[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 827 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 827
To amend the Social Security Act to guarantee comprehensive health care
coverage for all children born after 2001.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 3, 2001
Mr. Rockefeller (for himself and Mr. Reed) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Social Security Act to guarantee comprehensive health care
coverage for all children born after 2001.
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; FINDINGS.
(a) Short Title.--This Act may be cited as the ``MediKids Health
Insurance Act of 2002''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents; findings.
Sec. 2. Benefits for all children born after 2002.
``TITLE XXII--MEDIKIDS PROGRAM
``Sec. 2201. Eligibility.
``Sec. 2202. Benefits.
``Sec. 2203. Premiums.
``Sec. 2204. MediKids Trust Fund.
``Sec. 2205. Oversight and accountability.
``Sec. 2206. Addition of care coordination services.
``Sec. 2207. Administration and miscellaneous.
Sec. 3. MediKids premium.
Sec. 4. Refundable credit for cost-sharing expenses under MediKids
program.
Sec. 5. Report on long-term revenues.
(c) Findings.--Congress finds the following:
(1) More than 11 million American children are uninsured.
(2) Children who are uninsured receive less medical care
and less preventive care and have a poorer level of health,
which result in lifetime costs to themselves and to the entire
American economy.
(3) Although SCHIP and Medicaid are successfully extending
a health coverage safety net to a growing portion of the
vulnerable low-income population of uninsured children, we now
see that they alone cannot achieve 100 percent health insurance
coverage for our nation's children due to inevitable gaps
during outreach and enrollment, fluctuations in eligibility,
and variations in access to private insurance at all income
levels.
(4) As all segments of our society continue to become more
and more transient, with many changes in employment over the
working lifetime of parents, the need for a reliable safety net
of health insurance which follows children across State lines,
already a major problem for the children of migrant and
seasonal farmworkers, will become a major concern for all
families in the United States.
(5) The Medicare program has successfully evolved over the
years to provide a stable, universal source of health insurance
for the nation's disabled and those over age 65, and therefore
provides a tested model for designing a program to reach out to
America's children.
(6) The problem of insuring 100 percent of all American
children could be gradually solved by automatically enrolling
all children born after December 31, 2002, in a program modeled
after Medicare (and to be known as ``MediKids''), and allowing
those children to be transferred into other equivalent or
better insurance programs, including either private insurance,
SCHIP, or Medicaid, if they are eligible to do so, but
maintaining the child's default enrollment in MediKids for any
times when the child's access to other sources of insurance is
lost.
(7) A family's freedom of choice to use other insurers to
cover children would not be interfered with in any way, and
children eligible for SCHIP and Medicaid would continue to be
enrolled in those programs, but the underlying safety net of
MediKids would always be available to cover any gaps in
insurance due to changes in medical condition, employment,
income, or marital status, or other changes affecting a child's
access to alternate forms of insurance.
(8) The MediKids program can be administered without
impacting the finances or status of the existing Medicare
program.
(9) The MediKids benefit package can be tailored to the
special needs of children and updated over time.
(10) The financing of the program can be administered
without difficulty by a yearly payment of affordable premiums
through a family's tax filing (or adjustment of a family's
earned income tax credit).
(11) The cost of the program will gradually rise as the
number of children using MediKids as the insurer of last resort
increases, and a future Congress always can accelerate or slow
down the enrollment process as desired, while the societal
costs for emergency room usage, lost productivity and work
days, and poor health status for the next generation of
Americans will decline.
(12) Over time 100 percent of American children will always
have basic health insurance, and we can therefore expect a
healthier, more equitable, and more productive society.
SEC. 2. BENEFITS FOR ALL CHILDREN BORN AFTER 2002.
(a) In General.--The Social Security Act is amended by adding at
the end the following new title:
``TITLE XXII--MEDIKIDS PROGRAM
``SEC. 2201. ELIGIBILITY.
``(a) Eligibility of Individuals Born After December 31, 2002; All
Children Under 23 Years of Age in Sixth Year.--An individual who meets
the following requirements with respect to a month is eligible to
enroll under this title with respect to such month:
``(1) Age.--
``(A) First year.--During the first year in which
this title is effective, the individual has not
attained 6 years of age.
``(B) Second year.--During the second year in which
this title is effective, the individual has not
attained 11 years of age.
``(C) Third year.--During the third year in which
this title is effective, the individual has not
attained 16 years of age.
