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HR 1263 IH
105th CONGRESS 1st Session
To amend the Public Health Service Act to provide access to health care insurance coverage for children and to amend the Internal Revenue Code of 1986 to increase the excise taxes on tobacco products for the purpose of offsetting the Federal budgetary costs associated such insurance coverage.
IN THE HOUSE OF REPRESENTATIVES April 9, 1997
Mr. PALLONE (for himself, Mrs. ROUKEMA, Ms. ESHOO, Ms. PELOSI, and Mr. MCDERMOTT) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committees on Ways and Means and Education and the Workforce, 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
A BILL To amend the Public Health Service Act to provide access to health care insurance coverage for children and to amend the Internal Revenue Code of 1986 to increase the excise taxes on tobacco products for the purpose of offsetting the Federal budgetary costs associated such insurance coverage.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Child Health Insurance and Lower Deficit Act'.
(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Amendment to Public Health Service Act.
`TITLE XXVIII--CHILDREN'S HEALTH INSURANCE GRANT PROGRAM `
PART A--STATE PROGRAMS `
PART B--ASSISTANCE `
SUBPART 1--ASSISTANCE TO FAMILIES `
SUBPART 2--SERVICES FOR PREGNANT WOMEN, NEW MOTHERS, AND INFANTS `
PART C--DEFINITIONS AND MISCELLANEOUS PROVISIONS `
SUBPART 1--DEFINITIONS `
SUBPART 2--MISCELLANEOUS PROVISIONS
Sec. 4. Increase in excise taxes on tobacco products.
Sec. 5. Conforming amendments.
Sec. 6. Effective date.
SEC. 2. PURPOSES. It is the purpose of this Act to benefit American families by--
(1) providing grants to States to develop and implement a voluntary program to help purchase health coverage for uninsured, needy children; and
(2) acquiring resources targeted to help reduce the Federal budget deficit that, if unchecked, will require American families to devote an increasing proportion of their tax liability to service the debt.
SEC. 3. AMENDMENT TO PUBLIC HEALTH SERVICE ACT. The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by adding at the end the following:
`TITLE XXVIII--CHILDREN'S HEALTH INSURANCE GRANT PROGRAM `
PART A--VOLUNTARY STATE GRANT PROGRAMS `SEC. 2801. AUTHORITY TO ESTABLISH. `
(a) STATE ELECTION- Each State may elect to establish a children's health insurance program that complies with this title. `
(b) STATE PLAN- `
(1) IN GENERAL- To apply to participate under this part, a State shall, not later than 90 days prior to the beginning of the calendar year in which the State program is to begin, prepare and submit to the Secretary a State plan for the operation of the program. `
(2) APPROVAL BY SECRETARY- The State plan submitted by a State under paragraph (1) must be approved by the Secretary in order for the State to be eligible to receive a grant under this title. `
(c) USE OF FUNDS- Under a program under this title, a participating State shall provide subsidies, consistent with section 2822, for coverage under a qualifying children's policy and a qualifying children's direct service benefit option. `
SEC. 2802. REQUIREMENTS FOR QUALIFYING CHILDREN'S POLICY. `(a) IN GENERAL- Each participating State-- `
(1) shall contract with health insurance issuers to make qualifying children's policies available to subsidy eligible children in the State; `
(2) shall ensure that qualifying children's policies are available to all eligible children in the State and that each eligible child has the opportunity to enroll for coverage under such policies; `
(3) shall ensure that a qualifying children's policy provides coverage for the care described in subsections (b) and (c); and `
(4) shall provide for the payment of premium and cost sharing subsidies (in amounts as defined by the State in accordance with section 2822), that may include vouchers, to or on behalf of subsidy eligible children, except that a State electing to participate may not-- `
(A) provide a premium subsidy that is less than 95 percent for a subsidy eligible child in a family with a family income below 185 percent of the poverty line for a family of the size involved; `
(B) allow the imposition of cost-sharing requirements for preventive services provided to a subsidy eligible child; or `
(C) enter into a contract with a health insurance issuer offering a qualifying children's policy that requires that a subsidy eligible child (in a family with a family income below 150 percent of the poverty line for a family of the size involved) pay more than 20 percent of the cost-sharing otherwise applied under such contract as applied with respect to a particular item or service unless the cost-sharing required under the contract involved has been deemed by the Secretary as not being a barrier to care for children of families below 150 percent of poverty line for a family of the size involved. `
