article: SECTION 1. SHORT TITLE. This Act may be cited as the ``American Health Security Partnership Act of 1995.'' SEC. 2. FINDINGS; PURPOSE. (a) Findings.--Congress finds as follows: (1) 40 million Americans do not have health insurance coverage. (2) Cost shifting among payers and providers contributes to the increasing cost of health care in the United States. (3) The only means of ending this cost shifting is to ensure that each individual in the United States has health insurance coverage. (b) Purpose.--It is the purpose of this Act to provide assistance to each State to enable the State to ensure, in the manner the State itself considers most appropriate, that each individual has health insurance coverage at least equivalent to the coverage provided to employees of the Federal Government. SEC. 3. STATE DEFINED. In this Act, the term ``State'' means each of the 50 States and the District of Columbia. TITLE I--FEDERAL PAYMENTS TO STATES SEC. 101. PAYMENTS TO STATES WITH CERTIFIED PLANS. For purposes of assisting States in carrying out plans approved under title II, the Secretary of Health and Human Services (hereafter in this Act referred to as the ``Secretary'') shall make payments to States with comprehensive health insurance plans certified under title II for a fiscal year in an amount determined under section 102. SEC. 102. AMOUNT OF STATE PAYMENT. The amount of payment made to a State for a fiscal year under section 101 shall be equal to the State's allocation of the total amount available for payments under this title for the fiscal year under section 103, as determined in accordance with the following formula: (1) 50 percent of the total amount available shall be allocated among the States on the basis of the ratio of the population of each State to the population of all States. (2) 50 percent of the total amount available shall be allocated among the States in amounts determined in accordance with the representative revenue system established by the Advisory Commission on Intergovernmental Relations. SEC. 103. TOTAL AMOUNT AVAILABLE FOR PAYMENTS. The total amount available for payments to States for a fiscal year under this title is equal to the following: (1) For fiscal year 1998, $1,000,000,000. (2) For fiscal year 1999, $2,000,000,000. (3) For fiscal year 2000, $28,000,000,000. (4) For fiscal year 2001, $29,000,000,000. (5) For fiscal year 2002, $30,000,000,000. (6) For fiscal year 2003, $31,000,000,000. TITLE II--REQUIREMENTS FOR COMPREHENSIVE HEALTH PLANS SEC. 201. IMPLEMENTATION OF CERTIFIED HEALTH INSURANCE PLANS BY STATES. (a) In General.--Not later than July 1, 1999, each State shall submit to the Secretary a comprehensive health insurance plan designed to be administered by the State and containing the provisions required under this title, and shall have such plan in place and operating not later than January 1, 2000. (b) Certification of Plans by Secretary.--The Secretary shall certify for a fiscal year those State plans developed and implemented under this title which meet the applicable requirements of this title for the fiscal year. SEC. 202. REQUIRED PROVISIONS OF HEALTH INSURANCE PLAN. Each State shall have maximum flexibility in developing and implementing its comprehensive health insurance plan under this title, except that the plan shall include at least the following provisions: (1) Coverage.--Health insurance coverage meeting the requirements of this title for all individuals in the State without regard to employment status, income, or pre-existing condition or other health status. (2) Portability and guaranteed renewal.--A prohibition against the denial, cancellation, or refusal to renew the coverage of an individual or employer except-- (A) on the basis of nonpayment of premiums, (B) on the basis of fraud or misrepresentation, or (C) because the plan is ceasing to provide any coverage in a geographic area. (3) Benefits.-- (A) Comparable to fehbp.--Coverage comparable to the coverage available to employees of the Federal Government under the Federal Employees Health Benefits Program (FEHBP) (as determined by the Secretary). Coverage under title XVIII of the Social Security Act or coverage under a State plan under title XIX of such Act shall be deemed to meet the requirement of the previous sentence. (B) Availability of home- and community-based care.--The offering of home- and community-based care as an alternative to institutional care if medically appropriate. (4) Community rating of premiums.--A requirement that the premium charged shall be equivalent for all individuals within any community, except that the premium may vary with respect to an individual on the basis of the individual's age or the number of members of the individual's family covered. (5) State supplemental premium payments.--The payment by the State of supplemental amounts to ensure that all individuals may obtain coverage at reasonable rates. (6) Quality of care.--The creation of adequate mechanisms designed to assure, monitor, and maintain the provision of high quality health care to individuals in the State. (7) Cost containment.