The States’ Right to Innovate in Health Care Act
The following is draft legislation of the Utah Healthcare Initiative:
The States’ Right to Innovate in Health Care Act
To amend the Social Security Act to provide grants and flexibility through demonstration projects for States to provide universal, comprehensive, cost-effective systems of health care coverage, with simplified administration.
SECTION 1. SHORT TITLE.
SHORT TITLE.—This Act may be cited as the ‘‘States’ Right To Innovate in Health Care Act’’.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS.—Congress finds the following: (1) In 1998, annual health care expenditures in the United States totaled $1.15 trillion, or $4,094 9
per person. (2) In 1998, health care expenditures represented 13.5 percent of the gross domestic product (GDP) in the United States and grew at the rate of 5.6 percent while the gross domestic product grew only at the rate of 4.9 percent. (3) Businesses, and consumers, would save approximately $562.8 billion over 7 years if health care expenditures were increasing at the same rate as GDP growth. (4) Because many individuals do not have health insurance coverage, they may incur health care costs which they do not fully reimburse, resulting in cost-shifting to others. (5) As a consequence of the piecemeal health care system in the United States, administrative overhead costs approximately $1,000 per person annually while other Western industrialized nations with universal health care systems spend approximately $200 per person annually for administrative overhead. (b) PURPOSE.—It is the purpose of this Act to encourage States— (1) to develop plans for universal, comprehensive, cost-effective systems of health care with simplified administration to individuals residing in such States; and (2) to implement such plans by offering transitional grants and by removing Federal statutory and administrative barriers that may inhibit or discourage efforts by States to provide such health care while maintaining Federal payments for health care under Federal health care programs.
SEC. 3. AMENDMENT TO SOCIAL SECURITY ACT.
The Social Security Act (42 U.S.C. 301 et seq.) is amended by adding at the end the following new title: ‘‘TITLE XXII—STATE COMPREHENSIVE HEALTH CARE AND COST CONTAINMENT DEMONSTRATION PROJECTS”.
SEC. 4. PLANNING GRANTS.
(a) APPLICATION.—A State may apply to the Secretary for a State planning grant under this section to develop a State plan to offer universal comprehensive health care, with simplified administration, and to improve the cost-effectiveness of the health care delivery system. (b) CONTENTS.—The Secretary may not approve such a State planning grant for a State unless the application for the grant includes or provides for the following: (1) BUDGET.—A budget and a budget justification. (2) PLANNING PROCESS.—A description of how under the grant the State shall— (A) identify options to provide a universal, comprehensive, and cost-effective system of health care, with simplified administration, that is affordable and accessible to all eligible beneficiaries in the State; and (B) conduct an analysis that compares projected overall health expenditures over a 7year period under the proposed system with the projected overall health expenditures that would otherwise occur during such period. (3) OPPORTUNITY FOR PUBLIC PARTICIPATION.—Assurances that the State will include a process for public contribution and participation in the planning process. (c) NUMBER OF STATES; PERIOD OF GRANT.—The Secretary may not award State planning grants under this section to more than 10 States. A State planning grant under this section shall be effective for a period of up to 30 months. In awarding State planning grants under this section the Secretary shall give preference to States from a variety of geographic areas in the United States. (d) AMOUNT.—The amount of a State planning grant under this section to a State may not exceed $3,750,000. (e) TECHNICAL ASSISTANCE.—The Secretary shall provide States with technical assistance in applying for and implementing State planning grants under this section. At the request of the Secretary, other Departments and Offices of the Federal Government shall provide States with such technical assistance.
SEC. 5. DEMONSTRATION GRANTS.
