[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2900 Introduced in House (IH)]

113th CONGRESS
  1st Session
                                H. R. 2900

To repeal the Patient Protection and Affordable Care Act and the Health 
 Care and Education Reconciliation Act of 2010; to amend the Internal 
Revenue Code of 1986 to repeal the percentage floor on medical expense 
 deductions, expand the use of tax-preferred health care accounts, and 
 establish a charity care credit; to amend the Social Security Act to 
      create a Medicare Premium Assistance Program, reform EMTALA 
 requirements, and to replace the Medicaid program and the Children's 
Health Insurance program with a block grant to the States; to amend the 
   Public Health Service Act to provide for cooperative governing of 
 individual and group health insurance coverage offered in interstate 
                   commerce; and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 1, 2013

Mr. Broun of Georgia introduced the following bill; which was referred 
    to the Committee on Energy and Commerce, and in addition to the 
  Committees on Ways and Means, Education and the Workforce, Natural 
  Resources, the Judiciary, House Administration, Appropriations, and 
 Rules, 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 repeal the Patient Protection and Affordable Care Act and the Health 
 Care and Education Reconciliation Act of 2010; to amend the Internal 
Revenue Code of 1986 to repeal the percentage floor on medical expense 
 deductions, expand the use of tax-preferred health care accounts, and 
 establish a charity care credit; to amend the Social Security Act to 
      create a Medicare Premium Assistance Program, reform EMTALA 
 requirements, and to replace the Medicaid program and the Children's 
Health Insurance program with a block grant to the States; to amend the 
   Public Health Service Act to provide for cooperative governing of 
 individual and group health insurance coverage offered in interstate 
                   commerce; 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; CONSTRUCTION.

    (a) Short Title.--This Act may be cited as the ``Offering Patients 
True Individualized Options Now Act of 2013'' or the ``OPTION Act of 
2013''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents; construction.
                   TITLE I--REPEAL OF PPACA AND HCERA

Sec. 101. Repeal of PPACA and HCERA.
                    TITLE II--HEALTH CARE TAX REFORM

                         Subtitle A--HSA Reform

Sec. 201. Repeal of high deductible health plan requirement.
Sec. 202. Increase in deductible HSA contribution limitations.
Sec. 203. Medicare eligible individuals eligible to contribute to HSA.
Sec. 204. HSA Rollover to Medicare Advantage MSA.
Sec. 205. Repeal of additional tax on distributions not used for 
                            qualified medical expenses.
                Subtitle B--Other Health Care Tax Reform

Sec. 206. Elimination of 10-percent floor on medical expense 
                            deductions.
Sec. 207. Repeal of prescribed drug limitation on certain tax benefits 
                            for medical expenses.
Sec. 208. Repeal of 2-percent miscellaneous itemized deduction floor 
                            for medical expense deductions.
Sec. 209. Charity care credit.
Sec. 210. Credit for contributions made for purpose of providing 
                            medical care to the indigent.
Sec. 211. COBRA continuation coverage extended.
Sec. 212. HSA charitable contributions.
             TITLE III--MEDICARE PREMIUM ASSISTANCE PROGRAM

Sec. 301. Replacement of Medicare part A entitlement with Medicare 
                            Reform Premium Assistance Program.
Sec. 302. Gradual phasing out of CMS and transfer of functions to 
                            Department of the Treasury.
                        TITLE IV--EMTALA REFORMS

Sec. 401. EMTALA reforms.
TITLE V--COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP HEALTH INSURANCE 
                                COVERAGE

Sec. 501. Cooperative governing of individual and group health 
                            insurance coverage.
Sec. 502. Continuing State authority.
                   TITLE VI--STATE HEALTH FLEXIBILITY

Sec. 601. Short title.
Sec. 602. Health grants to the States for health care services to 
                            indigent individuals.
Sec. 603. Repeal of Federal requirements of Medicaid and CHIP.
Sec. 604. Severability.
Sec. 605. Effective date.
    (c) Construction.--Nothing in this Act shall be construed to 
preclude or prohibit a health care provider or health insurance issuer 
from publicly disclosing any pricing of services provided or covered.

                   TITLE I--REPEAL OF PPACA AND HCERA

SEC. 101. REPEAL OF PPACA AND HCERA.

    The Patient Protection and Affordable Care Act and the Health Care 
and Education Reconciliation Act of 2010 are each repealed, effective 
as of the respective date of enactment of each such Act, and the 
provisions of law amended or repealed by such Acts are restored or 
revived as if such Acts had not been enacted.

                    TITLE II--HEALTH CARE TAX REFORM

                         Subtitle A--HSA Reform

SEC. 201. REPEAL OF HIGH DEDUCTIBLE HEALTH PLAN REQUIREMENT.

    (a) In General.--Section 223 of the Internal Revenue Code of 1986 
is amended by striking subsection (c) and redesignating subsections (d) 
through (h) as subsections (c) through (g), respectively.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 223 of such Code is amended 
        to read as follows:
    ``(a) Deduction Allowed.--In the case of an individual, there shall 
be allowed as a deduction for a taxable year an amount equal to the 
aggregate amount paid in cash during such taxable year by or on behalf 
of such individual to a health savings account of such individual.''.
            (2) Subsection (b) of section 223 of such Code is amended 
        by striking paragraph (8).
            (3) Subparagraph (A) of section 223(c)(1) of the Internal 
        Revenue Code of 1986 (as redesignated by subsection (b)(1)) is 
        amended--
                    (A) by striking ``subsection (f)(5)'' and inserting 
                ``subsection (e)(5)'', and
                    (B) in clause (ii)--
                            (i) by striking ``the sum of--'' and all 
                        that follows and inserting ``the dollar amount 
                        in effect under subsection (b)(1).''.
            (4) Section 223(f)(1) of such Code (as redesignated by 
        subsection (b)(1)) is amended by striking ``Each dollar amount 
        in subsections (b)(2) and (c)(2)(A)'' and inserting ``In the 
        case of a taxable year beginning after December 31, 2010, each 
        dollar amount in subsection (b)(1)''.
            (5) Section 26(b)(U) of such Code is amended by striking 
        ``section 223(f)(4)'' and inserting ``section 223(e)(4)''.
            (6) Sections 35(g)(3), 220(f)(5)(A), 848(e)(1)(v), 
        4973(a)(5), and 6051(a)(12) of such Code are each amended by 
        striking ``section 223(d)'' each place it appears and inserting 
        ``section 223(c)''.
            (7) Section 106(d)(1) of such Code is amended--
                    (A) by striking ``who is an eligible individual (as 
                defined in section 223(c)(1))'', and
                    (B) by striking ``section 223(d)'' and inserting 
                ``section 223(c)''.
            (8) Section 408(d)(9) of such Code is amended--
                    (A) in subparagraph (A) by striking ``who is an 
                eligible individual (as defined in section 223(c)) 
                and'', and
                    (B) in subparagraph (C) by striking ``computed on 
                the basis of the type of coverage under the high 
                deductible health plan covering the individual at the 
                time of the qualified HSA funding distribution''.
            (9) Section 877A(g)(6) of such Code is amended by striking 
        ``223(f)(4)'' and inserting ``223(e)(4)''.
            (10) Section 4973(g) of such Code is amended--
                    (A) by striking ``section 223(d)'' and inserting 
                ``section 223(c)'',
                    (B) in paragraph (2), by striking ``section 
                223(f)(2)'' and inserting ``section 223(e)(2)'', and
                    (C) by striking ``section 223(f)(3)'' and inserting 
                ``section 223(e)(3)''.
            (11) Section 4975 of such Code is amended--
                    (A) in subsection (c)(6)--
                            (i) by striking ``section 223(d)'' and 
                        inserting ``section 223(c)'', and
                            (ii) by striking ``section 223(e)(2)'' and 
                        inserting ``section 223(d)(2)'', and
                    (B) in subsection (e)(1)(E), by striking ``section 
                223(d)'' and inserting ``section 223(c)''.
            (12) Section 6693(a)(2)(C) of such Code is amended by 
        striking ``section 223(h)'' and inserting ``section 223(g)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 202. INCREASE IN DEDUCTIBLE HSA CONTRIBUTION LIMITATIONS.

    (a) In General.--Paragraph (1) of section 223(b) of the Internal 
Revenue Code of 1986 is amended by striking ``the sum of the monthly'' 
and all that follows through ``eligible individual'' and inserting 
``$10,000 ($20,000 in the case of a joint return)''.
    (b) Conforming Amendments.--
            (1) Subsection (b) of such Code is amended by striking 
        paragraphs (2), (3), and (5) and by redesignating paragraphs 
        (4), (6), and (7) as paragraphs (2), (3), and (4), 
        respectively.
            (2) Paragraph (2) of section 223(b) of such Code (as 
        redesignated by paragraph (1)) is amended by striking the last 
        sentence.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 203. MEDICARE ELIGIBLE INDIVIDUALS ELIGIBLE TO CONTRIBUTE TO HSA.

    (a) Subsection (b) of section 223 of the Internal Revenue Code of 
1986 is amended by striking paragraph (7).
    (b) Paragraph (1) of section 223(c) of such Code is amended by 
adding at the end the following new subparagraph:
                    ``(C) Special rule for individuals entitled to 
                benefits under medicare.--In the case of an 
                individual--
                            ``(i) who is entitled to benefits under 
                        title XVIII of the Social Security Act, and
                            ``(ii) with respect to whom a health 
                        savings account is established in a month 
                        before the first month such individual is 
                        entitled to such benefits,
                such individual shall be deemed to be an eligible 
                individual.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 204. HSA ROLLOVER TO MEDICARE ADVANTAGE MSA.

