Short title

This Act may be cited as the

Guaranteed Access to Health Insurance Act of 2012

Repeal of certain health insurance requirements

Title I and subtitle A of title X of the Patient Protection and Affordable Care Act and section 2301 of the Health Care and Education Reconciliation Act of 2010 are repealed, and the provisions of law amended or repealed by such title, subtitle, and section, respectively, are restored or revived as if such Acts had not been enacted.

Ensuring affordability of health coverage through high risk pools, reinsurance programs, and other innovative methods

(a)

Treatment of qualified State reinsurance program as an alternative mechanism

Section 2744 of the Public Health Service Act (42 U.S.C. 300gg–44) is amended— (1)in subsection (a)(1)(D)— (A)by striking or at the end of clause (ii); (B)by striking the period at the end of clause (iii) and inserting a comma; and (C)by adding at the end the following:

(iv)a qualified reinsurance program described in subsection (c)(4), or (v)an innovative method described in subsection (c)(5).

; and

(2)in subsection (c), by adding at the end the following:

(4)

Qualified reinsurance program

For purposes of subsection (a)(1)(D)(iv), a qualified reinsurance program described in this paragraph is a program that— (A)is operated by a State (directly, or through a contract with an entity that provides reinsurance for health insurance coverage offered in the individual market, the small group market, or in both such markets); and (B)is designed to make reinsurance payments to, or otherwise limit the risk of, health insurance issuers that provide health insurance coverage to eligible individuals in the individual market in the State. (5)

Innovative method

For purposes of subsection (a)(1)(D)(v), the term innovative method has the meaning given such term in section 2745(g).

(b)

Seed grants to States

Section 2745(a) of the Public Health Service Act (42 U.S.C. 300gg–45(a)) is amended to read as follows:

(a)

Seed grants to States

(1)

In general

The Secretary shall provide from the funds appropriated under subsection (d)(1)(A) a grant of up to $5,000,000 to a State described in paragraph (2) for the State’s costs for the creation and initial operation of a qualified high risk pool, a qualified reinsurance program, or an innovative method. (2)

State described

A State described in this paragraph is a State that, as of the date of enactment of the Guaranteed Access to Health Insurance Act of 2012, has not created any of the following: (A)A qualified high risk pool. (B)A qualified reinsurance program. (C)An innovative method. (3)

Limitations on seed grants

(A)

One grant per State

After the date of enactment of the Guaranteed Access to Health Insurance Act of 2012, a State may receive only one grant under paragraph (1). (B)

One year to spend

The funds made available to a State under a grant under paragraph (1) shall not be available for obligation after the end of the 12-month period beginning on the date that the State receives such grant. (C)

Unexpended funds available for allotment

Any funds made available under a grant under this subsection that are not expended in the period under subparagraph (B) shall be made available for purpose of allotment under subsection (b).

(c)

Grants for operational losses

(1)

In general

Paragraph (1) of section 2745(b) of the Public Health Service Act (42 U.S.C. 300gg–45(b)(1)) is amended to read as follows:

(1)

In general

(A)

Grants for pools, reinsurance programs, and innovative methods

In the case of a State that has established a qualified high risk pool described in subparagraph (B), a qualified reinsurance program, or an innovative method the Secretary shall provide, from funds allotted to the State under paragraph (2), a grant for the losses incurred by the State in connection with the operation of the qualified high risk pool, qualified reinsurance program, or innovative method. (B)

Qualified high risk pool described

A qualified high risk pool described in this subparagraph is a qualified high risk pool (as such term is defined in subsection (g)(1)) that has in effect a mechanism reasonably designed to ensure continued funding of losses incurred by the State in connection with operation of the pool after the end of the last fiscal year for which a grant is provided under this paragraph.

(2)

Allotment

Paragraph (2) of section 2745(b) the Public Health Service Act (42 U.S.C. 300gg–45(b)(2)) is amended— (A)in the matter preceding subparagraph (A)— (i)by striking appropriated under paragraphs (1)(B)(i) and (2)(A) of subsection (d) for a fiscal year and inserting allocated for a fiscal year under subsection (d)(2)(A); and (ii)by inserting , reinsurance program, or innovative method after operate the high risk pool; (B)in subparagraph (A)— (i)by striking 40 and inserting 30; and (ii)by striking appropriated and inserting allocated; (C)in subparagraph (B), by striking each instance of appropriated and inserting allocated; (D)in subparagraph (C)— (i)by striking each instance of appropriated and inserting allocated; and (ii)by striking as the number of individuals and all that follows through the end of the subparagraph and inserting the following:

as—(i)the sum of— (I)the number of individuals enrolled in health care coverage through the qualified high risk pool of the State; and (II)the number of individuals whose health care coverage is covered by the qualified reinsurance program or innovative method of the State; bears to (ii)the total number of individuals in all qualifying States that so apply that are so enrolled or so covered (as determined by the Secretary).