(a) APPLICATION.—A State that has developed a State plan may apply to the Secretary for approval of a demonstration grant under this section to achieve a cost-effective delivery system of universal, comprehensive health care with simplified administration. The Secretary shall notify the chief executive officer of all States of the availability of demonstration grants under this section. (b) APPROVAL.—The Secretary shall approve the applications of not more than 5 States under this section. In approving grants under this section the Secretary shall give preference to States from a variety of geographic areas in the United States. If the Secretary determines that a State no longer meets the conditions for approval of the grant, the Secretary shall notify the State of such determination and provide the State with an opportunity to correct deficiencies in a timely manner. If the Secretary further determines that a State has not corrected such de- ficiencies in a timely manner, the Secretary shall terminate the grant (including waivers authorized under the grant). (c) PERIOD.—A demonstration grant approved under this section shall be effective for 7 years from the date of final approval of the demonstration grant application under subsection (b). (d) STATE PLAN REQUIRED.—The Secretary may not approve a demonstration grant under this section unless the State has a State plan to carry out the grant consistent with the requirements of section 6. (e) FUNDING— (1) TRANSITIONAL GRANT AMOUNT.—The amount awarded under this section to a State with a demonstration grant approved under this section may not exceed an aggregate amount of $10,000,000 plus $3 multiplied by the number of eligible State residents of the State, to assist the State in the transition of the health care delivery and financing infrastructure. Such amount shall be made available to a State during the period of transition, as provided in the State plan. The number of eligible State residents of a State shall be determined based on the best available Census Bureau data as of the July 1 before the date the grant under this section is approved. (2) MAINTENANCE OF FEDERAL FUNDS UNDER WAIVERS.—Pursuant to the waivers under subsection (f), the Federal Government shall pay to a State amounts for health care under Federal health care programs that would otherwise have been payable by the Federal Government but for the State’s universal, comprehensive health care system under this section. (f) WAIVER OF ERISA PREEMPTION AND WAIVERS TO POOL FUNDS.—As part of a demonstration grant under this section and subject to the benefit maintenance requirements applicable under section 6(b), a State may request (and the Secretary may grant) the following waivers of requirements and provisions to the extent necessary to carry out the State plan under section 6: (1) ERISA.—Waiving application of section 514 of the Employee Retirement Income Security Act of 1974. (2) MEDICARE.—Waiving provisions necessary to permit the State— (A) to use funds otherwise paid under title XVIII for beneficiaries residing in the State; and (B) to permit the State to enter into an arrangement with the Secretary under which eligible State residents who are not otherwise enrolled for benefits under parts A and B of such title are enrolled for such benefits under such title and the State provides for such actuarially appropriate reimbursement to the Secretary with respect to coverage of such benefits for such residents as is necessary to assure that the Trust Funds under such title are not adversely affected by virtue of such waiver, such reimbursement subject to— (i) an independent audit, to be reviewed by the Comptroller General of the United States, assuring that such reimbursement does not adversely affect in any way the Trust Funds for medicare eligible beneficiaries, and (ii) in the case that the audit determines that additional reimbursement to the Secretary is required, such additional reimbursement, with appropriate adjustments for interest attributable to the late reimbursement. (3) MEDICAID.—Waiving provisions necessary to permit the State to use funds otherwise paid to the State under title XIX. (4) SCHIP.—Waiving provisions necessary to permit the State to use funds otherwise paid to the State under title XXI. (5) FEHBP.—Waiving provisions necessary to permit the State to use funds otherwise paid under chapter 89 of title 5, United States Code, or allowing the Office of Personnel Management to purchase health care coverage for Federal employees and retirees in the State under the State plan. (6) USE OF OTHER FUNDS.—Waiving provisions necessary to permit the State to use funds otherwise provided under other Federal programs for the provision of health care coverage or services, identified by the State. (7) OTHER LAWS.