``(D) Fourth year.--During the fourth year in which
this title is effective, the individual has not
attained 21 years of age.
``(E) Fifth and subsequent years.--During the fifth
year in which this title is effective and each
subsequent year, the individual has not attained 23
years of age.
``(2) Citizenship.--The individual is a citizen or national
of the United States or is permanently residing in the United
States under color of law.
``(b) Enrollment Process.--An individual may enroll in the program
established under this title only in such manner and form as may be
prescribed by regulations, and only during an enrollment period
prescribed by the Secretary consistent with the provisions of this
section. Such regulations shall provide a process under which--
``(1) individuals who are born in the United States after
December 31, 2002, are deemed to be enrolled at the time of
birth and a parent or guardian of such an individual is
permitted to pre-enroll in the month prior to the expected
month of birth;
``(2) individuals who are born outside the United States
after such date and who become eligible to enroll by virtue of
immigration into (or an adjustment of immigration status in)
the United States are deemed enrolled at the time of entry or
adjustment of status;
``(3) eligible individuals may otherwise be enrolled at
such other times and manner as the Secretary shall specify,
including the use of outstationed eligibility sites as
described in section 1902(a)(55)(A) and the use of presumptive
eligibility provisions like those described in section 1920A;
and
``(4) at the time of automatic enrollment of a child, the
Secretary provides for issuance to a parent or custodian of the
individual a card evidencing coverage under this title and for
a description of such coverage.
The provisions of section 1837(h) apply with respect to enrollment
under this title in the same manner as they apply to enrollment under
part B of title XVIII.
``(c) Date Coverage Begins.--
``(1) In general.--The period during which an individual is
entitled to benefits under this title shall begin as follows,
but in no case earlier than January 1, 2003:
``(A) In the case of an individual who is enrolled
under paragraph (1) or (2) of subsection (b), the date
of birth or date of obtaining appropriate citizenship
or immigration status, as the case may be.
``(B) In the case of an another individual who
enrolls (including pre-enrolls) before the month in
which the individual satisfies eligibility for
enrollment under subsection (a), the first day of such
month of eligibility.
``(C) In the case of an another individual who
enrolls during or after the month in which the
individual first satisfies eligibility for enrollment
under such subsection, the first day of the following
month.
``(2) Authority to provide for partial months of
coverage.--Under regulations, the Secretary may, in the
Secretary's discretion, provide for coverage periods that
include portions of a month in order to avoid lapses of
coverage.
``(3) Limitation on payments.--No payments may be made
under this title with respect to the expenses of an individual
enrolled under this title unless such expenses were incurred by
such individual during a period which, with respect to the
individual, is a coverage period under this section.
``(d) Expiration of Eligibility.--An individual's coverage period
under this part shall continue until the individual's enrollment has
been terminated because the individual no longer meets the requirements
of subsection (a) (whether because of age or change in immigration
status).
``(e) Entitlement to MediKids Benefits for Enrolled Individuals.--
An individual enrolled under this section is entitled to the benefits
described in section 2202.
``(f) Low-Income Information.--At the time of enrollment of a child
under this title, the Secretary shall make an inquiry as to whether or
not the family income of the family that includes the child is less
than 150 percent of the poverty line for a family of the size involved.
If the family income is below such level, the Secretary shall encode in
the identification card issued in connection with eligibility under
this title a code indicating such fact. The Secretary also shall
provide for a toll-free telephone line at which providers can verify
whether or not such a child is in a family the income of which is below
such level.
``(g) Construction.--Nothing in this title shall be construed as
requiring (or preventing) an individual who is enrolled under this
section from seeking medical assistance under a State medicaid plan
under title XIX or child health assistance under a State child health
plan under title XXI.
``SEC. 2202. BENEFITS.
``(a) Secretarial Specification of Benefit Package.--
``(1) In general.--The Secretary shall specify the benefits
to be made available under this title consistent with the
provisions of this section and in a manner designed to meet the
health needs of enrollees.
``(2) Updating.--The Secretary shall update the
specification of benefits over time to ensure the inclusion of
age-appropriate benefits to reflect the enrollee population.
``(3) Annual updating.--The Secretary shall establish
procedures for the annual review and updating of such benefits
to account for changes in medical practice, new information
from medical research, and other relevant developments in
health science.
``(4) Input.--The Secretary shall seek the input of the
pediatric community in specifying and updating such benefits.
