H. Rept. 116-414 - STATE HEALTH CARE PREMIUM REDUCTION ACT116th Congress (2019-2020)
Committee Report
Hide Overview| Report Type: | House Report |
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| Accompanies: | H.R.1425 |
| Committees: | House Energy and Commerce Committee |
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116th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 116-414
======================================================================
STATE HEALTH CARE PREMIUM REDUCTION ACT
_______
March 9, 2020.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Pallone, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 1425]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 1425) to amend the Patient Protection and
Affordable Care Act to provide for a Improve Health Insurance
Affordability Fund to provide for certain reinsurance payments
to lower premiums in the individual health insurance market,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
I. Purpose and Summary.............................................4
II. Background and Need for the Legislation.........................4
III. Committee Hearings..............................................5
IV. Committee Consideration.........................................5
V. Committee Votes.................................................6
VI. Oversight Findings.............................................11
VII. New Budget Authority, Entitlement Authority, and Tax Expenditur11
VIII. Federal Mandates Statement.....................................11
IX. Statement of General Performance Goals and Objectives..........11
X. Duplication of Federal Programs................................11
XI. Committee Cost Estimate........................................11
XII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits....11
XIII. Advisory Committee Statement...................................12
XIV. Applicability to Legislative Branch............................12
XV. Section-by-Section Analysis of the Legislation.................12
XVI. Changes in Existing Law Made by the Bill, as Reported..........13
XVII. Dissenting Views...............................................18
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``State Health Care Premium Reduction
Act''.
SEC. 2. IMPROVE HEALTH INSURANCE AFFORDABILITY FUND.
Subtitle D of title I of the Patient Protection and Affordable Care
Act is amended by inserting after part 5 (42 U.S.C. 18061 et seq.) the
following new part:
``PART 6--IMPROVE HEALTH INSURANCE AFFORDABILITY FUND
``SEC. 1351. ESTABLISHMENT OF PROGRAM.
``There is hereby established the `Improve Health Insurance
Affordability Fund' to be administered by the Secretary of Health and
Human Services, acting through the Administrator of the Centers for
Medicare & Medicaid Services (in this section referred to as the
`Administrator'), to provide funding, in accordance with this part, to
the 50 States and the District of Columbia (each referred to in this
section as a `State') beginning on January 1, 2020, for the purposes
described in section 1352.
``SEC. 1352. USE OF FUNDS.
``(a) In General.--A State shall use the funds allocated to the State
under this part for one of the following purposes:
``(1) To provide reinsurance payments to health insurance
issuers with respect to individuals enrolled under individual
health insurance coverage (other than through a plan described
in subsection (b)) offered by such issuers.
``(2) To provide assistance (other than through payments
described in paragraph (1)) to reduce out-of-pocket costs, such
as copayments, coinsurance, premiums, and deductibles, of
individuals enrolled under qualified health plans offered on
the individual market through an Exchange.
``(b) Exclusion of Certain Grandfathered and Transitional Plans.--For
purposes of subsection (a), a plan described in this subsection is the
following:
``(1) A grandfathered health plan (as defined in section
1251).
``(2) A plan (commonly referred to as a `transitional plan')
continued under the letter issued by the Centers for Medicare &
Medicaid Services on November 14, 2013, to the State Insurance
Commissioners outlining a transitional policy for coverage in
the individual and small group markets to which section 1251
does not apply, and under the extension of the transitional
policy for such coverage set forth in the Insurance Standards
Bulletin Series guidance issued by the Centers for Medicare &
Medicaid Services on March 5, 2014, February 29, 2016, February
13, 2017, April 9, 2018, and March 25, 2019, or under any
subsequent extensions thereof.
``(3) Student health insurance coverage (as defined in
section 147.145 of title 45, Code of Federal Regulations).
``SEC. 1353. STATE ELIGIBILITY AND APPROVAL; DEFAULT SAFEGUARD.
``(a) Encouraging State Options for Allocations.--
``(1) In general.--To be eligible for an allocation of funds
under this part for a year (beginning with 2020), a State shall
submit to the Administrator an application at such time (but,
in the case of allocations for 2020, not later than 90 days
after the date of the enactment of this part and, in the case
of allocations for a subsequent year, not later than March 1 of
the previous year) and in such form and manner as specified by
the Administrator containing--
``(A) a description of how the funds will be used;
and
``(B) such other information as the Administrator may
require.
