[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[Senate]
[Pages 124-130]
[From the U.S. Government Publishing Office, www.gpo.gov]



          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KYL:
  S. 2012. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit against income tax to elementary and secondary school teachers 
who provide classroom materials; to the Committee on Finance.


                  Teacher Tax Credit Relief Act, 2000

 Mr. KYL. Mr. President, I rise to introduce the Teacher Tax 
Credit Relief Act of 2000. The act would provide an annual tax credit 
of up to $100 for teachers' un-reimbursed classroom expenditures that 
are qualified under the Internal Revenue Code.
  Thomas Jefferson once said that ``an educated citizenry is essential 
for the preservation of democracy.'' It falls to our teachers--through 
their hard work and lifetime of commitment to young people--to 
inculcate the academic values and analytical skills that make good 
citizenship possible.
  In my discussions with teachers--public and private--I have been 
amazed to learn that many use their own money to cover the cost of 
classroom materials that are not supplied by their schools or school 
districts. These expenditures enhance our childrens' education but are 
paid for out-of-pocket.
  In fact, in 1996, according to a study by the National Education 
Association, the average K-12 teacher spent $408 annually on classroom 
materials needed for education but not supplied by the schools. These 
materials include everything from books, workbooks, erasers, paper, 
pens, equipment related to classroom instruction, and professional 
enrichment programs.
  Under current law, a tax deduction is allowed for such expenses, but 
only if the teacher itemizes, and only if the expenses exceed two 
percent of the teacher's AGI. Of course, a deduction just reduces 
taxable income. A credit would give teachers relief dollar-for-dollar 
spent, up to the $100 annual limit.
  On a modest income, teachers provide an incalculable service to our 
country. Surely, we should not expect them to pay for school supplies 
out of their salary, when they have already committed their lives to 
the education of our young.
  A similar provision enacted by the Arizona legislature in 1995 has 
been extremely well-received by teachers. The provision was recently 
upheld as constitutional by the Arizona Supreme Court.
  Please join me in supporting this bill. Our teachers deserve to be at 
least partially reimbursed for financial sacrifices they make to 
educate our nation's children.
                                 ______
                                 
      By Mr. LOTT (for Mr. McCain):
  S. 2013. A bill to restore health care equity for Medicare-eligible 
uniformed services retirees, and for other purposes; to the Committee 
on Armed Services.


Honoring Health Care Commitments to Servicemembers Past and Present Act 
                                of 2000

 Mr. McCAIN. Mr. President, last November, I spoke on the floor 
of the Senate about the severe deficiencies in our nation's military 
health care delivery system. We, as a nation, face a very critical 
challenge in determining how best to reconfigure the military health 
care delivery system so that it can continue to meet its military 
readiness and peace-time obligations during this period of ongoing 
change in our base and force structure.
  This is a challenge that has concerned me for some time. As I have 
been working on this matter and deciding how best to proceed, I have 
met with, and heard from, many military family members, veterans, and 
military retirees from around the country. And, in that process, I have 
been inundated with suggestions for reform. During every meeting and in 
every letter,

[[Page 125]]

I have heard from retired service men and women about so many problems 
with all aspects of the military medical care system--including long 
waiting periods, access to the right kind of care, access to needed 
pharmaceutical drugs, and especially the ``broken promise'' of free 
lifetime health care for military retirees and their spouses. I have 
also personally heard such concerns repeatedly expressed as I have 
traveled extensively throughout the United States over the past several 
months.
  I have found that a primary concern among military retirees and their 
families is the ``broken promise'' of lifetime medical care. In this 
vein, retiree health care is a readiness issue. Today's service members 
are acutely aware of retirees' disenfranchisement from military health 
care coverage, and exit surveys cite this issue with increasing 
frequency as one of the factors in members' decisions to leave the 
service. In fact, a recent General Accounting Office study found that 
poor ``access to medical and dental care in retirement'' was among the 
top five elements of dissatisfaction among active duty officers in 
retention-critical specialties.
  Failure to keep health care commitments is hurting service recruiting 
efforts, as well. Traditionally, retirees have been the services' most 
effective recruiters, and their children and those of family friends 
have been more likely to serve. Unfortunately, increasing numbers of 
retirees who have seen the government renege on its ``lifetime health 
care'' promises have become more reluctant to recommend service careers 
to their family members and friends. Restoring retirees' confidence in 
their health care coverage could go a long way in restoring this 
invaluable recruiting resource.
  Certainly, the high cost of providing quality health care has 
contributed to Congress' failure to implement meaningful reform in the 
past. Yet, even though Congress has increased the President's defense 
budget requests in recent years to attempt to meet the military's 
future needs, it simultaneously has squandered billions each year on 
projects the military did not request and does not need. Last year 
alone, Congress appropriated over $6 billion for wasteful, unrequested, 
and low-priority projects that would have no positive effect on 
preparing our military for future challenges, and would address this 
military health care quandary.
  Congress also continues to refuse to close military bases that are 
not essential to our security, permitting politics to outweigh military 
readiness, at a cost to the taxpayer of nearly $7 billion each year. If 
Congress would allow the Pentagon to privatize or consolidate depot and 
base maintenance activities, savings of $2 billion each year could be 
achieved. In addition, Congress refuses to eliminate anti-competitive 
``Buy American'' restrictions, which could save almost $5.5 billion 
annually on defense contracts. These common sense reforms together 
would free up nearly $20 billion per year, which could be used to begin 
correcting our readiness shortfalls and, significantly, provide a 
quality health care delivery system for our older military retirees, 
once and for all.
  I must add that there are other wasteful funding efforts that are 
particularly disgraceful. While Congress wastes taxpayer money on 
obsolete infrastructure, unneeded weapon systems, and projects that 
have no meaningful value to our Armed Forces, it simultaneously refuses 
to adequately pay the nearly 12,000 enlisted military personnel who are 
forced to subsist on food stamps. We must work to improve our treatment 
of all the honored military personnel serving our nation.


