[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4256 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4256

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 8, 2005

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

_______________________________________________________________________

                                 A BILL


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

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

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

    (a) Short Title.--This Act may be cited as the ``American Health 
Benefits Program Act of 2005''.
    (b) Findings.--Congress finds the following:
            (1) Uninsured americans and lack of access to choices.--(A) 
        In 2002, 43.6 million Americans were uninsured, 80 percent of 
        whom were employed (or dependents of individuals who were 
        employed).
            (B) Health care providers provided to uninsured Americans 
        $35 billion in care for which they were not compensated by the 
        individuals or through insurance.
            (C) Only 8 percent of employers providing health benefits 
        are able to offer their employees a choice between two or more 
        health plans.
            (2) Double-digit growth in employer costs.--In 2003 the 
        average per capita cost for employers to provide health 
        benefits coverage increased by almost 14 percent. This was the 
        third consecutive year of double-digit increases in such cost.
            (3) Administrative efficiency of using fehbp model for 
        providing health insurance coverage.--(A) The private insurance 
        market presents increasing administrative challenges for 
        employers in seeking out, contracting with, and administering 
        health benefits.
            (B) The Federal Employee Health Benefits Program (FEHBP) 
        currently manages negotiations with health insurers over 
        premiums and benefits on behalf of 8.6 million Federal 
        employees and retirees and their dependents.
            (C) Overhead costs for employers providing health benefits 
        coverage can be over 30 percent for employers with fewer than 
        10 employees and about 12 percent for employers with more than 
        500 employees.
            (D) In comparison, the overhead cost of coverage provided 
        under FEHBP is about 3 percent.
            (4) Expansion of fehbp model to cover uninsured and other 
        americans.--Requiring participation in an FEHBP-style program 
        would expand consumer choice, ensure portability and continuity 
        of coverage, improve incentives for cost containment, and 
        stabilize the burden on businesses
            (5) Personal responsibility.--A recent survey indicates 
        that a clear majority of Americans sees securing health 
        insurance coverage as a personal responsibility for themselves 
        and others.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; findings; table of contents.
Sec. 2. Establishment of American Health Benefits Program.
             ``TITLE XXII--AMERICAN HEALTH BENEFITS PROGRAM

        ``Sec. 2201. Establishment of program.
        ``Sec. 2202. Eligibility; requirement of coverage.
        ``Sec. 2203. Qualified health plans; benefits; premiums.
        ``Sec. 2204. Government contribution; American Health Benefits 
                            Program Trust Fund.
        ``Sec. 2205. Premium and cost-sharing subsidies for lower 
                            income individuals.
        ``Sec. 2206. Administration.
        ``Sec. 2207. Definitions.
Sec. 3. Collection of premiums, subsidies, and employer funding.
         ``Part VIII--American Health Benefits Program premiums

        ``Sec. 59B. American Health Benefits Program premiums.
        ``Sec. 36. Subsidy and prepayment of American Health Benefits 
                            premiums.
             ``Chapter 25--American Health Benefits Program

        ``Sec. 3451. Tax on employers.
        ``Sec. 3452. Refund of tax in case of qualified employer-
                            provided coverage.
        ``Sec. 3453. Instrumentalities of the United States.
Sec. 4. Amendments to the medicaid program and SCHIP.
Sec. 5. Studies.

SEC. 2. ESTABLISHMENT OF AMERICAN HEALTH BENEFITS PROGRAM.

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

             ``TITLE XXII--AMERICAN HEALTH BENEFITS PROGRAM

``SEC. 2201. ESTABLISHMENT OF PROGRAM.

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

``SEC. 2202. ELIGIBILITY; REQUIREMENT OF COVERAGE.

