[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2051 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2051

To amend the Internal Revenue Code of 1986 to restore the deduction for 
  the health insurance costs of self-employed individuals, to provide 
   incentives for certain medical practitioners to practice in rural 
areas, to provide for the creation of medical savings accounts, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 18, 1995

    Mr. Baker of Louisiana introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
     Committees on Commerce and the Judiciary, for a period to be 
 subseqently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to restore the deduction for 
  the health insurance costs of self-employed individuals, to provide 
   incentives for certain medical practitioners to practice in rural 
areas, to provide for the creation of medical savings accounts, and for 
                            other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Accessibility Expansion 
Act of 1993''.

SEC. 2. FULL DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED 
              INDIVIDUALS.

    (a) Deduction Made Permanent.--
            (1) In general.--Subsection (l) of section 162 of the 
        Internal Revenue Code of 1986 (relating to special rules for 
        health insurance costs of self-employed individuals) is amended 
        by striking paragraph (6).
            (2) Conforming amendment.--Subsection (a) of section 110 of 
        the Tax Extension Act of 1991 is amended by striking paragraph 
        (2).
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 1991.
    (b) Deduction Increased to 100 Percent.--
            (1) In general.--Paragraph (1) of section 162(l) of such 
        Code is amended by striking ``25 percent'' and inserting ``100 
        percent''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning after December 31, 1993.

SEC. 3. CREDIT FOR MEDICAL PRACTITIONERS COMMENCING MEDICAL PRACTICE IN 
              RURAL AREAS.

    (a) 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 22 the 
following new section:

``SEC. 23. CERTAIN MEDICAL PRACTITIONERS COMMENCING MEDICAL PRACTICE IN 
              RURAL AREAS.

    ``(a) Allowance of Credit.--In the case of an eligible medical 
practitioner who commences a medical practice in a rural area, there is 
allowed as a credit against the tax imposed by this subtitle for the 
taxable year during which such commencement occurs, and for each of the 
4 succeeding taxable years, an amount equal to $5,000.
    ``(b) Limitation.--No credit shall be allowed under subsection (a) 
with respect to any taxable year in which the taxpayer practices a 
medical practice in the rural area for less than 9 months or ceases to 
practice a medical practice in the rural area.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible medical practitioner.--The term `eligible 
        medical practitioner' means any physician, nurse practitioner, 
        or certified physician assistant.
            ``(2) Physician.--The term `physician' means a doctor of 
        medicine or osteopathy legally authorized to practice medicine 
        and surgery by the State in which such individual performs such 
        function or action.
            ``(3) Commences practice.--The term `commences practice' 
        means the location or relocation of an eligible medical 
        practitioner's principal place of medical practice to a rural 
        area. Such term does not include the relocation of a 
        practitioner's medical practice from 1 rural area to another 
        rural area.
            ``(4) Rural area.--The term `rural area' means any area 
        that is not within any metropolitan statistical area (as 
        defined by the Secretary of Commerce).
    ``(d) Recapture of Credit.--
            ``(1) In general.--If, a taxpayer who is allowed a credit 
        under subsection (a) ceases medical practice in a rural area 
        during any taxable year, then the tax of the taxpayer under 
        this chapter for such taxable year shall be increased by an 
        amount equal to the sum of the credits allowed under subsection 
        (a) for the 5 preceding taxable years.
            ``(2) 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--
                    ``(A) the amount of any credit under this part, or
                    ``(B) the amount of the tax under section 55.''
    (b) 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 22 the following new item:

                              ``Sec. 23. Certain medical practitioners 
                                        commencing medical practice in 
                                        rural areas.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.
SEC. 4. DEDUCTION FOR MEDICAL SCHOOL EDUCATION LOAN INTEREST INCURRED 
              BY CERTAIN MEDICAL PRACTITIONERS SERVING IN RURAL AREAS.

