TITLE IX AGGREGATE GOVERNMENT PAYMENTS

table of contents of title                                                Page

TITLE IX AGGREGATE GOVERNMENT PAYMENTS

Subtitle A Aggregate State Payments

Part 1 State Maintenance of Effort Payment

Sec. 9001. State maintenance-of-effort payment relating to non-cash assistance
recipients                                                                1277

Sec. 9002. Non-cash baseline amounts                                      1278

Sec. 9003. Updating of baseline amounts                                   1282

Sec. 9004. Non-cash assistance child and adult defined                    1284

Part 2 State Premium Payments

Sec. 9011. State premium payment relating to cash assistance recipients   1285

Sec. 9012. Determination of AFDC per capita premium amount for regional
alliances                                                                 1286

Sec. 9013. Determination of SSI per capita premium amount for regional
alliances                                                                 1291

Sec. 9014. Determination of number of AFDC and SSI recipients             1292

Sec. 9015. Regional alliance adjustment factors                           1293

Part 3 General and Miscellaneous Provisions

Sec. 9021. Timing and manner of payments                                  1294

Sec. 9022. Review of payment level                                        1294

Sec. 9023. Special rules for Puerto Rico and other territories            1295

Subtitle B Aggregate Federal Alliance Payments

Sec. 9101. Federal premium payments for cash assistance recipients        1296

Sec. 9102. Capped Federal alliance payments                               1298

Subtitle C Borrowing Authority to Cover Cash-Flow Shortfalls

Sec. 9201. Borrowing authority to cover cash-flow shortfalls              1308


Subtitle A Aggregate State Payments

Title IX, Subtitle A

PART 1 STATE MAINTENANCE OF EFFORT PAYMENT

SEC. 9001. STATE MAINTENANCE-OF-EFFORT PAYMENT RELATING TO NON-CASH ASSISTANCE
RECIPIENTS.

  (a) Payment. Each participating State shall provide for each year (beginning
with State's first year) for payment to regional alliances in the State in the
amounts specified in subsection (b).

  (b) Amount. Subject to sections 6005, 9023, and 9201(c)(2), the total amount
of such payment for a year shall be equal to the following:

  (1) First year. In the case of the first year for a State, the sum of

  (A) the State non-cash, non-DSH baseline amount for the State, determined
under section 9002(a)(1) and updated under section 9003(a)(1), and

  (B) the State non-cash, DSH baseline amount for the State, determined under
section 9002(a)(2) and updated under section 9003(a)(2).

  (2) Subsequent year. In the case of any succeeding year, the sum computed
under paragraph (1) for the first year updated to the year involved under
section 9003(b) .

  (c) Division Among Regional Alliances. In the case of a State with more than
one regional alliance, the payment required to be made under this section
shall be distributed among the regional alliances in an equitable manner
(determined by the State) that takes into account, for each regional alliance,
the proportion of the non-cash baseline amount (described in section 9002)
that is attributable to individuals who resided in the alliance area of the
regional alliance.

Title IX, Subtitle A

SEC. 9002. NON-CASH BASELINE AMOUNTS.

  (a) Baseline Amounts.

  (1) Non-dsh amount. The Secretary shall determine for each State a non-cash,
non-DSH baseline amount which is equal to the sum of the following:

  (A) Expenditures for comprehensive benefit package for non-cash assistance
children. The aggregate State medicaid expenditures in fiscal year 1993 (as
defined in subsection (b)(1)) for the comprehensive benefit package for
non-cash assistance children (as defined in section 9004(a)).

  (B) Expenditures for comprehensive benefit package for non-cash assistance
adults. The aggregate State medicaid expenditures in fiscal year 1993 for the
comprehensive benefit package for non-cash assistance adults (as defined in
section 9004(b)).

  (C) Expenditures for additional benefits for certain children receiving afdc
or ssi. The aggregate medicaid expenditures in fiscal year 1993 for all
medically necessary items and services described in section 1905(a) of the
Social Security Act (including items and services described in section 1905(r)
of such Act but excluding long-term care services described in section 1933(c)
of such Act) for qualified children described in section 1934(b)(1) of such
Act who are AFDC or SSI recipients.