(b) COVERAGE FOR MEDICAL CARE- For purposes of this title, a qualifying children's policy is a policy for an eligible child that provides coverage for medical care for such child that is the equivalent of the medical assistance available (other than cost sharing) to children under the State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.). `
(c) ACCESS TO SPECIALITY CARE FOR SPECIAL NEEDS CHILDREN- Each participating State shall assure that each qualifying children's policy ensure access to pediatric primary and speciality care providers, including centers of pediatric specialized treatment expertise. `
(d) ACCESS- `
(1) ACCESS TO POLICIES- In carrying out subsection (a)(1), a participating State shall, subject to the funding limitation described in section 2822(d), ensure that subsidy eligible children have access to a qualifying children's policy provided by a health insurance issuer serving the area in which the eligible child resides. Such policies may be offered to eligible children residing in the State through existing public and private purchasing sponsors. `
(2) TO TRADITIONAL PROVIDERS- A participating State shall ensure that a qualifying children's policy provides access to traditional providers who have experience in serving populations covered under this title and in areas in which such populations reside. `
SEC. 2803 REQUIREMENTS FOR QUALIFYING CHILDREN'S DIRECT SERVICE BENEFIT OPTION. `
(a) IN GENERAL- Each participating State-- `
(1) for each area of the State served by a health center (as defined in section 330), shall contract directly with the health center to provide services under the program under this title for subsidy eligible children who choose to receive services from the health center; `
(2) shall ensure that under a qualifying children's direct service benefit option, coverage is provided for the care described in subsections (c) and (d); `
(3) shall ensure that services described in subsection (c) which are not made available by a health center are provided either-- `
(A) through contracts for direct payment to specific networks of providers; or `
(B) through the purchase of wraparound insurance; and `
(4) shall provide for payments in accordance with subsection (b). `
(b) PAYMENTS- `
(1) IN GENERAL- Under a qualifying children's direct service benefit option, a State may not-- (A) require that a subsidy eligible child in a family with a family income below 185 percent of the poverty line for a family of the size involved pay more than 5 percent of the capitated payment rate; `
(B) allow the imposition of cost-sharing requirements for preventive services provided to a subsidy eligible child; or `
(C) enter into a contract that requires that a subsidy eligible child (in a family with a family income below 150 percent of the poverty line for a family of the size involved) pay more than 20 percent of the cost-sharing otherwise applied by the health center, unless the cost-sharing required under the contract involved has been deemed by the Secretary as not being a barrier to care for children of families below 150 percent of the poverty line for a family of the size involved. `
(c) COVERAGE FOR MEDICAL CARE- For purposes of this title, a qualifying children's direct service benefit option is an option for a eligible child that provides coverage for medical care for such child that is the equivalent of the medical assistance available (other than cost sharing) to children under the State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.). `
(d) ACCESS TO SPECIALITY CARE FOR SPECIAL NEEDS CHILDREN- Each qualified children's direct service benefit option shall assure access to pediatric primary and speciality care providers, including centers of pediatric specialized treatment expertise. `
SEC. 2804. OTHER REQUIREMENTS. `
(a) IN GENERAL- A participating State shall-- `
(1) take steps to ensure that information about the availability of the program, requirements for family participation in the program, benefits offered, and the application process are disseminated effectively to potential participants; `
(2) have in effect an outreach system under which families eligible for assistance under this title are assisted in enrolling in the State program and are enrolled at a wide variety of locations, including through of traditional providers of care; `
(3) ensure that every subsidy eligible children have the opportunity to apply for assistance under the State program under this title pursuant to State law; `
(4) if the State determines that a child is eligible for cost-sharing assistance under this title, notify the health plan in which such child is participating in a timely manner of such eligibility; `
