89–006 

116TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 116–49 

STATE ALLOWANCE FOR A VARIETY OF EXCHANGES ACT 

MAY 3, 2019.—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. 1385] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Energy and Commerce, to whom was referred 

the bill (H.R. 1385) to amend the Patient Protection and Affordable 

Care Act to preserve the option of States to implement health care 

marketplaces, and for other purposes, having considered the same, 

report favorably thereon with an amendment and recommend that 

the bill as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 2 

Committee Hearings ................................................................................................ 3 

Committee Consideration ........................................................................................ 3 

Committee Votes ...................................................................................................... 4 

Oversight Findings .................................................................................................. 6 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 6 

Congressional Budget Office Estimate ................................................................... 6 

Federal Mandates Statement ................................................................................. 7 

Statement of General Performance Goals and Objectives .................................... 7 

Duplication of Federal Programs ............................................................................ 7 

Committee Cost Estimate ....................................................................................... 7 

Earmarks, Limited Tax Benefits, and Limited Tariff Benefits ........................... 8 

Advisory Committee Statement .............................................................................. 8 

Applicability to Legislative Branch ........................................................................ 8 

Section-by-Section Analysis of the Legislation ...................................................... 8 

Changes in Existing Law Made by the Bill, as Reported ..................................... 8 

Dissenting Views ..................................................................................................... 22 


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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 Allowance for a Variety of Exchanges Act’’ 

or the ‘‘SAVE Act’’. 

SEC. 2. PRESERVING STATE OPTION TO IMPLEMENT HEALTH CARE MARKETPLACES. 

(a) IN GENERAL.—Section 1311 of the Patient Protection and Affordable Care Act 

(42 U.S.C. 18031) is amended— 

(1) in subsection (a)— 

(A) in paragraph (4)(B), by striking ‘‘under this subsection’’ and inserting 

‘‘under this paragraph or paragraph (1)’’; and 

(B) by adding at the end the following new paragraph: 

‘‘(6) ADDITIONAL PLANNING AND ESTABLISHMENT GRANTS.— 

‘‘(A) IN GENERAL.—There shall be appropriated to the Secretary, out of 

any moneys in the Treasury not otherwise appropriated, $200,000,000 to 

award grants to eligible States for the uses described in paragraph (3). 

‘‘(B) DURATION AND RENEWABILITY.—A grant awarded under subparagraph (A) shall be for a period of two years and may not be renewed. 

‘‘(C) LIMITATION.—A grant may not be awarded under subparagraph (A) 

after December 31, 2022. 

‘‘(D) ELIGIBLE STATE DEFINED.—For purposes of this paragraph, the term 

‘eligible State’ means a State that, as of the date of the enactment of this 

paragraph, is not operating an Exchange (other than an Exchange described in section 155.200(f) of title 45, Code of Federal Regulations).’’; and 

(2) in subsection (d)(5)(A)— 

(A) by striking ‘‘OPERATIONS.—In establishing an Exchange under this 

section’’ and inserting ‘‘OPERATIONS.— 

‘‘(i) IN GENERAL.—In establishing an Exchange under this section 

(other than in establishing an Exchange pursuant to a grant awarded 

under subsection (a)(6))’’; and 

(B) by adding at the end the following: 

‘‘(ii) ADDITIONAL PLANNING AND ESTABLISHMENT GRANTS.—In establishing an Exchange pursuant to a grant awarded under subsection 

(a)(6), the State shall ensure that such Exchange is self-sustaining beginning on January 1, 2024, including allowing the Exchange to charge 

assessments or user fees to participating health insurance issuers, or 

to otherwise generate funding, to support its operations.’’. 

(b) CLARIFICATION REGARDING FAILURE TO ESTABLISH EXCHANGE OR IMPLEMENT

REQUIREMENTS.—Section 1321(c) of the Patient Protection and Affordable Care Act 

(42 U.S.C. 18041(c)) is amended— 

(1) in paragraph (1), by striking ‘‘If’’ and inserting ‘‘Subject to paragraph (3), 

if’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(3) CLARIFICATION.—This subsection shall not apply in the case of a State 

that elects to apply the requirements described in subsection (a) and satisfies 

the requirement described in subsection (b) on or after January 1, 2014.’’. 

PURPOSE AND SUMMARY

H.R. 1385, the ‘‘State Allowance for a Variety of Exchanges Act’’ 

or the ‘‘SAVE Act’’, was introduced on February 27, 2019, by Reps. 

Andy Kim (D–NJ) and Brian K. Fitzpatrick (R–PA) and referred to 

the Committee on Energy and Commerce. 

The goal of H.R. 1385 is to provide states with $200 million in 

federal funds to establish state-based marketplaces. 

BACKGROUND AND NEED FOR LEGISLATION

The Affordable Care Act (ACA) provided states the option to establish their own marketplaces or rely on the Federally-Facilitated 

Marketplace (FFM). The law also provided grants to states to support the planning and establishment of state-based marketplaces. 

These grants, however, could be awarded only up until January 1, 


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1The Commonwealth Fund, Health Insurance Markets Perform Better in States That Run 

Their Own Marketplaces (Mar 7, 2018) (www.commonwealthfund.org/blog/2018/health-insurancemarkets-perform-better-states-run-their-own-marketplaces). 2 Urban Institute, What Explains 2018’s Marketplace Enrollment Rates? (June 2018) 

(www.urban.org/sites/default/files/publication/98650/marketplace2018_2001877.pdf). 

2015. Accordingly, states no longer have access to federal funds to 

establish a state-based marketplace. 

