```

[House Report 115-58]
[From the U.S. Government Publishing Office]

115th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {       115-58

======================================================================

 
  PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 1628) TO PROVIDE FOR 
RECONCILIATION PURSUANT TO TITLE II OF THE CONCURRENT RESOLUTION ON THE 
                      BUDGET FOR FISCAL YEAR 2017

                                _______
                                

   March 24, 2017.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Sessions, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 228]

    The Committee on Rules, having had under consideration 
House Resolution 228, by a record vote of 9 to 3, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 1628, the 
American Health Care Act of 2017, under a closed rule. The 
resolution provides four hours of debate equally divided and 
controlled by the chair and ranking minority member of the 
Committee on the Budget or their respective designees. The 
resolution waives all points of order against consideration of 
the bill. The resolution provides that the amendment printed in 
part A of this report, modified by the amendment printed in 
part B of this report shall be considered as adopted. The 
resolution provides that the amendment printed in part C of 
this report, modified by the amendments printed in part D and 
part E of this report shall be considered as adopted. The 
resolution provides that the bill, as amended, shall be 
considered as read. The resolution waives all points of order 
against provisions in the bill, as amended. The resolution 
provides one motion to recommit with or without instructions.

                         EXPLANATION OF WAIVERS

    The waiver of all points of order against consideration of 
the bill includes a waiver of the following:
           Clause 4 of rule XXI, which prohibits 
        reporting a bill or joint resolution carrying an 
        appropriation from a committee not having jurisdiction 
        to report an appropriation;
           Clause 5(a) of rule XXI, which prohibits a 
        bill or joint resolution carrying a tax or tariff 
        measure from being reported by a committee not having 
        jurisdiction to report tax or tariff measures; and
           Section 311 of the Congressional Budget Act, 
        which prohibits consideration of legislation that would 
        cause revenues to be less than the level of total 
        revenues for the first fiscal year or for the total of 
        that first fiscal year and the ensuing fiscal years for 
        which allocations are provided.
    Although the resolution waives all points of order against 
provisions in the bill, as amended, the Committee is not aware 
of any points of order. The waiver is prophylactic in nature.

                            COMMITTEE VOTES

    The results of each record vote on an amendment or motion 
to report, together with the names of those voting for and 
against, are printed below:

Rules Committee record vote No. 39

    Motion by Mr. Polis to report an open rule. Defeated: 3-9

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Mr. Cole........................................          Nay   Ms. Slaughter.....................  ............
Mr. Woodall.....................................          Nay   Mr. McGovern......................          Yea
Mr. Burgess.....................................          Nay   Mr. Hastings of Florida...........          Yea
Mr. Collins.....................................          Nay   Mr. Polis.........................          Yea
Mr. Byrne.......................................          Nay
Mr. Newhouse....................................          Nay
Mr. Buck........................................          Nay
Ms. Cheney......................................          Nay
Mr. Sessions, Chairman..........................          Nay
----------------------------------------------------------------------------------------------------------------

Rules Committee record vote No. 40

    Motion by Mr. Cole to report the rule. Adopted: 9-3

----------------------------------------------------------------------------------------------------------------
                Majority Members                      Vote               Minority Members               Vote
----------------------------------------------------------------------------------------------------------------
Mr. Cole........................................          Yea   Ms. Slaughter.....................  ............
Mr. Woodall.....................................          Yea   Mr. McGovern......................          Nay
Mr. Burgess.....................................          Yea   Mr. Hastings of Florida...........          Nay
Mr. Collins.....................................          Yea   Mr. Polis.........................          Nay
Mr. Byrne.......................................          Yea
Mr. Newhouse....................................          Yea
Mr. Buck........................................          Yea
Ms. Cheney......................................          Yea
Mr. Sessions, Chairman..........................          Yea
----------------------------------------------------------------------------------------------------------------

        SUMMARY OF THE AMENDMENT IN PART A CONSIDERED AS ADOPTED

    1. Walden (OR), Brady, Kevin (TX): MANAGER'S Makes 
technical changes to conform with reconciliation instructions 
and address other drafting issues.

        SUMMARY OF THE AMENDMENT IN PART B CONSIDERED AS ADOPTED

    1. Walden (OR), Brady, Kevin (TX): Makes technical changes 
to amendment #4 to address drafting issues.

        SUMMARY OF THE AMENDMENT IN PART C CONSIDERED AS ADOPTED

    1. Walden (OR), Brady, Kevin (TX): Provides for the 
inclusion of additional policies affecting both Medicaid and 
the tax code.

        SUMMARY OF THE AMENDMENT IN PART D CONSIDERED AS ADOPTED

    1. Walden (OR): Makes technical corrections to amendment #5 
to address drafting issues.

        SUMMARY OF THE AMENDMENT IN PART E CONSIDERED AS ADOPTED

    1. Walden (OR), Brady, Kevin (TX): Delays the repeal of the 
additional .9 percent Medicare tax on high-income earners, 
require states to establish their own essential health benefits 
standards for purposes of the premium tax credit, and provide 
additional funding for the Patient and State Stability Fund for 
mental health and substance use disorders and maternity care.

            PART A--TEXT OF AMENDMENT CONSIDERED AS ADOPTED

  Page 12, line 11, strike ``from exemption'' and insert ``from 
reduction''.
  Page 20, strike line 12 and all that follows through page 22, 
line 14.
  Page 22, line 15, strike ``(d)'' and insert ``(c)''.
  Page 24, line 14, strike ``2018 and ending with 2021'' and 
insert ``fiscal year 2018 and ending with fiscal year 2022''.
  Page 24, lines 16, insert ``fiscal'' before ``year''.
  Page 24, line 21, insert ``fiscal'' before ``year''.
  Page 24, line 26, insert ``so long as the payment adjustment 
to such an eligible provider does not exceed the provider's 
costs in furnishing health care services (as determined by the 
Secretary and net of payments under this title, other than 
under this section, and by uninsured patients) to individuals 
who either are eligible for medical assistance under the State 
plan (or under a waiver of such plan) or have no health 
insurance or health plan coverage for such services'' before 
the period at the end.
  Page 25, beginning on line 7, strike ``calendar years'' and 
insert ``fiscal years''.
  Page 25, beginning on line 9, strike ``calendar year'' and 
insert ``fiscal year''.
