 
out this section.''.

SEC. 112. PROGRAM TO PROVIDE FOR EXPANSION OF FEDERALLY QUALIFIED 
              HEALTH CENTERS.

    (a) In General.--Subpart I of part D of title III of the Public 
Health Service Act (42 U.S.C. 254b et seq.) (as amended by section 111) 
is further amended by adding at the end thereof the following new 
section:

``SEC. 330B. PROGRAM TO PROVIDE FOR EXPANSION OF FEDERALLY QUALIFIED 
              HEALTH CENTERS.

    ``(a) Establishment of Health Services Access Program.--From 
amounts appropriated under this section, the Secretary shall, acting 
through the Bureau of Health Care Delivery Assistance, award grants 
under this section to federally qualified health centers (hereafter 
referred to in this section as `FQHCs') and other entities and 
organizations submitting applications under this section (as described 
in subsection (c)) for the purpose of providing access to services for 
medically underserved populations (as defined in section 330(b)(3)) or 
in high impact areas (as defined in section 329(a)(5)) not currently 
being served by a FQHC.
    ``(b) Eligibility for Grants.--
            ``(1) In general.--The Secretary shall award grants under 
        this section to entities or organizations described in this 
        paragraph and paragraph (2) which have submitted a proposal to 
        the Secretary to expand such entities or organizations 
        operations (including expansions to new sites (as determined 
        necessary by the Secretary)) to serve medically underserved 
        populations or high impact areas not currently served by a FQHC 
        and which--
                    ``(A) have as of the date of enactment of the 
                BasiCare Health Access and Cost Control Act, been 
                certified by the Secretary as a FQHC under section 
                1905(l)(2)(B) of the Social Security Act;
                    ``(B) have submitted applications to the Secretary 
                to qualify as FQHCs under section 1905(l)(2)(B) of the 
                Social Security Act; or
                    ``(C) have submitted a plan to the Secretary which 
                provides that the entity or organization will meet the 
                requirements to qualify as a FQHC when operational.
            ``(2) Non-fqhc entities.--
                    ``(A) Eligibility.--The Secretary shall also make 
                grants under this section to any public or private 
                nonprofit agency, or any health care entity or 
                organization which--
                            ``(i) meets the requirements necessary to 
                        qualify as a FQHC, except the requirement that 
                        such agency, entity, or organization has a 
                        consumer majority governing board,
                            ``(ii) has submitted a proposal to the 
                        Secretary to provide those services provided by 
                        a FQHC as defined in section 1905(l)(2)(B) of 
                        the Social Security Act, and
                            ``(iii) is designed to promote access to 
                        primary care services or to reduce reliance on 
                        hospital emergency rooms or other high cost 
                        providers of primary health care services,
                provided that the proposal described in clause (ii) is 
                developed by the agency, entity, or organization (or 
                such agencies, entities, or organizations acting in a 
                consortium in a community) with the review and approval 
                of the Governor of the State in which such agency, 
                entity, or organization is located.
                    ``(B) Limitation.--The Secretary shall provide in 
                making grants to entities or organizations described in 
                this paragraph that not more than 10 percent of the 
                funds provided for grants under this section shall be 
                made available for grants to such entities or 
                organizations.
    ``(c) Application Requirements.--
            ``(1) In general.--In order to be eligible to receive a 
        grant under this section, a FQHC or other entity or 
        organization must submit an application in such form and at 
        such time as the Secretary shall prescribe and which meets the 
        requirements of this subsection.
            ``(2) Requirements.--An application submitted under this 
        section must provide--
                    ``(A)(i) for a schedule of fees or payments for the 
                provision of the services provided by the entity or 
                organization designed to cover its reasonable costs of 
                operations; and
                    ``(ii) for a corresponding schedule of discounts to 
                be applied to such fees or payments, based upon the 
                patient's ability to pay (determined by using a sliding 
                scale formula based on the income of the patient);
                    ``(B) assurances that the entity or organization 
                provides services to persons who are eligible for 
                benefits under title XVIII of the Social Security Act, 
                for medical assistance under title XIX of such Act, or 
                for assistance for medical expenses under any other 
                public assistance program or private health insurance 
                program; and
                    ``(C) assurances that the entity or organization 
                has made and will continue to make every reasonable 
                effort to collect reimbursement for services--
                            ``(i) from persons eligible for assistance 
                        under any of the programs described in 
                        subparagraph (B); and
                            ``(ii) from patients not entitled to 
                        benefits under any such programs.
    ``(d) Limitations on Use of Funds.--
            ``(1) In general.--From the amounts awarded to a FQHC or 
        other entity or organization under this section, funds may be 
        used for purposes of planning but may only be expended for the 
        costs of--
                    ``(A) assessing the needs of the populations or 
                proposed areas to be served;
                    ``(B) preparing a description of how the needs 
                identified will be met; and
                    ``(C) development of an implementation plan that 
                addresses--
                            ``(i) recruitment and training of 
                        personnel; and
                            ``(ii) activities necessary to achieve 
                        operational status in order to meet FQHC 
                        requirements under 1905(l)(2)(B) of the Social 
                        Security Act.
            ``(2) Recruiting, training, and compensation of staff.--
        From the amounts awarded to an entity or organization under 
        this section, funds may be used for the purposes of paying for 
        the costs of recruiting, training, and compensating staff 
        (clinical and associated administrative personnel (to the 
        extent such costs are not already reimbursed under title XIX of 
        the Social Security Act or any other State or Federal program)) 
        to the extent necessary to allow the entity or organization to 
        operate at new or expanded existing sites.
            ``(3) Facilities and equipment.--From the amounts awarded 
        to an entity or organization under this section, funds may be 
        expended for the purposes of acquiring facilities and equipment 
        but only for the costs of--
                    ``(A) construction of new buildings (to the extent 
                that new construction is found to be the most cost-
                efficient approach by the Secretary);
                    ``(B) acquiring, expanding, or modernizing existing 
                facilities;
                    ``(C) purchasing essential (as determined by the 
                Secretary) equipment; and
                    ``(D) amortization of principal and payment of 
                interest on loans obtained for purposes of site 
                construction, acquisition, modernization, or expansion, 
                as well as necessary equipment.
            ``(4) Services.--From the amounts awarded to an entity or 
        organization under this section, funds may be expended for the 
        payment of services but only for the costs of--
                    ``(A) providing or arranging for the provision of 
                all services through the entity or organization 
                necessary to qualify such entity or organization as a 
                FQHC under section 1905(l)(2)(B) of the Social Security 
                Act;
                    ``(B) providing or arranging for any other service 
                that a FQHC may provide and be reimbursed for under 
                title XIX of the Social Security Act; and
                    ``(C) providing any unreimbursed costs of providing 
                services as described in section 330(a) to patients.
    ``(e) Priorities in the Awarding of Grants.--
            ``(1) Certified fqhcs.--The Secretary shall give priority 
        in awarding grants under this section to entities and 
        organizations which have, as of the date of enactment of the 
        BasiCare Health Access and Cost Control Act, been certified as 
        a FQHC under section 1905(l)(2)(B) of the Social Security Act 
        and which have submitted a proposal to the Secretary to expand 
        their operations (including expansion to new sites) to serve 
        medically underserved populations for high impact areas not 
        currently served by a FQHC. The Secretary shall give first 
        priority in awarding grants under this section to those FQHCs 
        or other entities or organizations which propose to serve 
        populations with the highest degree of unmet need, and which 
        can demonstrate the ability to expand their operations in the 
        most efficient manner.
            ``(2) Qualified fqhcs.--The Secretary shall give second 
        priority in awarding grants to entities and organizations which 
        have submitted applications to the Secretary which demonstrate 
        that the entities or organizations will qualify as FQHCs under 
        section 1905(l)(2)(B) of the Social Security Act before they 
        provide or arrange for the provision of services supported by 
        funds awarded under this section, and which are serving or 
        proposing to serve medically underserved populations or high 
        impact areas which are not currently served (or proposed to be 
        served) by a FQHC.
            ``(3) Expanded services and projects.--The Secretary shall 
        give third priority in awarding grants in subsequent years to 
        those FQHCs or other entities or organizations which have 
        provided for expanded services and projects and are able to 
        demonstrate that such entities or organizations will incur 
        significant unreimbursed costs in providing such expanded 
        services.
    ``(f) Return of Funds to Secretary for Costs Reimbursed From Other 
Sources.--To the extent that a FQHC or other entity or organization 
receiving funds under this section is reimbursed from another source 
for the provision of services to an individual, and does not use such 
increased reimbursement to expand services furnished, to expand areas 
served, to compensate for costs of unreimbursed services provided to 
patients, or to promote recruitment, training, or retention of 
personnel, such excess revenues shall be returned to the Secretary.
    ``(g) Termination of Grants.--
            ``(1) Failure to meet fqhc requirements.--
                    ``(A) In general.--With respect to any entity or 
                organization that is receiving funds awarded under this 
                section and which subsequently fails to meet the 
                requirements to qualify as a FQHC under section 
                1905(l)(2)(B) of the Social Security Act or is an 
                entity or organization that is not required to meet the 
                requirements to qualify as a FQHC under section 
                1905(l)(2)(B) of the Social Security Act but fails to 
                meet the requirements of this section, the Secretary 
                shall terminate the award of funds under this section 
                to such entity or organization.
                    ``(B) Notice.--Prior to any termination of funds 
                under this section to an entity or organization, the 
                entity or organization shall be entitled to 60 days' 
                prior notice of termination and, as provided by the 
                Secretary in regulations, an opportunity to correct any 
                deficiencies in order to allow the entity or 
                organization to continue to receive funds under this 
                section.
            ``(2) Requirements.--Upon any termination of funding under 
        this section, the Secretary may (to the extent practicable)--
                    ``(A) sell any property (including equipment) 
                acquired or constructed by the entity or organization 
                using funds made available under this section or 
                transfer such property to another FQHC, except that the 
                Secretary shall reimburse any costs which were incurred 
                by the entity or organization in acquiring or 
                constructing such property (including equipment) which 
                were not supported by grants under this section; and
                    ``(B) recoup any funds provided to an entity or 
                organization terminated under this section.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $600,000,000 for each of the 
fiscal years 1994 through 1998.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
become effective with respect to services furnished by a federally 
qualified health center or other qualifying entity or organization 
described in this section beginning on or after the date of enactment 
of this Act.

 Subtitle C--Expansion of Tax Incentives for Self-Employed Individuals

SEC. 121. PERMANENT INCREASE IN DEDUCTIBLE HEALTH INSURANCE COSTS FOR 
              SELF-EMPLOYED INDIVIDUALS.

    (a) In General.--Paragraph (1) of section 162(l) of the Internal 
Revenue Code of 1986 (relating to special rules for health insurance 
costs of self-employed individuals) is amended by striking ``25 
percent'' and inserting ``100 percent''.
    (b) Permanent Deduction.--Section 162(l) of such Code is amended by 
striking paragraph (6).
    (c) Effective Date.--The amendment made by this subsection shall 
apply to taxable years beginning after the date of enactment of this 
Act.

Subtitle D--Expanding the Supply of Health Professionals in Rural Areas

SEC. 131. EXPANSION OF NATIONAL HEALTH SERVICE CORPS.

    Section 338H(b) of the Public Health Service Act (42 U.S.C. 
254q(b)) is amended--
            (1) in paragraph (1), by striking ``and such sums'' and all 
        that follows through the end thereof and inserting 
        ``$120,000,000 for each of the fiscal years 1992 through 
        1997.''; and
            (2) in paragraph (2)--
                    (A) by redesignating subparagraphs (A) and (B) as 
                subparagraphs (B) and (C), respectively; and
                    (B) by inserting before subparagraph (B) (as so 
                redesignated) the following new subparagraph:
                    ``(A) In general.--Of the amount appropriated under 
                paragraph (1) for each fiscal year, the Secretary shall 
                utilize 25 percent of such amount to carry out section 
                338A and 75 percent of such amount to carry out section 
                338B.''.

SEC. 132. TAX INCENTIVES FOR PRACTICE IN RURAL AREAS.

    (a) Nonrefundable Credit for Certain Primary Health Services 
Providers.--
            (1) In general.--Subpart A of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 (relating to 
        nonrefundable personal credits) is amended by inserting after 
        section 25 the following new section:

``SEC. 25A. PRIMARY HEALTH SERVICES PROVIDERS.

    ``(a) Allowance of Credit.--In the case of a qualified primary 
health services provider, there is allowed as a credit against the tax 
imposed by this chapter for any taxable year in a mandatory service 
period an amount equal to the product of--
            ``(1) the lesser of--
                    ``(A) the number of months of such period occurring 
                in such taxable year, or
                    ``(B) 36 months, reduced by the number of months 
                taken into account under this paragraph with respect to 
                such provider for all preceding taxable years (whether 
                or not in the same mandatory service period), 
                multiplied by
            ``(2) $1,000 ($500 in the case of a qualified primary 
        health services provider who is a physician assistant or a 
        nurse practitioner).
    ``(b) Qualified Primary Health Services Provider.--For purposes of 
this section, the term `qualified primary health services provider' 
means any physician, physician assistant, or nurse practitioner who for 
any month during a mandatory service period is certified by the Bureau 
to be a primary health services provider who--
            ``(1) is providing primary health services--
                    ``(A) full time, and
                    ``(B) to individuals at least 80 percent of whom 
                reside in a rural health professional shortage area,
            ``(2) is not receiving during such year a scholarship under 
        the National Health Service Corps Scholarship Program or a loan 
        repayment under the National Health Service Corps Loan 
        Repayment Program,
            ``(3) is not fulfilling service obligations under such 
        Programs, and
            ``(4) has not defaulted on such obligations.
    ``(c) Mandatory Service Period.--For purposes of this section, the 
term `mandatory service period' means the period of 60 consecutive 
calendar months beginning with the first month the taxpayer is a 
qualified primary health services provider.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bureau.--The term `Bureau' means the Bureau of Health 
        Care Delivery and Assistance, Health Resources and Services 
        Administration of the United States Public Health Service.
            ``(2) Physician.--The term `physician' has the meaning 
        given to such term by section 1861(r) of the Social Security 
        Act.
            ``(3) Physician assistant; nurse practitioner.--The terms 
        `physician assistant' and `nurse practitioner' have the 
        meanings given to such terms by section 1861(aa)(3) of the 
        Social Security Act.
            ``(4) Primary health services provider.--The term `primary 
        health services provider' means a provider of primary health 
        services (as defined in section 330(b)(1) of the Public Health 
        Service Act).
            ``(5) Rural health professional shortage area.--The term 
        `rural health professional shortage area' means--
                    ``(A) a class 1 or class 2 rural health 
                professional shortage area (as defined in section 
                332(a)(1)(A) of the Public Health Service Act) in a 
                rural area (as determined under section 1886(d)(2)(D) 
                of the Social Security Act), or
                    ``(B) an area which is determined by the Secretary 
                of Health and Human Services as equivalent to an area 
                described in subparagraph (A) and which is designated 
                by the Bureau of the Census as not urbanized.
                    ``(C) a community that is certified as underserved 
                by the Secretary for purposes of participation in the 
                rural health clinic program under title XVIII of the 
                Social Security Act.
    ``(e) Recapture of Credit.--
            ``(1) In general.--If, during any taxable year, there is a 
        recapture event, then the tax of the taxpayer under this 
        chapter for such taxable year shall be increased by an amount 
        equal to the product of--
                    ``(A) the applicable percentage, and
                    ``(B) the aggregate unrecaptured credits allowed to 
                such taxpayer under this section for all prior taxable 
                years.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

                    ``If the recapture
                                                  The applicable recap-
                      event occurs during:
                                                    ture percentage is:
                            Months 1-24..............         100      
                            Months 25-36.............          75      
                            Months 37-48.............          50      
                            Months 49-60.............          25      
                            Months 61 and thereafter.          0.      
                    ``(B) Timing.--For purposes of subparagraph (A), 
                month 1 shall begin on the first day of the mandatory 
                service period.
            ``(3) Recapture event defined.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `recapture event' means the failure of the 
                taxpayer to be a qualified primary health services 
                provider for any month during any mandatory service 
                period.
                    ``(B) Cessation of designation.--The cessation of 
                the designation of any area as a rural health 
                professional shortage area after the beginning of the 
                mandatory service period for any taxpayer shall not 
                constitute a recapture event.
                    ``(C) Secretarial waiver.--The Secretary may waive 
                any recapture event caused by extraordinary 
                circumstances.
            ``(4) No credits against tax.--Any increase in tax under 
        this subsection shall not be treated as a tax imposed by this 
        chapter for purposes of determining the amount of any credit 
        under subpart A, B, or D of this part.''.
            (2) Clerical amendment.--The table of sections for subpart 
        A of part IV of subchapter A of chapter 1 of such Code is 
        amended by inserting after the item relating to section 25 the 
        following new item:

                              ``Sec. 25A. Primary health services 
                                        providers.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (b) National Health Service Corps Loan Repayments Excluded From 
Gross Income.--
            (1) In general.--Part III of subchapter B of chapter 1 of 
        the Internal Revenue Code of 1986 (relating to items 
        specifically excluded from gross income) is amended by 
        redesignating section 136 as section 137 and by inserting after 
        section 135 the following new section:

``SEC. 136. NATIONAL HEALTH SERVICE CORPS LOAN REPAYMENTS.

