[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 15 Introduced in House (IH)]







111th CONGRESS
  1st Session
                                 H. R. 15

   To provide a program of national health insurance, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 6, 2009

 Mr. Dingell introduced the following bill; which was referred to the 
 Committee on Energy and Commerce, and in addition to the Committee on 
   Ways and Means, 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 a program of national health insurance, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``National Health 
Insurance 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 and declaration of purpose.
Sec. 3. Policies of Act.
                   TITLE I--BENEFITS AND ELIGIBILITY

Sec. 101. Classes of personal health services.
Sec. 102. Availability of benefits.
Sec. 103. How benefits obtained: free choice by patient.
Sec. 104. Eligibility for benefits.
Sec. 105. Provision of benefits for noninsured needy and other 
                            individuals.
TITLE II--PARTICIPATION OF PHYSICIANS, DENTISTS, NURSES, HOSPITALS, AND 
                                 OTHERS

Sec. 201. Physicians and dentists; specialists.
Sec. 202. Nurses.
Sec. 203. Hospitals.
Sec. 204. Auxiliary services.
Sec. 205. Agreements with individual practitioners, hospitals, and 
                            others.
Sec. 206. Agreements with voluntary health insurance and other 
                            organizations.
Sec. 207. Provisions common to all agreements.
Sec. 208. Methods of payments for services.
Sec. 209. Amount of payments for services.
Sec. 210. Professional rights and responsibilities.
                    TITLE III--LOCAL ADMINISTRATION

Sec. 301. Decentralization of administration.
Sec. 302. Local administrative committee or officer.
Sec. 303. Local area committees.
Sec. 304. Local professional committees.
Sec. 305. Methods of administration.
                     TITLE IV--STATE ADMINISTRATION

Sec. 401. Declaration of policy.
Sec. 402. State plan of operations.
  TITLE V--NATIONAL HEALTH INSURANCE BOARD; NATIONAL ADVISORY MEDICAL 
           POLICY COUNCIL; GENERAL ADMINISTRATIVE PROVISIONS

Sec. 501. National Health Insurance Board.
Sec. 502. Advisory Council.
Sec. 503. Studies, recommendations, and reports.
Sec. 504. Nondisclosure of information.
Sec. 505. Prohibition against discrimination.
    TITLE VI--ELIGIBILITY DETERMINATIONS, COMPLAINTS, HEARINGS, AND 
                            JUDICIAL REVIEW

Sec. 601. Determinations as to eligibility for benefits.
Sec. 602. Complaints of eligible individuals and of persons furnishing 
                            benefits.
  TITLE VII--APPLICATION OF ACT TO INDIVIDUALS COVERED UNDER MEDICARE 
                                PROGRAM

Sec. 701. Eligibility; benefits available.
Sec. 702. Study and report.
                     TITLE VIII--FISCAL PROVISIONS

Sec. 801. Use of Trust Fund.
Sec. 802. Allotment of funds.
Sec. 803. Grants-in-aid for training and education.
                   TITLE IX--MISCELLANEOUS PROVISIONS

Sec. 901. Definitions.
Sec. 902. Effective date.
      TITLE X--VALUE ADDED TAX AND NATIONAL HEALTH CARE TRUST FUND

Sec. 1001. Imposition of value added tax.
Sec. 1002. Revenue from value added tax to fund National Health Care 
                            Trust Fund.
       TITLE XI--STUDY AND DEVELOPMENT OF COST CONTROL MECHANISMS

Sec. 1101. Development of cost control mechanisms.

SEC. 2. FINDINGS AND DECLARATION OF PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) the health of the Nation's people is the foundation of 
        our Nation's strength, productivity, and wealth;
            (2) the assurance of adequate medical care to all of our 
        people is essential to the general welfare and to the Nation's 
        security;
            (3) since the tremendous advances in medical science in 
        recent years have necessarily meant great advances in the cost 
        of health services, our archaic system of paying for medical 
        care--based on public and private charity for the poor, on 
        unpredictable and often unbearable costs to the otherwise self-
        supporting, and on disproportionate charges for the well-to-
        do--has resulted in the following conditions:
                    (A) the inability of the vast majority of our 
                people to meet the shattering cost of serious or 
                chronic illness;
                    (B) the inability of most of our people to benefit 
                from modern preventive medicine; and
                    (C) wholly inadequate provision for the health 
                needs of our farm families and agricultural workers;
            (4) the conditions described in the preceding paragraph 
        cannot effectively be remedied under the present system of 
        payment for medical care, or under any voluntary insurance 
        system; and
            (5) a medical dole as an answer to this problem is 
        repugnant to the American people and would certainly result in 
        a system of state medicine, paid for from tax funds and 
        rendered by regimented doctors.
    (b) Purposes.--The Congress declares the purposes of this Act to be 
to provide a sound economic foundation for our free system of medicine 
and to correct the maldistribution of health personnel and facilities 
by establishing a system of prepaid personal health insurance on the 
principle of social insurance.

SEC. 3. POLICIES OF ACT.

    (a) In General.--In establishing a system of national health 
insurance, it is the policy of this Act that--
            (1) those persons and their dependents who are insured 
        under the provisions of the Act shall be assured full freedom 
        to choose their physicians and to change their choice as they 
        may desire;
            (2) physicians and other professions furnishing services in 
        accordance with the provisions of this Act shall be assured 
        full freedom in the practice of their professions, including 
        the right to accept or reject patients except as this right may 
        be restricted by their own professional ethics or by the laws 
        of the several States; and
            (3) the administration of this Act shall be based upon the 
        American principle of decentralization.
    (b) Administrative Responsibilities.--In carrying out these 
policies, it is the intention of Congress that the major administrative 
responsibilities be placed in the hands of local bodies representing 
both those who pay for and receive services and those who render 
services, and operating within the framework of plans made by the 
several States, and approved by the Federal agency; that the National 
Health Care Trust Fund created by this Act shall be allotted equitably 
among the several States and by the States to their local areas; that 
voluntary as well as governmental organizations shall be recognized and 
utilized; and that all eligible individuals and their dependents as 
specified in this Act shall be entitled to its benefits without 
discrimination because of race, color, or creed.

                   TITLE I--BENEFITS AND ELIGIBILITY

SEC. 101. CLASSES OF PERSONAL HEALTH SERVICES.

    (a) Personal Health Services.--
            (1) In general.--The personal health services to be made 
        available as benefits to eligible individuals as provided in 
        this title are the following:
                    (A) Medical services.
                    (B) Dental services.
                    (C) Podiatric services.
                    (D) Home-nursing services.
                    (E) Hospital services.
                    (F) Auxiliary services.
            (2) Provision of services.--Each class of services shall be 
        provided by persons (including individuals, partnerships, 
        corporations, associations, consumer cooperatives, and other 
        organizations) who are authorized by applicable State law, and 
        who are qualified under title II, to do so.
    (b) Medical Services.--Medical services consist of--
            (1) general medical services such as can be rendered by a 
        physician engaged in the general or family practice of 
        medicine, including preventive, diagnostic, and therapeutic 
        care and periodic medical examinations; and
            (2) specialist services rendered by a physician who is a 
        specialist in the class of services rendered, as defined in 
        section 201.
Such medical services may be rendered at the office, home, hospital, or 
elsewhere, as necessary.
    (c) Dental Services.--Dental services consist of--
            (1) general dental services rendered by a dentist engaged 
        in the general practice of dentistry, including preventive, 
        diagnostic, and therapeutic care, and periodic dental 
        examinations; and
            (2) specialist services rendered by a dentist who is a 
        specialist in the class of services rendered, as defined in 
        section 201.
Such dental services may be rendered at the office, home, hospital, or 
elsewhere, as necessary.
    (d) Podiatric Services.--Podiatric services consist of those 
professional services of a podiatrist who is legally authorized to 
perform such services in the State in which the podiatrist practices.
    (e) Home-Nursing Services.--Home-nursing services consist of 
nursing care of the sick rendered in the home by a registered 
professional nurse or a qualified practical nurse.
    (f) Hospital Services.--
            (1) In general.--Hospital services consist of 
        hospitalization, including necessary nursing services, and such 
        physician, laboratory, ambulance, and other services in 
        connection with hospitalization as the National Health 
        Insurance Board (in this Act referred to as the ``Board''), 
        after consultation with the National Advisory Medical Policy 
        Council (in this Act referred to as the ``Advisory Council''), 
        by regulation designates as essential to good hospital care, 
        for a maximum of 60 days in any benefit year.
            (2) Exclusion.--Hospital services shall not include 
        hospitalization in a mental disease hospital or institution, or 
        hospitalization for any day more than 30 days following the 
        diagnosis of a psychosis.
            (3) Increase in maximum number of days.--Whenever the 
        Board, after consultation with the Advisory Council, finds that 
        moneys in the National Health Care Trust Fund are adequate and 
        that facilities are available, it may by regulation increase 
        the maximum days of hospitalization in any benefit year.
    (g) Auxiliary Services.--Auxiliary services consist of such--
            (1) chemical, bacteriological, pathological, diagnostic X-
        ray and related laboratory services;
            (2) X-ray, radium, and related therapy;
            (3) physiotherapy;
            (4) services of optometrists;
            (5) prescribed drugs which are unusually expensive;
            (6) special appliances; and
            (7) eyeglasses;
as the Board, after consultation with the Advisory Council, by 
regulation designates as auxiliary services on the basis of its finding 
that their provision under this Act is practicable and is essential to 
good health care.

SEC. 102. AVAILABILITY OF BENEFITS.

    (a) General Availability.--
            (1) In general.--Medical services, hospital services, and, 
        except as otherwise provided in subsection (b), all other 
        personal health services specified in section 101 shall be made 
        available (subject to section 701) as benefits to eligible 
        individuals in all health-service areas within the United 
        States as rapidly and as completely as possible having regard 
        for the availability of the professional and technical 
        personnel and the hospital and other facilities needed to 
        provide such services.
            (2) Surveys of resources and needs.--To this end the 
        resources and needs of each State shall be surveyed and a 
        program developed in each State to assure the maximum 
        participation and use of health personnel and facilities in the 
        provision of benefits, and to encourage improvement in the 
        number and distribution of such personnel and facilities 
        throughout the State. Additional surveys shall be undertaken as 
        required, and the program in the State from time to time 
        modified on the basis thereof.
    (b) Limitation on Availability.--If the Board, after consultation 
with the Advisory Council, finds that the personnel or facilities or 
funds that are or can be made available are inadequate to insure the 
provision of all services included as dental, home-nursing, or 
auxiliary services under section 101, it may by regulation limit for a 
specified period the services which may be provided as benefits, or 
modify the extent to which, or the circumstances under which, they will 
be provided to eligible individuals. Any such restriction or limitation 
shall be reduced or withdrawn as rapidly as may be practicable. In the 
case of dental services, priority in the reduction or withdrawal of any 
such restriction or limitation shall be given to children.
    (c) Recommendations.--The Board shall have the duty of--
            (1) studying and making recommendations as to needed 
        services and facilities for the care of the chronic sick 
        afflicted with physical ailments, and for the care of 
        individuals afflicted with mental or nervous diseases, and as 
        to needed provisions for the prevention of chronic physical 
        diseases and of mental or nervous diseases; and
            (2) making reports from time to time, with recommendations 
        as to legislation, but the first such report shall be made not 
        later than two years after benefits under this Act first become 
        available.

SEC. 103. HOW BENEFITS OBTAINED: FREE CHOICE BY PATIENT.

    (a) In General.--Every individual eligible for personal health 
services available under this Act may freely select the physician, 
dentist, podiatrist, nurse, medical group, hospital, or other person of 
the individual's choice to render such services, and may change such 
selection if the practitioner, medical group, hospital, or other person 
has agreed under title II to furnish the class of services required and 
consents to furnish such services to the individual.
    (b) Practitioner Services.--General medical, dental, and podiatric 
services may be obtained by request made by the individual directly to 
the practitioner of the individual's choice.
    (c) Specialty Services.--Specialist, home-nursing, hospital, and 
auxiliary services shall be obtained from the specialist, nurse, 
hospital, or other person of the individual's choice, whenever the 
practitioner from whom the individual is receiving medical or dental 
services as benefits under this Act refers the individual for 
specialist, home-nursing, hospital, or auxiliary services upon 
determining that such services are required in the proper care of the 
individual's particular case; or whenever, upon request of the 
individual, an administrative medical officer, upon a like 
determination, refers the individual for such services.
    (d) Waiver of Referral.--The Board, by regulation, shall dispense 
with the necessity of referral in cases of emergency, and may dispense 
with the necessity of referral under specified circumstances or as 
respects specified classes of services, or both, if it finds, after 
consultation with the Advisory Council, that such action will be 
conducive to the provision of a more adequate amount and quality of 
health care and will not unreasonably increase the expenditures from 
the National Health Care Trust Fund for such services.

SEC. 104. ELIGIBILITY FOR BENEFITS.