  Page 25, strike line 11 and all that follows through page 26, 
line 15 and insert the following:
  ``(c) Annual Allotment Limitation.--Payment under section 
1903(a) shall not be made to a State with respect to any 
payment adjustment made under this section for all calendar 
quarters in a fiscal year in excess of the $2,000,000,000 
multiplied by the ratio of--
          ``(1) the population of the State with income below 
        138 percent of the poverty line in 2015 (as determined 
        based the table entitled `Health Insurance Coverage 
        Status and Type by Ratio of Income to Poverty Level in 
        the Past 12 Months by Age' for the universe of the 
        civilian noninstitutionalized population for whom 
        poverty status is determined based on the 2015 American 
        Community Survey 1-Year Estimates, as published by the 
        Bureau of the Census), to
          ``(2) the sum of the populations under paragraph (1) 
        for all non-expansion States.''.
  Page 26, line 18, insert ``fiscal'' before ``year''.
  Page 26, line 19, insert ``fiscal'' before ``year''.
  Page 26, line 21, insert ``fiscal'' before ``years''.
  Page 27, strike line 22 and all that follows through page 28, 
line 11.
  Page 28, line 12, strike ``(c)'' and insert ``(b)''.
  Page 32, line 16, insert before the period the following : 
``and includes non-DSH supplemental payments (as defined in 
subsection (d)(4)(A)(ii)) and payments described in subsection 
(d)(4)(A)(iii) but shall not be construed as including any 
expenditures attributable to the program under section 1928''.
  Page 32, after line 16, insert the following: ``In applying 
subparagraph (B), non-DSH supplemental payments (as defined in 
subsection (d)(4)(A)(ii)) and payments described in subsection 
(d)(4)(A)(iii) shall be treated as fully attributable to 1903A 
enrollees.''.
  Page 32, beginning on line 25 strike ``that directly result 
from providing medical assistance under the State plan 
(including under a waiver of the plan)''.
  Page 59, strike lines 14 through 17, and insert the 
following:
                                  ``(I) The ratio described in 
                                subclause (II) of clause (v) 
                                that would be determined for 
                                such State by substituting 
                                `2015' for each reference in 
                                such subclause to `the third 
                                preceding year' and by 
                                substituting `all such States' 
                                for the reference in item (bb) 
                                of such subclause to `all 
                                States described in clause 
                                (vi)' is greater than the ratio 
                                described in such subclause 
                                that would be determined for 
                                such State by substituting 
                                `2013' for each reference in 
                                such subclause to `the third 
                                preceding year' and by 
                                substituting `all such States' 
                                for the reference in item (bb) 
                                of such subclause to `all 
                                States described in clause 
                                (vi)'.''.
  Page 59, line 18, strike ``State have'' and insert ``State 
has''.
  Page 65, line 18, strike ``or small group''.
  Page 66, line 23, strike ``36C'' and insert ``36B''.
  Page 75, line 15, insert ``of such Code'' before ``is 
amended''.
  Page 75, line 18, insert ``of such Code'' before ``is 
amended''.
  Page 75, after line 22, insert the following:
                          (iii) Section 36B(c)(2)(A)(i) of such 
                        Code is amended by striking ``that was 
                        enrolled in through an Exchange 
                        established by the State under section 
                        1311 of the Patient Protection and 
                        Affordable Care Act''.
  Page 78, strike line 22 and all that follows through page 79, 
line 23.
  Page 80, line 1, strike ``204'' and insert ``203''.
  Page 82, line 13, strike ``205'' and insert ``204''.
  Page 83, line 1, strike ``206'' and insert ``205''.
  Page 83, line 14, strike ``207'' and insert ``206''.
  Page 84, line 1, strike ``208'' and insert ``207''.
  Page 85, line 1, strike ``209'' and insert ``208''.
  Page 85, line 12, strike ``210'' and insert ``209''.
  Page 85, line 19, strike ``211'' and insert ``10''.
  Page 86, line 1, strike ``212'' and insert ``211''.
  Page 86, line 13, strike ``213'' and insert ``212''.
  Page 86, line 13, strike ``repeal of increase in'' and insert 
``reduction of''.
  Page 87, line 7, strike ``214'' and insert ``213''.
  Page 88, strike line 5 and all that follows through page 119, 
line 3, and insert the following:

SEC. 214. REFUNDABLE TAX CREDIT FOR HEALTH INSURANCE COVERAGE.

  (a) In General.--Section 36B of the Internal Revenue Code of 
1986 is amended to read as follows:

``SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH 
                    PLAN.

  ``(a) Allowance of Premium Tax Credit.--In the case of an 
individual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year the sum of the 
monthly credit amounts with respect to such taxpayer for 
calendar months during such taxable year which are eligible 
coverage months appropriately taken into account under 
subsection (b)(2) with respect to the taxpayer or any 
qualifying family member of the taxpayer.
  ``(b) Monthly Credit Amounts.--
          ``(1) In general.--The monthly credit amount with 
        respect to any taxpayer for any calendar month is the 
        lesser of--
                  ``(A) the sum of the monthly limitation 
                amounts determined under subsection (c) with 
                respect to the taxpayer and the taxpayer's 
                qualifying family members for such month, or
                  ``(B) the amount paid for a qualified health 
                plan for the taxpayer and the taxpayer's 
                qualifying family members for such month.
          ``(2) Eligible coverage month requirement.--No amount 
        shall be taken into account under subparagraph (A) or 
        (B) of paragraph (1) with respect to any individual for 
        any month unless such month is an eligible coverage 
        month with respect to such individual.
  ``(c) Monthly Limitation Amounts.--
          ``(1) In general.--The monthly limitation amount with 
        respect to any individual for any eligible coverage 
        month during any taxable year is \1/12\ of--
                  ``(A) $2,000 in the case of an individual who 
                has not attained age 30 as of the beginning of 
                such taxable year,
                  ``(B) $2,500 in the case of an individual who 
                has attained age 30 but who has not attained 
                age 40 as of such time,
                  ``(C) $3,000 in the case of an individual who 
                has attained age 40 but who has not attained 
                age 50 as of such time,
                  ``(D) $3,500 in the case of an individual who 
                has attained age 50 but who has not attained 
                age 60 as of such time, and
                  ``(E) $4,000 in the case of an individual who 
                has attained age 60 as of such time.