    ``(a) General Rule.--Gross income shall not include any qualified 
loan repayment.
    ``(b) Qualified Loan Repayment.--For purposes of this section, the 
term `qualified loan repayment' means any payment made on behalf of the 
taxpayer by the National Health Service Corps Loan Repayment Program 
under section 338B(g) of the Public Health Service Act.''.
            (2) Conforming amendment.--Paragraph (3) of section 338B(g) 
        of the Public Health Service Act is amended by striking 
        ``Federal, State, or local'' and inserting ``State or local''.
            (3) Clerical amendment.--The table of sections for part III 
        of subchapter B of chapter 1 of the Internal Revenue Code of 
        1986 is amended by striking the item relating to section 136 
        and inserting the following:

                              ``Sec. 136. National Health Service Corps 
                                        loan repayments.
                              ``Sec. 137. Cross references to other 
                                        Acts.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to payments made under section 338B(g) of the 
        Public Health Service Act after the date of the enactment of 
        this Act.
    (c) Expensing of Medical Equipment.--
            (1) In general.--Section 179 of the Internal Revenue Code 
        of 1986 (relating to election to expense certain depreciable 
        business assets) is amended--
                    (A) by striking paragraph (1) of subsection (b) and 
                inserting the following:
            ``(1) Dollar limitation.--
                    ``(A) General rule.--The aggregate cost which may 
                be taken into account under subsection (a) for any 
                taxable year shall not exceed $10,000.
                    ``(B) Rural health care property.--In the case of 
                rural health care property, the aggregate cost which 
                may be taken into account under subsection (a) for any 
                taxable year shall not exceed $25,000, reduced by the 
                amount otherwise taken into account under subsection 
                (a) for such year.''; and
                    (B) by adding at the end of subsection (d) the 
                following new paragraph:
            ``(11) Rural health care property.--For purposes of this 
        section, the term `rural health care property' means section 
        179 property used by a physician (as defined in section 1861(r) 
        of the Social Security Act) in the active conduct of such 
        physician's full-time trade or business of providing primary 
        health services (as defined in section 330(b)(1) of the Public 
        Health Service Act) in a rural health professional shortage 
        area (as defined in section 25A(d)(5)).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service in taxable years 
        beginning after the date of enactment of this Act.
    (d) Deduction for Student Loan Payments by Medical Professionals 
Practicing in Rural Areas.--
            (1) Interest on student loans not treated as personal 
        interest.--Section 163(h)(2) of the Internal Revenue Code of 
        1986 (defining personal interest) is amended by striking 
        ``and'' at the end of subparagraph (D), by striking the period 
        at the end of subparagraph (E) and inserting ``, and'', and by 
        adding at the end thereof the following new subparagraph:
            ``(F) any qualified medical education interest (within the 
        meaning of subsection (k)).''.
            (2) Qualified medical education interest defined.--Section 
        163 of such Code (relating to interest expenses) is amended by 
        redesignating subsection (k) as subsection (l) and by inserting 
        after subsection (j) the following new subsection:
    ``(k) Qualified Medical Education Interest of Medical Professionals 
Practicing in Rural Areas.--
            ``(1) In general.--For purposes of subsection (h)(2)(F), 
        the term `qualified medical education interest' means an amount 
        which bears the same ratio to the interest paid on qualified 
        educational loans during the taxable year by an individual 
        performing services under a qualified rural medical practice 
        agreement as--
                    ``(A) the number of months during the taxable year 
                during which such services were performed, bears to
                    ``(B) the number of months in the taxable year.
            ``(2) Dollar limitation.--The aggregate amount which may be 
        treated as qualified medical education interest for any taxable 
        year with respect to any individual shall not exceed $5,000.
            ``(3) Qualified rural medical practice agreement.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `qualified rural 
                medical practice agreement' means a written agreement 
                between an individual and an applicable rural community 
                under which the individual agrees--
                            ``(i) in the case of a medical doctor, upon 
                        completion of the individual's residency (or 
                        internship if no residency is required), or
                            ``(ii) in the case of a registered nurse, 
                        nurse practitioner, or physician's assistant, 
                        upon completion of the education to which the 
                        qualified education loan relates,
                to perform full-time services as such a medical 
                professional in the applicable rural community for a 
                period of 24 consecutive months. An individual and an 
                applicable rural community may elect to have the 
                agreement apply for 36 consecutive months rather than 
                24 months.
                    ``(B) Special rule for computing periods.--An 
                individual shall be treated as meeting the 24 or 36 
                consecutive month requirement under subparagraph (A) 
                if, during each 12-consecutive month period within 
                either such period, the individual performs full-time 
                services as a medical doctor, registered nurse, nurse 
                practitioner, or physician's assistant, whichever 
                applies, in the applicable rural community during 9 of 
                the months in such 12-consecutive month period. For 
                purposes of this subsection, an individual meeting the 
                requirements of the preceding sentence shall be treated 
                as performing services during the entire 12-month 
                period.
                    ``(C) Applicable rural community.--The term 
                `applicable rural community' means--
                            ``(i) any political subdivision of a State 
                        which--
                                    ``(I) has a population of 5,000 or 
                                less, and
                                    ``(II) has a per capita income of 
                                $15,000 or less, or
                            ``(ii) an Indian reservation which has a 
                        per capita income of $15,000 or less.
            ``(4) Qualified educational loan.--The term `qualified 
        educational loan' means any indebtedness to pay qualified 
        tuition and related expenses (within the meaning of section 
        117(b)) and reasonable living expenses--
                    ``(A) which are paid or incurred--
                            ``(i) as a candidate for a degree as a 
                        medical doctor at an educational institution 
                        described in section 170(b)(1)(A)(ii), or
                            ``(ii) in connection with courses of 
                        instruction at such an institution necessary 
                        for certification as a registered nurse, nurse 
                        practitioner, or physician's assistant, and
                    ``(B) which are paid or incurred within a 
                reasonable time before or after such indebtedness is 
                incurred.
            ``(5) Recapture.--If an individual fails to carry out a 
        qualified rural medical practice agreement during any taxable 
        year, then--
                    ``(A) no deduction with respect to such agreement 
                shall be allowable by reason of subsection (h)(2)(F) 
                for such taxable year and any subsequent taxable year, 
                and
                    ``(B) there shall be included in gross income for 
                such taxable year the aggregate amount of the 
                deductions allowable under this section (by reason of 
                subsection (h)(2)(F)) for all preceding taxable years.
            ``(6) Definitions.--For purposes of this subsection, the 
        terms `registered nurse', `nurse practitioner', and 
        `physician's assistant' have the meaning given such terms by 
        section 1861 of the Social Security Act.''.
            (3) Deduction allowed in computing adjusted gross income.--
        Section 62(a) of such Code is amended by inserting after 
        paragraph (13) the following new paragraph:
            ``(14) Interest on student loans of rural health 
        professionals.--The deduction allowable by reason of section 
        163(h)(2)(F) (relating to student loan payments of medical 
        professionals practicing in rural areas).''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

                     Subtitle E--Malpractice Reform

                          PART I--DEFINITIONS

SEC. 141. DEFINITIONS.

    For purposes of this subtitle:
            (1) Alternative dispute resolution system.--The term 
        ``alternative dispute resolution system'' means a system that 
        is enacted or adopted by a State to resolve health care 
        liability actions as an alternative to a judicial proceeding in 
        a Federal or State court.
            (2) Concerted action and acting in concert.--The terms 
        ``concerted action'' and ``acting in concert'' mean the 
        participation in joint conduct by two or more persons who agree 
        to jointly participate in such conduct with actual knowledge of 
        the wrongfulness of the conduct.
            (3) Economic losses.--The term ``economic losses'' means 
        losses for health care provider and medical expenses, lost 
        wages, lost employment, and other pecuniary losses.
            (4) Health care liability action.--The term ``health care 
        liability action'' means any civil action or proceeding in any 
        judicial tribunal brought pursuant to Federal or State law 
        against a health care provider alleging that injury was 
        suffered by the claimant as a result of any act or omission by 
        such provider, without regard to the theory of liability 
        asserted in the action. Such term includes a claim, third-party 
        claim, cross-claim, counter-claim, or contribution-claim.
            (5) Health care provider.--The term ``health care 
        provider'' means--
                    (A) any individual who provides health care 
                services in a State and who is required by State law or 
                regulation to be licensed or certified by the State to 
                provide such services in the State; and
                    (B) any organization or institution that is engaged 
                in the delivery of health care services in a State and 
                that is required by State law or regulation to be 
                licensed or certified by the State to engage in the 
                delivery of such services in the State.
            (6) Injury.--The term ``injury'' means any injury, illness, 
        disease, or other harm suffered by an individual as a result of 
        the provision of health care services by a health care 
        provider.
            (7) Noneconomic losses.--The term ``noneconomic losses'' 
        means losses for physical and emotional pain, suffering, 
        physical impairment, mental anguish, disfigurement, loss of 
        enjoyment of life, loss of companionship, consortium, and other 
        nonpecuniary losses.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (9) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, and Guam.

         PART II--TORT REFORM OF HEALTH CARE LIABILITY ACTIONS

SEC. 142. APPLICATION TO CIVIL ACTIONS.

    This part shall apply to any health care liability action brought 
in any Federal or State court. This part shall not be construed to 
create or effect any cause of action or theory of liability recognized 
in any Federal or State proceeding.

SEC. 143. DAMAGES.

    (a) Limitation on Noneconomic Damages.--The total amount of damages 
which may be awarded to an individual and the family members of such 
individual for noneconomic losses resulting from an injury which is the 
subject of a health care liability action may not exceed $250,000, 
regardless of the number of health care providers against whom such 
action is brought or the number of such actions brought with respect to 
the injury.
    (b) Payments.--With respect to a health care liability action, no 
person may be required to pay more than $100,000 in a single payment 
for an award of damages for economic or noneconomic losses, but such 
person shall be permitted to make such payments on a periodic basis. 
The periods for such payments shall be determined by the court.
    (c) Mandatory Offsets for Damages Paid by a Collateral Source.--
            (1) In general.--The total amount of damages received by an 
        individual in connection with a health care liability action 
        shall be reduced, in accordance with paragraph (2), by any 
        other payment which has been made or which will be made to such 
        individual to compensate such individual for an injury, 
        including payments under--
                    (A) Federal or State disability or sickness 
                programs;
                    (B) Federal, State, or private health insurance 
                programs;
                    (C) private disability insurance programs;
                    (D) employer wage continuation programs; and
                    (E) any other source of payment intended to 
                compensate such individual for such injury.
            (2) Amount of reduction.--The amount by which an award of 
        damages to an individual for an injury shall be reduced under 
        paragraph (1) shall be--
                    (A) the total amount of any payments (other than 
                such award) which have been made or which will be made 
                to such individual to compensate such individual for 
                such injury; minus
                    (B) the amount paid by such individual (or by the 
                spouse, parent, or legal guardian of such individual) 
                to secure the payments described in subparagraph (A).
    (d) Punitive Damages.--
            (1) Limitation.--With respect to a health care liability 
        action, punitive damages may not exceed the sum of damages 
        awarded for economic and noneconomic losses.
            (2) Determination of amount.--In determining the amount of 
        punitive damages in a health care liability action, the trier 
        of fact shall consider all relevant evidence, including--
                    (A) the severity of the harm caused by the conduct 
                of the defendant;
                    (B) the duration of the conduct or any concealment 
                of the conduct by the defendant;
                    (C) awards of punitive or exemplary damages to 
                persons similarly situated to the claimant; and
                    (D) prospective awards of economic and noneconomic 
                losses to persons similarly situated to the claimant.
    (e) Attorneys' Fees.--Compensation for reasonable attorneys' fees 
to be paid by each party in connection with a health care liability 
action shall be determined by the court after an evidentiary hearing 
and prior to final disposition of the action. Attorneys' fees shall be 
calculated on the basis of an hourly rate or as a percentage of the 
total damages awarded for economic and noneconomic losses and shall not 
exceed an amount that would be considered reasonable based on the 
following:
            (1) The time, labor, and skill necessary to properly 
        perform the legal services required by the action.
            (2) The novelty and difficulty of the questions involved in 
        the action.
            (3) The likelihood, if apparent to the client, that the 
        acceptance of employment with respect to the client's action 
        will preclude other employment by the attorney.
            (4) The fee customarily charged in the locality for similar 
        legal services.
            (5) The amount involved in the action and the results 
        obtained.
            (6) The time limitations imposed by the client or by the 
        circumstances of the action.
            (7) The nature and length of the professional relationship 
        between the attorney or attorneys and the client.
            (8) The experience, reputation, and ability of the attorney 
        or attorneys performing the services in connection with the 
        action.
            (9) Whether the fee for services in connection with the 
        action is fixed or contingent.

SEC. 144. JOINT AND SEVERAL LIABILITY.

    (a) In General.--With respect to a health care liability action, 
joint and several liability shall apply--
            (1) to the liability of each defendant for damages for 
        economic losses; and
            (2) as between persons acting in concert where the 
        concerted action proximately caused the injury for which one or 
        more persons are found liable for damages.
    (b) Noneconomic Damages.--With respect to a health care liability 
action, joint and several liability shall not apply to the liability of 
each defendant for damages for noneconomic losses. A person found 
liable for damages for noneconomic losses in any such action may--
            (1) be found liable, if at all, only for those damages 
        directly attributable to the pro rata share of fault or 
        responsibility of such person for the injury; and
            (2) not be found liable for damages attributable to the pro 
        rata share of fault or responsibility of any other person 
        (without regard to whether that person is a party to the 
        action) for the injury, including any person bringing the 
        action.

SEC. 145. STATUTE OF LIMITATIONS.

    (a) In General.--Except as provided in subsection (b), no health 
care liability action may be initiated after the expiration of the 2-
year period that begins on the date on which the alleged injury should 
reasonably have been discovered, but in no event later than 4 years 
after the date of the alleged occurrence of the injury.
    (b) Exception for Minors.--In the case of an alleged injury 
suffered by a minor who has not attained 6 years of age, no health care 
liability action may be initiated after the expiration of the 2-year 
period that begins on the date on which the alleged injury should 
reasonably have been discovered, but in no event later than 4 years 
after the date of the alleged occurrence of the injury or the date on 
which the minor attains 8 years of age, whichever is later.

SEC. 146. PREEMPTION.

    (a) In General.--This part supersedes any State law only to the 
extent that State law establishes higher payment limits, permits the 
recovery of a greater amount of damages or the awarding of a greater 
amount of attorneys' fees, or establishes a longer period during which 
a health care liability action may be initiated.
    (b) Effect on Sovereign Immunity and Choice of Law or Venue.--
Nothing in this part shall be construed to--
            (1) waive or affect any defense of sovereign immunity 
        asserted by any State under any provision of law;
            (2) waive or affect any defense of sovereign immunity 
        asserted by the United States;
            (3) affect the applicability of any provision of the 
        Foreign Sovereign Immunities Act of 1976 (28 U.S.C. 1602 et 
        seq.);
            (4) preempt State choice-of-law rules with respect to 
        actions brought by a foreign nation or a citizen of a foreign 
        nation; or
            (5) affect the right of any court to transfer venue or to 
        apply the law of a foreign nation or to dismiss an action of a 
        foreign nation or of a citizen of a foreign nation on the 
        ground of inconvenient forum.

SEC. 147. EFFECTIVE DATE.

    This part shall apply to any health care liability action initiated 
after the expiration of the 2-year period that begins on the date of 
the enactment of this Act.

            PART III--ALTERNATIVE DISPUTE RESOLUTION SYSTEMS

SEC. 148. GRANTS FOR ALTERNATIVE DISPUTE RESOLUTION SYSTEMS.

