[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3218 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3218

To provide a refundable tax credit for medical costs, to expand access 
to health insurance coverage through individual membership associations 
     (IMAs), and to assist in the establishment of high risk pools.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 14, 2009

 Mr. Shadegg (for himself, Mr. Gingrey of Georgia, Mr. Bishop of Utah, 
Mr. Boustany, Mr. Hoekstra, Mrs. Blackburn, Mr. Fleming, Mr. Franks of 
  Arizona, Mr. Buyer, and Mr. Burgess) 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 refundable tax credit for medical costs, to expand access 
to health insurance coverage through individual membership associations 
     (IMAs), and to assist in the establishment of high risk pools.

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

SECTION 1. SHORT TITLE, ETC.

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

Sec. 1. Short title, etc.
Sec. 2. Statement of constitutional authority.
Sec. 3. Findings.
      TITLE I--REFUNDABLE AND ADVANCEABLE CREDIT FOR MEDICAL COSTS

Sec. 101. Refundable and advanceable credit for medical costs.
 TITLE II--EXPANSION OF ACCESS AND CHOICE OF HEALTH INSURANCE COVERAGE 
           THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS)

Sec. 201. Expansion of access and choice of health insurance coverage 
                            through individual membership associations 
                            (IMAs).
  TITLE III--FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES

Sec. 301. Federal matching funding for StatFederal matching funding for 
                            State insurance expenditurese insurance 
                            expenditures.

SEC. 2. STATEMENT OF CONSTITUTIONAL AUTHORITY.

    Congress enacts this Act pursuant to its authority under article I 
of the Constitution to regulate commerce.

SEC. 3. FINDINGS.

    The Congress finds the following:
            (1) Approximately 180 million Americans receive health care 
        through employer-sponsored coverage.
            (2) Surveys indicate that 8 in 10 Americans are satisfied 
        with the current employer-sponsored health care plan.
            (3) Taxing employer-sponsored health care benefits, 
        creating a new government-run health care plan, and expanding 
        existing entitlement programs will result in the loss of 
        private health care coverage for an estimated 120 million 
        Americans.

      TITLE I--REFUNDABLE AND ADVANCEABLE CREDIT FOR MEDICAL COSTS

SEC. 101. REFUNDABLE AND ADVANCEABLE CREDIT FOR MEDICAL COSTS.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36A the following new section:

``SEC. 36B. MEDICAL COSTS.