                  initial steps on the road to reform

  Last October, the Chairman of the Joint Chiefs of Staff and the other 
Joint Chiefs testified before the Senate Armed Services Committee on 
the state of the military. During that hearing, they universally 
declared the year 2000 to be the year of military health care reform.
  The rush to implement military health care reform, as evidenced by a 
plethora of well-intentioned legislation introduced by Congress and to 
be proposed by the Administration, and the evaluation of current health 
care delivery pilot projects must be balanced with the need to provide 
uninterrupted critical health care to the over-65 military retirees and 
their families, as well as, recognize the need to provide free health 
care to those Medicare eligible retirees who entered military service 
before June 7, 1956. Their concern about losing even the minimal health 
care they received from the time of retirement until age 65 increases 
dramatically as they turn 65. If this is to be the year of military 
health care, a key part of this effort must entail reassuring these 
older retirees that the Department of Defense will no longer deny or 
ignore their legitimate health care needs. By doing so, Congress also 
will be taking an essential step in reassuring today's servicemembers 
that the government does, in fact, keep its recruiting and retention 
promises concerning health care and other career service benefits.
  The legislation that I am proposing is the next step in my effort to 
lead Congress down the road to meaningful reform of our nation's 
military health care delivery system. This measure adopts positive 
ideas already based in other legislation, but offers an essential 
element that other plans do not--that is, choice. My legislation would 
offer the military retiree and his family a choice of several health 
care delivery plans. Having the choice to decide which health care plan 
works well is important for two reasons: to ensure control of overall 
health care reform costs and to reflect the reality that each retiree's 
needs can be very different.
  Some military retirees live near military installations and could use 
military health care if they had access to it. Others who live far from 
installations might be satisfied, for example, with the addition of a 
relatively low-cost prescription drug benefit. Still others, however, 
might desperately need full-coverage insurance such as the Federal 
Employees Health Benefits Program (FEHBP). The plan would accommodate 
these different requirements. This health care reform plan also would 
be portable and less dependent on any specific military hospital 
system, particularly if further rounds of base closures occur.


                     Specific Elements of the Plan

  For Medicare-eligible military retirees, this legislation authorizes 
the following options:
  Option 1: Establishes a nationwide mail-order pharmacy service and 
community-based pharmacy network to serve the prescription drug needs 
of over-age 65 military retired members, their spouses and survivors of 
the military community; this provision would expand the Base 
Realignment and Closure (mail-order and TRICARE retail) pharmacy 
benefit nationwide to all Medicare-eligible uniformed services 
beneficiaries beginning October 1, 2000.
  Option 2: Allows Medicare-eligible retirees to enroll in the Medicare 
subvention benefit and expands TRICARE Senior Prime nationwide 
beginning October 1, 2000.
  Option 3: Allows Medicare-eligible retirees to enroll in the Federal 
Employees Health Benefits Program (FEHBP) and would expand FEHBP 
benefits worldwide effective with the fall 2000 open enrollment period 
and coverge beginning January 1, 2001.
  This legislation includes a critical ``Sense of the Senate'' 
instruction: That urgent priority should be given to the enactment of 
legislation (such as S. 2003/H.R. 2966) that provides health care 
coverage at no cost for Medicare-eligible military retirees who first 
entered the service before June 7, 1956, and their dependents. Such 
legislation also should have priority consideration by the Senate 
committee with jurisdiction over the bill and the measure should 
receive expedited consideration by the full Senate, immediately after 
it has been reported out of committee to the Senate.
  This legislation proposes to make essential improvements to the 
military health delivery system for active duty servicemembers and 
their families, including:
  Elimination of copayments and deductibles for all active duty family

[[Page 126]]

members enrolled in TRICARE Prime; this is a great quality of life 
improvement for our military personnel and their families, especially 
our enlisted families; and
  Extension of TRICARE Prime Remote coverage free of charge to the 
families of 80,000 active duty members living more than 50 miles from a 
military medical treatment facility (i.e., recruiters, ROTC 
instructors, reserve center and National Guard active duty personnel, 
and others similarly situated), who are unable to participate in 
TRICARE Prime.
  This measure proposes other significant administrative improvements 
to the military medical delivery system, including:
  Promotes efficiency in the military health care system by combining 
the various uniformed services health care delivery systems for 
Medicare-eligibles under a common delivery program, TRICARE Senior 
Prime, just as the same systems for younger beneficiaries have been 
combined under TRICARE Prime;
  Establishes an account within the Treasury called the Uniformed 
Services Retirees Health Care Account that helps fund the added cost of 
this new benefit for age-65 uniformed services retirees; under this 
concept, savings from efficiencies (such as moving to electronic vs. 
paper claims processing) could be devoted to fulfilling health care 
obligations to older retirees;
  Authorizes the Secretary of Defense to enter into contracts with 
private industry for the purpose of recovering overpayments to civilian 
health care providers under TRICARE program; these services may include 
audits and other services deemed necessary by the Secretary of Defense;
  Directs the Secretary of Defense to enhance and simplify the TRICARE 
health program through administrative efficiencies and the use of the 
Internet relating to marketing, beneficiary enrollment, beneficiary and 
provider education, claims processing, scheduling of appointments and 
other services, as deemed appropriate by the Secretary, to enhance the 
military health delivery system; and
  Directs the Secretary of Defense to design and issue a national 
enrollment card for the TRICARE health program that shall serve as an 
enrollment card for participation in the TRICARE program nationwide; 
the enrollment card is designed to facilitate the ready portability of 
benefits under TRICARE nationwide.


                               conclusion

  The federal government must not fail our nation's military retirees, 
their families, and survivors in ensuring the continuation of adequate 
health care coverage in their late years. I believe the steps I have 
outlined today, which have earned the overwhelming endorsement of The 
Military Coalition and The Military And Veterans' Alliance, 
representing 9 million members, start us down the road to comprehensive 
reform of the military health care system. Such an effort has not been 
seen in decades, and would fulfill our obligation to our military 
retirees and bolster retention and readiness among today's 
servicemembers.
  Mr. President, I concur with the Joint Chiefs that this truly is the 
year of military health care reform. The success of the legislation 
that I am introducing today will depend significantly on Congress' 
ability to produce real military health care reform and provide the 
necessary resources in a timely manner. In addition, it will be 
important that the Pentagon, private industry, and the military 
retirees and active duty servicemembers who utilize the system can work 
together and galvanize support for a solid military health care system 
for the long term.
  Mr. President, I ask that letters from The Military Coalition, The 
Military And Veterans Alliance, the Air Force Association (AFA), the 
National Association For Uniformed Services (NAUS), and Colonel George 
``Bud'' Day, USAF, Ret. (a Medal of Honor recipient and who is very 
active in military and veterans' issues) in support of this 
comprehensive military health care reform plan be placed in the Record, 
immediately following my remarks. In addition, I ask that the bill be 
printed in the Record as well as the letters from the military and 
veterans' associations.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the additional material was ordered to be 
printed in the Record, as follows:

                                S. 2013

       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 ``Honoring Health Care 
     Commitments to Service-
     members Past and Present Act of 2000''.