``(5) Limitation on updating.--In no case shall updating of
benefits under this subsection result in a failure to provide
benefits required under subsection (b).
``(b) Inclusion of Certain Benefits.--
``(1) Medicare core benefits.--Such benefits shall include
(to the extent consistent with other provisions of this
section) at least the same benefits (including coverage,
access, availability, duration, and beneficiary rights) that
are available under parts A and B of title XVIII.
``(2) All required medicaid benefits.--Such benefits shall
also include all items and services for which medical
assistance is required to be provided under section
1902(a)(10)(A) to individuals described in such section,
including early and periodic screening, diagnostic services,
and treatment services.
``(3) Inclusion of prescription drugs.--Such benefits also
shall include (as specified by the Secretary) prescription
drugs and biologicals.
``(4) Cost-sharing.--
``(A) In general.--Subject to subparagraph (B),
such benefits also shall include the cost-sharing (in
the form of deductibles, coinsurance, and copayments)
applicable under title XVIII with respect to comparable
items and services, except that no cost-sharing shall
be imposed with respect to early and periodic screening
and diagnostic services included under paragraph (2).
``(B) No cost-sharing for lowest income children.--
Such benefits shall not include any cost-sharing for
children in families the income of which (as determined
for purposes of section 1905(p)) does not exceed 150
percent of the official income poverty line (referred
to in such section) applicable to a family of the size
involved.
``(C) Refundable credit for cost-sharing for other
low-income children.--For a refundable credit for cost-
sharing in the case of children in certain families,
see section 35 of the Internal Revenue Code of 1986.
``(c) Payment Schedule.--The Secretary, with the assistance of the
Medicare Payment Advisory Commission, shall develop and implement a
payment schedule for benefits covered under this title. To the extent
feasible, such payment schedule shall be consistent with comparable
payment schedules and reimbursement methodologies applied under parts A
and B of title XVIII.
``(d) Input.--The Secretary shall specify such benefits and payment
schedules only after obtaining input from appropriate child health
providers and experts.
``(e) Enrollment in Health Plans.--The Secretary shall provide for
the offering of benefits under this title through enrollment in a
health benefit plan that meets the same (or similar) requirements as
the requirements that apply to Medicare+Choice plans under part C of
title XVIII. In the case of individuals enrolled under this title in
such a plan, the Medicare+Choice capitation rate described in section
1853(c) shall be adjusted in an appropriate manner to reflect
differences between the population served under this title and the
population under title XVIII.
``SEC. 2203. PREMIUMS.
``(a) Amount of Monthly Premiums.--
``(1) In general.--The Secretary shall, during September of
each year (beginning with 2002), establish a monthly MediKids
premium. Subject to paragraph (2), the monthly MediKids premium
for a year is equal to \1/12\ of the annual premium rate
computed under subsection (b).
``(2) Elimination of monthly premium for demonstration of
equivalent coverage (including coverage under low-income
programs).--The amount of the monthly premium imposed under
this section for an individual for a month shall be zero in the
case of an individual who demonstrates to the satisfaction of
the Secretary that the individual has basic health insurance
coverage for that month. For purposes of the previous sentence
enrollment in a medicaid plan under title XIX, a State child
health insurance plan under title XXI, or under the medicare
program under title XVIII is deemed to constitute basic health
insurance coverage described in such sentence.
``(b) Annual Premium.--
``(1) National, per capita average.--The Secretary shall
estimate the average, annual per capita amount that would be
payable under this title with respect to individuals residing
in the United States who meet the requirement of section
2201(a)(1) as if all such individuals were eligible for (and
enrolled) under this title during the entire year (and assuming
that section 1862(b)(2)(A)(i) did not apply).
``(2) Annual premium.--Subject to subsection (d), the
annual premium under this subsection for months in a year is
equal to 25 percent of the average, annual per capita amount
estimated under paragraph (1) for the year.
``(c) Payment of Monthly Premium.--
``(1) Period of payment.--In the case of an individual who
participates in the program established by this title, subject
to subsection (d), the monthly premium shall be payable for the
period commencing with the first month of the individual's
coverage period and ending with the month in which the
individual's coverage under this title terminates.
``(2) Collection through tax return.--For provisions
providing for the payment of monthly premiums under this
subsection, see section 59B of the Internal Revenue Code of
1986.
``(3) Protections against fraud and abuse.--The Secretary
shall develop, in coordination with States and other health
insurance issuers, administrative systems to ensure that claims
which are submitted to more than one payor are coordinated and
duplicate payments are not made.
