II 

116TH CONGRESS 

1ST SESSION S. 981 

To establish a public health plan. 

IN THE SENATE OF THE UNITED STATES 

APRIL 2, 2019 

Mr. BENNET (for himself, Mr. KAINE, Mr. CARDIN, Ms. KLOBUCHAR, Mr. 

LEAHY, Ms. SMITH, Ms. STABENOW, Ms. HARRIS, Mr. BOOKER, Mr. 

PETERS, Mr. DURBIN, and Mrs. SHAHEEN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To establish a public health plan. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Medicare-X Choice Act 

5 of 2019’’. 

6 SEC. 2. ESTABLISHMENT AND ADMINISTRATION OF A PUB7 LIC HEALTH PLAN. 

8 The Social Security Act is amended by adding at the 

9 end the following new title: 


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1 ‘‘TITLE XXII—MEDICARE 

2 EXCHANGE HEALTH PLAN 

3 ‘‘SEC. 2201. ESTABLISHMENT. 

4 ‘‘(a) ESTABLISHMENT OF PLAN.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall estab6 lish a coordinated and low-cost health plan, to be 

7 known as the ‘Medicare Exchange health plan’ (re8 ferred to in this section as the ‘health plan’) to pro9 vide access to quality health care for enrollees. 

10 ‘‘(2) TIMEFRAME.— 

11 ‘‘(A) INDIVIDUAL MARKET AVAIL12 ABILITY.— 

13 ‘‘(i) IN GENERAL.—In accordance 

14 with clause (ii), the Secretary shall make 

15 the health plan available in the individual 

16 market, in certain rating areas, for plan 

17 year 2021 and each subsequent plan year, 

18 and increase the availability such that the 

19 plan is available in the individual market 

20 to all residents of all rating areas in the 

21 United States for plan year 2024 and each 

22 subsequent plan year. 

23 ‘‘(ii) PRIORITY AREAS.—In deter24 mining in which rating areas the Secretary 

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1 able, the Secretary shall give priority to 

2 rating areas in which— 

3 ‘‘(I) not more than 1 health in4 surance issuer offers plans on the ap5 plicable State or Federal American 

6 Health Benefit Exchange (referred to 

7 in this title as the ‘Exchange’); or 

8 ‘‘(II) there is a shortage of 

9 health providers or lack of competition 

10 that results in a high cost of health 

11 care services, including health profes12 sional shortage areas and rural areas. 

13 ‘‘(B) SMALL GROUP MARKET.—The Sec14 retary shall make the health plan available in 

15 the small group market in all rating areas for 

16 plan year 2025. 

17 ‘‘(b) ESTABLISHMENT OF FUNDS.— 

18 ‘‘(1) PLAN RESERVE FUND.— 

19 ‘‘(A) IN GENERAL.—There is established in 

20 the Treasury of the United States a ‘Plan Re21 serve Fund’, to be administered by the Sec22 retary of Health and Human Services, for pur23 poses of establishing the Medicare Exchange 

24 health plan and administering such plan, con25 sisting of amounts appropriated to such fund. 


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1 ‘‘(B) APPROPRIATION.—There is appro2 priated $1,000,000,000, out of monies in the 

3 Treasury not otherwise obligated, to the Plan 

4 Reserve Fund for fiscal year 2020. 

5 ‘‘(2) DATA AND TECHNOLOGY FUND.—There is 

6 established in the Treasury of the United States a 

7 ‘Data and Technology Fund’, to be administered by 

8 the Secretary of Health and Human Services, acting 

9 through the Chief Actuary of the Centers for Medi10 care & Medicaid Services, for purposes of updating 

11 technology and performing data collection under sec12 tion 2205 in order to establish appropriate pre13 miums for all geographic regions of the United 

14 States. There are authorized to be appropriated to 

15 the Data and Technology Fund such sums as may 

16 be necessary for fiscal year 2020. 

17 ‘‘(c) RULEMAKING.—The Secretary may promulgate 

18 such regulations as may be necessary to carry out this 

19 title. 

20 ‘‘SEC. 2202. AVAILABILITY OF PLAN. 

21 ‘‘(a) ELIGIBILITY.—An individual shall be eligible to 

22 enroll in the health plan if such individual, for the entire 

23 period for which enrollment is sought— 


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1 ‘‘(1) is a qualified individual within the mean2 ing of section 1312 of the Patient Protection and 

3 Affordable Care Act (42 U.S.C. 18032); and 

4 ‘‘(2) is not eligible for benefits under the Medi5 care program under title XVIII. 

