[Congressional Record Volume 153, Number 10 (Thursday, January 18, 2007)]
[Senate]
[Pages S757-S763]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN:
  S. 334. A bill to provide affordable, guaranteed private health 
coverage that will make Americans healthier and can never be taken 
away; to the Committee on Finance.
  Mr. WYDEN. Mr. President, it has been more than a decade since the 
U.S. Senate last addressed fixing health care. I do not think it is 
morally right for the Senate to duck on health care any longer and that 
is why I am proposing legislation today to provide affordable, 
guaranteed, private health coverage for all Americans.
  The legislation, called the Healthy Americans Act, ensures care for 
the 46 million Americans who now live without health insurance, frees 
business owners from the skyrocketing costs of insuring their workers, 
and promises every American health care coverage that can never be 
taken away. My proposal is fully paid for, holds down health care cost 
growth in the future and provides coverage just like Members of 
Congress can get now.
  America spent $2.2 trillion on health care last year. 
PriceWaterhouseCoopers expects premiums will increase 11 percent this 
year alone and I believe the American health care system as we know it 
is not sustainable.
  Our current employer-sponsored health insurance system is a historic 
accident. In the 1940s, employers needed a way to attract workers as 
wage and price controls continued. Our country needs a uniquely 
American solution that works for an economy that is competing not just 
with the company across town but the company across the world. 
Americans need a health care system that works for individuals and 
families, and encourages people to stay healthy instead of only seeking 
care after they are sick.
  The Healthy Americans Act does this and more. It doesn't take long to 
explain how the Healthy Americans Act works. From the first day 
individuals, families and businesses win. The Healthy Americans Act 
cuts the link between health insurance and employment altogether. Under 
the Healthy Americans Act, businesses paying for employee health 
premiums are required to increase their workers' paychecks by the 
amount they spent last year on their health coverage. Federal tax law 
is changed to hold the worker harmless for the extra compensation, and 
the worker is required to purchase private coverage through an exchange 
in their State that forces insurance companies to offer simplified, 
standardized coverage, with benefits like a Member of Congress gets, 
and prohibits insurers from engaging in price discrimination.
  Requiring employers to cash out their health premiums, as I propose 
in the Healthy Americans Act, is good for both employers and workers. 
With health premiums going up 11 percent this year, employers are going 
to be glad to be exempt from these increases. With the extra money in 
their paycheck, workers have a new incentive to shop for their health 
care and hold down their cost. If a worker can save a few hundred 
dollars on their health care purchase, they can use that money for 
something else they need.
  In addition, the Healthy Americans Act is easy to administer and 
guarantees lifetime health security. Once you have signed up with a 
plan through an exchange in the State in which you live, that is it; 
you have completed the administrative process. Even if you lose your 
job or you go bankrupt, you can never have your coverage taken away. 
Sign up, and the premium you pay for the plan and all of the 
administrative activities are handled through the tax system. For those 
who cannot afford private coverage, the Healthy Americans Act 
subsidizes their purchases.
  Businesses that have not been able to afford health coverage for 
their workers, under the new approach, will pay a fee--one that is 
tiered to their size and revenue, with some paying as little as 2 
percent of the national average premium amount per worker for that 
basic benefit package.
  It will be easy to administer, locally controlled, with guaranteed 
coverage as good as your Member of Congress gets. The Lewin Group has 
costed out my proposal and reports that it is fully paid for and in 
addition to expanding coverage for millions of people, guaranteeing 
health benefits as good as their Member of Congress gets, it also saves 
$4.5 billion in health spending in the first year. Money is saved by 
reducing the administrative costs of insurance, reducing cost shifting, 
and preventing those needless hospital emergency room visits. Also, 
there are substantial incentives that come about because insurance 
companies would have to compete for the business of consumers, who 
would have a new incentive to hold down health costs.
  There are other parts of the Healthy Americans Act I wish to describe 
briefly. As the name of the legislation suggests, I believe strongly 
that fixing American health care requires a new ethic of health care 
prevention, a sharp new focus in keeping our citizens well, and trying 
to keep them from falling victim to skyrocketing rates of increase in 
diabetes, heart attack, and strokes.
  Spending on these chronic illnesses is soaring, and it is especially 
sad to see so many children and seniors fall victim to these diseases. 
Yet many Government programs and private insurance devote most of their 
attention to treating Americans after they are ill and give short 
shrift to wellness.