--The creation of adequate mechanisms designed to control premiums and the costs of providing high quality health care to individuals in the State. SEC. 203. WAIVER OF ERISA LIMITATION ON STATE REGULATION OF SELF- INSURED PLANS. Section 514(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)) is amended by adding at the end the following paragraph: ``(9) Subsection (a) shall not apply to any State law to the extent such law conforms to or reflects the provisions of a comprehensive health insurance plan developed and implemented by the State and certified by the Secretary of Health and Human Services under title II of the American Health Security Partnership Act of 1995.''. SEC. 204. REQUIRING OPERATION OF CERTIFIED PLAN TO RECEIVE MEDICAID PAYMENTS. Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by adding at the end the following new subsection: ``(x)(1) In order to receive payments under this title for any quarter beginning on or after January 1, 2000, a State must have in effect a comprehensive health insurance plan certified for the fiscal year in which the quarter occurs by the Secretary under section 201(b) of the American Health Security Partnership Act of 1995. ``(2)(A) The provisions of this subsection shall not apply to a State for any quarter-- ``(i) that follows the quarter during which the State meets the requirements of this subsection; or ``(ii) with respect to which the Secretary determines that the State is unable to comply with the relevant requirements of this subsection-- ``(I) for good cause (but such a waiver may not be for a period in excess of 4 quarters), or ``(II) due to circumstances beyond the control of such State. ``(B) For purposes of determining deadlines imposed under this subsection, any time period during which a State was found under subparagraph (A)(ii)(II) to be unable to comply with the requirements of this subsection shall not be taken into account, and the Secretary shall modify all such deadlines with respect to such State accordingly.''. SEC. 205. INCREASE IN MINIMUM COMMUNITY SPOUSE RESOURCE ALLOWANCE UNDER MEDICAID. (a) In General.--Section 1924(f)(2)(A)(i) of the Social Security Act (42 U.S.C. 1396r-5(f)(2)(A)(i)) is amended by striking ``$12,000'' and inserting ``$50,000''. (b) Effective Date.--The amendment made by subsection (a) shall apply to quarters beginning on or after October 1, 1995. TITLE III--FINANCING MECHANISMS SEC. 301. INCREASE IN TOP INCOME TAX RATE APPLICABLE TO CORPORATIONS. (a) In General.--Subsection (b) of section 11 of the Internal Revenue Code of 1986 is amended by striking ``35 percent'' each place it appears and inserting ``36 percent''. (b) Conforming Amendments.-- (1) The last sentence of section 11(b) of such Code is amended by striking ``$100,000'' and inserting ``$200,000''. (2) Clause (iii) of section 852(b)(3)(D) of such Code is amended by striking ``65 percent'' and inserting ``64 percent''. (3) Subsection (a) of section 1201 of such Code is amended by striking ``35 percent'' each place it appears and inserting ``36 percent''. (4) Paragraphs (1) and (2) of section 1445(e) of such Code are each amended by striking ``35 percent'' and inserting ``36 percent''. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1995. SEC. 302. REVISION OF FEDERAL MEDICAL ASSISTANCE PERCENTAGE UNDER MEDICAID. Section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is amended-- (1) in the first sentence, by striking ``83 per centum'' and inserting ``the applicable maximum percentage described in the second sentence''; and (2) by inserting after the first sentence the following new sentence: ``In the previous sentence, the `applicable maximum percentage' is 83 per centum for quarters occurring during fiscal years prior to fiscal year 1998 and 60 per centum for quarters occurring during fiscal year 1998 and each succeeding fiscal year.''. SEC. 303. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS. (a) Cigarettes.--Subsection (b) of section 5701 of the Internal Revenue Code of 1986 is amended-- (1) by striking ``$12 per thousand ($10 per thousand on cigarettes removed during 1991 or 1992)'' in paragraph (1) and inserting ``$49.50 per thousand'', and (2) by striking ``$25.20 per thousand ($21 per thousand on cigarettes removed during 1991 or 1992)'' in paragraph (2) and inserting ``$103.95 per thousand''. (b) Cigars.--Subsection (a) of section 5701 of such Code is amended-- (1) by striking ``$1.125 cents per thousand (93.75 cents per thousand on cigars removed during 1991 or 1992)'' in paragraph (1) and inserting ``$38.62\1/2\ per thousand'', and (2) by striking ``equal to'' and all that follows in paragraph (2) and inserting ``equal to 52.594 percent of the price for which sold but not more than $123.75 per thousand.''. (c) Cigarette Papers.--Subsection (c) of section 5701 of such Code is amended by striking ``0.75 cent (0.625 cent on cigarette papers removed during 1991 or 1992)'' and inserting ``3.09 cents''. (d) Cigarette Tubes.