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A new standard deduction for health insurance would be available to any taxpayer with qualified health insurance, whether provided through an employer or purchased directly from an insurer regardless of the actual cost of the coverage. In general, the current tax exclusion for employer paid coverage, the individual medical expense deduction, and the self-employed premium deduction would no longer be available.

Changes would also be made to the Health Coverage Tax Credit (HCTC) that was created under the Trade Adjustment Assistance Reform Act of 2002. Under this program, refundable tax credits for qualified health insurance are available to eligible individuals whose jobs were lost as a result of competition from foreign trade or whose retiree health benefits were lost as a result of their former employer's corporate insolvency.

Would phase out the 24-month waiting period for disabled individuals to become eligible for Medicare benefits. Would eliminate the 24-month waiting period for individuals with life-threatening conditions (in the same way as for individuals with amyotrophic lateral sclerosis (ALS).

Reauthorizes SCHIP permanently, makes other program changes, and establishes a tax credit toward the purchase of health insurance for children in families up to 350% of the federal poverty level (FPL) who are not eligible for public coverage.

The bills would add a new section to ERISA providing for rules governing Association Health Plans (AHPs). AHPs are health plans sponsored by, for example, bona fide trade, industry or professional associations or bona fide chambers of commerce, for the benefit of their members, typically small businesses and self-employed individuals. To become certified as an AHP, an entity would have to meet requirements relating to membership, governance, premiums, marketing, and other operations. AHPs offering self-insured plans would have to meet additional requirements, especially related to financial reserves and solvency. Certified AHPs would be exempt from most state insurance laws, including mandated benefit requirements and restrictions on premiums (i.e., rating rules).

Provides increased appropriations for the State Children's Health Insurance Program (SCHIP) through 2012, offers state option for coverage of pregnant women, phases out coverage of childless adults, limits coverage of parents, eliminates federal matching payments for children above 300% of the federal poverty level (FPL), provides for improved outreach and enrollment of eligible children, requires dental coverage and mental health parity, gives states an option for using SCHIP funds for employer plan premium assistance, requires development of child health quality measures and makes other changes to SCHIP and Medicaid.