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  Under the Healthy Americans Act, there will be for the first time 
significant new incentives for all Americans to stay healthy. They are 
voluntary incentives, but ones that I think will make a real difference 
in building a national new ethic of wellness and health care 
prevention.
  Parents who enroll children in wellness programs will be eligible for 
discounts in their own premiums. Instead of mandating that parents take 
youngsters to various health programs--and maybe they do and maybe they 
don't--the Healthy Americans Act says when a parent takes a child to 
one of those wellness programs, the parent would be eligible to get a 
discount on the parent's health premiums.
  Under the Healthy Americans Act, employers who financially support 
health care prevention for their workers get incentives for doing that 
as well. Medicare is authorized to reduce outpatient Part B premiums so 
as to reward seniors trying to reduce their cholesterol, lose weight, 
or decrease the risk of stroke. It has never been done before. For 
example, Part B of Medicare, the outpatient part, doesn't offer any 
incentives for older Americans to change their behavior. Everybody pays 
the same Medicare Part B premium right now. The Healthy Americans Act 
proposes we change that and ensures that if a senior from Virginia or 
Oregon or elsewhere is involved in a wellness program, in health care 
prevention efforts, like smoking cessation, they could get a lower Part 
B premium for doing that.
  The preventive health efforts I have described are promoted through 
new voluntary incentives under the Healthy Americans Act, not heavy-
handed mandates. What this legislation says is--let's make it more 
attractive for people to stay healthy and change their behaviors to 
promote the kind of wellness practices we all know we should do but 
need an incentive to follow.
  Finally, and most importantly, the Healthy Americans Act does not 
harm those who have coverage in order to help those who have nothing. 
The legislation makes clear that all Americans retain the right to 
purchase as much health care coverage as they want. All Americans will 
enjoy true health security with the Healthy Americans Act, a lifetime 
guarantee of coverage at least as good as their Member of Congress 
receives.
  A recent ``Health Affairs'' article pointed out that more than half 
of the Nation's uninsured are ineligible for public programs such as 
Medicaid, but do not have the money to purchase coverage for 
themselves.
  At present, for most poor people to receive health benefits, they 
have to go out and try to squeeze themselves into one of the categories 
that entitles them to care. Under the Healthy Americans Act, low-income 
people will receive private health coverage, coverage that is as good 
as a Member of Congress gets, automatically. Like everyone else, they 
will sign up through the exchange in their State. When they are 
working, the premiums they owe are withheld from their paycheck. If 
they lose their job, there is an automatic adjustment in their 
withholding.
  In addition, under the Healthy Americans Act, it will be more 
attractive for doctors and other health care providers to care for the 
poor. Those who are now in underfunded programs, such as Medicaid, are 
going to be able to have private insurance that pays doctors and other 
providers commercial rates which are traditionally higher than Medicaid 
reimbursement rates.
  Because low-income children and the disabled are so vulnerable, if 
Medicaid provides benefits that are not included in the kind of package 
Members of Congress get, then those low-income folks would be entitled 
to get the additional benefits from the Medicaid Program in their 
State.
  The Healthy Americans Act also makes changes in Medicare. As the 
largest Federal health program, Medicare's financial status is far more 
fragile than Social Security. Two-thirds of Medicare spending is now 
devoted to about 5 percent of the elderly population. Those are the 
seniors with chronic illness and the seniors who need compassionate 
end-of-life health care. The Healthy Americans Act strengthens Medicare 
for both seniors and taxpayers in both of these areas.
  In addition to reducing Medicare's outpatient premiums for seniors 
who adopt healthy lifestyles and reduce the prospect of chronic 
illness, primary care reimbursements for doctors and other providers 
get a boost under the Healthy Americans Act. Good primary care for 
seniors also reduces the likelihood of chronic illness that goes 
unmanaged. This reimbursement boost is sure to increase access to care 
for seniors--and I see them all over, in Oregon and elsewhere--who are 
having difficulty finding doctors who will treat them.
  To better meet the needs of seniors suffering from multiple chronic 
illnesses, the Healthy Americans Act promotes better coordination of 
their care by allowing a special management fee to providers who better 
assist seniors with these especially important services.
  Hospice law is changed so that seniors who are terminally ill do not 
have to give up care that allows them to treat their illness in order 
to get the Medicare hospice benefit. In addition, the Healthy Americans 
Act empowers all our citizens wishing to make their own end-of-life 
care decisions. The legislation requires hospitals and other facilities 
to give patients the choice of stating in writing how they would want 
their doctor and other health care providers to handle various end-of-
life care decisions.
  When I announced the Healthy Americans Act last December, I stood 
with an unprecedented coalition of labor and business. Andy Stern, 
president of SEIU said ``It is time for fundamental, not incremental 
change and Senator Wyden has a plan that is practical and principle, 
and sets down a moral test'' 'Why doesn't every American have the right 
to the same health care as the President, the Vice President, 535 
members of Congress and 3 million Federal workers?' '' Steve Burd, the 
CEO of Safeway, a Fortune 50 company that has focused on prevention and 
wellness, called the Healthy Americans Act ``an innovative proposal 
that lays a foundation to begin a serious discussion on health care 
reform in this country.''
  Ron Pollack of Families USA, listed the principles embodied in the 
Healthy Americans Act that he believes are important: universality; 
subsides to make the coverage affordable; community rating rules so the 
sicker and older are not priced out of the market; and benefits like a 
Member of Congress has today.
  Also at my press conference was Mike Roach, of Portland, OR, a 30-
year member of National Federation of Independent Businesses. He owns a 
clothing store in Portland and employs eight people. He believes the 
Healthy Americans Act will help him attract good employees. And Bob 
Beal, president of Oregon Iron Works, an Oregon-based company that 
competes internationally, believes that we must also address the 
skyrocketing health care costs that make it harder for companies like 
his in the international market place.

  Like me, the people who stood by me when I announced the Healthy 
Americans Act believe we need to move the health care debate forward 
and cannot afford to let more time to go by. The last time Congress 
took a serious look at reforming health care, there wasn't anything 
resembling this kind of coalition of labor, business, low-income and 
end-of-life advocates standing together to call for action.
  In tackling one-seventh of the economy, invariably technical issues 
arise. I want to thank many people who have assisted along the way. Len 
Nichols of the New America Foundation sent me e-mails at 2 in the 
morning that helped refine provisions. John Sheils, Randy Haught and 
Evelyn Murphy of the Lewin Group assisted in telling us our numbers 
worked or didn't. The Congressional Research Service staff followed up 
on questions from the common to the obscure. That group included: Bob 
Lyke, Jeanne Hearne, April Grady, Julie Whitaker, Christine Scott, 
Chris Peterson, Richard Rimkunas, Karen Trintz, Julie Stone and Andrew 
Sommers. The Senate Legislative Counsel staff translated the ideas and 
concepts into legislative language. They devoted an enormous amount of 
time in getting the ideas and the language right. I'd like to thank 
Mark Mathiesen, Mark McGunagle, Bill Baird, John Goetcheus, Stacy Kern-
Sheerer, Kelly

[[Page S759]]

Malone and Ruth Ernest for their patience and extraordinary effort.
  On my staff, Joshua Sheinkman, my legislative director and Jeff 
Michaels, my administrative assistant, were instrumental in completing 
the tax and business sections of the bill. Emily Katz who started in my 
office as a legislative fellow and became a permanent part of the Wyden 
health team made sure we had credible facts and statistics. Last but 
not least, I would like to thank Stephanie Kennan, my Senior Health 
Policy Adviser for the last 9 years who played devil's advocate, worked 
through the conflicting and evolving ideas, and kept the many threads 
of the bill working together.
  The full text of the Healthy Americans Act and the Lewin analysis are 
available on my Web site.
  In closing, I believe that without your health, you don't get to the 
starting line of life. For too long, the Congress has dodged the debate 
and chosen to slice off parts of the issue. And as worthy as those past 
efforts have been to help certain segments of our citizens, all 
Americans deserve guaranteed coverage like their Member of Congress, 
and no one should go to bed at night worrying about losing their health 
care. It is time for Congress to provide 21st century solutions to one 
of the most important issues our country must address. The Healthy 
Americans Act starts that debate.
  I ask unanimous consent, that the Healthy Americans Act section-by-
section summary, and examples of how the legislation would affect 
individuals and families and employers be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

              The Healthy Americans Act Section by Section

       Section 1-- Short Title and Table of Contents
       Section 2--Findings
       Section 3--Definitions


           TITLE I: HEALTHY AMERICANS PRIVATE INSURANCE PLANS

                Subtitle A--Guaranteed Private Coverage

       Section 101: Guarantee of Healthy Americans Private 
     Insurance Coverage: Within 2 years of enactment States must 
     create a system as outlined in the bill to provide 
     individuals the opportunity to purchase a Healthy Americans 
     Private Insurance (HAPI) plan that meets the requirements of 
     the Act.
       Section 102: Individual Responsibility to Enroll: Adults 
     (over age 19, U.S. citizens, not incarcerated) must enroll 
     themselves and dependent children in a plan offered through 
     the state-wide Health Help Agency (HHA) unless they provide 
     evidence of enrollment or coverage through Medicare, a health 
     insurance plan offered by the Department of Defense, an 
     employee benefit plan through a former employer (i.e. retiree 
     health plans), a qualified collective bargaining agreement, 
     the Department of Veterans Affairs, or the Indian Health 
     Service.
       Religious Exemption: If a person opposes for religious 
     reasons to purchasing health insurance the requirement may be 
     waived.
       Dependent Children: Each adult has the responsibility to 
     enroll each child in a plan. Dependent children include 
     individuals up to age 24 claimed by their parents for 
     deductions in the tax code.
       Penalty for Failure to Purchase Coverage: If an individual 
     fails to purchase coverage and does not meet the exceptions 
     or the religious exemption, then a financial penalty will be 
     assessed. The penalty is calculated by multiplying the number 
     of uncovered months times the weighted average of the monthly 
     premium for a plan in the person's coverage class and 
     coverage area, plus 15 percent. Payments will be made to the 
     HHA of the State in which the person resides. That agency 
     also may establish a procedure to waive the penalty if the 
     penalty poses a hardship. Each State shall determine 
     appropriate mechanisms to enforce the requirement that 
     individuals be enrolled, but the enforcement cannot be the 
     revocation or ineligibility of coverage.