``(d) Reduction in Premium for Certain Low-Income Families.--For
provisions reducing the premium under this section for certain low-
income families, see section 59B(c) of the Internal Revenue Code of
1986.
``SEC. 2204. MEDIKIDS TRUST FUND.
``(a) Establishment of Trust Fund.--
``(1) In general.--There is hereby created on the books of
the Treasury of the United States a trust fund to be known as
the `MediKids Trust Fund' (in this section referred to as the
`Trust Fund'). The Trust Fund shall consist of such gifts and
bequests as may be made as provided in section 201(i)(1) and
such amounts as may be deposited in, or appropriated to, such
fund as provided in this title.
``(2) Premiums.--Premiums collected under section 2203
shall be transferred to the Trust Fund.
``(b) Incorporation of Provisions.--
``(1) In general.--Subject to paragraph (2), subsections
(b) through (i) of section 1841 shall apply with respect to the
Trust Fund and this title in the same manner as they apply with
respect to the Federal Supplementary Medical Insurance Trust
Fund and part B, respectively.
``(2) Miscellaneous references.--In applying provisions of
section 1841 under paragraph (1)--
``(A) any reference in such section to `this part'
is construed to refer to title XXII;
``(B) any reference in section 1841(h) to section
1840(d) and in section 1841(i) to sections 1840(b)(1)
and 1842(g) are deemed references to comparable
authority exercised under this title;
``(C) payments may be made under section 1841(g) to
the Trust Funds under sections 1817 and 1841 as
reimbursement to such funds for payments they made for
benefits provided under this title; and
``(D) the Board of Trustees of the MediKids Trust
Fund shall be the same as the Board of Trustees of the
Federal Supplementary Medical Insurance Trust Fund.
``SEC. 2205. OVERSIGHT AND ACCOUNTABILITY.
``(a) Through Annual Reports of Trustees.--The Board of Trustees of
the MediKids Trust Fund under section 2204(b)(1) shall report on an
annual basis to Congress concerning the status of the Trust Fund and
the need for adjustments in the program under this title to maintain
financial solvency of the program under this title.
``(b) Periodic GAO Reports.--The Comptroller General of the United
States shall periodically submit to Congress reports on the adequacy of
the financing of coverage provided under this title. The Comptroller
General shall include in such report such recommendations for
adjustments in such financing and coverage as the Comptroller General
deems appropriate in order to maintain financial solvency of the
program under this title.
``SEC. 2206. INCLUSION OF CARE COORDINATION SERVICES.
``(a) In General.--
``(1) Program authority.--The Secretary, beginning in 2003,
may implement a care coordination services program in
accordance with the provisions of this section under which, in
appropriate circumstances, eligible individuals may elect to
have health care services covered under this title managed and
coordinated by a designated care coordinator.
``(2) Administration by contract.--The Secretary may
administer the program under this section through a contract
with an appropriate program administrator.
``(3) Coverage.--Care coordination services furnished in
accordance with this section shall be treated under this title
as if they were included in the definition of medical and other
health services under section 1861(s) and benefits shall be
available under this title with respect to such services
without the application of any deductible or coinsurance.
``(b) Eligibility Criteria; Identification and Notification of
Eligible Individuals.--
``(1) Individual eligibility criteria.--The Secretary shall
specify criteria to be used in making a determination as to
whether an individual may appropriately be enrolled in the care
coordination services program under this section, which shall
include at least a finding by the Secretary that for cohorts of
individuals with characteristics identified by the Secretary,
professional management and coordination of care can reasonably
be expected to improve processes or outcomes of health care and
to reduce aggregate costs to the programs under this title.
``(2) Procedures to facilitate enrollment.--The Secretary
shall develop and implement procedures designed to facilitate
enrollment of eligible individuals in the program under this
section.
``(c) Enrollment of Individuals.--
``(1) Secretary's determination of eligibility.--The
Secretary shall determine the eligibility for services under
this section of individuals who are enrolled in the program
under this section and who make application for such services
in such form and manner as the Secretary may prescribe.
``(2) Enrollment period.--
``(A) Effective date and duration.--Enrollment of
an individual in the program under this section shall
be effective as of the first day of the month following
the month in which the Secretary approves the
individual's application under paragraph (1), shall
remain in effect for one month (or such longer period
as the Secretary may specify), and shall be
automatically renewed for additional periods, unless
terminated in accordance with such procedures as the
Secretary shall establish by regulation. Such
procedures shall permit an individual to disenroll for
cause at any time and without cause at re-enrollment
intervals.