States that operate their own marketplaces have greater control 

over their insurance markets and can tailor consumer outreach and 

financial assistance to meet the needs of their population. Enrollment in state-based marketplaces has remained stable and premiums are lower overall, compared to the FFM.1 Moreover, statebased marketplaces that opted for longer open enrollment periods 

beyond the FFM’s shortened six-week period experienced higher 

enrollment gains in 2018.2

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. 

1385: 

On March 6, 2019, the Subcommittee on Health held a legislative 

hearing entitled, ‘‘Strengthening Our Health Care System: Legislation to Lower Consumer Costs and Expand Access.’’ The hearing focused on H.R. 1385 and two other bills. 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. 

COMMITTEE CONSIDERATION

H.R. 1385, the ‘‘State Allowance for a Variety of Exchanges Act’’ 

or the ‘‘SAVE Act’’, was introduced on February 27, 2019, by Rep. 

Kim (D–NJ), and referred to the Committee on Energy and Commerce. The bill was subsequently referred to the Subcommittee on 

Health on February 28, 2019. Following legislative hearings, on 

March 26, 2019, the Subcommittee met in open markup session, 

pursuant to notice, on H.R. 1385 for consideration of the bill. During markup, an amendment offered by Mr. Bucshon (R–IN) was defeated by a record vote of 10 yeas to 18 nays. Subsequently, the 

Subcommittee on Health agreed to a motion by Ms. Eshoo, Chairwoman of the Subcommittee, to favorably forward H.R. 1385 to the 

full Committee on Energy and Commerce, without amendment, by 

a voice vote. 

On April 3, 2019, the full Committee met in open markup session, pursuant to notice, to consider H.R. 1385. During the markup, 

Mr. Pallone (D–NJ) offered an amendment to the bill that was 

agreed to by a voice vote. At the conclusion of consideration of the 

bill, the Committee on Energy and Commerce agreed to a motion 

by Mr. Pallone, Chairman of the Committee, to order H.R. 1385 favorably reported to the House, amended, by a record vote of 29 

yeas to 22 nays. 


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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 a record vote was taken on final passage of H.R. 1385. 

A motion by Mr. Pallone to order H.R. 1385 favorably reported to 

the House, amended, was agreed to by a record vote of 29 yeas to 

22 nays. The following is that record vote taken during Committee 

consideration, including the names of those members voting for and 

against: 


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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. 

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. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

With respect to the requirements of clause (3)(c)(3) of rule XIII 

of the Rules of the House of Representatives and section 402 of the 

Congressional Budget Act of 1974, the Committee has received the 

following cost estimate for H.R. 1385 from the Director of the Congressional Budget Office: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, April 25, 2019. 

Hon. FRANK PALLONE, Jr., 

Chairman, Committee on Energy and Commerce, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1385, the State Allowance 

for a Variety of Exchanges Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Lisa Ramirez-Branum. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 


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No Under the Affordable Care Act (ACA), HHS was authorized 

to provide grant funds to states to plan and establish on-line platforms—also known as health care marketplaces—where people 

without health care insurance could find information about health 

insurance options and also purchase health care insurance. The authority for HHS to award such grants expired at the end of 2014. 

H.R. 1385 would appropriate $200 million to HHS to provide 

grants to states that, as of the date of enactment of the bill, were 

not operating a health care marketplace. The bill also would limit 

a grant to a period of two years and would prohibit HHS from 

awarding a grant after December 31, 2022. CBO estimates that enacting the bill would increase direct spending by $196 million over 

the 2019–2029 period. 

Details of the estimated budgetary effect of H.R. 1385 are shown 

in Table 1. The costs of the legislation fall within budget function 

550. 

TABLE 1.—ESTIMATED BUDGETARY EFFECTS OF H.R. 1385 

By fiscal year, millions of dollars— 

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019– 

2024 

2019– 

2029 

Increases in Direct Spending 

Budget Authority ............................. 200 0 0 0 0 0 0 0 0 0 0 200 200 

Estimated Outlays ........................... 0 86 80 16 14 0 0 0 0 0 0 196 196 

The CBO staff contact for this estimate is Lisa Ramirez-Branum. 

The estimate was reviewed by Leo Lex, Deputy Assistant Director 

for Budget Analysis. 

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. 

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 states with $200 

million in federal funds to establish state-based marketplaces. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to clause 3(c)(5) of rule XIII, no provision of H.R. 1385 

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. 

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. 


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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. 1385 contains no earmarks, limited tax benefits, or 

limited tariff benefits. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

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. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

Section 1 designates that the short title of the Act may be cited 

as the ‘‘State Allowance for a Variety of Exchanges Act’’ or the 

‘‘SAVE Act’’. 

Section 2. Preserving state option to implement health care marketplaces 

Section 2 amends Section 1331 of the ACA. Section 2 appropriates $200 million and provides the Secretary of the Department 

of Health and Human Services the authority to award grants to eligible states for the purposes of establishing a state-based exchange. 

This section defines eligible states as states currently on the FFM 

and state-based exchanges on the FFM platform. The section requires that the grants be available for a period of two years and 

includes a limitation that the grants may not be awarded after December 21, 2022. The section also requires states receiving grant 

funding to ensure that the state exchange is self-sustaining beginning on January 1, 2024. 

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 (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

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 

* * * * * * * 


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Subtitle D—Available Coverage Choices for 

All Americans 

* * * * * * * 

PART 2—CONSUMER CHOICES AND INSURANCE COMPETITION THROUGH HEALTH 

BENEFIT EXCHANGES 

SEC. 1311. AFFORDABLE CHOICES OF HEALTH BENEFIT PLANS. 