    ``(a) In General.--In the case of an eligible individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
an amount equal to the sum of--
            ``(1) the amount paid by the taxpayer during the taxable 
        year for qualified health insurance for coverage of the 
        taxpayer, his spouse, and dependents, and
            ``(2) the amount paid by the taxpayer during the taxable 
        year for medical care for the taxpayer, his spouse, and his 
        dependents.
    ``(b) Limitation.--The amount allowed as a credit under subsection 
(a) for a taxable year shall not exceed $2,500 ($5,000 in the case of a 
joint return).
    ``(c) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means an individual who is--
            ``(1) a citizen or national of the United States, or
            ``(2) lawfully present in the United States.
    ``(d) Medical Care.--For purposes of this section, the term 
`medical care' has the meaning given such term by section 213(d), 
determined without regard to subparagraphs (C) and (D) of paragraph (1) 
thereof.
    ``(e) Qualified Health Insurance.--For purposes of this section--
            ``(1) In general.--The term `qualified health insurance' 
        means insurance which constitutes medical care.
            ``(2) Employer subsidized coverage.--Such term shall not 
        include amounts paid for coverage of any individual for any 
        month for which such individual participates in any subsidized 
        health plan maintained by any employer of the taxpayer or of 
        the spouse of the taxpayer. For purposes of the preceding 
        sentence, the rule of the last sentence of section 162(l)(2)(B) 
        shall apply and health care flexible spending accounts and 
        health reimbursement arrangements shall not be treated as a 
        subsidized health plan maintained by any employer.
            ``(3) Governmental coverage.--Such term shall not include 
        medical care provided through a program described in--
                    ``(A) title XVIII or XIX of the Social Security 
                Act,
                    ``(B) chapter 55 of title 10, United States Code,
                    ``(C) chapter 17 of title 38, United States Code,
                    ``(D) chapter 89 of title 5, United States Code, or
                    ``(E) the Indian Health Care Improvement Act, and
            ``(4) Exclusion of certain plans.--Such term does not 
        include insurance if substantially all of its coverage is 
        coverage described in section 223(c)(1)(B).
    ``(f) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--Any amount 
        paid by a taxpayer for insurance to which subsection (a) 
        applies shall not be taken into account in computing the amount 
        allowable to the taxpayer as a credit under section 35 or as a 
        deduction under section 162(l) or 213(a).
            ``(2) Coordination with advance payments of credit; 
        recapture of excess advance payments.--With respect to any 
        taxable year--
                    ``(A) the amount which would (but for this 
                subsection) be allowed as a credit to the taxpayer 
                under subsection (a) shall be reduced (but not below 
                zero) by the aggregate amount paid on behalf of such 
                taxpayer under section 7529 for months beginning in 
                such taxable year, and
                    ``(B) the tax imposed by section 1 for such taxable 
                year shall be increased by the excess (if any) of--
                            ``(i) the aggregate amount paid on behalf 
                        of such taxpayer under section 7529 for months 
                        beginning in such taxable year, over
                            ``(ii) the amount which would (but for this 
                        subsection) be allowed as a credit to the 
                        taxpayer under subsection (a).
            ``(3) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
            ``(4) Married couples must file joint return.--
                    ``(A) In general.--If the taxpayer is married at 
                the close of the taxable year, the credit shall be 
                allowed under subsection (a) only if the taxpayer and 
                his spouse file a joint return for the taxable year.
                    ``(B) Marital status; certain married individuals 
                living apart.--Rules similar to the rules of paragraphs 
                (3) and (4) of section 21(e) shall apply for purposes 
                of this paragraph.
            ``(5) Verification of coverage, etc.--No credit shall be 
        allowed under this section to any individual unless such 
        individual's coverage under qualified health insurance, and the 
        amount paid for such coverage, are verified in such manner as 
        the Secretary may prescribe.
            ``(6) Cost-of-living adjustment.--In the case of any 
        taxable year beginning in a calendar year after 2010, each 
        dollar amount contained in subsection (b) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins by substituting `calendar year 
                2009' for `calendar year 1992' in subparagraph (B) 
                thereof.
        Any increase determined under the preceding sentence shall be 
        rounded to the nearest multiple of $10.''.
    (b) Advance Payment.--
            (1) In general.--Chapter 77 of the Internal Revenue Code of 
        1986 (relating to miscellaneous provisions) is amended by 
        adding at the end the following:

``SEC. 7529. ADVANCE PAYMENT OF CREDIT FOR MEDICAL COSTS.

    ``The Secretary shall establish a program for--
            ``(1) making payments to providers of qualified health 
        insurance (as defined in section 36B(e)) on behalf of taxpayers 
        eligible for the credit under section 36B, and
            ``(2) making payments relating to medical care for which a 
        credit is allowable under such section.''.
            (2) Information reporting.--
                    (A) In general.--Subpart B of part III of 
                subchapter A of chapter 61 of such Code (relating to 
                information concerning transactions with other persons) 
                is amended by adding at the end the following new 
                section:

``SEC. 6050X. RETURNS RELATING TO CREDIT FOR MEDICAL COSTS.

