[Congressional Record Volume 152, Number 105 (Wednesday, August 2, 2006)]
[Senate]
[Pages S8616-S8621]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 3776. A bill to ensure the provision of high-quality health care 
coverage for uninsured individuals through State health care 
initiatives that expand coverage and access and improve quality and 
efficiency in the health care system; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. FEINGOLD. Mr. President, I rise today to speak about a crisis 
facing our country, a crisis that directly affects the lives of 46 
million people in the United States, and that indirectly affects many 
more. The crisis is the lack of universal health insurance in America, 
and its effects are rippling through our families, our communities, and 
our economy. It is the No. 1 issue that I hear about in Wisconsin, and 
it is the No. 1 issue for tens of millions of Americans. Nevertheless, 
the issue has been largely ignored in the Halls of Congress. We sit 
idle, locked in a stalemate, refusing to give this life-threatening 
problem its due attention. We need a way to break that deadlock, and 
today I am introducing a bill that will do just that--the State-Based 
Health Care Reform Act.
  I believe that health care is a fundamental right, and every American 
should have guaranteed health care coverage. My bill seeks to move us 
toward that goal in a way that I hope will be acceptable to many of my 
colleagues.
  Every day, all over our Nation, Americans suffer from medical 
conditions that cause them pain and even change they way they lead 
their lives. Every one of us has either experienced this personally or 
through a family member suffering from cancer, Alzheimer's, diabetes, 
genetic disorders, mental illness or some other condition. The disease 
takes its toll on both individuals and families, as trips to the 
hospital for treatments such as chemotherapy test the strength of the 
person and the family affected. This is an incredibly difficult 
situation for anyone. But for the uninsured and underinsured, the 
suffering goes beyond physical discomfort. These 46 million Americans 
bear the additional burden of wondering where the next dollar for their 
health care bills will come from; worries of going into debt; worries 
of going bankrupt because of health care needs. When illness strikes 
families, the last thing they should have to think about is money, but 
I know that for many in our country, this is a persistent burden that 
causes stress and hopelessness.
  It is difficult to do justice to the magnitude of the uninsurance 
problem, but I want to share a few astounding statistics. Forty-seven 
percent of the uninsured avoided seeking care in 2003 due to the cost. 
Thirty-five percent needed care but did not get it. Thirty-seven 
percent did not fill a prescription because of cost. The uninsured are 
seven times more likely to seek care in an emergency room. They are 
less likely to receive preventative care because they cannot afford to 
see the doctor, and they are more likely to die as a result. Each year, 
at least 18,000 people die prematurely in this country because of 
uninsurance. If the uninsured

[[Page S8617]]