    (a) In General.--Paragraph (1) of section 163(h) of the Internal 
Revenue Code of 1986 (relating to disallowance of deduction for 
personal interest) is amended by striking ``and'' at the end of 
subparagraph (D), by redesignating subparagraph (E) as subparagraph 
(F), and by inserting after subparagraph (D) the following new 
subparagraph:
                    ``(E) any qualified medical education loan interest 
                (within the meaning of paragraph (5)), and''.
    (b) Qualified Medical Education Loan Interest Defined.--Subsection 
(h) of section 163 of such Code is amended by redesignating paragraph 
(5) as paragraph (6) and by inserting after paragraph (4) the following 
new paragraph:
            ``(5) Qualified medical education loan interest.--
                    ``(A) In general.--The term `qualified medical 
                education loan interest' means interest--
                            ``(i) which is on a medical education loan 
                        of an eligible medical practitioner (as defined 
                        in section 23(c)),
                            ``(ii) which is paid or accrued by such 
                        practitioner, and
                            ``(iii) which accrues during the period 
                        during which the practitioner is eligible to 
                        receive a credit under section 23(c).
                    ``(B) Medical education loan.--The term `medical 
                education loan' means indebtedness incurred to pay the 
                individual's--
                            ``(i) qualified tuition and related 
                        expenses (as defined in section 117(b)) 
                        incurred for the medical education of such 
                        individual, or
                            ``(ii) reasonable living expenses while 
                        away from home in order to attend an 
                        educational institution described in section 
                        170(b)(1)(A)(ii) for the medical education of 
                        such individual.
                    ``(C) Rural area.--The term `rural area' means any 
                area that is not within any metropolitan statistical 
                area (as defined by the Secretary of Commerce).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 5. MEDICAL SAVINGS ACCOUNTS.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 220 as 
section 221 and by inserting after section 219 the following new 
section:

``SEC. 220. MEDICAL SAVINGS ACCOUNTS.