(5) provide to any subsidy eligible child whose claim for assistance under the State program is denied or is not acted on within a reasonable period of time, an opportunity under State law for an administrative hearing on such denial or inaction before the State agency; `
(6) provide to the public, a general description of the rules (including the objective criteria used) established by the State for making decisions concerning eligibility for assistance under the State program; and `
(7) use funds received under this title only in accordance with the provisions of this title. `
(b) DESIGNATION OF STATE AGENCY- A participating State may designate an appropriate State agency to administer the State program under this title. `
PART B--ASSISTANCE `
SUBPART 1--ASSISTANCE TO FAMILIES `
SEC. 2821. ELIGIBILITY DETERMINATIONS. `
(a) IN GENERAL- The following requirements shall apply with respect to eligibility determinations for assistance under this title: `
(1) APPLICATIONS- A State program shall provide that an individual may file an application for assistance in any manner determined appropriate by the State. Such applications shall-- `
(A) be in an understandable form and generally accessible to individuals; `
(B) require the provision of information necessary to make a determination as to whether a child is eligible for assistance; and `
(C) require attachment of such documentation as deemed necessary by the Secretary in order to verify eligibility for assistance. `
(2) TERM- The State program may provide for a determination of eligibility under this section to be effective for a 6-month period or longer. `
(b) COORDINATION- Eligibility determinations made pursuant to this section may be coordinated with determinations of eligibility for State-administered health programs to the extent that such coordination brings about administrative efficiencies. `
SEC. 2822. ASSISTANCE TO FAMILIES. `
(a) STATE APPLICABLE INCOME CRITERIA- For purposes of this title, the applicable income criteria used by the State for purposes of determining whether a child is a subsidy eligible child, shall be based on the income of the family of the subsidy eligible child expressed as a percentage of the poverty line for a family of the size involved. In establishing the applicable eligibility criteria and subsidy level, the State shall give priority to families in the State with the lowest family incomes, except that the State shall establish a higher income criterion for families with a disabled child. `
(b) PAYMENTS- `
(1) IN GENERAL- The amount of the assistance available to a subsidy eligible child shall be paid directly to-- `
(A) in the case of a child enrolled in a qualifying children's policy, the health insurance issuer offering the qualifying children's policy (unless such plan is a group health plan in which case such payment may be made directly to the group health plan or the health insurance issuer offering health insurance coverage through the group health plan, or to the individual); or `
(B) in the case of an individual receiving benefits under a qualifying children's direct service benefit option, to the provider and the health insurance issuer if applicable with whom the State has contracted under section 2803. `
(2) INDIVIDUAL RESPONSIBILITY- An individual shall be responsible for any portion of the premium or cost sharing not subsidized by the State. `
(c) SPECIAL RULE- `
(1) IN GENERAL- If a subsidy eligible child enrolls in a group health plan, a premium subsidy under this title shall be applied only to the amount of the employee contribution for coverage for a subsidy eligible child. `
(2) RULE OF CONSTRUCTION- Nothing in this section shall be construed to require that an employer provide a qualifying children's policy to an eligible child regardless of whether such child is eligible for a subsidy under this title. `
(d) LIMITATION- Nothing in this title shall be construed to require that a State provide assistance to subsidy eligible children under this part in an amount that exceeds the total amount available to the State under section 2826 (including State matching funds) for carrying out the program under this title. If the State determines that such available amount is not sufficient to provide premium subsidies and other assistance under this part to all subsidy eligible children in the State, the State may adjust the applicable eligibility criteria appropriately or adjust the State program in another manner specified by the Secretary prior to the program year. `
SEC. 2823. PENALTIES FOR MATERIAL MISREPRESENTATION AND FALSE INFORMATION. `
