[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3163 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3163

  To provide affordable, guaranteed private health coverage that will 
         make Americans healthier and can never be taken away.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 24, 2007

 Mr. Baird (for himself, Mrs. Emerson, Mr. Blumenauer, and Mr. Cooper) 
 introduced the following bill; which was referred to the Committee on 
  Energy and Commerce, and in addition to the Committees on Ways and 
Means, Education and Labor, and Oversight and Government Reform, 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 provide affordable, guaranteed private health coverage that will 
         make Americans healthier and can never be taken away.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Healthy Americans 
Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
           TITLE I--HEALTHY AMERICANS PRIVATE INSURANCE PLANS

                Subtitle A--Guaranteed Private Coverage

Sec. 101. Guarantee of Healthy Americans Private Insurance coverage.
Sec. 102. Individual responsibility to enroll in a Healthy Americans 
                            Private Insurance plan.
 Subtitle B--Standards for Healthy Americans Private Insurance Coverage

Sec. 111. Healthy Americans Private Insurance Plans.
Sec. 112. Specific coverage requirements.
Sec. 113. Updating Healthy Americans Private Insurance plan 
                            requirements.
    Subtitle C--Eligibility for Premium and Personal Responsibility 
                         Contribution Subsidies

Sec. 121. Eligibility for premium subsidies.
Sec. 122. Eligibility for personal responsibility contribution 
                            subsidies.
Sec. 123. Definitions and special rules.
                     Subtitle D--Wellness Programs

Sec. 131. Requirements for wellness programs.
                  TITLE II--HEALTHY START FOR CHILDREN

                  Subtitle A--Benefits and Eligibility

Sec. 201. General goal and authorization of appropriations for HAPI 
                            plan coverage for children.
Sec. 202. Coordination of supplemental coverage under the Medicaid 
                            program to HAPI plan coverage for children.
                     Subtitle B--Service Providers

Sec. 211. Inclusion of providers under HAPI plans.
Sec. 212. Use of school-based health centers.
       TITLE III--BETTER HEALTH FOR OLDER AND DISABLED AMERICANS

Sec. 301. Coordination of supplemental coverage under the Medicaid 
                            program for elderly and disabled 
                            individuals.
                      TITLE IV--HEALTHIER MEDICARE

  Subtitle A--Authority To Adjust Amount of Part B Premium To Reward 
                        Positive Health Behavior

Sec. 401. Authority to adjust amount of Medicare part B premium to 
                            reward positive health behavior.
     Subtitle B--Promoting Primary Care for Medicare Beneficiaries

Sec. 411. Primary care services management payment.
              Subtitle C--Chronic Care Disease Management

Sec. 421. Chronic care disease management.
Sec. 422. Chronic Care Education Centers.
      Subtitle D--Improving Quality in Hospitals for All Patients

Sec. 431. Improving quality in hospitals for all patients.
                   Subtitle E--Additional Provisions

Sec. 441. Additional cost information.
Sec. 442. Reducing Medicare paperwork and regulatory burdens.
                  TITLE V--STATE HEALTH HELP AGENCIES

Sec. 501. Establishment.
Sec. 502. Responsibilities and authorities.
Sec. 503. Appropriations for Transition to State Health Help Agencies.
                   TITLE VI--SHARED RESPONSIBILITIES

                Subtitle A--Individual Responsibilities

Sec. 601. Individual responsibility to ensure HAPI plan coverage.
                 Subtitle B--Employer Responsibilities

Sec. 611. Health care responsibility payments.
Sec. 612. Distribution of individual responsibility payments to HHAs.
                  Subtitle C--Insurer Responsibilities

Sec. 621. Insurer responsibilities.
                   Subtitle D--State Responsibilities

Sec. 631. State responsibilities.
Sec. 632. Empowering States to innovate through waivers.
         Subtitle E--Federal Fallback Guarantee Responsibility

Sec. 641. Federal guarantee of access to coverage.
             Subtitle F--Federal Financing Responsibilities

Sec. 651. Appropriation for subsidy payments.
Sec. 652. Recapture of Medicare and 90 percent of Medicaid Federal DSH 
                            funds to strengthen Medicare and ensure 
                            continued support for public health 
                            programs.
    Subtitle G--Tax Treatment of Health Care Coverage Under Healthy 
  Americans Program; Termination of Coverage Under Other Governmental 
          Programs and Transition Rules for Medicaid and SCHIP

 Part 1--Tax Treatment of Health Care Coverage Under Healthy Americans 
                                Program

Sec. 661. Limited employee income and payroll tax exclusion for 
                            employer shared responsibility payments, 
                            historic retiree health contributions, and 
                            transitional coverage contributions.
Sec. 662. Exclusion for limited employer-provided health care fringe 
                            benefits.
Sec. 663. Limited employer deduction for employer shared responsibility 
                            payments, historic retiree health 
                            contributions, and other health care 
                            expenses.
Sec. 664. Refundable credit for individual shared responsibility 
                            payments.
Sec. 665. Modification of other tax incentives to complement Healthy 
                            Americans program.
Sec. 666. Termination of certain employer incentives when replaced by 
                            lower health care costs.
 Part 2--Termination of Coverage Under Other Governmental Programs and 
                Transition Rules for Medicaid and Schip

Sec. 671. Group and individual health plan requirements not applicable 
                            to HAPI plans.
Sec. 672. Federal Employees Health Benefits Plan.
Sec. 673. Medicaid and SCHIP.
   TITLE VII--PURCHASING HEALTH SERVICES AND PRODUCTS THAT ARE MOST 
                               EFFECTIVE

Sec. 701. One time disallowance of deduction for advertising and 
                            promotional expenses for certain 
                            prescription pharmaceuticals.
Sec. 702. Enhanced new drug and device approval.
Sec. 703. Medical schools and finding what works in health care.
Sec. 704. Finding affordable health care providers nearby.
                 TITLE VIII--ENHANCED HEALTH CARE VALUE

Sec. 801. Short title.
Sec. 802. Research on comparative effectiveness of health care items 
                            and services.
Sec. 803. Health Care Comparative Effectiveness Research Trust Fund; 
                            financing for Trust Fund.
Sec. 804. Coordination of Health Services Research.
   TITLE IX--CONTAINING MEDICAL COSTS AND GETTING MORE VALUE FOR THE 
                           HEALTH CARE DOLLAR

Sec. 901. Cost-containment results of the Healthy Americans Act.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Americans want affordable, guaranteed private health 
        coverage that makes them healthier and can never be taken away.
            (2) American health care provides primarily ``sick care'' 
        and does not do enough to prevent chronic illnesses like heart 
        disease, stroke, and diabetes. This results in significantly 
        higher health costs for all Americans.
            (3) Staying as healthy as possible often requires an 
        individual to change behavior and assume more personal 
        responsibility for his or her health.
            (4) Personal responsibility for one's health should include 
        purchasing one's own private health care coverage.
            (5) To accompany this new focus on staying healthy and 
        personal responsibility, our government must guarantee that all 
        Americans receive private affordable health coverage that can 
        never be taken away.
            (6) Financing this guarantee should be a shared 
        responsibility between individuals, the Government, and 
        employers.
            (7) The $2,200,000,000,000 spent annually on American 
        health care must be spent more effectively in order to meet 
        this guarantee.
            (8) This guarantee must include easier access to 
        understandable information about the quality, cost, and 
        effectiveness of health care providers, products, and services.
            (9) The fact that businesses in the United States compete 
        globally against businesses whose governments pay for health 
        care, coupled with the aging of the American population and the 
        explosive growth of preventable health problems, makes the 
        status quo in American health care unacceptable.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Adult individual.--The term ``adult individual'' means 
        an individual who--
                    (A) is--
                            (i) age 19 or older;
                            (ii) a resident of a State;
                            (iii)(I) a United States citizen; or
                            (II) an alien with permanent residence;
                            (iv) not a dependent child; and
                            (v) not an alien unlawfully present in the 
                        United States; and
                    (B) in the case of an incarcerated individual, such 
                an individual who is incarcerated for less than 1 
                month.
            (2) Alien with permanent residence.--The term ``alien with 
        permanent residence'' has the meaning given the term 
        ``qualified alien'' in section 431 of the Personal 
        Responsibility and Work Opportunity Reconciliation Act of 1996 
        (8 U.S.C. 1641).
            (3) Covered individual.--The term ``covered individual'' 
        means an individual who is enrolled in a HAPI plan.
            (4) Dependent child.--The term ``dependent child'' has the 
        meaning given the term ``qualifying child'' in section 152(c) 
        of the Internal Revenue Code of 1986.
            (5) HAPI plan.--The term ``HAPI plan'' means a Healthy 
        Americans Private Insurance plan described under subtitle B of 
        title I.
            (6) HHA.--The term ``HHA'' means the Health Help Agency of 
        a State as described under title V.
            (7) Health insurance issuer.--The term ``health insurance 
        issuer'' means an insurance company, insurance service, or 
        insurance organization (including a health maintenance 
        organization, as defined in paragraph (8)) which is licensed to 
        engage in the business of insurance in a State and which is 
        subject to State law which regulates insurance (within the 
        meaning of section 514(b)(2) of the Employee Retirement Income 
        Security Act of 1974). Such term does not include a group 
        health plan.
            (8) Health maintenance organization.--The term ``health 
        maintenance organization'' means--
                    (A) a federally qualified health maintenance 
                organization (as defined in section 1301(a)),
                    (B) an organization recognized under State law as a 
                health maintenance organization, or
                    (C) a similar organization regulated under State 
                law for solvency in the same manner and to the same 
                extent as such a health maintenance organization.
            (9) Personal responsibility contribution.--The term 
        ``personal responsibility contribution'' means a payment made 
        by a covered individual to a health care provider or a health 
        insurance issuer with respect to the provision of health care 
        services under a HAPI plan, not including any health insurance 
        premium payment.
            (10) Qualified collective bargaining agreement.--
                    (A) In general.--The term ``qualified collective 
                bargaining agreement'' means an agreement between a 
                qualified collective bargaining employer and an 
                employee organization that represents the employees of 
                such employer that is in effect until the date that is 
                the earlier of--
                            (i) January 1 of the first year which is 
                        more than 9 years after the date of enactment 
                        of this Act, or
                            (ii) the date the collective bargaining 
                        agreement expires.
                    (B) Qualified collective bargaining employer.--The 
                term ``qualified collective bargaining employer'' means 
                an employer who provides health insurance to employees 
                under the terms of a collective bargaining agreement 
                which is entered into before the date of the enactment 
                of this Act.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (12) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, American 
        Samoa, Guam, the Commonwealth of the Northern Mariana Islands, 
        and other territories of the United States.
            (13) State of residence.--The term ``State of residence'', 
        with respect to an individual, means the State in which the 
        individual has primary residence.

           TITLE I--HEALTHY AMERICANS PRIVATE INSURANCE PLANS

                Subtitle A--Guaranteed Private Coverage

SEC. 101. GUARANTEE OF HEALTHY AMERICANS PRIVATE INSURANCE COVERAGE.

    Not later than the date that is 4 years after the date of enactment 
of this Act, each adult individual shall have the opportunity to 
purchase a Healthy Americans Private Insurance plan that meets the 
requirements of subtitle B, (referred to in this Act as ``HAPI plan'') 
for such individual and the dependent children of such individual.

SEC. 102. INDIVIDUAL RESPONSIBILITY TO ENROLL IN A HEALTHY AMERICANS 
              PRIVATE INSURANCE PLAN.

    (a) Individual Responsibility.--
            (1) Adult individuals.--Each adult individual shall have 
        the responsibility to enroll in a HAPI plan offered through the 
        HHA of the adult individual's State of residence, unless the 
        adult individual--
                    (A) provides evidence of receipt of coverage under, 
                or enrollment in a health plan offered through--
                            (i) the Medicare program under title XVIII 
                        of the Social Security Act;
                            (ii) a health insurance plan offered by the 
                        Department of Defense;
                            (iii) an employee benefit plan through a 
                        former employer;
                            (iv) a qualified collective bargaining 
                        agreement;
                            (v) the Department of Veterans Affairs; or
                            (vi) the Indian Health Service; or
                    (B) is opposed to health plan coverage for 
                religious reasons, including an individual who declines 
                health plan coverage due to a reliance on healing using 
                spiritual means through prayer alone.
            (2) Dependent children.--Each adult individual shall have 
        the responsibility to enroll each dependent child of the adult 
        individual in a HAPI plan offered through the HHA of the adult 
        individual's State of residence, unless the adult individual--
                    (A) provides evidence that the dependent child is 
                enrolled in a health plan offered through a program 
                described in paragraph (1)(A); or
                    (B) is described in paragraph (1)(B).
            (3) Verification of religious exception.--Each State shall 
        develop guidelines for determining and verifying the 
        individuals who qualify for the exception under paragraph 
        (1)(B).
    (b) Penalty for Failure To Purchase Coverage.--
            (1) Penalty.--
                    (A) In general.--In the case of an individual 
                described in subparagraph (B), such individual shall be 
                subject to a late enrollment penalty in an amount 
                determined under subparagraph (C).
                    (B) Individuals subject to penalty.--An individual 
                described in this subparagraph is an adult individual 
                for whom there is a continuous period of 63 days or 
                longer, beginning on the applicable date (as defined in 
                subparagraph (E)) and ending on the date of enrollment 
                in a HAPI plan, during all of which the individual--
                            (i) was not covered under a HAPI plan or a 
                        health plan offered through a program described 
                        in paragraph (1)(A) of section 102(a); and
                            (ii) was not described in paragraph (1)(B) 
                        of such section.
                    (C) Amount of penalty.--
                            (i) In general.--The amount determined 
                        under this subparagraph for an individual is an 
                        amount equal to the sum of--
                                    (I) the number of uncovered months 
                                multiplied by the weighted average of 
                                the monthly premium for HAPI plans of 
                                the same class of coverage as the 
                                individual's in the applicable coverage 
                                area (determined without regard to any 
                                subsidy under section 121); and
                                    (II) 15 percent of the amount 
                                determined under subclause (I).
                            (ii) Uncovered month defined.--For purposes 
                        of this subsection, the term ``uncovered 
                        month'' means, with respect to an individual, 
                        any month beginning on or after the applicable 
                        date (as defined in subparagraph (E)) unless 
                        the individual can demonstrate that the 
                        individual--
                                    (I) was covered under a HAPI plan 
                                or a health plan offered through a 
                                program described in paragraph (1)(A) 
                                of section 102(a) for any portion of 
                                such month; or
                                    (II) was described in paragraph 
                                (1)(B) of such section for any portion 
                                of such month.
                        A month shall not be treated as an uncovered 
                        month if the individual has already paid a late 
                        enrollment penalty under this subsection for 
                        such month or if the individual was 
                        incarcerated for the entire month.
                    (D) Payment.--Payment of any late enrollment 
                penalty by an individual under this subsection shall be 
                made to the HHA of the individual's State of residence 
                under procedures established by the State.
                    (E) Applicable date.--In this paragraph, the term 
                ``applicable date'' means the earlier of--
                            (i) the day after the end of the State's 
                        first open enrollment period for HAPI plans 
                        (during which all adult individuals are 
                        eligible to enroll); and
                            (ii) the day after the end of the first 
                        enrollment period for a fallback HAPI plan in 
                        the State.
            (2) Waiver.--An HHA of a State may reduce or waive the 
        amount of any late enrollment penalty applicable to an 
        individual under this subsection if payment of such penalty 
        would constitute a hardship (determined under procedures 
        established by the State).
            (3) Enforcement.--Each State shall determine appropriate 
        mechanisms, which may not include revocation or ineligibility 
        for coverage under a HAPI plan, to enforce the responsibility 
        of each adult individual to purchase HAPI plan coverage for 
        such individual and any dependent children of such individual 
        under subsection (a).
    (c) Other Insurance Coverage.--Nothing in this Act shall be 
construed to prohibit an individual from enrolling in a health 
insurance plan that is not a HAPI plan.

 Subtitle B--Standards for Healthy Americans Private Insurance Coverage

SEC. 111. HEALTHY AMERICANS PRIVATE INSURANCE PLANS.

    (a) Options.--A State HHA--
            (1) shall require that at least 2 HAPI plans that comply 
        with the requirements of subsection (b), be offered through the 
        HHA to each individual in the State;
            (2) shall require the offering of 1 or more HAPI plans that 
        include coverage for benefits, items, or services in addition 
        to the standardized benefits, items, or services required under 
        subsection (b) for HAPI plans if--
                    (A) such additional benefits, items, and services 
                build upon the standardized benefits package;
                    (B) a list of such additional benefits, items, or 
                services, and the prices applicable to such additional 
                benefits, items, and services, is displayed in a manner 
                that is separate from the description of the 
                standardized benefits, items, or services required 
                under the plan under this section (and consistent with 
                the manner in which such items are displayed by medigap 
                policies) and that enables a consumer to identify such 
                additional benefits, items, and services and the cost 
                associated with such; and
                    (C) no premium subsidies are available under 
                subtitle C for any portion of the premiums for a HAPI 
                plan that are attributable to such additional benefits, 
                items, or services; and
            (3) may permit the offering of 1 or more actuarially 
        equivalent HAPI plans through the HHA as provided for in 
        subsection (c).
    (b) Standardized Coverage Requirements for HAPI Plans.--
            (1) In general.--Each HAPI plan offered through an HHA 
        shall--
                    (A) provide benefits for health care items and 
                services that are actuarially equivalent or greater in 
                value than the benefits offered as of January 1, 2007, 
                under the Blue Cross/Blue Shield Standard Plan provided 
                under the Federal Employees Health Benefit Program 
                under chapter 89 of title 5, United States Code, 
                including coverage of an initial primary care 
                assessment and annual physical examinations;
                    (B) provide benefits for wellness programs and 
                incentives to promote the use of such programs;
                    (C) provide coverage for catastrophic medical 
                events that result in out-of-pocket costs for an 
                individual or family if lifetime limits are exhausted;
                    (D) designate a health care provider, such as a 
                primary care physician, nurse practitioner, or other 
                qualified health provider, to monitor the health and 
                health care of a covered individuals (such provider 
                shall be known as the ``health home'' of the covered 
                individual);
                    (E) ensure that, as part of the first visit with a 
                primary care physician or the health home of a covered 
                individual, such provider and individual determine a 
                care plan to maximize the health of the individual 
                through wellness and prevention activities;
                    (F) provide benefits for comprehensive disease 
                prevention, early detection, disease management, and 
                chronic condition management that meets minimum 
                standards developed by the Secretary;
                    (G) provide for the application of personal 
                responsibility contribution requirements with respect 
                to covered benefits in a manner that may be similar to 
                the cost sharing requirements applied as of January 1, 
                2007, under the Blue Cross/Blue Shield Standard Plan 
                provided under the Federal Employees Health Benefit 
                Program under chapter 89 of title 5, United States 
                Code, except that no contributions shall be required 
                for--
                            (i) preventive items or services; and
                            (ii) early detection, disease management, 
                        or chronic pain treatment items or services; 
                        and
                    (H) comply with the requirements of section 112.
            (2) Determination of benefits by secretary.--Not later than 
        1 year after the date of enactment of this Act, the Secretary 
        shall promulgate guidelines concerning the benefits, items, and 
        services that are covered under paragraph (1).
            (3) Coverage for family planning.--
                    (A) In general.--Except as provided in subparagraph 
                (B), a health insurance issuer shall make available 
                supplemental coverage for abortion services that may be 
                purchased in conjunction with enrollment in a HAPI plan 
                or an actuarially equivalent healthy American plan.
                    (B) Religious and moral exception.--Nothing in this 
                paragraph shall be construed to require a health 
                insurance issuer affiliated with a religious 
                institution to provide the coverage described in 
                subparagraph (A).
            (4) Rule of construction.--Nothing in this subsection shall 
        be construed to prohibit a HAPI plan from providing coverage 
        for benefits, items, and services in addition to the coverage 
        required under this subsection. No premium subsidies shall be 
        available under subtitle C for any portion of the premiums for 
        a HAPI plan that are attributable to such additional benefits, 
        items, or services.
    (c) Actuarially Equivalent Healthy American Plans.--Each 
actuarially equivalent healthy American plan offered through an HHA 
shall--
            (1) cover all treatments, items, services, and providers at 
        least to the same extent as those covered under a HAPI plan 
        that--
                    (A) shall include coverage for--
                            (i) preventive items and services 
                        (including well baby care and well child care 
                        and appropriate immunizations) and disease 
                        management services;
                            (ii) inpatient and outpatient hospital 
                        services;
                            (iii) physicians' surgical and medical 
                        services; and
                            (iv) laboratory and x-ray services; and
                    (B) may include additional supplemental benefits to 
                the extent approved by the State and provided for in 
                advance in the plan contract; and
            (2) ensure that no personal responsibility contribution 
        requirements are applied for prevention and chronic disease 
        management benefits, items, or services.
    (d) Premiums and Rating Requirements.--
            (1) Classes of coverage.--With respect to a HAPI plan, a 
        health insurance issuer shall provide for the following classes 
        of coverage:
                    (A) Coverage of an individual.
                    (B) Coverage of a married couple or domestic 
                partnership (as determined by a State) without 
                dependent children.
                    (C) Coverage of an adult individual with 1 or more 
                dependent children.
                    (D) Coverage of a married couple or domestic 
                partnership (as determined by a State) with 1 or more 
                dependent children.
            (2) Determinations of premiums.--With respect to each class 
        of coverage described in paragraph (1), a health insurance 
        issuer shall determine the premium amount for a HAPI plan using 
        adjusted community rating principals, as described in 
        paragraphs (3) and (4) established by the State. States may 
        permit premium variations based only on geography, tobacco use, 
        and family size. A State may determine to have no variation.
            (3) Rewards.--A State shall permit a health insurance 
        issuer to provide premium discounts and other incentives to 
        enrollees based on the participation of such enrollees in 
        wellness, chronic disease management, and other programs 
        designed to improve the health of the enrollees.
            (4) Limitation.--A health insurance issuer shall not 
        consider age, gender, industry, health status, or claims 
        experience in determining premiums under this subsection.
    (e) Application of State Mandate Laws.--State benefit mandate laws 
that would otherwise be applicable to HAPI plans shall be preempted.