; and

(E)by adding at the end the following new subparagraph:

(D)An amount equal to 10 percent of such allocated amount for the fiscal year shall be allotted among qualifying States that apply for such a grant so that the amount allotted to a State bears the same ratio to such allocated amount as— (i)the amount of funds contributed to the operation of any qualified high risk pool, qualified reinsurance program, or innovative method of the State by funding sources other than grants under this subsection; bears to (ii)the total of the amount described in clause (i) for all States.

(3)

Consistent premium rules

Section 2745(b) the Public Health Service Act (42 U.S.C. 300gg–45(b)) is amended— (A)by striking paragraph (3); and (B)by redesignating paragraph (4) as paragraph (3). (d)

Preference policy; no bonus grants

Section 2745 of the Public Health Service Act (42 U.S.C. 300gg–45) is amended by striking subsection (c) and inserting the following:

(c)

Preference policy

Beginning 3 years after the date of the enactment of the Guaranteed Access to Health Insurance Act of 2012, for the purpose of providing access to health insurance for high risk individuals in a State, the Secretary, in awarding any competitive grant for Federal funding for which the only eligible entities are States, shall give preference to any State that has received a grant under this section in the year during which such grant is awarded.

(e)

Funding

Section 2745(d) of the Public Health Service Act (42 U.S.C. 300gg–45(d)) is amended— (1)by striking paragraphs (1), (2), (3), and (4) and inserting the following:

(1)

Appropriations for fiscal year 2013 and subsequent years

Out of any funds in the Treasury not otherwise appropriated, on October 1, 2012, there is appropriated to the Secretary, $25,000,000,000, to remain available until expended, to carry out this section, of which— (A)$35,000,000 is to carry out subsection (a); and (B)$22,965,000,000 subject to paragraph (2), shall be made available for allotments under subsection (b)(2). (2)

Allotments

(A)

Annual amount

(i)

In general

For each fiscal year, the Secretary shall determine, from the amount available under paragraph (1)(B), the amount to allocate to such fiscal year for purposes of allotments under subsection (b)(2) for such fiscal year. (ii)

Criteria

In determining the amount for a fiscal year under clause (i), the Secretary shall ensure that an adequate, but not excessive, amount of funding is made available to support qualified high risk pools, qualified reinsurance programs, and innovative methods in the States. (B)

Reallotment

If, on June 30 of each fiscal year for which the Secretary made funds available for allotment under subparagraph (A), the Secretary determines that all the amounts made available for allotment for such fiscal year are not allotted or otherwise made available to States, such remaining amounts shall be allotted and made available under subsection (b) among States receiving grants under subsection (b) for the fiscal year based upon the allotment formula specified in such subsection.

; and

(2)by redesignating paragraph (5) as paragraph (3). (f)

Definitions

(1)

Qualified high risk pool

Section 2745(g)(1) of the Public Health Service Act (42 U.S.C. 300gg–45(g)(1)) is amended— (A)in subparagraph (A)— (i)by striking has the meaning given such term in section 2744(c)(2) and inserting means a qualified high risk pool (as such term is described in section 2744(c)(2)) that meets the requirements of subparagraph (B); (ii)by striking subparagraph (A) of such section and inserting subparagraph (A) of section 2744(c)(2); and (iii)by adding at the end the following:

(B)

Requirements for consumer protections

The requirements under this subparagraph for consumer protections for a qualified high risk pool are the following: (i)

Choice of coverage

The high risk pool provides all eligible individuals with a choice of health insurance coverage that includes at least one policy form that is a high deductible health plan that is combined with a health savings account. (ii)

Lifetime limits

The high risk pool provides to all eligible individuals health insurance coverage that does not impose any lifetime limit on the dollar value of benefits for any participant or beneficiary of such coverage. (iii)

Guaranteed availability

The high risk pool shall provide health insurance coverage to all eligible individuals who— (I)seek such coverage; and (II)pay any applicable premiums. (iv)

No wait list

The high risk pool may not— (I)apply any waiting period for health insurance coverage offered through the pool; (II)maintain any waiting list for access to such coverage; or (III)otherwise require an eligible individual to wait for access to such coverage. (v)

Premiums

The high risk pool may not charge any participant or beneficiary of coverage under such pool a premium for such coverage that is greater than 150 percent of the average premium in the individual market for health insurance coverage in that State. (vi)

Outreach and education

The high risk pool conducts education and outreach to residents of the State and insurance brokers in the State to ensure that such residents and brokers understand that the high risk pool is available to eligible individuals.