    (a) In General.--Paragraph (2) of section 138(b) of the Internal 
Revenue Code of 1986 is amended by striking ``or'' at the end of 
subparagraph (A), by adding ``or'' at the end of subparagraph (C), and 
by adding at the end the following new subparagraph:
                    ``(C) a HSA rollover contribution described in 
                subsection (d)(5),''.
    (b) HSA Rollover Contribution.--Subsection (c) of section 138 of 
such Code is amended by adding at the end the following new paragraph:
            ``(5) Rollover contribution.--An amount is described in 
        this paragraph as a rollover contribution if it meets the 
        requirement of subparagraphs (A) and (B).
                    ``(A) In general.--The requirements of this 
                subparagraph are met in the case of an amount paid or 
                distributed from a health savings to the account 
                beneficiary to the extent the amount is received is 
                paid into a Medicare Advantage MSA of such beneficiary 
                not later than the 60th day after the day on which the 
                beneficiary receives the payment or distribution.
                    ``(B) Limitation.--This paragraph shall not apply 
                to any amount described in subparagraph (A) received by 
                an individual from a health savings account if, at any 
                time during the 1-year period ending on the day of such 
                receipt, such individual received any other amount 
                described in subparagraph (A) from a health savings 
                account which was not includible in the individual's 
                gross income because of the application of section 
                223(f)(5)(A).''.
    (c) Conforming Amendment.--Subparagraph (A) of section 223(f)(5) of 
such Code is amended by inserting ``or Medicare Advantage MSA'' after 
``into a health savings account''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 205. REPEAL OF ADDITIONAL TAX ON DISTRIBUTIONS NOT USED FOR 
              QUALIFIED MEDICAL EXPENSES.

    (a) In General.--Subsection (f) of section 223 of the Internal 
Revenue Code of 1986 is amended by striking paragraph (4) and 
redesignating paragraphs (5), (6), and (7) and paragraphs (4), (5), and 
(6), respectively.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 25(b) of such Code is amended 
        by striking subparagraph (U) and by redesignating subparagraphs 
        (V), (W), and (X) as subparagraphs (U), (V), and (W).
            (2) Subparagraph (C) of section 106(e)(4) of such Code is 
        amended by striking ``223(f)(5)'' and inserting ``223(f)(4)''.
            (3) Paragraph (6) of section 877A(g) of such Code is 
        amended by striking ``223(f)(4),''.
            (4) Paragraph (1) of section 4973(g) of such Code is 
        amended by striking ``223(f)(5)'' and inserting ``223(f)(4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

                Subtitle B--Other Health Care Tax Reform

SEC. 206. ELIMINATION OF 10-PERCENT FLOOR ON MEDICAL EXPENSE 
              DEDUCTIONS.

    (a) In General.--Subsection (a) of section 213 of the Internal 
Revenue Code of 1986 is amended by striking ``, to the extent that such 
expenses exceed 10 percent of adjusted gross income''.
    (b) Conforming Amendment.--Paragraph (1) of section 56(b) of such 
Code is amended by striking subparagraph (B).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 207. REPEAL OF PRESCRIBED DRUG LIMITATION ON CERTAIN TAX BENEFITS 
              FOR MEDICAL EXPENSES.

    (a) Deduction for Medical Expenses.--
            (1) In general.--Section 213 of the Internal Revenue Code 
        of 1986 is amended by striking subsection (b).
            (2) Conforming amendment.--Subsection (d) of section 213 of 
        such Code is amended by striking paragraph (3).
    (b) Treatment of Reimbursements Under Accident or Health Plans.--
Section 106 of such Code is amended by striking subsection (f).
    (c) Health Savings Accounts.--Subparagraph (A) of section 223(d)(2) 
of such Code is amended by striking the last sentence thereof.
    (d) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of such 
Code is amended by striking the last sentence thereof.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 208. REPEAL OF 2-PERCENT MISCELLANEOUS ITEMIZED DEDUCTION FLOOR 
              FOR MEDICAL EXPENSE DEDUCTIONS.

    (a) In General.--Subsection (b) of section 67 of the Internal 
Revenue Code of 1986 is amended by striking paragraph (5).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the December 31, 2012.

SEC. 209. CHARITY CARE CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25D the 
following new section:

``SEC. 25E. CHARITY CARE CREDIT.

    ``(a) Allowance of Credit.--In the case of a physician, there shall 
be allowed as a credit against the tax imposed by this chapter for a 
taxable year the amount determined in accordance with the following 
table:


``If the physician has provided     The amount of
 during such taxable year:           the credit is:
  At least 25 but less than 30      $2,000.
   qualified hours of charity care
  At least 30 but less than 35      $2,400.
   qualified hours of charity care
  At least 35 but less than 40      $2,800.
   qualified hours of charity care
  At least 40 but less than 45      $3,200.
   qualified hours of charity care
  At least 45 but less than 50      $3,600.
   qualified hours of charity care
  At least 50 but less than 55      $4,000.
   qualified hours of charity care
  At least 55 but less than 60      $4,400.
   qualified hours of charity care
  At least 60 but less than 65      $4,800.
   qualified hours of charity care
  At least 65 but less than 70      $5,200.
   qualified hours of charity care
  At least 70 but less than 75      $5,600.
   qualified hours of charity care
  At least 75 but less than 80      $6,000.
   qualified hours of charity care
  At least 80 but less than 85      $6,400.
   qualified hours of charity care
  At least 85 but less than 90      $6,800.
   qualified hours of charity care
  At least 90 but less than 95      $7,200.
   qualified hours of charity care
  At least 95 but less than 100     $7,600.
   qualified hours of charity care
  At least 100 hours of charity     $8,000.
   care...........................
 

    ``(b) Qualified Hours of Charity Care.--For purposes of this 
section--
            ``(1) Qualified hours of charity care.--The term `qualified 
        hours of charity care' means the hours that a physician 
        provides medical care (as defined in section 213(d)(1)(A)) on a 
        volunteer or pro bono basis.
            ``(2) Physician.--The term `physician' has the meaning 
        given to such term in section 1861(r) of the Social Security 
        Act (42 U.S.C. 1395x(r)).''.
    (b) Conforming Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 25D the following new 
item:

``Sec. 25E. Charity care credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2012.

SEC. 210. CREDIT FOR CONTRIBUTIONS MADE FOR PURPOSE OF PROVIDING 
              MEDICAL CARE TO THE INDIGENT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 30E. CONTRIBUTIONS FOR PROVIDING MEDICAL CARE TO THE INDIGENT.

    ``(a) In General.--There shall be allowed as a credit against the 
tax imposed by this chapter for the taxable year an amount equal to the 
indigent care contributions made by the taxpayer during the taxable 
year.
    ``(b) Indigent Care Contribution.--For purposes of this section, 
the term `indigent care contribution' means any contribution or gift of 
money or other property to or for the use of any person if such 
contribution or gift is used (or the proceeds from which are used) by 
such person for the purpose of providing medical care to indigent 
individuals in the United States.
    ``(c) Valuation and Substantiation of Contributions, etc.--Rules 
similar to the rules of subsections (e) and (f) of section 170 shall 
apply for purposes of this section.
    ``(d) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--So much of the credit which would be allowed under 
        subsection (a) for any taxable year (determined without regard 
        to this subsection) that is attributable to indigent care 
        contributions made by--
                    ``(A) any corporation or partnership, or
                    ``(B) any other person if such contribution was 
                made in connection with a trade or business carried on 
                by such person,
        shall be treated as a credit listed in section 38(b) for such 
        taxable year (and not allowed under subsection (a)).
            ``(2) Personal credit.--For purposes of this title, the 
        credit allowed under subsection (a) for any taxable year 
        (determined after application of paragraph (1)) shall be 
        treated as a credit allowable under subpart A for such taxable 
        year.
    ``(e) Denial of Double Benefit.--The amount of any deduction or 
other credit allowable under this chapter for any indigent care 
contribution shall be reduced by the amount of credit allowable under 
this section for such contribution.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of such Code is amended by striking 
        ``plus'' at the end of paragraph (35), by striking the period 
        at the end of paragraph (36) and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(37) the portion of the credit described in section 
        30E(d)(1) (relating to credit for contributions for providing 
        medical care to the indigent).''.
            (2) Section 38(c)(4)(B) of such Code is amended by striking 
        ``and'' at the end of clause (viii), by striking the period at 
        the end of clause (ix) and inserting ``, and'', and by adding 
        at the end the following new clause:
                            ``(x) the portion of the credit described 
                        in section 30E(d)(1) (relating to credit for 
                        contributions for providing medical care to the 
                        indigent).''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 30E. Contributions for providing medical care to the 
                            indigent.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions made after the date of the enactment of this 
Act.

SEC. 211. COBRA CONTINUATION COVERAGE EXTENDED.