    ``(a) Eligibility.--
            ``(1) In general.--Each AHBP-eligible individual is 
        eligible to enroll in a qualified health plan offered under 
        this title.
            ``(2) AHBP-eligible individual defined.--
                    ``(A) In general.--For purposes of this title, the 
                term `AHBP-eligible individual' means an individual 
                residing in the United States who is--
                            ``(i) a citizen or national of the United 
                        States;
                            ``(ii) an alien lawfully admitted to the 
                        United States for permanent residence;
                            ``(iii) an alien admitted into the United 
                        States under section 207 of the Immigration and 
                        Nationality Act (relating to refugees);
                            ``(iv) an alien otherwise permanently 
                        residing in the United States under color of 
                        law (as specified by the Commissioner); or
                            ``(v) an alien with the status of a 
                        nonimmigrant who is within a class of long-term 
                        nonimmigrants under section 101(a)(15) of the 
                        Immigration and Nationality Act that the 
                        Commissioner determines, in consultation with 
                        the Secretary of Homeland Security, to be 
                        appropriate.
                    ``(B) Exceptions.--Such term does not include the 
                following individuals:
                            ``(i) Individuals eligible for qualified 
                        employer-provided coverage.--An individual who 
                        is eligible for employer-provided coverage, as 
                        defined in section 2207(6), whether an 
                        employee, dependent, or otherwise.
                            ``(ii) Incarcerated individuals.--An 
                        individual who is incarcerated (as specified by 
                        the Commissioner).
    ``(b) Requirement of Coverage.--
            ``(1) In general.--Except as provided in this subsection, 
        each AHBP-eligible individual shall be enrolled in a qualified 
        health plan under this title.
            ``(2) Exception for individuals demonstrating public health 
        insurance coverage.--The requirement of paragraph (1) shall not 
        apply to an individual who demonstrates coverage under any of 
        the following:
                    ``(A) Medicare.--Coverage under parts A and B (or 
                under part C) of title XVIII.
                    ``(B) Medicaid.--Coverage under a State plan under 
                title XIX.
                    ``(C) TRICARE/CHAMPUS.--Coverage under the TRICARE 
                program under chapter 55, of title 10, United States 
                Code.
                    ``(D) Indian health services.--Coverage under a 
                medical care program of the Indian Health Service or of 
                a tribal organization.
                    ``(E) Veterans health.--Coverage under the veterans 
                health care program under chapter 17 of title 38, 
                United States Code, if the coverage for the individual 
                involved is determined to be not less than the coverage 
                provided under a qualified health plan, based on the 
                individual's priority for services as provided under 
                section 1705(a) of such title.
            ``(3) Exception for nonimmigrants.--The requirement of 
        paragraph (1) shall not apply to an individual described in 
        subsection (a)(2)(A)(v).
    ``(c) Enrollment; Default Enrollment.--
            ``(1) In general.--The Commissioner shall establish a 
        process for AHBP-eligible individuals to enroll in qualified 
        health plans. Such process shall be based on the enrollment 
        process used under FEHBP and shall provide for the 
        dissemination of information to AHBP-eligible individuals on 
        qualified health plans being offered.
            ``(2) Default enrollment.--
                    ``(A) In general.--The Commissioner shall establish 
                a procedure under which an AHBP-eligible individual who 
                is required under subsection (b) to enroll, but is not 
                enrolled, in a qualified health plan will be assigned 
                to, and enrolled in, such a plan.
                    ``(B) Rules.--In carrying out subparagraph (A), the 
                Commissioner shall assign AHBP-eligible individuals and 
                families to plans the premium of which is below the 
                average premium for the AHBP region or other area in 
                which the individuals or families reside.
            ``(3) Changes in enrollment.--The Commissioner shall 
        establish enrollment procedures that include an annual open 
        season and permit changes in enrollment with qualified health 
        plans at other times (such as by reason of changes in marital 
        or dependent status). Such procedures shall be based on the 
        enrollment procedures established under FEHBP.
    ``(d) Treatment of Family Members.--Enrollment under this title 
shall include both individual and family enrollment, in a manner 
similar to that provided under FEHBP. To the extent consistent with 
eligibility under subsection (a), the Commissioner shall provide rules 
similar to the rules under FEHBP for the enrollment of family members 
who are AHBP-eligible individuals in the same plan, except that such 
rules shall permit a family consisting only of a married couple to 
elect to enroll each spouse in a different qualified health plan.
    ``(e) Changes in Plan Enrollment.--The Commissioner shall provide 
for and permit changes in the qualified health plan in which an 
individual or family is enrolled under this section in a manner similar 
to the manner in which such changes are provided or permitted under 
FEHBP. The Commissioner shall provide for termination of such 
enrollment for an individual at the time the individual is no longer an 
AHBP-eligible individual.
    ``(f) Enrollment Guides.--The Commissioner shall provide for the 
broad dissemination of information on qualified health plans offered 
under this title. Such information shall be provided in a comparative 
manner, similar to that used under FEHBP, and shall include 
information, collected through surveys of enrollees, on measures of 
enrollee satisfaction with the different plans.

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

    ``(a) Offering of Plans.--
            ``(1) Contracts.--The Commissioner shall enter into 
        contracts with entities for the offering of qualified health 
        plans in accordance with this title. Such contracts shall be 
        entered into in a manner similar to the process by which the 
        Director of the Office of Personnel Management is authorized to 
        enter into contracts with health benefits plans under FEHBP.
            ``(2) Requirements for entities offering plans.--No such 
        contract shall be entered into with an entity for the offering 
        of a qualified health plan in a region unless the entity--
                    ``(A) is licensed as a health maintenance 
                organization in that State or is licensed to sell group 
                health insurance coverage in that State;
                    ``(B) meets such requirements, similar to 
                requirements under FEHBP, as the Commissioner may 
                establish relating to solvency, organization, 
                structure, governance, access, and quality; and
                    ``(C) agrees to participate in the high-risk 
                reinsurance pool described in subsection (d).
            ``(3) Contracting with limited number of plans in a region 
        within types of plans.--
                    ``(A) In general.--The Commissioner shall contract 
                with only a limited number of qualified health plans of 
                each type (as specified under subparagraph (B)) in each 
                AHBP region.
                    ``(B) Types of plans.--For purposes of subparagraph 
                (A), the Commissioner shall classify the different 
                types of qualified health plans, such as fee-for-
                service plans, health maintenance plans, preferred 
                provider plans, and other types of plans.
    ``(b) FEHBP Scope of Benefits.--
            ``(1) Comprehensive benefits.--Qualified health plans shall 
        provide for the same scope and type of comprehensive benefits 
        that have been provided under FEHBP, including the types of 
        benefits described in section 8904 of title 5, United States 
        Code and including benefits previously required by regulation 
        or direction (such as preventive benefits, including childhood 
        immunization and cancer screening, and mental health parity) 
        under FEHBP.
            ``(2) No exclusion for pre-existing conditions.--Qualified 
        health plans shall not impose pre-existing condition exclusions 
        or otherwise discriminate against any enrollee based on the 
        health status of such enrollee (including genetic information 
        relating to such enrollee) .
            ``(3) Other consumer protections.--Qualified health plans 
        also shall meet consumer and patient protection requirements 
        that the Commissioner establishes, based on similar 
        requirements previously imposed under FEHBP, including 
        protections of patients' rights previously effected pursuant to 
        Executive Memorandum.
    ``(c) Community-Rated Premiums.--
            ``(1) In general.--The premiums established for a qualified 
        health plan under this title for individual or family coverage 
        shall be community-rated and shall not vary based on age, 
        gender, health status (including genetic information), or other 
        factors.
            ``(2) Collection process.--The Commissioner shall establish 
        a process for the timely and accurate collection of premiums 
        owed by enrollees, taking into account any Government 
        contribution under section 2204(a) and any premium subsidy 
        referred to in section 2205(a). Such process shall include 
        methods for payment through payroll withholding, as well as 
        payment through automatic debiting of accounts with financial 
        institutions, and shall be coordinated with the application of 
        section 59B of the Internal Revenue Code of 1986. Such premiums 
        shall be deposited into the American Health Benefits Program 
        Trust Fund established under section 2204(c).
    ``(d) High-Risk Reinsurance Pool.--The Commissioner shall establish 
an arrangement among the entities offering qualified health plans under 
which such entities contribute in an equitable manner (as determined by 
the Commissioner) into a fund that provides payment to plans for a 
percentage (specified by the Commissioner and not to exceed 90 percent) 
of the costs that they incur for enrollees beyond a predetermined 
threshold specified from time to time by the Commissioner.
    ``(e) Marketing Practices and Costs.--The Commissioner shall 
monitor marketing practices with respect to qualified health plans in 
order to assure--
            ``(1) the accuracy of the information disseminated 
        regarding such plans; and
            ``(2) that costs of marketing are reasonable and do not 
        exceed a percentage of total costs that is specified by the 
        Commissioner and that takes into account costs of market entry 
        for new qualified health plans.