    ``(a) Requirement of Reporting.--Every person who receives payments 
for any month of any calendar year under section 7529 with respect to 
any individual shall, at such time as the Secretary may prescribe, make 
the return described in subsection (b) with respect to each such 
individual.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of each individual 
                referred to in subsection (a), and
                    ``(B) such other information as the Secretary may 
                prescribe.
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each individual whose name is 
required to be set forth in such return a written statement showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(2) the information required to be shown on the return 
        with respect to such individual.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be 
made.''.
                    (B) Assessable penalties.--
                            (i) Subparagraph (B) of section 6724(d)(1) 
                        of such Code (relating to definitions) is 
                        amended by striking ``or'' at the end of clause 
                        (xxii), by striking ``and'' at the end of 
                        clause (xxiii) and inserting ``or'', and by 
                        inserting after clause (xxiii) the following 
                        new clause:
                            ``(xxiv) section 6050X (relating to returns 
                        relating to credit for medical costs), and''.
                            (ii) Paragraph (2) of section 6724(d) of 
                        such Code is amended by striking the period at 
                        the end of subparagraph (EE) and inserting a 
                        comma, by striking the period at the end of 
                        subparagraph (FF) and inserting ``, or'', and 
                        by adding after subparagraph (FF) the following 
                        new subparagraph:
                    ``(GG) section 6050X (relating to returns relating 
                to credit for medical costs).''.
            (3) Clerical amendments.--
                    (A) The table of sections for chapter 77 of such 
                Code is amended by adding at the end the following new 
                item:

``Sec. 7529. Advance payment of credit for medical costs.''.
                    (B) The table of sections for subpart B of part III 
                of subchapter A of chapter 61 of such Code is amended 
                by adding at the end the following new item:

``Sec. 6050X. Returns relating to credit for medical costs.''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36B,'' after ``35A,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the item relating to section 36 and 
        inserting the following new items:

``Sec. 36B. Medical costs.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

 TITLE II--EXPANSION OF ACCESS AND CHOICE OF HEALTH INSURANCE COVERAGE 
           THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS)

SEC. 201. EXPANSION OF ACCESS AND CHOICE OF HEALTH INSURANCE COVERAGE 
              THROUGH INDIVIDUAL MEMBERSHIP ASSOCIATIONS (IMAS).

    The Public Health Service Act is amended by adding at the end the 
following new title:

            ``TITLE XXXI--INDIVIDUAL MEMBERSHIP ASSOCIATIONS

``SEC. 3101. DEFINITION OF INDIVIDUAL MEMBERSHIP ASSOCIATION (IMA).