    (a) Under IRC.--Subparagraph (B) of section 4980B(f)(2) of the 
Internal Revenue Code of 1986 is amended by striking clauses (i) and 
(v) and by redesignating clauses (ii), (iii), and (iv) as clauses (i), 
(ii), and (iii), respectively.
    (b) Under ERISA.--Paragraph (2) of section 602 of the Employee 
Retirement Income Security Act of 2009 (29 U.S.C. 1162) is amended by 
striking subparagraphs (A) and (E) and by redesignating subparagraphs 
(B), (C), and (D) as subparagraphs (A), (B), and (C), respectively.
    (c) Under PHSA.--Paragraph (2) of section 2202(2) of the Public 
Health Service Act (42 U.S.C. 300bb-2(2)) is amended by striking 
subparagraphs (A) and (E) and by redesignating subparagraphs (B), (C), 
and (D) as subparagraphs (A), (B), and (C), respectively.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to group health plans, and health insurance coverage 
offered in connection with group health plans, for plan years beginning 
after the date of the enactment of this Act.

SEC. 212. HSA CHARITABLE CONTRIBUTIONS.

    (a) In General.--Subsection (f) of section 223 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(9) Distributions for charitable purposes.--For purposes 
        of this subsection--
                    ``(A) In general.--Paragraph (2) shall not apply to 
                any qualified charitable distributions with respect to 
                a taxpayer made during any taxable year.
                    ``(B) Qualified charitable distribution.--For 
                purposes of this paragraph, the term `qualified 
                charitable distribution' means any distribution from a 
                health savings account which is made directly by the 
                trustee to an organization described in section 
                170(b)(1)(A) (other than any organization described in 
                section 509(a)(3) or any fund or account described in 
                section 4966(d)(2)). A distribution shall be treated as 
                a qualified charitable distribution only to the extent 
                that the distribution would be includible in gross 
                income without regard to subparagraph (A).
                    ``(C) Contributions must be otherwise deductible.--
                For purposes of this paragraph, a distribution to an 
                organization described in subparagraph (B) shall be 
                treated as a qualified charitable distribution only if 
                a deduction for the entire distribution would be 
                allowable under section 170 (determined without regard 
                to subsection (b) thereof and this paragraph).
                    ``(D) Denial of deduction.--Qualified charitable 
                distributions which are not includible in gross income 
                pursuant to subparagraph (A) shall not be taken into 
                account in determining the deduction under section 
                170.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2012.

             TITLE III--MEDICARE PREMIUM ASSISTANCE PROGRAM

SEC. 301. REPLACEMENT OF MEDICARE PART A ENTITLEMENT WITH MEDICARE 
              REFORM PREMIUM ASSISTANCE PROGRAM.

    (a) In General.--Section 226 of the Social Security Act (42 U.S.C. 
426) is amended by adding at the end the following new subsections:
    ``(k) Replacement of Entitlement With Premium Assistance Program.--
            ``(1) In general.--Notwithstanding the previous provisions 
        of this section, beginning the first January 1 after the date 
        of the enactment of the Offering Patients True Individualized 
        Options Now Act of 2013, the Secretary shall establish 
        procedures under which--
                    ``(A) in the case of an individual who, but for the 
                application of this paragraph, would otherwise become 
                entitled under subsection (a) on or after such January 
                1 to benefits under part A of title XVIII, subject to 
                paragraph (4), the individual shall in lieu of such 
                entitlement be automatically enrolled in the Medicare 
                Reform Premium Assistance Program established under 
                subsection (l); and
                    ``(B) in the case of an individual who before such 
                January 1 is entitled under subsection (a) to benefits 
                under part A of title XVIII, the individual may in lieu 
                of such entitlement elect on or after such January 1 to 
                enroll in the Medicare Reform Premium Assistance 
                Program established under subsection (l).
            ``(2) Treatment under the internal revenue code of 1986.--
        An individual who is enrolled under the Medicare Reform Premium 
        Assistance Program under paragraph (1) shall not be treated as 
        entitled to benefits under title XVIII for purposes of section 
        223(b)(7) of the Internal Revenue Code of 1986.
            ``(3) Ineligibility for part b or d benefits.--An 
        individual shall not be eligible for benefits under part B or D 
        of title XVIII once the individual is enrolled in the Medicare 
        Reform Premium Assistance Program under paragraph (1).
            ``(4) Opt out.--
                    ``(A) In general.--Any individual who is otherwise 
                eligible for automatic enrollment in the Medicare 
                Reform Premium Assistance Program under paragraph 
                (1)(A) may elect (in such form and manner as may be 
                specified by the Secretary of Health and Human 
                Services) to not be so enrolled.
                    ``(B) Individuals electing to opt out not treated 
                as entitled to medicare benefits.--In the case of an 
                individual who makes an election under subparagraph 
                (A)--
                            ``(i) such individual shall not be eligible 
                        for benefits under part A of title XVIII; and
                            ``(ii) the provisions of paragraphs (2) and 
                        (3) shall apply to such individual in the same 
                        manner as such paragraphs apply to an 
                        individual enrolled under the Medicare Reform 
                        Premium Assistance Program under paragraph (1).
    ``(l) Medicare Reform Premium Assistance.--
            ``(1) Establishment of premium assistance program.--The 
        Secretary shall establish a program to be known as the Medicare 
        Reform Premium Assistance Program (in this subsection referred 
        to as the `premium assistance program') consistent with this 
        subsection.
            ``(2) Automatic enrollment.--An individual otherwise 
        entitled under subsection (a) to benefits under part A of title 
        XVIII shall, subject to subsection (k)(4), be enrolled in the 
        premium assistance program for the period during which such 
        individual would otherwise be so entitled to benefits.
            ``(3) Amount of premium assistance.--
                    ``(A) In general.--Subject to clause (ii), for each 
                year that an individual is enrolled in the premium 
                assistance program, the Secretary shall provide premium 
                assistance to such individual in an amount determined 
                by the Secretary that is based on the geographic 
                location of the individual and the cost of applicable 
                health insurance coverage and benefits in such area.
                    ``(B) Computation of premium assistance amounts.--
                The amount of premium assistance provided to an 
                individual located in a geographic area for a year 
                shall be computed at 100 percent of the sum of the 
                median premium and median deductible payment for such 
                year for all health insurance coverage offered by 
                health insurance issuers in the individual market 
                serving such area.
            ``(4) Permissible use of premium assistance.--Premium 
        assistance under paragraph (3) may be used only for the 
        following purposes:
                    ``(A) For payment of premiums, deductibles, 
                copayments, or other cost-sharing for enrollment of 
                such individual for health insurance coverage offered 
                by health insurance issuers in the individual market.
                    ``(B) As a contribution into a MSA plan established 
                by such individual, as defined in section 138(b)(2) of 
                the Internal Revenue Code of 1986.
            ``(5) MSA deposits.--The amount of the premium assistance 
        received by an individual under this subsection shall be 
        deposited, on behalf of such individual, into the MSA plan of 
        such individual.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the first January 1 after the date of the enactment of this 
Act.

SEC. 302. GRADUAL PHASING OUT OF CMS AND TRANSFER OF FUNCTIONS TO 
              DEPARTMENT OF THE TREASURY.

    (a) In General.--Beginning on January 1 of the first year beginning 
after the date of the enactment of this Act, the Secretary shall 
provide for the gradual phasing out over a period (not to exceed 10 
years) of the Office of the Administrator of the Centers for Medicare & 
Medicaid Services and such Centers and the transfer of the duties and 
responsibilities of such Administrator and Centers to such an office 
and official within the Department of the Treasury as the Secretary of 
the Treasury shall specify.
    (b) References.--Any reference in law to the Administrator of the 
Centers for Medicare & Medicaid Services, or to such Centers, is deemed 
to include a reference to such official and office, respectively, 
within the Department of the Treasury as is specified under subsection 
(a).

                        TITLE IV--EMTALA REFORMS

SEC. 401. EMTALA REFORMS.

    (a) Use of Qualified Emergency Department Personnel in Performing 
Initial Screening.--Subsection (a) of section 1867 of the Social 
Security Act (42 U.S.C. 1395dd) is amended--
            (1) by designating the sentence beginning with ``In the 
        case of'' as paragraph (1), with the heading ``In general.--'' 
        and appropriate indentation; and
            (2) by adding at the end the following new paragraph:
            ``(2) Permitting application of er triage.--
                    ``(A) In general.--The requirement of paragraph (1) 
                that a hospital conduct an appropriate medical 
                screening examination of an individual is deemed to be 
                satisfied if a qualified emergency screener (as defined 
                in subparagraph (B)) performs a preliminary triage-type 
                screening in which the personnel--
                            ``(i) assesses the nature and extent of the 
                        individual's illness or injury; and
                            ``(ii) determines, based on such 
                        assessment, that an emergency medical condition 
                        does not exist.
                    ``(B) Qualified emergency screener defined.--In 
                this paragraph, the term `qualified emergency screener' 
                means a physician, licensed practical nurse or 
                registered nurse, qualified emergency medical 
                technician, or other individual with basic, health care 
                education that meets standards specified by the 
                Secretary as being sufficient to perform the screening 
                described in subparagraph (A).''.
    (b) Revision of Emergency Medical Condition Definition.--Subsection 
(e)(1)(A) of such section is amended to read as follows:
                    ``(A) a medical condition manifesting itself by 
                symptoms of sufficient severity (including severe pain) 
                and with an onset or of a course such that the absence 
                of immediate medical attention could reasonably be 
                expected to pose an immediate risk to life or long-term 
                health of the individual (or, with respect to a 
                pregnant woman, the life or long-term health of the 
                woman or her unborn child); or''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply to 
individuals who come to an emergency room on or after the date that is 
30 days after the date of the enactment of this Act.