    (a) In General.--Subject to section 701, every individual shall be 
eligible for benefits under this Act throughout any benefit year if the 
individual--
            (1) has received (or, in the case of income from self-
        employment, has accrued)--
                    (A) not less than $2,000 in wages during the first 
                four of the last six calendar quarters preceding the 
                beginning of the benefit year; or
                    (B) not less than $1,500 in wages in each of six 
                calendar quarters during the first twelve of the last 
                fourteen calendar quarters preceding the beginning of 
                the benefit year (not counting as one of such fourteen 
                calendar quarters any quarter in any part of which the 
                individual was under a total disability which continued 
                for six months or more);
            (2) is entitled, for the first month in the benefit year, 
        to a benefit under title II of the Social Security Act or to an 
        annuity under subchapter III (relating to civil service 
        retirement) of chapter 83 of title 5, United States Code; or
            (3) the individual is on the first day of the benefit year 
        a dependent of an individual who is eligible under paragraph 
        (1) or paragraph (2).
    (b) Additional Eligibility.--Subject to section 701, every 
individual, not eligible therefor under subsection (a), shall be 
eligible for benefits under this Act during the remainder of a benefit 
year, beginning with--
            (1) the first day of any calendar quarter in such benefit 
        year, if the individual has received (or, in the case of income 
        from self-employment, has accrued) not less than $150 in wages 
        during the first four of the last six calendar quarters 
        preceding the beginning of such calendar quarter;
            (2) the first day of the first month in such benefit year 
        for which the individual is entitled to a benefit or annuity 
        referred to in subsection (a)(2); or
            (3) the first day in such benefit year on which the is or 
        becomes a dependent of an individual who is eligible for 
        benefits under subsection (a) (1) or (2) under paragraph (1) or 
        (2).
    (c) Coverage Under Workers' Compensation.--
            (1) No coverage.--No individual shall be deemed eligible 
        for any personal health services as a benefit under this Act 
        which are required by reason of any injury, disease, or 
        disability on account of which any medical, dental, home-
        nursing, hospital, or auxiliary service is being received, or 
        upon application therefor would be received, under a workmen's 
        compensation law of the United States or of any State, unless 
        equitable reimbursements to the National Health Care Trust Fund 
        for the provision of such services as benefits have been made 
        or assured under section 105.
            (2) Subrogation.--In any case in which an individual 
        receives any personal health service as a benefit under this 
        Act with respect to any such injury, disease, or disability, 
        for which no reimbursement to the National Health Care Trust 
        Fund has been made or assured, the United States shall to the 
        extent permitted by State law be subrogated to all rights of 
        such individual, or of the person who furnished such service, 
        to be paid or reimbursed, pursuant to such workmen's 
        compensation law, for the cost of furnishing such service.

SEC. 105. PROVISION OF BENEFITS FOR NONINSURED NEEDY AND OTHER 
              INDIVIDUALS.

    (a) In General.--Subject to section 701, any or all benefits 
provided under this Act to individuals eligible for such benefits may 
be furnished to individuals (including the needy) not otherwise 
eligible therefor, for any period for which equitable reimbursements to 
the National Health Care Trust Fund on behalf of such needy or other 
individuals have been made, or for which reasonable assurance of such 
reimbursements have been given, by public agencies of the United 
States, the several States, or any of them or of their political 
subdivisions, such reimbursements to be in accordance with agreements 
and working arrangements negotiated with such public agencies. Services 
furnished to such needy or other individuals as benefits shall be of 
the same quality, be furnished by the same methods, and be paid for 
through the same arrangements, as services furnished to individuals 
eligible for benefits under this Act.
    (b) Availability of Federal Funds.--Federal grants to States under 
title XIX, and part A of title IV, of the Social Security Act, and 
Federal grants to States for aid or assistance under other provisions 
of such Act, shall be available to the States for provision of 
personal-health services for noninsured needy individuals in accordance 
with the provisions of subsection (a).

TITLE II--PARTICIPATION OF PHYSICIANS, DENTISTS, NURSES, HOSPITALS, AND 
                                 OTHERS

SEC. 201. PHYSICIANS AND DENTISTS; SPECIALISTS.

    (a) Qualifications.--Any individual who is a physician, dentist, or 
podiatrist legally authorized in a State to render any services 
included as general medical, dental, or podiatric services shall be 
deemed qualified to render such services in that State as benefits 
under this Act.
    (b) Specialists.--
            (1) In general.--Any such individual who is found to 
        possess skill and experience of a degree and kind sufficient to 
        meet standards established for a class of specialist services 
        shall be deemed qualified to receive compensation for 
        specialist services of such class as benefits under this Act.
            (2) Standards.--The Board, after consultation with the 
        Advisory Council, shall establish standards as to the special 
        skills and experience required to qualify an individual to 
        render each such class of specialist services as benefits under 
        this Act, and to receive compensation for such specialist 
        services. In establishing such standards and in determining 
        whether individuals qualify thereunder, standards and 
        certifications developed by professional agencies shall be 
        utilized as far as is consistent with the purposes of this Act, 
        and regard shall be had for the varying needs and the available 
        resources in professional personnel of the States and of local 
        health-service areas.

SEC. 202. NURSES.

    Any individual shall be deemed qualified to render home-nursing 
services in a State as benefits under this title if such individual 
is--
            (1) a professional nurse registered in such State; or
            (2) a practical nurse--
                    (A) who is qualified as such under State standards 
                or requirements, or, in the absence of State standards 
                or requirements, is found to be qualified under 
                standards established by the Board after consultation 
                with the Advisory Council and with nursing agencies; 
                and
                    (B) who furnishes nursing care under the direction 
                or supervision of the State health agency, the health 
                agency of a political subdivision of the State, or an 
                organization supplying and supervising the services of 
                registered professional nurses in the State.

SEC. 203. HOSPITALS.

    Any hospital or other institution shall be deemed qualified to 
furnish all or particular classes of hospital services as benefits 
under this Act if--
            (1) it is qualified to furnish such services under State 
        standards or requirements for the maintenance and operation of 
        hospitals which apply to the class or classes of services to be 
        furnished; or
            (2) in the absence of such State standards or requirements, 
        it is found to afford professional services, personnel, and 
        equipment adequate to promote the health and safety of 
        individuals requiring the class or classes of hospital services 
        to be furnished, according to standards which the Board shall 
        establish after consultation with the Advisory Council.

SEC. 204. AUXILIARY SERVICES.

    Any person (as defined in section 901(1)) who--
            (1) is qualified under State standards or requirements to 
        furnish a class of services included as auxiliary services; or
            (2) in the absence of State standards or requirements, is 
        found to be qualified to furnish a class of such services under 
        standards established for such class by the Board after 
        consultation with the Advisory Council,
    
shall be deemed qualified to furnish such class of auxiliary services 
in that State as benefits under this Act.

SEC. 205. AGREEMENTS WITH INDIVIDUAL PRACTITIONERS, HOSPITALS, AND 
              OTHERS.

    Any individual (or, in the case of hospital or auxiliary services, 
any person) qualified under this title to furnish any class or classes 
of personal health services as benefits may enter into an agreement 
with the State agency which in accordance with title IV has assumed 
responsibility for the administration in the State of benefits under 
this Act (in this Act referred to as the ``State agency''), to furnish 
such class or classes of services as benefits to individuals eligible 
therefor under this Act.

SEC. 206. AGREEMENTS WITH VOLUNTARY HEALTH INSURANCE AND OTHER 
              ORGANIZATIONS.

    (a) In General.--In the provision of personal health services, it 
shall be the policy to utilize individuals or organizations qualified 
under this title to render such services, including--
            (1) any organized group of individuals;
            (2) any partnership, association, or consumer cooperative;
            (3) any hospital or any hospital and its staff; or
            (4) any organization operating a voluntary health-service 
        insurance plan or other voluntary health-service plan.
    (b) Authorization.--The State agency is authorized to enter into an 
agreement with any organization referred to in subsection (a) for the 
provision of personal health services under this Act. Any such 
organization, whether or not it enters into an agreement with the State 
agency on its own behalf, shall be permitted to act as agent for 
individuals or other persons in negotiating or in carrying out 
agreements with the State agency for rendering personal health services 
under this Act.
    (c) Qualification of Providers.--Any agreement under this section 
shall provide that each class of personal health services will be 
furnished only by individuals (or, in the case of hospital or auxiliary 
benefits, by persons, as defined in section 901(1)) who are qualified 
under this title to render such class of services and each of whom has 
agreed or has authorized an agreement to be made on the individual's 
behalf with the State agency that the individual will furnish such 
services in accordance with this Act and with regulations prescribed 
thereunder. Each such individual or person shall be responsible, both 
to the State agency and (in accordance with applicable State law) to 
individuals eligible for personal health services as benefits, for 
carrying out such agreement made by the individual or person or on 
behalf of the individual or person.

SEC. 207. PROVISIONS COMMON TO ALL AGREEMENTS.

    (a) In General.--Each agreement made under this title shall--
            (1) specify the class or classes of services to be 
        furnished or provided pursuant to its terms;
            (2) contain an undertaking to comply with this Act and with 
        regulations prescribed thereunder;
            (3) be made upon terms and conditions consistent with the 
        efficient and economical administration of this Act; and
            (4) continue in force for such period and be terminable 
        upon such notice as may be agreed upon.
    (b) Term.--No agreement under section 206, and no designation of an 
agent, shall for more than one year preclude any individual or person 
qualified to furnish personal health services from exercising such 
rights as the individual or person would otherwise have under this 
title--
            (1) to negotiate and enter into an agreement directly with 
        the State agency;
            (2) to designate another agent for such negotiation; or
            (3) to participate in another agreement under section 206.
    (c) Non Exclusive Agreements.--No agreement made under this title 
shall confer upon any individual or other person, or any group or other 
organization, the right of furnishing or providing personal health 
services as benefits, to the exclusion in whole or in part of other 
individuals, persons, groups, or organizations qualified to furnish or 
provide such services.
    (d) Disqualification.--
            (1) In general.--If the State agency after investigation 
        finds that an individual or other person under agreement to 
        furnish or provide personal health services as benefits is no 
        longer qualified to furnish or provide such services, or has 
        committed a substantial breach of the agreement, it shall 
        notify such person of its findings, together with the reasons 
        therefor, and in the absence of a request for a hearing by such 
        person under title VI, or in the event of a final decision 
        sustaining its findings after any hearing and further review 
        provided under title VI, may terminate the agreement and 
        withdraw the person's name from the list published pursuant to 
        title III.
            (2) Limitation on subsequent agreements.--After an 
        agreement has been so terminated, no new agreement shall be 
        entered into with such person under this Act unless and until 
        such person gives reasonable assurances to the State agency of 
        the person's ability and willingness to discharge all 
        obligations and responsibilities under a new agreement 
        satisfactorily in accordance with its provisions.

SEC. 208. METHODS OF PAYMENTS FOR SERVICES.

    (a) Professional Services.--Agreements for the furnishing of 
medical, dental, or podiatric services (other than specialist services) 
as benefits under this Act shall provide for payment--
            (1) on the basis of fees for services rendered as benefits, 
        according to a fee schedule;
            (2) on a per capita basis, the amount being according to 
        the number of individuals eligible for benefits who are on the 
        practitioner's list;
            (3) on a salary basis, whole time or part time; or
            (4) on such combinations or modifications of these bases, 
        including separate provision for travel and related expenses, 
        as may be approved by the State agency;
according in each health-service area as the majority of the medical 
practitioners or of the dental practitioners, respectively, under 
agreement to furnish such services shall elect. Provision shall be made 
for another method or methods of payment (from among the methods listed 
in this subsection) to those medical practitioners or to those dental 
practitioners who do not elect the method of such majority, when it is 
found that such alternative method of making payments contributes to 
carrying out the provisions of section 305 or otherwise promotes the 
efficient and economical provision of medical or dental services in the 
area.
    (b) Specialist Services.--Agreements for the furnishing of 
specialist services as benefits under this Act may provide for payments 
on the basis of fee for service, per case, per session, per capita, on 
salary (whole time or part time), or other basis, or combination 
thereof.
    (c) Treatment of Groups.--Any of the methods of making payments 
from among the methods listed in subsection (a) or subsection (b) may 
be used in making payments to groups or practitioners or organizations 
or other agencies which undertake to provide specialist services as 
well as general medical or general dental services.
    (d) Hospital Services.--
            (1) Use of reasonable costs.--Agreements for the furnishing 
        of hospital services as benefits under this Act shall provide 
        for payment on the basis of the reasonable costs of 
        hospitalization furnished as benefits.
            (2) Maximum rates.--The Board, after consultation with the 
        Advisory Council and with representatives of interested 
        hospital organizations, may by regulation prescribe maximum 
        rates for hospitalization furnished as benefits under this Act, 
        and such maximum rates may be varied according to classes of 
        localities or types of service.
            (3) Payment basis.--Payments to hospitals shall be based on 
        the least expensive multiple-bed accommodations available in 
        the hospital unless the patient's condition makes the use of 
        private accommodations essential for the patient's proper 
        medical care.
            (4) Additional charges.--An agreement made for furnishing 
        such services shall not affect the right of the hospital or 
        other person with whom the agreement is made to require 
        payments from patients with respect to the additional cost of 
        more expensive facilities occupied at the request of the 
        patient, or with respect to services not included as benefits 
        under this Act.
    (e) Home-Nursing Services and Auxiliary Services.--Agreements for 
the furnishing of home-nursing services or auxiliary services as 
benefits under this Act shall provide for payment in accordance with 
such methods as the State agency may approve from among those set forth 
in regulations prescribed pursuant to this Act.
    (f) Pro-Rating Certain Per Capita Payments.--In any health-service 
area where agreements for the furnishing of general medical or general 
dental services provide for payment only on a per capita basis, the per 
capita payments with respect to those individuals residing in the area 
who have failed to select a practitioner or other person to furnish 
such services to them shall be made on a pro rata basis among the 
practitioners and other persons under agreement to furnish such 
services in the area.

