The problem isn’t with God. The problem is in some people believing that God has anointed them to lead or purport to be God’s chosen ones. That’s anything but Christian. It would be nice to see a little humility from the Grabb folks. Apparently you believe questioning Clayton’s self-appointment by God as tantamount to challenging God’s place in the public realm. That’s not at all what I’m saying. Your’e arguing he’s qualified because he has a “calling from God.” That’s crazy. Just because someone “feels” they have a calling doesn’t mean they have a calling. It’s time for a little discernment here. What experience to lead does Clayton have other than his so called calling.

sounds like J. is taking things personally. Once again, there are not “All Americans” in high school (you are confusing high school with college). You are not a coach or a teacher in Western PA, or you would understand that-saying you are part of the Parade All America team is completely different from being an All American athlete (that is reserved for college athletes). State your name if you think you know what you are talking about – basically you don’t exist. And it’s almost strange that you are writing about someone who isn’t even running – who cares about some person’s football career that didn’t even make it to the pros.

Stop posting stupid things about football. This is about a race for a congressional seat. If Jason and so-called J. want to argue about stupid football, take it somewhere else. This is totally irrevelant. No one cares about football.

this healthcare reform is going to break the back of our economy . it is scary to think how much the health care bill will cyclically hurt all americans . and you couple that with the left’s cap & trade bill that we know they are going to try to ram down our throats like health care and you have the end of capitalism

i would really like to see a candidate or candidates adress just how damaging these 2 issues will be to the economy because you know the Democrat Dahkemperr is going to vote for any cap & trade bill that comes along

i dont know the exact #’s but it’s going to push this national debt we have so high where our grandchildren’s granchildren will be stuck with it

this spending is out of control

My point exactly. J. has some hang-up about Bob Kelly and can’t get on with it. If you didn’t make it to the pros, who really cares. The point isn’t whether Mike Kelly was All-American anything, the point is Mike Kelly got a scholarship. He isn’t some silver spoon type whose daddy paid his way through college. He worked for it. Not many people can say they got a scholarship to Notre Dame. So for all of you out there claiming he’s a good ‘ol boy/country clubber that doesn’t comport well with your notion now does it? Good luck attaching that label. Did Clayton or Huber get a scholarship, what was their level of achievement? Mike’s accomplishments in sports, academics, and business show he’s a leader. No other candidate in this race can claim that.

Jason — I’ve already proved you wrong enough and
Tom — no hang-ups with anybody ..that seems to be you — bringing other people in to the discussion…I was just merely pointing out a campaign ad which is relevant, and commented about how football around here used to be good as for “making it to the pros” — who can say they actually do that .0001% people didnt say anything about that – Im sure you and Jason are worthy of that though …

for 2 brothers to get scholarships to 2 schools like that is pretty remarkable Ill leave it at that.

I agree that Mike’s a good leader in the community, but again concerned that he can’t beat DDahlkemper that’s my concern

Wow…

Why all the petty, personal attacks against Mr. and Mrs. Kelly? Is it because of fear, envy…both? The old adage applies here: “People who live in glass houses should’t throw stones”.

Everyone has the opportunity in life to better themselves and achieve success. If one does not avail themself of those opportunites, that is their own fault and nobody elses.

The level of obsessive jealousy being shown about the Kelly’s is very telling and reveals who those posting such nonsense really are…no matter what pseudonym they post under.

I thought this site was about political issues, not the personal lives of candidates?

At no time did any of the Kelly supporters ever attack clayton grabb or his family, yet the grabb supporters are going all out in the personal vendettas. As I said…very, very telling.

Also, why the need for one person to post under so many different names? That’s also very obvious.

Mike’s accomplishments speak for themselves. He has been a leader in the community for many years and will continue to do so as Congressman for District 3.

does anyone know if there will be another debate with the six candidates for the 3rd district on television? what day and time?

Judging from the number of posts under this heading, clearly Mike Kelly is the candidate to beat for the GOP nomination.

stealing other candidates’ signs and using their wires because you don’t want to pay for wires. now, don’t think God will tell you to do that.

Sounds like Grabb’s gang again…what would Honest Abe have done?… I guess try to win at all costs if you’re a Grabb supporter, even if it means stealing.

sign stealing?
in 2004 I put up signs in the presidential election for Republicans and they were gone within a few days
then a few weeks later there were a bunch of Kerry/edwards signs that ACORN organiz. people put in Butler Co.

that’s something the far left has done lets not stoop to that

where were signs missing?

Are you kidding me???
This is past ridiculous. This is the type of baseless claims and accusations of politics of the past, that have soured people of the 3rd District and all Americans.

WE HAVE NEVER AND WOULD NEVER DO THAT.

We may not have the personal wealth to invest in our campaign – the type of money it takes the average American worker six years to make, but one thing we do have in our campaign is integrity and honor and we are fighting to restore America.
This is why Clayton is the best choice for PA’s 3rd Congressional District
~~ VOTE #1 ON THE BALLOT ~~

Thank you and God Bless – Cindy Grabb

Our campaign welcomes personal inquiries and we may be contacted at cindy@grabbforcongress.com

Here we go again…Cindy Grabb with the class warfare comments. Wait for Blanche to chime in next. Silly me for thinking you guys are Republicans capable of actually appreciating that someone would spend their own money to finance a campaign as opposed to taking money from others and then being beholden to them.
Please stop with the average worker stuff, you sound like a Dem trying to argue Mike Kelly didn’t work for his money and is just throwing money away that would matter to anyone else. Maybe he just cares enough to contribute his hard earned money, to the point that it really hurts, to his campaign in order to make an impact and defeat Dahlkemper. How far are you willing to go financially to make a difference?
~Vote 4 Mike Kelly ~ #4 on the Ballot.

I know you GOP wont respond to this b/c you cant justify arguing against real healthcare reform, but I’ve seen it in the media and on the internet: people complaining about the new healthcare reform. the media gives these tea partier people more credit than they should get.
I proudly support Kathy Dahlkemper for voting for the bill. I don’t know what it is about saving peoples lives thru this bill that scares you rightwingers so much? come on already, all of these candidate in the primary too they are all saying they will try turn back this historical reform what a bad idea! it doesnt matter who of the GOPwins this primary they will lose to Dahlkemper im sure.
Jason Altmire made a mistake not to vote for the bill but Kathy Dahlkemper stood up and had the guts to vote for it. Do you people know that there have been well over 40 million! uninsured people in the US now if they take care of those people that will result in lower medical costs in the long run and the insurance companies wont be able to price gauge like theyve been

im so happy for Dahlkemper and will vote for her again and suggest those on the fence to do so too and even happier we finally have a progressive enough president who can Articulate what he wants done and gets it done.

To Cindy, all other candidates, and to those people campaigning for their candidate of choice, I do apologize for my poison pen and will try to be a more productive citizen. Thank you.

No apologies to Cindy from Anonymous, but maybe from Anonymous #2. Or wait maybe Cindy is now apologizing to herself.

While this infighting goes on the Democrats can laugh. At this rate nobody or nothing will stop Kathy Dahlkemper. Candidates, you need to rein in your hit men and women and make this a productive blog. Accusations, name calling, etc. get this party nowhere. Watch the “meet the candidate” forums and debates. The one in Erie was especially interesting today. This is one you want to be sure and find out about. Thank you!

when is the next debate on TV anyone know ?
thank u

when is the next debate on TV anyone know?
thank u

Sounds like Team Huber is doing a good job at blaming Grabb’s people and Grabb’s people continue to rip on Kelly, so much so that Grabb’s wife is now involved. I can’t believe you people don’t see what’s going on. Get a clue. Why do you think most of the people on this site are anonymous or don’t post their real names b/c it’s another candidate trying to start problems. Unfortunately, grabb’s people just don’t get it – keep it up, keep campaigning for Huber.

I think everyone in this great country should be proud of their faith and patriotism. “In God We Trust” – “God Bless America” sound familiar?? I find it admirable that Clayton feels God put him here at this time for this purpose. “If not me, who? If not now, when?” These remarks from Clayton at a recent forum hit me hard. I feel that he is in this race for the right reasons and truly wants to make a difference for his family, friends, neighbors and all the others in the district. I also think that Martha Moore & Ed Franz have the same desire to make a difference. I don’t get that feeling from Steve Fisher. In fact Steve leaves me feeling empty and hopeless. Then there is Huber. Sorry, but I cannot get the fact that he was a Democrat for years out of my mind. Maybe it is because I felt so betrayed by Specter – I just cannot seem to think of them independently. I am not willing to take that chance. He (Huber) may be in the race for the right reasons but I can’t, and won’t, take the chance on him this time. And all his advertising that he is a “conservative republican” makes me ill. I know that he has hired an expensive advertising firm (see his FEC filings that are available to the public) but I throw all his flyers away and have yet to sit through his commercial. (I actually don’t watch any political TV ads because they are so misleading.) I just don’t trust him. Then there is Mike Kelly. The party machine’s answer to defeat Dahlkemper. Well thanks to Mike I know why he is in the race. Just check out the article he posted on his FB page. http://www.autonews.com/apps/pbcs.dll/article?AID=/20100322/RETAIL07/303229958 In the article from Automotive News it states, “He began thinking seriously about a run last August. Worried about slow cash-for-clunkers reimbursements, Kelly said he had trouble getting help from his U.S. representative’s office. “What frustrated me most of all was the lack of understanding of how important cash is to our business,” said Kelly. It states that the turning point for Mike Kelly came when he was informed that his Chevrolet business would survive but that GM intended to dump Kelly’s Cadillac store come 2010 – under the Government Bailouts of the Automotive Industry. It seems his dealership received over $625,000 from the program. (see article: http://online.worldmag.com/2010/04/05/clunker-candidates-for-congress/. I feel he is in the race for the wrong reasons and his contributions to Democratic campaigns only makes me more concerned than I was before. I am sure the RC picked Kelly because of his name recognition and bank account but I think they made a mistake. We really need someone with a passion to make a difference. This country is in some serious turmoil right now. If we keep doing what we’re doing, we will keep getting what we got. It’s time to try something different. A fresh young face with “no backs to scratch” once he gets elected – someone whose only interest is in serving the people in the district. I have been following this campaign for months and my prayers, my support and my vote will be for Clayton Grabb. http://www.grabbforcongress.com

Hey “Keep the Faith” otherwise known as “Roberta Biros” we now see why your whole blog is oriented towards positioning Clayton. You are so biased it’s ridiculous, but the worst part is you fein impartiality, objectivity, and above all pride yourself on being highly analytical on your blog. Meanwhile here there is nothing but conjecture and a disparate linking of the facts. What Mike Kelly says to an automotive publication and it’s readers is context specific, you ought to know, and it isn’t the be all to end all of why he’s running. He’s running for lots of reasons, but his realization of just how out of touch the governement is by vitue of his interaction with them as a small business owner is a very good one.
I feel sorry for the other candidates who have had to withstand your scrutiny as ridiculously partisan as it is.

And by the way Roberta, why don’t you get off of Mike Kelly’s fan page then, since you don’t seem to think he’s the right man for the job.

I am sorry to inform you that I am not Roberta Biros. She always uses her full name when blogging and has her own blog site. (http://mercerconservatives.blogspot.com/) Others may want to check it out as she is very good and always does her homework. I have contacted Roberta Biros through her email provided on her blog site – you may do the same to discuss any issues you have with her personally. I am sure she would be glad to discuss.

I am glad to see that you also realize that Mr. Kelly will say what he thinks people want to hear based upon his audience and not on any values or principles. I have learned this too over the last few months by attending the candidate forums.

No “Keep the Faith” I am saying Mike Kelly speaks to the points that concern the particular audience he is addressing. If for example he was to tell Automotive News about his concern for NW PA’s jobs as motivating factor that would mean little to a national audience made up of car dealers.

Anyway, it’s clear from your writing that you’re Roberta, and it doesn’t surprise me to see you chiming in now.

Still nothing though about why Clayton is qualified, just more slandering of Mike Kelly. No matter what he says you’ll find fault with it. No matter what he contributes to you’ll find some subversive plot. No matter how much good he does you’ll call it bad.

When Clayton says “If not me, who? If not now, when?” Most people think Mike Kelly and now. Unless of course this is a rhetorical question or he’s Obama’s version of “we are the ones we’ve been waiting for.”

Wow. How did I come up in this conversation?

I received an email from “Keep the Faith” a few minutes ago and she has requested that her name remain unpublished. I will honor that request.

I don’t know who any of you are and I was just now alerted to the fact that I was being discussed in this forum. I am going to contribute only as far as to set the record straight.

I can only guess that you’ve assumed that I am “Keep the Faith” because she used Clayton Grabb’s quote (“If not me, who? If not now, when?”). I will assure you that “Keep the Faith” is not me but I appreciate her use of the quote. In review of everything else that she has written, I honestly don’t see any other similarities.

I published an index comparing the candidates in the 3rd District. The comparison was based on information that I gathered regarding all of the candidates while attending several events and speaking with many of them personally. I’ve been in attendance at several meetings to see all of the candidates speak and interact, and I’ve met personally and face-to-face with Mike Kelly, Paul Huber, and Steve Fisher. I’ve had personal discussions at public forums with Clayton Grabb and Ed Franz. I’ve talked with Martha Moore only briefly on a few occasions. In comparison, I met Congresswoman Dahlkemper at a number of events last summer. All of those interactions were the basis of my comparison.

If you disagree with my assessments, I invite you to go to my blog (which you seem to be quite familiar with) and discuss your thoughts there. Going to a different site and making false allegations about me is counter-productive. If you’d like to address me, criticize me, or question me . . . please do so to “me” through email or through my website. I answer ALL questions openly.

Regarding my activity on Facebook, I’d like to make it very clear that I am doing everything that I can to make certain that Kathy Dahlkemper is defeated in November. That includes following and supporting ALL of the candidates for the Primary. I’ve made an open invitation to ALL candidates to post event listings on my blog, and some have taken advantage of that . . . some have not. That invitation remains open.

I’d like to remind all of you that after May 18th it is important that you all set aside your personal differences and back the ONE candidate that ends up on top after the Primary.

Thank you “Keep the Faith” for contacting me regarding this misunderstanding. For the record, I ALWAYS sign on AS MYSELF when contributing to any on-line forum. I have nothing to hide and no reason to duck behind “Anonymous” labels.

Thank you all for your time.

If you wish to question me directly, please do so by email to roberta.in.mercer@gmail.com.

Kudos to “Keep The Faith”. An absolutely wonderful blog entry. Thank you so much for adding some class to this site! I believe that your blog sums it all up, is what so many of us are thinking and feeling, and was so tastefully written that it has made every entry on this site look like chicken scratch. Anonymous #1, you could truly learn a little from Keep the Faith!

See “Keep the Faith”, Roberta, and Lori are all Grabb supporters who know and email eachother. No wonder they all sound alike. These are the self-appointed, anti-Republican, tea party people pretending to be for the little guy.

Tell me, if Clayton makes it to Congress and is making $200K+ will he then still be on the “people’s” end of main street. He should pledge to cap his salary and state his desire for term limits else it could look like he’s just trying to increase his income.

All for term limits!

Anonymous……is the majority of “people’s end of main street” mean Country Club? Sounds like it maybe is for you (I think), but sure isn’t for me and most Butlerites. So some candidates ARE starting on main street, hang out on the people’s main streets — while others are starting inside the Country Club and have no idea what the “people’s end of main street” is truly like, because most “people’s end of main street” aren’t getting shares of the Phillips Gas & Oil profits each month (I think).

What’s wrong with getting dividends? Now you sound like Obama. Let’s raise taxes and re-distribute the wealth to the “people’s end of main street.” “Peoples” sounds a lot like “Peoples Republic of China.” I guess you’re against free enterprise and investment which may result in one day you owning your own shares and getting your own dividends or wait that must the American Dream you’re fighting against. Please keep it up with the class warfare, that’s about as anti-Republican as you can get. Barnery is really showing true colors now. So at the end of the day you’re on the “peoples” side as long as you don’t make too much money, which is the goal of all the people afterall…we are all for personal financial success (you would have to be insane not to be).

There is a candidate forum coming up soon:

May 4th
Cranberry Municipal Bldg.
2525 Rochester Road
Cranberry, Pa.
7 – 9 p.m.
The following candidates have confirmed:
Franz, Grabb, Huber, Kelly and Rothfus

Go and hear what they say. It will be
enlightening.

Just keep fighting! You’re all doing a
great job.

I ask again…why the petty, jealous, vindictive personal attacks against the Kelly’s?

It is immature and shows who it is behind the many pseudonyms posting here.

Is it envy, fear or both?

There are six candidates in this primary. From the tone of these attacks, it’s apparent that Mike Kelly is the only one viewed as a threat to the others.

Grow up, people. Stop acting like you’re in pre-K.

my god everyone on this blog sounds so silly… do you people have jobs

I think everyone here is trying to get the other supporters concerned about vaild points of their canidate. But you are only talking to yourselfs. BTW I find none of the points valid only silly bathroom or lunchroom gossip / slander talk. You all need to seriously find a better use of your time. Later …

THESE ARE JUST THE LAST 50 PAGES OF THE “RECONCILIATION” HEALTH BILL….DO YOU THINK ALL OF THE POLITICANS WHO VOTED FOR THIS, ACTUALLY READ IT? (THEY SHOULD)

