H. R. 3218
IN THE HOUSE OF REPRESENTATIVES
July 14, 2009
Mr. Shadegg (for himself, Mr. Gingrey of Georgia, Mr. Bishop of Utah, Mr. Boustany, Mr. Hoekstra, Mrs. Blackburn, Mr. Fleming, Mr. Franks of Arizona, Mr. Buyer, and Mr. Burgess) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
To provide a refundable tax credit for medical costs, to expand access to health insurance coverage through individual membership associations (IMAs), and to assist in the establishment of high risk pools.
Short title, etc
This Act may be cited
Improving Health Care for All
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title, etc.
Sec. 2. Statement of constitutional authority.
Sec. 3. Findings.
Title I—Refundable and Advanceable Credit For Medical Costs
Sec. 101. Refundable and advanceable credit for medical costs.
Title II—Expansion of access and choice of health insurance coverage through individual membership associations (IMAs)
Sec. 201. Expansion of access and choice of health insurance coverage through individual membership associations (IMAs).
Title III—Federal matching funding for State insurance expenditures
Sec. 301. Federal matching funding for StatFederal matching funding for State insurance expenditurese insurance expenditures.
Statement of constitutional authority
Congress enacts this Act pursuant to its authority under article I of the Constitution to regulate commerce.
The Congress finds the following:
Approximately 180 million Americans receive health care through employer-sponsored coverage.
Surveys indicate that 8 in 10 Americans are satisfied with the current employer-sponsored health care plan.
Taxing employer-sponsored health care benefits, creating a new government-run health care plan, and expanding existing entitlement programs will result in the loss of private health care coverage for an estimated 120 million Americans.
Refundable and Advanceable Credit For Medical Costs
Refundable and advanceable credit for medical costs
Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by inserting after section 36A the following new section:
In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle an amount equal to the sum of—
the amount paid by the taxpayer during the taxable year for qualified health insurance for coverage of the taxpayer, his spouse, and dependents, and
the amount paid by the taxpayer during the taxable year for medical care for the taxpayer, his spouse, and his dependents.
The amount allowed as a credit under subsection (a) for a taxable year shall not exceed $2,500 ($5,000 in the case of a joint return).
For purposes of this section, the term eligible individual means an individual who is—
a citizen or national of the United States, or
lawfully present in the United States.
For purposes of this section, the term medical care has the meaning given such term by section 213(d), determined without regard to subparagraphs (C) and (D) of paragraph (1) thereof.
Qualified health insurance
For purposes of this section—
The term qualified health insurance means insurance which constitutes medical care.
Employer subsidized coverage
Such term shall not include amounts paid for coverage of any individual for any month for which such individual participates in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer. For purposes of the preceding sentence, the rule of the last sentence of section 162(l)(2)(B) shall apply and health care flexible spending accounts and health reimbursement arrangements shall not be treated as a subsidized health plan maintained by any employer.
Such term shall not include medical care provided through a program described in—
title XVIII or XIX of the Social Security Act,
chapter 55 of title 10, United States Code,
chapter 17 of title 38, United States Code,
chapter 89 of title 5, United States Code, or
the Indian Health Care Improvement Act, and
Exclusion of certain plans
Such term does not include insurance if substantially all of its coverage is coverage described in section 223(c)(1)(B).
Coordination with medical deduction, etc
Any amount paid by a taxpayer for insurance to which subsection (a) applies shall not be taken into account in computing the amount allowable to the taxpayer as a credit under section 35 or as a deduction under section 162(l) or 213(a).
Coordination with advance payments of credit; recapture of excess advance payments
With respect to any taxable year—
the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a) shall be reduced (but not below zero) by the aggregate amount paid on behalf of such taxpayer under section 7529 for months beginning in such taxable year, and
the tax imposed by section 1 for such taxable year shall be increased by the excess (if any) of—
the aggregate amount paid on behalf of such taxpayer under section 7529 for months beginning in such taxable year, over
the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a).
Denial of credit to dependents
No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.
Married couples must file joint return
If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year.
Marital status; certain married individuals living apart
Rules similar to the rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of this paragraph.
Verification of coverage, etc
No credit shall be allowed under this section to any individual unless such individual’s coverage under qualified health insurance, and the amount paid for such coverage, are verified in such manner as the Secretary may prescribe.
In the case of any taxable year beginning in a calendar year after 2010, each dollar amount contained in subsection (b) shall be increased by an amount equal to—
such dollar amount, multiplied by
adjustment determined under section 1(f)(3) for the calendar year in which the
taxable year begins by substituting
calendar year 2009 for
calendar year 1992 in subparagraph (B) thereof.
Chapter 77 of the Internal Revenue Code of 1986 (relating to miscellaneous provisions) is amended by adding at the end the following:
Advance payment of credit for medical costs
The Secretary shall establish a program for—
making payments to providers of qualified health insurance (as defined in section 36B(e)) on behalf of taxpayers eligible for the credit under section 36B, and
making payments relating to medical care for which a credit is allowable under such section.