    (a) In General.--The Secretary shall make grants to States from 
amounts appropriated under section 150 for the development and 
implementation of alternative dispute resolution systems, under such 
terms as the Secretary may require.
    (b) Application.--
            (1) In general.--No grant may be made under this section 
        unless an application is submitted to the Secretary. Any such 
        application shall--
                    (A) be submitted to the Secretary within 1 year 
                after the notification of availability of funds by the 
                Secretary; and
                    (B) either--
                            (i) contain a certification by the chief 
                        executive officer of the State that, on the 
                        date the application is submitted, the State 
                        has enacted, adopted, or otherwise has in 
                        effect an alternative dispute resolution 
                        system; or
                            (ii) contain a certification by the chief 
                        executive officer of the State that, on the 
                        date the application is submitted, the State 
                        plans to develop an alternative dispute 
                        resolution system.
            (2) Supporting documentation.--The certification required--
                    (A) under paragraph (1)(B)(i) shall be accompanied 
                by supporting documentation, including copies of 
                relevant State statutes, rules, procedures, 
                regulations, judicial decisions, and opinions of the 
                State attorney general; and
                    (B) under paragraph (1)(B)(ii) shall be accompanied 
                by supporting documentation, including a detailed plan 
                of the alternative dispute resolution system to be 
                developed by the State.
    (c) Review of Applications.--Within 90 days after receiving an 
application under subsection (b), the Secretary shall review and 
approve the application if, in the determination of the Secretary, the 
application demonstrates that--
            (1) the State has enacted, adopted, or otherwise has in 
        effect an alternative dispute resolution system; or
            (2) the State has a plan to develop an alternative dispute 
        resolution system.
    (d) Amount of Grant.--
            (1) In general.--The amount of a grant under this section 
        shall be an amount that the Secretary finds reasonable and 
        necessary for the development and implementation of the 
        alternative dispute resolution system of the State.
            (2) Reductions for expenses of supplies, equipment, and 
        employee detail.--The Secretary may reduce the amount of a 
        grant by--
                    (A) the fair market value of any supplies or 
                equipment furnished to the recipient by the Secretary;
                    (B) the amount of pay, allowances, and travel 
                expenses incurred by any officer or employee of the 
                Federal Government when such officer or employee has 
                been detailed to the recipient; and
                    (C) the amount of any other costs incurred in 
                connection with the detail of an officer or employee as 
                described in subparagraph (B),
        when the furnishing of such supplies or equipment or the detail 
        of such an officer or employee is for the convenience, and at 
        the request, of such recipient and for the purpose of carrying 
        out activities under the grant.
            (3) Option to refuse grant.--Not later than 90 days after 
        the Secretary makes a grant under this section to a State, that 
        State may send notice to the Secretary that it refuses the 
        grant. At the time the State sends such notice, the State shall 
        return any amounts paid to it under such grant to the 
        Secretary.
    (e) Supplemental Grants.--If amounts appropriated for grants under 
this section remain available because--
            (1) a State has notified the Secretary that it refuses the 
        grant made to the State;
            (2) a State has notified the Secretary that it does not 
        intend to use the full amount of a grant awarded to the State; 
        or
            (3) the amount paid to a State under a grant is reduced, 
        offset, or repaid under subsection (d)(2),
the Secretary shall have the discretion to make supplemental grants to 
States, to the extent such amounts are available, for the 
implementation of alternative dispute resolution systems. A grant 
received by a State under this subsection shall be used by the State to 
further implement and evaluate the effectiveness of such a system.
    (f) Records.--
            (1) In general.--Each recipient of a grant under this 
        section shall keep such records as the Secretary determines 
        appropriate.
            (2) Audit and examination of records.--The Secretary and 
        the Comptroller General of the United States shall have access 
        to any books, documents, papers, and records of the recipient 
        of a grant under this section, for the purpose of conducting 
        audits and examinations of such recipient that are pertinent to 
        such grant.
    (g) Reports.--
            (1) Reports on compliance.--
                    (A) Submission of reports.--Each State shall 
                annually submit a report to the Secretary containing 
                such information as the Secretary may require to 
                determine whether the State is in compliance with the 
                terms of the grant made under this section.
                    (B) Determination of noncompliance.--If, after 
                reviewing the report submitted under subparagraph (A), 
                the Secretary determines that a State receiving a grant 
                under this section is not in compliance with the terms 
                of the grant, the Secretary shall provide the State 
                with written notice of such determination. Such notice 
                shall specify--
                            (i) the reasons for the determination of 
                        the Secretary;
                            (ii) that the Secretary will require the 
                        State, not later than 60 days after receipt of 
                        such notice, to return all funds provided to 
                        the State under the grant, unless the State--
                                    (I) takes such corrective action as 
                                may be necessary to ensure that the 
                                State is in compliance with the terms 
                                of the grant; or
                                    (II) requests a hearing under 
                                clause (iii); and
                            (iii) that the State may request a hearing 
                        on the record before an administrative law 
                        judge under section 554 of title 5, United 
                        States Code, concerning the allegations set 
                        forth in the notice.
            (2) Additional reports.--Each State receiving a grant under 
        this section shall, not later than 2 years after the approval 
        of its application for such grant and every 2 years thereafter, 
        prepare and submit to the Commission on National Health Care 
        Access and Reform established under section 201 (hereafter in 
        this subtitle referred to as the ``Commission''), the 
        Secretary, and the appropriate committees of Congress, a report 
        and evaluation concerning the alternative dispute resolution 
        systems implemented by the State, including information--
                    (A) on the effect of such systems on the cost of 
                health care within the State;
                    (B) on the impact of such systems on the access of 
                individuals to health care within the State; and
                    (C) on the effect of such systems on the quality of 
                health care provided within the State.

SEC. 149. ESTABLISHMENT OF ADVISORY PANEL.

    (a) In General.--The Commission shall make recommendations to the 
Secretary concerning the eligibility, approval, and review requirements 
for alternative dispute resolution systems described in applications 
submitted under section 148(b).
    (b) Advisors.--The Commission shall--
            (1) direct the National Advisory Board established under 
        section 202 to assist in carrying out the Commission's 
        activities under this section, or
            (2) establish a panel of advisors to assist in carrying out 
        the Commission's activities under this section.
    (c) Members of the Advisory Panel.--If the Commission establishes 
an advisory panel under subsection (b)(2), the members of the advisory 
panel shall include representatives from each of the following:
            (1) Patient advocacy groups.
            (2) Groups representing State governments.
            (3) Health care provider groups, including organized 
        medicine.
            (4) Health care insurers.
            (5) Health care employers.
            (6) Academic researchers from disciplines such as medicine, 
        economics, law or health services, with expertise in 
        alternative dispute resolution models.
    (d) Duties of Advisors.--The advisors appointed under paragraph (1) 
or (2) of subsection (b) shall--
            (1) assist in the development of criteria for alternative 
        dispute resolution systems that States must meet to be eligible 
        to receive grants under section 148 and make information on 
        such criteria available to the States to assist such States in 
        preparing applications for grants;
            (2) as part of the criteria developed under paragraph (1), 
        require that the alternative dispute resolution systems for 
        which States receive grants under section 148--
                    (A) support access to health care;
                    (B) encourage improvements in the quality of care;
                    (C) enhance the patient-provider relationship;
                    (D) encourage innovation in health care delivery 
                systems;
                    (E) provide prompt resolution and fair 
                compensation;
                    (F) provide predictable outcomes; and
                    (G) operate efficiently in terms of costs and 
                processes;
            (3) provide advice and assistance to representatives from 
        State governments concerning the establishment of alternative 
        dispute resolution systems;
            (4) not later than 7 years after the date of enactment of 
        this Act, submit to the Commission, the Secretary, and to the 
        appropriate committees of Congress, a recommendation on the 
        feasibility of a national alternative dispute resolution 
        system; and
            (5) perform the duties set forth in part IV.
    (e) Compensation.--All members of the advisory panel established 
under subsection (b)(2) shall be reimbursed by the Commission for 
travel and per diem expenses in lieu of subsistence expenses during the 
performance of duties of the Panel in accordance with subchapter I of 
chapter 57 of title 5, United States Code.
    (f) FACA Not Applicable.--The provisions of the Federal Advisory 
Committee Act shall not apply to an advisory panel established under 
subsection (b)(2).
    (g) Provision of Information by the Secretary.--The Secretary shall 
make available to the advisors appointed under paragraph (1) or (2) of 
subsection (b) any information concerning the grants made under section 
148 that is necessary for such advisors to complete the duties set 
forth in subsection (d).

SEC. 150. AUTHORIZATION.

    (a) In General.--There are authorized to be appropriated 
$250,000,000 for each of the fiscal years 1994, 1995, and 1996, for 
grants under section 148.
    (b) Availability of Funds.--Amounts appropriated for grants under 
section 148 shall remain available until expended.

   PART IV--DEMONSTRATION PROJECTS FOR NO-FAULT COMPENSATION PROGRAMS

SEC. 151. DEMONSTRATION PROJECTS FOR NO-FAULT COMPENSATION PROGRAMS.

    (a) Establishment.--The Secretary shall establish a program to 
award grants to private entities for the development and implementation 
of demonstration no-fault compensation programs in the private sector.
    (b) Application.--To be eligible to receive a grant under this 
section a private entity shall prepare and submit to the Secretary an 
application at such time, in such form, and containing such information 
as the Secretary may require including a description of the no-fault 
compensation program that the private entity intends to develop or 
implement.
    (c) Review and Approval of Applications.--The Secretary shall 
review and approve applications received under subsection (b) in 
accordance with recommendations made by the Commission with the advice 
of the advisors appointed under section 149(b).
    (d) Amount of Grant.--The amount of a grant to a private entity 
under this section shall be an amount that the Secretary finds 
reasonable and necessary for the development and implementation of the 
no-fault compensation program.
    (e) Duties of Advisors.--
            (1) In general.--The advisors appointed under section 
        149(b) shall--
                    (A) develop criteria for no-fault compensation 
                programs in the private sector that private entities 
                must meet to be eligible to receive grants under this 
                section; and
                    (B) make information on such criteria available to 
                the private entities to assist such entities in 
                preparing applications for grants.
            (2) Criteria.--As part of the criteria developed under 
        paragraph (1), the advisors shall require that the no-fault 
        compensation programs for which States receive grants under 
        this section--
                    (A) provide that health care providers offer their 
                patients a no-fault compensation scheme in exchange for 
                a waiver of common law tort liability for all injuries;
                    (B) provide that patients are fully informed of the 
                common law tort rights they are surrendering and the 
                no-fault benefits they are eligible to receive; and
                    (C) provide that the health care facility operate 
                an effective quality assurance program, including 
                measures for reporting and accountability for all 
                adverse events identified through this claims process.
    (f) Reports and Recommendations.--
            (1) Reports by recipients of grants.--Not later than 2 
        years after the approval of its application, each private 
        entity that is a grant recipient shall prepare and submit a 
        report to the Commission, the Secretary, and the appropriate 
        committees of Congress, which contains--
                    (A) an analysis of the feasibility and desirability 
                of developing and implementing no-fault compensation 
                programs; and
                    (B) a recommendation for legislation on the 
                development and implementation of no-fault compensation 
                programs.
            (2) Recommendations.--The Commission shall review the 
        reports made by grant recipients pursuant to paragraph (1) and 
        make recommendations to the Secretary regarding proposals for 
        legislation to develop and implement national no-fault 
        compensation programs.
    (g) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated 
        for grants under this section $20,000,000 for each of the 
        fiscal years 1994, 1995, and 1996.
            (2) Availability of funds.--Amounts appropriated for grants 
        under this section shall remain available until expended.

                       Subtitle F--Joint Ventures

SEC. 161. AMENDMENT OF THE NATIONAL COOPERATIVE RESEARCH ACT OF 1984.

    (a) Definitions.--Section 2(a) of the National Cooperative Research 
Act of 1984 (15 U.S.C. 4301(a)) is amended by adding at the end the 
following new paragraph:
            ``(7) The term `joint health care provider venture' means a 
        group of activities, as determined by the Commission on 
        National Health Care Access and Reform (established under 
        section 201 of the BasiCare Health Access and Cost Control 
        Act), by 2 or more hospitals for the provision or delivery of 
        health care services.''.
    (b) Exclusions.--Section 2(b) of such Act (15 U.S.C. 4301(b)) is 
amended--
            (1) in the matter preceding paragraph (1) by striking 
        ``excludes'' and inserting ``and the term `joint health care 
        provider venture' exclude''; and
            (2) in paragraph (1) by striking ``conduct the research and 
        development that is'' and inserting ``carry out''.
    (c) Technical Amendments.--(1) Section 3 of such Act (15 U.S.C. 
4302) is amended by inserting ``or joint health care provider venture'' 
after ``joint research and development venture''.
    (2) Section 4 of such Act (15 U.S.C. 4303) is amended in 
subsections (a)(1), (b)(1), (c)(1), and (e) by inserting ``or joint 
health care provider venture'' after ``joint research and development 
venture'' each place it appears.
    (3) Section 5(a) of such Act (15 U.S.C. 4304(a)) is amended in the 
matter preceding paragraph (1) by inserting ``or joint health care 
provider venture'' after ``joint research and development venture''.
    (4) Section 6 of such Act (15 U.S.C. 4305) is amended--
            (A) in the heading by striking ``research and 
        development'';
            (B) in subsections (a), (d)(2), and (e) by inserting ``or 
        joint health care provider venture'' after ``joint research and 
        development venture'' each place it appears; and
            (C) in the first sentence of subsection (a) by inserting 
        ``(or in the case of a joint health care provider venture, the 
        date of enactment of the BasiCare Health Access and Cost 
        Control Act)'' after ``this Act''.

                      TITLE II--LONG-TERM REFORMS

       Subtitle A--Establishment of Commission and Advisory Board

SEC. 201. THE COMMISSION ON NATIONAL HEALTH CARE ACCESS AND REFORM.

    (a) Establishment.--There is established an independent commission 
to be known as the Commission on National Health Care Access and Reform 
(hereinafter referred to as the ``Commission'').
    (b) Duties.--The Commission shall carry out the duties specified 
for it in this title.
    (c) Appointment.--
            (1) Composition.--
                    (A) Size and manner of appointment.--The Commission 
                shall consist of--
                            (i) five members to be appointed by the 
                        President, by and with the advice and consent 
                        of the Senate, one of whom shall, at the time 
                        of appointment, be designated as Chairperson of 
                        the Commission;
                            (ii) two members to be appointed by the 
                        Speaker of the House of Representatives upon 
                        the recommendations of the Majority Leader and 
                        Minority Leader of the House of 
                        Representatives; and
                            (iii) two members to be appointed by the 
                        President pro tempore of the Senate upon the 
                        recommendations of the Majority Leader and 
                        Minority Leader of the Senate.
                    (B) Political affiliation.--At no time shall more 
                than three of the members appointed by the President, 
                one of the members appointed by the Speaker of the 
                House of Representatives, or one of the members 
                appointed by the President pro tempore of the Senate be 
                members of the same political party.
                    (C) Membership qualifications.--The membership of 
                the Commission shall consist of individuals who are of 
                recognized standing and distinction and who possess the 
                demonstrated capacity to discharge the duties imposed 
                on the Commission, and shall include persons possessing 
                substantial knowledge or expertise in health care 
                delivery, health care insurance, or health care 
                economics. No individual who is otherwise an officer or 
                full-time employee of the United States shall serve as 
                a member of the Commission. No member while serving on 
                the Commission may receive financial gain from direct 
                investments, employment or associations from any entity 
                with demonstrable financial interest in matters over 
                which the Commission has jurisdiction.
                    (D) Chairperson.--The Chairperson of the Commission 
                shall designate a member of the Commission to act as 
                Vice Chairperson of the Commission.
                    (E) Quorum.--A majority of the members of the 
                Commission shall constitute a quorum, but a lesser 
                number may conduct hearings.
                    (F) Term.--Members of the Commission shall be 
                appointed for a term of 5 years, except that with 
                respect to the members first appointed--
                            (i) the Chairperson and 2 members, 1 each 
                        appointed under clauses (ii) and (iii) of 
                        paragraph (1)(A), respectively, shall be 
                        appointed for a term of 5 years;
                            (ii) 3 members, 1 each appointed under 
                        clauses (i), (ii) and (iii) of paragraph 
                        (1)(A), respectively, shall be appointed for a 
                        term of 4 years; and
                            (iii) the remaining members shall be 
                        appointed for a term of 3 years.
                    (G) Vacancy.--A vacancy in the Commission shall not 
                affect its powers, but shall be filled in the same 
                manner as the original appointment, but the individual 
                appointed shall serve only for the unexpired portion of 
                the term for which the individual's predecessor was 
                appointed.
            (2) Effective date.--Appointments to the Commission shall 
        be made no later than 90 days after the date of enactment of 
        this Act.
    (d) Meetings.--The Commission shall meet at the call of the 
Chairperson, or at the call of a majority of the members of the 
Commission; but meetings shall not be held less frequently than once in 
each calendar month which begins after a majority of the membership of 
the Commission has been appointed.
    (e) Hearings.--In carrying out its duties under this section, the 
Commission, or any duly authorized committee thereof, is authorized to 
hold such hearings, sit and act at such times and places, and take such 
testimony, with respect to matters with respect to which it has a 
responsibility under this title, as the Commission or such committee 
may deem advisable. The Chairperson of the Commission or any member 
authorized by the Chairperson may administer oaths or affirmations to 
witnesses appearing before the Commission or before any committee 
thereof.
    (f) Pay and Travel Expenses.--
            (1) Pay.--
                    (A) Members.--Each member, other than the 
                Chairperson, shall be paid at a rate equal to the daily 
                equivalent of the minimum annual rate of basic pay 
                payable for level IV of the Executive Schedule under 
                section 5315 of title 5, United States Code, for each 
                day (including travel time) during which the member is 
                engaged in the actual performance of duties vested in 
                the Commission.
                    (B) Chairperson.--The Chairperson shall be paid for 
                each day referred to in subparagraph (A) at a rate 
                equal to the daily equivalent of the minimum annual 
                rate of basic pay payable for level III of the 
                Executive Schedule under section 5314 of title 5, 
                United States Code.
            (2) Travel expenses.--Members shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with sections 5702 and 5703 of title 5, United 
        States Code.
    (g) Staff.--
            (1) Appointment.--Subject to paragraphs (2) and (3), the 
        Chairperson, with the approval of the Commission, may appoint 
        and fix the pay of additional personnel.
            (2) Inapplicability of civil service laws.--The Chairperson 
        may make such appointments without regard to the provisions of 
        title 5, United States Code, governing appointments in the 
        competitive service, and any personnel so appointed may be paid 
        without regard to the provisions of chapter 51 and subchapter 
        III of chapter 53 of that title relating to classification and 
        General Schedule pay rates, except that an individual so 
        appointed shall receive pay--
                    (A) not less than 120 percent of the minimum rate 
                of basic pay payable for GS-15 of the General Schedule, 
                and
                    (B) no greater than the rate of basic pay payable 
                for level IV of the executive schedule.
            (3) Detail of personnel from federal agencies.--Upon 
        request of the Chairperson, the head of any Federal department 
        or agency may detail any of the personnel of that department or 
        agency to the Commission to assist the Commission in carrying 
        out its duties under this title.
            (4) Federal agency assistance.--The Comptroller General of 
        the United States, the Secretary of Health and Human Services, 
        and the Administrator of General Services shall provide 
        assistance on a reimbursable basis, including the detailing of 
        employees, to the Commission in accordance with an agreement 
        entered into with the Commission.
    (h) Other Authority.--
            (1) Consultant services.--The Commission may procure by 
        contract, to the extent funds are available, the temporary or 
        intermittent services of experts or consultants pursuant to 
        section 3109 of title 5, United States Code.
            (2) Property matters.--The Commission may lease space and 
        acquire personal property to the extent funds are available.