     SEC. 2. SENSE OF SENATE ON HEALTH CARE FOR MEMBERS OF THE 
                   UNIFORMED SERVICES WHO FIRST BECAME MEMBERS 
                   BEFORE JUNE 7, 1956, AND THEIR DEPENDENTS.

       It is the sense of the Senate that--
       (1) urgent priority should be given to the enactment of 
     legislation that provides health care coverage for Medicare-
     eligible members and former members of the uniformed services 
     who first became members of the uniformed services before 
     June 7, 1956, and for their dependents, at no cost to such 
     members, former members, and dependents; and
       (2) the bill proposing to provide the health care coverage 
     described in paragraph (1), which has been introduced in the 
     Senate, should--
       (A) receive priority of consideration by the committee of 
     the Senate having jurisdiction over the bill; and
       (B) become the pending business of the Senate immediately 
     after its reporting to the Senate by the committee of the 
     Senate described in paragraph (1).

     SEC. 3. PARTICIPATION OF MEDICARE-ELIGIBLE BENEFICIARIES IN 
                   CERTAIN DEPARTMENT OF DEFENSE PHARMACY 
                   PROGRAMS.

       (a) In General.--Not later than October 1, 2000, the 
     Secretary of Defense shall--
       (1) expand and make permanent the demonstration project for 
     pharmaceuticals by mail established under subsection (a) of 
     section 702 of the National Defense Authorization Act for 
     Fiscal Year 1993 (10 U.S.C. 1079 note) in order to permit 
     individuals described in subsection (b) worldwide to obtain 
     pharmaceuticals through the project; and
       (2) modify each managed health care program which includes 
     a managed care network of community retail pharmacies under 
     subsection (b) of such section 702 to supply prescription 
     pharmaceuticals to the individuals described in subsection 
     (b) of this section through such network in the area covered 
     by such program.
       (b) Eligible Individuals.--(1) Except as provided in 
     paragraph (2), an individual eligible to obtain 
     pharmaceuticals under this section is a member or former 
     member of the uniformed services described in section 1074(b) 
     of title 10, United States Code, a dependent of a member 
     described in subsection (a)(2)(B) or (b) of section 1076 of 
     that title, or a dependent of a member who died while on 
     active duty for a period of more than 30 days, who is 
     entitled to hospital insurance benefits under part A of title 
     XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).
       (2) An individual described in paragraph (1) is not 
     eligible to obtain pharmaceuticals under this section if the 
     individual is covered by a health benefits plan offered 
     through the Federal Employee Health Benefits program, whether 
     as an employee under chapter 89 of title 5, United States 
     Code, or pursuant to section 1108 of title 10, United States 
     Code.
       (c) Fees and Charges.--(1) Subject to paragraph (2), the 
     amount of the deductible, copayment, annual fee, or other 
     fee, if any, paid by an eligible individual described in 
     subsection (b) who obtains a pharmaceutical under this 
     section through the project referred to in subsection (a)(1) 
     or a retail pharmacy network referred to in subsection (a)(2) 
     shall not exceed the amount of the deductible copayment, 
     annual fee, or other fee paid by other persons for such 
     pharmaceutical through the project or the pharmacy network, 
     as the case may be.
       (2) An eligible individual described in subsection (b) 
     shall not be charged an enrollment fee for participation in 
     the project or a retail pharmacy network under this section.
       (3) The Secretary of Defense may not establish or collect 
     any new fee or charge under the project referred to in 
     subsection (a)(1), or any retail pharmacy network referred to 
     in subsection (a)(2), by reason of the participation of 
     eligible individuals described in subsection (b) in the 
     project or network under this section.

     SEC. 4. NATIONWIDE EXPANSION OF MEDICARE SUBVENTION.

       (a) Participants.--Effective October 1, 2000, subsection 
     (a)(4) of section 1896 of the Social Security Act (42 U.S.C. 
     1395ggg) is amended by adding after subparagraph (D) the 
     following new flush matter:
     ``Notwithstanding the first sentence of this subparagraph, 
     the term does not include any individual who is covered by a 
     health benefits plan offered through the Federal Employee 
     Health Benefits program, whether as an employee under chapter 
     89 of title 5, United States Code, or pursuant to section 
     1108 of title 10, United States Code.''.

[[Page 127]]