``(B) Limitation on reenrollment.--The Secretary
may establish limits on an individual's eligibility to
reenroll in the program under this section if the
individual has disenrolled from the program more than
once during a specified time period.
``(d) Program.--The care coordination services program under this
section shall include the following elements:
``(1) Basic care coordination services.--
``(A) In general.--Subject to the cost-
effectiveness criteria specified in subsection (b)(1),
except as otherwise provided in this section, enrolled
individuals shall receive services described in section
1905(t)(1) and may receive additional items and
services as described in subparagraph (B).
``(B) Additional benefits.--The Secretary may
specify additional benefits for which payment would not
otherwise be made under this title that may be
available to individuals enrolled in the program under
this section (subject to an assessment by the care
coordinator of an individual's circumstance and need
for such benefits) in order to encourage enrollment in,
or to improve the effectiveness of, such program.
``(2) Care coordination requirement.--Notwithstanding any
other provision of this title, the Secretary may provide that
an individual enrolled in the program under this section may be
entitled to payment under this title for any specified health
care items or services only if the items or services have been
furnished by the care coordinator, or coordinated through the
care coordination services program. Under such provision, the
Secretary shall prescribe exceptions for emergency medical
services as described in section 1852(d)(3), and other
exceptions determined by the Secretary for the delivery of
timely and needed care.
``(e) Care Coordinators.--
``(1) Conditions of participation.--In order to be
qualified to furnish care coordination services under this
section, an individual or entity shall--
``(A) be a health care professional or entity
(which may include physicians, physician group
practices, or other health care professionals or
entities the Secretary may find appropriate) meeting
such conditions as the Secretary may specify;
``(B) have entered into a care coordination
agreement; and
``(C) meet such criteria as the Secretary may
establish (which may include experience in the
provision of care coordination or primary care
physician's services).
``(2) Agreement term; payment.--
``(A) Duration and renewal.--A care coordination
agreement under this subsection shall be for one year
and may be renewed if the Secretary is satisfied that
the care coordinator continues to meet the conditions
of participation specified in paragraph (1).
``(B) Payment for services.--The Secretary may
negotiate or otherwise establish payment terms and
rates for services described in subsection (d)(1).
``(C) Liability.--Case coordinators shall be
subject to liability for actual health damages which
may be suffered by recipients as a result of the care
coordinator's decisions, failure or delay in making
decisions, or other actions as a care coordinator.
``(D) Terms.--In addition to such other terms as
the Secretary may require, an agreement under this
section shall include the terms specified in
subparagraphs (A) through (C) of section 1905(t)(3).
``SEC. 2207. ADMINISTRATION AND MISCELLANEOUS.
``(a) In General.--Except as otherwise provided in this title--
``(1) the Secretary shall enter into appropriate contracts
with providers of services, other health care providers,
carriers, and fiscal intermediaries, taking into account the
types of contracts used under title XVIII with respect to such
entities, to administer the program under this title;
``(2) individuals enrolled under this title shall be
treated for purposes of title XVIII as though the individual
were entitled to benefits under part A and enrolled under part
B of such title;
``(3) benefits described in section 2202 that are payable
under this title to such individuals shall be paid in a manner
specified by the Secretary (taking into account, and based to
the greatest extent practicable upon, the manner in which they
are provided under title XVIII);
``(4) provider participation agreements under title XVIII
shall apply to enrollees and benefits under this title in the
same manner as they apply to enrollees and benefits under title
XVIII; and
``(5) individuals entitled to benefits under this title may
elect to receive such benefits under health plans in a manner,
specified by the Secretary, similar to the manner provided
under part C of title XVIII.
``(b) Coordination With Medicaid and SCHIP.--Notwithstanding any
other provision of law, individuals entitled to benefits for items and
services under this title who also qualify for benefits under title XIX
or XXI or any other Federally funded program may continue to qualify
and obtain benefits under such other title or program, and in such case
such an individual shall elect either--
``(1) such other title or program to be primary payor to
benefits under this title, in which case no benefits shall be
payable under this title and the monthly premium under section
2203 shall be zero; or
``(2) benefits under this title shall be primary payor to
benefits provided under such program or title, in which case
the Secretary shall enter into agreements with States as may be
appropriate to provide that, in the case of such individuals,
the benefits under titles XIX and XXI or such other program
(including reduction of cost-sharing) are provided on a `wrap-
around' basis to the benefits under this title.''.