6 ‘‘(b) EXCHANGES.—In accordance with the time7 frame under section 2201(a)(2), the health plan shall be 

8 made available through the American Health Benefit Ex9 changes described in sections 1311 and 1321 of the Pa10 tient Protection and Affordable Care Act (42 U.S.C. 

11 18031, 18041), including the Small Business Health Op12 tions Program Exchange. 

13 ‘‘SEC. 2203. PLAN REQUIREMENTS. 

14 ‘‘(a) GENERAL REQUIREMENTS.—The health plan 

15 shall comply with all requirements, as applicable, of sub16 title D of title I of the Patient Protection and Affordable 

17 Care Act (42 U.S.C. 18021 et seq.) and title XXVII of 

18 the Public Health Service Act (42 U.S.C. 300gg et seq.) 

19 applicable to qualified health plans, and such health plan 

20 shall be a qualified health plan, including for purposes of 

21 the Internal Revenue Code of 1986. 

22 ‘‘(b) LEVELS OF COVERAGE.—The Secretary— 

23 ‘‘(1) shall make available a silver level and gold 

24 level version of the plan, in accordance with section 

25 1301(a)(1)(C)(ii); and 


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1 ‘‘(2) may make available no more than 2 

2 versions of the plan for each of the 4 levels of cov3 erage described in subparagraphs (A) through (D) of 

4 section 1302(d)(1) of the Patient Protection and Af5 fordable Care Act (42 U.S.C. 18022(d)(1)). 

6 ‘‘SEC. 2204. ADMINISTRATIVE CONTRACTING. 

7 ‘‘(a) IN GENERAL.—The Secretary may enter into 

8 contracts for the purpose of performing administrative 

9 functions (including functions described in subsection 

10 (a)(4) of section 1874A) with respect to the health plan 

11 in the same manner as the Secretary may enter into con12 tracts under subsection (a)(1) of such section. The Sec13 retary shall have the same authority with respect to the 

14 public health insurance option as the Secretary has under 

15 such subsection (a)(1) and subsection (b) of section 1874A 

16 with respect to title XVIII. 

17 ‘‘(b) TRANSFER OF INSURANCE RISK.—Any contract 

18 under subsection (a) shall not involve the transfer of in19 surance risk from the Secretary to the entity entering into 

20 such contract with the Secretary, except in the case of an 

21 alternative payment model under section 2209(h). 

22 ‘‘SEC. 2205. DATA COLLECTION. 

23 ‘‘Subject to all applicable privacy requirements, in24 cluding the requirements under the regulations promul25 gated pursuant to section 264(c) of the Health Insurance 


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1 Portability and Accountability Act of 1996 (42 U.S.C. 

2 1320d–2 note), the Secretary may collect data from State 

3 insurance commissioners and other relevant entities to es4 tablish rates for premiums and for other purposes includ5 ing to improve quality, and reduce racial, ethnic, and other 

6 disparities, with respect to the health plan. 

7 ‘‘SEC. 2206. PREMIUMS; RISK POOL. 

8 ‘‘(a) SETTING PREMIUMS.— 

9 ‘‘(1) IN GENERAL.—The Secretary shall estab10 lish premiums for the health plan that cover the full 

11 actuarial cost of offering such plan, including the 

12 administrative costs of offering such plan. Such pre13 miums shall vary geographically and between the 

14 small group market and the individual market in ac15 cordance with differences in the cost of providing 

16 such coverage. If, for any plan year, the amount col17 lected in premiums exceeds the amount required for 

18 health care benefits and administrative costs in that 

19 plan year, such excess amounts shall remain avail20 able to the Secretary to administer the health plan 

21 and finance beneficiary costs in subsequent years. 

22 ‘‘(2) INITIAL PLAN YEAR.—For plan year 2021, 

23 the Secretary shall set premiums for the health plan 

24 for each rating area in which the health plan is 

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1 ation the premium rates for plans offered in each 

2 such rating area for plan year 2020. 

3 ‘‘(b) RISK POOL.—After plan year 2021, all enrollees 

4 in the health plan within a State shall be members of a 

5 single risk pool, except that the Secretary may establish 

6 separate risk pools for the individual market and small 

7 group market if the State has not exercised its authority 

8 under section 1312(c)(3) of the Patient Protection and Af9 fordable Care Act. 

