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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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.