A participating State shall establish penalties to be applied to any individual who knowingly and willfully makes a material misrepresentation of information or provides false information in an application for assistance under this part, and shall otherwise enforce the provisions of this title as determined appropriate by the State. `
SEC. 2824. AGGREGATE FEDERAL GRANT PAYMENTS. `
(a) PAYMENT SCHEDULE- `
(1) STATE AMOUNT- `
(A) IN GENERAL- A participating State shall be eligible to receive a grant in an amount under this title that bears the same relationship to the amount appropriated for such year under section 2825 (and available after the reservation under paragraph (7)), as the total number of uninsured eligible children in the State in a base year as determined appropriate by the Secretary bears to the total number of uninsured eligible children in all participating States in such base year. `
(B) STATE ALLOCATION ADJUSTMENTS- `
(i) STUDY- Not later than September 30, 1998, the Secretary shall conduct a study, and prepare and submit to the appropriate committees of Congress a report, concerning methodology for providing the State allotment under subparagraph (A) that takes into account an equitable adjustment to the formula based on variations in costs among States. `
(ii) IMPLEMENTATION OF METHODOLOGY- If determined appropriate and feasible by the Secretary, the Secretary shall, not later than January 1, 1999, implement by regulation a methodology for the determination of the maximum amount under subparagraph (A) that takes into account the relative number of uninsured eligible children in a State in the base year described in subparagraph (A) and the relative cost of the delivery of services to those children. (2) PAYMENT- Subject to paragraph (1), the Secretary shall provide for payment under a grant to each participating State for each calendar quarter, beginning with any quarter beginning on or after April 1, 1998, of an amount equal to-- `
(A)
(i) 100 percent of the total amount estimated by the Secretary to have been expended by the State during such prior quarter for premium and cost-sharing assistance under this title for enrollment in qualifying children's policies and for coverage under the qualifying children's direct service benefit option through the programs operated under part A; less `
(ii) the State matching amount as determined under paragraph (3) for such prior quarter; and
(B) 50 percent of the total amount estimated by the Secretary to be expended by the State during such prior quarter for the proper and efficient administration of the program described in this part. `
(3) STATE MATCHING PERCENTAGE- `
(A) IN GENERAL- With respect to the calendar quarter for which the payment is to be made under this section, the State will be responsible for contributing an amount equal to 40 percent of the percentage of the amount the State is responsible for expending for medical assistance under title XIX of the Social Security Act, based on the State percentage determined under section 1905(b) of such Act (42 U.S.C. 1396d(b)), for the State for the calendar quarter involved. `
(B) LIMITATION- In no case shall the State responsibility under subparagraph (A) for a calendar quarter be less than an amount equal to 10 percent of the amount determined under paragraph (2)(A)(i) for the State for the calendar quarter involved. `
(C) TERRITORIES- In the case of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands, the State percentage for purposes of determining the State matching amount under subparagraph (A) shall be 20 percent. `
(4) AVAILABILITY OF FUNDS- Except as provided in paragraph (5), amounts provided to a State under this section shall remain available until expended by the State. `
(5) REDISTRIBUTION- The Secretary shall establish a procedure for the redistribution of any funds-- `
(A) not expended by a State under this title; and `
(B) as determined by the Secretary, after consultation with the governor of the State, that are unlikely to be used in the future by the State. `
(6) STATE REQUEST FOR REDUCTION IN FUNDS- Nothing in this section shall be construed to prohibit a State from requesting only a portion of the amount allotted to the State under this section. `
(7) RESERVATION- `
(A) IN GENERAL- Of the amount appropriated to carry out this Act for a fiscal year, the Secretary shall reserve .15 percent of such amount for allocation among the territories described in paragraph (2)(C). `
(B) ALLOCATION- A territory described in paragraph (2)(C) shall be eligible to receive an amount that bears the same relationship to the amount reserved for such year under subparagraph (A), as the total number of uninsured eligible children in the territory in a base year as determined appropriate by the Secretary bears to the total number of uninsured eligible children in all participating territories in such base year. `