SEC. 209. AMOUNT OF PAYMENTS FOR SERVICES.

    (a) Consideration of Local Conditions.--
            (1) In general.--Rates or amounts of payment for particular 
        services or classes of services furnished as benefits under 
        this Act shall be adapted to take account of relevant regional, 
        State, or local conditions and practices.
            (2) Professional services.--In arriving at the payments to 
        be made for services of general medical and dental 
        practitioners, specialists, professional and practical nurses, 
        or other practitioners, regard shall be had for the annual 
        income or its equivalent which the payments will provide, and 
        consideration shall be given to degree of specialization, and 
        to the skill, experience, and responsibility involved in 
        rendering the services.
            (3) Adequacy.--Such payments, together with the other terms 
        and conditions of the agreements made under this title, shall 
        be adequate to provide professional and financial incentives to 
        practitioners to advance in their professions and to practice 
        in localities where their services are most needed, to 
        encourage high standards in the quality of services furnished, 
        to give assistance in their use of opportunities for 
        postgraduate study, and to allow for adequate vacation.
    (b) Equivalence in Choice of Payment Methods.--The rates and 
amounts of payments fixed under the different methods of payments 
specified in subsections (a), (b), (c), and (e) of section 208, and the 
methods of making payments, shall assure reasonably equivalent awards 
for practitioners selecting different methods of payment, in 
consideration of the value of the services they render.
    (c) Limitations on Maximum Number of Patients.--Maximum limits upon 
the number of eligible individuals with respect to whom any person may 
undertake to render services in any local health-service area may be 
fixed by the local administrative committee or local administrative 
officer of that health-service area only on the basis of a 
recommendation of the professional committee in that area that such 
limitation is necessary to maintain high standards in the quality of 
medical, dental, or other services furnished as benefits. Any such 
limits shall take account of professional needs and practices and shall 
provide suitable exceptions for emergency and temporary situations.
    (d) Treatment of Groups.--The making of an agreement under section 
206 with a group or other organization shall not operate to increase 
the payments to be made pursuant to any such agreement over the amounts 
which, in the absence of such group or organization would be payable 
for the same services pursuant to agreements made under section 205 
directly with the person or persons who furnish the services.

SEC. 210. PROFESSIONAL RIGHTS AND RESPONSIBILITIES.

    (a) Termination Arrangements.--Any person who enters into an 
agreement under this title may terminate such agreement after 
reasonable notice and after suitable arrangements are made to fulfill 
professional obligations to eligible individuals.
    (b) Freedom of Practice.--Every physician, dentist, or nurse 
agreeing to render services as benefits under this Act shall be free to 
practice such professional's profession in the locality of the 
professional's own choosing, consistent with the requirements of the 
laws of the States.
    (c) Freedom in Acceptance of Patients.--Every physician, dentist, 
nurse, hospital, or other person entering into an agreement under this 
title shall be free to the extent consistent with applicable State law 
and customary professional ethics to accept or reject as a patient any 
individual requesting the professional's services.
    (d) Freedom From Supervision or Control.--No supervision or control 
over the details of administration or operation, or over the selection, 
tenure, or compensation of personnel, shall be exercised under the 
authority of this Act over any hospital which has agreed to furnish 
personal health services as benefits.

                    TITLE III--LOCAL ADMINISTRATION

SEC. 301. DECENTRALIZATION OF ADMINISTRATION.

    (a) In General.--In order that personal health-service benefits may 
be made available promptly and in a manner best adapted to local 
practices, conditions, and needs, responsibility for administration of 
the benefits provided under this Act in the several local health-
service areas shall be decentralized as fully as practicable to local 
administrative committees or local administrative officers, acting with 
the advice and assistance, as provided in this title, of local 
professional committees and, in the case of local administrative 
officers, the advice and assistance of local area committees.
    (b) Designation of Health-Service Areas.--The health-service areas 
of a State shall be those so designated in the State plan of 
operations.

SEC. 302. LOCAL ADMINISTRATIVE COMMITTEE OR OFFICER.

    (a) In General.--The local administrative agency for each local 
health-service area may, as determined by the State, be either--
            (1) a local administrative committee established in 
        accordance with section 303, which shall act through a local 
        executive officer; or
            (2) a local administrative officer, who shall act with the 
        advice and assistance of a local advisory committee established 
        in accordance with section 303.
    (b) Arrangements for Services.--The local administrative committee 
or officer, with the advice and assistance of such local professional 
committees as may from time to time be established, shall arrange for 
the furnishing of personal health-service benefits to eligible 
individuals in the area and to that end shall--
            (1) publish, and make readily available to eligible 
        individuals in the area, lists of the names of all persons who 
        have agreed to furnish personal health services in the area, 
        together with the class or classes of services which each has 
        undertaken to furnish;
            (2) disseminate pertinent information concerning the rights 
        and privileges under this Act of eligible individuals and of 
        persons qualified to furnish personal health services as 
        benefits;
            (3) maintain effective relationships with physicians, 
        dentists, nurses, hospitals, and other persons who have entered 
        into agreements to furnish personal health services in the 
        area, in order to facilitate the furnishing of such services in 
        accordance with such agreements, to assure full and prompt 
        payment to such persons for services so furnished, and to 
        enlist their full cooperation in the administration of benefits 
        under this Act in the area;
            (4) receive and, to the extent possible in the local area, 
        adjust any complaints which may be made concerning the 
        administration of benefits under this Act in the area;
            (5) perform such other duties (including the making of 
        payments to persons furnishing personal health services in the 
        area) as may be assigned by the State agency; and
            (6) take or initiate such other administrative action as 
        the committee or officer finds will best carry out, within the 
        area, the provisions of this Act, and best effectuate its 
        purposes.

SEC. 303. LOCAL AREA COMMITTEES.

    (a) Establishment.--
            (1) In general.--A local area committee shall be 
        established in each health-service area.
            (2) Functions.--If designated by the State as a local 
        administrative committee, the local area committee shall 
        perform the functions specified in section 302 and shall 
        formulate policies for the administration of benefits under 
        this Act in the area. If designated as an advisory committee, 
        it shall advise and assist in the performance of such functions 
        and the formulation of such policies. The committee, whether 
        administrative or advisory, shall--
                    (A) participate in the solution of problems 
                affecting the administration of such benefits;
                    (B) promote impartiality and freedom from political 
                influence in such administration;
                    (C) perform related functions to the end that 
                administration in the area may be responsive to the 
                wishes and needs of persons furnishing and receiving 
                benefits in the area, be adapted to local practices and 
                resources; and
                    (D) provide adequate and high quality personal 
                health services to all eligible individuals.
    (b) Composition.--Each local area committee shall consist of not 
less than 8 nor more than 16 members. The members shall be so selected 
that--
            (1) a majority of the committee shall be representative of 
        the interests of individuals in the area who are eligible for 
        benefits; and
            (2) the remaining members shall be chosen from the several 
        professions, hospitals, and other organizations in the area by 
        whom such benefits will be provided.
    (c) Meetings.--
            (1) In general.--The local area committee shall meet--
                    (A) as often as may be necessary, and whenever one-
                third or more of the members request a meeting; and
                    (B) in the case of a local administrative 
                committee, not less frequently than once each month, 
                and, in the case of a local advisory committee, not 
                less frequently than once in each quarter of the year.
            (2) Annual public meeting.--At least one meeting of the 
        committee each year shall be open to the public, notice of 
        which shall be published and at which any person in the area 
        may participate.
            (3) Annual statewide meetings.--
                    (A) Administrative officers.--At least once each 
                year there shall be a statewide meeting of local 
                administrative officers and representatives of local 
                administrative committees.
                    (B) Local advisory committees.--At least once in 
                each year there shall be a statewide meeting of 
                representatives of all local advisory committees in the 
                State, and any reports or recommendations made at such 
                meeting shall on the request of such meeting be 
                transmitted through the State agency to the Board.

SEC. 304. LOCAL PROFESSIONAL COMMITTEES.

    (a) Establishment.--Local committees representative of the persons 
furnishing personal health services in the area shall be established in 
each health-service area.
    (b) Functions.--Each local professional committee shall assist the 
local administrative committee and its executive officer, or the local 
administrative officer and the local advisory committee, as the case 
may be, in--
            (1) the preservation of the customary freedom and 
        responsibility (under applicable State law) of practitioners in 
        the exercise of professional judgment as to the care of 
        patients; and
            (2) in the solution of technical problems concerning the 
        participation of professional personnel, hospitals, and other 
        qualified persons in the provision of personal health services 
        as benefits, and to advise the local administrative or 
        executive officer and the local area committee regarding 
        matters of professional practice or conduct arising in 
        connection with the performance of agreements for the provision 
        of such services.
    (c) Meetings.--Such local committees shall meet on call of the 
local administrative committee or officer, as the case may be, or upon 
their own motion. The members of any such local professional committee 
may be professional members of the local area committee or other 
professional persons or both.

SEC. 305. METHODS OF ADMINISTRATION.

    (a) In General.--In each health-service area the methods of 
administration shall be such as to--
            (1) insure the prompt and efficient care of individuals 
        entitled to personal health services as benefits;
            (2) promote personal relationships between physician and 
        patients;
            (3) promote coordination among and between general 
        practitioners, specialists, those who furnish auxiliary 
        services, nurses, and hospitals, in the furnishing of services 
        under this Act, between them and public-health centers and 
        agencies, and educational service, research, and other related 
        agencies or institutions, and between preventive, diagnostic, 
        and curative services, public and private;
            (4) aid in the prevention of disease, disability, and 
        premature death;
            (5) encourage improvement in the number and distribution of 
        professional personnel and facilities; and
            (6) insure the provision of adequate service with the 
        greatest economy consistent with high standards of quality.
    (b) Appointment.--Local administrative officers shall be appointed 
by the State agency or the head thereof, in accordance with the merit 
system provided for in the State plan of operations. Local 
administrative committees shall be appointed by such agency or the head 
thereof, from individuals residing in the respective health-service 
areas, and the executive officers of such committees shall be appointed 
by the committees in accordance with the merit system. The local 
health-service areas shall be those so designated in such plan. Members 
of local advisory committees and of local professional committees shall 
be selected in accordance with methods set forth in such plan.
    (c) Compliance With Provisions.--In exercising their functions and 
discharging their responsibilities under this Act, local administrative 
officers and communities, local advisory committees, and local 
professional committees shall observe the provisions of this Act, and 
of regulations prescribed thereunder, and of any regulations, 
standards, and procedures prescribed by the State agency.

                     TITLE IV--STATE ADMINISTRATION

SEC. 401. DECLARATION OF POLICY.

    It is the intent of Congress that the benefits provided under this 
Act be administered wherever possible by the several States, in 
accordance with plans of operations submitted and approved as provided 
in this title, and in each State insofar as feasible by the same State 
agency which administers, or supervises the administration of, the 
State's general public health and maternal and child health programs.

SEC. 402. STATE PLAN OF OPERATIONS.