10 ‘‘SEC. 2207. REIMBURSEMENT RATES. 

11 ‘‘(a) MEDICARE RATES.— 

12 ‘‘(1) IN GENERAL.—Except as provided in para13 graph (2) and subsections (b) and (c) and subject to 

14 subsection (d), the Secretary shall reimburse health 

15 care providers furnishing items and services under 

16 the health plan at rates determined for equivalent 

17 items and services under the original Medicare fee18 for-service program under parts A and B of title 

19 XVIII. 

20 ‘‘(2) AUTHORITY TO INCREASE PAYMENTS

21 RATES IN RURAL AREAS.—If the Secretary deter22 mines appropriate, the Secretary may increase the 

23 reimbursements rates described in paragraph (1) by 

24 up to 25 percent for items and services furnished in 

25 rural areas (as defined in section 1886(d)(2)(D)). 


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1 ‘‘(b) PRESCRIPTION DRUGS.—Subject to subsection 

2 (d), payment rates for prescription drugs shall be at a rate 

3 negotiated by the Secretary. Such negotiations may be in 

4 conjunction with negotiations for covered part D drugs 

5 under part D of title XVIII. 

6 ‘‘(c) ADDITIONAL ITEMS AND SERVICES.—Subject to 

7 subsection (d), the Secretary shall establish reimburse8 ment rates for any items and services provided under the 

9 health plan that are not items and services provided under 

10 the original Medicare fee-for-service program under parts 

11 A and B of title XVIII. 

12 ‘‘(d) INNOVATIVE PAYMENT METHODS.—The Sec13 retary may utilize innovative payment methods, including 

14 value-based payment arrangements, in making payments 

15 for items and services (including prescription drugs) fur16 nished under the health plan. 

17 ‘‘SEC. 2208. PARTICIPATING PROVIDERS. 

18 ‘‘(a) REQUIREMENT TO PARTICIPATE IN ORDER TO

19 BE ENROLLED UNDER MEDICARE.—Subject to sub20 section (d), beginning January 1, 2021, a health care pro21 vider may not be enrolled under the Medicare program 

22 under section 1866(j) unless the provider is also a partici23 pating provider under the health plan. 

24 ‘‘(b) REQUIREMENT TO PARTICIPATE IN ORDER TO

25 PARTICIPATE IN MEDICAID.—Subject to subsection (d), 


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1 beginning January 1, 2021, a health care provider may 

2 not be a participating provider under a State Medicaid 

3 plan under title XIX unless the provider is also a partici4 pating provider under the health plan. 

5 ‘‘(c) ADDITIONAL PROVIDERS.—The Secretary shall 

6 establish a process to allow health care providers not de7 scribed in subsection (a) or (b) to become a participating 

8 provider under the health plan. 

9 ‘‘(d) OPT-OUT.—The Secretary shall establish a 

10 process by which a health care provider described in sub11 section (a) or (b) may opt out of being a participating 

12 provider under the health plan. 

13 ‘‘SEC. 2209. DELIVERY SYSTEM REFORM FOR AN ENHANCED 

14 HEALTH PLAN. 

15 ‘‘(a) IN GENERAL.—For plan years beginning with 

16 plan year 2021, the Secretary may utilize innovative pay17 ment mechanisms and policies to determine payments for 

18 items and services under the health plan. The payment 

19 mechanisms and policies under this section may include 

20 patient-centered medical home and other care manage21 ment payments, accountable care organizations, account22 able communities for health, value-based purchasing, bun23 dling of services, differential payment rates, performance 

24 or utilization based payments, telehealth, remote patient 


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1 monitoring, partial capitation, and direct contracting with 

2 providers. 

3 ‘‘(b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.— 

4 The Secretary shall design and implement the payment 

5 mechanisms and policies under this section in a manner 

6 that— 

7 ‘‘(1) seeks to— 

8 ‘‘(A) improve health outcomes; 

9 ‘‘(B) reduce health disparities (including 

10 racial, ethnic, and other disparities); 

11 ‘‘(C) provide efficient and affordable care; 

12 ‘‘(D) address geographic variation in the 

13 provision of health services; or 

14 ‘‘(E) prevent or manage chronic illness; 

15 and 

16 ‘‘(2) promotes care that is integrated, patient17 centered, quality, and efficient. 