(b) REDUCTION IN PAYMENTS FOR ADMINISTRATIVE ERRORS- `
(1) IN GENERAL- In the case of administrative errors described in paragraph (2), matching payments available to a State under subsection (a) shall be reduced by an amount determined appropriate by the Secretary. `
(2) ADMINISTRATIVE ERRORS DESCRIBED- The administrative errors described in this paragraph include the following: `
(A) An eligibility error rate for premium assistance to the extent the applicable error rate exceeds the maximum permissible error rate specified by the Secretary. `
(B) Misappropriations or other expenditures that the Secretary finds are attributable to malfeasance or misfeasance. `
(c) AUDITS- The Secretary shall conduct regular audits of the activities conducted under this part. `
(d) BUDGETARY TREATMENT- Subject to section 2825, this section constitutes budget authority in advance of appropriations Acts, and represents the obligation of the Federal Government to provide payments to the States in accordance with this section. `
(e) NONENTITLEMENT- Nothing in this title shall be construed as providing an individual with an entitlement to assistance under this title. `
SEC. 2825. AUTHORIZATION OF APPROPRIATIONS AND DEFICIT REDUCTION. (a) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to make Federal payments under this title-- `
(1) for fiscal year 1998, $3,000,000,000; `
(2) for fiscal year 1999, $3,000,000,000; `
(3) for fiscal year 2000, $4,000,000,000; `
(4) for fiscal year 2001, $5,000,000,000; and `
(5) for fiscal year 2002, $5,000,000,000. `
(b) DEFICIT REDUCTION TARGETS- For purposes of this section, the deficit reduction target shall be-- `
(1) for fiscal year 1998, $3,000,000,000; `
(2) for fiscal year 1999, $3,000,000,000; `
(3) for fiscal year 2000, $2,000,000,000; `
(4) for fiscal year 2001, $1,000,000,000; and `
(5) for fiscal year 2002, $1,000,000,000. Any amount of revenue available under this subsection shall be deposited into the Treasury and used for deficit reduction. `
(c) REDUCTION IN AUTHORIZED AMOUNT- `
(1) IN GENERAL- If, with respect to a fiscal year, the total estimated amount of revenue derived for the financing of the program under this title is less than the total target amount determined under paragraph (2), then the amount referred to for the following fiscal year under subsection (a) shall be reduced by the amount by which the amount of such estimated revenue is less than the total target amount determined under paragraph (2) for such fiscal year multiplied by 2/3 . `
(2) TOTAL TARGET AMOUNT- For purposes of paragraph (1), the total target amount for a fiscal year shall be equal to the sum of-- `
(A) the amount authorized to be appropriated for such year under subsection (a); and `
(B) the deficit reduction target for such fiscal year under subsection (b). `
(3) REVENUE IN EXCESS OF ESTIMATES- If the estimated amount of revenue described in paragraph (1) for a fiscal year is greater than the total target amount under paragraph (2) for such fiscal year, then the amount authorized for the following fiscal year under subsection (a) shall be increased in the same manner as the reduction described in paragraph (1). `
SUBPART 2--SERVICES FOR PREGNANT WOMEN, NEW MOTHERS, AND INFANTS `
SEC. 2831. PROGRAM FOR PREGNANT WOMEN AND INFANTS. `
(a) ESTABLISHMENT OF PROGRAM- A participating State may use up to 5 percent of the amount of the allotment to the State for a fiscal year under section 2825 to establish a program to meet the needs identified by the State in the statewide needs assessments prepared by the States under section 505(a)(1)(A) of the Social Security Act (42 U.S.C. 705(a)(1)(A)). `
(b) COORDINATION- A State shall take actions to ensure that the program established under this section is coordinated with the programs operated by the State under title V of the Social Security Act (42 U.S.C. 705). `
(c) MAINTENANCE OF EFFORT- With respect to a State that carries out a program under this section, funds made available under this title for such program shall be used to supplement and not supplant current State spending for the needs described in subsection (a). `
PART C--DEFINITIONS AND MISCELLANEOUS PROVISIONS `
SUBPART 1--DEFINITIONS `
SEC. 2841. DEFINITIONS. `
(a) IN GENERAL- In this title: `
(1) ELIGIBLE CHILD- The term `eligible child' means an individual who is 18 years of age or younger. `
(2) PARTICIPATING STATE- The term `participating State' means any State that elects to establish a program under part A. `
(3) POVERTY LINE- The term `poverty line' means the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) that is applicable to a family of the size involved. `