  (2) DSH amount. The Secretary shall determine for each State a non-cash, DSH
baseline amount which is equal to the DSH expenditures in fiscal year 1993 (as
defined in subsection (b)(2)).

  (b) State Medicaid Expenditures and DSH Expenditures Defined.

  (1) Aggregate state medicaid expenditures.

  (A) In general. In this section, the term "aggregate State medicaid
expenditures'' means, with respect to specified individuals and a State in
fiscal year 1993, the amount of payments under the State medicaid plan with
respect to medical assistance furnished for such individuals for calendar
quarters in fiscal year 1993, less the amount of Federal financial
participation paid to the State with respect to such assistance, and not
including any DSH expenditures.

  (B) Limited to payments for services. In applying subparagraph (A), payments
under the State medicaid plan shall not be included unless Federal financial
participation is provided with respect to such payments under section
1903(a)(1) of the Social Security Act and such payments shall not include
payments for medicare cost-sharing (as defined in section 1905(p)(3) of the
Social Security Act).

  (2) DSH expenditures. In this section, the term "DSH expenditures'' means,
with respect to fiscal year 1993, payments made under section 1923 of the
Social Security Act in fiscal year 1993 multiplied by proportion of payments
for medical assistance for hospital services (including psychiatric hospital
services) under the State medicaid plan in fiscal year 1993 that is
attributable to non-cash assistance adults and non-cash assistance children.

  (3) Adjustment authorized to take into account cash flow variations. If the
Secretary finds that a State took an action that had the effect of shifting
the timing of medical assistance payments under the State medicaid plan
between quarters or fiscal years in a manner so that the payments made in
fiscal year 1993 do not accurately reflect the value of the medical assistance
provided with respect to items and services furnished in that fiscal year, the
Secretary may provide for such adjustment in the amounts computed under this
subsection as may be necessary so that the non-cash baseline amounts
determined under this section accurately reflects such value.

  (4) Treatment of disallowances. The amounts determined under this subsection
shall take into account amounts (or an estimate of amounts) disallowed.

  (c) Application to Particular Items and Services in Comprehensive Benefit
Package. For purposes of subsection (a)(1), in determining the aggregate State
medicaid expenditures for a category of items and services (within the
comprehensive benefit package) furnished in a State, there shall be counted
only that proportion of such expenditures that were attributable to items and
services included in the comprehensive benefit package (taking into account
any limitation on amount, duration, or scope of items and services included in
such package).

SEC. 9003. UPDATING OF BASELINE AMOUNTS.

  (a) Initial Update Through the First Year.

  (1) Non-cash, non-dsh baseline amount. The Secretary shall update the
non-cash, non-DSH baseline amount determined under section 9002(a)(1) for each
State from fiscal year 1993 through the first year, by the following
percentage:

  (A) If such first year is 1996, the applicable percentage is 56.6 percent.

  (B) If such first year is 1997, the applicable percentage is 78.1 percent.

  (C) If such first year is 1998, the applicable percentage is 102.2 percent.

  (2) Non-cash, dsh baseline amount. The Secretary shall update the non-cash,
DSH baseline amount determined under section 9002(a)(2) for each State from
fiscal year 1993 through the first year, by the following percentage:

  (A) If such first year is 1996, the applicable percentage is 45.9 percent.

  (B) If such first year is 1997, the applicable percentage is 61.8 percent.

  (C) If such first year is 1998, the applicable percentage is 79.0 percent.

  (3) Adjustment authorized to take into account cash flow variations. In
determining the updates under paragraphs (1) and (2), the Secretary may
provide for an adjustment in a manner similar to the adjustment permitted
under section 9002(b)(3).

  (b) Update For Subsequent Years. For each State for each year after the
first year, the Board shall update the non-cash baseline amount (as previously
updated under this subsection) by the product of

  (1) 1 plus the general health care inflation factor (as defined in section
6001(a)(3)) for the year, and

  (2) 1 plus the annual percentage increase in the population of the United
States of individuals who are under 65 years of age (as estimated by the Board
based on projections made by the Bureau of Labor Statistics of the Department
of Labor) for the year.

SEC. 9004. NON-CASH ASSISTANCE CHILD AND ADULT DEFINED.