(a) ASSISTANCE TO STATES TO ESTABLISH AMERICAN HEALTH BENEFIT EXCHANGES.— 

(1) PLANNING AND ESTABLISHMENT GRANTS.—There shall be 

appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, an amount necessary to enable 

the Secretary to make awards, not later than 1 year after the 

date of enactment of this Act, to States in the amount specified 

in paragraph (2) for the uses described in paragraph (3). 

(2) AMOUNT SPECIFIED.—For each fiscal year, the Secretary 

shall determine the total amount that the Secretary will make 

available to each State for grants under this subsection. 

(3) USE OF FUNDS.—A State shall use amounts awarded 

under this subsection for activities (including planning activities) related to establishing an American Health Benefit Exchange, as described in subsection (b). 

(4) RENEWABILITY OF GRANT.— 

(A) IN GENERAL.—Subject to subsection (d)(4), the Secretary may renew a grant awarded under paragraph (1) if 

the State recipient of such grant— 

(i) is making progress, as determined by the Secretary, toward— 

(I) establishing an Exchange; and 

(II) implementing the reforms described in subtitles A and C (and the amendments made by 

such subtitles); and 

(ii) is meeting such other benchmarks as the Secretary may establish. 

(B) LIMITATION.—No grant shall be awarded øunder this 

subsection¿ under this paragraph or paragraph (1) after 

January 1, 2015. 

(5) TECHNICAL ASSISTANCE TO FACILITATE PARTICIPATION IN

SHOP EXCHANGES.—The Secretary shall provide technical assistance to States to facilitate the participation of qualified 

small businesses in such States in SHOP Exchanges. 

(6) ADDITIONAL PLANNING AND ESTABLISHMENT GRANTS.— 

(A) IN GENERAL.—There shall be appropriated to the Secretary, out of any moneys in the Treasury not otherwise appropriated, $200,000,000 to award grants to eligible States 

for the uses described in paragraph (3). 

(B) DURATION AND RENEWABILITY.—A grant awarded 

under subparagraph (A) shall be for a period of two years 

and may not be renewed. 


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(C) LIMITATION.—A grant may not be awarded under 

subparagraph (A) after December 31, 2022. 

(D) ELIGIBLE STATE DEFINED.—For purposes of this paragraph, the term ‘‘eligible State’’ means a State that, as of 

the date of the enactment of this paragraph, is not operating an Exchange (other than an Exchange described in 

section 155.200(f) of title 45, Code of Federal Regulations). 

(b) AMERICAN HEALTH BENEFIT EXCHANGES.— (1) IN GENERAL.—Each State shall, not later than January 1, 

2014, establish an American Health Benefit Exchange (referred 

to in this title as an ‘‘Exchange’’) for the State that— 

(A) facilitates the purchase of qualified health plans; 

(B) provides for the establishment of a Small Business 

Health Options Program (in this title referred to as a 

‘‘SHOP Exchange’’) that is designed to assist qualified employers in the State who are small employers in facilitating the enrollment of their employees in qualified 

health plans offered in the small group market in the 

State; and 

(C) meets the requirements of subsection (d). 

(2) MERGER OF INDIVIDUAL AND SHOP EXCHANGES.—A State 

may elect to provide only one Exchange in the State for providing both Exchange and SHOP Exchange services to both 

qualified individuals and qualified small employers, but only if 

the Exchange has adequate resources to assist such individuals 

and employers. 

(c) RESPONSIBILITIES OF THE SECRETARY.— (1) IN GENERAL.—The Secretary shall, by regulation, establish criteria for the certification of health plans as qualified 

health plans. Such criteria shall require that, to be certified, 

a plan shall, at a minimum— 

(A) meet marketing requirements, and not employ marketing practices or benefit designs that have the effect of 

discouraging the enrollment in such plan by individuals 

with significant health needs; 

(B) ensure a sufficient choice of providers (in a manner 

consistent with applicable network adequacy provisions 

under section 2702(c) of the Public Health Service Act), 

and provide information to enrollees and prospective enrollees on the availability of in-network and out-of-network 

providers; 

(C) include within health insurance plan networks those 

essential community providers, where available, that serve 

predominately low-income, medically-underserved individuals, such as health care providers defined in section 

340B(a)(4) of the Public Health Service Act and providers 

described in section 1927(c)(1)(D)(i)(IV) of the Social Security Act as set forth by section 221 of Public Law 111–8, 

except that nothing in this subparagraph shall be construed to require any health plan to provide coverage for 

any specific medical procedure; 

(D)(i) be accredited with respect to local performance on 

clinical quality measures such as the Healthcare Effectiveness Data and Information Set, patient experience ratings 

on a standardized Consumer Assessment of Healthcare 


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Providers and Systems survey, as well as consumer access, 

utilization management, quality assurance, provider 

credentialing, complaints and appeals, network adequacy 

and access, and patient information programs by any entity recognized by the Secretary for the accreditation of 

health insurance issuers or plans (so long as any such entity has transparent and rigorous methodological and scoring criteria); or 

(ii) receive such accreditation within a period established 

by an Exchange for such accreditation that is applicable to 

all qualified health plans; 

(E) implement a quality improvement strategy described 

in subsection (g)(1); 

(F) utilize a uniform enrollment form that qualified individuals and qualified employers may use (either electronically or on paper) in enrolling in qualified health plans offered through such Exchange, and that takes into account 

criteria that the National Association of Insurance Commissioners develops and submits to the Secretary; 

(G) utilize the standard format established for presenting health benefits plan options; 

(H) provide information to enrollees and prospective enrollees, and to each Exchange in which the plan is offered, 

on any quality measures for health plan performance endorsed under section 399JJ of the Public Health Service 

Act, as applicable; and 

(I) report to the Secretary at least annually and in such 

manner as the Secretary shall require, pediatric quality reporting measures consistent with the pediatric quality reporting measures established under section 1139A of the 

Social Security Act. 