SEC. 202. NATIONAL ADVISORY BOARD.

    (a) Appointment.--The Commission shall provide for appointment of a 
National Advisory Board (hereinafter referred to as the ``Board'') to 
advise the Commission on its activities.
    (b) Membership.--The Board shall consist of 15 members who are 
representatives of employers, unions, health care providers, health 
care carriers, consumer organizations, State health programs, and 
public health professionals, as well as the general public. Such 
members shall serve for terms of 3 years, except that, in the initial 
appointment, 5 members shall be each appointed for terms of 1 year, 2 
years, and 3 years.
    (c) Vacancies.--
            (1) In general.--The Commission shall fill any vacancy in 
        the membership of the Board in the same manner as the original 
        appointment. The vacancy shall not affect the power of the 
        remaining members to execute the duties of the Board.
            (2) Vacancy appointments.--Any member appointed to fill a 
        vacancy shall serve for the remainder of the term for which the 
        predecessor of the member was appointed.
            (3) Reappointment.--The Commission may reappoint an 
        appointed member of the Board for a second term in the same 
        manner as the original appointment.
    (d) Chairperson and Vice Chairperson.--The Board shall select a 
Chairperson and a Vice Chairperson from among the members of the Board.
    (e) Compensation.--All members of the Board and the committees 
established under subsection (h) shall be reimbursed by the Commission 
for travel and per diem in lieu of subsistence expenses during the 
performance of duties of the Board in accordance with subchapter I of 
chapter 57 of title 5, United States Code.
    (f) FACA Not Applicable.--The provisions of the Federal Advisory 
Committee Act shall not apply to the Board.
    (g) Duties.--As directed by the Commission, the Board shall 
undertake such projects as the Commission may deem necessary. Such 
projects may include site visits and studies that are concerned with 
issues of access to health care services, utilization of health care 
services, consumer participation and satisfaction in the provision of 
health care services, education of health personnel, medical practice, 
medical technology, quality of insurance plans and health care 
delivery, and malpractice liability. The Board shall not undertake 
studies, visits, or projects, nor shall it issue recommendations, 
except at the request of the Commission.
    (h) Committees.--The Board shall create such committees (composed 
of Commission members and others as appointed by the Chairperson) as 
necessary to enable the Board to meet its responsibilities and 
functions.

SEC. 203. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Commission such 
funds as are necessary to carry out its duties under this title. Such 
funds shall remain available until expended.

      Subtitle B--Reform and Standardization of Private Insurance

SEC. 211. DEFINING GOALS AND GUIDELINES OF COMMISSION.

    (a) Defining Goals.--In carrying out the responsibilities assigned 
to it under this Act, the Commission shall at all times seek to--
            (1) improve access to basic health coverage and services;
            (2) control the cost of health care coverage and services;
            (3) safeguard the quality of health care services;
            (4) assure equity in the availability and cost of health 
        care coverage and services; and
            (5) minimize administrative complexity and duplication in 
        the health care system.
    (b) Guidelines.--In carrying out the responsibilities assigned to 
it under this Act, the Commission shall in developing or evaluating any 
health care proposal or modification be guided by the anticipated 
effect on--
            (1) the cost of health care to medical consumers;
            (2) the quality of health care services;
            (3) access to health care services;
            (4) the financial viability of health care providers;
            (5) the financial viability of health care carriers;
            (6) the provision of health benefits to employees by 
        employers; and
            (7) the administrative complexity of the health care 
        system.
    (c) Consultations.--In carrying out the responsibilities assigned 
to it under this Act, the Commission shall seek out and consider 
recommendations from a broad range of interested individuals and 
organizations, including organizations representing health care 
consumers, health care providers, health care carriers, representatives 
of State health programs, public health professionals, and the general 
public.

SEC. 212. DEVELOPMENT AND SUBMISSION OF LEGISLATIVE PROPOSAL.

    (a) In General.--By not later than January 1, of the 2nd year 
following the date of enactment of this Act, the Commission shall 
develop and submit to Congress a legislative proposal which provides 
for the following:
            (1) Basicare benefits package.--A uniform national health 
        benefits package (hereinafter referred to as the ``BasiCare 
        benefits package'') specifying minimum benefits applicable to 
        all carriers which meets the requirements of section 214.
            (2) Insurance responsibilities under basicare.--A national 
        health care insurance reform plan which meets the requirements 
        of section 215 and which shall apply to all carriers selling 
        health insurance in the United States.
            (3) Establishment of basicare base premium rate.--A base 
        premium rate (hereinafter referred to as the ``BasiCare base 
        premium rate'') to apply to the BasiCare benefits package, 
        which meets the requirements of section 216.
            (4) Employer responsibilities under Basicare.--Employer 
        responsibilities to offer the BasiCare health benefit plan as 
        described in section 217.
            (5) Individual responsibilities under Basicare.--Individual 
        responsibilities to obtain the BasiCare health benefit plan 
        coverage as described in section 218.
            (6) Self-insured requirements.--Self-insured plan 
        requirements with respect to certification as described in 
        section 219.
            (7) Provider responsibilities under Basicare.--Provider 
        responsibilities under the BasiCare health benefit plan as 
        described in section 220.
            (8) Treatment of managed care plans.--Federal standards for 
        managed care plans as described in section 221 and preemption 
        of State provisions relating to such plans, as described in 
        section 222.
            (9) Low-income assistance.--A program to provide low-income 
        individuals and families--
                    (A) an orderly transfer from medicaid program 
                coverage under title XIX of the Social Security Act to 
                BasiCare health benefit plan coverage, and
                    (B) financial assistance in obtaining BasiCare 
                health benefit plan coverage,
        as specified in subtitle C.
    (b) Consideration.--The legislative proposal described in 
subsection (a) shall be considered by the Congress under the procedures 
for consideration of an ``approval resolution'' as described in 
subtitle D.
    (c) Effective Date of Implementation.--The provisions of the 
recommendation shall become effective on January 1 of the year 
following the year of the date of approval of the Commission's 
recommendation (unless such period of time is less than 9 months, in 
which case such provisions shall become effective on January 1 of the 
second year following the date of approval of the Commission's 
recommendation).

SEC. 213. CONTINUING DUTIES AND RESPONSIBILITIES OF THE COMMISSION.

    (a) Period for Resubmission of BasiCare Package and Base Rate in 
Case of Nonapproval.--If the recommendation of the Commission submitted 
under section 212 is not approved by Congress in a year, the Commission 
shall by not later than January 1 of each year thereafter, for a period 
not to exceed 2 years (unless such recommendation is approved in a 
year) submit a new recommendation to Congress subject to the guidelines 
and requirements of this title.
    (b) Continuing Review of BasiCare Benefits Package and BasiCare 
Base Premium Rate.--
            (1) Modifications in basicare benefits package.--The 
        Commission may by not later than September 30 of any year 
        following the effective date of implementation of the 
        Commission's recommendation under section 212, subject to the 
        guidelines and goals applicable to its initial recommendation, 
        publish in the Federal Register revisions to the BasiCare 
        benefits package, which revisions shall become effective on 
        January 1 of the immediately following calendar year unless 
        rescinded by Congress.
            (2) Modifications to variations in basicare base premium 
        rate.--The Commission may by not later than September 30 of any 
        year following the effective date of implementation of the 
        Commission's recommendation under section 212, subject to the 
        guidelines and goals applicable to its initial recommendation, 
        publish in the Federal Register revisions to any variations 
        provided in the BasiCare base premium rate, which revisions 
        shall become effective on January 1 of the immediately 
        following calendar year unless rescinded by Congress.
    (c) Establishment of Annual Allowable Rates of Increase in BasiCare 
Premium Rates.--The Commission shall by not later than September 30 of 
each year following the effective date of implementation of the 
Commission's recommendation under section 212, subject to the 
guidelines and goals applicable to its initial recommendation, publish 
in the Federal Register a percentage figure for a single allowable rate 
of increase in BasiCare premiums to become effective on January 1 of 
the immediately following calendar year unless such percentage figure 
is modified or rescinded by Congress. Such rate of increase shall be 
binding on all carriers offering benefits covered under the BasiCare 
benefits package, as provided in section 215.
    (d) Oversight of Provider Participation.--
            (1) In general.--The Commission shall conduct ongoing 
        oversight of provider response to the imposition of annual 
        limits in the allowable rate of increase in BasiCare premiums, 
        as provided in this Act. The findings of such oversight shall 
        be expressed in annual reports to Congress.
            (2) Considerations.--Matters to be examined in such 
        oversight shall include, but are not limited to, the following:
                    (A) The incidence of participation (or 
                nonparticipation) of health care providers in BasiCare 
                health benefit plans.
                    (B) The effect of such participation (or 
                nonparticipation) on the availability and affordability 
                of health care services to health care consumers.
                    (C) The extent to which the incidence of 
                nonparticipation in BasiCare health benefit plans may 
                vary according to professional specialty or region.
            (3) Option for participation requirements.--At any time 
        following the standardization of the BasiCare health benefit 
        plan under this Act, the Commission may submit to Congress a 
        legislative proposal providing for such participation 
        requirements as the Commission may deem necessary to assure a 
        level of provider participation in BasiCare health benefit 
        plans sufficient to assure affordable access to quality health 
        care services by BasiCare enrollees.
            (4) Congressional consideration.--Any proposal made to 
        Congress under this subsection shall be considered by Congress 
        under the procedures for consideration of an ``approval 
        resolution'' as described in subtitle D.
    (e) Oversight of Supplemental Health Insurance Market.--
            (1) In general.--The Commission shall, upon implementation 
        of the Commission's recommendations under section 212, commence 
        an ongoing assessment of the condition of the supplemental 
        health insurance market for insurance benefits which are beyond 
        the scope of the BasiCare benefits package. The findings of 
        such assessment shall be transmitted in annual reports to the 
        appropriate committees of Congress.
            (2) Considerations.--Matters to be addressed in such 
        assessment shall include, but not be limited to--
                    (A) the rate of cost growth in the supplemental 
                market, and the extent to which such growth may be 
                contributing to growth in national health care 
                expenditures;
                    (B) the affordability and availability of 
                supplemental policies to employers, families, and 
                individuals;
                    (C) the extent to which the terms and cost of 
                coverage vary among beneficiaries based on health and 
                claims status;
                    (D) the value of supplemental policies to 
                beneficiaries, as measured by loss ratios;
                    (E) the extent of questionable marketing practices, 
                such as misrepresentation of policy benefits or 
                provisions, or the selling of policies that duplicate 
                existing coverage; and
                    (F) the extent to which State insurance regulation 
                is addressing perceived problems in the supplemental 
                market.
            (3) Recommendation to congress.--No later than January 1 of 
        the second year following the effective date of implementation 
        of the Commission's recommendations under this title, the 
        Commission shall include in its annual report to Congress 
        (under this subsection) a recommendation regarding the 
        advisability of Federal regulation of the supplemental health 
        insurance market. If the Commission's recommendation is that 
        such regulation is needed, the Commission shall prepare and 
        submit to Congress draft legislation to carry out the terms of 
        such regulation as it may deem necessary.
            (4) Subsequent recommendations.--At any time following 
        submission of its recommendation to Congress under paragraph 
        (3), the Commission may, based on the findings of its 
        continuing assessment under paragraphs (1) and (2), submit 
        additional recommendations or draft legislation to Congress 
        regarding action it may consider advisable relative to the 
        supplemental market.
            (5) Congressional consideration.--Proposals made to 
        Congress under this subsection shall be considered by Congress 
        under the procedures for consideration of an ``approval 
        resolution'' as described in subtitle D.
    (f) Safeguarding Quality of Health Care.--
            (1) Annual report.--The Commission shall by no later than 
        January 1 of each year following the date of enactment of this 
        Act, submit an annual report to Congress assessing the quality 
        of health care in the United States, and outlining areas of 
        significant progress or decline in the delivery of or 
        accessibility to health care. In preparing such reports, the 
        Commission shall conduct such studies, hearings, or other 
        evaluations as it deems necessary to accomplish a comprehensive 
        and continuing evaluation of health care quality in the United 
        States.
            (2) Contracts for provision of information to consumers 
        regarding quality of health care services and insurance.--The 
        Commission shall enter into contracts with the applicable 
        regulatory authority in each State, or such public or private 
        nonprofit entities as the Commission deems necessary, for the 
        collection and dissemination to consumers of information 
        regarding the quality and cost-effectiveness of services 
        provided by health care providers and carriers of BasiCare 
        health benefit plans in the State. Such information shall 
        include--
                    (A) the degree to which a plan's practice patterns 
                agree with what is known about appropriate and 
                inappropriate approaches to health care,
                    (B) outcome rates for patients with particular 
                conditions, and
                    (C) patient satisfaction with various aspects of a 
                plan's performance.
            (3) Requirement to consider health care quality data.--
        Information regarding health care quality obtained through the 
        activities described in this subsection shall be considered and 
        incorporated by the Commission in carrying out the other 
        continuing duties and responsibilities assigned to it under 
        this section including setting annual premium limits and other 
        rates as provided in this title.
    (g) Uniform Claims Forms and Electronic Processing.--
            (1) In general.--The Commission shall develop in 
        consultation with entities offering health insurance, health 
        care providers, and the Secretary, a uniform claims form to be 
        used by both private health plans and by the medicare program 
        under title XVIII of the Social Security Act.
            (2) Application and revision.--The Commission shall by no 
        later than 1 year after the effective date of implementation of 
        the Commission's recommendation under section 212, require that 
        the uniform claims form developed under paragraph (1), be 
        utilized by all carriers offering benefits covered under the 
        BasiCare benefits package and under title XVIII of the Social 
        Security Act. The Commission shall revise such form, as 
        necessary, to reflect changes in the health care insurance 
        market.
            (3) Uniform reporting standards.--In developing the claims 
        form under paragraph (1), the Commission in consultation with 
        the entities described in such paragraph, shall develop 
        standards for uniform reporting (while preserving individual 
        patient identity) concerning--
                    (A) the types and amounts of required health 
                services provided; and
                    (B) the costs of such facilities providing such 
                services.
        The Commission shall periodically collect, analyze, and 
        disseminate information received under this paragraph.
            (4) Universal electronic payment and billing card.--In 
        conjunction with development of the standard claims form under 
        paragraph (1), the Commission shall develop, and all private 
        and public health insurance programs shall be required to 
        participate in, a program to provide a universal health 
        insurance card to every individual or family which shall be 
        accepted by all health care providers for purposes of payment 
        and billing. Such cards shall be imprinted electronically with 
        necessary and appropriate information concerning coverage and 
        billing, and to the maximum extent practicable, with 
        information to assist in the management of a uniform system of 
        computerized patient records.
    (h) Long-Term Disposition of Medicaid Benefits and Program.--
            (1) In general.--At any time following the effective date 
        of implementation of the Commission's recommendation under 
        section 212, the Commission may submit to Congress a proposed 
        plan for long-term disposition of any benefits of the medicaid 
        program not covered under or subsumed by the BasiCare benefits 
        package.
            (2) Proposed plan.--In preparing a proposed plan described 
        in paragraph (1), the Commission shall consult with 
        representatives of State medicaid programs, and shall follow 
        the goals and guidelines described in section 211.
            (3) Congressional consideration.--Proposals made to 
        Congress under this subsection shall be considered by the 
        Congress under the procedures for consideration of an 
        ``approval resolution'' as described in subtitle D.
            (4) Period for resubmission of proposal.--If the 
        recommendation of the Commission submitted under this 
        subsection is not approved by Congress in a year, the 
        Commission shall by not later than January 1 of each year 
        thereafter, for a period not to exceed 2 years (unless such 
        recommendation is approved in a year) submit a new 
        recommendation to Congress subject to the guidelines and 
        requirements of this title.
    (i) Assimilation of Medicare Into BasiCare System.--
            (1) In general.--The Commission shall by no later than 
        January 1 of the fifth year following the effective date of 
        implementation of the Commission's recommendation under section 
        212, submit to the Congress draft legislation providing for the 
        assimilation of the medicare program under title XVIII of the 
        Social Security Act into the BasiCare system. The Commission 
        shall include with such draft legislation, an accompanying 
        report detailing and explaining the provisions of such draft 
        legislation.
            (2) Congressional consideration.--Proposals made to 
        Congress under this subsection shall be considered by Congress 
        under the procedures for consideration of an ``approval 
        resolution'' as described in subtitle D.
            (3) Period for resubmission of proposal.--If the proposal 
        of the Commission submitted under this subsection is not 
        approved by Congress in a year, the Commission shall by not 
        later than January 1 of each year thereafter, for a period not 
        to exceed 2 years (unless such recommendation is approved in a 
        year) submit a new proposal to Congress subject to the 
        guidelines and requirements of this title.
    (j) Assimilation of Other Programs Into BasiCare System.--
            (1) In general.--The Commission shall by no later than 
        January 1 of the fifth year following the effective date of 
        implementation of the Commission's recommendation under section 
        212, submit to the Congress draft legislation providing for the 
        assimilation into the BasiCare system of--
                    (A) the veterans health care program under chapter 
                17 of title 38, United States Code,
                    (B) the Civilian Health and Medical Program of the 
                Uniformed Services (CHAMPUS), as defined in section 
                1073(4) of title 10, United States Code,
                    (C) the Indian health service program under the 
                Indian Health Care Improvement Act (25 U.S.C. 1601 et 
                seq.), and
                    (D) the Federal employees program under chapter 89 
                of title 5, United States Code.
        The Commission shall include with such draft legislation, an 
        accompanying report detailing and explaining the provisions of 
        such draft legislation.
            (2) Congressional consideration.--Proposals made to 
        Congress under this subsection shall be considered by Congress 
        under the procedures for consideration of an ``approval 
        resolution'' as described in subtitle D.
            (3) Period for resubmission of proposal.--If the proposal 
        of the Commission submitted under this subsection is not 
        approved by Congress in a year, the Commission shall by not 
        later than January 1 of each year thereafter, for a period not 
        to exceed 2 years (unless such recommendation is approved in a 
        year) submit a new proposal to Congress subject to the 
        guidelines and requirements of this title.
    (k) Oversight of Such Uncompensated Care as May Remain.--To the 
extent it deems necessary, and to the extent practicable, the 
Commission may provide to Congress recommendations for the 
establishment of national or regional compensation pools, or other 
mechanisms, for the payment of providers who furnish BasiCare-covered 
services to individuals who, through choice or inadvertence, fail to 
secure BasiCare coverage as provided in this Act.
    (l) Medical Education Assistance.--In conjunction with the duties 
assigned to it under section 212 of this Act, and in conjunction with 
its proposal to assimilate the medicare program under title XVIII of 
the Social Security Act into BasiCare under subsection (i) of this 
section, the Commission shall consider and develop methods to assure 
support for academic health centers and the provision of quality 
training to health professionals.
    (m) Certification.--
            (1) In general.--The Commission shall require that no 
        health benefit plan may be offered by a carrier under section 
        215 or by an employer under section 217 or 219 on or after the 
        effective date of implementation of the Commission's 
        recommendation under this title, unless the plan has been 
        certified by the Commission (in accordance with such procedures 
        as the Commission establishes) as qualifying as a BasiCare 
        health benefit plan. The Commission shall enter into an 
        agreement with the applicable regulatory authority of each 
        State, or such public or private nonprofit entities as the 
        Commission deems necessary, to provide for the administration 
        of such certification under this subsection.
            (2) Look-behind authority.--If the Commission determines 
        that a health benefit plan does not qualify on or after the 
        effective date specified in paragraph (1), no coverage may be 
        provided under the plan to individuals not enrolled as of the 
        date of the determination, and the plan may not be continued 
        for plan years beginning after the date of such determination 
        until the Commission determines that such plan so qualifies.
            (3) Nonapplication to supplemental insurance.--The 
        provisions described in this subsection shall apply only to 
        coverage for benefits equivalent to the BasiCare health benefit 
        plan and do not apply to other health benefits.

