[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3776 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3776

   To ensure the provision of high-quality health care coverage for 
uninsured individuals through State health care initiatives that expand 
 coverage and access and improve quality and efficiency in the health 
                              care system.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 2, 2006

 Mr. Feingold introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
   To ensure the provision of high-quality health care coverage for 
uninsured individuals through State health care initiatives that expand 
 coverage and access and improve quality and efficiency in the health 
                              care system.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``State-Based Health Care Reform 
Act''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Health care remains one of the most important domestic 
        issues for Americans.
            (2) According to the Census Bureau, 45,800,000 Americans 
        were uninsured in 2004. Over 8,000,000 of these individuals 
        were children. The number of uninsured has increased by 
        6,000,000 since 2000.
            (3) According to the Commonwealth Fund, many of the 
        uninsured are employed, and an increasing number are from 
        middle-income families:
                    (A) Two in five working-age Americans with annual 
                incomes between $20,000 and $40,000 were uninsured for 
                at least part of 2005. In 2001, just over one-quarter 
                of those with moderate incomes were uninsured.
                    (B) Of the estimated 48,000,000 American adults who 
                spent any time uninsured in 2005, two-thirds were in 
                families where at least one person was working full 
                time.
            (4) The uninsured face serious financial problems, and 
        often have to choose between medical care and other basic 
        necessities. According to the Commonwealth Fund, more than half 
        of uninsured adults reported medical debt or problems paying 
        bills. Of those, nearly half used up all their savings to pay 
        their bills. Two of five were unable to pay for basic 
        necessities like food, heat, or rent because of medical bills.
            (5) Health outcomes for the uninsured are worse than health 
        outcomes for those who are covered. According to the Institute 
        of Medicine, the number of excess deaths among uninsured adults 
        ages 25 to 64 is estimated at around 18,000 a year. Fifty-nine 
        percent of uninsured adults who had a chronic illness, such as 
        diabetes or asthma, did not fill a prescription or skipped 
        their medications because they could not afford them.
            (6) The cost of providing care to the uninsured weighs 
        heavily on the United States economy. The United States spends 
        twice as much as any other industrialized nation on health 
        care, and more than the United Kingdom's entire gross domestic 
        product. According to the Kaiser Family Foundation, 
        $124,600,000,000 was spent on care provided to individuals who 
        were uninsured for all or part of 2004. Despite this spending, 
        the United States ranks second to last among industrialized 
        countries in infant mortality rates.

SEC. 3. PURPOSE.

    It is the purpose of this Act to establish a program to award 
grants to States for the establishment of State-based projects to--
            (1) increase health care coverage for uninsured individuals 
        in selected States within the 5-year period beginning on the 
        date of enactment of this Act;
            (2) ensure high-quality health care coverage that provides 
        adequate access to providers, services, and benefits;
            (3) improve the efficiency of health care spending and 
        lower the cost of health care for the participating State; and
            (4) encourage universal health care coverage within States.

                     TITLE I--HEALTH CARE COVERAGE

SEC. 101. STATE-BASED HEALTH CARE COVERAGE PROGRAM.