          ``(2) Limitation based on modified adjusted gross 
        income.--The credit allowed under subsection (a) with 
        respect to any taxpayer for any taxable year shall be 
        reduced (but not below zero) by 10 percent of the 
        excess (if any) of--
                  ``(A) the taxpayer's modified adjusted gross 
                income (as defined in section 36B(d)(2)(B), as 
                in effect for taxable years beginning before 
                January 1, 2020) for such taxable year, over
                  ``(B) $75,000 (twice such amount in the case 
                of a joint return).
          ``(3) Other limitations.--
                  ``(A) Aggregate dollar limitation.--The sum 
                of the monthly limitation amounts taken into 
                account under this section with respect to any 
                taxpayer for any taxable year shall not exceed 
                $14,000.
                  ``(B) Maximum number of individuals taken 
                into account.--With respect to any taxpayer for 
                any month, monthly limitation amounts shall be 
                taken into account under this section only with 
                respect to the 5 oldest individuals with 
                respect to whom monthly limitation amounts 
                could (without regard to this subparagraph) 
                otherwise be so taken into account.
  ``(d) Eligible Coverage Month.--For purposes of this section, 
the term `eligible coverage month' means, with respect to any 
individual, any month if, as of the first day of such month, 
the individual meets the following requirements:
          ``(1) The individual is covered by a health insurance 
        coverage which is certified by the State in which such 
        insurance is offered as coverage that meets the 
        requirements for qualified health plans under 
        subsection (f).
          ``(2) The individual is not eligible for--
                  ``(A) coverage under a group health plan 
                (within the meaning of section 5000(b)(1)) 
                other than coverage under a plan substantially 
                all of the coverage of which is of excepted 
                benefits described in section 9832(c), or
                  ``(B) coverage described in section 
                5000A(f)(1)(A).
          ``(3) The individual is either--
                  ``(A) a citizen or national of the United 
                States, or
                  ``(B) a qualified alien (within the meaning 
                of section 431 of the Personal Responsibility 
                and Work Opportunity Reconciliation Act of 1996 
                (8 U.S.C. 1641)).
          ``(4) The individual is not incarcerated, other than 
        incarceration pending the disposition of charges.
  ``(e) Qualifying Family Member.--For purposes of this 
section, the term `qualifying family member' means--
          ``(1) in the case of a joint return, the taxpayer's 
        spouse,
          ``(2) any dependent of the taxpayer, and
          ``(3) with respect to any eligible coverage month, 
        any child (as defined in section 152(f)(1)) of the 
        taxpayer who as of the end of the taxable year has not 
        attained age 27 if such child is covered for such month 
        under a qualified health plan which also covers the 
        taxpayer (in the case of a joint return, either 
        spouse).
  ``(f) Qualified Health Plan.--For purposes of this section, 
the term `qualified health plan' means any health insurance 
coverage (as defined in section 9832(b)) if--
          ``(1) such coverage is offered in the individual 
        health insurance market within a State (within the 
        meaning of section 5000A(f)(1)(C)),
          ``(2) substantially all of such coverage is not of 
        excepted benefits described in section 9832(c),
          ``(3) such coverage does not consist of short-term 
        limited duration insurance (within the meaning of 
        section 2791(b)(5) of the Public Health Service Act),
          ``(4) such coverage is not a grandfathered health 
        plan (as defined in section 1251 of the Patient 
        Protection and Affordable Care Act) or a grandmothered 
        health plan (as defined in section 36B(c)(3)(C) as in 
        effect for taxable years beginning before January 1, 
        2020), and
          ``(5) such coverage does not include coverage for 
        abortions (other than any abortion necessary to save 
        the life of the mother or any abortion with respect to 
        a pregnancy that is the result of an act of rape or 
        incest).
  ``(g) Special Rules.--
          ``(1) Married couples must file joint return.--
                  ``(A) In general.--Except as provided in 
                subparagraph (B), if the taxpayer is married 
                (within the meaning of section 7703) at the 
                close of the taxable year, no credit shall be 
                allowed under this section to such taxpayer 
                unless such taxpayer and the taxpayer's spouse 
                file a joint return for such taxable year.
                  ``(B) Exception for certain taxpayers.--
                Subparagraph (A) shall not apply to any married 
                taxpayer who--
                          ``(i) is living apart from the 
                        taxpayer's spouse at the time the 
                        taxpayer files the tax return,
                          ``(ii) is unable to file a joint 
                        return because such taxpayer is a 
                        victim of domestic abuse or spousal 
                        abandonment,
                          ``(iii) certifies on the tax return 
                        that such taxpayer meets the 
                        requirements of clauses (i) and (ii), 
                        and
                          ``(iv) has not met the requirements 
                        of clauses (i), (ii), and (iii) for 
                        each of the 3 preceding taxable years.
          ``(2) Denial of credit to dependents.--
                  ``(A) In general.--No credit shall be allowed 
                under this section to any individual who is a 
                dependent with respect to another taxpayer for 
                a taxable year beginning in the calendar year 
                in which such individual's taxable year begins.
                  ``(B) Coordination with rule for older 
                children.--In the case of any individual who is 
                a qualifying family member described in 
                subsection (e)(3) with respect to another 
                taxpayer for any month, in determining the 
                amount of any credit allowable to such 
                individual under this section for any taxable 
                year of such individual which includes such 
                month, the monthly limitation amount with 
                respect to such individual for such month shall 
                be zero and no amount paid for any qualified 
                health plan with respect to such individual for 
                such month shall be taken into account.
          ``(3) Coordination with medical expense deduction.--
        Amounts described in subsection (b)(1)(B) with respect 
        to any month shall not be taken into account in 
        determining the deduction allowed under section 213 
        except to the extent that such amounts exceed the 
        amount described in subsection (b)(1)(A) with respect 
        to such month.
          ``(4) Coordination with advance payments of credit.--
        With respect to any taxable year--
                  ``(A) the amount which would (but for this 
                subsection) be allowed as a credit to the 
                taxpayer under subsection (a) shall be reduced 
                (but not below zero) by the aggregate amount 
                paid on behalf of such taxpayer under section 
                1412 of the Patient Protection and Affordable 
                Care Act for months beginning in such taxable 
                year, and
                  ``(B) the tax imposed by section 1 for such 
                taxable year shall be increased by the excess 
                (if any) of--
                          ``(i) the aggregate amount paid on 
                        behalf of such taxpayer under such 
                        section 1412 for months beginning in 
                        such taxable year, over
                          ``(ii) the amount which would (but 
                        for this subsection) be allowed as a 
                        credit to the taxpayer under subsection 
                        (a).