SEC. 112. SPECIFIC COVERAGE REQUIREMENTS.

    (a) In General.--Each HAPI plan offered through a HHA shall--
            (1) provide for increased portability through limitations 
        on the application of preexisting condition exclusions, in a 
        manner similar to that provided for under section 2701 of the 
        Public Health Service Act (42 U.S.C. 300gg), as such section 
        existed on the day before the date of enactment of this Act, 
        except that the State shall develop procedures to ensure that 
        preexisting exclusion limitations do not apply to new enrollees 
        who had no applicable creditable coverage immediately prior to 
        the first enrollment period;
            (2) provide for the guaranteed availability of coverage to 
        prospective enrollees in a manner similar to that provided for 
        under section 2711 of the Public Health Service Act (42 U.S.C. 
        300gg-11), as such section existed on the day before the date 
        of enactment of this Act;
            (3) provide for the guaranteed renewability of coverage in 
        a manner similar to that provided for under section 2712 of the 
        Public Health Service Act (42 U.S.C. 300gg-12), as such section 
        existed on the day before the date of enactment of this Act, 
        except that the prohibition on market reentry provided for 
        under such section shall be deemed to be 2 years;
            (4) prohibit discrimination against individual enrollees 
        and prospective enrollees based on health status in a manner 
        similar to that provided for under section 2702 of the Public 
        Health Service Act (42 U.S.C. 300gg-1), as such section existed 
        on the day before the date of enactment of this Act;
            (5) provide coverage protections for enrollees who are 
        mothers and newborns in a manner similar to that provided for 
        under section 2704 of the Public Health Service Act (42 U.S.C. 
        300gg-3), as such section existed on the day before the date of 
        enactment of this Act;
            (6) provide for full parity in the application of certain 
        limits to mental health benefits in a manner similar to that 
        provided for under section 2705 of the Public Health Service 
        Act (42 U.S.C. 300gg-4), as such section would be in effect if 
        the amendments described in subsection (c) had been made;
            (7) provide coverage for reconstructive surgery following a 
        mastectomy in a manner similar to that provided for under 
        section 2706 of the Public Health Service Act (42 U.S.C. 300gg-
        5), as such section existed on the day before the date of 
        enactment of this Act; and
            (8) prohibit discrimination on the basis of genetic 
        information, as provided for under subsection (b).
    (b) Genetic Nondiscrimination.--
            (1) Prohibition on genetic information as a condition of 
        eligibility.--A HAPI plan shall not establish rules for the 
        eligibility (including continued eligibility) of any individual 
        to enroll in coverage under the plan based on genetic 
        information (including information about a request for or 
        receipt of genetic services by an individual or family member 
        of such individual).
            (2) Prohibition on genetic information in setting premium 
        rates.--A HAPI plan shall not adjust premium or personal 
        responsibility contribution amounts for an individual on the 
        basis of genetic information concerning the individual or a 
        family member of the individual (including information about a 
        request for or receipt of genetic services by an individual or 
        family member of such individual).
            (3) Genetic testing.--
                    (A) Limitation on requesting or requiring genetic 
                testing.--A HAPI plan shall not request or require an 
                individual or a family member of such individual to 
                undergo a genetic test.
                    (B) Rule of construction.--Nothing in this 
                subsection shall be construed to--
                            (i) limit the authority of a health care 
                        professional who is providing health care 
                        services with respect to an individual to 
                        request that such individual or a family member 
                        of such individual undergo a genetic test;
                            (ii) limit the authority of a health care 
                        professional who is employed by or affiliated 
                        with a HAPI plan and who is providing health 
                        care services to an individual as part of a 
                        bona fide wellness program to notify such 
                        individual of the availability of a genetic 
                        test or to provide information to such 
                        individual regarding such genetic test; or
                            (iii) authorize or permit a health care 
                        professional to require that an individual 
                        undergo a genetic test.
    (c) Amendments Providing Full Mental Health Parity.--For purposes 
of subsection (a)(6), the amendments to section 2705 of the Public 
Health Service Act (42 U.S.C. 300gg-5) referred to in such subsection 
are as follows:
            (1) Extension of parity to treatment limits and beneficiary 
        financial requirements.--In such section--
                    (A) in subsection (a), add at the end the following 
                new paragraphs:
            ``(3) Treatment limits.--
                    ``(A) No treatment limit.--If the plan or coverage 
                does not include a treatment limit (as defined in 
                subparagraph (D)) on substantially all medical and 
                surgical benefits in any category of items or services 
                (specified in subparagraph (C)), the plan or coverage 
                may not impose any treatment limit on mental health and 
                substance-related disorder benefits that are classified 
                in the same category of items or services.
                    ``(B) Treatment limit.--If the plan or coverage 
                includes a treatment limit on substantially all medical 
                and surgical benefits in any category of items or 
                services, the plan or coverage may not impose such a 
                treatment limit on mental health and substance-related 
                disorder benefits for items and services within such 
                category that are more restrictive than the predominant 
                treatment limit that is applicable to medical and 
                surgical benefits for items and services within such 
                category.
                    ``(C) Categories of items and services for 
                application of treatment limits and beneficiary 
                financial requirements.--For purposes of this paragraph 
                and paragraph (4), there shall be the following four 
                categories of items and services for benefits, whether 
                medical and surgical benefits or mental health and 
                substance-related disorder benefits, and all medical 
                and surgical benefits and all mental health and 
                substance related benefits shall be classified into one 
                of the following categories:
                            ``(i) Inpatient, in-network.--Items and 
                        services furnished on an inpatient basis and 
                        within a network of providers established or 
                        recognized under such plan or coverage.
                            ``(ii) Inpatient, out-of-network.--Items 
                        and services furnished on an inpatient basis 
                        and outside any network of providers 
                        established or recognized under such plan or 
                        coverage.
                            ``(iii) Outpatient, in-network.--Items and 
                        services furnished on an outpatient basis and 
                        within a network of providers established or 
                        recognized under such plan or coverage.
                            ``(iv) Outpatient, out-of-network.--Items 
                        and services furnished on an outpatient basis 
                        and outside any network of providers 
                        established or recognized under such plan or 
                        coverage.
                    ``(D) Treatment limit defined.--For purposes of 
                this paragraph, the term `treatment limit' means, with 
                respect to a plan or coverage, limitation on the 
                frequency of treatment, number of visits or days of 
                coverage, or other similar limit on the duration or 
                scope of treatment under the plan or coverage.
                    ``(E) Predominance.--For purposes of this 
                subsection, a treatment limit or financial requirement 
                with respect to a category of items and services is 
                considered to be predominant if it is the most common 
                or frequent of such type of limit or requirement with 
                respect to such category of items and services.
            ``(4) Beneficiary financial requirements.--
                    ``(A) No beneficiary financial requirement.--If the 
                plan or coverage does not include a beneficiary 
                financial requirement (as defined in subparagraph (C)) 
                on substantially all medical and surgical benefits 
                within a category of items and services (specified in 
                paragraph (3)(C)), the plan or coverage may not impose 
                such a beneficiary financial requirement on mental 
                health and substance-related disorder benefits for 
                items and services within such category.
                    ``(B) Beneficiary financial requirement.--
                            ``(i) Treatment of deductibles, out-of-
                        pocket limits, and similar financial 
                        requirements.--If the plan or coverage includes 
                        a deductible, a limitation on out-of-pocket 
                        expenses, or similar beneficiary financial 
                        requirement that does not apply separately to 
                        individual items and services on substantially 
                        all medical and surgical benefits within a 
                        category of items and services, the plan or 
                        coverage shall apply such requirement (or, if 
                        there is more than one such requirement for 
                        such category of items and services, the 
                        predominant requirement for such category) both 
                        to medical and surgical benefits within such 
                        category and to mental health and substance-
                        related disorder benefits within such category 
                        and shall not distinguish in the application of 
                        such requirement between such medical and 
                        surgical benefits and such mental health and 
                        substance-related disorder benefits.
                            ``(ii) Other financial requirements.--If 
                        the plan or coverage includes a beneficiary 
                        financial requirement not described in clause 
                        (i) on substantially all medical and surgical 
                        benefits within a category of items and 
                        services, the plan or coverage may not impose 
                        such financial requirement on mental health and 
                        substance-related disorder benefits for items 
                        and services within such category in a way that 
                        is more costly to the participant or 
                        beneficiary than the predominant beneficiary 
                        financial requirement applicable to medical and 
                        surgical benefits for items and services within 
                        such category.
                    ``(C) Beneficiary financial requirement defined.--
                For purposes of this paragraph, the term `beneficiary 
                financial requirement' includes, with respect to a plan 
                or coverage, any deductible, coinsurance, co-payment, 
                other cost sharing, and limitation on the total amount 
                that may be paid by a participant or beneficiary with 
                respect to benefits under the plan or coverage, but 
                does not include the application of any aggregate 
                lifetime limit or annual limit.''; and
                    (B) in subsection (b)--
                            (i) strike ``construed--'' and all that 
                        follows through ``(1) as requiring'' and insert 
                        ``construed as requiring'';
                            (ii) by strike ``; or'' and insert a 
                        period; and
                            (iii) by strike paragraph (2).
            (2) Expansion to substance-related disorder benefits and 
        revision of definition.--In such section--
                    (A) strike ``mental health benefits'' and insert 
                ``mental health and substance-related disorder 
                benefits'' each place it appears; and
                    (B) in paragraph (4) of subsection (e)--
                            (i) strike ``Mental health benefits'' and 
                        insert ``Mental health and substance-related 
                        disorder benefits'';
                            (ii) strike ``benefits with respect to 
                        mental health services'' and insert ``benefits 
                        with respect to services for mental health 
                        conditions or substance-related disorders''; 
                        and
                            (iii) strike ``, but does not include 
                        benefits with respect to treatment of 
                        substances abuse or chemical dependency''.
            (3) Availability of plan information about criteria for 
        medical necessity.--In subsection (a) of such section, as 
        amended by paragraph (1)(A), add at the end the following new 
        paragraph:
            ``(5) Availability of plan information.--The criteria for 
        medical necessity determinations made under the plan with 
        respect to mental health and substance-related disorder 
        benefits (or the health insurance coverage offered in 
        connection with the plan with respect to such benefits) shall 
        be made available by the plan administrator (or the health 
        insurance issuer offering such coverage) to any current or 
        potential participant, beneficiary, or contracting provider 
        upon request. The reason for any denial under the plan (or 
        coverage) of reimbursement or payment for services with respect 
        to mental health and substance-related disorder benefits in the 
        case of any participant or beneficiary shall, upon request, be 
        made available by the plan administrator (or the health 
        insurance issuer offering such coverage) to the participant or 
        beneficiary.''.
            (4) Minimum benefit requirements.--In subsection (a) of 
        such section, add at the end the following new paragraph:
            ``(6) Minimum scope of coverage and equity in out-of-
        network benefits.--
                    ``(A) Minimum scope of mental health and substance-
                related disorder benefits.--In the case of a group 
                health plan (or health insurance coverage offered in 
                connection with such a plan) that provides any mental 
                health and substance-related disorder benefits, the 
                plan or coverage shall include benefits for any mental 
                health condition or substance-related disorder for 
                which benefits are provided under the benefit plan 
                option offered under chapter 89 of title 5, United 
                States Code, with the highest average enrollment as of 
                the beginning of the most recent year beginning on or 
                before the beginning of the plan year involved.
                    ``(B) Equity in coverage of out-of-network 
                benefits.--
                            ``(i) In general.--In the case of a plan or 
                        coverage that provides both medical and 
                        surgical benefits and mental health and 
                        substance-related disorder benefits, if medical 
                        and surgical benefits are provided for 
                        substantially all items and services in a 
                        category specified in clause (ii) furnished 
                        outside any network of providers established or 
                        recognized under such plan or coverage, the 
                        mental health and substance-related disorder 
                        benefits shall also be provided for items and 
                        services in such category furnished outside any 
                        network of providers established or recognized 
                        under such plan or coverage in accordance with 
                        the requirements of this section.
                            ``(ii) Categories of items and services.--
                        For purposes of clause (i), there shall be the 
                        following three categories of items and 
                        services for benefits, whether medical and 
                        surgical benefits or mental health and 
                        substance-related disorder benefits, and all 
                        medical and surgical benefits and all mental 
                        health and substance-related disorder benefits 
                        shall be classified into one of the following 
                        categories:
                                    ``(I) Emergency.--Items and 
                                services, whether furnished on an 
                                inpatient or outpatient basis, required 
                                for the treatment of an emergency 
                                medical condition (including an 
                                emergency condition relating to mental 
                                health and substance-related 
                                disorders).
                                    ``(II) Inpatient.--Items and 
                                services not described in subclause (I) 
                                furnished on an inpatient basis.
                                    ``(III) Outpatient.--Items and 
                                services not described in subclause (I) 
                                furnished on an outpatient basis.''.
            (5) Revision of increased cost exemption.--Amend paragraph 
        (2) of subsection (c) of such section to read as follows:
            ``(2) Increased cost exemption.--
                    ``(A) In general.--With respect to a group health 
                plan (or health insurance coverage offered in 
                connection with such a plan), if the application of 
                this section to such plan (or coverage) results in an 
                increase for the plan year involved of the actual total 
                costs of coverage with respect to medical and surgical 
                benefits and mental health and substance-related 
                disorder benefits under the plan (as determined and 
                certified under subparagraph (C)) by an amount that 
                exceeds the applicable percentage described in 
                subparagraph (B) of the actual total plan costs, the 
                provisions of this section shall not apply to such plan 
                (or coverage) during the following plan year, and such 
                exemption shall apply to the plan (or coverage) for 1 
                plan year.
                    ``(B) Applicable percentage.--With respect to a 
                plan (or coverage), the applicable percentage described 
                in this paragraph shall be--
                            ``(i) 2 percent in the case of the first 
                        plan year which begins after the date of the 
                        enactment of the Paul Wellstone Mental Health 
                        and Addiction Equity Act of 2007; and
                            ``(ii) 1 percent in the case of each 
                        subsequent plan year.
                    ``(C) Determinations by actuaries.--Determinations 
                as to increases in actual costs under a plan (or 
                coverage) for purposes of this subsection shall be made 
                by a qualified actuary who is a member in good standing 
                of the American Academy of Actuaries. Such 
                determinations shall be certified by the actuary and be 
                made available to the general public.
                    ``(D) 6-month determinations.--If a group health 
                plan (or a health insurance issuer offering coverage in 
                connection with such a plan) seeks an exemption under 
                this paragraph, determinations under subparagraph (A) 
                shall be made after such plan (or coverage) has 
                complied with this section for the first 6 months of 
                the plan year involved.
                    ``(E) Notification.--A group health plan under this 
                part shall comply with the notice requirement under 
                section 712(c)(2)(E) of the Employee Retirement Income 
                Security Act of 1974 with respect to the a modification 
                of mental health and substance-related disorder 
                benefits as permitted under this paragraph as if such 
                section applied to such plan.''.
            (6) Change in exclusion for smallest employers.--In 
        subsection (c)(1)(B) of such section--
                    (A) insert ``(or 1 in the case of an employer 
                residing in a State that permits small groups to 
                include a single individual)'' after ``at least 2'' the 
                first place it appears; and
                    (B) strike ``and who employs at least 2 employees 
                on the first day of the plan year''.
            (7) Elimination of sunset provision.--Strike subsection (f) 
        of such section.
            (8) Clarification regarding preemption.--In such section, 
        insert after subsection (e) the following new subsection:
    ``(f) Preemption, Relation to State Laws.--
            ``(1) In general.--Nothing in this section shall be 
        construed to preempt any State law that provides greater 
        consumer protections, benefits, methods of access to benefits, 
        rights or remedies that are greater than the protections, 
        benefits, methods of access to benefits, rights or remedies 
        provided under this section.
            ``(2) Construction.--Nothing in this section shall be 
        construed to affect or modify the provisions of section 2723 
        with respect to group health plans.''.
    (d) Guidelines.--Not later than 1 year after the date of enactment 
of this Act, the Secretary shall develop guidelines for the application 
of the requirements of this section.

SEC. 113. UPDATING HEALTHY AMERICANS PRIVATE INSURANCE PLAN 
              REQUIREMENTS.

    (a) In General.--The Secretary shall establish the Healthy America 
Advisory Committee (referred to in this section as the ``Advisory 
Committee'') to provide annual recommendations to the Secretary and 
Congress concerning modifications to the benefits, items, and services 
required under section 111(a)(1).
    (b) Composition.--
            (1) In general.--The Advisory Committee shall be composed 
        of 15 members to be appointed by the Comptroller General, of 
        which--
                    (A) at least 1 such member shall be a health 
                economist;
                    (B) at least 1 such member shall be an ethicist;
                    (C) at least 1 such member shall be a 
                representative of health care providers, including 
                nurses and other nonphysician providers;
                    (D) at least 1 such member shall be a 
                representative of health insurance issuers;
                    (E) at least 1 such member shall be a health care 
                consumer;
                    (F) at least 1 such member shall be a 
                representative of the United States Preventive Services 
                Task Force; and
                    (G) at least 1 such member shall be an actuary.
            (2) Geographic balance.--The Comptroller General shall 
        ensure the geographic diversity of the members appointed under 
        paragraph (1).
    (c) Terms, Vacancies.--Members of the Advisory Committee shall be 
appointed for a term of 3 years and may be reappointed for 1 additional 
term. In appointing members, the Comptroller General shall stagger the 
terms of the initial members so that the terms of one-third of the 
members expire each year. Vacancies in the membership of the Advisory 
Committee shall not affect the Committee's ability to carry out its 
functions. The Comptroller General shall appoint an individual to fill 
the remaining term of a vacant member within 2 months of being notified 
of such vacancy.
    (d) Compensation and Expenses.--Each member of the Advisory 
Committee who is not otherwise employed by the United States Government 
shall receive compensation at a rate equal to the daily rate prescribed 
for GS-18 under the General Schedule under section 5332 of title 5, 
United States Code, for each day, including travel time, such member is 
engaged in the actual performance of duties as a member of the 
Committee. A member of the Advisory Committee who is an officer or 
employee of the United States Government shall serve without additional 
compensation. All members of the Advisory Committee shall be reimbursed 
for travel, subsistence, and other necessary expenses incurred by them 
in the performance of their duties.
    (e) Reports.--
            (1) Annual reports.--Not later than December 31 of the 
        fourth full calendar year following the date of enactment of 
        this Act, and each December 31 thereafter, the Advisory 
        Committee shall provide to Congress and the Secretary a report 
        that--
                    (A) describes any recommendations for modifications 
                to the benefits, items, and services that are required 
                to be covered under a HAPI plan; and
                    (B) includes any recommendations to modify HAPI 
                plans to improve the quality of life for United States 
                citizens and to ensure that benefits in such plans are 
                medically- and cost-effective.
            (2) Report on standardization of enrollment.--Not later 
        than December 31 of the second full calendar year following the 
        date of enactment of this Act, the Advisory Committee, in 
        consultation with the States, shall provide to Congress and the 
        Secretary a report that includes recommendations relating to 
        the standardization of enrollment forms for HAPI plans 
        throughout the country and the transfer of basic information 
        (such as identity and basic health information) from one HAPI 
        plan to another HAPI plan, including across State lines.
    (f) Application of FACA.--The Federal Advisory Committee Act (5 
U.S.C. App.) shall apply to the Advisory Committee, except that section 
14 of such Act shall not apply.

