[Congressional Record (Bound Edition), Volume 152 (2006), Part 6]
[Senate]
[Pages 7316-7329]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      Mr. DODD (for himself and Mr. Smith):
  S. 2765. A bill to provide assistance to improve the health of 
newborns, children, and mothers in developing countries, and for other 
purposes; to the Committee on Foreign Relations.
  Mr. President, I rise today to introduce, on behalf of myself and my 
friend, Senator Gordon Smith of Oregon, the Child Health Investment for 
Long-term Development (CHILD and Newborn) Act of 2006. This legislation 
would perform four simple, yet critically important functions.

[[Page 7317]]

  First, it would require the Administration to develop and implement a 
strategy to improve the health of, and reduce mortality rates among, 
newborns, children, and mothers in developing countries.
  Second, it would mandate the establishment of a U.S. Government task 
force to assess, monitor, and evaluate the progress of U.S. efforts to 
meet the United Nations Millennium Development Goals by 2015--
specifically as those goals relate to reducing mortality rates for 
mothers and for children less than 5 years of age in developing 
countries.
  Third, it would authorize the President to furnish assistance for 
programs whose goal is to improve the health of newborns, children, and 
mothers in developing countries.
  And fourth, this legislation would authorize appropriations to carry 
out its provisions--$660 million for fiscal year 2007, and $1.2 billion 
for each of fiscal years 2008-2011.
  I know that some of my colleagues will look at this bill and ask why 
the U.S. should devote such large amounts of resources to combating 
child and maternal mortality in the developing world. Certainly, nobody 
would deny that it's an important cause, but should it really be this 
much of a priority?
  I would argue that the answer to this is yes. Why? Because with U.S. 
leadership, the current reality for mothers and their young children in 
the developing world can be changed dramatically.
  What is that reality?
  Almost 11 million children under the age of 5 die every year in the 
developing world--that's approximately 30,000 each day. About four 
million of those children die in their first four weeks of life. In 
many cases, they aren't even provided with a fighting chance. Indeed, 
for children under the age of five in the developing world, preventable 
or treatable diseases such as measles, tetanus, diarrhea, pneumonia, 
and malaria are the most common causes of death.
  Each year, more than 525,000 women die from causes related to 
pregnancy and childbirth--more than 1,400 each day. Ninety-nine percent 
of these deaths occur in the developing world. And the lifetime risk of 
an African woman dying from a pregnancy or childbirth-related 
complication is I in 16, a high level of risk that is all the more 
striking when compared to the same risk for women in more developed 
regions--1 in 2,800. Some of the most common risk factors for maternal 
death in developing countries include early pregnancy and childbirth, 
closely spaced births, infectious diseases, malnutrition, and 
complications during childbirth.
  Mr. President, the deaths of these nearly 12 million mothers and 
children are from largely preventable causes. This is a tragic 
situation, and it shouldn't be the case.
  Luckily, we can combat these high levels of mortality--and it won't 
require lots of sophisticated technology. Instead, it will require 
simple measures that we take for granted here in the developed world.
  For instance, it is estimated that two-thirds of deaths among 
children under 5 years of age--that's 7.1 million children, including 3 
million new-
borns--could be prevented by low-cost, low-tech health and nutritional 
interventions. These interventions include encouraging breastfeeding; 
providing vitamin supplements, immunizations, and antibiotics; offering 
oral rehydration therapy with clean water; and expansion of basic 
clinical care.
  For expecting mothers, simple steps such as birth spacing, access to 
preventive care, skilled birth attendants, and emergency obstetric care 
can help reduce maternal morality rates. And keeping mothers healthy is 
critical because the welfare of newborns and infants is inextricably 
tied to the health of the mother.
  Mr. President, the U.S. isn't new at this battle. Over the past 30 
years, our work in promoting child survival and maternal health 
globally has resulted in millions of lives being saved.
  And in 2000, the U.S. joined 188 other countries in supporting eight 
Millennium Development Goals laid out by the United Nations. Two of 
these goals are related to child and maternal health--one calls for a 
reduction by two-thirds in the mortality rate of children under 5, and 
the other calls for a reduction in maternal deaths by three-quarters. 
Both of these goals are targeted to be met by 2015.
  But with current structures and at current funding levels, the world 
is unlikely to meet these laudable goals. Certainly, the U.S. can't 
meet these global needs alone. Addressing this critical issue can't be 
a unilateral effort--countries around the world must also do their part 
and come forward with much-needed funding.
  But passing the CHILD and Newborn Act of 2006 would send a strong 
message to the international community that this is a priority issue, 
and it would encourage them to step up to the plate. Millions of lives 
could be saved in the process.
  On September 14, 2005, President Bush stated that the U.S. is 
``committed to the Millennium Development Goals.'' I commend the 
President for his words. But now, it is time for Congress to stand up 
and make sure that the U.S. fulfills this commitment to protect 
millions of innocent women and their children around the globe. I urge 
my colleagues to support this bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2765

       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 ``Child Health Investment for 
     Long-term Development (CHILD and Newborn) Act of 2006''.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds the following:
       (1) Around the world, approximately 10.8 million children 
     under the age of five die each year, more than 30,000 per 
     day, almost all in the developing world.
       (2) Each year in the developing world, four million 
     newborns die in their first four weeks of life.
       (3) Sub-Saharan Africa, with only 10 percent of the world's 
     population, accounts for 43 percent of all deaths among 
     children under the age of five.
       (4) Countries such as Afghanistan, Angola and Niger 
     experience extreme levels of child mortality, with 25 percent 
     of children dying before their fifth birthday.
       (5) For children under the age of five in the developing 
     world, preventable or treatable diseases, such as measles, 
     tetanus, diarrhea, pneumonia, and malaria, are the most 
     common causes of death.
       (6) Throughout the developing world, the lack of basic 
     health services, clean water, adequate sanitation, and proper 
     nutrition contribute significantly to child mortality.
       (7) Hunger and malnutrition contribute to over five million 
     child deaths annually.
       (8) The lack of low-cost antibiotics and anti-malarial 
     drugs contribute to three million child deaths each year.
       (9) Lack of access to health services results in 30 million 
     children under the age of one year going without necessary 
     immunizations.
       (10) Every year an estimated 250,000 to 500,000 vitamin A-
     deficient children become blind, with one-half of such 
     children dying within 12 months of losing their sight.
       (11) Iron deficiency, affecting over 30 percent of the 
     world's population, causes premature birth, low birth weight, 
     and infections, elevating the risk of death in children.
       (12) Two-thirds of deaths of children under five years of 
     age, or 7.1 million children, including three million newborn 
     deaths, could be prevented by low-cost, low-tech health and 
     nutritional interventions.
       (13) Exclusive breastfeeding--giving only breast milk for 
     the first six months of life--could prevent an estimated 1.3 
     million newborn and infant deaths each year, primarily by 
     protecting against diarrhea and pneumonia.
       (14) An additional two million lives could be saved 
     annually by providing oral-rehydration therapy prepared with 
     clean water.
       (15) During the 1990s, successful immunization programs 
     reduced polio by 99 percent, tetanus deaths by 50 percent, 
     and measles cases by 40 percent.
       (16) Between 1998 and 2000, distribution of low-cost 
     vitamin A supplements saved an estimated one million lives.
       (17) Expansion of clinical care of newborns and mothers, 
     such as clean delivery by skilled attendants, emergency 
     obstetric care, and neonatal resuscitation, can avert 50 
     percent of newborn deaths.
       (18) Keeping mothers healthy is essential for child 
     survival because illness, complications, or maternal death 
     during or following

[[Page 7318]]

     pregnancy increases the risk for death in newborns and 
     infants.
       (19) Each year more than 525,000 women die from causes 
     related to pregnancy and childbirth, with 99 percent of these 
     deaths occurring in developing countries.
       (20) The lifetime risk of an African woman dying from a 
     complication related to pregnancy or childbirth is 1 in 16, 
     while the same risk for a woman in a developed country is 1 
     in 2,800.
       (21) Risk factors for maternal death in developing 
     countries include early pregnancy and childbirth, closely 
     spaced births, infectious diseases, malnutrition, and 
     complications during childbirth.
       (22) Birth spacing, access to preventive care, skilled 
     birth attendants, and emergency obstetric care can help 
     reduce maternal mortality.
       (23) The role of the United States in promoting child 
     survival and maternal health over the past three decades has 
     resulted in millions of lives being saved around the world.
       (24) In 2000, the United States joined 188 other countries 
     in supporting eight Millennium Development Goals designed to 
     achieve ``a more peaceful, prosperous and just world''.
       (25) Two of the Millennium Development Goals call for a 
     reduction in the mortality rate of children under the age of 
     five by two-thirds and a reduction in maternal deaths by 
     three-quarters by 2015.
       (26) On September 14, 2005, President George W. Bush stated 
     before the leaders of the world: ``To spread a vision of 
     hope, the United States is determined to help nations that 
     are struggling with poverty. We are committed to the 
     Millennium Development Goals.''.
       (b) Purposes.--The purposes of this Act are to--
       (1) authorize assistance to improve the health of newborns, 
     children, and mothers in developing countries, including by 
     strengthening the capacity of health systems and health 
     workers;
       (2) develop and implement a strategy to improve the health 
     of newborns, children, and mothers, including reducing child 
     and maternal mortality, in developing countries;
       (3) to establish a task force to assess, monitor, and 
     evaluate the progress and contributions of relevant 
     departments and agencies of the Government of the United 
     States in achieving the United Nations Millennium Development 
     Goals by 2015 for reducing the mortality of children under 
     the age of five by two-thirds and reducing maternal mortality 
     by three-quarters in developing countries.

     SEC. 3. ASSISTANCE TO IMPROVE THE HEALTH OF NEWBORNS, 
                   CHILDREN, AND MOTHERS IN DEVELOPING COUNTRIES.

       (a) In General.--Chapter 1 of part I of the Foreign 
     Assistance Act of 1961 (22 U.S.C. 2151 et seq.) is amended--
       (1) in section 104(c)--
       (A) by striking paragraphs (2) and (3); and
       (B) by redesignating paragraph (4) as paragraph (2);
       (2) by redesignating sections 104A, 104B, and 104C as 
     sections 104B, 104C, and 104D, respectively; and
       (3) by inserting after section 104 the following new 
     section:

     ``SEC. 104A. ASSISTANCE TO IMPROVE THE HEALTH OF NEWBORNS, 
                   CHILDREN, AND MOTHERS.

