Consumer Health Options and Insurance Competition Enhancement Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Health Options and 
Insurance Competition Enhancement Act'' or the ``CHOICE Act''.

SEC. 2. PUBLIC HEALTH INSURANCE OPTION.

    (a) In General.--Part C of title XXVII of the Public Health Service 
Act (42 U.S.C. 300gg-91) is amended by adding at the end the following:

``SEC. 2795. PUBLIC HEALTH INSURANCE OPTION.

    ``(a) Establishment.--
            ``(1) In general.--For plan years beginning in 2019, the 
        Secretary shall establish, and provide for the offering through 
        the Exchanges, of a qualified health plan (in this Act referred 
        to as the `public health insurance option') that provides 
        value, choice, competition, and stability of affordable, high-
        quality coverage throughout the United States in accordance 
        with this section.
            ``(2) Primary responsibility.--In designing the public 
        health insurance option, the primary responsibility of the 
        Secretary shall be to create an affordable health plan without 
        compromising quality or access to care.
    ``(b) Administrating the Public Health Insurance Option.--
            ``(1) Offered through exchanges.--
                    ``(A) Exclusive to exchanges.--The public health 
                insurance option shall be made available through the 
                Exchanges.
                    ``(B) Ensuring a level playing field.--Consistent 
                with this section, the public health insurance option 
                shall comply with requirements under title I of the 
                Patient Protection and Affordable Care Act, and the 
                amendments made by that title, that are applicable to 
                health plans offered through the Exchanges, including 
                requirements related to benefits, benefit levels, 
                provider networks, notices, consumer protections, and 
                cost-sharing.
                    ``(C) Provision of benefit levels.--The public 
                health insurance option shall offer bronze, silver, and 
                gold plans.
            ``(2) Administrative contracting.--
                    ``(A) Authorities.--The Secretary may enter into 
                contracts for the purpose of performing administrative 
                functions (including functions described in subsection 
                (a)(4) of section 1874A of the Social Security Act) 
                with respect to the public health insurance option in 
                the same manner as the Secretary may enter into 
                contracts under subsection (a)(1) of such section. The 
                Secretary shall have the same authority with respect to 
                the public health insurance option as the Secretary has 
                under such subsection (a)(1) and subsection (b) of 
                section 1874A of the Social Security Act with respect 
                to title XVIII of such Act.
                    ``(B) Transfer of insurance risk.--Any contract 
                under this paragraph shall not involve the transfer of 
                insurance risk from the Secretary to the entity 
                entering into such contract with the Secretary.
            ``(3) Ombudsman.--
                    ``(A) Establishment.--The Secretary shall establish 
                an office of the ombudsman for the public health 
                insurance option.
                    ``(B) Duties.--Such ombudsman shall--
                            ``(i) have duties with respect to the 
                        public health insurance option similar to the 
                        duties of the Medicare Beneficiary Ombudsman 
                        under section 1808(c)(2) of the Social Security 
                        Act; and
                            ``(ii) work with States to ensure that 
                        information and notice is provided that the 
                        public health insurance option is one of the 
                        health plans available through an Exchange.
            ``(4) State advisory council.--
                    ``(A) Establishment.--A State may establish a 
                public or nonprofit entity to serve as the State 
                Advisory Council to provide recommendations to the 
                Secretary on the operations and policies of the public 
                health insurance option offered through the Exchange 
                operating in the State.
                    ``(B) Recommendations.--A State Advisory Council 
                established under subparagraph (A) shall provide 
                recommendations on at least the following:
                            ``(i) Policies and procedures to integrate 
                        quality improvement and cost containment 
                        mechanisms into the health care delivery 
                        system.
                            ``(ii) Mechanisms to facilitate public 
                        awareness of the availability of the public 
                        health insurance option.
                            ``(iii) Alternative payment models and 
                        value-based insurance design under the public 
                        health insurance option that encourage quality 
                        improvement and cost control.
                    ``(C) Members.--The members of any State Advisory 
                Council shall be representatives of the public and 
                include health care consumers and health care 
                providers.
                    ``(D) Applicability of recommendations.--The 
                Secretary may apply the recommendations of a State 
                Advisory Council to the public health insurance option 
                in that State, in any other State, or in all States.
            ``(5) Data collection.--The Secretary shall collect such 
        data as may be required--
                    ``(A) to establish rates for premiums and health 
                care provider reimbursement under subsection (c); and
                    ``(B) for other purposes under this section, 
                including to improve quality, and reduce racial, 
                ethnic, and other disparities, in health and health 
                care.
    ``(c) Financing the Public Health Insurance Option.--
            ``(1) Premiums.--
                    ``(A) Establishment.--The Secretary shall establish 
                geographically adjusted premium rates for the public 
                health insurance option--
                            ``(i) in a manner that complies with the 
                        requirement for premium rates under 
                        subparagraph (C) and considers the data 
                        collected under subsection (b)(4); and
                            ``(ii) at a level sufficient to fully 
                        finance--
                                    ``(I) the costs of health benefits 
                                provided by the public health insurance 
                                option; and
                                    ``(II) administrative costs related 
                                to operating the public health 
                                insurance option.
                    ``(B) Contingency margin.--In establishing premium 
                rates under subparagraph (A), the Secretary shall 
                include an appropriate amount for a contingency margin.
                    ``(C) Variations in premium rates.--The premium 
                rate charged for the public health insurance option may 
                not vary except as provided under section 2701.
            ``(2) Health care provider payment rates for items and 
        services.--
                    ``(A) In general.--