  (a) Non-Cash Assistance Child. In this part, the term "non-cash assistance
child'' means a child described in section 1934(b)(1) of the Social Security
Act (as inserted by section 4222(a)) who is not a medicare-eligible
individual.

  (b) Non-Cash Assistance Adult. In this part, the term "non-cash assistance
adult'' means an individual who is

  (1) over 21 years,

  (2) is a citizen or national of the United States or an alien who is
lawfully admitted for permanent residence or otherwise permanently residing in
the United States under color of law, and

  (3) is not an AFDC or SSI recipient or a medicare-eligible individual.

PART 2 STATE PREMIUM PAYMENTS

SEC. 9011. STATE PREMIUM PAYMENT RELATING TO CASH ASSISTANCE RECIPIENTS.

  (a) In General. Subject to subsection (c), each participating State shall
provide in each year (beginning with the State's first year) for payment to
each regional alliance in the State of an amount equal to the State medical
assistance percentage (as defined in subsection (b)) of 95 percent of the sum
of the following products:

  (1) AFDC portion. The product of

  (A) the AFDC per capita premium amount for the regional alliance for the
year (determined under section 9012(a)), and

  (B) the number of AFDC recipients residing in the alliance area in the year
(as determined under section 9014(b)(1)).

  (2) SSI portion. The product of

  (A) the SSI per capita premium amount for the regional alliance for the year
(determined under section 9013), and

  (B) the number of SSI recipients residing in the alliance area in the year
(as determined under section 9014(b)(1)).

  (b) State Medical Assistance Percentage Defined. In subsection (a), the term
"State medical assistance percentage'' means, for a State for a quarter in a
fiscal year, 100 percent minus the Federal medical assistance percentage (as
defined in section 1905(b) of the Social Security Act) for the State for the
fiscal year.

  (c) Additional Amount. The amount of payment under subsection (a) for a
State for a year shall be increased by the State medical assistance percentage
multiplied by the sum of the following:

  (1) Amount of special increase in premium discount. The aggregate increase
in the premium discounts under section 6104 for AFDC and SSI families enrolled
in regional alliance health plans in the State that is attributable to
subsection (b)(2) of such section, and

  (2) Amount of basic cost sharing reduction. The amount of any cost sharing
reduction under section 1371(c)(1) for such families.

SEC. 9012. DETERMINATION OF AFDC PER CAPITA PREMIUM AMOUNT FOR REGIONAL
ALLIANCES.

  (a) In General. For each regional alliance in a State for each year, the
Secretary shall determine an AFDC per capita premium amount in accordance with
this section. Such amount is equal to

  (1) the per capita State medicaid expenditures for the comprehensive benefit
package for AFDC recipients for the State for the year (as determined under
subsection (b)), multiplied by

  (2) the regional alliance adjustment factor (determined under section 9015)
for the year for the regional alliance.

  (b) Per Capita State Medicaid Expenditures Defined. The "per capita State
medicaid expenditures for the comprehensive benefit package for AFDC
recipients'' for a State for a year is equal to the base per capita
expenditures (described in subsection (c)), updated to the year involved under
subsection (d)).

  (c) Base Per Capita Expenditures. The "base per capita expenditures''
described in this subsection, for a State for a year, is

  (1) the baseline medicaid expenditures (as defined in subsection (e)) for
the State, divided by

  (2) the number of AFDC recipients enrolled in the State medicaid plan in
fiscal year 1993, as determined under section 9014(a).

  (d) Updating.

  (1) Initial update through year before first year.

  (A) In general. The Secretary shall update the base per capita expenditures
described in subsection (c) for each State from fiscal year 1993 through the
year before first year, by the applicable percentage specified in subparagraph
(B), or, if less, the increase percentage specified in subparagraph (C).

  (B) Applicable percentage. For purposes of subparagraph (A), the applicable
percentage specified in this subparagraph, in the case of a State in which the
first year is

  (i) 1996 is 32.2 percent,

  (ii) 1997 is 46.6 percent, or

  (iii) 1998 is 62.1 percent.

  (C) Increase percentage.

  (i) In general. The increase percentage for a State specified in this
subparagraph is the Secretary's estimate of the percentage increase in the per
capita expenditures specified in clause (ii) from fiscal year 1993 through the
year before the first year, adjusted so as to eliminate any change in medicaid
expenditures that is attributable to a reduction in the scope of services, an
arbitrary reduction in payment rates, or a reduction in access to high quality
services under the State medicaid plan.