    (a) In General.--Any State desiring to assume responsibility for 
the administration in the State of the personal health-service benefits 
provided under this Act to all individuals in the State who are 
eligible for such benefits, may do so for the period beginning October 
1, 2010 (when benefits first become available under this Act), or for 
the period beginning October 1 of any succeeding year, if it has 
undertaken, through its legislature, to administer such benefits in 
accordance with the provisions of this Act and with the provisions of 
regulations and standards prescribed thereunder, and, at least 12 
months in advance, has submitted and had approved a State plan of 
operations which provides for the following:
            (1) The plan must designate as the sole agency for the 
        statewide administration of benefits under this Act a single 
        State agency duly authorized under the law of the State to 
        administer such benefits within the State in accordance with 
        the provisions of this Act, the provisions of regulations and 
        standards prescribed thereunder, and the provisions of the 
        State plan.
            (2) The plan must provide for the designation of a State 
        advisory committee which shall include members who are familiar 
        with the needs for personal health services in urban and rural 
        areas, and who are representative of the interests of 
        individuals in the State who are eligible for benefits, such 
        members to constitute a majority, and members chosen from the 
        several professions, hospitals, and other organizations in the 
        State by whom such benefits will be provided, to advise the 
        State agency in carrying out the administration of such 
        benefits in the State.
            (3) The plan must provide for the decentralized 
        administration of this Act in the State in accordance with 
        title III for the designation of local health-service areas, 
        and for such methods of selecting the members of local advisory 
        committees and of local professional committees as are 
        calculated to insure representation of the nature set forth in 
        sections 303 and 304, respectively.
            (4) The plan must provide for such methods of 
        administration, including methods relating to the establishment 
        and maintenance of personnel standards on a merit basis (except 
        that the Board shall exercise no authority with respect to the 
        selection, tenure of office, or compensation of any individual 
        employed in accordance with such methods), as are found by the 
        Board to be necessary for the proper and efficient 
        administration of such benefits in the State.
            (5) The plan must provide for the making of surveys of the 
        resources and needs of the State, in accordance with section 
        102(a), and sets forth a program for the administration of such 
        benefits in the State which gives reasonable assurance (A) that 
        maximum use will be made of all available health personnel and 
        facilities desiring to participate in the provision of benefits 
        to eligible individuals, (B) that funds allotted to the State 
        for the several classes of benefits will be allocated in such 
        manner as to give reasonable assurance of the availability of 
        services in all health-service areas in the State, and (C) that 
        any maldistribution or other inadequacies in the health 
        personnel or facilities available for such purpose, or in the 
        quality of the services rendered, will be progressively 
        improved as rapidly as may be practicable.
            (6) The plan must provide that the State agency will make 
        such reports in such form and containing such information as 
        the Board may from time to time reasonably require, and give 
        the Board, upon demand, access to the records upon which such 
        information is based.
            (7) The plan must provide that all Federal funds paid to 
        the State agency for purposes of carrying out this Act in the 
        State shall be properly safeguarded and expended solely for the 
        purposes for which paid, and must provide for the repayment by 
        the State to the United States of any such funds lost by the 
        State agency or diverted from the purposes for which paid.
            (8) The plan must provide for cooperation, including where 
        necessary entering into working agreements (with any 
        appropriate transfer of funds), with other public agencies of 
        the State or of its political subdivisions concerned with 
        programs related to the purposes of this Act, and with 
        appropriate agencies of other States or of the United States 
        administering this Act, or benefits under this Act, in other 
        States.
    (b) Approval.--The Board shall approve any State plan and any 
modification thereof submitted by the State which it finds complies 
with the provisions of subsection (a). No change in a State plan shall 
be required within one year after initial approval thereof, or within 
one year after any change thereafter required therein, by reason of any 
change in the regulations or standards prescribed pursuant to this Act, 
except with the consent of the State or in accordance with further 
action by Congress.
    (c) Notice of Disapproval.--In the event of its disapproval of any 
plan or any modification therein submitted by a State pursuant to this 
title, the Board shall notify the State of such disapproval and shall, 
upon request of the State, afford it reasonable notice and opportunity 
for a hearing on such disapproval.
    (d) Fallback Administration.--
            (1) Notice to governor.--If a State has not prior to 
        October 1, 2010, submitted and had approved a plan of 
        operations, the Board shall notify the Governor of the State 
        that the Board will be required to administer this Act in the 
        State, commencing October 1, 2010.
            (2) Publication of notice.--The Board shall provide for the 
        publication of such notice in at least two newspapers of 
        general circulation in the State.
            (3) Continued administration.--If within 60 days after such 
        notification to the Governor the State has not submitted an 
        approvable plan, the Board shall continue such administration 
        until one year after the submission and approval of a plan of 
        operations in accordance with this section.
            (4) Waiver.--The Board may waive the requirement that a 
        State plan must be submitted and approved one year prior to 
        commencement of State administration if it is satisfied in a 
        particular case that the substitution of a shorter preparatory 
        period will not prejudice the interests of eligible individuals 
        in the State.
    (e) Noncompliance.--
            (1) Notice.--Whenever the Board, after reasonable notice 
        and opportunity for hearing to the State, finds that the State, 
        having submitted and had approved a plan of operations under 
        this title--
                    (A) is not complying substantially with the 
                provisions of such plan, or with the provisions of this 
                Act or any regulations or standards prescribed 
                thereunder, or
                    (B) has withdrawn its plan or failed to change it 
                when and as required by a change in this Act or in 
                regulations prescribed thereunder,
        the Board shall notify the Governor of the State of such 
        findings, together with its reasons therefor and a statement 
        concerning the effect of such findings under this Act, and 
        shall provide for the publication of such notice in at least 
        two newspapers of general circulation in the State.
            (2) Board assumption of responsibility.--If within 60 days 
        following such a notice the State has not taken appropriate 
        action to bring its plan or its administration thereof into 
        conformity with this Act and regulations and standards 
        thereunder, the Board shall immediately assume responsibility 
        for the administration of this Act in the State and shall 
        administer the same in such State for so long thereafter as the 
        State fails to give reasonable assurances of substantial 
        compliance or fails to submit an approvable plan, as the case 
        may be.
    (f) Board Authority.--In any State in which the Board has assumed 
responsibility for the administration of benefits under this Act as 
provided in subsections (d) and (e), the Board shall have and discharge 
all authority and duties, in accordance with the provisions of this 
Act, which it finds necessary for that purpose, and the term ``State 
agency'' wherever used in title II or title III shall be deemed to 
refer to the Board.
    (g) Additional State-Funded Services.--Nothing in this Act shall 
preclude any State or any political subdivision thereof, whether or not 
the State has assumed responsibility for the administration of benefits 
under this Act, from furnishing, with funds available from sources 
other than the National Health Care Trust Fund, any additional health 
services to individuals who are eligible for benefits under this Act or 
any or all health services to individuals who are not so eligible.

  TITLE V--NATIONAL HEALTH INSURANCE BOARD; NATIONAL ADVISORY MEDICAL 
           POLICY COUNCIL; GENERAL ADMINISTRATIVE PROVISIONS

SEC. 501. NATIONAL HEALTH INSURANCE BOARD.

    (a) Establishment.--
            (1) In general.--There is hereby established in the 
        Department of Health and Human Services a National Health 
        Insurance Board.
            (2) Composition.--The Board shall be composed of 5 members, 
        three of whom shall be appointed by the President by and with 
        the advice and consent of the Senate, and the other two of whom 
        shall be the Surgeon General of the Public Health Service and 
        the Administrator of Social Security. At least one of the 
        appointed members shall be a doctor of medicine licensed to 
        practice medicine or surgery in one of the States.
            (3) No other employment.--During an appointment member's 
        term of membership on the Board, the member shall not shall 
        engage in any other business, vocation, or employment.
            (4) Compensation.--Each appointed member shall receive a 
        salary at an annual rate of basic pay, established by the 
        President, which is not less than the annual rate of basic pay 
        for positions at level V of the Executive Schedule and which is 
        not greater than the annual rate of basic pay for positions at 
        level IV of the Executive Schedule.
            (5) Term.--Each appointed member shall hold office for a 
        term of six years, except that--
                    (A) any member appointed to fill a vacancy 
                occurring prior to the expiration of the term for which 
                the member's predecessor was appointed shall be 
                appointed for the remainder of such term; and
                    (B) the terms of office of the members first taking 
                office after the date of the enactment of this Act 
                shall expire, as designated by the President at the 
                time of appointment, one at the end of two years, one 
                at the end of four years, and one at the end of six 
                years, after the date of the enactment of this Act.
            (6) Designation of chairman.--The President shall designate 
        one of the appointed members as the Chairman of the Board.
    (b) Functions.--
            (1) Supervision.--All functions of the Board shall be 
        administered by the Board under the direction and supervision 
        of the Secretary of Health and Human Services. The board shall 
        perform such functions as it finds necessary to carry out the 
        provisions of this Act, and shall make all regulations and 
        standards specifically authorized to be made in this Act and 
        such other regulations not inconsistent with this Act as may be 
        necessary.
            (2) Delegation.--The Board may delegate to any of its 
        members, officers, or employees, or with the approval of the 
        Secretary to any other officer or employee of the Department of 
        Health and Human Services, such of its powers or duties, except 
        that of making regulations, as it may consider necessary and 
        proper to carry out the provisions of this Act.
            (3) Contract authority.--The Board may also enter into 
        agreements for the furnishing or provision of personal health 
        services under this Act without regard to the provisions of 
        title 5, United States Code, pertaining to the appointment, 
        status, or compensation of Federal employees, or pertaining to 
        contracts for personal services, and without regard to section 
        3709 of the Revised Statutes (41 U.S.C. 5), and any person 
        rendering services pursuant to an agreement so made shall not 
        by reason thereof be deemed to be an employee of the United 
        States.
    (c) Use of Executive Agencies.--In administering the provisions of 
this Act, the Board is authorized to utilize the services and 
facilities of any executive department or other agency of the United 
States in accordance with an agreement with the head thereof. Payment 
for such services and facilities shall be made in advance or by way of 
reimbursement, as may be agreed upon with the head of the executive 
department or other agency furnishing them.
    (d) Personnel.--
            (1) In general.--Personnel of the Board shall be appointed 
        by the Secretary upon recommendation of the Board.
            (2) Detailing of employees to board.--The Secretary is 
        authorized to detail to the Board, upon its request, any 
        officer or employee of the Department of Health and Human 
        Services, and in the Secretary's discretion to reimburse, from 
        funds available for the administration of this Act, the 
        appropriation from which the salary or, in the case of 
        commissioned officers of the Public Health Service, the pay and 
        allowances of such officer or employee are paid.
    (e) Detailing of Board Employees.--Upon the request of any State 
agency administering a State plan of operations pursuant to title IV, 
or upon the request of any State desiring to prepare and submit a plan 
of operations, any officer or employee of the Board (including any 
officer or employee detailed to the Board pursuant to subsection (d)) 
may be detailed by the Board to assist in the administration, or in the 
preparation, of such State plan of operations. The funds available for 
the Federal administration of this Act may, in the discretion of the 
Secretary, be reimbursed from funds allotted to the State pursuant to 
section 802 and available for State administration, for the salary (or 
for the pay and allowances) of any officer or employee so detailed.

SEC. 502. ADVISORY COUNCIL.

    (a) Establishment.--
            (1) In general.--There is hereby established a National 
        Advisory Medical Policy Council.
            (2) Composition.--The Council shall consist of the Chairman 
        of the Board, who shall serve as Chairman of the Advisory 
        Council ex officio, and 16 members appointed by the Secretary 
        of Health and Human Services. At least 8 of the 16 appointed 
        members shall be individuals who are familiar with the need for 
        personal health services in urban or rural areas and who are 
        representative of the interests of individuals eligible for 
        benefits under this Act, and at least 6 of the members shall be 
        individuals who are outstanding in the medical or other 
        professions concerned with the provision of services provided 
        as benefits under this Act and who are representative of the 
        individuals, organizations, and other persons by whom personal 
        health services will be provided.
            (3) Term.--Each appointed member shall hold office for a 
        term of 4 years, except that any member appointed to fill a 
        vacancy occurring prior to the expiration of the term for which 
        the member's predecessor was appointed shall be appointed for 
        the remainder of that term, and the terms of the members first 
        taking office shall expire, as designated by the Secretary at 
        the time of appointment, four at the end of the first year, 
        four at the end of the second year, four at the end of the 
        third year, and four at the end of the fourth year after the 
        date of appointment.
            (4) Technical and professional advisory committees.--The 
        Advisory Council is authorized to appoint such special advisory 
        technical or professional committees as may be useful in 
        carrying out its functions, and the members of such committees 
        may be members of the Advisory Council, or other persons, or 
        both.
            (5) Compensation.--Appointed Advisory Council members and 
        members of technical or professional committees, while serving 
        on business of the Council (inclusive of traveltime), shall 
        receive compensation at rates fixed by the Secretary, but not 
        exceeding $200 per day, and shall be entitled to receive actual 
        and necessary traveling expenses and per diem in lieu of 
        subsistence while so serving away from their places of 
        residence.
            (6) Support services.--The Advisory Council, its appointed 
        members, and its committees, shall be provided with such 
        secretarial, clerical, or other assistance as may be provided 
        by the Congress for carrying out their respective functions.
            (7) Meetings.--The Advisory Council shall meet as 
        frequently as the Board deems necessary, but not less than 
        twice each year. Upon request by six or more members, it shall 
        be the duty of the Chairman to call a meeting of the Council.
    (b) Functions.--The Advisory Council shall advise the Board with 
reference to matters of general policy and administration arising in 
connection with the making of regulations, the establishment of 
professional standards, and the performance of its other duties under 
this Act.
    (c) Indefinite Duration.--Section 14 of the Federal Advisory 
Committee Act shall not apply to the Advisory Council.

SEC. 503. STUDIES, RECOMMENDATIONS, AND REPORTS.

    (a) In General.--The Board shall have the duty of studying and 
making recommendations as to the most effective methods of providing 
health services, and as to legislation and matters of administrative 
policy concerning health and related subjects.
    (b) Annual Reports.--At the beginning of each regular session of 
Congress, it shall make a full report to Congress of the administration 
of this Act, including a report with regard to the adequacy of its 
financial provisions contained in this Act and of appropriations made 
pursuant thereto, the methods of allotment of funds among the States, 
and related matters. Such report shall include a record of 
consultations with the Advisory Council, recommendations of the 
Advisory Council, and comments thereon.

SEC. 504. NONDISCLOSURE OF INFORMATION.

