[Congressional Record Volume 163, Number 125 (Tuesday, July 25, 2017)]
[Senate]
[Pages S4200-S4218]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 270. Mr. McCONNELL proposed an amendment to amendment SA 267
proposed by Mr. McConnell to the bill H.R. 1628, to provide for
reconciliation pursuant to title II of the concurrent resolution on the
budget for fiscal year 2017; as follows:
Strike all after line one and insert the following:
This Act may be cited as the ``Better Care Reconciliation
Act of 2017''.
TITLE I
SEC. 101. ELIMINATION OF LIMITATION ON RECAPTURE OF EXCESS
ADVANCE PAYMENTS OF PREMIUM TAX CREDITS.
Subparagraph (B) of section 36B(f)(2) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new clause:
``(iii) Nonapplicability of limitation.--This subparagraph
shall not apply to taxable years ending after December 31,
2017.''.
SEC. 102. RESTRICTIONS FOR THE PREMIUM TAX CREDIT.
(a) Eligibility for Credit.--
(1) In general.--Section 36B(c)(1) of the Internal Revenue
Code of 1986 is amended--
(A) by striking ``equals or exceeds 100 percent but does
not exceed 400 percent'' in subparagraph (A) and inserting
``does not exceed 350 percent'', and
(B) by striking subparagraph (B) and redesignating
subparagraphs (C) and (D) as subparagraphs (B) and (C),
respectively.
(2) Treatment of certain aliens.--
(A) In general.--Paragraph (2) of section 36B(e) of the
Internal Revenue Code of 1986 is amended by striking ``an
alien lawfully present in the United States'' and inserting
``a qualified alien (within the meaning of section 431 of the
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996)''.
(B) Amendments to patient protection and affordable care
act.--
(i) Section 1411(a)(1) of the Patient Protection and
Affordable Care Act is amended by striking ``or an alien
lawfully present in the United States'' and inserting ``or a
qualified alien (within the meaning of section 431 of the
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996)''.
(ii) Section 1411(c)(2)(B) of such Act is amended by
striking ``an alien lawfully present in the United States''
each place it appears in clauses (i)(I) and (ii)(II) and
inserting ``a qualified alien (within the meaning of section
431 of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996)''.
(iii) Section 1412(d) of such Act is amended--
(I) by striking ``not lawfully present in the United
States'' and inserting ``not citizens or nationals of the
United States or qualified aliens (within the meaning of
section 431 of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996)'', and
(II) by striking ``Individuals Not Lawfully Present'' in
the heading and inserting ``Certain Aliens''.
(b) Modification of Limitation on Premium Assistance
Amount.--
(1) Use of benchmark plan.--
(A) In general.--Section 36B(b) of the Internal Revenue
Code of 1986 is amended--
(i) by striking ``applicable second lowest cost silver
plan'' each place it appears in paragraph (2)(B)(i) and
(3)(C) and inserting ``applicable median cost benchmark
plan'',
(ii) by striking ``such silver plan'' in paragraph (3)(C)
and inserting ``such benchmark plan'', and
(iii) in paragraph (3)(B)--
(I) by redesignating clauses (i) and (ii) as clauses (iii)
and (iv), respectively, and by striking all that precedes
clause (iii) (as so redesignated) and inserting the
following:
``(B) Applicable median cost benchmark plan.--The
applicable median cost benchmark plan with respect to any
applicable taxpayer is the qualified health plan offered
[[Page S4201]]
in the individual market in the rating area in which the
taxpayer resides which--
``(i) provides a level of coverage that is designed to
provide benefits that are actuarially equivalent to 58
percent of the full actuarial value of the benefits (as
determined under rules similar to the rules of paragraphs (2)
and (3) of section 1302(d) of the Patient Protection and
Affordable Care Act) provided under the plan,
``(ii) has a premium which is the median premium of all
qualified health plans described in clause (i) which are
offered in the individual market in such rating area (or, in
any case in which no such plan has such median premium, has a
premium nearest (but not in excess of) such median
premium),'', and
(II) by striking ``clause (ii)(I)'' in the flush text at
the end and inserting ``clause (iv)(I)''.
(B) Waiver of actuarial value standard for benchmark
plans.--Section 36B(b)(3)(B) of the Internal Revenue Code of
1986, as amended by subparagraph (A), is amended by adding at
the end the following new sentence: ``If, for any plan year
before 2027, the Secretary of the Treasury, in consultation
with the Secretary of Health and Human Services, determines
that there will be no plan offered in a rating area in the
individual market that meets the level of coverage described
in clause (i), the Secretary of the Treasury may increase the
58 percent amount in such clause.''.
(2) Modification of applicable percentage.--Section
36B(b)(3)(A) of the Internal Revenue Code of 1986 is
amended--
(A) in clause (i), by striking ``from the initial premium
percentage'' and all that follows and inserting ``from the
initial percentage to the final percentage specified in such
table for such income tier with respect to a taxpayer of the
age involved:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
``In the case of Up to Age 29 Age 30-39 Age 40-49 Age 50-59 Over Age 59
household income ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(expressed as a
percent of the
poverty line)
within the Initial % Final % Initial % Final % Initial % Final % Initial % Final % Initial % Final %
following income
tier:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Up to 100% 2............... 2............... 2............... 2.............. 2.............. 2.............. 2.............. 2.............. 2.............. 2
100%-133% 2............... 2.5............. 2............... 2.5............ 2.............. 2.5............ 2.............. 2.5............ 2.............. 2.5
133%-150% 2.5............. 4............... 2.5............. 4.............. 2.5............ 4.............. 2.5............ 4.............. 2.5............ 4
150%-200% 4............... 4.3............. 4............... 5.3............ 4.............. 6.3............ 4.............. 7.3............ 4.............. 8.3
200%-250% 4.3............. 4.3............. 5.3............. 5.9............ 6.3............ 8.05........... 7.3............ 9.............. 8.3............ 10
250%-300% 4.3............. 4.3............. 5.9............. 5.9............ 8.05........... 8.35........... 9.............. 10.5........... 10............. 11.5
300%-350% 4.3............. 6.4............. 5.9............. 8.9............ 8.35........... 12.5........... 10.5........... 15.8........... 11.5........... 16.2'',
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(B) by striking ``0.504'' in clause (ii)(III) and inserting
``0.4'', and
(C) by adding at the end the following new clause:
``(iii) Age determinations.--For purposes of clause (i),
the age of the taxpayer taken into account under clause (i)
with respect to any taxable year is the age attained before
the close of the taxable year by the oldest individual taken
into account on such taxpayer's return who is covered by a
qualified health plan taken into account under paragraph
(2)(A).''.
(c) Elimination of Eligibility Exceptions for Employer-
sponsored Coverage.--
(1) In general.--Section 36B(c)(2) of the Internal Revenue
Code of 1986 is amended by striking subparagraph (C).
(2) Amendments related to qualified small employer health
reimbursement arrangements.--Section 36B(c)(4) of such Code
is amended--
(A) by striking ``which constitutes affordable coverage''
in subparagraph (A), and
(B) by striking subparagraphs (B), (C), (E), and (F) and
redesignating subparagraph (D) as subparagraph (B).
(d) Modifications to Definition of Qualified Health Plan.--
(1) In general.--Section 36B(c)(3)(A) of the Internal
Revenue Code of 1986 is amended by inserting at the end the
following new sentence: ``Such term shall not include a plan
that includes coverage for abortions (other than any abortion
necessary to save the life of the mother or any abortion with
respect to a pregnancy that is the result of an act of rape
or incest).''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years beginning after December 31,
2017.
(e) Allowance of Credit for Catastrophic Plans.--Section
36B(c)(3)(A) of the Internal Revenue Code of 1986, as amended
by this Act, is amended by striking ``, except that such term
shall not include a qualified health plan that is a
catastrophic plan described in section 1302(e) of such Act''.
(f) Increased Penalty on Erroneous Claims of Credit.--
Section 6676(a) of the Internal Revenue Code of 1986 is
amended by inserting ``(25 percent in the case of a claim for
refund or credit relating to the health insurance coverage
credit under section 36B)'' after ``20 percent''.
(g) Effective Date.--Except as otherwise provided in this
section, the amendments made by this section shall apply to
taxable years beginning after December 31, 2019.
SEC. 103. MODIFICATIONS TO SMALL BUSINESS TAX CREDIT.
(a) Sunset.--
(1) In general.--Section 45R of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(j) Shall Not Apply.--This section shall not apply with
respect to amounts paid or incurred in taxable years
beginning after December 31, 2019.''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years beginning after December 31,
2019.
(b) Disallowance of Small Employer Health Insurance Expense
Credit for Plan Which Does Not Include Protections for
Life.--
(1) In general.--Subsection (h) of section 45R of the
Internal Revenue Code of 1986 is amended--
(A) by striking ``Any term'' and inserting the following:
``(1) In general.--Any term'', and
(B) by adding at the end the following new paragraph:
``(2) Exclusion of certain health plans.--The term
`qualified health plan' does not include any health plan that
includes coverage for abortions (other than any abortion
necessary to save the life of the mother or any abortion with
respect to a pregnancy that is the result of an act of rape
or incest).''.
(2) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31,
2017.
SEC. 104. INDIVIDUAL MANDATE.
(a) In General.--Section 5000A(c) of the Internal Revenue
Code of 1986 is amended--
(1) in paragraph (2)(B)(iii), by striking ``2.5 percent''
and inserting ``Zero percent'', and
(2) in paragraph (3)--
(A) by striking ``$695'' in subparagraph (A) and inserting
``$0'', and
(B) by striking subparagraph (D).
(b) Effective Date.--The amendments made by this section
shall apply to months beginning after December 31, 2015.
SEC. 105. EMPLOYER MANDATE.
(a) In General.--
(1) Paragraph (1) of section 4980H(c) of the Internal
Revenue Code of 1986 is amended by inserting ``($0 in the
case of months beginning after December 31, 2015)'' after
``$2,000''.
(2) Paragraph (1) of section 4980H(b) of the Internal
Revenue Code of 1986 is amended by inserting ``($0 in the
case of months beginning after December 31, 2015)'' after
``$3,000''.
(b) Effective Date.--The amendments made by this section
shall apply to months beginning after December 31, 2015.
SEC. 106. STATE STABILITY AND INNOVATION PROGRAM.
(a) In General.--Section 2105 of the Social Security Act
(42 U.S.C. 1397ee) is amended by adding at the end the
following new subsections:
``(h) Short-term Assistance to Address Coverage and Access
Disruption and Provide Support for States.--
``(1) Appropriation.--There are authorized to be
appropriated, and are appropriated, out of monies in the
Treasury not otherwise obligated, $15,000,000,000 for each of
calendar years 2018 and 2019, and $10,000,000,000 for each of
calendar years 2020 and 2021, to the Administrator of the
Centers for Medicare & Medicaid Services (in this subsection
and subsection (i) referred to as the `Administrator') to
fund arrangements with health insurance issuers to assist in
the purchase of health benefits coverage by addressing
coverage and access disruption and responding to urgent
health care needs within States. Funds appropriated under
this paragraph shall remain available until expended.
``(2) Participation requirements.--
``(A) Guidance.--Not later than 30 days after the date of
enactment of this subsection, the Administrator shall issue
guidance to health insurance issuers regarding how to submit
a notice of intent to participate in the program established
under this subsection.
``(B) Notice of intent to participate.--To be eligible for
funding under this subsection, a health insurance issuer
shall submit to the Administrator a notice of intent to
participate at such time (but, in the case of funding for
calendar year 2018, not later than 35 days after the date of
enactment of this subsection and, in the case of funding for
calendar year 2019, 2020, 2021, 2022, 2023, 2024, 2025, or
2026, not later than March 31 of the previous year) and in
such form and manner as specified by the Administrator and
containing--
[[Page S4202]]
``(i) a certification that the health insurance issuer will
use the funds in accordance with the requirements of
paragraph (5); and
``(ii) such information as the Administrator may require to
carry out this subsection.
``(3) Procedure for distribution of funds.--The
Administrator shall determine an appropriate procedure for
providing and distributing funds under this subsection that
includes reserving an amount equal to 1 percent of the
amounts appropriated under paragraph (1) for a calendar year
for providing and distributing funds to health insurance
issuers in States where the cost of insurance premiums are at
least 75 percent higher than the national average.
``(4) No match.--Neither the State percentage applicable to
payments to States under subsection (i)(5)(B) nor any other
matching requirement shall apply to funds provided to health
insurance issuers under this subsection.
``(5) Use of funds.--Funds provided to a health insurance
issuer under paragraph (1) or (6) shall be subject to the
requirements of paragraphs (1)(D) and (7) of subsection (i)
in the same manner as such requirements apply to States
receiving payments under subsection (i) and shall be used
only for the activities specified in paragraph (1)(A)(ii) of
subsection (i).
``(6) Additional support for stabilizing premiums and
promoting choice in plans offered in the individual market.--
``(A) Appropriation.--In addition to the amounts
appropriated under paragraph (1), there is appropriated, out
of any money in the Treasury not otherwise obligated,
$10,000,000,000 for each of calendar years 2020 through 2026,
for the purpose of funding arrangements with health insurance
issuers to support the offering of qualified health plans in
States in which such issuers also offer coverage in
accordance with section 212(a) of the Better Care
Reconciliation Act.
``(B) Use of funds.--
``(i) In general.--The Administrator shall use amounts
appropriated under subparagraph (A) to establish a Federal
fund for the purpose of providing health insurance coverage
by making payments to health insurance issuers that offer a
plan in accordance with section 212(a) of the Better Care
Reconciliation Act, to assist such health insurance issuers
in covering high risk individuals enrolled in qualified
health plans through an Exchange in rating areas in which
coverage is offered in accordance with section 212(a) of such
Act. The Administrator shall determine an appropriate
procedure for making such payments.
``(ii) Priority uses.--In making payments from the amounts
appropriated under subparagraph (A), the Administrator shall
prioritize payments--
``(I) based on the percentage of rating areas in the State
that meet the conditions in section212(b) of such Act; and
``(II) to health plans certified under section 212(b)(2) of
such Act in States for which paragraphs (1) through (6) of
section 212(c) of such Act are not applicable.
``(i) Long-Term State Stability and Innovation Program.--
``(1) Application and certification requirements.--To be
eligible for an allotment of funds under this subsection, a
State shall submit to the Administrator an application, not
later than March 31, 2018, in the case of allotments for
calendar year 2019, and not later than March 31 of the
previous year, in the case of allotments for any subsequent
calendar year) and in such form and manner as specified by
the Administrator, that contains the following:
``(A) A description of how the funds will be used to do 1
or more of the following:
``(i) To establish or maintain a program or mechanism to
help high-risk individuals in the purchase of health benefits
coverage, including by reducing premium costs for such
individuals, who have or are projected to have a high rate of
utilization of health services, as measured by cost, and who
do not have access to health insurance coverage offered
through an employer, enroll in health insurance coverage
under a plan offered in the individual market (within the
meaning of section 5000A(f)(1)(C) of the Internal Revenue
Code of 1986).
``(ii) To establish or maintain a program to enter into
arrangements with health insurance issuers to assist in the
purchase of health benefits coverage by stabilizing premiums
and promoting State health insurance market participation and
choice in plans offered in the individual market (within the
meaning of section 5000A(f)(1)(C) of the Internal Revenue
Code of 1986).
``(iii) To provide payments for health care providers for
the provision of health care services, as specified by the
Administrator.
``(iv) To provide health insurance coverage by funding
assistance to reduce out-of-pocket costs, such as copayments,
coinsurance, and deductibles, of individuals enrolled in
plans offered in the individual market (within the meaning of
section 5000A(f)(1)(C) of the Internal Revenue Code of 1986).
``(B) A certification that the State shall make, from non-
Federal funds, expenditures for 1 or more of the activities
specified in subparagraph (A) in an amount that is not less
than the State percentage required for the year under
paragraph (5)(B)(ii).
``(C) A certification that the funds provided under this
subsection shall only be used for the activities specified in
subparagraph (A).
``(D) A certification that none of the funds provided under
this subsection shall be used by the State for an expenditure
that is attributable to an intergovernmental transfer,
certified public expenditure, or any other expenditure to
finance the non-Federal share of expenditures required under
any provision of law, including under the State plans
established under this title and title XIX or under a waiver
of such plans.
``(E) Such other information as necessary for the
Administrator to carry out this subsection.
``(2) Eligibility.--Only the 50 States and the District of
Columbia shall be eligible for an allotment and payments
under this subsection and all references in this subsection
to a State shall be treated as only referring to the 50
States and the District of Columbia.
``(3) One-time application.--If an application of a State
submitted under this subsection is approved by the
Administrator for a year, the application shall be deemed to
be approved by the Administrator for that year and each
subsequent year through December 31, 2026.
``(4) Long-term state stability and innovation
allotments.--
``(A) Appropriation; total allotment.--For the purpose of
providing allotments to States under this subsection, there
is appropriated, out of any money in the Treasury not
otherwise appropriated--
``(i) for calendar year 2019, $8,000,000,000;
``(ii) for calendar year 2020, $29,000,000,000;
``(iii) for calendar year 2021, $29,000,000,000;
``(iv) for calendar year 2022, $33,200,000,000;
``(v) for calendar year 2023, $33,200,000,000;
``(vi) for calendar year 2024, $33,200,000,000;
``(vii) for calendar year 2025, $33,200,000,000; and
``(viii) for calendar year 2026, $33,200,000,000.
``(B) Allotments.--
``(i) In general.--In the case of a State with an
application approved under this subsection with respect to a
year, the Administrator shall allot to the State, in
accordance with an allotment methodology specified by the
Administrator that ensures that the spending requirements in
paragraphs (6) are met for the year and that reserves an
amount that is at least 1 percent of the amount appropriated
under subparagraph (A) for a calendar year for allotments to
each State where the cost of insurance premiums are at least
75 percent higher than the national average, from amounts
appropriated for such year under subparagraph (A), such
amount as specified by the Administrator with respect to the
State and application and year.
``(ii) Annual redistribution of previous year's unused
funds.--
``(I) In general.-- In carrying out clause (i), with
respect to a year (beginning with 2021), the Administrator
shall, not later than March 31 of such year--
``(aa) determine the amount of funds, if any, remaining
unused under subparagraph (A) from the previous year; and
``(bb) if the Administrator determines that any funds so
remain from the previous year, redistribute such remaining
funds in accordance with an allotment methodology specified
by the Administrator to States that have submitted an
application approved under this subsection for the year.
``(II) Applicable state percentage.--The State percentage
specified for a year in paragraph (5)(B)(ii) shall apply to
funds redistributed under subclause (I) in that year.
``(C) Availability of allotted state funds.--
``(i) In general.--Amounts allotted to a State pursuant to
subparagraph (B)(i) for a year shall remain available for
expenditure by the State through the end of the second
succeeding year.
``(ii) Availability of amounts redistributed.--Amounts
redistributed to a State under subparagraph (B)(ii) in a year
shall be available for expenditure by the State through the
end of the second succeeding year.