``(2) Automatic approval.--An application so submitted is
approved unless the Administrator notifies the State submitting
the application, not later than 60 days after the date of the
submission of such application, that the application has been
denied for not being in compliance with any requirement of this
part and of the reason for such denial.
``(3) 5-year application approval.--If an application of a
State is approved for a purpose described in section 1352 for a
year, such application shall be treated as approved for such
purpose for each of the subsequent 4 years.
``(4) Revocation of approval.--The approval of an application
of a State, with respect to a purpose described in section
1352, may be revoked if the State fails to use funds provided
to the State under this section for such purpose or otherwise
fails to comply with the requirements of this section.
``(b) Default Federal Safeguard.--
``(1) 2020.--For 2020, in the case of a State that does not
submit an application under subsection (a) by the 90-day
submission date applicable to such year under subsection (a)(1)
and in the case of a State that does submit such an application
by such date that is not approved, the Administrator, in
consultation with the State insurance commissioner, shall, from
the amount calculated under paragraph (4) for such year, carry
out the purpose described in paragraph (3) in such State for
such year.
``(2) 2021 and subsequent years.--For 2021 or a subsequent
year, in the case of a State that does not have in effect an
approved application under this section for such year, the
Administrator, in consultation with the State insurance
commissioner, shall, from the amount calculated under paragraph
(4) for such year, carry out the purpose described in paragraph
(3) in such State for such year.
``(3) Specified use.--The amount described in paragraph (4),
with respect to 2020 or a subsequent year, shall be used to
carry out the purpose described in section 1352(a)(1) in each
State described in paragraph (1) or (2) for such year, as
applicable, by providing reinsurance payments to health
insurance issuers with respect to attachment range claims (as
defined in section 1354(b)(2)), using the dollar amounts
specified in subparagraph (B) of such section for such year) in
an amount equal to, subject to paragraph (5), the percentage
(specified for such year by the Secretary under such
subparagraph) of the amount of such claims.
``(4) Amount described.--The amount described in this
paragraph, with respect to 2020 or a subsequent year, is the
amount equal to the total sum of amounts that the Secretary
would otherwise estimate under section 1354(b)(2)(A)(i) for
such year for each State described in paragraph (1) or (2) for
such year, as applicable, if each such State were not so
described for such year.
``(5) Adjustment.--For purposes of this subsection, the
Secretary may apply a percentage under paragraph (3) with
respect to a year that is less than the percentage otherwise
specified in section 1354(b)(2)(B) for such year, if the cost
of paying the total eligible attachment range claims for States
described in this subsection for such year at such percentage
otherwise specified would exceed the amount calculated under
paragraph (4) for such year.
``SEC. 1354. ALLOCATIONS.
``(a) Appropriation.--For the purpose of providing allocations for
States under subsection (b) and payments under section 1353(b) there is
appropriated, out of any money in the Treasury not otherwise
appropriated, $10,000,000,000 for 2020 and each subsequent year.
``(b) Allocations.--
``(1) Payment.--
``(A) In general.--From amounts appropriated under
subsection (a) for a year, the Secretary shall, with
respect to a State not described in section 1353(b) for
such year and not later than the date specified under
subparagraph (B) for such year, allocate for such State
the amount determined for such State and year under
paragraph (2).
``(B) Specified date.--For purposes of subparagraph
(A), the date specified in this subparagraph is--
``(i) for 2020, the date that is 45 days
after the date of the enactment of this part;
and
``(ii) for 2021 or a subsequent year, January
1 of the respective year.
``(C) Notifications of allocation amounts.--For 2021
and each subsequent year, the Secretary shall notify
each State of the amount determined for such State
under paragraph (2) for such year by not later than
January 1 of the previous year.
``(2) Allocation amount determinations.--
``(A) In general.--For purposes of paragraph (1), the
amount determined under this paragraph for a year for a
State described in paragraph (1)(A) for such year is
the amount equal to--
``(i) the amount that the Secretary estimates
would be expended under this part for such year
on attachment range claims of individuals
residing in such State if such State used such
funds only for the purpose described in
paragraph (1) of section 1352(a) at the dollar
amounts and percentage specified under
subparagraph (B) for such year; minus
``(ii) the amount, if any, by which the
Secretary determines--
``(I) the estimated amount of premium
tax credits under section 36B of the
Internal Revenue Code of 1986 that
would be attributable to individuals
residing in such State for such year
without application of this part;
exceeds
``(II) the estimated amount of
premium tax credits under section 36B
of the Internal Revenue Code of 1986
that would be attributable to
individuals residing in such State for
such year if such State were a State
described in section 1353(b) for such
year.
