II 

115TH CONGRESS 

1ST SESSION S. 1354 

To establish an Individual Market Reinsurance fund to provide funding for 

State individual market stabilization reinsurance programs. 

IN THE SENATE OF THE UNITED STATES 

JUNE 14, 2017 

Mr. CARPER (for himself, Mr. KAINE, Mrs. SHAHEEN, Mr. NELSON, Ms. HASSAN, and Mr. CARDIN) introduced the following bill; which was read twice 

and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To establish an Individual Market Reinsurance fund to provide funding for State individual market stabilization 

reinsurance programs. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Individual Health In5 surance Marketplace Improvement Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress makes the following findings: 

8 (1) Before the passage of the Patient Protec9 tion and Affordable Care Act (Public Law 114–148) 


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1 in 2010, Americans with pre-existing conditions 

2 faced unfair barriers to accessing health insurance 

3 coverage and health care costs had risen rapidly for 

4 decades. 

5 (2) Since 2010, the rate of uninsured Ameri6 cans has declined to a historic low, with more than 

7 20,000,000 Americans gaining access to health in8 surance coverage. 

9 (3) Since 2010, America has experienced the 

10 slowest growth in the price of health care in over 

11 five decades. 

12 (4) Thanks to the Patient Protection and Af13 fordable Care Act (Public Law 114–148), Americans 

14 can no longer be denied insurance or charged more 

15 on the basis of their health status, more Americans 

16 than ever have insurance, and the health care they 

17 receive is continually improving. 

18 (5) Starting in 2016, independent, non-partisan 

19 organizations, including the Congressional Budget 

20 Office, have determined that the individual health 

21 insurance markets have stabilized and improved. 

22 (6) The cost-sharing reduction payments in the 

23 Patient Protection and Affordable Care Act provide 

24 stability in the individual health insurance market, 

25 lower insurance premiums by nearly 20 percent, and 


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1 encourage competition among health insurers. The 

2 payments reduce costs for approximately 6,000,000 

3 people with incomes below 250 percent of the pov4 erty line by an average of about $1,100 per person 

5 and should be increased to help more Americans. 

6 (7) Risk mitigation programs, such as the rein7 surance program for the Medicare Part D prescrip8 tion drug benefit program, have provided additional 

9 stability to the health insurance markets, restrained 

10 premium growth, and lowered taxpayer costs by 

11 helping health insurers predict and bear risk associ12 ated with managing health care costs for a popu13 lation. 

14 (8) From 2014 to 2016, the temporary reinsur15 ance program established under the Affordable Care 

16 Act helped to stabilize the new insurance market17 places and reduced insurance premiums in the indi18 vidual health insurance market by as much as 10 

19 percent. 

20 (9) Throughout his Presidential campaign, the 

21 President of the United States repeatedly promised 

22 the American people that his health care plan will 

23 result in reduced rates of uninsured, lower costs, 

24 and higher quality care, stating on January 14, 

25 2017, that ‘‘We’re going to have insurance for everyVerDate Sep 11 2014 01:11 Jun 20, 2017 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1354.IS S1354

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1 body. There was a philosophy in some circles that if 

2 you can’t pay for it, you don’t get it. That’s not 

3 going to happen with us’’; and on January 25, 2017, 

4 that ‘‘I can assure you, we are going to have a bet5 ter plan, much better health care, much better serv6 ice treatment, a plan where you can have access to 

7 the doctor that you want and the plan that you 

8 want. We’re gonna have a much better health care 

9 plan at much less money’’. 

10 (10) The goal of any health care legislation 

11 should be to build on the Affordable Care Act to 

12 continue expanding coverage and make health care 

13 more affordable for Americans. Improving afford14 ability and expanding coverage will also broaden the 

15 individual market risk pool, contributing to lower 

16 premiums and strengthening market stability. 

17 SEC. 3. INDIVIDUAL MARKET REINSURANCE FUND. 

18 (a) ESTABLISHMENT OF FUND.— 

19 (1) IN GENERAL.—There is established the ‘‘In20 dividual Market Reinsurance Fund’’ to be adminis21 tered by the Secretary to provide funding for an in22 dividual market stabilization reinsurance program in 

23 each State that complies with the requirements of 

24 this section. 


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1 (2) FUNDING.—There is appropriated to the 

2 Fund, out of any moneys in the Treasury not other3 wise appropriated, such sums as are necessary to 

4 carry out this section (other than subsection (c)) for 

5 each calendar year beginning with 2018. Amounts 

6 appropriated to the Fund shall remain available 

7 without fiscal or calendar year limitation to carry 

8 out this section. 