``(5) Payments.--
``(A) Annual payment of allotments.--Subject to
subparagraph (B), the Administrator shall pay to each State
that has an application approved under this subsection for a
year, from the allotment determined under paragraph (4)(B)
for the State for the year, an amount equal to the Federal
percentage of the State's expenditures for the year.
``(B) State expenditures required beginning 2022.--For
purposes of subparagraph (A), the Federal percentage is equal
to 100 percent reduced by the State percentage for that year,
and the State percentage is equal to--
``(i) in the case of calendar year 2019, 0 percent;
``(ii) in the case of calendar year 2020, 0 percent;
``(iii) in the case of calendar year 2021, 0 percent;
``(iv) in the case of calendar year 2022, 7 percent;
``(v) in the case of calendar year 2023, 14 percent;
``(vi) in the case of calendar year 2024, 21 percent;
``(vii) in the case of calendar year 2025, 28 percent; and
``(viii) in the case of calendar year 2026, 35 percent.
``(C) Advance payment; retrospective adjustment.--
``(i) In general.--If the Administrator deems it
appropriate, the Administrator shall make payments under this
subsection for each year on the basis of advance estimates of
expenditures submitted by the
[[Page S4203]]
State and such other investigation as the Administrator shall
find necessary, and shall reduce or increase the payments as
necessary to adjust for any overpayment or underpayment for
prior years.
``(ii) Misuse of funds.--If the Administrator determines
that a State is not using funds paid to the State under this
subsection in a manner consistent with the description
provided by the State in its application approved under
paragraph (1), the Administrator may withhold payments,
reduce payments, or recover previous payments to the State
under this subsection as the Administrator deems appropriate.
``(D) Flexibility in submittal of claims.--Nothing in this
subsection shall be construed as preventing a State from
claiming as expenditures in the year expenditures that were
incurred in a previous year.
``(6) Required uses.--
``(A) Premium stabilization and incentives for individual
market participation.--In determining allotments for States
under this subsection for each of calendar years 2019, 2020,
and 2021, the Administrator shall ensure that at least
$5,000,000,000 of the amounts appropriated for each such year
under paragraph (4)(A) are used by States for the purposes
described in paragraph (1)(A)(ii) and in accordance with
guidance issued by the Administrator not later than 30 days
after the date of enactment of this subsection that specifies
the parameters for the use of funds for such purposes.
``(B) Assistance with out-of-pocket costs.--In determining
allotments for States under this subsection for each of
calendar years 2020 through 2026, the Administrator shall
ensure that at least $15,000,000,000 of the amounts
appropriated for each of calendar years 2020 and 2021 under
paragraph (4)(A), and at least $14,000,000,000 of the amounts
appropriated for each of calendar years 2022 through 2026
under such paragraph, are used by States for the purposes
described in paragraph (1)(A)(iv) and in accordance with
guidance issued by the Administrator not later than September
1, 2019, that specifies the parameters for the use of funds
for such purposes.
``(7) Exemptions.--Paragraphs (2), (3), (5), (6), (8),
(10), and (11) of subsection (c) do not apply to payments
under this subsection.''.
(b) Other Title XXI Amendments.--
(1) Section 2101 of such Act (42 U.S.C. 1397aa) is
amended--
(A) in subsection (a), in the matter preceding paragraph
(1), by striking ``The purpose'' and inserting ``Except with
respect to short-term assistance activities under section
2105(h) and the Long-Term State Stability and Innovation
Program established in section 2105(i), the purpose''; and
(B) in subsection (b), in the matter preceding paragraph
(1), by inserting ``subsection (a) or (g) of'' before
``section 2105''.
(2) Section 2105(c)(1) of such Act (42 U.S.C. 1397ee(c)(1))
is amended by striking ``and may not include'' and inserting
``or to carry out short-term assistance activities under
subsection (h) or the Long-Term State Stability and
Innovation Program established in subsection (i) and, except
in the case of funds made available under subsection (h) or
(i), may not include''.
(3) Section 2106(a)(1) of such Act (42 U.S.C. 1397ff(a)(1))
is amended by inserting ``subsection (a) or (g) of'' before
``section 2105''.
SEC. 107. BETTER CARE RECONCILIATION IMPLEMENTATION FUND.
(a) In General.--There is hereby established a Better Care
Reconciliation Implementation Fund (referred to in this
section as the ``Fund'') within the Department of Health and
Human Services to provide for Federal administrative expenses
in carrying out this Act.
(b) Funding.--There is appropriated to the Fund, out of any
funds in the Treasury not otherwise appropriated,
$500,000,000.
SEC. 108. REPEAL OF THE TAX ON EMPLOYEE HEALTH INSURANCE
PREMIUMS AND HEALTH PLAN BENEFITS.
(a) In General.--Chapter 43 of the Internal Revenue Code of
1986 is amended by striking section 4980I.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to taxable years beginning after December 31,
2019.
(c) Subsequent Effective Date.--The amendment made by
subsection (a) shall not apply to taxable years beginning
after December 31, 2025, and chapter 43 of the Internal
Revenue Code of 1986 is amended to read as such chapter would
read if such subsection had never been enacted.
SEC. 109. REPEAL OF TAX ON OVER-THE-COUNTER MEDICATIONS.
(a) HSAs.--Subparagraph (A) of section 223(d)(2) of the
Internal Revenue Code of 1986 is amended by striking ``Such
term'' and all that follows through the period.
(b) Archer MSAs.--Subparagraph (A) of section 220(d)(2) of
the Internal Revenue Code of 1986 is amended by striking
``Such term'' and all that follows through the period.
(c) Health Flexible Spending Arrangements and Health
Reimbursement Arrangements.--Section 106 of the Internal
Revenue Code of 1986 is amended by striking subsection (f).
(d) Effective Dates.--
(1) Distributions from savings accounts.--The amendments
made by subsections (a) and (b) shall apply to amounts paid
with respect to taxable years beginning after December 31,
2016.
(2) Reimbursements.--The amendment made by subsection (c)
shall apply to expenses incurred with respect to taxable
years beginning after December 31, 2016.
SEC. 110. REPEAL OF TAX ON HEALTH SAVINGS ACCOUNTS.
(a) HSAs.--Section 223(f)(4)(A) of the Internal Revenue
Code of 1986 is amended by striking ``20 percent'' and
inserting ``10 percent''.
(b) Archer MSAs.--Section 220(f)(4)(A) of the Internal
Revenue Code of 1986 is amended by striking ``20 percent''
and inserting ``15 percent''.
(c) Effective Date.--The amendments made by this section
shall apply to distributions made after December 31, 2016.
SEC. 111. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO FLEXIBLE
SPENDING ACCOUNTS.
(a) In General.--Section 125 of the Internal Revenue Code
of 1986 is amended by striking subsection (i).
(b) Effective Date.--The amendment made by this section
shall apply to plan years beginning after December 31, 2017.
SEC. 112. REPEAL OF TAX ON PRESCRIPTION MEDICATIONS.
Subsection (j) of section 9008 of the Patient Protection
and Affordable Care Act is amended to read as follows:
``(j) Repeal.--This section shall apply to calendar years
beginning after December 31, 2010, and ending before January
1, 2018.''.
SEC. 113. REPEAL OF MEDICAL DEVICE EXCISE TAX.
Section 4191 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
``(d) Applicability.--The tax imposed under subsection (a)
shall not apply to sales after December 31, 2017.''.
SEC. 114. REPEAL OF HEALTH INSURANCE TAX.
Subsection (j) of section 9010 of the Patient Protection
and Affordable Care Act is amended by striking ``, and'' at
the end of paragraph (1) and all that follows through
``2017''.
SEC. 115. REPEAL OF ELIMINATION OF DEDUCTION FOR EXPENSES
ALLOCABLE TO MEDICARE PART D SUBSIDY.
(a) In General.--Section 139A of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
sentence: ``This section shall not be taken into account for
purposes of determining whether any deduction is allowable
with respect to any cost taken into account in determining
such payment.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2016.
SEC. 116. REPEAL OF CHRONIC CARE TAX.
(a) In General.--Subsection (a) of section 213 of the
Internal Revenue Code of 1986 is amended by striking ``10
percent'' and inserting ``7.5 percent''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2016.
SEC. 117. REPEAL OF TANNING TAX.
(a) In General.--The Internal Revenue Code of 1986 is
amended by striking chapter 49.
(b) Effective Date.--The amendment made by this section
shall apply to services performed after September 30, 2017.
SEC. 118. PURCHASE OF INSURANCE FROM HEALTH SAVINGS ACCOUNT.
(a) Purchase of High Deductible Health Plans.--
(1) In general.--Paragraph (2) of section 223(d) of the
Internal Revenue Code of 1986, as amended by section 109(a),
is amended--
(A) by striking ``and any dependent (as defined in section
152, determined without regard to subsections (b)(1), (b)(2),
and (d)(1)(B) thereof) of such individual'' in subparagraph
(A) and inserting ``any dependent (as defined in section 152,
determined without regard to subsections (b)(1), (b)(2), and
(d)(1)(B) thereof) of such individual, and any child (as
defined in section 152(f)(1)) of such individual who has not
attained the age of 27 before the end of such individual's
taxable year'',
(B) by striking subparagraph (B) and inserting the
following:
``(B) Health insurance may not be purchased from account.--
Except as provided in subparagraph (C), subparagraph (A)
shall not apply to any payment for insurance.'', and
(C) by striking ``or'' at the end of subparagraph (C)(iii),
by striking the period at the end of subparagraph (C)(iv) and
inserting ``, or'', and by adding at the end the following:
``(v) a high deductible health plan but only to the extent
of the portion of such expense in excess of--
``(I) any amount allowable as a credit under section 36B
for the taxable year with respect to such coverage,
``(II) any amount allowable as a deduction under section
162(l) with respect to such coverage, or
``(III) any amount excludable from gross income with
respect to such coverage under section 106 (including by
reason of section 125) or 402(l).''.
(2) Effective date.--The amendments made by this subsection
shall apply with respect to amounts paid for expenses
incurred for, and distributions made for, coverage under a
high deductible health plan beginning after December 31,
2017.
(b) Consumer Freedom Plans.--
(1) In general.--Section 223(d)(2)(C) of the Internal
Revenue Code of 1986, as amended by subsection (a) and
section 122, is amended--
(A) by striking ``or'' at the end of clause (iv), by
striking the period at the end of clause (v), and by adding
at the end the following:
[[Page S4204]]
``(vi) any plan which--
``(I) is offered by a health insurance issuer which meets
the conditions described in section 212(b) of the Better Care
Reconciliation Act of 2017 for the plan year, and
``(II) would not be permitted to be offered in the market
but for such section.'', and
(B) by inserting ``or (vi)'' after ``clause (v)'' in the
last sentence thereof.
(2) Effective date.--The amendments made by this subsection
shall to taxable years beginning after December 31, 2019.
SEC. 119. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAVINGS
ACCOUNT INCREASED TO AMOUNT OF DEDUCTIBLE AND
OUT-OF-POCKET LIMITATION.
(a) Self-Only Coverage.--Section 223(b)(2)(A) of the
Internal Revenue Code of 1986 is amended by striking
``$2,250'' and inserting ``the amount in effect under
subsection (c)(2)(A)(ii)(I)''.
(b) Family Coverage.--Section 223(b)(2)(B) of such Code is
amended by striking ``$4,500'' and inserting ``the amount in
effect under subsection (c)(2)(A)(ii)(II)''.
(c) Cost-of-living Adjustment.--Section 223(g)(1) of such
Code is amended--
(1) by striking ``subsections (b)(2) and'' both places it
appears and inserting ``subsection'', and
(2) in subparagraph (B), by striking ``determined by'' and
all that follows through `` `calendar year 2003'.'' and
inserting ``determined by substituting `calendar year 2003'
for `calendar year 1992' in subparagraph (B) thereof.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2017.
SEC. 120. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CONTRIBUTIONS
TO THE SAME HEALTH SAVINGS ACCOUNT.
(a) In General.--Section 223(b)(5) of the Internal Revenue
Code of 1986 is amended to read as follows:
``(5) Special rule for married individuals with family
coverage.--
``(A) In general.--In the case of individuals who are
married to each other, if both spouses are eligible
individuals and either spouse has family coverage under a
high deductible health plan as of the first day of any
month--
``(i) the limitation under paragraph (1) shall be applied
by not taking into account any other high deductible health
plan coverage of either spouse (and if such spouses both have
family coverage under separate high deductible health plans,
only one such coverage shall be taken into account),
``(ii) such limitation (after application of clause (i))
shall be reduced by the aggregate amount paid to Archer MSAs
of such spouses for the taxable year, and
``(iii) such limitation (after application of clauses (i)
and (ii)) shall be divided equally between such spouses
unless they agree on a different division.
``(B) Treatment of additional contribution amounts.--If
both spouses referred to in subparagraph (A) have attained
age 55 before the close of the taxable year, the limitation
referred to in subparagraph (A)(iii) which is subject to
division between the spouses shall include the additional
contribution amounts determined under paragraph (3) for both
spouses. In any other case, any additional contribution
amount determined under paragraph (3) shall not be taken into
account under subparagraph (A)(iii) and shall not be subject
to division between the spouses.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2017.
SEC. 121. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES INCURRED
BEFORE ESTABLISHMENT OF HEALTH SAVINGS ACCOUNT.
(a) In General.--Section 223(d)(2) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new subparagraph:
``(D) Treatment of certain medical expenses incurred before
establishment of account.--If a health savings account is
established during the 60-day period beginning on the date
that coverage of the account beneficiary under a high
deductible health plan begins, then, solely for purposes of
determining whether an amount paid is used for a qualified
medical expense, such account shall be treated as having been
established on the date that such coverage begins.''.
(b) Effective Date.--The amendment made by this subsection
shall apply with respect to coverage under a high deductible
health plan beginning after December 31, 2017.
SEC. 122. EXCLUSION FROM HSAS OF HIGH DEDUCTIBLE HEALTH PLANS
WHICH DO NOT INCLUDE PROTECTIONS FOR LIFE.
(a) In General.--Subparagraph (C) of section 223(d)(2) of
the Internal Revenue Code of 1986 is amended by adding at the
end the following flush sentence:
``A high deductible health plan shall not be treated as
described in clause (v) if such plan includes coverage for
abortions (other than any abortion necessary to save the life
of the mother or any abortion with respect to a pregnancy
that is the result of an act of rape or incest).''.
(b) Effective Date.--The amendment made by this section
shall apply with respect to coverage under a high deductible
health plan beginning after December 31, 2017.
SEC. 123. FEDERAL PAYMENTS TO STATES.
(a) In General.--Notwithstanding section 504(a),
1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or
2105(a)(1) of the Social Security Act (42 U.S.C. 704(a),
1396a(a)(23), 1396b(a), 1397a, 1397d(a)(4), 1397bb(a)(7),
1397ee(a)(1)), or the terms of any Medicaid waiver in effect
on the date of enactment of this Act that is approved under
section 1115 or 1915 of the Social Security Act (42 U.S.C.
1315, 1396n), for the 1-year period beginning on the date of
enactment of this Act, no Federal funds provided from a
program referred to in this subsection that is considered
direct spending for any year may be made available to a State
for payments to a prohibited entity, whether made directly to
the prohibited entity or through a managed care organization
under contract with the State.
(b) Definitions.--In this section:
(1) Prohibited entity.--The term ``prohibited entity''
means an entity, including its affiliates, subsidiaries,
successors, and clinics--
(A) that, as of the date of enactment of this Act--
(i) is an organization described in section 501(c)(3) of
the Internal Revenue Code of 1986 and exempt from tax under
section 501(a) of such Code;
(ii) is an essential community provider described in
section 156.235 of title 45, Code of Federal Regulations (as
in effect on the date of enactment of this Act), that is
primarily engaged in family planning services, reproductive
health, and related medical care; and
(iii) provides for abortions, other than an abortion--
(I) if the pregnancy is the result of an act of rape or
incest; or
(II) in the case where a woman suffers from a physical
disorder, physical injury, or physical illness that would, as
certified by a physician, place the woman in danger of death
unless an abortion is performed, including a life-endangering
physical condition caused by or arising from the pregnancy
itself; and
(B) for which the total amount of Federal and State
expenditures under the Medicaid program under title XIX of
the Social Security Act in fiscal year 2014 made directly to
the entity and to any affiliates, subsidiaries, successors,
or clinics of the entity, or made to the entity and to any
affiliates, subsidiaries, successors, or clinics of the
entity as part of a nationwide health care provider network,
exceeded $350,000,000.
(2) Direct spending.--The term ``direct spending'' has the
meaning given that term under section 250(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
900(c)).
SEC. 124. MEDICAID PROVISIONS.
The Social Security Act is amended--
(1) in section 1902(a)(47)(B) (42 U.S.C. 1396a(a)(47)(B)),
by inserting ``and provided that any such election shall
cease to be effective on January 1, 2020, and no such
election shall be made after that date'' before the semicolon
at the end;
(2) in section 1915(k)(2) (42 U.S.C. 1396n(k)(2)), by
striking ``during the period described in paragraph (1)'' and
inserting ``on or after the date referred to in paragraph (1)
and before January 1, 2020''; and
(3) in section 1920(e) (42 U.S.C. 1396r-1(e)), by striking
``under clause (i)(VIII), clause (i)(IX), or clause (ii)(XX)
of subsection (a)(10)(A)'' and inserting ``under clause
(i)(VIII) or clause (ii)(XX) of section 1902(a)(10)(A) before
January 1, 2020, section 1902(a)(10)(A)(i)(IX),''.
SEC. 125. MEDICAID EXPANSION.
(a) In General.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended--
(1) in section 1902 (42 U.S.C. 1396a)--
(A) in subsection (a)(10)(A)--
(i) in clause (i)(VIII), by inserting ``and ending December
31, 2019,'' after ``2014,''; and
(ii) in clause (ii), in subclause (XX), by inserting ``and
ending December 31, 2017,'' after ``2014,'', and by adding at
the end the following new subclause:
``(XXIII) beginning January 1, 2020, who are expansion
enrollees (as defined in subsection (nn)(1));''; and
(B) by adding at the end the following new subsection:
``(nn) Expansion Enrollees.--
``(1) In general.--In this title, the term `expansion
enrollee' means an individual--
``(A) who is under 65 years of age;
``(B) who is not pregnant;
``(C) who is not entitled to, or enrolled for, benefits
under part A of title XVIII, or enrolled for benefits under
part B of title XVIII;
``(D) who is not described in any of subclauses (I) through
(VII) of subsection (a)(10)(A)(i); and
``(E) whose income (as determined under subsection (e)(14))
does not exceed 133 percent of the poverty line (as defined
in section 2110(c)(5)) applicable to a family of the size
involved.