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

    ``(a) Government Contribution.--
            ``(1) In general.--The Commissioner shall provide each year 
        for a contribution under this subsection towards the coverage 
        provided under this title for those AHBP-eligible individuals 
        who are required to be enrolled in a qualified health plan 
        under section 2202(b). Except as provided in this subsection, 
        the amount of such contribution shall be determined using the 
        same methodology that is applied for purposes of determining 
        the Government contribution under section 8906 of title 5, 
        United States Code and shall not exceed 75 percent of the 
        premium for the plan selected.
            ``(2) Use of regional weighted average.--Instead of 
        computing the Government contribution using methodology under 
        section 8906(b)(1) of title 5, United States Code, based on 72 
        percent of the weighted average premium for qualified health 
        plans nationally, the Commissioner shall compute such 
        contribution based on 72 percent of the weighted average 
        premium for qualified health plans in each region involved (as 
        identified by the Commissioner).
    ``(b) Plan Payment.--
            ``(1) In general.--The Commissioner shall provide for 
        payment of qualified health plans of the premiums for such 
        plans, as adjusted under this subsection.
            ``(2) Risk adjusted payment.--The payment to a qualified 
        health plan under this subsection shall be adjusted in a 
        budget-neutral manner specified by the Commissioner to reflect 
        the actuarial risk of the enrollees in the plan compared to an 
        average actuarial risk.
            ``(3) Reduction for administrative expenses and contingency 
        reserve.--The Commissioner shall provide for a uniform 
        percentage reduction in payment otherwise made to a qualified 
        health plan under this subsection. Such percentage shall 
        consist of the following:
                    ``(A) Contingency reserve.--A percentage (not to 
                exceed 3 percent) to provide for a contingency reserve 
                described in section 2206(h)(1).
                    ``(B) Federal administrative costs.--A percentage 
                (not to exceed 5 percent) to cover Federal 
                administrative costs in implementing this title.
    ``(c) Trust Fund.--
            ``(1) Establishment.--There is hereby established a trust 
        fund, to be known as the `American Health Benefits Program 
        Trust Fund' (in this subsection referred to as the `Trust 
        Fund') .
            ``(2) Deposits.--The Trust Fund shall consist of such gifts 
        and bequests as may be provided in section 201(i)(1) and such 
        amounts as may be deposited in, or appropriated to, such fund 
        as provided in this title. There are hereby appropriated to the 
        Trust Fund, out of any moneys in the Treasury not otherwise 
        appropriated, amounts equivalent to 100 percent of--
                    ``(A) the taxes imposed by section 3451 of the 
                Internal Revenue Code of 1986 with respect to wages 
                reported to the Secretary of the Treasury or the 
                Secretary 's delegate pursuant to subtitle F of such 
                Code, as determined by the Secretary of the Treasury by 
                applying the applicable rates of tax under such section 
                to such wages, which wages shall be certified by the 
                Commissioner of Social Security on the basis of records 
                of wages established and maintained by such 
                Commissioner in accordance with such reports;
                    ``(B) the taxes imposed by section 1401(c) of the 
                Internal Revenue Code of 1986 with respect to self-
                employment income reported to the Secretary of the 
                Treasury or the Secretary's delegate pursuant to 
                subtitle F of such Code, as determined by the Secretary 
                of the Treasury by applying the applicable rates of tax 
                under such section to such self-employment income, 
                which self-employment income shall be certified by the 
                Commissioner of Social Security on the basis of records 
                of self-employment established and maintained by such 
                Commissioner in accordance with such returns; and
                    ``(C) the excess of the amounts imposed under 
                section 59B of the Internal Revenue Code of 1986 over 
                the amounts of credits allowed under section 36.
        The amounts appropriated by the preceding sentence shall be 
        transferred from time to time from the general fund in the 
        Treasury to the Trust Fund, such amounts to be determined on 
        the basis of estimates by the Secretary of the Treasury of the 
        taxes, specified in the preceding sentence, paid to or 
        deposited into the Treasury; and proper adjustments shall be 
        made in amounts subsequently transferred to the extent prior 
        estimates were in excess of or were less than the taxes 
        specified in such sentence.
            ``(3) Application of trust fund provisions.--The provisions 
        of subsections (b) through (f) of section 1817 shall apply to 
        the Trust Fund in the same manner as they apply to the Federal 
        Hospital Insurance Trust Fund, except that, for purposes of 
        this paragraph, any reference in such subsections to a 
        provision of the Internal Revenue Code of 1986 is deemed a 
        reference to the corresponding provision of such Code referred 
        to in paragraph (2) of this subsection.