    ``(a) In General.--For purposes of this title, the terms 
`individual membership association' and `IMA' mean a legal entity that 
meets the following requirements:
            ``(1) Organization.--The IMA is an organization operated 
        under the direction of an association (as defined in section 
        3104(1)).
            ``(2) Offering health benefits coverage.--
                    ``(A) Different groups.--The IMA, in conjunction 
                with those health insurance issuers that offer health 
                benefits coverage through the IMA, makes available 
                health benefits coverage in the manner described in 
                subsection (b) to all members of the IMA and the 
                dependents of such members in the manner described in 
                subsection (c)(2) at rates that are established by the 
                health insurance issuer on a policy or product specific 
                basis and that may vary only as permissible under State 
                law.
                    ``(B) Nondiscrimination in coverage offered.--
                            ``(i) In general.--Subject to clause (ii), 
                        the IMA may not offer health benefits coverage 
                        to a member of an IMA unless the same coverage 
                        is offered to all such members of the IMA.
                            ``(ii) Construction.--Nothing in this title 
                        shall be construed as requiring or permitting a 
                        health insurance issuer to provide coverage 
                        outside the service area of the issuer, as 
                        approved under State law, or requiring a health 
                        insurance issuer from excluding or limiting the 
                        coverage on any individual, subject to the 
                        requirement of section 2741.
                    ``(C) No financial underwriting.--The IMA provides 
                health benefits coverage only through contracts with 
                health insurance issuers and does not assume insurance 
                risk with respect to such coverage.
            ``(3) Geographic areas.--Nothing in this title shall be 
        construed as preventing the establishment and operation of more 
        than one IMA in a geographic area or as limiting the number of 
        IMAs that may operate in any area.
            ``(4) Provision of administrative services to purchasers.--
                    ``(A) In general.--The IMA may provide 
                administrative services for members. Such services may 
                include accounting, billing, and enrollment 
                information.
                    ``(B) Construction.--Nothing in this subsection 
                shall be construed as preventing an IMA from serving as 
                an administrative service organization to any entity.
            ``(5) Filing information.--The IMA files with the Secretary 
        information that demonstrates the IMA's compliance with the 
        applicable requirements of this title.
    ``(b) Health Benefits Coverage Requirements.--
            ``(1) Compliance with consumer protection requirements.--
        Any health benefits coverage offered through an IMA shall--
                    ``(A) be underwritten by a health insurance issuer 
                that--
                            ``(i) is licensed (or otherwise regulated) 
                        under State law,
                            ``(ii) meets all applicable State standards 
                        relating to consumer protection, subject to 
                        section 3002(b), and
                    ``(B) subject to paragraph (2), be approved or 
                otherwise permitted to be offered under State law.
            ``(2) Examples of types of coverage.--The benefits coverage 
        made available through an IMA may include, but is not limited 
        to, any of the following if it meets the other applicable 
        requirements of this title:
                    ``(A) Coverage through a health maintenance 
                organization.
                    ``(B) Coverage in connection with a preferred 
                provider organization.
                    ``(C) Coverage in connection with a licensed 
                provider-sponsored organization.
                    ``(D) Indemnity coverage through an insurance 
                company.
                    ``(E) Coverage offered in connection with a 
                contribution into a medical savings account, health 
                savings account, or flexible spending account.
                    ``(F) Coverage that includes a point-of-service 
                option.
                    ``(G) Any combination of such types of coverage.
            ``(3) Wellness bonuses for health promotion.--Nothing in 
        this title shall be construed as precluding a health insurance 
        issuer offering health benefits coverage through an IMA from 
        establishing premium discounts or rebates for members or from 
        modifying otherwise applicable copayments or deductibles in 
        return for adherence to programs of health promotion and 
        disease prevention so long as such programs are agreed to in 
        advance by the IMA and comply with all other provisions of this 
        title and do not discriminate among similarly situated members.
    ``(c) Members; Health Insurance Issuers.--
            ``(1) Members.--
                    ``(A) In general.--Under rules established to carry 
                out this title, with respect to an individual who is a 
                member of an IMA, the individual may enroll for health 
                benefits coverage (including coverage for dependents of 
                such individual) offered by a health insurance issuer 
                through the IMA.
                    ``(B) Rules for enrollment.--Nothing in this 
                paragraph shall preclude an IMA from establishing rules 
                of enrollment and reenrollment of members. Such rules 
                shall be applied consistently to all members within the 
                IMA and shall not be based in any manner on health 
                status-related factors.
            ``(2) Health insurance issuers.--The contract between an 
        IMA and a health insurance issuer shall provide, with respect 
        to a member enrolled with health benefits coverage offered by 
        the issuer through the IMA, for the payment of the premiums 
        collected by the issuer.

``SEC. 3102. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS.

    ``State laws insofar as they relate to any of the following are 
superseded and shall not apply to health benefits coverage made 
available through an IMA:
            ``(1) Benefit requirements for health benefits coverage 
        offered through an IMA, including (but not limited to) 
        requirements relating to coverage of specific providers, 
        specific services or conditions, or the amount, duration, or 
        scope of benefits, but not including requirements to the extent 
        required to implement title XXVII or other Federal law and to 
        the extent the requirement prohibits an exclusion of a specific 
        disease from such coverage.
            ``(2) Any other requirements (including limitations on 
        compensation arrangements) that, directly or indirectly, 
        preclude (or have the effect of precluding) the offering of 
        such coverage through an IMA, if the IMA meets the requirements 
        of this title.
Any State law or regulation relating to the composition or organization 
of an IMA is preempted to the extent the law or regulation is 
inconsistent with the provisions of this title.

``SEC. 3103. ADMINISTRATION.

    ``(a) In General.--The Secretary shall administer this title and is 
authorized to issue such regulations as may be required to carry out 
this title. Such regulations shall be subject to Congressional review 
under the provisions of chapter 8 of title 5, United States Code. The 
Secretary shall incorporate the process of `deemed file and use' with 
respect to the information filed under section 3001(a)(5)(A) and shall 
determine whether information filed by an IMA demonstrates compliance 
with the applicable requirements of this title. The Secretary shall 
exercise authority under this title in a manner that fosters and 
promotes the development of IMAs in order to improve access to health 
care coverage and services.
    ``(b) Periodic Reports.--The Secretary shall submit to Congress a 
report every 30 months, during the 10-year period beginning on the 
effective date of the rules promulgated by the Secretary to carry out 
this title, on the effectiveness of this title in promoting coverage of 
uninsured individuals. The Secretary may provide for the production of 
such reports through one or more contracts with appropriate private 
entities.