``(2) Application of related provisions.--Any reference in
subsection (a)(10)(G), (k), or (gg) of this section or in
section 1903, 1905(a), 1920(e), or 1937(a)(1)(B) to
individuals described in subclause (VIII) of subsection
(a)(10)(A)(i) shall be deemed to include a reference to
expansion enrollees.''; and
(2) in section 1905 (42 U.S.C. 1396d)--
(A) in subsection (y)(1)--
(i) in the matter preceding subparagraph (A), by striking
``, with respect to'' and all that follows through ``shall be
equal to'' and inserting ``and that has elected to cover
newly eligible individuals before March 1, 2017, with respect
to amounts expended by such State before January 1, 2020, for
medical assistance for newly eligible individuals
[[Page S4205]]
described in subclause (VIII) of section 1902(a)(10)(A)(i),
and, with respect to amounts expended by such State after
December 31, 2019, and before January 1, 2024, for medical
assistance for expansion enrollees (as defined in section
1902(nn)(1)), shall be equal to the higher of the percentage
otherwise determined for the State and year under subsection
(b) (without regard to this subsection) and'';
(ii) in subparagraph (D), by striking ``and'' after the
semicolon;
(iii) by striking subparagraph (E) and inserting the
following new subparagraphs:
``(E) 90 percent for calendar quarters in 2020;
``(F) 85 percent for calendar quarters in 2021;
``(G) 80 percent for calendar quarters in 2022; and
``(H) 75 percent for calendar quarters in 2023.''; and
(iv) by adding after and below subparagraph (H) (as added
by clause (iii)), the following flush sentence:
``The Federal medical assistance percentage determined for a
State and year under subsection (b) shall apply to
expenditures for medical assistance to newly eligible
individuals (as so described) and expansion enrollees (as so
defined), in the case of a State that has elected to cover
newly eligible individuals before March 1, 2017, for calendar
quarters after 2023, and, in the case of any other State, for
calendar quarters (or portions of calendar quarters) after
February 28, 2017.''; and
(B) in subsection (z)(2)--
(i) in subparagraph (A)--
(I) by inserting ``through 2023'' after ``each year
thereafter''; and
(II) by striking ``shall be equal to'' and inserting ``and,
for periods after December 31, 2019 and before January 1,
2024, who are expansion enrollees (as defined in section
1902(nn)(1)) shall be equal to the higher of the percentage
otherwise determined for the State and year under subsection
(b) (without regard to this subsection) and''; and
(ii) in subparagraph (B)(ii)--
(I) in subclause (III), by adding ``and'' at the end; and
(II) by striking subclauses (IV), (V), and (VI) and
inserting the following new subclause:
``(IV) 2017 and each subsequent year through 2023 is 80
percent.''.
(b) Sunset of Medicaid Essential Health Benefits
Requirement.--Section 1937(b)(5) of the Social Security Act
(42 U.S.C. 1396u-7(b)(5)) is amended by adding at the end the
following: ``This paragraph shall not apply after December
31, 2019.''.
SEC. 126. RESTORING FAIRNESS IN DSH ALLOTMENTS.
Section 1923(f)(7) of the Social Security Act (42 U.S.C.
1396r-4(f)(7)) is amended by adding at the end the following
new subparagraph:
``(C) Non-expansion states.--
``(i) In general.--In the case of a State that is a non-
expansion State for a fiscal year--
``(I) subparagraph (A) shall not apply to the DSH allotment
for such State and fiscal year; and
``(II) the DSH allotment for the State for fiscal year 2020
(including for a non-expansion State that has a DSH allotment
determined under paragraph (6)) shall be increased by the
amount calculated according to clause (iii).
``(ii) No change in reduction for expansion states.--In the
case of a State that is an expansion State for a fiscal year,
the DSH allotment for such State and fiscal year shall be
determined as if clause (i) did not apply.
``(iii) Amount calculated.--For purposes of clause (i)(II),
the amount calculated according to this clause for a non-
expansion State is the following:
``(I) For each State, the Secretary shall calculate a ratio
equal to the State's fiscal year 2016 DSH allotment divided
by the number of uninsured individuals in the State for such
fiscal year (determined on the basis of the most recent
information available from the Bureau of the Census).
``(II) The Secretary shall identify the States whose ratio
as so determined is below the national average of such ratio
for all States.
``(III) The amount calculated pursuant to this clause is an
amount that, if added to the State's fiscal year 2016 DSH
allotment, would increase the ratio calculated pursuant to
subclause (I) up to the national average for all States.
``(iv) Disregard of increase.--The DSH allotment for a non-
expansion State for the second, third, and fourth quarters of
fiscal year 2024 and fiscal years thereafter shall be
determined as if there had been no increase in the State's
DSH allotment for fiscal year 2020 under clause (i)(II).
``(v) Non-expansion and expansion state defined.--In this
subparagraph:
``(I) The term `expansion State' means with respect to a
fiscal year, a State that, on or after January 1, 2021,
provides eligibility under subclause (XXIII) of section
1902(a)(10)(A)(ii) for medical assistance under this title
(or provides eligibility for individuals described in such
subclause under a waiver of the State plan approved under
section 1115).
``(II) The term `non-expansion State' means, with respect
to a fiscal year, a State that is not an expansion State,
except that--
``(aa) in the case of a State that provides eligibility
under clause (i)(VIII), (ii)(XX), or (ii)(XXIII) of section
1902(a)(10)(A) for medical assistance under this title (or
provides eligibility for individuals described in any of such
clauses under a waiver of the State plan approved under
section 1115) for any quarter occurring during the period
that begins on October 1, 2017, and ends on December 31, 2020
the State shall be treated as a non-expansion State for
purposes of clause (i) only for quarters beginning on or
after the first day of the first month for which the State no
longer provides such eligibility; and
``(bb) in the case of a State identified by the Secretary
under clause (iii)(II) that is a non-expansion State on
January 1, 2021, but which provided such eligibility on
January 1, 2020, the DSH allotment for such State for each of
fiscal years 2021 through 2023 and the first fiscal quarter
of 2024 shall be determined as if the State's DSH allotment
for fiscal year 2020 had been increased under clause
(i)(II).''.
SEC. 127. REDUCING STATE MEDICAID COSTS.
(a) In General.--
(1) State plan requirements.--Section 1902(a)(34) of the
Social Security Act (42 U.S.C. 1396a(a)(34)) is amended by
striking ``in or after the third month'' and all that follows
through ``individual)'' and inserting ``in or after the month
in which the individual (or, in the case of a deceased
individual, another individual acting on the individual's
behalf) made application (or, in the case of an individual
who is 65 years of age or older or who is eligible for
medical assistance under the plan on the basis of being blind
or disabled, in or after the third month before such
month)''.
(2) Definition of medical assistance.--Section 1905(a) of
the Social Security Act (42 U.S.C. 1396d(a)) is amended by
striking ``in or after the third month before the month in
which the recipient makes application for assistance'' and
inserting ``in or after the month in which the recipient
makes application for assistance, or, in the case of a
recipient who is 65 years of age or older or who is eligible
for medical assistance on the basis of being blind or
disabled at the time application is made, in or after the
third month before the month in which the recipient makes
application for assistance,''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to medical assistance with respect to individuals
whose eligibility for such assistance is based on an
application for such assistance made (or deemed to be made)
on or after October 1, 2017.
SEC. 128. PROVIDING SAFETY NET FUNDING FOR NON-EXPANSION
STATES.
Title XIX of the Social Security Act is amended by
inserting after section 1923 (42 U.S.C. 1396r-4) the
following new section:
``adjustment in payment for services of safety net providers in non-
expansion states
``Sec. 1923A. (a) In General.--Subject to the limitations
of this section, for each year during the period beginning
with fiscal year 2018 and ending with fiscal year 2022, each
State that is one of the 50 States or the District of
Columbia and that, as of July 1 of the preceding fiscal year,
did not provide for eligibility under clause (i)(VIII),
(ii)(XX), or (ii)(XXIII) of section 1902(a)(10)(A) for
medical assistance under this title (or a waiver of the State
plan approved under section 1115) (each such State or
District referred to in this section for the fiscal year as a
`non-expansion State') may adjust the payment amounts
otherwise provided under the State plan under this title (or
a waiver of such plan) to health care providers that provide
health care services to individuals enrolled under this title
(in this section referred to as `eligible providers') so long
as the payment adjustment to such an eligible provider does
not exceed the provider's costs in furnishing health care
services (as determined by the Secretary and net of payments
under this title, other than under this section, and by
uninsured patients) to individuals who either are eligible
for medical assistance under the State plan (or under a
waiver of such plan) or have no health insurance or health
plan coverage for such services.
``(b) Increase in Applicable FMAP.--Notwithstanding section
1905(b), the Federal medical assistance percentage applicable
with respect to expenditures attributable to a payment
adjustment under subsection (a) for which payment is
permitted under subsection (c) shall be equal to--
``(1) 100 percent for calendar quarters in fiscal years
2018, 2019, 2020, and 2021; and
``(2) 95 percent for calendar quarters in fiscal year 2022.
``(c) Annual Allotment Limitation.--Payment under section
1903(a) shall not be made to a State with respect to any
payment adjustment made under this section for all calendar
quarters in a fiscal year in excess of the product of
$2,000,000,000 multiplied by the ratio of--
``(1) the population of the State with income below 138
percent of the poverty line in 2015 (as determined based the
table entitled `Health Insurance Coverage Status and Type by
Ratio of Income to Poverty Level in the Past 12 Months by
Age' for the universe of the civilian noninstitutionalized
population for whom poverty status is determined based on the
2015 American Community Survey 1-Year Estimates, as published
by the Bureau of the Census), to
``(2) the sum of the populations under paragraph (1) for
all non-expansion States.
``(d) Disqualification in Case of State Coverage
Expansion.--If a State is a non-expansion for a fiscal year
and provides eligibility for medical assistance described in
[[Page S4206]]
subsection (a) during the fiscal year, the State shall no
longer be treated as a non-expansion State under this section
for any subsequent fiscal years.''.
SEC. 129. ELIGIBILITY REDETERMINATIONS.
(a) In General.--Section 1902(e)(14) of the Social Security
Act (42 U.S.C. 1396a(e)(14)) (relating to modified adjusted
gross income) is amended by adding at the end the following:
``(J) Frequency of eligibility redeterminations.--Beginning
on October 1, 2017, and notwithstanding subparagraph (H), in
the case of an individual whose eligibility for medical
assistance under the State plan under this title (or a waiver
of such plan) is determined based on the application of
modified adjusted gross income under subparagraph (A) and who
is so eligible on the basis of clause (i)(VIII), (ii)(XX), or
(ii)(XXIII) of subsection (a)(10)(A), at the option of the
State, the State plan may provide that the individual's
eligibility shall be redetermined every 6 months (or such
shorter number of months as the State may elect).''.
(b) Increased Administrative Matching Percentage.--For each
calendar quarter during the period beginning on October 1,
2017, and ending on December 31, 2019, the Federal matching
percentage otherwise applicable under section 1903(a) of the
Social Security Act (42 U.S.C. 1396b(a)) with respect to
State expenditures during such quarter that are attributable
to meeting the requirement of section 1902(e)(14) (relating
to determinations of eligibility using modified adjusted
gross income) of such Act shall be increased by 5 percentage
points with respect to State expenditures attributable to
activities carried out by the State (and approved by the
Secretary) to exercise the option described in subparagraph
(J) of such section (relating to eligibility redeterminations
made on a 6-month or shorter basis) (as added by subsection
(a)) to increase the frequency of eligibility
redeterminations.
SEC. 130. OPTIONAL WORK REQUIREMENT FOR NONDISABLED,
NONELDERLY, NONPREGNANT INDIVIDUALS.
(a) In General.--Section 1902 of the Social Security Act
(42 U.S.C. 1396a), as previously amended, is further amended
by adding at the end the following new subsection:
``(oo) Optional Work Requirement for Nondisabled,
Nonelderly, Nonpregnant Individuals.--
``(1) In general.--Beginning October 1, 2017, subject to
paragraph (3), a State may elect to condition medical
assistance to a nondisabled, nonelderly, nonpregnant
individual under this title upon such an individual's
satisfaction of a work requirement (as defined in paragraph
(2)).
``(2) Work requirement defined.--In this section, the term
`work requirement' means, with respect to an individual, the
individual's participation in work activities (as defined in
section 407(d)) for such period of time as determined by the
State, and as directed and administered by the State.
``(3) Required exceptions.--States administering a work
requirement under this subsection may not apply such
requirement to--
``(A) a woman during pregnancy through the end of the month
in which the 60-day period (beginning on the last day of her
pregnancy) ends;
``(B) an individual who is under 19 years of age;
``(C) an individual who is the only parent or caretaker
relative in the family of a child who has not attained 6
years of age or who is the only parent or caretaker of a
child with disabilities; or
``(D) an individual who is married or a head of household
and has not attained 20 years of age and who--
``(i) maintains satisfactory attendance at secondary school
or the equivalent; or
``(ii) participates in education directly related to
employment.''.
(b) Increase in Matching Rate for Implementation.--Section
1903 of the Social Security Act (42 U.S.C. 1396b) is amended
by adding at the end the following:
``(aa) The Federal matching percentage otherwise applicable
under subsection (a) with respect to State administrative
expenditures during a calendar quarter for which the State
receives payment under such subsection shall, in addition to
any other increase to such Federal matching percentage, be
increased for such calendar quarter by 5 percentage points
with respect to State expenditures attributable to activities
carried out by the State (and approved by the Secretary) to
implement subsection (oo) of section 1902.''.
SEC. 131. PROVIDER TAXES.
Section 1903(w)(4)(C) of the Social Security Act (42 U.S.C.
1396b(w)(4)(C)) is amended by adding at the end the following
new clause:
``(iii) For purposes of clause (i), a determination of the
existence of an indirect guarantee shall be made under
paragraph (3)(i) of section 433.68(f) of title 42, Code of
Federal Regulations, as in effect on June 1, 2017, except
that--
``(I) for fiscal year 2021, `5.8 percent' shall be
substituted for `6 percent' each place it appears;
``(II) for fiscal year 2022, `5.6 percent' shall be
substituted for `6 percent' each place it appears;
``(III) for fiscal year 2023, `5.4 percent' shall be
substituted for `6 percent' each place it appears;
``(IV) for fiscal year 2024, `5.2 percent' shall be
substituted for `6 percent' each place it appears; and
``(V) for fiscal year 2025 and each subsequent fiscal year,
`5 percent' shall be substituted for `6 percent' each place
it appears.''.
SEC. 132. PER CAPITA ALLOTMENT FOR MEDICAL ASSISTANCE.
(a) In General.--Title XIX of the Social Security Act is
amended--
(1) in section 1903 (42 U.S.C. 1396b)--
(A) in subsection (a), in the matter before paragraph (1),
by inserting ``and section 1903A(a)'' after ``except as
otherwise provided in this section''; and
(B) in subsection (d)(1), by striking ``to which'' and
inserting ``to which, subject to section 1903A(a),''; and
(2) by inserting after such section 1903 the following new
section:
``SEC. 1903A. PER CAPITA-BASED CAP ON PAYMENTS FOR MEDICAL
ASSISTANCE.
``(a) Application of Per Capita Cap on Payments for Medical
Assistance Expenditures.--
``(1) In general.--If a State which is one of the 50 States
or the District of Columbia has excess aggregate medical
assistance expenditures (as defined in paragraph (2)) for a
fiscal year (beginning with fiscal year 2020), the amount of
payment to the State under section 1903(a)(1) for each
quarter in the following fiscal year shall be reduced by \1/
4\ of the excess aggregate medical assistance payments (as
defined in paragraph (3)) for that previous fiscal year. In
this section, the term `State' means only the 50 States and
the District of Columbia.
``(2) Excess aggregate medical assistance expenditures.--In
this subsection, the term `excess aggregate medical
assistance expenditures' means, for a State for a fiscal
year, the amount (if any) by which--
``(A) the amount of the adjusted total medical assistance
expenditures (as defined in subsection (b)(1)) for the State
and fiscal year; exceeds
``(B) the amount of the target total medical assistance
expenditures (as defined in subsection (c)) for the State and
fiscal year.
``(3) Excess aggregate medical assistance payments.--In
this subsection, the term `excess aggregate medical
assistance payments' means, for a State for a fiscal year,
the product of--
``(A) the excess aggregate medical assistance expenditures
(as defined in paragraph (2)) for the State for the fiscal
year; and
``(B) the Federal average medical assistance matching
percentage (as defined in paragraph (4)) for the State for
the fiscal year.
``(4) Federal average medical assistance matching
percentage.--In this subsection, the term `Federal average
medical assistance matching percentage' means, for a State
for a fiscal year, the ratio (expressed as a percentage) of--
``(A) the amount of the Federal payments that would be made
to the State under section 1903(a)(1) for medical assistance
expenditures for calendar quarters in the fiscal year if
paragraph (1) did not apply; to
``(B) the amount of the medical assistance expenditures for
the State and fiscal year.
``(5) Per capita base period.--
``(A) In general.--In this section, the term `per capita
base period' means, with respect to a State, a period of 8
(or, in the case of a State selecting a period under
subparagraph (D), not less than 4) consecutive fiscal
quarters selected by the State.
``(B) Timeline.--Each State shall submit its selection of a
per capita base period to the Secretary not later than
January 1, 2018.
``(C) Parameters.--In selecting a per capita base period
under this paragraph, a State shall--
``(i) only select a period of 8 (or, in the case of a State
selecting a base period under subparagraph (D), not less than
4) consecutive fiscal quarters for which all the data
necessary to make determinations required under this section
is available, as determined by the Secretary; and
``(ii) shall not select any period of 8 (or, in the case of
a State selecting a base period under subparagraph (D), not
less than 4) consecutive fiscal quarters that begins with a
fiscal quarter earlier than the first quarter of fiscal year
2014 or ends with a fiscal quarter later than the third
fiscal quarter of 2017.
``(D) Base period for late-expanding states.--
``(i) In general.--In the case of a State that did not
provide for medical assistance for the 1903A enrollee
category described in subsection (e)(2)(D) as of the first
day of the fourth fiscal quarter of fiscal year 2015 but
which provided for such assistance for such category in a
subsequent fiscal quarter that is not later than the fourth
quarter of fiscal year 2016, the State may select a per
capita base period that is less than 8 consecutive fiscal
quarters, but in no case shall the period selected be less
than 4 consecutive fiscal quarters.
``(ii) Application of other requirements.--Except for the
requirement that a per capita base period be a period of 8
consecutive fiscal quarters, all other requirements of this
paragraph shall apply to a per capita base period selected
under this subparagraph.
``(iii) Application of base period adjustments.--The
adjustments to amounts for per capita base periods required
under subsections (b)(5) and (d)(4)(E) shall be applied to
amounts for per capita base periods selected under this
subparagraph by substituting `divided by the ratio that the
number of quarters in the base period bears to 4' for
`divided by 2'.
