[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.
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