123
1 would be eligible’’ and inserting ‘‘one-half the Fed2
eral Pell Grant amount, determined under section
3 401(b)(2)(A), for which a student would be eligible’’;
4 (4) in section 483(e)(3)(A)(ii) (20 U.S.C.
5 1090(e)(3)(A)(ii)), by striking ‘‘based on the max6
imum Federal Pell Grant award at the time of appli7
cation’’ and inserting ‘‘based on the Federal Pell
8 Grant amount, determined under section
9 401(b)(2)(A), for which a student is eligible at the
10 time of application’’;
11 (5) in section 485E(b)(1)(A) (20 U.S.C.
12 1092f(b)(1)(A)), by striking ‘‘of such students’ po13
tential eligibility for a maximum Federal Pell Grant
14 under subpart 1 of part A’’ and inserting ‘‘of such
15 students’ potential eligibility for the Federal Pell
16 Grant amount, determined under section
17 401(b)(2)(A), for which the student would be eligi18
ble’’; and
19 (6) in section 894(f)(2)(C)(ii)(I) (20 U.S.C.
20 1161y(f)(2)(C)(ii)(I)), by striking ‘‘the maximum
21 Federal Pell Grant for each award year’’ and insert22
ing ‘‘the Federal Pell Grant amount, determined
23 under section 401(b)(2)(A), for which a student may
24 be eligible for each award year’’.
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1 (c) EFFECTIVE DATE.—The amendments made by
2 subsections (a) and (b) shall take effect on July 1, 2010.
3 SEC. 2102. STUDENT FINANCIAL ASSISTANCE.
4 (a) IN GENERAL.—There are authorized to be appro5
priated, and there are appropriated, to carry out subpart
6 1 of part A of title IV of the Higher Education Act of
7 1965 (20 U.S.C. 1070 et seq.) (in addition to any other
8 amounts appropriated to carry out such subpart and out
9 of any money in the Treasury not otherwise appropriated)
10 $13,500,000,000.
11 (b) AVAILABILITY OF FUNDS.—Funds appropriated
12 under this section shall be available as of the date of en13
actment of this subtitle and shall remain available until
14 September 30, 2012.
15 SEC. 2103. COLLEGE ACCESS CHALLENGE GRANT PRO16
GRAM.
17 Section 781 (20 U.S.C. 1141) is amended—
18 (1) in the first sentence of subsection (a), by
19 striking ‘‘$66,000,000’’ and all that follows through
20 the period and inserting ‘‘$150,000,000 for each of
21 the fiscal years 2010 through 2014. The authority
22 to award grants under this section shall expire at
23 the end of fiscal year 2014.’’; and
24 (2) in subsection (c)(2), by striking ‘‘0.5 per25
cent’’ and inserting ‘‘1.0 percent’’.
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125
1 SEC. 2104. INVESTMENT IN HISTORICALLY BLACK COL2
LEGES AND UNIVERSITIES AND MINORITY3
SERVING INSTITUTIONS.
4 Section 371(b)(1)(A) (20 U.S.C. 1067q(b)(1)(A)) is
5 amended by striking ‘‘and 2009.’’ and all that follows and
6 inserting ‘‘through 2019. The authority to award grants
7 under this section shall expire at the end of fiscal year
8 2019.’’.
9 PART II—STUDENT LOAN REFORM
10 SEC. 2201. TERMINATION OF FEDERAL FAMILY EDUCATION
11 LOAN APPROPRIATIONS.
12 Section 421 (20 U.S.C. 1071) is amended—
13 (1) in subsection (b), in the first sentence of
14 the matter following paragraph (6), by inserting ‘‘,
15 except that no sums may be expended after June 30,
16 2010, with respect to loans under this part for which
17 the first disbursement is after such date’’ after ‘‘ex18
pended’’; and
19 (2) by adding at the end the following new sub20
section:
21 ‘‘(d) TERMINATION OF AUTHORITY TO MAKE OR IN22
SURE NEW LOANS.—Notwithstanding paragraphs (1)
23 through (6) of subsection (b) or any other provision of
24 law—
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126
1 ‘‘(1) no new loans (including consolidation
2 loans) may be made or insured under this part after
3 June 30, 2010; and
4 ‘‘(2) no funds are authorized to be appro5
priated, or may be expended, under this Act or any
6 other Act to make or insure loans under this part
7 (including consolidation loans) for which the first
8 disbursement is after June 30, 2010,
9 except as expressly authorized by an Act of Congress en10
acted after the date of enactment of the SAFRA Act.’’.
11 SEC. 2202. TERMINATION OF FEDERAL LOAN INSURANCE
12 PROGRAM.
13 Section 424(a) (20 U.S.C. 1074(a)) is amended by
14 striking ‘‘September 30, 1976,’’ and all that follows and
15 inserting ‘‘September 30, 1976, for each of the succeeding
16 fiscal years ending prior to October 1, 2009, and for the
17 period from October 1, 2009, to June 30, 2010, for loans
18 first disbursed on or before June 30, 2010.’’.
19 SEC. 2203. TERMINATION OF APPLICABLE INTEREST
20 RATES.
21 Section 427A(l) (20 U.S.C. 1077a(l)) is amended—
22 (1) in the subsection heading, by inserting
23 ‘‘AND BEFORE JULY 1, 2010’’ after ‘‘2006’’;
24 (2) in paragraph (1), by inserting ‘‘and before
25 July 1, 2010,’’ after ‘‘July 1, 2006,’’;
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127
1 (3) in paragraph (2), by inserting ‘‘and before
2 July 1, 2010,’’ after ‘‘July 1, 2006,’’;
3 (4) in paragraph (3), by inserting ‘‘and that
4 was disbursed before July 1, 2010,’’ after ‘‘July 1,
5 2006,’’; and
6 (5) in paragraph (4)—
7 (A) in the matter preceding subparagraph
8 (A), by striking ‘‘July 1, 2012’’ and inserting
9 ‘‘July 1, 2010’’; and
10 (B) by repealing subparagraphs (D) and
11 (E).
12 SEC. 2204. TERMINATION OF FEDERAL PAYMENTS TO RE13
DUCE STUDENT INTEREST COSTS.
14 (a) HIGHER EDUCATION ACT OF 1965.—Section 428
15 (20 U.S.C. 1078) is amended—
16 (1) in subsection (a)—
17 (A) in paragraph (1), in the matter pre18
ceding subparagraph (A), by inserting ‘‘for
19 which the first disbursement is made before
20 July 1, 2010, and’’ after ‘‘eligible institution’’;
21 and
22 (B) in paragraph (5), by striking ‘‘Sep23
tember 30, 2014,’’ and all that follows through
24 the period and inserting ‘‘June 30, 2010.’’;
25 (2) in subsection (b)(1)—
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128
1 (A) in subparagraph (G)(ii), by inserting
2 ‘‘and before July 1, 2010,’’ after ‘‘July 1,
3 2006,’’; and
4 (B) in subparagraph (H)(ii), by inserting
5 ‘‘and that are first disbursed before July 1,
6 2010,’’ after ‘‘July 1, 2006,’’;
7 (3) in subsection (f)(1)(A)(ii)—
8 (A) by striking ‘‘during fiscal years begin9
ning’’; and
10 (B) by inserting ‘‘and first disbursed be11
fore July 1, 2010,’’ after ‘‘October 1, 2003,’’;
12 and
13 (4) in subsection (j)(1), by inserting ‘‘, before
14 July 1, 2010,’’ after ‘‘section 435(d)(1)(D) of this
15 Act shall’’.
16 (b) COLLEGE COST REDUCTION AND ACCESS ACT.—
17 Section 303 of the College Cost Reduction and Access Act
18 (Public Law 110–84) is repealed.
19 SEC. 2205. TERMINATION OF FFEL PLUS LOANS.
20 Section 428B(a)(1) (20 U.S.C. 1078–2(a)(1)) is
21 amended by striking ‘‘A graduate’’ and inserting ‘‘Prior
22 to July 1, 2010, a graduate’’.
23 SEC. 2206. FEDERAL CONSOLIDATION LOANS.
24 (a) IN GENERAL.—Section 428C (20 U.S.C. 1078–
25 3) is amended—
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129
1 (1) in subsection (a)(4)(A), by inserting ‘‘, and
2 first disbursed before July 1, 2010’’ after ‘‘under
3 this part’’;
4 (2) in subsection (b)—
5 (A) in paragraph (1)(E), by inserting be6
fore the semicolon ‘‘, and before July 1, 2010’’;
7 and
8 (B) in paragraph (5), by striking ‘‘In the
9 event that’’ and inserting ‘‘If, before July 1,
10 2010,’’;
11 (3) in subsection (c)(1)—
12 (A) in subparagraph (A)(ii), by inserting
13 ‘‘and that is disbursed before July 1, 2010,’’
14 after ‘‘2006,’’; and
15 (B) in subparagraph (C), by inserting
16 ‘‘and disbursed before July 1, 2010,’’ after
17 ‘‘1994,’’; and
18 (4) in subsection (e), by striking ‘‘September
19 30, 2014.’’ and inserting ‘‘June 30, 2010. No loan
20 may be made under this section for which the dis21
bursement is on or after July 1, 2010.’’.
22 (b) TEMPORARY LOAN CONSOLIDATION AUTHOR23
ITY.—Part D of title IV (20 U.S.C. 1087a et seq.) is
24 amended by inserting after section 459A (20 U.S.C.
25 1087i) the following:
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1 ‘‘SEC. 459B. TEMPORARY LOAN CONSOLIDATION AUTHOR2
ITY.
3 ‘‘(a) TEMPORARY LOAN CONSOLIDATION AUTHOR4
ITY.—
5 ‘‘(1) IN GENERAL.—A borrower who has 1 or
6 more loans in 2 or more of the categories described
7 in paragraph (2), and who has not yet entered re8
payment on 1 or more of those loans in any of the
9 categories, may consolidate all of the loans of the
10 borrower that are described in paragraph (2) into a
11 Federal Direct Consolidation Loan during the period
12 described in paragraph (3).
13 ‘‘(2) CATEGORIES OF LOANS THAT MAY BE
14 CONSOLIDATED.—The categories of loans that may
15 be consolidated under paragraph (1) are—
16 ‘‘(A) loans made under this part;
17 ‘‘(B) loans purchased by the Secretary
18 pursuant to section 459A; and
19 ‘‘(C) loans made under part B that are
20 held by an eligible lender, as such term is de21
fined in section 435(d).
22 ‘‘(3) TIME PERIOD IN WHICH LOANS MAY BE
23 CONSOLIDATED.—The Secretary may make a Fed24
eral Direct Consolidation Loan under this section to
25 a borrower whose application for such Federal Di-
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1 rect Consolidation Loan is received on or after July
2 1, 2010, and before July 1, 2011.
3 ‘‘(b) TERMS OF LOANS.—A Federal Direct Consoli4
dation Loan made under this section shall have the same
5 terms and conditions as a Federal Direct Consolidation
6 Loan made under section 455(g), except that—
7 ‘‘(1) in determining the applicable rate of inter8
est on the Federal Direct Consolidation Loan made
9 under this section (other than on a Federal Direct
10 Consolidation Loan described in paragraph (2)), sec11
tion 427A(l)(3) shall be applied without rounding
12 the weighted average of the interest rate on the
13 loans consolidated to the nearest higher one-eighth
14 of 1 percent as described in subparagraph (A) of
15 section 427A(l)(3); and
16 ‘‘(2) if a Federal Direct Consolidation Loan
17 made under this section that repays a loan which is
18 subject to an interest rate determined under section
19 427A(g)(2), (j)(2), or (k)(2), then the interest rate
20 for such Federal Direct Consolidation Loan shall be
21 calculated—
22 ‘‘(A) by using the applicable rate of inter23
est described in section 427A(g)(2), (j)(2), or
24 (k)(2), respectively; and
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1 ‘‘(B) in accordance with section
2 427A(l)(3).’’.
3 SEC. 2207. TERMINATION OF UNSUBSIDIZED STAFFORD
4 LOANS FOR MIDDLE-INCOME BORROWERS.
5 Section 428H (20 U.S.C. 1078–8) is amended—
6 (1) in subsection (a), by inserting ‘‘that are
7 first disbursed before July 1, 2010,’’ after ‘‘under
8 this part’’;
9 (2) in subsection (b)—
10 (A) by striking ‘‘Any student’’ and insert11
ing ‘‘Prior to July 1, 2010, any student’’; and
12 (B) by inserting ‘‘for which the first dis13
bursement is made before such date’’ after ‘‘un14
subsidized Federal Stafford Loan’’; and
15 (3) in subsection (h), by inserting ‘‘and that are
16 first disbursed before July 1, 2010,’’ after ‘‘July 1,
17 2006,’’.
18 SEC. 2208. TERMINATION OF SPECIAL ALLOWANCES.
19 Section 438 (20 U.S.C. 1087–1) is amended—
20 (1) in subsection (b)(2)(I)—
21 (A) in the subclause heading, by inserting
22 ‘‘, AND BEFORE JULY 1, 2010’’ after ‘‘2000’’;
23 (B) in clause (i), by inserting ‘‘and before
24 July 1, 2010,’’ after ‘‘2000,’’;
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1 (C) in clause (ii)(II), by inserting ‘‘and be2
fore July 1, 2010,’’ after ‘‘2006,’’;
3 (D) in clause (iii), by inserting ‘‘and before
4 July 1, 2010,’’ after ‘‘2000,’’;
5 (E) in clause (iv), by inserting ‘‘and that
6 is disbursed before July 1, 2010,’’ after
7 ‘‘2000,’’;
8 (F) in clause (v)(I), by inserting ‘‘and be9
fore July 1, 2010,’’ after ‘‘2006,’’; and
10 (G) in clause (vi)—
11 (i) in the clause heading, by inserting
12 ‘‘, AND BEFORE JULY 1, 2010’’ after ‘‘2007’’;
13 and
14 (ii) in the matter preceding subclause
15 (I), by inserting ‘‘and before July 1,
16 2010,’’ after ‘‘2007,’’;
17 (2) in subsection (c)—
18 (A) in paragraph (2)(B)—
19 (i) in clause (iii), by inserting ‘‘and’’
20 after the semicolon;
21 (ii) in clause (iv), by striking ‘‘; and’’
22 and inserting a period; and
23 (iii) by striking clause (v); and
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1 (B) in paragraph (6), by inserting ‘‘and
2 first disbursed before July 1, 2010,’’ after
3 ‘‘1992,’’; and
4 (3) in subsection (d)(2)(B), by inserting ‘‘, and
5 before July 1, 2010’’ after ‘‘2007’’.
6 SEC. 2209. ORIGINATION OF DIRECT LOANS AT INSTITU7
TIONS OUTSIDE THE UNITED STATES.
8 (a) LOANS FOR STUDENTS ATTENDING INSTITU9
TIONS OUTSIDE THE UNITED STATES.—Section 452 (20
10 U.S.C. 1087b) is amended by adding at the end the fol11
lowing:
12 ‘‘(d) INSTITUTIONS OUTSIDE THE UNITED
13 STATES.—Loan funds for students (and parents of stu14
dents) attending institutions outside the United States
15 shall be disbursed through a financial institution located
16 or operating in the United States and designated by the
17 Secretary to serve as the agent of such institutions with
18 respect to the receipt of the disbursements of such loan
19 funds and the transfer of such funds to such institutions.
20 To be eligible to receive funds under this part, an institu21
tion outside the United States shall make arrangements
22 with the agent designated by the Secretary under this sub23
section to receive funds under this part.’’.
24 (b) CONFORMING AMENDMENTS.—
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1 (1) AMENDMENTS.—Section 102 (20 U.S.C.
2 1002), as amended by section 102 of the Higher
3 Education Opportunity Act (Public Law 110–315)
4 and section 101 of Public Law 111–39, is amend5
ed—
6 (A) by striking ‘‘part B’’ each place the
7 term appears and inserting ‘‘part D’’;
8 (B) in subsection (a)(1)(C), by inserting ‘‘,
9 consistent with the requirements of section
10 452(d)’’ before the period at the end; and
11 (C) in subsection (a)(2)(A)—
12 (i) in the second sentence of the mat13
ter preceding clause (i), by striking ‘‘made,
14 insured, or guaranteed’’ and inserting
15 ‘‘made’’; and
16 (ii) in clause (iii)—
17 (I) in subclause (III), by striking
18 ‘‘only Federal Stafford’’ and all that
19 follows through ‘‘section 428B’’ and
20 inserting ‘‘only Federal Direct Staf21
ford Loans under section
22 455(a)(2)(A), Federal Direct Unsub23
sidized Stafford Loans under section
24 455(a)(2)(D), or Federal Direct
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1 PLUS Loans under section
2 455(a)(2)(B)’’; and
3 (II) in subclause (V), by striking
4 ‘‘a Federal Stafford’’ and all that fol5
lows through ‘‘section 428B’’ and in6
serting ‘‘a Federal Direct Stafford
7 Loan under section 455(a)(2)(A), a
8 Federal Direct Unsubsidized Stafford
9 Loan under section 455(a)(2)(D), or a
10 Federal Direct PLUS Loan under
11 section 455(a)(2)(B)’’.
12 (2) EFFECTIVE DATE.—The amendments made
13 by subparagraph (C) of paragraph (1) shall be effec14
tive on July 1, 2010, as if enacted as part of section
15 102(a)(1) of the Higher Education Opportunity Act
16 (Public Law 110–315) and subject to section 102(e)
17 of such Act as amended by section 101(a)(2) of
18 Public Law 111–39 (20 U.S.C. 1002 note).
19 SEC. 2210. CONFORMING AMENDMENTS.
20 (a) AMENDMENTS.—Section 454 (20 U.S.C. 1087d)
21 is amended—
22 (1) in subsection (a)—
23 (A) by striking paragraph (4); and
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1 (B) by redesignating paragraphs (5)
2 through (7) as paragraphs (4) through (6), re3
spectively; and
4 (2) in subsection (b)(2), by striking ‘‘(5), (6),
5 and (7)’’ and inserting ‘‘(5), and (6)’’.
6 (b) EFFECTIVE DATE.—The amendments made by
7 subsection (a) shall take effect on July 1, 2010.
8 SEC. 2211. TERMS AND CONDITIONS OF LOANS.
9 (a) IN GENERAL.—Section 455 (20 U.S.C. 1087e) is
10 amended—
11 (1) in subsection (a)(1), by inserting ‘‘, and
12 first disbursed on June 30, 2010,’’ before ‘‘under
13 sections 428’’; and
14 (2) in subsection (g)—
15 (A) by inserting ‘‘, including any loan
16 made under part B and first disbursed before
17 July 1, 2010’’ after ‘‘section 428C(a)(4)’’; and
18 (B) by striking the third sentence.
19 (b) EFFECTIVE DATE.—The amendment made by
20 subsection (a)(1) shall apply with respect to loans first dis21
bursed under part D of title IV of the Higher Education
22 Act of 1965 (20 U.S.C. 1087a et seq.) on or after July
23 1, 2010.
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1 SEC. 2212. CONTRACTS; MANDATORY FUNDS.
2 (a) CONTRACTS.—Section 456 (20 U.S.C. 1087f) is
3 amended—
4 (1) in subsection (a)—
5 (A) by inserting after paragraph (3) the
6 following new paragraph:
7 ‘‘(4) SERVICING BY ELIGIBLE NOT-FOR-PROFIT
8 SERVICERS.—
9 ‘‘(A) SERVICING CONTRACTS.—
10 ‘‘(i) IN GENERAL.—The Secretary
11 shall contract with each eligible not-for12
profit servicer to service loans originated
13 under this part, if the servicer—
14 ‘‘(I) meets the standards for
15 servicing Federal assets that apply to
16 contracts awarded pursuant to para17
graph (1); and
18 ‘‘(II) has the capacity to service
19 the applicable loan volume allocation
20 described in subparagraph (B).
21 ‘‘(ii) COMPETITIVE MARKET RATED TERMINATION 22 FOR2 3 FIRST 100,000 BORROWER ACCOUNTS.—The Secretary shall
24 establish a separate pricing tier for each of
25 the first 100,000 borrower loan accounts
26 at a competitive market rate.