``(E) Adjustment by the secretary.--If the Secretary
determines that a State took
[[Page S4207]]
actions after the date of enactment of this section
(including making retroactive adjustments to supplemental
payment data in a manner that affects a fiscal quarter in the
per capita base period) to diminish the quality of the data
from the per capita base period used to make determinations
under this section, the Secretary may adjust the data as the
Secretary deems appropriate.
``(b) Adjusted Total Medical Assistance Expenditures.--
Subject to subsection (g), the following shall apply:
``(1) In general.--In this section, the term `adjusted
total medical assistance expenditures' means, for a State--
``(A) for the State's per capita base period (as defined in
subsection (a)(5)), the product of--
``(i) the amount of the medical assistance expenditures (as
defined in paragraph (2) and adjusted under paragraph (5))
for the State and period, reduced by the amount of any
excluded expenditures (as defined in paragraph (3) and
adjusted under paragraph (5)) for the State and period
otherwise included in such medical assistance expenditures;
and
``(ii) the 1903A base period population percentage (as
defined in paragraph (4)) for the State; or
``(B) for fiscal year 2019 or a subsequent fiscal year, the
amount of the medical assistance expenditures (as defined in
paragraph (2)) for the State and fiscal year that is
attributable to 1903A enrollees, reduced by the amount of any
excluded expenditures (as defined in paragraph (3)) for the
State and fiscal year otherwise included in such medical
assistance expenditures and includes non-DSH supplemental
payments (as defined in subsection (d)(4)(A)(ii)) and
payments described in subsection (d)(4)(A)(iii) but shall not
be construed as including any expenditures attributable to
the program under section 1928 (relating to State pediatric
vaccine distribution programs). In applying subparagraph (B),
non-DSH supplemental payments (as defined in subsection
(d)(4)(A)(ii)) and payments described in subsection
(d)(4)(A)(iii) shall be treated as fully attributable to
1903A enrollees.
``(2) Medical assistance expenditures.--In this section,
the term `medical assistance expenditures' means, for a State
and fiscal year or per capita base period, the medical
assistance payments as reported by medical service category
on the Form CMS-64 quarterly expense report (or successor to
such a report form, and including enrollment data and
subsequent adjustments to any such report, in this section
referred to collectively as a `CMS-64 report') for quarters
in the year or base period for which payment is (or may
otherwise be) made pursuant to section 1903(a)(1), adjusted,
in the case of a per capita base period, under paragraph (5).
``(3) Excluded expenditures.--In this section, the term
`excluded expenditures' means, for a State and fiscal year or
per capita base period, expenditures under the State plan (or
under a waiver of such plan) that are attributable to any of
the following:
``(A) DSH.--Payment adjustments made for disproportionate
share hospitals under section 1923.
``(B) Medicare cost-sharing.--Payments made for medicare
cost-sharing (as defined in section 1905(p)(3)).
``(C) Safety net provider payment adjustments in non-
expansion states.--Payment adjustments under subsection (a)
of section 1923A for which payment is permitted under
subsection (c) of such section.
``(D) Expenditures for public health emergencies.--Any
expenditures that are subject to a public health emergency
exclusion under paragraph (6).
``(4) 1903A base period population percentage.--In this
subsection, the term `1903A base period population
percentage' means, for a State, the Secretary's calculation
of the percentage of the actual medical assistance
expenditures, as reported by the State on the CMS-64 reports
for calendar quarters in the State's per capita base period,
that are attributable to 1903A enrollees (as defined in
subsection (e)(1)).
``(5) Adjustments for per capita base period.--In
calculating medical assistance expenditures under paragraph
(2) and excluded expenditures under paragraph (3) for a State
for the State's per capita base period, the total amount of
each type of expenditure for the State and base period shall
be divided by 2.
``(6) Authority to exclude state expenditures from caps
during public health emergency.--
``(A) In general.--During the period that begins on January
1, 2020, and ends on December 31, 2024, the Secretary may
exclude, from a State's medical assistance expenditures for a
fiscal year or portion of a fiscal year that occurs during
such period, an amount that shall not exceed the amount
determined under subparagraph (B) for the State and year or
portion of a year if--
``(i) a public health emergency declared by the Secretary
pursuant to section 319 of the Public Health Service Act
existed within the State during such year or portion of a
year; and
``(ii) the Secretary determines that such an exemption
would be appropriate.
``(B) Maximum amount of adjustment.--The amount excluded
for a State and fiscal year or portion of a fiscal year under
this paragraph shall not exceed the amount by which--
``(i) the amount of State expenditures for medical
assistance for 1903A enrollees in areas of the State which
are subject to a declaration described in subparagraph (A)(i)
for the fiscal year or portion of a fiscal year; exceeds
``(ii) the amount of such expenditures for such enrollees
in such areas during the most recent fiscal year or portion
of a fiscal year of equal length to the portion of a fiscal
year involved during which no such declaration was in effect.
``(C) Aggregate limitation on exclusions and additional
block grant payments.--The aggregate amount of expenditures
excluded under this paragraph and additional payments made
under section 1903B(c)(3)(E) for the period described in
subparagraph (A) shall not exceed $5,000,000,000.
``(D) Review.--If the Secretary exercises the authority
under this paragraph with respect to a State for a fiscal
year or portion of a fiscal year, the Secretary shall, not
later than 6 months after the declaration described in
subparagraph (A)(i) ceases to be in effect, conduct an audit
of the State's medical assistance expenditures for 1903A
enrollees during the year or portion of a year to ensure that
all of the expenditures so excluded were made for the purpose
of ensuring that the health care needs of 1903A enrollees in
areas affected by a public health emergency are met.
``(c) Target Total Medical Assistance Expenditures.--
``(1) Calculation.--In this section, the term `target total
medical assistance expenditures' means, for a State for a
fiscal year and subject to paragraph (4), the sum of the
products, for each of the 1903A enrollee categories (as
defined in subsection (e)(2)), of--
``(A) the target per capita medical assistance expenditures
(as defined in paragraph (2)) for the enrollee category,
State, and fiscal year; and
``(B) the number of 1903A enrollees for such enrollee
category, State, and fiscal year, as determined under
subsection (e)(4).
``(2) Target per capita medical assistance expenditures.--
In this subsection, the term `target per capita medical
assistance expenditures' means, for a 1903A enrollee category
and State--
``(A) for fiscal year 2020, an amount equal to--
``(i) the provisional FY19 target per capita amount for
such enrollee category (as calculated under subsection
(d)(5)) for the State; increased by
``(ii) the applicable annual inflation factor (as defined
in paragraph (3)) for fiscal year 2020; and
``(B) for each succeeding fiscal year, an amount equal to--
``(i) the target per capita medical assistance expenditures
(under subparagraph (A) or this subparagraph) for the 1903A
enrollee category and State for the preceding fiscal year;
increased by
``(ii) the applicable annual inflation factor for that
succeeding fiscal year.
``(3) Applicable annual inflation factor.--In paragraph
(2), the term `applicable annual inflation factor' means--
``(A) for fiscal years before 2025--
``(i) for each of the 1903A enrollee categories described
in subparagraphs (C), (D), and (E) of subsection (e)(2), the
percentage increase in the medical care component of the
consumer price index for all urban consumers (U.S. city
average) from September of the previous fiscal year to
September of the fiscal year involved; and
``(ii) for each of the 1903A enrollee categories described
in subparagraphs (A) and (B) of subsection (e)(2), the
percentage increase described in clause (i) plus 1 percentage
point; and
``(B) for fiscal years after 2024, for all 1903A enrollee
categories, the percentage increase in the consumer price
index for all urban consumers (U.S. city average) from
September of the previous fiscal year to September of the
fiscal year involved.
``(4) Decrease in target expenditures for required
expenditures by certain political subdivisions.--
``(A) In general.--In the case of a State that had a DSH
allotment under section 1923(f) for fiscal year 2016 that was
more than 6 times the national average of such allotments for
all the States for such fiscal year and that requires
political subdivisions within the State to contribute funds
towards medical assistance or other expenditures under the
State plan under this title (or under a waiver of such plan)
for a fiscal year (beginning with fiscal year 2020), the
target total medical assistance expenditures for such State
and fiscal year shall be decreased by the amount that
political subdivisions in the State are required to
contribute under the plan (or waiver) without reimbursement
from the State for such fiscal year, other than contributions
described in subparagraph (B).
``(B) Exceptions.--The contributions described in this
subparagraph are the following:
``(i) Contributions required by a State from a political
subdivision that, as of the first day of the calendar year in
which the fiscal year involved begins--
``(I) has a population of more than 5,000,000, as estimated
by the Bureau of the Census; and
``(II) imposes a local income tax upon its residents.
[[Page S4208]]
``(ii) Contributions required by a State from a political
subdivision for administrative expenses if the State required
such contributions from such subdivision without
reimbursement from the State as of January 1, 2017.
``(5) Adjustments to state expenditures targets to promote
program equity across states.--
``(A) In general.--Beginning with fiscal year 2020, the
target per capita medical assistance expenditures for a 1903A
enrollee category, State, and fiscal year, as determined
under paragraph (2), shall be adjusted (subject to
subparagraph (C)(i)) in accordance with this paragraph.
``(B) Adjustment based on level of per capita spending for
1903a enrollee categories.--Subject to subparagraph (C), with
respect to a State, fiscal year, and 1903A enrollee category,
if the State's per capita categorical medical assistance
expenditures (as defined in subparagraph (D)) for the State
and category in the preceding fiscal year--
``(i) exceed the mean per capita categorical medical
assistance expenditures for the category for all States for
such preceding year by not less than 25 percent, the State's
target per capita medical assistance expenditures for such
category for the fiscal year involved shall be reduced by a
percentage that shall be determined by the Secretary but
which shall not be less than 0.5 percent or greater than 3
percent; or
``(ii) are less than the mean per capita categorical
medical assistance expenditures for the category for all
States for such preceding year by not less than 25 percent,
the State's target per capita medical assistance expenditures
for such category for the fiscal year involved shall be
increased by a percentage that shall be determined by the
Secretary but which shall not be less than 0.5 percent or
greater than 3 percent.
``(C) Rules of application.--
``(i) Budget neutrality requirement.--In determining the
appropriate percentages by which to adjust States' target per
capita medical assistance expenditures for a category and
fiscal year under this paragraph, the Secretary shall make
such adjustments in a manner that does not result in a net
increase in Federal payments under this section for such
fiscal year, and if the Secretary cannot adjust such
expenditures in such a manner there shall be no adjustment
under this paragraph for such fiscal year.
``(ii) Assumption regarding state expenditures.--For
purposes of clause (i), in the case of a State that has its
target per capita medical assistance expenditures for a 1903A
enrollee category and fiscal year increased under this
paragraph, the Secretary shall assume that the categorical
medical assistance expenditures (as defined in subparagraph
(D)(ii)) for such State, category, and fiscal year will equal
such increased target medical assistance expenditures.
``(iii) Nonapplication to low-density states.--This
paragraph shall not apply to any State that has a population
density of less than 15 individuals per square mile, based on
the most recent data available from the Bureau of the Census.
``(iv) Disregard of adjustment.--Any adjustment under this
paragraph to target medical assistance expenditures for a
State, 1903A enrollee category, and fiscal year shall be
disregarded when determining the target medical assistance
expenditures for such State and category for a succeeding
year under paragraph (2).
``(v) Application for fiscal years 2020 and 2021.--In
fiscal years 2020 and 2021, the Secretary shall apply this
paragraph by deeming all categories of 1903A enrollees to be
a single category.
``(D) Per capita categorical medical assistance
expenditures.--
``(i) In general.--In this paragraph, the term `per capita
categorical medical assistance expenditures' means, with
respect to a State, 1903A enrollee category, and fiscal year,
an amount equal to--
``(I) the categorical medical expenditures (as defined in
clause (ii)) for the State, category, and year; divided by
``(II) the number of 1903A enrollees for the State,
category, and year.
``(ii) Categorical medical assistance expenditures.--The
term `categorical medical assistance expenditures' means,
with respect to a State, 1903A enrollee category, and fiscal
year, an amount equal to the total medical assistance
expenditures (as defined in paragraph (2)) for the State and
fiscal year that are attributable to 1903A enrollees in the
category, excluding any excluded expenditures (as defined in
paragraph (3)) for the State and fiscal year that are
attributable to 1903A enrollees in the category.
``(d) Calculation of FY19 Provisional Target Amount for
Each 1903A Enrollee Category.--Subject to subsection (g), the
following shall apply:
``(1) Calculation of base amounts for per capita base
period.--For each State the Secretary shall calculate (and
provide notice to the State not later than April 1, 2018, of)
the following:
``(A) The amount of the adjusted total medical assistance
expenditures (as defined in subsection (b)(1)) for the State
for the State's per capita base period.
``(B) The number of 1903A enrollees for the State in the
State's per capita base period (as determined under
subsection (e)(4)).
``(C) The average per capita medical assistance
expenditures for the State for the State's per capita base
period equal to--
``(i) the amount calculated under subparagraph (A); divided
by
``(ii) the number calculated under subparagraph (B).
``(2) Fiscal year 2019 average per capita amount based on
inflating the per capita base period amount to fiscal year
2019 by cpi-medical.--The Secretary shall calculate a fiscal
year 2019 average per capita amount for each State equal to--
``(A) the average per capita medical assistance
expenditures for the State for the State's per capita base
period (calculated under paragraph (1)(C)); increased by
``(B) the percentage increase in the medical care component
of the consumer price index for all urban consumers (U.S.
city average) from the last month of the State's per capita
base period to September of fiscal year 2019.
``(3) Aggregate and average expenditures per capita for
fiscal year 2019.--The Secretary shall calculate for each
State the following:
``(A) The amount of the adjusted total medical assistance
expenditures (as defined in subsection (b)(1)) for the State
for fiscal year 2019.
``(B) The number of 1903A enrollees for the State in fiscal
year 2019 (as determined under subsection (e)(4)).
``(4) Per capita expenditures for fiscal year 2019 for each
1903a enrollee category.--The Secretary shall calculate (and
provide notice to each State not later than January 1, 2020,
of) the following:
``(A)(i) For each 1903A enrollee category, the amount of
the adjusted total medical assistance expenditures (as
defined in subsection (b)(1)) for the State for fiscal year
2019 for individuals in the enrollee category, calculated by
excluding from medical assistance expenditures those
expenditures attributable to expenditures described in clause
(iii) or non-DSH supplemental expenditures (as defined in
clause (ii)).
``(ii) In this paragraph, the term `non-DSH supplemental
expenditure' means a payment to a provider under the State
plan (or under a waiver of the plan) that--
``(I) is not made under section 1923;
``(II) is not made with respect to a specific item or
service for an individual;
``(III) is in addition to any payments made to the provider
under the plan (or waiver) for any such item or service; and
``(IV) complies with the limits for additional payments to
providers under the plan (or waiver) imposed pursuant to
section 1902(a)(30)(A), including the regulations specifying
upper payment limits under the State plan in part 447 of
title 42, Code of Federal Regulations (or any successor
regulations).
``(iii) An expenditure described in this clause is an
expenditure that meets the criteria specified in subclauses
(I), (II), and (III) of clause (ii) and is authorized under
section 1115 for the purposes of funding a delivery system
reform pool, uncompensated care pool, a designated State
health program, or any other similar expenditure (as defined
by the Secretary).
``(B) For each 1903A enrollee category, the number of 1903A
enrollees for the State in fiscal year 2019 in the enrollee
category (as determined under subsection (e)(4)).
``(C) For the State's per capita base period, the State's
non-DSH supplemental and pool payment percentage is equal to
the ratio (expressed as a percentage) of--
``(i) the total amount of non-DSH supplemental expenditures
(as defined in subparagraph (A)(ii) and adjusted under
subparagraph (E)) and payments described in subparagraph
(A)(iii) (and adjusted under subparagraph (E)) for the State
for the period; to
``(ii) the amount described in subsection (b)(1)(A) for the
State for the State's per capita base period.
``(D) For each 1903A enrollee category an average medical
assistance expenditures per capita for the State for fiscal
year 2019 for the enrollee category equal to--
``(i) the amount calculated under subparagraph (A) for the
State, increased by the non-DSH supplemental and pool payment
percentage for the State (as calculated under subparagraph
(C)); divided by
``(ii) the number calculated under subparagraph (B) for the
State for the enrollee category.
``(E) For purposes of subparagraph (C)(i), in calculating
the total amount of non-DSH supplemental expenditures and
payments described in subparagraph (A)(iii) for a State for
the per capita base period, the total amount of such
expenditures and the total amount of such payments for the
State and base period shall each be divided by 2.
``(5) Provisional fy19 per capita target amount for each
1903a enrollee category.--Subject to subsection (f)(2), the
Secretary shall calculate for each State a provisional FY19
per capita target amount for each 1903A enrollee category
equal to the average medical assistance expenditures per
capita for the State for fiscal year 2019 (as calculated
under paragraph (4)(D)) for such enrollee category multiplied
by the ratio of--
``(A) the product of--
``(i) the fiscal year 2019 average per capita amount for
the State, as calculated under paragraph (2); and
``(ii) the number of 1903A enrollees for the State in
fiscal year 2019, as calculated under paragraph (3)(B); to
``(B) the amount of the adjusted total medical assistance
expenditures for the State for fiscal year 2019, as
calculated under paragraph (3)(A).
[[Page S4209]]
``(e) 1903A Enrollee; 1903A Enrollee Category.--Subject to
subsection (g), for purposes of this section, the following
shall apply:
``(1) 1903A enrollee.--The term `1903A enrollee' means,
with respect to a State and a month and subject to subsection
(i)(1)(B), any Medicaid enrollee (as defined in paragraph
(3)) for the month, other than such an enrollee who for such
month is in any of the following categories of excluded
individuals:
``(A) CHIP.--An individual who is provided, under this
title in the manner described in section 2101(a)(2), child
health assistance under title XXI.
``(B) IHS.--An individual who receives any medical
assistance under this title for services for which payment is
made under the third sentence of section 1905(b).
``(C) Breast and cervical cancer services eligible
individual.--An individual who is eligible for medical
assistance under this title only on the basis of section
1902(a)(10)(A)(ii)(XVIII).
``(D) Partial-benefit enrollees.--An individual who--
``(i) is an alien who is eligible for medical assistance
under this title only on the basis of section 1903(v)(2);
``(ii) is eligible for medical assistance under this title
only on the basis of subclause (XII) or (XXI) of section
1902(a)(10)(A)(ii) (or on the basis of a waiver that provides
only comparable benefits);
``(iii) is a dual eligible individual (as defined in
section 1915(h)(2)(B)) and is eligible for medical assistance
under this title (or under a waiver) only for some or all of
medicare cost-sharing (as defined in section 1905(p)(3)); or
``(iv) is eligible for medical assistance under this title
and for whom the State is providing a payment or subsidy to
an employer for coverage of the individual under a group
health plan pursuant to section 1906 or section 1906A (or
pursuant to a waiver that provides only comparable benefits).
``(E) Blind and disabled children.--An individual who--
``(i) is a child under 19 years of age; and
``(ii) is eligible for medical assistance under this title
on the basis of being blind or disabled.