TITLE V--COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP HEALTH INSURANCE 
                                COVERAGE

SEC. 501. COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP HEALTH 
              INSURANCE COVERAGE.

    (a) In General.--Title XXVII of the Public Health Service Act (42 
U.S.C. 300gg et seq.) is amended by adding at the end the following new 
part:

    ``PART D--COOPERATIVE GOVERNING OF INDIVIDUAL AND GROUP HEALTH 
                           INSURANCE COVERAGE

``SEC. 2795. DEFINITIONS.

    ``In this part:
            ``(1) Primary state.--The term `primary State' means, with 
        respect to individual or group health insurance coverage 
        offered by a health insurance issuer, the State designated by 
        the issuer as the State whose covered laws shall govern the 
        health insurance issuer in the sale of such coverage under this 
        part. An issuer, with respect to a particular policy, may only 
        designate one such State as its primary State with respect to 
        all such coverage it offers. Such an issuer may not change the 
        designated primary State with respect to individual or group 
        health insurance coverage once the policy is issued, except 
        that such a change may be made upon renewal of the policy. With 
        respect to such designated State, the issuer is deemed to be 
        doing business in that State.
            ``(2) Secondary state.--The term `secondary State' means, 
        with respect to individual or group health insurance coverage 
        offered by a health insurance issuer, any State that is not the 
        primary State. In the case of a health insurance issuer that is 
        selling a policy in, or to a resident of, a secondary State, 
        the issuer is deemed to be doing business in that secondary 
        State.
            ``(3) Health insurance issuer.--The term `health insurance 
        issuer' has the meaning given such term in section 2791(b)(2), 
        except that such an issuer must be licensed in the primary 
        State and be qualified to sell individual health insurance 
        coverage in that State.
            ``(4) Individual health insurance coverage.--The term 
        `individual health insurance coverage' means health insurance 
        coverage offered in the individual market, as defined in 
        section 2791(e)(1).
            ``(5) Group health insurance coverage.--The term `group 
        health insurance coverage' has the meaning given such term in 
        2791(b)(4).
            ``(6) Applicable state authority.--The term `applicable 
        State authority' means, with respect to a health insurance 
        issuer in a State, the State insurance commissioner or official 
        or officials designated by the State to enforce the 
        requirements of this title for the State with respect to the 
        issuer.
            ``(7) Hazardous financial condition.--The term `hazardous 
        financial condition' means that, based on its present or 
        reasonably anticipated financial condition, a health insurance 
        issuer is unlikely to be able--
                    ``(A) to meet obligations to policyholders with 
                respect to known claims and reasonably anticipated 
                claims; or
                    ``(B) to pay other obligations in the normal course 
                of business.
            ``(8) Covered laws.--
                    ``(A) In general.--The term `covered laws' means 
                the laws, rules, regulations, agreements, and orders 
                governing the insurance business pertaining to--
                            ``(i) individual or group health insurance 
                        coverage issued by a health insurance issuer;
                            ``(ii) the offer, sale, rating (including 
                        medical underwriting), renewal, and issuance of 
                        individual or group health insurance coverage 
                        to an individual;
                            ``(iii) the provision to an individual in 
                        relation to individual or group health 
                        insurance coverage of health care and insurance 
                        related services;
                            ``(iv) the provision to an individual in 
                        relation to individual or group health 
                        insurance coverage of management, operations, 
                        and investment activities of a health insurance 
                        issuer; and
                            ``(v) the provision to an individual in 
                        relation to individual or group health 
                        insurance coverage of loss control and claims 
                        administration for a health insurance issuer 
                        with respect to liability for which the issuer 
                        provides insurance.
                    ``(B) Exception.--Such term does not include any 
                law, rule, regulation, agreement, or order governing 
                the use of care or cost management techniques, 
                including any requirement related to provider 
                contracting, network access or adequacy, health care 
                data collection, or quality assurance.
            ``(9) State.--The term `State' means the 50 States and 
        includes the District of Columbia, Puerto Rico, the Virgin 
        Islands, Guam, American Samoa, and the Northern Mariana 
        Islands.
            ``(10) Unfair claims settlement practices.--The term 
        `unfair claims settlement practices' means only the following 
        practices:
                    ``(A) Knowingly misrepresenting to claimants and 
                insured individuals relevant facts or policy provisions 
                relating to coverage at issue.
                    ``(B) Failing to acknowledge with reasonable 
                promptness pertinent communications with respect to 
                claims arising under policies.
                    ``(C) Failing to adopt and implement reasonable 
                standards for the prompt investigation and settlement 
                of claims arising under policies.
                    ``(D) Failing to effectuate prompt, fair, and 
                equitable settlement of claims submitted in which 
                liability has become reasonably clear.
                    ``(E) Refusing to pay claims without conducting a 
                reasonable investigation.
                    ``(F) Failing to affirm or deny coverage of claims 
                within a reasonable period of time after having 
                completed an investigation related to those claims.
                    ``(G) A pattern or practice of compelling insured 
                individuals or their beneficiaries to institute suits 
                to recover amounts due under its policies by offering 
                substantially less than the amounts ultimately 
                recovered in suits brought by them.
                    ``(H) A pattern or practice of attempting to settle 
                or settling claims for less than the amount that a 
                reasonable person would believe the insured individual 
                or his or her beneficiary was entitled by reference to 
                written or printed advertising material accompanying or 
                made part of an application.
                    ``(I) Attempting to settle or settling claims on 
                the basis of an application that was materially altered 
                without notice to, or knowledge or consent of, the 
                insured.
                    ``(J) Failing to provide forms necessary to present 
                claims within 15 calendar days of a requests with 
                reasonable explanations regarding their use.
                    ``(K) Attempting to cancel a policy in less time 
                than that prescribed in the policy or by the law of the 
                primary State.
            ``(11) Fraud and abuse.--The term `fraud and abuse' means 
        an act or omission committed by a person who, knowingly and 
        with intent to defraud, commits, or conceals any material 
        information concerning, one or more of the following:
                    ``(A) Presenting, causing to be presented or 
                preparing with knowledge or belief that it will be 
                presented to or by an insurer, a reinsurer, broker or 
                its agent, false information as part of, in support of 
                or concerning a fact material to one or more of the 
                following:
                            ``(i) An application for the issuance or 
                        renewal of an insurance policy or reinsurance 
                        contract.
                            ``(ii) The rating of an insurance policy or 
                        reinsurance contract.
                            ``(iii) A claim for payment or benefit 
                        pursuant to an insurance policy or reinsurance 
                        contract.
                            ``(iv) Premiums paid on an insurance policy 
                        or reinsurance contract.
                            ``(v) Payments made in accordance with the 
                        terms of an insurance policy or reinsurance 
                        contract.
                            ``(vi) A document filed with the 
                        commissioner or the chief insurance regulatory 
                        official of another jurisdiction.
                            ``(vii) The financial condition of an 
                        insurer or reinsurer.
                            ``(viii) The formation, acquisition, 
                        merger, reconsolidation, dissolution or 
                        withdrawal from one or more lines of insurance 
                        or reinsurance in all or part of a State by an 
                        insurer or reinsurer.
                            ``(ix) The issuance of written evidence of 
                        insurance.
                            ``(x) The reinstatement of an insurance 
                        policy.
                    ``(B) Solicitation or acceptance of new or renewal 
                insurance risks on behalf of an insurer reinsurer or 
                other person engaged in the business of insurance by a 
                person who knows or should know that the insurer or 
                other person responsible for the risk is insolvent at 
                the time of the transaction.
                    ``(C) Transaction of the business of insurance in 
                violation of laws requiring a license, certificate of 
                authority or other legal authority for the transaction 
                of the business of insurance.
                    ``(D) Attempt to commit, aiding or abetting in the 
                commission of, or conspiracy to commit the acts or 
                omissions specified in this paragraph.

``SEC. 2796. APPLICATION OF LAW.