9 (b) INDIVIDUAL MARKET REINSURANCE PRO10 GRAM.— 

11 (1) USE OF FUNDS.—The Secretary shall use 

12 amounts in the Fund to establish a reinsurance pro13 gram under which the Secretary shall make reinsur14 ance payments to health insurance issuers with re15 spect to high-cost individuals enrolled in qualified 

16 health plans offered by such issuers that are not 

17 grandfathered health plans or transitional health 

18 plans for any plan year beginning with the 2018 

19 plan year. This subsection constitutes budget au20 thority in advance of appropriations Acts and rep21 resents the obligation of the Secretary to provide 

22 payments from the Fund in accordance with this 

23 subsection. 

24 (2) AMOUNT OF PAYMENT.—The payment 

25 made to a health insurance issuer under subsection 


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1 (a) with respect to each high-cost individual enrolled 

2 in a qualified health plan issued by the issuer that 

3 is not a grandfathered health plan or a transitional 

4 health plan shall equal 80 percent of the lesser of— 

5 (A) the amount (if any) by which the indi6 vidual’s claims incurred during the plan year 

7 exceeds— 

8 (i) in the case of the 2018, 2019, or 

9 2020 plan year, $50,000; and 

10 (ii) in the case of any other plan year, 

11 $100,000; or 

12 (B) for plan years described in— 

13 (i) subparagraph (A)(i), $450,000; 

14 and 

15 (ii) subparagraph (A)(ii), $400,000. 

16 (3) INDEXING.—In the case of plan years be17 ginning after 2018, the dollar amounts that appear 

18 in subparagraphs (A) and (B) of paragraph (2) shall 

19 each be increased by an amount equal to— 

20 (A) such amount; multiplied by 

21 (B) the premium adjustment percentage 

22 specified under section 1302(c)(4) of the Af23 fordable Care Act, but determined by sub24 stituting ‘‘2018’’ for ‘‘2013’’. 

25 (4) PAYMENT METHODS.— 


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1 (A) IN GENERAL.—Payments under this 

2 subsection shall be based on such a method as 

3 the Secretary determines. The Secretary may 

4 establish a payment method by which interim 

5 payments of amounts under this subsection are 

6 made during a plan year based on the Sec7 retary’s best estimate of amounts that will be 

8 payable after obtaining all of the information. 

9 (B) REQUIREMENT FOR PROVISION OF IN10 FORMATION.— 

11 (i) REQUIREMENT.—Payments under 

12 this subsection to a health insurance issuer 

13 are conditioned upon the furnishing to the 

14 Secretary, in a form and manner specified 

15 by the Secretary, of such information as 

16 may be required to carry out this sub17 section. 

18 (ii) RESTRICTION ON USE OF INFOR19 MATION.—Information disclosed or ob20 tained pursuant to clause (i) is subject to 

21 the HIPAA privacy and security law, as 

22 defined in section 3009(a) of the Public 

23 Health Service Act (42 U.S.C. 300jj– 

24 19(a)). 


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1 (5) SECRETARY FLEXIBILITY FOR BUDGET

2 NEUTRAL REVISIONS TO REINSURANCE PAYMENT

3 SPECIFICATIONS.—If the Secretary determines ap4 propriate, the Secretary may substitute higher dollar 

5 amounts for the dollar amounts specified under sub6 paragraphs (A) and (B) of paragraph (2) (and ad7 justed under paragraph (3), if applicable) if the Sec8 retary certifies that such substitutions, considered 

9 together, neither increase nor decease the total pro10 jected payments under this subsection. 

11 (c) OUTREACH AND ENROLLMENT.— 

12 (1) IN GENERAL.—During the period that be13 gins on January 1, 2018, and ends on December 31, 

14 2020, the Secretary shall award grants to eligible 

15 entities for the following purposes: 

16 (A) OUTREACH AND ENROLLMENT.—To 

17 carry out outreach, public education activities, 

18 and enrollment activities to raise awareness of 

19 the availability of, and encourage enrollment in, 

20 qualified health plans. 

21 (B) ASSISTING INDIVIDUALS TRANSITION

22 TO QUALIFIED HEALTH PLANS.—To provide as23 sistance to individuals who are enrolled in 

24 health insurance coverage that is not a qualified 

25 health plan enroll in a qualified health plan. 


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1 (C) ASSISTING ENROLLMENT IN PUBLIC

2 HEALTH PROGRAMS.—To facilitate the enroll3 ment of eligible individuals in the Medicare pro4 gram or in a State Medicaid program, as appro5 priate. 

6 (D) RAISING AWARENESS OF PREMIUM AS7 SISTANCE AND COST-SHARING REDUCTIONS.— 

8 To distribute fair and impartial information 

9 concerning enrollment in qualified health plans 

10 and the availability of premium assistance tax 

11 credits under section 36B of the Internal Rev12 enue Code of 1986 and cost-sharing reductions 

13 under section 1402 of the Patient Protection 

14 and Affordable Care Act, and to assist eligible 

15 individuals in applying for such tax credits and 

16 cost-sharing reductions. 