``(2) 1903A enrollee category.--The term `1903A enrollee
category' means each of the following:
``(A) Elderly.--A category of 1903A enrollees who are 65
years of age or older.
``(B) Blind and disabled.--A category of 1903A enrollees
(not described in the previous subparagraph) who--
``(i) are 19 years of age or older; and
``(ii) are eligible for medical assistance under this title
on the basis of being blind or disabled.
``(C) Children.--A category of 1903A enrollees (not
described in a previous subparagraph) who are children under
19 years of age.
``(D) Expansion enrollees.--A category of 1903A enrollees
(not described in a previous subparagraph) who are eligible
for medical assistance under this title only on the basis of
clause (i)(VIII), (ii)(XX), or (ii)(XXIII) of section
1902(a)(10)(A).
``(E) Other nonelderly, nondisabled, non-expansion
adults.--A category of 1903A enrollees who are not described
in any previous subparagraph.
``(3) Medicaid enrollee.--The term `Medicaid enrollee'
means, with respect to a State for a month, an individual who
is eligible for medical assistance for items or services
under this title and enrolled under the State plan (or a
waiver of such plan) under this title for the month.
``(4) Determination of number of 1903a enrollees.--The
number of 1903A enrollees for a State and fiscal year or the
State's per capita base period, and, if applicable, for a
1903A enrollee category, is the average monthly number of
Medicaid enrollees for such State and fiscal year or base
period (and, if applicable, in such category) that are
reported through the CMS-64 report under (and subject to
audit under) subsection (h).
``(f) Special Payment Rules.--
``(1) Application in case of research and demonstration
projects and other waivers.--In the case of a State with a
waiver of the State plan approved under section 1115, section
1915, or another provision of this title, this section shall
apply to medical assistance expenditures and medical
assistance payments under the waiver, in the same manner as
if such expenditures and payments had been made under a State
plan under this title and the limitations on expenditures
under this section shall supersede any other payment
limitations or provisions (including limitations based on a
per capita limitation) otherwise applicable under such a
waiver.
``(2) Treatment of states expanding coverage after july 1,
2016.--In the case of a State that did not provide for
medical assistance for the 1903A enrollee category described
in subsection (e)(2)(D) as of July 1, 2016, but which
subsequently provides for such assistance for such category,
the provisional FY19 per capita target amount for such
enrollee category under subsection (d)(5) shall be equal to
the provisional FY19 per capita target amount for the 1903A
enrollee category described in subsection (e)(2)(E).
``(3) In case of state failure to report necessary data.--
If a State for any quarter in a fiscal year (beginning with
fiscal year 2019) fails to satisfactorily submit data on
expenditures and enrollees in accordance with subsection
(h)(1), for such fiscal year and any succeeding fiscal year
for which such data are not satisfactorily submitted--
``(A) the Secretary shall calculate and apply subsections
(a) through (e) with respect to the State as if all 1903A
enrollee categories for which such expenditure and enrollee
data were not satisfactorily submitted were a single 1903A
enrollee category; and
``(B) the growth factor otherwise applied under subsection
(c)(2)(B) shall be decreased by 1 percentage point.
``(g) Recalculation of Certain Amounts for Data Errors.--
The amounts and percentage calculated under paragraphs (1)
and (4)(C) of subsection (d) for a State for the State's per
capita base period, and the amounts of the adjusted total
medical assistance expenditures calculated under subsection
(b) and the number of Medicaid enrollees and 1903A enrollees
determined under subsection (e)(4) for a State for the
State's per capita base period, fiscal year 2019, and any
subsequent fiscal year, may be adjusted by the Secretary
based upon an appeal (filed by the State in such a form,
manner, and time, and containing such information relating to
data errors that support such appeal, as the Secretary
specifies) that the Secretary determines to be valid, except
that any adjustment by the Secretary under this subsection
for a State may not result in an increase of the target total
medical assistance expenditures exceeding 2 percent.
``(h) Required Reporting and Auditing; Transitional
Increase in Federal Matching Percentage for Certain
Administrative Expenses.--
``(1) Reporting of cms-64 data.--
``(A) In general.--In addition to the data required on form
Group VIII on the CMS-64 report form as of January 1, 2017,
in each CMS-64 report required to be submitted (for each
quarter beginning on or after October 1, 2018), the State
shall include data on medical assistance expenditures within
such categories of services and categories of enrollees
(including each 1903A enrollee category and each category of
excluded individuals under subsection (e)(1)) and the numbers
of enrollees within each of such enrollee categories, as the
Secretary determines are necessary (including timely guidance
published as soon as possible after the date of the enactment
of this section) in order to implement this section and to
enable States to comply with the requirement of this
paragraph on a timely basis.
``(B) Reporting on qualified inpatient psychiatric hospital
services.--Not later than 60 days after the date of the
enactment of this section, the Secretary shall modify the
CMS-64 report form to require that States submit data with
respect to medical assistance expenditures for qualified
inpatient psychiatric hospital services (as defined in
section 1905(h)(3)).
``(C) Reporting on children with complex medical
conditions.--Not later than January 1, 2020, the Secretary
shall modify the CMS-64 report form to require that States
submit data with respect to individuals who--
``(i) are enrolled in a State plan under this title or
title XXI or under a waiver of such plan;
``(ii) are under 21 years of age; and
``(iii) have a chronic medical condition or serious injury
that--
``(I) affects two or more body systems;
``(II) affects cognitive or physical functioning (such as
reducing the ability to perform the activities of daily
living, including the ability to engage in movement or
mobility, eat, drink, communicate, or breathe independently);
and
``(III) either--
``(aa) requires intensive healthcare interventions (such as
multiple medications, therapies, or durable medical
equipment) and intensive care coordination to optimize health
and avoid hospitalizations or emergency department visits; or
``(bb) meets the criteria for medical complexity under
existing risk adjustment methodologies using a recognized,
publicly available pediatric grouping system (such as the
pediatric complex conditions classification system or the
Pediatric Medical Complexity Algorithm) selected by the
Secretary in close collaboration with the State agencies
responsible for administering State plans under this title
and a national panel of pediatric, pediatric specialty, and
pediatric subspecialty experts.
``(2) Auditing of cms-64 data.--The Secretary shall conduct
for each State an audit of the number of individuals and
expenditures reported through the CMS-64 report for the
State's per capita base period, fiscal year 2019, and each
subsequent fiscal year, which audit may be conducted on a
representative sample (as determined by the Secretary).
``(3) Auditing of state spending.--The Inspector General of
the Department of Health and Human Services shall conduct an
audit (which shall be conducted using random sampling, as
determined by the Inspector General) of each State's spending
under this section not less than once every 3 years.
``(4) Temporary increase in federal matching percentage to
support improved data reporting systems for fiscal years 2018
and 2019.--In the case of any State that selects as its per
capita base period the most recent 8 consecutive quarter
period for which the data necessary to make the
determinations required under this section is available, for
amounts expended during calendar quarters beginning on or
after October 1, 2017, and before October 1, 2019--
``(A) the Federal matching percentage applied under section
1903(a)(3)(A)(i) shall be
[[Page S4210]]
increased by 10 percentage points to 100 percent;
``(B) the Federal matching percentage applied under section
1903(a)(3)(B) shall be increased by 25 percentage points to
100 percent; and
``(C) the Federal matching percentage applied under section
1903(a)(7) shall be increased by 10 percentage points to 60
percent but only with respect to amounts expended that are
attributable to a State's additional administrative
expenditures to implement the data requirements of paragraph
(1).
``(5) HHS report on adoption of t-msis data.--Not later
than January 1, 2025, the Secretary shall submit to Congress
a report making recommendations as to whether data from the
Transformed Medicaid Statistical Information System would be
preferable to CMS-64 report data for purposes of making the
determinations necessary under this section.''.
(b) Ensuring Access to Home and Community Based Services.--
Section 1915 of the Social Security Act (42 U.S.C. 1396n) is
amended by adding at the end the following new subsection:
``(l) Incentive Payments for Home and Community-based
Services.--
``(1) In general.--The Secretary shall establish a
demonstration project (referred to in this subsection as the
`demonstration project') under which eligible States may make
HCBS payment adjustments for the purpose of continuing to
provide and improving the quality of home and community-based
services provided under a waiver under subsection (c) or (d)
or a State plan amendment under subsection (i).
``(2) Selection of eligible states.--
``(A) Application.--A State seeking to participate in the
demonstration project shall submit to the Secretary, at such
time and in such manner as the Secretary shall require, an
application that includes--
``(i) an assurance that any HCBS payment adjustment made by
the State under this subsection will comply with the health
and welfare and financial accountability safeguards taken by
the State under subsection (c)(2)(A); and
``(ii) such other information and assurances as the
Secretary shall require.
``(B) Selection.--The Secretary shall select States to
participate in the demonstration project on a competitive
basis except that, in making selections under this paragraph,
the Secretary shall give priority to any State that is one of
the 15 States in the United States with the lowest population
density, as determined by the Secretary based on data from
the Bureau of the Census.
``(3) Term of demonstration project.--The demonstration
project shall be conducted for the 4-year period beginning on
January 1, 2020, and ending on December 31, 2023.
``(4) State allotments and increased fmap for payment
adjustments.--
``(A) In general.--
``(i) Annual allotment.--Subject to clause (ii), for each
year of the demonstration project, the Secretary shall allot
an amount to each State that is an eligible State for the
year.
``(ii) Limitation on federal spending.--The aggregate
amount that may be allotted to eligible States under clause
(i) for all years of the demonstration project shall not
exceed $8,000,000,000, and in no case may the aggregate
amount of payments made by the Secretary to eligible States
for payment adjustments under this subsection exceed such
amount.
``(B) Payments to eligible states and limitations on
payments.--
``(i) In general.--Subject to clauses (ii) and (iii), for
each year of the demonstration project, notwithstanding
section 1905(b), the Federal medical assistance percentage
applicable with respect to expenditures by an eligible State
that are attributable to HCBS payment adjustments shall be
equal to (and shall in no case exceed) 100 percent.
``(ii) Limitation on hcbs payment adjustments for
individual providers.--Payment under section 1903(a) shall
not be made to an eligible State for expenditures for a year
that are attributable to an HCBS payment adjustment that is
paid to a single provider and exceeds a percentage which
shall be established by the Secretary of the payment
otherwise made to the provider.
``(iii) Limitation of payment to amount of allotment.--
Payment under section 1903(a) shall not be made to an
eligible State for expenditures for a year that are
attributable to an HCBS payment adjustment to the extent that
the aggregate amount of HCBS payment adjustments made by the
State in the year exceeds the amount allotted to the State
for the year under subparagraph (A)(i).
``(5) Reporting and evaluation.--
``(A) In general.--As a condition of receiving the
increased Federal medical assistance percentage described in
paragraph (4)(B)(i), each eligible State shall collect and
report information, as determined necessary by the Secretary,
for the purposes of providing Federal oversight and
evaluating the State's compliance with the health and welfare
and financial accountability safeguards taken by the State
under subsection (c)(2)(A).
``(B) Forms.--Expenditures by eligible States on HCBS
payment adjustments shall be separately reported on the CMS-
64 Form and in T-MSIS.
``(6) Definitions.--In this subsection:
``(A) Eligible state.--The term `eligible State' means a
State that--
``(i) is one of the 50 States or the District of Columbia;
``(ii) has in effect--
``(I) a waiver under subsection (c) or (d); or
``(II) a State plan amendment under subsection (i);
``(iii) submits an application under paragraph (2)(A); and
``(iv) is selected by the Secretary to participate in the
demonstration project.
``(B) HCBS payment adjustment.--The term `HCBS payment
adjustment' means a payment adjustment made by an eligible
State to the amount of payment otherwise provided under a
waiver under subsection (c) or (d) or a State plan amendment
under subsection (i) for a home and community-based service
which is provided to a 1903A enrollee (as defined in section
1903A(e)(1)) who is in the enrollee category described in
subparagraph (A) or (B) of section 1903A(e)(2).''.
SEC. 133. FLEXIBLE BLOCK GRANT OPTION FOR STATES.
Title XIX of the Social Security Act, as amended by section
132, is further amended by inserting after section 1903A the
following new section:
``SEC. 1903B. MEDICAID FLEXIBILITY PROGRAM.
``(a) In General.--Beginning with fiscal year 2020, any
State (as defined in subsection (e)) that has an application
approved by the Secretary under subsection (b) may conduct a
Medicaid Flexibility Program to provide targeted health
assistance to program enrollees.
``(b) State Application.--
``(1) In general.--To be eligible to conduct a Medicaid
Flexibility Program, a State shall submit an application to
the Secretary that meets the requirements of this subsection.
``(2) Contents of application.--An application under this
subsection shall include the following:
``(A) A description of the proposed Medicaid Flexibility
Program and how the State will satisfy the requirements
described in subsection (d).
``(B) The proposed conditions for eligibility of program
enrollees.
``(C) The applicable program enrollee category (as defined
in subsection (e)(1)).
``(D) A description of the types, amount, duration, and
scope of services which will be offered as targeted health
assistance under the program, including a description of the
proposed package of services which will be provided to
program enrollees to whom the State would otherwise be
required to make medical assistance available under section
1902(a)(10)(A)(i).
``(E) A description of how the State will notify
individuals currently enrolled in the State plan for medical
assistance under this title of the transition to such
program.
``(F) Statements certifying that the State agrees to--
``(i) submit regular enrollment data with respect to the
program to the Centers for Medicare & Medicaid Services at
such time and in such manner as the Secretary may require;
``(ii) submit timely and accurate data to the Transformed
Medicaid Statistical Information System (T-MSIS);
``(iii) report annually to the Secretary on adult health
quality measures implemented under the program and
information on the quality of health care furnished to
program enrollees under the program as part of the annual
report required under section 1139B(d)(1);
``(iv) submit such additional data and information not
described in any of the preceding clauses of this
subparagraph but which the Secretary determines is necessary
for monitoring, evaluation, or program integrity purposes,
including--
``(I) survey data, such as the data from Consumer
Assessment of Healthcare Providers and Systems (CAHPS)
surveys;
``(II) birth certificate data; and
``(III) clinical patient data for quality measurements
which may not be present in a claim, such as laboratory data,
body mass index, and blood pressure; and
``(v) on an annual basis, conduct a report evaluating the
program and make such report available to the public.
``(G) An information technology systems plan demonstrating
that the State has the capability to support the
technological administration of the program and comply with
reporting requirements under this section.
``(H) A statement of the goals of the proposed program,
which shall include--
``(i) goals related to quality, access, rate of growth
targets, consumer satisfaction, and outcomes;
``(ii) a plan for monitoring and evaluating the program to
determine whether such goals are being met; and
``(iii) a proposed process for the State, in consultation
with the Centers for Medicare & Medicaid Services, to take
remedial action to make progress on unmet goals.
``(I) Such other information as the Secretary may require.
``(3) State notice and comment period.--
``(A) In general.--Before submitting an application under
this subsection, a State shall make the application publicly
available for a 30 day notice and comment period.
``(B) Notice and comment process.--During the notice and
comment period described in subparagraph (A), the State shall
provide opportunities for a meaningful level of public input,
which shall include public hearings on the proposed Medicaid
Flexibility Program.
``(4) Federal notice and comment period.--The Secretary
shall not approve of
[[Page S4211]]
any application to conduct a Medicaid Flexibility Program
without making such application publicly available for a 30
day notice and comment period.
``(5) Timeline for submission.--
``(A) In general.--A State may submit an application under
this subsection to conduct a Medicaid Flexibility Program
that would begin in the next fiscal year at any time, subject
to subparagraph (B).
``(B) Deadlines.--Each year beginning with 2019, the
Secretary shall specify a deadline for submitting an
application under this subsection to conduct a Medicaid
Flexibility Program that would begin in the next fiscal year,
but such deadline shall not be earlier than 60 days after the
date that the Secretary publishes the amounts of State block
grants as required under subsection (c)(4).
``(c) Financing.--
``(1) In general.--For each fiscal year during which a
State is conducting a Medicaid Flexibility Program, the State
shall receive, instead of amounts otherwise payable to the
State under this title for medical assistance for program
enrollees, the amount specified in paragraph (3)(A).
``(2) Amount of block grant funds.--
``(A) In general.--The block grant amount under this
paragraph for a State and year shall be equal to the sum of
the amounts determined under subparagraph (B) for each 1903A
enrollee category within the applicable program enrollee
category for the State and year.
``(B) Enrollee category amounts.--
``(i) For initial year.--Subject to subparagraph (C), for
the first fiscal year in which a 1903A enrollee category is
included in the applicable program enrollee category for a
Medicaid Flexibility Program conducted by the State, the
amount determined under this subparagraph for the State,
year, and category shall be equal to the Federal average
medical assistance matching percentage (as defined in section
1903A(a)(4)) for the State and year multiplied by the product
of--
``(I) the target per capita medical assistance expenditures
(as defined in section 1903A(c)(2)) for the State, year, and
category; and
``(II) the number of 1903A enrollees in such category for
the State for the second fiscal year preceding such first
fiscal year, increased by the percentage increase in State
population from such second preceding fiscal year to such
first fiscal year, based on the best available estimates of
the Bureau of the Census.
``(ii) For any subsequent year.--For any fiscal year that
is not the first fiscal year in which a 1903A enrollee
category is included in the applicable program enrollee
category for a Medicaid Flexibility Program conducted by the
State, the block grant amount under this paragraph for the
State, year, and category shall be equal to the amount
determined for the State and category for the most recent
previous fiscal year in which the State conducted a Medicaid
Flexibility Program that included such category, except that
such amount shall be increased by the percentage increase in
the consumer price index for all urban consumers (U.S. city
average) from April of the second fiscal year preceding the
fiscal year involved to April of the fiscal year preceding
the fiscal year involved.
``(C) Cap on total population of 1903a enrollees for
purposes of block grant calculation.--
``(i) In general.--In calculating the amount of a block
grant for the first year in which a 1903A enrollee category
is included in the applicable program enrollee category for a
Medicaid Flexibility Program conducted by the State under
subparagraph (B)(i), the total number of 1903A enrollees in
such 1903A enrollee category for the State and year shall not
exceed the adjusted number of base period enrollees for the
State (as defined in clause (ii)).
``(ii) Adjusted number of base period enrollees.--The term
`adjusted number of base period enrollees' means, with
respect to a State and 1903A enrollee category, the number of
1903A enrollees in the enrollee category for the State for
the State's per capita base period (as determined under
section 1903A(e)(4)), increased by the percentage increase,
if any, in the total State population from the last April in
the State's per capita base period to April of the fiscal
year preceding the fiscal year involved (determined using the
best available data from the Bureau of the Census) plus 3
percentage points.