       ``(a) Authorization.--Consistent with section 104(c), the 
     President is authorized to furnish assistance, on such terms 
     and conditions as the President may determine, to improve the 
     health of newborns, children, and mothers in developing 
     countries.
       ``(b) Activities Supported.--Assistance provided under 
     subsection (b) shall, to the maximum extent practicable, be 
     used to carry out the following activities:
       ``(1) Activities to strengthen the capacity of health 
     systems in developing countries, including training for 
     clinicians, nurses, technicians, sanitation and public health 
     workers, community-based health workers, midwives and birth 
     attendants, peer educators, and private sector enterprises.
       ``(2) Activities to provide health care access to 
     underserved and marginalized populations.
       ``(3) Activities to ensure the supply, logistical support, 
     and distribution of essential drugs, vaccines, commodities, 
     and equipment to regional, district, and local levels.
       ``(4) Activities to educate underserved and marginalized 
     populations to seek health care when appropriate, including 
     clinical and community-based activities.
       ``(5) Activities to integrate and coordinate assistance 
     provided under this section with existing health programs 
     for--
       ``(A) the prevention of the transmission of HIV from 
     mother-to-child and other HIV/AIDS counseling, care, and 
     treatment activities;
       ``(B) malaria;
       ``(C) tuberculosis; and
       ``(D) child spacing.
       ``(6) Activities to expand access to safe water and 
     sanitation.
       ``(7) Activities to expand the use of and technical support 
     for appropriate technology to reduce acute respiratory 
     infection from firewood smoke inhalation.
       ``(c) Guidelines.--To the maximum extent practicable, 
     programs, projects, and activities carried out using 
     assistance provided under this section shall be--
       ``(1) carried out through private and voluntary 
     organizations, as well as faith-based organizations, giving 
     priority to organizations that demonstrate effectiveness and 
     commitment to improving the health of newborns, children, and 
     mothers;
       ``(2) carried out with input by host countries, including 
     civil society and local communities, as well as other donors 
     and multilateral organizations;
       ``(3) carried out with input by beneficiaries and other 
     directly affected populations, especially women and 
     marginalized communities; and
       ``(4) designed to build the capacity of host country 
     governments and civil society organizations.
       ``(d) Annual Report.--Not later than January 31 of each 
     year, the President shall transmit to Congress a report on 
     the implementation of this section for the prior fiscal year.
       ``(e) Definitions.--In this section:
       ``(1) AIDS.--The term `AIDS' has the meaning given the term 
     in section 104B(g)(1) of this Act.
       ``(2) HIV.--The term `HIV' has the meaning given the term 
     in section 104B(g)(2) of this Act.
       ``(3) HIV/AIDS.--The term `HIV/AIDS' has the meaning given 
     the term in section 104B(g)(3) of this Act.''.
       (b) Conforming Amendments.--The Foreign Assistance Act of 
     1961 (22 U.S.C. 2151 et seq.) is amended--
       (1) in section 104(c)(2) (as redesignated by subsection 
     (a)(1)(B) of this section), by striking ``and 104C'' and 
     inserting ``104C, and 104D'';
       (2) in section 104B (as redesignated by subsection (a)(2) 
     of this section)--
       (A) in subsection (c)(1), by inserting ``and section 104A'' 
     after ``section 104(c)'';
       (B) in subsection (e)(2), by striking ``section 104B, and 
     section 104C'' and inserting ``section 104C, and section 
     104D''; and
       (C) in subsection (f), by striking ``section 104(c), this 
     section, section 104B, and section 104C'' and inserting 
     ``section 104(c), section 104A, this section, section 104C, 
     and section 104D'';
       (3) in subsection (c) of section 104C (as redesignated by 
     subsection (a)(2) of this section), by inserting ``and 
     section 104A'' after ``section 104(c)'';
       (4) in subsection (c) of section 104D (as redesignated by 
     subsection (a)(2) of this section), by inserting ``and 
     section 104A'' after ``section 104(c)''; and
       (5) in the first sentence of section 119(c), by striking 
     ``section 104(c)(2), relating to Child Survival Fund'' and 
     inserting ``section 104A''.

     SEC. 4. DEVELOPMENT OF STRATEGY TO IMPROVE THE HEALTH OF 
                   NEWBORNS, CHILDREN, AND MOTHERS IN DEVELOPING 
                   COUNTRIES.

       (a) Development of Strategy.--The President shall develop a 
     comprehensive strategy to improve the health of newborns, 
     children, and mothers, including reducing newborn, child, and 
     maternal mortality, in developing countries.
       (b) Components.--The strategy developed pursuant to 
     subsection (a) shall include the following:
       (1) Programmatic areas and interventions providing maximum 
     health benefits to populations at risk as well as maximum 
     reduction in mortality, including--
       (A) costs and benefits of programs and interventions; and
       (B) investments needed in identified programs and 
     interventions to achieve the greatest results.
       (2) An identification of countries with priority needs for 
     the five-year period beginning on the date of the enactment 
     of this Act based on--
       (A) the neonatal mortality rate;
       (B) the mortality rate of children under the age of five;
       (C) the maternal mortality rate;
       (D) the percentage of women and children with limited or no 
     access to basic health care; and
       (E) additional criteria for evaluation such as--
       (i) the percentage of one-year old children who are fully 
     immunized;
       (ii) the percentage of children under the age of five who 
     sleep under insecticide-treated bed nets;
       (iii) the percentage of children under the age of five with 
     fever treated with anti-malarial drugs;
       (iv) the percentage of children under the age of five who 
     are covered by vitamin A supplementation;
       (v) the percentage of children under the age of five with 
     diarrhea who are receiving oral-rehydration therapy and 
     continued feeding;
       (vi) the percentage of children under the age of five with 
     pneumonia who are receiving appropriate care;
       (vii) the percentage of the population with access to 
     improved sanitation facilities;
       (viii) the percentage of the population with access to safe 
     drinking water;
       (ix) the percentage of children under the age of five who 
     are underweight for their age;
       (x) the percentage of births attended by skilled health 
     care personnel;

[[Page 7319]]

       (xi) the percentage of women with access to emergency 
     obstetric care;
       (xii) the potential for implementing newborn, child, and 
     maternal health interventions at scale; and
       (xiii) the demonstrated commitment of countries to newborn, 
     child, and maternal health.
       (3) A description of how United States assistance 
     complements and leverages efforts by other donors, as well as 
     builds capacity and self-sufficiency among recipient 
     countries.
       (4) An expansion of the Child Survival and Health Grants 
     Program of the United States Agency for International 
     Development to provide additional support programs and 
     interventions determined to be efficacious and cost-effective 
     in improving health and reducing mortality.
       (5) Enhanced coordination among relevant departments and 
     agencies of the Government of the United States engaged in 
     activities to improve the health of newborns, children, and 
     mothers in developing countries.
       (c) Report.--Not later than 180 days after the date of the 
     enactment of this Act, the President shall transmit to 
     Congress a report that contains the strategy described in 
     this section.

     SEC. 5. INTERAGENCY TASK FORCE ON CHILD SURVIVAL AND MATERNAL 
                   HEALTH IN DEVELOPING COUNTRIES.

       (a) Establishment.--There is established a task force to be 
     known as the Interagency Task Force on Child Survival and 
     Maternal Health in Developing Countries (in this section 
     referred to as the ``Task Force'').
       (b) Duties.--
       (1) In general.--The Task Force shall assess, monitor, and 
     evaluate the progress and contributions of relevant 
     departments and agencies of the Government of the United 
     States in achieving the Millennium Development Goals by 2015 
     for reducing the mortality of children under the age of five 
     by two-thirds and reducing maternal mortality by three-
     quarters in developing countries, including by--
       (A) identifying and evaluating programs and interventions 
     that directly or indirectly contribute to the reduction of 
     child and maternal mortality rates;
       (B) assessing effectiveness of programs, interventions, and 
     strategies toward achieving the maximum reduction of child 
     and maternal mortality rates;
       (C) assessing the level of coordination among relevant 
     departments and agencies of the Government of the United 
     States, the international community, international 
     organizations, faith-based organizations, academic 
     institutions, and the private sector;
       (D) assessing the contributions made by United States-
     funded programs toward achieving the Millennium Development 
     Goals;
       (E) identifying the bilateral efforts of other nations and 
     multilateral efforts toward achieving the Millennium 
     Development Goals; and
       (F) preparing the annual report required by subsection (f).
       (2) Consultation.--To the maximum extent practicable, the 
     Task Force shall consult with individuals with expertise in 
     the matters to be considered by the Task Force who are not 
     officers or employees of the Government of the United States, 
     including representatives of United States-based 
     nongovernmental organizations (including faith-based 
     organizations and private foundations), academic 
     institutions, private corporations, the United Nations 
     Children's Fund (UNICEF), and the World Bank.
       (c) Membership.--
       (1) Number and appointment.--The Task Force shall be 
     composed of the following members:
       (A) The Administrator of the United States Agency for 
     International Development.
       (B) The Assistant Secretary of State for Population, 
     Refugees and Migration.
       (C) The Coordinator of United States Government Activities 
     to Combat HIV/AIDS Globally.
       (D) The Director of the Office of Global Health Affairs of 
     the Department of Health and Human Services.
       (E) The Under Secretary for Food, Nutrition and Consumer 
     Services of the Department of Agriculture.
       (F) The Chief Executive Officer of the Millennium Challenge 
     Corporation.
       (G) The Director of the Peace Corps.
       (H) Other officials of relevant departments and agencies of 
     the Federal Government who shall be appointed by the 
     President.
       (2) Chairperson.--The Administrator of the United States 
     Agency for International Development shall serve as 
     chairperson of the Task Force.
       (d) Meetings.--The Task Force shall meet on a regular 
     basis, not less often than quarterly, on a schedule to be 
     agreed upon by the members of the Task Force, and starting 
     not later than 90 days after the date of the enactment of 
     this Act.
       (e) Definition.--In this subsection, the term ``Millennium 
     Development Goals'' means the key development objectives 
     described in the United Nations Millennium Declaration, as 
     contained in United Nations General Assembly Resolution 55/2 
     (September 2000).
       (f) Report.--Not later than 120 days after the date of the 
     enactment of this Act, and not later than April 30 of each 
     year thereafter, the Task Force shall submit to Congress and 
     the President a report on the implementation of this section.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated to 
     carry out this Act, and the amendments made by this Act, 
     $660,000,000 for fiscal year 2007 and $1,200,000,000 for each 
     of the fiscal years 2008 through 2011.
       (b) Availability of Funds.--Amounts appropriated pursuant 
     to the authorization of appropriations under subsection (a) 
     are authorized to remain available until expended.
                                 ______
                                 
      By Mr. VOINOVICH (for himself, Mr. Bingaman, Mr. DeWine, and Mr. 
        Akaka):
  S. 2772. A bill to provide for innovation in health care through 
State initiatives that expand coverage and access and improve quality 
and efficiency in the health care system; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. VOINOVICH. Mr. President, I rise to speak about a bill my 
colleague Senator Bingaman and I introduced today, the Health Care 
Partnership Act. For too many years, I have listened to my colleagues 
on both sides of the aisle talk about the rising cost of health care 
and the growing number of uninsured Americans. Yet, we have not been 
able to make much progress here at the Federal level to find a 
meaningful solution for the dilemma this Nation is facing regarding 
access to quality, affordable health care. Next to the economy, it is 
the greatest domestic challenge facing our Nation. In fact, the rising 
cost of health care is a major part of what is hurting our 
competitiveness in the global marketplace.
  While surveys have indicated that health insurance premiums have 
stabilized--a 9.2 percent increase in 2006 and 2005 and compared with a 
12.3 percent in 2004; 14.7 percent in 2003; and 15.2 percent in 2002--
health insurance costs continue to be a significant factor impacting 
American competitiveness. In addition, the share of costs that 
individuals have paid for employer sponsored insurance has risen 
roughly 2 percent each year, from 31.4 percent of health care costs in 
2001 to 38.4 percent this year.
  In fact, spending on health care in the United States reached $1.9 
trillion in 2004--almost 16.5 percent of our GDP--the largest share 
ever.
  Yet, despite all the increases in health care spending some 46 
million Americans--15 percent of the population--had no health 
insurance at some point last year. This number has increased steadily. 
In 2000, that number was 39.8 million. In 2002 it was 43.6 million.
  These statistics are startling and it is time that we do something 
about them. The bill Senator Bingaman and I are introducing today aims 
to break the log-jam here in Washington and allow states the freedom to 
explore with health care reform options. This bill would support state-
based efforts to reduce the uninsured and the cost of health care, 
improve quality, improve access to care, and expand information 
technology.
  I have been in this situation before. As Governor of Ohio, I had to 
work creatively to expand coverage and deal with increasing health care 
costs for a growing number of uninsured Ohioans. I am happy to report 
that we were able to make some progress toward reducing the number of 
uninsured Ohioans during my time as the head of the state by 
negotiating with the state unions to move to managed care; by 
controlling Medicaid costs to the point where from 1995 to 1998, due to 
good stewardship and management, Ohio ended up under-spending on 
Medicaid without harming families; and implementing the S-CHIP program 
to provide coverage for uninsured children.
  Like we did in Ohio, a number of states are already actively pursuing 
efforts to reduce the number of their residents who lack adequate 
health care coverage. The Health Care Partnership Act will build on 
what states like Massachusetts and others are doing, while providing a 
mechanism to analyze results and make recommendations for future action 
at the Federal level.
  Under the Health Partnership Act, Congress would authorize grants to 
individual states, groups of states, and

[[Page 7320]]

Indian tribes and local governments to carry out any of a broad range 
of strategies to improve our Nation's health care delivery. The bill 
creates a mechanism for states to apply for grants to a bipartisan 
``State Health Innovation Commission'' housed at the Department of 
Health and Human Services (HHS). After reviewing the state proposals, 
the Commission would submit to Congress a list of recommended state 
applications. The Commission would also recommend the amount of Federal 
grant money each state should receive to carry out the actions 
described in their plan.
  Most importantly, at the end of the five-year period, the Commission 
would be required to report to Congress whether the states are meeting 
the goals of the Act. The Commission would then recommend future action 
Congress should take concerning overall reform, including whether or 
not to extend the state program.
  I believe it is important that we pass this legislation to provide a 
platform from which we can have a thoughtful conversation about health 
care reform here in Washington. Since I have been in the Senate, 
Congress has made some progress toward improving health care, most 
notably for our 43 million seniors who now have access to affordable 
prescription medication through the Medicare Modernization Act. We have 
also increased funding for community health centers and safety net 
hospitals that provide health care for the uninsured and under insured; 
increased the use of technology in our health care delivery system; and 
improved the safety of medical care by passing a medical errors 
reporting bill.
  Yet, these incremental steps are not enough, and we have been at this 
too long here in Washington without comprehensive, meaningful results. 
I ask for my colleagues' support for this bipartisan bill that I hope 
will move us closer toward a solution to the uninsured.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2772

       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 ``Health Partnership Act''.