139
1 ‘‘(iii) INELIGIBILITY.—An eligible not2
for-profit servicer shall no longer be eligi3
ble for a contract under this paragraph
4 after July 1, 2014, if—
5 ‘‘(I) the servicer has not been
6 awarded such a contract before that
7 date; or
8 ‘‘(II) the servicer’s contract was
9 terminated, and the servicer had not
10 reapplied for, and been awarded, a
11 contract under this paragraph.
12 ‘‘(B) ALLOCATIONS.—
13 ‘‘(i) IN GENERAL.—The Secretary
14 shall (except as provided in clause (ii)) al15
locate to an eligible not-for-profit servicer,
16 subject to the contract of such servicer de17
scribed in subparagraph (A), the servicing
18 rights for the loan accounts of 100,000
19 borrowers (including borrowers who bor20
rowed loans in a prior year that were serv21
iced by the servicer).
22 ‘‘(ii) SERVICER ALLOCATION.—The
23 Secretary may reallocate, increase, reduce,
24 or terminate an eligible not-for-profit
25 servicer’s allocation of servicing rights
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1 under clause (i) based on the performance
2 of such servicer, on the same terms as loan
3 allocations provided by contracts awarded
4 pursuant to paragraph (1).’’; and
5 (2) by adding at the end the following:
6 ‘‘(c) DEFINITION OF ELIGIBLE NOT-FOR-PROFIT
7 SERVICER.—In this section:
8 ‘‘(1) IN GENERAL.—The term ‘eligible not-for9
profit servicer’ means an entity—
10 ‘‘(A) that is not owned or controlled in
11 whole or in part by—
12 ‘‘(i) a for profit entity; or
13 ‘‘(ii) a nonprofit entity having its
14 principal place of business in another
15 State; and
16 ‘‘(B) that—
17 ‘‘(i) as of July 1, 2009—
18 ‘‘(I) meets the definition of an el19
igible not-for-profit holder under sec20
tion 435(p), except that such term
21 does not include eligible lenders de22
scribed in paragraph (1)(D) of such
23 section; and
24 ‘‘(II) was performing, or had en25
tered into a contract with a third
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1 party servicer (as such term is defined
2 in section 481(c)) who was per3
forming, student loan servicing func4
tions for loans made under part B of
5 this title;
6 ‘‘(ii) notwithstanding clause (i), as of
7 July 1, 2009—
8 ‘‘(I) is the sole beneficial owner
9 of a loan for which the special allow10
ance rate is calculated under section
11 438(b)(2)(I)(vi)(II) because the loan
12 is held by an eligible lender trustee
13 that is an eligible not-for-profit holder
14 as defined under section
15 435(p)(1)(D); and
16 ‘‘(II) was performing, or had en17
tered into a contract with a third
18 party servicer (as such term is defined
19 in section 481(c)) who was per20
forming, student loan servicing func21
tions for loans made under part B of
22 this title; or
23 ‘‘(iii) is an affiliated entity of an eligi24
ble not-for-profit servicer described in
25 clause (i) or (ii) that—
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1 ‘‘(I) directly employs, or will di2
rectly employ (on or before the date
3 the entity begins servicing loans under
4 a contract awarded by the Secretary
5 pursuant to subsection (a)(3)(A)), the
6 majority of individuals who perform
7 borrower-specific student loan serv8
icing functions; and
9 ‘‘(II) as of July 1, 2009, was
10 performing, or had entered into a con11
tract with a third party servicer (as
12 such term is defined in section
13 481(c)) who was performing, student
14 loan servicing functions for loans
15 made under part B of this title.
16 ‘‘(2) AFFILIATED ENTITY.—For the purposes of
17 paragraph (1), the term ‘affiliated entity’—
18 ‘‘(A) means an entity contracted to per19
form services for an eligible not-for-profit
20 servicer that—
21 ‘‘(i) is a nonprofit entity or is wholly
22 owned by a nonprofit entity; and
23 ‘‘(ii) is not owned or controlled, in
24 whole or in part, by—
25 ‘‘(I) a for-profit entity; or
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1 ‘‘(II) an entity having its prin2
cipal place of business in another
3 State; and
4 ‘‘(B) may include an affiliated entity that
5 is established by an eligible not-for-profit
6 servicer after the date of enactment of the
7 SAFRA Act, if such affiliated entity is other8
wise described in paragraph (1)(B)(iii)(I) and
9 subparagraph (A) of this paragraph.’’.
10 (b) MANDATORY FUNDS.—
11 (1) AMENDMENTS.—Section 458(a) (20 U.S.C.
12 1087h(a)) is amended—
13 (A) by redesignating paragraph (5) as
14 paragraph (8);
15 (B) by redesignating paragraphs (2)
16 through (4) as paragraphs (3) through (5), re17
spectively;
18 (C) by inserting after paragraph (1) the
19 following new paragraph:
20 ‘‘(2) MANDATORY FUNDS FOR ELIGIBLE NOT21
FOR-PROFIT-SERVICERS.—For fiscal years 2010
22 through 2019, there shall be available to the Sec23
retary, in addition to any other amounts appro24
priated to carry out this paragraph and out of any
25 money in the Treasury not otherwise appropriated,
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1 funds to be obligated for administrative costs of
2 servicing contracts with eligible not-for-profit
3 servicers as described in section 456.’’; and
4 (D) by inserting after paragraph (5), as
5 redesignated by subparagraph (B) of this para6
graph, the following:
7 ‘‘(6) TECHNICAL ASSISTANCE TO INSTITUTIONS
8 OF HIGHER EDUCATION.—
9 ‘‘(A) PROVISION OF ASSISTANCE.—The
10 Secretary shall provide institutions of higher
11 education participating, or seeking to partici12
pate, in the loan programs under this part with
13 technical assistance in establishing and admin14
istering such programs.
15 ‘‘(B) FUNDS.—There are authorized to be
16 appropriated, and there are appropriated, to
17 carry out this paragraph (in addition to any
18 other amounts appropriated to carry out this
19 paragraph and out of any money in the Treas20
ury not otherwise appropriated), $50,000,000
21 for fiscal year 2010.
22 ‘‘(C) DEFINITION.—In this paragraph, the
23 term ‘assistance’ means the provision of tech24
nical support, training, materials, technical as25
sistance, and financial assistance.
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1 ‘‘(7) ADDITIONAL PAYMENTS.—
2 ‘‘(A) PROVISION OF ASSISTANCE.—The
3 Secretary shall provide payments to loan
4 servicers for retaining jobs at locations in the
5 United States where such servicers were oper6
ating under part B on January 1, 2010.
7 ‘‘(B) FUNDS.—There are authorized to be
8 appropriated, and there are appropriated, to
9 carry out this paragraph (in addition to any
10 other amounts appropriated to carry out this
11 paragraph and out of any money in the Treas12
ury not otherwise appropriated), $25,000,000
13 for each of the fiscal years 2010 and 2011.’’.
14 (2) CONFORMING AMENDMENT.—Section 458
15 (20 U.S.C. 1087h) is further amended by striking
16 ‘‘subsection (a)(3)’’ in subsection (b) and inserting
17 ‘‘subsection (a)(4)’’.
18 SEC. 2213. AGREEMENTS WITH STATE-OWNED BANKS.
19 Part D of title IV (as amended by this subtitle) (20
20 U.S.C. 1087a et seq.) is further amended by adding at
21 the end the following:
22 ‘‘SEC. 460A. AGREEMENTS WITH STATE-OWNED BANKS.
23 ‘‘(a) DEFINITION OF ELIGIBLE LENDER.—In this
24 section, the term ‘eligible lender’ means a lender that, on
25 July 1, 2009, was and continues to be—
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1 ‘‘(1) a bank, the deposits of which are guaran2
teed by a State;
3 ‘‘(2) owned by the State in which the lender is
4 located;
5 ‘‘(3) under the control of a board of directors
6 that includes the Governor of the State; and
7 ‘‘(4) an originator or holder of loans made
8 under the program under part B, as such part was
9 in effect on July 1, 2009.
10 ‘‘(b) AGREEMENTS.—
11 ‘‘(1) IN GENERAL.—At the request of a State
12 in which an eligible lender is located, the Secretary
13 shall enter into an agreement with the eligible lender
14 under which—
15 ‘‘(A) the eligible lender agrees to provide
16 student loans to borrowers in accordance with
17 this section; and
18 ‘‘(B) the Secretary agrees to provide Fed19
eral loan insurance on the student loans made
20 under this section by that eligible lender to bor21
rowers who—
22 ‘‘(i) are residents of the State in
23 which the eligible lender is located; or
24 ‘‘(ii) attend an institution of higher
25 education in such State.
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1 ‘‘(2) TERMS OF LOANS.—Loans covered by an
2 agreement under this section shall have the same
3 terms and conditions as loans made under part B,
4 as such part was in effect on June 30, 2010.
5 ‘‘(3) PAYMENTS TO ELIGIBLE LENDER.—An
6 agreement under this section shall provide the eligi7
ble lender with the equivalent payments and sub8
sidies as those provided for loans made under part
9 B, as such part was in effect on June 30, 2010.
10 ‘‘(4) FFEL PROGRAM REGULATIONS.—An
11 agreement under this section, any loans made under
12 this section, and the participation of institutions of
13 higher education under this section, shall be subject
14 to regulations issued by the Secretary under part B,
15 as such part was in effect on June 30, 2010.
16 ‘‘(c) INSTITUTIONS OF HIGHER EDUCATION.—An in17
stitution of higher education that is located in the same
18 State as an eligible lender that has an agreement with the
19 Secretary under this section, or an institution of higher
20 education that is located in another State and is attended
21 by borrowers described in subsection (b)(1)(B)(i), may
22 choose to participate in the loan program operated pursu23
ant to the agreement. If such institution of higher edu24
cation chooses such participation, the institution shall
25 carry out the institution’s responsibilities with respect to
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1 loans made pursuant to the agreement in accordance with
2 subsection (b)(4).
3 ‘‘(d) BORROWERS.—A borrower described in sub4
section (b)(1)(B) may choose to borrow a loan made pur5
suant to an agreement described in subsection (b)(1). A
6 borrower of a loan made pursuant to such agreement shall
7 be subject to the loan terms and conditions required by
8 the agreement, and shall not be eligible to receive a loan
9 made under this part concurrently with a loan made under
10 this section.
11 ‘‘(e) INAPPLICABILITY.—Sections 451 through 460
12 shall not apply to this section.’’.
13 SEC. 2214. INCOME-BASED REPAYMENT.
14 Section 493C (20 U.S.C. 1098e) is amended by add15
ing at the end the following new subsection:
16 ‘‘(e) SPECIAL TERMS FOR NEW BORROWERS ON AND
17 AFTER JULY 1, 2014.—With respect to any loan made
18 to a new borrower on or after July 1, 2014—
19 ‘‘(1) subsection (a)(3)(B) shall be applied by
20 substituting ‘10 percent’ for ‘15 percent’; and
21 ‘‘(2) subsection (b)(7)(B) shall be applied by
22 substituting ‘20 years’ for ‘25 years’.’’.
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1 Subtitle B—Health
2 SEC. 2301. INSURANCE REFORMS.
3 (a) EXTENDING CERTAIN INSURANCE REFORMS TO
4 GRANDFATHERED PLANS.—Section 1251(a) of the Pa5
tient Protection and Affordable Care Act, as added by sec6
tion 10103(d) of such Act, is amended by adding at the
7 end the following:
8 ‘‘(4) APPLICATION OF CERTAIN PROVISIONS.—
9 ‘‘(A) IN GENERAL.—The following provi10
sions of the Public Health Service Act (as
11 added by this title) shall apply to grandfathered
12 health plans for plan years beginning with the
13 first plan year to which such provisions would
14 otherwise apply:
15 ‘‘(i) Section 2708 (relating to exces16
sive waiting periods).
17 ‘‘(ii) Those provisions of section 2711
18 relating to lifetime limits.
19 ‘‘(iii) Section 2712 (relating to rescis20
sions).
21 ‘‘(iv) Section 2714 (relating to exten22
sion of dependent coverage).
23 ‘‘(B) PROVISIONS APPLICABLE ONLY TO
24 GROUP HEALTH PLANS.—
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1 ‘‘(i) PROVISIONS DESCRIBED.—Those
2 provisions of section 2711 relating to an3
nual limits and the provisions of section
4 2704 (relating to pre-existing condition ex5
clusions) of the Public Health Service Act
6 (as added by this subtitle) shall apply to
7 grandfathered health plans that are group
8 health plans for plan years beginning with
9 the first plan year to which such provisions
10 otherwise apply.
11 ‘‘(ii) ADULT DEPENDENT COV12
ERAGE.—For plan years beginning before
13 January 1, 2014, the provisions of section
14 2714 of the Public Health Service Act (as
15 added by this subtitle) shall apply in the
16 case of an adult dependent with respect to
17 a grandfathered health plan that is a
18 group health plan only if such dependent is
19 not eligible to enroll in an eligible em20
ployer-sponsored health plan (as defined in
21 section 5000A(f)(2) of the Internal Rev22
enue Code of 1986) other than such grand23
fathered health plan.’’.
24 (b) CLARIFICATION REGARDING DEPENDENT COV25
ERAGE.—Section 2714(a) of the Public Health Service
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1 Act, as added by section 1001(5) of the Patient Protection
2 and Affordable Care Act, is amended by striking ‘‘(who
3 is not married)’’.
4 SEC. 2302. DRUGS PURCHASED BY COVERED ENTITIES.
5 Section 340B of the Public Health Service Act (42
6 U.S.C. 256b), as amended by sections 7101 and 7102 of
7 the Patient Protection and Affordable Care Act, is amend8
ed—
9 (1) in subsection (a)—
10 (A) in paragraphs (1), (2), (5), (7), and
11 (9), by striking the terms ‘‘covered drug’’ and
12 ‘‘covered drugs’’ each place either term appears
13 and inserting ‘‘covered outpatient drug’’ or
14 ‘‘covered outpatient drugs’’, respectively;
15 (B) in paragraph (4)(L)—
16 (i) in clause (i), by striking ‘‘and’’ at
17 the end;
18 (ii) in clause (ii), by striking the pe19
riod and inserting ‘‘; and’’; and
20 (iii) by inserting after clause (ii), the
21 following:
22 ‘‘(iii) does not obtain covered out23
patient drugs through a group purchasing
24 organization or other group purchasing ar25
rangement.’’; and
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1 (C) in paragraph (5)—
2 (i) by striking subparagraph (C);
3 (ii) by redesignating subparagraphs
4 (D) and (E) as subparagraphs (C) and
5 (D), respectively; and
6 (iii) in subparagraph (D), as so redes7
ignated, by striking ‘‘subparagraph (D)’’
8 and inserting ‘‘subparagraph (C)’’;
9 (2) by striking subsection (c);
10 (3) in subsection (d)—
11 (A) by striking ‘‘covered drugs’’ each place
12 it appears and inserting ‘‘covered outpatient
13 drugs’’;
14 (B) by striking ‘‘(a)(5)(D)’’ each place it
15 appears and inserting ‘‘(a)(5)(C)’’; and
16 (C) by striking ‘‘(a)(5)(E)’’ each place it
17 appears and inserting ‘‘(a)(5)(D)’’; and
18 (4) by inserting after subsection (d) the fol19
lowing:
20 ‘‘(e) EXCLUSION OF ORPHAN DRUGS FOR CERTAIN
21 COVERED ENTITIES.—For covered entities described in
22 subparagraph (M), (N), or (O) of subsection (a)(4), the
23 term ‘covered outpatient drug’ shall not include a drug
24 designated by the Secretary under section 526 of the Fed-
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1 eral Food, Drug, and Cosmetic Act for a rare disease or
2 condition.’’.
3 SEC. 2303. COMMUNITY HEALTH CENTERS.
4 Section 10503(b)(1) of the Patient Protection and
5 Affordable Care Act is amended—
6 (1) in subparagraph (A), by striking
7 ‘‘700,000,000’’ and inserting ‘‘1,000,000,000’’;
8 (2) in subparagraph (B), by striking
9 ‘‘800,000,000’’ and inserting ‘‘1,200,000,000’’;
10 (3) in subparagraph (C), by striking
11 ‘‘1,000,000,000’’ and inserting ‘‘1,500,000,000’’;
12 (4) in subparagraph (D), by striking
13 ‘‘1,600,000,000’’ and inserting ‘‘2,200,000,000’’;
14 and
15 (5) in subparagraph (E), by striking
16 ‘‘2,900,000,000’’ and inserting ‘‘3,600,000,000’’.

….AND HERE ARE THE FIRST 122 ! PAGES of JUST the “reconciliation” amendment…do you seriously think any of these beauracratic fatcats in D.C. who voted for this (including Dahlkemper) actually read this! or anybody read it:

AMENDMENT IN THE NATURE OF A SUBSTITUTE
TO H.R. 4872, AS REPORTED
Strike all after the enacting clause and insert the
following:
1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
2 (a) SHORT TITLE.—This Act may be cited as the
3 ‘‘Health Care and Education Affordability Reconciliation
4 Act of 2010’’.
5 (b) TABLE OF CONTENTS.—The table of contents of
6 this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—COVERAGE, MEDICARE, MEDICAID, AND REVENUES
Subtitle A—Coverage
Sec. 1001. Affordability.
Sec. 1002. Individual responsibility.
Sec. 1003. Employer responsibility.
Sec. 1004. Income definitions.
Sec. 1005. Implementation funding.
Subtitle B—Medicare
Sec. 1101. Closing the medicare prescription drug ‘‘donut hole’’.
Sec. 1102. Medicare Advantage payments.
Sec. 1103. Savings from limits on MA plan administrative costs.
Sec. 1104. Disproportionate share hospital (DSH) payments.
Sec. 1105. Market basket updates.
Sec. 1106. Physician ownership-referral.
Sec. 1107. Payment for imaging services.
Subtitle C—Medicaid
Sec. 1201. Federal funding for States.
Sec. 1202. Payments to primary care physicians.
Sec. 1203. Disproportionate share hospital payments.
Sec. 1204. Funding for the territories.
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Sec. 1205. Delay in Community First Choice option.
Sec. 1206. Drug rebates for new formulations of existing drugs.
Subtitle D—Reducing Fraud, Waste, and Abuse
Sec. 1301. Community mental health centers.
Sec. 1302. Medicare prepayment medical review limitations .
Sec. 1303. CMS–IRS data match to identify fraudulent providers.
Sec. 1304. Funding to fight fraud, waste, and abuse.
Sec. 1305. 90-day period of enhanced oversight for initial claims of DME suppliers.
Subtitle E—Provisions Relating to Revenue
Sec. 1401. High-cost plan excise tax.
Sec. 1402. Medicare tax.
Sec. 1403. Delay of limitation on health flexible spending arrangements under
cafeteria plans.
Sec. 1404. Brand name pharmaceuticals.
Sec. 1405. Excise tax on medical device manufacturers.
Sec. 1406. Health insurance providers.
Sec. 1407. Delay of elimination of deduction for expenses allocable to medicare
part D subsidy.
Sec. 1408. Elimination of unintended application of cellulosic biofuel producer
credit.
Sec. 1409. Codification of economic substance doctrine and penalties.
Sec. 1410. Time for payment of corporate estimated taxes.
Sec. 1411. No impact on Social Security trust funds.
Subtitle F—Other Provisions
Sec. 1501. Community college and career training grant program.
TITLE II—EDUCATION AND HEALTH
Subtitle A—Education
Sec. 2001. Short title; references.
PART I—INVESTING IN STUDENTS AND FAMILIES
Sec. 2101. Federal Pell Grants.
Sec. 2102. Student financial assistance.
Sec. 2103. College access challenge grant program.
Sec. 2104. Investment in historically black colleges and universities and minority-
serving institutions.
PART II—STUDENT LOAN REFORM
Sec. 2201. Termination of Federal Family Education Loan appropriations.
Sec. 2202. Termination of Federal loan insurance program.
Sec. 2203. Termination of applicable interest rates.
Sec. 2204. Termination of Federal payments to reduce student interest costs.
Sec. 2205. Termination of FFEL PLUS Loans.
Sec. 2206. Federal Consolidation Loans.
Sec. 2207. Termination of Unsubsidized Stafford Loans for middle-income borrowers.
Sec. 2208. Termination of special allowances.
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Sec. 2209. Origination of Direct Loans at institutions outside the United
States.
Sec. 2210. Conforming amendments.
Sec. 2211. Terms and conditions of loans.
Sec. 2212. Contracts; mandatory funds.
Sec. 2213. Agreements with State-owned banks.
Sec. 2214. Income-based repayment.
Subtitle B—Health
Sec. 2301. Insurance reforms.
Sec. 2302. Drugs purchased by covered entities.
Sec. 2303. Community health centers.
1 TITLE I—COVERAGE, MEDICARE,
2 MEDICAID, AND REVENUES
3 Subtitle A—Coverage
4 SEC. 1001. AFFORDABILITY.
5 (a) PREMIUM TAX CREDITS.—Section 36B of the In6
ternal Revenue Code of 1986, as added by section 1401
7 of the Patient Protection and Affordable Care Act and
8 amended by section 10105 of such Act, is amended—
9 (1) in subsection (b)(3)(A)—
10 (A) in clause (i), by striking ‘‘with respect
11 to any taxpayer’’ and all that follows up to the
12 end period and inserting ‘‘for any taxable year
13 shall be the percentage such that the applicable
14 percentage for any taxpayer whose household
15 income is within an income tier specified in the
16 following table shall increase, on a sliding scale
17 in a linear manner, from the initial premium
18 percentage to the final premium percentage
19 specified in such table for such income tier:
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‘‘In the case of household income
(expressed as a percent of
poverty line) within the following
income tier:
The initial premium
percentage is—
The final premium
percentage is—
Up to 133% 2.0% 2.0%
133% up to 150% 3.0% 4.0%
150% up to 200% 4.0% 6.3%
200% up to 250% 6.3% 8.05%
250% up to 300% 8.05% 9.5%
300% up to 400% 9.5% 9.5%’’; and
1 (B) by striking clauses (ii) and (iii), and
2 inserting the following:
3 ‘‘(ii) INDEXING.—
4 ‘‘(I) IN GENERAL.—Subject to
5 subclause (II), in the case of taxable
6 years beginning in any calendar year
7 after 2014, the initial and final appli8
cable percentages under clause (i) (as
9 in effect for the preceding calendar
10 year after application of this clause)
11 shall be adjusted to reflect the excess
12 of the rate of premium growth for the
13 preceding calendar year over the rate
14 of income growth for the preceding
15 calendar year.
16 ‘‘(II) ADDITIONAL ADJUST17
MENT.—Except as provided in sub18
clause (III), in the case of any cal19
endar year after 2018, the percent20
ages described in subclause (I) shall,
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1 in addition to the adjustment under
2 subclause (I), be adjusted to reflect
3 the excess (if any) of the rate of pre4
mium growth estimated under sub5
clause (I) for the preceding calendar
6 year over the rate of growth in the
7 consumer price index for the pre8
ceding calendar year.
9 ‘‘(III) FAILSAFE.—Subclause (II)
10 shall apply for any calendar year only
11 if the aggregate amount of premium
12 tax credits under this section and
13 cost-sharing reductions under section
14 1402 of the Patient Protection and
15 Affordable Care Act for the preceding
16 calendar year exceeds an amount
17 equal to 0.504 percent of the gross
18 domestic product for the preceding
19 calendar year.’’; and
20 (2) in subsection (c)(2)(C)—
21 (A) by striking ‘‘9.8 percent’’ in clauses
22 (i)(II) and (iv) and inserting ‘‘9.5 percent’’, and
23 (B) by striking ‘‘(b)(3)(A)(iii)’’ in clause
24 (iv) and inserting ‘‘(b)(3)(A)(ii)’’.
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1 (b) COST SHARING.—Section 1402(c) of the Patient
2 Protection and Affordable Care Act is amended—
3 (1) in paragraph (1)(B)(i)—
4 (A) in subclause (I), by striking ‘‘90’’ and
5 inserting ‘‘94’’;
6 (B) in subclause (II)—
7 (i) by striking ‘‘80’’ and inserting
8 ‘‘87’’; and
9 (ii) by striking ‘‘and’’; and
10 (C) by striking subclause (III) and insert11
ing the following:
12 ‘‘(III) 73 percent in the case of
13 an eligible insured whose household
14 income is more than 200 percent but
15 not more than 250 percent of the pov16
erty line for a family of the size in17
volved; and
18 ‘‘(IV) 70 percent in the case of
19 an eligible insured whose household
20 income is more than 250 percent but
21 not more than 400 percent of the pov22
erty line for a family of the size in23
volved.’’; and
24 (2) in paragraph (2)—
25 (A) in subparagraph (A)—
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1 (i) by striking ‘‘90’’ and inserting
2 ‘‘94’’; and
3 (ii) by striking ‘‘and’’;
4 (B) in subparagraph (B)—
5 (i) by striking ‘‘80’’ and inserting
6 ‘‘87’’; and
7 (ii) by striking the period and insert8
ing ‘‘; and’’; and
9 (C) by inserting after subparagraph (B)
10 the following new subparagraph:
11 ‘‘(C) in the case of an eligible insured
12 whose household income is more than 200 per13
cent but not more than 250 percent of the pov14
erty line for a family of the size involved, in15
crease the plan’s share of the total allowed
16 costs of benefits provided under the plan to 73
17 percent of such costs.’’.
18 SEC. 1002. INDIVIDUAL RESPONSIBILITY.
19 (a) AMOUNTS.—Section 5000A(c) of the Internal
20 Revenue Code of 1986, as added by section 1501(b) of
21 the Patient Protection and Affordable Care Act and
22 amended by section 10106 of such Act, is amended—
23 (1) in paragraph (2)(B)—
24 (A) in the matter preceding clause (i),
25 by—
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1 (i) inserting ‘‘the excess of’’ before
2 ‘‘the taxpayer’s household income’’; and
3 (ii) inserting ‘‘for the taxable year
4 over the amount of gross income specified
5 in section 6012(a)(1) with respect to the
6 taxpayer’’ before ‘‘for the taxable year’’;
7 (B) in clause (i), by striking ‘‘0.5’’ and in8
serting ‘‘1.0’’;
9 (C) in clause (ii), by striking ‘‘1.0’’ and in10
serting ‘‘2.0’’; and
11 (D) in clause (iii), by striking ‘‘2.0’’ and
12 inserting ‘‘2.5’’; and
13 (2) in paragraph (3)—
14 (A) in subparagraph (A), by striking
15 ‘‘$750’’ and inserting ‘‘$695’’;
16 (B) in subparagraph (B), by striking
17 ‘‘$495’’ and inserting ‘‘$325’’; and
18 (C) in subparagraph (D)—
19 (i) in the matter preceding clause (i),
20 by striking ‘‘$750’’ and inserting ‘‘$695’’;
21 and
22 (ii) in clause (i), by striking ‘‘$750’’
23 and inserting ‘‘$695’’.
24 (b) THRESHOLD.—Section 5000A of such Code, as
25 so added and amended, is amended—
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1 (1) by striking subsection (c)(4)(D); and
2 (2) in subsection (e)(2)—
3 (A) by striking ‘‘UNDER 100 PERCENT OF
4 POVERTY LINE’’ and inserting ‘‘BELOW FILING
5 THRESHOLD’’; and
6 (B) by striking all that follows ‘‘less than’’
7 and inserting ‘‘the amount of gross income
8 specified in section 6012(a)(1) with respect to
9 the taxpayer.’’.
10 SEC. 1003. EMPLOYER RESPONSIBILITY.
11 (a) PAYMENT CALCULATION.—Subparagraph (D) of
12 subsection (d)(2) of section 4980H of the Internal Rev13
enue Code of 1986, as added by section 1513 of the Pa14
tient Protection and Affordable Care Act and amended by
15 section 10106 of such Act, is amended to read as follows:
16 ‘‘(D) APPLICATION OF EMPLOYER SIZE TO
17 ASSESSABLE PENALTIES.—
18 ‘‘(i) IN GENERAL.—The number of in19
dividuals employed by an applicable large
20 employer as full-time employees during any
21 month shall be reduced by 30 solely for
22 purposes of calculating—
23 ‘‘(I) the assessable payment
24 under subsection (a), or
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1 ‘‘(II) the overall limitation under
2 subsection (b)(2).
3 ‘‘(ii) AGGREGATION.—In the case of
4 persons treated as 1 employer under sub5
paragraph (C)(i), only 1 reduction under
6 subclause (I) or (II) shall be allowed with
7 respect to such persons and such reduction
8 shall be allocated among such persons rat9
ably on the basis of the number of full10
time employees employed by each such per11
son.’’.
12 (b) APPLICABLE PAYMENT AMOUNT.—Section
13 4980H of such Code, as so added and amended, is amend14
ed—
15 (1) in the flush text following subsection
16 (c)(1)(B), by striking ‘‘400 percent of the applicable
17 payment amount’’ and inserting ‘‘an amount equal
18 to 1⁄12 of $3,000’’;
19 (2) in subsection (d)(1), by striking ‘‘$750’’
20 and inserting ‘‘$2,000’’; and
21 (3) in subsection (d)(5)(A), in the matter pre22
ceding clause (i), by striking ‘‘subsection (b)(2) and
23 (d)(1)’’ and inserting ‘‘subsection (b) and paragraph
24 (1)’’.
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1 (c) COUNTING PART-TIME WORKERS IN SETTING
2 THE THRESHOLD FOR EMPLOYER RESPONSIBILITY.—
3 Section 4980H(d)(2) of such Code, as so added and
4 amended and as amended by subsection (a), is amended
5 by adding at the end the following new subparagraph:
6 ‘‘(E) FULL-TIME EQUIVALENTS TREATED
7 AS FULL-TIME EMPLOYEES.—Solely for pur8
poses of determining whether an employer is an
9 applicable large employer under this paragraph,
10 an employer shall, in addition to the number of
11 full-time employees for any month otherwise de12
termined, include for such month a number of
13 full-time employees determined by dividing the
14 aggregate number of hours of service of employ15
ees who are not full-time employees for the
16 month by 120.’’.
17 (d) ELIMINATING WAITING PERIOD ASSESSMENT.—
18 Section 4980H of such Code, as so added and amended
19 and as amended by the preceding subsections, is amended
20 by striking subsection (b) and redesignating subsections
21 (c), (d), and (e) as subsections (b), (c), and (d), respec22
tively.
23 SEC. 1004. INCOME DEFINITIONS.
24 (a) MODIFIED ADJUSTED GROSS INCOME.—
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1 (1) IN GENERAL.—The following provisions of
2 the Internal Revenue Code of 1986 are each amend3
ed by striking ‘‘modified gross’’ each place it ap4
pears and inserting ‘‘modified adjusted gross’’:
5 (A) Clauses (i) and (ii) of section
6 36B(d)(2)(A), as added by section 1401 of the
7 Patient Protection and Affordable Care Act.
8 (B) Section 6103(l)(21)(A)(iv), as added
9 by section 1414 of such Act.
10 (C) Clauses (i) and (ii) of section
11 5000A(c)(4), as added by section 1501(b) of
12 such Act.
13 (2) DEFINITION.—
14 (A) Section 36B(d)(2)(B) of such Code, as
15 so added, is amended to read as follows:
16 ‘‘(B) MODIFIED ADJUSTED GROSS IN17
COME.—The term ‘modified adjusted gross in18
come’ means adjusted gross income increased
19 by—
20 ‘‘(i) any amount excluded from gross
21 income under section 911, and
22 ‘‘(ii) any amount of interest received
23 or accrued by the taxpayer during the tax24
able year which is exempt from tax.’’.
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1 (B) Section 5000A(c)(4)(C) of such Code,
2 as so added, is amended to read as follows:
3 ‘‘(C) MODIFIED ADJUSTED GROSS IN4
COME.—The term ‘modified adjusted gross in5
come’ means adjusted gross income increased
6 by—
7 ‘‘(i) any amount excluded from gross
8 income under section 911, and
9 ‘‘(ii) any amount of interest received
10 or accrued by the taxpayer during the tax11
able year which is exempt from tax.’’.
12 (b) MODIFIED ADJUSTED GROSS INCOME DEFINI13
TION.—
14 (1) MEDICAID.—Section 1902 of the Social Se15
curity Act (42 U.S.C. 1396a) is amended by striking
16 ‘‘modified gross income’’ each place it appears in the
17 text and headings of the following provisions and in18
serting ‘‘modified adjusted gross income’’:
19 (A) Paragraph (14) of subsection (e), as
20 added by section 2002(a) of the Patient Protec21
tion and Affordable Care Act.
22 (B) Subsection (gg)(4)(A), as added by
23 section 2001(b) of such Act.
24 (2) CHIP.—
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1 (A) STATE PLAN REQUIREMENTS.—Section
2 2102(b)(1)(B)(v) of the Social Security Act (42
3 U.S.C. 1397bb(b)(1)(B)(v)), as added by sec4
tion 2101(d)(1) of the Patient Protection and
5 Affordable Care Act, is amended by striking
6 ‘‘modified gross income’’ and inserting ‘‘modi7
fied adjusted gross income’’.
8 (B) PLAN ADMINISTRATION.—Section
9 2107(e)(1)(E) of the Social Security Act (42
10 U.S.C. 1397gg(e)(1)(E)), as added by section
11 2101(d)(2) of the Patient Protection and Af12
fordable Care Act, is amended by striking
13 ‘‘modified gross income’’ and inserting ‘‘modi14
fied adjusted gross income’’.
15 (c) NO EXCESS PAYMENTS.—Section 36B(f) of the
16 Internal Revenue Code of 1986, as added by section
17 1401(a) of the Patient Protection and Affordable Care
18 Act, is amended by adding at the end the following new
19 paragraph:
20 ‘‘(3) INFORMATION REQUIREMENT.—Each Ex21
change (and any other person specified by the Sec22
retary) shall provide the following information to the
23 Secretary and to the taxpayer with respect to any
24 health plan provided through the Exchange:
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1 ‘‘(A) The level of coverage described in sec2
tion 1302(d) of the Patient Protection and Af3
fordable Care Act and the period such coverage
4 was in effect.
5 ‘‘(B) The total premium for the coverage
6 without regard to the credit under this section
7 or cost-sharing reductions under section 1402
8 of such Act.
9 ‘‘(C) The aggregate amount of any ad10
vance payment of such credit or reductions
11 under section 1412 of such Act.
12 ‘‘(D) The name, address, and TIN of the
13 primary insured and the name and TIN of each
14 other individual obtaining coverage under the
15 policy.
16 ‘‘(E) Any information provided to the Ex17
change, including any change of circumstances,
18 necessary to determine eligibility for, and the
19 amount of, such credit.
20 ‘‘(F) Any other similar information nec21
essary to carry out this subsection and deter22
mine whether a taxpayer has received excess
23 advance payments.’’.
24 (d) ADULT DEPENDENTS.—
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1 (1) EXCLUSION OF AMOUNTS EXPENDED FOR
2 MEDICAL CARE.—The first sentence of section
3 105(b) of the Internal Revenue Code of 1986 (relat4
ing to amounts expended for medical care) is amend5
ed—
6 (A) by striking ‘‘and his dependents’’ and
7 inserting ‘‘his dependents’’; and
8 (B) by inserting before the period the fol9
lowing: ‘‘, and any child (as defined in section
10 152(f)(1)) of the taxpayer who as of the end of
11 the taxable year has not attained age 27’’.
12 (2) SELF-EMPLOYED HEALTH INSURANCE DE13
DUCTION.—Section 162(l)(1) of such Code is
14 amended to read as follows:
15 ‘‘(1) ALLOWANCE OF DEDUCTION.—In the case
16 of a taxpayer who is an employee within the mean17
ing of section 401(c)(1), there shall be allowed as a
18 deduction under this section an amount equal to the
19 amount paid during the taxable year for insurance
20 which constitutes medical care for—
21 ‘‘(A) the taxpayer,
22 ‘‘(B) the taxpayer’s spouse,
23 ‘‘(C) the taxpayer’s dependents, and
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1 ‘‘(D) any child (as defined in section
2 152(f)(1)) of the taxpayer who as of the end of
3 the taxable year has not attained age 27.’’.
4 (3) CONFORMING AMENDMENTS.—
5 (A) INTERNAL REVENUE CODE.—Section
6 162(l)(2)(B) of such Code is amended by in7
serting ‘‘, or any dependent, or individual de8
scribed in subparagraph (D) of paragraph (1)
9 with respect to,’’ after ‘‘spouse of’’.
10 (B) PUBLIC HEALTH SERVICE ACT.—Sec11
tion 2714 of the Public Health Service Act, as
12 added by section 1001(5) of the Patient Protec13
tion and Affordable Care Act, is amended by
14 striking subsection (c).
15 (4) SICK AND ACCIDENT BENEFITS PROVIDED
16 TO MEMBERS OF A VOLUNTARY EMPLOYEES’ BENE17
FICIARY ASSOCIATION AND THEIR DEPENDENTS.—
18 Section 501(c)(9) of such Code is amended by add19
ing at the end the following new sentence: ‘‘For pur20
poses of providing for the payment of sick and acci21
dent benefits to members of such an association and
22 their dependents, the term ‘dependent’ shall include
23 any individual who is a child (as defined in section
24 152(f)(1)) of a member who as of the end of the cal25
endar year has not attained age 27.’’.
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1 (5) MEDICAL AND OTHER BENEFITS FOR RE2
TIRED EMPLOYEES.—Section 401(h) of such Code is
3 amended by adding at the end the following: ‘‘For
4 purposes of this subsection, the term ‘dependent’
5 shall include any individual who is a child (as de6
fined in section 152(f)(1)) of a retired employee who
7 as of the end of the calendar year has not attained
8 age 27.’’.
9 (e) FIVE PERCENT INCOME DISREGARD FOR CER10
TAIN INDIVIDUALS.—Section 1902(e)(14) of the Social
11 Security Act (42 U.S.C. 1396a(e)(14)), as amended by
12 subsection (b)(1), is further amended—
13 (1) in subparagraph (B), by striking ‘‘No type’’
14 and inserting ‘‘Subject to subparagraph (I), no
15 type’’; and
16 (2) by adding at the end the following new sub17
paragraph:
18 ‘‘(I) TREATMENT OF PORTION OF MODI19
FIED ADJUSTED GROSS INCOME.—For purposes
20 of determining the income eligibility of an indi21
vidual for medical assistance whose eligibility is
22 determined based on the application of modified
23 adjusted gross income under subparagraph (A),
24 the State shall—
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1 ‘‘(i) determine the dollar equivalent of
2 the difference between the upper income
3 limit on eligibility for such an individual
4 (expressed as a percentage of the poverty
5 line) and such upper income limit in6
creased by 5 percentage points; and
7 ‘‘(ii) notwithstanding the requirement
8 in subparagraph (A) with respect to use of
9 modified adjusted gross income, utilize as
10 the applicable income of such individual, in
11 determining such income eligibility, an
12 amount equal to the modified adjusted
13 gross income applicable to such individual
14 reduced by such dollar equivalent
15 amount.’’.
16 SEC. 1005. IMPLEMENTATION FUNDING.
17 (a) IN GENERAL.—There is hereby established a
18 Health Insurance Reform Implementation Fund (referred
19 to in this section as the ‘‘Fund’’) within the Department
20 of Health and Human Services to carry out the Patient
21 Protection and Affordable Care Act and this Act (and the
22 amendments made by such Acts).
23 (b) FUNDING.—There is appropriated to the Fund,
24 out of any funds in the Treasury not otherwise appro25
priated, $1,000,000,000 for Federal administrative ex-
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1 penses to carry out such Act (and the amendments made
2 by such Acts).
3 Subtitle B—Medicare
4 SEC. 1101. CLOSING THE MEDICARE PRESCRIPTION DRUG
5 ‘‘DONUT HOLE’’.
6 (a) COVERAGE GAP REBATE FOR 2010.—
7 (1) IN GENERAL.—Section 1860D–42 of the
8 Social Security Act (42 U.S.C. 1395w–152) is
9 amended by adding at the end the following new
10 subsection:
11 ‘‘(c) COVERAGE GAP REBATE FOR 2010.—
12 ‘‘(1) IN GENERAL.—In the case of an individual
13 described in subparagraphs (A) through (D) of sec14
tion 1860D–14A(g)(1) who as of the last day of a
15 calendar quarter in 2010 has incurred costs for cov16
ered part D drugs so that the individual has exceed17
ed the initial coverage limit under section 1860D–
18 2(b)(3) for 2010, the Secretary shall provide for
19 payment from the Medicare Prescription Drug Ac20
count of $250 to the individual by not later than the
21 15th day of the third month following the end of
22 such quarter.
23 ‘‘(2) LIMITATION.—The Secretary shall provide
24 only 1 payment under this subsection with respect to
25 any individual.’’.
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1 (2) REPEAL OF PROVISION.—Section 3315 of
2 the Patient Protection and Affordable Care Act (in3
cluding the amendments made by such section) is re4
pealed, and any provision of law amended or re5
pealed by such sections is hereby restored or revived
6 as if such section had not been enacted into law.
7 (b) CLOSING THE DONUT HOLE.—Part D of title
8 XVIII of the Social Security Act (42 U.S.C. 1395w–101
9 et seq.), as amended by section 3301 of the Patient Pro10
tection and Affordable Care Act, is further amended—
11 (1) in section 1860D–43—
12 (A) in subsection (b), by striking ‘‘July 1,
13 2010’’ and inserting ‘‘January 1, 2011’’; and
14 (B) in subsection (c)(2), by striking ‘‘July
15 1, 2010, and ending on December 31, 2010,’’
16 and inserting ‘‘January 1, 2011, and December
17 31, 2011,’’;
18 (2) in section 1860D–14A—
19 (A) in subsection (a)—
20 (i) by striking ‘‘July 1, 2010’’ and in21
serting ‘‘January 1, 2011’’; and
22 (ii) by striking ‘‘April 1, 2010’’ and
23 inserting ‘‘180 days after the date of the
24 enactment of this section’’;
25 (B) in subsection (b)(1)(C)—
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1 (i) in the heading, by striking ‘‘2010
2 AND’’;
3 (ii) by striking ‘‘July 1, 2010’’ and in4
serting ‘‘January 1, 2011’’; and
5 (iii) by striking ‘‘May 1, 2010’’ and
6 inserting ‘‘not later than 30 days after the
7 date of the establishment of a model agree8
ment under subsection (a)’’;
9 (C) in subsection (c)—
10 (i) in paragraph (1)(A)(iii), by strik11
ing ‘‘July 1, 2010, and ending on Decem12
ber 31, 2011’’ and inserting ‘‘January 1,
13 2011, and ending on December 31, 2011’’;
14 and
15 (ii) in paragraph (2), by striking
16 ‘‘2010’’ and inserting ‘‘2011’’;
17 (D) in subsection (d)(2)(B), by striking
18 ‘‘July 1, 2010, and ending on December 31,
19 2010’’ and inserting ‘‘January 1, 2011, and
20 ending on December 31, 2011’’; and
21 (E) in subsection (g)(1)—
22 (i) in the matter before subparagraph
23 (A), by striking ‘‘an applicable drug’’ and
24 inserting ‘‘a covered part D drug’’;
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1 (ii) by adding ‘‘and’’ at the end of
2 subparagraph (C);
3 (iii) by striking subparagraph (D);
4 and
5 (iv) by redesignating subparagraph
6 (E) as subparagraph (D); and
7 (3) in section 1860D–2(b) —
8 (A) in paragraph (2)(A), by striking ‘‘The
9 coverage’’ and inserting ‘‘Subject to subpara10
graphs (C) and (D), the coverage’’;
11 (B) in paragraph (2)(B), by striking ‘‘sub12
paragraph (A)(ii)’’ and inserting ‘‘subpara13
graphs (A)(ii), (C), and (D)’’;
14 (C) by adding at the end of paragraph (2)
15 the following new subparagraphs:
16 ‘‘(C) COVERAGE FOR GENERIC DRUGS IN
17 COVERAGE GAP.—
18 ‘‘(i) IN GENERAL.—Except as pro19
vided in paragraph (4), the coverage for an
20 applicable beneficiary (as defined in section
21 1860D–14A(g)(1)) has coinsurance (for
22 costs above the initial coverage limit under
23 paragraph (3) and below the out-of-pocket
24 threshold) for covered part D drugs that
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1 are not applicable drugs under section
2 1860D–14A(g)(2) that is—
3 ‘‘(I) equal to the generic-gap co4
insurance percentage (specified in
5 clause (ii)) for the year, or
6 ‘‘(II) actuarially equivalent
7 (using processes and methods estab8
lished under section 1860D–11(c)) to
9 an average expected payment of such
10 percentage of such costs for covered
11 part D drugs that are not applicable
12 drugs under section 1860D–
13 14A(g)(2).
14 ‘‘(ii) GENERIC-GAP COINSURANCE
15 PERCENTAGE.—The generic-gap coinsur16
ance percentage specified in this clause
17 for—
18 ‘‘(I) 2011 is 93 percent;
19 ‘‘(II) 2012 and each succeeding
20 year before 2020 is the generic-gap
21 coinsurance percentage under this