 Subtitle B--Standards for Healthy Americans Private Insurance Coverage

       Section 111: Healthy Americans Private Insurance Plans: At 
     least two plans that meet the requirements of the Act must be 
     offered through the Health Help Agency in each State. The 
     offerings permitted through Health Help include several 
     options: (1) a plan similar to the Blue Cross Blue Shield 
     Standard Plan provided under the Federal Employees Health 
     Benefit Program as of January 1, 2007; (2) plans with 
     additional benefits added to the standard plan so long as 
     those benefits are priced and displayed separately; and (3) 
     actuarial equivalent plans to the standard plan. In addition, 
     plans must provide benefits for wellness programs; incentives 
     to promote wellness; provide coverage for catastrophic 
     medical events resulting in the exhaustion of lifetime 
     limits; create a health home for the covered individual or 
     family; ensure that as part of a first visit with a primary 
     care physician, a care plan is developed to maximize the 
     health of the individual through wellness and prevention 
     activities; provide for comprehensive disease prevention, 
     early detection and management; and provide for personal 
     responsibility contributions at the time services are 
     administered except for preventive items or services for 
     early detection.
       Family Planning: A health insurance issuer must make 
     available supplemental coverage for abortion services that 
     may be purchased in conjunction with a HAPI plan or an 
     actuarially equivalent HAPI.
       Actuarial Equivalent Plans: Actuarial equivalent plans have 
     to have a set of core benefits that include preventive items 
     and services; inpatient and outpatient hospital services; 
     physicians' surgical and medical services; and laboratory and 
     X-ray services. Like the other HAPI plans, actuarial 
     equivalent plans cannot charge copays for prevention and 
     chronic disease management items or services.
       Coverage Classes: There will be the following coverage 
     classes: (1) individual; (2) married couple or domestic 
     partnership (as determined by a State) without dependent 
     children; (3) coverage of an adult individual with 1 or more 
     dependent children; (4) coverage of a married couple or 
     domestic partnership as determined by a State with one or 
     more dependent children.
       Premium Determinations: Community rating or adjusted 
     community rating principles established by the State will be 
     used. States may permit premium variations based only on 
     geography, smoking status, and family size. States may 
     determine to have no variations.
       A State shall permit a health insurance issuer to provide 
     premium discounts and other incentives to enrollees based on 
     participation in wellness, chronic disease management, and 
     other programs designed to improve the health of 
     participants.
       Limitations: Age, gender, industry, health status or claims 
     experience may not be used to determine premiums.
       Section 112: Specific Coverage Requirements: This section 
     requires existing provisions of law currently applied to 
     group health markets to be applied to the plans offered 
     through Health Help Agencies including: protections for 
     coverage of pre-existing conditions; guaranteed availability 
     of coverage; guaranteed renewability of coverage; prohibition 
     of discrimination based on health status; coverage 
     protections for mothers and newborns, mental health parity, 
     and reconstructive surgery following a mastectomy; and 
     prohibition of discrimination on the basis of genetic 
     information.
       This section also states that a HAPI plan shall not 
     establish rules for eligibility for enrollment based on 
     genetic information, and premiums and personal responsibility 
     payments cannot be adjusted based on genetic information. A 
     plan cannot request or require an individual to have a 
     genetic test.
       Section 113: Updating Healthy Americans Private Insurance 
     Plan Requirements: The Secretary of Health and Human Services 
     (HHS) shall create a 15-person advisory committee that will 
     report annually to Congress and the Secretary concerning 
     modifications to benefits, items and services. The committee 
     members will include a health economist; an ethicist; health 
     care providers including nurses and other non-physician 
     providers; health insurance issuers; health care consumers; a 
     member of the U.S. Preventive Services Task Force; and an 
     actuary.

    Subtitle C--Eligibility for Premium and Personal Responsibility 
                         Contribution Subsidies

       Section 121: Eligibility for Premium Subsidies: Individuals 
     and families with modified adjusted gross incomes of 100% of 
     poverty ($9,800 individual, $20,000 for a family of four) and 
     below will be eligible for a full subsidy with which to 
     purchase health insurance. For individuals and families with 
     income between 100% of poverty and 400% of poverty ($39,200 
     for an individual, $52,800 for a couple and $80,000 for a 
     family of four), subsidies will be provided on a sliding 
     scale.
       [Note: To calculate the subsidy level, the individual or 
     family would first subtract the health deductions and a 
     deduction for children in the family to determine the 
     modified adjusted gross income. See deductions in Section 
     664.]
       Individuals have 60 days to notify the HHA that there has 
     been a change in income which may make them eligible or 
     ineligible for the subsidy. States may also develop other 
     mechanisms to ensure individuals do not have a break in 
     coverage due to a catastrophic financial event.
       Section 122: Eligibility for Personal Responsibility 
     Contribution Subsidies:
       Full subsidy: Individuals who have a modified adjusted 
     gross income below 100 percent of poverty will receive a 
     subsidy amount equal to the full amount of any personal 
     responsibility contributions.
       Partial subsidy: For individuals with modified adjusted 
     gross incomes at or above 100 percent of poverty an HHA may 
     provide a subsidy equal to the amount of any personal 
     responsibility contributions the person incurs.
       Section 123: Definitions and Special Rules:
       The term modified adjusted gross income means adjusted 
     gross income as defined in the Internal Revenue Code 
     increased by the amount of interest received during the year 
     and the amount of any Social Security benefits received 
     during the taxable year.
       Taxable year to be used to determine modified adjusted 
     gross income is determined by the individual's most recent 
     income tax return and other information the Secretary may 
     require.

[[Page S760]]

       Poverty Line is the meaning given in the Community Health 
     Services Block Grant.
       The Secretary shall promulgate regulations to be used by 
     the HHAs to calculate premium subsides and personal 
     responsibility subsidies for individuals whose modified 
     adjusted gross income is significantly lower than for the 
     previous year being used to calculate the premium subsidy.
       Special Rule for Unlawfully Present Aliens: Subsidies may 
     not go to adult illegal aliens.
       Special Rule for Aliens: If an alien owes either a premium 
     payment or a penalty, the alien's visa may not be renewed or 
     adjusted.
       Bankruptcy: Debts created by failing to pay premiums are 
     not dischargeable through bankruptcy.