    ``(a) In General.--The covered laws of the primary State shall 
apply to individual and group health insurance coverage offered by a 
health insurance issuer in the primary State and in any secondary 
State, but only if the coverage and issuer comply with the conditions 
of this section with respect to the offering of coverage in any 
secondary State.
    ``(b) Exemptions From Covered Laws in a Secondary State.--Except as 
provided in this section, a health insurance issuer with respect to its 
offer, sale, rating (including medical underwriting), renewal, and 
issuance of individual or group health insurance coverage in any 
secondary State is exempt from any covered laws of the secondary State 
(and any rules, regulations, agreements, or orders sought or issued by 
such State under or related to such covered laws) to the extent that 
such laws would--
            ``(1) make unlawful, or regulate, directly or indirectly, 
        the operation of the health insurance issuer operating in the 
        secondary State, except that any secondary State may require 
        such an issuer--
                    ``(A) to pay, on a nondiscriminatory basis, 
                applicable premium and other taxes (including high risk 
                pool assessments) which are levied on insurers and 
                surplus lines insurers, brokers, or policyholders under 
                the laws of the State;
                    ``(B) to register with and designate the State 
                insurance commissioner as its agent solely for the 
                purpose of receiving service of legal documents or 
                process;
                    ``(C) to submit to an examination of its financial 
                condition by the State insurance commissioner in any 
                State in which the issuer is doing business to 
                determine the issuer's financial condition, if--
                            ``(i) the State insurance commissioner of 
                        the primary State has not done an examination 
                        within the period recommended by the National 
                        Association of Insurance Commissioners; and
                            ``(ii) any such examination is conducted in 
                        accordance with the examiners' handbook of the 
                        National Association of Insurance Commissioners 
                        and is coordinated to avoid unjustified 
                        duplication and unjustified repetition;
                    ``(D) to comply with a lawful order issued--
                            ``(i) in a delinquency proceeding commenced 
                        by the State insurance commissioner if there 
                        has been a finding of financial impairment 
                        under subparagraph (C); or
                            ``(ii) in a voluntary dissolution 
                        proceeding;
                    ``(E) to comply with an injunction issued by a 
                court of competent jurisdiction, upon a petition by the 
                State insurance commissioner alleging that the issuer 
                is in hazardous financial condition;
                    ``(F) to participate, on a nondiscriminatory basis, 
                in any insurance insolvency guaranty association or 
                similar association to which a health insurance issuer 
                in the State is required to belong;
                    ``(G) to comply with any State law regarding fraud 
                and abuse (as defined in section 2795(10)), except that 
                if the State seeks an injunction regarding the conduct 
                described in this subparagraph, such injunction must be 
                obtained from a court of competent jurisdiction;
                    ``(H) to comply with any State law regarding unfair 
                claims settlement practices (as defined in section 
                2795(9)); or
                    ``(I) to comply with the applicable requirements 
                for independent review under section 2798 with respect 
                to coverage offered in the State;
            ``(2) require any individual or group health insurance 
        coverage issued by the issuer to be countersigned by an 
        insurance agent or broker residing in that Secondary State; or
            ``(3) otherwise discriminate against the issuer issuing 
        insurance in both the primary State and in any secondary State.
    ``(c) Clear and Conspicuous Disclosure.--A health insurance issuer 
shall provide the following notice, in 12-point bold type, in any 
insurance coverage offered in a secondary State under this part by such 
a health insurance issuer and at renewal of the policy, with the 5 
blank spaces therein being appropriately filled with the name of the 
health insurance issuer, the name of primary State, the name of the 
secondary State, the name of the secondary State, and the name of the 
secondary State, respectively, for the coverage concerned: `Notice: 
This policy is issued by ____ and is governed by the laws and 
regulations of the State of ____, and it has met all the laws of that 
State as determined by that State's Department of Insurance. This 
policy may be less expensive than others because it is not subject to 
all of the insurance laws and regulations of the State of _____, 
including coverage of some services or benefits mandated by the law of 
the State of _____. Additionally, this policy is not subject to all of 
the consumer protection laws or restrictions on rate changes of the 
State of _____. As with all insurance products, before purchasing this 
policy, you should carefully review the policy and determine what 
health care services the policy covers and what benefits it provides, 
including any exclusions, limitations, or conditions for such services 
or benefits.'.
    ``(d) Prohibition on Certain Reclassifications and Premium 
Increases.--
            ``(1) In general.--For purposes of this section, a health 
        insurance issuer that provides individual or group health 
        insurance coverage to an individual under this part in a 
        primary or secondary State may not upon renewal--
                    ``(A) move or reclassify the individual insured 
                under the health insurance coverage from the class such 
                individual is in at the time of issue of the contract 
                based on the health status-related factors of the 
                individual; or
                    ``(B) increase the premiums assessed the individual 
                for such coverage based on a health status-related 
                factor or change of a health status-related factor or 
                the past or prospective claim experience of the insured 
                individual.
            ``(2) Construction.--Nothing in paragraph (1) shall be 
        construed to prohibit a health insurance issuer--
                    ``(A) from terminating or discontinuing coverage or 
                a class of coverage in accordance with subsections (b) 
                and (c) of section 2742;
                    ``(B) from raising premium rates for all policy 
                holders within a class based on claims experience;
                    ``(C) from changing premiums or offering discounted 
                premiums to individuals who engage in wellness 
                activities at intervals prescribed by the issuer, if 
                such premium changes or incentives--
                            ``(i) are disclosed to the consumer in the 
                        insurance contract;
                            ``(ii) are based on specific wellness 
                        activities that are not applicable to all 
                        individuals; and
                            ``(iii) are not obtainable by all 
                        individuals to whom coverage is offered;
                    ``(D) from reinstating lapsed coverage; or
                    ``(E) from retroactively adjusting the rates 
                charged an insured individual if the initial rates were 
                set based on material misrepresentation by the 
                individual at the time of issue.
    ``(e) Prior Offering of Policy in Primary State.--A health 
insurance issuer may not offer for sale individual or group health 
insurance coverage in a secondary State unless that coverage is 
currently offered for sale in the primary State.
    ``(f) Licensing of Agents or Brokers for Health Insurance 
Issuers.--Any State may require that a person acting, or offering to 
act, as an agent or broker for a health insurance issuer with respect 
to the offering of individual or group health insurance coverage obtain 
a license from that State, with commissions or other compensation 
subject to the provisions of the laws of that State, except that a 
State may not impose any qualification or requirement which 
discriminates against a nonresident agent or broker.
    ``(g) Documents for Submission to State Insurance Commissioner.--
Each health insurance issuer issuing individual or group health 
insurance coverage in both primary and secondary States shall submit--
            ``(1) to the insurance commissioner of each State in which 
        it intends to offer such coverage, before it may offer 
        individual or group health insurance coverage in such State--
                    ``(A) a copy of the plan of operation or 
                feasibility study or any similar statement of the 
                policy being offered and its coverage (which shall 
                include the name of its primary State and its principal 
                place of business);
                    ``(B) written notice of any change in its 
                designation of its primary State; and
                    ``(C) written notice from the issuer of the 
                issuer's compliance with all the laws of the primary 
                State; and
            ``(2) to the insurance commissioner of each secondary State 
        in which it offers individual or group health insurance 
        coverage, a copy of the issuer's quarterly financial statement 
        submitted to the primary State, which statement shall be 
        certified by an independent public accountant and contain a 
        statement of opinion on loss and loss adjustment expense 
        reserves made by--
                    ``(A) a member of the American Academy of 
                Actuaries; or
                    ``(B) a qualified loss reserve specialist.
    ``(h) Power of Courts To Enjoin Conduct.--Nothing in this section 
shall be construed to affect the authority of any Federal or State 
court to enjoin--
            ``(1) the solicitation or sale of individual or group 
        health insurance coverage by a health insurance issuer to any 
        person or group who is not eligible for such insurance; or
            ``(2) the solicitation or sale of individual or group 
        health insurance coverage that violates the requirements of the 
        law of a secondary State which are described in subparagraphs 
        (A) through (H) of section 2796(b)(1).
    ``(i) Power of Secondary States To Take Administrative Action.--
Nothing in this section shall be construed to affect the authority of 
any State to enjoin conduct in violation of that State's laws described 
in section 2796(b)(1).
    ``(j) State Powers To Enforce State Laws.--
            ``(1) In general.--Subject to the provisions of subsection 
        (b)(1)(G) (relating to injunctions) and paragraph (2), nothing 
        in this section shall be construed to affect the authority of 
        any State to make use of any of its powers to enforce the laws 
        of such State with respect to which a health insurance issuer 
        is not exempt under subsection (b).
            ``(2) Courts of competent jurisdiction.--If a State seeks 
        an injunction regarding the conduct described in paragraphs (1) 
        and (2) of subsection (h), such injunction must be obtained 
        from a Federal or State court of competent jurisdiction.
    ``(k) States' Authority To Sue.--Nothing in this section shall 
affect the authority of any State to bring action in any Federal or 
State court.
    ``(l) Generally Applicable Laws.--Nothing in this section shall be 
construed to affect the applicability of State laws generally 
applicable to persons or corporations.
    ``(m) Guaranteed Availability of Coverage to HIPAA Eligible 
Individuals.--To the extent that a health insurance issuer is offering 
coverage in a primary State that does not accommodate residents of 
secondary States or does not provide a working mechanism for residents 
of a secondary State, and the issuer is offering coverage under this 
part in such secondary State which has not adopted a qualified high 
risk pool as its acceptable alternative mechanism (as defined in 
section 2744(c)(2)), the issuer shall, with respect to any individual 
or group health insurance coverage offered in a secondary State under 
this part, comply with the guaranteed availability requirements for 
eligible individuals in section 2741.

``SEC. 2797. PRIMARY STATE MUST MEET FEDERAL FLOOR BEFORE ISSUER MAY 
              SELL INTO SECONDARY STATES.

    ``A health insurance issuer may not offer, sell, or issue 
individual or group health insurance coverage in a secondary State if 
the State insurance commissioner does not use a risk-based capital 
formula for the determination of capital and surplus requirements for 
all health insurance issuers.

``SEC. 2798. INDEPENDENT EXTERNAL APPEALS PROCEDURES.