22 clause for the previous year decreased
23 by 7 percentage points; and
24 ‘‘(III) 2020 and each subsequent
25 year is 25 percent.
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1 ‘‘(D) COVERAGE FOR APPLICABLE DRUGS
2 IN COVERAGE GAP.—
3 ‘‘(i) IN GENERAL.—Except as pro4
vided in paragraph (4), the coverage for an
5 applicable beneficiary (as defined in section
6 1860D–14A(g)(1)) has coinsurance (for
7 costs above the initial coverage limit under
8 paragraph (3) and below the out-of-pocket
9 threshold) for the negotiated price (as de10
fined in section 1860D–14A(g)(6)) of cov11
ered part D drugs that are applicable
12 drugs under section 1860D–14A(g)(2) that
13 is—
14 ‘‘(I) equal to the difference be15
tween the applicable gap percentage
16 (specified in clause (ii) for the year)
17 and the discount percentage specified
18 in section 1860D–14A(g)(4)(A) for
19 such applicable drugs, or
20 ‘‘(II) actuarially equivalent
21 (using processes and methods estab22
lished under section 1860D–11(c)) to
23 an average expected payment of such
24 percentage of such costs, for covered
25 part D drugs that are applicable
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1 drugs under section 1860D–
2 14A(g)(2).
3 ‘‘(ii) APPLICABLE GAP PERCENT4
AGE.—The applicable gap percentage spec5
ified in this clause for—
6 ‘‘(I) 2013 and 2014 is 97.5 per7
cent;
8 ‘‘(II) 2015 and 2016 is 95 per9
cent;
10 ‘‘(III) 2017 is 90 percent;
11 ‘‘(IV) 2018 is 85 percent;
12 ‘‘(V) 2019 is 80 percent; and
13 ‘‘(VI) 2020 and each subsequent
14 year is 75 percent.’’;
15 (D) in paragraph (3)(A), as restored under
16 subsection (a)(2), by striking ‘‘paragraph (4)’’
17 and inserting ‘‘paragraphs (2)(C), (2)(D), and
18 (4)’’;
19 (E) in paragraph (4)(E), by inserting be20
fore the period at the end the following: ‘‘, ex21
cept that incurred costs shall not include the
22 portion of the negotiated price that represents
23 the reduction in coinsurance resulting from the
24 application of paragraph (2)(D)’’; and
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1 (4) in section 1860D–22(a)(2)(A), by inserting
2 before the period at the end the following: ‘‘, not
3 taking into account the value of any discount or cov4
erage provided during the gap in prescription drug
5 coverage that occurs between the initial coverage
6 limit under section 1860D–2(b)(3) during the year
7 and the out-of-pocket threshold specified in section
8 1860D–2(b)(4)(B)’’.
9 (c) CONFORMING AMENDMENT TO AMP UNDER
10 MEDICAID.—Section 1927(k)(1)(B)(i) of the Social Secu11
rity Act (42 U.S.C. 1396r–8(k)(1)(B)(i)), as amended by
12 section 2503(a)(2)(B) of the Patient Protection and Af13
fordable Care Act, is amended—
14 (1) by striking ‘‘and’’ at the end of subclause
15 (III);
16 (2) by striking the period at the end of sub17
clause (IV); and
18 (3) by adding at the end the following new sub19
clause:
20 ‘‘(V) discounts provided by man21
ufacturers under section 1860D–
22 14A.’’.
23 SEC. 1102. MEDICARE ADVANTAGE PAYMENTS.
24 (a) REPEAL.—Effective as if included in the enact25
ment of the Patient Protection and Affordable Care Act,
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1 sections 3201 and 3203 of such Act (and the amendments
2 made by such sections) are repealed.
3 (b) PHASE-IN OF MODIFIED BENCHMARKS.—Section
4 1853 of the Social Security Act (42 U.S.C. 1395w–23)
5 is amended—
6 (1) in subsection (j)(1)(A), by striking ‘‘(or, be7
ginning with 2007, 1⁄12 of the applicable amount de8
termined under subsection (k)(1)) for the area for
9 the year’’ and inserting ‘‘ for the area for the year
10 (or, for 2007, 2008, 2009, and 2010, 1⁄12 of the ap11
plicable amount determined under subsection (k)(1)
12 for the area for the year; for 2011, 1⁄12 of the appli13
cable amount determined under subsection (k)(1) for
14 the area for 2010; and, beginning with 2012, 1⁄12 of
15 the blended benchmark amount determined under
16 subsection (n)(1) for the area for the year)’’; and
17 (2) by adding at the end the following new sub18
section:
19 ‘‘(n) DETERMINATION OF BLENDED BENCHMARK
20 AMOUNT.—
21 ‘‘(1) IN GENERAL.—For purposes of subsection
22 (j), subject to paragraphs (3), (4), and (5), the term
23 ‘blended benchmark amount’ means for an area—
24 ‘‘(A) for 2012 the sum of—
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1 ‘‘(i) 1⁄2 of the applicable amount for
2 the area and year; and
3 ‘‘(ii) 1⁄2 of the amount specified in
4 paragraph (2)(A) for the area and year;
5 and
6 ‘‘(B) for a subsequent year the amount
7 specified in paragraph (2)(A) for the area and
8 year.
9 ‘‘(2) SPECIFIED AMOUNT.—
10 ‘‘(A) IN GENERAL.—The amount specified
11 in this subparagraph for an area and year is
12 the product of—
13 ‘‘(i) the base payment amount speci14
fied in subparagraph (E) for the area and
15 year adjusted to take into account the
16 phase-out in the indirect costs of medical
17 education from capitation rates described
18 in subsection (k)(4); and
19 ‘‘(ii) the applicable percentage for the
20 area for the year specified under subpara21
graph (B).
22 ‘‘(B) APPLICABLE PERCENTAGE.—Subject
23 to subparagraph (D), the applicable percentage
24 specified in this subparagraph for an area for
25 a year in the case of an area that is ranked—
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1 ‘‘(i) in the highest quartile under sub2
paragraph (C) for the previous year is 95
3 percent;
4 ‘‘(ii) in the second highest quartile
5 under such subparagraph for the previous
6 year is 100 percent;
7 ‘‘(iii) in the third highest quartile
8 under such subparagraph for the previous
9 year is 107.5 percent; or
10 ‘‘(iv) in the lowest quartile under such
11 subparagraph for the previous year is 115
12 percent.
13 ‘‘(C) PERIODIC RANKING.—For purposes
14 of this paragraph in the case of an area lo15
cated—
16 ‘‘(i) in 1 of the 50 States or the Dis17
trict of Columbia, the Secretary shall rank
18 such area in each year specified under sub19
section (c)(1)(D)(ii) based upon the level
20 of the amount specified in subparagraph
21 (A)(i) for such areas; or
22 ‘‘(ii) in a territory, the Secretary shall
23 rank such areas in each such year based
24 upon the level of the amount specified in
25 subparagraph (A)(i) for such area relative
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1 to quartile rankings computed under clause
2 (i).
3 ‘‘(D) 1-YEAR TRANSITION FOR CHANGES IN
4 APPLICABLE PERCENTAGE.—If, for a year after
5 2012, there is a change in the quartile in which
6 an area is ranked compared to the previous
7 year, the applicable percentage for the area in
8 the year shall be the average of—
9 ‘‘(i) the applicable percentage for the
10 area for the previous year; and
11 ‘‘(ii) the applicable percentage that
12 would otherwise apply for the area for the
13 year.
14 ‘‘(E) BASE PAYMENT AMOUNT.—Subject
15 to subparagraph (F), the base payment amount
16 specified in this subparagraph—
17 ‘‘(i) for 2012 is the amount specified
18 in subsection (c)(1)(D) for the area for the
19 year; or
20 ‘‘(ii) for a subsequent year that—
21 ‘‘(I) is not specified under sub22
section (c)(1)(D)(ii), is the base
23 amount specified in this subparagraph
24 for the area for the previous year, in25
creased by the national per capita MA
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1 growth percentage, described in sub2
section (c)(6) for that succeeding
3 year, but not taking into account any
4 adjustment under subparagraph (C)
5 of such subsection for a year before
6 2004; and
7 ‘‘(II) is specified under sub8
section (c)(1)(D)(ii), is the amount
9 specified in subsection (c)(1)(D) for
10 the area for the year.
11 ‘‘(F) APPLICATION OF INDIRECT MEDICAL
12 EDUCATION PHASE-OUT.—The base payment
13 amount specified in subparagraph (E) for a
14 year shall be adjusted in the same manner
15 under paragraph (4) of subsection (k) as the
16 applicable amount is adjusted under such sub17
section.
18 ‘‘(3) ALTERNATIVE PHASE-INS.—
19 ‘‘(A) 4-YEAR PHASE-IN FOR CERTAIN
20 AREAS.—If the difference between the applica21
ble amount (as defined in subsection (k)) for an
22 area for 2010 and the projected 2010 bench23
mark amount (as defined in subparagraph (C))
24 for the area is at least $30 but less than $50,
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1 the blended benchmark amount for the area
2 is—
3 ‘‘(i) for 2012 the sum of—
4 ‘‘(I) 3⁄4 of the applicable amount
5 for the area and year; and
6 ‘‘(II) 1⁄4 of the amount specified
7 in paragraph (2)(A) for the area and
8 year;
9 ‘‘(ii) for 2013 the sum of—
10 ‘‘(I) 1⁄2 of the applicable amount
11 for the area and year; and
12 ‘‘(II) 1⁄2 of the amount specified
13 in paragraph (2)(A) for the area and
14 year;
15 ‘‘(iii) for 2014 the sum of—
16 ‘‘(I) 1⁄4 of the applicable amount
17 for the area and year; and
18 ‘‘(II) 3⁄4 of the amount specified
19 in paragraph (2)(A) for the area and
20 year; and
21 ‘‘(iv) for a subsequent year the
22 amount specified in paragraph (2)(A) for
23 the area and year.
24 ‘‘(B) 6-YEAR PHASE-IN FOR CERTAIN
25 AREAS.—If the difference between the applica-
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1 ble amount (as defined in subsection (k)) for an
2 area for 2010 and the projected 2010 bench3
mark amount (as defined in subparagraph (C))
4 for the area is at least $50, the blended bench5
mark amount for the area is—
6 ‘‘(i) for 2012 the sum of—
7 ‘‘(I) 5⁄6 of the applicable amount
8 for the area and year; and
9 ‘‘(II) 1⁄6 of the amount specified
10 in paragraph (2)(A) for the area and
11 year;
12 ‘‘(ii) for 2013 the sum of—
13 ‘‘(I) 2⁄3 of the applicable amount
14 for the area and year; and
15 ‘‘(II) 1⁄3 of the amount specified
16 in paragraph (2)(A) for the area and
17 year;
18 ‘‘(iii) for 2014 the sum of—
19 ‘‘(I) 1⁄2 of the applicable amount
20 for the area and year; and
21 ‘‘(II) 1⁄2 of the amount specified
22 in paragraph (2)(A) for the area and
23 year;
24 ‘‘(iv) for 2015 the sum of—
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1 ‘‘(I) 1⁄3 of the applicable amount
2 for the area and year; and
3 ‘‘(II) 2⁄3 of the amount specified
4 in paragraph (2)(A) for the area and
5 year; and
6 ‘‘(v) for 2016 the sum of—
7 ‘‘(I) 1⁄6 of the applicable amount
8 for the area and year; and
9 ‘‘(II) 5⁄6 of the amount specified
10 in paragraph (2)(A) for the area and
11 year; and
12 ‘‘(vi) for a subsequent year the
13 amount specified in paragraph (2)(A) for
14 the area and year.
15 ‘‘(C) PROJECTED 2010 BENCHMARK
16 AMOUNT.—The projected 2010 benchmark
17 amount described in this subparagraph for an
18 area is equal to the sum of—
19 ‘‘(i) 1⁄2 of the applicable amount (as
20 defined in subsection (k)) for the area for
21 2010; and
22 ‘‘(ii) 1⁄2 of the amount specified in
23 paragraph (2)(A) for the area for 2010 but
24 determined as if there were substituted for
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1 the applicable percentage specified in
2 clause (ii) of such paragraph the sum of—
3 ‘‘(I) the applicable percent that
4 would be specified under subpara5
graph (B) of paragraph (2) (deter6
mined without regard to subpara7
graph (D) of such paragraph) for the
8 area for 2010 if any reference in such
9 paragraph to ‘the previous year’ were
10 deemed a reference to 2010; and
11 ‘‘(II) the applicable percentage
12 increase that would apply to a quali13
fying plan in the area under sub14
section (o) as if any reference in such
15 subsection to 2012 were deemed a ref16
erence to 2010 and as if the deter17
mination of a qualifying county under
18 paragraph (3)(B) of such subsection
19 were made for 2010.
20 ‘‘(4) CAP ON BENCHMARK AMOUNT.—In no
21 case shall the blended benchmark amount for an
22 area for a year (determined taking into account sub23
section (o)) be greater than the applicable amount
24 that would (but for the application of this sub-
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1 section) be determined under subsection (k)(1) for
2 the area for the year.
3 ‘‘(5) NON-APPLICATION TO PACE PLANS.—This
4 subsection shall not apply to payments to a PACE
5 program under section 1894.’’.
6 (c) APPLICABLE PERCENTAGE QUALITY IN7
CREASES.—Section 1853 of such Act (42 U.S.C. 1395w–
8 23), as amended by subsection (b), is amended—
9 (1) in subsection (j), by inserting ‘‘subject to
10 subsection (o),’’ after ‘‘For purposes of this part,’’;
11 (2) in subsection (n)(2)(B), as added by sub12
section (b), by inserting ‘‘, subject to subsection (o)’’
13 after ‘‘as follows’’; and
14 (3) by adding at the end the following new sub15
section:
16 ‘‘(o) APPLICABLE PERCENTAGE QUALITY IN17
CREASES.—
18 ‘‘(1) IN GENERAL.—Subject to the succeeding
19 paragraphs, in the case of a qualifying plan with re20
spect to a year beginning with 2012, the applicable
21 percentage under subsection (n)(2)(B) shall be in22
creased on a plan or contract level, as determined by
23 the Secretary—
24 ‘‘(A) for 2012, by 1.5 percentage points;
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1 ‘‘(B) for 2013, by 3.0 percentage points;
2 and
3 ‘‘(C) for 2014 or a subsequent year, by 5.0
4 percentage points.
5 ‘‘(2) INCREASE FOR QUALIFYING PLANS IN
6 QUALIFYING COUNTIES.—The increase applied under
7 paragraph (1) for a qualifying plan located in a
8 qualifying county for a year shall be doubled.
9 ‘‘(3) QUALIFYING PLANS AND QUALIFYING
10 COUNTY DEFINED; APPLICATION OF INCREASES TO
11 LOW ENROLLMENT AND NEW PLANS.—For purposes
12 of this subsection:
13 ‘‘(A) QUALIFYING PLAN.—
14 ‘‘(i) IN GENERAL.—The term ‘quali15
fying plan’ means, for a year and subject
16 to paragraph (4), a plan that had a quality
17 rating under paragraph (4) of 4 stars or
18 higher based on the most recent data avail19
able for such year.
20 ‘‘(ii) APPLICATION OF INCREASES TO
21 LOW ENROLLMENT PLANS.—
22 ‘‘(I) 2012.—For 2012, the term
23 ‘qualifying plan’ includes an MA plan
24 that the Secretary determines is not
25 able to have a quality rating under
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1 paragraph (4) because of low enroll2
ment.
3 ‘‘(II) 2013 AND SUBSEQUENT
4 YEARS.—For 2013 and subsequent
5 years, for purposes of determining
6 whether an MA plan with low enroll7
ment (as defined by the Secretary) is
8 included as a qualifying plan, the Sec9
retary shall establish a method to
10 apply to MA plans with low enroll11
ment (as defined by the Secretary)
12 the computation of quality rating and
13 the rating system under paragraph
14 (4).
15 ‘‘(iii) APPLICATION OF INCREASES TO
16 NEW PLANS.—
17 ‘‘(I) IN GENERAL.—A new MA
18 plan that meets criteria specified by
19 the Secretary shall be treated as a
20 qualifying plan, except that in apply21
ing paragraph (1), the applicable per22
centage under subsection (n)(2)(B)
23 shall be increased—
24 ‘‘(aa) for 2012, by 1.5 per25
centage points;
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1 ‘‘(bb) for 2013, by 2.5 per2
centage points; and
3 ‘‘(cc) for 2014 or a subse4
quent year, by 3.5 percentage
5 points.
6 ‘‘(II) NEW MA PLAN DEFINED.—
7 The term ‘new MA plan’ means, with
8 respect to a year, a plan offered by an
9 organization or sponsor that has not
10 had a contract as a Medicare Advan11
tage organization in the preceding 3-
12 year period.
13 ‘‘(B) QUALIFYING COUNTY.—The term
14 ‘qualifying county’ means, for a year, a coun15
ty—
16 ‘‘(i) that has an MA capitation rate
17 that, in 2004, was based on the amount
18 specified in subsection (c)(1)(B) for a Met19
ropolitan Statistical Area with a population
20 of more than 250,000;
21 ‘‘(ii) for which, as of December 2009,
22 of the Medicare Advantage eligible individ23
uals residing in the county at least 25 per24
cent of such individuals were enrolled in
25 Medicare Advantage plans; and
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1 ‘‘(iii) that has per capita fee-for-serv2
ice spending that is lower than the na3
tional monthly per capita cost for expendi4
tures for individuals enrolled under the
5 original medicare fee-for-service program
6 for the year.
7 ‘‘(4) QUALITY DETERMINATIONS FOR APPLICA8
TION OF INCREASE.—
9 ‘‘(A) QUALITY DETERMINATION.—The
10 quality rating for a plan shall be determined ac11
cording to a 5-star rating system (based on the
12 data collected under section 1852(e)).
13 ‘‘(B) PLANS THAT FAILED TO REPORT.—
14 An MA plan which does not report data that
15 enables the Secretary to rate the plan for pur16
poses of this paragraph shall be counted as hav17
ing a rating of fewer than 3.5 stars.
18 ‘‘(5) EXCEPTION FOR PACE PLANS.—This sub19
section shall not apply to payments to a PACE pro20
gram under section 1894.’’.
21 (4) DETERMINATION OF MEDICARE PART D
22 LOW-INCOME BENCHMARK PREMIUM.—Section
23 1860D–14(b)(2)(B)(iii) of the Social Security Act
24 (42 U.S.C. 1395w–114(b)(2)(B)(iii)) as amended by
25 section 3302 of the Patient Protection and Afford-
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1 able Care Act, is amended by striking ‘‘, determined
2 without regard to any reduction in such premium as
3 a result of any beneficiary rebate under section
4 1854(b)(1)(C) or bonus payment under section
5 1853(n)’’ and inserting the following: ‘‘and deter6
mined before the application of the monthly rebate
7 computed under section 1854(b)(1)(C)(i) for that
8 plan and year involved and, in the case of a quali9
fying plan, before the application of the increase
10 under section 1853(o) for that plan and year in11
volved’’.
12 (d) BENEFICIARY REBATES.—Section 1854(b)(1)(C)
13 of such Act (42 U.S.C. 1395w–24(b)(1)(C)), as amended
14 by section 3202(b) of the Patient Protection and Afford15
able Care Act, is further amended—
16 (1) in clause (i), by inserting ‘‘(or the applica17
ble rebate percentage specified in clause (iii) in the
18 case of plan years beginning on or after January 1,
19 2012)’’ after ‘‘75 percent’’; and
20 (2) by striking clause (iii), by redesignating
21 clauses (iv) and (v) as clauses (vii) and (viii), respec22
tively, and by inserting after clause (ii) the following
23 new clauses:
24 ‘‘(iii) APPLICABLE REBATE PERCENT25
AGE.—The applicable rebate percentage
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1 specified in this clause for a plan for a
2 year, based on the system under section
3 1853(o)(4)(A), is the sum of—
4 ‘‘(I) the product of the old phase5
in proportion for the year under
6 clause (iv) and 75 percent; and
7 ‘‘(II) the product of the new
8 phase-in proportion for the year under
9 clause (iv) and the final applicable re10
bate percentage under clause (v).
11 ‘‘(iv) OLD AND NEW PHASE-IN PRO12
PORTIONS.—For purposes of clause (iv)—
13 ‘‘(I) for 2012, the old phase-in
14 proportion is 2⁄3 and the new phase-in
15 proportion is 1⁄3;
16 ‘‘(II) for 2013, the old phase-in
17 proportion is 1⁄3 and the new phase-in
18 proportion is 2⁄3; and
19 ‘‘(III) for 2014 and any subse20
quent year, the old phase-in propor21
tion is 0 and the new phase-in propor22
tion is 1.
23 ‘‘(v) FINAL APPLICABLE REBATE PER24
CENTAGE.—Subject to clause (vi), the final
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1 applicable rebate percentage under this
2 clause is—
3 ‘‘(I) in the case of a plan with a
4 quality rating under such system of at
5 least 4.5 stars, 70 percent;
6 ‘‘(II) in the case of a plan with
7 a quality rating under such system of
8 at least 3.5 stars and less than 4.5
9 stars, 65 percent; and
10 ‘‘(III) in the case of a plan with
11 a quality rating under such system of
12 less than 3.5 stars, 50 percent.
13 ‘‘(vi) TREATMENT OF LOW ENROLL14
MENT AND NEW PLANS.—For purposes of
15 clause (v)—
16 ‘‘(I) for 2012, in the case of a
17 plan described in subclause (I) of sub18
section (o)(3)(A)(ii), the plan shall be
19 treated as having a rating of 4.5
20 stars; and
21 ‘‘(II) for 2012 or a subsequent
22 year, in the case of a new MA plan
23 (as defined under subclause (III) of
24 subsection (o)(3)(A)(iii))) that is
25 treated as a qualifying plan pursuant
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1 to subclause (I) of such subsection,
2 the plan shall be treated as having a
3 rating of 3.5 stars.’’.
4 (e) CODING INTENSITY ADJUSTMENT.—Section
5 1853(a)(1)(C)(ii) of such Act (42 U.S.C. 1395w–
6 23(a)(1)(C)(ii)) is amended—
7 (1) in the heading, by striking ‘‘DURING PHASE8
OUT OF BUDGET NEUTRALITY FACTOR’’ and insert9
ing ‘‘OF CODING ADJUSTMENT’’;
10 (2) in the matter before subclause (I), by strik11
ing ‘‘through 2010’’ and inserting ‘‘and each subse12
quent year’’; and
13 (3) in subclause (II)—
14 (A) in the first sentence, by inserting ‘‘an15
nually’’ before ‘‘conduct an analysis’’;
16 (B) in the second sentence—
17 (i) by inserting ‘‘on a timely basis’’
18 after ‘‘are incorporated’’; and
19 (ii) by striking ‘‘only for 2008, 2009,
20 and 2010’’ and inserting ‘‘for 2008 and
21 subsequent years’’;
22 (C) in the third sentence, by inserting
23 ‘‘and updated as appropriate’’ before the period
24 at the end; and
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46
1 (D) by adding at the end the following new
2 subclauses:
3 ‘‘(III) In calculating each year’s
4 adjustment for 2019 and subsequent
5 years, the adjustment factor shall be
6 no less than 5.7 percent.
7 ‘‘(IV) Such adjustment shall be
8 applied to risk scores until the Sec9
retary implements risk adjustment
10 using Medicare Advantage diagnostic,
11 cost, and use data.’’.
12 (f) REPEAL OF COMPARATIVE COST ADJUSTMENT
13 PROGRAM.—Section 1860C–1 of the Social Security Act
14 (42 U.S.C. 1395w–29), as added by section 241(a) of the
15 Medicare Prescription Drug, Improvement, and Mod16
ernization Act of 2003 (Public Law 108–173), is repealed.
17 SEC. 1103. SAVINGS FROM LIMITS ON MA PLAN ADMINIS18
TRATIVE COSTS.
19 Section 1857(e) of the Social Security Act (42 U.S.C.
20 1395w–27(e)) is amended by adding at the end the fol21
lowing new paragraph:
22 ‘‘(4) REQUIREMENT FOR MINIMUM MEDICAL
23 LOSS RATIO.—If the Secretary determines for a con24
tract year (beginning with 2014) that an MA plan
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47
1 has failed to have a medical loss ratio of at least
2 .85—
3 ‘‘(A) the MA plan shall remit to the Sec4
retary an amount equal to the product of—
5 ‘‘(i) the total revenue of the MA plan
6 under this part for the contract year; and
7 ‘‘(ii) the difference between .85 and
8 the medical loss ratio;
9 ‘‘(B) for 3 consecutive contract years, the
10 Secretary shall not permit the enrollment of
11 new enrollees under the plan for coverage dur12
ing the second succeeding contract year; and
13 ‘‘(C) the Secretary shall terminate the plan
14 contract if the plan fails to have such a medical
15 loss ratio for 5 consecutive contract years.
16 Amounts collected pursuant to subparagraph (A)
17 shall be deposited into the Centers for Medicare &
18 Medicaid Program Management Account to be avail19
able until expended.’’.
20 SEC. 1104. DISPROPORTIONATE SHARE HOSPITAL (DSH)
21 PAYMENTS.
22 Section 1886(r) of the Social Security Act (42 U.S.C.
23 1395ww(r)), as added by section 3133 of the Patient Pro24
tection and Affordable Care Act and as amended by sec25
tion 10316 of such Act, is amended—
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1 (1) in paragraph (1), by striking ‘‘2015’’ and
2 inserting ‘‘2014’’; and
3 (2) in paragraph (2)—
4 (A) in the matter preceding subparagraph
5 (A), by striking ‘‘2015’’ and inserting ‘‘2014’’;
6 (B) in subparagraph (B)(i)—
7 (i) in the heading, by inserting ‘‘2014,’’
8 after ‘‘YEARS’’;
9 (ii) in the matter preceding subclause
10 (I), by inserting ‘‘2014,’’ after ‘‘each of fis11
cal years’’;
12 (iii) in subclause (I), by striking ‘‘on
13 such Act’’ and inserting ‘‘on the Health
14 Care and Education Affordability Rec15
onciliation Act of 2010’’; and
16 (iv) in the matter following subclause
17 (II), by striking ‘‘minus 1.5 percentage
18 points’’ and inserting ‘‘minus 0.1 percent19
age points for fiscal year 2014 and minus
20 0.2 percentage points for each of fiscal
21 years 2015, 2016, and 2017’’; and
22 (C) in subparagraph (B)(ii), in the matter
23 following subclause (II), by striking ‘‘and, for
24 each of 2018 and 2019, minus 1.5 percentage
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1 points’’ and inserting ‘‘minus 0.2 percentage
2 points for each of fiscal years 2018 and 2019’’.
3 SEC. 1105. MARKET BASKET UPDATES.
4 (a) IPPS.—Section 1886(b)(3)(B) of the Social Se5
curity Act (42 U.S.C. 1395ww(b)(3)(B)), as amended by
6 sections 3401(a)(4) and 10319(a) of the Patient Protec7
tion and Affordable Care Act, is amended—
8 (1) in clause (xii)—
9 (A) by placing the subclause (II) (inserted
10 by section 10319(a)(3) of the Patient Protec11
tion and Affordable Care Act) immediately after
12 subclause (I) and, in such subclause (II), by
13 striking ‘‘and’’ at the end; and
14 (B) by striking subclause (III) and insert15
ing the following:
16 ‘‘(III) for fiscal year 2014, by 0.3 percentage
17 point;
18 ‘‘(IV) for each of fiscal years 2015 and 2016,
19 by 0.2 percentage point; and
20 ‘‘(V) for each of fiscal years 2017, 2018, and
21 2019, by 0.75 percentage point.’’; and
22 (2) by striking clause (xiii).
23 (b) LONG-TERM CARE HOSPITALS.—Section
24 1886(m)(4) of the Social Security Act (42 U.S.C.
25 1395ww(m)(4)), as added by section 3401(c) of the Pa-
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1 tient Protection and Affordable Care Act and amended by
2 section 10319(b) of such Act, is amended—
3 (1) in subparagraph (A)—
4 (A) in clause (iii), by striking ‘‘and’’ at the
5 end; and
6 (B) by striking clause (iv) and inserting
7 the following:
8 ‘‘(iv) for rate year 2014, 0.3 percent9
age point;
10 ‘‘(v) for each of rate years 2015 and
11 2016, 0.2 percentage point; and
12 ‘‘(vi) for each of rate years 2017,
13 2018, and 2019, 0.75 percentage point.’’;
14 (2) by striking subparagraph (B); and
15 (3) by striking ‘‘(4) OTHER ADJUSTMENT.—’’
16 and all that follows through ‘‘For purposes’’ and in17
serting ‘‘(4) OTHER ADJUSTMENT.—For purposes’’
18 (and redesignating clauses (i) through (vi) as sub19
paragraphs (A) through (F), respectively, with ap20
propriate indentation).
21 (c) INPATIENT REHABILITATION FACILITIES.—Sec22
tion 1886(j)(3)(D) of the Social Security Act (42 U.S.C.
23 1395ww(j)(3)(D)), as added by section 3401(d)(2) of the
24 Patient Protection and Affordable Care Act and amended
25 by section 10319(c) of such Act, is amended—
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1 (1) in clause (i)—
2 (A) by placing the subclause (II) (inserted
3 by section 10319(c)(3)