SEC. 214. BASICARE BENEFITS PACKAGE.

    (a) Criteria.--In preparing the BasiCare benefits package described 
in section 212(a)(1), the Commission shall, subject to the requirements 
of this title, develop and recommend the BasiCare benefits package as 
it deems appropriate, adhering to the goals and guidelines described in 
this subtitle. The BasiCare benefits package developed and recommended 
by the Commission shall at a minimum provide for--
            (1) basic hospitalization coverage;
            (2) basic outpatient services;
            (3) protection against catastrophic out-of-pocket costs;
            (4) coverage against extraordinary long-term care costs; 
        and
            (5) coverage for preventive care services of significant 
        proven and recognized value in averting serious and costly 
        medical conditions.
    (b) Uniformity.--
            (1) In general.--Subject to the exceptions described in 
        paragraph (2), the BasiCare benefits package recommended by the 
        Commission shall provide for uniform national deductibles, 
        copayments, and benefit applications and standards.
            (2) Limited variation allowed.--In order to accommodate 
        systems for providing health care in a managed system, the 
        Commission may provide for variations in the structure of 
        BasiCare cost-sharing requirements for such systems, but only 
        to the extent such variations do not significantly compromise 
        the national uniformity of a single BasiCare benefits package.
    (c) Flexibility Regarding Long-Term Care.--
            (1) Modified benefit plan for medicare beneficiaries.--The 
        Commission may include in its proposal under section 212 
        provisions for the establishment of a modified BasiCare long-
        term care benefits plan for persons currently enrolled in the 
        medicare program under title XVIII of the Social Security Act. 
        If the Commission includes such a plan, the plan shall--
                    (A) consist only of long-term care benefits 
                included in the BasiCare benefits package, and
                    (B) be subject to the rules and requirements 
                applicable to the BasiCare health benefit plan under 
                this title, except as may be modified by the Commission 
                in its proposal to Congress under section 212.
            (2) Continuity of long-term care coverage.--The Commission 
        may include in its proposal under section 212 such special 
        provisions as it may deem necessary to assure portability of 
        coverage consistent with the requirements of section 215.
            (3) Interaction with other programs.--The Commission may 
        include such provisions as it deems necessary to coordinate 
        BasiCare long-term care coverage with coverage provided under 
        the medicare program under title XVIII of the Social Security 
        Act, and with coverage provided by the medicaid program under 
        title XIX of the Social Security Act, as modified by the terms 
        of this Act.
    (d) Preference for Copayments in Cost-Sharing.--To the extent 
practicable, the Commission shall employ copayments rather than 
deductibles in providing for such cost-sharing requirements as may be 
included in the BasiCare benefits package under this section.

SEC. 215. INSURANCE RESPONSIBILITIES UNDER BASICARE.

    (a) In General.--In developing the legislative proposal described 
in section 212(a)(2), the Commission shall provide that the 
requirements of this section are incorporated as part of its 
recommendation for national health care insurance reform.
    (b) General Requirement.--Each carrier shall offer the BasiCare 
health benefit plan as specified in this section.
    (c) Preemption of State Mandated Benefit Laws.--To the extent that 
laws of any State or local government regulate or otherwise provide any 
requirement relating to the benefits to be provided under contracts or 
policies of insurance issued to, or under, a BasiCare health benefit 
plan, such laws are preempted.
    (d) Nonduplication of BasiCare.--Health benefit plans may be issued 
for benefits other than those covered by the BasiCare benefits package 
described in section 214, but no health benefit plans may be offered by 
any carrier in any State which duplicate, either in whole or in part, 
the benefits described in the BasiCare benefits package.
    (e) Nondiscrimination Based on Health Status.--
            (1) In general.--BasiCare health benefit plans offered by 
        carriers may not deny, limit, or condition the coverage under 
        (or benefits of) the plan based on the health status, claims 
        experience, receipt of health care, medical history, or lack of 
        evidence of insurability, of an individual.
            (2) Treatment of preexisting condition exclusions for all 
        services.--BasiCare health benefit plans provided by carriers 
        may not exclude or otherwise discourage coverage with respect 
        to services related to treatment of a preexisting condition.
    (f) Registration With Applicable Regulatory Authority.--
            (1) In general.--Each carrier shall register with the 
        applicable regulatory authority for each State in which it 
        issues or offers health benefit plans.
            (2) No preemption of state information requirements.--
        Nothing in paragraph (1) shall be construed as preventing the 
        applicable regulatory authority from requiring, in the case of 
        BasiCare carriers that are not self-insurance carriers, such 
        additional information in conjunction with, or apart from, the 
        registration required under paragraph (1) as the applicable 
        regulatory authority may be authorized to require under State 
        law.
    (g) Guaranteed Issue.--
            (1) In general.--Subject to the succeeding provisions of 
        this subsection, a carrier that offers a BasiCare health 
        benefit plan (including a reinsurance plan) to groups or 
        individuals located in a community must offer the same plan to 
        any other group or individual located in the community, and 
        shall participate in a program developed by the Commission for 
        assigning high-risk groups or individuals among all such 
        carriers.
            (2) Treatment of health maintenance organizations.--
                    (A) Geographic limitations.--A health maintenance 
                organization may deny coverage under a BasiCare health 
                benefit plan to an individual or group whose members 
                are located outside the service area of the 
                organization, but only if such denial is applied 
                uniformly without regard to health status or 
                insurability.
                    (B) Size limits.--A health maintenance organization 
                may apply to the applicable regulatory authority to 
                cease enrolling new groups or individuals in its 
                BasiCare health benefit plan (or in a geographic area 
                served by the plan) if it can demonstrate that its 
                financial or administrative capacity to serve 
                previously enrolled groups and individuals (and 
                additional individuals who will be expected to enroll 
                because of affiliation with such previously enrolled 
                groups) will be impaired if it is required to enroll 
                new groups or individuals.
            (3) Grounds for refusal to issue or renew.--
                    (A) In general.--A carrier may refuse to issue or 
                renew or terminate a BasiCare health benefit plan under 
                this part only for--
                            (i) nonpayment of premiums,
                            (ii) fraud or misrepresentation, and
                            (iii) failure to meet minimum participation 
                        rates (consistent with subparagraph (B)).
                    (B) Minimum participation rates.--A carrier may 
                require, with respect to an employment-related group 
                BasiCare health benefit plan, that a minimum percentage 
                of full-time employees eligible to enroll under the 
                plan be enrolled, so long as such percentage is 
                enforced uniformly for all employment groups of 
                comparable size.
    (h) Minimum Plan Period.--A carrier may not offer, or issue a 
BasiCare health benefit plan with a term of less than 12 months.
    (i) Guaranteed Renewability.--
            (1) In general.--
                    (A) General rule.--Subject to the succeeding 
                provisions of this subsection, a carrier shall ensure 
                that a BasiCare health benefit plan issued to a group 
                or individual be renewed, at the option of the 
                policyholder, unless the plan is terminated for the 
                reasons specified in subsection (h)(3) (A) or under 
                subparagraph (B).
                    (B) Termination of business.--A carrier need not 
                renew a BasiCare health benefit plan with respect to 
                such a policyholder if the carrier--
                            (i) is terminating provision of all health 
                        insurance in the community; and
                            (ii) provides notice to the policyholder 
                        covered under the plan of such termination at 
                        least 90 days before the date of expiration of 
                        the plan.
                In the case of such a termination, the carrier may not 
                provide for issuance of any health benefit plan in such 
                community during the 5-year period beginning on the 
                date of termination of such block of business.
                    (C) Construction respecting additional state 
                disclosure requirements.--Subparagraph (B)(ii) shall 
                not be construed as preventing the applicable 
                regulatory authority from specifying the information to 
                be included in the notice under such subparagraph or in 
                requiring such notice to be provided at an earlier 
                date.
            (2) Notice and specification of rates and administrative 
        changes.--
                    (A) Notice.--A carrier offering BasiCare health 
                benefit plans shall provide for notice, at least 30 
                days before the date of expiration of the health 
                benefit plan, of the terms for renewal of the plan. 
                Except with respect to rates and administrative 
                changes, the terms of renewal (including benefits) 
                shall be the same as the terms of issuance.
                    (B) Renewal rates same as issuance rates.--The 
                carrier may change the terms for such renewal, but the 
                premium rates charged with respect to such renewal 
                shall be the same as that for a new issue.
                    (C) Rates cannot change more often than monthly.--
                            (i) In general.--A carrier may not change 
                        the premium rates established with respect to 
                        BasiCare health benefit plans offered in a 
                        community more often than monthly.
                            (ii) Application of new rates to specific 
                        plans.--With respect to a BasiCare health 
                        benefit plan which becomes effective in a 
                        month, the carrier shall ensure that the 
                        premium rate established under clause (i) for 
                        that month shall apply to such plan for all 
                        months during the 12-month period beginning 
                        with that month. In the case of a plan renewal 
                        which is effective for a 12-month period 
                        beginning with a month, the premium rate 
                        established under clause (i) with respect to 
                        that month shall apply to all months during 12-
                        month renewal period.
            (3) Period of renewal.--The period of renewal of each 
        health benefit plan offered by a carrier shall be for a period 
        of not less than 12 months.
    (j) Community Rating.--
            (1) In general.--A carrier may not charge premium rates for 
        BasiCare health benefit plans in excess of the average per 
        capita cost of providing such coverage to all individuals 
        covered under BasiCare policies issued by that carrier in a 
        community. A BasiCare health benefit plan meeting such criteria 
        will be considered ``actuarially certified'' for purposes of 
        this subsection.
            (2) Actuarially certified defined.--A BasiCare health 
        benefit plan is considered to be ``actuarially certified'' if 
        there is a written statement by a member of the American 
        Academy of Actuaries or other individual acceptable to the 
        applicable regulatory authority that a carrier is in compliance 
        with this section, based upon the individual's examination, 
        including a review of the appropriate records and of the 
        actuarial assumptions and methods utilized by the carrier in 
        establishing premium rates for applicable health benefit plans.
    (k) Adjustments to Community Rating.--
            (1) In general.--A BasiCare health benefit plan offered by 
        a carrier to a group or individual may provide for an 
        adjustment to the average community rate based on the age of 
        covered individuals. Any such adjustment shall be applied by 
        the carrier consistently to all policyholders, and no other 
        adjustments shall be permitted.
            (2) Limitation on adjustment.--
                    (A) In general.--The adjustment under paragraph (1) 
                may not result, with respect to BasiCare health benefit 
                plans offered by carriers to groups and individuals in 
                the same community, in a premium rate for the most 
                expensive age group exceeding the average community 
                rate by more than the applicable percent (as defined in 
                subparagraph (B)).
                    (B) Applicable percent defined.--In subparagraph 
                (A), the term ``applicable percent'' means--
                            (i) for the first effective year, 50 
                        percent,
                            (ii) for the second effective year, 40 
                        percent,
                            (iii) for the third effective year, 30 
                        percent, and
                            (iv) for any subsequent year, 20 percent.
    (l) Application of Standards to Reinsurance Policies.--The 
requirements of this section shall apply to all reinsurance policies 
sold by an entity to a carrier offering BasiCare health benefit plans 
through self-insured employment-related health benefit plans.
    (m) Application of BasiCare Base Premium Rate.--For the first year 
of standardization of the BasiCare health benefit plan under this Act, 
premiums charged for BasiCare health benefit plans may not exceed the 
BasiCare base premium rate, as provided in section 216.
    (n) Application of Allowed Rate of Increase.--
            (1) In general.--A carrier may not charge premiums with 
        respect to BasiCare health benefit plans in any calendar year 
        which exceed the greater of--
                    (A) the previous year's rate plus the annual 
                allowable percentage rate of increase for the year as 
                provided in section 213; or
                    (B) the applicable base premium rate, as provided 
                in section 216, plus amounts corresponding to the 
                cumulative total of annual allowable percentage rates 
                of increase up to the current year.
            (2) Exception.--Notwithstanding paragraph (1)(B), in any 
        single calendar year a carrier may not increase its premium 
        with respect to a BasiCare health benefit plan by an amount 
        exceeding 120 percent of the national annual allowable 
        percentage rate of increase for that year, as provided in 
        section 213.
    (o) Risk-Adjustment Structure.--In preparing its recommendation to 
Congress under section 212 of this Act, the Commission shall provide 
guidelines for a risk-adjustment structure under which all BasiCare 
health benefit plans in a State are assigned a numerical risk index 
based on risk-adjustment factors developed by the Commission and based 
on such index low-risk carriers are required to pay an assessment and 
high-risk carriers are designated to receive a subsidy in order to 
balance the risk of doing business in such State. The Commission shall 
administer such a risk-adjustment structure in any State in which the 
applicable regulatory authority fails to do so.

SEC. 216. BASICARE BASE PREMIUM RATE.