       (b) Repeal of Limitation on Number of Sites.--Effective 
     October 1, 2000, paragraph (2) of section 1896(b) of such Act 
     is amended to read as follows:
       ``(2) Location of sites.--
       ``(A) In general.--The program shall be conducted in any 
     site designated jointly by the administering Secretaries.
       ``(B) Fee-for-service.--If feasible, at least 1 of the 
     sites designated under subparagraph (A) shall be conducted 
     using the fee-for-service reimbursement method described in 
     subsection (l)(1).
       ``(C) Uniformed services treatment facilities.--If 
     feasible, designated providers covered by section 722 of the 
     National Defense Authorization Act for 1997 (Public Law 104-
     201; 10 U.S.C. 1073 note) shall be included among the sites 
     designated by the administering Secretaries.''.
       (c) Making Project Permanent; Changes in Project 
     References.--
       (1) Elimination of time limitation.--Paragraph (4) of 
     section 1896(b) of such Act is repealed.
       (2) Conforming changes of references to demonstration 
     project.--Section 1896 of such Act is further amended--
       (A) in the heading, by striking ``DEMONSTRATION PROJECT'' 
     and inserting ``PROGRAM'';
       (B) by amending subsection (a)(2) to read as follows:
       ``(2) Program.--The term `program' means the program 
     carried out under this section.'';
       (C) in the heading to subsection (b), by striking 
     ``Demonstration Project'' and inserting ``Program'';
       (D) by striking ``demonstration project'' or ``project'' 
     each place either appears and inserting ``program''; and
       (E) in subsection (k)(2)--
       (i) in the heading, by striking ``extension and expansion 
     of demonstration project'' and inserting ``program''; and
       (ii) by striking subparagraphs (A) through (C) and 
     inserting the following:
       ``(A) whether there is a cost to the health care program 
     under this title in conducting the program under this 
     section; and
       ``(B) whether the terms and conditions of the program 
     should be modified.''.
       (3) Repeal of obsolete reporting requirement.--Paragraph 
     (5) of section 1896(b) of such Act is repealed.
       (d) Correction of Reference to Medicare-Eligible 
     Retirees.--Section 1896 of such Act is further amended--
       (1) in the heading, by striking ``MILITARY RETIREES'' and 
     inserting ``UNIFORMED SERVICES RETIREES'';
       (2) in paragraph (4) of subsection (a)--
       (A) in the caption, by striking ``Military Retiree'' and 
     inserting ``Uniformed Services Retiree''; and
       (B) by striking ``military retiree'' and inserting 
     ``uniformed services retiree''; and
       (3) by striking ``military retirees'' each place it appears 
     and inserting ``uniformed services retirees''.
       (e) Permitting Payment on a Fee-for-Service Basis.--
       (1) In general.--Section 1896 of the Social Security Act is 
     further amended by adding at the end the following new 
     subsection:
       ``(l) Reimbursement on Fee-For-Service Basis.--
       ``(1) Reimbursement at designated sites.--In the case of a 
     medicare health care service provided at a site, if any, 
     designated for operation under the fee-for-service model 
     under subsection (b)(2)(B), the Secretary shall reimburse the 
     Secretary of Defense at a rate equal to 95 percent of the 
     amount that otherwise would be payable under this title on a 
     noncapitated basis for the service if the site were not part 
     of the program under this section.
       ``(2) Reimbursement for unenrolled individuals.--
     Notwithstanding subsection (i), in the case of medicare-
     eligible uniformed services retirees or dependents who are 
     not enrolled in the program under this section, the Secretary 
     may reimburse the Secretary of Defense for medicare health 
     care services provided to such retirees or dependents at a 
     military treatment facility under the program at a rate that 
     does not exceed the rate of payment that would otherwise be 
     made under this title for such services.
       ``(3) Inapplicability of limitations on federal payments.--
     Sections 1814(c) and 1835(d), and paragraphs (2) and (3) of 
     section 1862(a), do not apply to the making of payments under 
     this subsection.''.
       (2) Conforming amendments.--Such section is further 
     amended--
       (A) in subsections (b)(1)(B)(v) and (b)(1)(B)(viii)(I), by 
     inserting ``or subsection (l)'' after ``subsection (i)'';
       (B) in subsection (d)(1)(A), by inserting ``(insofar as it 
     provides for the enrollment of individuals and payment on the 
     basis described in subsection (i))'' before ``shall meet'';
       (C) in subsection (d)(1)(A), by inserting ``and the program 
     (insofar as it provides for payment for medicare health care 
     services provided at a military treatment facility on the 
     basis described in subsection (l)) shall meet all 
     requirements that are applicable to facilities that provide 
     such services under this title'' after ``medicare payments'';
       (D) in subsection (d)(2), by inserting ``, insofar as it 
     provides for the enrollment of individuals and payment on the 
     basis described in subsection (i),'' before ``shall comply'';
       (E) in subsection (g)(1), by inserting ``insofar as it 
     provides for the enrollment of individuals and payment on the 
     basis described in subsection (i),'' before ``the Secretary 
     of Defense'';
       (F) in subsection (i)(1), by inserting ``and subsection 
     (l)'' after ``of this subsection'';
       (G) in subsection (i)(4), by inserting ``and subsection 
     (l)'' after ``under this subsection''; and
       (H) in subsection (j)(2)(B)(ii), by inserting ``or 
     subsection (l)'' after ``subsection (i)(1)''.
       (3) Effective date.--The amendments made by this subsection 
     take effect on October 1, 2000, and apply to services 
     furnished on or after such date.
       (f) Elimination of Restriction on Eligibility.--Section 
     1896(b)(1) of such Act is amended by adding at the end the 
     following new subparagraph:
       ``(C) Elimination of restrictive policy.--If the enrollment 
     capacity in the program has been reached at a particular site 
     designated under paragraph (2) and the Secretary therefore 
     limits enrollment at the site to medicare-eligible uniformed 
     services retirees and dependents who are enrolled in TRICARE 
     Prime (as defined for purposes of chapter 55 of title 10, 
     United States Code) at the site immediately before attaining 
     65 years of age, participation in the program by a retiree or 
     dependent at such site shall not be restricted based on 
     whether the retiree or dependent has a civilian primary care 
     manager instead of a military primary care manager.''.
       (g) Medigap Protection for Enrollees.--Section 1896 of such 
     Act is further amended by adding at the end the following new 
     subsection:
       ``(m) Medigap Protection for Enrollees.--
       ``(1) In general.--Subject to paragraph (2), the provisions 
     of section 1882(s)(3) (other than clauses (i) through (iv) of 
     subparagraph (B)) and section 1882(s)(4) shall apply to any 
     enrollment (and termination of enrollment) in the program 
     (for which payment is made on the basis described in 
     subsection (i)) in the same manner as they apply to 
     enrollment (and termination of enrollment) with a 
     Medicare+Choice organization in a Medicare+Choice plan.
       ``(2) Rule of construction.--In applying paragraph (1)--
       ``(A) in the case of enrollments occurring before October 
     1, 2000, any reference in clause (v) or (vi) of section 
     1882(s)(3)(B) to 12 months is deemed a reference to the 
     period ending on September 30, 2001; and
       ``(B) the notification required under section 1882(s)(3)(D) 
     shall be provided in a manner specified by the Secretary of 
     Defense in consultation with the Secretary.''.