          ``(5) Special rules for qualified small employer 
        health reimbursement arrangements.--
                  ``(A) In general.--If the taxpayer or any 
                qualifying family member of the taxpayer is 
                provided a qualified small employer health 
                reimbursement arrangement for an eligible 
                coverage month, the sum determined under 
                subsection (b)(1)(A) with respect to the 
                taxpayer shall be reduced (but not below zero) 
                by \1/12\ of the permitted benefit (as defined 
                in section 9831(d)(3)(C)) under such 
                arrangement for each such month such 
                arrangement is provided to such taxpayer.
                  ``(B) Qualified small employer health 
                reimbursement arrangement.--For purposes of 
                this paragraph, the term `qualified small 
                employer health reimbursement arrangement' has 
                the meaning given such term by section 
                9831(d)(2).
                  ``(C) Coverage for less than entire year.--In 
                the case of an employee who is provided a 
                qualified small employer health reimbursement 
                arrangement for less than an entire year, 
                subparagraph (A) shall be applied by 
                substituting `the number of months during the 
                year for which such arrangement was provided' 
                for `12'.
          ``(6) Certain rules related to nonqualified health 
        plans.--The rules of section 36B(c)(3)(D), as in effect 
        for taxable years beginning before January 1, 2020, 
        shall apply with respect to subsection (f)(5).
          ``(7) Inflation adjustment.--
                  ``(A) In general.--In the case of any taxable 
                year beginning in a calendar year after 2020, 
                each dollar amount in subsection (c)(1), the 
                $75,000 amount in subsection (c)(2)(B), and the 
                dollar amount in subsection (c)(3)(A), shall be 
                increased by an amount equal to--
                          ``(i) such dollar amount, multiplied 
                        by
                          ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for 
                        the calendar year in which the taxable 
                        year begins, determined--
                                  ``(I) by substituting 
                                `calendar year 2019' for 
                                `calendar year 1992' in 
                                subparagraph (B) thereof, and
                                  ``(II) by substituting for 
                                the CPI referred to section 
                                1(f)(3)(A) the amount that such 
                                CPI would have been if the 
                                annual percentage increase in 
                                CPI with respect to each year 
                                after 2019 had been one 
                                percentage point greater.
                  ``(B) Terms related to cpi.--
                          ``(i) Annual percentage increase.--
                        For purposes of subparagraph 
                        (A)(ii)(II), the term `annual 
                        percentage increase' means the 
                        percentage (if any) by which CPI for 
                        any year exceeds CPI for the prior 
                        year.
                          ``(ii) Other terms.--Terms used in 
                        this paragraph which are also used in 
                        section 1(f)(3) shall have the same 
                        meanings as when used in such section.
                  ``(C) Rounding.--Any increase determined 
                under subparagraph (A) shall be rounded to the 
                nearest multiple of $50.
          ``(8) Rules related to state certification of 
        qualified health plans.--A certification shall not be 
        taken into account under subsection (d)(1) unless such 
        certification is made available to the public and meets 
        such other requirements as the Secretary may provide.
          ``(9) Regulations.--The Secretary may prescribe such 
        regulations and other guidance as may be necessary or 
        appropriate to carry out this section and section 1412 
        of the Patient Protection and Affordable Care Act.''.
  (b) Advance Payment of Credit.--Section 1412 of the Patient 
Protection and Affordable Care Act is amended by adding at the 
end the following new subsection:
  ``(f) Application to Certain Plans.--The Secretary and the 
Secretary of the Treasury shall prescribe such regulations as 
each respective Secretary may deem necessary in order to 
establish and operate the advance payment program established 
under this section for individuals covered under qualified 
health plans (whether enrolled in through an Exchange or 
otherwise) in such a manner that protects taxpayer information 
(including names, taxpayer identification numbers, and other 
confidential information), provides robust verification of all 
information necessary to establish eligibility of taxpayer for 
advance payments under this section, ensures proper and timely 
payments to appropriate health providers, and protects program 
integrity to the maximum extent feasible.''.
  (c) Increased Penalty on Erroneous Claims of Credit.--Section 
6676(a) of the Internal Revenue Code of 1986 is amended by 
inserting ``(25 percent in the case of a claim for refund or 
credit relating to the health insurance coverage credit under 
section 36B)''.
  (d) Reporting by Employers.--Section 6051(a) of such Code is 
amended by striking ``and'' at the end of paragraph (14), by 
striking the period at the end of paragraph (15) and inserting 
``, and'', and by inserting after paragraph (15) the following 
new paragraph:
          ``(16) each month with respect to which the employee 
        is eligible for coverage described in section 36B(d)(2) 
        in connection with employment with the employer.''.
  (d) Coordination With Other Tax Benefits.--
          (1) Credit for health insurance costs of eligible 
        individuals.--Section 35(g) of such Code is amended by 
        adding at the end the following new paragraph:
          ``(14) Coordination with health insurance coverage 
        credit.--
                  ``(A) In general.--An eligible coverage month 
                to which the election under paragraph (11) 
                applies shall not be treated as an eligible 
                coverage month (as defined in section 36B(d)) 
                for purposes of section 36B with respect to the 
                taxpayer or any of the taxpayer's qualifying 
                family members (as defined in section 36B(e)).
                  ``(B) Coordination with advance payments of 
                health insurance coverage credit.--In the case 
                of a taxpayer who makes the election under 
                paragraph (11) with respect to any eligible 
                coverage month in a taxable year or on behalf 
                of whom any advance payment is made under 
                section 7527 with respect to any month in such 
                taxable year--
                          ``(i) the tax imposed by this chapter 
                        for the taxable year shall be increased 
                        by the excess, if any, of--
                                  ``(I) the sum of any advance 
                                payments made on behalf of the 
                                taxpayer under section 7527 and 
                                section 1412 of the Patient 
                                Protection and Affordable Care 
                                Act, over
                                  ``(II) the sum of the credits 
                                allowed under this section 
                                (determined without regard to 
                                paragraph (1)) and section 36B 
                                (determined without regard to 
                                subsection (g)(5)(A) thereof) 
                                for such taxable year, and
                          ``(ii) section 36B(g)(5)(B) shall not 
                        apply with respect to such taxpayer for 
                        such taxable year.''.