    (a) Applications by States, Multi-State Regions, Local Governments, 
and Tribes.--
            (1) State application.--A State, in consultation with local 
        governments, Indian tribes, and Indian organizations involved 
        in the provision of health care (referred to in this Act as a 
        ``State''), may apply for a State health care reform grant for 
        the entire State (or for regions of two or more States) under 
        paragraph (2).
            (2) Submission of application.--In accordance with this 
        section, each State desiring to implement a State health care 
        reform program shall submit an application to the Health Care 
        Reform Task Force established under subsection (b) (referred to 
        in this section as the ``Task Force'') for approval.
            (3) Local government and other applications.--
                    (A) In general.--Where a State fails to submit an 
                application under this section, a unit of local 
                government of such State, or a consortium of such units 
                of local governments, may submit an application 
                directly to the Task Force for programs or projects 
                under this section. Such an application shall be 
                subject to the requirements of this section.
                    (B) Other applications.--Subject to such additional 
                regulations as the Secretary may prescribe, a unit of 
                local government, Indian tribe, or Indian health 
                organization may submit an application under this 
                section, whether or not the State submits such an 
                application, if such unit, tribe, or organization can 
                demonstrate unique demographic needs or a significant 
                population size that warrants a substate program under 
                this subsection.
    (b) Health Care Reform Task Force.--
            (1) Establishment.--Not later than 180 days after the date 
        of the enactment of this Act, the Secretary shall establish a 
        Health Care Reform Task Force in accordance with this 
        subsection.
            (2) Membership.--
                    (A) In general.--The Task Force shall be comprised 
                of not less than 20 members to be appointed by the 
                Comptroller General in accordance with subparagraph (B) 
                and the Secretary.
                    (B) Appointed members.--With respect to the members 
                appointed by the Comptroller General under subparagraph 
                (A)--
                            (i) such members shall include consumers of 
                        health services who represent individuals who 
                        have not had health insurance coverage during 
                        the 2-year period prior to the appointment and 
                        who have had a chronic illness and are 
                        disabled;
                            (ii) such members shall include 
                        individuals--
                                    (I) with expertise in the financing 
                                of, and paying for, benefits and access 
                                to care;
                                    (II) representing business and 
                                labor; and
                                    (III) who are health care 
                                providers;
                            (iii) such members shall include 
                        individuals with expertise and experience in 
                        State health policy, State government, and 
                        local government;
                            (iv) such members shall have a broad 
                        geographic representation and be balanced 
                        between urban and rural areas; and
                            (v) such members shall not include elected 
                        officials or paid employees or representatives 
                        of associations or advocacy organizations 
                        involved in the health care system.
            (3) General duties.--The Task Force shall--
                    (A) formally approve the application of a State for 
                a grant under this section and the administration of a 
                reform program within the State;
                    (B) establish minimum performance measures with 
                respect to coverage, quality, and cost of State 
                programs, as described under subsection (c)(1);
                    (C) conduct a thorough review of the grant 
                application from a State and carry on a dialogue with 
                such State applicants concerning possible modifications 
                and adjustments;
                    (D) be responsible for monitoring the status and 
                progress achieved under programs and projects granted 
                under this section; and
                    (E) report to the public concerning progress made 
                by States with respect to the performance measures and 
                goals established under this Act, the periodic progress 
                of the State relative to its State performance measures 
                and goals, and the State program application 
                procedures, by region and State jurisdiction.
            (4) Period of appointment; representation requirements; 
        vacancies.--Members shall be appointed for the life of the Task 
        Force. In appointing members under paragraph (1)(A), the 
        Comptroller General shall ensure the representation of urban 
        and rural areas and an appropriate geographic distribution of 
        such members. Any vacancy on the Task Force shall not affect 
        its powers, but shall be filled within a reasonable period of 
        time and in the same manner as the original appointment.
            (5) Chairperson, meetings.--
                    (A) Chairperson.--The Task Force shall select a 
                Chairperson from among its members.
                    (B) Quorum.--A majority of the members of the Task 
                Force shall constitute a quorum, but a lesser number of 
                members may hold hearings.
                    (C) Meetings.--Not later than 30 days after the 
                date on which all members of the Task Force have been 
                appointed, the Task Force shall hold its first meeting. 
                The Task Force shall meet at the call of the 
                Chairperson.
            (6) Powers of the task force.--
                    (A) Negotiations with states.--The Task Force may 
                conduct detailed discussions and negotiations with 
                States submitting applications under this section, 
                either individually or in groups, to facilitate a final 
                set of recommendations for purposes of subsection 
                (c)(4)(B). Such negotiations shall be conducted in a 
                public forum.
                    (B) Subcommittees.--The Task Force may establish 
                such subcommittees as the Task Force determines are 
                necessary to increase the efficiency of the Task Force.
                    (C) Hearings.--The Task Force may hold hearings, so 
                long as the Task Force determines such meetings to be 
                necessary in order to carry out the purposes of this 
                Act, sit and act at such times and places, take such 
                testimony, and receive such evidence as the Task Force 
                considers advisable to carry out the purposes of this 
                subsection.
                    (D) Annual meeting.--In addition to other meetings 
                the Task Force may hold, the Task Force shall hold an 
                annual meeting with the participating States under this 
                section for the purpose of having States report 
                progress toward the purposes in section 3 and for an 
                exchange of information.
                    (E) Information.--The Task Force may obtain 
                information directly from any Federal department or 
                agency as the Task Force considers necessary to carry 
                out the provisions of this subsection. Upon request of 
                the Chairperson of the Task Force, the head of such 
                department or agency shall furnish such information to 
                the Task Force.
                    (F) Contracting.--The Task Force may enter into 
                contracts with qualified independent organizations 
                (such as Mathematica or the Institute of Medicine) to 
                obtain necessary information for the development of the 
                performance standards, reporting requirements, 
                financing mechanisms, or any other matters determined 
                by the Task Force to be appropriate and reasonable.
                    (G) Postal services.--The Task Force may use the 
                United States mails in the same manner and under the 
                same conditions as other departments and agencies of 
                the Federal Government.
            (7) Personnel matters.--
                    (A) Compensation.--Each member of the Task Force 
                who is not an officer or employee of the Federal 
                Government shall be compensated at a rate equal to the 
                daily equivalent of the annual rate of basic pay 
                prescribed for level IV of the Executive Schedule under 
                section 5315 of title 5, United States Code, for each 
                day (including travel time) during which such member is 
                engaged in the performance of the duties of the Task 
                Force. All members of the Task Force who are officers 
                or employees of the United States shall serve without 
                compensation in addition to that received for their 
                services as officers or employees of the United States.
                    (B) Travel expenses.--The members of the Task Force 
                shall be allowed travel expenses, including per diem in 
                lieu of subsistence, at rates authorized for employees 
                of agencies under subchapter I of chapter 57 of title 
                5, United States Code, while away from their homes or 
                regular places of business in the performance of 
                services for the Task Force.
                    (C) Staff.--The Chairperson of the Task Force may, 
                without regard to the civil service laws and 
                regulations, appoint and terminate personnel as may be 
                necessary to enable the Task Force to perform its 
                duties.
                    (D) Detail of government employees.--Any Federal 
                Government employee may be detailed to the Task Force 
                without reimbursement, and such detail shall be without 
                interruption or loss of civil service status or 
                privilege.
                    (E) Temporary and intermittent services.--The 
                Chairperson of the Task Force may procure temporary and 
                intermittent services under section 3109(b) of title 5, 
                United States Code, at rates for individuals which do 
                not exceed the daily equivalent of the annual rate of 
                basic pay prescribed for level V of the Executive 
                Schedule under section 5316 of such title.
            (8) Funding.--For the purpose of carrying out this 
        subsection, there are authorized to be appropriated $4,000,000 
        for fiscal year 2007 and each fiscal year thereafter.
    (c) State Plan.--
            (1) In general.--A State that seeks to receive a grant to 
        operate a program under this section shall prepare and submit 
        to the Task Force, as part of the application under subsection 
        (a), a State health care plan that--
                    (A) designates the lead State entity that will be 
                responsible for administering the State program;
                    (B) contains a list of the minimum benefits that 
                will be provided to all individuals covered under the 
                State program, which shall, at a minimum, provide for 
                coverage that is comparable to the coverage provided 
                for benefits under any of the plans offered under the 
                Federal Employees Health Benefits Program under chapter 
                89 of title 5, United States Code or the minimum 
                benefits required under the program under title XXI of 
                the Social Security Act (42 U.S.C. 1397aa et seq.);
                    (C) includes specific target dates for decreasing 
                the number of uninsured individuals in the State; and
                    (D) otherwise complies with this subsection.
            (2) Coverage.--With respect to coverage for uninsured 
        individuals in the State, the State plan shall--