    Subtitle C--Eligibility for Premium and Personal Responsibility 
                         Contribution Subsidies

SEC. 121. ELIGIBILITY FOR PREMIUM SUBSIDIES.

    (a) Individuals and Families At or Below the Poverty Line.--For any 
calendar year, in the case of a covered individual who is determined to 
have a modified adjusted gross income that is at or below 100 percent 
of the poverty line, as applicable to a family of the size involved, 
the covered individual is entitled under this section to an income-
related premium subsidy equal to the basic premium subsidy amount.
    (b) Partial Subsidy for Other Individuals and Families.--
            (1) In general.--For any calendar year, in the case of a 
        covered individual who is determined to have a modified 
        adjusted gross income that is greater than 100 percent of the 
        poverty line, as applicable to a family of the size involved, 
        but below the applicable percentage of the poverty line, as 
        applicable to a family of the size involved, the covered 
        individual is entitled under this section to an income-related 
        premium subsidy equal to the basic premium subsidy amount 
        reduced by the amount determined under paragraph (2).
            (2) Amount of reduction.--The amount of the reduction 
        determined under this paragraph is the amount that bears the 
        same ratio to the basic premium subsidy amount as--
                    (A) the excess of--
                            (i) such individual's modified adjusted 
                        gross income, over
                            (ii) an amount equal to 100 percent of the 
                        poverty line as applicable to a family of the 
                        size involved, bears to
                    (B) the excess of--
                            (i) an amount equal to the applicable 
                        percentage of the poverty line as applicable to 
                        a family of the size involved, over
                            (ii) an amount equal to 100 percent of the 
                        poverty line as applicable to a family of the 
                        size involved.
            (3) Applicable percentage.--For purposes of this 
        subsection, the applicable percentage is 400 percent.
    (c) Basic Premium Subsidy Amount.--For purposes of this section, 
the term ``basic premium subsidy amount'' means, with respect to any 
individual, the lesser of--
            (1) the annual premium for the HAPI plan under which the 
        individual is a covered individual; or
            (2) the weighted average of the premium for HAPI plans of 
        the same class of coverage (as described in section 111(d)(1)) 
        as the individual's in the applicable coverage area.
    (d) Change in Status Notification.--
            (1) In general.--If an individual's modified adjusted 
        income changes such that the individual becomes eligible or 
        ineligible for a subsidy under this section, the individual 
        shall report that change to the HHA of the individual's State 
        of residence not more than 60 days after the change takes 
        effect. If an individual reports the change within 60 days 
        under the preceding sentence, the individual's HAPI plan 
        coverage shall be deemed credible coverage for the purposes of 
        maintaining coverage for preexisting conditions.
            (2) Adjustment.--The HHA shall adjust the premium subsidy 
        of such individual to take effect on the first month after the 
        date of the notification under paragraph (1) for which the next 
        premium payment would be due from the individual.
    (e) Catastrophic Event.--A State may develop mechanisms to ensure 
that covered individuals do not have a break in coverage due to a 
catastrophic financial event.

SEC. 122. ELIGIBILITY FOR PERSONAL RESPONSIBILITY CONTRIBUTION 
              SUBSIDIES.

    (a) Full Subsidy.--To meet the eligibility requirements under 
subtitle B for an HHA, for any taxable year, in the case of a covered 
individual who is determined to have a modified adjusted gross income 
that is below 100 percent of the poverty line as applicable to a family 
of the size involved, an HHA shall provide to such an individual a 
subsidy equal to the full amount of any personal responsibility 
contributions applicable to such individual.
    (b) Partial Subsidy.--To meet the eligibility requirements under 
subtitle B for an HHA, for any taxable year, in the case of a covered 
individual who is determined to have a modified adjusted gross income 
that is at or above 100 percent of the poverty line as applicable to a 
family of the size involved, an HHA may provide to such an individual a 
subsidy equal to the part of the amount of any personal responsibility 
contributions applicable to such individual.

SEC. 123. DEFINITIONS AND SPECIAL RULES.

    (a) Determination of Modified Adjusted Gross Income.--
            (1) In general.--In this subtitle, the term ``modified 
        adjusted gross income'' means adjusted gross income (as defined 
        in section 62 of the Internal Revenue Code of 1986)--
                    (A) determined without regard to sections 86, 135, 
                137, 199, 221, 222, 911, 931, and 933 of such Code; and
                    (B) increased by--
                            (i) the amount of interest received or 
                        accrued during the taxable year which is exempt 
                        from tax under such Code; and
                            (ii) the amount of any social security 
                        benefits (as defined in section 86(d) of such 
                        Code) received or accrued during the taxable 
                        year.
            (2) Taxable year to be used to determine modified adjusted 
        gross income.--In applying this subtitle to determine an 
        individual's annual premiums, the covered individual's modified 
        adjusted gross income shall be such income determined using the 
        individual's most recent income tax return or other information 
        furnished to the Secretary by such individual, as the Secretary 
        may require.
    (b) Poverty Line.--In this subtitle, the term ``poverty line'' has 
the meaning given such term in section 673(2) of the Community Health 
Services Block Grant Act (42 U.S.C. 9902(2)), including any revision 
required by such section.
    (c) Other Procedures To Determine Subsidies.--The Secretary shall 
promulgate regulations to be used by HHAs to calculate the premium 
subsidies under section 121 and personal responsibility subsidies under 
section 122 for individuals whose modified adjusted gross income 
described in subsection (a)(2) is significantly lower than the modified 
adjusted gross income of the year involved.
    (d) Special Rule for Unlawfully Present Aliens.--A health insurance 
issuer shall remit to the Federal Government any funding, including any 
subsidy payments, received by such issuer from the Federal Government 
on behalf of any adult alien who is unlawfully present in the United 
States.
    (e) Special Rule for Aliens.--The Secretary of Homeland Security 
may not extend or renew an alien's eligibility for status in the United 
States or adjust the status of an alien in the United States if the 
alien owes--
            (1) a premium payment for a HAPI plan that is past due; or
            (2) a penalty incurred for failing to pay such a premium.
    (f) No Discharge in Bankruptcy.--In the case of any bankruptcy 
filed by or on behalf of any person after the date that is 4 years 
after the date of enactment of this Act, under title 11, United States 
Code, any penalty imposed with respect to such person for failure to 
pay a HAPI plan premium shall not be subject to discharge under such 
title.

                     Subtitle D--Wellness Programs

SEC. 131. REQUIREMENTS FOR WELLNESS PROGRAMS.

    (a) Definition.--In this Act, the term ``wellness program'' means a 
program that consists of a combination of activities that are designed 
to increase awareness, assess risks, educate, and promote voluntary 
behavior change to improve the health of an individual, modify his or 
her consumer health behavior, enhance his or her personal well-being 
and productivity, and prevent illness and injury.
    (b) Discounts.--
            (1) Eligibility.--With respect to a HAPI plan that is 
        offered in a State that permits premium discounts for enrollees 
        who participate in a wellness program, to be eligible to 
        receive such a discount, the administrator of the wellness 
        program, on behalf of the enrollee, shall certify in writing to 
        the plan that--
                    (A)(i) the enrollee is participating in an approved 
                wellness program; or
                    (ii) the dependent child of the enrollee is 
                participating in an approved wellness program; and
                    (B) the wellness program meets the requirements of 
                this subsection.
            (2) Requirements.--A wellness program meets the 
        requirements of this paragraph if such program--
                    (A) is reasonably designed (as determined by the 
                HAPI plan) to promote good health and prevent disease 
                for program participants;
                    (B) has been approved by the HAPI plan for purposes 
                of applying participation discounts;
                    (C) is offered to all enrollees in a HAPI plan 
                regardless of health status;
                    (D) permits any enrollee for whom it is 
                unreasonably difficult to meet the initial program 
                standard for participation due to a medical condition 
                (or for whom it is medically inadvisable to attempt) an 
                opportunity to meet a reasonable alternative 
                participation standard--
                            (i)(I) that is developed prior to 
                        enrollment of the enrollee; or
                            (II) that is developed in consultation with 
                        the enrollee after enrollment of the enrollee, 
                        after a determination has been made that the 
                        enrollee cannot safely meet the program 
                        participation standard; and
                            (ii) the availability of which is disclosed 
                        in the original documents relating to 
                        participation in the program;
                    (E) applies procedures for determining whether an 
                enrollee is participating in a meaningful manner in the 
                program, including procedures to determine if such 
                participation is resulting in lifestyle changes that 
                are indicative of an improved health outcome or 
                outcomes; and
                    (F) meets any other requirements imposed by the 
                HAPI plan.
            (3) Relation to health status.--Participation in a wellness 
        program may not be used by a HAPI plan to make rate or discount 
        determinations with respect to the health status of an 
        enrollee.
            (4) Availability of discounts.--
                    (A) Offering of enrollment.--A HAPI plan shall 
                provide enrollees with the opportunity to participate 
                in a wellness program (for purposes of qualifying for 
                premium discounts) at least once each year.
                    (B) Determinations.--Determinations with respect to 
                the successful participation by an enrollee in a 
                wellness program for purposes of qualifying for 
                discounts shall be made by the HAPI plan based on a 
                retrospective review of the scope of activities of the 
                enrollee under the program. The HAPI plan may require a 
                minimum level of successful participation in such a 
                program prior to applying any premium discount.
                    (C) Participation in multiple programs.--An 
                enrollee may participate in multiple wellness programs 
                to reach the maximum premium discount permitted by the 
                HAPI plan under applicable State law.
            (5) Personal responsibility contribution discount.--A HAPI 
        plan may elect to provide discounts in the amount of the 
        personal responsibility contribution that is required of an 
        enrollee if the enrollee participates in an approved wellness 
        program.
    (c) Employer Incentive for Wellness Programs.--For provisions 
relating to employers deducting the costs of offering wellness programs 
or worksite health centers see section 162(l) of the Internal Revenue 
Code of 1986.

                  TITLE II--HEALTHY START FOR CHILDREN

                  Subtitle A--Benefits and Eligibility

SEC. 201. GENERAL GOAL AND AUTHORIZATION OF APPROPRIATIONS FOR HAPI 
              PLAN COVERAGE FOR CHILDREN.

    (a) General Goal.--It is the general goal of this Act to provide 
essential, good quality, affordable, and prevention-oriented health 
care coverage for all children in the United States.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated, such sums as may be necessary for each fiscal year to 
enable the Secretary to provide assistance to States to enable such 
States to ensure that each child who is a member of a family with a 
modified adjusted gross income that is below 300 percent of the poverty 
line as applicable to a family of the size involved, who is not 
otherwise eligible for coverage as a dependent under a HAPI plan 
maintained by his or her parents, is covered under a HAPI plan provided 
through the State HHA.
    (c) Policies and Procedures.--The Secretary shall develop policies 
and procedures to be applied by the States to identify children 
described in subsection (a) and to provide such children with coverage 
under a HAPI plan. States shall determine, in consultation with health 
insurance issuers, a separate class of coverage to assure affordable 
child coverage.
    (d) Definition.--In this title, the term ``child'' means an 
individual who is under the age of 19 years or, in the case of an 
individual in foster care, under the age of 21 years.

SEC. 202. COORDINATION OF SUPPLEMENTAL COVERAGE UNDER THE MEDICAID 
              PROGRAM TO HAPI PLAN COVERAGE FOR CHILDREN.

    (a) Assurance of Supplemental Coverage.--The Secretary shall 
provide guidance to States and health insurance issuers that ensures 
that, after December 31 of the last calendar year ending before the 
first calendar year in which coverage under a HAPI plan begins, any 
child covered under a HAPI plan provided through the State HHA 
continues to receive medical assistance under State Medicaid plans in a 
manner that--
            (1) is provided in coordination with, and as a supplement 
        to, the coverage provided the child under the HAPI plan in 
        which the child is enrolled;
            (2) does not supplant the child's coverage under a HAPI 
        plan; and
            (3) ensures that the child receives any items or services 
        that are not available under the HAPI plan in which they are 
        enrolled but that the child would have received under the 
        Medicaid program of the State in which the child resides if the 
        Healthy Americans Act had not been enacted, including items and 
        services described in section 1905(a)(4)(B) (relating to early 
        and periodic screening, diagnostic, and treatment services 
        defined in section 1905(r) and provided in accordance with the 
        requirements of section 1902(a)(43)).
    (b) Definition.--In this section, the term ``child'', in addition 
to the meaning given that term under section 201(d), includes any 
individual who would be considered a child under the Medicaid program 
of the State in which the individual resides.

                     Subtitle B--Service Providers

SEC. 211. INCLUSION OF PROVIDERS UNDER HAPI PLANS.

    (a) In General.--To ensure that children have access to health care 
in their communities, and that such care is provided to such children 
for no cost or on a reimbursable basis, a HAPI plan shall ensure that 
health care items and services may be obtained by such children from, 
at a minimum, the providers described in subsection (b) if available in 
the area involved.
    (b) Providers Described.--The providers described in this 
subsection include the following:
            (1) A school-based health center (in accordance with 
        section 212).
            (2) A health center funded under section 330 of the Public 
        Health Service Act (42 U.S.C. 254b).
            (3) A federally qualified health center.
            (4) A rural health clinic under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.).
            (5) An Indian health service facility.

SEC. 212. USE OF SCHOOL-BASED HEALTH CENTERS.

    (a) Definition.--In this section, the term ``school-based health 
center'' means a health center that--
            (1) is located within an elementary or secondary school 
        facility;
            (2) is operated in collaboration with the school in which 
        such center is located;
            (3) is administered by a community-based organization 
        including a hospital, public health department, community 
        health center, or nonprofit health care agency;
            (4) at a minimum, provides to school-aged children--
                    (A) primary health care services, including 
                comprehensive health assessments, and diagnosis and 
                treatment of minor, acute, and chronic medical 
                conditions and Healthy Start benefits;
                    (B) mental health services, including crisis 
                intervention, counseling, and emergency psychiatric 
                care at the school or by referral;
                    (C) the availability of services at the school when 
                the school is open and 24-hour coverage through an on-
                call system with other providers to ensure access when 
                the school or health center is closed;
                    (D) services through the use of a qualified and 
                appropriately credentialed individual, including a 
                nurse practitioner or physician assistant, a mental 
                health professional, a physician, and a health 
                assistant; and
                    (E) by not later than January 1, 2012, an 
                electronic medical record relating to the individual; 
                and
            (5) may provide optional preventive dental services, 
        consistent with State licensure law, through the use of dental 
        hygienists or dental assistants that provide preventive 
        services such as basic oral exams, cleanings, and sealants.
    (b) Access to School-Based Health Centers.--
            (1) In general.--A school-based health center may provide 
        services to students in more than 1 school if the school 
        district or other supervising State entity determined that 
        capacity and geographic location make such provision of 
        services appropriate.
            (2) Enrollment.--Upon the enrollment of a student in a 
        school with a school-based health center, the center will 
        provide the student with the opportunity to enroll, after 
        parental consent, to receive health care from the center.
            (3) Reimbursement for services.--
                    (A) In general.--A school-based health center may 
                seek reimbursement from a third party payer if 
                available, including a HAPI plan, if a child receives 
                health care items or services through the center.
                    (B) Use of funds.--Amounts received from a third 
                party payer under subparagraph (A) shall be allocated 
                to the school-based health center that provided the 
                care for which the reimbursement was provided for use 
                by that center for providing additional health care 
                items and services.
    (c) Coverage by Federal Tort Claims Act.--In providing health care 
items and services to students through a school-based health care 
center, a health care provider shall be deemed to be an employee of the 
government for purposes of the application of chapter 171 of title 28, 
United States Code (the Federal Tort Claims Act) if such provider was 
acting within the scope of his or her license.

       TITLE III--BETTER HEALTH FOR OLDER AND DISABLED AMERICANS

SEC. 301. COORDINATION OF SUPPLEMENTAL COVERAGE UNDER THE MEDICAID 
              PROGRAM FOR ELDERLY AND DISABLED INDIVIDUALS.

    (a) Coordination of Care.--The Secretary shall provide guidance to 
States and insurers that--
            (1) takes into account the special health care needs of 
        elderly and disabled individuals who are eligible for medical 
        assistance under State Medicaid programs, particularly with 
        respect to institutionalized care or home and community-based 
        services; and
            (2) ensures that, after December 31 of the last calendar 
        year ending before the first calendar year in which coverage 
        under a HAPI plan begins, each such individual continues to 
        receive medical assistance under State Medicaid programs in a 
        manner that--
                    (A) is provided in coordination with, and as a 
                supplement to, the coverage provided the individual 
                under the HAPI plans in which the individual is 
                enrolled;
                    (B) does not supplant the individual's coverage 
                under a HAPI plan; and
                    (C) ensures that the individual receives any items 
                or services that are not available under the HAPI plan 
                in which the individual is enrolled but that the 
                individual would have received under the Medicaid 
                program of the State in which the individual resides if 
                the Healthy Americans Act had not been enacted.
    (b) Definitions.--In this section--
            (1) the term ``institutionalized care'' means the health 
        care provided under the Medicaid plan of the State of residence 
        of an elderly or disabled individual who is a patient in a 
        hospital, nursing facility, intermediate care facility for the 
        mentally retarded, or an institution for mental diseases (as 
        such terms are defined for purposes of such plan); and
            (2) the term ``home and community-based services'' means 
        any services which may be offered under the Medicaid plan of 
        the State of residence of an elderly or disabled individual 
        under a home and community-based waiver authorized for a State 
        under section 1115 of the Social Security Act (42 U.S.C. 1315) 
        or under subsection (c), (d), or (i) of section 1915 of such 
        Act (42 U.S.C. 1396n).

                      TITLE IV--HEALTHIER MEDICARE

  Subtitle A--Authority To Adjust Amount of Part B Premium To Reward 
                        Positive Health Behavior

SEC. 401. AUTHORITY TO ADJUST AMOUNT OF MEDICARE PART B PREMIUM TO 
              REWARD POSITIVE HEALTH BEHAVIOR.

    Section 1839 of the Social Security Act (42 U.S.C. 1395r) is 
amended--
            (1) in subsection (a)(2), by striking ``and (i)'' and 
        inserting ``(i), and (j)''; and
            (2) by adding at the end the following new subsection:
    ``(j)(1) With respect to the monthly premium amount for months 
after December 2008, the Secretary may adjust (under procedures 
established by the Secretary) the amount of such premium for an 
individual based on whether or not the individual participates in 
certain healthy behaviors, such as weight management, exercise, 
nutrition counseling, refraining from tobacco use, designating a health 
home, and other behaviors determined appropriate by the Secretary.
    ``(2) In making the adjustments under paragraph (1) for a month, 
the Secretary shall ensure that the total amount of premiums to be paid 
under this part for the month is equal to the total amount of premiums 
that would have been paid under this part for the month if no such 
adjustments had been made, as estimated by the Secretary.''.