     SEC. 2. STATE HEALTH REFORM PROJECTS.

       (a) Purpose; Establishment of State Health Care Expansion 
     and Improvement Program.--The purposes of the programs 
     approved under this section shall include, but not be limited 
     to--
       (1) achieving the goals of increased health coverage and 
     access;
       (2) ensuring that patients receive high-quality, 
     appropriate health care;
       (3) improving the efficiency of health care spending; and
       (4) testing alternative reforms, such as building on the 
     public or private health systems, or creating new systems, to 
     achieve the objectives of this Act.
       (b) Applications by States, Local Governments, and 
     Tribes.--
       (1) Entities that may apply.--
       (A) In general.--A State, in consultation with local 
     governments, Indian tribes, and Indian organizations involved 
     in the provision of health care, may apply for a State health 
     care expansion and improvement program for the entire State 
     (or for regions of the State) under paragraph (2).
       (B) Regional groups.--A regional entity consisting of more 
     than one State may apply for a multi State health care 
     expansion and improvement program for the entire region 
     involved under paragraph (2).
       (C) Definition.--In this Act, the term ``State'' means the 
     50 States, the District of Columbia, and the Commonwealth of 
     Puerto Rico. Such term shall include a regional entity 
     described in subparagraph (B).
       (2) Submission of application.--In accordance with this 
     section, each State desiring to implement a State health care 
     expansion and improvement program may submit an application 
     to the State Health Innovation Commission under subsection 
     (c) (referred to in this section as the ``Commission'') for 
     approval.
       (3) Local government applications.--
       (A) In general.--Where a State declines to submit an 
     application under this section, a unit of local government of 
     such State, or a consortium of such units of local 
     governments, may submit an application directly to the 
     Commission for programs or projects under this subsection. 
     Such an application shall be subject to the requirements of 
     this section.
       (B) Other applications.--Subject to such additional 
     guidelines as the Secretary may prescribe, a unit of local 
     government, Indian tribe, or Indian health organization may 
     submit an application under this section, whether or not the 
     State submits such an application, if such unit of local 
     government can demonstrate unique demographic needs or a 
     significant population size that warrants a substate program 
     under this subsection.
       (c) State Health Innovation Commission.--
       (1) In general.--Within 90 days after the date of the 
     enactment of this Act, the Secretary shall establish a State 
     Health Innovation Commission that shall--
       (A) be comprised of--
       (i) the Secretary;
       (ii) four State governors to be appointed by the National 
     Governors Association on a bipartisan basis;
       (iii) two members of a State legislature to be appointed by 
     the National Conference of State Legislators on a bipartisan 
     basis;
       (iv) two county officials to be appointed by the National 
     Association of Counties on a bipartisan basis;
       (v) two mayors to be appointed by the United States 
     Conference of Mayors on a bipartisan basis;
       (vi) two individuals to be appointed by the Speaker of the 
     House of Representatives;
       (vii) two individuals to be appointed by the Minority 
     Leader of the House of Representatives;
       (viii) two individuals to be appointed by the Majority 
     Leader of the Senate;
       (ix) two individuals to be appointed by the Minority Leader 
     of the Senate; and
       (x) two individuals who are members of federally-recognized 
     Indian tribes to be appointed on a bipartisan basis by the 
     National Congress of American Indians;
       (B) upon approval of \2/3\ of the members of the 
     Commission, provide the States with a variety of reform 
     options for their applications, such as tax credit 
     approaches, expansions of public programs such as medicaid 
     and the State Children's Health Insurance Program, the 
     creation of purchasing pooling arrangements similar to the 
     Federal Employees Health Benefits Program, individual market 
     purchasing options, single risk pool or single payer systems, 
     health savings accounts, a combination of the options 
     described in this clause, or other alternatives determined 
     appropriate by the Commission, including options suggested by 
     States, Indian tribes, or the public;
       (C) establish, in collaboration with a qualified and 
     independent organization such as the Institute of Medicine, 
     minimum performance measures and goals with respect to 
     coverage, quality, and cost of State programs, as described 
     under subsection (d)(1);
       (D) conduct a thorough review of the grant application from 
     a State and carry on a dialogue with all State applicants 
     concerning possible modifications and adjustments;
       (E) submit the recommendations and legislative proposal 
     described in subsection (d)(4)(B);
       (F) be responsible for monitoring the status and progress 
     achieved under program or projects granted under this 
     section;
       (G) report to the public concerning progress made by States 
     with respect to the performance measures and goals 
     established under this Act, the periodic progress of the 
     State relative to its State performance measures and goals, 
     and the State program application procedures, by region and 
     State jurisdiction;
       (H) promote information exchange between States and the 
     Federal Government; and
       (I) be responsible for making recommendations to the 
     Secretary and the Congress, using equivalency or minimum 
     standards, for minimizing the negative effect of State 
     program on national employer groups, provider organizations, 
     and insurers because of differing State requirements under 
     the programs.
       (2) Period of appointment; representation requirements; 
     vacancies.--Members shall be appointed for a term of 5 years. 
     In appointing such members under paragraph (1)(A), the 
     designated appointing individuals shall ensure the 
     representation of urban and rural areas and an appropriate 
     geographic distribution of such members. Any vacancy in the 
     Commission shall not affect its powers, but shall be filled 
     in the same manner as the original appointment.
       (3) Chairperson, meetings.--
       (A) Chairperson.--The Commission shall select a Chairperson 
     from among its members.
       (B) Quorum.--A majority of the members of the Commission 
     shall constitute a quorum, but a lesser number of members may 
     hold hearings.
       (C) Meetings.--Not later than 30 days after the date on 
     which all members of the Commission have been appointed, the 
     Commission shall hold its first meeting. The Commission shall 
     meet at the call of the Chairperson.
       (4) Powers of the commission.--
       (A) Negotiations with states.--The Commission may conduct 
     detailed discussions and negotiations with States submitting 
     applications under this section, either individually or in 
     groups, to facilitate a final set of recommendations for 
     purposes of subsection (d)(4)(B). Such negotiations shall 
     include consultations with Indian tribes, and be conducted in 
     a public forum.

[[Page 7321]]

       (B) Hearings.--The Commission may hold such hearings, sit 
     and act at such times and places, take such testimony, and 
     receive such evidence as the Commission considers advisable 
     to carry out the purposes of this subsection.
       (C) Meetings.--In addition to other meetings the Commission 
     may hold, the Commission shall hold an annual meeting with 
     the participating States under this section for the purpose 
     of having States report progress toward the purposes in 
     subsection (a)(1) and for an exchange of information.
       (D) Information.--The Commission may secure directly from 
     any Federal department or agency such information as the 
     Commission considers necessary to carry out the provisions of 
     this subsection. Upon request of the Chairperson of the 
     Commission, the head of such department or agency shall 
     furnish such information to the Commission if the head of the 
     department or agency involved determines it appropriate.
       (E)  Postal services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (5) Personnel matters.--
       (A) Compensation.--Each member of the Commission who is not 
     an officer or employee of the Federal Government or of a 
     State or local government shall be compensated at a rate 
     equal to the daily equivalent of the annual rate of basic pay 
     prescribed for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code, for each day 
     (including travel time) during which such member is engaged 
     in the performance of the duties of the Commission. All 
     members of the Commission who are officers or employees of 
     the United States shall serve without compensation in 
     addition to that received for their services as officers or 
     employees of the United States.
       (B) Travel expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in the performance of services for the Commission.
       (C) Staff.--The Chairperson of the Commission may, without 
     regard to the civil service laws and regulations, appoint and 
     terminate an executive director and such other additional 
     personnel as may be necessary to enable the Commission to 
     perform its duties. The employment of an executive director 
     shall be subject to confirmation by the Commission.
       (D) Detail of government employees.--Any Federal Government 
     employee may be detailed to the Commission without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service status or privilege.
       (E) Temporary and intermittent services.--The Chairperson 
     of the Commission may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       (6) Funding.--For the purpose of carrying out this 
     subsection, there are authorized to be appropriated 
     $3,000,000 for fiscal year 2006 and each fiscal year 
     thereafter.
       (d) Requirements for Programs.--
       (1) State plan.--A State that seeks to receive a grant 
     under subsection (f) to operate a program under this section 
     shall prepare and submit to the Commission, as part of the 
     application under subsection (b), a State health care plan 
     that shall have as its goal improvements in coverage, quality 
     and costs. To achieve such goal, the State plan shall comply 
     with the following:
       (A) Coverage.--With respect to coverage, the State plan 
     shall--
       (i) provide and describe the manner in which the State will 
     ensure that an increased number of individuals residing 
     within the State will have expanded access to health care 
     coverage with a specific 5-year target for reduction in the 
     number of uninsured individuals through either private or 
     public program expansion, or both, in accordance with the 
     options established by the Commission;
       (ii) describe the number and percentage of current 
     uninsured individuals who will achieve coverage under the 
     State health program;
       (iii) describe the minimum benefits package that will be 
     provided to all classes of beneficiaries under the State 
     health program;
       (iv) identify Federal, State, or local and private programs 
     that currently provide health care services in the State and 
     describe how such programs could be coordinated with the 
     State health program, to the extent practicable; and
       (v) provide for improvements in the availability of 
     appropriate health care services that will increase access to 
     care in urban, rural, and frontier areas of the State with 
     medically underserved populations or where there is an 
     inadequate supply of health care providers.
       (B) Quality.--With respect to quality, the State plan 
     shall--
       (i) provide a plan to improve health care quality in the 
     State, including increasing effectiveness, efficiency, 
     timeliness, patient focused, equity while reducing health 
     disparities, and medical errors; and
       (ii) contain appropriate results-based quality indicators 
     established by the Commission that will be addressed by the 
     State as well as State-specific quality indicators.
       (C) Costs.--With respect to costs, the State plan shall--
       (i) provide that the State will develop and implement 
     systems to improve the efficiency of health care, including a 
     specific 5-year target for reducing administrative costs 
     (including paperwork burdens);
       (ii) describe the public and private sector financing to be 
     provided for the State health program;
       (iii) estimate the amount of Federal, State, and local 
     expenditures, as well as, the costs to business and 
     individuals under the State health program;
       (iv) describe how the State plan will ensure the financial 
     solvency of the State health program; and
       (v) provide that the State will prepare and submit to the 
     Secretary and the Commission such reports as the Secretary or 
     Commission may require to carry out program evaluations.
       (D) Health information technology.--With respect to health 
     information technology, the State plan shall provide 
     methodology for the appropriate use of health information 
     technology to improve infrastructure, such as improving the 
     availability of evidence-based medical and outcomes data to 
     providers and patients, as well as other health information 
     (such as electronic health records, electronic billing, and 
     electronic prescribing).
       (2) Technical assistance.--The Secretary shall, if 
     requested, provide technical assistance to States to assist 
     such States in developing applications and plans under this 
     section, including technical assistance by private sector 
     entities if determined appropriate by the Commission.
       (3) Initial review.--With respect to a State application 
     for a grant under subsection (b), the Secretary and the 
     Commission shall complete an initial review of such State 
     application within 60 days of the receipt of such 
     application, analyze the scope of the proposal, and determine 
     whether additional information is needed from the State. The 
     Commission shall advise the State within such period of the 
     need to submit additional information.
       (4) Final determination.--
       (A) In general.--Not later than 90 days after completion of 
     the initial review under paragraph (3), the Commission shall 
     determine whether to submit a State proposal to Congress for 
     approval.
       (B) Voting.--
       (i) In general.--The determination to submit a State 
     proposal to Congress under subparagraph (A) shall be approved 
     by \2/3\ of the members of the Commission who are eligible to 
     participate in such determination subject to clause (ii).
       (ii) Eligibility.--A member of the Commission shall not 
     participate in a determination under subparagraph (A) if--

       (I) in the case of a member who is a Governor, such 
     determination relates to the State of which the member is the 
     Governor; or
       (II) in the case of member not described in subclause (I), 
     such determination relates to the geographic area of a State 
     of which such member serves as a State or local official.