# 51

1 (1) in clause (i)—
2 (A) by placing the subclause (II) (inserted
3 by section 10319(c)(3) of the Patient Protec4
tion and Affordable Care Act) immediately after
5 subclause (I) and, in such subclause (II), by
6 striking ‘‘and’’ at the end; and
7 (B) by striking subclause (III) and insert8
ing the following:
9 ‘‘(III) for fiscal year 2014, 0.3
10 percentage point;
11 ‘‘(IV) for each of fiscal years
12 2015 and 2016, 0.2 percentage point;
13 and
14 ‘‘(V) for each of fiscal years
15 2017, 2018, and 2019, 0.75 percent16
age point.’’;
17 (2) by striking clause (ii); and
18 (3) by striking ‘‘(D) OTHER ADJUSTMENT.—’’
19 and all that follows through ‘‘For purposes’’ and in20
serting ‘‘(D) OTHER ADJUSTMENT.—For purposes’’
21 (and redesignating subclauses (I) through (V) as
22 clauses (i) through (v), respectively, with appropriate
23 indentation).
24 (d) PSYCHIATRIC HOSPITALS.—Section 1886(s)(3) of
25 the Social Security Act, as added by section 3401(f) of
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1 the Patient Protection and Affordable Care Act and
2 amended by section 10319(e) of such Act, is amended—
3 (1) in subparagraph (A)—
4 (A) by placing the clause (ii) (inserted by
5 section 10319(e)(3) of the Patient Protection
6 and Affordable Care Act) immediately after
7 clause (i) and, in such clause (ii), by striking
8 ‘‘and’’ at the end; and
9 (B) by striking clause (iii) and inserting
10 the following:
11 ‘‘(iii) for the rate year beginning in
12 2014, 0.3 percentage point;
13 ‘‘(iv) for each of the rate years begin14
ning in 2015 and 2016, 0.2 percentage
15 point; and
16 ‘‘(v) for each of the rate years begin17
ning in 2017, 2018, and 2019, 0.75 per18
centage point.’’;
19 (2) by striking subparagraph (B); and
20 (3) by striking ‘‘(3) OTHER ADJUSTMENT.—’’
21 and all that follows through ‘‘For purposes’’ and in22
serting ‘‘(3) OTHER ADJUSTMENT.—For purposes’’
23 (and redesignating clauses (i) through (v) as sub24
paragraphs (A) through (E), respectively, with ap25
propriate indentation).
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1 (e) OUTPATIENT HOSPITALS.—Section
2 1833(t)(3)(G) of the Social Security Act (42 U.S.C.
3 1395l(t)(3)(G)), as added by section 3401(i)(2) of the Pa4
tient Protection and Affordable Care Act and amended by
5 section 10319(g) of such Act, is amended—
6 (1) in clause (i)—
7 (A) by placing the subclause (II) (inserted
8 by section 10319(g)(3) of the Patient Protec9
tion and Affordable Care Act) immediately after
10 subclause (I) and, in such subclause (II), by
11 striking ‘‘and’’ at the end; and
12 (B) by striking subclause (III) and insert13
ing the following:
14 ‘‘(III) for 2014, 0.3 percentage
15 point;
16 ‘‘(IV) for each of 2015 and 2016,
17 0.2 percentage point; and
18 ‘‘(V) for each of 2017, 2018, and
19 2019, 0.75 percentage point.’’;
20 (2) by striking clause (ii); and
21 (3) by striking ‘‘(G) OTHER ADJUSTMENT.—’’
22 and all that follows through ‘‘For purposes’’ and in23
serting ‘‘(G) OTHER ADJUSTMENT.—For purposes’’
24 (and redesignating subclauses (I) through (V) as
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1 clauses (i) through (v), respectively, with appropriate
2 indentation).
3 SEC. 1106. PHYSICIAN OWNERSHIP-REFERRAL.
4 Section 1877(i) of the Social Security Act (42 U.S.C.
5 1395nn(i)), as added by section 6001(a)(3) of the Patient
6 Protection and Affordable Care Act and as amended by
7 section 10601(a) of such Act, is amended—
8 (1) in paragraph (1)(A)(i), by striking ‘‘August
9 1, 2010’’ and inserting ‘‘December 31, 2010’’; and
10 (2) in paragraph (3)—
11 (A) in subparagraph (A)(i), by striking
12 ‘‘an applicable hospital (as defined in subpara13
graph (E))’’ and inserting ‘‘a hospital that is an
14 applicable hospital (as defined in subparagraph
15 (E)) or is a high Medicaid facility described in
16 subparagraph (F)’’;
17 (B) in subparagraph (C)(iii), by inserting
18 after ‘‘date of enactment of this subsection’’ the
19 following: ‘‘(or, in the case of a hospital that
20 did not have a provider agreement in effect as
21 of such date but does have such an agreement
22 in effect on December 31, 2010, the effective
23 date of such provider agreement)’’;
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1 (C) by redesignating subparagraphs (F)
2 through (H) as subparagraphs (G) through (I),
3 respectively; and
4 (D) by inserting after subparagraph (E)
5 the following new subparagraph:
6 ‘‘(F) HIGH MEDICAID FACILITY DE7
SCRIBED.—A high Medicaid facility described in
8 this subparagraph is a hospital that—
9 ‘‘(i) is not the sole hospital in a coun10
ty;
11 ‘‘(ii) with respect to each of the 3
12 most recent years for which data are avail13
able, has an annual percent of total inpa14
tient admissions that represent inpatient
15 admissions under title XIX that is esti16
mated to be greater than such percent with
17 respect to such admissions for any other
18 hospital located in the county in which the
19 hospital is located; and
20 ‘‘(iii) meets the conditions described
21 in subparagraph (E)(iii).’’.
22 SEC. 1107. PAYMENT FOR IMAGING SERVICES.
23 Section 1848 of the Social Security Act (42 U.S.C.
24 1395w–4), as amended by section 3135(a) of the Patient
25 Protection and Affordable Care Act, is amended—
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1 (1) in subsection (b)(4)—
2 (A) in subparagraph (B), by striking ‘‘this
3 paragraph’’ and inserting ‘‘subparagraph (A)’’;
4 and
5 (B) by amending subparagraph (C) to read
6 as follows:
7 ‘‘(C) ADJUSTMENT IN IMAGING UTILIZA8
TION RATE.—With respect to fee schedules es9
tablished for 2011 and subsequent years, in the
10 methodology for determining practice expense
11 relative value units for expensive diagnostic im12
aging equipment under the final rule published
13 by the Secretary in the Federal Register on No14
vember 25, 2009 (42 CFR 410, et al.), the Sec15
retary shall use a 75 percent assumption in16
stead of the utilization rates otherwise estab17
lished in such final rule.’’; and
18 (2) in subsection (c)(2)(B)(v), by striking sub19
clauses (III), (IV), and (V) and inserting the fol20
lowing new subclause:
21 ‘‘(III) CHANGE IN UTILIZATION
22 RATE FOR CERTAIN IMAGING SERV23
ICES.—Effective for fee schedules es24
tablished beginning with 2011, re25
duced expenditures attributable to the
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1 change in the utilization rate applica2
ble to 2011, as described in subsection
3 (b)(4)(C).’’.
4 Subtitle C—Medicaid
5 SEC. 1201. FEDERAL FUNDING FOR STATES.
6 Section 1905 of the Social Security Act (42 U.S.C.
7 1396d), as amended by sections 2001(a)(3) and 10201(c)
8 of the Patient Protection and Affordable Care Act, is
9 amended—
10 (1) in subsection (y)—
11 (A) by redesignating subclause (II) of
12 paragraph (1)(B)(ii) as paragraph (5) of sub13
section (z) and realigning the left margins ac14
cordingly; and
15 (B) by striking paragraph (1) and insert16
ing the following:
17 ‘‘(1) AMOUNT OF INCREASE.—Notwithstanding
18 subsection (b), the Federal medical assistance per19
centage for a State that is one of the 50 States or
20 the District of Columbia, with respect to amounts
21 expended by such State for medical assistance for
22 newly eligible individuals described in subclause
23 (VIII) of section 1902(a)(10)(A)(i), shall be equal
24 to—
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1 ‘‘(A) 100 percent for calendar quarters in
2 2014, 2015, and 2016;
3 ‘‘(B) 95 percent for calendar quarters in
4 2017;
5 ‘‘(C) 94 percent for calendar quarters in
6 2018;
7 ‘‘(D) 93 percent for calendar quarters in
8 2019; and
9 ‘‘(E) 90 percent for calendar quarters in
10 2020 and each year thereafter.’’; and
11 (2) in subsection (z)—
12 (A) in paragraph (1), by striking ‘‘Sep13
tember 30, 2019’’ and inserting ‘‘December 31,
14 2015’’ and by striking ‘‘subsection
15 (y)(1)(B)(ii)(II)’’ and inserting ‘‘paragraph
16 (3)’’;
17 (B) by striking paragraphs (2) through (4)
18 and inserting the following:
19 ‘‘(2)(A) For calendar quarters in 2014 and
20 each year thereafter, the Federal medical assistance
21 percentage otherwise determined under subsection
22 (b) for an expansion State described in paragraph
23 (3) with respect to medical assistance for individuals
24 described in section 1902(a)(10)(A)(i)(VIII) who are
25 nonpregnant childless adults with respect to whom
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1 the State may require enrollment in benchmark cov2
erage under section 1937 shall be equal to the per3
cent specified in subparagraph (B)(i) for such year.
4 ‘‘(B)(i) The percent specified in this subpara5
graph for a State for a year is equal to the Federal
6 medical assistance percentage (as defined in the first
7 sentence of subsection (b)) for the State increased
8 by a number of percentage points equal to the tran9
sition percentage (specified in clause (ii) for the
10 year) of the number of percentage points by which—
11 ‘‘(I) such Federal medical assistance per12
centage for the State, is less than
13 ‘‘(II) the percent specified in subsection
14 (y)(1) for the year.
15 ‘‘(ii) The transition percentage specified in this
16 clause for—
17 ‘‘(I) 2014 is 50 percent;
18 ‘‘(II) 2015 is 60 percent;
19 ‘‘(III) 2016 is 70 percent;
20 ‘‘(IV) 2017 is 80 percent;
21 ‘‘(V) 2018 is 90 percent; and
22 ‘‘(VI) 2019 and each subsequent year is
23 100 percent.’’; and
24 (C) by redesignating paragraph (5) (as
25 added by paragraph (1)(A) of this section) as
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1 paragraph (3), realigning the left margins to
2 align with paragraph (2), and striking the
3 heading and all that follows through ‘‘a State
4 is’’ and inserting ‘‘A State is’’.
5 SEC. 1202. PAYMENTS TO PRIMARY CARE PHYSICIANS.
6 (a) IN GENERAL.—
7 (1) FEE-FOR-SERVICE PAYMENTS.—Section
8 1902 of the Social Security Act (42 U.S.C. 1396a),
9 as amended by section 2303(a)(2) of the Patient
10 Protection and Affordable Care Act, is amended—
11 (A) in subsection (a)(13)—
12 (i) by striking ‘‘and’’ at the end of
13 subparagraph (A);
14 (ii) by adding ‘‘and’’ at the end of
15 subparagraph (B); and
16 (iii) by adding at the end the fol17
lowing new subparagraph:
18 ‘‘(C) payment for primary care services (as
19 defined in subsection (jj)) furnished in 2013
20 and 2014 by a physician with a primary spe21
cialty designation of family medicine, general
22 internal medicine, or pediatric medicine at a
23 rate not less than 100 percent of the payment
24 rate that applies to such services and physician
25 under part B of title XVIII (or, if greater, the
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1 payment rate that would be applicable under
2 such part if the conversion factor under section
3 1848(d) for the year involved were the conver4
sion factor under such section for 2009);’’; and
5 (B) by adding at the end the following new
6 subsection:
7 ‘‘(jj) PRIMARY CARE SERVICES DEFINED.—For pur8
poses of subsection (a)(13)(C), the term ‘primary care
9 services’ means—
10 ‘‘(1) evaluation and management services that
11 are procedure codes (for services covered under title
12 XVIII) for services in the category designated Eval13
uation and Management in the Healthcare Common
14 Procedure Coding System (established by the Sec15
retary under section 1848(c)(5) as of December 31,
16 2009, and as subsequently modified); and
17 ‘‘(2) services related to immunization adminis18
tration for vaccines and toxoids for which CPT codes
19 90465, 90466, 90467, 90468, 90471, 90472, 90473,
20 or 90474 (as subsequently modified) apply under
21 such System.’’.
22 (2) UNDER MEDICAID MANAGED CARE
23 PLANS.—Section 1932(f) of such Act (42 U.S.C.
24 1396u–2(f)) is amended—
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1 (A) in the heading, by adding at the end
2 the following: ‘‘; ADEQUACY OF PAYMENT FOR
3 PRIMARY CARE SERVICES’’; and
4 (B) by inserting before the period at the
5 end the following: ‘‘and, in the case of primary
6 care services described in section
7 1902(a)(13)(C), consistent with the minimum
8 payment rates specified in such section (regard9
less of the manner in which such payments are
10 made, including in the form of capitation or
11 partial capitation)’’.
12 (b) INCREASE IN PAYMENT USING INCREASED
13 FMAP.—Section 1905 of the Social Security Act, as
14 amended by section 1004(b) of this Act and section
15 10201(c)(6) of the Patient Protection and Affordable Care
16 Act, is amended by adding at the end the following new
17 subsection:
18 ‘‘(dd) INCREASED FMAP FOR ADDITIONAL EXPEND19
ITURES FOR PRIMARY CARE SERVICES.—Notwithstanding
20 subsection (b), with respect to the portion of the amounts
21 expended for medical assistance for services described in
22 section 1902(a)(13)(C) furnished on or after January 1,
23 2013, and before January 1, 2015, that is attributable to
24 the amount by which the minimum payment rate required
25 under such section (or, by application, section 1932(f)) ex-
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1 ceeds the payment rate applicable to such services under
2 the State plan as of July 1, 2009, the Federal medical
3 assistance percentage for a State that is one of the 50
4 States or the District of Columbia shall be equal to 100
5 percent. The preceding sentence does not prohibit the pay6
ment of Federal financial participation based on the Fed7
eral medical assistance percentage for amounts in excess
8 of those specified in such sentence.’’.
9 SEC. 1203. DISPROPORTIONATE SHARE HOSPITAL PAY10
MENTS.
11 (a) IN GENERAL.—Section 1923(f) of the Social Se12
curity Act (42 U.S.C. 1396r–4(f)), as amended by sections
13 2551(a)(4) and 10201(e)(1) of the Patient Protection and
14 Affordable Care Act, is amended—
15 (1) in paragraph (6)(B)(iii), in the matter pre16
ceding subclause (I), by striking ‘‘or paragraph (7)’’;
17 and
18 (2) by striking paragraph (7) and inserting the
19 following:
20 ‘‘(7) MEDICAID DSH REDUCTIONS.—
21 ‘‘(A) REDUCTIONS.—
22 ‘‘(i) IN GENERAL.—For each of fiscal
23 years 2014 through 2020 the Secretary
24 shall effect the following reductions:
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1 ‘‘(I) REDUCTION IN DSH ALLOT2
MENTS.—The Secretary shall reduce
3 DSH allotments to States in the
4 amount specified under the DSH
5 health reform methodology under sub6
paragraph (B) for the State for the
7 fiscal year.
8 ‘‘(II) REDUCTIONS IN PAY9
MENTS.—The Secretary shall reduce
10 payments to States under section
11 1903(a) for each calendar quarter in
12 the fiscal year, in the manner speci13
fied in clause (iii), in an amount equal
14 to 1⁄4 of the DSH allotment reduction
15 under subclause (I) for the State for
16 the fiscal year.
17 ‘‘(ii) AGGREGATE REDUCTIONS.—The
18 aggregate reductions in DSH allotments
19 for all States under clause (i)(I) shall be
20 equal to—
21 ‘‘(I) $500,000,000 for fiscal year
22 2014;
23 ‘‘(II) $600,000,000 for fiscal
24 year 2015;
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1 ‘‘(III) $600,000,000 for fiscal
2 year 2016;
3 ‘‘(IV) $1,800,000,000 for fiscal
4 year 2017;
5 ‘‘(V) $5,000,000,000 for fiscal
6 year 2018;
7 ‘‘(VI) $5,600,000,000 for fiscal
8 year 2019; and
9 ‘‘(VII) $4,000,000,000 for fiscal
10 year 2020.
11 The Secretary shall distribute such aggre12
gate reductions among States in accord13
ance with subparagraph (B).
14 ‘‘(iii) MANNER OF PAYMENT REDUC15
TION.—The amount of the payment reduc16
tion under clause (i)(II) for a State for a
17 quarter shall be deemed an overpayment to
18 the State under this title to be disallowed
19 against the State’s regular quarterly draw
20 for all spending under section 1903(d)(2).
21 Such a disallowance is not subject to a re22
consideration under subsections (d) and (e)
23 of section 1116.
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1 ‘‘(iv) DEFINITION.—In this para2
graph, the term ‘State’ means the 50
3 States and the District of Columbia.
4 ‘‘(B) DSH HEALTH REFORM METHOD5
OLOGY.—The Secretary shall carry out sub6
paragraph (A) through use of a DSH Health
7 Reform methodology that meets the following
8 requirements:
9 ‘‘(i) The methodology imposes the
10 largest percentage reductions on the States
11 that—
12 ‘‘(I) have the lowest percentages
13 of uninsured individuals (determined
14 on the basis of data from the Bureau
15 of the Census, audited hospital cost
16 reports, and other information likely
17 to yield accurate data) during the
18 most recent year for which such data
19 are available; or
20 ‘‘(II) do not target their DSH
21 payments on—
22 ‘‘(aa) hospitals with high
23 volumes of Medicaid inpatients
24 (as defined in subsection
25 (b)(1)(A)); and
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1 ‘‘(bb) hospitals that have
2 high levels of uncompensated
3 care (excluding bad debt).
4 ‘‘(ii) The methodology imposes a
5 smaller percentage reduction on low DSH
6 States described in paragraph (5)(B).
7 ‘‘(iii) The methodology takes into ac8
count the extent to which the DSH allot9
ment for a State was included in the budg10
et neutrality calculation for a coverage ex11
pansion approved under section 1115 as of
12 July 31, 2009.’’.
13 (b) EXTENSION OF DSH ALLOTMENT.—Section
14 1923(f)(6)(A) of the Social Security Act (42 U.S.C.
15 1396r-4(f)(6)(A)) is amended by adding at the end the
16 following:
17 ‘‘(v) ALLOTMENT FOR 2D, 3RD, AND
18 4TH QUARTERS OF FISCAL YEAR 2012 AND
19 FOR FISCAL YEAR 2013.—Notwithstanding
20 the table set forth in paragraph (2):
21 ‘‘(I) 2D, 3RD, AND 4TH QUAR22
TERS OF FISCAL YEAR 2012.—In the
23 case of a State that has a DSH allot24
ment of $0 for the 2d, 3rd, and 4th
25 quarters of fiscal year 2012, the DSH
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1 allotment shall be $47,200,000 for
2 such quarters.
3 ‘‘(II) FISCAL YEAR 2013.—In the
4 case of a State that has a DSH allot5
ment of $0 for fiscal year 2013, the
6 DSH allotment shall be $53,100,000
7 for such fiscal year.’’.
8 SEC. 1204. FUNDING FOR THE TERRITORIES.
9 (a) IN GENERAL.—Part III of subtitle D of title I
10 of the Patient Protection and Affordable Care Act, as
11 amended by section 10104(m) of such Act, is amended
12 by inserting after section 1322 the following section:
13 ‘‘SEC. 1323. FUNDING FOR THE TERRITORIES.
14 ‘‘(a) IN GENERAL.—A territory that—
15 ‘‘(1) elects consistent with subsection (b) to es16
tablish an Exchange in accordance with part II of
17 this subtitle and establishes such an Exchange in ac18
cordance with such part shall be treated as a State
19 for purposes of such part and shall be entitled to
20 payment from the amount allocated to the territory
21 under subsection (c); or
22 ‘‘(2) does not make such election shall be enti23
tled to an increase in the dollar limitation applicable
24 to the territory under subsections (f) and (g) of sec25
tion 1108 of the Social Security Act (42 U.S.C.
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1 1308) for such period in such amount for such terri2
tory and such increase shall not be taken into ac3
count in computing any other amount under such
4 subsections.
5 ‘‘(b) TERMS AND CONDITIONS.—An election under
6 subsection (a)(1) shall—
7 ‘‘(1) not be effective unless the election is con8
sistent with a form and manner specified by the Sec9
retary and is received not later than October 1,
10 2013; and
11 ‘‘(2) be contingent upon entering into an agree12
ment between the territory and the Secretary that
13 requires that—
14 ‘‘(A) funds provided under the agreement
15 shall be used only to provide premium and cost16
sharing assistance to residents of the territory
17 obtaining health insurance coverage through the
18 Exchange; and
19 ‘‘(B) the premium and cost-sharing assist20
ance provided under such agreement shall be
21 structured in such a manner so as to prevent
22 any gap in assistance for individuals between
23 the income level at which medical assistance is
24 available through the territory’s Medicaid plan
25 under title XIX of the Social Security Act and
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1 the income level at which premium and cost2
sharing assistance is available under the agree3
ment.
4 ‘‘(c) APPROPRIATION AND ALLOCATION.—
5 ‘‘(1) APPROPRIATION.—Out of any funds in the
6 Treasury not otherwise appropriated, there is appro7
priated for purposes of payment pursuant to sub8
section (a) $1,000,000,000, to be available during
9 the period beginning with 2014 and ending with
10 2019.
11 ‘‘(2) ALLOCATION.—The Secretary shall allo12
cate the amount appropriated under paragraph (1)
13 among the territories for purposes of carrying out
14 this section as follows:
15 ‘‘(A) For Puerto Rico, $925,000,000.
16 ‘‘(B) For another territory, the portion of
17 $75,000,000 specified by the Secretary.’’.
18 (b) MEDICAID FUNDING.—
19 (1) INCREASE IN FUNDING CAPS.—Section
20 1108(g) of the Social Security Act (42 U.S.C.
21 1308(g)), as amended by section 2005(a) of the Pa22
tient Protection and Affordable Care Act, is amend23
ed—
24 (A) in paragraph (2), by inserting ‘‘and
25 section 1323(a)(2) of the Patient Protection
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1 and Affordable Care Act’’ after ‘‘subject to’’;
2 and
3 (B) by striking paragraph (5) and insert4
ing the following:
5 ‘‘(5) ADDITIONAL INCREASE.—The Secretary
6 shall increase the amounts otherwise determined
7 under this subsection for Puerto Rico, the Virgin Is8
lands, Guam, the Northern Mariana Islands, and
9 American Samoa (after the application of subsection
10 (f) and the preceding paragraphs of this subsection)
11 for the period beginning July 1, 2011, and ending
12 on September 30, 2019, by such amounts that the
13 total additional payments under title XIX to such
14 territories equals $6,300,000,000 for such period.
15 The Secretary shall increase such amounts in pro16
portion to the amounts applicable to such territories
17 under this subsection and subsection (f) on the date
18 of enactment of this paragraph.’’.
19 (2) DISREGARD OF PAYMENTS; INCREASED
20 FMAP.—Section 2005 of the Patient Protection and
21 Affordable Care Act is amended—
22 (A) by repealing subsection (b) (and the
23 amendments made by that subsection) and sec24
tion 1108(g)(4) of the Social Security Act shall
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1 be applied as if such amendments had never
2 been enacted; and
3 (B) in subsection (c)(2), by striking ‘‘Jan4
uary’’ and inserting ‘‘July’’.
5 SEC. 1205. DELAY IN COMMUNITY FIRST CHOICE OPTION.
6 Section 1915(k)(1) of the Social Security Act (42
7 U.S.C. 1396n(k)), as added by section 2401 of the Patient
8 Protection and Affordable Care Act, is amended by strik9
ing ‘‘October 1, 2010’’ and inserting ‘‘October 1, 2011’’.
10 SEC. 1206. DRUG REBATES FOR NEW FORMULATIONS OF
11 EXISTING DRUGS.
12 (a) TREATMENT OF NEW FORMULATIONS.—Sub13
paragraph (C) of section 1927(c)(2) of the Social Security
14 Act (42 U.S.C. 1396r–8(c)(2)), as added by section
15 2501(d) of the Patient Protection and Affordable Care
16 Act, is amended to read as follows:
17 ‘‘(C) TREATMENT OF NEW FORMULA18
TIONS.—In the case of a drug that is a line ex19
tension of a single source drug or an innovator
20 multiple source drug that is an oral solid dos21
age form, the rebate obligation with respect to
22 such drug under this section shall be the
23 amount computed under this section for such
24 new drug or, if greater, the product of—
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1 ‘‘(i) the average manufacturer price of
2 the line extension of a single source drug
3 or an innovator multiple source drug that
4 is an oral solid dosage form;
5 ‘‘(ii) the highest additional rebate
6 (calculated as a percentage of average
7 manufacturer price) under this section for
8 any strength of the original single source
9 drug or innovator multiple source drug;
10 and
11 ‘‘(iii) the total number of units of
12 each dosage form and strength of the line
13 extension product paid for under the State
14 plan in the rebate period (as reported by
15 the State).
16 In this subparagraph, the term ‘line extension’
17 means, with respect to a drug, a new formula18
tion of the drug, such as an extended release
19 formulation.’’.
20 (b) EFFECTIVE DATE.—The amendment made by
21 subsection (a) shall take effect as if included in the enact22
ment of the Patient Protection and Affordable Care Act.
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1 Subtitle D—Reducing Fraud,
2 Waste, and Abuse
3 SEC. 1301. COMMUNITY MENTAL HEALTH CENTERS.
4 (a) IN GENERAL.—Section 1861(ff)(3)(B) of the So5
cial Security Act (42 U.S.C. 1395x(ff)(3)(B)) is amend6
ed—
7 (1) in clause (ii), by striking ‘‘and’’ at the end;
8 (2) by redesignating clause (iii) as clause (iv);
9 and
10 (3) by inserting after clause (ii) the following:
11 ‘‘(iii) provides a significant share of its services
12 to individuals who are not eligible for benefits under
13 this title; and’’.
14 (b) RESTRICTION.—Section 1861(ff)(3)(A) of such
15 Act (42 U.S.C. 1395x(ff)(3)(A)) is amended by inserting
16 ‘‘other than in an individual’s home or in an inpatient or
17 residential setting’’ before the period.
18 (c) EFFECTIVE DATE.—The amendments made by
19 this section shall apply to items and services furnished on
20 or after the first day of the first calendar quarter that
21 begins at least 12 months after the date of the enactment
22 of this Act.
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1 SEC. 1302. MEDICARE PREPAYMENT MEDICAL REVIEW LIM2
ITATIONS .
3 Section 1874A(h) of the Social Security Act (42
4 U.S.C. 1395w–3a(h)) is repealed.
5 SEC. 1303. CMS–IRS DATA MATCH TO IDENTIFY FRAUDU6
LENT PROVIDERS.
7 (a) AUTHORITY TO DISCLOSE RETURN INFORMATION
8 CONCERNING OUTSTANDING TAX DEBTS FOR PURPOSES
9 OF ENHANCING MEDICARE PROGRAM INTEGRITY.—
10 (1) IN GENERAL.—Section 6103(l) of the Inter11
nal Revenue Code of 1986 is amended by adding at
12 the end the following new paragraph:
13 ‘‘(22) DISCLOSURE OF RETURN INFORMATION
14 TO DEPARTMENT OF HEALTH AND HUMAN SERVICES
15 FOR PURPOSES OF ENHANCING MEDICARE PROGRAM
16 INTEGRITY.—
17 ‘‘(A) IN GENERAL.—The Secretary shall,
18 upon written request from the Secretary of
19 Health and Human Services, disclose to officers
20 and employees of the Department of Health
21 and Human Services return information with
22 respect to a taxpayer who has applied to enroll,
23 or reenroll, as a provider of services or supplier
24 under the Medicare program under title XVIII
25 of the Social Security Act. Such return infor26
mation shall be limited to—
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1 ‘‘(i) the taxpayer identity information
2 with respect to such taxpayer;