     Subtitle B--Promoting Primary Care for Medicare Beneficiaries

SEC. 411. PRIMARY CARE SERVICES MANAGEMENT PAYMENT.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by inserting after section 1807 the following new section:

``SEC. 1807A. PRIMARY CARE MANAGEMENT PAYMENT FOR COORDINATING CARE.

    ``(a) Payment.--
            ``(1) In general.--Not later than January 1, 2008, the 
        Secretary, subject to paragraph (2), shall establish procedures 
        for providing primary care and participating providers with a 
        management fee (as determined appropriate by the Secretary, in 
        consultation with the Medicare Payment Advisory Commission 
        established under section 1805) that reflects the amount of 
        time spent with a Medicare beneficiary, and the family of such 
        beneficiary, providing chronic care disease management services 
        or other services in assisting in coordinating care.
            ``(2) Requirement for designation as health home.--The 
        management fee under paragraph (1) shall not be provided to a 
        primary care provider with respect to a Medicare beneficiary 
        unless the provider has been designated (under procedures 
        established by the Secretary) as the health home by the 
        beneficiary.
    ``(b) Definitions.--In this section:
            ``(1) Health home.--The term `health home' means a health 
        care provider that a Medicare beneficiary has designated to 
        monitor the health and health care of the beneficiary.
            ``(2) Medicare beneficiary.--The term `Medicare 
        beneficiary' means an individual who is entitled to, or 
        enrolled for, benefits under part A, enrolled under part B, or 
        both.
            ``(3) Primary care provider.--
                    ``(A) In general.--The term `primary care provider' 
                means a primary care physician (as defined in 
                subparagraph (B), a nurse practitioner (as defined in 
                section 1861aa(5)(A)), or a physician assistant (as so 
                defined).
                    ``(B) Primary care physician.--In subparagraph (A), 
                the term `primary care physician' means a physician, 
                such as a family practitioner or internist, who is 
                chosen by an individual to provide continuous medical 
                care, who is able to give a wide range of care, 
                including prevention and treatment, and who can refer 
                the individual to a specialist.''.

              Subtitle C--Chronic Care Disease Management

SEC. 421. CHRONIC CARE DISEASE MANAGEMENT.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), as 
amended by section 411, is amended by inserting after section 1807A the 
following new section:

``SEC. 1807B. CHRONIC CARE DISEASE MANAGEMENT PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.--Not later than January 1, 2008, the 
        Secretary shall develop and implement a chronic care disease 
        management program (in this section referred to as the 
        `program'). The program shall be designed to provide chronic 
        care disease management to all Medicare beneficiaries with 
        respect to at least the 5 most prevalent diseases within the 
        population of such beneficiaries (as determined by the 
        Secretary).
            ``(2) Development.--In developing and implementing the 
        program under paragraph (1), the Secretary shall--
                    ``(A) take into consideration--
                            ``(i) the results of chronic care 
                        improvement programs conducted under section 
                        1807, including the independent evaluations of 
                        such programs conducted under section 
                        1807(b)(5) and any outcomes reports submitted 
                        under section 1807(e)(4)(A); and
                            ``(ii) the results of the payments to 
                        primary care providers under section 1807A; and
                    ``(B) consult individuals with expertise in chronic 
                care disease management.
    ``(b) Identification and Enrollment.--The Secretary shall establish 
procedures for identifying and enrolling Medicare beneficiaries who may 
benefit from participation in the program.
    ``(c) Chronic Care Disease Management Payment for Non-Primary Care 
Physicians.--
            ``(1) In general.--Under the program, a non-primary care 
        physician shall receive a chronic care disease management 
        payment if the physician serves the Medicare beneficiary by 
        assuring the beneficiary receives appropriate and comprehensive 
        care, including referral of the individual to specialists, and 
        assuring the beneficiary receives preventive services.
            ``(2) Amount of payment.--The amount of the management 
        payment under the program shall be an amount determined 
        appropriate by the Secretary, in consultation with the Medicare 
        Payment Advisory Commission established under section 1805. 
        Such amount shall reflect the amount of time spent with a 
        Medicare beneficiary, and the family of such beneficiary, 
        providing chronic care disease management services.
    ``(d) Definitions.--In this section:
            ``(1) Medicare beneficiary.--The term `Medicare 
        beneficiary' means an individual who is entitled to, or 
        enrolled for, benefits under part A, enrolled under part B, or 
        both.
            ``(2) Non-primary care physician.--The term `non-primary 
        care physician' means a physician who--
                    ``(A) is not a primary care physician (as defined 
                in section 1807A (b)(3)(B)); and
                    ``(B) provides chronic care disease management 
                services to a Medicare beneficiary under the 
                program.''.

SEC. 422. CHRONIC CARE EDUCATION CENTERS.

    (a) Establishment.--The Secretary shall establish Chronic Care 
Education Centers.
    (b) Purpose.--The Chronic Care Education Centers established under 
subsection (a) shall serve as clearinghouses for information on health 
care providers who have expertise in the management of chronic disease.
    (c) Use of Certain Information.--In developing the information 
described in subsection (b), the Secretary shall utilize--
            (1) information on the performance of providers in chronic 
        disease demonstration projects and pay for performance efforts; 
        and
            (2) additional information determined appropriate by the 
        Secretary.

      Subtitle D--Improving Quality in Hospitals for All Patients

SEC. 431. IMPROVING QUALITY IN HOSPITALS FOR ALL PATIENTS.

    (a) Improving Healthcare Quality for All Patients.--
            (1) In general.--Section 1866(a)(1) of the Social Security 
        Act (42 U.S.C. 1395cc(a)(1)) is amended--
                    (A) in subparagraph (U), by striking ``and'' at the 
                end;
                    (B) in subparagraph (V), by striking the period at 
                the end and inserting ``, and''; and
                    (C) by inserting after subparagraph (V) the 
                following new subparagraph:
            ``(W) in the case of hospitals, to demonstrate to 
        accrediting bodies measurable improvement in quality control 
        with respect to all patients and to have in place quality 
        control programs that are directed at care for all patients and 
        that include--
                    ``(i) rapid response teams that can assist patients 
                with unstable vital signs;
                    ``(ii) heart attack treatments with proven 
                reliability;
                    ``(iii) procedures that reduce medication errors;
                    ``(iv) aggressive infection prevention, with 
                special focus on surgeries and infections with the 
                highest death rates;
                    ``(v) procedures that reduce the threat of 
                pneumonia, with special focus on the incidence of 
                ventilator-related illness; and
                    ``(vi) such other elements as the Secretary 
                determines appropriate.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to hospitals as of the date that is 4 years after 
        the date of enactment of this Act.
    (b) Panel of Independent Experts.--Beginning not later than the 
date that is 4 years after the date of enactment of this Act, in order 
to ensure that hospitals practice state-of-the-art quality control, the 
Secretary shall convene a panel of independent experts to update the 
measures of quality control and the types of quality control programs, 
including the elements of such programs, required under section 
1866(a)(1)(W) of the Social Security Act, as added by subsection (a), 
not less frequently than on an annual basis.

                   Subtitle E--Additional Provisions

SEC. 441. ADDITIONAL COST INFORMATION.

    (a) In General.--Section 1857(e) of the Social Security Act (42 
U.S.C. 1395w-27(e)) is amended by adding at the end the following new 
paragraph:
            ``(4) Additional cost information.--A contract under this 
        section shall require a Medicare Advantage Organization to 
        aggregate claims information into episodes of care and to 
        provide such information to the Secretary so that costs for 
        specific hospitals and physicians may be measured and compared. 
        The Secretary shall make such information public on an annual 
        basis.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to contracts entered into on or after the date of enactment of 
this Act.

SEC. 442. REDUCING MEDICARE PAPERWORK AND REGULATORY BURDENS.

    Not later than 18 months after the date of enactment of this Act, 
the Secretary shall provide to Congress a plan for reducing regulations 
and paperwork in the Medicare program under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.). Such plan shall focus initially 
on regulations that do not directly enhance the quality of patient care 
provided under such program.

                  TITLE V--STATE HEALTH HELP AGENCIES

SEC. 501. ESTABLISHMENT.

    As a condition of receiving payment under section 503, a State 
shall, not later than the date that is 4 years after the date of 
enactment of this Act, establish or designate a State agency, to be 
known as the State ``Health Help Agency'' (referred to in this Act as a 
``HHA'') to--
            (1) carry out the administration of HAPI plans to 
        individuals in such State; and
            (2) carry out the functions described in section 502.

SEC. 502. RESPONSIBILITIES AND AUTHORITIES.

    (a) Promotion of Prevention and Wellness.--Each HHA shall promote 
prevention and wellness for all State residents, including through the 
implementation of programs that--
            (1) educate residents about responsibility for individual 
        health and the health of children;
            (2) upon request, distribute information to covered 
        individuals regarding the availability of wellness programs;
            (3) make available to the public, with respect to each 
        health insurance issuer and each HAPI plan, the number of 
        covered individuals who have designated a health home described 
        in section 111(b); and
            (4) promote the use and understanding of health information 
        technology.
    (b) Enrollment Oversight.--Each HHA shall oversee enrollment in 
HAPI plans by--
            (1) providing standardized, unbiased information on HAPI 
        plans and supplemental health insurance options;
            (2) not less than once per year, administering open 
        enrollment periods for individuals;
            (3) allowing a covered individual to make enrollment 
        changes during a 30-day period following marriage, divorce, 
        birth, adoption or placement for adoption, and other 
        circumstances;
            (4) establish procedures for health insurance issuers to 
        report to the HHA of each State in which the issuer offers a 
        HAPI plan, the health insurance status of State residents in 
        order for the HHA to report annual on the number of uninsured 
        and other relevant data;
            (5) establish procedures for default enrollment of 
        uninsured individuals into low-cost HAPI plans for individuals 
        or families who do not enroll, are not covered under a health 
        plan offered through a program described in paragraphs (1)(A) 
        of section 102(a), and are not described in paragraph (1)(B) of 
        such section;
            (6) establish procedures for hospitals and other providers 
        to report to the HHA if an individual seeks care and is 
        uninsured or does not know his or her health insurance status;
            (7) ensure that the enrollment of all individuals into HAPI 
        plans, including those individuals assisted by an employer, 
        insurance agent, or other person, is administered by the HHA;
            (8) develop standardized language for HAPI plan terms and 
        conditions and require participating health insurance issuers 
        to use such language in plan information documents;
            (9) provide prospective enrollees with a comparative 
        document that describes all the HAPI plans in which the 
        individual may enroll; and
            (10) to assist consumers in choosing a HAPI plan, publish 
        information that includes loss ratios, outcome data regarding 
        wellness programs, disease detection and chronic care 
        management programs categorized by health insurance issuer, and 
        other data as the HHA determines appropriate.
    (c) Determination and Administration of HAPI Plan Subsidies.--Each 
HHA shall oversee the determination and administration of HAPI plan 
subsidies by--
            (1) informing State residents about how subsidy eligibility 
        determinations are made;
            (2) obtaining necessary information about income from 
        individuals and Federal and State agencies;
            (3) making eligibility determinations on an individual 
        basis and informing individuals of such determinations;
            (4) establishing a process by which an individual may 
        appeal an eligibility determination;
            (5) collecting from health insurance issuers an 
        administrative fee for joining the HHA system and offering a 
        HAPI plan in a State;
            (6) collecting premium payments made by, or on behalf of, 
        covered individuals, and remitting such payments to the HAPI 
        plans; and
            (7) collecting Federal premium subsidies for covered 
        individuals and remitting such subsidies to HAPI plans.
    (d) Premium Rating Rules.--Each HHA shall ensure that the premium 
payments for each HAPI plan are determined in accordance with the 
rating rules described in section 111(d).
    (e) Empowerment of Individuals To Make Health Care Decisions.--Each 
HHA shall, upon enrollment of an individual in a HAPI plan, provide 
such individual with information regarding--
            (1) the right of individuals to refuse treatment and to 
        make end-of-life care decisions;
            (2) State laws relating to end-of-life care, including 
        applicable State law with respect to health care proxies, 
        advanced directives, living wills, and other documentation by 
        which individuals may make their care decisions known;
            (3) contact information for any State end-of-life care 
        advocates; and
            (4) applicable State forms on health proxies, advanced 
        directives, living wills, and other such documentation.
    (f) Determination of Plan Coverage Areas.--Each HHA shall 
establish, and may revise, HAPI plan coverage areas for the State in 
which the HHA is located. The service area of a HAPI plan shall consist 
of an entire coverage area established under the preceding sentence.
    (g) Cooperation Among States.--States that share 1 or more 
metropolitan statistical area may enter into agreements to share 
administrative responsibilities described under this section.
    (h) Transition From Medicaid and SCHIP; Coordination of 
Supplemental Medical Assistance for Elderly and Disabled Medicaid 
Eligibles.--Each HHA shall work with the Secretary to ensure that the 
requirements of section 301 of this Act, section 1941 of the Social 
Security Act (as added by section 673(a) of this Act), and subsections 
(a) and (b) of section 1940 of the Social Security Act (as added by 
section 311 of this Act) are met.

SEC. 503. APPROPRIATIONS FOR TRANSITION TO STATE HEALTH HELP AGENCIES.

    (a) Appropriation.--There is authorized to be appropriated and 
there is appropriated, for each of the 4 full fiscal years immediately 
following the date of enactment of this Act, such sums as may be 
necessary for the purpose of enabling each State to carry out the 
purposes of this title. The sums made available under this section 
shall be used for making payments to States that have submitted, and 
had approved by the Secretary, an HHA plan under this section.
    (b) Submission of State HHA Plan.--Each HHA plan submitted by a 
State shall provide for--
            (1) the establishment of an HHA within such State by the 
        date that is 4 years after the date of enactment of this Act;
            (2) the administration by with State of such HHA in 
        accordance with the requirements described under this Act; and
            (3) the compliance by the State of the requirements 
        described under section 631.
    (c) Payment to States.--From the sums appropriated under subsection 
(a), the Secretary shall pay to each State that has an HHA plan 
approved under this section, an amount necessary for the State to 
implement such plan for the applicable fiscal year.

                   TITLE VI--SHARED RESPONSIBILITIES

                Subtitle A--Individual Responsibilities

SEC. 601. INDIVIDUAL RESPONSIBILITY TO ENSURE HAPI PLAN COVERAGE.

    (a) Open Season.--An adult individual, on behalf of such individual 
and the dependent children of such individual, shall--
            (1) enroll in a HAPI plan through the HHA of the 
        individual's State of residence during an open enrollment 
        period; and
            (2) submit necessary documentation to the applicable HHA so 
        that such HHA may determine individual eligibility for premium 
        and personal responsibility contribution subsidies.
An adult individual may carry out the activities described under 
paragraphs (1) and (2) on behalf of the spouse of such adult 
individual.
    (b) During Plan Year.--A covered individual shall--
            (1) submit any required monthly premium payments;
            (2) submit any personal responsibility contributions as 
        required; and
            (3) inform such HHA of any changes in the family status or 
        residence of such individual.

                 Subtitle B--Employer Responsibilities

SEC. 611. HEALTH CARE RESPONSIBILITY PAYMENTS.

    (a) Payment Requirements.--
            (1) In general.--Subtitle C of the Internal Revenue Code of 
        1986 is amended by inserting after chapter 24 the following new 
        chapter:

           ``CHAPTER 24A--HEALTH CARE RESPONSIBILITY PAYMENTS

        ``subchapter a--employer shared responsibility payments

       ``subchapter b--individual shared responsibility payments

                   ``subchapter c--general provisions

        ``Subchapter A--Employer Shared Responsibility Payments

``Sec. 3411. Payment requirement.
``Sec. 3412. Instrumentalities of the United States.

``SEC. 3411. PAYMENT REQUIREMENT.

    ``(a) Employer Shared Responsibility Payments.--Every employer 
shall pay an employer shared responsibility payment for each calendar 
year in an amount equal to the product of--
            ``(1) the number of full-time equivalent employees employed 
        by the employer during the preceding calendar year, multiplied 
        by
            ``(2) the applicable percentage of the average HAPI plan 
        premium amount for such calendar year.
    ``(b) Applicable Percentage.--For purposes of subsection (a)(2)--
            ``(1) In general.--The applicable percentage shall be 
        determined as follows:


 
------------------------------------------------------------------------
  Revenue per employee national percentile of      Large        Small
 the taxpayer for the preceding calendar year:   employer:    employer:
------------------------------------------------------------------------
0-20th percentile.............................          17%           2%
21st-40th percentile..........................          19%           4%
41st-60th percentile..........................          21%           6%
61st-80th percentile..........................          23%           8%
81st-99th percentile..........................          25%         10%.
------------------------------------------------------------------------

            ``(2) Applicable percentage for certain non-revenue 
        producing entities.--In the case of an employer which is a 
        nonprofit entity, a State or local government, or any other 
        type of entity for which the Secretary determines that 
        calculating revenue per employee is not appropriate, the 
        applicable percentage shall be--
                    ``(A) in the case of a large employer, 17 percent, 
                and
                    ``(B) in the case of a small employer, 2 percent.
            ``(3) Additional rate for certain small employers.--
                    ``(A) In general.--In the case of a small employer, 
                the applicable percentage determined under paragraph 
                (1) shall be increased by 0.1 percent for each full-
                time equivalent employee employed by the employer 
                during the preceding calendar year in excess of 50.
                    ``(B) Maximum additional rate.--The increase in the 
                applicable percentage determined under this paragraph 
                shall not exceed 15 percent.
            ``(4) Revenue per employee national percentile rank.--At 
        the beginning of each calendar year, the Secretary, in 
        consultation with the Secretary of Labor, shall publish a 
        table, based on sampling of employers, to be used in 
        determining the national percentile for revenue per employee 
        amounts for the preceding calendar year.
            ``(5) Increased transitional rates for large employers.--In 
        the case of any employer who did not provide health insurance 
        coverage for employees on the day before the date of enactment 
        of the Healthy Americans Act, the table contained in paragraph 
        (1) shall be applied by substituting `28%' for `23%' and by 
        substituting `30%' for `25%' with respect to each of the first 
        4 calendar years to which this section applies.
    ``(c) Temporary Additional Payment for Certain Employers.--In the 
case of the first 4 calendar years to which this section applies--
            ``(1) In general.--In the case of any employer who provided 
        health insurance coverage for employees on the day before the 
        date of enactment of the Healthy Americans Act, the employer 
        shared responsibility payment shall be increased by an amount 
        equal to the excess of--
                    ``(A) 100 percent of the designated employee health 
                insurance premium amount of such employer, over
                    ``(B) the employee salary investment amount.
            ``(2) Employee salary investment amount.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `employee salary 
                investment amount' means the lesser of--
                            ``(i) the excess of the amount of average 
                        yearly wages paid to all employees for such 
                        year over the amount of average yearly wages 
                        paid to such employee for the year before the 
                        first year this section applies, or
                            ``(ii) the designated employee health 
                        insurance premium amount of such employer.
                    ``(B) Nondiscrimination rules.--No amount paid by 
                an employer shall be treated as an employee salary 
                investment amount unless such amount is distributed to 
                all employees on a basis that is proportional to the 
                amount of wages paid to such employee before such 
                distribution.
                    ``(C) Notice requirement.--No amount paid by an 
                employer shall be treated as an employee salary 
                investment amount unless the employer gives each 
                employee notice of the amount of the designated 
                employee health insurance premium amount paid by the 
                employer with respect to the employee.
                    ``(D) Treatment of amount.--An employee salary 
                investment amount shall not be treated as income or 
                otherwise taken into account for purposes of 
                determining any individual's eligibility for benefits 
                or assistance under any governmental assistance 
                program.
            ``(3) Employer shared responsibility credit.--The Secretary 
        may provide a credit to private employers who provided health 
        insurance benefits greater than the 80th percentile of the 
        national average in the 4 years prior to enactment of the 
        Healthy Americans Act, if such employer can demonstrate the 
        benefits provided encouraged prevention and wellness activities 
        as defined in this Act, and that the employer continues to 
        provide wellness programs.
            ``(4) Special rule for self-insured employers.--In the case 
        of any employer who provided health care coverage for employees 
        through self-insurance, `average HAPI plan premium amount for 
        the first year this section applies' shall be substituted for 
        `designated employee health insurance premium amount of such 
        employer' in paragraphs (1)(A) and (2)(A)(ii).
            ``(5) Regulations.--The Secretary may establish such rules 
        and regulations as necessary to carry out the purposes of this 
        subsection.
    ``(d) Transition Rate for Employers Not Previously Providing Health 
Insurance.--In the case of any employer who did not provide health 
insurance to employees on the day before the date of enactment of the 
Healthy Americans Act--
            ``(1) the employer shared responsibility payment for the 
        first year this section applies shall be an amount equal \1/3\ 
        of the amount otherwise required under this section (determined 
        without regard to this subsection), and
            ``(2) the employer shared responsibility payment for the 
        second year this section applies shall be an amount equal \2/3\ 
        of the amount otherwise required under this section (determined 
        without regard to this subsection).

``SEC. 3412. 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 payment required by 
section 3411 unless such provision of law grants a specific exemption, 
by reference to section 3111 from the payment required by such section.

       ``Subchapter B--Individual Shared Responsibility Payments

``Sec. 3421. Amount of payment.
``Sec. 3422. Deduction of tax from wages.

``SEC. 3421. AMOUNT OF PAYMENT.

    ``(a) In General.--Every individual shall pay an individual shared 
responsibility payment in an amount equal to the HAPI plan premium 
amount of such individual.
    ``(b) Exception.--This section shall not apply to any individual--
            ``(1) who is covered under a HAPI plan of another 
        individual, or
            ``(2) who provides such documentation as required by the 
        Secretary demonstrating that such individual has paid such HAPI 
        plan premium amount, but only for the period with respect to 
        which such amount is shown to be paid.

``SEC. 3422. DEDUCTION OF INDIVIDUAL SHARED RESPONSIBILITY PAYMENT FROM 
              WAGES.

    ``(a) In General.--The individual shared responsibility payment 
imposed by section 3421 shall be collected by the employer by deducting 
the amount of the payment from the wages as and when paid.
    ``(b) Nondeductibility by Employer.--The individual shared 
responsibility payment deducted and withheld by the employer under 
subsection (a) shall not be allowed as a deduction to the employer in 
computing taxable income under subtitle A.
    ``(c) Indemnification of Employer; Special Rule for Tips.--Rules 
similar to the rules of subsections (b) and (c) of section 3102 shall 
apply for purposes of this section.

                   ``Subchapter C--General Provisions

``Sec. 3431. Definitions and special rules.
``Sec. 3432. Labor contracts.

``SEC. 3431. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this chapter--
            ``(1) Average hapi plan premium amount.--The term `average 
        HAPI plan premium amount' means the national average yearly 
        premium for HAPI plans with standard coverage (as determined 
        under section 103(b) of the Healthy Americans Act), determined 
        without regard to differing classes of coverage.
            ``(2) Designated employee health insurance premium 
        amount.--The term `designated employee health insurance premium 
        amount' means the greater of--
                    ``(A) the yearly premium paid by an employer for 
                health insurance coverage for employees for the most 
                recent calendar year ending before the date of 
                enactment of the Healthy Americans Act, or
                    ``(B) the yearly premium paid by an employer for 
                health insurance coverage for employees for the year 
                before the first year this section applies.
            ``(3) Employer.--
                    ``(A) In general.--The term `employer' has the 
                meaning given such term under section 3401(d).
                    ``(B) Aggregation rules.--For purposes of this 
                chapter, all persons treated as a single employer under 
                subsection (a) or (b) of section 52 shall be treated as 
                1 person.
            ``(4) Employment.--The term `employment' has the meaning 
        given such term under section 3121(b).
            ``(5) Full-time equivalent employee.--The term `full-time 
        equivalent employee' means the equivalent number of full-time 
        employees of an employer determined for any year under the 
        following formula:
                    ``(A) The sum of the number of full-time employees 
                employed by the employer for more than 3 months during 
                such year, plus
                    ``(B) The quotient of--
                            ``(i) the sum of the average weekly hours 
                        worked during such year for each employee of 
                        the employer (including common law employees) 
                        who--
                                    ``(I) was employed by such employer 
                                during such year for more than 3 
                                months, and
                                    ``(II) is not a full-time employee, 
                                divided by
                            ``(ii) 40.
            ``(6) Full-time employee.--The term `full-time employee' 
        means an employee (including a common law employee) who during 
        an average workweek performs, or can reasonably be expected to 
        perform, at least 40 hours of work. The Secretary may prescribe 
        alternative rules for determining full-time equivalent 
        employees in occupations or industries not using a standard 
        workweek.
            ``(7) HAPI plan.--The term `HAPI plan' has the meaning 
        given such term under section 3 of the Healthy Americans Act.
            ``(8) HAPI plan premium amount.--The term `HAPI plan 
        premium amount' means, with respect to any individual, the 
        monthly premium for the HAPI plan under which such individual 
        is enrolled, determined after taking into account any subsidy 
        provided to such individual under section 131 of the Healthy 
        Americans Act.
            ``(9) Large employer.--The term `large employer' means, 
        with respect to any year, an employer who employs an average of 
        over 200 full-time equivalent employees during such year.
            ``(10)  Revenue per employee.--The term `revenue per 
        employee' means, with respect to any employer for any year, the 
        gross receipts of the employer for such year divided by the 
        number of full-time equivalent employees employed by such 
        employer for such year.
            ``(11) Small employer.--The term `small employer' means, 
        with respect to any year, an employer who employs an average of 
        200 or fewer full-time equivalent employees during such year.
            ``(12) Wages.--The term `wages' has the meaning given such 
        term under section 3401(a).
    ``(b) Special Rules.--
            ``(1) Special rule for self-employed individuals.--For 
        purposes of this chapter, a self-employed individual (as 
        defined by section 401(c)(1)(B)) shall be treated as both a 
        full-time equivalent employee and as an employer.
            ``(2) Treatment of payments.--For purposes of this title, 
        the payments required by sections 3411 and 3421 shall be 
        treated as a tax imposed by such sections, respectively.
            ``(3) Other special rules.--For purposes of this chapter, 
        rules similar to rules under the following provisions shall 
        apply:
                    ``(A) Section 3122 (relating to Federal service).
                    ``(B) Section 3123 (relating to deductions as 
                constructive payments).
                    ``(C) Section 3125 (relating to returns in the case 
                of governmental employees in States, Guam, American 
                Samoa, and the District of Columbia).
                    ``(D) Section 3126 (relating to return and payment 
                by government employer).
                    ``(E) Section 3127 (relating to exemption for 
                employers and their employees where both are members of 
                religious faiths opposed to participation in social 
                security act programs).

``SEC. 3432. LABOR CONTRACTS.

    ``(a) In General.--This chapter shall not apply with respect to any 
qualified collective bargaining employee of any qualified collective 
bargaining employer before the earlier of--
            ``(1) January 1 of the first year which is more than 9 
        years after the date of the enactment of this chapter, or
            ``(2) the date the collective bargaining agreement expires.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified collective bargaining employer.--The term 
        `qualified collective bargaining employer' means an employer 
        who provides health insurance to employees under the terms of a 
        collective bargaining agreement which is entered into before 
        the date of the enactment of this chapter.
            ``(2) Qualified collective bargaining employee.--The term 
        `qualified collective bargaining employee' means an employee of 
        a qualified collective bargaining employer who is covered by a 
        collective bargaining agreement governing the employee's health 
        insurance.''.
            (2) Conforming amendment.--The table of chapters of the 
        Internal Revenue Code of 1986 is amended by inserting after the 
        item relating to chapter 24 the following new item:

         ``CHAPTER 24A--Health Care Responsibility Payments''.

    (b) Collection of Individual Shared Responsibility Payments Through 
Estimated Taxes.--Section 6654 of the Internal Revenue Code of 1986 
(relating to failure by individual to pay estimated tax) is amended--
            (1) in subsection (a), by striking ``and the tax under 
        chapter 2'' and inserting ``, the tax under chapter 2, and the 
        individual shared responsibility payment required under 
        subchapter B of chapter 24A'', and
            (2) in subsection (f)--
                    (A) by striking ``minus'' at the end of paragraph 
                (2) and inserting ``plus'',
                    (B) by redesignating paragraph (3) as paragraph 
                (5), and
                    (C) by inserting after paragraph (2) the following 
                new paragraphs:
            ``(3) the individual shared responsibility payment required 
        under subchapter B of chapter 24A, minus
            ``(4) the amount withheld as an individual shared 
        responsibility payment under section 3422, minus''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning at least 4 years after the date of 
the enactment of this Act.

SEC. 612. DISTRIBUTION OF INDIVIDUAL RESPONSIBILITY PAYMENTS TO HHAS.

    (a) In General.--The Secretary of the Treasury shall pay to the HHA 
in each State an amount equal to the amount of individual shared 
responsibility payments received under section 3421 of the Internal 
Revenue Code of 1986 with respect to each individual residing in such 
State.
    (b) Treatment of Payments.--Any amount paid to a State under 
subsection (a) shall be treated as an amount paid by the individual as 
a premium for the HAPI plan in which such individual is enrolled.

                  Subtitle C--Insurer Responsibilities

SEC. 621. INSURER RESPONSIBILITIES.

    (a) In General.--To offer a HAPI plan through an HHA, a State shall 
require that a health insurance issuer meet the requirements of this 
section.
    (b) Requirements.--A health insurance issuer offering a HAPI plan 
in a State shall--
            (1) implement and emphasize prevention, early detection and 
        chronic disease management;
            (2) ensure that a wellness program as described in section 
        131 is available to all covered individuals so long as such a 
        wellness program meets the requirements of the health insurance 
        issuers and other relevant requirements;
            (3) demonstrate how the provider reimbursement methodology 
        used by such an issuer has been adjusted to reward providers 
        for achieving quality and cost efficiency in prevention, early 
        detection of disease, and chronic care management;
            (4) ensure enrollees have the opportunity to designate a 
        health home as described in section 111(b) and make public how 
        many enrollees per policy have designated a health home;
            (5) upon enrollment, make available to each covered 
        individual an initial physical and a care plan;
            (6) create and implement an electronic medical record for 
        each covered individual, unless the individual submits a 
        notification to the issuer that the individual declines to have 
        such a record;
            (7) contribute to the financing of the HHAs by 
        incorporating into the administration component of premiums an 
        additional amount to reimburse HHAs for administrative costs;
            (8) comply with loss ratios as established by the Secretary 
        under subsection (e);
            (9) use standardized common claims forms and uniform 
        billing practices as provided for under subsection (c);
            (10) require that hospitals, as a condition of receiving 
        payment, send bills that are in an amount more than $5,000 to 
        the covered individual (without regard to whether the covered 
        individual is responsible for full or partial payment of the 
        bill) and provide the individual the contact information of a 
        person who can discuss the bill with the individual;
            (11) provide incentives such as premium discounts--
                    (A) for parents, if a covered child participates in 
                wellness activities and the health of such child 
                improves; and
                    (B) for adults covered by a plan to participate in 
                prevention, wellness and chronic disease management 
                programs;
            (12) report to the HHA of the State in which the issuer 
        offers HAPI plans, outcome data regarding wellness program, 
        disease detection and chronic care management, and loss ratio 
        information, so that the HHAs may make such data available to 
        the public in a consumer-friendly format;
            (13) work with the Agency for Healthcare Research and 
        Quality, medical experts, and patient groups to make 
        information on high quality affordable health providers 
        available to all Americans within 4 years of the date of 
        enactment of this Act through a website searchable by zip code;
            (14) provide to the HHA of each State in which the issuer 
        offers a HAPI plan, detailed information on the HAPI plans 
        offered by such issuer, using standardized language as required 
        by the HHA, so that the HHA may compile a document that 
        compares the HAPI plans for use by prospective enrollees;
            (15) pay to the HHA of each State in which the issuer seeks 
        to offer a HAPI plan the amount of the administrative fee 
        assessed by the HHA under section 502(c)(5) to enter the HHA 
        system of that State; and
            (16) provide for prompt payment of providers for claims 
        received in accordance with State law, but in no case later 
        than 45 days after the date of receipt of a claim that has no 
        defect or impropriety or particular circumstance requiring 
        special treatment that prevents timely payment from being made 
        on the claim under the plan.
    (c) Uniform Billing Practices.--
            (1) In general.--A health insurance issuer offering a HAPI 
        plan in a State shall not receive subsidy payments from the 
        applicable State HHA unless such issuer agrees to use 
        standardized common claim forms prescribed by the applicable 
        State HHA consistent with paragraph (2) and to provide a copy 
        of such form to the insured.
            (2) Contents of claim form.--Each common claims form shall 
        show--
                    (A) the cost of the entire episode of care provided 
                to the insured;
                    (B) the percentage of the cost covered by the 
                issuer; and
                    (C) the percentage of the cost paid by the insured.
            (3) Exception.--Paragraph (1) shall not apply to any State 
        worker's compensation system.
    (d) Chronic Care Programs Offered by Issuers.--
            (1) In general.--A health insurance issuer offering a HAPI 
        plan in a State shall provide a chronic care program to provide 
        early identification and management of chronic diseases.
            (2) Determination of chronic care program.--Each State HHA 
        shall determine what constitutes a chronic care program under 
        this subsection and whether to collect and report financial 
        information related to chronic care programs.
            (3) Uniform clinical performance standards.--Each chronic 
        care program offered by a health insurance issuer shall use a 
        uniform set of clinical performance standards prescribed by the 
        HHA of the State in which the issuer offers a HAPI plan (in 
        consultation with the State Medicare quality improvement 
        organizations and patient and physician organizations) which 
        should include encouragement that the issuers not require 
        personal responsibility contributions for clinically-needed 
        services to treat or manage a covered individual's chronic 
        disease, particularly if the individual is taking an active 
        management role in working with their provider to manage any 
        such disease.
            (4) Reporting by issuers.--Seven years after the date of 
        enactment of this Act and on an annual basis thereafter, each 
        health insurance issuer shall report to the applicable State 
        Insurance Commissioner, State Secretary of Health or other 
        state entity selected by the State HHA, the chronic care 
        management performance of the issuer as measured by the uniform 
        clinical performance standards described in paragraph (3). The 
        issuer shall make such performance public in a manner 
        accessible to the public.
    (e) Private Insurance Company Loss Ratio.--
            (1) In general.--The Secretary, in consultation with 
        consumer and patient organizations, the National Association of 
        Insurance Commissioners, and health insurance issuers 
        (including health maintenance organizations) shall establish a 
        loss ratio for issuers of HAPI plans.
            (2) Determination of loss ratio.--In determining the loss 
        ratio, administrative costs shall be defined as expenses 
        consisting of all actual, allowable, allocable, and reasonable 
        expenses incurred in the adjudication of subscriber benefit 
        claims or incurred in the health insurance issuer's overall 
        operation of the business.
            (3) Administrative expenses.--
                    (A) In general.--Unless otherwise determined by an 
                agreement between a State HHA and a health insurance 
                issuer, the administrative expenses of an issuer 
                shall--
                            (i) include all taxes (excluding premium 
                        taxes) reinsurance premiums, medical and dental 
                        consultants used in the adjudication process, 
                        concurrent or managed care review when not 
                        billed by a health care provider and other 
                        forms of utilization review, the cost of 
                        maintaining eligibility files, legal expenses 
                        incurred in the litigation of benefit payments, 
                        and bank charges for letters of credit; and
                            (ii) not include the cost of personnel, 
                        equipment, and facilities directly used in the 
                        delivery of health care services (benefit 
                        costs), payments to HHAs for establishment and 
                        administration of HHAs, and the cost of 
                        overseeing chronic disease management programs 
                        and wellness programs.

                   Subtitle D--State Responsibilities

SEC. 631. STATE RESPONSIBILITIES.

    (a) General Requirements.--As a condition of receiving payment 
under section 503, each State shall--
            (1) designate or create a Health Help Agency as described 
        in title V;
            (2) ensure that the HAPI plans offered in the State--
                    (A) are sold only through the State HHA; and
                    (B) comply with the requirements of this Act;
            (3) ensure that health insurance issuers offering a HAPI 
        plan in such State comply with the requirements described in 
        section 621;
            (4) ensure that HAPI plans offer premium discounts and 
        incentives for participation in wellness programs;
            (5) implement mechanisms to collect premium payments not 
        otherwise collected under chapter 24A of the Internal Revenue 
        Code of 1986 (as added by this Act);
            (6) continue to apply State law with respect to--
                    (A) solvency and financial standards for health 
                insurance issuers;
                    (B) fair marketing practices for health insurance 
                issuers;
                    (C) grievances and appeals for covered individuals; 
                and
                    (D) patient protection;
            (7) ensure that providers receiving payment from the State 
        HHA, when appropriate, provide information to patients seeking 
        treatment on the different treatment options, the costs of 
        these treatment options, and any comparative effectiveness 
        information available through the research on comparative 
        effectiveness conducted under the amendments made by title 
        VIII; and
            (8) comply with subsections (b) and (c).
    (b) Ensuring Maximum Enrollment.--Each State shall--
            (1) collect and exchange data with Federal and other public 
        agencies as necessary to maintain a database containing 
        information on the health insurance enrollment status of all 
        State residents;
            (2) implement methods to check enrollment status and enroll 
        individuals in HAPI plans, such as through the Department of 
        Motor Vehicles of the State, the enrollment of children in 
        elementary and secondary schools, the voter registration 
        authority of the State, and other checkpoints determined 
        appropriate by the State;
            (3) implement mechanisms, which may not include revocation 
        or ineligibility for coverage under a HAPI plan, to enforce the 
        responsibility of each adult individual to purchase HAPI plan 
        coverage for such individual and any dependent children of such 
        individual; and
            (4) implement a mechanism to automatically enroll 
        individuals in a HAPI plan who present in emergency departments 
        without health insurance.
    (c) Maintenance of Effort.--Each State shall submit an annual 
report to the Secretary that demonstrates that, for each State fiscal 
year that begins on or after January 1 of the first calendar year in 
which HAPI coverage begins under this Act, State expenditures for 
health services (as defined by the Secretary) are not less than the 
amount equal to--
            (1) in the case of the first State fiscal year for which 
        such a report is submitted, 100 percent of the total amount of 
        the State share of expenditures for such services under all 
        public health programs operated in the State that are funded in 
        whole or in part with State expenditures (including the 
        Medicaid program) for the most recent State fiscal year ending 
        before January 1 of the first calendar year in which HAPI 
        coverage begins under this Act; and
            (2) in the case of any subsequent State fiscal year for 
        which such a report is submitted, the amount applicable under 
        this subsection for the preceding State fiscal year increased 
        by the percentage change, if any, in the consumer price index 
        for all urban consumers over the previous Federal fiscal year.

SEC. 632. EMPOWERING STATES TO INNOVATE THROUGH WAIVERS.

    (a) In General.--A State that meets the requirements of subsection 
(b) shall be eligible for a waiver of applicable Federal health-related 
program requirements.
    (b) Eligibility Requirements.--A State shall be eligible to receive 
a waiver under this section if--
            (1) the legislature of such State enacts legislation, or 
        the State through a publically approved ballot measure approves 
        a plan, to provide health care coverage to it's residents that 
        is at least as comprehensive as the coverage required under a 
        HAPI plan; and
            (2) the State submits to the Secretary an application at 
        such time, in such manner, and containing such information as 
        the Secretary may require, including a comprehensive 
        description of the State legislation or plan for implementing 
        the State-based health plan.
    (c) Determinations by Secretary.--
            (1) In general.--Not later than 180 days after the receipt 
        of an application from a State under subsection (b)(2), the 
        Secretary shall make a determination with respect to the 
        granting of a waiver under this section to such State.
            (2) Granting of waiver.--If the Secretary determines that a 
        waiver should be granted under this section, the Secretary 
        shall notify the State involved of such determination and the 
        terms and effectiveness of such waiver.
            (3) Refusal to grant waiver.--If the Secretary refuses to 
        grant a waiver under this section, the Secretary shall--
                    (A) notify the State involved of such 
                determination, and the reasons therefore; and
                    (B) notify the appropriate committees of Congress 
                of such determination and the reasons therefore.
    (d) Scope of Waivers.--The Secretary shall determine the scope of a 
waiver granted to a State under this section, including which Federal 
laws and requirements will not apply to the State under the waiver.

         Subtitle E--Federal Fallback Guarantee Responsibility

SEC. 641. FEDERAL GUARANTEE OF ACCESS TO COVERAGE.

    (a) Federal Guarantee.--
            (1) In general.--If a State does not establish an HHA in 
        compliance with title V by the date that is 4 years after the 
        date of enactment of this Act, the Secretary shall ensure that 
        each individual has available, consistent with paragraph (2), a 
        choice of enrollment in at least 2 HAPI plans in the coverage 
        area in which the individual resides. In any such case in which 
        such plans are not available, the individual shall be given the 
        opportunity to enroll in a fallback HAPI plan.
            (2) Requirement for different plan sponsors.--The 
        requirement in paragraph (1) is not satisfied with respect to a 
        coverage area if only 1 entity offers all the HAPI plans in the 
        area.
    (b) Contracts.--
            (1) In general.--The Secretary shall enter into contracts 
        under this subsection with entities for the offering of 
        fallback HAPI plans in coverage areas in which the guarantee 
        under subsection (a) is not met.
            (2) Competitive procedures.--Competitive procedures (as 
        defined in section 4(5) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 403(5))) shall be used to enter into a 
        contract under this subsection.
    (c) Fallback HAPI Plan.--For purposes of this section, the term 
``fallback HAPI plan'' means a HAPI plan that--
            (1) meets the requirements described in section 111(b) and 
        does not provide actuarially equivalent coverage described in 
        section 111(c); and
            (2) meets such other requirements as the Secretary may 
        specify.

             Subtitle F--Federal Financing Responsibilities

SEC. 651. APPROPRIATION FOR SUBSIDY PAYMENTS.

    There is authorized to be appropriated and there is appropriated 
for each fiscal year such sums as may be necessary to fund the 
insurance premium subsidies under section 121.

SEC. 652. RECAPTURE OF MEDICARE AND 90 PERCENT OF MEDICAID FEDERAL DSH 
              FUNDS TO STRENGTHEN MEDICARE AND ENSURE CONTINUED SUPPORT 
              FOR PUBLIC HEALTH PROGRAMS.

    (a) Recapture of Medicare DSH Funds.--
            (1) In general.--Section 1886(d)(5)(F)(i) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(5)(F)(i)) is amended by 
        inserting ``and before January 1 of the first calendar year in 
        which coverage under a HAPI plan begins under the Healthy 
        Americans Act,'' after ``May 1, 1986,''.
            (2) Savings to part a trust fund.--The savings to the 
        Federal Hospital Insurance Trust Fund by reason of the 
        amendment made by paragraph (1) shall be used to strengthen the 
        financial solvency of such Trust Fund.
    (b) Recapture of 90 Percent of Medicaid DSH Funds.--
            (1) Healthy americans public health trust fund.--Subchapter 
        A of chapter 98 of the Internal Revenue Code of 1986 (relating 
        to trust fund code) is amended by adding at the end the 
        following new section:

``SEC. 9511. HEALTHY AMERICANS PUBLIC HEALTH TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Healthy Americans 
Public Health Trust Fund', consisting of any amount appropriated or 
credited to the Trust Fund as provided in this section or section 
9602(b).
    ``(b) Transfer to Trust Fund of 90 Percent of Medicaid DSH Funds.--
There are hereby appropriated to the Healthy Americans Public Health 
Trust Fund the following amounts:
            ``(1) In the case of the second, third, and fourth quarters 
        of the first fiscal year in which coverage under a HAPI plan 
        begins under the Healthy Americans Act, an amount equal to 90 
        percent of the amount that would otherwise have been 
        appropriated for the purpose of making payments to States under 
        section 1903(a) of the Social Security Act for the Federal 
        share of disproportionate share hospital payments made under 
        section 1923 of such Act for such quarters of that fiscal year 
        but for subsections (c)(2) and (d)(2)(D) of section 1941 of the 
        such Act, as determined by the Secretary of Health and Human 
        Services.
            ``(2) In the case of each succeeding fiscal year, an amount 
        equal to 90 percent of the amount that would otherwise have 
        been appropriated for the purpose of making payments to States 
        under section 1903(a) of the Social Security Act for the 
        Federal share of disproportionate share hospital payments made 
        under section 1923 of such Act for that fiscal year but for 
        subsections (c)(1) and (d)(2)(D) of section 1941 of such Act, 
        as determined by the Secretary of Health and Human Services, 
        taking into account the percentage change, if any, in the 
        consumer price index for all urban consumers (U.S. city 
        average) for the preceding fiscal year.
    ``(c) Expenditures From Trust Fund.--With respect to each fiscal 
year for which transfers are made under subsection (b), amounts in the 
Healthy Americans Public Health Trust Fund shall be available for that 
fiscal year for the following purposes:
            ``(1) Providing premium and personal responsibility 
        contribution subsidies.--For making appropriations authorized 
        under section 651 of the Healthy Americans Act for providing 
        premium and personal responsibility contribution subsidies in 
        accordance with section 122 of such Act.
            ``(2) Reducing the federal budget deficit.--The Secretary 
        shall transfer any amounts in the Trust Fund that are not 
        expended as of September 30 of a fiscal year for a purpose 
        described in paragraph (1) to the general revenues account of 
        the Treasury.''.
            (2) Clerical amendment.--The table of sections for such 
        subchapter is amended by adding at the end the following new 
        item:

``Sec. 9511. Healthy Americans Public Health Trust Fund.''.

    Subtitle G--Tax Treatment of Health Care Coverage Under Healthy 
  Americans Program; Termination of Coverage Under Other Governmental 
          Programs and Transition Rules for Medicaid and SCHIP

 PART 1--TAX TREATMENT OF HEALTH CARE COVERAGE UNDER HEALTHY AMERICANS 
                                PROGRAM

SEC. 661. LIMITED EMPLOYEE INCOME AND PAYROLL TAX EXCLUSION FOR 
              EMPLOYER SHARED RESPONSIBILITY PAYMENTS, HISTORIC RETIREE 
              HEALTH CONTRIBUTIONS, AND TRANSITIONAL COVERAGE 
              CONTRIBUTIONS.

    (a) Income Tax Exclusion.--
            (1) In general.--Subsection (a) of section 106 of the 
        Internal Revenue Code of 1986 (relating to contributions by 
        employer to accident and health plans) is amended to read as 
        follows:
    ``(a) General Rule.--Gross income of an individual does not 
include--
            ``(1) if such individual is an employee, shared 
        responsibility payments made by an employer under section 3411,
            ``(2) if such individual is a former employee before the 
        first calendar year beginning 4 years after the date of the 
        enactment of the Healthy Americans Act, employer-provided 
        coverage under an accident or health plan,
            ``(3) if such individual is a qualified collective 
        bargaining employee under an accident or health plan in effect 
        on January 1 of the first calendar year beginning 4 years after 
        the date of the enactment of the Healthy Americans Act, 
        employer-provided coverage under such plan during any 
        transition period described in section 3432, and
            ``(4) employer-provided coverage for qualified long-term 
        care services (as defined in section 7702B(c)).''.
            (2) Conforming amendments.--Section 106 of such Code is 
        amended--
                    (A) by adding at the end of subsection (b) the 
                following new paragraph:
            ``(8) Termination.--This subsection shall not apply to 
        contributions made in any calendar year beginning at least 4 
        years after the date of the enactment of the Healthy Americans 
        Act.'',
                    (B) by inserting ``and before the first calendar 
                year beginning 4 years after the date of the enactment 
                of the Healthy Americans Act,'' after ``January 1, 
                1997,'' in subsection (c)(1), and
                    (C) by striking ``shall be treated as employer-
                provided coverage for medical expenses under an 
                accident or health plan'' in subsection (d)(1) and 
                inserting ``shall not be included in such employee's 
                gross income''.
    (b) Payroll Taxes.--
            (1) In general.--Section 3121(a) (defining wages) is 
        amended by adding at the end the following new sentence: ``In 
        the case of any calendar year beginning at least 4 years after 
        the date of the enactment of the Healthy Americans Act, 
        paragraphs (2) and (3) shall apply to payments on account of 
        sickness only if such payments are described in section 
        106(a).''.
            (2) Railroad retirement.--Section 3231(e)(1) (defining 
        wages) is amended by adding at the end the following new 
        sentence: ``In the case of any calendar year beginning at least 
        4 years after the date of the enactment of the Healthy 
        Americans Act, this paragraph shall apply to payments on 
        account of sickness only if such payments are described in 
        section 106(a).''.
            (3) Unemployment.--Section 3306(b) (defining wages) is 
        amended by adding at the end the following new sentence: ``In 
        the case of any calendar year beginning at least 4 years after 
        the date of the enactment of the Healthy Americans Act, 
        paragraphs (2) and (4) shall apply to payments on account of 
        sickness only if such payments are described in section 
        106(a).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning at least 4 years after the date of 
the enactment of the Healthy Americans Act.

SEC. 662. EXCLUSION FOR LIMITED EMPLOYER-PROVIDED HEALTH CARE FRINGE 
              BENEFITS.

    (a) In General.--Section 132(a) of the Internal Revenue Code of 
1986 (relating to certain fringe benefits) is amended by striking 
``or'' at the end of paragraph (7), by striking the period at the end 
of paragraph (8) and inserting ``, or'', and by adding at the end the 
following new paragraph:
            ``(9) qualified health care fringe.''.
    (b) Qualified Health Care Fringe.--
            (1) In general.--Section 132 of the Internal Revenue Code 
        of 1986 is amended by redesignating subsection (o) as 
        subsection (p) and by inserting after subsection (n) the 
        following new subsection:
    ``(o) Qualified Health Care Fringe.--For purposes of this section, 
the term `qualified health care fringe' means--
            ``(1) any wellness program described in section 131 of the 
        Healthy Americans Act, and
            ``(2) any on-site first aid coverage for employees.''.
            (2) Nondiscriminatory treatment.--Section 132(j)(1) of such 
        Code (relating to exclusions under subsection (a)(1) and (2) 
        apply to highly compensated employees only if no 
        discrimination) is amended--
                    (A) by striking ``Paragraphs (1) and (2) of 
                subsection (a)'' and inserting ``Paragraphs (1), (2), 
                and (9) of subsection (a)'', and
                    (B) by striking ``subsection (a)(1) and'' in the 
                heading and inserting ``subsections (a)(1), (2), and''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning at least 4 years after the date of 
the enactment of the Healthy Americans Act.

SEC. 663. LIMITED EMPLOYER DEDUCTION FOR EMPLOYER SHARED RESPONSIBILITY 
              PAYMENTS, HISTORIC RETIREE HEALTH CONTRIBUTIONS, AND 
              OTHER HEALTH CARE EXPENSES.

    (a) In General.--Subsection (l) of section 162 of the Internal 
Revenue Code of 1986 (relating to trade or business expenses) is 
amended to read as follows:
    ``(l) Limitation on Deductible Employer Health Care Expenditures.--
No deduction shall be allowed under this chapter for any employer 
contribution to an accident or health plan other than--
            ``(1) any shared responsibility payment made under section 
        3411,
            ``(2) any accident or health plan coverage for individuals 
        who are former employees before the first calendar year 
        beginning 4 years after the date of the enactment of the 
        Healthy Americans Act,
            ``(3) any accident or health plan in effect on January 1 of 
        the first calendar year beginning 4 years after the date of the 
        enactment of the Healthy Americans Act with respect to coverage 
        for qualified collective bargaining employees during a 
        transition period described in section 3432,
            ``(4) any accident or health plan which qualifies as a 
        wellness program described in section 131 of such Act,
            ``(5) any accident or health plan which constitutes on-site 
        first aid coverage for employees, and
            ``(6) any accident or health plan which is a qualified 
        long-term care insurance contract.''.
    (b) Conforming Amendment.--Section 162 of the Internal Revenue Code 
of 1986 is amended by striking subsection (n).
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning at least 4 years after the date of 
the enactment of the Healthy Americans Act.

SEC. 664. REFUNDABLE CREDIT FOR INDIVIDUAL SHARED RESPONSIBILITY 
              PAYMENTS.

    (a) 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. REFUNDABLE CREDIT FOR INDIVIDUAL SHARED RESPONSIBILITY 
              PAYMENTS.

    ``(a) In General.--In the case of an individual, if the taxpayer 
has gross income for the taxable year exceeding 100 percent of the 
poverty line (adjusted for the size of the family involved) for the 
calendar year in which such taxable year begins and is enrolled in a 
HAPI plan under the Healthy Americans Act, there shall be allowed as a 
credit against the tax imposed by this chapter an amount equal to the 
applicable fraction times, in the case of--
            ``(1) coverage of an individual, $1,810,
            ``(2) coverage of a married couple or domestic partnership 
        (as determined by a State) without dependent children, $3,615,
            ``(3) coverage of an unmarried individual with 1 or more 
        dependent children, $2,585, plus $600 for each dependent child, 
        and
            ``(4) coverage of a married couple or domestic partnership 
        (as determined by a State) with 1 or more dependent children, 
        $4,565, plus $600 for each dependent child.
    ``(b) Applicable Fraction.--For purposes of subsection (a), the 
applicable fraction is the fraction (not to exceed 1)--
            ``(1) the numerator of which is the gross income of the 
        taxpayer for the taxable year expressed as a percentage of the 
        poverty line (adjusted for the size of the family involved) 
        minus such poverty line for the calendar year in which such 
        taxable year begins, and
            ``(2) the denominator of which is 400 percent of the 
        poverty line (adjusted for the size of the family involved) 
        minus such poverty line.
    ``(c) Phaseout of Credit Amount.--
            ``(1) In general.--The amount otherwise determined under 
        subsection (a) for any taxable year shall be reduced by the 
        amount determined under paragraph (2).
            ``(2) Amount of reduction.--The amount determined under 
        this paragraph shall be the amount which bears the same ratio 
        to the amount determined under subsection (a) as--
                    ``(A) the excess of the taxpayer's modified 
                adjusted gross income for such taxable year, over 
                $62,500 (twice such amount in the case of a joint 
                return), bears to
                    ``(B) $62,500 (twice such amount in the case of a 
                joint return).
        Any amount determined under this paragraph which is not a 
        multiple of $50 shall be rounded to the next lowest $50.
    ``(d) Inflation Adjustment.--In the case of any taxable year 
beginning in a calendar year after 2009, each dollar amount contained 
in subsection (a) and subparagraphs (A) and (B) of subsection (c)(2) 
shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        begins, determined by substituting `calendar year 2008' for 
        `calendar year 1992' in subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be rounded 
to the nearest multiple of $50.
    ``(e) Determination of Modified Adjusted Gross Income.--
            ``(1) In general.--For purposes of this section, the term 
        `modified adjusted gross income' means adjusted gross income--
                    ``(A) determined without regard to this section and 
                sections 86, 135, 137, 199, 221, 222, 911, 931, and 
                933, and
                    ``(B) increased by--
                            ``(i) the amount of interest received or 
                        accrued during the taxable year which is exempt 
                        from tax under this title, and
                            ``(ii) the amount of any social security 
                        benefits (as defined in section 86(d)) received 
                        or accrued during the taxable year.
            ``(2) Poverty line.--For purposes of this paragraph, the 
        term `poverty line' has the meaning given such term in section 
        673(2) of the Community Health Services Block Grant Act (42 
        U.S.C. 9902(2)), including any revision required by such 
        section.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``or 36'' after ``section 
        35''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following new items:

``Sec. 36. Refundable credit for individual shared responsibility 
                            payments.
``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made in calendar years beginning at least 4 years 
after the date of the enactment of this Act.

SEC. 665. MODIFICATION OF OTHER TAX INCENTIVES TO COMPLEMENT HEALTHY 
              AMERICANS PROGRAM.

    (a) Termination of Credit for Health Insurance Costs of Eligible 
Individuals.--Section 35 of the Internal Revenue Code of 1986 (relating 
to health insurance costs of eligible individuals) is amended by adding 
at the end the following new subsection:
    ``(h) Termination.--This section shall not apply to payments made 
in any calendar year beginning at least 4 years after the date of the 
enactment of the Healthy Americans Act.''.
    (b) Termination of Health Care Expense Reimbursement Under 
Cafeteria Plans.--
            (1) In general.--Section 125 of the Internal Revenue Code 
        of 1986 (relating to cafeteria plans) is amended by 
        redesignating subsection (h) as subsection (i) and by inserting 
        after subsection (g) the following new subsection:
    ``(h) Termination.--This section shall not apply to health benefits 
coverage in any calendar year beginning at least 4 years after the date 
of the enactment of the Healthy Americans Act.''.
            (2) Long-term care allowed under cafeteria plans.--
                    (A) In general.--Section 125(f) of such Code 
                (defining qualified benefits) is amended by striking 
                the last sentence.
                    (B) Effective date.--The amendment made by this 
                paragraph shall apply to contracts issued with respect 
                to any calendar year beginning at least 4 years after 
                the date of the enactment of this Act.
    (c) Termination of Archer MSA Contributions.--Section 220 of the 
Internal Revenue Code of 1986 (relating to Archer MSAs) is amended--
            (1) by inserting ``and made before the first calendar year 
        beginning 4 years after the date of the enactment of the 
        Healthy Americans Act'' after ``in cash'' in subsection 
        (d)(1)(A)(i), and
            (2) by adding at the end the following new subsection:
    ``(k) Termination.--This section shall not apply to contributions 
made in any calendar year beginning at least 4 years after the date of 
the enactment of the Healthy Americans Act.''.
    (d) Health Savings Accounts Allowed in Conjunction With High 
Deductible HAPI Plans.--
            (1) In general.--Section 223 of the Internal Revenue Code 
        of 1986 (relating to health savings accounts) is amended--
                    (A) by inserting ``qualified'' before ``high 
                deductible health plan'' each place it appears in the 
                text (other than subsection (c)(2)(A)),
                    (B) by striking ``The term `high deductible health 
                plan' means a health plan'' in subsection (c)(2)(A) and 
                inserting ``The term `qualified high deductible health 
                plan' means a HAPI plan under the Healthy Americans 
                Act'',
                    (C) by striking subparagraphs (B) and (C) of 
                subsection (c)(2) and by redesignating subparagraph (D) 
                of subsection (c)(2) as subparagraph (B), and
                    (D) by striking ``High'' in the heading for 
                paragraph (2) of subsection (c) and inserting 
                ``Qualified high''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to payments made in calendar years beginning at 
        least 4 years after the date of the enactment of this Act.

SEC. 666. TERMINATION OF CERTAIN EMPLOYER INCENTIVES WHEN REPLACED BY 
              LOWER HEALTH CARE COSTS.

    (a) In General.--Subchapter C of chapter 90 of the Internal Revenue 
Code of 1986 (relating to provisions affecting more than one subtitle) 
is amended by adding at the end the following new section:

``SEC. 7875. TERMINATION OF CERTAIN PROVISIONS.

    ``The following provisions shall not apply to taxable years 
beginning (or transactions in the case of sections referred to in 
paragraph (3)) in any calendar year beginning at least 4 years after 
the date of the enactment of the Healthy Americans Act:
            ``(1) Section 199 (relating to income attributable to 
        domestic production activities).
            ``(2) Section 501(c)(9) (relating to tax-exempt status of 
        voluntary employees' beneficiary associations).
            ``(3) Sections 861(a)(6), 862(a)(6), 863(b)(2), 863(b)(3), 
        and 865(b) (relating to inventory property sales source rule 
        exception).''.
    (b) Deferral of Active Income of Controlled Foreign Corporations.--
Section 952 of the Internal Revenue Code of 1986 (relating to subpart F 
income defined) is amended by adding at the end the following new 
subsection:
    ``(e) Special Application of Subpart.--
            ``(1) In general.--For taxable years beginning in any 
        calendar year beginning at least 4 years after the date of the 
        enactment of the Healthy Americans Act, notwithstanding any 
        other provision of this subpart, the term `subpart F income' 
        means, in the case of any controlled foreign corporation, the 
        income of such corporation derived from any foreign country.
            ``(2) Applicable rules.--Rules similar to the rules under 
        the last sentence of subsection (a) and subsection (d) shall 
        apply to this subsection.''.
    (c) Conforming Amendment.--The table of sections for subchapter C 
of chapter 90 of the Internal Revenue Code of 1986 is amended by adding 
at the end the following new item:

``Sec. 7875. Termination of certain provisions.''.

 PART 2--TERMINATION OF COVERAGE UNDER OTHER GOVERNMENTAL PROGRAMS AND 
                TRANSITION RULES FOR MEDICAID AND SCHIP

SEC. 671. GROUP AND INDIVIDUAL HEALTH PLAN REQUIREMENTS NOT APPLICABLE 
              TO HAPI PLANS.

    (a) ERISA.--Section 3(1) of Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1002(1)) is amended by adding at the end the 
following new sentence: ``Such terms shall not include the provision of 
medical, surgical, or hospital care or benefits through HAPI plans 
under the Healthy Americans Act.''.
    (b) Internal Revenue Code of 1986.--Section 5000 of the Internal 
Revenue Code of 1986 (relating to certain group health plans) is 
amended by adding at the end the following new subsection:
    ``(e) HAPI Plans.--For purposes of this section, the terms `group 
health plan' and `large group health plan' shall not include any HAPI 
plan under the Healthy Americans Act.''.
    (c) Public Health Service Act.--Section 2791(b)(5) of the Public 
Health Service Act (42 U.S.C. 300gg-91(b)(5)) is amended by adding at 
the end the following new sentence: ``Such term shall not include 
health insurance coverage offered to individuals through a HAPI plan 
under the Healthy Americans Act.''.

SEC. 672. FEDERAL EMPLOYEES HEALTH BENEFITS PLAN.

    (a) In General.--Chapter 89 of title 5, United States Code, is 
amended by adding at the end the following new section:
``Sec. 8915. Termination
    ``No contract shall be entered into under this chapter or chapters 
89A and 89B with respect to any coverage period occurring in any 
calendar year beginning at least 4 years after the date of the 
enactment of the Healthy Americans Act.''.
    (b) Conforming Amendment.--The table of sections for such chapter 
89 is amended by adding at the end the following new item:

``8915. Termination.''.

SEC. 673. MEDICAID AND SCHIP.

    (a) In General.--Title XIX of the Social Security Act, as amended 
by section 311, is amended by adding at the end the following new 
section:

   ``transition to coverage under hapi plans; requirement to provide 
      supplemental coverage; termination of unnecessary provisions

    ``Sec. 1941.  (a) Transition and Supplemental Coverage 
Requirements.--The Secretary shall provide technical assistance to 
States and health insurance issuers of HAPI plans to ensure that 
individuals receiving medical assistance under State Medicaid plans 
under this title or child health assistance under child health plans 
under title XXI are--
            ``(1) informed of--
                    ``(A) the guarantee of private coverage for 
                essential services for all Americans established by the 
                Healthy Americans Act; and
                    ``(B) each individual's personal responsibility--
                            ``(i) for health care prevention;
                            ``(ii) to enroll (or to be enrolled on 
                        their behalf) in a HAPI plan through the 
                        applicable State HHA during an open enrollment 
                        period; and
                            ``(iii) to submit necessary documentation 
                        to their State HHA so that the HHA may 
                        determine the individual's eligibility for 
                        premium and personal responsibility 
                        contribution subsidies;
            ``(2) provided with appropriate assistance in transitioning 
        from receiving medical assistance under State Medicaid plans or 
        child health assistance under child health plans for their 
        primary health coverage to obtaining such coverage through 
        enrollment in HAPI plans in a manner that ensures continuation 
        of coverage for such individuals; and
            ``(3) notwithstanding any other provision of this title, 
        after December 31 of the last calendar year ending before the 
        first calendar year in which coverage under a HAPI plan begins 
        in accordance with the Healthy Americans Act, provided with 
        medical assistance that consists of supplemental coverage that 
        meets the requirements of sections 202 and 301 of such Act.
    ``(b) Maintenance of Medicare Cost-Sharing.--For each month 
beginning after the last month of the last calendar year ending before 
the first calendar year in which coverage under a HAPI plan begins in 
accordance with the Healthy Americans Act--
            ``(1) a State shall continue to provide medical assistance 
        for medicare cost-sharing to individuals described in section 
        1902(a)(10)(E) as if the Healthy Americans Act had not been 
        enacted; and
            ``(2) the Secretary shall continue to reimburse the State 
        for the provision of such medical assistance.
    ``(c) Continued Support for DSH Expenditures.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, with respect to each fiscal year that begins after 
        the first calendar year in which coverage under a HAPI plan 
        begins in accordance with the Healthy Americans Act, the DSH 
        allotment for each State otherwise applicable under section 
        1923(f) for that fiscal year shall be reduced by 90 percent and 
        no payment shall be made under section 1903(a) to a State with 
        respect to any payment adjustment made under section 1923 for 
        hospitals in the State for quarters in the fiscal year in 
        excess of the reduced DSH allotment for the State applicable 
        for such year.
            ``(2) Special rule for last 3 quarters of first fiscal year 
        in which coverage under a hapi plan begins.--With respect to 
        the first fiscal year in which coverage under a HAPI plan 
        begins in accordance with the Healthy Americans Act, the 
        Secretary shall reduce the DSH allotment for each State that is 
        otherwise applicable under section 1923(f) for that fiscal year 
        so that each such DSH allotment reflects a 90 percent reduction 
        in the allotment for the second, third, and fourth quarters of 
        that fiscal year.
    ``(d) Termination of All Federal Payments Under This Title Other 
Than for Medicare Cost-Sharing or Supplemental Medical Assistance.--
Notwithstanding any other provision of this title:
            ``(1) no individual other than an individual to which 
        section 202 or 301 of the Healthy Americans Act applies is 
        entitled to medical assistance under a State plan approved 
        under this title for any item or service furnished after 
        December 31 of the last calendar year ending before the first 
        calendar year in which coverage under a HAPI plan begins in 
        accordance with such Act;
            ``(2) no payment shall be made to a State under section 
        1903(a) for any item or service furnished after that date or 
        for any other sums expended by a State for which a payment 
        would have been made under such section, other than for the 
        Federal medical assistance percentage of the total amount 
        expended by a State for each fiscal year quarter beginning 
        after that date for providing--
                    ``(A) medical assistance for the maintenance of 
                medicare cost-sharing in accordance with subsection 
                (b);
                    ``(B) medical assistance for individuals who are 
                eligible for supplemental medical assistance under this 
                title after such date in accordance with section 202 or 
                301 of the Healthy Americans Act; and
                    ``(C) payment adjustments under section 1923 for 
                hospitals in the State that do not exceed the reduced 
                DSH allotment for the State determined under subsection 
                (c)''.
    (b) Application to SCHIP.--
            (1) Application of transition requirements.--Section 
        2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) 
        is amended by adding at the end the following:
                    ``(E) Section 1941(a) (relating to transition to 
                coverage under HAPI plans and, in the case of paragraph 
                (3) of such section, the requirement to provide 
                supplemental medical assistance for targeted low-income 
                children who are provided child health assistance as 
                optional targeted low-income children under title 
                XIX).''.
            (2) Termination.--Title XXI of the Social Security Act is 
        amended by adding at the end the following new section:

                             ``termination

    ``Sec. 2111.  Notwithstanding any other provision of this title, no 
payment shall be made to a State under section 2105(a) with respect to 
child health assistance for any item or service furnished after 
December 31 of the last calendar year ending before the first calendar 
year in which coverage under a HAPI plan begins in accordance with the 
Healthy Americans Act.''.

   TITLE VII--PURCHASING HEALTH SERVICES AND PRODUCTS THAT ARE MOST 
                               EFFECTIVE

SEC. 701. ONE TIME DISALLOWANCE OF DEDUCTION FOR ADVERTISING AND 
              PROMOTIONAL EXPENSES FOR CERTAIN PRESCRIPTION 
              PHARMACEUTICALS.

    (a) In General.--Part IX of subchapter B of chapter 1 of subtitle A 
of the Internal Revenue Code of 1986 (relating to items not deductible) 
is amended by adding at the end the following new section:

``SEC. 280I. ONE TIME DISALLOWANCE OF DEDUCTION FOR CERTAIN 
              PRESCRIPTION PHARMACEUTICALS ADVERTISING AND PROMOTIONAL 
              EXPENSES.

    ``(a) In General.--No deduction shall be allowed under this chapter 
for expenses relating to advertising or promoting the sale and use of 
prescription pharmaceuticals other than drugs for rare diseases or 
conditions (within the meaning of section 45C) for any taxable year 
which includes any portion of--
            ``(1) the 3-year period which begins on the date of a new 
        drug application approval with respect to such a 
        pharmaceutical, unless the manufacturer of such pharmaceutical 
        demonstrates to the satisfaction of the Secretary that such 
        pharmaceutical is subject to a comparison effectiveness study, 
        including over-the-counter medication (if appropriate), or
            ``(2) the 1-year period which ends with the availability of 
        a generic drug substitute, unless such advertising or promotion 
        includes a statement that a lower cost alternative may soon be 
        available and includes the chemical name of such alternative.
    ``(b) Advertising or Promoting.--For purposes of this section, the 
term `advertising or promoting' includes direct-to-consumer advertising 
and any activity designed to promote the use of a prescription 
pharmaceutical directed to providers or others who may make decisions 
about the use of prescription pharmaceuticals (including the provision 
of product samples, free trials, and starter kits).''.
    (b) Conforming Amendment.--The table of sections for such part IX 
is amended by adding after the item relating to section 280H the 
following new item:

``Sec. 280I. One time disallowance of deduction for certain 
                            prescription pharmaceuticals advertising 
                            and promotional expenses.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning with or within calendar years 
beginning at least 4 years after the date of the enactment of this Act.

SEC. 702. ENHANCED NEW DRUG AND DEVICE APPROVAL.

    (a) In General.--
            (1) New drugs.--Section 505 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355) is amended by adding at the end 
        the following:
    ``(o)(1) The sponsor of a new drug application under subsection (b) 
may include as part of such application a full report of an 
investigation which has been made to show, with respect to the new drug 
that is the subject of the application--
            ``(A) the population for whom the drug is appropriate; and
            ``(B) the effectiveness of the drug when compared to the 
        effectiveness of drugs on the market as of the date that the 
        application is submitted.
    ``(2) If a sponsor of a new drug application under subsection (b) 
includes in such application the report described under paragraph (1) 
then, notwithstanding any other provision of law, the Secretary shall 
apply section 505A(b) to the drug that is the subject of such 
application in the same manner as the Secretary applies such section to 
a new drug in the pediatric population that is the subject of a study 
described in such section.
    ``(3) If a sponsor of a new drug application under subsection (b) 
does not include in such application the report described under 
paragraph (1) then, notwithstanding any other provision of law, the 
Secretary shall require that--
            ``(A) all promotional material with respect to such drug 
        include the following disclosure: `This drug has not been 
        proven to be more effective than other drugs on the market for 
        any condition or illness mentioned in this advertisement.'; and
            ``(B) such disclosure--
                    ``(i) appears at the beginning and end of any audio 
                and visual promotional material;
                    ``(ii) constitutes not less than 20 percent of the 
                time of any audio and visual promotional material; and
                    ``(iii)(I) in any promotional material, includes a 
                clear and conspicuous printed statement that is larger 
                than other print used in such promotional material; and
                    ``(II) in any audio and visual promotional 
                material, includes such statement in audio as well as 
                visual format.''.
            (2) New devices.--Section 515(c) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 360e) is amended by adding at the 
        end the following:
    ``(5)(A) A person that files a report seeking premarket approval 
under this subsection may include as part of such report a full 
description of an investigation which has been made to show, with 
respect to the device that is the subject of the report--
            ``(i) the population for whom the device is appropriate; 
        and
            ``(ii) the effectiveness of the device when compared to the 
        effectiveness of devices on the market as of the date that the 
        report is submitted.
    ``(B) If a person that files a report seeking premarket approval 
under this subsection includes in such report the description referred 
to under subparagraph (A), then the Secretary shall certify to the 
Director of the United States Patent and Trademark Office that such 
person included such description in such report so that the Director 
may extend the patent with respect to such device under section 702(b) 
of the Healthy Americans Act.
    ``(C) If a person that files a report seeking premarket approval 
under this subsection does not include in such report the description 
referred to under subparagraph (A) then, notwithstanding any other 
provision of law, the Secretary shall require that--
            ``(i) all promotional material with respect to such device 
        include the following disclosure: `This device has not been 
        proven to be more effective than other devices on the market 
        for any condition or illness mentioned in this advertisement.'; 
        and
            ``(ii) such disclosure--
                    ``(I) appears at the beginning and end of any audio 
                and visual promotional material;
                    ``(II) constitutes not less than 20 percent of the 
                time of any audio and visual promotional material; and
                    ``(III)(aa) in any promotional material, includes a 
                clear and conspicuous printed statement that is larger 
                than other print used in such promotional material; and
                    ``(bb) in any audio and visual promotional 
                material, includes such statement in audio as well as 
                visual format.''.
    (b) Extension of Device Patents.--If the Director of the United 
States Patent and Trademark Office receives a certification from the 
Secretary pursuant to section 515(c)(5) of the Federal Food, Drug, and 
Cosmetic Act (as added under subsection (a)), the Director shall 
extend, for a period of 2 years, the patent in effect with respect to 
such device under title 35 of the United States Code.
    (c) Effective Date.--This section shall apply to new drug 
applications filed under section 505(b) of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 355(b) and to applications for premarket 
approval of devices under section 515 of such Act (21 U.S.C. 350e) 180 
days after the date of enactment of this Act.

SEC. 703. MEDICAL SCHOOLS AND FINDING WHAT WORKS IN HEALTH CARE.

    Part B of title IX of the Public Health Service Act (42 U.S.C. 299b 
et seq.) is amended by adding at the end the following:

``SEC. 918. MEDICAL SCHOOLS AND FINDING WHAT WORKS IN HEALTH CARE.

    ``(a) Establishment of Website.--Not later than 1 year after the 
date of enactment of the Healthy Americans Act, the Agency shall 
establish an Internet website--
            ``(1) on which researchers at medical schools and other 
        institutions may post the results of their research concerning 
        evidence-informed best practices for improving the quality and 
        efficiency of care; and
            ``(2) that--
                    ``(A) includes a description on how to implement 
                such best practices; and
                    ``(B) clearly identifies the funding source for the 
                research.
    ``(b) Pilot Program.--
            ``(1) Establishment.--Using the information about evidence-
        informed best practices from the website under subsection (a) 
        and other sources, the Agency, through the National Research 
        Training Program and in consultation with medical schools, 
        shall develop a pilot program to establish methods by which 
        medical school curricula and training may be updated regularly 
        to reflect best practices to improve quality and efficiency in 
        medical practice.
            ``(2) Application to participate.--To participate in the 
        pilot program, an entity shall--
                    ``(A) be an accredited medical school; and
                    ``(B) submit an application at such time, in such 
                manner, and containing such information as the 
                Secretary may require.
            ``(3) Participants.--The Secretary shall ensure that not 
        less than 28 medical schools shall be included in the pilot 
        program.
            ``(4) Duration; publication of results.--The Agency shall--
                    ``(A) operate the pilot program for 3 years; and
                    ``(B) not later than 180 days after the date of the 
                completion of the pilot program, publish and make 
                public the results of the pilot program; and
                    ``(C) include, as part of the published results 
                under subparagraph (B), recommendations on how to 
                assure that all medical school curricula is updated on 
                a regular basis to reflect best practices to improve 
                quality and efficiency in medical practice.''.

SEC. 704. FINDING AFFORDABLE HEALTH CARE PROVIDERS NEARBY.

    (a) In General.--Not later than 2 years after the date of enactment 
of this Act, the Secretary, in consultation with each HHA and health 
insurance issuers that offer a HAPI plan, shall establish an Internet 
website to assist covered individuals with locating health care 
providers in their State of residence who provide affordable, high-
quality health care services.
    (b) Quality of Care Standard.--To develop the information displayed 
on the website with respect to the quality of care of a health care 
provider, the Secretary shall--
            (1) on the date of establishment of the website, use 
        information on the performance of providers in quality 
        initiatives under the Medicare program, including demonstration 
        projects, reporting initiatives, and pay for performance 
        efforts; and
            (2) not later than 3 years after the date of establishment 
        of the website, in addition to the information used under 
        paragraph (1), use quality of care standards developed in 
        consultation with, and similar to standards used by, Medicare 
        quality improvement organizations of each State.
    (c) Affordability Standard.--Not later than 2 years after the date 
of enactment of this Act, the Secretary shall, in consultation with 
health insurance issuers that offer a HAPI plan, develop guidelines by 
which each health care provider reports to the Secretary with respect 
to the affordability of services by such provider. The Secretary shall 
ensure that such guidelines--
            (1) on the date of establishment of such guidelines, 
        provide for the reporting of affordability of primary care 
        services; and
            (2) by a date that is no later than 3 years after the date 
        of enactment of this Act, provide for the reporting of other 
        services.

                 TITLE VIII--ENHANCED HEALTH CARE VALUE

SEC. 801. SHORT TITLE.

    This title may be cited as the ``Enhanced Health Care Value for All 
Act of 2007''.

SEC. 802. RESEARCH ON COMPARATIVE EFFECTIVENESS OF HEALTH CARE ITEMS 
              AND SERVICES.

