Title VII, SEC. 7142. EXTENDING MEDICARE COVERAGE OF, AND APPLICATION OF 
HOSPITAL INSURANCE TAX TO, ALL STATE AND LOCAL GOVERNMENT EMPLOYEES. 
      (a) In General. 

        (1) Application of hospital insurance tax. Section 3121(u)(2) is 
      amended by striking subparagraphs (C) and (D). 

        (2) Coverage under medicare. Section 210(p) of the Social Security Act 
      (42 U.S.C. 410(p)) is amended by striking paragraphs (3) and (4). 

        (3) Effective date. The amendments made by this subsection shall apply 
      to services performed after September 30, 1995. 

      (b) Transition in Benefits for State and Local Government Employees and 
    Former Employees. 

        (1) In general. 

          (A) Employees newly subject to tax. For purposes of sections 226, 
        226A, and 1811 of the Social Security Act, in the case of any 
        individual who performs services during the calendar quarter beginning 
        October 1, 1995, the wages for which are subject to the tax imposed by 
        section 3101(b) of the Internal Revenue Code of 1986 only because of 
        the amendment made by subsection (a), the individual's medicare 
        qualified State or local government employment (as defined in 
        subparagraph (B)) performed before October 1, 1995, shall be considered 
        to be ``employment'' (as defined for purposes of title II of such Act), 
        but only for purposes of providing the individual (or another person) 
        with entitlement to hospital insurance benefits under part A of title 
        XVIII of such Act for months beginning with October 1995. 

          (B) Medicare qualified state or local government employment defined. 
        In this paragraph, the term ``medicare qualified State or local 
        government employment'' means medicare qualified government employment 
        described in section 210(p)(1)(B) of the Social Security Act 
        (determined without regard to section 210(p)(3) of such Act, as in 
        effect before its repeal under subsection (a)(2)). 

        (2) Authorization of appropriations. There are authorized to be 
      appropriated to the Federal Hospital Insurance Trust Fund from time to 
      time such sums as the Secretary of Health and Human Services deems 
      necessary for any fiscal year on account of 

          (A) payments made or to be made during such fiscal year from such 
        Trust Fund with respect to individuals who are entitled to benefits 
        under title XVIII of the Social Security Act solely by reason of 
        paragraph (1), 

          (B) the additional administrative expenses resulting or expected to 
        result therefrom, and 

          (C) any loss in interest to such Trust Fund resulting from the 
        payment of those amounts, in order to place such Trust Fund in the same 
        position at the end of such fiscal year as it would have been in if 
        this subsection had not been enacted. 

        (3) Information to individuals who are prospective medicare 
      beneficiaries based on state and local government employment. Section 
      226(g) of the Social Security Act (42 U.S.C. 426(g)) is amended 

          (A) by redesignating paragraphs (1) through (3) as subparagraphs (A) 
        through (C), respectively, 

          (B) by inserting ``(1)'' after ``(g)'', and 

          (C) by adding at the end the following new paragraph: 

          ``(2) The Secretary, in consultation with State and local 
        governments, shall provide procedures designed to assure that 
        individuals who perform medicare qualified government employment by 
        virtue of service described in section 210(a)(7) are fully informed 
        with respect to (A) their eligibility or potential eligibility for 
        hospital insurance benefits (based on such employment) under part A of 
        title XVIII, (B) the requirements for, and conditions of, such 
        eligibility, and (C) the necessity of timely application as a condition 
        of becoming entitled under subsection (b)(2)(C), giving particular 
        attention to individuals who apply for an annuity or retirement benefit 
        and whose eligibility for such annuity or retirement benefit is based 
        on a disability.'' 

      (c) Technical Amendments. 

        (1) Subparagraph (A) of section 3121(u)(2) is amended by striking 
      ``subparagraphs (B) and (C),'' and inserting ``subparagraph (B),''. 

        (2) Subparagraph (B) of section 210(p)(1) of the Social Security Act 
      (42 U.S.C. 410(p)(1)) is amended by striking ``paragraphs (2) and (3).'' 
      and inserting ``paragraph (2).'' 

        (3) Section 218 of the Social Security Act (42 U.S.C. 418) is amended 
      by striking subsection (n). 

        (4) The amendments made by this subsection shall apply after September 
      30, 1995.