  (ii) Per capita expenditures. The per capita expenditures specified in this
clause for a year is the quotient of the baseline medicaid expenditures for
the State for the year, divided by the number of AFDC recipients enrolled in
the State medicaid plan for the year.

  (D) Adjustment authorized to take into account cash flow variations. In
determining the update under paragraph (1), the Secretary may provide for an
adjustment in a manner similar to the adjustment permitted under section
9002(b)(3).

  (2) Update for subsequent years. For each State for the first year and for
each year after the first year, the Board shall update the base per capita
expenditures described in subsection (c) (as previously updated under this
subsection) by a factor equal to 1 plus the general health care inflation
factor (as defined in section 6001(a)(3)) for the year.

  (e) Determination of Baseline Medicaid Expenditures.

  (1) In general. For purposes of subsection (c)(1), the "baseline medicaid
expenditures'' for a State is the gross amount of payments under the State
medicaid plan with respect to medical assistance furnished, for items and
services included in the comprehensive benefit package, for AFDC recipients
for calendar quarters in fiscal year 1993, but does not include such
expenditures for which no Federal financial participation is provided under
such plan.

  (2) Disproportionate share payments not included. In applying paragraph (1),
payments made under section 1923 of the Social Security Act shall not be
counted in the gross amount of payments.

  (3) Treatment of disallowances. The amount determined under this subsection
shall take into account amounts (or an estimate of amounts) disallowed.

  (f) Application to Particular Items and Services in Comprehensive Benefit
Package. For purposes of this section, in determining the per capita State
medicaid expenditures for a category of items and services (within the
comprehensive benefit package) furnished in a State, there shall be counted
only that proportion of such expenditures (determined only with respect to
medical assistance furnished to AFDC recipients) that were attributable to
items and services included in the comprehensive benefit package (taking into
account any limitation on amount, duration, or scope of items and services
included in such package).

SEC. 9013. DETERMINATION OF SSI PER CAPITA PREMIUM AMOUNT FOR REGIONAL
ALLIANCES.

  For each regional alliance in a State for each year, the Secretary shall
determine an SSI per capita premium amount in accordance with this section.
Such amount shall be determined in the same manner as the AFDC per capita
premium amount for the regional alliance is determined under section 9012
except that, for purposes of this section

  (1) any reference in such section (or in sections referred to in such
section) to an "AFDC recipient'' is deemed a reference to an "SSI recipient'',
and

  (2) the following percents shall be substituted for the percents specified
in section 9012(d)(1)(B):

  (A) For 1996, 29.4 percent.

  (B) For 1997, 43.7 percent.

  (C) For 1998, 58.8 percent.

SEC. 9014. DETERMINATION OF NUMBER OF AFDC AND SSI RECIPIENTS.

  (a) Baseline. For purposes of section 9012 and section 9013, the number of
AFDC recipients and SSI recipients for a State for fiscal year 1993 shall be
determined based on actual reports submitted by the State to the Secretary. In
the case of individuals who were not recipients for the entire fiscal year,
the number shall take into account only the portion of the year in which they
were such recipients. The Secretary may audit such reports.

  (b) Subsequent Years.

  (1) Payments. For purposes of section 9011(a), the number of AFDC and SSI
recipients enrolled in regional alliance health plans for a regional alliance
shall be determined on a monthly basis based on actual enrollment.

  (2) Computation of regional adjustment factors and blended plan payment
rates. For purposes of computing regional alliance adjustment factors under
section 9015 and the AFDC and SSI proportions under section 6202, the number
of AFDC and SSI recipients for a regional alliance in a State for a year
(beginning with 1997) shall be determined by the State before the date the
State is required to compute AFDC and SSI proportions under section 6202 based
on the best available estimate of such proportion in the previous year.

SEC. 9015. REGIONAL ALLIANCE ADJUSTMENT FACTORS.

  (a) In General. If a State

  (1) has more than one regional alliance operating in the State for a year,
the State shall compute under this section a regional alliance adjustment
factor for each such regional alliance for the year in accordance with
subsection (b), or

  (2) has only one regional alliance for a year, the regional alliance
adjustment factor under this section is 1.