(b) Conforming Amendments to Social Security Act Provisions.--
(1) Section 201(i)(1) of the Social Security Act (42 U.S.C.
401(i)(1)) is amended by striking ``or the Federal
Supplementary Medical Insurance Trust Fund'' and inserting
``the Federal Supplementary Medical Insurance Trust Fund, and
the MediKids Trust Fund''.
(2) Section 201(g)(1)(A) of such Act (42 U.S.C.
401(g)(1)(A)) is amended by striking `` and the Federal
Supplementary Medical Insurance Trust Fund established by title
XVIII'' and inserting ``, the Federal Supplementary Medical
Insurance Trust Fund, and the MediKids Trust Fund established
by title XVIII''.
(3) Section 1853(c) of such Act (42 U.S.C. 1395w-23(c)) is
amended--
(A) in paragraph (1), by striking ``or (7)'' and
inserting ``, (7), or (8)'', and
(B) by adding at the end the following:
``(8) Adjustment for medikids.--In applying this subsection
with respect to individuals entitled to benefits under title
XXII, the Secretary shall provide for an appropriate adjustment
in the Medicare+Choice capitation rate as may be appropriate to
reflect differences between the population served under such
title and the population under parts A and B.''.
(c) Maintenance of Medicaid Eligibility and Benefits for
Children.--
(1) In general.--In order for a State to continue to be
eligible for payments under section 1903(a) of the Social
Security Act (42 U.S.C. 1396b(a))--
(A) the State may not reduce standards of
eligibility, or benefits, provided under its State
medicaid plan under title XIX of the Social Security
Act or under its State child health plan under title
XXI of such Act for individuals under 23 years of age
below such standards of eligibility, and benefits, in
effect on the date of the enactment of this Act; and
(B) the State shall demonstrate to the satisfaction
of the Secretary of Health and Human Services that any
savings in State expenditures under title XIX or XXI of
the Social Security Act that results from children from
enrolling under title XXII of such Act shall be used in
a manner that improves services to beneficiaries under
title XIX of such Act, such as through increases in
provider payment rates, expansion of eligibility,
improved nurse and nurse aide staffing and improved
inspections of nursing facilities, and coverage of
additional services.
(2) Medikids as primary payor.--In applying title XIX of
the Social Security Act, the MediKids program under title XXII
of such Act shall be treated as a primary payor in cases in
which the election described in section 2207(b)(2) of such Act,
as added by subsection (a), has been made.
(d) Expansion of MedPAC Membership to 19.--
(1) In general.--Section 1805(c) of the Social Security Act
(42 U.S.C. 1395b-6(c)) is amended--
(A) in paragraph (1), by striking ``17'' and
inserting ``19''; and
(B) in paragraph (2)(B), by inserting ``experts in
children's health,'' after ``other health
professionals,''.
(2) Initial terms of additional members.--
(A) In general.--For purposes of staggering the
initial terms of members of the Medicare Payment
Advisory Commission under section 1805(c)(3) of the
Social Security Act (42 U.S.C. 1395b-6(c)(3)), the
initial terms of the 2 additional members of the
Commission provided for by the amendment under
subsection (a)(1) are as follows:
(i) One member shall be appointed for 1
year.
(ii) One member shall be appointed for 2
years.
(B) Commencement of terms.--Such terms shall begin
on January 1, 2002.
SEC. 3. MEDIKIDS PREMIUM.
(a) General Rule.--Subchapter A of chapter 1 of the Internal
Revenue Code of 1986 (relating to determination of tax liability) is
amended by adding at the end the following new part:
``PART VIII--MEDIKIDS PREMIUM
``Sec. 59B. MediKids premium.
``SEC. 59B. MEDIKIDS PREMIUM.
``(a) Imposition of Tax.--In the case of an individual to whom this
section applies, there is hereby imposed (in addition to any other tax
imposed by this subtitle) a MediKids premium for the taxable year.
``(b) Individuals Subject to Premium.--
``(1) In general.--This section shall apply to an
individual if the taxpayer has a MediKid at any time during the
taxable year.
``(2) Medikid.--For purposes of this section, the term
`MediKid' means, with respect to a taxpayer, any individual
with respect to whom the taxpayer is required to pay a premium
under section 2203(c) of the Social Security Act for any month
of the taxable year.