                    (A) provide and describe the manner in which the 
                State will ensure that an increased number of such 
                individuals residing within the State will have 
                expanded access to health care coverage with a specific 
                5-year target for reduction in the number of uninsured 
                individuals through either private or public program 
                expansion, or both, such description to include the 
                manner in which the State will ensure expanded access 
                to health care coverage for low-income individuals 
                within the 5-year target period;
                    (B) provide for improvements in the availability of 
                appropriate health care services that will increase 
                access to care in urban, rural, and frontier areas of 
                the State with medically underserved populations or 
                where there is an inadequate supply of health care 
                providers; and
                    (C) describe the minimum benefits package that will 
                be provided to every beneficiary, including information 
                on affordability for beneficiaries.
            (3) Effectiveness and efficiency.--The State plan shall 
        include provisions to improve the effectiveness and efficiency 
        of health care in the State, including provisions to attempt to 
        reduce the overall health care costs within the State.
            (4) Costs.--
                    (A) In general.--With respect to the costs of 
                health care provided under the program, the State plan 
                shall--
                            (i) describe the public and private sector 
                        financing to be provided for the State health 
                        program;
                            (ii) estimate the amount of Federal, State, 
                        and local expenditures, as well as the costs to 
                        business and individuals under the State health 
                        program;
                            (iii) describe how the State plan will 
                        ensure the financial solvency of the State 
                        health program; and
                            (iv) contain assurances that the State will 
                        comply with the premium and cost sharing 
                        limitations described in subparagraph (B).
                    (B) Premium and cost sharing limitations.--
                            (i) Premiums.--In providing health care 
                        coverage under a State program under this Act, 
                        the State shall ensure that--
                                    (I) with respect to an individual 
                                whose family income is at or below 100 
                                percent of the poverty line, the State 
                                program shall not require--
                                            (aa) the payment of 
                                        premiums for such coverage; or
                                            (bb) the payment of cost 
                                        sharing for such coverage in an 
                                        amount that exceeds .5 percent 
                                        of the family's income for the 
                                        year involved;
                                    (II) with respect to an individual 
                                whose family income is greater than 100 
                                percent, but at or below 200 percent, 
                                of the poverty line, the State program 
                                shall not require--
                                            (aa) the payment of 
                                        premiums for such coverage in 
                                        excess of 20 percent of the 
                                        average cost of providing 
                                        benefits to an individual or 
                                        family or 3 percent of the 
                                        amount of the family's income 
                                        for the year involved; or
                                            (bb) the payment of cost 
                                        sharing for such coverage in an 
                                        amount that, together with the 
                                        premium amount, does not exceed 
                                        5 percent of the family's 
                                        income for the year involved; 
                                        and
                                    (III) with respect to an individual 
                                whose family income is greater than 200 
                                percent, but at or below 300 percent, 
                                of the poverty line, the State program 
                                shall not require--
                                            (aa) the payment of 
                                        premiums for such coverage in 
                                        excess of 20 percent of the 
                                        average cost of providing 
                                        benefits to an individual or 
                                        family or 5 percent of the 
                                        amount of the family's income 
                                        for the year involved; or
                                            (bb) the payment of cost 
                                        sharing for such coverage in an 
                                        amount that, together with the 
                                        premium amount, does not exceed 
                                        7 percent of the family's 
                                        income for the year involved.
                            (ii) Definition.--For purposes of this 
                        subparagraph, the term ``poverty line'' has the 
                        meaning given such term in section 2110(c)(5) 
                        of the Social Security Act (42 U.S.C. 
                        1397jj(c)(5)).
            (5) Protection for lower income individuals.--The State 
        plan may only vary premiums, deductibles, coinsurance, and 
        other cost sharing under the plan based on the family income of 