    ``(a) Right to External Appeal.--A health insurance issuer may not 
offer, sell, or issue individual or group health insurance coverage in 
a secondary State under the provisions of this title unless--
            ``(1) both the secondary State and the primary State have 
        legislation or regulations in place establishing an independent 
        review process for individuals who are covered by individual 
        health insurance coverage or group health insurance offered by 
        a health insurance issuer, respectively, or
            ``(2) in any case in which the requirements of subparagraph 
        (A) are not met with respect to the either of such States, the 
        issuer provides an independent review mechanism substantially 
        identical (as determined by the applicable State authority of 
        such State) to that prescribed in the `Health Carrier External 
        Review Model Act' of the National Association of Insurance 
        Commissioners for all individuals who purchase insurance 
        coverage under the terms of this part, except that, under such 
        mechanism, the review is conducted by an independent medical 
        reviewer, or a panel of such reviewers, with respect to whom 
        the requirements of subsection (b) are met.
    ``(b) Qualifications of Independent Medical Reviewers.--In the case 
of any independent review mechanism referred to in subsection (a)(2):
            ``(1) In general.--In referring a denial of a claim to an 
        independent medical reviewer, or to any panel of such 
        reviewers, to conduct independent medical review, the issuer 
        shall ensure that--
                    ``(A) each independent medical reviewer meets the 
                qualifications described in paragraphs (2) and (3);
                    ``(B) with respect to each review, each reviewer 
                meets the requirements of paragraph (4) and the 
                reviewer, or at least 1 reviewer on the panel, meets 
                the requirements described in paragraph (5); and
                    ``(C) compensation provided by the issuer to each 
                reviewer is consistent with paragraph (6).
            ``(2) Licensure and expertise.--Each independent medical 
        reviewer shall be a physician (allopathic or osteopathic) or 
        health care professional who--
                    ``(A) is appropriately credentialed or licensed in 
                1 or more States to deliver health care services; and
                    ``(B) typically treats the condition, makes the 
                diagnosis, or provides the type of treatment under 
                review.
            ``(3) Independence.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each independent medical reviewer in a case shall--
                            ``(i) not be a related party (as defined in 
                        paragraph (7));
                            ``(ii) not have a material familial, 
                        financial, or professional relationship with 
                        such a party; and
                            ``(iii) not otherwise have a conflict of 
                        interest with such a party (as determined under 
                        regulations).
                    ``(B) Exception.--Nothing in subparagraph (A) shall 
                be construed to--
                            ``(i) prohibit an individual, solely on the 
                        basis of affiliation with the issuer, from 
                        serving as an independent medical reviewer if--
                                    ``(I) a non-affiliated individual 
                                is not reasonably available;
                                    ``(II) the affiliated individual is 
                                not involved in the provision of items 
                                or services in the case under review;
                                    ``(III) the fact of such an 
                                affiliation is disclosed to the issuer 
                                and the enrollee (or authorized 
                                representative) and neither party 
                                objects; and
                                    ``(IV) the affiliated individual is 
                                not an employee of the issuer and does 
                                not provide services exclusively or 
                                primarily to or on behalf of the 
                                issuer;
                            ``(ii) prohibit an individual who has staff 
                        privileges at the institution where the 
                        treatment involved takes place from serving as 
                        an independent medical reviewer merely on the 
                        basis of such affiliation if the affiliation is 
                        disclosed to the issuer and the enrollee (or 
                        authorized representative), and neither party 
                        objects; or
                            ``(iii) prohibit receipt of compensation by 
                        an independent medical reviewer from an entity 
                        if the compensation is provided consistent with 
                        paragraph (6).
            ``(4) Practicing health care professional in same field.--
                    ``(A) In general.--In a case involving treatment, 
                or the provision of items or services--
                            ``(i) by a physician, a reviewer shall be a 
                        practicing physician (allopathic or 
                        osteopathic) of the same or similar specialty, 
                        as a physician who, acting within the 
                        appropriate scope of practice within the State 
                        in which the service is provided or rendered, 
                        typically treats the condition, makes the 
                        diagnosis, or provides the type of treatment 
                        under review; or
                            ``(ii) by a non-physician health care 
                        professional, the reviewer, or at least 1 
                        member of the review panel, shall be a 
                        practicing non-physician health care 
                        professional of the same or similar specialty 
                        as the non-physician health care professional 
                        who, acting within the appropriate scope of 
                        practice within the State in which the service 
                        is provided or rendered, typically treats the 
                        condition, makes the diagnosis, or provides the 
                        type of treatment under review.
                    ``(B) Practicing defined.--For purposes of this 
                paragraph, the term `practicing' means, with respect to 
                an individual who is a physician or other health care 
                professional, that the individual provides health care 
                services to individual patients on average at least 2 
                days per week.
            ``(5) Pediatric expertise.--In the case of an external 
        review relating to a child, a reviewer shall have expertise 
        under paragraph (2) in pediatrics.
            ``(6) Limitations on reviewer compensation.--Compensation 
        provided by the issuer to an independent medical reviewer in 
        connection with a review under this section shall--
                    ``(A) not exceed a reasonable level; and
                    ``(B) not be contingent on the decision rendered by 
                the reviewer.
            ``(7) Related party defined.--For purposes of this section, 
        the term `related party' means, with respect to a denial of a 
        claim under a coverage relating to an enrollee, any of the 
        following:
                    ``(A) The issuer involved, or any fiduciary, 
                officer, director, or employee of the issuer.
                    ``(B) The enrollee (or authorized representative).
                    ``(C) The health care professional that provides 
                the items or services involved in the denial.
                    ``(D) The institution at which the items or 
                services (or treatment) involved in the denial are 
                provided.
                    ``(E) The manufacturer of any drug or other item 
                that is included in the items or services involved in 
                the denial.
                    ``(F) Any other party determined under any 
                regulations to have a substantial interest in the 
                denial involved.
            ``(8) Definitions.--For purposes of this subsection:
                    ``(A) Enrollee.--The term `enrollee' means, with 
                respect to health insurance coverage offered by a 
                health insurance issuer, an individual enrolled with 
                the issuer to receive such coverage.
                    ``(B) Health care professional.--The term `health 
                care professional' means an individual who is licensed, 
                accredited, or certified under State law to provide 
                specified health care services and who is operating 
                within the scope of such licensure, accreditation, or 
                certification.

``SEC. 2799. ENFORCEMENT.

    ``(a) In General.--Subject to subsection (b), with respect to 
specific individual or group health insurance coverage the primary 
State for such coverage has sole jurisdiction to enforce the primary 
State's covered laws in the primary State and any secondary State.
    ``(b) Secondary State's Authority.--Nothing in subsection (a) shall 
be construed to affect the authority of a secondary State to enforce 
its laws as set forth in the exception specified in section 2796(b)(1).
    ``(c) Court Interpretation.--In reviewing action initiated by the 
applicable secondary State authority, the court of competent 
jurisdiction shall apply the covered laws of the primary State.
    ``(d) Notice of Compliance Failure.--In the case of individual 
health insurance coverage offered in a secondary State, or group health 
insurance coveraged offered by a health insurance issuer in a secondary 
State, that fails to comply with the covered laws of the primary State, 
the applicable State authority of the secondary State may notify the 
applicable State authority of the primary State.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to health insurance coverage offered, issued, or sold after the 
date that is one year after the date of the enactment of this Act.
    (c) GAO Ongoing Study and Reports.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct an ongoing study concerning the effect of the 
        amendment made by subsection (a) on--
                    (A) the number of uninsured and under-insured;
                    (B) the availability and cost of health insurance 
                policies for individuals with pre-existing medical 
                conditions;
                    (C) the availability and cost of health insurance 
                policies generally;
                    (D) the elimination or reduction of different types 
                of benefits under health insurance policies offered in 
                different States; and
                    (E) cases of fraud or abuse relating to health 
                insurance coverage offered under such amendment and the 
                resolution of such cases.
            (2) Annual reports.--The Comptroller General shall submit 
        to Congress an annual report, after the end of each of the 5 
        years following the effective date of the amendment made by 
        subsection (a), on the ongoing study conducted under paragraph 
        (1).

SEC. 502. CONTINUING STATE AUTHORITY.

    Nothing in this title, or the amendments made by this title, shall 
be construed as preventing a State--
            (1) from permitting residents of the State to purchase of 
        health insurance offered by a health insurance issuer located 
        outside the State; or
            (2) from permitting groups to directly obtain, through an 
        association health plan or otherwise, health insurance coverage 
        for their members.

                   TITLE VI--STATE HEALTH FLEXIBILITY

SEC. 601. SHORT TITLE.

    This title may be cited as the ``State Health Flexibility Act of 
2013''.

SEC. 602. HEALTH GRANTS TO THE STATES FOR HEALTH CARE SERVICES TO 
              INDIGENT INDIVIDUALS.

    (a) Health Care Block Grant to States.--The Social Security Act is 
amended by adding at the end the following new title:

   ``TITLE XXII--BLOCK GRANTS TO STATES FOR HEALTH CARE SERVICES TO 
                          INDIGENT INDIVIDUALS

``SEC. 2201. PURPOSE.

    ``The purpose of this title is to provide Federal financial 
assistance to the States, in the form of a single grant, to allow the 
States maximum flexibility in providing, and financing the provision 
of, health-care-related items and services to indigent individuals.

``SEC. 2202. GRANTS TO STATES.