17 (2) ELIGIBLE ENTITIES DEFINED.— 

18 (A) IN GENERAL.—In this subsection, the 

19 term ‘‘eligible entity’’ means— 

20 (i) a State; or 

21 (ii) a nonprofit community-based or22 ganization. 

23 (B) ENROLLMENT AGENTS.—Such term 

24 includes a licensed independent insurance agent 

25 or broker that has an arrangement with a State 


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1 or nonprofit community-based organization to 

2 enroll eligible individuals in qualified health 

3 plans. 

4 (C) EXCLUSIONS.—Such term does not in5 clude an entity that— 

6 (i) is a health insurance issuer; or 

7 (ii) receives any consideration, either 

8 directly or indirectly, from any health in9 surance issuer in connection with the en10 rollment of any qualified individuals or em11 ployees of a qualified employer in a quali12 fied health plan. 

13 (3) PRIORITY.—In awarding grants under this 

14 subsection, the Secretary shall give priority to 

15 awarding grants to States or eligible entities in 

16 States that have geographic rating areas at risk of 

17 having no qualified health plans in the individual 

18 market. 

19 (4) FUNDING.—Out of any moneys in the 

20 Treasury not otherwise appropriated, $500,000,000 

21 is appropriated to the Secretary for each of calendar 

22 years 2018 through 2020, to carry out this sub23 section. 

24 (d) REPORTS TO CONGRESS.— 


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1 (1) ANNUAL REPORT.—The Secretary shall 

2 submit a report to Congress, not later than January 

3 21, 2019, and each year thereafter, that contains 

4 the following information for the most recently 

5 ended year: 

6 (A) The number and types of plans in each 

7 State’s individual market, specifying the num8 ber that are qualified health plans, grand9 fathered health plans, or health insurance cov10 erage that is not a qualified health plan. 

11 (B) The impact of the reinsurance pay12 ments provided under this section on the avail13 ability of coverage, cost of coverage, and cov14 erage options in each State. 

15 (C) The amount of premiums paid by indi16 viduals in each State by age, family size, geo17 graphic area in the State’s individual market, 

18 and category of health plan (as described in 

19 subparagraph (A)). 

20 (D) The process used to award funds for 

21 outreach and enrollment activities awarded to 

22 eligible entities under subsection (c), the 

23 amount of such funds awarded, and the activi24 ties carried out with such funds. 


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1 (E) Such other information as the Sec2 retary deems relevant. 

3 (2) EVALUATION REPORT.—Not later than Jan4 uary 31, 2022, the Secretary shall submit to Con5 gress a report that— 

6 (A) analyzes the impact of the funds pro7 vided under this section on premiums and en8 rollment in the individual market in all States; 

9 and 

10 (B) contains a State-by-State comparison 

11 of the design of the programs carried out by 

12 States with funds provided under this section. 

13 (e) DEFINITIONS.—In this section: 

14 (1) SECRETARY.—The term ‘‘Secretary’’ means 

15 the Secretary of the Department of Health and 

16 Human Services. 

17 (2) FUND.—The term ‘‘Fund’’ means the Indi18 vidual Market Reinsurance Fund established under 

19 subsection (a). 

20 (3) GRANDFATHERED HEALTH PLAN.—The 

21 term ‘‘grandfathered health plan’’ has the meaning 

22 given that term in section 1251(e) of the Patient 

23 Protection and Affordable Care Act. 

24 (4) HIGH-COST INDIVIDUAL.—The term ‘‘high25 cost individual’’ means an individual enrolled in a 


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1 qualified health plan (other than a grandfathered 

2 health plan or a transitional health plan) who incurs 

3 claims in excess of $50,000 during a plan year. 

4 (5) STATE.—The term ‘‘State’’ means each of 

5 the 50 States and the District of Columbia. 

6 (6) TRANSITIONAL HEALTH PLAN.—The term 

7 ‘‘transitional health plan’’ means a plan continued 

8 under the letter issued by the Centers for Medicare 

9 & Medicaid Services on November 14, 2013, to the 

10 State Insurance Commissioners outlining a transi11 tional policy for coverage in the individual and small 

12 group markets to which section 1251 of the Patient 

13 Protection and Affordable Care Act does not apply, 

14 and under the extension of the transitional policy for 

15 such coverage set forth in the Insurance Standards 

16 Bulletin Series guidance issued by the Centers for 

17 Medicare & Medicaid Services on March 5, 2014, 

18 February 29, 2016, and February 13, 2017. 

Æ 


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