S.Amdt. 3226

SA 3226. Mr. WHITEHOUSE submitted an amendment intended to be
proposed to amendment SA 2786 proposed by Mr. Reid (for himself, Mr.
Baucus, Mr. Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the
Internal Revenue Code of 1986 to modify the first-time homebuyers
credit in the case of members of the Armed Forces and certain other
Federal employees, and for other purposes; which was ordered to lie on
the table; as follows:

Beginning on page 2027, strike line 20 and all that follows
through page 2029, line 4, and insert the following:
(2) Amounts taken into account.--For purposes of paragraph
(1)--
(A) Net premiums written.--
(i) In general.--The net premiums written with respect to
health insurance for any United States health risk that are
taken into account during any calendar year with respect to
any covered entity shall be the sum of--

(I) the net premiums written with respect to Medicaid
business that are taken into account during the calendar
year, plus
(II) the net premiums written with respect to non-Medicaid
business that are taken into account during the calendar
year.

(ii) Net premiums written with respect to medicaid
business.--

(I) In general.--The net premiums written with respect to
Medicaid business that are taken into account during the
calendar year shall be determined in accordance with the
following table:

[[Page S13264]]

------------------------------------------------------------------------
With respect to a covered entity's net
premiums written with respect to      The percentage of net premiums
Medicaid business during the calendar     written that are taken into
year that are:                        account is:
------------------------------------------------------------------------
Not more than $100,000,000.............  0 percent
More than $100,000,000 but not more      25 percent
than $150,000,000.
More than $150,000,000 but not more      50 percent
than $200,000,000.
More than $200,000,000.................  100 percent.
------------------------------------------------------------------------

(II) Medicaid business.--For purposes of this section, net
premiums written with respect to Medicaid business means,
with respect to any covered entity, that portion of the net
premiums written with respect to health insurance for United
States health risks which are written with respect to
individuals who are eligible for medical assistance under,
and enrolled in, a State plan under title XIX of the Social
Security Act or a waiver of such plan. Such amounts shall be
reported separately by each covered entity in the report
required under subsection (g).

(iii) Net premiums written with respect to non-medicaid
business.--

(I) In general.--The net premiums written with respect to
non-Medicaid business that are taken into account during the
calendar year shall be determined in accordance with the
following table:

------------------------------------------------------------------------
With respect to a covered entity's net
premiums written with respect to non-    The percentage of net premiums
Medicaid business during the calendar     written that are taken into
year that are:                        account is:
------------------------------------------------------------------------
Not more than $25,000,000..............  0 percent
More than $25,000,000 but not more than  50 percent
$50,000,000.
More than $50,000,000..................  100 percent.
------------------------------------------------------------------------

(II) Non-medicaid business.--For purpose of this section,
the net premiums written with respect to non-Medicaid
business means, with respect to any covered entity, the total
amount of net premiums written with respect to health
insurance for United States health risks less the net
premiums written with respect to Medicaid business.

(B) Third party administration agreement fees.--The third
party administration agreement fees that are taken into
account during any calendar year with respect to any covered
entity shall be determined in accordance with the following
table:

------------------------------------------------------------------------
With respect to a covered entity's     The percentage of third party
third party administration agreement    administration agreement fees
fees during the calendar year that are:  that are taken into account is:
------------------------------------------------------------------------
Not more than $5,000,000...............  0 percent
More than $5,000,000 but not more than   50 percent
$10,000,000.
More than $10,000,000..................  100 percent.
------------------------------------------------------------------------