(2)

Eligible individual

(A)

In general

Section 2745(g) of the Public Health Service Act (42 U.S.C. 300gg–45(g)), as amended by paragraph (1), is further amended by striking paragraph (2) and inserting the following:

(2)

Eligible individual

The term eligible individual means an individual who— (A)is an eligible individual (as such term is defined in section 2741(b)); or (B)would be eligible for Medicare under title XVIII of the Social Security Act, except that such individual is subject to a 24-month disability waiting period under section 226(b) of the Social Security Act, during such period.

(B)

Conforming amendment

Section 2741(b) of the Public Health Service Act (42 U.S.C. 300gg–41(b)) is amended by inserting (except, for purposes of section 2745) after In this part. (3)

Qualified reinsurance program and innovative method

Section 2745(g) of the Public Health Service Act (42 U.S.C. 300gg–45(g)), as amended by paragraph (2), is further amended by adding at the end the following:

(4)

Qualified reinsurance program

The term qualified reinsurance program means a qualified reinsurance program, as such term is defined in section 2744(c)(4), that does not require any waiting period for health insurance coverage offered to eligible individuals in connection with such qualified reinsurance program. (5)

Innovative method

The term innovative method means a method implemented by a State, to provide access to health insurance coverage for eligible individuals in the State, that the Secretary determines will— (A)mitigate the cost of providing health insurance coverage to eligible individuals in the State in a manner that is better than, as determined by the Secretary, the provision of such coverage through a qualified high risk pool; and (B)that ensures that such individuals receive consumer protections that are similar to the consumer protections required under paragraph (1)(B) for a qualified high risk pool.

(g)

Protection against dumping

Section 2745 of the Public Health Service Act (42 U.S.C. 300gg–45) is amended by adding at the end the following:

(h)

Protection against dumping risk by insurers

(1)

In general

Subject to the criteria established by the Secretary under paragraph (1) of section 2746(d), a State operating a qualified high risk pool, qualified reinsurance program, or innovative method under this section may enforce sanctions against health insurance issuers in the State that are similar to the sanctions described in paragraph (2) of such section. (2)

Rule of construction

The rule of construction under paragraph (3) of section 2746(d) shall apply to this subsection in the same manner that such paragraph (3) applies to section 2746(d).

(h)

Effective date

The amendments made by this section shall take effect on October 1, 2012.

Federal fallback high risk pool

(a)

In general

Subpart 1 of part B of title XXVII of the Public Health Service Act (42 U.S.C. 300gg–41 et seq.) is amended by adding at the end the following:

2746.

Federal fallback high risk pool

(a)

Establishment and application of Federal fallback high risk pool

(1)

For States with no history of providing support for eligible individuals

If, by October 1, 2015, a State has not established a qualified high risk pool, qualified reinsurance program, or innovative method at any point in the 5-year period before such date, the Secretary shall establish a Federal fallback high risk pool program to provide health insurance coverage for eligible individuals in such State. (2)

For States that discontinue State high risk pools

Beginning October 1, 2015, if a State that operated a qualified high risk pool, a qualified reinsurance program, or innovative method under section 2745 before such date fails to operate a qualified high risk pool, qualified reinsurance program, or innovative method for any period of 2 consecutive years after such date, the Secretary shall, at the end of such 2-year period, establish a Federal fallback high risk pool to provide health insurance coverage for eligible individuals in such State. (b)

Administration

(1)

In general

The Secretary may carry out the program under this section directly or through contracts to eligible entities. (2)

Eligible entities

To be eligible for a contract under paragraph (1), an entity shall— (A)be a nonprofit private entity; (B)submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require; and (C)agree to utilize contract funding to establish and administer a Federal fallback high risk pool for eligible individuals. (c)

Use of funds

Amounts made available under this section shall be used to establish and operate a Federal fallback high risk pool that is a qualified high risk pool, as such term is defined in section 2744(c)(2), that meets the requirements of section 2745(g)(1)(B) of such Act, with respect to each State in which such Federal fallback high risk pool applies. (d)