had access to continuous health coverage, a reduction in mortality of 5 
percent to 15 percent could be achieved.
  Even for those Americans who currently have health insurance through 
their employer, the risk of becoming uninsured is very real. Large 
businesses are finding themselves less competitive in the global market 
because of skyrocketing health care costs. Small businesses are finding 
it difficult to offer insurance to employees while staying competitive 
in their own communities. Our health care system has failed to keep 
costs in check, and there is simply no way we can expect businesses to 
keep up. More and more, employers offer sub-par benefits, or no 
benefits at all. Employers cannot be the sole provider of health care 
when these costs are rising faster than inflation.
  I travel to each of Wisconsin's 72 counties every year to hold 
townhall meetings. Almost every year, the No. 1 issue raised at these 
listening sessions is the same--health care. The failure of our health 
care system brings people to these meetings in droves. These people 
used to think government involvement was a terrible idea, but not 
anymore. Now they come armed with their frustration, their anger, and 
their desperation, and they tell me that their businesses and their 
lives are being destroyed by health care costs, and they want the 
government to step in.
  Our country can do better, and it will.
  Last year, I was pleased to be joined by the Senator from South 
Carolina, Mr. Graham, in introducing legislation that requires Congress 
to act on health care reform. It requires Congress to take up and 
debate universal health care bills within the first 90 days of the 
session following enactment of the bill. This bill does not prejudge 
what particular health care reform measure should be debated--it simply 
requires Congress to act.
  Today, I am here to build on the proposal from last year. I am 
introducing the State-Based Health Care Reform Act. In short, this bill 
establishes a pilot project to provide States with the resources needed 
to implement universal health care reform. The bill does not dictate 
what kind of reform the States should implement; it just provides an 
incentive for action, provided the States meet certain minimum coverage 
and low-income requirements.
  Over the years I have heard many different proposals for how we 
should change the health care system in this country. Some propose 
using tax incentives as a way to expand access to health care. Others 
think the best approach is to expand public programs. Some feel a 
national single payer health care system is the only way to go. I have 
my own preferences, but I don't think we can ignore any of these 
proposals. We need to consider all of these as we address our broken 
health care system.
  As a former State legislator, I come to this debate appreciating the 
role that States are playing in coming up with some very innovative 
solutions to the health care problem. We are already seeing States move 
ahead of the Federal Government on covering the uninsured. 
Massachusetts recently passed into law a plan to require health 
insurance for all residents, and State legislators in my home State of 
Wisconsin, as well as Vermont, Maine, and California, are working to 
expand health insurance coverage in their States. The Federal 
Government should be encouraging these innovative initiatives, and my 
bill provides the mechanism for this goal to be realized.
  This legislation harnesses the talent and ingenuity of Americans to 
come up with new solutions. This approach takes advantage of America's 
greatest resources--the mind power and creativity of the American 
people--to move our country toward the goal of a working health care 
system with universal coverage. With help from the Federal Government, 
States will be able to try new ways of covering all their residents, 
and our political logjam around health care will begin to loosen.
  Under my proposal, States can be creative in the State resources they 
use to expand health care coverage. For example, a State can use 
personal or employer mandates for coverage, use State tax incentives, 
create a single-payer system or even join with neighboring States to 
offer a regional health care plan. The proposals are subject only to 
the approval of the newly created Health Care Reform Task Force, which 
will be composed of health care experts, consumers, and representatives 
from groups affected by health care reform. This task force will be 
responsible for choosing viable State projects and ensuring that the 
projects are effective. The Task Force will also help the States 
develop projects, and will continue a dialog with the States in order 
to facilitate a good relationship between the State and Federal 
Governments.
  The task force is also charged with making sure that the State plans 
meet certain minimal requirements. First, the State plans must include 
specific target dates for decreasing the number of uninsured, and must 
also identify a set of minimum benefits for every covered individual. 
These benefits must be comparable to health insurance offered to 
Federal employees. Second, the State plans must include a mechanism to 
guarantee that the insurance is affordable. Americans should not go 
broke trying to keep healthy, and health care reform should ensure that 
individual costs are manageable. The State-Based Health Care Reform Act 
bases affordability on income.
  Another provision in this legislation requires that the States 
contribute to paying for their new health care programs. The Federal 
Government will provide matching funds based on enhanced FMAP--the same 
standard used for SCHIP--and will then provide an additional 5 percent. 
States that can afford to provide more are encouraged to, but in order 
to ensure the financial viability of the bill and to ensure State buy-
in, this matching requirement provides a starting point. Other than 
these requirements, the States largely have flexibility to design a 
plan that works best for their respective residents. The possibilities 
for reform are wide open.
  One of the main criticisms of Federal Government spending on health 
care is that it is expensive and increases the deficit. My legislation 
is fully offset, ensuring that it will not increase the deficit. The 
bill doesn't avoid making the tough budget choices that need to be made 
if we are going to pay for health care reform.
  One of the offsets in the bill was proposed by the Congressional 
Budget Office: an increase in the flat rebate paid by drug 
manufacturers for Medicaid prescription drugs. Currently, Medicaid 
recoups a portion of its drug spending through a rebate paid by the 
manufacturer. The savings mechanism would set a flat rebate, and 
provide funding for the States' health care reform projects.
  Additional funding for the bill comes from the President's fiscal 
year 2007 budget proposal to extend the authority of the Federal 
Communications Commission to auction the radio spectrum and the 
authority of Customs and Border Protection to collect multiple 
different conveyance and passenger user fees through fiscal year 2016. 
My bill proposes similar extensions of these established authorities. 
Also, my bill proposes to both simplify and reduce the federal subsidy 
of airline passenger screening costs by replacing the current variable 
fee, which is capped at five dollars per one-way trip, with a flat five 
dollar fee. This proposal is similar to one in the President's fiscal 
year 2007 budget and would decrease federal subsidies to about thirty 
percent of passenger security costs, without reducing aviation security 
spending.
  I also pay for this bill with an offset modeled on legislation 
introduced in the House by my good friend and fellow Wisconsinite Tom 
Petri and in the Senate by the senior Senator from Massachusetts that 
seeks to save money by encouraging higher education institutions to 
shift from private lenders to the direct loan program, which is most 
cost-effective for taxpayers. Currently, the Federal Government 
subsidizes private lenders for the loans they issue to students and 
this offset would end the current taxpayer-funded subsidies while 
increasing financial aid to students.
  We can say that it is time to move toward universal coverage, but it 
is empty rhetoric without a feasible plan. I believe that this is the 
way to make universal coverage work in this country. Universal coverage 
doesn't mean that we have to copy a system already in place in another 
country. We can harness our Nation's creativity and entrepreneurial 
spirit to design a system

[[Page S8618]]

that is uniquely American. Universal coverage doesn't have to be 
defined by what's been attempted in the past. What universal coverage 
does mean is providing a solution for a broken system where millions 
are uninsured, and where businesses and Americans are struggling under 
the burden of health care costs.
  It has been over 10 years since the last serious debate over health 
care reform was killed by special interests and the soft money 
contributions they used to corrupt the legislative process. The 
legislative landscape is now much different. Soft money can no longer 
be used to set the agenda, and businesses and workers are crying out as 
never before for Congress to do something about the country's health 
care crisis.
  We are fortunate to live in a country that has been abundantly 
blessed with democracy and wealth, and yet, there are those in our 
society whose daily health struggles overshadow these blessings. That 
is an injustice, and it is one we can and must address. Martin Luther 
King, Jr. said, ``Of all the forms of inequality, injustice in health 
care is the most shocking and inhumane.'' It is long past time for 
Congress to heed these words and end this terrible inequality. I urge 
my colleagues to support the State-Based Health Care Reform Act.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3776

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``State-Based Health Care 
     Reform Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Health care remains one of the most important domestic 
     issues for Americans.
       (2) According to the Census Bureau, 45,800,000 Americans 
     were uninsured in 2004. Over 8,000,000 of these individuals 
     were children. The number of uninsured has increased by 
     6,000,000 since 2000.
       (3) According to the Commonwealth Fund, many of the 
     uninsured are employed, and an increasing number are from 
     middle-income families:
       (A) Two in five working-age Americans with annual incomes 
     between $20,000 and $40,000 were uninsured for at least part 
     of 2005. In 2001, just over one-quarter of those with 
     moderate incomes were uninsured.
       (B) Of the estimated 48,000,000 American adults who spent 
     any time uninsured in 2005, two-thirds were in families where 
     at least one person was working full time.
       (4) The uninsured face serious financial problems, and 
     often have to choose between medical care and other basic 
     necessities. According to the Commonwealth Fund, more than 
     half of uninsured adults reported medical debt or problems 
     paying bills. Of those, nearly half used up all their savings 
     to pay their bills. Two of five were unable to pay for basic 
     necessities like food, heat, or rent because of medical 
     bills.
       (5) Health outcomes for the uninsured are worse than health 
     outcomes for those who are covered. According to the 
     Institute of Medicine, the number of excess deaths among 
     uninsured adults ages 25 to 64 is estimated at around 18,000 
     a year. Fifty-nine percent of uninsured adults who had a 
     chronic illness, such as diabetes or asthma, did not fill a 
     prescription or skipped their medications because they could 
     not afford them.
       (6) The cost of providing care to the uninsured weighs 
     heavily on the United States economy. The United States 
     spends twice as much as any other industrialized nation on 
     health care, and more than the United Kingdom's entire gross 
     domestic product. According to the Kaiser Family Foundation, 
     $124,600,000,000 was spent on care provided to individuals 
     who were uninsured for all or part of 2004. Despite this 
     spending, the United States ranks second to last among 
     industrialized countries in infant mortality rates.

     SEC. 3. PURPOSE.

       It is the purpose of this Act to establish a program to 
     award grants to States for the establishment of State-based 
     projects to--
       (1) increase health care coverage for uninsured individuals 
     in selected States within the 5-year period beginning on the 
     date of enactment of this Act;
       (2) ensure high-quality health care coverage that provides 
     adequate access to providers, services, and benefits;
       (3) improve the efficiency of health care spending and 
     lower the cost of health care for the participating State; 
     and
       (4) encourage universal health care coverage within States.

                     TITLE I--HEALTH CARE COVERAGE

     SEC. 101. STATE-BASED HEALTH CARE COVERAGE PROGRAM.

       (a) Applications by States, Multi-State Regions, Local 
     Governments, and Tribes.--
       (1) State application.--A State, in consultation with local 
     governments, Indian tribes, and Indian organizations involved 
     in the provision of health care (referred to in this Act as a 
     ``State''), may apply for a State health care reform grant 
     for the entire State (or for regions of two or more States) 
     under paragraph (2).
       (2) Submission of application.--In accordance with this 
     section, each State desiring to implement a State health care 
     reform program shall submit an application to the Health Care 
     Reform Task Force established under subsection (b) (referred 
     to in this section as the ``Task Force'') for approval.
       (3) Local government and other applications.--
       (A) In general.--Where a State fails to submit an 
     application under this section, a unit of local government of 
     such State, or a consortium of such units of local 
     governments, may submit an application directly to the Task 
     Force for programs or projects under this section. Such an 
     application shall be subject to the requirements of this 
     section.
       (B) Other applications.--Subject to such additional 
     regulations as the Secretary may prescribe, a unit of local 
     government, Indian tribe, or Indian health organization may 
     submit an application under this section, whether or not the 
     State submits such an application, if such unit, tribe, or 
     organization can demonstrate unique demographic needs or a 
     significant population size that warrants a substate program 
     under this subsection.
       (b) Health Care Reform Task Force.--
       (1) Establishment.--Not later than 180 days after the date 
     of the enactment of this Act, the Secretary shall establish a 
     Health Care Reform Task Force in accordance with this 
     subsection.
       (2) Membership.--
       (A) In general.--The Task Force shall be comprised of not 
     less than 20 members to be appointed by the Comptroller 
     General in accordance with subparagraph (B) and the 
     Secretary.
       (B) Appointed members.--With respect to the members 
     appointed by the Comptroller General under subparagraph (A)--
       (i) such members shall include consumers of health services 
     who represent individuals who have not had health insurance 
     coverage during the 2-year period prior to the appointment 
     and who have had a chronic illness and are disabled;
       (ii) such members shall include individuals--