(3) Secretarial determination.--The Secretary shall
calculate the amount of each covered entity's fee for any
calendar year under paragraph (1). In calculating such
amount, the Secretary shall determine such covered entity's
net premiums written with respect to any United States health
risk and third party administration agreement fees on the
basis of reports submitted by the covered entity under
subsection (g) and through the use of any other source of
information available to the Secretary.
(c) Performance Adjustment to Annual Fee.--
(1) In general.--The Secretary shall--
(A) in the case of a penalized covered entity, increase the
fee determined under subsection (b) for a calendar year as
provided in paragraph (3), and
(B) in the case of any other covered entity, reduce the fee
determined under subsection (b) for a calendar year as
provided in paragraph (4).
(2) Penalized covered entity described.--
(A) In general.--For purposes of this paragraph, the term
``penalized covered entity'' means a covered entity that the
Secretary determines has failed to meet the key performance
thresholds (established under subparagraph (B)) for the
calendar year involved.
(B) Key performance thresholds.--The key performance
thresholds established under this subparagraph are as
follows:
(i) Medical loss ratio threshold.--The covered entity has a
medical loss ratio, as reported under section 2718(a)(1) of
the Public Health Service Act, of not less than 85 percent.
The Secretary, in consultation with the Secretary of Health
and Human Services may increase, but not decrease, such
percentage by regulation.
(ii) Maximum financial reserve threshold.--

(I) In general.--The covered entity has a financial reserve
which is not greater than the amount established under
regulations by the Secretary, in consultation with the
Secretary of Health and Human Services. The Secretary may
establish different thresholds for different categories of
covered entity under this section. The Secretary, in
consultation with the National Association of Insurance
Commissioners, shall establish a uniform methodology for
reporting financial reserve levels and determining maximum
financial reserve thresholds under this subparagraph.
(II) Reports.--Each covered entity shall annually submit a
report (in a manner to be established by the Secretary
through regulation) to the Secretary and the Secretary of
Health and Human Services containing such information about
the financial reserves of the entity as the Secretary may
require. The rules of subsection (g)(2) shall apply to the
information required to be reported under this subclause.

(3) Amount of fee increase.--
(A) In general.--In the case of a penalized covered entity,
the fee determined under subsection (b) for the calendar year
shall be increased by the penalty amount.
(B) Penalty amount.--
(i) In general.--The penalty amount shall be the product
of--

(I) the amount determined under subsection (b), and
(II) the sum of the amounts determined under subparagraphs
(C) and (D).

(ii) Limitation.--The penalty amount shall not exceed 20
percent of the amount determined under subsection (b).
(C) Medical loss ratio component.--The amount determined
under this subparagraph is the amount equal to the excess
of--
(i) the medical loss ratio threshold established under
paragraph (2)(A), over
(ii) the medical loss ratio (expressed in decimal form) of
the penalized covered entity.
(D) Financial reserve component.--The amount determined
under this subparagraph is the amount equal to the ratio of--
(i) the excess of--

(I) the financial reserves of the penalized covered entity,
over
(II) the maximum financial reserve threshold established
under paragraph (2)(B)(ii), to

(ii) such maximum financial reserve threshold.
(4) Reduction in fee.--
(A) In general.--
(i) Amount of reduction.--In the case of any covered entity
that is not a penalized covered entity, the fee determined
under subsection (b) for the calendar year shall be reduced
by an amount equal to the product of--

(I) the sum of all penalty amounts assessed in the calendar
year under paragraph (3), and
(II) the fee redistribution ratio.

(ii) Limitation.--The reduction under this paragraph shall
not exceed 20 percent of the amount determined under
subsection (b).
(B) Fee distribution ratio.--For purposes of this
paragraph, the fee redistribution ratio is the ratio of--
(i) the weighted net written premium amount of the covered
entity, to
(ii) the aggregate of the weighted net written premium
amount of all covered entities.
(C) Weighted net written premium amount.--For purposes of
this paragraph, the weighted net written premium amount with
respect to any covered entity is the amount described in
subsection (b)(1)(A)(i) with respect to such covered entity,
increased by the product of--
(i) such amount, and
(ii) the product of 0.05 and the sum of the amounts
determined under subparagraphs (D) and (E).
(D) Medical loss ratio component.--The amount determined
under this subparagraph is the amount equal to the excess
of--

[[Page S13265]]

(i) the medical loss ratio (expressed as a percentage) of
the covered entity, over
(ii) the medical loss ratio threshold established under
paragraph (2)(A).
(E) Financial reserve component.--The amount determined
under this subparagraph is the amount equal to the ratio of--
(i) the excess of--

(I) the maximum financial reserve threshold established
under paragraph (2)(B)(ii), over
(II) the financial reserves of the covered entity, to

(ii) such maximum financial reserve threshold.
______