          (2) Trade or business deduction.--Section 162(l) of 
        such Code is amended by adding at the end the following 
        new paragraph:
          ``(6) Coordination with health insurance coverage 
        credit.--The deduction otherwise allowable to a 
        taxpayer under paragraph (1) for any taxable year shall 
        be reduced (but not below zero) by the amount of the 
        credit allowable to such taxpayer under section 36B 
        (determined without regard to subsection (g)(5)(A) 
        thereof) for such taxable year.''.
  (e) Effective Date.--The amendments made by this section 
shall apply to months beginning after December 31, 2019, in 
taxable years ending after such date.
  Page 119, line 4, strike ``216'' and insert ``215''.
  Page 120, line 4, strike ``217'' and insert ``216''.
  Page 122, line 1, strike ``218'' and insert ``217''.
                              ----------                              

            PART B--TEXT OF AMENDMENT CONSIDERED AS ADOPTED

  Page 19, line 20, strike ``(d)'' and insert ``(e)''.
  Page 21, line 5, strike ``(g)(5)(A)'' and insert 
``(g)(4)(A)''.
  Page 21, line 7, strike ``36B(g)(5)(B)'' and insert 
``36B(g)(4)(B)''.
  Page 21, line 19, strike ``(g)(5)(A)'' and insert 
``(g)(4)(A)''.
  Page 21, line 20, strike ``(e)'' and insert ``(f)''.
  Add at the end the following:
  ``Page 39, line 4, insert `and pool' after `supplemental'.''
  ``Page 39, line 8, insert `and payments described in 
subparagraph (A)(iii)' after `as defined in subparagraph 
(A)(ii))'.''
  ``Page 39, line 19, insert `and pool' after `supplemental'.''
  ``Page 66, line 19, insert `that' after `demonstrate'.''
  ``Page 75, strike lines 11 through 13.''
  ``Page 78, line 6, strike `(b)' and insert `(c)'.''
                              ----------                              

            PART C--TEXT OF AMENDMENT CONSIDERED AS ADOPTED

  Page 9, strike line 4 and all that follows through page 11, 
line 16, and insert the following:

SEC. 112. REPEAL OF MEDICAID EXPANSION.

  Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) 
is amended--
          (1) in section 1902 (42 U.S.C. 1396a)--
                  (A) in subsection (a)(10)(A)--
                          (i) in clause (i)(VIII), by inserting 
                        ``and ending December 31, 2019,'' after 
                        ``2014,'';
                          (ii) in clause (ii)(XX), by inserting 
                        ``and ending December 31, 2017,'' after 
                        ``2014,''; and
                          (iii) in clause (ii), by adding at 
                        the end the following new subclause:
                          ``(XXIII) beginning January 1, 2020--
                                  ``(aa) who are expansion 
                                enrollees (as defined in 
                                subsection (nn)(1)); or
                                  ``(bb) who are grandfathered 
                                expansion enrollees (as defined 
                                in subsection (nn)(2));''; and
                  (B) by adding at the end the following new 
                subsection:
  ``(nn) Expansion Enrollees.--In this title:
          ``(1) In general.--The term `expansion enrollee' 
        means an individual--
                  ``(A) who is under 65 years of age;
                  ``(B) who is not pregnant;
                  ``(C) who is not entitled to, or enrolled 
                for, benefits under part A of title XVIII, or 
                enrolled for benefits under part B of title 
                XVIII;
                  ``(D) who is not described in any of 
                subclauses (I) through (VII) of subsection 
                (a)(10)(A)(i); and
                  ``(E) whose income (as determined under 
                subsection (e)(14)) does not exceed 133 percent 
                of the poverty line (as defined in section 
                2110(c)(5)) applicable to a family of the size 
                involved.
          ``(2) Grandfathered expansion enrollees.--The term 
        `grandfathered expansion enrollee' means an expansion 
        enrollee who--
                  ``(A) was enrolled under the State plan under 
                this title (or under a waiver of such plan) as 
                of December 31, 2019; and
                  ``(B) does not have a break in eligibility 
                for medical assistance under such State plan 
                (or waiver) for more than one month after such 
                date.
          ``(3) Application of related provisions.--Any 
        reference in subsection (a)(10)(G), (k), or (gg) of 
        this section or in section 1903, 1905(a), 1920(e), or 
        1937(a)(1)(B) to individuals described in subclause 
        (VIII) of subsection (a)(10)(A)(i) shall be deemed to 
        include a reference to expansion enrollees (including 
        grandfathered expansion enrollees).''; and
          (2) in section 1905 (42 U.S.C. 1396d)--
                  (A) in subsection (y)(1), in the matter 
                preceding subparagraph (A)--
                          (i) by inserting ``and that has 
                        elected to cover newly eligible 
                        individuals before March 1, 2017'' 
                        after ``that is one of the 50 States or 
                        the District of Columbia''; and
                          (ii) by inserting after ``subclause 
                        (VIII) of section 1902(a)(10)(A)(i)'' 
                        the following: ``who, for periods after 
                        December 31, 2019, are grandfathered 
                        expansion enrollees (as defined in 
                        section 1902(nn)(2))''; and
                  (B) in subsection (z)(2)--
                          (i) in subparagraph (A), by inserting 
                        after ``section 1937'' the following: 
                        ``and, for periods after December 31, 
                        2019, who are grandfathered expansion 
                        enrollees (as defined in section 
                        1902(nn)(2))''; and
                          (ii) in subparagraph (B)(ii)--
                                  (I) in subclause (III), by 
                                adding ``and'' at the end; and
                                  (II) by striking subclauses 
                                (IV), (V), and (VI) and 
                                inserting the following new 
                                subclause:
                  ``(IV) 2017 and each subsequent year is 80 
                percent.''.
  Page 29, after line 2, insert the following new section:

SEC. 117. PERMITTING STATES TO APPLY A WORK REQUIREMENT FOR 
                    NONDISABLED, NONELDERLY, NONPREGNANT ADULTS UNDER 
                    MEDICAID.

  (a) In General.--Section 1902 of the Social Security Act (42 
U.S.C. 1396a), as previously amended, is further amended by 
adding at the end the following new subsection:
  ``(oo) Work Requirement Option for Nondisabled, Nonelderly, 
Nonpregnant Adults.--
          ``(1) In general.--Beginning October 1, 2017, subject 
        to paragraph (3), a State may elect to condition 
        medical assistance to a nondisabled, nonelderly, 
        nonpregnant individual under this title upon such an 
        individual's satisfaction of a work requirement (as 
        defined in paragraph (2)).