       (I) with expertise in the financing of, and paying for, 
     benefits and access to care;
       (II) representing business and labor; and
       (III) who are health care providers;

       (iii) such members shall include individuals with expertise 
     and experience in State health policy, State government, and 
     local government;
       (iv) such members shall have a broad geographic 
     representation and be balanced between urban and rural areas; 
     and
       (v) such members shall not include elected officials or 
     paid employees or representatives of associations or advocacy 
     organizations involved in the health care system.
       (3) General duties.--The Task Force shall--
       (A) formally approve the application of a State for a grant 
     under this section and the administration of a reform program 
     within the State;
       (B) establish minimum performance measures with respect to 
     coverage, quality, and cost of State programs, as described 
     under subsection (c)(1);
       (C) conduct a thorough review of the grant application from 
     a State and carry on a dialogue with such State applicants 
     concerning possible modifications and adjustments;
       (D) be responsible for monitoring the status and progress 
     achieved under programs and projects granted under this 
     section; and
       (E) report to the public concerning progress made by States 
     with respect to the performance measures and goals 
     established under this Act, the periodic progress of the 
     State relative to its State performance measures and goals, 
     and the State program application procedures, by region and 
     State jurisdiction.
       (4) Period of appointment; representation requirements; 
     vacancies.--Members shall be appointed for the life of the 
     Task Force. In appointing members under paragraph (1)(A), the 
     Comptroller General shall ensure the representation of urban 
     and rural areas and an appropriate geographic distribution of 
     such members. Any vacancy on the Task Force shall not affect 
     its powers, but shall be filled within a reasonable period of 
     time and in the same manner as the original appointment.
       (5) Chairperson, meetings.--
       (A) Chairperson.--The Task Force shall select a Chairperson 
     from among its members.
       (B) Quorum.--A majority of the members of the Task Force 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (C) Meetings.--Not later than 30 days after the date on 
     which all members of the Task Force have been appointed, the 
     Task Force shall hold its first meeting. The Task Force shall 
     meet at the call of the Chairperson.
       (6) Powers of the task force.--
       (A) Negotiations with states.--The Task Force may conduct 
     detailed discussions and negotiations with States submitting 
     applications under this section, either individually or in 
     groups, to facilitate a final set of recommendations for 
     purposes of subsection (c)(4)(B). Such negotiations shall be 
     conducted in a public forum.

[[Page S8619]]

       (B) Subcommittees.--The Task Force may establish such 
     subcommittees as the Task Force determines are necessary to 
     increase the efficiency of the Task Force.
       (C) Hearings.--The Task Force may hold hearings, so long as 
     the Task Force determines such meetings to be necessary in 
     order to carry out the purposes of this Act, sit and act at 
     such times and places, take such testimony, and receive such 
     evidence as the Task Force considers advisable to carry out 
     the purposes of this subsection.
       (D) Annual meeting.--In addition to other meetings the Task 
     Force may hold, the Task Force shall hold an annual meeting 
     with the participating States under this section for the 
     purpose of having States report progress toward the purposes 
     in section 3 and for an exchange of information.
       (E) Information.--The Task Force may obtain information 
     directly from any Federal department or agency as the Task 
     Force considers necessary to carry out the provisions of this 
     subsection. Upon request of the Chairperson of the Task 
     Force, the head of such department or agency shall furnish 
     such information to the Task Force.
       (F) Contracting.--The Task Force may enter into contracts 
     with qualified independent organizations (such as Mathematica 
     or the Institute of Medicine) to obtain necessary information 
     for the development of the performance standards, reporting 
     requirements, financing mechanisms, or any other matters 
     determined by the Task Force to be appropriate and 
     reasonable.
       (G) Postal services.--The Task Force may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (7) Personnel matters.--
       (A) Compensation.--Each member of the Task Force who is not 
     an officer or employee of the Federal Government shall be 
     compensated at a rate equal to the daily equivalent of the 
     annual rate of basic pay prescribed for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, for each day (including travel time) during 
     which such member is engaged in the performance of the duties 
     of the Task Force. All members of the Task Force who are 
     officers or employees of the United States shall serve 
     without compensation in addition to that received for their 
     services as officers or employees of the United States.
       (B) Travel expenses.--The members of the Task Force shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Task Force.
       (C) Staff.--The Chairperson of the Task Force may, without 
     regard to the civil service laws and regulations, appoint and 
     terminate personnel as may be necessary to enable the Task 
     Force to perform its duties.
       (D) Detail of government employees.--Any Federal Government 
     employee may be detailed to the Task Force without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (E) Temporary and intermittent services.--The Chairperson 
     of the Task Force may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       (8) Funding.--For the purpose of carrying out this 
     subsection, there are authorized to be appropriated 
     $4,000,000 for fiscal year 2007 and each fiscal year 
     thereafter.
       (c) State Plan.--
       (1) In general.--A State that seeks to receive a grant to 
     operate a program under this section shall prepare and submit 
     to the Task Force, as part of the application under 
     subsection (a), a State health care plan that--
       (A) designates the lead State entity that will be 
     responsible for administering the State program;
       (B) contains a list of the minimum benefits that will be 
     provided to all individuals covered under the State program, 
     which shall, at a minimum, provide for coverage that is 
     comparable to the coverage provided for benefits under any of 
     the plans offered under the Federal Employees Health Benefits 
     Program under chapter 89 of title 5, United States Code or 
     the minimum benefits required under the program under title 
     XXI of the Social Security Act (42 U.S.C. 1397aa et seq.);
       (C) includes specific target dates for decreasing the 
     number of uninsured individuals in the State; and
       (D) otherwise complies with this subsection.
       (2) Coverage.--With respect to coverage for uninsured 
     individuals in the State, the State plan shall--
       (A) provide and describe the manner in which the State will 
     ensure that an increased number of such individuals residing 
     within the State will have expanded access to health care 
     coverage with a specific 5-year target for reduction in the 
     number of uninsured individuals through either private or 
     public program expansion, or both, such description to 
     include the manner in which the State will ensure expanded 
     access to health care coverage for low-income individuals 
     within the 5-year target period;
       (B) provide for improvements in the availability of 
     appropriate health care services that will increase access to 
     care in urban, rural, and frontier areas of the State with 
     medically underserved populations or where there is an 
     inadequate supply of health care providers; and
       (C) describe the minimum benefits package that will be 
     provided to every beneficiary, including information on 
     affordability for beneficiaries.
       (3) Effectiveness and efficiency.--The State plan shall 
     include provisions to improve the effectiveness and 
     efficiency of health care in the State, including provisions 
     to attempt to reduce the overall health care costs within the 
     State.
       (4) Costs.--
       (A) In general.--With respect to the costs of health care 
     provided under the program, the State plan shall--
       (i) describe the public and private sector financing to be 
     provided for the State health program;
       (ii) estimate the amount of Federal, State, and local 
     expenditures, as well as the costs to business and 
     individuals under the State health program;
       (iii) describe how the State plan will ensure the financial 
     solvency of the State health program; and
       (iv) contain assurances that the State will comply with the 
     premium and cost sharing limitations described in 
     subparagraph (B).
       (B) Premium and cost sharing limitations.--
       (i) Premiums.--In providing health care coverage under a 
     State program under this Act, the State shall ensure that--

