1. Short title
This Act may be cited as the “Health Care Choices for Seniors Act”.
Health Care Choices for Seniors Act
A BILL
To amend the Social Security Act to improve choices available to Medicare eligible seniors by permitting them to elect (instead of regular Medicare benefits) to receive a voucher for a health savings account, for premiums for a high deductible health insurance plan, or both and by suspending Medicare late enrollment penalties between ages 65 and 70.
2. Findings
Congress finds the following:
The Social Security Administration’s Program Operations Manual System section HI 00801.002, titled “Waiver of Hospital Insurance Entitlement by Monthly Beneficiary”, provides that an individual who does not sign up for part A of the Medicare program when the individual signs up for social security benefits will lose such benefits, regardless of the desire of the individual to not participate in the Medicare program because of religious or philosophical reasons or a preference to have private health insurance.
As part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108–173), Congress increased health insurance options by authorizing health savings accounts into which individuals may make annual contributions of not more than $2,650 and families may make such contributions of not more than $5,250 that are allowable as deductions for income tax purposes. Seniors are not allowed to deduct contributions to their health savings account after the date of the entitlement of such seniors to Medicare benefits.
Section 1802(b) of the Social Security Act (42 U.S.C. 1395a(b)), added by section 4507 of the Balanced Budget Act of 1997, states that a Medicare beneficiary may only enter into a private contract with a physician for an item or service if no claim for payment under title XVIII of such Act will be submitted. In the case of such contract, the physician must sign an affidavit that acknowledges such contract and that provides that the physician will not submit a claim, and will forgo reimbursement, under such title for an item or service provided to any Medicare beneficiary for a period of two years.
3. Authority to elect voucher program instead of Medicare part A entitlement
In general— Section 226 of the Social Security Act (42 U.S.C. 426) is amended by adding at the end the following new subsections:
“(k) Waiver of entitlement and election of voucher program
“(1) In general—Notwithstanding the previous provisions of this section, the Secretary shall establish a procedure under which an individual otherwise entitled under subsection (a) to benefits under part A of title XVIII may waive such entitlement and be automatically enrolled in the Medicare Alternative Voucher Program established under subsection (l) if—
“(A) at the time such waiver is made the individual—
“(i) has a health savings account described in subsection (d) of section 223 of the Internal Revenue Code of 1986 (26 U.S.C. 223); and
“(ii) is enrolled under a high deductible health plan, as defined in subsection (c)(1) of such section; and
“(B) the individual makes such waiver during the initial enrollment period described in section 1837(d).
“(2) Treatment under the Internal Revenue Code of 1986—An individual who waives entitlement under paragraph (1) shall not be treated as entitled to benefits under title XVIII for purposes of section 223(b)(7) of the Internal Revenue Code of 1986.
“(3) Ineligibility for part B or D benefits—An individual shall not be eligible for benefits under part B or D of title XVIII during the period for which the individual waives entitlement under part A of such title under paragraph (1).
“(4) Termination of waiver and reenrollment under Medicare program—The Secretary shall establish a procedure under which an individual who waives entitlement under paragraph (1) may terminate such waiver during an annual period that shall be the same as the annual general enrollment period described in section 1837(e). For purposes of applying parts B and D of title XVIII, such individual shall be treated as if the individual were entitled to benefits under part A of such title as of the date such individual terminates the waiver under this paragraph. An individual who has terminated such a waiver may not subsequently make such a waiver.
“(l) Medicare Alternative Voucher Program
“(1) Establishment of program—The Secretary shall establish a program to be known as the Medicare Alternative Voucher Program (in this subsection referred to as the “voucher program”) consistent with this subsection.
“(2) Automatic enrollment—An individual who waives entitlement under subsection (k)(1) shall be enrolled in the voucher program for the period during which such waiver is in effect.
“(3) Amount of voucher
“(A) Amount based on age cohort
“(i) In general—Subject to clause (ii), for each month that an individual within an age cohort is enrolled in the voucher program, the Secretary shall provide a voucher to such individual in an amount that is equal to the monthly actuarial rate for that month computed under section 1818(d)(1) multiplied by the age cohort adjustment factor for such age cohort under subparagraph (B).
“(ii) Monthly limit—The amount of a voucher provided to an individual for a month may not exceed $200.
“(B) Age cohort adjustment factor—For each age cohort the Secretary shall determine an age cohort adjustment factor equal to the ratio of—
“(i) the monthly actuarial rate described in section 1818(d)(1) as determined by the Secretary for individuals in such age cohort, to
“(ii) the monthly actuarial rate described in such section.
“(C) Age cohort defined—For purposes of this paragraph, an “age cohort” means a group of individuals whose age falls within a span of five consecutive years, consistent with the following:
“(i) The first such span begins at age 65.
“(ii) Other spans follow consecutively.
“(4) Permissible use of voucher—A voucher under paragraph (3) may be used only for the following purposes:
“(A) As a contribution into a health savings account established by such individual, as described in subsection (k)(1)(A).
“(B) For payment of premiums for enrollment of such individual under a high deductible health plan described in such subsection.
“(5) Effect of subsequent termination of waiver—If an individual terminates a waiver under subsection (k)(4), the enrollment of such individual in the voucher program shall be terminated on the date on which the termination becomes effective.”
Amendment of Internal Revenue Code of 1986— Paragraph (7) of section 223(b) of the Internal Revenue Code of 1986 (relating to Medicare eligible individuals) is amended to read as follows:
“(7) Medicare eligible individuals
“(A) In general—The limitation under this subsection for any month with respect to an individual shall be zero for any month such individual is entitled to benefits under title XVIII of the Social Security Act.
“(B) Medicare alternative voucher program—In the case of an individual who is enrolled in the Medicare Alternative Voucher Program under section 226(l) of the Social Security Act, the applicable limitation under subparagraphs (A) and (B) of paragraph (2) shall be increased by the amount of the voucher described in paragraph (3) of such section which is contributed to a health savings account of such individual.”
Effective date—
In general— The amendment made by subsection (a) shall take effect on the date that is six months after the date of the enactment of this Act and shall apply to an individual who becomes entitled to benefits under part A of title XVIII of the Social Security Act on or after such date of the enactment.
Amendment of Internal Revenue Code of 1986— The amendment made by subsection (b) shall apply to months ending after the date referred to in paragraph (1), in taxable years ending after such date.
4. Suspension of Medicare late enrollment penalties between ages 65 and 70
Part B— The second sentence of section 1839(b) of the Social Security Act (42 U.S.C. 1395r(b)) is amended by inserting before the period the following: “and there shall not be taken into account (for individuals not entitled to benefits under section 226A) any month during any part of which the individual attained age 65 and has not attained age 70”.
Part D—
In general— Section 1860D–13(b)(7)(A) of such Act (42 U.S.C. 1395w–113(b)(7)(A)) is amended by adding at the end the following sentence: “For purposes of the preceding sentence, in the case of an individual not entitled to benefits under part A under section 226A, a continuous period of eligibility shall not include any month during any part of which the individual attained age 65 and has not attained age 70.”.
Conforming amendment— Section 1860D–1(b)(6)(A) of such Act (42 U.S.C. 1395w–101(b)(6)(A)) is amended by inserting after “paragraph (2)” the following: “, but excluding the period between 65 and 70 years of age”.
Effective date— The amendments made by this section shall apply to individuals who attain 65 years of age in a month after the month in which this Act is enacted.