    ``(a) Deduction Allowed.--In the case of an eligible individual, 
there shall be allowed as a deduction amounts paid in cash during the 
taxable year by or on behalf of such individual to a medical savings 
account.
    ``(b) Limitation.--
            ``(1) In general.--The amount allowable as a deduction 
        under subsection (a) to an individual for the taxable year 
        shall not exceed the excess (if any) of--
                    ``(A) the lesser of--
                            ``(i) the applicable limit, or
                            ``(ii) the compensation (as defined in 
                        section 219(f)) includible in the individual's 
                        gross income for the taxable year, over
                    ``(B) the sum of--
                            ``(i) the value of employer-provided 
                        coverage for the medical expenses of such 
                        individual, plus
                            ``(ii) the aggregate amount contributed to 
                        such account during the taxable year pursuant 
                        to section 125(d)(3).
            ``(2) Applicable limit.--For purposes of paragraph (1), the 
        applicable limit is the sum of--
                    ``(A) $4,800, plus
                    ``(B) $1,000 for each individual who is a dependent 
                (as defined in section 152) of the individual for whose 
                benefit the account is established.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Medical savings account.--The term `medical savings 
        account' means a trust created or organized in the United 
        States exclusively for the purpose of paying the qualified 
        medical expenses of the individual for whose benefit the trust 
        is established, but only if the written governing instrument 
        creating the trust meets the following requirements:
                    ``(A) No contribution will be accepted unless it is 
                in cash and contributions will not be accepted for any 
                taxable year in excess of the applicable limit (as 
                defined in subsection (b)(2)).
                    ``(B) The trustee is a bank (as defined in section 
                408(n)) or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) No part of the trust assets will be invested 
                in life insurance contracts.
                    ``(D) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
            ``(2) Eligible individual.--The term `eligible individual' 
        means any individual if--
                    ``(A) such individual is not covered by any 
                employer-provided group health plan, or
                    ``(B) such individual is covered by an employer-
                provided group health plan which is a qualified 
                catastrophic coverage health plan and is not covered by 
                any other health plan.
            ``(3) Qualified medical expenses.--
                    ``(A) In general.--The term `qualified medical 
                expenses' means--
                            ``(i) medical expenses, and
                            ``(ii) amounts paid for qualified long-term 
                        care insurance.
                    ``(B) Medical expenses.--The term `medical 
                expenses' means amounts paid by the individual for 
                whose benefit the account was established for medical 
                care (as defined in section 213) of such individual, 
                the spouse of such individual, and any dependent (as 
                defined in section 152) of such individual, but only to 
                the extent such amounts are not compensated for by 
                insurance or otherwise.
                    ``(C) Qualified long-term care insurance.--
                            ``(i) In general.--Subject to clauses (i) 
                        and (ii), the term `qualified long-term care 
                        insurance' means insurance under a policy or 
                        rider, which is issued by a qualified issuer, 
                        which meets standards at least as stringent as 
                        those set forth in the January 1990 Long-Term 
                        Care Insurance Model Regulation of the National 
                        Association of Insurance Commissioners, and 
                        which is certified by the Secretary of Health 
                        and Human Services (in accordance with 
                        procedures similar to the procedures prescribed 
                        in section 1882 of the Social Security Act (42 
                        U.S.C. 1385ss) used in the certification of 
                        medicare supplemental policies (as defined in 
                        subsection (g)(1) of such section)) to be 
                        advertised, marketed, offered, or designed to 
                        provide coverage--
                                    ``(I) for not less than 12 
                                consecutive months for each covered 
                                person who has attained age 50,
                                    ``(II) on an expense incurred, 
                                indemnity, or prepaid basis,
                                    ``(III) for 1 or more medically 
                                necessary, diagnostic services, 
                                preventive services, therapeutic 
                                services, rehabilitation services, 
                                maintenance services, or personal care 
                                services, and
                                    ``(IV) provided in a setting other 
                                than an acute care unit of a hospital.
                        The requirement of subclause (IV) shall be met 
                        only if at least 1 of the settings in which 
                        such coverage is provided is the patient's 
                        home.
                            ``(ii) Coverage specifically excluded.--
                        Such term does not include any insurance under 
                        any policy or rider which is offered primarily 
                        to provide any combination of the following 
                        kinds of coverage:
                                    ``(I) Basic Medicare supplement 
                                coverage.
                                    ``(II) Basic hospital-based acute 
                                care expense coverage.
                                    ``(III) Basic medical-surgical 
                                expense coverage.