       (I) with respect to an individual whose family income is at 
     or below 100 percent of the poverty line, the State program 
     shall not require--

       (aa) the payment of premiums for such coverage; or
       (bb) the payment of cost sharing for such coverage in an 
     amount that exceeds .5 percent of the family's income for the 
     year involved;

       (II) with respect to an individual whose family income is 
     greater than 100 percent, but at or below 200 percent, of the 
     poverty line, the State program shall not require--

       (aa) the payment of premiums for such coverage in excess of 
     20 percent of the average cost of providing benefits to an 
     individual or family or 3 percent of the amount of the 
     family's income for the year involved; or
       (bb) the payment of cost sharing for such coverage in an 
     amount that, together with the premium amount, does not 
     exceed 5 percent of the family's income for the year 
     involved; and

       (III) with respect to an individual whose family income is 
     greater than 200 percent, but at or below 300 percent, of the 
     poverty line, the State program shall not require--

       (aa) the payment of premiums for such coverage in excess of 
     20 percent of the average cost of providing benefits to an 
     individual or family or 5 percent of the amount of the 
     family's income for the year involved; or
       (bb) the payment of cost sharing for such coverage in an 
     amount that, together with the premium amount, does not 
     exceed 7 percent of the family's income for the year 
     involved.
       (ii) Definition.--For purposes of this subparagraph, the 
     term ``poverty line'' has the meaning given such term in 
     section 2110(c)(5) of the Social Security Act (42 U.S.C. 
     1397jj(c)(5)).
       (5) Protection for lower income individuals.--The State 
     plan may only vary premiums, deductibles, coinsurance, and 
     other cost sharing under the plan based on the family income 
     of the family involved in a manner that does not favor 
     individuals from families with higher income over individuals 
     from families with lower income.
       (d) Review; Determination; and Project Period.--
       (1) Initial review.--With respect to a State application 
     for a grant under subsection (a), the Secretary and the Task 
     Force shall, not later than 90 days after receipt of such 
     application, complete an initial review of such State 
     application, an analysis of the scope of the proposal, and a 
     determination of whether additional information is needed 
     from the State. The Task Force shall advise the State within 
     such 90-day period of the need to submit additional 
     information.
       (2) Final determination.--Not later than 90 days after 
     completion of the initial review under paragraph (1), the 
     Task Force shall determine whether to approve such 
     application. Such application may be approved only if \2/3\ 
     of the members of the Task Force vote to approve such 
     application.
       (3) Program or project period.--A State program or project 
     may be approved for a period of not to exceed 5 years and may 
     be extended for subsequent 5-year periods upon approval by 
     the Task Force and the Secretary, based upon achievement of 
     targets, except that a shorter period may be requested by a 
     State and granted by the Secretary.
       (e) Required Congressional Action.--It is the sense of the 
     Senate that, not later than 45 days after receiving the 
     report submitted under subsection (g)(2), each committee to 
     which such report is submitted should hold at least 1 hearing 
     concerning such report and the recommendations contained in 
     such report.
       (f) Funding.--