For purposes of the previous sentence and section
1353(b)(3), the term `attachment range claims' means,
with respect to an individual, the claims for such
individual that exceed a dollar amount specified by the
Secretary for a year, but do not exceed a ceiling
dollar amount specified by the Secretary for such year,
under subparagraph (B).
``(B) Specifications.--For purposes of subparagraph
(A) and section 1353(b)(3), the Secretary shall
determine the dollar amounts and the percentage to be
specified under this subparagraph for a year in a
manner to ensure that the total amount of expenditures
under this part for such year is estimated to equal the
total amount appropriated for such year under
subsection (a) if such expenditures were used solely
for the purpose described in paragraph (1) of section
1352(a) for attachment range claims at the dollar
amounts and percentage so specified for such year.
``(3) Availability.--Funds allocated to a State under this
subsection for a year shall remain available through the end of
the subsequent year.''.
I. Purpose and Summary
H.R. 1425, the ``State Health Care Premium Reduction Act,''
was introduced on February 28, 2019, by Reps. Craig (D-MN) and
Peters (D-CA) and referred to the Committee on Energy and
Commerce.
The goal of H.R. 1425 is to provide $10 billion annually to
States, with the option for States to establish a state
reinsurance program or use the funds to provide financial
assistance to reduce premium costs and out-of-pocket costs for
individuals enrolled in qualified health plans. The legislation
further requires the Centers for Medicare and Medicaid Services
(CMS) to establish and implement a reinsurance program in
States that do not apply for federal funding. The legislation
sets a State's allocation amount based on the State's share of
claims of high-cost enrollees.
II. Background and Need for Legislation
The Affordable Care Act (ACA) established a transitional
reinsurance program that provided payments to individual market
health plans for high-cost enrollees with significant medical
needs. The reinsurance program, which sunset in 2016, helped
reduce premiums for all enrollees in the individual market.
The Administration has issued several regulations and
implemented policy changes that have resulted in an increase in
premiums.\1\ A study by the Kaiser Family Foundation estimates
that 2019 premiums are 16 percent higher than they otherwise
would be due to the Administration's actions to eliminate the
law's cost-sharing subsidies, expand the availability of short-
term limited duration insurance (STLDI), and the repeal of the
individual mandate.\2\
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\1\The Brookings Institution, How Would Individual Market Premiums
Change in 2019 in a Stable Policy Environment? (Aug. 2018)
(www.brookings.edu/wp-content/uploads/2018/08/Individual-Market-
Premium-Outlook-20191.pdf).
\2\Henry J Kaiser Family Foundation, How Repeal of the Individual
Mandate and Expansion of Loosely Regulated Plans are Affecting 2019
Premiums (Oct. 26, 2018) (www.kff.org/health-reform/issue-brief/how-
repeal-of-the-individual-mandate-and-expansion-of-loosely-regulated-
plans-are-affecting-2019-premiums/?utm_campaign=KFF-2018-October-
Health-Costs-ACA-Premiums-Marketplaces).
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The Administration's regulatory and policy changes have
contributed to an increase in health care costs for individuals
who are not eligible for the ACA's tax subsidies and has caused
a significant decrease in enrollment among this population.\3\
Premiums in the individual market increased approximately 17
percent in 2018 versus 2017, and unsubsidized enrollment
outside the ACA marketplaces decreased by 2.3 million.\4\
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\3\Centers for Medicare & Medicaid Services, Trends in Subsidized
and Unsubsidized Individual Health Insurance Market Enrollment (July 2,
2018) (www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-
Marketplaces/Downloads/2018-07-02-Trends-Report-2.pdf).
\4\Kaiser Family Foundation, Data Note: Changes in Enrollment in
the Individual Health Insurance Market (July 31, 2018) (www.kff.org/
health-reform/issue-brief/data-note-changes-in-enrollment-in-the-
individual-health-insurance-market).