                     Subtitle D--Wellness Programs

       Section 131: Requirements for Wellness Programs:
       Defining Wellness: Wellness programs must consist of a 
     combination of activities designed to increase awareness, 
     assess risks, educate and promote voluntary behavior change 
     to improve the health of an individual, modify his or her 
     consumer health behavior, enhance his or her personal well-
     being and productivity, and prevent illness and injury.
       Discounts on premiums: Individuals who participate 
     successfully in approved wellness programs are eligible for a 
     discounted premium, including rewarding parents if their 
     child participates in an approved wellness program. 
     Determinations concerning successful participation by an 
     individual in a wellness program shall be made by the plan 
     based on a retrospective review of the activities the 
     individual participated in and the plan may require a 
     minimum level of successful participation.
       A plan may choose to provide discounts on personal 
     responsibility contributions.
       Wellness programs approved by the insurer must be offered 
     to all enrollees and permit enrollees an opportunity to meet 
     a reasonable alternative participation standard if it is 
     medically inadvisable to attempt to meet the initial program 
     standard. Participation in wellness programs cannot be used 
     as a proxy for health status.
       To be an approved wellness program, the program must be 
     designed to promote good health and prevent disease, is 
     approved by the HAPI plan, and is offered to all enrollees.
       Employers may deduct the costs of offering wellness 
     programs or worksite health centers.


                  TITLE II: HEALTHY START FOR CHILDREN

                  Subtitle A--Benefits and Eligibility

       Section 201: General Goal and Authorization of 
     Appropriations for HAPI Plan Coverage for Children: The 
     general goal of Healthy Start is to ensure all children 
     receive health coverage that is good quality, affordable and 
     includes prevention-oriented benefits.
       Funds needed for this section are to be appropriated.
       If a child is in a family with an income of 300% or below 
     and the child does not have coverage, Healthy Start shall 
     ensure the child is enrolled in a plan. The States and 
     insurers shall create a separate class of coverage for 
     children not enrolled in a plan by an adult. A child is 
     defined as those under the age of 18 or in the case of foster 
     care, under the age of 21.
       Section 202: Coordination of Supplemental Coverage under 
     the Medicaid Program to HAPI Plan Coverage for Children: If a 
     child was receiving services through Medicaid that are not 
     offered through the private coverage offered through Health 
     Help, Medicaid will continue to provide that assistance. This 
     includes Early Periodic Screening Diagnosis and Treatment 
     (EPSDT) services.

                     Subtitle B--Service Providers

       Section 211: Inclusion of Providers under HAPI Plans: 
     Children receiving care though school based health centers, 
     other centers funded through Public Health Service Act, rural 
     health clinics or an Indian Health Service facility will be 
     provided services at no cost or HAPI plans will reimburse the 
     providers for the services.
       Section 212: Use of, and Grants for, School Based Health 
     Centers: Creates and defines school based health centers and 
     provides for grants to develop more school based health 
     centers.
       School based health centers must be located in elementary 
     or secondary schools, operated in collaboration with the 
     school in which the center is located; administered by a 
     community-based organization including a hospital, public 
     health department, community health center, or nonprofit 
     health care agency. The school based health center must 
     provide primary health care services including health 
     assessments, diagnosis and treatment of minor acute or 
     chronic conditions and Healthy Start benefits; and mental 
     health services. Services must be available when the school 
     is open and through on call coverage. Services are to be 
     provided by appropriately credentialed individuals including 
     nurse practitioner, physician assistant, a mental health 
     professional, physician or an assistant. Centers must use 
     electronic medical records by January 1, 2010. In addition, 
     the centers may also provide preventive dental services 
     consistent with State licensure law through dental hygienists 
     or dental assistants.
       School based health centers may provide services to 
     students in more than one school if it is determined to be 
     appropriate.
       A parent must give permission for the child to receive care 
     in a school based health center. Centers may seek 
     reimbursement from a third party payer including HAPI plans. 
     Funds received from third party payer reimbursement shall be 
     allocated to the center in which the care was provided.
       Development Grants: The Secretary shall provide grants to 
     local school districts and communities for the establishment 
     and operation of school based health centers. The Secretary 
     shall give priority to applicants who will establish a school 
     based health center in medically underserved areas or areas 
     for which there are extended distances between the school 
     involved and appropriate providers of care for children; 
     services students with the highest incidence of unmet medical 
     and psycho social needs; and can demonstrate that funding 
     state, local or community partners have provided at least 50 
     percent of the funding for the center to ensure the ongoing 
     operation of the center.
       Federal Tort Claims Act: A health care provider shall have 
     malpractice coverage through the Federal Tort Claims Act for 
     services provided through a school based health center.


       TITLE III: BETTER HEALTH FOR OLDER AND DISABLED AMERICANS

        Subtitle A--Assurance of Supplemental Medicaid Coverage

       Section 301: Coordination of Supplemental Coverage under 
     the Medicaid Program for Elderly and Disabled Individuals: 
     The Secretary shall provide guidance to States and insurers 
     that takes into account the specific health care needs of 
     elderly and disabled individuals who receive Medicaid 
     benefits so that Medicaid may provide services not 
     provided by HAPI plans.

Subtitle B--Empowering Individuals and States To Improve Long-Term Care 
                                Choices

       Section 311: New, Automatic Medicaid Option for State 
     Choices for Long-Term Care: If a State decides to do a waiver 
     similar to the Vermont waiver which allows individuals to 
     have access to home and community based services, so long as 
     the State meets criteria specified, the State may 
     automatically implement the program.
       Section 312: Simpler and More Affordable Long-Term Care 
     Insurance Coverage: This section creates Medigap-like models 
     for tax qualified long term care policies and adds additional 
     consumer protections.
       A Qualified Long Term Care Plan is a plan that meets the 
     standards and requirements developed by either the National 
     Association of Insurance Commissioners (NAIC) or by federal 
     regulations.
       Development of Standards and Requirements: Within 9 months 
     after the date of enactment, the NAIC should adopt a model 
     regulation to regulate limitations on the groups or packages 
     of benefits that may be offered under a long term care 
     insurance policy; uniform language and definitions; uniform 
     format to be used in the policy with respect to benefits; and 
     other standards required by the Secretary of HHS.
       If NAIC does not adopt a model regulation with the 9-month 
     period, the Secretary shall promulgate regulations within 9 
     months that do the same as the above section. In developing 
     standards and requirements, the Secretary shall consult with 
     a working group of representatives of long term care 
     insurers, beneficiaries and consumer groups, and other 
     individuals.
       Limitations on Groups and Packages of Benefits: The model 
     regulation or federal regulation shall provide for the 
     identification of a core group of basic benefits common to 
     all policies and the total number of different benefit 
     packages and combination of benefits that maybe offered as a 
     separate benefit package may not exceed 10.
       The objectives that need to be balanced in developing the 
     packages are: to simplify the market to facilitate 
     comparisons among policies; avoiding adverse selection; 
     provide consumer choice; provide market stability and promote 
     competition.
       The requirements would go into effect no later than one 
     year after the date NAIC or the Secretary adopts the 
     standards.
       Required State Legislation: State legislatures would adopt 
     the standards.
       Additional Consumer Protections: This section amends the 
     1993 NAIC model regulation and model Act to require 
     additional consumer protections for qualified long term care 
     policies concerning, guaranteed renewal or noncancelability; 
     prohibitions on limitations and exclusions, continuation or 
     conversion of coverage, unintentional lapse, probationary 
     periods, preexisting conditions, and other issues.
       Any person selling a long term care insurance policy shall 
     make available for sale a policy with only the core group of 
     basic benefits.