       (C) Submission.--Not later than 90 days prior to October 1 
     of each fiscal year, the Commission shall submit to Congress 
     a list, in the form of a legislative proposal, of the State 
     applications that the Commission recommends for approval 
     under this section.
       (D) Approval.--With respect to a fiscal year, a State 
     proposal that has been recommended under subparagraph (B) 
     shall be deemed to be approved, and subject to the 
     availability of appropriations, Federal funds shall be 
     provided to such program, unless a joint resolution has been 
     enacted disapproving such proposal as provided for in 
     subsection (e). Nothing in the preceding sentence shall be 
     construed to include the approval of State proposals that 
     involve waivers or modifications in applicable Federal law.
       (5) Program or project period.--A State program or project 
     may be approved for a period of 5 years and may be extended 
     for subsequent 5-year periods upon approval by the Commission 
     and the Secretary, based upon achievement of targets, except 
     that a shorter period may be requested by a State and granted 
     by the Secretary.
       (e) Expedited Congressional Consideration.--
       (1) Introduction and Committee Consideration.--
       (A) Introduction.--The legislative proposal submitted 
     pursuant to subsection (d)(4)(B) shall be in the form of a 
     joint resolution (in this subsection referred to as the 
     ``resolution''). Such resolution shall be introduced in the 
     House of Representatives by the Speaker, and in the Senate, 
     by the Majority Leader, immediately upon receipt of the 
     language and shall be referred to the appropriate committee 
     of Congress. If the resolution is not introduced in 
     accordance with the

[[Page 7322]]

     preceding sentence, the resolution may be introduced in 
     either House of Congress by any member thereof.
       (B) Committee consideration.--A resolution introduced in 
     the House of Representatives shall be referred to the 
     Committee on Ways and Means of the House of Representatives. 
     A resolution introduced in the Senate shall be referred to 
     the Committee on Finance of the Senate. Not later than 15 
     calendar days after the introduction of the resolution, the 
     committee of Congress to which the resolution was referred 
     shall report the resolution or a committee amendment thereto. 
     If the committee has not reported such resolution (or an 
     identical resolution) at the end of 15 calendar days after 
     its introduction or at the end of the first day after there 
     has been reported to the House involved a resolution, 
     whichever is earlier, such committee shall be deemed to be 
     discharged from further consideration of such reform bill and 
     such reform bill shall be placed on the appropriate calendar 
     of the House involved.
       (2) Expedited Procedure.--
       (A) Consideration.--Not later than 5 days after the date on 
     which a committee has been discharged from consideration of a 
     resolution, the Speaker of the House of Representatives, or 
     the Speaker's designee, or the Majority Leader of the Senate, 
     or the Leader's designee, shall move to proceed to the 
     consideration of the committee amendment to the resolution, 
     and if there is no such amendment, to the resolution. It 
     shall also be in order for any member of the House of 
     Representatives or the Senate, respectively, to move to 
     proceed to the consideration of the resolution at any time 
     after the conclusion of such 5-day period. All points of 
     order against the resolution (and against consideration of 
     the resolution) are waived. A motion to proceed to the 
     consideration of the resolution is highly privileged in the 
     House of Representatives and is privileged in the Senate and 
     is not debatable. The motion is not subject to amendment, to 
     a motion to postpone consideration of the resolution, or to a 
     motion to proceed to the consideration of other business. A 
     motion to reconsider the vote by which the motion to proceed 
     is agreed to or not agreed to shall not be in order. If the 
     motion to proceed is agreed to, the House of Representatives 
     or the Senate, as the case may be, shall immediately proceed 
     to consideration of the resolution without intervening 
     motion, order, or other business, and the resolution shall 
     remain the unfinished business of the House of 
     Representatives or the Senate, as the case may be, until 
     disposed of.
       (B) Consideration by other house.--If, before the passage 
     by one House of the resolution that was introduced in such 
     House, such House receives from the other House a resolution 
     as passed by such other House--
       (i) the resolution of the other House shall not be referred 
     to a committee and may only be considered for final passage 
     in the House that receives it under clause (iii);
       (ii) the procedure in the House in receipt of the 
     resolution of the other House, with respect to the resolution 
     that was introduced in the House in receipt of the resolution 
     of the other House, shall be the same as if no resolution had 
     been received from the other House; and
       (iii) notwithstanding clause (ii), the vote on final 
     passage shall be on the reform bill of the other House.
     Upon disposition of a resolution that is received by one 
     House from the other House, it shall no longer be in order to 
     consider the resolution bill that was introduced in the 
     receiving House.
       (C) Consideration in conference.--Immediately upon a final 
     passage of the resolution that results in a disagreement 
     between the two Houses of Congress with respect to the 
     resolution, conferees shall be appointed and a conference 
     convened. Not later than 10 days after the date on which 
     conferees are appointed, the conferees shall file a report 
     with the House of Representatives and the Senate resolving 
     the differences between the Houses on the resolution. 
     Notwithstanding any other rule of the House of 
     Representatives or the Senate, it shall be in order to 
     immediately consider a report of a committee of conference on 
     the resolution filed in accordance with this subclause. 
     Debate in the House of Representatives and the Senate on the 
     conference report shall be limited to 10 hours, equally 
     divided and controlled by the Speaker of the House of 
     Representatives and the Minority Leader of the House of 
     Representatives or their designees and the Majority and 
     Minority Leaders of the Senate or their designees. A vote on 
     final passage of the conference report shall occur 
     immediately at the conclusion or yielding back of all time 
     for debate on the conference report.
       (3) Rules of the senate and house of representatives.--This 
     subsection is enacted by Congress--
       (A) as an exercise of the rulemaking power of the Senate 
     and House of Representatives, respectively, and is deemed to 
     be part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a resolution, and it supersedes 
     other rules only to the extent that it is inconsistent with 
     such rules; and
       (B) with full recognition of the constitutional right of 
     either House to change the rules (so far as they relate to 
     the procedure of that House) at any time, in the same manner, 
     and to the same extent as in the case of any other rule of 
     that House.
       (4) Limitation.--The amount of Federal funds provided with 
     respect to any State proposal that is deemed approved under 
     subsection (d)(3) shall not exceed the cost provided for such 
     proposals within the concurrent resolution on the budget as 
     enacted by Congress for the fiscal year involved.
       (f) Funding.--
       (1) In general.--The Secretary shall provide a grant to a 
     State that has an application approved under subsection (b) 
     to enable such State to carry out an innovative State health 
     program in the State.
       (2) Amount of grant.--The amount of a grant provided to a 
     State under paragraph (1) shall be determined based upon the 
     recommendations of the Commission, subject to the amount 
     appropriated under subsection (k).
       (3) Performance-based funding allocation and 
     prioritization.--In awarding grants under paragraph (1), the 
     Secretary shall--
       (A) fund a diversity of approaches as provided for by the 
     Commission in subsection (c)(1)(B);
       (B) give priority to those State programs that the 
     Commission determines have the greatest opportunity to 
     succeed in providing expanded health insurance coverage and 
     in providing children, youth, and other vulnerable 
     populations with improved access to health care items and 
     services; and
       (C) link allocations to the State to the meeting of the 
     goals and performance measures relating to health care 
     coverage, quality, and health care costs established under 
     this Act through the State project application process.
       (4) Maintenance of effort.--A State, in utilizing the 
     proceeds of a grant received under paragraph (1), shall 
     maintain the expenditures of the State for health care 
     coverage purposes for the support of direct health care 
     delivery at a level equal to not less than the level of such 
     expenditures maintained by the State for the fiscal year 
     preceding the fiscal year for which the grant is received.
       (5) Report.--At the end of the 5-year period beginning on 
     the date on which the Secretary awards the first grant under 
     paragraph (1), the State Health Innovation Advisory 
     Commission established under subsection (c) shall prepare and 
     submit to the appropriate committees of Congress, a report on 
     the progress made by States receiving grants under paragraph 
     (1) in meeting the goals of expanded coverage, improved 
     quality, and cost containment through performance measures 
     established during the 5-year period of the grant. Such 
     report shall contain the recommendation of the Commission 
     concerning any future action that Congress should take 
     concerning health care reform, including whether or not to 
     extend the program established under this subsection.
       (g) Monitoring and Evaluation.--
       (1) Annual reports and participation by states.--Each State 
     that has received a program approval shall--
       (A) submit to the Commission an annual report based on the 
     period representing the respective State's fiscal year, 
     detailing compliance with the requirements established by the 
     Commission and the Secretary in the approval and in this 
     section; and
       (B) participate in the annual meeting under subsection 
     (c)(4)(B).
       (2) Evaluations by commission.--The Commission, in 
     consultation with a qualified and independent organization 
     such as the Institute of Medicine, shall prepare and submit 
     to the Committee on Finance and the Committee on Health, 
     Education, Labor, and Pensions of the Senate and the 
     Committee on Energy and Commerce, the Committee on Education 
     and the Workforce, and the Committee on Ways and Means of the 
     House of Representatives annual reports that shall contain--
       (A) a description of the effects of the reforms undertaken 
     in States receiving approvals under this section;
       (B) a description of the recommendations of the Commission 
     and actions taken based on these recommendations;
       (C) an evaluation of the effectiveness of such reforms in--
       (i) expanding health care coverage for State residents;
       (ii) improving the quality of health care provided in the 
     States; and
       (iii) reducing or containing health care costs in the 
     States;
       (D) recommendations regarding the advisability of 
     increasing Federal financial assistance for State ongoing or 
     future health program initiatives, including the amount and 
     source of such assistance; and
       (E) as required by the Commission or the Secretary under 
     subsection (f)(5), a periodic, independent evaluation of the 
     program.
       (h) Noncompliance.--
       (1) Corrective action plans.--If a State is not in 
     compliance with a requirements of this section, the Secretary 
     shall develop a corrective action plan for such State.
       (2) Termination.--For good cause and in consultation with 
     the Commission, the Secretary may revoke any program granted 
     under this section. Such decisions shall be subject to a 
     petition for reconsideration and