    ``(a) In General.--Subject to the requirements of this title, each 
State is entitled to receive from the Secretary of the Treasury a grant 
for each quarter of fiscal years 2014, 2015, 2016, 2017, 2018, 2019, 
2020, 2021, 2022, and 2023, in an amount that is equal to 25 percent of 
the total amount received by a State under title XIX and title XXI for 
fiscal year 2012.
    ``(b) Appropriation.--Out of any money in the Treasury of the 
United States not otherwise appropriated, there are appropriated for 
fiscal years 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, and 
2023 such sums as are necessary for grants under this section.
    ``(c) Requirements Relating to Intergovernmental Financing.--The 
Secretary of the Treasury shall make the transfer of funds under grants 
under subsection (a) directly to each State in accordance with the 
requirements of section 6503 of title 31, United States Code.
    ``(d) Expenditure of Funds.--
            ``(1) In general.--Except as provided in paragraph (2), 
        amounts received by a State under this title for any fiscal 
        year shall be expended by the State in such fiscal year or in 
        the succeeding fiscal year.
            ``(2) Use of rainy day fund permitted.--Of the amounts 
        received by a State under this title, the State may set aside, 
        in a separate account, such amounts as the State deems 
        necessary to provide, without fiscal limitation, health-care-
        related items and services for indigent individuals during--
                    ``(A) periods of unexpectedly high rates of 
                unemployment; or
                    ``(B) periods related to circumstances that are not 
                described in subparagraph (A) and that cause unexpected 
                increases in the need for such items and services for 
                such individuals.
            ``(3) Funds remaining after fiscal year 2022.--If, after 
        fiscal year 2023, a State has funds in the account under 
        paragraph (2), the State may only expend such funds if such 
        funds are used in a manner that is permitted under subsection 
        (e), as such subsection is in effect on September 30, 2023.
    ``(e) Use of Funds.--A State may only use the amounts received 
under subsection (a) as follows:
            ``(1) General purpose.--For the purpose under section 2201, 
        including the provision of health-care-related items and 
        services as required under section 2205. Nothing in this title 
        shall be construed as limiting the flexibility of a State to 
        determine which providers of such items and services qualify to 
        receive payment from a grant made to the State under this 
        title.
            ``(2) Funding for risk adjustment mechanisms.--To fund 
        qualified high risk pools, reinsurance pools, or other risk-
        adjustment mechanisms used for the purpose of subsidizing the 
        purchase of private health insurance for the high-risk 
        population.
            ``(3) Authority to use portion of federal assistance for 
        other welfare-related programs.--
                    ``(A) In general.--Subject to the limit under 
                subparagraph (B), to carry out a State program pursuant 
                to any or all of the following provisions of law:
                            ``(i) Part A of title IV of this Act.
                            ``(ii) Section 1616 of this Act.
                            ``(iii) The Food and Nutrition Act of 2008.
                    ``(B) Limitation.--A State may not use more than 30 
                percent of the amount received under subsection (a) for 
                a fiscal year to carry out a State program, or 
                programs, under subparagraph (A).
                    ``(C) Requirements on funds.--Any amounts that are 
                used under subparagraph (A)--
                            ``(i) shall not be subject to any of the 
                        requirements of subsection (d), subsection (f), 
                        section 2204, or section 2205; and
                            ``(ii) shall be subject to--
                                    ``(I) the audit requirements under 
                                section 2203; and
                                    ``(II) any requirements that apply 
                                to Federal funds provided directly for 
                                such State program.
    ``(f) Maintenance of Current Law Restrictions on Use of Federal 
Funds.--
            ``(1) In general.--
                    ``(A) No funding for abortions.--None of the funds 
                appropriated in this title shall be expended for any 
                abortion.
                    ``(B) No funds for coverage of abortion.--None of 
                the funds appropriated in this title shall be expended 
                for health benefits coverage that includes coverage of 
                abortion.
                    ``(C) Health benefits coverage defined.--For 
                purposes of this subsection, the term `health benefits 
                coverage' means the package of services covered by a 
                managed care provider or organization pursuant to a 
                contract or other arrangement.
            ``(2) Exceptions.--The limitations established in paragraph 
        (1) shall not apply to an abortion in the case where a woman 
        suffers from a physical disorder, physical injury, or physical 
        illness that would, as certified by a physician, place the 
        woman in danger of death unless an abortion is performed, 
        including a life-endangering physical condition caused by or 
        arising from the pregnancy itself.
            ``(3) State funds used in conjunction with federal funds.--
        The limitations established in paragraph (1) shall apply to any 
        State funds used in conjunction with Federal funds appropriated 
        under this title to provide, or finance the provision of, 
        health-care-related items and services to indigent individuals 
        pursuant to section 2201 or subsections (d)(2), (e)(1), or 
        (e)(2) of this section.
            ``(4) Option to purchase separate coverage or plan.--
        Nothing in this subsection shall be construed as prohibiting a 
        State from purchasing separate coverage for abortions for which 
        funding is prohibited under this subsection, or a health plan 
        that includes such abortions, so long as such coverage or plan 
        is paid for entirely using funds not provided by this title.
            ``(5) Option to offer coverage or plan.--Nothing in this 
        subsection shall restrict any health insurance issuer from 
        offering separate coverage for abortions for which funding is 
        prohibited under this subsection, or a health plan that 
        includes such abortions, so long as--
                    ``(A) premiums for such separate coverage or plan 
                are paid entirely with funds not provided by this 
                title; and
                    ``(B) administrative costs and all services offered 
                through such separate coverage or plan are paid for 
                using only premiums collected for such coverage or 
                plan.
            ``(6) Conscience protections.--
                    ``(A) None of the funds appropriated in this Act 
                may be made available to a Federal agency or program, 
                or to a State or local government, if such agency, 
                program, or government subjects any institutional or 
                individual health care entity to discrimination on the 
                basis that the health care entity does not provide, pay 
                for, provide coverage of, or refer for abortions.
                    ``(B) In this paragraph, the term `health care 
                entity' includes an individual physician, pharmacist, 
                or other health care professional, a hospital, a 
                provider-sponsored organization, a health maintenance 
                organization, a health insurance plan, or any other 
                kind of health care facility, organization, or plan.
    ``(g) No Funding for Illegal Aliens.--Except as provided under this 
section and section 2205, no funds appropriated in this title may be 
used to provide health-care-related items and services to an alien who 
is not lawfully admitted for permanent residence or otherwise 
permanently residing in the United States under color of law.
    ``(h) Nonentitlement.--Nothing in this title shall be construed as 
providing an individual with an entitlement to health-care-related 
items and services under this title.

``SEC. 2203. ADMINISTRATIVE AND FISCAL ACCOUNTABILITY.