18 ‘‘(c) ENCOURAGING THE USE OF HIGH VALUE SERV19 ICES.—To the extent allowed by the benefit standards ap20 plied to all health benefits plans participating in the Ex21 changes (as described in section 2202(b)), the health plan 

22 may modify cost-sharing and payment rates to encourage 

23 the use of services that promote health and value. 

24 ‘‘(d) PROMOTION OF DELIVERY SYSTEM REFORM.— 

25 The Secretary shall monitor and evaluate the progress of 


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1 payment and delivery system reforms under this section 

2 and shall seek to implement such reforms subject to the 

3 following: 

4 ‘‘(1) To the extent that the Secretary finds a 

5 payment and delivery system reform successful in 

6 improving quality and reducing costs, the Secretary 

7 shall implement such reform on as large a geo8 graphic scale as practical and economical. 

9 ‘‘(2) The Secretary may delay the implementa10 tion of such a reform in geographic areas in which 

11 such implementation would place the public health 

12 insurance option at a competitive disadvantage. 

13 ‘‘(3) The Secretary may prioritize implementa14 tion of such a reform in high-cost geographic areas 

15 or otherwise in order to reduce total program costs 

16 or to promote high value care. 

17 ‘‘(e) NON-UNIFORMITY PERMITTED.—Nothing in 

18 this section shall prevent the Secretary from varying pay19 ments based on different payment structure models (such 

20 as accountable care organizations and medical homes) 

21 under the health plan for different geographic areas. 

22 ‘‘(f) INTEGRATION WITH SOCIAL SERVICES.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall estab24 lish processes and, when appropriate, collaborate 

25 with other agencies to integrate medical care under 


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1 the health plan with food, housing, transportation, 

2 and income assistance if the Secretary determines 

3 that such integration is expected to— 

4 ‘‘(A) reduce spending without reducing the 

5 quality of patient care; or 

6 ‘‘(B) improve the quality of patient care 

7 without increasing spending. 

8 ‘‘(2) AUTHORIZATION OF A GRANT PROGRAM.— 

9 ‘‘(A) IN GENERAL.—The Secretary may es10 tablish a grant program to permit broader ex11 perimentation with accountable communities for 

12 health model. 

13 ‘‘(B) ELIGIBLE RECIPIENTS.—The Sec14 retary may award a grant under this section 

15 to— 

16 ‘‘(i) an institution of higher learning 

17 (as defined in section 3452(f) of title 38, 

18 United States Code); 

19 ‘‘(ii) a local educational agency (as de20 fined in section 8101 of the Elementary 

21 and Secondary Education Act of 1965) or 

22 health care agency; 

23 ‘‘(iii) a nonprofit entity that the Sec24 retary determines has a demonstrated his25 tory of community engagement; or 


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1 ‘‘(iv) any other entity, as the Sec2 retary determines appropriate. 

3 ‘‘(C) USE OF FUNDS.—A recipient of a 

4 grant under this section may use the grant to— 

5 ‘‘(i) support community needs assess6 ment; 

7 ‘‘(ii) establish social service partner8 ships; or 

9 ‘‘(iii) establish interactive data sys10 tems across health and social service pro11 viders. 

12 ‘‘(D) AUTHORIZATION OF APPROPRIA13 TIONS.—There are authorized to be appro14 priated such sums as may be necessary to carry 

15 out this paragraph. 

16 ‘‘(3) REGULATIONS.—If the Secretary estab17 lishes a grant program under this section, the Sec18 retary shall promulgate regulations on— 

19 ‘‘(A) the evaluation of applications for 

20 grants under the program; and 

21 ‘‘(B) administration of the program. 

22 ‘‘(g) TELEHEALTH.—The Secretary shall ensure the 

23 integration of telehealth tools that increase patient access 

24 to medical care, particularly in remote or underserved 


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1 areas, if the Secretary determines that such integration 

2 is expected to— 

3 ‘‘(1) reduce spending without reducing the qual4 ity of patient care; or 

5 ‘‘(2) improve the quality of patient care without 

6 increasing spending. 

7 ‘‘(h) ALTERNATIVE PAYMENT MODEL.— 

8 ‘‘(1) IN GENERAL.—The Secretary shall evalu9 ate the possibility of providing incentives, and, if ap10 propriate, apply incentives, for enrollees in the 

11 health plan who receive services from providers who 

12 are participating in an alternative payment model 

13 (as defined in section 1833(z)(3)(C)). 