    (a) Criteria.--In developing the legislative proposal described in 
section 212(a)(3), the BasiCare base premium rate established and 
recommended by the Commission shall be based on the anticipated average 
cost of providing the BasiCare benefits package to an average group of 
beneficiaries (as determined by the Commission in consultation with the 
Board).
    (b) Limited Variation Allowed.--In establishing the BasiCare base 
premium rate, the Commission may propose limited variations in such 
rate to accommodate geographic variables, or other variables as 
described in paragraphs (1) and (2).
            (1) Geographic variables.--In order to accommodate 
        differences in costs in delivering health care in different 
        geographical areas, the Commission may provide for limited 
        geographical variations in the BasiCare base premium rate to 
        the extent such variations are--
                    (A) based on statistically verifiable differences 
                in the cost of providing the BasiCare benefits package, 
                and
                    (B) not provided for geographic areas smaller than 
                areas that encompass at least--
                            (i) one or more adjacent metropolitan 
                        statistical areas (as defined by the 
                        Commission, in consultation with the Bureau of 
                        the Census); or
                            (ii) the total remaining area within a 
                        State not otherwise included in a geographic 
                        area described under clause (i).
            (2) Other variables.--If the Commission has provided for 
        variation in the BasiCare benefits package under paragraph (2) 
        of section 214(b), the Commission may provide for variations in 
        the BasiCare base premium rate to reflect such variations in 
        the benefit package, to the extent such variations meet the 
        criteria for allowing variations under paragraph (2) of such 
        section. Also, to the extent that adjustments to community 
        rating of BasiCare health benefit plans are permitted under 
        section 215(k), the Commission may provide for corresponding 
        variation in the BasiCare base premium rate to reflect such 
        permitted adjustments. If variations are provided for in the 
        BasiCare base premium rate, such variations shall be expressed 
        in terms of percentage variation from a single standard 
        national rate.

SEC. 217. EMPLOYER RESPONSIBILITIES UNDER BASICARE.

    In developing the legislative proposal described in section 
212(a)(4), the Commission shall require the following:
            (1) No discrimination based on health status for certain 
        services.--An employment-related BasiCare health benefit plan 
        may not deny, limit, or condition coverage based on the health 
        status, claims experience, receipt of health care, medical 
        history, or lack of evidence of insurability, of an individual.
            (2) Treatment of preexisting condition exclusions.--An 
        employment-related BasiCare health benefit plan may not exclude 
        or otherwise discourage coverage with respect to services 
        related to treatment of a preexisting condition.
            (3) Treatment of waiting periods.--An employment-related 
        BasiCare health benefit plan may not impose waiting periods of 
        any length.
            (4) No discrimination based on income level.--An 
        employment-related BasiCare health benefit plan shall apply 
        equally to employees of all income levels.
            (5) Equal contribution levels.--The total amount of an 
        employer's contribution to the cost of coverage under an 
        employment-related BasiCare health benefit plan for employees 
        with incomes less than 200 percent of the income official 
        poverty line (as described in section 232(g)(1)) shall equal or 
        exceed such total amount for employees with incomes greater 
        than 200 percent of such income official poverty line.

SEC. 218. INDIVIDUAL RESPONSIBILITIES UNDER BASICARE.

    Subject to the provisions of subsections (h) and (i) of section 
213, in developing the legislative proposal described in section 
212(a)(5), the Commission shall require that to be eligible for 
benefits under a Federal program, an individual seeking benefits under 
such program shall certify to the administrator of such program that 
such individual and the dependents of such individual possess BasiCare 
health insurance coverage that meets the applicable minimum standards 
under this title. Except as may be provided by the Commission under 
section 214(c)(1), this section shall not apply to persons eligible for 
enrollment in--
            (1) the medicare program under title XVIII of the Social 
        Security Act,
            (2) the veterans health care program under chapter 17 of 
        title 38, United States Code,
            (3) the Civilian Health and Medical Program of the 
        Uniformed Services (CHAMPUS), as defined in section 1073(4) of 
        title 10, United States Code,
            (4) the Indian health service program under the Indian 
        Health Care Improvement Act (25 U.S.C. 1601 et seq.), and
            (5) the Federal employees program under chapter 89 of title 
        5, United States Code.

SEC. 219. SELF-INSURED PLAN REQUIREMENTS.

    (a) In General.--In developing the legislative proposal described 
in section 212(a)(6), the Commission shall require that in order to 
obtain certification as a BasiCare health benefit plan as provided in 
section 213(m), a self-insured health benefit plan must demonstrate to 
the satisfaction of the Commission that--
            (1) the benefits and conditions of such plan (including 
        copayments and deductibles) are substantially equivalent to 
        those of a BasiCare health benefit plan as provided under this 
        Act;
            (2) the self-insuring entity is adhering to 
        nondiscrimination standards substantially equivalent to those 
        provided for carriers in section 215 (insurance reform 
        requirements) and described in subsection (b);
            (3) the average per capita cost of providing BasiCare 
        equivalent benefits to enrollees in the self-insured plan 
        differs no more than 10 percent (either above or below) from 
        the average per capita cost of providing BasiCare benefits 
        package to non-self-insured beneficiaries in the community (or 
        communities) in which the self-insured group is located 
        (without taking into account any reductions in costs due to 
        health promotion activities of the employer); and
            (4) the self-insuring entity possesses adequate financial 
        reserves, as determined by the Commission, to assure the 
        immediate and long-term solvency of the entity and the benefits 
        of individuals receiving coverage through such entity.
    (b) Standards Described.--Standards described in this subsection 
shall include (but are not limited to) the following:
            (1) No discrimination based on health status.--No self-
        insured BasiCare health benefit plan may deny, limit, or 
        condition the coverage under (or benefits of) the plan with 
        respect to health status, claims experience, receipt of health 
        care, medical history, or lack of evidence of insurability, of 
        an individual or group.
            (2) Treatment of preexisting conditions.--No self-insured 
        BasiCare health benefit plan may exclude or otherwise 
        discourage coverage with respect to services related to 
        treatment of a preexisting condition.
            (3) Waiting periods.--No self-insured BasiCare health 
        benefit plan may impose waiting periods of any length.

SEC. 220. PROVIDER RESPONSIBILITIES UNDER BASICARE.

    In developing the legislative proposal described in section 
212(a)(7), the Commission shall require as a condition of participation 
in the BasiCare health benefit plan by any health care provider the 
acceptance by such provider of any payment by BasiCare as full payment 
for the service performed.

SEC. 221. DEVELOPMENT OF STANDARDS FOR MANAGED CARE PLANS.

    (a) In General.--In preparing the legislative proposal described in 
section 212(a)(8), the Commission, taking into account recommendations 
of the Managed Care Advisory Committee (as described in subsection 
(b)), shall develop recommended standards that carriers offering 
managed care plans should meet with respect to the benefits, coverage, 
and delivery systems provided under such plans. Such standards shall 
encompass the standards by which managed care entities operate.
    (b) Managed Care Advisory Committee.--
            (1) Establishment.--There shall be established a Managed 
        Care Advisory Committee (hereinafter referred to as the 
        ``Committee'').
            (2) Membership.--The Committee shall be composed of 5 
        members appointed by the Chairperson of the Commission, each 
        member representing 1 of the following areas:
                    (A) Health care professionals.
                    (B) Managed care industry.
                    (C) Academia (with specific expertise in managed 
                care plans).
                    (D) Business management.
                    (E) Organized labor.
            (3) Compensation.--
                    (A) In general.--Members of the Committee shall 
                serve without compensation.
                    (B) Expenses, etc., reimbursed.--While away from 
                their homes or regular places of business on the 
                business of the Committee, the members may be allowed 
                travel expenses, including per diem in lieu of 
                subsistence, as authorized by section 5703 of title 5, 
                United States Code, for persons employed intermittently 
                in Government service.
                    (C) Application of act.--The provisions of the 
                Federal Advisory Committee Act (5 U.S.C. App.) shall 
                not apply with respect to the Committee.
                    (D) Support.--The Commission shall supply such 
                necessary office facilities, office supplies, support 
                services, and related expenses as necessary to carry 
                out the functions of the Committee.

SEC. 222. PREEMPTION OF PROVISIONS RELATING TO MANAGED CARE.

    In developing the legislative proposal described in section 
212(a)(8), the Commission shall provide that in the case of a managed 
care plan meeting the recommended standards under section 221 that is 
offered by a carrier, the following provisions of law are preempted and 
may not be enforced against the managed care plan with respect to a 
carrier offering such plan:
            (1) Restrictions on reimbursement rates or selective 
        contracting.--Any law that restricts the ability of the carrier 
        to negotiate reimbursement rates with health care providers or 
        to contract selectively with one provider or a limited number 
        of providers.
            (2) Restrictions on differential financial incentives.--Any 
        law that limits the financial incentives that the managed care 
        plan may require a beneficiary to pay when a non-plan provider 
        is used on a non-emergency basis.
            (3) Restrictions on utilization review methods.--
                    (A) In general.--Any law that--
                            (i) prohibits utilization review of any or 
                        all treatments and conditions;
                            (ii) requires that such review be made by a 
                        resident of the State in which the treatment is 
                        to be offered or by an individual licensed in 
                        such State, or by a physician in any particular 
                        specialty or with any board certified specialty 
                        of the same medical specialty as the provider 
                        whose services are being rendered;
                            (iii) requires the use of specified 
                        standards of health care practice in such 
                        review or requires the disclosure of the 
                        specific criteria used in such review;
                            (iv) requires payments to providers for the 
                        expenses of responding to utilization review 
                        requests; or
                            (v) imposes liability for delays in 
                        performing such review.
                    (B) Construction.--Nothing in subparagraph (A)(ii) 
                shall be construed as prohibiting a State from 
                requiring that utilization review be conducted by a 
                licensed health care professional, or requiring that 
                any appeal from such a review be made by a licensed 
                physician or by a licensed physician in any particular 
                specialty or with any board certified specialty of the 
                same medical specialty as the provider whose services 
                are being rendered.
            (4) Restrictions on benefits.--Any law that mandates 
        benefits under the managed care plan that are greater than the 
        benefits recommended under the standards developed under 
        section 221.
            (5) ERISA.--Any provision of the Employee Retirement Income 
        Security Act to the extent inconsistent with the managed care 
        plan.

                   Subtitle C--Low-Income Assistance

SEC. 231. TRANSFER FROM MEDICAID TO BASICARE.

    (a) In General.--In developing the legislative proposal described 
in section 212(a)(9)(A), the Commission shall provide for the orderly 
termination of medicaid program coverage under title XIX of the Social 
Security Act, to the extent that such coverage duplicates the BasiCare 
benefits package.
    (b) Transfer of Covered Individuals From Medicaid to BasiCare.--
Such proposal shall require each State--
            (1) to notify medicaid beneficiaries of the impending 
        transfer of coverage of such beneficiaries to the BasiCare 
        program not later than 1 year prior to the date of transfer 
        from medicaid to the BasiCare program; and
            (2) to provide such information and assistance as may be 
        necessary to assure the enrollment of all medicaid 
        beneficiaries in BasiCare health benefit plans upon the 
        establishment of such plans.
    (c) Provisional Treatment of Medicaid Benefits Not Covered by 
BasiCare.--Such proposal shall require--
            (1) that for a period of 5 years following the termination 
        of medicaid benefits that duplicate the BasiCare benefits 
        package, the medicaid program shall continue to operate with 
        respect to the provision of any existing benefits which are not 
        covered under the BasiCare benefits package; and
            (2) Federal rules and regulations regarding the medicaid 
        program shall remain in effect during a transition period 
        subject to such adjustments deemed necessary by the Commission 
        to carry out the medicaid-to-BasiCare transfer described in 
        this section.
    (d) Final Disposition of Medicaid Benefits.--Upon expiration of the 
5-year transition period described in subsection (c)(1), Federal 
funding for any existing medicaid benefits which are not covered under 
the BasiCare benefits package shall be discontinued, unless Congress 
has approved a plan for alternate disposition of such benefits, as 
provided in section 213.

SEC. 232. LOW-INCOME ASSISTANCE WITH COSTS OF BASICARE INSURANCE.

    (a) In General.--In developing the legislative proposal described 
in section 212(a)(9)(B), the Commission shall provide for a BasiCare 
public assistance program (hereafter in this section referred to as 
`BasiCare Assist') which, at a minimum, meets the requirements of the 
following subsections of this section.
    (b) Assistance for Under-Poverty Families.--In the case of an 
individual who is a member of an under-poverty family, BasiCare Assist 
shall provide for payment of--
            (1) premiums charged the individual for coverage under a 
        BasiCare health benefit plan in which the individual is 
        enrolled; and
            (2) deductibles and other cost-sharing imposed on the 
        individual under such plan, other than a per service copayment, 
        not to exceed $5 per service, as determined by the Commission.
    (c) Assistance for Near-Poverty Families.--
            (1) In general.--In the case of an individual who is a 
        member of a near-poverty family, BasiCare Assist shall provide 
        for payment of the applicable percentage of any premiums, 
        deductibles, and other cost-sharing charged the individual for 
        coverage under a BasiCare health benefit plan in which the 
        individual is enrolled.
            (2) Applicable percentage.--For purposes of paragraph (1), 
        the term `applicable percentage' means 100 percent reduced (but 
        not below zero percent) by 10 percentage points for each 10 
        percentage point bracket (or portion thereof) such family's 
        income equals or exceeds 100 percent of the income official 
        poverty line (as defined by the Office of Management and 
        Budget, and revised annually in accordance with section 673(2) 
        of the Omnibus Budget Reconciliation Act of 1981) applicable to 
        a family of the size involved.
    (d) Adjustment of Assistance.--The Commission shall provide for 
appropriate adjustments to any assistance under this section to reflect 
partial family coverage under an employment-related BasiCare health 
benefit plan.
    (e) Application for Assistance.--BasiCare Assist shall use a 
standard Federal application which shall be as simple in form as 
possible and understandable to the average individual, and shall 
require attachment of such documentation as deemed necessary by the 
Commission in order to ensure eligibility for assistance. Such 
application shall be available to any individual or family, may be 
filed at any time, and as provided in subsection (f), may initiate 
coverage under a BasiCare health benefit plan. The Commission shall 
use, as deemed practicable by the Commission, any existing forms 
employed for Federal income tax filings as an application for BasiCare 
Assist.
    (f) Enrollment at Point of Application.--To the extent practicable, 
the Commission shall provide for the option of enrollment in a BasiCare 
health benefit plan as part of the application and approval process for 
assistance under this section. In providing for such an option, the 
Commission may require carriers of BasiCare health benefit plans to 
provide such information and assistance as may be necessary.
    (g) Payment of Premiums, Deductibles, and Other Cost-Sharing.--
BasiCare Assist shall provide to an individual a voucher for the 
applicable percentage of BasiCare premiums, deductibles, and other 
cost-sharing for which such individual qualifies under subsection (b) 
or (c). Such voucher shall be remitted by the individual to the carrier 
of BasiCare health benefit plans (or, in the case of an employment-
related BasiCare health benefit plan, to the individual's employer) for 
payment by BasiCare Assist. Such carrier shall make proper adjustments 
in billing statements to reflect such individual's remaining premium 
obligations, deductibles, and other cost-sharing (if any).
    (h) Documentation of Eligibility.--
            (1) Requirement for filing of income statement.--In the 
        case of a family which is receiving assistance under BasiCare 
        Assist for any month in a year, a member of the family shall 
        file a statement with the Commission, at such intervals during 
        such year as the Commission deems necessary, and by not later 
        than April 15 of the following year. Such a statement shall 
        provide information necessary to determine the family income 
        and the number of family members in the family during the year.
            (2) Reconciliation of assistance based on actual income.--
        Based on and using the income reported in the statement filed 
        under paragraph (1) with respect to a family, the Commission 
        shall compute the amount of assistance that should have been 
        provided under BasiCare Assist with respect to the family in 
        the year involved and make proper adjustments in future 
        assistance. If the amount of such assistance computed is--
                    (A) greater than the amount of assistance provided, 
                the Commission shall provide for payment to the family 
                involved of an amount equal to the amount of the 
                deficit, or
                    (B) less than the amount of assistance provided, 
                the Commission shall require the family to pay to the 
                Federal Government (to the credit of BasiCare Assist) 
                an amount equal to the amount of the excess payment.
            (3) Disqualification for failure to file.--In the case of 
        any family that is required to file an information statement 
        under paragraph (1) for a year and that fails to file such a 
        statement by the deadline specified by the Commission, no 
        member of the family shall be eligible for assistance under 
        this section after such deadline. The Commission shall waive 
        the application of this paragraph if the family establishes, to 
        the satisfaction of the Commission, good cause for the failure 
        to file the statement on a timely basis.
            (4) Penalties for false information.--
                    (A) Interest for understatements.--Each individual 
                who knowingly understates income reported in an 
                application for assistance under BasiCare Assist or any 
                statement described in paragraph (1), or otherwise 
                makes a material misrepresentation of information in 
                such an application or statement shall be liable to the 
                Federal Government for excess payments made based on 
                such understatement or misrepresentation, and for 
                interest on such excess payments at a rate specified by 
                the Commission.
                    (B) Penalties for misrepresentation.--Each 
                individual who knowingly misrepresents material 
                information in an application for assistance under 
                BasiCare Assist or any statement described in paragraph 
                (1) shall be liable to the Federal Government for 
                $1,000 or, if greater, 3 times the excess payments made 
                based on such misrepresentation.
            (5) Notice of requirement.--The Commission shall provide 
        for written notice, in March of each year, of the requirement 
        of paragraph (1) to each family which received assistance under 
        BasiCare Assist in any month during the preceding year and to 
        which such requirement applies.
            (6) Transmittal of information.--The Secretary of the 
        Treasury shall transmit annually to the Commission such 
        information relating to the total income of individuals and 
        families for the taxable year ending in the previous year as 
        may be necessary to verify the reconciliation of assistance 
        under BasiCare Assist.
    (i) Definitions and Special Rules.--For purposes of this section--
            (1) Under-poverty family.--The term ``under-poverty 
        family'' means a family whose income is less than 100 percent 
        of the income official poverty line (as defined by the Office 
        of Management and Budget, and revised annually in accordance 
        with section 673(2) of the Omnibus Budget Reconciliation Act of 
        1981) applicable to a family of the size involved.
            (2) Near-poverty family.--The term ``near-poverty family'' 
        means a family whose income equals or exceeds 100 percent of 
        the income official poverty line (as described in paragraph 
        (1)), but is less than 200 percent of such income official 
        poverty line.
            (3) Determinations of income.--
                    (A) In general.--The term ``income'' means--
                            (i) adjusted gross income (as defined in 
                        section 62(a) of the Internal Revenue Code of 
                        1986), determined without the application of 
                        paragraphs (6) and (7) of such section and 
                        without the application of section 162(l) of 
                        such Code, plus
                            (ii) the amount of social security benefits 
                        (described in section 86(d) of such Code) which 
                        is not includable in gross income under section 
                        86 of such Code.
                    (B) Family income.--The term ``family income'' 
                means, with respect to an individual, the sum of the 
                income for the individual and all the other family 
                members.
                    (C) Family size.--The family size to be applied 
                under this section, with respect to family income, is 
                the number of individuals included in the family for 
                purposes of coverage of a BasiCare health benefit plan.
                    (D) Timing of determination.--Income shall be 
                determined in accordance with one of the following 
                methods, at the option of the applicant, for coverage 
                under this section:
                            (i) Multiplying by a factor of 4 the family 
                        income of the applicant for the 3-month period 
                        immediately preceding the month in which the 
                        application for assistance under BasiCare is 
                        made.
                            (ii) Determining the family income of the 
                        applicant for the month in which the 
                        application for such assistance is made.
    (j) Effective Date.--The provisions of this section shall take 
effect on the effective date of the legislation described in section 
212(a) or 213(a) of this Act.