    (a) Confidentiality.--Information concerning an individual, 
obtained from the individual or from any physician, dentist, nurse, or 
hospital, or from any other person pursuant to or as a result of the 
administration of this Act, shall be held confidential (except for 
statistical purposes) and shall not be disclosed or be open to public 
inspection in any manner revealing the identity of the individual or 
other person from whom the information was obtained or to whom the 
information pertains, except as may be necessary for the proper 
administration of this Act or of other laws, State or Federal.
    (b) Penalty.--Any person who shall violate any provision of 
subsection (a) shall be deemed guilty of a misdemeanor and, upon 
conviction thereof, shall be punished by a fine not exceeding $50,000 
or by imprisonment not exceeding one year, or both.

SEC. 505. PROHIBITION AGAINST DISCRIMINATION.

    In carrying out the provisions of this Act there shall be no 
discrimination on account of race, creed, or color. Personal health 
services shall be made available as benefits to all eligible 
individuals, and all persons qualified under title II to enter into 
agreements to furnish or provide such services shall be permitted to do 
so.

    TITLE VI--ELIGIBILITY DETERMINATIONS, COMPLAINTS, HEARINGS, AND 
                            JUDICIAL REVIEW

SEC. 601. DETERMINATIONS AS TO ELIGIBILITY FOR BENEFITS.

    (a) In General.--The Secretary of Health and Human Services through 
such units of the Department of Health and Human Services as the 
Secretary may determine, shall upon the Secretary's own initiative or 
upon application of any individual make determinations as to the 
eligibility of individuals for benefits under this Act. Whenever 
requested by any individual determined by the Secretary not to be 
eligible for benefits for any period, or by a dependent of any such 
individual, the Secretary shall give such individual or such dependent 
reasonable notice and opportunity for a hearing with respect to such 
determination and on the basis of the evidence adduced at the hearing 
shall affirm, modify, or reverse the Secretary's determination.
    (b) Authority.--
            (1) In general.--In carrying out the Secretary's 
        responsibility under this section, the Secretary shall have all 
        the powers and duties conferred upon the Secretary under 
        sections 205 and 206 of the Social Security Act. Such powers 
        and duties shall be subject to the same limitations and rights 
        of judicial review as are contained in section 205 of such Act.
            (2) Civil service eligibility determinations.--Eligibility 
        for benefits under this title based on entitlement to an 
        annuity under subchapter III (relating to civil service 
        retirement) of chapter 83 of title 5, United States Code, shall 
        be determined on the basis of certification by the Office of 
        Personnel Management.
    (c) Role of States.--Nothing in title IV shall be deemed to require 
or authorize any assumption by the State agency, designated in 
accordance with an approved State plan of operations approved under 
such title, of any of the Secretary's responsibilities under this 
section, but the Secretary may utilize existing facilities and services 
of any such agency on the basis of mutual agreements with such agency.

SEC. 602. COMPLAINTS OF ELIGIBLE INDIVIDUALS AND OF PERSONS FURNISHING 
              BENEFITS.

    (a) In General.--
            (1) Filing.--Any eligible individual aggrieved by reason of 
        the individual's failure to receive any personal health-service 
        benefits to which the believes entitled, or dissatisfied with 
        any service rendered the individual as a personal health-
        service benefit, and any person who has entered into an 
        agreement to furnish services as personal health-service 
        benefits and who is aggrieved by the failure or alleged failure 
        of a local or other administrative officer or a local 
        administrative committee to carry out the agreement in 
        accordance with its terms, may make a complaint to the local 
        administrative officer or local executive officer in the area 
        in which the action or inaction complained of occurred, or to 
        such other officer as may be provided in regulations.
            (2) Response.--If the officer to whom such complaint is 
        made finds, after investigation, that the complaint is well 
        founded, the officer shall promptly--
                    (A) take such steps as may be necessary and 
                appropriate to correct the action or inaction 
                complained of; and
                    (B) notify the individual or other person making 
                the complaint of the officer's disposition thereof.
            (3) Hearing.--Any such individual or other person 
        dissatisfied with the action taken may in writing request a 
        hearing thereon and shall be afforded opportunity for the same 
        pursuant to subsection (b).
    (b) Hearings.--
            (1) In general.--Provision shall be made for the 
        establishment of necessary and sufficient impartial tribunals 
        to afford hearings to individuals and other persons entitled 
        thereto under subsection (a), or section 207(d), and for 
        further review of the findings, conclusions, and 
        recommendations of such tribunals, in accordance with 
        regulations made by the Board, after consultation with the 
        Advisory Council.
            (2) Specific subjects.--With respect to any complaint 
        involving--
                    (A) matters or questions of professional practice 
                or conduct, the hearing body shall contain competent 
                and disinterested professional representation; and
                    (B) only matters or questions of professional 
                practice or conduct, the hearing body shall consist 
                exclusively of such professional persons.
    (c) Powers of Board.--In administering this section in any State 
which has not assumed responsibility for the administration of benefits 
under this Act as provided in title IV, the Board (subject to the 
provisions of section 501(b)) shall, insofar as they are applicable to 
its functions under this Act, have all the powers and duties conferred 
upon the Secretary by sections 205 and 206 of the Social Security Act. 
Such powers and duties shall be subject to the limitations and rights 
of judicial review contained in section 205 of such Act.
    (d) Judicial Review.--In any State which has assumed responsibility 
for the administration of benefits under this Act as provided in title 
IV the powers and duties of the State agency shall be subject to such 
rights of judicial review in the courts of the State as the law of the 
State may provide; subject, however, to review by the Supreme Court of 
the United States in such cases and in such manner as is provided in 
section 1257 of title 28 of the United States Code.

  TITLE VII--APPLICATION OF ACT TO INDIVIDUALS COVERED UNDER MEDICARE 
                                PROGRAM

SEC. 701. ELIGIBILITY; BENEFITS AVAILABLE.

    (a) Limitation to Supplementary Benefits.--
            (1) In general.--In the case of any individual who is 
        entitled to hospital insurance benefits under part A of title 
        XVIII of the Social Security Act, or to supplementary medical 
        insurance benefits under the insurance program established by 
        part B of such title, during any benefit year or part thereof 
        in which the individual is otherwise eligible for benefits 
        under this Act in accordance with section 104 or would 
        otherwise be furnished such benefits in accordance with section 
        105, the personal health services (specified in section 101) 
        which may be made available to the individual as benefits under 
        this Act shall be limited to those services (otherwise 
        available to the individual in accordance with section 102) for 
        which the individual is ineligible under part A or B of such 
        title XVIII.
            (2) Treatment.--For purposes of paragraph (1), an 
        individual shall be considered ineligible under part A or B of 
        such title XVIII if no payment is or can be made to the 
        individual or on the individual's behalf thereunder with 
        respect to the item or service involved, whether because the 
        individual is not entitled to benefits under whichever such 
        part is applicable, because no payment is provided under either 
        such part for the item or service involved, or because the 
        individual has exhausted entitlement to have payment made 
        thereunder for items or services of the type involved. An 
        individual shall also be considered ineligible under part A or 
        B of such title XVIII with respect to any item or service (for 
        which the individual is otherwise entitled to have payment made 
        thereunder) to the extent that payment is not made with respect 
        to such item or service because of the application of the 
        deductible and coinsurance provisions of sections 1813 and 1833 
        of the Social Security Act.
    (b) Regulations.--The Board, after consultation with the Advisory 
Council, shall prescribe such regulations as may be necessary or 
appropriate to insure, in the case of individuals whose benefits under 
this Act are limited under subsection (a), that the combination of 
benefits under this Act and title XVIII of the Social Security Act will 
effectively carry out (without duplication of benefits) the purpose of 
this Act.
    (c) No Impact on Dependents.--The limitation under subsection (a) 
of an individual's benefits under this Act shall not be construed as 
affecting the eligibility of the individual's dependents for such 
benefits in accordance with subsection (a)(3) or (b)(3) of section 104.

SEC. 702. STUDY AND REPORT.

    (a) Study.--As soon as practicable after the date of the enactment 
of this Act, the Secretary of Health and Human Services shall undertake 
and carry out a full and complete study of the interrelationship of the 
program of national health insurance under this Act and the program of 
health insurance under title XVIII of the Social Security Act, in order 
to determine the way in which the latter program may be most 
effectively and equitably transferred to and incorporated in the 
program under this Act.
    (b) Considerations.--In conducting such study, the Secretary shall 
give particular attention to the transitional problems which would 
result from such a transfer, and shall consider in detail (with respect 
to each such program)--
            (1) the benefits provided;
            (2) the standards of eligibility therefor;
            (3) the standards and qualifications for participation by 
        providers of services of various types;
            (4) the methods of administration;
            (5) the costs and methods of financing; and
            (6) any other matters which might assist in making such 
        determination and in insuring that all desirable features of 
        the program under title XVIII of the Social Security Act will 
        to the maximum extent feasible be preserved with respect to the 
        individuals covered by that program (and, in appropriate cases, 
        included in the program under this Act for all individuals who 
        are eligible thereunder, without regard to any transfer).
    (c) Report.--The Secretary shall submit to the President and the 
Congress, no later than one year after the date of the enactment of 
this Act, a complete report of the study conducted under this section 
together with the Secretary's findings as to the most effective and 
equitable way in which the transfer under consideration could be 
effected and detailed recommendations for legislative, administrative, 
and other actions to accomplish it.

                     TITLE VIII--FISCAL PROVISIONS

SEC. 801. USE OF TRUST FUND.

    (a) Availability of Funds.--Funds in the National Health Care Trust 
Fund shall be available for all expenditures necessary or appropriate 
to carry out this Act; except that (subject to the provisions of 
section 802(g)) only so much of such funds shall be available for 
salaries or other administrative expenses of any department or agency 
of the United States as may be authorized in annual or other 
appropriation Acts.
    (b) Deposit of Reimbursements.--Sums received as reimbursements to 
the National Health Care Trust Fund pursuant to section 104(c) or 
section 105, or by virtue of subrogation pursuant to section 104(c), 
shall be deposited in the National Health Care Trust Fund and shall be 
available in accordance with the provisions of subsection (a).

SEC. 802. ALLOTMENT OF FUNDS.

    (a) For Classes of Services.--
            (1) In general.--The Board, after consultation with the 
        Advisory Council, shall determine, as far in advance of the 
        beginning of each fiscal year as is possible, the sums which 
        shall be available from the Trust Fund for provision during the 
        fiscal year of all classes, and of each of the five classes, of 
        personal health-service benefits specified in section 101(a).
            (2) Considerations.--Such sums shall be determined, after 
        taking into consideration the estimated amount which will be in 
        the Trust Fund at the beginning of the fiscal year and the 
        anticipated income of the National Health Care Trust Fund 
        thereafter, with a view--
                    (A) to maintaining as nearly as practicable a 
                uniform rate of expenditure for personal health-service 
                benefits in successive fiscal years, except for 
                appropriated allowance on account of anticipated 
                increase in the personnel and facilities available to 
                furnish personal health-service benefits and on account 
                of reduction or withdrawal of restrictions or 
                limitations pursuant to section 102(b); and
                    (B) to establishing and maintaining a reserve in 
                the Trust Fund adequate to meet emergency demands in 
                accordance with subsection (d) and adequate to maintain 
                the rate of expenditure or to permit its gradual 
                reduction if the income of the Trust Fund should fall 
                below the income which had been anticipated.
    (b) Initial State Allotments.--
            (1) In general.--In accordance with regulations prescribed 
        after consultation with the State agencies, the Board, prior to 
        the beginning of each fiscal year shall allot to the several 
        States, for the fiscal years 2010, 2011, and 2012, 90 percent, 
        and for each fiscal year thereafter 95 percent of each sum 
        determined pursuant to subsection (a).
            (2) Basis of allotments.--Such regulations shall provide 
        for allotments on the basis of--
                    (A) the population in the several States eligible 
                for benefits under this Act;
                    (B) professional and other personnel, hospitals, 
                and other facilities, and supplies and commodities, to 
                be available in the several States in the provision of 
                such benefits; and
                    (C) the cost of reasonable and equitable 
                compensation to such personnel and facilities and for 
                such supplies and commodities.
            (3) Operation of allotments.--Such allotments shall 
        operate, to the maximum extent possible, both to assure 
        provision to eligible individuals of adequate personal health-
        service benefits in all States and all local health-service 
        areas, and also to increase the adequacy of services where 
        personnel and facilities are below the national average.
    (c) Allotment of Remainder to States.--
            (1) In general.--From time to time during each fiscal year, 
        the Board shall allot to the several States the remaining 10 
        percent or the remaining 5 percent, as the case may be, of each 
        sum determined pursuant to subsection (a).
            (2) Considerations.--In making allotments under this 
        subsection, the Board shall take into consideration the factors 
        specified in subsection (b), but shall, in addition, give 
        special consideration to the extent of which allotments under 
        subsection (b) have proved to be insufficient to permit 
        provision of reasonably adequate benefits under this Act.
    (d) Emergency Allotments.--In addition to the sums determined 
pursuant to subsection (a) to be available for the provision of 
personal health-service benefits, the Board, after consultation with 
the Advisory Council, is authorized to make emergency allotments from 
the National Health Care Trust Fund if it finds that a disaster, 
epidemic, or other cause has substantially increased the volume of 
personal health-service benefits required in any part of the United 
States over the volume anticipated when the determinations pursuant to 
subsection (a) were made. Allotments pursuant to this subsection shall 
be made to such State or States, for such class or classes of personal 
health-service benefits, and in such amounts, as the Board may find 
necessary to meet the emergency.
    (e) Payment From Allotments.--The Board shall from time to time 
determine the amounts to be paid to each State from its allotments 
under this section, and shall certify to the Secretary of the Treasury 
the amounts so determined. The Secretary shall thereupon, and prior to 
audit or settlement by the General Accounting Office, pay to the State 
the amounts so certified.
    (f) Use of Funds.--
            (1) In general.--Funds paid to a State for any class of 
        personal health-service benefits shall be used exclusively for 
        the provision of benefits of that class, except that the 
        administrative costs of the State in administering personal 
        health-service benefits under this Act may be met from the 
        allotments to the State.
            (2) Limitation on administrative costs.--Such 
        administrative costs, which in any fiscal year shall not exceed 
        5 percent of the aggregate allotments to the State for such 
        fiscal year, shall be apportioned as between the several 
        allotments in accordance with the costs of administering the 
        respective classes of benefits. Such apportionment may be made 
        in such manner, and by such sampling, statistical, or other 
        methods, as may be agreed upon between the Board and the State 
        agency.
    (g) Board Assumption of Responsibility.--In any case in which the 
Board has assumed responsibility for the administration in a State of 
benefits under this Act in accordance with section 402 (d) or (e), all 
allotments or balances of allotments to such State shall be available 
for expenditure by the Board for the provision of personal health-
service benefits in that State, and (until the Congress shall make 
funds available therefor pursuant to section 801(a)) for the costs of 
administration of such benefits in such State. Expenditures authorized 
pursuant to section 801(a) for such costs of administration shall be 
charged against allotments to such State.