[[Page S8620]]

       (1) In general.--The Secretary shall provide a grant to a 
     State that has an application approved under subsection 
     (d)(2) to enable such State to carry out the State health 
     program under the grant.
       (2) Amount of grant.--The amount of a grant provided to a 
     State under paragraph (1) shall be determined based upon the 
     recommendations of the Task Force, subject to the amount 
     appropriated under subsection (k).
       (3) Matching requirement.--To be eligible to receive a 
     grant under paragraph (1), a State shall provide assurances 
     to the Secretary that the State shall contribute to the costs 
     of carrying out activities under the grant an amount equal to 
     not less than the product of--
       (A) the amount of the grant; and
       (B) the sum of the enhanced FMAP for the State (as defined 
     in section 2105(b) of the Social Security Act (42 U.S.C. 
     1397ee(b))) and 5 percent.
       (4) Maintenance of effort.--A State, in utilizing the 
     proceeds of a grant received under paragraph (1), shall 
     maintain the expenditures of the State for health care 
     coverage purposes for the support of direct health care 
     delivery at a level equal to not less than the level of such 
     expenditures maintained by the State for the fiscal year 
     preceding the fiscal year for which the grant is received.
       (g) Reports.--
       (1) By states.--Each State that has received a grant under 
     subsection (f)(1) shall submit to the Task Force an annual 
     report for the period representing the respective State's 
     fiscal year, that shall contain a description of the results, 
     with respect to health care coverage, quality, and costs, of 
     the State program.
       (2) By task force.--At the end of the 5-year period 
     beginning on the date on which the Secretary awards the first 
     grant under paragraph (1), the Task Force established under 
     subsection (b) shall prepare and submit to the appropriate 
     committees of Congress, a report on the progress made by 
     States receiving grants under paragraph (1) in meeting the 
     goals of expanded coverage, improved quality, and cost 
     containment through performance measures established during 
     the 5-year period of the grant. Such report shall contain--
       (A) the recommendation of the Task Force concerning any 
     future action that Congress should take concerning health 
     care reform, including whether or not to extend the program 
     established under this subsection;
       (B) an evaluation of the effectiveness of State health care 
     coverage reforms in--
       (i) expanding health care coverage for State residents;
       (ii) improving the quality of health care provided in the 
     States; and
       (iii) reducing or containing health care costs in the 
     States;
       (C) recommendations regarding the advisability of 
     increasing Federal financial assistance for State ongoing or 
     future health program initiatives, including the amount and 
     source of such assistance; and
       (D) recommendations concerning whether any particular State 
     program should serve as a model for implementation as a 
     national health care reform program.
       (h) Protections for Federal Programs.--
       (1) In general.--Nothing in this Act, or in section 1115 of 
     the Social Security Act (42 U.S.C. 1315) shall be construed 
     as authorizing the Secretary, the Task Force, a State, or any 
     other person or entity to alter or affect in any way the 
     provisions of titles XIX and XXI of such Act (42 U.S.C. 1396 
     et seq. and 1397 et seq.) or the regulations implementing 
     such titles.
       (2) Maintenance of effort.--No payment may be made under 
     this section if the State adopts criteria for benefits, 
     income, and resource standards and methodologies for purposes 
     of determining an individual's eligibility for medical 
     assistance under the State plan under title XIX that are more 
     restrictive than those applied as of the date of enactment of 
     this Act.
       (i) Miscellaneous Provisions.--
       (1) Application of certain requirements.--
       (A) Restriction on application of preexisting condition 
     exclusions.--
       (i) In general.--Subject to subparagraph (B), a State shall 
     not permit the imposition of any preexisting condition 
     exclusion for covered benefits under a program or project 
     under this section.
       (ii) Group health plans and group health insurance 
     coverage.--If the State program or project provides for 
     benefits through payment for, or a contract with, a group 
     health plan or group health insurance coverage, the program 
     or project may permit the imposition of a preexisting 
     condition exclusion but only insofar and to the extent that 
     such exclusion is permitted under the applicable provisions 
     of part 7 of subtitle B of title I of the Employee Retirement 
     Income Security Act of 1974 and title XXVII of the Public 
     Health Service Act.
       (B) Compliance with other requirements.--Coverage offered 
     under the program or project shall comply with the 
     requirements of subpart 2 of part A of title XXVII of the 
     Public Health Service Act insofar as such requirements apply 
     with respect to a health insurance issuer that offers group 
     health insurance coverage.
       (2) Prevention of duplicative payments.--
       (A) Other health plans.--No payment shall be made to a 
     State under this section for expenditures for health 
     assistance provided for an individual to the extent that a 
     private insurer (as defined by the Secretary by regulation 
     and including a group health plan (as defined in section 
     607(1) of the Employee Retirement Income Security Act of 
     1974), a service benefit plan, and a health maintenance 
     organization) would have been obligated to provide such 
     assistance but for a provision of its insurance contract 
     which has the effect of limiting or excluding such obligation 
     because the individual is eligible for or is provided health 
     assistance under the plan.
       (B) Other federal governmental programs.--Except as 
     provided in any other provision of law, no payment shall be 
     made to a State under this section for expenditures for 
     health assistance provided for an individual to the extent 
     that payment has been made or can reasonably be expected to 
     be made promptly (as determined in accordance with 
     regulations) under any other federally operated or financed 
     health care insurance program, other than an insurance 
     program operated or financed by the Indian Health Service, as 
     identified by the Secretary. For purposes of this paragraph, 
     rules similar to the rules for overpayments under section 
     1903(d)(2) of the Social Security Act shall apply.
       (3) Application of certain general provisions.--The 
     following sections of the Social Security Act shall apply to 
     States under this section in the same manner as they apply to 
     a State under such title XIX:
       (A) Title xix provisions.--
       (i) Section 1902(a)(4)(C) (relating to conflict of interest 
     standards).
       (ii) Paragraphs (2), (16), and (17) of section 1903(i) 
     (relating to limitations on payment).
       (iii) Section 1903(w) (relating to limitations on provider 
     taxes and donations).
       (iv) Section 1920A (relating to presumptive eligibility for 
     children).
       (B) Title xi provisions.--
       (i) Section 1116 (relating to administrative and judicial 
     review), but only insofar as consistent with this title.
       (ii) Section 1124 (relating to disclosure of ownership and 
     related information).
       (iii) Section 1126 (relating to disclosure of information 
     about certain convicted individuals).
       (iv) Section 1128A (relating to civil monetary penalties).
       (v) Section 1128B(d) (relating to criminal penalties for 
     certain additional charges).
       (vi) Section 1132 (relating to periods within which claims 
     must be filed).
       (4) Relation to other laws.--
       (A) HIPAA.--Health benefits coverage provided under a State 
     program or project under this section shall be treated as 
     creditable coverage for purposes of part 7 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974, title XXVII of the Public Health Service Act, and 
     subtitle K of the Internal Revenue Code of 1986.
       (B) ERISA.--Nothing in this section shall be construed as 
     affecting or modifying section 514 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144) with respect to 
     a group health plan (as defined in section 2791(a)(1) of the 
     Public Health Service Act (42 U.S.C. 300gg-91(a)(1))).
       (j) Authorizations.--
       (1) In general.--There are appropriated in each of fiscal 
     years 2007 through 2016 to carry out this Act, an amount 
     equal to the amount of savings to the Federal Government in 
     each such fiscal year as a result of the enactment of the 
     provisions of title II.
       (2) Use of funds.--Amounts appropriated for a fiscal year 
     under paragraph (1) and not expended may be used in 
     subsequent fiscal years to carry out this section.
       (3) Limitation.--Notwithstanding any other provision of 
     this Act, the total amount of funds appropriated to carry out 
     this Act through fiscal year 2016 shall not exceed 
     $32,000,000,000.