  Subtitle D--Congressional Consideration of Commission Recommendation

SEC. 241. RULES GOVERNING CONGRESSIONAL CONSIDERATION.

    (a) Rules of House of Representatives and Senate.--This section is 
enacted by the Congress--
            (1) as an exercise of the rulemaking power of the House of 
        Representatives and the Senate, respectively, and as such is 
        deemed a part of the rules of each House, respectively, but 
        applicable only with respect to the procedure to be followed in 
        that House in the case of approval resolutions described in 
        subsection (b), and supersedes other rules only to the extent 
        that such rules are inconsistent therewith; and
            (2) with full recognition of the constitutional right of 
        either House to change the rules (so far as relating to the 
        procedure of that House) at any time, in the same manner and to 
        the same extent as in the case of any other rule of that House.
    (b) Terms of the Resolution.--For purposes of section 212(b), the 
term ``approval resolution'' means only a joint resolution of the two 
Houses of the Congress, providing in--
            (1) the matter after the resolving clause of which is as 
        follows: ``That the Congress approves the recommendations of 
        the Commission on National Health Care Access and Reform as 
        submitted by the Commission on ____________________________'', 
        the blank space being filled in with the appropriate date; and
            (2) the title of which is as follows: ``Joint Resolution 
        approving the recommendation of the Commission on National 
        Health Care Access and Reform''.
    (c) Introduction and Referral.--On the day on which the 
recommendation of the Commission is transmitted to the House of 
Representatives and the Senate, an approval resolution with respect to 
such recommendation shall be introduced (by request) in the House of 
Representatives by the Majority Leader of the House, for himself and 
the Minority Leader of the House, or by Members of the House designated 
by the Majority Leader of the House, for himself and the Minority 
Leader of the House, or by Members of the House designated by the 
Majority Leader and Minority Leader of the House; and shall be 
introduced (by request) in the Senate by the Majority Leader of the 
Senate, for himself and the Minority Leader of the Senate, or by 
Members of the Senate designated by the Majority Leader and Minority 
Leader of the Senate. If either House is not in session on the day on 
which such recommendation is transmitted, the approval resolution with 
respect to such recommendation shall be introduced in the House, as 
provided in the preceding sentence, on the first day thereafter on 
which the House is in session. The approval resolution introduced in 
the House of Representatives and the Senate shall be referred to the 
appropriate committees of each House.
    (d) Amendments Prohibited.--No amendment to an approval resolution 
shall be in order in either the House of Representatives or the Senate; 
and no motion to suspend the application of this subsection shall be in 
order in either House, nor shall it be in order in either House for the 
Presiding Officer to entertain a request to suspend the application of 
this subsection by unanimous consent.
    (e) Period for Committee and Floor Consideration.--
            (1) In general.--Except as provided in paragraph (2), if 
        the committee or committees of either House to which an 
        approval resolution has been referred have not reported it at 
        the close of the 45th day after its introduction, such 
        committee or committees shall be automatically discharged from 
        further consideration of the approval resolution and it shall 
        be placed on the appropriation calendar. A vote on final 
        passage of the approval resolution shall be taken in each House 
        on or before the close of the 45th day after the approval 
        resolution is reported by the committees or committee of that 
        House to which it was referred, or after such committee or 
        committees have been discharged from further consideration of 
        the approval resolution. If prior to the passage by one House 
        of an approval resolution of that House, that House receives 
        the same approval resolution from the other House then--
                    (A) the procedure in that House shall be the same 
                as if no approval resolution had been received from the 
                other House; but
                    (B) the vote on final passage shall be on the 
                approval resolution of the other House.
            (2) Computation of days.--For purposes of paragraph (1), in 
        computing a number of days in either House, there shall be 
        excluded any day on which the House is not in session.
    (f) Floor Consideration in the House of Representatives.--
            (1) Motion to proceed.--A motion in the House of 
        Representatives to proceed to the consideration of an approval 
        resolution shall be highly privileged and not debatable. An 
        amendment to the motion shall not be in order, nor shall it be 
        in order to move to reconsider the vote by which the motion is 
        agreed to or disagreed to.
            (2) Debate.--Debate in the House of Representatives on an 
        approval resolution shall be limited to not more than 20 hours, 
        which shall be divided equally between those favoring and those 
        opposing the bill or resolution. A motion further to limit 
        debate shall not be debatable. It shall not be in order to move 
        to recommit an approval resolution or to move to reconsider the 
        vote by which an approval resolution is agreed to or disagreed 
        to.
            (3) Motion to postpone.--Motions to postpone, made in the 
        House of Representatives with respect to the consideration of 
        an approval resolution, and motions to proceed to the 
        consideration of other business, shall be decided without 
        debate.
            (4) Appeals.--All appeals from the decisions of the Chair 
        relating to the application of the Rules of the House of 
        Representatives to the procedure relating to an approval 
        resolution shall be decided without debate.
            (5) General rules apply.--Except to the extent specifically 
        provided in the preceding provisions of this subsection, 
        consideration of an approval resolution shall be governed by 
        the Rules of the House of Representatives applicable to other 
        bills and resolutions in similar circumstances.
    (g) Floor Consideration in the Senate.--
            (1) Motion to proceed.--A motion in the Senate to proceed 
        to the consideration of an approval resolution shall be 
        privileged and not debatable. An amendment to the motion shall 
        not be in order, nor shall it be in order to move to reconsider 
        the vote by which the motion is agreed to or disagreed to.
            (2) General debate.--Debate in the Senate on an approval 
        resolution, and all debatable motions and appeals in connection 
        therewith, shall be limited to not more than 20 hours. The time 
        shall be equally divided between, and controlled by, the 
        Majority Leader and the Minority Leader or their designees.
            (3) Debate of motions and appeals.--Debate in the Senate on 
        any debatable motion or appeal in connection with an approval 
        resolution shall be limited to not more than 1 hour, to be 
        equally divided between, and controlled by, the mover and the 
        manager of the approval resolution, except that in the event 
        the manager of the approval resolution is in favor of any such 
        motion or appeal, the time in opposition thereto, shall be 
        controlled by the Minority Leader or his designee. Such 
        leaders, or either of them, may, from time under their control 
        on the passage of an approval resolution, allot additional time 
        to any Senator during the consideration of any debatable motion 
        or appeal.
            (4) Other motions.--A motion in the Senate to further limit 
        debate is not debatable. A motion to recommit an approval 
        resolution is not in order.
    (h) Point of Order Requiring Supermajority for Modifications to 
Recommendation Once Approved.--
            (1) In general.--It shall not be in order in the House of 
        Representatives or the Senate to consider any amendment to the 
        provisions of the BasiCare Health Access and Reform Act except 
        as provided in paragraph (2).
            (2) Waiver.--The point of order described in paragraph (1) 
        may be waived or suspended in the House of Representatives or 
        the Senate only, by the affirmative vote of three-fifths of the 
        Members duly chosen and sworn.

                   Subtitle E--Enforcement Provisions

SEC. 251. ENFORCEMENT PROVISIONS FOR CARRIERS, PROVIDERS, AND 
              EMPLOYERS.

    (a) In General.--Chapter 47 of the Internal Revenue Code of 1986 
(relating to excise taxes on qualified pension, etc. plans) is amended 
by striking section 5000 and section 5000A (as added by section 106) 
and inserting the following new sections:

``SEC. 5000. FAILURE OF CARRIERS WITH RESPECT TO BASICARE INSURANCE.

    ``(a) General Rule.--In the case of any carrier offering any health 
benefit plan, there is hereby imposed a tax on such carrier if such 
plan fails to qualify as a Basicare health benefit plan.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of tax imposed by subsection 
        (a) by reason of 1 or more failures during a taxable year shall 
        be equal to 50 percent of the gross premiums received during 
        such taxable year with respect to all health benefit plans 
        issued by the carrier on whom such tax is imposed.
            ``(2) Gross premiums.--For purposes of paragraph (1), gross 
        premiums shall include any consideration received with respect 
        to any health benefit contract.
            ``(3) Controlled groups.--For purposes of paragraph (1)--
                    ``(A) Controlled group of corporations.--All 
                corporations which are members of the same controlled 
                group of corporations shall be treated as 1 carrier. 
                For purposes of the preceding sentence, the term 
                `controlled group of corporations' has the meaning 
                given to such term by section 1563(a), except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears in section 1563(a)(1), and
                            ``(ii) the determination shall be made 
                        without regard to subsections (a)(4) and 
                        (e)(3)(C) of section 1563.
                    ``(B) Partnerships, proprietorships, etc., which 
                are under common control.--Under regulations prescribed 
                by the Secretary, all trades or businesses (whether or 
                not incorporated) which are under common control shall 
                be treated as 1 carrier. The regulations prescribed 
                under this subparagraph shall be based on principles 
                similar to the principles which apply in the case of 
                subparagraph (A).
    ``(c) Limitation on Tax.--
            ``(1) Tax not to apply where failure not discovered 
        exercising reasonable diligence.--No tax shall be imposed by 
        subsection (a) with respect to any failure for which it is 
        established to the satisfaction of the Secretary that the 
        carrier on whom the tax is imposed did not know, and exercising 
        reasonable diligence would not have known, that such failure 
        existed.
            ``(2) Tax not to apply where failures corrected within 30 
        days.--No tax shall be imposed by subsection (a) with respect 
        to any failure if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected during the 30-day 
                period beginning on the 1st date any of the carriers on 
                whom the tax is imposed knew, or exercising reasonable 
                diligence would have known, that such failure existed.
            ``(3) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive relative to the failure involved.
    ``(d) Compliance Determination.--
            ``(1) In general.--The Commission on National Health Care 
        Access and Reform (hereafter in this subsection referred to as 
        the `Commission' shall determine whether any health benefit 
        plan qualifies as a BasiCare health benefit plan.
            ``(2) State agreements.--
                    ``(A) In general.--The Commission may, in its 
                discretion, enter into an agreement with any State to 
                provide for the State to make the initial determination 
                described in paragraph (1).
                    ``(B) Standards.--An agreement may be entered into 
                under subparagraph (A) only if--
                            ``(i) the chief executive officer of the 
                        State requests such agreement be entered into,
                            ``(ii) the Commission determines that the 
                        State agreement will apply to substantially all 
                        health benefit plans issued in such State, and
                            ``(iii) the Commission determines that the 
                        application of the State agreement will carry 
                        out the purposes of this section.
            ``(3) Termination.--The Commission shall terminate any 
        agreement if the Commission determines that the application of 
        the State agreement ceases to carry out the purposes of this 
        section.
    ``(e) Definitions.--For purposes of this section the terms `health 
benefit plan', `BasiCare health benefit plan', and `carrier' shall have 
the same meanings given such terms under section 271 of the BasiCare 
Health Access and Cost Control Act.

``SEC. 5000A. FAILURE OF PROVIDERS WITH RESPECT TO BASICARE INSURANCE.

    ``(a) General Rule.--There is hereby imposed a tax on the failure 
of any person who provides any service under a BasiCare health benefit 
plan to comply with the requirements of section 220 of the BasiCare 
Health Access and Cost Control Act.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of tax imposed by subsection 
        (a) by reason of 1 or more failures during a taxable year shall 
        be equal to 50 percent of the gross income received during such 
        taxable year with respect to all services provided by the 
        person on whom such tax is imposed.
            ``(2) Controlled groups.--For purposes of paragraph (1)--
                    ``(A) Controlled group of corporations.--All 
                corporations which are members of the same controlled 
                group of corporations shall be treated as 1 person. For 
                purposes of the preceding sentence, the term 
                `controlled group of corporations' has the meaning 
                given to such term by section 1563(a), except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears in section 1563(a)(1), and
                            ``(ii) the determination shall be made 
                        without regard to subsections (a)(4) and 
                        (e)(3)(C) of section 1563.
                    ``(B) Partnerships, proprietorships, etc., which 
                are under common control.--Under regulations prescribed 
                by the Secretary, all trades or business (whether or 
                not incorporated) which are under common control shall 
                be treated as 1 person. The regulations prescribed 
                under this subparagraph shall be based on principles 
                similar to the principles which apply in the case of 
                subparagraph (A).
    ``(c) Limitation on Tax.--
            ``(1) Tax not to apply where failure not discovered 
        exercising reasonable diligence.--No tax shall be imposed by 
        subsection (a) with respect to any failure for which it is 
        established to the satisfaction of the Secretary that the 
        person on whom the tax is imposed did not know, and exercising 
        reasonable diligence would not have known, that such failure 
        existed.
            ``(2) Tax not to apply where failures corrected within 30 
        days.--No tax shall be imposed by subsection (a) with respect 
        to any failure if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected during the 30-day 
                period beginning on the 1st date any of the persons on 
                whom the tax is imposed knew, or exercising reasonable 
                diligence would have known, that such failure existed.
            ``(3) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive relative to the failure involved.
    ``(d) Compliance Determination.--
            ``(1) In general.--The Commission on National Health Care 
        Access and Reform (hereafter in this subsection referred to as 
        the `Commission' shall determine compliance with the 
        requirements of section 220 of the BasiCare Health Access and 
        Cost Control Act.
            ``(2) State agreements.--
                    ``(A) In general.--The Commission may, in its 
                discretion, enter into an agreement with any State to 
                provide for the State to make the initial determination 
                described in paragraph (1).
                    ``(B) Standards.--An agreement may be entered into 
                under subparagraph (A) only if--
                            ``(i) the chief executive officer of the 
                        State requests such agreement be entered into,
                            ``(ii) the Commission determines that the 
                        State agreement will apply to substantially all 
                        providers of services under health benefit 
                        plans issued in such State, and
                            ``(iii) the Commission determines that the 
                        application of the State agreement will carry 
                        out the purposes of this section.
            ``(3) Termination.--The Commission shall terminate any 
        agreement if the Commission determines that the application of 
        the State agreement ceases to carry out the purposes of this 
        section.
    ``(e) Definitions.--For purposes of this section the terms `health 
benefit plan' and `BasiCare health benefit plan' shall have the same 
meanings given such terms under section 271 of the BasiCare Health 
Access and Cost Control Act.

``SEC. 5000B. FAILURE OF EMPLOYERS WITH RESPECT TO BASICARE INSURANCE.