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

    ``(a) Premium Subsidies.--The Commissioner, in consultation with 
the Secretary of the Treasury, shall assist individuals in estimating 
the amount of the premium subsidy which will be allowed to such 
individuals under section 36 of the Internal Revenue Code of 1986 with 
respect to any month, and shall take the estimated amount of such 
premium subsidy into account for purposes of collecting any premium 
under section 2203(c)(2).
    ``(b) Cost-Sharing Subsidies.--
            ``(1) No cost-sharing for individuals with family income 
        below lowest income threshold.--In the case of a cost-sharing 
        subsidy-eligible individual whose family income is less than 
        the lowest income threshold, there shall be a cost-sharing 
        subsidy so the cost-sharing is reduced to zero.
            ``(2) No cost-sharing for pregnant women and children.--In 
        the case of a cost-sharing subsidy-eligible individual who is 
        under 18 years of age or who is a pregnant woman, there shall 
        be a cost-sharing subsidy so the cost-sharing is reduced to 
        zero.
            ``(3) Sliding scale for other individuals.--In the case of 
        cost-sharing subsidy-eligible individuals not described in 
        paragraph (1) or (2), the Commissioner, in consultation with 
        the Secretary of the Treasury, shall establish a schedule of 
        cost-sharing subsidies consistent with this paragraph. Under 
        such schedule the amount of a cost-sharing subsidy for such 
        individuals shall be such that--
                    ``(A) the cost-sharing is nominal (as defined for 
                purposes of section 1916(a)(3)) for individuals whose 
                family income is at the lowest income threshold; and
                    ``(B) as the family income increases from such 
                lowest income threshold to twice such threshold, the 
                cost-sharing subsidy is reduced in a ratable matter to 
                zero.
            ``(4) Application of a previous year's family income.--In 
        applying this subsection for cost-sharing subsidies for 
        expenses incurred for services furnished in a year, family 
        income shall be determined based on the modified AGI, as 
        defined in paragraph (7)(D), for taxable years ending in or 
        with the previous year (or, if information on such modified AGI 
        for such taxable years is not available on a timely basis, for 
        the most recent taxable years for which such information is so 
        available).
            ``(5) Application for subsidies.--A cost-sharing subsidy 
        shall not be available to a cost-sharing subsidy-eligible 
        individual under this subsection unless an application, in a 
        form and manner and containing such information and in such 
        frequency as the Commissioner shall specify, has been made for 
        such subsidy.
            ``(6) Payment of subsidies to plans.--The Commissioner 
        shall establish the form of additional payments to qualified 
        health plans to compensate such plans for cost-sharing 
        subsidies provided to enrollees under this subsection. Such 
        payments may be in such form as the Commissioner specifies and 
        may include--
                    ``(A) a capitation payment, in an amount that 
                reflects the per capita actuarial value of such 
                subsidies;
                    ``(B) reimbursement for the reductions in cost-
                sharing made to carry out this subsection; or
                    ``(C) a combination of the methodologies under 
                subparagraphs (A) and (B).
            ``(7) Definitions.--For purposes of this subsection:
                    ``(A) Cost-sharing subsidy-eligible individual 
                defined.--The term `cost-sharing subsidy-eligible 
                individual' means an AHBP-eligible individual--
                            ``(i) who is enrolled, and required under 
                        section 2202(b) to be enrolled, in a qualified 
                        health plan under this title;
                            ``(ii) whose family income does not exceed 
                        twice the lowest income threshold (as defined 
                        in subparagraph (B)); and
                            ``(iii) who does not have in effect (and 
                        any of whose family members does not have in 
                        effect), in a form and manner specified by the 
                        Commissioner, in consultation with the 
                        Secretary of the Treasury, for any portion of 
                        the year involved an objection to the release 
                        of information under section 6103(l)(21) of the 
                        Internal Revenue Code of 1986.
                    ``(B) Lowest income threshold.--The term `lowest 
                income threshold' means--
                            ``(i) in the case of coverage consisting of 
                        only an individual, 125 percent of the poverty 
                        line (as defined in section 673(2) of the 
                        Community Services Block Grant Act (42 U.S.C. 
                        9902(2)), including any revision required by 
                        such section) for a single individual; or
                            ``(ii) in the case of coverage consisting 
                        of a family of two or more individuals, 150 
                        percent of the poverty line (as so defined) for 
                        a family of the size involved.
                    ``(C) Family income.--The term `family income' 
                means, with respect to an AHBP-eligible individual who 
                is enrolled in a qualified health plan--
                            ``(i) for individual-only coverage, the 
                        modified AGI of the individual; or
                            ``(ii) for coverage that includes other 
                        family members, the sum of the modified AGI of 
                        the individual and of each other individual 
                        covered under the plan as a family member of 
                        the individual.
                The Commissioner, in consultation with the Secretary of 
                the Treasury, may provide for exclusion from family 
                income under subparagraph (B) of family members (such 
                as children) who have de minimis income (as specified 
                by the Commissioner).
                    ``(D) Modified agi defined.--The term `modified 
                AGI' means adjusted gross income (as defined in section 
                62 of the Internal Revenue Code of 1986)--
                            ``(i) determined without regard to sections 
                        135, 911, 931, and 933 of such Code; and
                            ``(ii) increased by the amount of interest 
                        received or accrued during the taxable year 
                        which is exempt from tax under such Code.
                In the case of an individual filing a joint return, any 
                reference in this subsection to the modified adjusted 
                gross income of such individual shall be \1/2\ such 
                return's modified adjusted gross income.