                            ``(i) Rates negotiated by the secretary.--
                        Not later than January 1, 2018, and except as 
                        provided in clause (ii), the Secretary shall, 
                        through a negotiated agreement with health care 
                        providers, establish rates for reimbursing 
                        health care providers for providing the 
                        benefits covered by the public health insurance 
                        option.
                            ``(ii) Medicare reimbursement rates.--If 
                        the Secretary and health care providers are 
                        unable to reach a negotiated agreement on a 
                        reimbursement rate, the Secretary shall 
                        reimburse providers at rates determined for 
                        equivalent items and services under the 
                        original medicare fee-for-service program under 
                        parts A and B of title XVIII of the Social 
                        Security Act.
                            ``(iii) For new services.--The Secretary 
                        shall modify reimbursement rates described in 
                        clause (ii) in order to accommodate payments 
                        for services, such as well-child visits, that 
                        are not otherwise covered under the original 
                        medicare fee-for-service program.
                    ``(B) Prescription drugs.--Any payment rate under 
                this subsection for a prescription drug shall be at a 
                rate negotiated by the Secretary. If the Secretary is 
                unable to reach a negotiated agreement on such a 
                reimbursement rate, the Secretary shall use rates 
                determined for equivalent drugs paid for under the 
                original medicare fee-for-service program. The 
                Secretary shall modify such rates in order to 
                accommodate payments for drugs that are not otherwise 
                covered under the original medicare fee-for-service 
                program.
            ``(3) Account.--
                    ``(A) Establishment.--There is established in the 
                Treasury of the United States an account for the 
                receipts and disbursements attributable to the 
                operation of the public health insurance option, 
                including the start-up funding under subparagraph (C) 
                and appropriations authorized under subparagraph (D).
                    ``(B) Prohibition of state imposition of taxes.--
                Section 1854(g) of the Social Security Act shall apply 
                to receipts and disbursements described in subparagraph 
                (A) in the same manner as such section applies to 
                payments or premiums described in such section.
                    ``(C) Start-up funding.--
                            ``(i) Authorization of funding.--There are 
                        authorized to be appropriated such sums as may 
                        be necessary to establish the public health 
                        insurance option and cover 90 days of claims 
                        reserves based on projected enrollment.
                            ``(ii) Amortization of start-up funding.--
                        The Secretary shall provide for the repayment 
                        of the startup funding provided under clause 
                        (i) to the Treasury in an amortized manner over 
                        the 10-year period beginning on January 1, 
                        2019.
                    ``(D) Additional authorization of appropriations.--
                To carry out paragraph (2) of subsection (b), there are 
                authorized to be appropriated such sums as may be 
                necessary.
    ``(d) Health Care Provider Participation.--
            ``(1) Provider participation.--
                    ``(A) In general.--The Secretary shall establish 
                conditions of participation for health care providers 
                under the public health insurance option.
                    ``(B) Licensure or certification.--The Secretary 
                shall not allow a health care provider to participate 
                in the public health insurance option unless such 
                provider is appropriately licensed or certified under 
                State law.
            ``(2) Establishment of a provider network.--
                    ``(A) Medicare and medicaid participating 
                providers.--A health care provider that is a 
                participating provider of services or supplier under 
                the Medicare program under title XVIII of the Social 
                Security Act or under a State Medicaid plan under title 
                XIX of such Act is a participating provider in the 
                public health insurance option unless the health care 
                provider opts out of participating in the public health 
                insurance option through a process established by the 
                Secretary.
                    ``(B) Additional providers.--The Secretary shall 
                establish a process to allow health care providers not 
                described in subparagraph (A) to become participating 
                providers in the public health insurance option.''.
    (b) Conforming Amendments.--
            (1) Treatment as a qualified health plan.--Section 
        1301(a)(2) of the Patient Protection and Affordable Care Act 
        (42 U.S.C. 18021(a)(2)) is amended--
                    (A) in the paragraph heading, by inserting ``, the 
                public health insurance option,'' before ``and''; and
                    (B) by inserting ``the public health insurance 
                option under section 2795 of the Public Health Service 
                Act,'' before ``and a multi-State plan''.
            (2) Level playing field.--Section 1324(a) of the Patient 
        Protection and Affordable Care Act (42 U.S.C. 18044(a)) is 
        amended by inserting ``the public health insurance option under 
        section 2795 of the Public Health Service Act,'' before ``or a 
        multi-State qualified health plan''.

Summary: Consumer Health Options and Insurance Competition Enhancement Act or the CHOICE Act This bill amends the Public Health Service Act to require the Department of Health and Human Services (HHS) to offer, throughout the United States, a public health insurance option that provides value, choice, competition, and the stability of affordable, high-quality coverage. Plans under the public health insurance option must be qualified health plans and must include plans with bronze, silver, and gold tier benefits. HHS must establish an office of the ombudsman for the public health insurance option. States may establish advisory councils to provide recommendations to HHS on the operations and policies of the public health insurance option. HHS must collect data to establish rates for premiums and health care provider reimbursement and for other purposes. Premium rates for public health insurance option plans must: (1) fully finance administrative costs and provided health benefits, and (2) include a contingency margin. HHS must negotiate rates for health care providers and prescription drugs under the public health insurance option. If HHS is unable to reach a negotiated agreement on rates, HHS must use Medicare rates. States may not tax federal receipts or disbursements attributable to the operation of the public health insurance option. HHS must establish conditions for participation by health care providers in the public health insurance option. A provider participating in Medicare or Medicaid is a participant in the public health insurance option unless the provider opts out.