  (b) Rules. The adjustment factors under subsection (a)(1) for a year shall
be computed in a manner so that

  (1) such factors for the different regional alliances reflect

  (A) the variation in regional alliance per capita premium targets
(determined under section 6003), and

  (B) the variation in base per capita expenditures for medicaid across
regional alliances; and

  (2) the weighted average of such factors is 1.

  (c) Use of Same Data. The weighted average under subsection (b)(2) shall be
determined based on the number of AFDC recipients or SSI recipients (as the
case may be) enrolled in each regional alliance in a State (as determined for
each regional alliance under section 9014(b)(2)).

  (d) Clarification of Separate Computations. Determinations of adjustment
factors under this section shall be made separately for AFDC recipients and
for SSI recipients.

PART 3 GENERAL AND MISCELLANEOUS PROVISIONS

SEC. 9021. TIMING AND MANNER OF PAYMENTS.

  The provisions of paragraphs (1) and (2) of section 9101(b) apply to
payments by a State under this subtitle in the same manner as they apply to
payments by the Secretary under section 9101, and any reference in such
provisions to the Secretary is deemed a reference to the State.

SEC. 9022. REVIEW OF PAYMENT LEVEL.

  (a) In General. The National Health Board shall review from time to time the
appropriateness of the levels of payments required of States under this
subtitle.

  (b) Report. The Board may report to the Congress on such adjustments as
should be made to assure an equitable distribution of State payments under
this Act, taking into account the revenue base in each of the States.

  (c) Limit on Authority. Nothing in this subtitle shall be construed as
permitting the Board to change the amount of the payments required by States
under the previous sections in this subtitle.

SEC. 9023. SPECIAL RULES FOR PUERTO RICO AND OTHER TERRITORIES.

  (a) Waiver Authority. Notwithstanding any other requirement of this title or
title VI, the Secretary may waive or modify any requirement of this title or
title VI (other than financial contribution and subsidy requirements) with
respect to Puerto Rico, the Virgin Islands, Guam, American Samoa, and the
Northern Mariana Islands, consistent with this section, to accommodate their
unique geographic and social conditions and features of their health care
systems.

  (b) Territorial Maintenance of Effort and Division of Financial
Responsibility.

  (1) In general. In the case of such a Commonwealth or territory, the
Secretary shall determine the State payments under part 1 taking into account

  (A) payments that qualify for Federal financial participation under the
medicaid program,

  (B) payments that would qualify for such participation in the absence of
section 1108(c) of the Social Security Act, and

  (C) other factors that the Secretary may consider.

  (2) Cash assistance recipients. With respect to such Commonwealths and
territories not covered under the supplementary security income program, in
this Act, the term "SSI recipient'' includes an individual receiving aid under
a territorial program for the aged, blind, or disabled under the Social
Security Act.

Title IX, Subtitle B

Subtitle B Aggregate Federal Alliance Payments

SEC. 9101. FEDERAL PREMIUM PAYMENTS FOR CASH ASSISTANCE RECIPIENTS.

  (a) Amount.

  (1) In general. The Secretary shall provide each year (beginning with a
State's first year) for payment to each regional alliance of an amount equal
to the Federal medical assistance percentage (as defined in section 1905(b) of
the Social Security Act) of (A) 95 percent of the sum of the products
described in section 9011(a) for that State for that fiscal year, plus (B) the
sum described in section 9011(c).

  (2) Special rules for single-payer States. In determining the products
referred to in paragraph (1) in the case of a single-payer State, the State is
deemed to be a single regional alliance and the regional alliance adjustment
factor (under section 9015) is deemed to be 1.

  (b) Timing and Manner of Payment.

  (1) In general. Amounts required to be paid under this section shall be paid
on a periodic basis that reflects the cash flow requirements of regional
alliances for payments under this section in order to meet obligations
established under this Act and, in consultation with the Secretary of the
Treasury, the cash management interests of the Federal Government.

  (2) Periodic provision of information. Each regional alliance shall
periodically transmit to the Secretary such information as the Secretary may
require to make such payments.

  (3) Reconciliation.

  (A) Preliminary. At such time after the end of each year as the Secretary
shall specify, the State shall submit to the Secretary such information as the
Secretary may require to do a preliminary reconciliation of the amounts paid
under this section and the amounts due.