                      TITLE IV: HEALTHIER MEDICARE

  Subtitle A--Authority To Adjust Amount of Part B Premium To Reward 
                        Positive Health Behavior

       Section 401: Authority to Adjust Amount of Medicare Part B 
     Premium to Reward Positive Health Behavior: The Secretary may 
     adjust Part B premiums for an individual based on whether or 
     not the individual participates in healthy behaviors, 
     including weight management, exercise, nutrition counseling, 
     refraining from tobacco use, designating a health home, and 
     other behaviors determined appropriate by the Secretary. In 
     adjusting the Part B premium, the Secretary

[[Page S761]]

     must ensure budget neutrality and the aggregate must be equal 
     to 25 percent of premium paid (as in current law).

     Subtitle B--Promoting Primary Care for Medicare Beneficiaries

       Section 411: Primary Care Services Management Payment: This 
     section requires the Secretary to create a primary care 
     management fee for providers who are designated the health 
     home of a Medicare beneficiary and who provide continuous 
     medical care, including prevention and treatment, and 
     referrals to specialists. This section is cross referenced in 
     the chronic care disease management section so that primary 
     care physicians providing chronic disease management may 
     receive the primary care services management fee for those 
     services. The amount of the payment will be determined by the 
     Secretary in consultation with MedPAC.
       Requirement for Designation as a Health Home: The 
     management fee shall be provided if the beneficiary has 
     designated the provider as a health home. A health home is a 
     provider that a Medicare beneficiary has designated to 
     monitor the health and health care of the senior.

              Subtitle C--Chronic Care Disease Management

       Section 421: Chronic Care Disease Management: This section 
     requires Medicare to have a chronic disease management 
     program available to all Medicare beneficiaries no later than 
     January 1, 2008. The program must cover the 5 most prevalent 
     diseases. Physicians who are not primary care providers, but 
     do provide chronic disease management may receive an 
     additional payment for providing chronic disease management. 
     The fee will be determined by the Secretary in consultation 
     with MedPAC.
       The Secretary shall establish procedures for identifying 
     and enrolling Medicare beneficiaries who may benefit from 
     participation in the program.
       Section 422: Chronic Care Education Centers: This section 
     creates Chronic Care Education Centers to serve as 
     clearinghouses for information on health care providers who 
     have expertise in the management of chronic disease.

               Subtitle D--Part D Improvements Chapter 1

       Section 431: Negotiating Fair Prices for Medicare 
     Prescription Drugs (based on Snowe-Wyden MEND bill): This 
     section provides the Secretary with authority to negotiate 
     prices with manufacturers of prescription drugs. The 
     Secretary must negotiate for fall back plans and if a plan 
     requests assistance. However, the authority to negotiate is 
     not limited to these two scenarios. Specifies no uniform 
     formulary or price setting is permitted. Savings are to go 
     towards filling the coverage gap or deficit reduction.
       Section 432: Process for Individuals Entering the Medicare 
     Coverage Gap to Switch to a Plan that Provides Coverage in 
     the Gap (based on Snowe-Wyden Lifeline Act to permit people 
     to change plans if they hit the donut hole): Permits 
     individuals to change plans if they hit the coverage gap. In 
     addition, the section requires the Secretary to notify 
     individuals they are getting close to the coverage gap and 
     what their options are. This provision would sunset 5 years 
     after enactment.

      Subtitle E--Improving Quality in Hospitals for All Patients

       Section 441: Improving Quality in Hospitals for All 
     Patients: Within 2 years after enactment, hospitals must 
     demonstrate to accrediting bodies improvements in quality 
     control that include: rapid response teams; heart attack 
     treatments; procedures that reduce medication errors; 
     infection prevention; procedures that reduce the incidence of 
     ventilator-related illnesses; and other elements the 
     Secretary wishes to add.
       Within 2 years after enactment, the Secretary shall convene 
     a panel of independent experts to ensure hospitals have state 
     of the art quality control that is updated on an annual 
     basis.

               Subtitle F--End-of-Life Care Improvements

       Section 451: Patient Empowerment and Following a Patient's 
     Health Care Wishes: Within 2 years after enactment, health 
     care facilities receiving Medicare funds must provide each 
     patient with a document designed to promote patient autonomy 
     by documenting the patient's treatment preferences and 
     coordinating these preferences with physician orders. The 
     document must transfer with the patient from one setting to 
     another; provide a summary of treatment preferences in 
     multiple scenarios by the patient or the patient's guardian 
     and a physician or other practitioner's order for care; is 
     easy to read in an emergency situation; reduces repetitive 
     activities in complying with the Patient Self Determination 
     Act; ensures that the use of the document is voluntary by the 
     patient or the patient's guardian; is easily accessible in 
     the patient's medical chart and does not supplant State 
     health care proxy, living wills or other end-of-life care 
     forms.
       Section 452: Permitting Hospice Beneficiaries to Receive 
     Curative Care: Changes the current Medicare requirement that 
     to choose hospice an individual must give up curative care. 
     Instead, an individual may continue curative care while 
     receiving hospice.
       Section 453: Providing Beneficiaries with Information 
     Regarding End-of-Life Care Clearinghouse: When signing up for 
     Medicare, the Secretary shall refer people to the 
     clearinghouse described in this Act.
       Section 454: Clearinghouse: The Secretary shall establish a 
     national toll-free information clearinghouse that the public 
     may access to find out State-specific information regarding 
     advance directives and end-of-life care decisions. If such a 
     clearinghouse exists and is administered by a not-for-profit 
     organization the Secretary must support that clearinghouse 
     instead of creating a new one.

                   Subtitle G--Additional Provisions

       Section 461: Additional Cost Information: The Secretary of 
     HHS shall require Medicare Advantage Organizations to 
     aggregate claims information into episodes of care and to 
     provide the information to the Secretary so costs for 
     specific hospitals and physicians may be measured and 
     compared. The Secretary shall make the information public on 
     an annual basis.
       Section 462: Reducing Medicare Paperwork and Regulatory 
     Burdens: Not later than 18 months after the date of 
     enactment, the Secretary shall provide to Congress a plan for 
     reducing regulations and paperwork in the Medicare program. 
     The plan shall focus initially on regulations that do not 
     directly enhance the quality of patient care provided under 
     Medicare.


                  title v: state health help agencies

       Section 501: Establishment: Each state will establish a 
     Health Help Agency to administer HAPI plans. States must 
     establish an HHA in order to get transition payments to 
     develop them.
       Section 502: Responsibilities and Authorities: Health Help 
     Agencies shall promote prevention and wellness through 
     education; distribution of information about wellness 
     programs; making available to the public the number of 
     individuals in each plan that have chosen a health home; and 
     promoting the use and understanding of health information 
     technology.
       Enrollment Oversight: Each HHA shall oversee enrollment in 
     plans by: providing standardized unbiased information on 
     plans available; administering open enrollment periods; 
     assisting changes required by birth, divorce, marriage, 
     adoption or other circumstances that may affect the plan a 
     person chooses; establishing a default enrollment process; 
     establishing procedures for hospitals and other providers 
     to report individuals not enrolled in a plan; ensuring 
     enrollment of all individuals; developing standardized 
     language for plan terms and conditions to be used; 
     providing enrollees with a comparative document of HAPI 
     plans; and assisting consumers in choosing a plan by 
     publishing loss ratios, outcome data regarding wellness 
     programs, and disease detection and chronic care 
     management programs categorized by health insurer.
       The HHA will determine and administer subsidies to eligible 
     individuals and collect premium payments made by or on behalf 
     of individuals and send the payments to the plans.
       HHAs shall empower individuals to make health care 
     decisions by providing State-specific information concerning 
     the right to refuse treatment and laws relating to end-of-
     life care decisions; and by providing access to State forms.
       Each HHA will establish plan coverage areas for the State.
       States that share one or more metropolitan statistical 
     areas may enter into agreements to share responsibilities for 
     administration.
       States will have to work with the Secretary of HHS to 
     ensure transition from Medicaid and SCHIP is orderly and that 
     individuals receiving other benefits from Medicaid continue 
     to do so.
       Section 503: Appropriations for Transition to State Health 
     Help Agencies: States will receive federal funds to establish 
     HHAs for two full fiscal years. States may assess insurers 
     for administrative costs of running their HHAs.