``SEC. 2206. ADMINISTRATION.

    ``(a) Application of FEHBP Rules.--
            ``(1) In general.--Except as otherwise provided in this 
        title, the program under this title shall be administered in 
        the same manner as FEHBP.
            ``(2) Specific provisions.--In carrying out this title, the 
        Commissioner pursuant to paragraph (1) shall provide for the 
        following:
                    ``(A) Approval and disapproval of plans as 
                qualified health plans.
                    ``(B) Negotiation of plan benefits (including cost-
                sharing) and plan premiums.
    ``(b) Establishment of Health Benefits Administration.--There is 
hereby established, as an independent agency in the executive branch of 
Government, a Health Benefits Administration (in this title referred to 
as the `Administration').
    ``(c) Duties.--
            ``(1) In general.--The Administration shall administer the 
        program under this title and, with respect to application of 
        any provision of FEHBP under this title, any reference in FEHBP 
        to the Director of the Office of Management and Budget is 
        deemed a reference to the Commissioner of Health Benefits.
            ``(2) Establishment of ahbp regions.--For purposes of 
        carrying out this title, the Commissioner shall divide the 
        United States into, and establish, AHBP regions.
    ``(d) Officers.--
            ``(1) Commissioner of health benefits.--
                    ``(A) In general.--There shall be in the 
                Administration a Commissioner of Health Benefits who 
                shall be appointed by the President, by and with the 
                advice and consent of the Senate.
                    ``(B) Compensation.--The Commissioner shall be 
                compensated at the rate provided for level I of the 
                Executive Schedule.
                    ``(C) Term.--The provisions of section 702(a)(3) 
                shall apply to the Commissioner of Health Benefits in 
                the same manner as they apply to the Commissioner of 
                Social Security, except that any reference to January 
                19, 2001, shall be treated as a reference to the date 
                that is January 19 of the fifth year that begins after 
                the date of the enactment of this title.
            ``(2) Deputy commissioner.--
                    ``(A) In general.--There shall be in the 
                Administration a Deputy Commissioner for Health 
                Benefits, who shall be appointed by the President, by 
                and with the advice and consent of the Senate.
                    ``(B) Application of ssa provisions.--The 
                provisions of paragraphs (2) through (4) of section 
                702(b) shall apply to the Deputy Commissioner in the 
                same manner as they apply to the Deputy Commissioner of 
                Social Security, except that any reference to January 
                19, 2001, shall be treated as a reference to the date 
                specified under paragraph (1)(C).
            ``(3) Other officers.--There shall be in the Administration 
        a Chief Actuary, Chief Financial Officer, and Inspector 
        General. The provisions of subsections (c) through (e) of 
        section 702 shall apply with respect to such officers in the 
        same manner as they apply with respect to comparable officers 
        in the Social Security Administration.
            ``(4) Personnel; budgetary matters; seal of office.--The 
        provisions of subsections (a)(1), (a)(2), (b), and (d) of 
        section 704 shall apply to the Commissioner and the 
        Administration in the same manner as they apply to the 
        Commissioner of Social Security and the Social Security 
        Administration, respectively.
    ``(e) Authority and Rulemaking.--The provisions of paragraphs (4) 
through (7) of section 702(a) shall apply to the Administration and 
Commissioner in the same manner as they apply to the Social Security 
Administration and the Commissioner of Social Security.
    ``(f) Use of Regional and Field Offices.--The Commissioner shall 
establish such regional and field offices as may be appropriate for the 
convenient and efficient administration of this title.
    ``(g) Coverage of Administration Costs.--The Commissioner shall 
provide for the collection of administrative costs of offering coverage 
under this title from entities offering qualified health plans in the 
same manner as FEHBP provides for coverage of its administrative costs.
    ``(h) Contingency Reserves.--
            ``(1) AHBP contingency reserve.--The Commissioner is 
        authorized to establish and maintain a contingency reserve for 
        purposes of carrying out this title and is authorized to impose 
        under section 2204(b)(3)(A) a premium surcharge of up to three 
        percent in order to provide financing for such reserve.
            ``(2) Plan reserves.--A qualified health plan may establish 
        contingency reserves, that are in addition to the reserve 
        described in paragraph (1), in a manner similar to that 
        permitted under FEHBP.

``SEC. 2207. DEFINITIONS.

    ``For purposes of this title, except as otherwise provided:
            ``(1) The term `Administration' means the Health Benefits 
        Administration established under section 2206(b).
            ``(2) The term `AHBP-eligible individual' means an 
        individual described in section 2202(a)(2).
            ``(3) The term `AHBP region' means a region as specified by 
        the Commissioner under section 2206(c)(2).
            ``(4) The term `Commissioner' means the Commissioner of 
        Health Benefits appointed under section 2206(d)(1).
            ``(5) The term `FEHBP' means the program under chapter 89 
        of title 5, United States Code, as in effect before the date of 
        the enactment of this title.
            ``(6) The term `qualified employer-provided coverage' means 
        health coverage that is provided on the basis of employment and 
        that the Commissioner has certified as being equivalent to the 
        coverage under qualified health plans. For purposes of the 
        previous sentence, coverage provided on the basis of employment 
        is not equivalent to coverage under a qualified health plan 
        unless the employer's share of the cost of such coverage is is 
        not less than the Government's share of the cost of coverage 
        under qualified health plans.
            ``(7) The term `qualified health plan' means such a plan 
        offered under this title.''.
    (b) Effective Date; Collective Bargaining Agreements.--
            (1) Benefits.--Title XXII of the Social Security Act shall 
        first apply to benefits for items and services furnished on or 
        after January 1, 2008.
            (2) Effect on collective bargaining agreements.--Nothing in 
        this Act shall be construed as preventing a collectively 
        bargained agreement from providing coverage that is additional 
        to, or supplementary of, benefits provided under the American 
        Health Benefits Program.