  (B) Final. No later than June 30 of each year, the Secretary shall provide
for a final reconciliation for such payments for quarters in the previous
year. Amounts subsequently payable are subject to adjustment to reflect the
results of such reconciliation.

  (C) Audit. Payments under this section are subject to audits by the
Secretary in accordance with rules established by the Secretary.

SEC. 9102. CAPPED FEDERAL ALLIANCE PAYMENTS.

  (a) Capped Entitlement.

  (1) Payment. The Secretary shall provide for each calendar quarter
(beginning on or after January 1, 1996) for payment to each regional alliance
of an amount equal to the capped Federal alliance payment amount (as defined
in subsection (b)(1)) for the regional alliance for the quarter.

  (2) Entitlement. This section constitutes budget authority in advance of
appropriations Acts, and represents the obligation of the Federal Government
to provide for the payment to regional alliances of the capped Federal
alliance payment amount under this section.

  (b) Capped Federal Alliance Payment Amount.

  (1) In general. In this section, the term "capped Federal alliance payment
amount'' means, for a regional alliance for a calendar quarter in a year and
subject to subsection (e), the amount by which

  (A) \1/4\ of the total payment obligation (described in paragraph (2)) for
the alliance for the year, exceeds

  (B) \1/4\ of the total amounts receivable (described in paragraph (3)) by
the alliance for the year.

  (2) Total payment obligation. The total payment obligation described in this
paragraph for an alliance for a year is the total amount payable by the
alliance for the following:

  (A) Plan payments (and certain cost sharing reductions). Payments to
regional alliance health plans under section 1351 (including amounts
attributable to cost sharing reductions under section 1371, not including a
reduction under subsection (c)(2) thereof).

  (B) Alliance administrative expenses. Payments retained by the regional
alliance for administration (in accordance with section 1352).

  (3) Total amounts receivable. The total amounts receivable by a regional
alliance for a year is the sum of the following:

  (A) Premiums. The amount payable to the regional alliance for the family
share of premiums, employer premiums, and liabilities owed the alliance under
subtitle B of title VI, not taking into account any failure to make or collect
such payments.

  (B) Other government payments. The amounts payable to the regional alliance
under sections 9001, 9011, and 9101, and payable under section 1894 of the
Social Security Act (as added by section 4003) during the year.

  (4) No payment for certain amounts.

  (A) Uncollected alliance premiums. Each regional alliance is responsible,
under section 1345(a), for the collection of all amounts owed the alliance
(whether by individuals, employers, or others and whether on the basis of
premiums owed, incorrect amounts of discounts or premium, cost sharing, or
other reductions made, or otherwise), and no amounts are payable by the
Federal Goverment under this section with respect to the failure to collect
any such amounts.

  (B) Administrative errors.

  (i) In general. Each participating State is responsible, under section
1202(g), for the payment to regional alliances in the State of amounts
attributable to administrative errors (described in clause (ii)).

  (ii) Administrative errors described. The administrative errors described in
this clause include the following:

  (I) An eligibility error rate for premium discounts, liability reductions,
and cost sharing reductions under sections 6104 and 6123, section 6113,  and
section 1371, respectively, to the extent the applicable error rate exceeds
the maximum permissible error rate, specified by the applicable Secretary
under section 1361(b)(1)(C), with respect to the section involved.

  (II) Misappropriations or other regional alliance expenditures that the
Secretary finds are attributable to malfeasance or misfeasance by the regional
alliance or the State.

  (5) Special rules for single-payer states. In applying this subsection in
the case of a single-payer State, the Secretary shall develop and apply a
methodology for computing an amount of payment (with respect to each calendar
quarter) that is equivalent to the amount of payment that would have been made
to all regional alliances in the State for the quarter if the State were not a
single-payer State.

  (c) Determination of Capped Federal Alliance Payment Amounts.

  (1) Reports. At such time as the Secretary may require before the beginning
of each fiscal year, each regional alliance shall submit to the Secretary such
information as the Secretary may require to estimate the capped Federal
alliance payment amount under this section for the succeeding calendar year
(and the portion of such year that falls in such fiscal year).