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H.R. 1425 would provide $10 billion annually to States to
reinstitute the ACA's reinsurance program and reduce health
care costs for enrollees in the individual market.
III. Committee Hearings
For the purposes of section 103(i) of H. Res. 6 of the
116th Congress, the following hearing was used to develop or
consider H.R. 1425:
On March 6, 2019, the Subcommittee on Health held a hearing
on H.R. 1425 entitled, ``Strengthening Our Health Care System:
Legislation to Lower Consumer Costs and Expand Access.'' The
Subcommittee received testimony from the following witnesses:
Peter Lee, Executive Director, Covered
California;
Audrey Morse Gasteier, Chief of Policy,
Massachusetts Health Connector; and
J.P. Wieske, Vice President, State Affairs,
Council for Affordable Health Coverage.
IV. Committee Consideration
H.R. 1425, the ``State Health Care Premium Reduction Act,''
was introduced on February 28, 2019, by Reps. Craig (D-MN) and
Peters (D-CA) and referred to the Committee on Energy and
Commerce. The bill was then referred to the Subcommittee on
Health on March 1, 2019. Following a legislative hearing, the
Subcommittee met, pursuant to notice, in open markup session to
consider H.R. 1425. Mr. Pallone offered an amendment in the
nature of a substitute (AINS) to the bill. Mr. Burgess offered
an amendment to the Pallone AINS, which was defeated by a roll
call vote of 12 yeas to 17 nays (roll call # HE--3). A vote
occurred on the Pallone AINS, which was agreed to by a roll
call vote of 18 yeas to 12 nays (roll call # HE--4). The
Subcommittee on Health then agreed to a motion by Ms. Eshoo,
chairwoman of the subcommittee, to forward favorably H.R. 1425,
amended, to the full Committee by a record vote of 18 yeas to
13 nays (roll call #HE--5).
On April 3, 2019, the full Committee on Energy and Commerce
met, pursuant to notice, in open markup session to consider
H.R. 1425, as amended by the Subcommittee on Health. Mr.
Burgess offered an amendment, which was subsequently withdrawn.
Mr. Pallone offered an amendment that was agreed to by a voice
vote. Mrs. Rodgers offered an amendment that was defeated by a
voice vote. The full Committee then agreed to a motion by Mr.
Pallone, chairman of the committee, to order H.R. 1425
favorably reported to the House, amended, by a record vote of
30 yeas to 22 nays, a quorum being present (roll call # 20)--
Final Passage.
V. Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list each record vote
on the motion to report legislation and amendments thereto. The
Committee advises that there were 5 record votes taken on H.R.
1425, including three record votes taken during subcommittee
markup, and a motion by Mr. Pallone during full Committee
markup ordering H.R. 1425 reported favorably to the House,
amended. The motion on final passage of the bill was approved
by a record vote of 30 yeas to 22 nays. The following are the
record votes taken during Committee consideration, including
the names of those members voting for and against:
VI. Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the
oversight findings and recommendations of the Committee are
reflected in the descriptive portion of the report.
VII. New Budget Authority, Entitlement Authority, and Tax Expenditures
Pursuant to 3(c)(2) of rule XIII of the Rules of the House
of Representatives, the Committee adopts as its own the
estimate of new budget authority, entitlement authority, or tax
expenditures or revenues contained in the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
The Committee has requested but not received from the
Director of the Congressional Budget Office a statement as to
whether this bill contains any new budget authority, spending
authority, credit authority, or an increase or decrease in
revenues or tax expenditures.
VIII. Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
IX. Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII, the general
performance goal or objective of this legislation is to provide
$10 billion annually to states, with the option for states to
establish a state reinsurance program or use the funds to
provide financial assistance to reduce costs for individuals
enrolled in qualified health plans. The bill further requires
CMS to establish and implement a reinsurance program in states
that do not apply for federal funding.
X. Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII, no provision of
H.R. 1425 is known to be duplicative of another Federal
program, including any program that was included in a report to
Congress pursuant to section 21 of Public Law 111-139 or the
most recent Catalog of Federal Domestic Assistance.
XI. Committee Cost Estimate
Pursuant to clause 3(d)(1) of rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of
the Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974.
XII. Earmarks, Limited Tax Benefits, and Limited Tariff Benefits
Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the
Committee finds that H.R. 1425 contains no earmarks, limited
tax benefits, or limited tariff benefits.