14 ‘‘(2) AUTHORITY TO USE APMS IN USE UNDER

15 TRADITIONAL MEDICARE.—Nothing in this section 

16 shall preclude the Secretary from using alternative 

17 payment models (as so defined) under this title that 

18 are in use under title XVIII. 

19 ‘‘SEC. 2210. NO EFFECT ON MEDICARE BENEFITS OR MEDI20 CARE TRUST FUNDS. 

21 ‘‘Nothing in this title shall— 

22 ‘‘(1) affect the benefits available under title 

23 XVIII; or 

24 ‘‘(2) impact the Federal Hospital Insurance 

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1 plementary Medical Insurance Trust Fund under 

2 section 1841 (including the Medicare Prescription 

3 Drug Account within such Trust Fund).’’. 

4 SEC. 3. REINSURANCE. 

5 (a) IN GENERAL.—The Secretary of Health and 

6 Human Services shall establish a mechanism to pool, on 

7 a nationwide basis, the costs of the highest-cost patients 

8 enrolled in individual health insurance coverage (as de9 fined in section 2791 of the Public Health Service Act (42 

10 U.S.C. 300gg–91)) offered on or off the Exchanges, to the 

11 extent such costs are not already pooled pursuant to sec12 tion 1343 of the Patient Protection and Affordable Care 

13 Act (42 U.S.C. 18063), for the purpose of reducing pre14 miums for such individual health insurance coverage. 

15 (b) AUTHORIZATION OF APPROPRIATIONS.—For pur16 poses of carrying out paragraph (1), there is authorized 

17 to be appropriated $10,000,000,000 for each of fiscal 

18 years 2021, 2022, and 2023. 

19 SEC. 4. EXPANSION OF TAX CREDIT. 

20 (a) IN GENERAL.—Subparagraph (A) of section 

21 36B(c)(1) of the Internal Revenue Code of 1986 is amend22 ed by striking ‘‘but does not exceed 400 percent’’. 

23 (b) APPLICABLE PERCENTAGES.—Clause (i) of sec24 tion 36B(b)(3)(A) of the Internal Revenue Code of 1986 

25 is amended to read as follows: 


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1 ‘‘(i) IN GENERAL.—The applicable 

2 percentage for any taxable year shall be 

3 the percentage such that the applicable 

4 percentage for any taxpayer whose house5 hold income is within an income tier speci6 fied in the following table shall increase, on 

7 a sliding scale in a linear manner, from the 

8 initial premium percentage to the final pre9 mium percentage specified in such table 

10 for such income tier: 

‘‘In the case of household income (expressed as a 

percent of poverty line) within the following income tier: 

The initial 

premium 

percentage 

is— 

The final 

premium 

percentage 

is— 

Up to 138 percent .................................................. 1.5 1.5

138 percent up to 150 percent ............................... 2.5 3.5

150 percent up to 200 percent ............................... 3.5 5.8

200 percent up to 250 percent ............................... 5.8 7.55

250 percent up to 300 percent ............................... 7.55 9.0

300 percent up to 400 percent ............................... 9.0 9.0

400 percent up to 600 percent ............................... 9.0 13.0

600 percent and up ................................................ 13.0 13.0.’’. 

11 (c) LIMITATION ON RECAPTURE.—Clause (i) of sec12 tion 36B(f)(2)(B) of the Internal Revenue Code of 1986 

13 is amended— 

14 (1) by striking ‘‘In the case of a taxpayer’’ and 

15 all that follows through ‘‘the amount of the in16 crease’’ and inserting ‘‘The amount of the increase’’; 

17 (2) by striking the period at the end of the last 

18 row of the table; and 


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1 (3) by adding at the end of the table the fol2 lowing new row: 

‘‘400 percent and up ....................................................................... $5,000.’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 December 31, 2019. 

6 SEC. 5. AUTHORITY TO NEGOTIATE FAIR PRICES FOR MEDI7 CARE PRESCRIPTION DRUGS. 

8 (a) IN GENERAL.—Section 1860D–11 of the Social 

9 Security Act (42 U.S.C. 1395w–111) is amended by strik10 ing subsection (i). 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall take effect on the date of the enactment 

13 of this Act. 

Æ 


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