(2) RULE OF CONSTRUCTION.—Nothing in paragraph (1)(C) 

shall be construed to require a qualified health plan to contract 

with a provider described in such paragraph if such provider 

refuses to accept the generally applicable payment rates of 

such plan. 

(3) RATING SYSTEM.—The Secretary shall develop a rating 

system that would rate qualified health plans offered through 

an Exchange in each benefits level on the basis of the relative 

quality and price. The Exchange shall include the quality rating in the information provided to individuals and employers 

through the Internet portal established under paragraph (4). 

(4) ENROLLEE SATISFACTION SYSTEM.—The Secretary shall 

develop an enrollee satisfaction survey system that would 

evaluate the level of enrollee satisfaction with qualified health 

plans offered through an Exchange, for each such qualified 

health plan that had more than 500 enrollees in the previous 

year. The Exchange shall include enrollee satisfaction information in the information provided to individuals and employers 

through the Internet portal established under paragraph (5) in 

a manner that allows individuals to easily compare enrollee 

satisfaction levels between comparable plans. 

(5) INTERNET PORTALS.—The Secretary shall— 

(A) continue to operate, maintain, and update the Internet portal developed under section 1103(a) and to assist 


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States in developing and maintaining their own such portal; and 

(B) make available for use by Exchanges a model template for an Internet portal that may be used to direct 

qualified individuals and qualified employers to qualified 

health plans, to assist such individuals and employers in 

determining whether they are eligible to participate in an 

Exchange or eligible for a premium tax credit or cost-sharing reduction, and to present standardized information (including quality ratings) regarding qualified health plans 

offered through an Exchange to assist consumers in making easy health insurance choices. 

Such template shall include, with respect to each qualified 

health plan offered through the Exchange in each rating area, 

access to the uniform outline of coverage the plan is required 

to provide under section 2716 of the Public Health Service Act 

and to a copy of the plan’s written policy. 

(6) ENROLLMENT PERIODS.—The Secretary shall require an 

Exchange to provide for— 

(A) an initial open enrollment, as determined by the Secretary (such determination to be made not later than July 

1, 2012); 

(B) annual open enrollment periods, as determined by 

the Secretary for calendar years after the initial enrollment period; 

(C) special enrollment periods specified in section 9801 

of the Internal Revenue Code of 1986 and other special enrollment periods under circumstances similar to such periods under part D of title XVIII of the Social Security Act; 

and 

(D) special monthly enrollment periods for Indians (as 

defined in section 4 of the Indian Health Care Improvement Act). 

(d) REQUIREMENTS.— 

(1) IN GENERAL.—An Exchange shall be a governmental 

agency or nonprofit entity that is established by a State. 

(2) OFFERING OF COVERAGE.— 

(A) IN GENERAL.—An Exchange shall make available 

qualified health plans to qualified individuals and qualified employers. 

(B) LIMITATION.— 

(i) IN GENERAL.—An Exchange may not make available any health plan that is not a qualified health 

plan. 

(ii) OFFERING OF STAND-ALONE DENTAL BENEFITS.— 

Each Exchange within a State shall allow an issuer of 

a plan that only provides limited scope dental benefits 

meeting the requirements of section 9832(c)(2)(A) of 

the Internal Revenue Code of 1986 to offer the plan 

through the Exchange (either separately or in conjunction with a qualified health plan) if the plan provides 

pediatric dental benefits meeting the requirements of 

section 1302(b)(1)(J)). 

(3) RULES RELATING TO ADDITIONAL REQUIRED BENEFITS.— 


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(A) IN GENERAL.—Except as provided in subparagraph 

(B), an Exchange may make available a qualified health 

plan notwithstanding any provision of law that may require benefits other than the essential health benefits 

specified under section 1302(b). 

(B) STATES MAY REQUIRE ADDITIONAL BENEFITS.— (i) IN GENERAL.—Subject to the requirements of 

clause (ii), a State may require that a qualified health 

plan offered in such State offer benefits in addition to 

the essential health benefits specified under section 

1302(b). 

(ii) STATE MUST ASSUME COST.—A State shall make 

payments— 

(I) to an individual enrolled in a qualified health 

plan offered in such State; or 

(II) on behalf of an individual described in subclause (I) directly to the qualified health plan in 

which such individual is enrolled; 

to defray the cost of any additional benefits described 

in clause (i). 