XIII. Advisory Committee Statement
No advisory committee within the meaning of section 5(b) of
the Federal Advisory Committee Act was created by this
legislation.
XIV. Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
XV. Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 designates that the short title may be cited as
the ``State Health Care Premium Reduction Act''.
Sec. 2. Improve Health Insurance Affordability Fund
Section 2 amends Subtitle D of title I of the Affordable
Care Act (ACA) by inserting a new subdivision, Part 6--Improve
Health Insurance Affordability Fund. As part of the new
subdivision, section 2 adds the following new sections to the
ACA, sec. 1351, sec. 1352, sec. 1353, and sec. 1354. The new
subdivision and the new sections are as follows:
PART 6--IMPROVE HEALTH INSURANCE AFFORDABILITY FUND
Sec. 1351. Establishment of program
Section 1351 establishes the ``Improve Health Insurance
Affordability Fund'' to be administered by the Secretary of
Health and Human Services (HHS) to provide funding to States
and the District of Columbia beginning on January 1, 2020.
Sec. 1352. Use of funds
Section 1352 establishes the purpose for the use of funds.
This section allows states to use the funds to establish a
state reinsurance program and provide payment to insurers for
high-cost individuals enrolled in health insurance coverage in
the individual market. States may also use the funds to provide
financial assistance to reduce costs for individuals enrolled
in qualified health plans. The section excludes the use of
funds for grandfathered plans, transitional plans, and student
health insurance coverage.
Sec. 1353. State eligibility and approval; Default safeguard
Section 1353 establishes the application process and
timeline for States to apply for the funds. This section
requires States to apply to the CMS Administrator and allows
States to receive automatic approval for a period of five
years. For 2020, States are required to apply no later than 90
days after the date of enactment, and for subsequent years, no
later than March 1 of the previous year. This section requires
CMS to implement a default federal reinsurance program in
states that do not apply for federal funding. This section
allows for state funds to be revoked if a state fails to use
the funds for the intended purpose described in the
legislation. The section also allows the HHS Secretary to make
an adjustment to the allocation formula if total eligible
claims for states exceed the amount calculated for a year.
Sec. 1354. Allocations
Section 1354 appropriates $10 billion annually and
establishes the allocation methodology. This section requires
the HHS Secretary to allocate funds to a State based on the
estimated expenditure on attachment range claims for
individuals in that state if such State used the funds for the
purposes of administering a reinsurance program. For 2020, the
HHS Secretary is required to notify States of the allocation
amount 45 days after the date of enactment, and for subsequent
years, no later than January 1 of the previous year. This
section provides the HHS Secretary the authority to establish
the attachment range claims and requires the Secretary to set
the attachment range claims in a manner to ensure that the
amount of expenditures equals the amount appropriated for such
year. The section also allows the funds allocated to a State
for a year to remain available through the end of the
subsequent year.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
PATIENT PROTECTION AND AFFORDABLE CARE ACT
* * * * * * *
TITLE I--QUALITY, AFFORDABLE HEALTH CARE FOR ALL AMERICANS
* * * * * * *
Subtitle D--Available Coverage Choices for All Americans
* * * * * * *
PART 6--IMPROVE HEALTH INSURANCE AFFORDABILITY FUND
SEC. 1351. ESTABLISHMENT OF PROGRAM.
There is hereby established the ``Improve Health Insurance
Affordability Fund'' to be administered by the Secretary of
Health and Human Services, acting through the Administrator of
the Centers for Medicare & Medicaid Services (in this section
referred to as the ``Administrator''), to provide funding, in
accordance with this part, to the 50 States and the District of
Columbia (each referred to in this section as a ``State'')
beginning on January 1, 2020, for the purposes described in
section 1352.
SEC. 1352. USE OF FUNDS.
(a) In General.--A State shall use the funds allocated to the
State under this part for one of the following purposes:
(1) To provide reinsurance payments to health
insurance issuers with respect to individuals enrolled
under individual health insurance coverage (other than
through a plan described in subsection (b)) offered by
such issuers.
(2) To provide assistance (other than through
payments described in paragraph (1)) to reduce out-of-
pocket costs, such as copayments, coinsurance,
premiums, and deductibles, of individuals enrolled
under qualified health plans offered on the individual
market through an Exchange.