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

    (a) Premium Collection.--
            (1) In general.--Subchapter A of chapter 1 of the Internal 
        Revenue Code of 1986 (relating to determination of tax 
        liability) is amended by adding at the end the following new 
        part:

         ``PART VIII--AMERICAN HEALTH BENEFITS PROGRAM PREMIUMS

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

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

    ``(a) In General.--In the case of a specified individual who is 
enrolled in a qualified health plan under title XXII of the Social 
Security Act (including by reason of a default enrollment under section 
2202(c)(2)), there is hereby imposed (in addition to any other amount 
imposed by this subtitle) for the taxable year an amount equal to the 
aggregate premiums established under such title with respect to the 
coverage under such title which covers such individual for months 
beginning in such taxable year. The amount imposed under this 
subsection shall be reduced by the amount of any government 
contribution under section 2204(a) of such Act which relates to such 
coverage.
    ``(b) Specified Individual.--For purposes of this section, the term 
`specified individual' means, with respect to coverage under title XXII 
of the Social Security Act for any month beginning in a taxable year--
            ``(1) in the case of self-only coverage, the individual 
        covered under such coverage, and
            ``(2) in the case of family coverage, each individual 
        covered under such coverage unless such individual is covered 
        under such coverage by reason of being a member of the family 
        (other than a spouse).
    ``(c) Joint and Several Liability.--In the case of an individual 
and such individual's spouse covered under family coverage--
            ``(1) each such individual shall be jointly and severally 
        liable for the amount imposed under subsection (a), and
            ``(2) the aggregate amount imposed under subsection (a) 
        with respect to such coverage may not exceed the amount imposed 
        with respect to either such individual.
    ``(d) Coordination With Other Provisions.--
            ``(1) Not treated as medical expense.--For purposes of 
        section 213, the amount imposed by this section for any taxable 
        year shall not be treated as an expense paid for medical care.
            ``(2) Not treated as tax for certain purposes.--The amount 
        imposed by this section shall not be treated as a tax imposed 
        by this chapter for purposes of determining--
                    ``(A) the amount of any credit allowable under this 
                chapter, or
                    ``(B) the amount of the minimum tax imposed by 
                section 55.
            ``(3) Treatment under subtitle f.--For purposes of subtitle 
        F, the amount imposed by this section shall be treated as if it 
        were a tax imposed by section 1.
            ``(4) Section 15 not to apply.--Section 15 shall not apply 
        to the amount imposed by this section.
            ``(5) Section not to affect liability of possessions, 
        etc.--This section shall not apply for purposes of determining 
        liability to any possession of the United States. For purposes 
        of section 932 and 7654, the amount imposed under this section 
        shall not be treated as a tax imposed by this chapter.
    ``(e) Regulations.--The Secretary may prescribe such regulations as 
may be appropriate to carry out the purposes of this section.''.
            (2) Adjustments to withholding.--Subsection (a) of section 
        3402 of such Code (relating to income tax collected at source) 
        is amended by adding at the end the following new paragraph:
            ``(3) Special rule for amounts imposed by section 59b.--
                    ``(A) In general.--In determining the amount 
                required to be deducted and withheld from wages paid to 
                an individual during any month by such individual's 
                employer, the amount imposed by section 59B shall be 
                taken into account.
                    ``(B) Wages not reduced by exemptions.--In 
                determining the amount to be deducted and withheld by 
                reason of subparagraph (A), the amount of wages shall 
                not be reduced as provided in paragraph (2).''.
            (3) Clerical amendment.--The table of parts for subchapter 
        A of chapter 1 of such Code is amended by adding at the end the 
        following new item:

       ``Part VIII. American Health Benefits Program premiums''.

    (b) Credit for Subsidy and Prepayments of American Health Benefits 
Premiums.--
            (1) In general.--Subpart C of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        redesignating section 36 as section 37 and by inserting after 
        section 35 the following new section:

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

    ``(a) In General.--In the case of a specified individual (as 
defined in section 59B(b)), there shall be allowed as a credit against 
the tax imposed by this subtitle for the taxable year an amount equal 
to the sum of--
            ``(1) the aggregate amount of premiums paid (other than any 
        government contribution under section 2204(a) of the Social 
        Security Act) with respect to the coverage of such individual 
        under title XXII of the Social Security Act, and
            ``(2) in the case of any premium subsidy-eligible 
        individual, the applicable premium subsidy.
    ``(b) Applicable Premium Subsidy.--
            ``(1) In general.--For purposes of this section, the term 
        `applicable premium subsidy' means, with respect to any premium 
        subsidy-eligible individual, the weighted average premium in 
        effect for the calendar year in which the taxable year begins 
        (for the type of coverage involved) for plans in the AHBP 
        region involved, as determined by the Commissioner of Health 
        Benefits.
            ``(2) Reduction based on family income.--The amount 
        otherwise determined under paragraph (1) shall be reduced (but 
        not below zero) by an amount which bears the same ratio to the 
        amount so determined as--
                    ``(A) the amount (if any) by which the taxpayer's 
                family income for the taxable year exceeds the lowest 
                income threshold, bears to
                    ``(B) the lowest income threshold.
    ``(c) Premium Subsidy-Eligible Individual.--For purposes of this 
section, the term `premium subsidy-eligible individual' means an 
individual--
            ``(1) who is enrolled, and required to be enrolled, in a 
        qualified health plan under title XXII of the Social Security 
        Act,
            ``(2) whose family income does not exceed twice the lowest 
        income threshold, and
            ``(3) who does not have in effect (and, in the case of 
        family coverage, each other individual covered under such 
        coverage does not have in effect), in a form and manner 
        specified by the Secretary of the Treasury in consultation with 
        the Commissioner of Health Benefits, for any portion of the 
        taxable year of such individual an objection to the release of 
        information under section 6103(k)(10)).
    ``(d) Lowest Income Threshold.--For purposes of this section, the 
term `lowest income threshold' means, with respect to coverage 
consisting of--
            ``(1) only an individual, 125 percent of the poverty line 
        (as defined in section 673(2) of the Community Services Block 
        Grant Act (42 U.S.C. 9902(2)), including any revision required 
        by such section) for a single individual for the calendar year 
        which includes the close of the taxable year, or
            ``(2) a family of two or more individuals, 150 percent of 
        the poverty line (as so defined) for a family of the size 
        involved for the calendar year which includes the close of the 
        taxable year.
    ``(e) Family Income.--For purposes of this section--
            ``(1) In general.--The term `family income' means, with 
        respect to a specified individual (as defined in section 
        59B(b)) covered under coverage consisting of--
                    ``(A) only such individual, the modified adjusted 
                gross income of such individual, or
                    ``(B) two or more individuals, the sum of the 
                modified adjusted gross income of the specified 
                individual and the modified adjusted gross income of 
                each other individual covered under the plan for the 
                taxable year that ends in or with the taxable year of 
                the specified individual.
            ``(2) Modified adjusted gross income.--The term `modified 
        adjusted gross income' means adjusted gross income--
                    ``(A) determined without regard to sections 135, 
                911, 931, and 933, and
                    ``(B) increased by the amount of interest received 
                or accrued during the taxable year which is exempt from 
                tax under this title.
    ``(f) Regulations.--The Secretary may prescribe such regulations as 
are necessary or appropriate to carry out this section, including 
regulations which provide for not taking into account individuals with 
de minimis income for purposes of determining family income for 
purposes of this section.''.
            (2) Conforming amendments.--
                    (A) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by inserting ``or 36'' 
                after ``section 35''.
                    (B) The table of section for subpart C of part IV 
                of subchapter A of chapter 1 of the Internal Revenue 
                Code of 1986 is amended by striking the item relating 
                to section 36 and inserting the following new items:

``Sec. 36. Subsidy and prepayment of American Health Benefits premiums.
``Sec. 37. Overpayments of tax.''.
    (c) Employer Funding.--
            (1) In general.--Subtitle C of the Internal Revenue Code of 
        1986 (relating to employment taxes) is amended by redesignating 
        chapter 25 as chapter 26 and by inserting after chapter 24 the 
        following new chapter:

             ``CHAPTER 25--AMERICAN HEALTH BENEFITS PROGRAM

``Sec. 3451. Tax on employers.
``Sec. 3452. Refund of tax in case of qualified employer-provided 
                            coverage.
``Sec. 3453. Instrumentalities of the United States.

``SEC. 3451. TAX ON EMPLOYERS.

    ``(a) Imposition of Tax.--In addition to other taxes, there is 
hereby imposed on every employer an excise tax, with respect to having 
individuals in his employ, equal to the applicable percentage of the 
wages paid by him with respect to employment.
    ``(b) Applicable Percentage.--The term `applicable percentage' 
means, with respect to wages paid during any period, the percentage 
determined by the Commissioner of Health Benefits, in consultation with 
the Secretary, with respect to such period which, in the estimation of 
such Commissioner, will provide revenue to the Federal Government equal 
to the excess of the cost to the Federal Government of providing 
coverage under under title XXII of the Social Security Act over the 
aggregate premiums (reduced by any premium subsidies) established under 
such title with respect to such coverage.
    ``(c) No Cover Over to Possessions.--Notwithstanding any other 
provision of law, no amount collected under this chapter shall be 
covered over to any possession of the United States.
    ``(d) Other Definitions.--For purposes of this chapter, the terms 
`wages', `employer', and `employment' have the same respective meanings 
as when used in chapter 21: except that, for purposes of this chapter, 
section 3121(a)(1) shall not apply.

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

    ``(a) In General.--In the case of a person subject to tax under 
section 3451 or section 1401(c), there shall be allowed as a credit 
against the tax imposed by such section an amount equal to the tax 
imposed under such section with respect to the wages or self-employment 
income of individuals for periods during which the individual is 
covered by qualified employer-provided coverage (which is provided by 
such person).
    ``(b) Qualified Employer-Provided Coverage.--For purposes of 
subsection (a), the term `qualified employer-provided coverage' has the 
meaning given that term in section 2207(6) of the Social Security Act.

``SEC. 3453. INSTRUMENTALITIES OF THE UNITED STATES.