Subpart B of part III of subchapter A of chapter 61 of such Code (relating to information concerning transactions with other persons) is amended by adding at the end the following new section:
Returns relating to credit for medical costs
Requirement of reporting
Every person who receives payments for any month of any calendar year under section 7529 with respect to any individual shall, at such time as the Secretary may prescribe, make the return described in subsection (b) with respect to each such individual.
Form and manner of returns
A return is described in this subsection if such return—
is in such form as the Secretary may prescribe, and
the name, address, and TIN of each individual referred to in subsection (a), and
such other information as the Secretary may prescribe.
Statements To be furnished to individuals with respect to whom information is required
Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing—
the name and address of the person required to make such return and the phone number of the information contact for such person, and
the information required to be shown on the return with respect to such individual.
of section 6724(d)(1) of such Code (relating to definitions) is amended by
or at the end of clause (xxii), by striking
and at the end of clause (xxiii) and inserting
or, and by inserting after clause (xxiii) the following new
section 6050X (relating to returns relating to credit for medical costs), and
Paragraph (2) of
section 6724(d) of such Code is amended by striking the period at the end of
subparagraph (EE) and inserting a comma, by striking the period at the end of
subparagraph (FF) and inserting
, or, and by adding after
subparagraph (FF) the following new subparagraph:
section 6050X (relating to returns relating to credit for medical costs).
The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:
Sec. 7529. Advance payment of credit for medical costs.
The table of sections for subpart B of part III of subchapter A of chapter 61 of such Code is amended by adding at the end the following new item:
Sec. 6050X. Returns relating to credit for medical costs.
Paragraph (2) of
section 1324(b) of title 31, United States Code, is amended by inserting
The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 36 and inserting the following new items:
Sec. 36B. Medical costs.
The amendments made by this section shall apply to taxable years beginning after December 31, 2009.
Expansion of access and choice of health insurance coverage through individual membership associations (IMAs)
Expansion of access and choice of health insurance coverage through individual membership associations (IMAs)
The Public Health Service Act is amended by adding at the end the following new title:
Individual Membership Associations
Definition of individual membership association (IMA)
For purposes of this title, the terms individual membership association and IMA mean a legal entity that meets the following requirements:
The IMA is an organization operated under the direction of an association (as defined in section 3104(1)).
Offering health benefits coverage
The IMA, in conjunction with those health insurance issuers that offer health benefits coverage through the IMA, makes available health benefits coverage in the manner described in subsection (b) to all members of the IMA and the dependents of such members in the manner described in subsection (c)(2) at rates that are established by the health insurance issuer on a policy or product specific basis and that may vary only as permissible under State law.
Nondiscrimination in coverage offered
Subject to clause (ii), the IMA may not offer health benefits coverage to a member of an IMA unless the same coverage is offered to all such members of the IMA.
Nothing in this title shall be construed as requiring or permitting a health insurance issuer to provide coverage outside the service area of the issuer, as approved under State law, or requiring a health insurance issuer from excluding or limiting the coverage on any individual, subject to the requirement of section 2741.
No financial underwriting
The IMA provides health benefits coverage only through contracts with health insurance issuers and does not assume insurance risk with respect to such coverage.
Nothing in this title shall be construed as preventing the establishment and operation of more than one IMA in a geographic area or as limiting the number of IMAs that may operate in any area.
Provision of administrative services to purchasers
The IMA may provide administrative services for members. Such services may include accounting, billing, and enrollment information.
Nothing in this subsection shall be construed as preventing an IMA from serving as an administrative service organization to any entity.
The IMA files with the Secretary information that demonstrates the IMA’s compliance with the applicable requirements of this title.
Health benefits coverage requirements
Compliance with consumer protection requirements
Any health benefits coverage offered through an IMA shall—
be underwritten by a health insurance issuer that—
is licensed (or otherwise regulated) under State law,
meets all applicable State standards relating to consumer protection, subject to section 3002(b), and
subject to paragraph (2), be approved or otherwise permitted to be offered under State law.
Examples of types of coverage
The benefits coverage made available through an IMA may include, but is not limited to, any of the following if it meets the other applicable requirements of this title:
Coverage through a health maintenance organization.
Coverage in connection with a preferred provider organization.
Coverage in connection with a licensed provider-sponsored organization.
Indemnity coverage through an insurance company.
Coverage offered in connection with a contribution into a medical savings account, health savings account, or flexible spending account.
Coverage that includes a point-of-service option.
Any combination of such types of coverage.
Wellness bonuses for health promotion
Nothing in this title shall be construed as precluding a health insurance issuer offering health benefits coverage through an IMA from establishing premium discounts or rebates for members or from modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention so long as such programs are agreed to in advance by the IMA and comply with all other provisions of this title and do not discriminate among similarly situated members.