          ``(2) Work requirement defined.--In this section, the 
        term `work requirement' means, with respect to an 
        individual, the individual's participation in work 
        activities (as defined in section 407(d)) for such 
        period of time as determined by the State, and as 
        directed and administered by the State.
          ``(3) Required exceptions.--States administering a 
        work requirement under this subsection may not apply 
        such requirement to--
                  ``(A) a woman during pregnancy through the 
                end of the month in which the 60-day period 
                (beginning on the last day of her pregnancy) 
                ends;
                  ``(B) an individual who is under 19 years of 
                age;
                  ``(C) an individual who is the only parent or 
                caretaker relative in the family of a child who 
                has not attained 6 years of age or who is the 
                only parent or caretaker of a child with 
                disabilities; or
                  ``(D) an individual who is married or a head 
                of household and has not attained 20 years of 
                age and who--
                          ``(i) maintains satisfactory 
                        attendance at secondary school or the 
                        equivalent; or
                          ``(ii) participates in education 
                        directly related to employment.''.
  (b) Increase in Matching Rate for Implementation.--Section 
1903 of the Social Security Act (42 U.S.C. 1396b) is amended by 
adding at the end the following:
  ``(aa) The Federal matching percentage otherwise applicable 
under subsection (a) with respect to State administrative 
expenditures during a calendar quarter for which the State 
receives payment under such subsection shall, in addition to 
any other increase to such Federal matching percentage, be 
increased for such calendar quarter by 5 percentage points with 
respect to State expenditures attributable to activities 
carried out by the State (and approved by the Secretary) to 
implement subsection (oo) of section 1902.''.
  Page 34, line 8, insert ``and subject to paragraph (4)'' 
after ``fiscal year''.
   Page 34, strike line 18 and all that follows through page 
35, line 7 and insert the following:
          ``(2) Target per capita medical assistance 
        expenditures.--In this subsection, the term `target per 
        capita medical assistance expenditures' means, for a 
        1903A enrollee category and State--
                  ``(A) for fiscal year 2020, an amount equal 
                to--
                          ``(i) the provisional FY19 target per 
                        capita amount for such enrollee 
                        category (as calculated under 
                        subsection (d)(5)) for the State; 
                        increased by
                          ``(ii) the applicable annual 
                        inflation factor (as defined in 
                        paragraph (3)) for fiscal year 2020; 
                        and
                  ``(B) for each succeeding fiscal year, an 
                amount equal to--
                          ``(i) the target per capita medical 
                        assistance expenditures (under 
                        subparagraph (A) or this subparagraph) 
                        for the 1903A enrollee category and 
                        State for the preceding fiscal year, 
                        increased by
                          ``(ii) the applicable annual 
                        inflation factor for that succeeding 
                        fiscal year.
          ``(3) Applicable annual inflation factor.--In 
        paragraph (2), the term `applicable annual inflation 
        factor' means, for a fiscal year--
                  ``(A) for each of the 1903A enrollee 
                categories described in subparagraphs (C), (D), 
                and (E) of subsection (e)(2), the percentage 
                increase in the medical care component of the 
                consumer price index for all urban consumers 
                (U.S. city average) from September of the 
                previous fiscal year to September of the fiscal 
                year involved; and
                  ``(B) for each of the 1903A enrollee 
                categories described in subparagraphs (A) and 
                (B) of subsection (e)(2), the percentage 
                increase described in subparagraph (A) plus 1 
                percentage point.
  Page 35, after line 7, insert the following:
          ``(4) Decrease in target expenditures for required 
        expenditures by certain political subdivisions.--
                  ``(A) In general.--In the case of a State 
                that had a DSH allotment under section 1923(f) 
                for fiscal year 2016 that was more than 6 times 
                the national average of such allotments for all 
                the States for such fiscal year and that 
                requires political subdivisions within the 
                State to contribute funds towards medical 
                assistance or other expenditures under the 
                State plan under this title (or under a waiver 
                of such plan) for a fiscal year (beginning with 
                fiscal year 2020), the target total medical 
                assistance expenditures for such State and 
                fiscal year shall be decreased by the amount 
                that political subdivisions in the State are 
                required to contribute under the plan (or 
                waiver) without reimbursement from the State 
                for such fiscal year, other than contributions 
                described in subparagraph (B).
                  ``(B) Exceptions.--The contributions 
                described in this subparagraph are the 
                following:
                          ``(i) Contributions required by a 
                        State from a political subdivision 
                        that, as of the first day of the 
                        calendar year in which the fiscal year 
                        involved begins--
                                  ``(I) has a population of 
                                more than 5,000,000, as 
                                estimated by the Bureau of the 
                                Census; and
                                  ``(II) imposes a local income 
                                tax upon its residents.
                          ``(ii) Contributions required by a 
                        State from a political subdivision for 
                        administrative expenses if the State 
                        required such contributions from such 
                        subdivision without reimbursement from 
                        the State as of January 1, 2017.''.
  Page 40, line 25, insert ``and subject to subsection 
(i)(1)(B)'' after ``and a month''.
  Page 48, after line 11, insert the following:
  ``(i) Flexible Block Grant Option for States.--
          ``(1) In general.--In the case of a State that elects 
        the option of applying this subsection for a 10-fiscal-
        year period (beginning no earlier than fiscal year 2020 
        and, at the State option, for any succeeding 10-fiscal-
        year period) and that has a plan approved by the 
        Secretary under paragraph (2) to carry out the option 
        for such period--
                  ``(A) the State shall receive, instead of 
                amounts otherwise payable to the State under 
                this title for medical assistance for block 
                grant individuals within the applicable block 
                grant category (as defined in paragraph (6)) 
                for the State during the period in which the 
                election is in effect, the amount specified in 
                paragraph (4);
                  ``(B) the previous provisions of this section 
                shall be applied as if--
                          ``(i) block grant individuals within 
                        the applicable block grant category for 
                        the State and period were not section 
                        1903A enrollees for each 10-fiscal year 
                        period for which the State elects to 
                        apply this subsection; and
                          ``(ii) if such option is not extended 
                        at the end of a 10-fiscal-year-period, 
                        the per capita limitations under such 
                        previous provisions shall again apply 
                        after such period and such limitations 
                        shall be applied as if the election 
                        under this subsection had never taken 
                        place;
                  ``(C) the payment under this subsection may 
                only be used consistent with the State plan 
                under paragraph (2) for block grant health care 
                assistance (as defined in paragraph (7)); and
                  ``(D) with respect to block grant individuals 
                within the applicable block grant category for 
                the State for which block grant health care 
                assistance is made available under this 
                subsection, such assistance shall be instead of 
                medical assistance otherwise provided to the 
                individual under this title.