  (2) Estimation. Before the beginning of each year, the Secretary shall
estimate for each regional alliance the capped Federal alliance payment amount
for calendar quarters in such year. Such estimate shall be based on factors
including prior financial experience in the alliance, future estimates of
income, wages, and employment, and other characteristics of the area found
relevant by the Secretary. The Secretary shall transmit to Congress, on a
timely basis consistent with the timely appropriation of funds under this
section, a report that specifies an estimate of the total capped Federal
alliance payment amounts owed to regional alliances under this section for the
fiscal and calendar year involved.

  (d) Payments to Regional Alliances. Subject to subsection (e), the
provisions of section 9101(b) apply to payments under this section in the same
manner as they apply to payments under section 9101.

  (e) Cap on Payments.

  (1) In general. The total amount of the capped Federal alliance payments
made under this section for quarters in a fiscal year may not exceed the cap
specified under paragraph (2) for the fiscal year.

  (2) Cap. Subject to paragraphs (3) and (6)

  (A) Fiscal years 1996 through 2000. The cap under this paragraph

  (i) for fiscal year 1996, is $10.3 billion,

  (ii) for fiscal year 1997, is $28.3 billion,

  (iii) for fiscal year 1998, is $75.6 billion,

  (iv) for fiscal year 1999, is $78.9 billion, and

  (v) for fiscal year 2000, is $81.0 billion.

  (B) Subsequent fiscal year. The cap under this paragraph for a fiscal year
after fiscal year 2000 is the cap under this paragraph for the previous fiscal
year (not taking into account paragraph (3)) multiplied by the product of the
factors described in subparagraph (C) for that fiscal year and for each
previous year after fiscal year 2000.

  (C) Factor. The factor described in this subparagraph for a fiscal year is 1
plus the following:

  (i) CPI. The percentage change in the CPI for the fiscal year, determined
based upon the percentage change in the average of the CPI for the 12-month
period ending with May 31 of the previous fiscal year over such average for
the preceding 12-month period.

  (ii) Population. The average annual percentage change in the population of
the United States during the 3-year period ending in the preceding calendar
year, determined by the Board based on data supplied by the Bureau of the
Census.

  (iii) Real gdp per capita. The average annual percentage change in the real,
per capita gross domestic product of the United States during the 3-year
period ending in the preceding calendar year, determined by the Board based on
data supplied by the Department of Commerce.

  (3) Carryforward. If the total of the capped Federal alliance payment
amounts for all regional alliances for all calendar quarters in a fiscal year
is less than the cap specified in paragraph (2) for the fiscal year, then the
amount of such surplus shall be accumulated and will be available in the case
of a year in which the cap would otherwise be breached.

  (4) Notification.

  (A) In general. If the Secretary anticipates that the amount of the cap,
plus any carryforward from a previous year accumulated under paragraph (3),
will not be sufficient for a fiscal year, the Secretary shall notify the
President, the Congress, and each regional alliance. Such notification shall
include information about the anticipated amount of the shortfall and the
anticipated time when the shortfall will first occur.

  (B) Required action. Within 30 days after receiving such a notice, the
President shall submit to Congress a report containing specific legislative
recommendations for actions which would eliminate the shortfall.

  (5) Congressional consideration.

  (A) Expedited consideration. If a joint resolution the substance of which
approves the specific recommendations submitted under paragraph (4)(B) is
introduced, subject to subparagraph (B), the provisions of section 2908 (other
than subsection (a)) of the Defense Base Closure and Realignment Act of 1990
shall apply to the consideration of the joint resolution in the same manner as
such provisions apply to a joint resolution described in section 2908(a) of
such Act.

  (B) Special rules. For purposes of applying subparagraph (A) with respect to
such provisions, any reference to the Committee on Armed Services of the House
of Representatives shall be deemed a reference to an appropriate Committee of
the House of Representatives (specified by the Speaker of the House of
Representatives at the time of submission of recommendations under paragraph
(4)) and any reference to the Committee on Armed Services of the Senate shall
be deemed a reference to an appropriate Committee of the Senate (specified by
the Majority Leader of the Senate at the time of submission of such
recommendations).