                   TITLE VI--SHARED RESPONSIBILITIES

                Subtitle A--Individual Responsibilities

       Section 601: Individual Responsibility to Ensure HAPI Plan 
     Coverage: Individuals must enroll themselves and their 
     children in a plan during open enrollment periods; submit 
     documentation to the HHA to determine premium and personal 
     responsibility contribution subsidies; pay the required 
     premium and personal responsibility contributions; and inform 
     the HHA of any changes that affect family status or 
     residence.

                 Subtitle B--Employer Responsibilities

       Section 611: Health Care Responsibility Payments: Reorders 
     and changes the IRS code.

         Subchapter A: Employer Shared Responsibility Payments

       Section 3411: Payment Requirement: Employer Shared 
     Responsibility Payments: Every Employer must make an employer 
     shared responsibility payment (ESR) for each calendar year in 
     the amount equal to the number of full time equivalent 
     employees employed by the employer during the previous year 
     multiplied by a percentage of the average HAPI plan premium 
     amount. The percentage used is determined by size and revenue 
     per employee.
       Once in effect, the percentages employers would pay are:
       Large employers:
       0-20th percentile 17%
       21st-40th percentile 19%
       41st-60th percentile 21%
       61st-80th percentile 23%
       81st-99th percentile 25%
       Small employers:
       0-20th percentile 2%
       21st-40th percentile 4%

[[Page S762]]

       41st-60th percentile 6%
       61st-80th percentile 8%
       81st-99th percentile 10%
       At the beginning of each calendar year, the Secretary in 
     consultation with the Secretary of Labor shall publish a 
     table based on a sampling of employers to be used in 
     determining the national percentile for revenue per employee 
     amounts.
       Transition Rates: Employers who offered health insurance 
     prior to enactment will contribute ``make good'' payments to 
     their employees. The payments will be equal to the cash value 
     of the health insurance provided and the amount will be added 
     to the employee's wages. These employers will not be required 
     to make any other payments in the first two years.
       If an employer did not provide health insurance to 
     employees prior to this legislation, the employer shared 
     responsibility payment for the first year will be equal to 
     one-third of the amount otherwise required and the payment 
     for the second year will be two thirds of the amount 
     required.
       Employer Shared Responsibility Credit: The Secretary may 
     provide a credit to private employers who provided health 
     insurance benefits greater than the 80th percentile of the 
     national average in the 2 years prior to enactment, can 
     demonstrate the benefits provided encouraged prevention and 
     wellness activities and continue to provide wellness 
     programs.
       Section 3412: Instrumentalities of the United States: State 
     and local governments must make employer shared 
     responsibility payments.

        Subchapter B: Individual Shared Responsibility Payments

       Section 3421: Amount of Payment: Every individual shall pay 
     an amount equal to the premium amount they owe.
       Section 3422: Deduction of Individual Shared Responsibility 
     Payment from Wages: Employers may deduct the amount of the 
     payment for premiums from their employees' wages.

                    Subchapter C: General Provisions

       Section 3431: Definitions and Special Rules: Provides 
     definitions.
       The average HAPI plan premium used to compute employer 
     responsibility payments will be a simple average of all four 
     premium classes (individuals, married, head of household and 
     family)
       All individuals who perform work for an employer for more 
     than three months in the previous calendar year and who meet 
     the definition of common law employee, either full or part 
     time, will be counted toward the employer's total employees 
     when determining the employer shared responsibility payments.
       Section 3431: Definitions and Special Rules: Provides 
     definitions
       Section 3432: Labor Contracts: In general these provisions 
     do not apply to collective bargaining agreements until the 
     earlier of 7 years after the date of enactment or the date 
     the collective bargaining agreement expires.
       Section 612: Distribution of Individual Responsibility 
     Payments to HHAs: The Treasury will provide to each HHA an 
     amount equal to the amount of individual shared 
     responsibility payments made through the tax code by each 
     eligible individual.

                  Subtitle C--Insurer Responsibilities

       Section 621: Insurer Responsibilities: To offer a HAPI plan 
     through an HHA, insurers will be required to: implement and 
     emphasize prevention, early detection and chronic disease 
     management; ensure wellness programs are available; 
     demonstrate how provider reimbursement methodology achieves 
     quality and cost efficiency; ensure a physical and a care 
     plan are available to the individual; ensure enrollees have 
     the opportunity to designate a health home and make public 
     how many enrollees have designated a health home; create a 
     medical record if the patient wants one; comply with loss 
     ratios established; use common claims form and billing 
     practices; make administrative payments the State requires 
     for the operation of its HHA; provide discounts and 
     incentives for the parent if the child participates in a 
     wellness program; report outcome data on wellness programs, 
     disease detection and chronic care management, and loss ratio 
     information; send large hospital bills to patients with a 
     contact name so the patient can contact a person to discuss 
     questions or complaints; and provide HHA with information 
     concerning the plans offered.
       Insurers must use standardized common claim forms 
     prescribed by the State HHA chronic care programs offered 
     must help provide early identification and management. Each 
     program will use a uniform set of clinical performance 
     standards.
       Insurers must report performance and outcomes of chronic 
     care management programs and loss ratios. Loss ratios will be 
     defined by the Secretary in consultation with NAIC, 
     consumers, and insurers.
       Defines administrative expenses as including all taxes, 
     reinsurance premiums, medical and dental consultants used in 
     the adjudication process, concurrent or managed care review 
     when not billed by a health provider and other forms of 
     utilization review, the cost of maintaining eligibility 
     files, legal expenses incurred in the litigation of benefit 
     payments and bank charges for letters of credit.
       The cost of personnel, equipment and facilities directly 
     used in the delivery of health care services, payments to 
     HHAs and the cost of overseeing chronic disease management 
     programs and wellness programs are not included in the 
     definition of administrative costs.