--Subsection (d) of section 5701 of such Code is amended by striking ``1.5 cents (1.25 cents on cigarette tubes removed during 1991 or 1992)'' and inserting ``6.19 cents''. (e) Smokeless Tobacco.--Subsection (e) of section 5701 of such Code is amended-- (1) by striking ``36 cents (30 cents on snuff removed during 1991 or 1992)'' in paragraph (1) and inserting ``$12.86'', and (2) by striking ``12 cents (10 cents on chewing tobacco removed during 1991 or 1992)'' in paragraph (2) and inserting ``$12.62''. (f) Pipe Tobacco.--Subsection (f) of section 5701 of such Code is amended by striking ``67.5 cents (56.25 cents on pipe tobacco removed during 1991 or 1992)'' and inserting ``$13.17\1/2\''. (g) Effective Date.--The amendments made by this section shall apply to articles removed (as defined in section 5702(k) of the Internal Revenue Code of 1986) after December 31, 1996. TITLE IV--TAX DEDUCTIBILITY OF HEALTH INSURANCE SEC. 401. TAX DEDUCTIBILITY OF HEALTH INSURANCE. (a) In General.--Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to additional itemized deductions) is amended by redesignating section 220 as section 221 and by inserting after section 219 the following new section: ``SEC. 220. HEALTH INSURANCE COSTS. ``(a) In General.--In the case of an individual, there shall be allowed as a deduction an amount equal to 80 percent (or 100 percent, in the case of an individual who is a self-employed individual within the meaning of section 401(c)) of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents. ``(b) Limitation Based on Earned Income.--No deduction shall be allowed under subsection (a) to the extent that the amount of such deduction exceeds the sum of-- ``(1) the taxpayer's wages, salaries, tips, and other employee compensation includible in gross income, plus ``(2) the taxpayer's earned income (as defined in section 401(c)(2)). ``(c) Other Coverage.--Subsection (a) shall not apply to any taxpayer for any calendar month for which the taxpayer is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer. ``(d) Special Rules.-- ``(1) 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 deduction under section 213(a). ``(2) Deduction not allowed for self-employment tax purposes.--The deduction allowable by reason of this section shall not be taken into account in determining an individual's net earnings from self-employment (within the meaning of section 1402(a)) for purposes of chapter 2.'' (b) Conforming Amendments.-- (1) Subsection (l) of section 162 of such Code is hereby repealed. (2) Subsection (a) of section 62 of such Code is amended by inserting after paragraph (15) the following new item: ``(16) Health insurance costs.--The deduction allowed by section 220.'' (3) The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following new items: ``Sec. 220. Health insurance costs. ``Sec. 221. Cross reference.'' (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1995.
summary: TABLE OF CONTENTS: Title I: Federal Payments to States Title II: Requirements for Comprehensive Health Plans Title III: Financing Mechanisms Title IV: Tax Deductibility of Health Insurance American Health Security Partnership Act of 1995 - Title I: Federal Payments to States - Mandates payments to States for comprehensive health insurance plans certified under title II of this Act. Title II: Requirements for Comprehensive Health Plans - Requires each State to submit (by July 1999) and operate (by 2000) a comprehensive health insurance plan designed to be administered by the State and having at least: (1) coverage for all individuals in the State; (2) benefits comparable to that available under the Federal Employees Health Benefits Program (deeming coverage under titles XVIII (Medicare) and XIX (Medicaid) of the Social Security Act to meet this requirement); (3) home- and community-based care when medically appropriate; (4) community premium rating; (5) payment by the State of supplemental amounts to ensure that all individuals may obtain coverage at reasonable rates; (6) quality control mechanisms; and (7) premium control and cost control mechanisms. (Sec. 203) Amends the Employee Retirement Income Security Act of 1974 (ERISA) to exempt from ERISA State laws conforming to or reflecting a plan certified under this Act. (Sec. 204) Amends title XIX (Medicaid) of the Social Security Act to condition Medicaid payments to a State on the State having a certified plan in effect by the deadline. (Sec. 205) Modifies the method for determining the amount of the "community spouse resource allowance" for Medicaid provisions relating to transferring resources to a community spouse. Title III: Financing Mechanisms - Amends the Internal Revenue Code (IRC) to increase the highest corporate income tax rate. (Sec. 302) Amends Medicaid provisions to reduce the maximum Federal medical assistance percentage. (Sec. 303) Amends the IRC to increase the tax rate on tobacco and related products. Title IV: Tax Deductibility of Health Insurance - Allows a tax deduction for insurance that constitutes medical care.