[[Page 7323]]

     appeal pursuant to regulations established by the Secretary.
       (i) Relationship to Federal Programs.--
       (1) In general.--Nothing in this Act, or in section 1115 of 
     the Social Security Act (42 U.S.C. 1315) shall be construed 
     as authorizing the Secretary, the Commission, a State, or any 
     other person or entity to alter or affect in any way the 
     provisions of title XIX of such Act (42 U.S.C. 1396 et seq.) 
     or the regulations implementing such title.
       (2) Maintenance of effort.--No payment may be made under 
     this section if the State adopts criteria for benefits, 
     income, and resource standards and methodologies for purposes 
     of determining an individual's eligibility for medical 
     assistance under the State plan under title XIX that are more 
     restrictive than those applied as of the date of enactment of 
     this Act.
       (j) Miscellaneous Provisions.--
       (1) Application of certain requirements.--
       (A) Restriction on application of preexisting condition 
     exclusions.--
       (i) In general.--Subject to subparagraph (B), a State shall 
     not permit the imposition of any preexisting condition 
     exclusion for covered benefits under a program or project 
     under this section.
       (ii) Group health plans and group health insurance 
     coverage.--If the State program or project provides for 
     benefits through payment for, or a contract with, a group 
     health plan or group health insurance coverage, the program 
     or project may permit the imposition of a preexisting 
     condition exclusion but only insofar and to the extent that 
     such exclusion is permitted under the applicable provisions 
     of part 7 of subtitle B of title I of the Employee Retirement 
     Income Security Act of 1974 and title XXVII of the Public 
     Health Service Act.
       (B) Compliance with other requirements.--Coverage offered 
     under the program or project shall comply with the 
     requirements of subpart 2 of part A of title XXVII of the 
     Public Health Service Act insofar as such requirements apply 
     with respect to a health insurance issuer that offers group 
     health insurance coverage.
       (2) Prevention of duplicative payments.--
       (A) Other health plans.--No payment shall be made to a 
     State under this section for expenditures for health 
     assistance provided for an individual to the extent that a 
     private insurer (as defined by the Secretary by regulation 
     and including a group health plan (as defined in section 
     607(1) of the Employee Retirement Income Security Act of 
     1974), a service benefit plan, and a health maintenance 
     organization) would have been obligated to provide such 
     assistance but for a provision of its insurance contract 
     which has the effect of limiting or excluding such obligation 
     because the individual is eligible for or is provided health 
     assistance under the plan.
       (B) Other federal governmental programs.--Except as 
     provided in any other provision of law, no payment shall be 
     made to a State under this section for expenditures for 
     health assistance provided for an individual to the extent 
     that payment has been made or can reasonably be expected to 
     be made promptly (as determined in accordance with 
     regulations) under any other federally operated or financed 
     health care insurance program, other than an insurance 
     program operated or financed by the Indian Health Service, as 
     identified by the Secretary. For purposes of this paragraph, 
     rules similar to the rules for overpayments under section 
     1903(d)(2) of the Social Security Act shall apply.
       (3) Application of certain general provisions.--The 
     following sections of the Social Security Act shall apply to 
     States under this section in the same manner as they apply to 
     a State under such title XIX:
       (A) Title xix provisions.--
       (i) Section 1902(a)(4)(C) (relating to conflict of interest 
     standards).
       (ii) Paragraphs (2), (16), and (17) of section 1903(i) 
     (relating to limitations on payment).
       (iii) Section 1903(w) (relating to limitations on provider 
     taxes and donations).
       (iv) Section 1920A (relating to presumptive eligibility for 
     children).
       (B) Title xi provisions.--
       (i) Section 1116 (relating to administrative and judicial 
     review), but only insofar as consistent with this title.
       (ii) Section 1124 (relating to disclosure of ownership and 
     related information).
       (iii) Section 1126 (relating to disclosure of information 
     about certain convicted individuals).
       (iv) Section 1128A (relating to civil monetary penalties).
       (v) Section 1128B(d) (relating to criminal penalties for 
     certain additional charges).
       (vi) Section 1132 (relating to periods within which claims 
     must be filed).
       (4) Relation to other laws.--
       (A) HIPAA.--Health benefits coverage provided under a State 
     program or project under this section shall be treated as 
     creditable coverage for purposes of part 7 of subtitle B of 
     title I of the Employee Retirement Income Security Act of 
     1974, title XXVII of the Public Health Service Act, and 
     subtitle K of the Internal Revenue Code of 1986.
       (B) ERISA.--Nothing in this section shall be construed as 
     affecting or modifying section 514 of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1144) with respect to 
     a group health plan (as defined in section 2791(a)(1) of the 
     Public Health Service Act (42 U.S.C. 300gg-91(a)(1))).
       (k) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, such sums as 
     may be necessary in each fiscal year. Amounts appropriated 
     for a fiscal year under this subsection and not expended may 
     be used in subsequent fiscal years to carry out this section.

  Mr. BINGAMAN. I am pleased to announce today the introduction of 
bipartisan legislation with Senator Voinovich entitled the ``Health 
Partnership Act of 2006'' with additional bipartisan support from 
Senators DeWine and Akaka. The ``Health Partnership Act'' is intended 
to move beyond the political gridlock in Washington, D.C., and set us 
on a path toward finding solutions to affordable, quality health care 
for all Americans by creating partnerships between the federal 
government, state and local governments, private payers, and health 
care providers to implement different and promising approaches to 
health care.
  Federal funding and support would be committed to states to reduce 
the number of uninsured, reduce costs, and improve the quality of 
health care for all Americans. Should a state decline to apply or if a 
unique need exists, local governments also would be authorized to apply 
for a federal grant for such purposes.
  States, local governments, and tribes and tribal governments would be 
able to submit applications to the federal government for funding to 
implement a state health care expansion and improvement program to a 
bipartisan ``State Health Innovation Commission.'' Based on funding 
available through the federal budget process, the Commission would 
approve a variety of reform options and innovative approaches.
  This federalist approach to health reform would encourage a broad 
array of reform options that would be closely monitored to see what is 
working and what is not. As Supreme Court Justice Louis D. Brandeis 
wrote in 1932, ``It is one of the happy incidents of the federal system 
that a single courageous State may, if its citizens choose, serve as a 
laboratory; and try novel social and economic experiments without risk 
to the rest of the country.''
  Our bipartisan legislation, the ``Health Partnership Act,'' 
encourages this type of state-based innovation and will help the nation 
better address both the policy and the politics of health care reform. 
We do not have consensus at the federal level on anyone approach and so 
encouraging states to adopt a variety of approaches will help us all 
better understand what may or may not work. And, it is well past the 
time when we need action to be taking place to address the growing and 
related problems of the uninsured and increasing health care costs.
  In fact, spending on health care in our country has now reached $2 
trillion annually, and yet, the number of uninsured has increased to 46 
million people, which is six million more than in 2000. The 
consequences are staggering, as uninsured citizens get about half the 
medical care they need compared to those with health insurance and, 
according to the Institute of Medicine, about 18,000 unnecessary deaths 
occur each year in the United States because of lack of health 
Insurance.
  While gridlock absent a solution continues to permeate Washington, 
DC, a number of states and local governments are moving ahead with 
health reform. The premise on which this bill is based is that the 
federal government should provide support for such efforts rather than 
constantly undermining them.
  The ``Health Partnership Act'' would provide such support, as it 
authorizes grants to states, groups of states, local governments, and 
Indian tribes and organizations to carry out any of a broad range of 
strategies to reach the goals of reducing the number of uninsured, 
reducing costs, and improving the quality of care.
  As usual, state and local governments are not waiting around for 
federal action. This is exactly what was happening in the early 1990s 
as states such as New Mexico, Massachusetts,

[[Page 7324]]

Pennsylvania, Florida, Rhode Island, Hawaii, Maryland, Tennessee, 
Vermont, and Washington led the way to expanding coverage to children 
through the enactment of a variety of health reforms. Some of these 
programs worked better than others and the federal government responded 
in 1997 with passage of the ``State Children's Health Insurance 
Program'' or SCHIP. This legislation received broad bipartisan support 
and was built upon the experience of the state expansions. SCHIP 
continues to be a state-based model that covers millions of children 
and continues to have broad-based bipartisan support across this 
nation.
  So, why not use that successful model and build upon it? In fact, 
state and local governments are already taking up that challenge and 
the federal government should, through the enactment of the ``Health 
Partnership Act,'' do what it can to be helpful with those efforts. For 
example--
  On November 15, 2005, Illinois Governor Rod Blagojevich signed into 
law the ``Covering All Kids Health Insurance Act'' which, beginning in 
July 2006, will attempt to make insurance coverage available to all 
uninsured children.
  In Massachusetts, Governor Mitt Romney recently signed into law 
legislation that requires all Bay State residents to have health 
insurance. Virtually everyone interested in solutions to our nation's 
health care problems are looking at the Massachusetts ``experiment'' as 
a possible solution.
  Other states, including New Mexico, Maine, West Virginia, Oklahoma, 
and New York have enacted other health reforms that have had mixed 
success.
  All of these efforts are very important to add to our knowledge base, 
which can then lead to the formation of a possible national solution to 
our uninsured and affordability crisis. We can learn from each and 
every one of these efforts, whether successful or failed.
  Commonwealth Fund President Karen Davis said it well by noting that 
state-based reforms, such as that passed in Massachusetts, are very 
good news. As she notes, ``First, any substantive effort to expand 
access to coverage is worthwhile, given the growing number of uninsured 
in this country and the large body of evidence showing the dangerous 
health implications of lacking coverage.''
  She adds, ``But something more important is at work here, While we 
urgently need a national solution so that all Americans have insurance, 
it doesn't appear that we'll be getting one at the federal level any 
time soon. So what Massachusetts has done potentially holds lessons for 
every state.'' I would add that it holds lessons for the federal 
government as well and not just for the mechanics of implementing 
health reform policy but also to the politics of health reform.
  As she concludes, ``One particularly cogent lesson is the manner in 
which the measure was crafted--via a civil process that successfully 
brought together numerous players from across the political business, 
health care delivery, and policy sectors.''
  Mr. President, Senator Voinovich and I have worked together for many 
months now on this legislation via a process much like that described 
by Karen Davis. The legislation stems from past legislative efforts by 
senators such as Bob Graham, Mark Hatfield, and Paul Wellstone, but 
also from work across ideological lines by Henry Aaron of the Brookings 
Institute and Stuart Butler of the Heritage Foundation.
  The legislation also received much advice and support from Dr. Tim 
Garson who, as Dean of the University of Virginia, brought a much 
needed provider perspective which is reflected in support for the 
legislation from the American Medical Association, the American Academy 
of Pediatrics, the American College of Physicians, the American College 
of Cardiology, American Gastroenterological Association, the Visiting 
Nurses Association, the National Association of Community Health 
Centers, and from state-based health providers such as the New Mexico 
Medical Society and Ohio Association of Community Health Centers.
  And the legislation also received much comment and support from 
consumer-based groups advocating for national health reform, including 
that by Dr. Ken Frisof and UHCAN, which is the Universal Health Care 
Action Network, Bill Vaughan at Consumers Union, and from numerous 
health care advocates in New Mexico, including Community Action New 
Mexico, Health Action New Mexico, Health Care for All Campaign of New 
Mexico, New Mexico Center on Law and Poverty, New Mexico Health Choices 
Initiative, New Mexico POZ Coalition, New Mexico Public Health 
Association, New Mexico Religious Coalition for Reproductive Choice, 
New Mexico Progressive Alliance for Community Empowerment, and the 
Health Security for New Mexicans Campaign, which includes 115 
organizations based in the State.
  Support from all stakeholders in our nation's health care system has 
been sought and I would like to thank the many organizations from New 
Mexico for their support and input to this legislation. There is great 
urgency in New Mexico because our State, like all of those along the 
U.S.-Mexico border, faces a severe health care crisis. In fact, New 
Mexico ranks second only to Texas in the percentage of its citizens who 
are uninsured. New Mexico is also the only state in the country with 
less than half of its population having private health insurance 
coverage.
  A rather shocking statistic, which also continues to worsen, is that 
one out of every three Hispanic citizens are uninsured. In fact, less 
than 43 percent of the Hispanic population now has employer-based 
coverage nationwide, which is in sharp comparison to the 68 percent of 
non-Hispanic whites who have employer-based coverage.
  The State has also enacted its own health reform plan called the 
State Coverage Initiative, or SCI in July 2005. SCI is a public/private 
partnership that is intended to expand employer-sponsored insurance and 
was developed in part with grant funding from the Robert Wood Johnson 
Foundation. As of May 1, there were just over 4,500 people covered by 
this initiative and there are efforts to expand this effort to cover 
over 20,000 individuals. With federal support for my State, the hope 
would be to further expand coverage to as many New Mexicans as 
possible.
  It is also important to note that the legislation encourages reforms 
at both the state and local levels of government. Senator Voinovich, as 
former Mayor of Cleveland, suggested language that would capture 
community-based efforts as well. Illinois, Georgia, Michigan, and 
Oregon have all initiated efforts at the local level for reform, 
including what is known as the ``three-share'' programs in Illinois and 
Michigan. These initiatives have employers, employees, and the 
community each pick up about one-third of the cost of the program.
  Jeaneane Smith, deputy administrator in the Office of Oregon Health 
Policy and Research was quoted in a recent Academy Health publication 
saying, ``In recent years it has become apparent that there is a need 
to consider both state- and community-level approaches to improved 
access. We want to learn how best to support communities as they play 
an integral part in addressing the gaps in coverage.''
  Our hope is to spawn as much creative innovation as possible. 
Brookings Institute Senior Health Fellow Henry Aaron and Heritage 
Foundation Vice President Stuart Butler wrote a Health Affairs article 
in March 2004 that lays out the foundation for this legislative effort. 
They argue that while we remain unable to reconcile how best to expand 
coverage at the federal level, we can agree to support states in their 
efforts to try widely differing solutions to health coverage, cost 
containment, and quality improvement. As they write, ``This approach 
offers both a way to improve knowledge about how to reform health care 
and a practical way to initiate a process of reform. Such a pluralist 
approach respects the real, abiding differences in politics, 
preferences, traditions, and institutions across the nation. It also 
implies a willingness to accept differences over an extended period in 
order to make progress. And it recognizes that permitting wide 
diversity can foster consensus by revealing the strengths and