     SEC. 5. INCLUSION OF MEDICARE-ELIGIBLE UNIFORMED SERVICES 
                   BENEFICIARIES IN FEDERAL EMPLOYEES HEALTH 
                   BENEFITS PROGRAM.

       (a) FEHBP Option.--(1) Section 1108 of title 10, United 
     States Code, is amended to read as follows:

     ``Sec. 1108. Health care coverage through Federal Employees 
       Health Benefits program

       ``(a) FEHBP Option.--(1) The Secretary of Defense, after 
     consulting with the other administering Secretaries, shall 
     enter into an agreement with the Office of Personnel 
     Management under which a medicare-eligible covered 
     beneficiary described in subsection (b) will be offered an 
     opportunity to enroll in a health benefits plan offered 
     through the Federal Employee Health Benefits program under 
     chapter 89 of title 5.
       ``(2) The agreement may provide for limitations on 
     enrollment of medicare-eligible covered beneficiaries in the 
     Federal Employee Health Benefits program if the Office of 
     Personnel Management determines the limitations are necessary 
     to allow for adequate planning for access for services under 
     the Federal Employee Health Benefits program.
       ``(b) Medicare-Eligible Covered Beneficiary Described.--A 
     medicare-eligible covered beneficiary referred to in 
     subsection (a) is a covered beneficiary under this chapter 
     who for any reason is or becomes entitled to hospital 
     insurance benefits under part A of title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.). The covered 
     beneficiary shall not be required to satisfy any eligibility 
     criteria specified in chapter 89 of title 5 as a condition 
     for enrollment in a health benefits plan offered through the 
     Federal Employee Health Benefits program pursuant to 
     subsection (a).
       ``(c) Limitations on Enrollment.--The number of medicare-
     eligible covered beneficiaries enrolled in the Federal 
     Employees Health Benefits program under this section shall 
     not exceed 275,000.
       ``(d) Continued Participation in Uniformed Services Health 
     System.--(1) A medicare-eligible covered beneficiary who 
     enrolls in the Federal Employees Health Benefits program 
     under this section shall not be eligible to receive health 
     care under section 1086 or 1097 of this title.
       ``(2)(A) Subject to such limitations as the Secretary of 
     Defense, after consultation with the other administering 
     Secretaries, a medicare-eligible covered beneficiary 
     described in paragraph (1) may continue to receive health 
     care in a military medical treatment facility on a space 
     available basis.
       ``(B) A treatment facility providing care under 
     subparagraph (A) shall be reimbursed

[[Page 128]]

     by the Federal Employees Health Benefits program for the cost 
     of such care at rates not to exceed the rates of 
     reimbursement for such care under the program if such care 
     had been provided by a health care provider other than the 
     treatment facility.
       ``(e) Limitations on Other Health Care Coverage.--(1) A 
     medicare-eligible covered beneficiary who is covered by a 
     health benefits plan through the Federal Employees Health 
     Benefits program under subsection (a) may not, during a 
     period of coverage under such plan under this section--
       ``(A) be enrolled in a health benefits plan under the 
     Federal Employees Health Benefits program as an employee 
     under chapter 89 of title 5;
       ``(B) be enrolled in the medicare subvention program for 
     military retirees under section 1896 of the Social Security 
     Act (42 U.S.C. 1395ggg);
       ``(C) otherwise obtain pharmaceuticals by mail under 
     section 702(a) of Public Law 102-484 (10 U.S.C. 1079 note) 
     pursuant to section 3(a)(1) of the Honoring Health Care 
     Commitments to Service-
     members Past and Present Act of 2000; or
       ``(D) otherwise obtain pharmaceuticals through a network of 
     retail pharmacies under section 702(b) of Public Law 102-484 
     pursuant to section 3(a)(2) of the Honoring Health Care 
     Commitments to Servicemembers Past and Present Act of 2000.
       ``(2) A medicare-eligible covered beneficiary who is also 
     eligible for participation in the Federal Employees Health 
     Benefits program as an employee under chapter 89 of title 5 
     shall participate in the program, if at all, under that 
     chapter.
       ``(f) Contributions.--(1) In the case of a medicare-
     eligible covered beneficiary who enrolls in a health benefits 
     plan offered through the Federal Employee Health Benefits 
     program pursuant to subsection (a), the administering 
     Secretary concerned shall be responsible for Government 
     contributions that the Office of Personnel Management 
     determines are necessary to cover all costs in excess of 
     beneficiary contributions under paragraph (2).
       ``(2) The contribution required from the enrolled medicare-
     eligible covered beneficiary shall be equal to the amount 
     that would be withheld from the pay of a similarly situated 
     Federal employee who enrolls in a health benefits plan under 
     chapter 89 of title 5.
       ``(g) Management of Participation.--(1) If an enrolled 
     medicare-eligible covered beneficiary is a member or former 
     member of the uniformed services described in section 1074(b) 
     of this title, the authority responsible for approving 
     retired or retainer pay or equivalent pay for the member or 
     former member shall manage the participation of the enrolled 
     member or former member in a health benefits plan offered 
     through the Federal Employee Health Benefits program pursuant 
     to subsection (a).
       ``(2) If an enrolled medicare-eligible covered beneficiary 
     is a dependent of a member or former member, the authority 
     that is, or would be, responsible for approving retired or 
     retainer pay or equivalent pay for the member or former 
     member shall manage the participation of the dependent in a 
     health benefits plan offered through the Federal Employee 
     Health Benefits program under subsection (a).
       ``(3) The Office of Personnel Management shall maintain 
     separate risk pools for enrolled medicare-eligible covered 
     beneficiaries until such time as the Director of the Office 
     of Personnel Management determines that complete inclusion of 
     enrolled medicare-eligible covered beneficiaries under 
     chapter 89 of title 5 will not adversely affect Federal 
     employees and annuitants enrolled in health benefits plans 
     under such chapter.
       ``(h) Effect of Cancellation.--The cancellation by a 
     medicare-eligible covered beneficiary of coverage under the 
     Federal Employee Health Benefits program under this section 
     shall be irrevocable for purposes of this section.
       ``(i) Reporting Requirements.--Not later than November 1 of 
     each year, the administering Secretaries and the Director of 
     the Office of Personnel Management shall jointly submit to 
     Congress a report describing the provision of health care 
     services to medicare-eligible covered beneficiaries under 
     this section during the preceding fiscal year. The report 
     shall address or contain the following:
       ``(1) The number of medicare-eligible covered beneficiaries 
     enrolled in health benefits plans offered through the Federal 
     Employee Health Benefits program pursuant to subsection (a), 
     both in terms of total number and as a percentage of all 
     medicare-eligible covered beneficiaries receiving health care 
     through the health care system of the uniformed services.
       ``(2) The out-of-pocket cost to enrolled medicare-eligible 
     covered beneficiaries under such health benefits plans.
       ``(3) The cost to the Government (including the Department 
     of Defense, the Department of Transportation, and the 
     Department of Health and Human Services) of providing care 
     under such health benefits plans as a result of this section.
       ``(4) A comparison of the costs determined under paragraphs 
     (2) and (3) and the costs that would have otherwise been 
     incurred by the Government and enrolled medicare-eligible 
     covered beneficiaries under alternative health care options 
     available to the administering Secretaries.
       ``(5) The effect of this section on the cost, access, and 
     utilization rates of other health care options under the 
     health care system of the uniformed services.
       ``(j) Time for Option.--The Secretary of Defense shall 
     begin to offer the health benefits option under subsection 
     (a) on January 1, 2001, with an initial open enrollment 
     period conducted in the fall of 2000.''.
       (2) The item relating to section 1108 in the table of 
     sections at the beginning of such chapter is amended to read 
     as follows:

``1108. Health care coverage through Federal Employees Health Benefits 
              program.''.

       (b) Conforming Amendments.--Chapter 89 of title 5, United 
     States Code, is amended--
       (1) in section 8905--
       (A) by redesignating subsections (d) through (f) as 
     subsections (e) through (g), respectively; and
       (B) by inserting after subsection (c) the following:
       ``(d) Subject to subsection (e) of section 1108 of title 
     10, an individual whom an administering Secretary (as defined 
     in section 1073 of such title) determines is a medicare-
     eligible covered beneficiary under subsection (b) of such 
     section 1108 may enroll in a health benefits plan under this 
     chapter in accordance with the agreement entered into under 
     subsection (a) of such section 1108 between the Secretary of 
     Defense and the Office and in accordance with applicable 
     regulations under this chapter.'';
       (2) in section 8906(b), by striking paragraph (4) and 
     inserting the following new paragraph (4):
       ``(4) In the case of individuals who enroll in a health 
     plan in accordance with section 8905(d) of this title, the 
     Government contribution shall be determined under section 
     1108(f) of title 10.''; and
       (3) in section 8906(g), by striking paragraph (3) and 
     inserting the following new paragraph (3):
       ``(3) The Government contribution described in subsection 
     (b)(4) for beneficiaries who enroll in accordance with 
     section 8905(d) of this title shall be paid as provided in 
     section 1108(f) of title 10.''.

     SEC. 6. ELIMINATION OF COPAYMENTS, DEDUCTIBLES, AND OTHER 
                   FEES FOR CARE FOR DEPENDENTS UNDER TRICARE 
                   PRIME.

       (a) Elimination.--Section 1097a of title 10, United States 
     Code, is amended--
       (1) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (2) by inserting after subsection (c) the following new 
     subsection (d):
       ``(d) Prohibition on Copayments and Other Fees for Care for 
     Dependents.--No copayment, deductible, annual fee, or other 
     fee may be collected for or with respect to any medical care 
     provided a dependent (as described in subparagraph (A), (D), 
     or (I) of section 1072(2) of this title) of a member of the 
     uniformed services who is enrolled in TRICARE Prime.''.
       (b) Conforming and Clerical Amendments.--(1) The section 
     heading of such section is amended by adding at the end the 
     following: ``; prohibition on fees for certain 
     beneficiaries''.
       (2) The item relating to such section at the beginning of 
     chapter 55 of such title is amended by inserting before the 
     period the following: ``; prohibition on fees for certain 
     beneficiaries''.

     SEC. 7. HEALTH CARE COVERAGE OF IMMEDIATE FAMILY MEMBERS 
                   UNDER PROGRAM FOR MEMBERS ASSIGNED TO CERTAIN 
                   DUTY LOCATIONS FAR FROM CARE.

       Section 1079 of title 10, United States Code, is amended by 
     adding at the end the following:
       ``(p)(1)(A) Subject to such exceptions as the Secretary of 
     Defense considers necessary, coverage for medical care under 
     this section for the dependents referred to in subsection (a) 
     of a member of the armed forces covered by section 1074(c) of 
     this title who are residing with the member, and standards 
     with respect to timely access to such care, shall be 
     comparable to coverage for medical care and standards for 
     timely access to such care under the managed care option of 
     the TRICARE program known as TRICARE Prime.
       ``(B) No copayment, deductible, or annual fee may be 
     collected for or with respect to any medical care provided a 
     dependent under subparagraph (A).
       ``(2) The Secretary of Defense shall enter into 
     arrangements with contractors under the TRICARE program or 
     with other appropriate contractors for the timely and 
     efficient processing of claims under this subsection.
       ``(3) The Secretary of Defense may not require dependents 
     referred to in subsection (a) of a member of the armed forces 
     described in section 1074(c)(3)(B) of this title to receive 
     routine primary medical care at a military medical treatment 
     facility.''.

     SEC. 8. UNIFORMED SERVICES RETIREE HEALTH CARE ACCOUNT.