    (a) Expansion of Scope of Research.--Subsection (a) of section 1013 
of the Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (Public Law 108-173) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) by striking ``programs established 
                        under titles XVIII, XIX, and XXI of the Social 
                        Security Act'' and inserting ``Federal health 
                        care programs (as defined in subparagraph 
                        (C))'';
                            (ii) by striking ``shall conduct and 
                        support research'' and inserting ``shall 
                        conduct and support research, which may include 
                        clinical research,'';
                            (iii) in clause (i), by striking ``and'' at 
                        the end;
                            (iv) in clause (ii), by striking the period 
                        at the end and inserting ``; and''; and
                            (v) by adding at the end the following:
                            ``(iii) gaps in current research which may 
                        necessitate research beyond systematic reviews 
                        of existing evidence.'';
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(C) Federal health care programs defined.--For 
                purposes of this section, the term `Federal health care 
                program' means each of the following:
                            ``(i) Any program established under title 
                        XVIII, XIX, or XXI of the Social Security Act.
                            ``(ii) The Federal employees health 
                        benefits program under chapter 89 of title 5, 
                        United States Code.
                            ``(iii) A health program operated under 
                        title 38, United States Code, by the Department 
                        of Veterans Affairs.
                            ``(iv) The TRICARE program under chapter 55 
                        of title 10, United States Code.
                            ``(v) A medical care program of the Indian 
                        Health Service or of a tribal organization.
                            ``(vi) A HAPI plan under the Healthy 
                        Americans Act.'';
            (2) in paragraph (2)--
                    (A) in subparagraph (C)(i), by striking ``the 
                programs established'' and inserting ``Federal health 
                care programs, including the programs established'';
                    (B) in subparagraph (C)(ii), by striking ``and'' at 
                the end;
                    (C) in subparagraph (C)(iii), by striking the 
                period at the end and inserting ``; and'';
                    (D) by inserting after subparagraph (C) the 
                following:
                                            ``(iv) shall provide for 
                                        education to physicians, other 
                                        health care providers, and the 
                                        public (including patients and 
                                        consumers) about the 
                                        information on comparative 
                                        effectiveness that is available 
                                        as a result of research funded 
                                        under this section.''; and
                    (E) by adding at the end the following:
                    ``(D) Comparative effectiveness advisory board.--
                            ``(i) In general.--Effective as of the date 
                        of the enactment of the Enhanced Health Care 
                        Value for All Act of 2007, the stakeholder 
                        group consulted for purposes of subparagraph 
                        (C)(1) shall be known as the Comparative 
                        Effectiveness Advisory Board. Any reference in 
                        a law, map, regulation, document, paper, or 
                        other record of the United States to such 
                        stakeholder group shall be deemed to be a 
                        reference to the Comparative Effectiveness 
                        Advisory Board.
                            ``(ii) Composition of board.--The members 
                        of the Comparative Effectiveness Advisory Board 
                        shall consist of--
                                    ``(I) the Director of the Agency 
                                for Healthcare Research and Quality; 
                                and
                                    ``(II) up to 14 additional members 
                                who shall represent broad 
                                constituencies of stakeholders 
                                including clinicians, patients, 
                                researchers, third-party payers, 
                                consumers of Federal and State 
                                beneficiary programs, and health care 
                                industry professionals.
                            ``(iii) Appointment; terms.--The 
                        Comptroller General of the United States shall 
                        appoint the members of the Comparative 
                        Effectiveness Advisory Board. Each member shall 
                        be appointed for a term of 2 years. The members 
                        appointed for the first term following the date 
                        of the enactment of the Enhanced Health Care 
                        Value for All Act of 2007 shall be appointed 
                        not later than 90 days after such date of 
                        enactment. Any member serving on the Advisory 
                        Board as of the date of the enactment of the 
                        Enhanced Health Care Value for All Act of 2007 
                        may continuing serving through the end of the 
                        member's term.
                            ``(iv) Conflicts of interest.--In 
                        appointing the members of the Comparative 
                        Effectiveness Advisory Board (and the members 
                        of any panel that reports to the Board), the 
                        Comptroller General of the United States shall 
                        take into consideration any financial conflicts 
                        of interest.
                    ``(E) Additional authorities.--In addition to any 
                authorities vested in the Comparative Effectiveness 
                Advisory Board as of the day before the date of the 
                enactment of the Enhanced Health Care Value for All Act 
                of 2007, the Comparative Effectiveness Advisory Board 
                shall have the following authorities:
                            ``(i) To provide input on research 
                        priorities.
                            ``(ii) To recommend how to organize 
                        research funded under this section taking into 
                        consideration the full range of appropriate 
                        methodologies, including randomized control 
                        trials, practical clinical trials, observation 
                        studies, and synthesis of existing research.
                            ``(iii) To make recommendations on how 
                        findings resulting from research funded under 
                        this section should be described, presented, 
                        and disseminated.
                            ``(iv) To make recommendations to the 
                        Congress and the Secretary, not later than 2 
                        years after the date of the enactment of the 
                        Enhanced Health Care Value for All Act of 2007, 
                        regarding the establishment of one or more 
                        federally-funded research and development 
                        centers.
                            ``(v) To identify, consistent with 
                        subparagraph (C)(i), highest priorities (such 
                        as treatments that are highly utilized or are 
                        for high-cost, chronic illnesses) for research, 
                        demonstrations, and evaluations to support and 
                        improve Federal health care programs.
                            ``(vi) To ensure that such priorities are 
                        in accordance with the principles described in 
                        subparagraph (F).
                            ``(vii) To establish a clinical peer review 
                        advisory panel (comprised of methodologists, 
                        health service researchers, and medical 
                        experts) for each such priority to advise the 
                        Secretary on validating the science and methods 
                        used to conduct comparative effectiveness 
                        studies.
                    ``(F) Principles.--Research conducted or supported 
                under this section shall be in accordance with the 
                following principles:
                            ``(i) Independence.--The setting of the 
                        agenda and use of the research shall be 
                        insulated from inappropriate political or 
                        stakeholder influence.
                            ``(ii) Scientific credibility.--The methods 
                        for conducting the research shall be 
                        scientifically based.
                            ``(iii) Transparency.--All aspects of the 
                        prioritization of research, the conduct of the 
                        research, and any recommendations based on the 
                        research shall be carried out in a transparent 
                        manner.
                            ``(iv) Inclusion of input from 
                        stakeholders.--Patients, providers, health care 
                        consumer representatives, health industry 
                        representatives, and lawmakers shall be 
                        consulted regarding priorities and 
                        dissemination of the research.'';
            (3) in paragraph (3)(C), by adding at the end the 
        following:
                            ``(iii) Updates.--The Secretary shall make 
                        available and disseminate updated evaluations, 
                        syntheses, and findings under this subparagraph 
                        not less than every 6 months.''; and
            (4) in paragraph (4)(A), by striking ``the programs 
        established under titles XVIII, XIX, and XXI of the Social 
        Security Act'' and inserting ``the Federal health care 
        programs''.
    (b) Reports to Congress.--Such section is further amended--
            (1) by redesignating subsection (e) as subsection (f); and
            (2) by inserting after subsection (d) the following:
    ``(e) Reports.--Not later than 1 year after the date of the 
enactment of the Enhanced Health Care Value for All Act of 2007, and 
annually thereafter, the Secretary, in consultation with the 
Comparative Effectiveness Advisory Board, shall submit to Congress a 
report on the activities conducted under this section. The report 
submitted under this subsection in 2012 shall include a description of 
the total activities conducted under this section since the date of the 
enactment of the Enhanced Health Care Value for All Act of 2007, 
including--
            ``(1) an evaluation of the return on the investment in the 
        program conducted under this section, including the overall 
        cost of the program, the scientific knowledge created through 
        the program, and the ways in which such knowledge has been 
        used;
            ``(2) an evaluation of any backlog of unfunded research 
        projects; and
            ``(3) an assessment of--
                    ``(A) how the program is working;
                    ``(B) the governance structure of the program;
                    ``(C) the ability of the program to include public 
                comment and patient perspectives in priority setting; 
                and
                    ``(D) the ability of the program to disseminate 
                findings and conclusions.''.

SEC. 803. HEALTH CARE COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND; 
              FINANCING FOR TRUST FUND.

    (a) Establishment of Trust Fund.--
            (1) In general.--Subchapter A of chapter 98 of the Internal 
        Revenue Code of 1986 (relating to trust fund code) is amended 
        by adding at the end the following new section:

``SEC. 9511. HEALTH CARE COMPARATIVE EFFECTIVENESS RESEARCH TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Health Care 
Comparative Effectiveness Research Trust Fund' (hereinafter in this 
section referred to as the `Trust Fund'), consisting of such amounts as 
may be appropriated or credited to such Trust Fund as provided in this 
section and section 9602(b).
    ``(b) Transfers to Fund.--There are hereby appropriated to the 
Trust Fund the following:
            ``(1) Amounts equivalent to the net revenues received in 
        the Treasury from the fees imposed under subchapter B of 
        chapter 34 (relating to fees on health insurance and self-
        insured plans).
            ``(2) Subject to subsection (c)(2), for each fiscal year 
        beginning with fiscal year 2008, amounts determined by the 
        Secretary of Health and Human Services to be equivalent to fair 
        share amount determined under subsection (c) multiplied by the 
        average number of individuals entitled to benefits under part 
        A, or enrolled under part B, of title XVIII of the Social 
        Security Act during such fiscal year.
The amounts appropriated under paragraph (2) shall be transferred from 
the Federal Hospital Insurance Trust Fund (established under section 
1817 of the Social Security Act) and from the Federal Supplementary 
Medical Insurance Trust Fund (established under section 1841 of such 
Act), and from the Medicare Prescription Drug Account within such Trust 
Fund, in proportion (as estimated by the Secretary) to the total 
expenditures during such fiscal year that are made under title XVIIII 
of such Act from the respective trust fund or account.
    ``(c) Fair Share Amount.--
            ``(1) In general.--The Secretary of Health and Human 
        Services shall compute for each fiscal year (beginning with 
        fiscal year 2008) a fair share amount under this subsection 
        that is an amount that, when applied under this section and 
        subchapter B of chapter 34 of the Internal Revenue Code of 
        1986, will result in revenues to the Trust Fund (taking into 
        account any outstanding balance in the Trust Fund) for the 
        fiscal year as follows:
                    ``(A) for fiscal year 2008, $100,000,000;
                    ``(B) for fiscal year 2009, $200,000,000; and
                    ``(C) for each of fiscal years 2010 through 2012, 
                $900,000,000.
            ``(2) Limitation on medicare funding.--In no case shall the 
        amount transferred under subsection (b)(2) for any fiscal year 
        exceed $200,000,000.
    ``(d) Expenditures From Fund.--Amounts in the Trust Fund are 
available to the Secretary of Health and Human Services for carrying 
out section 1013 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003.
    ``(e) Net Revenues.--For purposes of this section, the term `net 
revenues' means the amount estimated by the Secretary based on the 
excess of--
            ``(1) the fees received in the Treasury under subchapter B 
        of chapter 34, over
            ``(2) the decrease in the tax imposed by chapter 1 
        resulting from the fees imposed by such subchapter.''.
            (2) Clerical amendment.--The table of sections for such 
        subchapter A is amended by adding at the end thereof the 
        following new item:

``Sec. 9511. Health Care Comparative Effectiveness Research Trust 
                            Fund.''.
    (b) Financing for Fund From Fees on Insured and Self-Insured Health 
Plans.--
            (1) General rule.--Chapter 34 of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subchapter:

                  ``Subchapter B--Insured Health Plans

``Sec. 4375. Health insurance.
``Sec. 4376. Definitions and special rules.

``SEC. 4375. HEALTH INSURANCE.

    ``(a) Imposition of Fee.--There is hereby imposed on each specified 
health insurance policy for each policy year a fee equal to the fair 
share amount determined under section 9511(c)(1) multiplied by the 
average number of lives covered under the policy.
    ``(b) Liability for Fee.--The fee imposed by subsection (a) shall 
be paid by the issuer of the policy.
    ``(c) Specified Health Insurance Policy.--For purposes of this 
section--
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `specified health insurance policy' means any 
        accident or health insurance policy issued with respect to 
        individuals residing in the United States.
            ``(2) Exemption of certain policies.--The term `specified 
        health insurance policy' does not include any insurance policy 
        if substantially all of the coverage provided under such policy 
        relates to--
                    ``(A) liabilities incurred under workers' 
                compensation laws,
                    ``(B) tort liabilities,
                    ``(C) liabilities relating to ownership or use of 
                property,
                    ``(D) credit insurance,
                    ``(E) medicare supplemental coverage, or
                    ``(F) such other similar liabilities as the 
                Secretary may specify by regulations.
            ``(3) Treatment of prepaid health coverage arrangements.--
                    ``(A) In general.--In the case of any arrangement 
                described in subparagraph (B)--
                            ``(i) such arrangement shall be treated as 
                        a specified health insurance policy, and
                            ``(ii) the person referred to in such 
                        subparagraph shall be treated as the issuer.
                    ``(B) Description of arrangements.--An arrangement 
                is described in this subparagraph if under such 
                arrangement fixed payments or premiums are received as 
                consideration for any person's agreement to provide or 
                arrange for the provision of accident or health 
                coverage to residents of the United States, regardless 
                of how such coverage is provided or arranged to be 
                provided.

``SEC. 4376. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Accident and health coverage.--The term `accident and 
        health coverage' means any coverage which, if provided by an 
        insurance policy, would cause such policy to be a specified 
        health insurance policy (as defined in section 4375(c)).
            ``(2) Insurance policy.--The term `insurance policy' means 
        any policy or other instrument whereby a contract of insurance 
        is issued, renewed, or extended.
            ``(3) United states.--The term `United States' includes any 
        possession of the United States.
    ``(b) Treatment of Governmental Entities.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) the term `person' includes any governmental 
                entity, and
                    ``(B) notwithstanding any other law or rule of law, 
                governmental entities shall not be exempt from the fees 
                imposed by this subchapter except as provided in 
                paragraph (2).
            ``(2) Treatment of exempt governmental programs.--In the 
        case of an exempt governmental program, no fee shall be imposed 
        under section 4375 or section 4376 on any covered life under 
        such program.
            ``(3) Exempt governmental program defined.--For purposes of 
        this subchapter, the term `exempt governmental program' means--
                    ``(A) any insurance program established under title 
                XVIII of the Social Security Act,
                    ``(B) the medical assistance program established by 
                title XIX or XXI of the Social Security Act,
                    ``(C) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to individuals (or the spouses and dependents 
                thereof) by reason of such individuals being--
                            ``(i) members of the Armed Forces of the 
                        United States, or
                            ``(ii) veterans, and
                    ``(D) any program established by Federal law for 
                providing medical care (other than through insurance 
                policies) to members of Indian tribes (as defined in 
                section 4(d) of the Indian Health Care Improvement 
                Act).
    ``(c) Treatment as Tax.--For purposes of subtitle F, the fees 
imposed by this subchapter shall be treated as if they were taxes.
    ``(d) No Cover Over to Possessions.--Notwithstanding any other 
provision of law, no amount collected under this subchapter shall be 
covered over to any possession of the United States.''
            (2) Clerical amendment.--Chapter 34 of such Code is amended 
        by striking the chapter heading and inserting the following:

           ``CHAPTER 34--TAXES ON CERTAIN INSURANCE POLICIES

          ``subchapter a. policies issued by foreign insurers

                  ``subchapter b. insured health plans

         ``Subchapter A--Policies Issued By Foreign Insurers''.

            (3) Effective date.--The amendments made by this section 
        shall apply with respect to policies and plans for portions or 
        policy or plan years beginning on or after October 1, 2007.

SEC. 804. COORDINATION OF HEALTH SERVICES RESEARCH.

    (a) Establishment.--The Secretary of Health and Human Services 
shall establish a permanent council (in this section referred to as the 
``Council'') for the purpose of assisting the offices and agencies of 
the Department of Health and Human Services, the Department of Veterans 
Affairs, the Department of Defense, and any other department or agency 
to coordinate the conduct or support of health services research. Such 
coordination shall include advising each such office and agency--
            (1) on clarifying its policies regarding public access to 
        data resulting from research conducted or supported by the 
        office or agency, including the provision of reasons for not 
        permitting any such data to be publicly disclosed;
            (2) on making such policies, as clarified, publicly 
        available; and
            (3) on updating the publicly available versions of such 
        policies to reflect any subsequent modifications;
    (b) Membership.--
            (1) Number and appointment.--The Council shall be composed 
        of 20 members. One member shall be the Director of the Agency 
        for Healthcare Research and Quality. The Director shall appoint 
        the other members not later than 30 days after the enactment of 
        this Act.
            (2) Qualifications.--
                    (A) In general.--The members of the Council shall 
                include one senior official from each of the following 
                agencies:
                            (i) The Veterans Health Administration.
                            (ii) The Department of Defense Military 
                        Health Care System.
                            (iii) The Centers for Disease Control and 
                        Prevention.
                            (iv) The National Center for Health 
                        Statistics.
                            (v) The National Institutes of Health.
                            (vi) The Center for Medicare & Medicaid 
                        Services.
                            (vii) The Federal Employees Health Benefits 
                        Program.
                    (B) National, philanthropic foundations.--The 
                members of the Council shall include 4 senior leaders 
                from major national, philanthropic foundations that 
                fund and use health services research.
                    (C) Stakeholders.--The remaining members of the 
                Council shall be representatives of other stakeholders 
                in health services research, including private 
                purchasers, health plans, hospitals and other health 
                facilities, and health consumer groups.
                    (D) Period of appointment.--Members of the Council 
                shall be appointed for the life of the Council. Any 
                vacancies shall not affect the power and duties of the 
                Council and shall be filled in the same manner as the 
                original appointment.
    (c) Leadership.--The Secretary of Health and Human Services shall 
appoint the chair of the Council. Not later than 15 days after the date 
on which all members of the Council have been appointed under section 
(b)(1), the Council chair shall designate a co-chair of the Council. 
The co-chair shall be the leader of a national foundation that funds 
health services research.
    (d) Subcommittees.--The Council may establish subcommittees to 
assist in carrying out its duties.
    (e) Duties.--
            (1) Public meetings.--Not later than 120 days after the 
        designation of a co-chairperson under subsection (c), the 
        Council shall hold public meetings with producers and users of 
        health services research to examine--
                    (A) the major infrastructure challenges facing the 
                field of health services research;
                    (B) the field's research priorities over the next 5 
                years;
                    (C) the current portfolio of health services 
                research being funded;
                    (D) ways to stimulate innovation in the field of 
                health services research; and
                    (E) ways in which the field of health services 
                research might help to transform the health care system 
                by 2020.
            (2) Additional meetings.--The Council may hold additional 
        public meetings on subjects other than those listed in the 
        paragraph (1) so long as the meetings are determined to be 
        necessary by the Council in carrying out its duties. Additional 
        meetings are not required to be completed within the time 
        period specified in paragraph (1).
            (3) Develop a strategic plan.--Not later than 2 years after 
        the meetings described in paragraph (1) and (2) are completed, 
        the Council shall prepare and make public through the Internet 
        and other channels a strategic plan for the field of health 
        services research, which plan shall include the following:
                    (A) A health services research agenda to address 
                the Nation's evolving health care priorities.
                    (B) A plan for addressing the infrastructure needs 
                of the field of health services research, including 
                professional development for the next generation of 
                researchers and improved methods and data.
                    (C) A plan for fostering innovation in the field of 
                health services research.
                    (D) A uniform definition of health services 
                research and standard research categories to be used 
                across the funders of health services research in 
                developing research budgets and reporting research 
                expenditures.
    (f) Annual Report.--Not later than 1 year after the publication of 
the Council's strategic plan under subsection (e)(3), and annually 
thereafter, the Council shall report to the Congress on, and make 
public a detailed description of, the following:
            (1) The Council's progress in implementing the strategic 
        plan.
            (2) Organizational expenditures in health services research 
        by the Federal agencies specified in subsection (b)(2)(A) 
        according to the uniform definition and standard research 
        categories developed by the Council.
    (g) Detail of Employees.--Each Federal agency represented on the 
Council may, on a non-reimbursable basis, detail one employee to the 
Council. Each such detail shall last no more than 2 years. Any detail 
of an employee shall be without interruption or loss of civil services 
status or privilege.
    (h) Contracting.--The Director of the Agency for Healthcare 
Research and Quality may contract with an outside entity to assist the 
Council in holding public meetings, developing the strategic plan for 
the field of health services research, and fulfilling annual reporting 
requirements.

   TITLE IX--CONTAINING MEDICAL COSTS AND GETTING MORE VALUE FOR THE 
                           HEALTH CARE DOLLAR

SEC. 901. COST-CONTAINMENT RESULTS OF THE HEALTHY AMERICANS ACT.

    Congress finds that the Healthy Americans Act will result in the 
following:
            (1) Private insurance companies will be forced to hold down 
        costs and will slow the rate of growth because they are 
        required to offer standardized Healthy American Private 
        Insurance plans.
            (2) Administrative savings will be derived from decoupling 
        employers from the health care infrastructure and reducing 
        employers' and insurers' administrative costs.
            (3) Private insurance companies will implement uniform 
        billing and common claims forms.
            (4) Congress will reclaim Medicare and Medicaid 
        disproportionate share hospital (DSH) payments because 
        previously uninsured persons will go to providers on an 
        outpatient basis instead of an emergency department.
            (5) State and local governments will save money on programs 
        they operated for the uninsured before enactment of this Act.
            (6) The Federal Government will save money on Federal tax 
        subsidies that reward inefficient care and are regressive.
            (7) The Federal Government and the private sector will save 
        money if the Food and Drug Administration determines whether 
        products provide new value.
            (8) Reducing medical errors will save the government and 
        the private sector money.
            (9) Requiring hospitals to send large bills to patients for 
        their review will reduce errors in medical billing and force 
        major providers to be more cost conscious.
            (10) Requiring insurers to reimburse for quality and cost 
        effective services will hold down private sector costs.
            (11) Reduction of Medicare's restriction on bargaining 
        power for prescription drugs will reduce costs for sole source 
        drugs and other medications.
            (12) Establishment of electronic medical records by 
        insurers will create savings.
            (13) Publication of cost and quality data will enable 
        people to look up by zip code affordable high-quality 
        providers.
                                 <all>