[[Page 7325]]

exposing the weaknesses of rival approaches.''
  The most important message that I hope this bill carries is that we 
must stop having the perfect be the enemy of the good. This proposal is 
certainly not perfect but we hope it makes a very important 
contribution to addressing our nation's health care crisis.
  In addition to Dr. Garson, Mr. Aaron, Mr. Butler, and Dr. Frisof, I 
would like to express my appreciation to Dan Hawkins at the National 
Association of Community Health Centers, Bill Vaughan at Consumers 
Union, and both Jack Meyer and Stan Dorn at ESRI for their counsel and 
guidance on health reform and this legislation.
  I would also like to commend the American College of Physicians, or 
ACP, for their outstanding leadership on the issue of the uninsured and 
for their willingness to support a variety of efforts to expand health 
coverage. ACP has been a longstanding advocate for expanding health 
coverage and has authored landmark reports on the important role that 
health insurance has in reducing people's morbidity and mortality. In 
fact, to cite the conclusion of one of those studies, ``Lack of 
insurance contributes to the endangerment of the health of each 
uninsured American as well as the collective health of the nation.''
  And finally, I would also thank the many people at the Robert Wood 
Johnson Foundation on their forethought and knowledge on all the issues 
confronting the uninsured. Their efforts to maintain the focus and 
dialogue on addressing the uninsured has kept the issue alive for many 
years.
  I hope we can break the gridlock and urge my colleagues to support 
this important legislation.
  I would ask for unanimous consent for a Fact Sheet and copy of the 
Health Affairs article entitled ``How Federalism Could Spur Bipartisan 
Action on the Uninsured'' be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                       The Health Partnership Act

       Introduced by Senators Voinovich and Bingaman in May 2006--
     ``A bill to provide for innovation in health care through 
     state initiatives that expand coverage and access and improve 
     quality and efficiency in the health care system.''
       The Health Partnership Act, cosponsored by U.S. Senators 
     Voinovich (R-OH) and Bingaman (D-NM), is a first step to move 
     beyond the political deadlock that has prevented the United 
     States from finding paths to affordable, quality health care 
     for all. For decades, national solutions have proven 
     impossible to attain because of sharp differences on how to 
     pay for and organize health care services. The Health 
     Partnership Act breaks through the impasse. It creates 
     partnerships among the federal government, state governments, 
     private payers and health care providers to implement 
     different approaches to achieve sustainable reform that 
     provides affordable, quality health care for all. It 
     demonstrates federal leadership on health care through 
     establishing a mechanism by which federal dollars are 
     committed to states to reduce the number of uninsured and to 
     improve the quality of health care for all.
       A creative new bipartisan initiative to move beyond 
     political deadlock and a potential first step towards 
     affordable quality health care for all.


                           the federal level

       Federal dollars will fund five-year State Health Care 
     Expansion and Improvement Grants. The amount of federal 
     funding for new grants will be determined annually in the 
     budgetary process.
       The bill establishes a bipartisan State Health Innovation 
     Commission composed of national, state and local leaders that 
     will:
       Issue requests for proposals.
       Establish, in collaboration with an organization such as 
     the Institute of Medicine, minimum performance standards and 
     5-year goals.
       Provide states with a ``toolkit'' of reform options, such 
     as single-payer systems, public program expansions, pay-or-
     play mechanisms, tax credit incentives, health savings 
     accounts, etc.
       Ensure the maintenance of Medicaid--prohibiting restrictive 
     rule changes that would limit eligibility or benefits.
       Recommend to Congress which grants to support, giving 
     preference to states maximizing the reduction in numbers of 
     the uninsured.
       Monitor the progress of programs and promote information 
     exchange on what works.
       Recommend ways to minimize negative effects on national 
     employer groups, providers and insurers related to differing 
     state requirements.


                              state level

       Each state applying for a grant will develop a health care 
     plan to increase coverage, improve quality and reduce costs, 
     with specific targets for reduction in the number of 
     uninsured and the costs of administration.
       States will receive renewable grants for five-year 
     expansion and improvement programs.
       States will receive from the federal level technical 
     assistance, if requested, for developing proposals.
       Each state plan would address:
       Coverage by describing the process and setting a 5-year 
     target for reducing the number of uninsured individuals in 
     the state.
       Quality by providing a plan to increase health care 
     effectiveness, efficiency, timeliness, and equity while 
     reducing health disparities and medical errors.
       Costs by developing and implementing systems to improve the 
     efficiency of health care, including a 5-year target to 
     reduce administrative costs and paperwork burdens.
       Information technology by designing the appropriate use of 
     health information technology to improve infrastructure, to 
     expand the availability of evidence-based medical and to 
     provide outcomes data to providers and patients.


      states in the lead: lessons on the process of making change

       Given the inaction of the federal government on health care 
     access issues, states have begun to address these challenges 
     creatively with sensitivity to local ideas and conditions. 
     Dozens of states are considering new proposals. Five have 
     already acted.
       Maine, June 2003--the Dirigo Health Plan.
       California, October 2003--phased-in Employer Mandate 
     (repealed by ballot initiative, November 2004).
       Illinois, September 2005--Health Care for All Children.
       Maryland, January 2006--Fair Share Health Care (employer 
     mandate for the largest employers).
       Massachusetts, April 2006--Massachusetts Health Reform 
     Package--with both an individual and an employer mandate.
       The recently passed Massachusetts law deserves special 
     attention because it is the first one enacted cooperatively 
     with a divided government--a strongly Democratic state 
     legislature and a Republican governor.
       The detailed policy particulars in each of these state 
     measures are controversial, with strong supporters and strong 
     detractors. But they teach us a lot about the process of 
     reforming health care in America.
       State political leadership at the highest level is 
     necessary.
       Active consumer advocacy plays an important role.
       Some stakeholder leadership must be willing to put the 
     larger public interest above their own narrow economic self-
     interest.
       The proposals have implementation phased in over several 
     years.
       It is easier for these proposals to expand access than to 
     restrain the growth of costs--the latter being critical to 
     make them sustainable over the long term.
       Massachusetts, in particular, demonstrated how modest 
     federal financial incentives (in this case the threatened 
     loss of less than \1/10\ of federal Medicaid funding) can 
     provide the critical stimulus for leaders to come together to 
     create comprehensive reform.


           political advantages of the health partnership act

       The Health Partnership Act provides positive multi-year 
     financial incentives to states to address these issues, 
     making it more likely for them to take the first steps and 
     less likely to backslide when money concerns arise.
       Congress need not pick just one path to health care for 
     all. Members may be willing to let other states try models 
     that they would oppose in their home states.
       Allowing states to design their own plans, based on simple 
     federal standards, has the potential to break through the 
     current political deadlock. Breakthroughs in some states 
     could be replicated elsewhere.
       Advocacy is needed concurrently at the state and federal 
     levels, with each reinforcing the other.
       Federal support has the potential to counteract likely 
     opposition by special interests in state efforts.


            policy advantages of the health partnership act

       The process of implementing a variety of partnerships 
     recognizes that one national plan may not address the 
     differences among states and encourages states to address 
     creatively their own needs.
       Lessons learned in testing diverse state plans would 
     benefit other states and national reform.
                                  ____


      How Federalism Could Spur Bipartisan Action on the Uninsured

                (By Henry J. Aaron and Stuart M. Butler)

       Nearly everyone thinks that something should be done to 
     reduce the number of Americans lacking health insurance. 
     Unfortunately, while numerous plans exist on how to reach 
     that goal, few agree on any one. Indeed, as authors we 
     disagree on how best to

[[Page 7326]]

     extend and assure health insurance coverage. Nonetheless, we 
     believe that using the pluralism and creative power of 
     federalism is the best way to break the political logjam and 
     to discover the best way to expand coverage.
       Accordingly, we believe that states should be strongly 
     encouraged to try any of a wide range of approaches to 
     increasing health insurance coverage and rewarded for their 
     success. This approach offers both a way to improve knowledge 
     about how to reform health care and a practical way to 
     initiate a process of reform. Such a pluralist approach 
     respects the real, abiding differences in politics, 
     preferences, traditions, and institutions across the nation. 
     It also implies a willingness to accept differences over an 
     extended period in order to make progress. And it recognizes 
     that permitting wide diversity can foster consensus by 
     revealing the strengths and exposing the weaknesses of rival 
     approaches.
       Despite our abiding disagreements on which substantive 
     approach to extending coverage is best, we believe that 
     people of goodwill must be prepared to countenance the 
     testing of ideas they oppose if progress is to be made. 
     Moreover, we believe that there is no hope for legislation to 
     begin to transform the largest U.S. industry--health care--
     unless such legislation enjoys strong support from both major 
     political parties.


