Medical Expense Protection Act

Medical Expense Protection Act - Title I: Catastrophic Automatic Protection Plan - Adds a new title to the Social Security Act, Title XXI - Catastrophic Automatic Protection Plan. Establishes a voluntary insurance plan to provide automatic protection to families against catastrophic medical expenses, the Catastrophic Automatic Protection Plan (CAPP), to be funded by general revenues and coinsurance amounts. Provides that a family will be eligible for CAPP assistance for CAPP covered expenses after members of the family incur medical expenses equal to the deductible. Stipulates that eligibility is contingent upon the payment of specified coinsurance amounts. Provides that the deductible and coinsurance amounts shall be equal to approximately 10 to 20 percent of family income, graduated according to income. Provides that there shall be no coinsurance payments after a family has incurred expenses equal to the "CAPP stop-loss". Provides that the CAPP stop-loss for any year shall be equal to approximately 10 to 25 percent of family income, again graduated according to income.

Sets forth provisions relating to applications for assistance under this Act. Requires any family filing for assistance under this Act to file an income statement with the Secretary of Health and Human Services. Permits civil penalties to be imposed for submission of an intentionally false statement.

Provides that payments shall be made for 100 percent of covered CAPP medical expenses and services except that in the case of prescription drugs for chronic illness the payment rate shall be 75 percent. Provides that there shall be no coinsurance for such drugs.

Provides that payments with respect to CAPP covered services which are described in title XVIII (Medicare) of the Act shall be made to providers, with specified exceptions, in the amount and in accordance with the procedures set forth in such title.

Establishes the Catastrophic Automatic Protection Plan Trust Fund in the United States Treasury. Appropriates to the fund, out of any moneys in the Treasury not otherwise appropriated, amounts necessary to make CAPP payments. Creates a Board of Trustees to hold the Fund, report to Congress concerning the Fund, and review policies allowed in managing the Fund.

Directs the Secretary to provide for a listing of drug entities which may be legally introduced into interstate commerce with specified therapeutic categories.

Provides that any individual dissatisfied with any determination relating to the individual's eligibility for or amount of CAPP benefits shall be entitled to a hearing concerning such determination and to judicial review of the Secretary's final decision.

Sets forth definitions of terms used in this Act, including "CAPP covered services" which is defined as services furnished to an individual to the extent payment for such service may be made under the Medicare program, except that under CAPP: (1) inpatient psychiatric services shall be covered for 45 days in a calendar year; (2) items and services related to pregnancy, delivery, and care of a child through the first year are covered; (3) immunizations against serious communicable diseases are covered; and (4) prescription drugs for "chronic illness" are covered for an individual entitled to hospital insurance benefits under Medicare.

Directs the Secretary to provide for an evaluation, by an entity outside the Department of Health and Human Services, of the implementation of this Act during its first five years and to report to Congress on the evaluation.

Title II: Employer Health Plans - Amends the Internal Revenue Code to exclude from gross income, subject to stated conditions, amounts received by an employee through an accident or health plan towards which the employer contributed, only if the plan is a qualified plan. Subjects such exclusion to certain conditions, including: (1) the employer must make a contribution equal to at least 50 percent of the premium for the least expensive qualified plan; (2) requiring the employer to pay the employee a monthly rebate if the employee is offered more than one qualified plan and the employer contribution for the plan the employee selects would be greater than the premium of a low option plan, or the employee elects to participate in no qualified plan and is otherwise covered by a qualified plan; and (3) that the employer contribution for any employee for a family plan shall not exceed $120 per month.

Defines terms including, among others, "qualified health plan." Defines such plan as a plan of an employer providing medical care for employees and their families which the Secretary certifies as meeting certain requirements, including the provision of CAPP covered services after the employee has incurred out-of-pocket expenses in excess of $2,500.

Prohibits an income tax deduction for contributions by an employer to a health plan for compensation to his or her employees for sickness, unless the employer offers a qualified plan.

Limits the income tax deduction for medical and dental expenses to an individual: (1) who is blind or disabled as determined under title XVI (Supplemental Security Income) of the Act or is receiving Medicare benefits because of end-stage renal disease; or (2) for care while a resident of a long-term care facility or of an institution for the care, rehabilitation or training of the physically or mentally handicapped. Provides for a deduction, not to exceed $250, for one-half of the premiums for a qualified health plan.

Title III: Medicare Amendments - Amends title XVIII (Medicare) of the Social Security Act to remove the time limitation on inpatient hospital care. Makes individuals entitled to benefits under part A (Hospital Insurance) of title XVIII of the Act eligible for certain benefits under CAPP.

Eliminates coinsurance under part A.

Provides that any charge for any service or procedure performed by a doctor shall be reasonable if: (1) the service or procedure is performed in a designated physician shortage area; (2) the physician has a regular practice in the shortage area; (3) the charge does not exceed the prevailing charge level as otherwise determined; and (4) the charge does not exceed the amount generally charged by such physician for similar services.

Permits entities utilized for administering the Medicare program to be utilized for administering CAPP.

Title IV: Studies and Miscellaneous Provisions - Directs the Secretary: (1) to provide for studies of, and demonstration projects with respect to, the desirability and feasibility of adding a long-term care program into the Medicare program or CAPP and to report to Congress the results of the studies and projects; (2) to conduct a study of the feasibility of, and options with respect to, consolidating title XIX (Medicaid) of the Act into CAPP or other programs and to report to Congress concerning such study; and (3) to conduct a study of the feasibility of promoting better efficiency and effectiveness in the Medicare and Medicaid programs by permitting those eligible under such programs the option of receiving benefits through competitive private plans to report to Congress concerning such study.

Requires the Secretary to reduce Medicaid payments to a State if the State reduces the number of categories of individuals eligible for benefits or the amount of benefits provided under: (1) title V (Maternal and Child Health), XIX, or XX (Grants to States for Services) of the Act; or (2) any program providing benefits similar to those under title XXI, and such reduction results in an increase in the amount of payments that would otherwise be made under such title.

Amends the Federal Trade Commission Act to consider it an unfair trade practice for any entity to advertise that any amounts paid to an individual represents reimbursement for the deductible under CAPP.