(4) FUNCTIONS.—An Exchange shall, at a minimum— 

(A) implement procedures for the certification, recertification, and decertification, consistent with guidelines developed by the Secretary under subsection (c), of health 

plans as qualified health plans; 

(B) provide for the operation of a toll-free telephone hotline to respond to requests for assistance; 

(C) maintain an Internet website through which enrollees and prospective enrollees of qualified health plans may 

obtain standardized comparative information on such 

plans; 

(D) assign a rating to each qualified health plan offered 

through such Exchange in accordance with the criteria developed by the Secretary under subsection (c)(3); 

(E) utilize a standardized format for presenting health 

benefits plan options in the Exchange, including the use of 

the uniform outline of coverage established under section 

2715 of the Public Health Service Act; 

(F) in accordance with section 1413, inform individuals 

of eligibility requirements for the medicaid program under 

title XIX of the Social Security Act, the CHIP program 

under title XXI of such Act, or any applicable State or local 

public program and if through screening of the application 

by the Exchange, the Exchange determines that such individuals are eligible for any such program, enroll such individuals in such program; 

(G) establish and make available by electronic means a 

calculator to determine the actual cost of coverage after 

the application of any premium tax credit under section 

36B of the Internal Revenue Code of 1986 and any costsharing reduction under section 1402; 

(H) subject to section 1411, grant a certification attesting that, for purposes of the individual responsibility penalty under section 5000A of the Internal Revenue Code of 

1986, an individual is exempt from the individual requireVerDate Sep 11 2014 04:59 May 07, 2019 Jkt 089006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6601 E:\HR\OC\HR049.XXX HR049

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ment or from the penalty imposed by such section because— 

(i) there is no affordable qualified health plan available through the Exchange, or the individual’s employer, covering the individual; or 

(ii) the individual meets the requirements for any 

other such exemption from the individual responsibility requirement or penalty; 

(I) transfer to the Secretary of the Treasury— 

(i) a list of the individuals who are issued a certification under subparagraph (H), including the name 

and taxpayer identification number of each individual; 

(ii) the name and taxpayer identification number of 

each individual who was an employee of an employer 

but who was determined to be eligible for the premium 

tax credit under section 36B of the Internal Revenue 

Code of 1986 because— 

(I) the employer did not provide minimum essential coverage; or 

(II) the employer provided such minimum essential coverage but it was determined under section 

36B(c)(2)(C) of such Code to either be unaffordable 

to the employee or not provide the required minimum actuarial value; and 

(iii) the name and taxpayer identification number of 

each individual who notifies the Exchange under section 1411(b)(4) that they have changed employers and 

of each individual who ceases coverage under a qualified health plan during a plan year (and the effective 

date of such cessation); 

(J) provide to each employer the name of each employee 

of the employer described in subparagraph (I)(ii) who 

ceases coverage under a qualified health plan during a 

plan year (and the effective date of such cessation); and 

(K) establish the Navigator program described in subsection (i). 

(5) FUNDING LIMITATIONS.— 

(A) NO FEDERAL FUNDS FOR CONTINUED øOPERATIONS.— 

¿ øIn establishing an Exchange under this section¿ OPERATIONS.— 

(i) IN GENERAL.—In establishing an Exchange under 

this section (other than in establishing an Exchange 

pursuant to a grant awarded under subsection (a)(6)), 

the State shall ensure that such Exchange is self-sustaining beginning on January 1, 2015, including allowing the Exchange to charge assessments or user fees 

to participating health insurance issuers, or to otherwise generate funding, to support its operations. 

(ii) ADDITIONAL PLANNING AND ESTABLISHMENT

GRANTS.—In establishing an Exchange pursuant to a 

grant awarded under subsection (a)(6), the State shall 

ensure that such Exchange is self-sustaining beginning 

on January 1, 2024, including allowing the Exchange 

to charge assessments or user fees to participating 


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health insurance issuers, or to otherwise generate funding, to support its operations. 

(B) PROHIBITING WASTEFUL USE OF FUNDS.—In carrying 

out activities under this subsection, an Exchange shall not 

utilize any funds intended for the administrative and operational expenses of the Exchange for staff retreats, promotional giveaways, excessive executive compensation, or 

promotion of Federal or State legislative and regulatory 

modifications. 

(6) CONSULTATION.—An Exchange shall consult with stakeholders relevant to carrying out the activities under this section, including— 

(A) educated health care consumers who are enrollees in 

qualified health plans; 

(B) individuals and entities with experience in facilitating enrollment in qualified health plans; 

(C) representatives of small businesses and self-employed individuals; 

(D) State Medicaid offices; and 

(E) advocates for enrolling hard to reach populations. 

(7) PUBLICATION OF COSTS.—An Exchange shall publish the 

average costs of licensing, regulatory fees, and any other payments required by the Exchange, and the administrative costs 

of such Exchange, on an Internet website to educate consumers 

on such costs. Such information shall also include monies lost 

to waste, fraud, and abuse. 

(e) CERTIFICATION.— (1) IN GENERAL.—An Exchange may certify a health plan as 

a qualified health plan if— 

(A) such health plan meets the requirements for certification as promulgated by the Secretary under subsection 

(c)(1); and 

(B) the Exchange determines that making available such 

health plan through such Exchange is in the interests of 

qualified individuals and qualified employers in the State 

or States in which such Exchange operates, except that the 

Exchange may not exclude a health plan— 

(i) on the basis that such plan is a fee-for-service 

plan; 

(ii) through the imposition of premium price controls; or 

(iii) on the basis that the plan provides treatments 

necessary to prevent patients’ deaths in circumstances 

the Exchange determines are inappropriate or too 

costly. 

(2) PREMIUM CONSIDERATIONS.—The Exchange shall require 

health plans seeking certification as qualified health plans to 

submit a justification for any premium increase prior to implementation of the increase. Such plans shall prominently post 

such information on their websites. The Exchange shall take 

this information, and the information and the recommendations provided to the Exchange by the State under section 

2794(b)(1) of the Public Health Service Act (relating to patterns or practices of excessive or unjustified premium increases), into consideration when determining whether to make 


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such health plan available through the Exchange. The Exchange shall take into account any excess of premium growth 

outside the Exchange as compared to the rate of such growth 

inside the Exchange, including information reported by the 

States. 