                   Subtitle D--State Responsibilities

       Section 631: State Responsibilities: States must: designate 
     or create a Health Help Agency; ensure HAPI plans are sold 
     through the HHA and comply with requirements (there must be 
     at least two HAPI plans offered); develop mechanisms for 
     enrollment and the collection of premiums; ensure enrollment 
     and develop methods to check on enrollment status; implement 
     mechanisms to enforce the individual responsibility to 
     purchase coverage (but this may not include revocation of 
     insurance); and implement a way to automatically enroll 
     individuals who are not covered and seek care in emergency 
     departments.
       States will continue to apply State law on consumer 
     protections and licensure.
       States must continue a maintenance of effort so they are 
     required to contribute 100 percent of what they spent on 
     health services prior to enactment.
       Section 632: Empowering States to Innovate through Waivers: 
     A State may be granted a waiver if the legislature enacts 
     legislation or the State approves through ballot initiative a 
     plan to provide heath care coverage that is at least as 
     comprehensive as required under a HAPI plan. If the State 
     submits a waiver to the Secretary, the Secretary must respond 
     no later than 180 days and if the Secretary refuses to grant 
     a waiver, the Secretary must notify the State and Congress 
     about why the waiver was not granted.

         Subtitle E--Federal Fallback Guarantee Responsibility

       Section 641: Federal Guarantee of Access to Coverage: If a 
     State does not establish an HHA and have a system up within 
     two years, the Secretary shall establish a fallback plan so 
     individuals can still receive a HAPI plan.

             Subtitle F--Federal Financing Responsibilities

       Section 561: Appropriation for Subsidy Payments: 
     Appropriations will be made each year to fund the insurance 
     premium subsides.
       Section 652: Recapture of Medicare and 90 Percent of 
     Medicaid Federal DSH Funds to Strengthen Medicare and Ensure 
     Continued Support for Public Health Programs: All of Medicare 
     DSH stops and remains in the Part A Trust Fund.
       Medicaid DSH continues at 10 percent of current levels. The 
     amount not spent is put into a new trust fund, the ``Healthy 
     Americans Public Health Trust Fund.''
       Section 9511: Healthy Americans Public Health Trust Fund: 
     The Treasury shall establish a trust fund in which the funds 
     that would have been spent on Medicaid DSH will now go. This 
     trust fund will be used only for premium and personal 
     responsibility payment subsidies and to States for a bonus 
     payment if they adopt certain medical malpractice reforms. 
     Any additional amounts will go toward reducing the federal 
     budget deficit.

    Subtitle G--Tax Treatment of Health Care Coverage Under Healthy 
  Americans Program; Termination of Coverage Under Other Governmental 
          Programs and Transition Rules for Medicaid and SCHIP

       Part 1: Tax Treatment of Health Care Coverage Under Healthy 
     Americans Program
       Section 661: Limited Employee Income and Payroll Tax 
     Exclusion for Employer Shared Responsibility Payments, 
     Historic Retiree Health Contributions, and Transitional 
     Coverage Contributions: The following payments made by 
     employers are not taxable as income to their employees: (1) 
     shared responsibility payments by employers; (2) payments for 
     coverage of retirees under existing retiree health plans; (3) 
     payments for continuing employer-provided health plans under 
     existing collective bargaining agreements; and (4) payments 
     for employer-provided coverage for long-term care.
       Section 662: Exclusion for Limited Employer-Provided Health 
     Care Fringe Benefits: The value of employer-provided wellness 
     programs and on-site first aid coverage for employees is not 
     taxable as income to the employees.
       Section 663: Limited Employer Deduction for Employer Shared 
     Responsibility Payments, Retiree Health Contributions and 
     other Health Care Expenses: Limits the current employer 
     deduction for the costs of employee health care coverage to 
     the following: (1) shared responsibility payments made by 
     employers; (2) coverage of retirees under existing retiree 
     health plans; (3) continuing employer-provided health plans 
     under existing collective bargaining agreements; (4) 
     employer-provided wellness programs; and (5) on-site first 
     aid coverage for employees.
       Section 664: Health Care Standard Deduction: Creates a new 
     Health Care Standard Deduction. Taxpayers can claim this 
     deduction and reduce the amount they pay in taxes whether 
     they file an itemized tax return or take the standard 
     deduction. The amount of the deduction a taxpayer can claim 
     depends on the class of health care coverage the taxpayer 
     has. The deduction is indexed to the consumer price index 
     with the deduction amounts initially set as follows:
       Individual coverage--$6,025
       Married couple or domestic partnership coverage--$12,050
       Unmarried individual with dependent children--$8, 610 plus 
     $2,000 for each dependent child

[[Page S763]]

       Married couple or domestic partnership (as determined by a 
     State) with dependent children--$15,210 plus $2,000 for each 
     dependent child
       The deduction can be claimed by individuals and families 
     with incomes greater than the poverty line. Both the health 
     care and the healthy child deduction are phased in starting 
     from 100-400 percent of poverty. The deduction begins phasing 
     out starting at $62,500 ($125,000 in the case of a joint 
     return) and is fully phased out at $125,000 ($250,000 in the 
     case of a joint return). The deduction will be adjusted for 
     inflation
       Section 665: Modification of Other Tax Incentives to 
     Complement Healthy Americans Program: Sunsets the following 
     tax breaks for health care: tax credit for health insurance 
     costs of individuals; coverage of health care benefits under 
     ``cafeteria plans''; and Archer Medical Savings Accounts. 
     This section also allows Health Savings Accounts in 
     conjunction with high deductible Healthy Americans Private 
     Insurance plans and long-term care benefits to be provided 
     tax-free to workers through cafeteria plans.
       Section 666: Termination of Certain Employer Incentives 
     When Replaced by Lower Health Care Costs: Beginning 2 years 
     after enactment, terminates tax provisions relating to income 
     attributable to domestic production activities, relating to 
     tax-exempt status of voluntary employees' beneficiary 
     associations, and relating to inventory property sales source 
     rule exception, and the deferral of active income of 
     controlled foreign corporations.
       Part II: Termination of Group Coverage under other 
     Governmental Programs and Transition Rules for Medicaid and 
     SCHIP
       Sections 671-673: eliminates group coverage, FEHBP, 
     Medicaid (except for its wrap around and long term care 
     functions) and SCHIP.


                      title vii: other provisions

           Subtitle A--Effective Health Services and Products

       Section 701: One Time Disallowance of Deduction for 
     Advertising and Promotional Expenses for Certain Prescription 
     Pharmaceuticals: If a drug is new and on the market, there is 
     no tax deduction for advertising unless it is being studied 
     for comparison effectiveness. If the drug is already on the 
     market it must inform consumers that a generic will be on the 
     market if the drug is coming off patent.
       Section 702: Enhanced New Drug and Device Approval: Drugs 
     and devices get additional exclusivity or additional patent 
     protection if they submit comparison effectiveness as part of 
     their application to the Food and Drug Administration.
       Section 703: Medical Schools and Finding What Works in 
     Health Care: Medical schools and other researchers may post 
     on a website run by Agency Healthcare Research and Quality 
     (AHRQ) evidence-informed best practices. AHRQ will run a 
     pilot program to find ways to get that information into the 
     curricula of medical schools.
       Section 704: Finding Affordable Health Care Providers 
     Nearby: Creates a website so individuals can find affordable 
     high quality providers by zip code. The website can begin 
     with the providers who report under pay for performance 
     efforts and then be broadened out to include all providers 
     using uniform care standards developed in consultation with 
     Quality Improvement Organizations (QIOs).
       The affordability standard would be developed by the 
     Secretary in consultation with insurers.