        the family involved in a manner that does not favor individuals 
        from families with higher income over individuals from families 
        with lower income.
    (d) Review; Determination; and Project Period.--
            (1) Initial review.--With respect to a State application 
        for a grant under subsection (a), the Secretary and the Task 
        Force shall, not later than 90 days after receipt of such 
        application, complete an initial review of such State 
        application, an analysis of the scope of the proposal, and a 
        determination of whether additional information is needed from 
        the State. The Task Force shall advise the State within such 
        90-day period of the need to submit additional information.
            (2) Final determination.--Not later than 90 days after 
        completion of the initial review under paragraph (1), the Task 
        Force shall determine whether to approve such application. Such 
        application may be approved only if \2/3\ of the members of the 
        Task Force vote to approve such application.
            (3) Program or project period.--A State program or project 
        may be approved for a period of not to exceed 5 years and may 
        be extended for subsequent 5-year periods upon approval by the 
        Task Force and the Secretary, based upon achievement of 
        targets, except that a shorter period may be requested by a 
        State and granted by the Secretary.
    (e) Required Congressional Action.--It is the sense of the Senate 
that, not later than 45 days after receiving the report submitted under 
subsection (g)(2), each committee to which such report is submitted 
should hold at least 1 hearing concerning such report and the 
recommendations contained in such report.
    (f) Funding.--
            (1) In general.--The Secretary shall provide a grant to a 
        State that has an application approved under subsection (d)(2) 
        to enable such State to carry out the State health program 
        under the grant.
            (2) Amount of grant.--The amount of a grant provided to a 
        State under paragraph (1) shall be determined based upon the 
        recommendations of the Task Force, subject to the amount 
        appropriated under subsection (k).
            (3) Matching requirement.--To be eligible to receive a 
        grant under paragraph (1), a State shall provide assurances to 
        the Secretary that the State shall contribute to the costs of 
        carrying out activities under the grant an amount equal to not 
        less than the product of--
                    (A) the amount of the grant; and
                    (B) the sum of the enhanced FMAP for the State (as 
                defined in section 2105(b) of the Social Security Act 
                (42 U.S.C. 1397ee(b))) and 5 percent.
            (4) Maintenance of effort.--A State, in utilizing the 
        proceeds of a grant received under paragraph (1), shall 
        maintain the expenditures of the State for health care coverage 
        purposes for the support of direct health care delivery at a 
        level equal to not less than the level of such expenditures 
        maintained by the State for the fiscal year preceding the 
        fiscal year for which the grant is received.
    (g) Reports.--
            (1) By states.--Each State that has received a grant under 
        subsection (f)(1) shall submit to the Task Force an annual 
        report for the period representing the respective State's 
        fiscal year, that shall contain a description of the results, 
        with respect to health care coverage, quality, and costs, of 
        the State program.
            (2) By task force.--At the end of the 5-year period 
        beginning on the date on which the Secretary awards the first 
        grant under paragraph (1), the Task Force established under 
        subsection (b) shall prepare and submit to the appropriate 
        committees of Congress, a report on the progress made by States 
        receiving grants under paragraph (1) in meeting the goals of 
        expanded coverage, improved quality, and cost containment 
        through performance measures established during the 5-year 
        period of the grant. Such report shall contain--
                    (A) the recommendation of the Task Force concerning 
                any future action that Congress should take concerning 
                health care reform, including whether or not to extend 
                the program established under this subsection;
                    (B) an evaluation of the effectiveness of State 
                health care coverage reforms in--
                            (i) expanding health care coverage for 
                        State residents;
                            (ii) improving the quality of health care 
                        provided in the States; and
                            (iii) reducing or containing health care 
                        costs in the States;
                    (C) recommendations regarding the advisability of 
                increasing Federal financial assistance for State 
                ongoing or future health program initiatives, including 
                the amount and source of such assistance; and
                    (D) recommendations concerning whether any 
                particular State program should serve as a model for 
                implementation as a national health care reform 
                program.
    (h) Protections for Federal Programs.--
            (1) In general.--Nothing in this Act, or in section 1115 of 
        the Social Security Act (42 U.S.C. 1315) shall be construed as 
        authorizing the Secretary, the Task Force, a State, or any 
        other person or entity to alter or affect in any way the 
        provisions of titles XIX and XXI of such Act (42 U.S.C. 1396 et 
        seq. and 1397 et seq.) or the regulations implementing such 
        titles.
            (2) Maintenance of effort.--No payment may be made under 
        this section if the State adopts criteria for benefits, income, 
        and resource standards and methodologies for purposes of 
        determining an individual's eligibility for medical assistance 
        under the State plan under title XIX that are more restrictive 
        than those applied as of the date of enactment of this Act.
    (i) Miscellaneous Provisions.--
            (1) Application of certain requirements.--
                    (A) Restriction on application of preexisting 
                condition exclusions.--
                            (i) In general.--Subject to subparagraph 