                           TITLE II--OFFSETS

     SEC. 201. INCREASE IN REBATES FOR COVERED OUTPATIENT DRUGS.

       Section 1927(c)(1)(B)(i) of the Social Security Act (42 
     U.S.C. 1396r-8(c)(1)(B)(i)) is amended--
       (1) in subclause (IV), by striking ``and'' after the 
     semicolon;
       (2) in subclause (V)--
       (A) by inserting ``and before January 1, 2007,'' after 
     ``1995,''; and
       (B) by striking the period and inserting ``; and''; and
       (3) by adding at the end the following:

       ``(VI) after December 31, 2006, is 20 percent.''.

     SEC. 202. STUDENT AID REWARD PROGRAM.

       Part G of title IV of the Higher Education Act of 1965 is 
     amended by inserting after section 489 (20 U.S.C. 1096) the 
     end the following:

     ``SEC. 489A. STUDENT AID REWARD PROGRAM.

       ``(a) Program Authorized.--The Secretary shall carry out a 
     Student Aid Reward Program to encourage institutions of 
     higher education to participate in the student loan program 
     under this title that is most cost-effective for taxpayers.
       ``(b) Program Requirements.--In carrying out the Student 
     Aid Reward Program, the Secretary shall--
       ``(1) provide to each institution of higher education 
     participating in the student loan program under this title 
     that is most cost-effective for taxpayers a Student Aid 
     Reward Payment, in an amount determined in accordance with 
     subsection (c), to encourage the institution to participate 
     in that student loan program;

[[Page S8621]]