    ``(a) Audits.--
            ``(1) Contract with approved auditing entity.--Not later 
        than October 1, 2014, and annually thereafter, a State shall 
        contract with an approved auditing entity (as defined under 
        paragraph (3)(B)) for purposes of conducting an audit under 
        paragraph (2) (with respect to the fiscal year ending September 
        30 of such year).
            ``(2) Audit requirement.--Under a contract under paragraph 
        (1), an approved auditing entity shall conduct an audit of the 
        expenditures or transfers made by a State from amounts received 
        under a grant under this title, or from State funds described 
        in section 2202(f)(3), with respect to the fiscal year which 
        such audit covers, to determine the extent to which such 
        expenditures and transfers were expended in accordance with 
        this title.
            ``(3) Entity conducting audit.--
                    ``(A) In general.--With respect to a State, the 
                audit under paragraph (2) shall be conducted by an 
                approved auditing entity in accordance with generally 
                accepted auditing principles.
                    ``(B) Approved auditing entity.--For purposes of 
                this section, the term `approved auditing entity' 
                means, with respect to a State, an entity that is--
                            ``(i) approved by the Secretary of the 
                        Treasury;
                            ``(ii) approved by the chief executive 
                        officer of the State; and
                            ``(iii) independent of any Federal, State, 
                        or local agency.
            ``(4) Submission of audit.--Not later than December 31, 
        2014, and annually thereafter, a State shall submit the results 
        of the audit under paragraph (2) (with respect to the fiscal 
        year ending on September 30 of such year) to the State 
        legislature and to the Secretary of the Treasury.
            ``(5) Additional accounting requirements.--The provisions 
        of chapter 75 of title 31, United States Code, shall apply to 
        the audit requirements of this section.
    ``(b) Reimbursement and Penalty.--
            ``(1) In general.--If, through an audit conducted under 
        subsection (a), an approved auditing entity finds that any 
        amounts paid to a State under a grant under this title were not 
        expended in accordance with this title--
                    ``(A) the State shall pay to the Treasury of the 
                United States any such amount, plus 10 percent of such 
                amount as a penalty; or
                    ``(B) the Secretary of the Treasury shall offset 
                such amount plus the 10 percent penalty against any 
                other amount in any other fiscal year that the State 
                may be entitled to receive under a grant under this 
                title.
            ``(2) Misuse of state funds.--If, through an audit 
        conducted under subsection (a), an approved auditing entity 
        finds that a State violated the requirements of section 
        2202(f)(3), the State shall pay to the Treasury of the United 
        States 100 percent of the amount of State funds that were used 
        in violation of section 2202(f)(3) as a penalty. Insofar as a 
        State fails to pay any such penalty, the Secretary of the 
        Treasury shall offset the amount not so paid against the amount 
        of any grant otherwise payable to the State under this title.
    ``(c) Annual Reporting Requirements.--
            ``(1) In general.--Not later than January 31, 2015, and 
        annually thereafter, each State shall submit to the Secretary 
        of the Treasury and the State legislature a report on the 
        activities carried out by the State during the most recently 
        completed fiscal year with funds received by the State under a 
        grant under this title for such fiscal year.
            ``(2) Content.--A report under paragraph (1) shall, with 
        respect to a fiscal year--
                    ``(A) contain the results of the audit conducted by 
                an approved auditing entity for a State for such fiscal 
                year, in accordance with the requirements of subsection 
                (a) of this section;
                    ``(B) specify the amount of the grant made to the 
                State under this title that is used to carry out a 
                program under section 2202(e)(3); and
                    ``(C) be in such form and contain such other 
                information as the State determines is necessary to 
                provide--
                            ``(i) an accurate description of the 
                        activities conducted by the State for the 
                        purpose described under section 2201 and any 
                        other use of funds permitted under subsections 
                        (d) and (e) of section 2202; and
                            ``(ii) a complete record of the purposes 
                        for which amounts were expended in accordance 
                        with this title.
            ``(3) Conformity with accounting principals.--Any financial 
        information in the report under paragraph (1) shall be prepared 
        and reported in accordance with generally accepted accounting 
        principles, including the provisions of chapter 75 of title 31, 
        United States Code.
            ``(4) Public availability.--A State shall make copies of 
        the reports required under this section available on a public 
        Web site and shall make copies available in other formats upon 
        request.
    ``(d) Failure To Comply With Requirements.--The Secretary of the 
Treasury shall not make any payment to a State under a grant authorized 
by section 2202(a)--
            ``(1) if an audit for a State is not submitted as required 
        under subsection (a), during the period between the date such 
        audit is due and the date on which such audit is submitted;
            ``(2) if a State fails to submit a report as required under 
        subsection (c), during the period between the date such report 
        is due and the date on which such report is submitted; or
            ``(3) if a State violates a requirement of section 2202(f), 
        during the period beginning on the date the Secretary becomes 
        aware of such violation and the date on which such violation is 
        corrected by the State.
    ``(e) Administrative Supervision and Oversight.--
            ``(1) Limited role for secretary of treasury and the 
        attorney general.--
                    ``(A) Treasury.--The authority of the Secretary of 
                the Treasury under this title is limited to--
                            ``(i) promulgating regulations, issuing 
                        rules, or publishing guidance documents to the 
                        extent necessary for purposes of implementing 
                        subsection (a)(3)(B), subsection (b), and 
                        subsection (d);
                            ``(ii) making quarterly payments to the 
                        States under grants under this title in 
                        accordance with section 2202(a);
                            ``(iii) approving entities under subsection 
                        (a)(3)(B) for purposes of the audits required 
                        under subsection (a);
                            ``(iv) withholding payment to a State of a 
                        grant under subsection (d) or offsetting a 
                        payment of such a grant to a State under 
                        subsection (b); and
                            ``(v) exercising the authority relating to 
                        nondiscrimination that is specified in section 
                        2204(b).
                    ``(B) Attorney general.--The authority of the 
                Attorney General to supervise the amounts received by a 
                State under this title is limited to the authority 
                under section 2204(c).
            ``(2) Federal supervision.--
                    ``(A) In general.--Except as provided under 
                paragraph (1), an administrative officer, employee, 
                department, or agency of the United States (including 
                the Secretary of Health and Human Services) may not--
                            ``(i) supervise--
                                    ``(I) the amounts received by the 
                                States under this title; or
                                    ``(II) the use of such amounts by 
                                the States; or
                            ``(ii) promulgate regulations or issue 
                        rules in accordance with this title.
                    ``(B) Limitation on secretary of health and human 
                services.--The Secretary of Health and Human Services 
                shall have no authority over any provision of this 
                title.
    ``(f) Reservation of State Powers.--Nothing in this section shall 
be construed to limit the power of a State, including the power of a 
State to pursue civil and criminal penalties under State law against 
any individual or entity that misuses, or engages in fraud or abuse 
related to, the funds provided to a State under this title.

``SEC. 2204. NONDISCRIMINATION PROVISIONS.

    ``(a) No Discrimination Against Individuals.--No individual shall 
be excluded from participation in, denied the benefits of, or subjected 
to discrimination under, any program or activity funded in whole or in 
part with amounts paid to a State under this title on the basis of such 
individual's--
            ``(1) disability under section 504 of the Rehabilitation 
        Act of 1973 (29 U.S.C. 794);
            ``(2) sex under title IX of the Education Amendments of 
        1972 (20 U.S.C. 1681 et seq.); or
            ``(3) race, color, or national origin under title VI of the 
        Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
    ``(b) Compliance.--
            ``(1) If the Secretary of the Treasury determines that a 
        State or an entity that has received funds from amounts paid to 
        a State under a grant under this title has failed to comply 
        with a provision of law referred to in subsection (a), the 
        Secretary of the Treasury shall notify the chief executive 
        officer of the State of such failure to comply and shall 
        request that such chief executive officer secure such 
        compliance.
            ``(2) If, not later than 60 days after receiving 
        notification under paragraph (1), the chief executive officer 
        of a State fails or refuses to secure compliance with the 
        provision of law referred to in such notification, the 
        Secretary of the Treasury may--
                    ``(A) refer the matter to the Attorney General with 
                a recommendation that an appropriate civil action be 
                instituted; or
                    ``(B) exercise the powers and functions provided 
                under section 505 of the Rehabilitation Act of 1973 (29 
                U.S.C. 794a), title IX of the Education Amendments of 
                1972 (20 U.S.C. 1681 et seq.), or title VI of the Civil 
                Rights Act of 1964 (42 U.S.C. 2000d et seq.) (as 
                applicable).
    ``(c) Civil Actions.--If a matter is referred to the Attorney 
General under subsection (b)(2)(A), or the Attorney General has reason 
to believe that a State or entity has failed to comply with a provision 
of law referred to in subsection (a), the Attorney General may bring a 
civil action in an appropriate district court of the United States for 
such relief as may be appropriate, including injunctive relief.

``SEC. 2205. EMERGENCY ASSISTANCE.

    ``(a) In General.--A State that receives a grant under this title 
for a fiscal year shall provide payment for health-care-related items 
and services provided to a citizen, legal resident, or an alien who is 
not lawfully admitted for permanent residence or otherwise permanently 
residing in the United States under color of law, consistent with the 
requirements of section 1867, if--
            ``(1) such health-care-related items and services are--
                    ``(A) necessary for the treatment of an emergency 
                medical condition; and
                    ``(B) health-care-related items and services that 
                such State would provide payment for under this title, 
                if provided to an indigent individual;
            ``(2) the individual meets all necessary eligibility 
        requirements for health-care-related items and services under 
        the State program funded under this title, except for any 
        requirement related to immigration status; and
            ``(3) such items and services are not related to an organ 
        transplant procedure.
    ``(b) Emergency Medical Condition.--For purposes of this section, 
the term `emergency medical condition' means a medical condition 
(including emergency labor and delivery) manifesting itself by acute 
symptoms of sufficient severity (including severe pain) such that the 
absence of immediate medical attention could reasonably be expected to 
result in--
            ``(1) placing the patient's health in serious jeopardy;
            ``(2) serious impairment to bodily functions; or
            ``(3) serious dysfunction of any bodily organ or part.

``SEC. 2206. DEFINITIONS.

    ``For purposes of this title:
            ``(1) Health-care-related items and services.--The term 
        `health-care-related items and services' shall be defined by a 
        State with respect to use of such term for purposes of the 
        application of this title to the State.
            ``(2) High-risk population.--The term `high-risk 
        population' means individuals who are described in one of the 
        following subparagraphs:
                    ``(A) 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.
                    ``(B) Individuals who are provided health coverage 
                by a qualified high risk pool.
            ``(3) Indigent individual.--The term `indigent individual' 
        shall be defined by a State with respect to use of such term 
        for purposes of the application of this title to the State.
            ``(4) Qualified high risk pool.--The term `qualified high 
        risk pool' has the meaning given such term in section 
        2745(g)(1)(A) of the Public Health Service Act.
            ``(5) Risk-adjustment mechanism defined.--For purposes of 
        this section, the term `risk-adjustment mechanism' means any 
        risk-spreading mechanism to subsidize the purchase of private 
        health insurance for the high-risk population, including a 
        qualified high risk pool.''.
    (b) Report on Reduction of Federal Administrative Expenditures.--
Beginning not later than October 31, 2014, and annually thereafter 
until October 31, 2023, the Secretary of Health and Human Services, in 
consultation with the Secretary of the Treasury, shall submit a report 
to the Committee on Energy and Commerce in the House of Representatives 
and the Finance Committee in the Senate containing a description of the 
total reduction in Federal expenditures required to administer and 
provide oversight for the programs to provide health-care-related items 
and services to indigent individuals under this Act, compared to the 
expenditures required to administer and provide oversight for the 
programs under titles XIX and XXI of the Social Security Act, as in 
effect on September 30, 2012.
    (c) State Defined.--Section 1101(a)(1) of the Social Security Act 
(42 U.S.C. 1301(a)(1)) is amended--
            (1) in the first sentence, by striking ``and XXI'' and 
        inserting ``XXI, and XXII''; and
            (2) in the fourth sentence, by striking ``and XXI'' and 
        inserting ``, XXI, and XXII''.

SEC. 603. REPEAL OF FEDERAL REQUIREMENTS OF MEDICAID AND CHIP.

    Titles XIX and XXI of the Social Security Act are repealed.

SEC. 604. SEVERABILITY.

    If any provision of this title, or the application of such 
provision to any person or circumstance, is found to be 
unconstitutional, the remainder of this title, or the application of 
that provision to other persons or circumstances, shall not be 
affected.

SEC. 605. EFFECTIVE DATE.

    This title and the amendments made by this title shall take effect 
with respect to items and services furnished on or after October 1, 
2013.
                                 <all>