(b) Exclusion of Certain Grandfathered and Transitional
Plans.--For purposes of subsection (a), a plan described in
this subsection is the following:
(1) A grandfathered health plan (as defined in
section 1251).
(2) A plan (commonly referred to as a ``transitional
plan'') continued under the letter issued by the
Centers for Medicare & Medicaid Services on November
14, 2013, to the State Insurance Commissioners
outlining a transitional policy for coverage in the
individual and small group markets to which section
1251 does not apply, and under the extension of the
transitional policy for such coverage set forth in the
Insurance Standards Bulletin Series guidance issued by
the Centers for Medicare & Medicaid Services on March
5, 2014, February 29, 2016, February 13, 2017, April 9,
2018, and March 25, 2019, or under any subsequent
extensions thereof.
(3) Student health insurance coverage (as defined in
section 147.145 of title 45, Code of Federal
Regulations).
SEC. 1353. STATE ELIGIBILITY AND APPROVAL; DEFAULT SAFEGUARD.
(a) Encouraging State Options for Allocations.--
(1) In general.--To be eligible for an allocation of
funds under this part for a year (beginning with 2020),
a State shall submit to the Administrator an
application at such time (but, in the case of
allocations for 2020, not later than 90 days after the
date of the enactment of this part and, in the case of
allocations for a subsequent year, not later than March
1 of the previous year) and in such form and manner as
specified by the Administrator containing--
(A) a description of how the funds will be
used; and
(B) such other information as the
Administrator may require.
(2) Automatic approval.--An application so submitted
is approved unless the Administrator notifies the State
submitting the application, not later than 60 days
after the date of the submission of such application,
that the application has been denied for not being in
compliance with any requirement of this part and of the
reason for such denial.
(3) 5-year application approval.--If an application
of a State is approved for a purpose described in
section 1352 for a year, such application shall be
treated as approved for such purpose for each of the
subsequent 4 years.
(4) Revocation of approval.--The approval of an
application of a State, with respect to a purpose
described in section 1352, may be revoked if the State
fails to use funds provided to the State under this
section for such purpose or otherwise fails to comply
with the requirements of this section.
(b) Default Federal Safeguard.--
(1) 2020.--For 2020, in the case of a State that
does not submit an application under subsection (a) by
the 90-day submission date applicable to such year
under subsection (a)(1) and in the case of a State that
does submit such an application by such date that is
not approved, the Administrator, in consultation with
the State insurance commissioner, shall, from the
amount calculated under paragraph (4) for such year,
carry out the purpose described in paragraph (3) in
such State for such year.
(2) 2021 and subsequent years.--For 2021 or a
subsequent year, in the case of a State that does not
have in effect an approved application under this
section for such year, the Administrator, in
consultation with the State insurance commissioner,
shall, from the amount calculated under paragraph (4)
for such year, carry out the purpose described in
paragraph (3) in such State for such year.
(3) Specified use.--The amount described in paragraph
(4), with respect to 2020 or a subsequent year, shall
be used to carry out the purpose described in section
1352(a)(1) in each State described in paragraph (1) or
(2) for such year, as applicable, by providing
reinsurance payments to health insurance issuers with
respect to attachment range claims (as defined in
section 1354(b)(2)), using the dollar amounts specified
in subparagraph (B) of such section for such year) in
an amount equal to, subject to paragraph (5), the
percentage (specified for such year by the Secretary
under such subparagraph) of the amount of such claims.
(4) Amount described.--The amount described in this
paragraph, with respect to 2020 or a subsequent year,
is the amount equal to the total sum of amounts that
the Secretary would otherwise estimate under section
1354(b)(2)(A)(i) for such year for each State described
in paragraph (1) or (2) for such year, as applicable,
if each such State were not so described for such year.
(5) Adjustment.--For purposes of this subsection, the
Secretary may apply a percentage under paragraph (3)
with respect to a year that is less than the percentage
otherwise specified in section 1354(b)(2)(B) for such
year, if the cost of paying the total eligible
attachment range claims for States described in this
subsection for such year at such percentage otherwise
specified would exceed the amount calculated under
paragraph (4) for such year.
SEC. 1354. ALLOCATIONS.
(a) Appropriation.--For the purpose of providing allocations
for States under subsection (b) and payments under section
1353(b) there is appropriated, out of any money in the Treasury
not otherwise appropriated, $10,000,000,000 for 2020 and each
subsequent year.