—Waiving of other provisions of Federal law identified by the State under section 6(e)(3) only if the Secretary determines such a waiver to be appropriate after consultation with the head of the Federal agency or department concerned. The Secretary may grant a waiver under this subsection only if the State provides the Secretary with satisfactory assurances that necessary safeguards have been taken to protect the health and welfare of individuals provided services under the waiver and that financial accountability is maintained for any funds expended under the waiver. The Secretary may grant a waiver under paragraph (1) only with the concurrence of the Secretary of Labor. (g) REENROLLMENT OF ELIGIBLE STATE RESIDENTS WHO MOVE FROM A PARTICIPATING STATE.—In the case of an eligible State resident who is covered under a State plan under section 6, who (but for such coverage) is eligible to be enrolled in a program described in subsection (f) (including the medicare and medicaid programs), and who is not enrolled in such a program because of such coverage, if the resident leaves the State to reside in a State that does not have such a State plan in effect, the resident shall be permitted, notwithstanding any other provision of law, to enroll immediately in such a program if the resident is still otherwise eligible to be so enrolled. In the case of such enrollment in the medicare program, the resident shall be treated for purposes of section 1882(s)(2) (relating to availability of medigap policies without underwriting) as if the resident had turned 65 years of age on the date the resident enrolls in the medicare program. (h) DUTIES OF THE SECRETARY.— (1) GUIDANCE AND INFORMATION.—The Secretary shall— (A) provide guidance to State health care authorities regarding applications for grants under this title and exchange information with, and otherwise assist, such authorities upon the request of the authorities; (B) set application procedures; (C) review and approve applications for demonstration grants under this section, including providing for appropriate waivers described in subsection (f); (D) provide appropriate levels of funding for such approved applications consistent with such section; (E) conduct such evaluation, monitoring, compliance, and other review functions as may be appropriate; (F) develop guidelines, standards, and formats for States to follow in evaluating, reporting, and collecting data in order to enable the Commission to monitor State plan administration and compliance, and to evaluate and compare the effectiveness of State plans; and (G) implement any other requirements or activities necessary and appropriate under this title. (2) ANNUAL REPORT.—The Secretary shall submit to the President and the Congress an annual report. Such report shall be submitted not later than March 30 of each year and shall include information concerning States that receive grants under this title and the effectiveness of any health care programs assisted by such grants during the previous year. (3) APPROVAL PROCESS.—The provisions of section 2106(c) shall apply to State plans and the Secretary under this title in the same manner as they apply to State plans and the Secretary under such section.
SEC. 6. STATE PLAN REQUIREMENTS.
(a) COVERAGE.— (1) IN GENERAL.—A State plan shall provide a process and a timeline for achieving coverage of all eligible State residents statewide, without regard to employment status, income, health status or preexisting condition, or location of residency within the State. (2) OUTREACH MECHANISMS.—A State plan shall describe the outreach mechanisms to be used to assure coverage of all eligible individuals, including measures to assure coverage of individuals in hard-to-reach populations and to assure benefits are provided to eligible individuals located in underserved areas. (b) BENEFITS.— (1) BASIC BENEFITS.—A State plan shall provide for health benefits that— (A) are at least actuarially equivalent to the standard Blue Cross/Blue Shield preferred provider option service benefit plan, described in and offered under section 8903(1) of title 5, United States Code; and (B) include benefits for at least the following items and services: (i) Inpatient and outpatient hospital services, including emergency services available 24 hours a day. (ii) Long term, acute, and chronic care services, including skilled nursing facility services, intermediate care facility services home health services, home and community-based long-term care services, hospice care, and services in intermediate care facilities for individuals diagnosed with mental retardation. (iii) Professional services of health care practitioners authorized to provide health care services under State law. (iv) Community-based primary health care services, including rural health clinic services and Federally-qualified health center services. (v) Laboratory, x-ray services, and diagnostic tests. (vi) Preventive care, including prenatal, well-baby, and well-child care, appropriate immunizations, pap smears, screening mammography, colorectal cancer screening, physical examinations, and family planning. (vii) Prescription drugs and biologicals, including insulin and medical foods. (viii) Mental health services. (ix) Substance abuse treatment services. (x) Vision services, including routine eye examinations, eyeglasses, and contact lenses. (xi) Hearing services, including hearing aids. (xii) Dental services, including routine check ups. (xiii) Durable medical equipment, including home dialysis supplies and equipment. (xiv) Emergency ambulance services. (xv) Prosthetics. (xvi) Outpatient therapy, including physical therapy, occupational therapy, and speech language pathology services and related services. (2) ASSURANCE THAT BENEFITS ARE NOT REDUCED FOR INDIVIDUALS COVERED UNDER FEDERAL PROGRAMS.