3 ‘‘(ii) the amount of the seriously de4
linquent tax debt owed by that taxpayer;
5 and
6 ‘‘(iii) the taxable year to which the se7
riously delinquent tax debt pertains.
8 ‘‘(B) RESTRICTION ON DISCLOSURE.—Re9
turn information disclosed under subparagraph
10 (A) may be used by officers and employees of
11 the Department of Health and Human Services
12 for the purposes of, and to the extent necessary
13 in, establishing the taxpayer’s eligibility for en14
rollment or reenrollment in the Medicare pro15
gram, or in any administrative or judicial pro16
ceeding relating to, or arising from, a denial of
17 such enrollment or reenrollment, or in deter18
mining the level of enhanced oversight to be ap19
plied with respect to such taxpayer pursuant to
20 section 1866(j)(3) of the Social Security Act.
21 ‘‘(C) SERIOUSLY DELINQUENT TAX
22 DEBT.—For purposes of this paragraph, the
23 term ‘seriously delinquent tax debt’ means an
24 outstanding debt under this title for which a
25 notice of lien has been filed pursuant to section
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1 6323, but the term does not include a debt that
2 is being paid in a timely manner pursuant to an
3 agreement under section 6159 or 7122, or a
4 debt with respect to which a collection due proc5
ess hearing under section 6330, or relief under
6 subsection (a), (b), or (f) of section 6015, is re7
quested or pending.’’.
8 (2) CONFORMING AMENDMENTS.—Section
9 6103(p)(4) of such Code, as amended by sections
10 1414 and 3308 the Patient Protection and Afford11
able Care Act, in the matter preceding subparagraph
12 (A) and in subparagraph (F)(ii), is amended by
13 striking ‘‘or (17)’’ and inserting ‘‘(17), or (22)’’
14 each place it appears.
15 (b) SECRETARY’S AUTHORITY TO USE INFORMATION
16 FROM THE DEPARTMENT OF TREASURY IN MEDICARE
17 ENROLLMENTS AND REENROLLMENTS.—Section
18 1866(j)(2) of the Social Security Act (42 U.S.C.
19 1395cc(j)), as inserted by section 6401(a) of the Patient
20 Protection and Affordable Care Act, is further amended—
21 (1) by redesignating subparagraph (E) as sub22
paragraph (F); and
23 (2) by inserting after subparagraph (D) the fol24
lowing new subparagraph:
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1 ‘‘(E) USE OF INFORMATION FROM THE
2 DEPARTMENT OF TREASURY CONCERNING TAX
3 DEBTS.—In reviewing the application of a pro4
vider of services or supplier to enroll or reenroll
5 under the program under this title, the Sec6
retary shall determine, on the basis of informa7
tion supplied by the Secretary of the Treasury
8 pursuant to section 6103(l)(22) of the Internal
9 Revenue Code of 1986, whether to deny such
10 application or to apply enhanced oversight to
11 such provider of services or supplier pursuant
12 to paragraph (3) if the Secretary determines
13 such provider of services or supplier owes such
14 a debt.’’.
15 (c) AUTHORITY TO ADJUST PAYMENTS OF PRO16
VIDERS OF SERVICES AND SUPPLIERS WITH THE SAME
17 TAX IDENTIFICATION NUMBER FOR MEDICARE OBLIGA18
TIONS.—Section 1866(j)(5) of the Social Security Act (42
19 U.S.C. 1395cc(j)(5)), as inserted by section 6401(a) of the
20 Patient Protection and Affordable Care Act, is amended—
21 (1) in the paragraph heading, by striking
22 ‘‘PAST-DUE’’ and inserting ‘‘MEDICARE’’;
23 (2) in subparagraph (A), by striking ‘‘past-due
24 obligations described in subparagraph (B)(ii) of an’’
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1 and inserting ‘‘amount described in subparagraph
2 (B)(ii) due from such’’; and
3 (3) in subparagraph (B)(ii), by striking ‘‘a
4 past-due obligation’’ and inserting ‘‘an amount that
5 is more than the amount required to be paid’’.
6 SEC. 1304. FUNDING TO FIGHT FRAUD, WASTE, AND ABUSE.
7 (a) FUNDING TO FIGHT FRAUD, WASTE, AND
8 ABUSE.—
9 (1) IN GENERAL.—Section 1817(k) of the So10
cial Security Act (42 U.S.C. 1395i(k)), as amended
11 by section 6402(i) of the Patient Protection and Af12
fordable Care Act, is further amended—
13 (A) by adding at the end the following new
14 paragraph:
15 ‘‘(8) ADDITIONAL FUNDING.—
16 ‘‘(A) IN GENERAL.—In addition to the
17 funds otherwise appropriated to the Account
18 from the Trust Fund under paragraphs (3)(C)
19 and (4)(A) and for purposes described in para20
graphs (3)(C) and (4)(A), there are hereby ap21
propriated to such Account from such Trust
22 Fund the following additional amounts:
23 ‘‘(i) For fiscal year 2011,
24 $95,000,000.
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1 ‘‘(ii) For fiscal year 2012,
2 $55,000,000.
3 ‘‘(iii) For each of fiscal years 2013
4 and 2014, $30,000,000.
5 ‘‘(iv) For each of fiscal years 2015
6 and 2016, $20,000,000.
7 ‘‘(B) ALLOCATION.—The funds appro8
priated under this paragraph shall be allocated
9 in the same proportion as the total funding ap10
propriated with respect to paragraphs (3)(A)
11 and (4)(A) was allocated with respect to fiscal
12 year 2010, and shall be available without fur13
ther appropriation until expended.’’; and
14 (B) in paragraph (4)(A), by inserting ‘‘for
15 activities described in paragraph (3)(C) and’’
16 after ‘‘necessary’’.
17 (b) MEDICAID INTEGRITY PROGRAM.—Section
18 1936(e)(1) of such Act (42 U.S.C. 1396-u6(e)(1)) is
19 amended—
20 (1) in subparagraph (B), by striking at the end
21 ‘‘and’’;
22 (2) in subparagraph (C)—
23 (A) by striking ‘‘for each fiscal year there24
after’’ and inserting ‘‘for each of fiscal years
25 2009 and 2010’’; and
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1 (B) by striking the period and inserting ‘‘;
2 and’’; and
3 (3) by adding at the end the following new sub4
paragraph:
5 ‘‘(D) for each fiscal year after fiscal year
6 2010, the amount appropriated under this para7
graph for the previous fiscal year, increased by
8 the percentage increase in the consumer price
9 index for all urban consumers (all items; United
10 States city average) over the previous year.’’.
11 SEC. 1305. 90-DAY PERIOD OF ENHANCED OVERSIGHT FOR
12 INITIAL CLAIMS OF DME SUPPLIERS.
13 Section 1866(j), as amended by section 6401 of the
14 Patient Protection and Affordable Care Act, is further
15 amended—
16 (1) by redesignating paragraphs (4) through
17 (7) as paragraphs (5) through (8), respectively; and
18 (2) by inserting after paragraph (3) the fol19
lowing new paragraph:
20 ‘‘(4) 90-DAY PERIOD OF ENHANCED OVERSIGHT
21 FOR INITIAL CLAIMS OF DME SUPPLIERS.—For peri22
ods beginning after January 1, 2011, if the Sec23
retary determines that there is a significant risk of
24 fraudulent activity among suppliers of durable med25
ical equipment, in the case of a supplier of durable
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1 medical equipment who is within a category or geo2
graphic area under title XVIII identified pursuant to
3 such determination and who is initially enrolling
4 under such title, the Secretary shall, notwith5
standing sections 1816(c), 1842(c), and 1869(a)(2),
6 withhold payment under such title with respect to
7 durable medical equipment furnished by such sup8
plier during the 90-day period beginning on the date
9 of the first submission of a claim under such title
10 for durable medical equipment furnished by such
11 supplier.’’.
12 Subtitle E—Provisions Relating to
13 Revenue
14 SEC. 1401. HIGH-COST PLAN EXCISE TAX.
15 (a) IN GENERAL.—Section 4980I of the Internal
16 Revenue Code of 1986, as added by section 9001 of the
17 Patient Protection and Affordable Care Act and amended
18 by section 10901 of such Act, is amended—
19 (1) in subsection (b)(3)(B)—
20 (A) by striking ‘‘The annual’’ and insert21
ing the following:
22 ‘‘(i) IN GENERAL.—Except as pro23
vided in clause (ii), the annual’’, and
24 (B) by adding at the end the following new
25 clause:
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1 ‘‘(ii) MULTIEMPLOYER PLAN COV2
ERAGE.—Any coverage provided under a
3 multiemployer plan (as defined in section
4 414(f)) shall be treated as coverage other
5 than self-only coverage.’’,
6 (2) in subsection (b)(3)(C)—
7 (A) by striking ‘‘Except as provided in
8 subparagraph (D)—’’
9 (B) in clause (i)—
10 (i) by striking ‘‘2013’’ each place it
11 appears in the heading and the text and
12 inserting ‘‘2018’’,
13 (ii) by striking ‘‘$8,500’’ in subclause
14 (I) and inserting ‘‘$10,200 multiplied by
15 the health cost adjustment percentage (de16
termined by only taking into account self17
only coverage)’’, and
18 (iii) by striking ‘‘$23,000’’ in sub19
clause (II) and inserting ‘‘$27,500 multi20
plied by the health cost adjustment per21
centage (determined by only taking into
22 account coverage other than self-only cov23
erage)’’,
24 (C) by redesignating clauses (ii) and (iii)
25 as clauses (iv) and (v), respectively, and by in-
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1 serting after clause (i) the following new
2 clauses:
3 ‘‘(ii) HEALTH COST ADJUSTMENT
4 PERCENTAGE.—For purposes of clause (i),
5 the health cost adjustment percentage is
6 equal to 100 percent plus the excess (if
7 any) of—
8 ‘‘(I) the percentage by which the
9 per employee cost for providing cov10
erage under the Blue Cross/Blue
11 Shield standard benefit option under
12 the Federal Employees Health Bene13
fits Plan for plan year 2018 (deter14
mined by using the benefit package
15 for such coverage in 2010) exceeds
16 such cost for plan year 2010, over
17 ‘‘(II) 55 percent.
18 ‘‘(iii) AGE AND GENDER ADJUST19
MENT.—
20 ‘‘(I) IN GENERAL.—The amount
21 determined under subclause (I) or (II)
22 of clause (i), whichever is applicable,
23 for any taxable period shall be in24
creased by the amount determined
25 under subclause (II).
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1 ‘‘(II) AMOUNT DETERMINED.—
2 The amount determined under this
3 subclause is an amount equal to the
4 excess (if any) of—
5 ‘‘(aa) the premium cost of
6 the Blue Cross/Blue Shield
7 standard benefit option under the
8 Federal Employees Health Bene9
fits Plan for the type of coverage
10 provided such individual in such
11 taxable period if priced for the
12 age and gender characteristics of
13 all employees of the individual’s
14 employer, over
15 ‘‘(bb) that premium cost for
16 the provision of such coverage
17 under such option in such taxable
18 period if priced for the age and
19 gender characteristics of the na20
tional workforce.’’.
21 (D) in clause (iv), as redesignated by sub22
paragraph (C)—
23 (i) by inserting ‘‘covered by the plan’’
24 after ‘‘whose employees’’, and
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1 (ii) by striking subclauses (I) and (II)
2 and inserting the following:
3 ‘‘(I) the dollar amount in clause
4 (i)(I) shall be increased by $1,650,
5 and
6 ‘‘(II) the dollar amount in clause
7 (i)(II) shall be increased by $3,450,’’,
8 and
9 (E) in clause (v), as redesignated by sub10
paragraph (C)—
11 (i) by striking ‘‘2013’’ and inserting
12 ‘‘2018’’,
13 (ii) by striking ‘‘clauses (i) and (ii)’’
14 and inserting ‘‘clauses (i) (after the appli15
cation of clause (ii)) and (iv)’’, and
16 (iii) by inserting ‘‘in the case of deter17
minations for calendar years beginning be18
fore 2020’’ after ‘‘1 percentage point’’ in
19 subclause (II) thereof,
20 (3) by striking subparagraph (D) of subsection
21 (b)(3),
22 (4) in subsection (d)(1)(B), by redesignating
23 clause (ii) as clause (iii) and by inserting after
24 clause (i) the following new clause:
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1 ‘‘(ii) any coverage under a separate
2 policy, certificate, or contract of insurance
3 which provides benefits substantially all of
4 which are for treatment of the mouth (in5
cluding any organ or structure within the
6 mouth) or for treatment of the eye, or’’,
7 and
8 (5) in subsection (d), by adding at the end the
9 following new paragraph:
10 ‘‘(3) EMPLOYEE.—The term ‘employee’ includes
11 any former employee, surviving spouse, or other pri12
mary insured individual.’’.
13 (b) EFFECTIVE DATES.—
14 (1) Section 9001(c) of the Patient Protection
15 and Affordable Care Act is amended by striking
16 ‘‘2012’’ and inserting ‘‘2017’’.
17 (2) Section 10901(c) of the Patient Protection
18 and Affordable Care Act is amended by striking
19 ‘‘2012’’ and inserting ‘‘2017’’.
20 SEC. 1402. MEDICARE TAX.
21 (a) INVESTMENT INCOME.—
22 (1) IN GENERAL.—Subtitle A of the Internal
23 Revenue Code of 1986 is amended by inserting after
24 chapter 2 the following new chapter:
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1 ‘‘CHAPTER 2A—MEDICARE TAX
‘‘Sec. 1411. Imposition of tax.
2 ‘‘SEC. 1411. IMPOSITION OF TAX.
3 ‘‘(a) IN GENERAL.—Except as provided in subsection
4 (e)—
5 ‘‘(1) APPLICATION TO INDIVIDUALS.—In the
6 case of an individual, there is hereby imposed (in ad7
dition to any other tax imposed by this subtitle) for
8 each taxable year a tax equal to 3.8 percent of the
9 lesser of—
10 ‘‘(A) net investment income for such tax11
able year, or
12 ‘‘(B) the excess (if any) of—
13 ‘‘(i) the modified adjusted gross in14
come for such taxable year, over
15 ‘‘(ii) the threshold amount.
16 ‘‘(2) APPLICATION TO ESTATES AND TRUSTS.—
17 In the case of an estate or trust, there is hereby im18
posed (in addition to any other tax imposed by this
19 subtitle) for each taxable year a tax of 3.8 percent
20 of the lesser of—
21 ‘‘(A) the undistributed net investment in22
come for such taxable year, or
23 ‘‘(B) the excess (if any) of—
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1 ‘‘(i) the adjusted gross income (as de2
fined in section 67(e)) for such taxable
3 year, over
4 ‘‘(ii) the dollar amount at which the
5 highest tax bracket in section 1(e) begins
6 for such taxable year.
7 ‘‘(b) THRESHOLD AMOUNT.—For purposes of this
8 chapter, the term ‘threshold amount’ means—
9 ‘‘(1) in the case of a taxpayer making a joint
10 return under section 6013 or a surviving spouse (as
11 defined in section 2(a)), $250,000,
12 ‘‘(2) in the case of a married taxpayer (as de13
fined in section 7703) filing a separate return, 1⁄2 of
14 the dollar amount determined under paragraph (1),
15 and
16 ‘‘(3) in any other case, $200,000.
17 ‘‘(c) NET INVESTMENT INCOME.—For purposes of
18 this chapter—
19 ‘‘(1) IN GENERAL.—The term ‘net investment
20 income’ means the excess (if any) of—
21 ‘‘(A) the sum of—
22 ‘‘(i) gross income from interest, divi23
dends, annuities, royalties, and rents, other
24 than such income which is derived in the
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1 ordinary course of a trade or business not
2 described in paragraph (2),
3 ‘‘(ii) other gross income derived from
4 a trade or business described in paragraph
5 (2), and
6 ‘‘(iii) net gain (to the extent taken
7 into account in computing taxable income)
8 attributable to the disposition of property
9 other than property held in a trade or
10 business not described in paragraph (2),
11 over
12 ‘‘(B) the deductions allowed by this sub13
title which are properly allocable to such gross
14 income or net gain.
15 ‘‘(2) TRADES AND BUSINESSES TO WHICH TAX
16 APPLIES.—A trade or business is described in this
17 paragraph if such trade or business is—
18 ‘‘(A) a passive activity (within the meaning
19 of section 469) with respect to the taxpayer, or
20 ‘‘(B) a trade or business of trading in fi21
nancial instruments or commodities (as defined
22 in section 475(e)(2)).
23 ‘‘(3) INCOME ON INVESTMENT OF WORKING
24 CAPITAL SUBJECT TO TAX.—A rule similar to the
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1 rule of section 469(e)(1)(B) shall apply for purposes
2 of this subsection.
3 ‘‘(4) EXCEPTION FOR CERTAIN ACTIVE INTER4
ESTS IN PARTNERSHIPS AND S CORPORATIONS.—In
5 the case of a disposition of an interest in a partner6
ship or S corporation—
7 ‘‘(A) gain from such disposition shall be
8 taken into account under clause (iii) of para9
graph (1)(A) only to the extent of the net gain
10 which would be so taken into account by the
11 transferor if all property of the partnership or
12 S corporation were sold for fair market value
13 immediately before the disposition of such inter14
est, and
15 ‘‘(B) a rule similar to the rule of subpara16
graph (A) shall apply to a loss from such dis17
position.
18 ‘‘(5) EXCEPTION FOR DISTRIBUTIONS FROM
19 QUALIFIED PLANS.—The term ‘net investment in20
come’ shall not include any distribution from a plan
21 or arrangement described in section 401(a), 403(a),
22 403(b), 408, 408A, or 457(b).
23 ‘‘(6) SPECIAL RULE.—Net investment income
24 shall not include any item taken into account in de-
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1 termining self-employment income for such taxable
2 year on which a tax is imposed by section 1401(b).
3 ‘‘(d) MODIFIED ADJUSTED GROSS INCOME.—For
4 purposes of this chapter, the term ‘modified adjusted gross
5 income’ means adjusted gross income increased by the ex6
cess of—
7 ‘‘(1) the amount excluded from gross income
8 under section 911(a)(1), over
9 ‘‘(2) the amount of any deductions (taken into
10 account in computing adjusted gross income) or ex11
clusions disallowed under section 911(d)(6) with re12
spect to the amounts described in paragraph (1).
13 ‘‘(e) NONAPPLICATION OF SECTION.—This section
14 shall not apply to—
15 ‘‘(1) a nonresident alien, or
16 ‘‘(2) a trust all of the unexpired interests in
17 which are devoted to one or more of the purposes
18 described in section 170(c)(2)(B).’’.
19 (2) ESTIMATED TAXES.—Section 6654 of the
20 Internal Revenue Code of 1986 is amended—
21 (A) in subsection (a), by striking ‘‘and the
22 tax under chapter 2’’ and inserting ‘‘the tax
23 under chapter 2, and the tax under chapter
24 2A’’, and
25 (B) in subsection (f)—
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1 (i) by striking ‘‘minus’’ at the end of
2 paragraph (2) and inserting ‘‘plus’’, and
3 (ii) by redesignating paragraph (3) as
4 paragraph (4) and inserting after para5
graph (2) the following new paragraph:
6 ‘‘(3) the taxes imposed by chapter 2A, minus’’.
7 (3) FEDERAL SUPPLEMENTARY MEDICAL IN8
SURANCE TRUST FUND.—Section 1841(a) of such
9 Act (42 U.S.C. 1395t(a)) is amended by adding at
10 the end the following: ‘‘There are hereby appro11
priated to the Trust Fund, out of any moneys in the
12 Treasury not otherwise appropriated, amounts equiv13
alent to 100 per centum of the taxes imposed by
14 1411 of the Internal Revenue Code of 1986 with re15
spect to income described in such section and re16
ported to the Secretary of the Treasury or the Sec17
retary’s delegate on tax returns under subtitle F of
18 such Code, as determined by the Secretary of the
19 Treasury by applying the applicable rate of tax
20 under such section to such income. The amounts ap21
propriated by the preceding sentence shall be trans22
ferred from time to time from the general fund of
23 the Treasury to the Trust Fund, such amounts to be
24 determined on the basis of estimates by the Sec25
retary of the Treasury of the taxes, specified in the
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1 preceding sentence, paid to or deposited into the
2 Treasury; and proper adjustments shall be made in
3 amounts subsequently transferred to the extent prior
4 estimates were in excess of or were less than the
5 taxes specified in such sentence.’’.
6 (4) CLERICAL AMENDMENT.—The table of
7 chapters for subtitle A of chapter 1 of the Internal
8 Revenue Code of 1986 is amended by inserting after
9 the item relating to chapter 2 the following new
10 item:
‘‘CHAPTER 2A—MEDICARE TAX’’.
11 (5) EFFECTIVE DATES.—The amendments
12 made by this subsection shall apply to taxable years
13 beginning after December 31, 2012.
14 (b) EARNED INCOME.—
15 (1) THRESHOLD.—
16 (A) FICA.—Paragraph (2) of section
17 3101(b) of the Internal Revenue Code of 1986,
18 as added by section 9015 of the Patient Protec19
tion and Affordable Care Act and amended by
20 section 10906 of such Act, is amended by strik21
ing ‘‘and’’ at the end of subparagraph (A), by
22 redesignating subparagraph (B) as subpara23
graph (C), and by inserting after subparagraph
24 (A) the following new subparagraph:
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1 ‘‘(B) in the case of a married taxpayer (as
2 defined in section 7703) filing a separate re3
turn, 1⁄2 of the dollar amount determined under
4 subparagraph (A), and’’.
5 (B) SECA.—Section 1401(b)(2) of the In6
ternal Revenue Code of 1986, as added by sec7
tion 9015 of the Patient Protection and Afford8
able Care Act and amended by section 10906 of
9 such Act, is amended—
10 (i) in subparagraph (A), by striking
11 ‘‘and’’ at the end of clause (i), by redesig12
nating clause (ii) as clause (iii), and by in13
serting after clause (i) the following new
14 clause:
15 ‘‘(ii) in the case of a married taxpayer
16 (as defined in section 7703) filing a sepa17
rate return, 1⁄2 of the dollar amount deter18
mined under clause (i), and’’, and
19 (ii) in subparagraph (B), by striking
20 ‘‘under clauses (i) and (ii)’’ and inserting
21 ‘‘under clause (i), (ii), or (iii) (whichever is
22 applicable)’’.
23 (2) ESTIMATED TAXES.—Section 6654 of the
24 Internal Revenue Code of 1986 is amended by redes25
ignating subsection (m) as subsection (n) and by in-
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1 serting after subsection (l) the following new sub2
section:
3 ‘‘(m) SPECIAL RULE FOR MEDICARE TAX.—For pur4
poses of this section, the tax imposed under section
5 3101(b)(2) (to the extent not withheld) shall be treated
6 as a tax imposed under chapter 2.’’.
7 (3) EFFECTIVE DATE.—The amendments made
8 by this subsection shall apply with respect to remu9
neration received, and taxable years beginning after,
10 December 31, 2012.
11 SEC. 1403. DELAY OF LIMITATION ON HEALTH FLEXIBLE
12 SPENDING ARRANGEMENTS UNDER CAFE13
TERIA PLANS.
14 (a) IN GENERAL.—Section 10902(b) of the Patient
15 Protection and Affordable Care Act is amended by strik16
ing ‘‘December 31, 2010’’ and inserting ‘‘December 31,
17 2012’’.
18 (b) INFLATION ADJUSTMENT.—Paragraph (2) of sec19
tion 125(i) of the Internal Revenue Code of 1986, as
20 added by section 9005 of the Patient Protection and Af21
fordable Care Act and amended by section 10902 of such
22 Act, is amended—
23 (1) in the matter preceding subparagraph (A),
24 by striking ‘‘December 31, 2011’’ and inserting
25 ‘‘December 31, 2013’’, and
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1 (2) in subparagraph (B), by striking ‘‘2010’’
2 and inserting ‘‘2012’’.
3 SEC. 1404. BRAND NAME PHARMACEUTICALS.
4 (a) IN GENERAL.—Section 9008 of the Patient Pro5
tection and Affordable Care Act is amended—
6 (1) in subsection (a)(1), by striking ‘‘2009’’ and
7 inserting ‘‘2010’’,
8 (2) in subsection (b)—
9 (A) by striking ‘‘$2,300,000,000’’ in para10
graph (1) and inserting ‘‘the applicable
11 amount’’, and
12 (B) by adding at the end the following new
13 paragraph:
14 ‘‘(4) APPLICABLE AMOUNT.—For purposes of
15 paragraph (1), the applicable amount shall be deter16
mined in accordance with the following table:
‘‘Calendar year Applicable
amount
2011 …………………………………………………………….. $2,500,000,000
2012 …………………………………………………………….. $3,000,000,000
2013 …………………………………………………………….. $3,000,000,000
2014 …………………………………………………………….. $3,000,000,000
2015 …………………………………………………………….. $3,000,000,000
2016 …………………………………………………………….. $3,000,000,000
2017 …………………………………………………………….. $3,500,000,000.
2018 …………………………………………………………….. $4,200,000,000
2019 and thereafter ……………………………………….. $2,800,000,000.’’,
17 (3) in subsection (d), by adding at the end the
18 following new paragraph:
19 ‘‘(3) JOINT AND SEVERAL LIABILITY.—If more
20 than one person is liable for payment of the fee
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1 under subsection (a) with respect to a single covered
2 entity by reason of the application of paragraph (2),
3 all such persons shall be jointly and severally liable
4 for payment of such fee.’’, and
5 (4) by striking subsection (j) and inserting the
6 following new subsection:
7 ‘‘(j) EFFECTIVE DATE.—This section shall apply to
8 calendar years beginning after December 31, 2010.’’.
9 (b) EFFECTIVE DATE.—The amendments made by
10 this section shall take effect as if included in section 9008
11 of the Patient Protection and Affordable Care Act.
12 SEC. 1405. EXCISE TAX ON MEDICAL DEVICE MANUFACTUR13
ERS.
14 (a) IN GENERAL.—Chapter 32 of the Internal Rev15
enue Code of 1986 is amended—
16 (1) by inserting after subchapter D the fol17
lowing new subchapter:
18 ‘‘Subchapter E—Medical Devices
‘‘Sec. 4191. Medical devices.
19 ‘‘SEC. 4191. MEDICAL DEVICES.
20 ‘‘(a) IN GENERAL.—There is hereby imposed on the
21 sale of any taxable medical device by the manufacturer,
22 producer, or importer a tax equal to 2.9 percent of the
23 price for which so sold.
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1 ‘‘(b) TAXABLE MEDICAL DEVICE.—For purposes of
2 this section—
3 ‘‘(1) IN GENERAL.—The term ‘taxable medical
4 device’ means any device (as defined in section
5 201(h) of the Federal Food, Drug, and Cosmetic
6 Act) intended for humans.
7 ‘‘(2) EXEMPTIONS.—Such term shall not in8
clude—
9 ‘‘(A) devices classified in class I under sec10
tion 513 of such Act,
11 ‘‘(B) eyeglasses,
12 ‘‘(C) contact lenses,
13 ‘‘(D) hearing aids, and
14 ‘‘(E) any other medical device determined
15 by the Secretary to be of a type which is gen16
erally purchased by the general public at retail
17 for individual use.’’, and
18 (2) by inserting after the item relating to sub19
chapter D in the table of subchapters for such chap20
ter the following new item:
‘‘SUBCHAPTER E. MEDICAL DEVICES.’’.
21 (b) CERTAIN EXEMPTIONS NOT TO APPLY.—
22 (1) Section 4221(a) of the Internal Revenue
23 Code of 1986 is amended by adding at the end the
24 following new sentence: ‘‘In the case of the tax im-
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1 posed by section 4191, paragraphs (3), (4), (5), and
2 (6) shall not apply.’’.
3 (2) Section 6416(b)(2) of such Code is amend4
ed by adding at the end the following: ‘‘In the case
5 of the tax imposed by section 4191, subparagraphs
6 (B), (C), (D), and (E) shall not apply.’’.
7 (c) EFFECTIVE DATE.—The amendments made by
8 this section shall apply to sales after December 31, 2012.
9 (d) REPEAL OF SECTION 9009 OF THE PATIENT
10 PROTECTION AND AFFORDABLE CARE ACT.—Section
11 9009 of the Patient Protection and Affordable Care Act,
12 as amended by section 10904 of such Act, is repealed ef13
fective as of the date of enactment of that Act.
14 SEC. 1406. HEALTH INSURANCE PROVIDERS.
15 (a) IN GENERAL.—Section 9010 of the Patient Pro16
tection and Affordable Care Act, as amended by section
17 10905 of such Act, is amended—
18 (1) in subsection (a)(1), by striking ‘‘2010’’ and
19 inserting ‘‘2013’’,
20