SEC. 803. GRANTS-IN-AID FOR TRAINING AND EDUCATION.

    (a) Authority.--For the purpose of increasing the availability of 
training and education for professional and technical personnel engaged 
or undertaking to engage in the provision or administration of personal 
health services as benefits under this Act, and to carry out the 
policies of section 209(a), the Board is authorized to make grants--
            (1) to public or nonprofit institutions or agencies 
        engaging in undergraduate or postgraduate professional, 
        technical, or administration education or training, for the 
        cost (in whole or in part) of courses or projects which the 
        Board finds, after consultation with the Advisory Council and 
        appropriate Federal departments and agencies, (A) cannot be 
        carried out without financial assistance under this section, 
        and (B) show promise of making valuable contributions to the 
        education, training, or retraining of professional or technical 
        personnel engaged or undertaking to engage in the provision or 
        administration of benefits, or
            (2) to individuals who are professional or technical 
        persons engaged or who undertake to engage in the provision of 
        personal health-service benefits, or who are engaged or 
        undertake to engage in the administration of such benefits, for 
        maintenance (in whole or in part) while in attendance at 
        courses or projects assisted under paragraph (1) or approved by 
        the Board for similar training or education, and for costs of 
        necessary travel.
    (b) Payment Under Grants.--Such grants, in such amounts and for 
payment at such times as are approved by the Board, shall be certified 
for payment to the Secretary of the Treasury, who shall pay them from 
the National Health Care Trust Fund to the designated individuals, 
institutions, or agencies.
    (c) Availability of Funds.--For the purposes of this section there 
shall be available for the fiscal year 2010 the sum of $5,000,000, for 
the fiscal year 2011 the sum of $5,000,000, and for each fiscal year 
thereafter an amount not to exceed one-half of 1 percent of the amount 
expended for benefits under this Act in the last preceding calendar 
year.

                   TITLE IX--MISCELLANEOUS PROVISIONS

SEC. 901. DEFINITIONS.

    As used in this Act:
            (1) Wages.--The term ``wages'' means the sum of the 
        following items, excluding any amount in excess of the 
        applicable contribution and benefit base (as determined under 
        section 230 of the Social Security Act with respect to the 
        hospital insurance tax) which is received (or, in the case of 
        income from self-employment, accrued) by any individual during 
        any calendar year--
                    (A) all remuneration for employment, including the 
                cash value of all remuneration paid in any medium other 
                than cash; except that such term does not include--
                            (i) the amount of any payment made to, or 
                        on behalf of, an employee under a plan or 
                        system established by an employer which makes 
                        provision for the employer's employees 
                        generally or for a class or classes of the 
                        employer's employees (including any amount paid 
                        by an employer for insurance or annuities, or 
                        into a fund to provide for any such payment), 
                        on account of retirement, or sickness or 
                        accident disability, or medical and 
                        hospitalization expenses in connection with 
                        sickness or accident disability, or death; 
                        provided, in the case of a death benefit, that 
                        the employee (I) has not the option to receive, 
                        instead of provision for such death benefit, 
                        any part of such payment or, if such death 
                        benefit is insured, any part of the premiums 
                        (or contributions to premiums) paid by the 
                        employee's employer, and (II) has not the 
                        right, under the provisions of the plan or 
                        system or policy of insurance providing for 
                        such death benefit, to assign such benefit, or 
                        to receive a cash consideration in lieu of such 
                        benefit either upon the employee's withdrawal 
                        from the plan or system providing for such 
                        benefit or upon termination of such plan or 
                        system or policy of insurance or of the 
                        employee's employment with such employer;
                            (ii) the payment by an employer (without 
                        deductions from the remuneration of the 
                        employee) of any social-insurance taxes or 
                        contributions imposed upon an employee; or
                            (iii) the value of services exchanged for 
                        other services for which there is no payment 
                        other than the exchange; and
                    (B) all net income from farm, business, 
                professional, or other self-employment.
            (2) Employment.--The term ``employment'' means any service 
        of whatever nature performed by an employee for the person 
        employing the employee, irrespective of the citizenship or 
        residence of either, within United States, or on or in 
        connection with an American vessel or an American civil 
        aircraft under a contract of service which is entered into 
        within the United States or during the performance of which the 
        vessel or aircraft touches at a port or airport in the United 
        States, if the employee is employed on and in connection with 
        such vessel or aircraft when outside the United States, 
        except--
                    (A) service on active duty in the Armed Forces of 
                the United States;
                    (B) service performed in the employ of a State or 
                any political subdivision thereof, or any 
                instrumentality of any one or more of the foregoing 
                which is wholly owned by one or more States or 
                political subdivisions;
                    (C) casual labor not in the course of the 
                employer's trade or business;
                    (D) service performed by an employee on or in 
                connection with a vessel not an American vessel, or an 
                aircraft not an American aircraft, if the employee is 
                employed on and in connection with such vessel or 
                aircraft when outside the United States;
                    (E) service performed by a duly ordained or duly 
                commissioned or licensed minister of any church in the 
                regular exercise of the minister's ministry and service 
                performed by a regular member of a religious order in 
                the exercise of duties required by such order;
                    (F) service performed by an individual as an 
                employee or employee representative as defined in 
                section 1 of the Railroad Retirement Act of 1937 or 
                section 1 of the Railroad Retirement Act of 1974;
                    (G) service performance in any calendar quarter in 
                the employ of any organization exempt from income tax 
                under section 501 of the Internal Revenue Code of 1986 
                if--
                            (i) the remuneration for such services does 
                        not exceed $150; or
                            (ii) such service is in connection with the 
                        collection of dues or premiums for a fraternal 
                        beneficiary society, order, or association, and 
                        is performed away from the home office or is 
                        ritualistic service in connection with any such 
                        society, order, or association; or
                            (iii) such service is performed by a 
                        student who is enrolled and is regularly 
                        attending classes at a school, college, or 
                        university;
                    (H) service performed in the employ of a foreign 
                government (including service as a consular or other 
                officer or employee or a nondiplomatic representative);
                    (I) service performed in the employ of an 
                instrumentality wholly owned by a foreign government, 
                if--
                            (i) the service is of a character similar 
                        to that performed in foreign countries by 
                        employees of the United States Government or of 
                        an instrumentality thereof; and
                            (ii) the Secretary of State shall certify 
                        to the Secretary of Health and Human Services 
                        that the foreign government, with respect to 
                        whose instrumentality and employees thereof 
                        exemption is claimed, grants an equivalent 
                        exemption with respect to similar service 
                        performed in the foreign country by employees 
                        of the United States Government and of 
                        instrumentalities thereof; and
                    (J) service performed in the employ of an 
                international organization entitled to enjoy 
                privileges, exemptions, and immunities as an 
                international organization under the International 
                Organizations Immunities Act.
            (3) In any case in which an individual has received wages 
        equal to the applicable contribution and benefit base (as 
        determined under section 230 of the Social Security Act), in a 
        calendar year, not less than $500 of such wages shall be 
        deemed, for the purpose of section 104(a), to have been 
        received by the individual in the quarter during which the 
        first of such wages were in fact received by the individual and 
        in each quarter of such calendar year thereafter.
            (4) Benefit year.--The term ``benefit year'' means a period 
        commencing on July 1 of any year and ending on June 30 of the 
        succeeding year.
            (5) Quarter.--The term ``quarter'' and the term ``calendar 
        quarter'' mean a period of three calendar months ending on 
        March 31, June 30, September 30, or December 31.
            (6) Employee.--The term ``employee'' includes (in addition 
        to any individual who is a servant under the law of master and 
        servant) any individual who performs service, of whatever 
        nature, for a person, unless the service is performed by the 
        individual in pursuit of the individual's own independently 
        established business. The term ``employee'' also includes an 
        officer of a corporation.
            (7) American vessel.--The term ``American vessel'' means 
        any vessel documented or numbered under the laws of the United 
        States; and includes any vessel which is neither documented nor 
        numbered under the laws of any foreign country, if its crew is 
        employed solely by one or more citizens or residents of the 
        United States or corporations organized under the laws of the 
        United States or of any State.
            (8) American aircraft.--The term ``American aircraft'' 
        means an aircraft registered under the laws of the United 
        States.
            (9) State.--The term ``State'' includes the District of 
        Columbia.
            (10) United states.--The term ``United States'', when used 
        in a geographic sense, means the several States, as defined in 
        paragraph (9).
            (11) Dependent.--The term ``dependent'' means--
                    (A) an unmarried child (including a stepchild, 
                adopted, or foster child) of an individual, who is 
                under the age of 18, or who is under a total disability 
                which has continued for a period of not less than six 
                consecutive calendar months and is living with such 
                individual or receiving regular support from the 
                individual;
                    (B) a wife of an individual living with such 
                individual or receiving regular support from the 
                individual;
                    (C) a husband who is under a total disability which 
                has continued for a period of not less than six 
                consecutive calendar months, and is living with or 
                receiving regular and substantial support from such 
                individual; and
                    (D) a parent who is living with or receiving 
                regular and substantial support from such individual.
            (12) Person.--The term ``person'' means an individual, a 
        trust or estate, a partnership, a corporation, an association, 
        a consumer cooperative, or other organization.

SEC. 902. EFFECTIVE DATE.

    The effective date of this Act shall be the date of its enactment, 
but personal health services shall first become available as benefits 
in accordance with this Act on October 1, 2010.

      TITLE X--VALUE ADDED TAX AND NATIONAL HEALTH CARE TRUST FUND

SEC. 1001. IMPOSITION OF VALUE ADDED TAX.

    (a) In General.--Subtitle D of the Internal Revenue Code of 1986 
(relating to miscellaneous excise taxes) is amended by inserting before 
chapter 31 the following new chapter:

                     ``CHAPTER 30--VALUE ADDED TAX

                   ``subchapter a. imposition of tax

                  ``subchapter b. taxable transaction

 ``subchapter c. taxable amount; rate of tax for certain transactions; 
                           credit against tax

                     ``subchapter d. administration

  ``subchapter e. definitions and special rules; treatment of certain 
                              transactions

                   ``Subchapter A--Imposition of Tax

``Sec. 3901. Imposition of tax.

``SEC. 3901. IMPOSITION OF TAX.

    ``(a) General Rule.--A tax is hereby imposed on each taxable 
transaction.
    ``(b) Amount of Tax.--Except as otherwise provided in this chapter, 
the amount of the tax shall be 5 percent of the taxable amount.

                  ``Subchapter B--Taxable Transaction

``Sec. 3903. Taxable transaction.
``Sec. 3904. Commercial-type transaction.
``Sec. 3905. Taxable person.
``Sec. 3906. Transactions in the United States.
``Sec. 3907. Rules relating to other terms used in section 3903.

``SEC. 3903. TAXABLE TRANSACTION.

    ``For purposes of this chapter, the term `taxable transaction' 
means--
            ``(1) the sale of property in the United States,
            ``(2) the performance of services in the United States, and
            ``(3) the importing of property into the United States,
by a taxable person in a commercial-type transaction.

``SEC. 3904. COMMERCIAL-TYPE TRANSACTION.