``(D) Availability of rollover funds.--
``(i) In general.--To the extent that the block grant
amount available to a State for a fiscal year under this
paragraph exceeds the amount of Federal payments made to the
State for such fiscal year under paragraph (3)(A), the
Secretary shall make such funds available to the State for
the succeeding fiscal year if the State--
``(I) satisfies the State maintenance of effort requirement
under paragraph (3)(B); and
``(II) is conducting a Medicaid Flexibility Program in such
succeeding fiscal year.
``(ii) Use of funds.--Funds made available to a State under
this subparagraph shall only be used for expenditures related
to the State plan under this title or to the State Medicaid
Flexibility Program.
``(3) Federal payment and state maintenance of effort.--
``(A) Federal payment.--Subject to subparagraphs (D) and
(E), the Secretary shall pay to each State conducting a
Medicaid Flexibility Program under this section for a fiscal
year, from its block grant amount under paragraph (2) for
such year, an amount for each quarter of such year equal to
the Federal average medical assistance percentage (as defined
in section 1903A(a)(4)) of the total amount expended under
the program during such quarter as targeted health
assistance, and the State is responsible for the balance of
the funds to carry out such program.
``(B) State maintenance of effort expenditures.--For each
year during which a State is conducting a Medicaid
Flexibility Program, the State shall make expenditures for
targeted health assistance under the program in an amount
equal to the product of--
``(i) the block grant amount determined for the State and
year under paragraph (2); and
``(ii) the enhanced FMAP described in the first sentence of
section 2105(b) for the State and year.
``(C) Reduction in block grant amount for states failing to
meet moe requirement.--
``(i) In general.--In the case of a State conducting a
Medicaid Flexibility Program that makes expenditures for
targeted health assistance under the program for a fiscal
year in an amount that is less than the required amount for
the fiscal year under subparagraph (B), the amount of the
block grant determined for the State under paragraph (2) for
the succeeding fiscal year shall be reduced by the amount by
which such expenditures are less than such required amount.
``(ii) Disregard of reduction.--For purposes of determining
the amount of a State block grant under paragraph (2), any
reduction made under this subparagraph to a State's block
grant amount in a previous fiscal year shall be disregarded.
``(iii) Application to states that terminate program.--In
the case of a State described in clause (i) that terminates
the State Medicaid Flexibility Program under subsection
(d)(2)(B) and such termination is effective with the end of
the fiscal year in which the State fails to make the required
amount of expenditures under subparagraph (B), the reduction
amount determined for the State and succeeding fiscal year
under clause (i) shall be treated as an overpayment under
this title.
``(D) Reduction for noncompliance.--If the Secretary
determines that a State conducting a Medicaid Flexibility
Program is not complying with the requirements of this
section, the Secretary may withhold payments, reduce
payments, or recover previous payments to the State under
this section as the Secretary deems appropriate.
``(E) Additional federal payments during public health
emergency.--
``(i) In general.--In the case of a State and fiscal year
or portion of a fiscal year for which the Secretary has
excluded expenditures under section 1903A(b)(6), if the State
has uncompensated targeted health assistance expenditures for
the year or portion of a year, the Secretary may make an
additional payment to such State equal to the Federal average
medical assistance percentage (as defined in section
1903A(a)(4)) for the year or portion of a year of the amount
of such uncompensated targeted health assistance
expenditures, except that the amount of such payment shall
not exceed the amount determined for the State and year or
portion of a year under clause (ii).
``(ii) Maximum amount of additional payment.--The amount
determined for a State and fiscal year or portion of a fiscal
year under this subparagraph shall not exceed the Federal
average medical assistance percentage (as defined in section
1903A(a)(4)) for such year or portion of a year of the amount
by which--
``(I) the amount of State expenditures for targeted health
assistance for program enrollees in areas of the State which
are subject to a declaration described in section
1903A(b)(6)(A)(i) for the year or portion of a year; exceeds
``(II) the amount of such expenditures for such enrollees
in such areas during the most recent fiscal year involved (or
portion of a fiscal year of equal length to the portion of a
fiscal year involved) during which no such declaration was in
effect.
``(iii) Uncompensated targeted health assistance.--In this
subparagraph, the term `uncompensated targeted health
assistance expenditures' means, with respect to a State and
fiscal year or portion of a fiscal year, an amount equal to
the amount (if any) by which--
``(I) the total amount expended by the State under the
program for targeted health assistance for the year or
portion of a year; exceeds
``(II) the amount equal to the amount of the block grant
(reduced, in the case of a portion of a year, to the same
proportion of the full block grant amount that the portion of
the year bears to the whole year) divided by the Federal
average medical assistance percentage for the year or portion
of a year.
``(iv) Review.--If the Secretary makes a payment to a State
for a fiscal year or portion of a fiscal year, the Secretary
shall, not later than 6 months after the declaration
described in section 1903A(b)(6)(A)(i) ceases to be in
effect, conduct an audit of the State's targeted health
assistance expenditures for program enrollees during the year
or portion of a year to ensure that all of the expenditures
for which the additional payment was made were made for the
purpose of ensuring that the health care needs of program
enrollees in areas affected by a public health emergency are
met.
``(4) Determination and publication of block grant
amount.--Beginning in 2019 and
[[Page S4212]]
each year thereafter, the Secretary shall determine for each
State, regardless of whether the State is conducting a
Medicaid Flexibility Program or has submitted an application
to conduct such a program, the amount of the block grant for
the State under paragraph (2) which would apply for the
upcoming fiscal year if the State were to conduct such a
program in such fiscal year, and shall publish such
determinations not later than June 1 of each year.
``(d) Program Requirements.--
``(1) In general.--No payment shall be made under this
section to a State conducting a Medicaid Flexibility Program
unless such program meets the requirements of this
subsection.
``(2) Term of program.--
``(A) In general.--A State Medicaid Flexibility Program
approved under subsection (b)--
``(i) shall be conducted for not less than 1 program
period;
``(ii) at the option of the State, may be continued for
succeeding program periods without resubmitting an
application under subsection (b), provided that--
``(I) the State provides notice to the Secretary of its
decision to continue the program; and
``(II) no significant changes are made to the program; and
``(iii) shall be subject to termination only by the State,
which may terminate the program by making an election under
subparagraph (B).
``(B) Election to terminate program.--
``(i) In general.--Subject to clause (ii), a State
conducting a Medicaid Flexibility Program may elect to
terminate the program effective with the first day after the
end of the program period in which the State makes the
election.
``(ii) Transition plan requirement.--A State may not elect
to terminate a Medicaid Flexibility Program unless the State
has in place an appropriate transition plan approved by the
Secretary.
``(iii) Effect of termination.--If a State elects to
terminate a Medicaid Flexibility Program, the per capita cap
limitations under section 1903A shall apply effective with
the day described in clause (i), and such limitations shall
be applied as if the State had never conducted a Medicaid
Flexibility Program.
``(3) Provision of targeted health assistance.--
``(A) In general.--A State Medicaid Flexibility Program
shall provide targeted health assistance to program enrollees
and such assistance shall be instead of medical assistance
which would otherwise be provided to the enrollees under this
title.
``(B) Conditions for eligibility.--
``(i) In general.--A State conducting a Medicaid
Flexibility Program shall establish conditions for
eligibility of program enrollees, which shall be instead of
other conditions for eligibility under this title, except
that the program must provide for eligibility for program
enrollees to whom the State would otherwise be required to
make medical assistance available under section
1902(a)(10)(A)(i).
``(ii) MAGI.--Any determination of income necessary to
establish the eligibility of a program enrollee for purposes
of a State Medicaid Flexibility Program shall be made using
modified adjusted gross income in accordance with section
1902(e)(14).
``(4) Benefits and services.--
``(A) Required services.--In the case of program enrollees
to whom the State would otherwise be required to make medical
assistance available under section 1902(a)(10)(A)(i), a State
conducting a Medicaid Flexibility Program shall provide as
targeted health assistance the following types of services:
``(i) Inpatient and outpatient hospital services.
``(ii) Laboratory and X-ray services.
``(iii) Nursing facility services for individuals aged 21
and older.
``(iv) Physician services.
``(v) Home health care services (including home nursing
services, medical supplies, equipment, and appliances).
``(vi) Rural health clinic services (as defined in section
1905(l)(1)).
``(vii) Federally-qualified health center services (as
defined in section 1905(l)(2)).
``(viii) Family planning services and supplies.
``(ix) Nurse midwife services.
``(x) Certified pediatric and family nurse practitioner
services.
``(xi) Freestanding birth center services (as defined in
section 1905(l)(3)).
``(xii) Emergency medical transportation.
``(xiii) Non-cosmetic dental services.
``(xiv) Pregnancy-related services, including postpartum
services for the 12-week period beginning on the last day of
a pregnancy.
``(B) Optional benefits.--A State may, at its option,
provide services in addition to the services described in
subparagraph (A) as targeted health assistance under a
Medicaid Flexibility Program.
``(C) Benefit packages.--
``(i) In general.--The targeted health assistance provided
by a State to any group of program enrollees under a Medicaid
Flexibility Program shall have an aggregate actuarial value
that is equal to at least 95 percent of the aggregate
actuarial value of the benchmark coverage described in
subsection (b)(1) of section 1937 or benchmark-equivalent
coverage described in subsection (b)(2) of such section, as
such subsections were in effect prior to the enactment of the
Patient Protection and Affordable Care Act.
``(ii) Amount, duration, and scope of benefits.--Subject to
clause (i), the State shall determine the amount, duration,
and scope with respect to services provided as targeted
health assistance under a Medicaid Flexibility Program,
including with respect to services that are required to be
provided to certain program enrollees under subparagraph (A)
except as otherwise provided under such subparagraph.
``(iii) Mental health and substance use disorder coverage
and parity.--The targeted health assistance provided by a
State to program enrollees under a Medicaid Flexibility
Program shall include mental health services and substance
use disorder services and the financial requirements and
treatment limitations applicable to such services under the
program shall comply with the requirements of section 2726 of
the Public Health Service Act in the same manner as such
requirements apply to a group health plan.
``(iv) Prescription drugs.--If the targeted health
assistance provided by a State to program enrollees under a
Medicaid Flexibility Program includes assistance for covered
outpatient drugs, such drugs shall be subject to a rebate
agreement that complies with the requirements of section
1927, and any requirements applicable to medical assistance
for covered outpatient drugs under a State plan (including
the requirement that the State provide information to a
manufacturer) shall apply in the same manner to targeted
health assistance for covered outpatient drugs under a
Medicaid Flexibility Program.
``(D) Cost sharing.--A State conducting a Medicaid
Flexibility Program may impose premiums, deductibles, cost-
sharing, or other similar charges, except that the total
annual aggregate amount of all such charges imposed with
respect to all program enrollees in a family shall not exceed
5 percent of the family's income for the year involved.
``(5) Administration of program.--Each State conducting a
Medicaid Flexibility Program shall do the following:
``(A) Single agency.--Designate a single State agency
responsible for administering the program.
``(B) Enrollment simplification and coordination with state
health insurance exchanges.--Provide for simplified
enrollment processes (such as online enrollment and
reenrollment and electronic verification) and coordination
with State health insurance exchanges.
``(C) Beneficiary protections.--Establish a fair process
(which the State shall describe in the application required
under subsection (b)) for individuals to appeal adverse
eligibility determinations with respect to the program.
``(6) Application of rest of title xix.--
``(A) In general.--To the extent that a provision of this
section is inconsistent with another provision of this title,
the provision of this section shall apply.
``(B) Application of section 1903a.--With respect to a
State that is conducting a Medicaid Flexibility Program,
section 1903A shall be applied as if program enrollees were
not 1903A enrollees for each program period during which the
State conducts the program.
``(C) Waivers and state plan amendments.--
``(i) In general.--In the case of a State conducting a
Medicaid Flexibility Program that has in effect a waiver or
State plan amendment, such waiver or amendment shall not
apply with respect to the program, targeted health assistance
provided under the program, or program enrollees.
``(ii) Replication of waiver or amendment.--In designing a
Medicaid Flexibility Program, a State may mirror provisions
of a waiver or State plan amendment described in clause (i)
in the program to the extent that such provisions are
otherwise consistent with the requirements of this section.
``(iii) Effect of termination.--In the case of a State
described in clause (i) that terminates its program under
subsection (d)(2)(B), any waiver or amendment which was
limited pursuant to subparagraph (A) shall cease to be so
limited effective with the effective date of such
termination.
``(D) Nonapplication of provisions.--With respect to the
design and implementation of Medicaid Flexibility Programs
conducted under this section, paragraphs (1), (10)(B), (17),
and (23) of section 1902(a), as well as any other provision
of this title (except for this section and as otherwise
provided by this section) that the Secretary deems
appropriate, shall not apply.
``(e) Definitions.--For purposes of this section:
``(1) Applicable program enrollee category.--The term
`applicable program enrollee category' means, with respect to
a State Medicaid Flexibility Program for a program period,
any of the following as specified by the State for the period
in its application under subsection (b):
``(A) 2 enrollee categories.--Both of the 1903A enrollee
categories described in subparagraphs (D) and (E) of section
1903A(e)(2).
``(B) Expansion enrollees.--The 1903A enrollee category
described in subparagraph (D) of section 1903A(e)(2).
``(C) Nonelderly, nondisabled, nonexpansion adults.--The
1903A enrollee category described in subparagraph (E) of
section 1903A(e)(2).
``(2) Medicaid flexibility program.--The term `Medicaid
Flexibility Program' means a
[[Page S4213]]
State program for providing targeted health assistance to
program enrollees funded by a block grant under this section.
``(3) Program enrollee.--
``(A) In general.--The term `program enrollee' means, with
respect to a State that is conducting a Medicaid Flexibility
Program for a program period, an individual who is a 1903A
enrollee (as defined in section 1903A(e)(1)) who is in the
applicable program enrollee category specified by the State
for the period.
``(B) Rule of construction.--For purposes of section
1903A(e)(3), eligibility and enrollment of an individual
under a Medicaid Flexibility Program shall be deemed to be
eligibility and enrollment under a State plan (or waiver of
such plan) under this title.
``(4) Program period.--The term `program period' means,
with respect to a State Medicaid Flexibility Program, a
period of 5 consecutive fiscal years that begins with
either--
``(A) the first fiscal year in which the State conducts the
program; or
``(B) the next fiscal year in which the State conducts such
a program that begins after the end of a previous program
period.
``(5) State.--The term `State' means one of the 50 States
or the District of Columbia.
``(6) Targeted health assistance.--The term `targeted
health assistance' means assistance for health-care-related
items and medical services for program enrollees.''.
SEC. 134. MEDICAID AND CHIP QUALITY PERFORMANCE BONUS
PAYMENTS.
Section 1903 of the Social Security Act (42 U.S.C. 1396b),
as amended by section 130, is further amended by adding at
the end the following new subsection:
``(bb) Quality Performance Bonus Payments.--
``(1) Increased federal share.--With respect to each of
fiscal years 2023 through 2026, in the case of one of the 50
States or the District of Columbia (each referred to in this
subsection as a `State') that--
``(A) equals or exceeds the qualifying amount (as
established by the Secretary) of lower than expected
aggregate medical assistance expenditures (as defined in
paragraph (4)) for that fiscal year; and
``(B) submits to the Secretary, in accordance with such
manner and format as specified by the Secretary and for the
performance period (as defined by the Secretary) for such
fiscal year--
``(i) information on the applicable quality measures
identified under paragraph (3) with respect to each category
of Medicaid eligible individuals under the State plan or a
waiver of such plan; and
``(ii) a plan for spending a portion of additional funds
resulting from application of this subsection on quality
improvement within the State plan under this title or under a
waiver of such plan,
the Federal matching percentage otherwise applied under
subsection (a)(7) for such fiscal year shall be increased by
such percentage (as determined by the Secretary) so that the
aggregate amount of the resulting increase pursuant to this
subsection for the State and fiscal year does not exceed the
State allotment established under paragraph (2) for the State
and fiscal year.
``(2) Allotment determination.--The Secretary shall
establish a formula for computing State allotments under this
paragraph for each fiscal year described in paragraph (1)
such that--
``(A) such an allotment to a State is determined based on
the performance, including improvement, of such State under
this title and title XXI with respect to the quality measures
submitted under paragraph (3) by such State for the
performance period (as defined by the Secretary) for such
fiscal year; and
``(B) the total of the allotments under this paragraph for
all States for the period of the fiscal years described in
paragraph (1) is equal to $8,000,000,000.
``(3) Quality measures required for bonus payments.--For
purposes of this subsection, the Secretary shall, pursuant to
rulemaking and after consultation with State agencies
administering State plans under this title, identify and
publish (and update as necessary) peer-reviewed quality
measures (which shall include health care and long-term care
outcome measures and may include the quality measures that
are overseen or developed by the National Committee for
Quality Assurance or the Agency for Healthcare Research and
Quality or that are identified under section 1139A or 1139B)
that are quantifiable, objective measures that take into
account the clinically appropriate measures of quality for
different types of patient populations receiving benefits or
services under this title or title XXI.
``(4) Lower than expected aggregate medical assistance
expenditures.--In this subsection, the term `lower than
expected aggregate medical assistance expenditures' means,
with respect to a State the amount (if any) by which--
``(A) the amount of the adjusted total medical assistance
expenditures for the State and fiscal year determined in
section 1903A(b)(1) without regard to the 1903A enrollee
category described in section 1903A(e)(2)(E); is less than
``(B) the amount of the target total medical assistance
expenditures for the State and fiscal year determined in
section 1903A(c) without regard to the 1903A enrollee
category described in section 1903A(e)(2)(E).''.
SEC. 135. GRANDFATHERING CERTAIN MEDICAID WAIVERS;
PRIORITIZATION OF HCBS WAIVERS.
(a) Managed Care Waivers.--
(1) In general.--In the case of a State with a
grandfathered managed care waiver, the State may, at its
option through a State plan amendment, continue to implement
the managed care delivery system that is the subject of such
waiver in perpetuity under the State plan under title XIX of
the Social Security Act (or a waiver of such plan) without
submitting an application to the Secretary for a new waiver
to implement such managed care delivery system, so long as
the terms and conditions of the waiver involved (other than
such terms and conditions that relate to budget neutrality as
modified pursuant to section 1903A(f)(1) of the Social
Security Act) are not modified.
(2) Modifications.--
(A) In general.--If a State with a grandfathered managed
care waiver seeks to modify the terms or conditions of such a
waiver, the State shall submit to the Secretary an
application for approval of a new waiver under such modified
terms and conditions.
(B) Approval of modification.--
(i) In general.--An application described in subparagraph
(A) is deemed approved unless the Secretary, not later than
90 days after the date on which the application is submitted,
submits to the State--
(I) a denial; or
(II) a request for more information regarding the
application.
(ii) Additional information.--If the Secretary requests
additional information, the Secretary has 30 days after a
State submission in response to the Secretary's request to
deny the application or request more information.