                        (B), a State shall not permit the imposition of 
                        any preexisting condition exclusion for covered 
                        benefits under a program or project under this 
                        section.
                            (ii) Group health plans and group health 
                        insurance coverage.--If the State program or 
                        project provides for benefits through payment 
                        for, or a contract with, a group health plan or 
                        group health insurance coverage, the program or 
                        project may permit the imposition of a 
                        preexisting condition exclusion but only 
                        insofar and to the extent that such exclusion 
                        is permitted under the applicable provisions of 
                        part 7 of subtitle B of title I of the Employee 
                        Retirement Income Security Act of 1974 and 
                        title XXVII of the Public Health Service Act.
                    (B) Compliance with other requirements.--Coverage 
                offered under the program or project shall comply with 
                the requirements of subpart 2 of part A of title XXVII 
                of the Public Health Service Act insofar as such 
                requirements apply with respect to a health insurance 
                issuer that offers group health insurance coverage.
            (2) Prevention of duplicative payments.--
                    (A) Other health plans.--No payment shall be made 
                to a State under this section for expenditures for 
                health assistance provided for an individual to the 
                extent that a private insurer (as defined by the 
                Secretary by regulation and including a group health 
                plan (as defined in section 607(1) of the Employee 
                Retirement Income Security Act of 1974), a service 
                benefit plan, and a health maintenance organization) 
                would have been obligated to provide such assistance 
                but for a provision of its insurance contract which has 
                the effect of limiting or excluding such obligation 
                because the individual is eligible for or is provided 
                health assistance under the plan.
                    (B) Other federal governmental programs.--Except as 
                provided in any other provision of law, no payment 
                shall be made to a State under this section for 
                expenditures for health assistance provided for an 
                individual to the extent that payment has been made or 
                can reasonably be expected to be made promptly (as 
                determined in accordance with regulations) under any 
                other federally operated or financed health care 
                insurance program, other than an insurance program 
                operated or financed by the Indian Health Service, as 
                identified by the Secretary. For purposes of this 
                paragraph, rules similar to the rules for overpayments 
                under section 1903(d)(2) of the Social Security Act 
                shall apply.
            (3) Application of certain general provisions.--The 
        following sections of the Social Security Act shall apply to 
        States under this section in the same manner as they apply to a 
        State under such title XIX:
                    (A) Title xix provisions.--
                            (i) Section 1902(a)(4)(C) (relating to 
                        conflict of interest standards).
                            (ii) Paragraphs (2), (16), and (17) of 
                        section 1903(i) (relating to limitations on 
                        payment).
                            (iii) Section 1903(w) (relating to 
                        limitations on provider taxes and donations).
                            (iv) Section 1920A (relating to presumptive 
                        eligibility for children).
                    (B) Title xi provisions.--
                            (i) Section 1116 (relating to 
                        administrative and judicial review), but only 
                        insofar as consistent with this title.
                            (ii) Section 1124 (relating to disclosure 
                        of ownership and related information).
                            (iii) Section 1126 (relating to disclosure 
                        of information about certain convicted 
                        individuals).
                            (iv) Section 1128A (relating to civil 
                        monetary penalties).
                            (v) Section 1128B(d) (relating to criminal 
                        penalties for certain additional charges).
                            (vi) Section 1132 (relating to periods 
                        within which claims must be filed).
            (4) Relation to other laws.--
                    (A) HIPAA.--Health benefits coverage provided under 
                a State program or project under this section shall be 
                treated as creditable coverage for purposes of part 7 
                of subtitle B of title I of the Employee Retirement 
                Income Security Act of 1974, title XXVII of the Public 
                Health Service Act, and subtitle K of the Internal 
                Revenue Code of 1986.
                    (B) ERISA.--Nothing in this section shall be 
                construed as affecting or modifying section 514 of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1144) with respect to a group health plan (as 
                defined in section 2791(a)(1) of the Public Health 
                Service Act (42 U.S.C. 300gg-91(a)(1))).
    (j) Authorizations.--
            (1) In general.--There are appropriated in each of fiscal 
        years 2007 through 2016 to carry out this Act, an amount equal 
        to the amount of savings to the Federal Government in each such 
        fiscal year as a result of the enactment of the provisions of 
        title II.
            (2) Use of funds.--Amounts appropriated for a fiscal year 
        under paragraph (1) and not expended may be used in subsequent 
        fiscal years to carry out this section.
            (3) Limitation.--Notwithstanding any other provision of 
        this Act, the total amount of funds appropriated to carry out 
        this Act through fiscal year 2016 shall not exceed 
        $32,000,000,000.