(b) Allocations.--
(1) Payment.--
(A) In general.--From amounts appropriated
under subsection (a) for a year, the Secretary
shall, with respect to a State not described in
section 1353(b) for such year and not later
than the date specified under subparagraph (B)
for such year, allocate for such State the
amount determined for such State and year under
paragraph (2).
(B) Specified date.--For purposes of
subparagraph (A), the date specified in this
subparagraph is--
(i) for 2020, the date that is 45
days after the date of the enactment of
this part; and
(ii) for 2021 or a subsequent year,
January 1 of the respective year.
(C) Notifications of allocation amounts.--For
2021 and each subsequent year, the Secretary
shall notify each State of the amount
determined for such State under paragraph (2)
for such year by not later than January 1 of
the previous year.
(2) Allocation amount determinations.--
(A) In general.--For purposes of paragraph
(1), the amount determined under this paragraph
for a year for a State described in paragraph
(1)(A) for such year is the amount equal to--
(i) the amount that the Secretary
estimates would be expended under this
part for such year on attachment range
claims of individuals residing in such
State if such State used such funds
only for the purpose described in
paragraph (1) of section 1352(a) at the
dollar amounts and percentage specified
under subparagraph (B) for such year;
minus
(ii) the amount, if any, by which the
Secretary determines--
(I) the estimated amount of
premium tax credits under
section 36B of the Internal
Revenue Code of 1986 that would
be attributable to individuals
residing in such State for such
year without application of
this part; exceeds
(II) the estimated amount of
premium tax credits under
section 36B of the Internal
Revenue Code of 1986 that would
be attributable to individuals
residing in such State for such
year if such State were a State
described in section 1353(b)
for such year.
For purposes of the previous sentence and
section 1353(b)(3), the term ``attachment range
claims'' means, with respect to an individual,
the claims for such individual that exceed a
dollar amount specified by the Secretary for a
year, but do not exceed a ceiling dollar amount
specified by the Secretary for such year, under
subparagraph (B).
(B) Specifications.--For purposes of
subparagraph (A) and section 1353(b)(3), the
Secretary shall determine the dollar amounts
and the percentage to be specified under this
subparagraph for a year in a manner to ensure
that the total amount of expenditures under
this part for such year is estimated to equal
the total amount appropriated for such year
under subsection (a) if such expenditures were
used solely for the purpose described in
paragraph (1) of section 1352(a) for attachment
range claims at the dollar amounts and
percentage so specified for such year.
(3) Availability.--Funds allocated to a State under
this subsection for a year shall remain available
through the end of the subsequent year.
* * * * * * *
XVII. Dissenting Views
This bill provides $100 billion over 10 years for States to
establish reinsurance programs strictly for individuals
enrolled in the Patient Protection and Affordable Care Act's
(PPACA) qualified health plans (QHPs). The bill is not paid
for, nor does it contain a State match or State allocation
formula, delegating the latter to the Secretary of the
Department of Health and Human Services (HHS) like the
transitional reinsurance program did. Finally, the bill does
not include language affirming the long-standing consensus that
Federal dollars should not pay for abortion services.
Congress has taken recent steps to provide States with
reinsurance opportunities. In the 115th Congress, the House-
passed H.R. 1628, the American Health Care Act of 2017,
included the Patient and State Stability Fund. This provision
would have provided States with the flexibility and resources
to cut out-of-pocket costs like premiums and deductibles,
promote access to health care services, and repair insurance
markets. For States that chose not to access the available
funding, the Federal government would have established and
implemented a reinsurance program. In addition to reinsurance,
the Patient and State Stability Fund's uses of funds included:
helping high-risk individuals enroll in health insurance
coverage; promoting participation in the individual market and
small group market; and providing assistance to reduce out-of-
pocket costs, such as copayments, coinsurance, premiums, and
deductibles. The fund included a modestly phased-in State
match, as well as a State allocation formula based on each
State's previously incurred claims. The Patient and State
Stability Fund was fully paid for and included language
affirming the long-standing consensus that Federal dollars
should not pay for abortion services.
Greg Walden,
Republican Leader, Committee
on Energy and Commerce.
Michael C. Burgess, M.D.,
Republican Leader,
Subcommittee on Health,
Committee on Energy and
Commerce.