       (a) Establishment.--Chapter 55 of title 10, United States 
     Code, is amended by adding at the end the following new 
     section:

     ``Sec. 1110. Uniformed Services Retiree Health Care Account

       ``(a) Establishment.--There is established in the Treasury 
     an account to be known as

[[Page 129]]

     `Uniformed Services Retiree Health Care Account' (in this 
     section referred to as the `Account').
       ``(b) Transfers to Account.--There shall be transferred to 
     the Account any unexpired funds (as determined by the 
     Secretary of Defense, after consultation with the other 
     administering Secretaries) in the Defense Health Program 
     account that, as a result of economies, efficiencies, and 
     other savings achieved in the medical care and health care 
     programs of the Department of Defense, are excess to the 
     requirements of such programs.
       ``(c) Use of Funds.--(1) Amounts in the Account may be used 
     for purposes of covering the costs incurred by the Secretary 
     of Defense and the other administering Secretaries in 
     administering section 1108 of this title and the provisions 
     of the Honoring Health Care Commitments to Servicemembers 
     Past and Present Act of 2000 (including the amendments made 
     by that Act).
       ``(2) Notwithstanding any other provision of law, amounts 
     in the Account shall remain available until expended.
       ``(d) Unexpired Funds Defined.--In this section, the term 
     `unexpired funds' means funds appropriated for a definite 
     period of time that remain available for obligation.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by adding at the end the 
     following new item:

``1110. Uniformed Services Retiree Health Care Account.''.

     SEC. 9. CONTRACT AUTHORITY FOR RECOVERY OF OVERPAYMENTS UNDER 
                   THE TRICARE PROGRAM.

       Section 1097b of title 10, United States Code, is amended 
     by adding at the end the following new subsection:
       ``(d) Contract Authority for Recovery of Overpayments.--The 
     Secretary of Defense may enter into contracts with 
     appropriate private entities for purposes of recovering 
     amounts of overpayments to health care providers under the 
     TRICARE program. Services under contracts under this 
     subsection may include audit services and such other services 
     as the Secretary of Defense considers appropriate.''.

     SEC. 10. ENHANCEMENT OF EFFICIENCY OF ADMINISTRATION OF 
                   MILITARY HEALTH CARE SYSTEM.

       (a) In General.--The Secretary of Defense, after 
     consultation with the other administering Secretaries, shall 
     take appropriate actions--
       (1) to enhance the efficiency of administration of the 
     provision of health care services under chapter 55 of title 
     10, United States Code, including the TRICARE program, in 
     matters relating to marketing, beneficiary enrollment, 
     beneficiary and provider education, claims processing, and 
     the scheduling of appointments; and
       (2) otherwise to improve the quality of service provided 
     under that chapter.
       (b) Particular Actions.--The actions taken by the Secretary 
     of Defense under subsection (a) shall include the following:
       (1) Simplification of administrative processes.
       (2) Use of the Internet for critical administrative 
     processes.
       (c) Definitions.--In this section the terms ``administering 
     Secretaries'' and ``TRICARE program'' shall have the meanings 
     given such terms in section 1072 of title 10, United States 
     Code.

     SEC. 11. NATIONWIDE ENROLLMENT CARD UNDER THE TRICARE 
                   PROGRAM.

       (a) Requirement.--The Secretary of Defense, after 
     consultation with the other administering Secretaries, shall 
     issue to covered beneficiaries under the TRICARE program an 
     enrollment card which shall serve as an enrollment card for 
     participation in the TRICARE program nationwide. The purpose 
     of the enrollment card is to facilitate the ready portability 
     of benefits under the TRICARE program.
       (b) Definitions.--In this section the terms ``administering 
     Secretaries'' and ``TRICARE program'' shall have the meanings 
     given such terms in section 1072 of title 10, United States 
     Code.
                                  ____



                                       The Military Coalition,

                                 Alexandria, VA, January 21, 2000.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: The Military Coalition (TMC), a 
     consortium of nationally prominent uniformed services and 
     veterans associations representing more than five million 
     current and former members of the uniformed services, plus 
     their families and survivors, applauds your leadership in 
     introducing comprehensive legislation aimed at correcting 
     serious inequities in the military health care benefit.
       The Coalition believes enactment of such comprehensive 
     health care equity legislation is essential, not only to keep 
     commitments to long-serving members who sacrificed so much, 
     but also to rebuild the readiness of the current force. In 
     this regard, broken health care promises have undermined one 
     of the services' most potent recruiting resources--the 
     enthusiasm of retired members to recommend service careers 
     for their children and grandchildren and those of their 
     friends and neighbors. The broken promises also hurt current 
     force retention, as survey responses indicate that 
     reenlistment-eligible members are increasingly aware of how 
     poorly their predecessors are being treated.
       We are grateful to you for introducing legislation that 
     would keep promises to those who have already served and 
     improve health care delivery to those currently in uniform. 
     You legislation would accomplish TMC's longstanding health 
     care equity goals by authorizing Medicare-eligibles an option 
     to choose between coverage under TRICARE Senior Prime or 
     TRICARE Senior Prime Remote, FEHBP-65, or DoD mail-order and 
     retail pharmacy programs,. Members who first entered service 
     before June 7, 1956 would be authorized to enroll themselves 
     and their family members in DoD managed health care programs 
     without any fees or copays. Active duty family members would 
     be fully covered by Tricare Prime, without any copays, 
     regardless of their duty location.
       What you have proposed is the honorable thing to do, both 
     to ensure retired members receive long-promised and badly 
     needed health coverage in their senior years and to improve 
     quality of life and retention among current and future active 
     duty personnel. The Military Coalition looks forward to 
     working with you and your staff in seeking to bring these 
     important health care improvements to legislative reality.
           Sincerely,
                                           The Military Coalition.
       Air Force Association.
       Air Force Sergeants Association.
       Army Aviation Assn. of America.
       Assn. of Military Surgeons of the United States.
       Assn. of the US Army.
       Commissioned Officers Assn. of the US Public Health 
     Service, Inc.
       CWO & WO Assn. US Coast Guard.
       Enlisted Association of the National Guard of the United 
     States.
       Fleet Reserve Assn.
       Gold Star Wives of America, Inc.
       Jewish War Veterans of the USA.
       Marine Corps League.
       Marine Corps Reserve Officers Assn.
       Military Order of the Purple Heart.
       National Guard Assn. of the United States.
       National Military Family Assn.
       National Order of Battlefield Commissions.
       Naval Reserve Assn.
       Navy League of the United States.
       Reserve Officers Assn.
       Society of Medical Consultants to the Armed Forces.
       The Military Chaplains Assn. of the USA.
       The Retired Enlisted Assn.
       The Retired Officers Assn.
       United Armed Forces Assn.
       USCG Chief Petty Officers Assn.
       US Army Warrant Officers Assn.
       Veterans of Foreign Wars of the United States.
       Veterans' Widows International Network, Inc.
                                  ____