(3) TRANSPARENCY IN COVERAGE.— 

(A) IN GENERAL.—The Exchange shall require health 

plans seeking certification as qualified health plans to submit to the Exchange, the Secretary, the State insurance 

commissioner, and make available to the public, accurate 

and timely disclosure of the following information: 

(i) Claims payment policies and practices. 

(ii) Periodic financial disclosures. 

(iii) Data on enrollment. 

(iv) Data on disenrollment. 

(v) Data on the number of claims that are denied. 

(vi) Data on rating practices. 

(vii) Information on cost-sharing and payments with 

respect to any out-of-network coverage. 

(viii) Information on enrollee and participant rights 

under this title. 

(ix) Other information as determined appropriate by 

the Secretary. 

(B) USE OF PLAIN LANGUAGE.—The information required 

to be submitted under subparagraph (A) shall be provided 

in plain language. The term ‘‘plain language’’ means language that the intended audience, including individuals 

with limited English proficiency, can readily understand 

and use because that language is concise, well-organized, 

and follows other best practices of plain language writing. 

The Secretary and the Secretary of Labor shall jointly develop and issue guidance on best practices of plain language writing. 

(C) COST SHARING TRANSPARENCY.—The Exchange shall 

require health plans seeking certification as qualified 

health plans to permit individuals to learn the amount of 

cost-sharing (including deductibles, copayments, and coinsurance) under the individual’s plan or coverage that the 

individual would be responsible for paying with respect to 

the furnishing of a specific item or service by a participating provider in a timely manner upon the request of the 

individual. At a minimum, such information shall be made 

available to such individual through an Internet website 

and such other means for individuals without access to the 

Internet. 

(D) GROUP HEALTH PLANS.—The Secretary of Labor shall 

update and harmonize the Secretary’s rules concerning the 

accurate and timely disclosure to participants by group 

health plans of plan disclosure, plan terms and conditions, 

and periodic financial disclosure with the standards established by the Secretary under subparagraph (A). 

(f) FLEXIBILITY.— 

(1) REGIONAL OR OTHER INTERSTATE EXCHANGES.—An Exchange may operate in more than one State if— 


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(A) each State in which such Exchange operates permits 

such operation; and 

(B) the Secretary approves such regional or interstate 

Exchange. 

(2) SUBSIDIARY EXCHANGES.—A State may establish one or 

more subsidiary Exchanges if— 

(A) each such Exchange serves a geographically distinct 

area; and 

(B) the area served by each such Exchange is at least as 

large as a rating area described in section 2701(a) of the 

Public Health Service Act. 

(3) AUTHORITY TO CONTRACT.— (A) IN GENERAL.—A State may elect to authorize an Exchange established by the State under this section to enter 

into an agreement with an eligible entity to carry out 1 or 

more responsibilities of the Exchange. 

(B) ELIGIBLE ENTITY.—In this paragraph, the term ‘‘eligible entity’’ means— 

(i) a person— 

(I) incorporated under, and subject to the laws 

of, 1 or more States; 

(II) that has demonstrated experience on a 

State or regional basis in the individual and small 

group health insurance markets and in benefits 

coverage; and 

(III) that is not a health insurance issuer or 

that is treated under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986 as 

a member of the same controlled group of corporations (or under common control with) as a health 

insurance issuer; or 

(ii) the State medicaid agency under title XIX of the 

Social Security Act. 

(g) REWARDING QUALITY THROUGH MARKET-BASED INCENTIVES.— 

(1) STRATEGY DESCRIBED.—A strategy described in this paragraph is a payment structure that provides increased reimbursement or other incentives for— 

(A) improving health outcomes through the implementation of activities that shall include quality reporting, effective case management, care coordination, chronic disease 

management, medication and care compliance initiatives, 

including through the use of the medical home model, for 

treatment or services under the plan or coverage; 

(B) the implementation of activities to prevent hospital 

readmissions through a comprehensive program for hospital discharge that includes patient-centered education 

and counseling, comprehensive discharge planning, and 

post discharge reinforcement by an appropriate health care 

professional; 

(C) the implementation of activities to improve patient 

safety and reduce medical errors through the appropriate 

use of best clinical practices, evidence based medicine, and 

health information technology under the plan or coverage; 

(D) the implementation of wellness and health promotion activities; and 


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(E) the implementation of activities to reduce health and 

health care disparities, including through the use of language services, community outreach, and cultural competency trainings. 

(2) GUIDELINES.—The Secretary, in consultation with experts 

in health care quality and stakeholders, shall develop guidelines concerning the matters described in paragraph (1). 

(3) REQUIREMENTS.—The guidelines developed under paragraph (2) shall require the periodic reporting to the applicable 

Exchange of the activities that a qualified health plan has conducted to implement a strategy described in paragraph (1). 

(h) QUALITY IMPROVEMENT.— 

(1) ENHANCING PATIENT SAFETY.—Beginning on January 1, 

2015, a qualified health plan may contract with— 

(A) a hospital with greater than 50 beds only if such hospital— 

(i) utilizes a patient safety evaluation system as described in part C of title IX of the Public Health Service Act; and 

(ii) implements a mechanism to ensure that each patient receives a comprehensive program for hospital 

discharge that includes patient-centered education and 

counseling, comprehensive discharge planning, and 

post discharge reinforcement by an appropriate health 

care professional; or 

(B) a health care provider only if such provider implements such mechanisms to improve health care quality as 

the Secretary may by regulation require. 

(2) EXCEPTIONS.—The Secretary may establish reasonable 

exceptions to the requirements described in paragraph (1). 