                           TITLE II--OFFSETS

SEC. 201. INCREASE IN REBATES FOR COVERED OUTPATIENT DRUGS.

    Section 1927(c)(1)(B)(i) of the Social Security Act (42 U.S.C. 
1396r-8(c)(1)(B)(i)) is amended--
            (1) in subclause (IV), by striking ``and'' after the 
        semicolon;
            (2) in subclause (V)--
                    (A) by inserting ``and before January 1, 2007,'' 
                after ``1995,''; and
                    (B) by striking the period and inserting ``; and''; 
                and
            (3) by adding at the end the following:
                                    ``(VI) after December 31, 2006, is 
                                20 percent.''.

SEC. 202. STUDENT AID REWARD PROGRAM.

    Part G of title IV of the Higher Education Act of 1965 is amended 
by inserting after section 489 (20 U.S.C. 1096) the end the following:

``SEC. 489A. STUDENT AID REWARD PROGRAM.

    ``(a) Program Authorized.--The Secretary shall carry out a Student 
Aid Reward Program to encourage institutions of higher education to 
participate in the student loan program under this title that is most 
cost-effective for taxpayers.
    ``(b) Program Requirements.--In carrying out the Student Aid Reward 
Program, the Secretary shall--
            ``(1) provide to each institution of higher education 
        participating in the student loan program under this title that 
        is most cost-effective for taxpayers a Student Aid Reward 
        Payment, in an amount determined in accordance with subsection 
        (c), to encourage the institution to participate in that 
        student loan program;
            ``(2) require each institution of higher education 
        receiving a payment under this section to provide student loans 
        under that student loan program for a period of 5 years from 
        the date the payment is made;
            ``(3) where appropriate, require that funds paid to 
        institutions of higher education under this section be used to 
        award students a supplement to such students' Pell Grants under 
        subpart 1 of part A;
            ``(4) permit such funds to also be used to award lower and 
        middle income graduate students need-based grants; and
            ``(5) encourage all institutions of higher education to 
        participate in the Student Aid Reward Program.
    ``(c) Amount.--The amount of a Student Aid Reward Payment under 
this section shall be not less than 50 percent, and not more than 75 
percent, of the savings to the Federal Government generated by the 
institution's participation in the student loan program under this 
title that is most cost-effective for taxpayers instead of the 
institution's participation in the student loan program not cost-
effective for taxpayers.
    ``(d) Trigger to Ensure Cost Neutrality.--
            ``(1) Limit to ensure cost neutrality.--Notwithstanding 
        subsection (c), the Secretary shall not distribute Student Aid 
        Reward Payments under the Student Aid Reward Program that, in 
        the aggregate, exceed the Federal savings resulting from 
        implementation of the Student Aid Reward Program.
            ``(2) Federal savings.--In calculating Federal savings, as 
        used in paragraph (1), the Secretary shall determine Federal 
        savings on loans made to students at institutions of higher 
        education that participate the student loan program under this 
        title that is most cost-effective for taxpayers and that, on 
        the date of enactment of the Student Aid Reward Program, 
        participated in the student loan program that is not the most 
        cost-effective for taxpayers, resulting from the difference 
        of--
                    ``(A) the Federal cost of loan volume made under 
                the student loan program under this title that is most 
                cost-effective for taxpayers; and
                    ``(B) the Federal cost of an equivalent type and 
                amount of loan volume made, insured, or guaranteed 
                under the student loan program under this title that is 
                not the most cost-effective for taxpayers.
            ``(3) Distribution rules.--If the Federal savings 
        determined under paragraph (2) is not sufficient to distribute 
        full Student Aid Reward Payments under the Student Aid Reward 
