A bill to amend the Social Security Act to provide for a demonstration program for the transfer of individual entitlements to medical assistance under the medicare and medicaid programs to similar entitlements under a qualified State health insurance program.

Authorizes the Secretary of Health, Education, and Welfare to enter into an agreement with a State to transfer to the State a proportionate share of Medicare trust funds for each individual entitled to medical assistance under Title XVIII (Medicare) of the Social Security Act who elects for a one year period to receive medical assistance under an approved State plan in lieu of assistance under the Medicare program.

Requires a participating State to agree to enroll any individual who elects to participate in an approved State plan in lieu of Medicare and to credit against any premiums such individual pays under the State plan any premiums the individual paid under Medicare during the one year period of election.

Authorizes the Secretary to agree to transfer on a quarterly basis to a State those funds which the Secretary would otherwise pay to the State under its plan approved under Title XIX (Medicaid) of the Social Security Act and requires the State to enroll each individual in a plan which provides the same level of medical assistance as provided under the State's Medicaid plan.

Prohibits any individual who elects to receive medical assistance under an approved State plan from receiving medical assistance under the Medicare or Medicaid programs during the one year period of election.