Protection against dumping risk by insurers

(1)

In general

The Secretary shall establish criteria for determining whether health insurance issuers and employment-based health plans have discouraged an individual from remaining enrolled in prior coverage based on that individual’s health status. (2)

Sanctions

An health insurance issuer or employment-based health plan shall be responsible for reimbursing the Federal fallback high risk pool under this section for the medical expenses incurred by the Federal fallback high risk pool for an individual who, based on criteria established by the Secretary, the Secretary finds was encouraged by the health insurance issuer to disenroll from health benefits coverage prior to enrolling in coverage through the Federal fallback high risk. The criteria shall include at least the following circumstances: (A)In the case of prior coverage obtained through an employer, the provision by the employer, group health plan, or the health insurance issuer of money or other financial consideration for disenrolling from the coverage. (B)In the case of prior coverage obtained directly from a health insurance issuer or under an employment-based health plan— (i)the provision by the health insurance issuer or plan of money or other financial consideration for disenrolling from the coverage; or (ii)in the case of an individual whose premium for the prior coverage exceeded the premium required by the program (adjusted based on the age factors applied to the prior coverage)— (I)the prior coverage is a policy that is no longer being actively marketed (as defined by the Secretary) by the health insurance issuer; or (II)the prior coverage is a policy for which duration of coverage form issue or health status are factors that can be considered in determining premiums at renewal. (3)

Construction

Nothing in this subsection shall be construed as constituting exclusive remedies for violations of criteria established under paragraph (1) or as preventing States from applying or enforcing such paragraph or other provisions under law with respect to health insurance issuers. (e)

Oversight

The Secretary shall establish— (1)an appeals process to enable individuals to appeal a determination under this section; and (2)procedures to protect against waste, fraud, and abuse. (f)

Funding; termination of authority

(1)

In general

There are authorized to be appropriated to the Secretary $2,500,000,000 for the 3-fiscal-year period beginning on October 1, 2015, to pay claims against (and the administrative costs of) the Federal fallback high risk pool under this section that are in excess of the amount of premiums collected from eligible individuals enrolled in the Federal fallback high risk pool. (2)

Insufficient funds

If the Secretary estimates for any fiscal year that the aggregate amounts available for the payment of the expenses of the Federal fallback high risk pool will be less than the actual amount of such expenses, the Secretary shall make such adjustments as are necessary to eliminate such deficit. (3)

Relationship to State high risk pools

(A)

Termination of Federal coverage

Subject to subparagraph (B), if a State establishes a qualified high risk pool, qualified reinsurance program, or innovative method under section 2745, coverage of an eligible individual in such State under a Federal fallback high risk pool shall terminate on the date that— (i)is the last day of the plan year that applies to such individual under such Federal fallback high risk pool; and (ii)that occurs after the date on which the State establishes such a qualified high risk pool, qualified reinsurance program, or innovative method. (B)

Transition to State high risk pools

The Secretary shall develop procedures to provide for the transition of eligible individuals in a State enrolled in health insurance coverage offered through a Federal fallback high risk pool established under this section into a qualified high risk pool in such State. Such procedures shall ensure that there is no lapse in coverage with respect to the individual and may extend coverage after the applicable termination date under subparagraph (A) of the Federal fallback risk pool involved, if the Secretary determines necessary to avoid such a lapse. (C)

No new enrollment

The Federal fallback high risk pool in a State shall not enroll any individual in the State for coverage under such a Federal fallback high risk pool at any time that the State is operating such a qualified high risk pool, qualified reinsurance program, or innovative method under section 2745. (4)

Limitations

The Secretary has the authority to stop taking applications for participation in the Federal fallback high risk pool under this section to comply with paragraph (2). (5)

Relation to State laws

The standards established under this section shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to any Federal fallback high risk pool which is established in accordance with this section. (g)

Definitions

For purposes of this section— (1)

Terms from section 2745

Except as otherwise provided in this section, the terms eligible individual, innovative method, qualified high risk pool, and qualified reinsurance program have the meanings given such terms in section 2745(g). (2)

Employment-based health plan

The term employment-based health plan shall have the meaning given such term by the Secretary, consistent with the meaning given such term under section 1101 of Public Law 111–148.

(b)

Conforming amendment

Section 2741(b) of the Public Health Service Act (42 U.S.C. 300gg–41(b)), as amended by section 3(f)(2)(B), is further amended, in the matter before paragraph (1), by inserting and section 2746 after for purposes of section 2745.