                    Using Federalism To Spur Action

       Proposals to reduce the number of uninsured Americans 
     abound. Some favor expanding government programs, such as 
     Medicaid. Others favor refundable tax credits to help 
     families buy private health insurance. Still others favor 
     regulatory approaches, such as changes in insurance rules. 
     But working together in health care to achieve a goal shared 
     by virtually everyone has proved to be impossible. One reason 
     for this is that the capacity to reach substantive compromise 
     in Washington has seriously eroded. Among the causes is the 
     widespread view that reforming the complex health care system 
     requires very carefully designed and internally consistent 
     actions. Some say that it is like building a new airplane: 
     Unless all the key parts are there and fit together 
     perfectly, the airplane will not fly. Thus, many proponents 
     of particular approaches fear that abandoning key components 
     of their proposals to achieve a compromise will prevent a 
     fair test of their favored approach and lead to failure. 
     Another obstacle is that many lawmakers believe that 
     approaches that might conceivably work in one part of the 
     country, given the cultural, philosophical, or health 
     industry conditions prevailing there, will not work in their 
     state or district because of different local conditions. This 
     view leads many in Congress to resist proposals that might 
     work in some areas because they believe that those proposals 
     could make things worse for their constituents.
       These and other factors have stalled efforts to extend 
     health insurance and achieve other reforms for decades. The 
     enactment of Medicare and Medicaid stands as one notable--and 
     instructive--exception to that pattern. Medicare sprang from 
     comprehensive social insurance initiatives of congressional 
     Democrats, Medicaid from limited needs based approaches of 
     congressional Republicans. The passage of each program was 
     possible only because the two initiatives were linked in the 
     form of a trade-off, not so much by blending some elements of 
     each approach but by moving forward with two programs in 
     parallel: Medicare for the elderly and disabled, and Medicaid 
     for the poor of all ages. That experience illustrates a 
     principle of politics: that progress often requires combining 
     elements of competing proposals into a hybrid legislative 
     initiative, in which internally consistent approaches operate 
     in parallel.
       In our view, federalism offers a promising approach to the 
     challenge of building support to tackle the problem of 
     uninsurance. While proponents of nationwide measures to 
     introduce health insurance tax credits, or to extend Medicare 
     or the State Children's Health Insurance Program (SCHIP) to 
     other groups, should of course continue to make their case 
     for national policies, we emphasize an initiative designed to 
     support states in launching a variety of localized 
     initiatives. Under this process, the federal government would 
     reward states that agreed to test comprehensive and 
     internally consistent strategies that succeeded in extending 
     coverage within their borders. In contrast to block grants, 
     federal-state covenants would operate within congressionally 
     specified policy constraints designed to achieve national 
     goals for extending health insurance. These covenants would 
     include plans ranging from heavy government regulation to 
     almost none, as long as the plans were consistent with the 
     broad goals and included specified protections. States could 
     also select items from a federally designed ``policy 
     toolbox'' to include in their proposals. Allowable state 
     plans would include forms of single-payer plans, employer 
     mandates, mandatory individual purchase of privately offered 
     insurance, tax credits, and creative new approaches. States 
     would be free not to undertake such experiments and continue 
     with the current array of programs, but sizable financial 
     incentives would be offered to those that chose to experiment 
     and financial rewards given to those that achieve agreed-upon 
     goals.
       The model we propose builds upon proposals we have outlined 
     elsewhere. It is also compatible with some other federalism 
     approaches, such as the plan advanced by the Institute of 
     Medicine. We favor a wide diversity of federal-state 
     initiatives for three reasons. First, fostering a bold 
     program in a state will produce much information that will 
     aid the policy discovery process. Successes will encourage 
     others to follow, while unanticipated problems will force 
     redesign or abandonment and will be geographically contained. 
     Second, encouraging bold state action will quickly and 
     directly extend coverage to many of the uninsured. Instead of 
     facing continued national inaction or the potential for 
     disruption of state initiatives by future federal action, 
     states would have the incentive and freedom to act 
     decisively. Third, we see no evidence of an emerging 
     consensus on how to deal with these problems at the national 
     level. But our proposal is based on the observation that 
     advocates of rival plans trust their preferred approaches 
     enough to believe that a real-life version would persuade 
     opponents and create a consensus. Not all can be right, of 
     course, but all advocates of health insurance reform, like 
     residents of Lake Wobegon, seem to believe that their plans 
     are above average. Thus, they should be open to the idea of 
     testing diverse proposals. Our proposal is a process to 
     enable policymakers to discover which is right, either for 
     the whole country or for a region.


                             Core Elements

       We propose that Congress provide financial assistance and a 
     legal framework to trigger a diverse set of federal-state 
     initiatives. To help break the impasse in Congress over most 
     national approaches, we propose steps designed to enable 
     ``first choice'' political ideas to be tried in limited 
     areas, with the support of states and through the enactment 
     of a federal ``policy toolbox'' of legislated approaches that 
     would be available to states but not imposed on them. Our 
     view is that elected officials would be prepared to authorize 
     some approaches now bottled up in Congress if they knew that 
     the approach would not be imposed on their states. Our 
     proposed strategy would contain six key elements.
       Goals and protections. First, Congress would set certain 
     goals and general protections. Goals would be established for 
     extending coverage, and perhaps improving the coverage of 
     some of those with inadequate coverage today. One such goal 
     could be a percentage reduction in the number of uninsured 
     people in a state. The more precise the goals, the more 
     contentious they are likely to be. But clear and measurable 
     goals under the proposed covenants are necessary if the 
     system of financial rewards described below is to work 
     effectively.
       What is ``insurance''? For a coverage goal to mean 
     anything, it would have to define what constitutes 
     ``insurance.'' Specifying adequate coverage in health care is 
     no easier than quantifying an adequate high school education, 
     and when money follows success, drafting such definitions 
     becomes even more difficult.
       In defining what is meant by adequate insurance, agreement 
     on two characteristics is vital: the services to be covered 
     and the maximum residual costs (deductibles and copayments) 
     that the insured must bear. States could be more generous 
     than these standards. Instead of speciying precisely what 
     states must do in each of these dimensions, we suggest that 
     Congress establish a required actuarial minimum--such as the 
     cost of providing the benefit package of the Federal 
     Employees Health Benefits Program (FEHBP) for the state's 
     population--as the standard, with states retaining 
     considerable latitude on which services to include and how 
     much cost sharing to require. Whether to set this actuarial 
     standard high or low will be controversial and will determine 
     the overall cost to the federal government of eliciting state 
     participation.
       Both high and low benefit standards suffer from well-known 
     problems. High standards would raise program costs and weaken 
     individuals' incentives to be prudent purchasers of health 
     care. Low standards expose patients to sizable financial risk 
     and raise questions about whether to restrict patients' right 
     to buy supplemental coverage. Thus, federal legislation would 
     not specify the content of insurance plans beyond some such 
     actuarial amount. States would then be free to design plans 
     as they wish, although certain types of plans might be 
     presumptively acceptable (see below), and others could be 
     negotiated as part of a covenant. The exact mix of benefits 
     could vary within reason, but no further limits would be 
     imposed. One goal of this approach, after all, is to 
     encourage experimentation to generate information on whether 
     particular configurations of benefits work better than 
     others. It might turn out, for example, that states would 
     adopt quite different plans with similar actuarial values. 
     One group might opt for high deductible plans covering a wide 
     range of services with no cost sharing above the deductible 
     and generous relief from the deductible for the poor, while 
     others might adopt a system with low deductibles and modest 
     cost sharing but covering a much narrower range of benefits. 
     Discovering how individuals' and providers' attitudes and 
     behavior differ

[[Page 7327]]

     under such plans and how health outcomes vary would provide 
     valuable information for private health insurance planners 
     and government officials.
       Protections for individuals. In addition to the 
     definitional question, the question also arises, What 
     limitations and protections should be applied to state 
     experiments? If a simple net reduction in uninsurance 
     guaranteed a financial reward to a state, for example, the 
     state would have the incentive to drop coverage of costly 
     high-risk adults and extend coverage to less costly 
     (healthier and younger) workers. Some such concerns could be 
     addressed in negotiating covenants, but some broad 
     protections and policy ``corridors'' would be established 
     under our proposal and would be necessary to achieve 
     political support.
       One of the most politically sensitive would be a primum non 
     nocere limitation. That is, states could not introduce a plan 
     that reduced coverage for currently insured populations, most 
     notably the Medicaid population, beyond some minimum amount. 
     We believe that no reform proposal is likely to be achievable 
     without that restriction. Most Medicaid outlays in many 
     states are not strictly mandated by federal law, in the sense 
     that some beneficiaries and some services for all 
     beneficiaries are optional. States provide optional coverage 
     because federal law permits it, and the federal match makes 
     its provision attractive to states. If incentives were 
     introduced to cover the non-Medicaid population, states might 
     find it financially and politically attractive to increase 
     the total number of insured people by curtailing Medicaid 
     eligibility and benefits and using the money saved, together 
     with federal support, to cover a larger number of people who 
     are uninsured but less poor.
       Designing and enforcing rules to prohibit or limit such 
     ``insurance swapping'' would be extremely challenging but 
     politically--and, one could argue, morally--essential. On the 
     other hand, we believe that states should have some 
     opportunity to propose different ways of delivering the 
     Medicaid commitment to the currently insured population, as 
     long as the degree and quality of coverage were not 
     diminished. That form of Medicaid protection could stimulate 
     creativity and improvement in coverage for the poorest 
     citizens while avoiding any threat to their existing 
     coverage. To be sure, there are disagreements, including 
     between us, on the degree of freedom states should have in 
     deciding how to deliver the Medicaid commitment. Positions 
     range from only minor tweaking to sweeping changes in the 
     delivery system, such as allowing states to use Medicaid 
     money to subsidize individual enrollment in an equivalent 
     private plan. The degree of flexibility states should have, 
     while maintaining eligibility and level of coverage, is a 
     difficult political issue for Congress to decide.
       Acceptable state proposals would also have to limit cost 
     sharing and features analogous to pension nondiscrimination 
     rules. We believe that requirements, consistent with the 
     general goals and protections we propose, are needed to 
     ensure that lower-income households do not face unaffordable 
     coverage. Without such limits, states could reduce the number 
     of uninsured people and secure attendant federal financial 
     support, for example, by instituting an individual mandate 
     with a high premium that would effectively make insurance 
     universal among the financially secure and do little for the 
     poor. States would need to propose a fair, plausible way of 
     meeting the requirement, such as by mandating some form of 
     community rating or through a cross-subsidy to more 
     vulnerable populations.
       The federal government should establish broad guidelines, 
     but no more. A key principle of our proposal is that state 
     officials are more likely than federal officials to design 
     successful solutions to those problems that members of the 
     policy or congressional staff community have failed to solve. 
     Congress can and should set the parameters, but it should 
     avoid micromanagement.
       ``Policy toolbox'' of federal policies and programs. A 
     feature of the congressional impasse noted earlier is that 
     many plausible health initiatives that might merit testing, 
     and have support in some states, are blocked by other 
     lawmakers who oppose the introduction of the approach in 
     their own state or across the country. Thus, we propose that 
     Congress enact presumptively legitimate approaches to the 
     expansion of health insurance coverage as a ``policy 
     toolbox'' that would be available to states a la carte to 
     apply within their borders. Lawmakers could safely vote to 
     permit an initiative, confident that it would not be imposed 
     on their states. In this way, potentially useful policies and 
     programs could be ``unlocked'' from Congress and become 
     available for states to use in their own initiatives.
       A policy toolbox likely would include expansions of 
     existing policies, such as raising income limits under 
     Medicaid or lowering the age of Medicare eligibility. It 
     could include arrangements to subsidize individual buy-ins to 
     the FEHBP, refundable tax credits or their equivalent 
     (perhaps with some steps to modify the federal income tax 
     exclusion for employee-sponsored health insurance costs), 
     mandating employer or individual coverage, or creating a 
     single state insurance plan though which everyone may buy 
     subsidized coverage.
       Other possible examples might include the following: (1) 
     Remove regulatory and tax obstacles to churches, unions, and 
     other organizations providing group health insurance plans. 
     This could open up new forms of group coverage offered though 
     organizations with an established membership and common 
     values. (2) Allow Medicaid and SCHIP to cover additional 
     populations, with greatly enhanced federal matching payments, 
     and perhaps to operate in very different ways--with 
     appropriate safeguards to protect those who are covered under 
     current law. Both federal welfare legislation and SCHIP, for 
     example, included safeguards to preserve existing Medicaid 
     coverage. (3) Extend limited federal Employee Retirement 
     Income Security Act (ERISA) protection to large corporate 
     health plans willing to enroll nonemployees, and extend the 
     tax exclusion to those enrollees. This could lead in a state 
     to expanded access to comprehensive coverage. (4) Provide a 
     voucher to individuals designed to mimic a comprehensive 
     refundable tax credit for health insurance. This could allow 
     the practical issues of a major tax credit approach to be 
     examined. (5) Enact legislation to make forms of FEHBP-style 
     coverage available to broader populations within states. This 
     would enable states and federal government to explore the 
     issues associated with extending the program to nonfederal 
     employees and retirees. (6) Enable states to establish 
     association plans and other innovative health organizations.
       We emphasize that any menu of tools would be optional for 
     states. None would be required. Members of Congress would be 
     more likely to agree to the inclusion of elements they would 
     deplore in their own states if they knew that no state, 
     including their own, would be forced to adopt them than they 
     would be in a nationally uniform system. Some lawmakers, for 
     instance, oppose association plans be cause they believe that 
     such plans would disrupt successful state insurance 
     arrangements. Under the menu approach, association plans 
     would be introduced only in states wishing to use them as 
     part of their overall strategy.
       State proposals, federal approval. Under our proposed 
     strategy, states interested in a bold, creative initiative 
     would design a proposal consistent with the goals and 
     restrictions established by Congress. Typically this proposal 
     would include some elements from the federal policy toolbox 
     in conjunction with state initiatives.
       Needless to say, a critical congressional decision would 
     concern mechanisms for approving state plans and monitoring 
     state performance. States would no doubt seek to take 
     advantage of every financial opportunity to game the system 
     and to stretch agreements to the limit, as the almost zany 
     history of the Medicaid upper payment level (UPL) controversy 
     makes painfully clear. Yet monitoring state behavior, 
     determining state violations, and enforcing penalties on 
     states is enormously difficult. Moreover, the entity could 
     (and we think should) have the power to negotiate parts of a 
     proposal, not merely approve or reject it, so that 
     refinements could be made consistent with Congress's 
     objectives.
       But what entity should this be? It might seem natural to 
     designate an executive agency that reports to the president, 
     such as the Department of Health and Human Services (HHS). We 
     suspect, however, that many members of Congress would refuse 
     to cede so much selection authority to another branch of 
     government and that roughly half would fear partisan 
     decisions by an administration of the ``other'' party. 
     Congress would likely insist on adding suffocating selection 
     criteria and other restrictions to executive department 
     decisions, jeopardizing the very creativity we intend. Thus, 
     we favor instead an existing or newly created body that has 
     independence but ultimately answers to Congress. A new 
     bipartisan body might perform this function with members 
     selected by Congress and the administration or with members 
     also representing the states, with technical advice from the 
     U.S. Government Accountability Office (GAO). This body would 
     evaluate and negotiate draft state proposals according to the 
     general requirements specified by Congress and then present a 
     recommended ``slate'' of proposals to Congress for an up-or-
     down vote without amendment. Once the state proposals had 
     been selected, HHS would be responsible for implementing the 
     program.
       Bipartisan willingness to authorize state programs and to 
     appropriate sufficient funds to elicit state participation 
     also requires that members of Congress believe that 
     approaches they find congenial will receive a fair trial and 
     agree that approaches they reject will also receive a fair 
     trial. Unfortunately, current federal legislation makes two 
     key approaches difficult to implement in individual states or 
     even groups of states: a single-payer plan and an individual 
     mandate combined with refundable tax credits. A federalist 
     approach should include mechanisms that would enable states 
     to give such proposals as fair and complete a test as 
     possible, both because that would provide valuable 
     information and because the political support of their 
     advocates is important in Congress.
       Crafting a single-payer experiment. ERISA, which exempts 
     self-insured plans