   Subtitle B--Other Provisions to Improve Health Care Services and 
                                Quality

       Section 711: Individual Medical Records: Individuals own 
     their medical records.
       Section 712: Bonus Payment for Medical Malpractice Reform: 
     If a State adopts certain reforms the State may get 
     additional funds. Those reforms are: (1) require an 
     individual who files a malpractice action in state court have 
     the facts of their case reviewed by a panel with not less 
     than one qualified medical expert chosen in consultation with 
     the State Medicare quality improvement organization or 
     physician specialty whose expertise is appropriate for the 
     case; not less than one legal expert and not less than one 
     community representative to verify that a malpractice claim 
     exists; (2) permit an individual to engage in voluntary non-
     binding mediation with respect to the malpractice claim prior 
     to filing an action in court; (3) impose sanctions against 
     plaintiffs and attorneys who file frivolous medical 
     malpractice claims in courts; (4) prohibit attorneys who file 
     three or more medical malpractice actions in state courts 
     from filing others in state courts for a period of 10 years; 
     and provides for the application of presumption of 
     reasonableness if the defendant establishes that he or she 
     followed accepted clinical practice guidelines established by 
     the specialty or listed in the National Guideline 
     clearinghouse.
       The bonus payments must be used to carry out activities 
     related to disease and illness prevention and for children's 
     health care services.


                  title viii: containing medical costs

       Section 801: Cost-Containment Results of the Healthy 
     Americans Act: Summarizes what in the bill contains costs.

  THE HEALTHY AMERICANS ACT--AFFORDABLE HEALTH CARE FOR EVERY AMERICAN
------------------------------------------------------------------------
                                    Current Health
         Worker Profiles                System            Wyden Plan
------------------------------------------------------------------------
Fabulous Clean, janitor, has      Pays $2,000 in      Pays $1,200 in
 $25,000/year income; married      premiums; Tax       subsidized
 with 2 children; family insured   savings: $500       premiums; Salary
 through employer.                 (not taxed on       increase: $5,000;
                                   employer's $5,000   Additional taxes
                                   contribution).      after the new
                                  Net cost:$1,500...   health care tax
                                                       deduction: $150
                                                      Net savings:$3,650
Sally Forth, secretary, has       Pays $2,500 in      Pays $3,600 in
 $40,000/year income; married      premiums; Tax       subsidized
 with 2 children; family insured   savings: $1,500     premiums; Salary
 through employer.                 (not taxed on       increase:
                                   employer's          $10,000;
                                   $10,000             Additional taxes
                                   contribution).      after the new
                                  Net cost:$1,000...   health care tax
                                                       deduction: $60
                                                      Net savings:$6,340
Bess Driver, school bus driver,   Pays $1,000 in      Pays $8,200 in
 has $55,000/year income;          premiums; Tax       premiums; Salary
 married; couple insured through   savings: $1,575     increase:
 employer.                         (not taxed on       $10,500; Tax
                                   employer's          savings after the
                                   $10,500             new health care
                                   contribution).      tax deduction:
                                  Net savings:$575..   $230
                                                      Net savings:$2,530
Ann Bankroll, investment banker,  Pays $2,500 in      Pays $10,600 in
 has $200,000/year income;         premiums; Tax       premiums; Salary
 married; 2 children; family       savings: $3,300     increase:
 insured through employer.         (not taxed on       $10,000;
                                   employer's          Additional taxes
                                   $10,000             after the new
                                   contribution).      health care tax
                                  Net savings:$800..   deduction: $1,271
                                                      Net cost:$1,871
Shirley Needing, waitress, has    None..............  Pays $600 in
 $15,000/year income; single; no                       subsidized
 health coverage.                                      premiums; Tax
                                                       savings after new
                                                       health care tax
                                                       deduction:: $100
                                                      Net cost:$500 ($42/
                                                       month)
Harold Heart, salesman, has       None available      Pays $600 in
 $25,000/year income; married      because of          subsidized
 with 2 children; no health        preexisting         premiums; Tax
 coverage.                         condition.          savings*: $150
                                                      Net cost:$450 ($38/
                                                       month)
------------------------------------------------------------------------

            The Healthy Americans Act: Working for Employers


                         Small Service Employer

       Daisy Hills Day Care has 32 employees, 8 are full-time and 
     the other 24 work an average of 20 hours per week. Only the 8 
     full-time employees are currently eligible for the Daisy 
     Hills health plan, and 6 take advantage of it. The firm pays 
     half of the premium for employees, nothing for family 
     coverage. Daisy Hills's total current health care costs are 
     $10,400 per year, which pays for coverage of only 6 
     employees. Under the Healthy Americans Act, Daisy Hills would 
     pay a total of $6,208 per year in Employer Shared 
     Responsibility payments. This amount represents 4 percent of 
     the national average essential benefit premium multiplied by 
     20 full-time equivalent employees.


                            Small Restaurant

       Doug's Diner has 3 full-time and 9 part-time employees who 
     work an average of 30 hours per week. Doug cannot currently 
     afford to offer health care to his employees. He often loses 
     his best staff to chain restaurants that offer health 
     insurance and is unable to afford insurance for himself and 
     his family on the individual market. This small family 
     business falls into the lowest rate tier under revenue by 
     employee, paying a 2 percent rate. Under the Healthy 
     Americans Act Doug will pay $1,513 per year and he, his 
     family, and all of his employees will have access to 
     affordable health insurance.


                     Mid-Size Financial Institution

       Happy Valley Bank has 1,600 full-time employees and 400 
     part-time employees who work an average of 25 hours per week. 
     All employees who work over 20 hours per week are offered and 
     take advantage of health care. The firm pays 80 percent of 
     the premiums for individuals and families. Under the current 
     system, Happy Valley's total health care expenditures are 
     $10,200,000 per year. Under the Healthy Americans Act, they 
     will pay a total of $3,589,463 per year. This amount 
     represents 25 percent of the national average essential 
     benefit premium per employee.


                      Mid-Sized Manufacturing Firm

       Allied Industrial has 1,000 full time employees. The firm 
     pays 100 percent of individual premiums and 80 percent of 
     family premiums for all employees. Currently Allied pays 
     $6,100,000 per year in health care premiums and has been 
     seeing 10 percent increases year over year for several years 
     despite the use of a number of cost-control measures. Allied 
     falls into the middle range of companies in revenue per 
     employee, paying the 21 percent rate. Under the Healthy 
     Americans Act, Allied will pay $1,629,890.


                        Large Specialty Retailer

       Acme Game Emporiums is a national specialty retailer with 
     2,000 full time and 7,000 part time employees who work an 
     average of 22 hours per week. All full time and 4,500 of the 
     part time employees are eligible for and take advantage of 
     Acme's health plan. The firm pays 95 percent of employees' 
     premiums and 60 percent of family premiums. Their current 
     total health care costs are $52,000,000 per year. As a 
     retailer with relatively low revenue per employee, Acme pays 
     the 19 percent rate. Under the Healthy Americans Act, Acme 
     will pay $8,626,351.
                                 ______