(3) ADJUSTMENT.—The Secretary may by regulation adjust 

the number of beds described in paragraph (1)(A). 

(i) NAVIGATORS.— 

(1) IN GENERAL.—An Exchange shall establish a program 

under which it awards grants to entities described in paragraph (2) to carry out the duties described in paragraph (3). 

(2) ELIGIBILITY.— 

(A) IN GENERAL.—To be eligible to receive a grant under 

paragraph (1), an entity shall demonstrate to the Exchange involved that the entity has existing relationships, 

or could readily establish relationships, with employers 

and employees, consumers (including uninsured and 

underinsured consumers), or self-employed individuals 

likely to be qualified to enroll in a qualified health plan. 

(B) TYPES.—Entities described in subparagraph (A) may 

include trade, industry, and professional associations, commercial fishing industry organizations, ranching and farming organizations, community and consumer-focused nonprofit groups, chambers of commerce, unions, resource 

partners of the Small Business Administration, other licensed insurance agents and brokers, and other entities 

that— 

(i) are capable of carrying out the duties described 

in paragraph (3); 


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(ii) meet the standards described in paragraph (4); 

and 

(iii) provide information consistent with the standards developed under paragraph (5). 

(3) DUTIES.—An entity that serves as a navigator under a 

grant under this subsection shall— 

(A) conduct public education activities to raise awareness of the availability of qualified health plans; 

(B) distribute fair and impartial information concerning 

enrollment in qualified health plans, and the availability 

of premium tax credits under section 36B of the Internal 

Revenue Code of 1986 and cost-sharing reductions under 

section 1402; 

(C) facilitate enrollment in qualified health plans; 

(D) provide referrals to any applicable office of health insurance consumer assistance or health insurance ombudsman established under section 2793 of the Public Health 

Service Act, or any other appropriate State agency or 

agencies, for any enrollee with a grievance, complaint, or 

question regarding their health plan, coverage, or a determination under such plan or coverage; and 

(E) provide information in a manner that is culturally 

and linguistically appropriate to the needs of the population being served by the Exchange or Exchanges. 

(4) STANDARDS.— 

(A) IN GENERAL.—The Secretary shall establish standards for navigators under this subsection, including provisions to ensure that any private or public entity that is selected as a navigator is qualified, and licensed if appropriate, to engage in the navigator activities described in 

this subsection and to avoid conflicts of interest. Under 

such standards, a navigator shall not— 

(i) be a health insurance issuer; or 

(ii) receive any consideration directly or indirectly 

from any health insurance issuer in connection with 

the enrollment of any qualified individuals or employees of a qualified employer in a qualified health plan. 

(5) FAIR AND IMPARTIAL INFORMATION AND SERVICES.—The 

Secretary, in collaboration with States, shall develop standards 

to ensure that information made available by navigators is 

fair, accurate, and impartial. 

(6) FUNDING.—Grants under this subsection shall be made 

from the operational funds of the Exchange and not Federal 

funds received by the State to establish the Exchange. 

(j) APPLICABILITY OF MENTAL HEALTH PARITY.—Section 2726 of 

the Public Health Service Act shall apply to qualified health plans 

in the same manner and to the same extent as such section applies 

to health insurance issuers and group health plans. 

(k) CONFLICT.—An Exchange may not establish rules that conflict with or prevent the application of regulations promulgated by 

the Secretary under this subtitle. 

* * * * * * * 


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PART 3—STATE FLEXIBILITY RELATING TO 

EXCHANGES 

SEC. 1321. STATE FLEXIBILITY IN OPERATION AND ENFORCEMENT OF 

EXCHANGES AND RELATED REQUIREMENTS. 

(a) ESTABLISHMENT OF STANDARDS.— (1) IN GENERAL.—The Secretary shall, as soon as practicable 

after the date of enactment of this Act, issue regulations setting standards for meeting the requirements under this title, 

and the amendments made by this title, with respect to— 

(A) the establishment and operation of Exchanges (including SHOP Exchanges); 

(B) the offering of qualified health plans through such 

Exchanges; 

(C) the establishment of the reinsurance and risk adjustment programs under part V; and 

(D) such other requirements as the Secretary determines 

appropriate. 

The preceding sentence shall not apply to standards for requirements under subtitles A and C (and the amendments 

made by such subtitles) for which the Secretary issues regulations under the Public Health Service Act. 

(2) CONSULTATION.—In issuing the regulations under paragraph (1), the Secretary shall consult with the National Association of Insurance Commissioners and its members and with 

health insurance issuers, consumer organizations, and such 

other individuals as the Secretary selects in a manner designed to ensure balanced representation among interested 

parties. 

(b) STATE ACTION.—Each State that elects, at such time and in 

such manner as the Secretary may prescribe, to apply the requirements described in subsection (a) shall, not later than January 1, 

2014, adopt and have in effect— 

(1) the Federal standards established under subsection (a); 

or 

(2) a State law or regulation that the Secretary determines 

implements the standards within the State. 

(c) FAILURE TO ESTABLISH EXCHANGE OR IMPLEMENT REQUIREMENTS.— 

(1) IN GENERAL.—øIf¿ Subject to paragraph (3), if— 

(A) a State is not an electing State under subsection (b); 

or 

(B) the Secretary determines, on or before January 1, 

2013, that an electing State— 

(i) will not have any required Exchange operational 

by January 1, 2014; or 

(ii) has not taken the actions the Secretary determines necessary to implement— 

(I) the other requirements set forth in the 

standards under subsection (a); or 

(II) the requirements set forth in subtitles A 

and C and the amendments made by such subtitles; 

the Secretary shall (directly or through agreement with a notfor-profit entity) establish and operate such Exchange within 


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the State and the Secretary shall take such actions as are necessary to implement such other requirements. 

