To amend title XIX of the Social Security Act to provide States with flexibility with respect to providing premium assistance under the Medicaid program.

Summary: This bill allows the Centers for Medicare &amp; Medicaid Services (CMS) to waive specified requirements for&nbsp;a state Medicaid program to provide certain premium assistance&nbsp;if the CMS determines that such waivers are cost-effective. 

SECTION 1. PROVIDING FLEXIBILITY WITH RESPECT TO PREMIUM ASSISTANCE 
              UNDER MEDICAID.

    (a) In General.--Section 1906 of the Social Security Act (42 U.S.C. 
1396e) is amended--
            (1) in subsection (c)(2), by striking ``such plan.'' and 
        inserting ``such group health plan.''; and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) State Option for Nonelderly, Nondisabled Adults.--
            ``(1) In general.--Beginning on January 1, 2018, in the 
        case of a State electing the option described in paragraph (2) 
        of subsection (a), the Secretary may, upon the approval of a 
        State plan amendment submitted by the State, waive the 
        requirement of paragraph (3) of such subsection to the extent 
        such requirement provides for payment of premiums and 
        deductibles and other cost-sharing obligations with respect to 
        the items and services described in such paragraph furnished to 
        individuals described in paragraph (3) of this subsection.
            ``(2) Cost-effectiveness.--
                    ``(A) In general.--The Secretary may approve a 
                State plan amendment under this subsection if the 
                Secretary determines that the payment of premiums and 
                deductibles and other cost-sharing obligations under 
                the group health plan or plans involved is cost-
                effective relative to the amount of expenditures under 
                the State plan, including administrative expenditures, 
                and excluding payments for copayments or coinsurance, 
                that the State would have made to provide comparable 
                coverage of the individuals described in paragraph (3) 
                involved.
                    ``(B) Determination.--For purposes of subparagraph 
                (A), cost-effectiveness shall be determined--
                            ``(i) on an annual basis by comparing--
                                    ``(I) the amount of expenditures 
                                per employer for coverage under the 
                                group health plan or plans involved of 
                                the individuals described in paragraph 
                                (3) for the preceding 4 calendar 
                                quarters; to
                                    ``(II) the average per capita 
                                amount of expenditures that the State 
                                made under the State plan to provide 
                                comparable coverage of such individuals 
                                for such calendar quarters; and
                            ``(ii) in the case of individuals described 
                        in paragraph (3) who are parents of children--
                                    ``(I) if the parent is eligible for 
                                enrollment in a group health plan, 
                                based on the cost of purchasing family 
                                coverage under the group health plan; 
                                and
                                    ``(II) if the parent is not so 
                                eligible, based on the cost of 
                                individual coverage for the parent and 
                                each child.
                    ``(C) Child defined.--In this paragraph, the term 
                `child' has the meaning given such term in section 
                1902(e)(13)(G).
            ``(3) Nonelderly, nondisabled adults.--The individuals 
        described in this paragraph are individuals who are under 65 
        years of age, not pregnant, not entitled to, or enrolled for, 
        benefits under part A of title XVIII, or enrolled for benefits 
        under part B of title XVIII, are not described in subclauses 
        (I) through (VII) of section 1902(a)(10)(A)(i), and otherwise 
        entitled to medical assistance under this title.''.
    (b) Premium Assistance Subsidy Option.--Section 1906A of the Social 
Security Act (42 U.S.C. 1396e-1) is amended by adding at the end the 
following new subsection:
    ``(f) State Option for Nonelderly, Nondisabled Adults.--
            ``(1) In general.--Beginning on January 1, 2018, in the 
        case of a State electing to provide a premium assistance 
        subsidy as described in subsection (a), the Secretary may, upon 
        the approval of a State plan amendment submitted by the State, 
        waive the requirement of subsection (e) to the extent such 
        requirement provides for payment of premiums and deductibles 
        and other cost-sharing obligations with respect to the items 
        and services described in such subsection furnished to 
        individuals described in paragraph (3).
            ``(2) Cost-effectiveness.--
                    ``(A) In general.--The Secretary may approve a 
                State plan amendment under this subsection if the 
                Secretary determines that the payment of premiums and 
                deductibles and other cost-sharing obligations under 
                the qualified employer-sponsored coverage involved is 
                cost-effective relative to the amount of expenditures 
                under the State plan, including administrative 
                expenditures, and excluding payments for copayments or 
                coinsurance, that the State would have made to provide 
                comparable coverage of the individuals described in 
                paragraph (3)(B) involved.
                    ``(B) Determination.--For purposes of subparagraph 
                (A), cost-effectiveness shall be determined--
                            ``(i) on an annual basis by comparing--
                                    ``(I) the amount of expenditures 
                                per employer for coverage under the 
                                qualified employer-sponsored coverage 
                                involved of the individuals described 
                                in paragraph (3)(B) for the preceding 4 
                                calendar quarters; to
                                    ``(II) the average per capita 
                                amount of expenditures that the State 
                                made under the State plan to provide 
                                comparable coverage of such individuals 
                                for such calendar quarters; and
                            ``(ii) in the case of individuals described 
                        in paragraph (3) who are parents of individuals 
                        under 19 years of age--
                                    ``(I) if the parent is eligible for 
                                enrollment in qualified employer-
                                sponsored coverage, based on the cost 
                                of purchasing family coverage under 
                                such qualified employer-sponsored 
                                coverage; and
                                    ``(II) if the parent is not so 
                                eligible, based on the cost of 
                                individual coverage for the parent and 
                                each such individual under 19 years of 
                                age.
            ``(3) Nonelderly, nondisabled adults.--The individuals 
        described in this paragraph are individuals (or the parents of 
        individuals) who are--
                    ``(A) participating in a premium assistance subsidy 
                under this section for qualified employer-sponsored 
                coverage; and
                    ``(B) under 65 years of age, not pregnant, not 
                entitled to, or enrolled for, benefits under part A of 
                title XVIII, or enrolled for benefits under part B of 
                title XVIII, and are not described in subclauses (I) 
                through (VII) of section 1902(a)(10)(A)(i).''.