    ``Notwithstanding any other provision of law (whether enacted 
before or after the enactment of this section) which grants to any 
instrumentality of the United States an exemption from taxation, such 
instrumentality shall not be exempt from the tax imposed by section 
3451 unless such other provision of law grants a specific exemption, by 
reference to section 3451, from the tax imposed by such section.''.
            (2) Self-employment.--Section 1401 of such Code is amended 
        by redesignating subsection (c) as subsection (d) and by 
        inserting after subsection (b) the following new subsection:
    ``(c) American Health Benefits Program.--In addition to other 
taxes, there shall be imposed for each taxable year, on the self-
employment income of every individual, a tax equal to the applicable 
percentage (as defined in section 3451(b))) of the amount of the self-
employment income for such taxable year.''.
            (3) Clerical amendment.--The table of chapters for subtitle 
        C of such Code is amended by striking the item relating to 
        chapter 25 and inserting the following:

             ``Chapter 25. American Health Benefits Program

    ``Chapter 26. General provisions relating to employment taxes''

    (d) Disclosure of Taxpayer Return Information to Carry Out Cost-
Sharing Subsidies.--
            (1) In general.--Section 6103(l) of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        paragraph:
            ``(21) Disclosure of return information to carry out 
        american health benefits program.--
                    ``(A) In general.--The Secretary shall, upon 
                written request from the Commissioner of Health 
                Benefits, disclose to officers, employees, and 
                contractors of the Health Benefits Administration 
                return information of a taxpayer who is, according to 
                the records of the Secretary, a cost-sharing subsidy-
                eligible individual (as defined in section 
                2205(b)(7)(A) of the Social Security Act) or a family 
                member of such an individual. Such return information 
                shall be limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer,
                            ``(iii) the adjusted gross income of such 
                        taxpayer,
                            ``(iv) the amounts excluded from such 
                        taxpayer's gross income under sections 135 and 
                        911 to the extent such information is 
                        available,
                            ``(v) the interest received or accrued 
                        during the taxable year which is exempt from 
                        the tax imposed by chapter 1 to the extent such 
                        information is available,
                            ``(vi) the amounts excluded from such 
                        taxpayer's gross income by sections 931 and 933 
                        to the extent such information is available, 
                        and
                            ``(vii) the taxable year with respect to 
                        which the preceding information relates.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers, employees, 
                and contractors of the Health Benefits Administration 
                only for the purposes of, and to the extent necessary 
                in, establishing the appropriate amount of any cost-
                sharing subsidies under section 2205 of the Social 
                Security Act.''.
            (2) Conforming amendments.--
                    (A) Paragraph (3) of section 6103(a) of such Code 
                is amended by striking ``or (20)'' and inserting 
                ``(20), or (21)''.
                    (B) Paragraph (4) of section 6103(p) of such Code 
                is amended by striking ``(l)(16), (17), (19), or (20)'' 
                each place it appears and inserting ``(l)(16), (17), 
                (19), (20), or (21)''.
                    (C) Paragraph (2) of section 7213(a) of such Code 
                is amended by striking ``or (20)'' and inserting 
                ``(20), or (21)''.
    (e) Disclosure of Taxpayer Return Information to Carry Out Premium 
Subsidies.--Section 6103(k) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new paragraph:
            ``(10) Disclosure of information to administer premium 
        subsidy under section 36.--To the extent that Secretary 
        determines that disclosure is necessary to permit the effective 
        administration of section 36, the Secretary may disclose the 
        modified adjusted gross income (as defined in section 36) of 
        any individual whose modified adjusted gross income is taken 
        into account in determining the amount of any credit under such 
        section. ''.
    (f) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on January 1, 
        2008.
            (2) Subsections (a) and (b).--The amendments made by 
        subsections (a) and (b) shall apply to months beginning after 
        December 31, 2007, in taxable years ending after such date.

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

    (a) Increase in FMAP Under Medicaid for For AHBP-Covered 
Services.--Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
amended--
            (1) in subsection (b), by inserting ``subsection (y) and'' 
        after ``Subject to''; and
            (2) by adding at the end the following new subsection:
    ``(y)(1) Subject to the succeeding provisions of this subsection, 
the Federal medical assistance percentage under this title for calendar 
quarters in a fiscal year (beginning with the calendar quarter that 
begins on the effective date of the American Health Benefits Program 
under title XXII) shall be increased by a number of percentage points 
(rounded to the nearest 1/100th of a percentage point) equal to 40 
percent of the number of percentage points by which 100 percent exceeds 
the Federal medical assistance percentage otherwise determined for the 
State without regard to this subsection.
    ``(2) Paragraph (1) shall only apply with respect to medical 
assistance for AHBP-eligible individuals (as defined in section 
2207(2)) and only for items and services for which benefits are 
generally provided under qualified health plans under title XXII, as 
determined by the Secretary in consultation with the Commissioner of 
Health Benefits.
    ``(3) The Secretary shall provide for such special rules concerning 
the application of this subsection to the territories as the Secretary 
finds appropriate and equitable.''.
    (b) Sunset of SCHIP Funding.--Section 2105 of such Act (42 U.S.C. 
1397ee) is amended by adding at the end the following new subsection:
    ``(h) Sunset of Program Upon Initiation of American Health Benefits 
Program.--No payment shall be made under this title to a State for 
items and services furnished after the effective date of the American 
Health Benefits Program under title XXII.''.

SEC. 5. STUDIES.

    (a) Studies.--The Comptroller General of the United States shall 
provide for the following studies:
            (1) Integration with other public health insurance 
        coverage.--A study of the cost effectiveness and quality of 
        care under the American Health Benefits Program under title 
        XXII of the Social Security Act compared to the public health 
        insurance programs described in section 2202(b)(2) of such Act 
        and the feasibility and desirability of integrating such 
        programs with the Program under such title. Such study shall be 
        conducted in consultation with the Federal officials overseeing 
        such programs.
            (2) Growth of prescription drug costs.--A study of the rate 
        of growth of prescription drug costs under such Program 
        compared to such rate of growth under such public health 
        insurance programs.
    (b) Reports.--Not later than January 1, 2010, the Comptroller 
General shall submit to Congress a report on the studies conducted 
under subsection (a).
                                 <all>