(4) QUALIFYING CHILDREN'S POLICY- The term `qualifying children's policy' means a policy that meets the standards described in section 2802. `
(5) QUALIFYING CHILDREN'S DIRECT SERVICE BENEFIT OPTION- The term `qualifying children's direct service benefit option' means the provision of direct medical assistance under the standards described in section 2803. `
(6) STATE- The term `State' means each of the several States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. `
(7) SUBSIDY ELIGIBLE CHILD- The term `subsidy eligible child' means a child who-- `
(A) meets reasonable eligibility criteria established by the State, and has a family income that falls within the applicable income criteria (as defined in section 2822), for purposes of providing subsidies under the State program; `
(B) is an eligible child; `
(C) is a citizen or qualified alien (as defined in section 431(b) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641(b)); `
(D) is not eligible for medical assistance under the State plan under title XIX of the Social Security Act, except that nothing in this title shall be construed to require that an individual be denied medical assistance under a State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) in order for that child to be eligible to receive assistance under the State program under this title; and `
(E) has not been covered under a group health plan (unless such coverage was terminated as a result of a change in employment status) during the 6-month period ending on the date on which the individual applies for subsidy-eligible health coverage under this title. For purposes of subparagraph (E), enrollment in a health plan under a COBRA continuation provision (as defined in section 2791(d)(4)) shall not constitute enrollment in a group health plan. `
(b) DEFINITIONS RELATING TO INCOME- In this title: `
(1) FAMILY INCOME- The term `family income' means, with respect to an individual who-- (A) is not a dependent of another individual, the sum of the modified adjusted gross incomes for the individual, the individual's spouse, and children who are dependents of the individual; or `
(B) is a dependent of another individual, the sum of the modified adjusted gross incomes for the other individual, the other individual's spouse, and children who are dependents of the other individual. The Secretary may promulgate rules under which spousal income may be disregarded in instances where a spouse is not part of a family unit. `
(2) DEPENDENT- The term `dependent' has the meaning given such term under section 152 of the Internal Revenue Code of 1986. For purposes of this paragraph, a child who is placed in foster care by a State agency shall not be considered a dependent of another individual. `
(3) MODIFIED ADJUSTED GROSS INCOME- The term `modified adjusted gross income' means adjusted gross income (as defined in section 62(a) of the Internal Revenue Code of 1986)-- `
(A) determined without regard to sections 135, 162(l), 911, 931, and 933 of such Code, and (B) increased by-- `
(i) the amount of interest received or accrued by the individual during the taxable year which is exempt from tax, and `
(ii) the amount of the social security benefits (as defined in section 86(d) of such Code) received during the taxable year to the extent not included in gross income under section 86 of such Code. The determination under the preceding sentence shall be made without regard to any carryover or carryback. `
(c) OTHER DEFINITIONS- The term-- `
(1) `group health plan' has the meaning given the term in section 2791(a); `
(2) `health insurance coverage' has the meaning given the term in section 2791(b)(1); `
(3) `health insurance issuer' has the meaning given the term in section 2791(b)(2); `
(4) `health maintenance organization' has the meaning given the term in section 2791(b)(3); and (5) `network plan' has the meaning given the term in section 2791(B)(10). `
(d) REFERENCES TO INDIVIDUAL- For purposes of this title, any reference to an individual shall include a reference to the parent or guardian of such individual. `
SUBPART 2--MISCELLANEOUS PROVISIONS `
SEC. 2851. OTHER CONTRIBUTIONS TO PREMIUMS. `
(a) GENERAL RULE- Any employer which elects to make employer contributions on behalf of an individual who is an employee of such employer, or who is a dependent of such employee, for health insurance coverage shall not condition, or vary, such contributions with respect to any such individual by reason of such individual's status as an individual eligible for assistance under part B. `
(b) ELIMINATION OF CONTRIBUTIONS- An employer shall not be treated as failing to meet the requirements of subsection (a) if the employer ceases to make employer contributions for health insurance coverage for all its employees. `