Members; health insurance issuers
Under rules established to carry out this title, with respect to an individual who is a member of an IMA, the individual may enroll for health benefits coverage (including coverage for dependents of such individual) offered by a health insurance issuer through the IMA.
Rules for enrollment
Nothing in this paragraph shall preclude an IMA from establishing rules of enrollment and reenrollment of members. Such rules shall be applied consistently to all members within the IMA and shall not be based in any manner on health status-related factors.
Health insurance issuers
The contract between an IMA and a health insurance issuer shall provide, with respect to a member enrolled with health benefits coverage offered by the issuer through the IMA, for the payment of the premiums collected by the issuer.
Application of certain laws and requirements
State laws insofar as they relate to any of the following are superseded and shall not apply to health benefits coverage made available through an IMA:
Benefit requirements for health benefits coverage offered through an IMA, including (but not limited to) requirements relating to coverage of specific providers, specific services or conditions, or the amount, duration, or scope of benefits, but not including requirements to the extent required to implement title XXVII or other Federal law and to the extent the requirement prohibits an exclusion of a specific disease from such coverage.
Any other requirements (including limitations on compensation arrangements) that, directly or indirectly, preclude (or have the effect of precluding) the offering of such coverage through an IMA, if the IMA meets the requirements of this title.
The Secretary shall administer this title and is
authorized to issue such regulations as may be required to carry out this
title. Such regulations shall be subject to Congressional review under the
provisions of chapter 8 of title 5, United States Code. The Secretary shall
incorporate the process of
deemed file and use with respect to
the information filed under section 3001(a)(5)(A) and shall determine whether
information filed by an IMA demonstrates compliance with the applicable
requirements of this title. The Secretary shall exercise authority under this
title in a manner that fosters and promotes the development of IMAs in order to
improve access to health care coverage and services.
The Secretary shall submit to Congress a report every 30 months, during the 10-year period beginning on the effective date of the rules promulgated by the Secretary to carry out this title, on the effectiveness of this title in promoting coverage of uninsured individuals. The Secretary may provide for the production of such reports through one or more contracts with appropriate private entities.
For purposes of this title:
The term association means, with respect to health insurance coverage offered in a State, an association which—
has been actively in existence for at least 5 years;
has been formed and maintained in good faith for purposes other than obtaining insurance;
does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee); and
does not make health insurance coverage offered through the association available other than in connection with a member of the association.
The term dependent, as applied to health insurance coverage offered by a health insurance issuer licensed (or otherwise regulated) in a State, shall have the meaning applied to such term with respect to such coverage under the laws of the State relating to such coverage and such an issuer. Such term may include the spouse and children of the individual involved.
Health benefits coverage
The term health benefits coverage has the meaning given the term health insurance coverage in section 2791(b)(1).
Health insurance issuer
The term health insurance issuer has the meaning given such term in section 2791(b)(2).
Health status-related factor
The term health status-related factor has the meaning given such term in section 2791(d)(9).
IMA; individual membership association
The terms IMA and individual membership association are defined in section 3101(a).
The term member means, with respect to an IMA, an individual who is a member of the association to which the IMA is offering coverage.
Federal matching funding for State insurance expenditures
Federal matching funding for StatFederal matching funding for State insurance expenditurese insurance expenditures
Subject to the succeeding provisions of this section, each State shall receive from the Secretary of Health and Human Services an amount equal to 50 percent of the funds expended by the State in providing for the use, in connection with providing health benefits coverage, of a high-risk pool, a reinsurance pool, or other risk-adjustment mechanism used for the purpose of subsidizing the purchase of private health insurance.
A State shall not receive under this section for a fiscal year more than a total of 50 cents multiplied by the average number of residents (as estimated by the Secretary) in the State in the fiscal year.
The Secretary of Health and Human Services shall provide for the administration of this section and may establish such terms and conditions, including the requirement of an application, as may be appropriate to carry out this section.
Nothing in this section shall be construed as requiring a State to operate a reinsurance pool (or other risk-adjustment mechanism) under this section or as preventing a State from operating such a pool or mechanism through one or more private entities.
For purposes of this section, the term high-risk pool means any qualified high risk pool (as defined in section 2744(c)(2) of the Public Health Service Act).
Reinsurance pool or other risk-adjustment mechanism defined
For purposes of this section, the term reinsurance pool or other risk-adjustment mechanism means any State-based risk spreading mechanism to subsidize the purchase of private health insurance for the high-risk population.
For purposes of this section, the term high-risk population means—
individuals who, by reason of the existence or history of a medical condition, are able to acquire health coverage only at rates which are at least 150 percent of the standard risk rates for such coverage, and
individuals who are provided health coverage by a high-risk pool.
For purposes of this section, the term State includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.