    ``(a) General Rule.--For purposes of this chapter, the term 
`commercial-type transaction' means a transaction engaged in by--
            ``(1) a corporation, or
            ``(2) any person (other than a corporation) in connection 
        with a business.
    ``(b) Sales and Leases of Real Property; Imports.--For purposes of 
this chapter--
            ``(1) In general.--The term `commercial-type transaction' 
        includes--
                    ``(A) any sale or leasing of real property, and
                    ``(B) any importing of property,
        whether or not such transaction is described in subsection (a).
            ``(2) Certain imported articles.--Notwithstanding paragraph 
        (1)(B), the importing of an article which is free of duty under 
        part 2 of schedule 8 of the Tariff Schedules of the United 
        States shall not be treated as a commercial-type transaction 
        unless such transaction is described in subsection (a).

``SEC. 3905. TAXABLE PERSON.

    ``(a) General Rule.--Except as otherwise provided in this chapter, 
for purposes of this chapter, the term `taxable person' means a person 
who engages in a business or in a commercial-type transaction.
    ``(b) Treatment of Employees, etc.--For purposes of this chapter, 
an employee shall not be treated as a taxable person with respect to 
activities engaged in as an employee.

``SEC. 3906. TRANSACTIONS IN THE UNITED STATES.

    ``(a) Sales of Property.--For purposes of this chapter--
            ``(1) In general.--Except as provided in paragraph (2), the 
        sale of property shall be treated as occurring where delivery 
        takes place.
            ``(2) Real property.--The sale of real property shall be 
        treated as occurring where the real property is located.
    ``(b) Performance of Service.--For purposes of this chapter--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, a service shall be treated as occurring where it is 
        performed.
            ``(2) Services performed inside and outside the united 
        states.--If a service is performed both inside and outside the 
        United States, such service shall be treated as performed--
                    ``(A) inside the United States, if 50 percent or 
                more of such service is performed inside the United 
                States, and
                    ``(B) outside the United States, if less than 50 
                percent of such service is performed inside the United 
                States.

``SEC. 3907. RULES RELATING TO OTHER TERMS USED IN SECTION 3903.

    ``(a) Exchanges Treated as Sales.--For purposes of this chapter--
            ``(1) an exchange of property for property or services 
        shall be treated as a sale of property, and
            ``(2) an exchange of services for property or services 
        shall be treated as the performance of services.
    ``(b) Certain Transfers to Employees Treated as Sales.--For 
purposes of this chapter, the transfer of property to an employee as 
compensation (other than a transfer of a type for which no amount is 
includible in the gross income of employees for purposes of chapter 1) 
shall be treated as the sale of property.
    ``(c) Performance of Services.--For purposes of this chapter--
            ``(1) Certain activities treated as performance of 
        services.--Activities treated as included in the performance of 
        services shall include (but shall not be limited to)--
                    ``(A) permitting the use of property,
                    ``(B) the granting of a right to the performance of 
                services or to reimbursement (including the granting of 
                warranties, insurance, and similar items), and
                    ``(C) the making of a covenant not to compete (or 
                similar agreement to refrain from doing something).
            ``(2) Employers and employees.--
                    ``(A) Services for employer.--An employee's 
                services for the employee's employer shall not be 
                treated as the performance of services.
                    ``(B) Services for employee.--An employer's 
                services for the employer's employee shall not be 
                treated as the performance of services unless such 
                services are of a type which constitute gross income to 
                the employee for purposes of chapter 1.
            ``(3) Performance of services treated as sale of 
        services.--The performance of services shall be treated as the 
        sale of services.

 ``Subchapter C--Taxable Amount; Rate of Tax for Certain Transactions; 
                           Credit Against Tax

``Sec. 3911. Taxable amount.
``Sec. 3912. Zero rating for food, housing, and medical care.
``Sec. 3913. Zero rating for exports and interest.
``Sec. 3914. Governmental entities.
``Sec. 3915. Exempt organizations.
``Sec. 3916. Credit against tax.

``SEC. 3911. TAXABLE AMOUNT.

    ``(a) Amount Charged Customer.--For purposes of this chapter, the 
taxable amount for any transaction for which money is the only 
consideration shall be the price charged the purchaser of the property 
or services by the seller thereof--
            ``(1) including all invoiced charges for transportation, 
        and other items payable to the seller with respect to this 
        transaction, but
            ``(2) excluding the tax imposed by section 3901 with 
        respect to this transaction and excluding any State and local 
        sales and use taxes with respect to this transaction.
    ``(b) Exchanges.--For purposes of this chapter, the taxable amount 
in any exchange of property or services shall be the fair market value 
of the property or services transferred by the person liable for the 
tax (determined as if such person had sold the property or services to 
the other party to the exchange).
    ``(c) Imports.--For purposes of this chapter, the taxable amount in 
the case of any import shall be--
            ``(1) the customs value plus customs duties and any other 
        duties which may be imposed, or
            ``(2) if there is no such customs value, the fair market 
        value (determined as if the importer had sold the property).
    ``(d) Special Rule in the Case of Sales of Certain Used Consumer 
Goods.--For purposes of this chapter, if--
            ``(1) a taxable person acquires any tangible personal 
        property in a transaction which was not a taxable transaction, 
        and
            ``(2) such property had been used by an ultimate consumer 
        before such acquisition,
the taxable amount in the case of any sale of such property by such 
taxable person (determined without regard to this subsection) shall be 
reduced by the amount paid for such property by such taxable person.

``SEC. 3912. ZERO RATING FOR FOOD, HOUSING, AND MEDICAL CARE.

    ``(a) Zero Rating for Food, Housing, and Medical Care.--The rate of 
the tax imposed by section 3901 shall be zero with respect to the 
following:
            ``(1) Food.--The retail sale of food and nonalcoholic 
        beverages for human consumption (other than consumption on the 
        premises).
            ``(2) Housing.--The sale and renting of residential real 
        property for use by the purchaser or tenant as a principal 
        residence.
            ``(3) Medical care.--Medical care.
    ``(b) Definitions.--For purposes of subsection (a)--
            ``(1) Nonalcoholic beverages.--The term `nonalcoholic 
        beverages' does not include any article which is taxable under 
        chapter 51.
            ``(2) Medical care.--The term `medical care' means the 
        performance of any service, and the retail sale of any 
        property, payment for which by the purchaser would constitute 
        medical care within the meaning of section 213.
            ``(3) Mobile homes, etc., treated as real property.--A 
        mobile or floating home shall be treated as real property.
    ``(c) Advance Zero Rating.--The Secretary shall prescribe 
regulations under which any item which becomes clearly identifiable as 
an item to which subsection (a) will apply when it reaches the retail 
stage shall be zero rated for all transactions after it becomes so 
clearly identifiable.

``SEC. 3913. ZERO RATING FOR EXPORTS AND INTEREST.

    ``The rate of the tax imposed by section 3901 shall be zero with 
respect to the following:
            ``(1) Exports.--Exports of property.
            ``(2) Interest.--Interest.

``SEC. 3914. GOVERNMENTAL ENTITIES.

    ``(a) Zero Rating for Sales to Governmental Entities and 
Educational Activities of Governmental Entities.--The rate of the tax 
imposed by section 3901 shall be zero with respect to the following:
            ``(1) Sales to governmental entities.--Any sale of property 
        or services to a governmental entity.
            ``(2) Educational activities.--The providing by a 
        governmental entity of property and services in connection with 
        the education of students.
    ``(b) Sales, etc., by Governmental Entities Taxable Only Where 
Separate Charge Is Made.--For purposes of this chapter, the sale of 
property and the performance of services by a governmental entity shall 
be a taxable transaction if (and only if) a separate charge of fee is 
made therefor.
    ``(c) Governmental Entity Defined.--For purposes of this chapter, 
the term `governmental entity' means the United States, any State or 
political subdivision thereof, the District of Columbia, a Commonwealth 
or possession of the United States, or any agency or instrumentality of 
any of the foregoing.

``SEC. 3915. EXEMPT ORGANIZATIONS.

    ``(a) Zero Rating for Section 501(c)(3) Organizations; Credit 
Allowed for All Purchases.--
            ``(1) Zero rating.--The rate of the tax imposed by section 
        3901 shall be zero with respect to any taxable transaction 
        engaged in by a section 501(c)(3) organization other than as 
        part of an unrelated business.
            ``(2) Credit allowed for all purchases.--For purposes of 
        this chapter, a section 501(c)(3) organization shall be treated 
        as engaged in a business with respect to all of its activities.
    ``(b) Taxable Transactions in Case of Other Exempt Organizations.--
For purposes of this chapter, the sale of property and the performance 
of services by any exempt organization other than a section 501(c)(3) 
organization shall be a taxable transaction if (and only if) a charge 
or fee is made for such services.
    ``(c) Definitions.--For purposes of this chapter--
            ``(1) Section 501(c)(3) organizations.--The term `section 
        501(c)(3) organization' means an organization described in 
        section 501(c)(3) which is exempt from tax under section 
        501(a).
            ``(2) Other exempt organization.--The term `other exempt 
        organization' means any organization (other than a section 
        501(c)(3) organization) which is exempt from tax under chapter 
        1.

``SEC. 3916. CREDIT AGAINST TAX.

    ``(a) General Rule.--There shall be allowed as a credit against the 
tax imposed by section 3901 the aggregate amount of tax imposed by 
section 3901 which has been paid by sellers to the taxpayer of property 
and services which the taxpayer uses in the business to which the 
transaction relates.
    ``(b) Exempt Transactions, etc.--If--
            ``(1) property or services are used partly in the business 
        and partly for other purposes, or
            ``(2) property or services are used partly for taxable 
        transactions and partly for other transactions,
the credit shall be allowable only with respect to the property and 
services used for taxable transactions in the business. No credit shall 
be allowable for any transaction occurring when the taxpayer was a 
nontaxable person.
    ``(c) Excess Credit Treated as Overpayment.--
            ``(1) In general.--If for any taxable period the aggregate 
        amount of the credits allowable by subsection (a) exceeds the 
        aggregate amount of the tax imposed by section 3901 for such 
        period, such excess shall be treated as an overpayment of the 
        tax imposed by section 3901.
            ``(2) Time when overpayment arises.--Any overpayment under 
        paragraph (1) for any taxable period shall be treated as 
        arising on the later of--
                    ``(A) the due date for the return for such period, 
                or
                    ``(B) the date on which the return is filed.

                     ``Subchapter D--Administration

``Sec. 3921. Seller liable for tax.
``Sec. 3922. Tax invoices.
``Sec. 3923. De minimis exemption.
``Sec. 3924. Time for filing return and claiming credit; deposits of 
                            tax.
``Sec. 3925. Treatment of related businesses, etc.
``Sec. 3926. Secretary to be notified of certain events.
``Sec. 3927. Regulations.

``SEC. 3921. SELLER LIABLE FOR TAX.

    ``The person selling the property or services shall be liable for 
the tax imposed by section 3901.

``SEC. 3922. TAX INVOICES.

    ``(a) Seller Must Give Purchaser Tax Invoice.--Any taxable person 
engaging in a taxable transaction shall give the purchaser a tax 
invoice with respect to such transaction if the seller has reason to 
believe that the purchaser is a taxable person.
    ``(b) Content of Invoice.--The tax invoice required by subsection 
(a) with respect to any transaction shall set forth--
            ``(1) the name and identification number of the seller,
            ``(2) the name of the purchaser,
            ``(3) the amount of the tax imposed by section 3901, and
            ``(4) such other information as may be prescribed by 
        regulations.
    ``(c) No Credit Without Invoice.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), a purchaser may claim a credit with respect to a 
        transaction only if the purchaser--
                    ``(A) has received from the seller and has in the 
                purchaser's possession a tax invoice which meets the 
                requirements of subsection (b), and
                    ``(B) is named as the purchaser in such invoice.
            ``(2) Employees or other agents named in invoices.--To the 
        extent provided in regulations, the naming of an employee or 
        other agent of the purchaser shall be treated as the naming of 
        the purchaser.
            ``(3) Waiver of invoice requirement in certain cases.--To 
        the extent provided in regulations, paragraph (1) shall not 
        apply--
                    ``(A) where the purchaser without fault on the 
                purchaser's part fails to receive or fails to have in 
                the purchaser's possession a tax invoice,
                    ``(B) to a taxable transaction (or category of 
                transactions) where--
                            ``(i) the amount involved is de minimis, or
                            ``(ii) the information required by 
                        subsection (b) can be reliably established by 
                        sampling or by another method and can be 
                        adequately documented.
    ``(d) Time for Furnishing Invoice.--Any invoice required to be 
furnished by subsection (a) with respect to any transaction shall be 
furnished not later than 15 business days after the tax point for such 
transaction.

``SEC. 3923. DE MINIMIS EXEMPTION.