          ``(2) State plan for administering block grant 
        option.--
                  ``(A) In general.--No payment shall be made 
                under this subsection to a State pursuant to an 
                election for a 10-fiscal-year period under 
                paragraph (1) unless the State has a plan, 
                approved under subparagraph (B), for such 
                period that specifies--
                          ``(i) the applicable block grant 
                        category with respect to which the 
                        State will apply the option under this 
                        subsection for such period;
                          ``(ii) the conditions for eligibility 
                        of block grant individuals within such 
                        applicable block grant category for 
                        block grant health care assistance 
                        under the option, which shall be 
                        instead of other conditions for 
                        eligibility under this title, except 
                        that in the case of a State that has 
                        elected the applicable block grant 
                        category described in--
                                  ``(I) subparagraph (A) of 
                                paragraph (6), the plan must 
                                provide for eligibility for 
                                pregnant women and children 
                                required to be provided medical 
                                assistance under subsections 
                                (a)(10)(A)(i) and (e)(4) of 
                                section 1902; or
                                  ``(II) subparagraph (B) of 
                                paragraph (6), the plan must 
                                provide for eligibility for 
                                pregnant women required to be 
                                provided medical assistance 
                                under subsection (a)(10)(A)(i); 
                                and
                          ``(iii) the types of items and 
                        services, the amount, duration, and 
                        scope of such services, the cost-
                        sharing with respect to such services, 
                        and the method for delivery of block 
                        grant health care assistance under this 
                        subsection, which shall be instead of 
                        the such types, amount, duration, and 
                        scope, cost-sharing, and methods of 
                        delivery for medical assistance 
                        otherwise required under this title, 
                        except that the plan must provide for 
                        assistance for--
                                  ``(I) hospital care;
                                  ``(II) surgical care and 
                                treatment;
                                  ``(III) medical care and 
                                treatment;
                                  ``(IV) obstetrical and 
                                prenatal care and treatment;
                                  ``(V) prescribed drugs, 
                                medicines, and prosthetic 
                                devices;
                                  ``(VI) other medical supplies 
                                and services; and
                                  ``(VII) health care for 
                                children under 18 years of age.
                  ``(B) Review and approval.--A plan described 
                in subparagraph (A) shall be deemed approved by 
                the Secretary unless the Secretary determines, 
                within 30 days after the date of the 
                Secretary's receipt of the plan, that the plan 
                is incomplete or actuarially unsound and, with 
                respect to such plan and its implementation 
                under this subsection, the requirements of 
                paragraphs (1), (10)(B), (17), and (23) of 
                section 1902(a) shall not apply.
          ``(3) Amount of block grant funds.--
                  ``(A) For initial fiscal year.--The block 
                grant amount under this paragraph for a State 
                for the initial fiscal year in the first 10-
                fiscal-year period is equal to the sum of the 
                products (for each applicable block grant 
                category for such State and period) of--
                          ``(i) the target per capita medical 
                        assistance expenditures for such State 
                        for such fiscal year (under subsection 
                        (c)(2));
                          ``(ii) the number of 1903A enrollees 
                        for such category and State for fiscal 
                        year 2019, as determined under 
                        subsection (e)(4); and
                          ``(iii) the Federal average medical 
                        assistance matching percentage (as 
                        defined in subsection (a)(4)) for the 
                        State for fiscal year 2019.
                  ``(B) For any subsequent fiscal year.--The 
                block grant amount under this paragraph for a 
                State for each succeeding fiscal year (in any 
                10-fiscal-year period) is equal to the block 
                grant amount under subparagraph (A) (or this 
                subparagraph) for the State for the previous 
                fiscal year increased by the annual increase in 
                the consumer price index for all urban 
                consumers (all items; U.S. city average) for 
                the fiscal year involved.
                  ``(C) Availability of rollover funds.--The 
                block grant amount under this paragraph for a 
                State for a fiscal year shall remain available 
                to the State for expenditures under this 
                subsection for the succeeding fiscal year but 
                only if an election is in effect under this 
                subsection for the State in such succeeding 
                fiscal year.
          ``(4) Federal payment and state responsibility.--The 
        Secretary shall pay to each State with an election in 
        effect under this subsection for a fiscal year, from 
        its block grant amount under paragraph (3) available 
        for such fiscal year, an amount for each quarter of 
        such fiscal year equal to the enhanced FMAP described 
        in the first sentence of section 2105(b), and the State 
        is responsible for the balance of funds to carry out 
        such plan.
          ``(5) Block grant individual defined.--In this 
        subsection, the term `block grant individual' means, 
        with respect to a State for a 10-fiscal-year period, an 
        individual who is not disabled (as defined for purposes 
        of the State plan) and who is within an applicable 
        block grant category for the State and such period.
          ``(6) Applicable block grant category defined.--In 
        this subsection, the term `applicable block grant 
        category' means with respect to a State for a 10-
        fiscal-year period, either of the following as 
        specified by the State for such period in its plan 
        under paragraph (2)(A)(i):
                  ``(A) 2 enrollee categories.--Both of the 
                following 1903A enrollee categories:
                          ``(i) Children.--The 1903A enrollee 
                        category specified in subparagraph (C) 
                        of subsection (e)(2).
                          ``(ii) Other nonelderly, nondisabled, 
                        non-expansion adults.--The 1903A 
                        enrollee category specified in 
                        subparagraph (E) of such subsection.
                  ``(B) Other nonelderly, nondisabled, non-
                expansion adults.--Only the 1903A enrollee 
                category specified in subparagraph (E) of 
                subsection (e)(2).
          ``(7) Block grant health care assistance.--In this 
        subsection, the term `block grant health care 
        assistance' means assistance for health-care-related 
        items and medical services for block grant individuals 
        within the applicable block grant category for the 
        State and 10-fiscal-year period involved who are low-
        income individuals (as defined by the State).
          ``(8) Auditing.--As a condition of receiving funds 
        under this subsection, a State shall contract with an 
        independent entity to conduct audits of its 
        expenditures made with respect to activities funded 
        under this subsection for each fiscal year for which 
        the State elects to apply this subsection to ensure 
        that such funds are used consistent with this 
        subsection and shall make such audits available to the 
        Secretary upon the request of the Secretary.''.