``SEC. 3104. DEFINITIONS.

    ``For purposes of this title:
            ``(1) Association.--The term `association' means, with 
        respect to health insurance coverage offered in a State, an 
        association which--
                    ``(A) has been actively in existence for at least 5 
                years;
                    ``(B) has been formed and maintained in good faith 
                for purposes other than obtaining insurance;
                    ``(C) does not condition membership in the 
                association on any health status-related factor 
                relating to an individual (including an employee of an 
                employer or a dependent of an employee); and
                    ``(D) does not make health insurance coverage 
                offered through the association available other than in 
                connection with a member of the association.
            ``(2) Dependent.--The term `dependent', as applied to 
        health insurance coverage offered by a health insurance issuer 
        licensed (or otherwise regulated) in a State, shall have the 
        meaning applied to such term with respect to such coverage 
        under the laws of the State relating to such coverage and such 
        an issuer. Such term may include the spouse and children of the 
        individual involved.
            ``(3) Health benefits coverage.--The term `health benefits 
        coverage' has the meaning given the term health insurance 
        coverage in section 2791(b)(1).
            ``(4) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 2791(b)(2).
            ``(5) Health status-related factor.--The term `health 
        status-related factor' has the meaning given such term in 
        section 2791(d)(9).
            ``(6) IMA; individual membership association.--The terms 
        `IMA' and `individual membership association' are defined in 
        section 3101(a).
            ``(7) Member.--The term `member' means, with respect to an 
        IMA, an individual who is a member of the association to which 
        the IMA is offering coverage.''.

  TITLE III--FEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURES

SEC. 301. FEDERAL MATCHING FUNDING FOR STATFEDERAL MATCHING FUNDING FOR 
              STATE INSURANCE EXPENDITURESE INSURANCE EXPENDITURES.

    (a) In General.--Subject to the succeeding provisions of this 
section, each State shall receive from the Secretary of Health and 
Human Services an amount equal to 50 percent of the funds expended by 
the State in providing for the use, in connection with providing health 
benefits coverage, of a high-risk pool, a reinsurance pool, or other 
risk-adjustment mechanism used for the purpose of subsidizing the 
purchase of private health insurance.
    (b) Funding Limitation.--A State shall not receive under this 
section for a fiscal year more than a total of 50 cents multiplied by 
the average number of residents (as estimated by the Secretary) in the 
State in the fiscal year.
    (c) Administration.--The Secretary of Health and Human Services 
shall provide for the administration of this section and may establish 
such terms and conditions, including the requirement of an application, 
as may be appropriate to carry out this section.
    (d) Construction.--Nothing in this section shall be construed as 
requiring a State to operate a reinsurance pool (or other risk-
adjustment mechanism) under this section or as preventing a State from 
operating such a pool or mechanism through one or more private 
entities.
    (e) High-risk Pool.--For purposes of this section, the term ``high-
risk pool'' means any qualified high risk pool (as defined in section 
2744(c)(2) of the Public Health Service Act).
    (f) Reinsurance Pool or Other Risk-adjustment Mechanism Defined.--
For purposes of this section, the term ``reinsurance pool or other 
risk-adjustment mechanism'' means any State-based risk spreading 
mechanism to subsidize the purchase of private health insurance for the 
high-risk population.
    (g) High-risk Population.--For purposes of this section, the term 
``high-risk population'' means--
            (1) individuals who, by reason of the existence or history 
        of a medical condition, are able to acquire health coverage 
        only at rates which are at least 150 percent of the standard 
        risk rates for such coverage, and
            (2) individuals who are provided health coverage by a high-
        risk pool.
    (h) State Defined.--For purposes of this section, the term 
``State'' includes the District of Columbia, Puerto Rico, the Virgin 
Islands, Guam, American Samoa, and the Northern Mariana Islands.
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