    ``(a) In General.--Under regulations, a person--
            ``(1) whose aggregate taxable transactions for the calendar 
        year do not exceed $20,000, and
            ``(2) whose aggregate taxable transactions for the next 
        calendar year can reasonably be expected not to exceed $20,000,
may elect to be treated as a person who is not a taxable person for the 
next calendar year.
    ``(b) Exceptions.--Subsection (a) shall not apply--
            ``(1) to any sale or leasing of real property, and
            ``(2) to any importing of property.
    ``(c) Termination of Election.--Any election under subsection (a) 
for a calendar year shall terminate if the aggregate taxable 
transactions--
            ``(1) for the first calendar quarter in such year exceed 
        $7,000,
            ``(2) for the first 2 calendar quarters in such year exceed 
        $12,000, or
            ``(3) for the first 3 calendar quarters in such year exceed 
        $17,000.
Such termination shall take effect on the first day of the second month 
following the close of the first period in which the requirements of 
paragraph (1), (2), or (3) are met.
    ``(d) Taxable Amount Treated as Zero for Zero-Rated Transactions.--
For purposes of this section, the taxable amount of any zero-rated 
transaction shall be treated as zero.
    ``(e) Condition of Election.--In the case of a person who is a 
taxable person for any period, an election under subsection (a) may be 
made for succeeding periods only with the consent of the Secretary. 
Such consent shall be conditioned on placing such person, for all 
succeeding periods, in the same position with respect to the tax 
imposed by section 3901 (and the credit allowed by section 3916) he 
would have been in if all property and services he holds at the time he 
becomes a nontaxable person had been acquired as a nontaxable person.
    ``(f) Casual Sales and Leases of Real Property Excluded.--For 
purposes of this section, the term `taxable transaction' does not 
include a transaction which is treated as a commercial-type transaction 
solely by reason of section 3904(b)(1)(A).

``SEC. 3924. TIME FOR FILING RETURN AND CLAIMING CREDIT; DEPOSITS OF 
              TAX.

    ``(a) Filing Return.--Before the first day of the second calendar 
month beginning after the close of each taxable period, each taxable 
person shall file a return of the tax imposed by section 3901 on 
taxable transactions having a tax point within such taxable period.
    ``(b) Credit Allowed for Taxable Period in Which Purchaser Receives 
Invoice.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        credit allowable by section 3916 with respect to a transaction 
        may be allowed only for the first taxable period by the close 
        of which the taxpayer--
                    ``(A) has paid or accrued amounts properly 
                allocable to the tax imposed by section 3901 with 
                respect to such transaction, and
                    ``(B) has a tax invoice (or equivalent) with 
                respect to such transaction.
            ``(2) Use for later period.--Under regulations, a credit 
        allowable by section 3916 may be allowed for a period after the 
        period set forth in paragraph (1).
    ``(c) Taxable Period.--For purposes of this chapter--
            ``(1) In general.--The term `taxable period' means a 
        calendar quarter.
            ``(2) Exception.--
                    ``(A) Election of 1-month period.--If the taxpayer 
                so elects, the term `taxable period' means a calendar 
                month.
                    ``(B) Other periods.--To the extent provided in 
                regulations, the term `taxable period' includes a 
                period, other than a calendar quarter or month, 
                selected by the taxpayer.
    ``(d) Tax Point.--For purposes of this chapter--
            ``(1) Chapter 1 rules with respect to seller govern.--
        Except as provided in paragraph (2), the tax point for any sale 
        of property or services is the earlier of--
                    ``(A) the time (or times) when any income from the 
                sale should be treated by the seller as received or 
                accrued (or any loss should be taken into account by 
                the seller) for purposes of chapter 1, or
                    ``(B) the time (or times) when the seller receives 
                payment for the sale.
            ``(2) Imports.--In the case of the importing of property, 
        the tax point is when the property is entered, or withdrawn 
        from warehouse, for consumption in the United States.
    ``(e) Monthly Deposits Required.--To the extent provided in 
regulations, monthly deposits may be required of the estimated 
liability for any taxable period for the tax imposed by section 3901.

``SEC. 3925. TREATMENT OF RELATED BUSINESSES, ETC.

    ``(a) General Rule.--For purposes of this chapter (other than 
section 3923), to the extent provided in regulations, the taxpayer may 
elect--
            ``(1) to treat as 1 taxable person 2 or more businesses 
        which may be treated under section 52(b) as 1 employer, and
            ``(2) to treat as separate taxable persons separate 
        divisions of the same business.
    ``(b) De Minimis Exemption.--For purposes of section 3923, all 
businesses which are under common control (within the meaning of 
section 52(b)) shall be treated as 1 business.

``SEC. 3926. SECRETARY TO BE NOTIFIED OF CERTAIN EVENTS.

    ``To the extent provided in regulations, each person engaged in a 
business shall notify the Secretary (at such time or times as may be 
prescribed by such regulations) of any change in the form in which a 
business is conducted or any other change which might affect the 
liability for the tax imposed by section 3901 or the amount of such tax 
or any credit against such tax, or otherwise affect the administration 
of such tax in the case of such person.

``SEC. 3927. REGULATIONS.

    ``The Secretary shall prescribe such regulations as may be 
necessary to carry out the purposes of this chapter.

  ``Subchapter E--Definitions and Special Rules; Treatment of Certain 
                              Transactions

``Sec. 3931. Definitions.
``Sec. 3932. Special rules.
``Sec. 3933. Personal use by owner of business property or services.
``Sec. 3934. Gift of business property or services.
``Sec. 3935. Special rules for dispositions of nonbusiness real 
                            property.
``Sec. 3936. Special rule for insurance contracts.

``SEC. 3931. DEFINITIONS.

    ``(a) Property.--For purposes of this chapter, the term `property' 
means any tangible property.
    ``(b) Business.--For purposes of this chapter, the term `business' 
includes--
            ``(1) a trade, and
            ``(2) an activity regularly carried on for profit.
    ``(c) Employee.--For purposes of this chapter, the term `employee' 
has the meaning such term has for purposes of chapter 24 (relating to 
withholding).
    ``(d) Person.--For purposes of this chapter, the term `person' 
includes any governmental entity.
    ``(e) Business Day.--For purposes of this chapter, the term 
`business day' means any day other than Saturday and Sunday and other 
than a legal holiday (within the meaning of section 7503).
    ``(f) United States.--For purposes of this chapter, the term 
`United States', when used in a geographical sense, includes a 
Commonwealth and any possession of the United States.

``SEC. 3932. SPECIAL RULES.

    ``(a) Coordination With Subtitle A.--For purposes of subtitle A--
            ``(1) Treatment of credit.--Any credit allowable to a 
        taxpayer under section 3916 which is attributable to any 
        property or services shall be treated as a reduction in the 
        amount paid or incurred by the taxpayer for such property or 
        services.
            ``(2) Amount of deduction for tax.--The amount allowable as 
        a deduction for the tax imposed by section 3901 shall be 
        determined without regard to any credit allowable under section 
        3916.
            ``(3) Computation of percentage depletion.--For purposes of 
        sections 613 and 613A--
                    ``(A) gross income shall be reduced by the amount 
                of the tax imposed by section 3901, and
                    ``(B) taxable income shall be determined without 
                regard to any deduction allowed for such tax.
    ``(b) Special Rule Sale of Property Includes Incidental Performance 
of Services.--For purposes of this chapter, if in connection with the 
sale of any property there is an incidental performance of services, 
such performance of services shall be treated as part of the sale of 
such property.
    ``(c) Special Rule Where Performance of Services Includes 
Incidental Transfer of Property.--For purposes of this chapter, if in 
connection with the performance of any services there is an incidental 
transfer of property, such transfer shall be treated as part of the 
performance of such services.
    ``(d) Authority to Zero Rate De Minimis Transactions, etc.--The 
Secretary may prescribe regulations providing that the rate of tax 
shall be zero for a taxable transaction (or category of such 
transactions) where--
            ``(1) the amount involved is de minimis, or
            ``(2) the revenue raised by taxing the transaction is not 
        sufficient to justify the administrative and other costs 
        involved in the payment and collection of the tax.
    ``(e) Importing Treated as Sale and Purchase.--For purposes of this 
chapter, the importing of any property into the United States shall be 
treated as both a sale and purchase of such property by the person 
importing such property.
    ``(f) Subchapter S Corporation Treated as Not a Corporation.--For 
purposes of this chapter, an S corporation (as defined in section 
1361(a)) shall be treated as a person which is not a corporation.
    ``(g) Use Includes Held for Use.--For purposes of this chapter, 
property and services held for use by any person shall be treated as 
used by the person.

``SEC. 3933. PERSONAL USE BY OWNER OF BUSINESS PROPERTY OR SERVICES.

    ``(a) General Rule.--If any business property or services are used 
by an owner of the taxpayer for personal purposes, for purposes of this 
chapter such use shall be treated as a taxable transaction.
    ``(b) Taxable Amount.--In the case of a use described in subsection 
(a), for purposes of this chapter, the taxable amount shall be--
            ``(1) except as provided in paragraph (2), the fair market 
        value of the property or the services, or
            ``(2) if such use is only the temporary use of property, 
        the fair rental value of such use.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Business property or services.--The term `business 
        property or services' means any property or services if a sale 
        of such property, or the performance of such services, by the 
        taxpayer would be a taxable transaction.
            ``(2) Owner.--The term `owner' means--
                    ``(A) in the case of a sole proprietorship, the 
                proprietor,
                    ``(B) in the case of any other business enterprise, 
                any holder of a beneficial interest in the corporation, 
                partnership, or other entity, and
                    ``(C) any member of the family (within the meaning 
                of section 267(c)(4)) of an individual described in 
                subparagraph (A) or (B).

``SEC. 3934. GIFT OF BUSINESS PROPERTY OR SERVICES.

    ``(a) General Rule.--In the case of any gift of business property 
or services, for purposes of this chapter--
            ``(1) such gift shall be treated as a taxable transaction, 
        and
            ``(2) the taxable amount shall be the amount determined 
        under section 3933(b).
    ``(b) Gifts Related to Business Promotion Activities.--For purposes 
of subsection (a), the term `gift' includes any gift of property or 
services transferred in connection with business promotion activities.

``SEC. 3935. SPECIAL RULES FOR DISPOSITIONS OF NONBUSINESS REAL 
              PROPERTY.

    ``(a) In General.--In the case of any sale of real property which 
is treated as a commercial-type transaction solely by reason of section 
3904(b)(1)(A), for purposes of this chapter, the taxable amount shall 
be the excess (if any) of--
            ``(1) the amount realized on such sale, over
            ``(2) the adjusted cost to the taxpayer of such real 
        property.
    ``(b) Adjusted Cost.--For purposes of subsection (a)--
            ``(1) In general.--Except as provided in paragraph (2), the 
        term `adjusted cost' means, with respect to any property, the 
        basis of such property increased by expenditures properly 
        chargeable to capital account (other than taxes or other 
        carrying charges described in section 266) for periods during 
        the holding period for such property.
            ``(2) Transitional rule.--The adjusted cost of any property 
        shall include only amounts incurred during periods after 
        December 31, 2009.
    ``(c) Value Added Tax Not Taken Into Account.--For purposes of this 
section, the amount realized on any sale of real property shall not 
include any amount attributable to the tax imposed by this chapter.

``SEC. 3936. SPECIAL RULE FOR INSURANCE CONTRACTS.

    ``In the case of any contract of insurance, for purposes of this 
chapter, the taxable amount is the excess of--
            ``(1) the portion of the premium attributable to insurance 
        coverage, over
            ``(2) the actuarial cost to the insurer of providing such 
        insurance coverage.''
    (b) Clerical Amendment.--The table of chapters for subtitle D of 
the Internal Revenue Code of 1986 is amended by inserting before the 
item relating to chapter 31 the following:

                    ``Chapter 30. Value Added Tax''

    (c) Effective Date.--The amendments made by this section shall 
apply to transactions occurring after December 31, 2009.

SEC. 1002. REVENUE FROM VALUE ADDED TAX TO FUND NATIONAL HEALTH CARE 
              TRUST FUND.

    (a) 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. NATIONAL HEALTH CARE 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 `National Health 
Care Trust Fund', consisting of such amounts as may be appropriated or 
credited to the Trust Fund as provided in this section or section 
9602(b).
    ``(b) Transfers to Trust Fund.--There are hereby appropriated to 
the National Health Care Trust Fund amounts equivalent to amounts 
received in the Treasury from the tax imposed under section 3901 
(relating to the value added tax).
    ``(c) Expenditures From Trust Fund.--Amounts in the National Health 
Care Trust Fund shall be available only for purposes of making 
expenditures to carry out the program of health benefits under the 
National Health Insurance Act.''.
    (b) Clerical Amendment.--The table of sections for such subchapter 
A is amended by adding at the end the following new item:

``Sec. 9511. National Health Care Trust Fund.''.

       TITLE XI--STUDY AND DEVELOPMENT OF COST CONTROL MECHANISMS

SEC. 1101. DEVELOPMENT OF COST CONTROL MECHANISMS.

    (a) Study.--The Secretary of Health and Human Services shall 
conduct a study analyzing various methods to control the costs of 
providing personal health benefits under this Act, and shall include in 
such study an analysis of the effects on such costs of medical 
malpractice claims and the purchase of medical malpractice liability 
insurance by providers of the benefits.
    (b) Reports to Congress.--Not later than October 1, 2011, the 
Secretary shall submit a report to Congress describing the study 
conducted under subsection (a), and shall include in the report 
recommendations on methods to control costs under this Act, including 
recommendations on the development of a system under which medical 
malpractice claims brought against providers of benefits under this Act 
may be resolved in an equitable and cost-effective manner. Not later 
than April 1, 2012, the Secretary shall promulgate regulations to 
implement the recommendations made in the report.
                                 <all>