(3) Grandfathered managed care waiver defined.--In this
subsection, the term ``grandfathered managed care waiver''
means the provisions of a waiver or an experimental, pilot,
or demonstration project that relate to the authority of a
State to implement a managed care delivery system under the
State plan under title XIX of such Act (or under a waiver of
such plan under section 1115 of such Act) that--
(A) is approved by the Secretary of Health and Human
Services under section 1915(b), 1932, or 1115(a)(1) of the
Social Security Act (42 U.S.C. 1396n(b), 1396u-2, 1315(a)(1))
as of January 1, 2017; and
(B) has been renewed by the Secretary not less than 1 time.
(b) HCBS Waivers.--The Secretary of Health and Human
Services shall implement procedures encouraging States to
adopt or extend waivers related to the authority of a State
to make medical assistance available for home and community-
based services under the State plan under title XIX of the
Social Security Act if the State determines that such waivers
would improve patient access to services.
SEC. 136. COORDINATION WITH STATES.
Title XIX of the Social Security Act is amended by
inserting after section 1904 (42 U.S.C. 1396d) the following:
``coordination with states
``Sec. 1904A. No proposed rule (as defined in section
551(4) of title 5, United States Code) implementing or
interpreting any provision of this title shall be finalized
on or after January 1, 2018, unless the Secretary--
``(1) provides for a process under which the Secretary or
the Secretary's designee solicits advice from each State's
State agency responsible for administering the State plan
under this title (or a waiver of such plan) and State
Medicaid Director--
``(A) on a regular, ongoing basis on matters relating to
the application of this title that are likely to have a
direct effect on the operation or financing of State plans
under this title (or waivers of such plans); and
``(B) prior to submission of any final proposed rule, plan
amendment, waiver request, or proposal for a project that is
likely to have a direct effect on the operation or financing
of State plans under this title (or waivers of such plans);
``(2) accepts and considers written and oral comments from
a bipartisan, nonprofit, professional organization that
represents State Medicaid Directors, and from any State
agency administering the plan under this title, regarding
such proposed rule; and
``(3) incorporates in the preamble to the proposed rule a
summary of comments referred to in paragraph (2) and the
Secretary's response to such comments.''.
SEC. 137. OPTIONAL ASSISTANCE FOR CERTAIN INPATIENT
PSYCHIATRIC SERVICES.
(a) State Option.--Section 1905 of the Social Security Act
(42 U.S.C. 1396d) is amended--
(1) in subsection (a)--
(A) in paragraph (16)--
(i) by striking ``and, (B)'' and inserting ``(B)''; and
(ii) by inserting before the semicolon at the end the
following: ``, and (C) subject to subsection (h)(4),
qualified inpatient psychiatric hospital services (as defined
in subsection (h)(3)) for individuals who are over 21 years
of age and under 65 years of age''; and
(B) in the subdivision (B) that follows paragraph (29), by
inserting ``(other than services described in subparagraph
(C) of paragraph (16) for individuals described in such
subparagraph)'' after ``patient in an institution for mental
diseases''; and
(2) in subsection (h), by adding at the end the following
new paragraphs:
``(3) For purposes of subsection (a)(16)(C), the term
`qualified inpatient psychiatric
[[Page S4214]]
hospital services' means, with respect to individuals
described in such subsection, services described in
subparagraph (B) of paragraph (1) that are not otherwise
covered under subsection (a)(16)(A) and are furnished--
``(A) in an institution (or distinct part thereof) which is
a psychiatric hospital (as defined in section 1861(f)); and
``(B) with respect to such an individual, for a period not
to exceed 30 consecutive days in any month and not to exceed
90 days in any calendar year.
``(4) As a condition for a State including qualified
inpatient psychiatric hospital services as medical assistance
under subsection (a)(16)(C), the State must (during the
period in which it furnishes medical assistance under this
title for services and individuals described in such
subsection)--
``(A) maintain at least the number of licensed beds at
psychiatric hospitals owned, operated, or contracted for by
the State that were being maintained as of the date of the
enactment of this paragraph or, if higher, as of the date the
State applies to the Secretary to include medical assistance
under such subsection; and
``(B) maintain on an annual basis a level of funding
expended by the State (and political subdivisions thereof)
other than under this title from non-Federal funds for
inpatient services in an institution described in paragraph
(3)(A), and for active psychiatric care and treatment
provided on an outpatient basis, that is not less than the
level of such funding for such services and care as of the
date of the enactment of this paragraph or, if higher, as of
the date the State applies to the Secretary to include
medical assistance under such subsection.''.
(b) Special Matching Rate.--Section 1905(b) of the Social
Security Act (42 U.S.C. 1395d(b)) is amended by adding at the
end the following: ``Notwithstanding the previous provisions
of this subsection, the Federal medical assistance percentage
shall be 50 percent with respect to medical assistance for
services and individuals described in subsection
(a)(16)(C).''.
(c) Effective Date.--The amendments made by this section
shall apply to qualified inpatient psychiatric hospital
services furnished on or after October 1, 2018.
SEC. 138. ENHANCED FMAP FOR MEDICAL ASSISTANCE TO ELIGIBLE
INDIANS.
Section 1905(b) of the Social Security Act (42 U.S.C.
1396d(b)) is amended, in the third sentence, by inserting
``and with respect to amounts expended by a State as medical
assistance for services provided by any other provider under
the State plan to an individual who is a member of an Indian
tribe who is eligible for assistance under the State plan''
before the period.
SEC. 139. MEDICAID OPTION TO PROVIDE CONSUMER-FOCUSED COST-
SHARING ASSISTANCE FOR LOW-INCOME INDIVIDUALS
ENROLLING IN QUALIFIED HEALTH PLANS.
Title XIX of the Social Security Act (42 U.S.C. 1396 et
seq.), is amended by inserting after section 1906A the
following new section:
``consumer-focused cost-sharing assistance for low-income individuals
enrolling in qualified health plans
``Sec. 1906B. (a) In General.--A State may elect to
provide cost-sharing assistance (as defined in subsection
(c)) for an eligible low-income individual (as defined in
subsection (b)) who is enrolled in a qualified health plan
offered on an Exchange if the State meets the requirements of
this section and the offering of such assistance is cost-
effective (as defined in subsection (d)).
``(b) Eligible Low-income Individual Defined.--For purposes
of this section, the term `eligible low-income individual'
means an individual--
``(1) whose income (as determined under section
1902(e)(14)) does not exceed 133 percent of the poverty line
(as defined in section 2110(c)(5)) applicable to a family of
the size involved;
``(2) who is eligible for premium assistance for the
purchase of a qualified health plan under section 36B of the
Internal Revenue Code of 1986 and is enrolled in such a plan;
``(3) who would be described in subparagraph (D) or (E) of
section 1903A(e)(2) if the individual were eligible for
medical assistance under the State plan; and
``(4) who satisfies such additional criteria for the
provision of cost-sharing assistance under this section as
the State may establish.
``(c) Cost-sharing Assistance Defined.--
``(1) In general.--For purposes of this section, the term
`cost-sharing assistance' includes amounts expended for all
or part of the costs of premiums, deductibles, coinsurance,
copayments, or similar charges, and all or part of any
amounts paid for medical care (within the meaning of section
213(d) of the Internal Revenue Code of 1986).
``(2) Option of additional benefits.--Such term may
include, at the option of a State, such additional benefits
as the State may specify.
``(d) Cost-effective Defined.--
``(1) In general.--For purposes of this section, with
respect to a State and year, cost-sharing assistance shall be
considered to be `cost-effective' with respect to a State if
the aggregate amount of Federal cost-sharing and premium
assistance (as defined in paragraph (2)) for the State and
year do not exceed the Federal cost-sharing assistance limit
(as defined in paragraph (3)) for the State and year.
``(2) Aggregate amount of federal cost-sharing and premium
assistance.--The term `aggregate amount of Federal cost-
sharing and premium assistance' means, for a State and year,
the sum of--
``(A) the product of--
``(i) the Federal average medical assistance matching
percentage (as defined in section 1903A(a)(4)) for the State
and year; and
``(ii) the amount of cost-sharing assistance provided to
eligible low-income individuals by the State for the year;
and
``(B) the amount of Federal expenditures attributable to
advance payments for premium tax credits under section
1412(c)(2) of the Patient Protection and Affordable Care Act
made on behalf of eligible low-income individuals in the
State for the year.
``(3) Federal cost-sharing assistance limit.--The term
`Federal cost-sharing assistance limit' means, for a State
and year, the product of--
``(A) the Federal average medical assistance matching
percentage (as defined in section 1903A(a)(4)) for the State
and year; and
``(B) the sum of the products, for each of the 1903A
enrollee categories described in subparagraph (D) and (E) of
section 1903A(e)(2), of--
``(i) the target per capita medical assistance expenditures
for the State, year, and category; and
``(ii) the number of eligible low-income individuals in the
State for the year who, if they were eligible for medical
assistance, would be described in the category.
``(e) Other Provisions.--
``(1) Treatment as medical assistance.--Expenditures for
cost-sharing assistance provided by a State for a year in
accordance with this section shall be considered, for
purposes of section 1903, to be expenditures for medical
assistance, except that--
``(A) notwithstanding section 1905(b), the Federal medical
assistance percentage applicable to the total amount expended
for such assistance shall be equal to the Federal average
medical assistance matching percentage (as defined in section
1903A(a)(4)) for such State and year; and
``(B) in no case shall the amount of Federal payments made
to a State for a year with respect to amounts expended for
such assistance exceed the amount of the Federal cost-sharing
assistance limit for the State and year applicable under
subsection (d)(3).
``(2) Scaling of assistance.--A State may provide cost-
sharing assistance under this section on a sliding scale
based on income and percentage of full actuarial value that
the State may determine.
``(3) Not considered minimum essential coverage.--Cost-
sharing assistance provided under this section shall not be
considered to be minimum essential coverage (as defined in
section 5000A(f) of the Internal Revenue Code of 1986).
``(4) Nonapplication of other requirements.--Sections
1902(a)(1) (relating to statewideness), 1902(a)(10)(B)
(relating to comparability), 1916, and 1916A (relating to
cost-sharing for medical assistance), and any other provision
of this title which would be directly contrary to the
authority under this section shall not apply to the provision
of cost-sharing assistance under this section.''.
SEC. 140. SMALL BUSINESS HEALTH PLANS.
(a) Tax Treatment of Small Business Health Plans.--A small
business health plan (as defined in section 801(a) of the
Employee Retirement Income Security Act of 1974) shall be
treated--
(1) as a group health plan (as defined in section 2791 of
the Public Health Service Act (42 U.S.C. 300gg-91)) for
purposes of applying title XXVII of the Public Health Service
Act (42 U.S.C. 300gg et seq.) and title XXII of such Act (42
U.S.C. 300bb-1);
(2) as a group health plan (as defined in section
5000(b)(1) of the Internal Revenue Code of 1986) for purposes
of applying sections 4980B and 5000 and chapter 100 of the
Internal Revenue Code of 1986; and
(3) as a group health plan (as defined in section 733(a)(1)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1191b(a)(1))) for purposes of applying parts 6 and 7
of title I of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1161 et seq.).
(b) Rules.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021 et
seq.) is amended by adding at the end the following new part:
``PART 8--RULES GOVERNING SMALL BUSINESS RISK SHARING POOLS
``SEC. 801. SMALL BUSINESS HEALTH PLANS.
``(a) In General.--For purposes of this part, the term
`small business health plan' means a fully insured group
health plan, offered by a health insurance issuer in the
large group market, whose sponsor is described in subsection
(b).
``(b) Sponsor.--The sponsor of a group health plan is
described in this subsection if such sponsor--
``(1) is a qualified sponsor and receives certification by
the Secretary;
``(2) is organized and maintained in good faith, with a
constitution or bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis;
``(3) is established as a permanent entity;
``(4) is established for a purpose other than providing
health benefits to its members, such as an organization
established as a bona fide trade association, franchise, or
section 7705 organization; and
``(5) does not condition membership on the basis of a
minimum group size.
[[Page S4215]]
``SEC. 802. FILING FEE AND CERTIFICATION OF SMALL BUSINESS
HEALTH PLANS.
``(a) Filing Fee.--A small business health plan shall pay
to the Secretary at the time of filing an application for
certification under subsection (b) a filing fee in the amount
of $5,000, which shall be available to the Secretary for the
sole purpose of administering the certification procedures
applicable with respect to small business health plans.
``(b) Certification.--
``(1) In general.--Not later than 6 months after the date
of enactment of this part, the Secretary shall prescribe by
interim final rule a procedure under which the Secretary--
``(A) will certify a qualified sponsor of a small business
health plan, upon receipt of an application that includes the
information described in paragraph (2);
``(B) may provide for continued certification of small
business health plans under this part;
``(C) shall provide for the revocation of a certification
if the applicable authority finds that the small business
health plan involved fails to comply with the requirements of
this part;
``(D) shall conduct oversight of certified plan sponsors,
including periodic review, and consistent with section 504,
applying the requirements of sections 518, 519, and 520; and
``(E) will consult with a State with respect to a small
business health plan domiciled in such State regarding the
Secretary's authority under this part and other enforcement
authority under sections 502 and 504.
``(2) Information to be included in application for
certification.--An application for certification under this
part meets the requirements of this section only if it
includes, in a manner and form which shall be prescribed by
the applicable authority by regulation, at least the
following information:
``(A) Identifying information.
``(B) States in which the plan intends to do business.
``(C) Bonding requirements.
``(D) Plan documents.
``(E) Agreements with service providers.
``(3) Requirements for certified plan sponsors.--Not later
than 6 months after the date of enactment of this part, the
Secretary shall prescribe by interim final rule requirements
for certified plan sponsors that include requirements
regarding--
``(A) structure and requirements for boards of trustees or
plan administrators;
``(B) notification of material changes; and
``(C) notification for voluntary termination.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to a small business
health plan shall not be effective unless written notice of
such certification is filed by the plan sponsor with the
applicable State authority of each State in which the small
business health plan operates.
``(d) Expedited and Deemed Certification.--
``(1) In general.--If the Secretary fails to act on a
complete application for certification under this section
within 90 days of receipt of such complete application, the
applying small business health plan sponsor shall be deemed
certified until such time as the Secretary may deny for cause
the application for certification.
``(2) Penalty.--The Secretary may assess a penalty against
the board of trustees, plan administrator, and plan sponsor
(jointly and severally) of a small business health plan
sponsor that is deemed certified under paragraph (1) of up to
$500,000 in the event the Secretary determines that the
application for certification of such small business health
plan sponsor was willfully or with gross negligence
incomplete or inaccurate.
``SEC. 803. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements
of this subsection are met with respect to a small business
health plan if, under the terms of the plan--
``(1) each participating employer must be--
``(A) a member of the sponsor;
``(B) the sponsor; or
``(C) an affiliated member of the sponsor, except that, in
the case of a sponsor which is a professional association or
other individual-based association, if at least one of the
officers, directors, or employees of an employer, or at least
one of the individuals who are partners in an employer and
who actively participates in the business, is a member or
such an affiliated member of the sponsor, participating
employers may also include such employer; and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-employed
individuals with or without employees), officers, directors,
or employees of, or partners in, participating employers; or
``(B) the dependents of individuals described in
subparagraph (A).
``(b) Participating Employers.--In applying requirements
relating to coverage renewal, a participating employer shall
not be deemed to be a plan sponsor.
``(c) Prohibition of Discrimination Against Employers and
Employees Eligible to Participate.--The requirements of this
subsection are met with respect to a small business health
plan if--
``(1) under the terms of the plan, no participating
employer may provide health insurance coverage in the
individual market for any employee not covered under the
plan, if such exclusion of the employee from coverage under
the plan is based on a health status-related factor with
respect to the employee and such employee would, but for such
exclusion on such basis, be eligible for coverage under the
plan; and
``(2) information regarding all coverage options available
under the plan is made readily available to any employer
eligible to participate.
``SEC. 804. DEFINITIONS; RENEWAL.
``For purposes of this part:
``(1) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor--
``(A) a person who is otherwise eligible to be a member of
the sponsor but who elects an affiliated status with the
sponsor, or
``(B) in the case of a sponsor with members which consist
of associations, a person who is a member or employee of any
such association and elects an affiliated status with the
sponsor.
``(2) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(3) Franchisor; franchisee.--The terms `franchisor' and
`franchisee' have the meanings given such terms for purposes
of sections 436.2(a) through 436.2(c) of title 16, Code of
Federal Regulations (including any such amendments to such
regulation after the date of enactment of this part) and, for
purposes of this part, franchisor or franchisee employers
participating in such a group health plan shall not be
treated as the employer, co-employer, or joint employer of
the employees of another participating franchisor or
franchisee employer for any purpose.
``(4) Health plan terms.--The terms `group health plan',
`health insurance coverage', and `health insurance issuer'
have the meanings given such terms in section 733.
``(5) Individual market.--
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has fewer than 2 participants as current employees
or participants described in section 732(d)(3) on the first
day of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(6) Participating employer.--The term `participating
employer' means, in connection with a small business health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer with or without employees (or
any dependent, as defined under the terms of the plan, of
such individual) is or was covered under such plan in
connection with the status of such individual as such an
employee, partner, or self-employed individual in relation to
the plan.
``(7) Section 7705 organization.--The term `section 7705
organization' means an organization providing services for a
customer pursuant to a contract meeting the conditions of
subparagraphs (A), (B), (C), (D), and (E) (but not (F)) of
section 7705(e)(2) of the Internal Revenue Code of 1986,
including an entity that is part of a section 7705
organization control group . For purposes of this part, any
reference to `member' shall include a customer of a section
7705 organization except with respect to references to a
`member' or `members' in paragraph (1).''.
(c) Preemption Rules.--Section 514 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1144) is
amended by adding at the end the following:
``(f) The provisions of this title shall supersede any and
all State laws insofar as they may now or hereafter preclude
a health insurance issuer from offering health insurance
coverage in connection with a small business health plan
which is certified under part 8.''.
(d) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of a small business health plan under part 8.''.
(e) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(f) Effective Date.--The amendments made by this section
shall take effect 1 year after the date of the enactment of
this Act. The Secretary of Labor shall first issue all
regulations necessary to carry out the amendments made by
this section within 6 months after the date of the enactment
of this Act.
[[Page S4216]]
TITLE II
SEC. 201. THE PREVENTION AND PUBLIC HEALTH FUND.
Subsection (b) of section 4002 of the Patient Protection
and Affordable Care Act (42 U.S.C. 300u-11) is amended--
(1) in paragraph (3), by striking ``each of fiscal years
2018 and 2019'' and inserting ``fiscal year 2018''; and
(2) by striking paragraphs (4) through (8).
SEC. 202. SUPPORT FOR STATE RESPONSE TO OPIOID AND SUBSTANCE
ABUSE CRISIS.
There is authorized to be appropriated, and is
appropriated, to the Secretary of Health and Human Services,
out of monies in the Treasury not otherwise obligated--
(1) $4,972,000,000 for each of fiscal years 2018 through
2026, to provide grants to States to support substance use
disorder treatment and recovery support services for
individuals who have or may have mental or substance use
disorders, including counseling, medication assisted
treatment, and other substance abuse treatment and recovery
services as such Secretary determines appropriate; and
(2) $50,400,000 for each of fiscal years 2018 through 2022,
for research on addiction and pain related to the substance
abuse crisis.