  Page 69, after line 15, insert the following:

                   Subtitle E--Implementation Funding

SEC. 141. AMERICAN HEALTH CARE IMPLEMENTATION FUND.

  (a) In General.--There is hereby established an American 
Health Care Implementation Fund (referred to in this section as 
the ``Fund'') within the Department of Health and Human 
Services to carry out sections 121, 132, 202, and 214 
(including the amendments made by such sections).
  (b) Funding.--There is appropriated to the Fund, out of any 
funds in the Treasury not otherwise appropriated, 
$1,000,000,000 for Federal administrative expenses to carry out 
the sections described in subsection (a) (including the 
amendments made by such sections).
  Page 83, line 23, strike ``2025'' and insert ``2026''.
  Page 84, line 19, strike ``2017'' and insert ``2016''.
  Page 84, line 23, strike ``2017'' and insert ``2016''.
  Page 85, line 11, strike ``2017'' and insert ``2016''.
  Page 85, line 18, strike ``2017'' and insert ``2016''.
  Page 85, line 25, strike ``2017'' and insert ``2016''.
  Page 86, line 12, strike ``2017'' and insert ``2016''.
  Page 86, line 18, strike ``7.5'' and insert ``5.8''.
  Page 86, strike line 19 and all that follows through page 87, 
line 6, and insert the following:
  (b) Effective Date.--The amendment made by this section shall 
apply to taxable years beginning after December 31, 2016.
  Page 88, line 4, strike ``2017'' and insert ``2016''.
  Page 88, after line 4, insert the following:
  (d) Transition Rule.--An employer shall not be treated as 
failing to comply with the requirements of section 3102 of the 
Internal Revenue Code of 1986 with respect to any period during 
2017 if such employer would have complied with such 
requirements with respect to such period if section 3101 of 
such Code were applied without regard to the amendment made by 
subsection (a).
  Page 123, strike lines 3 through 17, and insert the 
following:

SEC. 221. REPEAL OF TAX ON PRESCRIPTION MEDICATIONS.

  Subsection (j) of section 9008 of the Patient Protection and 
Affordable Care Act is amended to read as follows:
  ``(j) Repeal.--This section shall apply to calendar years 
beginning after December 31, 2010, and ending before January 1, 
2017.''.

SEC. 222. REPEAL OF HEALTH INSURANCE TAX.

  Subsection (j) of section 9010 of the Patient Protection and 
Affordable Care Act is amended to read as follows:
  ``(j) Repeal.--This section shall apply to calendar years 
beginning after December 31, 2013, and ending before January 1, 
2017.''.
  Page 123, beginning on line 23, strike ``December 31, 2017'' 
and insert ``June 30, 2017''.
  Page 124, line 9, strike ``2017'' and insert ``2016''.
  Page 124, line 17, strike ``2017'' and insert ``2016''.
                              ----------                              

            PART D--TEXT OF AMENDMENT CONSIDERED AS ADOPTED

  Page 1, second unnumbered line, strike ``line 16'' and insert 
``line 11''.
  Page 1, line 2, insert ``(a) In General.--'' before ``Title 
XIX''.
  Page 16, line 21, insert ``of the total amount expended under 
the State plan under this subsection during such quarter'' 
after ``2105(b)''.
  Add at the end the following:
  ``Page 11, line 12, strike `(c)' and insert `(b)'.''
                              ----------                              

            PART E--TEXT OF AMENDMENT CONSIDERED AS ADOPTED

  Page 19, strike ``Page 88, line 4, strike `2017' and insert 
`2016'.'' and insert ``Page 88, line 4, strike `2017' and 
insert `2022'.''.
  Page 20, strike the first unnumbered line and lines 1 through 
7.
  Add at the end the following:
  ``Page 49, line 16, strike `A State' and insert `(a) In 
General.--Subject to subsection (b), a State'''''.
  ``Page 50, line 11, insert before the period the following: 
`and to individuals who have high costs of health insurance 
coverage due to the low density population of the State in 
which they reside'.''
  ``Page 50, strike lines 16 through 22 and insert the 
following:''
          ```(5) Promoting access to preventive services; 
        dental care services (whether preventive or medically 
        necessary); vision care services (whether preventive or 
        medically necessary); or any combination of such 
        services.
          ```(6) Maternity coverage and newborn care.
          ```(7) Prevention, treatment, or recovery support 
        services for individuals with mental or substance use 
        disorders, focused on either or both of the following:
                  ```(A) Direct inpatient or outpatient 
                clinical care for treatment of addiction and 
                mental illness.
                  ```(B) Early identification and intervention 
                for children and young adults with serious 
                mental illness.'.
  ``Page 50, line 23, strike `(6)' and insert `(8)'.''
  ``Page 51, line 3, strike `(7)' and insert `(9)'.''
  ``Page 51, after line 6, insert the following:''
  ```(b) Required Use of Increase in Allotment.--A State shall 
use the additional allocation provided to the State from the 
funds appropriated under the second sentence of section 2204(b) 
for each year only for the purposes described in paragraphs (6) 
and (7) of subsection (a).'.
  ``Page 55, after and below line 8, insert the following:''
``The amount otherwise appropriated under the previous sentence 
for 2020 shall be increased by $15,000,000,000, to be used and 
available under subsection (d) only for the purposes described 
in paragraphs (6) and (7) of section 2202(a).''.
  ``Page 69, after line 15, insert the following:''

``SEC. 136. ESSENTIAL HEALTH BENEFITS DEFINED BY THE STATES.

  ``Section 1302 of the Patient Protection and Affordable Care 
Act (42 U.S.C. 18022) is amended--
          ``(1) in subsection (a)(1), by striking `by the 
        Secretary'; and
          ``(2) in subsection (b)--
                  ``(A) in paragraph (1), by striking 
                `paragraph (2)' and inserting `paragraphs (2) 
                and (6)'; and
                  ``(B) by adding at the end the following new 
                paragraph:
          ```(6) Essential health benefits for plan and taxable 
        years beginning on or after January 1, 2018.--For plan 
        years and taxable years beginning on or after January 
        1, 2018, each State shall define the essential health 
        benefits with respect to health plans offered in such 
        State, for the purposes of section 36B of the Internal 
        Revenue Code of 1986.'.''.

                                  [all]
```