(2) ENFORCEMENT AUTHORITY.—The provisions of section 

2736(b) of the Public Health Services Act shall apply to the enforcement under paragraph (1) of requirements of subsection 

(a)(1) (without regard to any limitation on the application of 

those provisions to group health plans). 

(3) CLARIFICATION.—This subsection shall not apply in the 

case of a State that elects to apply the requirements described 

in subsection (a) and satisfies the requirement described in subsection (b) on or after January 1, 2014. 

(d) NO INTERFERENCE WITH STATE REGULATORY AUTHORITY.— Nothing in this title shall be construed to preempt any State law 

that does not prevent the application of the provisions of this title. 

(e) PRESUMPTION FOR CERTAIN STATE-OPERATED EXCHANGES.— (1) IN GENERAL.—In the case of a State operating an Exchange before January 1, 2010, and which has insured a percentage of its population not less than the percentage of the 

population projected to be covered nationally after the implementation of this Act, that seeks to operate an Exchange under 

this section, the Secretary shall presume that such Exchange 

meets the standards under this section unless the Secretary 

determines, after completion of the process established under 

paragraph (2), that the Exchange does not comply with such 

standards. 

(2) PROCESS.—The Secretary shall establish a process to 

work with a State described in paragraph (1) to provide assistance necessary to assist the State’s Exchange in coming into 

compliance with the standards for approval under this section. 

* * * * * * * 


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(22) 

1Patient Protection and Affordable Care Act, Pub. L. No. 111–148, 124 Stat. 119, (2010) (as 

amended by Health Care and Education Reconciliation Act of 2010, Pub. L. No 111–152, 124 

Stat. 1029 (2010)). 2 Henry J. Kaiser Family Foundation, State Health Insurance Marketplace Types, 2018, available at https://www.kff.org/health-reform/state-indicator/state-health-insurance-marketplacetypes/?activeTab=map¤tTimeframe=0&selectedDistributions=marketplacetype&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D (last visited 

April 17, 2019). 3 Id. 

4 Congressional Research Service, Overview of Health Insurance Exchanges (June 20, 2018), 

available at https://www.crs.gov/Reports/R44065#_Toc524344378. 5 Ryan Hutchins, New Jersey Proposes State-Based Obamacare Exchange, Politico (Mar. 22, 

2019), available at https://www.politico.com/states/new-jersey/story/2019/03/22/new-jersey-proposes-state-based-obamacare-exchange-929807. 6 Committee on Energy and Commerce, Implementing Obamacare A Review of CMS’ Management of the State-Based Exchanges, (Sept. 13, 2016), available at https://archivesenergycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/documents/114/ 

analysis/20160916Review_of_CMS_Management_of_the_State_Based_Exchanges_0.pdf. 

DISSENTING VIEWS 

This bill provides $200 million for States to establish State-based 

Marketplaces (SBMs). The bill is not paid for. 

The Patient Protection and Affordable Care Act (PPACA) provided States with the option of building their own SBM or utilizing 

the Federally-facilitated marketplace (FFM).1 An unlimited authorization and appropriation was made available to States in the form 

of grants for the planning and establishment of SBMs. No funding 

was awarded after December 31, 2014, in accordance with the law. 

In 2018, 11 States and the District of Columbia operated SBMs,2

five States operated on a State-based Marketplace-Federal Platform (SBM–FP), and six States operated on a State-Partnership 

Marketplace (SPM).3 According to the Congressional Research 

Service (CRS), 17 States were awarded roughly $4.5 billion in 

grants to plan and establish grants.4

While Federal funding for the establishment of SBMs has expired, current law continues to allow States to establish their own 

exchange. New Jersey recently announced its intention to create a 

SBM, where the insurance commissioner said, ‘‘We believe we can 

operate a State-based exchange and provide additional benefits to 

New Jersey residents with the funding we currently send to Washington, estimated to be over $50 million for 2019.’’ 5

The Committee on Energy and Commerce issued a Majority Staff 

report entitled, ‘‘Implementing Obamacare: A Review of CMS’ Management of the State-Based Exchanges,’’ on September 13, 2016.6

Among the report’s key findings in 2016: 

• The Centers for Medicare and Medicaid Services (CMS) is 

not confident that the remaining SBEs will be sustainable in 

the long term; 

• As of September 2016, every SBE still relies upon Federal 

establishment grant funds—20 months after SBEs were to be 

self-sustaining by law; and, 


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• CMS eased the transition for failed SBEs to join 

HealthCare.gov by allowing them to keep user fees collected by 

insurance carriers intended to pay for the use of 

HealthCare.gov. 

Any SBMs that would be funded by this bill is likely to face the 

same challenges numerous other states have faced and as many 

have proven, are not sustainable in the long term. In fact, when 

the 2016 Majority Staff report was issued, every SBM still relied 

on Federal establishment grant funds almost two years after the 

SBMs were supposed to be self-sustaining under the law. This bill 

is not paid for and states can pursue this option using state dollars 

if they wish. This bill is not a responsible use of taxpayer dollars. 

GREG WALDEN, 

Republican Leader, Committee on Energy and 

Commerce. 

MICHAEL C. BURGESS, M.D., 

Republican Leader, Subcommittee on Health, 

Committee on Energy and 

Commerce. 

Æ 


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