``(c) Amount of Premium.--For purposes of this section, the
MediKids premium for a taxable year is the sum of the monthly premiums
under section 2203 of the Social Security Act for months in the taxable
year.
``(d) Exceptions Based on Adjusted Gross Income.--
``(1) Exemption for very low-income taxpayers.--
``(A) In general.--No premium shall be imposed by
this section on any taxpayer having an adjusted gross
income not in excess of the exemption amount.
``(B) Exemption amount.--For purposes of this
paragraph, the exemption amount is--
``(i) $17,415 in the case of a taxpayer
having 1 MediKid,
``(ii) $21,945 in the case of a taxpayer
having 2 MediKids,
``(iii) $26,475 in the case of a taxpayer
having 3 MediKids, and
``(iv) $31,005 in the case of a taxpayer
having 4 or more MediKids.
``(C) Phaseout of exemption.--In the case of a
taxpayer having an adjusted gross income which exceeds
the exemption amount but does not exceed twice the
exemption amount, the premium shall be the amount which
bears the same ratio to the premium which would (but
for this subparagraph) apply to the taxpayer as such
excess bears to the exemption amount.
``(D) Inflation adjustment of exemption amounts.--
In the case of any taxable year beginning in a calendar
year after 2001, each dollar amount contained in
subparagraph (C) shall be increased by an amount equal
to the product of--
``(i) such dollar amount, and
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2000'
for `calendar year 1992' in subparagraph (B)
thereof.
If any increase determined under the preceding sentence
is not a multiple of $50, such increase shall be
rounded to the nearest multiple of $50.
``(2) Premium limited to 5 percent of adjusted gross
income.--In no event shall any taxpayer be required to pay a
premium under this section in excess of an amount equal to 5
percent of the taxpayer's adjusted gross income.
``(e) Coordination With Other Provisions.--
``(1) Not treated as medical expense.--For purposes of this
chapter, any premium paid under this section shall not be
treated as expense for medical care.
``(2) Not treated as tax for certain purposes.--The premium
paid under this section shall not be treated as a tax imposed
by this chapter for purposes of determining--
``(A) the amount of any credit allowable under this
chapter, or
``(B) the amount of the minimum tax imposed by
section 55.
``(3) Treatment under subtitle f.--For purposes of subtitle
F, the premium paid under this section shall be treated as if
it were a tax imposed by section 1.''.
(b) Technical Amendments.--
(1) Subsection (a) of section 6012 of such Code is amended
by inserting after paragraph (9) the following new paragraph:
``(10) Every individual liable for a premium under section
59B.''.
(2) The table of parts for subchapter A of chapter 1 of
such Code is amended by adding at the end the following new
item:
``Part VIII. MediKids premium.''.
(c) Effective Date.--The amendments made by this section shall
apply to months beginning after December 2002, in taxable years ending
after such date.
SEC. 4. REFUNDABLE CREDIT FOR COST-SHARING EXPENSES UNDER MEDIKIDS
PROGRAM.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (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. COST-SHARING EXPENSES UNDER MEDIKIDS PROGRAM.
``(a) Allowance of Credit.--In the case of an individual who has a
MediKid (as defined in section 59B) at any time during the taxable
year, there shall be allowed as a credit against the tax imposed by
this subtitle an amount equal to 50 percent of the amount paid by the
taxpayer during the taxable year as cost-sharing under section
2202(b)(4) of the Social Security Act.
``(b) Limitation Based on Adjusted Gross Income.--The amount of the
credit which would (but for this subsection) be allowed under this
section for the taxable year shall be reduced (but not below zero) by
an amount which bears the same ratio to such amount of credit as the
excess of the taxpayer's adjusted gross income for such taxable year
over the exemption amount (as defined in section 59B(d)) bears to such
exemption amount.''.
(b) Technical Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting before the period ``or
from section 35 of such Code''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of such Code is amended by striking
the last item and inserting the following new items:
``Sec. 35. Cost-sharing expenses under
MediKids program.
``Sec. 36. Overpayments of tax.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.
SEC. 5. REPORT ON LONG-TERM REVENUES.
Within one year after the date of the enactment of this Act, the
Secretary of the Treasury shall propose a gradual schedule of
progressive tax changes to fund the program under title XXII of the
Social Security Act, as the number of enrollees grows in the out-years.
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