(c) ENFORCEMENT- The enforcement provisions applicable to group health insurance coverage under the amendments made by section 101(e)(2) of the Health Insurance Portability and Accountability Act of 1996 shall apply with respect to an employer that violates the provisions of this section in the same manner as such provisions apply to employers under such amendments. `
SEC. 2852. MAINTENANCE OF EFFORT. `
(a) MEDICAID- A State that elects to participate under this title may not modify the eligibility requirements for children under the State program under title XIX of the Social Security Act, as in effect on January 1, 1997 (except that such requirements may be modified pursuant to an application for a waiver under section 1115 of the Social Security Act (42 U.S.C. 1315) submitted prior to January 1, 1997), in any manner that would have the effect of reducing the eligibility of children for coverage under such program. `
(b) MAINTENANCE OF EFFORT- Funds appropriated pursuant to the authority of this Act shall be used to supplement and not supplant other Federal and State funds expended to provide services for disabled individuals. `
SEC. 2853. APPLICATION OF OTHER REQUIREMENTS AND STATE FLEXIBILITY- (a) APPLICATION OF INSURANCE REQUIREMENTS UNDER TITLE XXVII- For purposes of applying sections 2701(a) through (e) and (g) (relating to limitations on preexisting conditions and increased portability) except those provisions relating to late enrollees, waiting periods, and election of alternative methods under section 2701(c)(3)(B), 2702(a)(1) and (b) (relating to eligibility to enroll), 2711(a)(1)(A) (relating to guaranteed availability for eligible individuals), and 2711(c) and (d)(1) (relating to special rules for network plans and financial capacity) to health insurance issuers offering a qualifying children's policy and health insurance issuers offering wrap-around insurance under this title, a qualifying children's policy shall be deemed to be health insurance coverage offered by a health insurance issuer in the small group market, in connection with a group health plan, and an eligible individual shall be considered a small employer for the purposes of section 2711(a)(1)(A), (c) and (d)(1), except that section 2701(b) shall apply to a qualifying children's policy offered to a subsidy eligible child. `
(b) STATE FLEXIBILITY- Nothing in this section shall be construed to prevent a State from establishing or implementing standards or requirements-- `
(1) not prescribed in this title; or `
(2) related to the issuance, renewal or portability of health insurance under a qualifying children's policy or a qualifying children's direct service benefit option that provide greater protection or benefit to an eligible child. `
SEC. 2854. REGULATIONS. `
The Secretary may issue regulations to implement the program established under this title.'.
SEC. 4. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.
(a) CIGARETTES- Section 5701(b) of the Internal Revenue Code of 1986 is amended-- (1) in paragraph (1), by striking `$12 per thousand ($10 per thousand on cigarettes removed during 1991 or 1992)' and inserting `$33.50 per thousand', and (2) in paragraph (2), by striking `$25.20 per thousand ($21 per thousand on cigarettes removed during 1991 or 1992)' and inserting `$70.35 per thousand'.
(b) CIGARS- Section 5701(a) of the Internal Revenue Code of 1986 is amended-- (1) in paragraph (1), by striking `$1.125 cents per thousand (93.75 cents per thousand on cigars removed during 1991 or 1992)' and inserting `$3.141 cents per thousand', and (2) by striking `equal to' and all that follows in paragraph (2) and inserting `equal to 35.59 percent of the price for which sold but not more than $83.75 per thousand.'
(c) CIGARETTE PAPERS- Section 5701(c) of the Internal Revenue Code of 1986 is amended by striking `0.75 cent (0.625 cent on cigarette papers removed during 1991 or 1992)' and inserting `2.09 cents'.
(d) CIGARETTE TUBES- Section 5701(d) of the Internal Revenue Code of 1986 is amended by striking `1.5 cents (1.25 cents on cigarette tubes removed during 1991 or 1992)' and inserting `4.18 cents'.
(e) SMOKELESS TOBACCO- Section 5701(e) of the Internal Revenue Code of 1986 is amended-- (1) in paragraph (1), by striking `36 cents (30 cents on snuff removed during 1991 or 1992)' and inserting `$6.09', and (2) by striking `12 cents (10 cents on chewing tobacco removed during 1991 or 1992)' in paragraph (2) and inserting `$2.41'.
(f) PIPE TOBACCO- Section 5701(f) of the Internal Revenue Code of 1986 is amended by striking `67.5 cents (56.25 cents on pipe tobacco removed during 1991 or 1992)' and inserting `$1.88'.
(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 September 30, 1997.