                                             National Military and


                                            Veterans Alliance,

                                                 January 25, 2000.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: The National Military and Veterans 
     Alliance representing over 3.5 million military retirees and 
     other veterans strongly supports your legislation, ``Honoring 
     Health Care Commitments to Service Members Past and Present 
     Act of 2000.''
       The bill reflects your longstanding interest in improving 
     military health care and it offers superb options for the 
     entire military family, retirees, active duty, their families 
     and survivors. With the closure and realignment of over 100 
     domestic military bases since 1988, hundreds of thousands of 
     military beneficiaries have been left with no Department of 
     Defense sponsored health care. This bill will repair the 
     broken health care promise to the nation's warriors and will 
     reassure those considering a military career that the nation 
     will honor its promises made to those who have served to keep 
     our country free.
       We applaud your leadership in introducing this 
     comprehensive legislation, which would include Medicare 
     eligible retirees who desperately need medical care and are 
     the only Federal employees who lose their DoD sponsored 
     health care at age 65. The options offered are critical to 
     military beneficiaries and include priority access to 
     military treatment facilities and TRICARE Senior Prime 
     networks, expansion of the Base Realignment and Closure 
     pharmacy benefit, allows enrollment in the Federal Employees 
     Health Benefits Program and establishes an accrual account 
     for military health care as is done for other Federal 
     retirees.
       With additional base closings being recommended, each 
     option in this legislation is essential. One size will not 
     fit all beneficiaries and they need the maximum number of 
     options to meet the varying needs of active duty, retirees, 
     their families and survivors whatever their location or 
     medical condition.
       The nation does not have a surplus until all obligations 
     are met. This bill will meet a major obligation of the 
     Government and we thank you for introducing it.
           Sincerely,
         Air Force Sergeants Association; American Military 
           Retirees Association; American Military Society; 
           American Retirees Association; Catholic War Veterans; 
           Class Act Group; Gold Star

[[Page 130]]

           Wives of America; Korean War Veterans Association; 
           Military Order of the Purple Heart; Legion of Valor; 
           National Assn. for Uniformed Services; Naval Enlisted 
           Reserve Association;Naval Reserve Association; Non 
           Commissioned Officers Assn; Society of Medical 
           Consultants; The Retired Enlisted Association; TREA 
           Senior Citizen League;Tragedy Assistance Program for 
           Survivors; Veterans of Foreign Wars; Women in Search of 
           Equity.
                                  ____



                                        Air Force Association,

                            Arlington, Virginia, January 25, 2000.
     Hon. John McCain,
     Senate Russell Building, Washington, DC.
       Dear Senator McCain:
       On behalf of the 150,000 members of the Air Force 
     Association, I want to thank you for taking the lead in the 
     Senate to enact legislation to restore affordable, portable 
     and accessible health care for our nation's military members, 
     their families and our retirees. I am confident your 
     legislative actions on this bill will have a long-term, 
     positive affect on the morale, welfare and retention of those 
     who now serve on active duty and will keep faith with those 
     now retired.
       While I know other Members of the Senate are planning to 
     introduce similar legislation, your very comprehensive bill 
     has set a high standard for others to follow. I also am 
     pleased to see that the Joint Chiefs of Staff (JCS) will make 
     military health care reform their number one personnel-
     related issue this year. The majority of the concerns raised 
     by the JCS are pointedly addressed in your legislation.
       We want to work with you to get this bill enacted into law. 
     Please let us know how we can be of assistance.
           Sincerely,
     Thomas J. McKee.
                                  ____

                                          National Association for


                                           Uniformed Services,

                                Springfield, VA, January 25, 2000.
     Hon. John McCain,
     U.S. Senate, Washington, DC.
       Dear Senator McCain: The National Association for Uniformed 
     Services and The Society of Military Widows with membership 
     encompassing all grades, ranks, family members and survivors 
     of all seven uniformed services strongly support your 
     legislation, ``Honoring Health Care Commitments to Service 
     Members Past and Present Act of 2000.''
       We applaud your leadership in introducing this most 
     comprehensive legislation which will improve access to health 
     care for every category of military member, active duty, 
     retired, family member and survivor.
       This bill will repair the broken health care promise to the 
     nation's warriors and will reassure those considering a 
     military career that the nation will honor its promises made 
     to those who have served to keep our country free. This 
     legislation includes Medicare eligible retirees who 
     desperately need medical care and are the only Federal 
     employees who lose their DoD sponsored health care at age 65. 
     The options offered are critical to military beneficiaries 
     and include priority access to military treatment facilities 
     and TRICARE Senior Prime networks, expansion of the Base 
     Realignment and Closure pharmacy benefit, allows enrollment 
     in the Federal Employees Health Benefits Program and 
     establishes an accrual account for military health care as is 
     done for other Federal retirees.
       Each option in this legislation is essential. Beneficiaries 
     need the maximum number of choices to meet the varying needs 
     of active duty, retirees, their families and survivors 
     whatever their location or medical condition.
       This bill reflects your longstanding commitment to a strong 
     national defense and the men and women who make that defense 
     possible. It also will meet a major obligation of the 
     Government and we thank you for introducing it.
           Sincerely,

                                            Richard D. Murray,

                                        Major General, USAF (Ret),
     President, NAUS and Administrator, SMW.
                                  ____

                                         Monday, January 24, 2000.
     Chris Paul,
     c/o John S. McCain III.
       I am delighted that Senator John McCain has signed on to 
     H.R. 2966. This is a giant step toward repairing the breach 
     of contract by this Administration.
       Furthermore, the McCain bill goes further to improve the 
     health care delivery system for active duty servicemembers 
     and their families and also repairs the ``broken promise'' 
     for military retirees and their families.
                                          Col. George ``Bud'' Day,
     Attorney for WWII-Korean Vets.

                          ____________________