Funds appropriated under this section shall remain available
until expended.
SEC. 203. COMMUNITY HEALTH CENTER PROGRAM.
Effective as if included in the enactment of the Medicare
Access and CHIP Reauthorization Act of 2015 (Public Law 114-
10, 129 Stat. 87), paragraph (1) of section 221(a) of such
Act is amended by inserting ``, and an additional
$422,000,000 for fiscal year 2017'' after ``2017''.
SEC. 204. CHANGE IN PERMISSIBLE AGE VARIATION IN HEALTH
INSURANCE PREMIUM RATES.
Section 2701(a)(1)(A)(iii) of the Public Health Service Act
(42 U.S.C. 300gg(a)(1)(A)(iii)) is amended by inserting after
``(consistent with section 2707(c))'' the following: ``or,
for plan years beginning on or after January 1, 2019, 5 to 1
for adults (consistent with section 2707(c)) or such other
ratio for adults (consistent with section 2707(c)) as the
State may determine''.
SEC. 205. MEDICAL LOSS RATIO DETERMINED BY THE STATE.
Section 2718(b) of the Public Health Service Act (42 U.S.C.
300gg-18(b)) is amended by adding at the end the following:
``(4) Sunset.--Paragraphs (1) through (3) and subsection
(d) shall not apply for plan years beginning on or after
January 1, 2019, and after such date any reference in law to
such paragraphs and subsection shall have no force or effect.
``(5) Medical loss ratio determined by the state.--For plan
years beginning on or after January 1, 2019, each State
shall--
``(A) set the ratio of the amount of premium revenue a
health insurance issuer offering group or individual health
insurance coverage may expend on non-claims costs to the
total amount of premium revenue; and
``(B) determine the amount of any annual rebate required to
be paid to enrollees under such coverage if the ratio of the
amount of premium revenue expended by the issuer on non-
claims costs to the total amount of premium revenue exceeds
the ratio set by the State under subparagraph (A).''.
SEC. 206. STABILIZING THE INDIVIDUAL INSURANCE MARKETS.
(a) Enrollment Waiting Periods.--Section 2702(b)(1) of the
Public Health Services Act (42 U.S.C. 300gg-1(b)(1)) is
amended by inserting ``, and as described in paragraph (3)''
before the period.
(b) Creditable Coverage Requirement.--Section 2702(b)(2) of
the Public Health Services Act (42 U.S.C. 300gg-1(b)(2)) is
amended by striking ``paragraph (3)'' and inserting
``paragraph (4)''.
(c) Application of Waiting Periods.--Section 2702(b) of the
Public Health Services Act (42 U.S.C. 300gg-1(b)) is
amended--
(1) in paragraph (3)--
(A) by striking ``with respect to enrollment periods under
paragraphs (1) and (2)'', inserting ``in accordance with this
subsection''; and
(B) by redesignating such paragraph as paragraph (4); and
(2) by inserting after paragraph (2), the following:
``(3) Waiting periods.--
``(A) In general.--With respect to health insurance
coverage that is effective on or after January 1, 2019, a
health insurance issuer described in subsection (a) that
offers such coverage in the individual market shall impose a
6 month waiting period (as defined in the same manner as such
term is defined in section 2704(b)(4) for group health plans)
on any individual who enrolls in such coverage and who cannot
demonstrate--
``(i) in the case of an individual submitting an
application during an open enrollment period, 12 months of
continuous creditable coverage without experiencing a
significant break in such coverage as described in
subparagraphs (A) and (B) of section 2704(c)(2); or
``(ii) in the case of an individual submitting an
application during a special enrollment period--
``(I) 12 months of continuous creditable coverage as
described in clause (i); or
``(II) at least 1 day of creditable coverage during the 60-
day period immediately preceding the date of submission of
such application.
``(B) Individuals enrolled in other coverage.--Such a
waiting period shall not apply to an individual who is
enrolled in health insurance coverage in the individual
market on the day before the effective date of the coverage
in which the individual is newly enrolling.
``(C) Waiting period described.--For purposes of
subparagraph (A)--
``(i) in the case of an individual that submits an
application during an open enrollment period or under a
special enrollment period for which the individual qualifies,
coverage under the plan begins on the first day of the first
month that begins 6 months after the date on which the
individual submits an application for health insurance
coverage; and
``(ii) in the case of an individual that submits an
application outside of an open enrollment period and does not
qualify for enrollment under a special enrollment period,
coverage under the plan begins on the later of--
``(I) the first day of the first month that begins 6 months
after the day on which the individual submits an application
for health insurance coverage; or
``(II) the first day of the next plan year.
``(D) Certificates of creditable coverage.--The Secretary
shall require health insurance issuers and health care
sharing ministries (as defined in section 5000A(d)(2)(B) of
the Internal Revenue Code of 1986) to provide certification
of periods of creditable coverage and waiting periods, in a
manner prescribed by the Secretary, for purposes of verifying
that the continuous coverage requirements of subparagraph (A)
are met.
``(E) Continuous creditable coverage defined.--For purposes
of this paragraph, the term `creditable coverage'--
``(i) has the meaning given such term in section
2704(c)(1); and
``(ii) includes membership in a health care sharing
ministry (as defined in section 5000A(d)(2)(B) of the
Internal Revenue Code of 1986).
``(F) Exceptions.--Notwithstanding subparagraph (A), a
health insurance issuer may not impose a waiting period with
respect to the following individuals:
``(i) A newborn who is enrolled in such coverage within 30
days of the date of birth.
``(ii) A child who is adopted or placed for adoption before
attaining 18 years of age and who is enrolled in such
coverage within 30 days of the date of the adoption.
``(iii) Other individuals, as the Secretary determines
appropriate.''.
SEC. 207. WAIVERS FOR STATE INNOVATION.
(a) In General.--Section 1332 of the Patient Protection and
Affordable Care Act (42 U.S.C. 18052) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) in subparagraph (B)--
(I) by amending clause (i) to read as follows:
``(i) a description of how the State plan meeting the
requirements of a waiver under this section would, with
respect to health insurance coverage within the State--
``(I) take the place of the requirements described in
paragraph (2) that are waived; and
``(II) provide for alternative means of, and requirements
for, increasing access to comprehensive coverage, reducing
average premiums, providing consumers the freedom to purchase
the health insurance of their choice, and increasing
enrollment in private health insurance; and''; and
(II) in clause (ii), by striking ``that is budget neutral
for the Federal Government'' and inserting ``, demonstrating
that the State plan does not increase the Federal deficit'';
and
(ii) in subparagraph (C), by striking ``the law'' and
inserting ``a law or has in effect a certification'';
(B) in paragraph (3)--
(i) in the first sentence, by inserting ``or would qualify
for a reduction in'' after ``would not qualify for'';
(ii) by adding after the second sentence the following: ``A
State may request that all of, or any portion of, such
aggregate amount of such credits or reductions be paid to the
State as described in the first sentence.'';
(iii) in the paragraph heading, by striking ``Pass through
of funding'' and inserting ``Funding'';
(iv) by striking ``With respect'' and inserting the
following:
``(A) Pass through of funding.--With respect''; and
(v) by adding at the end the following:
``(B) Additional funding.--There is authorized to be
appropriated, and is appropriated, to the Secretary of Health
and Human Services, out of monies in the Treasury not
otherwise obligated, $2,000,000,000 for fiscal year 2017, to
remain available until the end of fiscal year 2019, to
provide grants to States for purposes of submitting an
application for a waiver granted under this section and
implementing the State plan under such waiver.
``(C) Authority to use long-term state innovation and
stability allotment.--If the State has an application for an
allotment under section 2105(i) of the Social Security Act
for the plan year, the State may use the funds available
under the State's allotment for the plan year to carry out
the State plan under this section, so long as such use is
consistent with the requirements of paragraphs (1) and (7) of
section 2105(i) of such Act (other than paragraph (1)(B) of
such section). Any funds used to carry out a State plan under
this subparagraph shall not be
[[Page S4217]]
considered in determining whether the State plan increases
the Federal deficit.''; and
(C) in paragraph (4), by adding at the end the following:
``(D) Expedited process.--The Secretary shall establish an
expedited application and approval process that may be used
if the Secretary determines that such expedited process is
necessary to respond to an urgent or emergency situation with
respect to health insurance coverage within a State.'';
(2) in subsection (b)--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph (A)--
(I) by striking ``may'' and inserting ``shall''; and
(II) by striking ``only if'' and inserting ``unless''; and
(ii) by striking ``plan--'' and all that follows through
the period at the end of subparagraph (D) and inserting
``application is missing a required element under subsection
(a)(1) or that the State plan will increase the Federal
deficit, not taking into account any amounts received through
a grant under subsection (a)(3)(B).'';
(B) in paragraph (2)--
(i) in the paragraph heading, by inserting ``or certify''
after ``law'';
(ii) in subparagraph (A), by inserting before the period
``, and a certification described in this paragraph is a
document, signed by the Governor, and the State insurance
commissioner, of the State, that provides authority for State
actions under a waiver under this section, including the
implementation of the State plan under subsection
(a)(1)(B)''; and
(iii) in subparagraph (B)--
(I) in the subparagraph heading, by striking ``of opt
out''; and
(II) by striking `` may repeal a law'' and all that follows
through the period at the end and inserting the following:
``may terminate the authority provided under the waiver with
respect to the State by--
``(i) repealing a law described in subparagraph (A); or
``(ii) terminating a certification described in
subparagraph (A), through a certification for such
termination signed by the Governor, and the State insurance
commissioner, of the State.'';
(3) in subsection (d)(2)(B), by striking ``and the reasons
therefore'' and inserting ``and the reasons therefore, and
provide the data on which such determination was made''; and
(4) in subsection (e), by striking ``No waiver'' and all
that follows through the period at the end and inserting the
following: ``A waiver under this section--
``(1) shall be in effect for a period of 8 years unless the
State requests a shorter duration;
``(2) may be renewed for unlimited additional 8-year
periods upon application by the State; and
``(3) may not be cancelled by the Secretary before the
expiration of the 8-year period (including any renewal period
under paragraph (2)).''.
(b) Applicability.--Section 1332 of the Patient Protection
and Affordable Care Act (42 U.S.C. 18052) shall apply as
follows:
(1) In the case of a State for which a waiver under such
section was granted prior to the date of enactment of this
Act, such section 1332, as in effect on the day before the
date of enactment of this Act shall apply to the waiver and
State plan.
(2) In the case of a State that submitted an application
for a waiver under such section prior to the date of
enactment of this Act, and which application the Secretary of
Health and Human Services has not approved prior to such
date, the State may elect to have such section 1332, as in
effect on the day before the date of enactment of this Act,
or such section 1332, as amended by subsection (a), apply to
such application and State plan.
(3) In the case of a State that submits an application for
a waiver under such section on or after the date of enactment
of this Act, such section 1332, as amended by subsection (a),
shall apply to such application and State plan.
SEC. 208. ALLOWING ALL INDIVIDUALS PURCHASING HEALTH
INSURANCE IN THE INDIVIDUAL MARKET THE OPTION
TO PURCHASE A LOWER PREMIUM CATASTROPHIC PLAN.
(a) In General.--Section 1302(e) of the Patient Protection
and Affordable Care Act (42 U.S.C. 18022(e)) is amended by
adding at the end the following:
``(4) Consumer freedom.--For plan years beginning on or
after January 1, 2019, paragraph (1)(A) shall not apply with
respect to any plan offered in the State.''.
(b) Risk Pools.--Section 1312(c) of the Patient Protection
and Affordable Care Act (42 U.S.C. 18032(c)) is amended--
(1) in paragraph (1), by inserting ``and including, with
respect to plan years beginning on or after January 1, 2019,
enrollees in catastrophic plans described in section
1302(e)'' after ``Exchange''; and
(2) in paragraph (2), by inserting ``and including, with
respect to plan years beginning on or after January 1, 2019,
enrollees in catastrophic plans described in section
1302(e)'' after ``Exchange''.
SEC. 209. APPLICATION OF ENFORCEMENT PENALTIES.
(a) In General.--Section 2723 of the Public Health Service
Act (42 U.S.C. 300gg-22) is amended--
(1) in subsection (a)--
(A) in paragraph (1), by inserting ``and of section 1303 of
the Patient Protection and Affordable Care Act'' after ``this
part''; and
(B) in paragraph (2), by inserting ``or in such section
1303'' after ``this part''; and
(2) in subsection (b)--
(A) in paragraphs (1) and (2)(A), by inserting ``or section
1303 of the Patient Protection and Affordable Care Act''
after ``this part'' each place such term appears;
(B) in paragraph (2)(C)(ii), by inserting ``and section
1303 of the Patient Protection and Affordable Care Act''
after ``this part''.
(b) Effect of Waiver.--A State waiver pursuant to section
1332 of the Patient Protection and Affordable Care Act (42
U.S.C. 18052) shall not affect the authority of the Secretary
to impose penalties under section 2723 of the Public Health
Service Act (42 U.S.C. 300gg-22).
SEC. 210. FUNDING FOR COST-SHARING PAYMENTS.
There is appropriated to the Secretary of Health and Human
Services, out of any money in the Treasury not otherwise
appropriated, such sums as may be necessary for payments for
cost-sharing reductions authorized by the Patient Protection
and Affordable Care Act (including adjustments to any prior
obligations for such payments) for the period beginning on
the date of enactment of this Act and ending on December 31,
2019. Notwithstanding any other provision of this Act,
payments and other actions for adjustments to any obligations
incurred for plan years 2018 and 2019 may be made through
December 31, 2020.
SEC. 211. REPEAL OF COST-SHARING SUBSIDY PROGRAM.
(a) In General.--Section 1402 of the Patient Protection and
Affordable Care Act is repealed.
(b) Effective Date.--The repeal made by subsection (a)
shall apply to cost-sharing reductions (and payments to
issuers for such reductions) for plan years beginning after
December 31, 2019.
SEC. 212. CONDITIONS FOR RECEIVING ADDITIONAL SUPPORT FOR
STABILIZING PREMIUMS AND PROMOTING CHOICE IN
PLANS OFFERED IN THE INDIVIDUAL MARKET.
(a) Federal Funding for Plans.--If, for any of plan years
2020 through 2026 for which funds are available under
subsection (h)(6) of section 2105 of the Social Security Act
(42 U.S.C. 1397ee), a health insurance issuer (as defined in
section 2791(b)(2) of the Public Health Service Act (42
U.S.C. 300gg-91(b)(2)) meets the conditions of subsection (b)
with respect to an entire rating area within a State (as
defined in section 2701(a)(2) of the Public Health Service
Act (42 U.S.C. Sec. 300gg(a)(2)), the provisions described
in subsection (c) shall be treated as not applying (directly
or through reference) for those plan years to health
insurance coverage offered off the Exchange by such issuer in
the individual market in the rating area in the State for
such plan year (other than with respect to health insurance
coverage certified under subsection (b)(2)), provided that
such coverage offered off the Exchange complies with the
applicable State health insurance requirements.
(b) Conditions for Federal Funding for Plans.--The
conditions of this subsection for a health insurance issuer
for a plan year are that the health insurance issuer, on or
before May 3 of the calendar year preceding the plan year
involved--
(1) certifies to the Secretary and the applicable State
insurance commissioner that such issuer will apply subsection
(a) with respect to health insurance coverage in a rating
area within a State for such plan year; and
(2) certifies to the Secretary that such issuer will make
available through the Exchange in the rating area in the
State in such plan year at least one gold level and one
silver level qualified health plan (as described in section
1302(d)(1) of the Patient Protection and Affordable Care Act,
42 U.S.C. 18022(d)(1)) and one health plan that provides the
level of coverage described in section 36B(b)(3)(B)(i) of the
Internal Revenue Code of 1986.
(c) Non-applicable Provisions Described.--The provisions
described in this subsection are the following:
(1) Subsections (b), (c)(1)(B), and (d) of section 1302 of
the Patient Protection and Affordable Care Act (42 U.S.C.
18022).
(2) Section 2701(a)(1) of the Public Health Service Act (42
U.S.C. 300gg(a)(1)).
(3) Subsections (a) and (b)(2) of section 2702 of the
Public Health Service Act (42 U.S.C. Sec. Sec. 300gg-1).
(4) Section 2704 of the Public Health Service Act (42
U.S.C. Sec. Sec. 300gg-3).
(5) Subsections (a) through (j) of section 2705 of the
Public Health Service Act (42 U.S.C. Sec. Sec. 300gg-4).
(6) Section 2707 of the Public Health Service Act (42
U.S.C. 300gg-6).
(7) Section 2708 of the Public Health Service Act (42
U.S.C. 300gg-7).
(8) Section 2713(a) of the Public Health Service Act (42
U.S.C. 300gg-13(a)).
(9) Section 2718(b)(1) of the Public Health Service Act (42
U.S.C. Sec. Sec. 300gg-18(b)(1)).
(d) Continuous Coverage.--For purposes of section 2702(b)
of the Public Health Service Act (42 U.S.C. 300gg-1), health
insurance coverage offered off the Exchange in accordance
with subsection (a) shall not be deemed creditable coverage,
as defined in section 2704(c) of the Public Health Service
Act (42 U.S.C. 300gg-3(c)).
(e) Nonapplication of Risk Adjustment Program.--Section
1343 of the Patient Protection and Affordable Care Act (42
U.S.C. 18063) shall not apply to health insurance
[[Page S4218]]
coverage offered off the Exchange in accordance with
subsection (a) or to the issuer of such coverage with respect
to that coverage.
(f) Effect of Waiver.--A State that receives a waiver under
section 1332 of the Patient Protection and Affordable Care
Act (42 U.S.C. 18052) shall not be permitted to use pass
through funding under subsection (a)(3)(C) of such section
either to provide assistance to individuals who enroll in
health insurance coverage offered in accordance with
subsection (a) or to make payments to issuers for any health
insurance coverage offered in accordance with subsection (a).
(g) Funding for States.--
(1) Appropriation.--There is appropriated to the Secretary
of Health and Human Services, out of any money in the
Treasury not otherwise appropriated, $2,000,000,000 for the
period beginning on January 1, 2020, and ending on December
31, 2026, for the purpose of providing allotments for States
in which a health insurance issuer offers coverage in
accordance with subsection (a). Amounts paid to any such
State from such an allotment shall be used to offset costs
attributable to the State's regulation and oversight of such
coverage. Funds appropriated under this paragraph shall
remain available until expended.
(2) Procedure for distribution of funds.--The Secretary of
Health and Human Services shall determine an appropriate
procedure for providing and distributing funds under this
subsection.
(h) Tax Credit Not Available.--Health insurance coverage
offered off the Exchange in accordance with subsection (a)
shall not be taken into account as a qualified health plan
for purposes of calculating the amount of the premium tax
credit under section 36B of the Internal Revenue Code of
1986.
______