       ``(2) require each institution of higher education 
     receiving a payment under this section to provide student 
     loans under that student loan program for a period of 5 years 
     from the date the payment is made;
       ``(3) where appropriate, require that funds paid to 
     institutions of higher education under this section be used 
     to award students a supplement to such students' Pell Grants 
     under subpart 1 of part A;
       ``(4) permit such funds to also be used to award lower and 
     middle income graduate students need-based grants; and
       ``(5) encourage all institutions of higher education to 
     participate in the Student Aid Reward Program.
       ``(c) Amount.--The amount of a Student Aid Reward Payment 
     under this section shall be not less than 50 percent, and not 
     more than 75 percent, of the savings to the Federal 
     Government generated by the institution's participation in 
     the student loan program under this title that is most cost-
     effective for taxpayers instead of the institution's 
     participation in the student loan program not cost-effective 
     for taxpayers.
       ``(d) Trigger To Ensure Cost Neutrality.--
       ``(1) Limit to ensure cost neutrality.--Notwithstanding 
     subsection (c), the Secretary shall not distribute Student 
     Aid Reward Payments under the Student Aid Reward Program 
     that, in the aggregate, exceed the Federal savings resulting 
     from implementation of the Student Aid Reward Program.
       ``(2) Federal savings.--In calculating Federal savings, as 
     used in paragraph (1), the Secretary shall determine Federal 
     savings on loans made to students at institutions of higher 
     education that participate the student loan program under 
     this title that is most cost-effective for taxpayers and 
     that, on the date of enactment of the Student Aid Reward 
     Program, participated in the student loan program that is not 
     the most cost-effective for taxpayers, resulting from the 
     difference of--
       ``(A) the Federal cost of loan volume made under the 
     student loan program under this title that is most cost-
     effective for taxpayers; and
       ``(B) the Federal cost of an equivalent type and amount of 
     loan volume made, insured, or guaranteed under the student 
     loan program under this title that is not the most cost-
     effective for taxpayers.
       ``(3) Distribution rules.--If the Federal savings 
     determined under paragraph (2) is not sufficient to 
     distribute full Student Aid Reward Payments under the Student 
     Aid Reward Program, the Secretary shall--
       ``(A) first make Student Aid Reward Payments to those 
     institutions of higher education that participated in the 
     student loan program under this title that is not the most 
     cost-effective for taxpayers on the date of enactment of the 
     Student Aid Reward Program; and
       ``(B) with any remaining Federal savings after making 
     Payments under subparagraph (A), make Student Aid Reward 
     Payments to the institutions of higher education not 
     described in subparagraph (A) on a pro-rata basis.
       ``(4) Distribution to students.--Any institution of higher 
     education that receives a Student Aid Reward Payment under 
     this section--
       ``(A) shall distribute, where appropriate, part or all of 
     such payment among the students of such institution who are 
     Pell Grant recipients by awarding such students a 
     supplemental grant; and
       ``(B) may distribute part of such payment as a supplemental 
     grant to graduate students in financial need.
       ``(5) Estimates, adjustments, and carry over.--
       ``(A) Estimates and adjustments.--The Secretary may make 
     Student Aid Reward Payments to institutions of higher 
     education on the basis of estimates, using the best data 
     available at the beginning of an academic/fiscal year. If the 
     Secretary determines thereafter that loan program costs for 
     that academic/fiscal year were different than such estimate, 
     the Secretary shall adjust (reduce or increase) subsequent 
     Student Aid Reward Payments rewards paid to such institutions 
     of higher education to reflect such difference.
       ``(B) Carry over.--Any institution of higher education that 
     receives a reduced Student Aid Reward Payment under paragraph 
     (3)(B), shall remain eligible for the unpaid portion of such 
     institution's financial reward payment, as well as any 
     additional financial reward payments for which the 
     institution is otherwise eligible, in subsequent academic or 
     fiscal years.
       ``(e) Definition.--For purposes of this section--
       ``(1) the student loan program under this title that is 
     most cost-effective for taxpayers is the loan program under 
     part B or D of this title that has the lowest overall cost to 
     the Federal Government (including administrative costs) for 
     the loans authorized by such parts; and
       ``(2) the student loan program under this title that is not 
     most cost-effective for taxpayers is the loan program under 
     part B or D of this title that does not have the lowest 
     overall cost to the Federal Government (including 
     administrative costs) for the loans authorized by such 
     parts.''.

     SEC. 203. AVIATION SECURITY SERVICE PASSENGER FEES.

       Section 44940 of title 49, United States Code, is amended--
       (1) in subsection (a)(1), by inserting ``in an amount equal 
     to $5.00 per one-way trip'' after ``uniform fee'';
       (2) by striking subsection (c); and
       (3) in subsection (d)--
       (A) in paragraph (2), by striking ``subsection (d)'' each 
     place it appears and inserting ``this subsection''; and
       (B) in paragraph (3), by striking ``in accordance with 
     paragraph (1)'' and inserting ``under subsection (a)(2)''.

     SEC. 204. EXTENSION OF FCC SPECTRUM AUCTION AUTHORITY.

       Section 309(j)(11) of the Communications Act of 1934 (47 
     U.S.C. 309(j)(11)) is amended by striking ``2011'' and 
     inserting ``2016''.

     SEC. 205. EXTENSION OF FEES FOR CERTAIN CUSTOMS SERVICES.

       Section 13031(j)(3)(A) and (B) of the Consolidated Omnibus 
     Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)(A) and 
     (B)) is amended by striking ``2014'' each place it appears 
     and inserting ``2016''.
                                 ______