    ``(a) General Rule.--There is hereby imposed a tax on the failure 
of any person to comply with the requirements of sections 217 and 219 
of the BasiCare Health Access and Cost Control Act with respect to any 
full-time employee of the person.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on any failure with respect to a full-time 
        employee shall be $50 for each day in the noncompliance period 
        with respect to such failure.
            ``(2) Noncompliance period.--For purposes of this section, 
        the term `noncompliance period' means, with respect to any 
        failure, the period--
                    ``(A) beginning on the date such failure first 
                occurs, and
                    ``(B) ending on the date such failure is corrected.
            ``(3) Correction.--A failure of a person to comply with the 
        requirements of sections 217 and 219 of the BasiCare Health 
        Access and Cost Control Act with respect to any full-time 
        employee of the person shall be treated as corrected if--
                    ``(A) such failure is retroactively undone to the 
                extent possible, and
                    ``(B) the employee is placed in a financial 
                position which is as good as such employee would have 
                been in had such failure not occurred.
        For purposes of applying subparagraph (B), the employee shall 
        be treated as if the employee had elected the most favorable 
        coverage in light of the expenses incurred since the failure 
        first occurred.
    ``(c) Limitations on Amount of Tax.--
            ``(1) Tax not to apply where failure not discovered 
        exercising reasonable diligence.--No tax shall be imposed by 
        subsection (a) on any failure during any period for which it is 
        established to the satisfaction of the Secretary that none of 
        the persons referred to in subsection (d) knew, or exercising 
        reasonable diligence would have known, that such failure 
        existed.
            ``(2) Tax not to apply to failures corrected within 30 
        days.--No tax shall be imposed by subsection (a) on any failure 
        if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected during the 30-day 
                period beginning on the first date any of the persons 
                referred to in subsection (d) knew, or exercising 
                reasonable diligence would have known, that such 
                failure existed.
            ``(3) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive relative to the failure involved.
    ``(d) Liability for Tax.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the following shall be liable for the tax imposed 
        by subsection (a) on a failure:
                    ``(A) In the case of a BasiCare health benefit plan 
                other than a multiemployer plan, the employer.
                    ``(B) In the case of a multiemployer plan, the 
                plan.
                    ``(C) Each person who is responsible (other than in 
                a capacity as an employee) for administering or 
                providing benefits under the BasiCare health benefit 
                plan and whose act or failure to act caused (in whole 
                or in part) the failure.
            ``(2) Special rules for persons described in paragraph 
        (1)(c).--A person described in subparagraph (C) (and not in 
        subparagraphs (A) and (B)) of paragraph (1) shall be liable for 
        the tax imposed by subsection (a) on any failure only if such 
        person assumed (under a legally enforceable written agreement) 
        responsibility for the performance of the act to which the 
        failure relates.
    ``(e) Definitions.--For purposes of this section, the terms 
`BasiCare health benefit plan' and `full-time employee' shall have the 
same meanings given such terms under section 271 of the BasiCare Health 
Access and Cost Control Act.''.
    (b) Clerical Amendments.--The table of sections for such chapter 47 
is amended by adding at the end thereof the following new items:

                              ``Sec. 5000. Failure of carriers with 
                                        respect to BasiCare insurance.
                              ``Sec. 5000A. Failure of providers with 
                                        respect to BasiCare insurance.
                              ``Sec. 5000B. Failure of employers with 
                                        respect to BasiCare 
                                        insurance.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the effective date of the legislation described in section 
212(a) or 213(a) of this Act.

SEC. 252. ENFORCEMENT PROVISION FOR INDIVIDUALS.

    (a) In General.--Subsection (d) of section 151 of the Internal 
Revenue Code of 1986 (relating to allowance of deductions for personal 
exemptions) is amended by adding at the end thereof the following new 
paragraph:
            ``(5) Exemption amount disallowed for uninsured 
        individuals.--The exemption amount for any individual for such 
        individual's taxable year shall be zero, unless the policy 
        number of the BasiCare health benefit plan (as defined in 
        section 271 of the BasiCare Health Access and Cost Control Act) 
        for such individual is included in the return claiming such 
        exemption amount for such individual.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the effective date of the legislation described in section 
212(a) or 213(a) of this Act.

                    Subtitle F--Financial Provisions

SEC. 261. BASICARE TRUST FUND.

    (a) Trust Fund Established.--There is hereby created on the books 
of the Treasury of the United States a trust fund to be known as the 
BasiCare Trust Fund (hereafter in this section referred to as the 
``Trust Fund''). The Trust Fund shall consist of such gifts and 
bequests as may be made and such amounts as may be deposited in, 
appropriated to, or credited to such Trust Fund as provided in this 
section.
    (b) Transfer of Amounts Equivalent to Certain Taxes.--
            (1) In general.--There are hereby appropriated to the Trust 
        Fund amounts equivalent to 100 percent of--
                    (A) 1 percent of the wages (as defined in section 
                3121 of the Internal Revenue Code of 1986) paid on or 
                after the first day of the calendar year following the 
                date of the enactment of this Act, and reported to the 
                Secretary of the Treasury or the Secretary's delegate 
                pursuant to subtitle F of the Internal Revenue Code of 
                1986, and
                    (B) 1 percent of the amount of self-employment 
                income (as defined in section 1402 of the Internal 
                Revenue Code of 1986) reported to the Secretary of the 
                Treasury or the Secretary's delegate on tax returns 
                under subtitle F of the Internal Revenue Code of 1986 
                for any taxable year beginning on or after the first 
                day of the calendar year following the date of the 
                enactment of this Act.
            (2) Penalties.--There are hereby appropriated to the Trust 
        Fund amounts equivalent to 100 percent of the taxes imposed 
        under sections 5000, 5000A, and 5000B of the Internal Revenue 
        Code of 1986.
            (3) Additional revenues.--There are hereby appropriated to 
        the Trust Fund amounts equivalent to the additional revenues 
        received in the Treasury as the result of the amendments made 
        by section 262 of this Act.
            (4) Transfers based on estimates.--The amounts appropriated 
        by paragraphs (1) , (2), and (3) 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.
    (c) Transfer of Additional Funds.--
            (1) State share of medicaid funding.--
                    (A) In general.--On a fiscal year basis, each State 
                shall remit to the Trust Fund the State's medicaid 
                share for that fiscal year.
                    (B) State's medicaid share.--
                            (i) In general.--With respect to any fiscal 
                        year beginning after the applicable effective 
                        date of the legislation described in section 
                        212(a) or 213(a) of this Act, a State's 
                        medicaid share shall equal the amount such 
                        State expended under title XIX of the Social 
                        Security Act for the fiscal year preceding such 
                        applicable effective date for benefits equal to 
                        the BasiCare benefits package, as determined by 
                        the Commission, in consultation with the 
                        Secretary of Health and Human Services and 
                        State medicaid authorities. Such amount shall 
                        be adjusted each fiscal year by the increase in 
                        the Consumer Price Index (as determined by the 
                        Department of Labor) for the previous fiscal 
                        year.
                            (ii) Amount upon complete assimilation of 
                        medicaid.--The amount otherwise determined 
                        under clause (i) for the fiscal year beginning 
                        after the applicable effective date of the 
                        legislation described in section 213(h) of this 
                        Act shall be increased by the amount such State 
                        expended under title XIX of the Social Security 
                        Act for the fiscal year preceding such 
                        applicable effective date.
                    (C) Compliance.--The requirements of this paragraph 
                shall be subject to the provisions of section 1904 of 
                the Social Security Act.
            (2) Federal share of medicaid funding.--There are hereby 
        appropriated for each fiscal year described in paragraph (1) 
        the comparable Federal share expended under title XIX of the 
        Social Security Act for such fiscal year, as adjusted under 
        paragraph (1)(B)(i).
            (3) Medicare 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 
        applicable effective date of the legislation described in 
        section 213(i) of this Act shall be transferred to the Trust 
        Fund.
            (4) Additional federal funds.--There are hereby 
        appropriated to the Trust Fund for each fiscal year beginning 
        after the applicable effective date of the legislation 
        described in 213(j) of this Act, amounts equal to the amounts 
        appropriated with respect to--
                    (A) the veterans health care program under chapter 
                17 of title 38, United States Code,
                    (B) the Civilian Health and Medical Program of the 
                Uniformed Services (CHAMPUS), as defined in section 
                1073(4) of title 10, United States Code,
                    (C) the Indian health service program under the 
                Indian Health Care Improvement Act (25 U.S.C. 1601 et 
                seq.), and
                    (D) the Federal employees program under chapter 89 
                of title 5, United States Code,
        as in effect on the day before such applicable effective date, 
        as adjusted under paragraph (1)(B)(i).
            (5) Appropriation of additional sums.--There are hereby 
        authorized to be appropriated to the Trust Fund such additional 
        sums as may be required to make expenditures referred to in 
        subsection (e).
    (e) Expenditures.--
            (1) Low-income assistance.--There are hereby authorized and 
        appropriated such sums as are necessary in each fiscal year for 
        the expenses of the program described in section 241.
            (2) Administrative expenses.--There are hereby appropriated 
        such sums as are authorized under section 203 for the 
        administrative and other expenses of the Commission for each 
        fiscal year.
            (3) Title i expenditures.--Amounts in the Trust Fund shall 
        be available, as provided in appropriation Acts, for authorized 
        expenditures described in--
                    (A) sections 330A(h) and 330B(h) of the Public 
                Health Service Act, as added by sections 111 and 112 of 
                this Act, and
                    (B) sections 150 and 151(g) of this Act.
    (e) Investment of Trust Fund.--
            (1) In general.--It shall be the duty of the Secretary of 
        the Treasury to invest such portion of the Trust Fund as is 
        not, in the Secretary's judgment, required to meet current 
        withdrawals. Such investments may be made only in interest-
        bearing obligations of the United States or in obligations 
        guaranteed as to both principal and interest by the United 
        States. For such purpose, such obligations may be acquired--
                    (A) on original issue at the issue price, or
                    (B) by purchase of outstanding obligations at the 
                market price.
        The purposes for which obligations of the United States may be 
        issued under chapter 31 of title 31, of the United States Code, 
        are hereby extended to authorize the issuance at par of special 
        obligations exclusively to the Trust Fund. Such special 
        obligations shall bear interest at a rate equal to the average 
        rate of interest, computed as to the end of the calendar month 
        next preceding the date of such issue, borne by all marketable 
        interest-bearing obligations of the United States then forming 
        a part of the Public Debt; except that where such average rate 
        is not a multiple of one-eighth of 1 percent, the rate of 
        interest of such special obligations shall be the multiple of 
        one-eighth of 1 percent next lower than such average rate. Such 
        special obligations shall be issued only if the Secretary of 
        the Treasury determines that the purchase of other interest-
        bearing obligations of the United States, or of obligations 
        guaranteed as to both principal and interest by the United 
        States on original issue or at the market price, is not in the 
        public interest.
            (2) Sale of obligation.--Any obligation acquired by the 
        Trust Fund (except special obligations issued exclusively to 
        the Trust Fund) may be sold by the Secretary of the Treasury at 
        the market price, and such special obligations may be redeemed 
        at par plus accrued interest.
            (3) Credits to trust fund.--The interest on, and the 
        proceeds from the sale or redemption of, any obligations held 
        in the Trust Fund shall be credited to and form a part of the 
        Trust Fund.
    (f) Report to Congress.--It shall be the duty of the Secretary of 
the Treasury to hold the Trust Fund, and (after consultation with the 
Commission) to report to the Congress each year on the financial 
condition and the results of the operations of the Trust Fund during 
the preceding fiscal year and on its expected condition and operations 
during the next fiscal year. Such report shall be printed as both a 
House and Senate document of the session of the Congress to which the 
report is made.
    (g) Conforming Amendment.--Paragraph (4) of section 201(a) of the 
Social Security Act (42 U.S.C. 401(a)) is amended by inserting ``and 
section 261(1)(1) of the BasiCare Health Access and Cost Control Act'' 
before the end period.

SEC. 262. TAX TREATMENT OF COSTS OF BASICARE INSURANCE.

    (a) Tax Exclusions for Employer-Provided Health Insurance.--Section 
106 of the Internal Revenue Code of 1986 (relating to contributions by 
employer to accident and health plans) is amended by striking ``an 
accident or health plan'' and inserting ``a BasiCare health benefit 
plan (as defined in section 271(1) of the BasiCare Health Access and 
Cost Control Act)''.
    (b) Business Expense Deduction for Health Insurance.--Section 162 
of the Internal Revenue Code of 1986 (relating to trade or business 
expenses) is amended by redesignating subsection (m) as subsection (n) 
and by inserting after subsection (l) the following new subsection:
    ``(m) Group Health Plans.--The expenses paid or incurred by an 
employer for a group health plan shall not be allowed as a deduction 
under this section unless the plan qualifies as a BasiCare health 
benefit plan (as defined in section 271(1) of the BasiCare Health 
Access and Cost Control Act).''.
    (c) Rules Relating to Deductions for Individuals.--
            (1) Deduction limited to basicare.--Subparagraph (C) of 
        section 213(d)(1) of such Code (defining medical care) is 
        amended by striking ``for insurance'' and inserting ``for a 
        Basicare health benefit plan (as defined in section 271(1) of 
        the BasiCare Health Access and Cost Control Act).''.
            (2) Full deduction allowed.--Section 213 of such Code 
        (relating to medical, dental, etc., expenses) is amended by 
        adding at the end the following new subsection:
    ``(g) Special Rules for BasiCare Premium Expenses.--
            ``(1) In general.--The deduction under subsection (a) shall 
        be determined without regard to the limitation based on 
        adjusted gross income with respect to amounts paid for premiums 
        for coverage under a Basicare health benefit plan (as defined 
        in section 271(1) of the BasiCare Health Access and Cost 
        Control Act).
            ``(2) Limit.--The amount allowed as a deduction under 
        paragraph (1) with respect to the cost of providing coverage 
        for any individual shall be reduced by the aggregate amount of 
        payments to, or on behalf of, such individual by--
                    ``(A) BasiCare Assist under section 232 of the 
                BasiCare Health Access and Cost Control Act, and
                    ``(B) all other entities (including any employer or 
                governmental agency),
        for coverage of such individual under a BasiCare health benefit 
        plan (as so defined).''
            (3) Deduction allowed against gross income.--Section 62(a) 
        of such Code (defining adjusted gross income) is amended by 
        inserting after paragraph (14) the following new paragraph:
            ``(15) Deduction for basicare premiums.--The deduction 
        allowed under section 213(g).''
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to any taxable year beginning after the applicable 
effective date of the legislation described in section 212(a) or 213(a) 
of this Act.

                        Subtitle G--Definitions

SEC. 271. DEFINITIONS.

    For purposes of this title:
            (1) Basicare health benefit plan.--The term ``BasiCare 
        health benefit plan'' means a health benefit plan which--
                    (A) offers the BasiCare benefits package described 
                in section 214;
                    (B) applies the BasiCare base premium rate 
                described in section 216; and
                    (C) meets the requirements of this title.
            (2) Health benefit plan and other definitions relating to 
        health plans.--For purposes of this section:
                    (A) Health benefit plan.--
                            (i) In general.--The term ``health benefit 
                        plan'' means any hospital or medical expense 
                        incurred policy or certificate, hospital or 
                        medical service plan contract, health 
                        maintenance subscriber contract, other employee 
                        welfare plan (as defined in the Employee 
                        Retirement Income Security Act of 1964), or any 
                        other health insurance arrangement, and 
                        includes an employment-related reinsurance plan 
                        (as defined in paragraph (3)).
                            (ii) Exclusions.--The term `health benefit 
                        plan' does not include--
                                    (I) accident-only, credit, dental, 
                                or disability income insurance,
                                    (II) coverage issued as a 
                                supplement to liability insurance,
                                    (III) worker's compensation or 
                                similar insurance, or
                                    (IV) automobile medical-payment 
                                insurance;
                that is offered by a carrier.
                    (B) Reinsurance plan.--The term ``reinsurance 
                plan'' means any reinsurance or similar mechanism that 
                underwrites a portion of the risk for a health benefit 
                plan.
                    (C) Self-insured health benefit plan.--The term 
                ``self-insured health benefit plan'' means a health 
                benefit plan in which an employment-related group 
                assumes the underwriting risk for the plan (whether or 
                not there is any reinsurance or similar mechanism to 
                underwrite a portion of that risk).
            (3) Carrier; health maintenance organization; and other 
        definitions relating to carriers.--For purposes of this title:
                    (A) Carrier.--The term ``carrier'' means any person 
                that offers a health benefit plan, whether through 
                insurance or otherwise, including a licensed insurance 
                company, a prepaid hospital or medical service plan, a 
                health maintenance organization, a self-insurer 
                carrier, a reinsurance carrier, and a multiple small 
                employer welfare arrangement (a combination of small 
                employers associated for the purpose of providing 
                health benefit plan coverage for their employees).
                    (B) Health maintenance organization.--The term 
                ``health maintenance organization'' has the meaning 
                given the term `eligible organization' in section 
                1876(b) of the Social Security Act, as in effect on the 
                date of enactment of this Act.
                    (C) Reinsurance carrier.--The term ``reinsurance 
                carrier'' means the entity assuming responsibility for 
                underwriting under an employment-related reinsurance 
                plan, but does not include a carrier insofar as it 
                directly offers a health benefit plan.
                    (D) Self-insurer carrier.--The term ``self-insurer 
                carrier'' means a carrier that is not a licensed 
                insurance company, a prepaid hospital or medical 
                service plan, or a health maintenance organization, 
                that offers a health benefit plan directly with respect 
                to an employment-related group.
            (4) General definitions.--For purposes of this title:
                    (A) Applicable regulatory authority.--The term 
                ``applicable regulatory authority'' means, with respect 
                to a health benefit plan offered in a State, the State 
                commissioner or superintendent of insurance or other 
                State authority responsible for regulation of health 
                insurance.
                    (B) Community.--The term ``community'' means a 
                geographic area that encompasses at least--
                            (i) one or more adjacent metropolitan 
                        statistical areas (as defined by the 
                        Commission, in consultation with the Bureau of 
                        the Census); or
                            (ii) the total remaining area within a 
                        State not otherwise included in a geographic 
                        area described under clause (i).
                    (C) Full-time employee.--The term ``full-time 
                employee'' means, with respect to an employer, an 
                employee who normally performs on a monthly basis at 
                least 30 hours of service per week for such employer.

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