  (6) Method for adjusting the cap for changes in inflation. If the inflation
rate, as measured by the percentage increase in the CPI, is projected to be
significantly different from the inflation rate projected by the Council of
Economic Advisors to the President as of October 1993, the Secretary may
adjust the caps under paragraph (2) so as to reflect such deviation from the
projection.

Title IX, Subtitle C

Subtitle C Borrowing Authority to Cover Cash-flow Shortfalls

SEC. 9201. BORROWING AUTHORITY TO COVER CASH-FLOW SHORTFALLS.

  (a) In General. The Secretary shall make available loans to regional
alliances in order to cover any period of temporary cash-flow shortfall
attributable to any of the following:

  (1) Any estimation discrepancy (including those described in subsection
(e)(1)).

  (2) A period of temporary cash-flow shortfall attributable to an
administrative error (described in subsection (e)(2)).

  (3) A period of temporary cash-flow shortfall relating to the relative
timing during the year in which amounts are received and payments are required
to be made.

  (b) Terms and Conditions.

  (1) In general. Loans shall be made under this section under terms and
conditions, consistent with this subsection, specified by the Secretary, in
consultation with the Secretary of the Treasury and taking into account
Treasury cash management rules.

  (2) Period. Loans under this section shall be repayable with interest over a
period of not to exceed 2 years.

  (3) Interest rate. The rate of interest on such loans shall be at a rate
determined by the Secretary of the Treasury taking into consideration the
current average rate on outstanding marketable obligations of the United
States.

  (4) Appropriate payment adjustments. As a condition of providing a loan
under subsection (a)(1), the Secretary shall require the regional alliance to
make such adjustments under the appropriate estimation adjustment provision
(described in subsection (f)) in order to assure the repayment of the amount
so borrowed.

  (5) Limitation on loan balance outstanding to a regional alliance. The total
balance of loans outstanding at any time to a regional alliance shall not
exceed

  (A) for the first year, 25 percent of the estimated total premiums for the
alliance for such year, or

  (B) for a subsequent year, 25 percent of the actual total premiums for the
alliance for the previous year.

  (c) Repayment.

  (1) Estimation discrepancies and timing. Loans made under paragraphs (1) and
(3) of subsection (a) shall be repaid through a reduction in the payment
amounts otherwise required to be made under section 9102 to the regional
alliance.

  (2) Administrative error. Loans made under subsection (a)(2) shall be repaid
through a temporary increase in the amount of the State maintenance-of-effort
payment required under section 9001.

  (d) Reports. The Secretary shall annually report to Congress on the loans
made (and loan amounts repaid) under this section.

  (e) Sources of Discrepancy Described.

  (1) Estimation discrepancies. The estimation discrepancies described in this
paragraph are discrepancies in estimating the following:

  (A) The average premium payments per family under section 6122(b).

  (B) The AFDC and SSI proportions under section 6202.

  (C) The distribution of enrolled families in different risk categories for
purposes of section 1351(c).

  (D) The distribution of enrollment in excess premium plans (for purposes of
calculating and applying the reduced weighted average accepted bid under
section 6105(c)(1)).

  (E) The collection shortfalls (used in computing the family collection
shortfall add-on under section 6107).

  (2) Administrative errors. The administrative errors described in this
paragraph are errors described in section 9201(b)(4)(B)(ii).

  (f) Estimation Adjustment Provisions Described. The estimation adjustment
provisions, referred to in subsection (b)(4)) are the following adjustments
(corresponding to the respective estimation discrepancies specified in
subsection (d)(1)):

  (1) Adjustments for average premium payments per family under section
6122(b)(4).

  (2) Adjustments in the AFDC and SSI proportions under section 6202(d).

  (3) Adjustments pursuant to the methodology described in section 1541(b)(8).

  (4) Adjustments in excess premium credit pursuant to section 6105(b)(2).

  (5) Adjustment in the collection shortfall add-on under section
6107(b)(2)(C)).

  (g) Advances; Limitations on Advances.

  (1) In general. Subject to paragraph (2), the Secretary of the Treasury is
authorized to advance to the Secretary, under terms and conditions determined
by the Secretary of the Treasury, amounts sufficient to cover the loans made
to regional alliances by the Secretary under this section.

  (2) Limitation. The total balance of Treasury advances outstanding at any
time to the Secretary under paragraph (1) shall not exceed $3,500,000,000.