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     from state regulation, is the primary technical obstacle to 
     testing single-payer plans. The political sensitivity to 
     modifications in ERISA is difficult to exaggerate. Any 
     attempt to carve out an exception from ERISA for state 
     programs to extend cover age would probably doom federal 
     legislation. But states could create ``wrap around'' plans to 
     cover all who are not currently insured, or even to cover all 
     who are not insured under plans exempted by ERISA from state 
     regulation. While such an arrangement would not be a single-
     payer plan, it could achieve universal coverage, which is one 
     defining characteristic of single-payer plans, and arguably 
     be sufficient for a valid test. After all, the U.S. health 
     care system is characterized by different subsystems for 
     certain populations and has a form of single-payer coverage 
     for military veterans. But of course the real test is whether 
     advocates of single-payer plans regard such a limited 
     arrangement as a fair trial.
       An individual tax credit approach. The obstacles to a state 
     level individual mandate with a refundable credit are also 
     serious and complicated. We presume that an individual 
     mandate would require some contribution from people with 
     incomes above defined levels. Such a mandate raises both 
     political and practical questions. Testing federal tax reform 
     in selected geographic areas also raises constitutional and 
     practical issues, although advocates of the approach maintain 
     that other site-specific programs involving federal tax 
     changes, such as enterprise zones, have passed muster. In 
     addition, for a limited experiment it might be possible to 
     design subsidy programs that would mimic tax relief.
       Administering a refundable tax credit would pose formidable 
     difficulties for some states, particularly those that do not 
     have a personal income tax. In all states, the logistics of 
     providing a credit with reasonable accuracy on a timely basis 
     would be challenging. So, too, would deciding how to address 
     such administrative problems as households that live in one 
     state yet work in another. Advocates for tax credits say they 
     have solutions to these and similar challenges, just as 
     supporters of single-payer approaches or employer mandates 
     claim to have answers to challenges facing those approaches. 
     For instance, some maintain that the employment-based tax 
     withholding system could serve as a vehicle for refundable 
     credits or equivalent subsidies and would make individual 
     enrollment practical. Whether or not they are right is of 
     course disputed by their critics. The beauty of a ``put up or 
     shut up'' federalism initiative is that it offers a chance 
     for advocates to offer such solutions in practice instead of 
     in theory.
       Using ``managed federalism'' to build support? Deciding how 
     many states could qualify for experiments is an open 
     political and technical question. One approach would be to 
     limit it to a few states. This would limit costs but has 
     little else to be said for it. Accordingly, we would favor 
     opening the program to all states wishing to accept a federal 
     offer. Nevertheless, we recognize that some lawmakers would 
     be reluctant to vote for a process of federal-state 
     innovation unless they were sure that certain ``generic'' or 
     ``standard'' approaches were included--especially if the 
     number of states in the program were to be limited. In 
     particular, we believe that our proposal can win 
     congressional support only if liberals and conservatives 
     alike are fully convinced that the approaches each holds dear 
     will receive a fair and full trial in practice.
       While we believe that any state initiative that meets 
     approval should be welcomed, political considerations thus 
     might require that no state's proposal would be approved 
     unless a sufficient range of acceptable variants was 
     proposed. For example, strong advocates of market-based or 
     single-payer approaches might find the federalism option 
     acceptable only if each was confident that favored approaches 
     would be tested.
       Adequate data collection. To determine whether a state was 
     actually making progress toward a goal, accurate and timely 
     data would be needed. These data would include surveys of 
     insurance coverage, with sufficient detail to provide state-
     level estimates. Such surveys would be essential to show 
     whether the states were making progress in extending health 
     insurance coverage. They are vital to the success of the 
     whole approach because payments to states (apart from modest 
     planning assistance) should be based on actual progress in 
     extending coverage, not on compliance with procedural 
     milestones.
       Congress should also assure that states report on use of 
     health services, costs, health status, and any other 
     information deemed necessary to judge the relative success of 
     various approaches to extending coverage. Only a national 
     effort could ensure that data are comparable across states. 
     States' cooperation with data collection would be one element 
     of the determination of whether a state was in compliance 
     with its covenant and was therefore eligible for full 
     incentive payments. The experience with state waivers under 
     welfare before enactment of the 1996 welfare reform clearly 
     illustrates the power and importance of such data collection. 
     The cumulative effect of the reports showing the 
     effectiveness of welfare-to-work requirements in reducing 
     rolls, increasing earnings, and raising recipients' 
     satisfaction transformed the political environment and made 
     welfare reform inescapable.
       Rewarding progress. Congress would design a formula under 
     which states would be rewarded for their progress in meeting 
     the agreed federal-state goals of extending insurance 
     coverage. As experience with countless grant programs 
     attests, haggling over such formulas can become politics at 
     its grubbiest, with elected officials voting solely on the 
     basis of what a particular formula does for their districts. 
     Even without political parochialism, designing a formula that 
     rewards progress fairly is no easy task. For one thing, 
     states will be starting from quite different places. The 
     proportion of states' uninsured populations under age sixty-
     five during 1997-1999 ranged from 27.7 percent in New Mexico 
     and 26.8 percent in Texas to 9.6 percent in Rhode Island and 
     10.5 percent in Minnesota and Hawaii. Designing an incentive 
     formula to reward progress amid such diverse conditions is 
     both an analytical and a political challenge. Moreover, the 
     per capita cost of health care varies across the nation, 
     which further complicates the assessment of progress. The 
     cost of extending coverage depends on the geographic 
     location, income, and health status of the uninsured 
     population. Having financial access may be hollow in 
     communities where services are physically unavailable or 
     highly limited. Extending coverage may require supply-side 
     measures to supplement financial access.
       We believe that the only way to design such a formula is to 
     remove the detailed design decisions from congressional 
     micromanagement. We suggest that Congress be asked to adopt 
     the domestic equivalent of ``fast-track'' trade negotiation 
     rules or base-closing legislation. Under this arrangement, 
     Congress would designate a body appointed in equal numbers by 
     the two parties, to design an incentive formula that Congress 
     would agree to vote up or down, without amendments. Such a 
     formula would have to recognize the different positions from 
     which various states would start. Any acceptable formula 
     would have to reward both absolute and relative reductions in 
     the proportions of uninsured people. Whether financial 
     incentives would be offered for other dimensions of 
     performance and how performance would be measured constitute 
     additional important challenges.
       Sources of funding. Bleak budget prospects could cause one 
     to give up on this or any other attempt to extend health 
     insurance coverage broadly. But as recent history amply 
     illustrates, the political and budgetary weather can change 
     dramatically and with little notice. What funding approach 
     would be desirable if funds were available? Under our 
     proposal, the federal funding would be intended for several 
     broad purposes: (1) A large portion of the money would be 
     used to help states actually fund approaches to be tested. 
     (2) Some funding (perhaps with assistance from private 
     foundations) would provide national support and technical 
     assistance to states. A model to consider for such support is 
     the Health Resources and Services Administration (HRSA) State 
     Planning Grants program, which both funds state planning 
     activities and provides federal support and technical 
     assistance. (3) Some funds would cover the cost of 
     independent performance monitoring. (4) Some funds would be 
     set aside to reward states for meeting the goals in their 
     agreed-upon plan. Congress might consider an automatic 
     ``performance bonus'' system similar to the mechanism used in 
     welfare reform. Congress could also consider withholding the 
     periodic release of part of a state's grant pending a 
     periodic assessment by the independent monitor of the degree 
     to which the state is accomplishing the objectives specified 
     in its covenant. Only those states willing to offer proposals 
     designed to achieve the national goals would be eligible for 
     a share of the funding or for the menu of federal policy 
     tools. A state could decline to offer a proposal and remain 
     under current programs.
       Federalism enables the states to undertake innovative 
     approaches to challenges facing the United States. Federal 
     legislation often grants states broad discretion in designing 
     even those programs for which the federal government bears 
     much or most of the cost. In health care as well as education 
     or welfare, states have been the primary innovators. But the 
     federal government limits, shapes, and facilitates such 
     innovation through regulation, taxation, and grants. Such a 
     partnership is bound to be marked by conflict and tension as 
     state and federal interests diverge.
       A creative federalism approach of the kind we propose would 
     change the dynamics of discovering better ways to expand 
     insurance coverage, just as a version of this approach 
     triggered a radical change in the way states addressed 
     welfare dependency. By actually testing competing approaches 
     to reach common goals, rather than endlessly debating them, 
     the United States is far more likely to find the solution to 
     the perplexing and seemingly intractable problem of 
     uninsurance.

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