(h) FLOOR STOCKS TAXES-
(1) IMPOSITION OF TAX- On tobacco products and cigarette papers and tubes manufactured in or imported into the United States which are removed before October 1, 1997, and held on such date for sale by any person, there is hereby imposed a tax in an amount equal to the excess of--
(A) the tax which would be imposed under section 5701 of the Internal Revenue Code of 1986 on the article if the article had been removed on such date, over
(B) the prior tax (if any) imposed under section 5701 or 7652 of such Code on such article.
(2) AUTHORITY TO EXEMPT CIGARETTES HELD IN VENDING MACHINES- To the extent provided in regulations prescribed by the Secretary, no tax shall be imposed by paragraph (1) on cigarettes held for retail sale on October 1, 1997, by any person in any vending machine. If the Secretary provides such a benefit with respect to any person, the Secretary may reduce the $500 amount in paragraph (3) with respect to such person.
(3) CREDIT AGAINST TAX- Each person shall be allowed as a credit against the taxes imposed by paragraph (1) an amount equal to $500. Such credit shall not exceed the amount of taxes imposed by paragraph (1) on October 1, 1997, for which such person is liable.
(4) LIABILITY FOR TAX AND METHOD OF PAYMENT-
(A) LIABILITY FOR TAX- A person holding cigarettes on October 1, 1997, to which any tax imposed by paragraph (1) applies shall be liable for such tax.
(B) METHOD OF PAYMENT- The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe by regulations.
(C) TIME FOR PAYMENT- The tax imposed by paragraph (1) shall be paid on or before January 1, 1998.
(5) ARTICLES IN FOREIGN TRADE ZONES- Notwithstanding the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any other provision of law, any article which is located in a foreign trade zone on October 1, 1997, shall be subject to the tax imposed by paragraph (1) if-- (A) internal revenue taxes have been determined, or customs duties liquidated, with respect to such article before such date pursuant to a request made under the 1st proviso of section 3(a) of such Act, or
(B) such article is held on such date under the supervision of a customs officer pursuant to the 2d proviso of such section 3(a).
(6) DEFINITIONS- For purposes of this subsection--
(A) IN GENERAL- Terms used in this subsection which are also used in section 5702 of the Internal Revenue Code of 1986 shall have the respective meanings such terms have in such section, as amended by this Act.
(B) SECRETARY- The term `Secretary' means the Secretary of the Treasury or the Secretary's delegate.
(7) CONTROLLED GROUPS- Rules similar to the rules of section 5061(e)(3) of such Code shall apply for purposes of this subsection.
(8) OTHER LAWS APPLICABLE- All provisions of law, including penalties, applicable with respect to the taxes imposed by section 5701 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply to the floor stocks taxes imposed by paragraph (1), to the same extent as if such taxes were imposed by such section 5701. The Secretary may treat any person who bore the ultimate burden of the tax imposed by paragraph (1) as the person to whom a credit or refund under such provisions may be allowed or made. SEC. 5. CONFORMING AMENDMENTS.
(a) ERISA- Section 701(c)(1) of the Employee Retirement Income Security Act of 1974 (as added by section 101(a) of the Health Insurance Portability and Accountability Act of 1996) is amended by adding at the end the following: `
(K) A qualifying children's policy under the Child Health Insurance and Lower Deficit Act.'.
(b) PUBLIC HEALTH SERVICE ACT- (1) Section 2701(c)(1) of the Public Health Service Act (as added by section 102(a) of the Health Insurance Portability and Accountability Act of 1996) is amended by adding at the end the following: `
(K) A qualifying children's policy under the Child Health Insurance and Lower Deficit Act.'.
(2) Section 2761(b)(1)(A) of the Public Health Service Act (as added by section 102(a) of the Health Insurance Portability and Accountability Act of 1996) is amended--
(A) by striking `or church plan' and inserting `church plan'; and
(B) by inserting before the semicolon the following: `, qualifying children's policy, or qualifying children's direct service benefit option'.
SEC. 6. EFFECTIVE DATE. Except as provided in section 4(g), this Act shall become effective on the date of enactment of this Act, except that funds to carry out programs under the amendments made by this Act shall not be available prior to January 1, 1998.