        Program, the Secretary shall--
                    ``(A) first make Student Aid Reward Payments to 
                those institutions of higher education that 
                participated in the student loan program under this 
                title that is not the most cost-effective for taxpayers 
                on the date of enactment of the Student Aid Reward 
                Program; and
                    ``(B) with any remaining Federal savings after 
                making Payments under subparagraph (A), make Student 
                Aid Reward Payments to the institutions of higher 
                education not described in subparagraph (A) on a pro-
                rata basis.
            ``(4) Distribution to students.--Any institution of higher 
        education that receives a Student Aid Reward Payment under this 
        section--
                    ``(A) shall distribute, where appropriate, part or 
                all of such payment among the students of such 
                institution who are Pell Grant recipients by awarding 
                such students a supplemental grant; and
                    ``(B) may distribute part of such payment as a 
                supplemental grant to graduate students in financial 
                need.
            ``(5) Estimates, adjustments, and carry over.--
                    ``(A) Estimates and adjustments.--The Secretary may 
                make Student Aid Reward Payments to institutions of 
                higher education on the basis of estimates, using the 
                best data available at the beginning of an academic/
                fiscal year. If the Secretary determines thereafter 
                that loan program costs for that academic/fiscal year 
                were different than such estimate, the Secretary shall 
                adjust (reduce or increase) subsequent Student Aid 
                Reward Payments rewards paid to such institutions of 
                higher education to reflect such difference.
                    ``(B) Carry over.--Any institution of higher 
                education that receives a reduced Student Aid Reward 
                Payment under paragraph (3)(B), shall remain eligible 
                for the unpaid portion of such institution's financial 
                reward payment, as well as any additional financial 
                reward payments for which the institution is otherwise 
                eligible, in subsequent academic or fiscal years.
    ``(e) Definition.--For purposes of this section--
            ``(1) the student loan program under this title that is 
        most cost-effective for taxpayers is the loan program under 
        part B or D of this title that has the lowest overall cost to 
        the Federal Government (including administrative costs) for the 
        loans authorized by such parts; and
            ``(2) the student loan program under this title that is not 
        most cost-effective for taxpayers is the loan program under 
        part B or D of this title that does not have the lowest overall 
        cost to the Federal Government (including administrative costs) 
        for the loans authorized by such parts.''.

SEC. 203. AVIATION SECURITY SERVICE PASSENGER FEES.

    Section 44940 of title 49, United States Code, is amended--
            (1) in subsection (a)(1), by inserting ``in an amount equal 
        to $5.00 per one-way trip'' after ``uniform fee'';
            (2) by striking subsection (c); and
            (3) in subsection (d)--
                    (A) in paragraph (2), by striking ``subsection 
                (d)'' each place it appears and inserting ``this 
                subsection''; and
                    (B) in paragraph (3), by striking ``in accordance 
                with paragraph (1)'' and inserting ``under subsection 
                (a)(2)''.

SEC. 204. EXTENSION OF FCC SPECTRUM AUCTION AUTHORITY.

    Section 309(j)(11) of the Communications Act of 1934 (47 U.S.C. 
309(j)(11)) is amended by striking ``2011'' and inserting ``2016''.

SEC. 205. EXTENSION OF FEES FOR CERTAIN CUSTOMS SERVICES.

    Section 13031(j)(3)(A) and (B) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)(A) and (B)) is amended 
by striking ``2014'' each place it appears and inserting ``2016''.
                                 <all>