GOP_Gal, Please, for your own sanity you must really get a job. What a blatant waste of time and space. We can all find the healthcare bill on our own. Find a real cause and you will be so much happier. You are probably a lovely person who would flourish in the right environment.

VERY Sorry GOP_Gal, My comment should have been left for ANONYMOUS….

we must all wish anonymous the very best.

anonymous wishing you the very best….

Does anyone know what is going on with the “bogus”
Tea Party being held at the Kelly dealership. Exactly what is going on?

Probably BOGUS stuff went on, as it was indeed a bogus t party – i can’t even bring myself to continue to call his event a t party, because it was not an official tea party — it was a total play on words and used as a business approach as a gain in this election. Shame shame shame on them! Mr. K are you a true tea party member? If so, how many tea party events to DC have you attended, AND when did you become a member. And if your membership was recent, why now just a couple of weeks before the election? Why now your sudden interest in affliating yourself with tea parties? Hmmmmmmmm, people need to ask themselves if there may be a motive here?

LM you sound a lot like a Country Clubber talkin’ about membership in t-parties and good ‘ol boy networks who apparently count the number of events you have to attend to be in the in-crowd.
Since when did T-Parties become exclusive? Or the domain of T-Party membership so hierarchical and rigid…seems like an oxymoron to me to begin talking about true and false T-partiers since anyone who wants to throw a T-party can by definition be T-Party’n.
Stop with elitist tact, unless you’re going to go even further and ask the real slim shady to please stand up.
And if Clayton stands-up, he is the real Slim Shady, the self-appointed grand pu-ba of tea parties, and only he can deem a t-party true. Now I’d like see him dance.

I really don’t care who wins the 3rd seat I just want to see kelly sitting in a rocking chair talking about his days at college and football..at 61 he is ready for that don’t send an old man to dc

Don’t forget Clayton after the primary! This November, write in “Clayton Grabb” for a Christian conservative leader in the PA-3rd. tell everyone at your church

Klown Kathy is an obama storm trooper who voted FOR Health Care. You all need to unite behind Mike Kelly.

BTW, how has Klown Kathy raised 1.6 million dollars for her campaign over the last 2 years?? Think it’s her kick back for voting for Health Care??? Clearly she is an oduma storm trooper.