                                    ``(IV) Hospital confinement 
                                indemnity coverage.
                                    ``(V) Major medical expense 
                                coverage.
                                    ``(VI) Disability income protection 
                                coverage.
                                    ``(VII) Accident only coverage.
                                    ``(VIII) Specified disease 
                                coverage.
                                    ``(IX) Specified accident coverage.
                                    ``(X) Limited benefit health 
                                coverage.
                            ``(iii) Qualified issuer.--For purposes of 
                        clause (i), the term `qualified issuer' means 
                        any of the following:
                                    ``(I) Private insurance company.
                                    ``(II) Fraternal benefit society.
                                    ``(III) Nonprofit health 
                                corporation.
                                    ``(IV) Nonprofit hospital 
                                corporation.
                                    ``(V) Nonprofit medical service 
                                corporation.
                                    ``(VI) Prepaid health plan.
            ``(4) Qualified catastrophic coverage health plan.--The 
        term `qualified catastrophic coverage health plan' means any 
        health plan which is certified by the Secretary of Health and 
        Human Services as a plan--
                    ``(A) which provides no compensation for medical 
                expenses not exceeding $3,000 during any year,
                    ``(B) which requires the individual to pay 15 
                percent of such individual's medical expenses to the 
                extent they exceed $3,000 but not $9,000 during any 
                year, and
                    ``(C) which provides full reimbursement for medical 
                expenses exceeding $9,000.
            ``(5) Time when contributions deemed made.--A taxpayer 
        shall be deemed to have made a contribution on the last day of 
        the preceding taxable year if the contribution is made on 
        account of such taxable year and is made not later than the 
        time prescribed by law for filing the return for such taxable 
        year (not including extensions thereof).
    ``(d) Tax Treatment of Distributions.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, any amount paid or distributed out of a medical 
        savings account shall be included in the gross income of the 
        individual for whose benefit such account was established 
        unless such amount is used exclusively to pay the qualified 
        medical expenses of such individual.
            ``(2) Excess contributions returned before due date of 
        return.--Paragraph (1) shall not apply to the distribution of 
        any contribution paid during a taxable year to a medical 
        savings account to the extent that such contribution exceeds 
        the amount allowable as a deduction under subsection (a) if--
                    ``(A) such distribution is received on or before 
                the day prescribed by law (including extensions of 
                time) for filing such individual's return for such 
                taxable year,
                    ``(B) no deduction is allowed under subsection (a) 
                with respect to such excess contribution, and
                    ``(C) such distribution is accompanied by the 
                amount of net income attributable to such excess 
                contribution.
        Any net income described in subparagraph (C) shall be included 
        in the gross income of the individual for the taxable year in 
        which it is received.
    ``(e) Tax Treatment of Accounts.--
            ``(1) Exemption from tax.--A medical savings account is 
        exempt from taxation under this subtitle unless such account 
        has ceased to be an investment savings account by reason of 
        paragraph (2). Notwithstanding the preceding sentence, any such 
        account is subject to the taxes imposed by section 511 
        (relating to imposition of tax on unrelated business income of 
        charitable, etc. organizations).
            ``(2) Loss of exemption of account where individual engages 
        in prohibited transaction.--
                    ``(A) In general.--If, during any taxable year of 
                the individual for whose benefit the medical savings 
                account was established, such individual engages in any 
                transaction prohibited by section 4975 with respect to 
                the account, the account ceases to be a medical savings 
                account as of the first day of that taxable year.
                    ``(B) Account treated as distributing all its 
                assets.--In any case in which any account ceases to be 
                a medical savings account by reason of subparagraph (A) 
                on the first day of any taxable year, paragraph (1) of 
                subsection (d) applies as if there were a distribution 
                on such first day in an amount equal to the fair market 
                value (on such first day) of all assets in the account 
                (on such first day).
            ``(3) Effect of pledging account as security.--If, during 
        any taxable year, the individual for whose benefit a medical 
        savings account was established uses the account or any portion 
        thereof as security for a loan, the portion so used is treated 
        as distributed to that individual.
    ``(f) Additional Tax on Certain Amounts Included in Gross Income.--
            ``(1) Distribution not used for qualified medical 
        expenses.--If a distribution from a medical savings account is 
        made, and not used to pay the qualified medical expenses of the 
        individual for whose benefit the account was established, the 
        tax liability of such individual for the taxable year in which 
        such distribution is received shall be increased by an amount 
        equal to 10 percent of the amount of the distribution which is 
        includible in gross income for such taxable year.
            ``(2) Disqualification cases.--If an amount is includible 
        in the gross income of an individual for a taxable year under 
        subsection (e), his tax under this chapter for such taxable 
        year shall be increased by an amount equal to 10 percent of 
        such amount includible in his gross income.
            ``(3) Disability or death cases.--Paragraphs (1) and (2) do 
        not apply if the payment or distribution is made after the 
        individual for whose benefit the medical savings account was 
        established becomes disabled within the meaning of section 
        72(m)(7) or dies.
    ``(g) Special Rules.--
            ``(1) Community property laws.--This section shall be 
        applied without regard to any community property laws.
            ``(2) Custodial accounts.--For purposes of this section, a 
        custodial account shall be treated as a trust if--
                    ``(A) the assets of such account are held by a bank 
                (as defined in section 408(n)) or another person who 
                demonstrates to the satisfaction of the Secretary that 
                the manner in which he will administer the account will 
                be consistent with the requirements of this section, 
                and
                    ``(B) the custodial account would, except for the 
                fact that it is not a trust, constitute a medical 
                savings account described in subsection (c).
        For purposes of this title, in the case of a custodial account 
        treated as a trust by reason of the preceding sentence, the 
        custodian of such account shall be treated as the trustee 
        thereof.
            ``(3) Denial of deductions.--No amount paid or distributed 
        from a medical savings account shall be taken into account in 
        determining the deduction provided by section 213.
    ``(h) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 1994, each applicable dollar 
        amount shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment for the 
                calendar year in which the taxable year begins.
            ``(2) Cost-of-living adjustment.--For purposes of paragraph 
        (1), the cost-of-living adjustment for any calendar year is the 
        percentage (if any) by which--
                    ``(A) the deemed average total wages (as defined in 
                section 209(k) of the Social Security Act) for the 
                preceding calendar year, exceeds
                    ``(B) the deemed average total wages (as so 
                defined) for calendar year 1993.
            ``(3) Applicable dollar amount.--For purposes of paragraph 
        (1), the term `applicable dollar amount' means--
                    ``(A) the $4,800 and $1,000 amounts in subsection 
                (b), and
                    ``(B) the $3,000 and $9,000 amounts in subsection 
                (c)(4).
            ``(4) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $10, such amount shall be rounded to 
        the nearest multiple of $10 (or, if such amount is a multiple 
        of $5 and not of $10, such amount shall be rounded to the next 
        highest multiple of $10).
    ``(i) Reports.--The trustee of a medical savings account shall make 
such reports regarding such account to the Secretary and to the 
individual for whose benefit the account is maintained with respect to 
contributions, distributions, and such other matters as the Secretary 
may require under regulations. The reports required by this subsection 
shall be filed at such time and in such manner and furnished to such 
individuals at such time and in such manner as may be required by those 
regulations.''
    (b) Deduction Allowed in Arriving at Adjusted Gross Income.--
Paragraph (7) of section 62(a) of such Code (relating to retirement 
savings) is amended--
            (1) by inserting ``or medical expense'' after 
        ``Retirement'' in the heading of such paragraph, and
            (2) by inserting before the period at the end thereof the 
        following: ``and the deduction allowed by section 220 (relating 
        to deduction of certain payments to medical savings 
        accounts)''.
    (c) Tax on Excess Contributions.--Section 4973 of such Code 
(relating to tax on excess contributions to individual retirement 
accounts, certain section 403(b) contracts, and certain individual 
retirement annuities) is amended--
            (1) by inserting ``medical savings accounts,'' after 
        ``accounts,'' in the heading of such section,
            (2) by redesignating paragraph (2) of subsection (a) as 
        paragraph (3) and by inserting after paragraph (1) the 
        following:
            ``(2) a medical savings account (within the meaning of 
        section 220(c)),'',
            (3) by striking ``or'' at the end of paragraph (1) of 
        subsection (a), and
            (4) by adding at the end thereof the following new 
        subsection:
    ``(d) Excess Contributions to Medical Savings Accounts.--For 
purposes of this section, in the case of a medical savings account, the 
term `excess contributions' means the amount by which the amount 
contributed for the taxable year to the account exceeds the amount 
allowable as a deduction under section 220 for such taxable year. For 
purposes of this subsection, any contribution which is distributed out 
of the medical savings account and a distribution to which section 
220(d)(2) applies shall be treated as an amount not contributed.''
    (d) Tax on Prohibited Transactions.--Section 4975 of such Code 
(relating to prohibited transactions) is amended--
            (1) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(4) Special rule for medical savings accounts.--An 
        individual for whose benefit a medical savings account is 
        established shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be a medical 
        savings account by reason of the application of section 
        220(e)(2)(A) to such account.'', and
            (2) by inserting ``or a medical savings account described 
        in section 220(c)'' in subsection (e)(1) after ``described in 
        section 408(a)''.
    (e) Failure To Provide Reports on Medical Savings Accounts.--
Section 6693 of such Code (relating to failure to provide reports on 
individual retirement account or annuities) is amended--
            (1) by inserting ``or on medical savings accounts'' after 
        ``annuities'' in the heading of such section, and
            (2) by adding at the end of subsection (a) the following: 
        ``The person required by section 220(i) to file a report 
        regarding a medical savings account at the time and in the 
        manner required by such section shall pay a penalty of $50 for 
        each failure unless it is shown that such failure is due to 
        reasonable cause.''
    (f) Clerical Amendments.--
            (1) The table of sections for part VII of subchapter B of 
        chapter 1 of such Code is amended by striking the item relating 
        to section 220 and inserting the following:

                              ``Sec. 220. Medical savings accounts.
                              ``Sec. 221. Cross reference.''
            (2) The table of sections for chapter 43 of such Code is 
        amended by striking the item relating to section 4973 and 
        inserting the following:

                              ``Sec. 4973. Tax on excess contributions 
                                        to individual retirement 
                                        accounts, medical savings 
                                        accounts, certain 403(b) 
                                        contracts, and certain 
                                        individual retirement 
                                        annuities.''
            (3) The table of sections for subchapter B of chapter 68 of 
        such Code is amended by inserting ``or on medical savings 
        accounts'' after ``annuities'' in the item relating to section 
        6693.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 6. UNUSED AMOUNTS IN FLEXIBLE SPENDING ACCOUNTS TRANSFERABLE TO 
              MEDICAL SAVINGS ACCOUNTS.

    (a) In General.--Subsection (d) of section 125 of the Internal 
Revenue Code of 1986 (relating to cafeteria plans) is amended by adding 
at the end thereof the following new paragraph:
            ``(3) Unused amounts transferable to medical savings 
        accounts.--
                    ``(A) In general.--Subsection (a) shall not fail to 
                apply to a participant in a plan, and a plan shall not 
                fail to be treated as a cafeteria plan, solely because 
                under the plan amounts not paid out as reimbursements 
                under a flexible spending arrangement for health and 
                disability for the benefit of an individual are 
                contributed to a medical savings account (as defined in 
                section 220(c)) for the benefit of such individual.
                    ``(B) Special rules.--
                            ``(i) Timing of contributions.--
                        Contributions made under this paragraph shall 
                        be made on the last day of the plan year of the 
                        cafeteria plan.
                            ``(ii) Availability requirement.--
                        Subparagraph (A) shall apply only if the plan 
                        is available to at least 80 percent of the 
                        employees of the employer. For purposes of the 
                        preceding sentence, there shall be excluded 
                        employees who are excluded under section 
                        414(q)(8) or who would be so excluded if `30' 
                        were substituted for `17\1/2\' in subparagraph 
                        (B) thereof.''
    (b) Treatment of Amounts Received by Qualified Cash or Deferred 
Arrangement.--
            (1) Paragraph (2) of section 401(k) of such Code is amended 
        by striking ``and'' at the end of subparagraph (C), by striking 
        the period at the end of subparagraph (D) and inserting ``, 
        and'', and by adding at the end thereof the following new 
        subparagraph:
                    ``(E) which provides that, with respect to amounts 
                held by the trust which are attributable to 
                contributions made to the trust pursuant to section 
                125(d)(3)--
                            ``(i) an employee's right to such amounts 
                        is nonforfeitable, and
                            ``(ii) such amounts may be used only to pay 
                        expenses (not compensated for by insurance or 
                        otherwise) for the medical care (as defined in 
                        section 213) of the employee, the spouse of the 
                        employee, or any dependent (as defined in 
                        section 152) of the employee.''
            (2) Subsection (k) of section 401 of such Code is amended 
        by adding at the end thereof the following new paragraph:
            ``(11) Treatment of amounts received from medical savings 
        arrangements.--Contributions made to a trust by reason of 
        section 125(d)(3) shall not be taken into account under 
        paragraph (3)(A)(ii), and subsection (l) shall not apply to 
        such contributions.''
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1993.

SEC. 7. VOUCHERS FOR INDIVIDUALS ELIGIBLE TO PARTICIPATE IN MEDICAL 
              SAVINGS ACCOUNTS.
    (a) In General.--
            (1) Establishment of program.--The Secretary of the 
        Treasury shall establish a program under which eligible 
        individuals may obtain health insurance vouchers to be used 
        during such taxable year to make payments for qualified medical 
        expenses.
            (2) Definitions.--In this section, the terms ``eligible 
        individuals'' and ``qualified medical expenses'' have the 
        meaning given such terms in section 220(c) of the Internal 
        Revenue Code of 1986 (as added by section 5(a)).
    (b) Use of Designated State Agencies.--Under the program 
established pursuant to subsection (a), each State shall enter into an 
agreement with the Secretary of the Treasury under which an agency 
designated by the State shall--
            (1) receive applications from individuals residing in the 
        State for vouchers described in subsection (a);
            (2) using forms provided by the Secretary, determine 
        whether the individual is likely to be considered an eligible 
        individual under such subsection;
            (3) if the agency determines that an individual is likely 
        to be considered such an eligible individual for such taxable 
        year, issue the individual a health insurance voucher the value 
        of which is equal to 50 percent of the agency's best estimate 
        of the total contributions to the individual's medical savings 
        account (as described in section 220 of the Internal Revenue 
        Code of 1986) that will be available for payments for qualified 
        medical expenses for such taxable year; and
            (4) submit regular reports notifying the Secretary of those 
        individuals in the State to whom such health insurance vouchers 
        are issued during the year and the value of such vouchers.
    (c) Application Process.--Each individual may apply for 2 health 
insurance vouchers for a taxable year, at 6-month intervals (or at such 
other intervals as may be prescribed). In order to obtain a health 
insurance voucher, an individual shall submit to the designated agency 
of the State in which the individual resides an application (at such 
time and in such form as the State and the Secretary may require) 
containing such information and assurances as the State and the 
Secretary may require.
    (d) Application Against Costs of Qualified Medical Expenses.--A 
health insurance voucher issued to an individual pursuant to this 
section for a year may be presented to an entity in full or partial 
payment of the entity's charges for the individual for qualified 
medical expenses during the year. If an individual presents the entity 
with such a voucher, the entity shall accept the voucher toward payment 
of the entity's charges for the individual for the year.
    (e) Payment to Providers.--
            (1) Amount.--Except as otherwise provided in this 
        paragraph, an entity providing services for which an eligible 
        individual incurs qualified medical expenses shall be entitled, 
        upon presentation to the Secretary (or his designee) of an 
        individual's voucher and of information used by the entity to 
        determine the individual's applicable charges, to payment in 
        the amount of the voucher.
            (2) Charges less than voucher amount.--If the amount of a 
        voucher issued to an individual pursuant to this subsection is 
        greater than the amount of the individual's applicable charges, 
        the entity shall be entitled to payment under paragraph (1) 
        only in the amount of the individual's applicable charges.
            (3) Offsetting payments.--If an entity has received 
        prepayment of an individual's applicable charges for any period 
        for which the individual's voucher is in effect, the amount of 
        the payment to which the entity is otherwise entitled under 
        paragraph (1) shall be reduced to the extent of such charges 
        paid.
            (4) Acceptance of certain improper vouchers.--The Secretary 
        may not deny payment under paragraph (1) to an entity because a 
        voucher presented for payment was erroneously issued, 
        improperly transferred, forged, counterfeited, or otherwise 
        invalid, unless the entity had knowledge of such invalidity at 
        the time of its acceptance of the voucher.
    (f) Refundable Credit to Providers.--Subpart C of part IV of 
subchapter A of chapter 1 of such Code (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. HEALTH INSURANCE VOUCHERS.

    ``There shall be allowed as a credit against the tax imposed by 
this subtitle an amount equal to the aggregate amount of vouchers 
received during the taxable year pursuant to section 7(a) of the Health 
Care Accessibility Expansion Act of 1993 as payment for providing 
services for which individuals incur qualified medical expenses (as 
such terms are defined under such section).''.

SEC. 8. JOINT USE OF HIGH TECHNOLOGY EQUIPMENT AND SERVICES BY 
              HOSPITALS.

    (a) Waiver of Antitrust Laws.--
            (1) In general.--Notwithstanding any provision of the 
        antitrust laws, it shall not be considered a violation of the 
        antitrust laws for hospitals to jointly undertake, in the 
        provision of care, the purchasing, contracting for, or sharing 
        of high technology equipment and services.
            (2) Antitrust laws defined.--For purposes of this 
        subsection, the term ``antitrust laws'' means--
                    (A) the Act entitled ``An Act to protect trade and 
                commerce against unlawful restraints and monopolies'', 
                approved July 2, 1890, commonly known as the ``Sherman 
                Act'' (26 Stat. 209; chapter 647; 15 U.S.C. 1 et seq.);
                    (B) the Federal Trade Commission Act, approved 
                September 26, 1914 (38 Stat. 717; chapter 311; 15 
                U.S.C. 41 et seq.);
                    (C) the Act entitled ``An Act to supplement 
                existing laws against unlawful restraints and 
                monopolies, and for other purposes'', approved October 
                15, 1914, commonly known as the ``Clayton Act'' (38 
                Stat. 730; chapter 323; 15 U.S.C. 12 et seq.; 18 U.S.C. 
                402, 660, 3285, 3691; 29 U.S.C. 52, 53); and
                    (D) any State antitrust laws that would prohibit 
                the activities described in subsection (a).
    (b) Grants.--Title VI of the Public Health Service Act (42 U.S.C. 
291 et seq.) is amended--
            (1) by redesignating part D as part E; and
            (2) by inserting after section 633 the following new part:

                    ``Part D--Equipment and Services

``SEC. 637. HIGH TECHNOLOGY EQUIPMENT AND SERVICES.

    ``(a) Establishment.--The Secretary shall establish and carry out 
demonstration projects to assist hospitals in acquiring and sharing 
high technology equipment and services. In carrying out the 
demonstration projects, the Secretary shall make grants to States for 
the purpose of paying the Federal share of the costs of assisting 
hospitals to jointly purchase, contract for, or share high technology 
equipment and services in order to eliminate unnecessary duplication of 
the equipment and services.
    ``(b) Award of Grants.--The Secretary shall allocate grants under 
this section in accordance with criteria prescribed by the Secretary.
    ``(c) Duration of Grants.--Grants made under this section may be 
made for periods not to exceed 3 years.
    ``(d) Application.--To be eligible to receive a grant under this 
section, a State, acting through the appropriate State health 
authority, shall submit an application at such time, in such manner, 
and containing such agreements, assurances, and information as the 
Secretary determines necessary to carry out this section. At a minimum, 
the application shall include--
            ``(1) a State plan that describes the manner in which the 
        State health authority will assist hospitals in undertaking the 
        joint activities described in subsection (a);
            ``(2) a description of the criteria and procedures the 
        State health authority will use to select hospitals to be 
        assisted under this section; and
            ``(3) an assurance that the State will provide 50 percent 
        of the cost of the demonstration project from non-Federal 
        funds.
    ``(e) Federal Share.--The Federal share of the cost of carrying out 
any State plan under this section shall be 50 percent.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for each of the 1993 through 1996 fiscal years.''.
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