—Insofar as the State under the plan incorporates funding provided by Federal programs described in section 5(f), the State plan may not provide for a reduction in benefits (including coverage, access, availability, duration, and beneficiary rights, and, if applicable, vaccine benefits under section 1928) otherwise provided for under such programs or an increase in cost-sharing and premiums otherwise provided for under such programs. (3) CONTINUATION OF BENEFITS FOR CERTAIN ALIENS.—Nothing in this title shall be construed as affecting the access of aliens described in section 2204(1)(D) to health care services provided under law for such aliens as of the date of the enactment of this title. (c) QUALITY ASSURANCE.— (1) IN GENERAL.—A State plan shall provide, and describe, mechanisms to be used to assure, monitor, and maintain the quality of items and services furnished under the plan. (2) HEALTH OUTCOMES.—A State plan shall describe the plan’s projected effect on health outcomes in the State, including estimates of health benefits, decreased morbidity and mortality, and improved productivity resulting from reduction in the number of individuals without health benefits. (d) PROGRAMS FOR MEDICAL EDUCATION.—A State plan shall describe health professions training and graduate medical education activities applicable under the plan, and shall provide, under the State plan, for payment from Federal, State, and local governments for such training and education activities in the amounts that would otherwise be payable by such governments but for the State’s universal, comprehensive health care system under the State plan. (e) FINANCING.— (1) BUDGET.—A State plan shall incorporate a budget which contains— (A) detailed projections of health care expenditures presently and under the proposed system, including an identification and calculation of the amount of funding to be provided by the Federal, State, and local governments under the plan and an assurance that the amount of expenditures made by the State and local governments will not be reduced as a result of the implementation of the plan; and (B) a description (and an estimate of costs) of transitional activities to be undertaken in implementing the proposed system. (2) COST CONTAINMENT.—A State plan shall describe the means to be used to contain costs under the plan, including when and how the plan will increase efficiencies. (3) FEDERAL EXPENDITURE LIMIT.—A State plan shall contain assurances that aggregate Federal expenditures on health care (including Federal expenditures under titles 5, 10, and 38 of the United States Code, and under this Act) under the plan will not exceed aggregate Federal expenditures that would have been incurred in the absence of such plan. (f) IMPLEMENTATION.— (1) IN GENERAL.—A State plan shall describe the method (including a timetable and period of transition) for implementing the plan. (2) COORDINATION.—A State plan shall identify all Federal, State, and local programs that provide health care services in the State and describe how such programs would be incorporated in, or coordinated with, the health coverage system under the plan. (3) FEDERAL WAIVERS REQUIRED.—A State plan shall identify any waivers of Federal law required to implement the plan, including the use of any pooled Federal funds and other waivers described in section 5(f). (4) APPROVAL OF STATE LEGISLATURE.—A State plan shall provide that State approvals and commitments (including approval of the State legislature) necessary for the implementation of the plan will be obtained by not later than 1 year after the date of the Secretary’s approval of the plan. Any approval of a grant is conditioned upon the timely completion of such approvals and commitments. (g) EVALUATION.—A State plan shall provide for a process for its evaluation, and shall comply with any evaluation reporting or data collection requirements imposed by the Secretary. (h) CONSTRUCTION.—Nothing in this title shall be construed as preempting State laws that provide greater protections or benefits than the protections or benefits required under this title.
SEC. 7. INTERSTATE ARRANGEMENTS.
(a) IN GENERAL.—One or more contiguous States in a geographic region may file a joint application for planning and demonstration grants under this title. (b) CONGRESSIONAL APPROVAL.—Congress hereby authorizes and approves States entering into Interstate Compacts in order to conduct joint health care programs under such a grant. (c) REFERENCES TO STATE.—In the case of a joint application described in subsection (a), any reference in this title to a State is deemed to refer to all of the States, and the approval of a grant with respect to such a joint application shall be counted as 1 State for purposes of applying sections 4(c) and 5(b).
SEC. 8. DEFINITIONS.
As used in this title: