I 

115TH CONGRESS 

1ST SESSION H. R. 4695 

To amend the Patient Protection and Affordable Care Act to provide for 

stabilization in the individual health insurance market, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 20, 2017 

Mr. SCHRADER (for himself, Mr. REED, Mr. GOTTHEIMER, Mr. LANCE, Mr. 

BERA, Mr. TROTT, Mrs. MURPHY of Florida, Mr. THOMPSON of Pennsylvania, Mr. O’HALLERAN, Mr. COSTELLO of Pennsylvania, Mr. SUOZZI, 

Mr. DENT, Mr. PANETTA, Mr. CURBELO of Florida, Ms. SINEMA, Mr. 

FITZPATRICK, Mr. SOTO, Mr. KATKO, Mr. LIPINSKI, Mr. FASO, Ms. 

ESTY of Connecticut, Mr. COSTA, Mr. NOLAN, Mr. SCHNEIDER, Mr. 

PETERS, and Mr. WELCH) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to 

the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Patient Protection and Affordable Care Act 

to provide for stabilization in the individual health insurance market, and for other purposes. 

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 ‘‘Bipartisan Market Sta5 bilization and Innovation Act of 2017’’. 


SSpencer on DSKBBXCHB2PROD with BILLS
2 

•HR 4695 IH

1 SEC. 2. FUNDING FOR PPACA EXCHANGE PLANS COST2 SHARING REDUCTIONS. 

3 Section 1402 of the Patient Protection and Afford4 able Care Act (42 U.S.C. 18071) is amended by adding 

5 at the end the following new subsection: 

6 ‘‘(g) FUNDING.— 

7 ‘‘(1) IN GENERAL.—Out of any funds in the 

8 Treasury not otherwise appropriated, there is appro9 priated such sums as may be necessary for payments 

10 under this section, including through advance pay11 ment under section 1412(c)(3). Funds appropriated 

12 under this paragraph shall remain available for obli13 gation until expended. 

14 ‘‘(2) REPORTS.—The Secretary shall for 2017 

15 and each subsequent year submit to the Committee 

16 on Energy and Commerce, the Committee on Ways 

17 and Means, and the Committee on Appropriations of 

18 the House of Representatives and the Committee on 

19 Finance, the Committee on Health, Education, 

20 Labor, and Pensions, and the Committee on Appro21 priations of the Senate an annual report on— 

22 ‘‘(A) the amount of payments made under 

23 this section with respect to such year; 

24 ‘‘(B) the effects of such payments on the 

25 costs of health insurance in the individual mar26 ket; and 


SSpencer on DSKBBXCHB2PROD with BILLS
3 

•HR 4695 IH

1 ‘‘(C) the projected costs of health insur2 ance in the individual market over the subse3 quent year.’’. 

4 SEC. 3. PATIENT AND STATE STABILITY FUND. 

5 The Social Security Act (42 U.S.C. 301 et seq.) is 

6 amended by adding at the end the following new title: 

7 ‘‘TITLE XXII—PATIENT AND 

8 STATE STABILITY FUND 

9 ‘‘SEC. 2201. ESTABLISHMENT OF PROGRAM. 

10 ‘‘There is hereby established the ‘Patient and State 

11 Stability Fund’ to be administered by the Secretary of 

12 Health and Human Services, acting through the Adminis13 trator of the Centers for Medicare & Medicaid Services 

14 (in this section referred to as the ‘Administrator’), to pro15 vide funding, in accordance with this title, to the 50 States 

16 and the District of Columbia (each referred to in this sec17 tion as a ‘State’) during the period, subject to section 

18 2204(c), beginning on January 1, 2019, and ending on 

19 December 31, 2028, for the purposes described in section 

20 2202. 

21 ‘‘SEC. 2202. USE OF FUNDS. 

22 ‘‘A State may use the funds allocated to the State 

23 under this title for any of the following purposes: 

24 ‘‘(1) Helping, through the provision of financial 

25 assistance, high-risk individuals who do not have acVerDate Sep 11 2014 03:23 Dec 21, 2017 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4695.IH H4695

SSpencer on DSKBBXCHB2PROD with BILLS
4 

•HR 4695 IH

1 cess to health insurance coverage offered through an 

2 employer enroll in health insurance coverage. 

3 ‘‘(2) Providing incentives to appropriate entities 

4 to enter into arrangements with the State to help 

5 stabilize premiums for health insurance coverage in 

6 the individual market, as such markets are defined 

7 by the State. 

8 ‘‘(3) Reducing the cost for providing health in9 surance coverage in the individual market and small 

10 group market to individuals who have, or are pro11 jected to have, a high rate of utilization of health 

12 services (as measured by cost) and to individuals 

13 who have high costs of health insurance coverage 

14 due to the low density population of the State in 

15 which they reside. 

16 ‘‘(4) Promoting participation in the individual 

17 market and small group market in the State and in18 creasing health insurance options available through 

19 such market. 

20 ‘‘(5) Providing assistance to reduce out-of-pock21 et costs, such as copayments, coinsurance, pre22 miums, and deductibles, of individuals enrolled in 

23 health insurance coverage in the State. 


SSpencer on DSKBBXCHB2PROD with BILLS
5 

•HR 4695 IH

1 ‘‘SEC. 2203. STATE ELIGIBILITY AND APPROVAL; DEFAULT 

2 SAFEGUARD. 

3 ‘‘(a) ENCOURAGING STATE OPTIONS FOR ALLOCA4 TIONS.— 

5 ‘‘(1) IN GENERAL.—To be eligible for an alloca6 tion of funds under this title for a year during the 

7 period described in section 2201 for use for one or 

8 more purposes described in section 2202, a State 

9 shall submit to the Administrator an application at 

10 such time (not later than March 31 of the previous 

11 year) and in such form and manner as specified by 

12 the Administrator and containing— 

13 ‘‘(A) a description of how the funds will be 

14 used for such purposes; 

15 ‘‘(B) a certification that the State will 

16 make, from non-Federal funds, expenditures for 

17 such purposes in an amount that is not less 

18 than the State percentage required for the year 

19 under section 2204(e)(1); and 

20 ‘‘(C) such other information as the Admin21 istrator may require. 

22 ‘‘(2) ADMINISTRATOR DETERMINATION

23 TIMELINE.— 

24 ‘‘(A) IN GENERAL.—The Administrator 

25 shall make a determination as to the approval 


SSpencer on DSKBBXCHB2PROD with BILLS
6 

•HR 4695 IH

1 or disapproval of an application not later than 

2 90 days after the receipt of such application. 

3 ‘‘(B) EXPEDITED DETERMINATION.—The 

4 Administrator shall make a determination as to 

5 the approval or disapproval of an application 

6 not later than 45 days after the receipt of such 

7 application if such application— 

8 ‘‘(i) is submitted in response to an ur9 gent situation, with respect to areas in the 

10 State that the Administrator determines 

11 are at risk for excessive premium increases 

12 or having no health plans offered in the 

13 applicable health insurance market for the 

14 current or following plan year; or 

15 ‘‘(ii) resembles an application that is 

16 the same or substantially similar to an ap17 plication that the Administrator has al18 ready approved for another State. 

19 ‘‘(3) PERIOD OF APPROVAL.—If an application 

20 of a State is approved for a year, with respect to a 

21 purpose described in section 2202, such application 

22 shall also be treated as approved, with respect to 

23 such purpose, for each of the subsequent 4 years, 

24 but in no case shall an application be approved for 

25 a year after 2028. 


SSpencer on DSKBBXCHB2PROD with BILLS
7 

•HR 4695 IH

1 ‘‘(4) TREATMENT AS A STATE HEALTH CARE

2 PROGRAM.—Any program receiving funds from an 

3 allocation for a State under this title, including pur4 suant to subsection (b), shall be considered to be a 

5 ‘State health care program’ for purposes of sections 

6 1128, 1128A, and 1128B. 

7 ‘‘(b) DEFAULT FEDERAL SAFEGUARD.— 

8 ‘‘(1) IN GENERAL.—In the case of a State that 

9 does not have in effect an approved application 

10 under this section for 2019 or a subsequent year be11 ginning during the period described in section 2201, 

12 subject to section 2204(e), the Administrator, in 

13 consultation with the State insurance commissioner, 

14 shall use the allocation that would otherwise be pro15 vided to the State under this title for such year, in 

16 accordance with paragraph (2), for such State. 

17 ‘‘(2) REQUIRED USE FOR MARKET STABILIZA18 TION PAYMENTS TO ISSUERS.—Subject to section 

19 2204(a), an allocation for a State made pursuant to 

20 paragraph (1) for a year shall be used to carry out 

21 the purpose described in section 2202(2) in such 

22 State by providing payments to appropriate entities 

23 described in such section with respect to claims that 

24 exceed $50,000 (or, with respect to allocations made 

25 under this title for 2020 or a subsequent year durVerDate Sep 11 2014 03:23 Dec 21, 2017 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4695.IH H4695

SSpencer on DSKBBXCHB2PROD with BILLS
8 

•HR 4695 IH

1 ing the period specified in section 2201, such dollar 

2 amount specified by the Administrator), but do not 

3 exceed $350,000 (or, with respect to allocations 

4 made under this title for 2020 or a subsequent year 

5 during such period, such dollar amount specified by 

6 the Administrator), in an amount equal to 75 per7 cent (or, with respect to allocations made under this 

8 title for 2020 or a subsequent year during such pe9 riod, such percentage specified by the Administrator) 

10 of the amount of such claims. 

11 ‘‘SEC. 2204. ALLOCATIONS. 

12 ‘‘(a) APPROPRIATION.—For the purpose of providing 

13 allocations for States (including pursuant to section 

14 2203(b)) under this title there is appropriated, out of any 

15 money in the Treasury not otherwise appropriated, 

16 $11,500,000,000 for each of 2019 through 2028. 

17 ‘‘(b) ALLOCATIONS.— 

18 ‘‘(1) PAYMENT.—From amounts appropriated 

19 under subsection (a) for a year, the Administrator 

20 shall, with respect to a State and not later than 

21 January 1 of such year, allocate, subject to sub22 section (e), for such State (including pursuant to 

23 section 2203(b)) the amount determined for such 

24 State and year under paragraph (2). 


SSpencer on DSKBBXCHB2PROD with BILLS
9 

•HR 4695 IH

1 ‘‘(2) ALLOCATION AMOUNT DETERMINA2 TIONS.— 

3 ‘‘(A) FOR 2019 THROUGH 2021.— 

4 ‘‘(i) IN GENERAL.—For purposes of 

5 paragraph (1), the amount determined 

6 under this paragraph for each of 2019 

7 through 2021 for a State is an amount 

8 equal to the sum of— 

9 ‘‘(I) the relative incurred claims 

10 amount described in clause (ii) for 

11 such State and year; and 

12 ‘‘(II) the relative uninsured and 

13 issuer participation amount described 

14 in clause (iv) for such State and year. 

15 ‘‘(ii) RELATIVE INCURRED CLAIMS

16 AMOUNT.—For purposes of clause (i), the 

17 relative incurred claims amount described 

18 in this clause for a State for 2019, 2020, 

19 and 2021 is the product of— 

20 ‘‘(I) 90 percent of the amount 

21 appropriated under subsection (a) for 

22 the year; and 

23 ‘‘(II) the relative State incurred 

24 claims proportion described in clause 

25 (iii) for such State and year. 


SSpencer on DSKBBXCHB2PROD with BILLS
10 

•HR 4695 IH

1 ‘‘(iii) RELATIVE STATE INCURRED

2 CLAIMS PROPORTION.—The relative State 

3 incurred claims proportion described in 

4 this clause for a State and year is the 

5 amount equal to the ratio of— 

6 ‘‘(I) the adjusted incurred claims 

7 by the State, as reported through the 

8 medical loss ratio annual reporting 

9 under section 2718 of the Public 

10 Health Service Act for the third pre11 vious year; to 

12 ‘‘(II) the sum of such adjusted 

13 incurred claims for all States, as so 

14 reported, for such third previous year. 

15 ‘‘(iv) RELATIVE UNINSURED AND

16 ISSUER PARTICIPATION AMOUNT.—For 

17 purposes of clause (i), the relative unin18 sured and issuer participation amount de19 scribed in this clause for a State for 2019, 

20 2020, and 2021 is the product of— 

21 ‘‘(I) 10 percent of the amount 

22 appropriated under subsection (a) for 

23 the year; and 

24 ‘‘(II) the relative State uninsured 

25 and issuer participation proportion deVerDate Sep 11 2014 03:23 Dec 21, 2017 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4695.IH H4695

SSpencer on DSKBBXCHB2PROD with BILLS
11 

•HR 4695 IH

1 scribed in clause (v) for such State 

2 and year. 

3 ‘‘(v) RELATIVE STATE UNINSURED

4 AND ISSUER PARTICIPATION PROPOR5 TION.—The relative State uninsured and 

6 issuer participation proportion described in 

7 this clause for a State and year is— 

8 ‘‘(I) in the case of a State not 

9 described in clause (vi) for such year, 

10 0; and 

11 ‘‘(II) in the case of a State de12 scribed in clause (vi) for such year, 

13 the amount equal to the ratio of— 

14 ‘‘(aa) the number of individ15 uals residing in such State who 

16 for the third preceding year were 

17 not enrolled in a health plan or 

18 otherwise did not have health in19 surance coverage (including 

20 through a Federal or State 

21 health program) and whose in22 come is below 100 percent of the 

23 poverty line applicable to a family 

24 of the size involved; to 


SSpencer on DSKBBXCHB2PROD with BILLS
12 

•HR 4695 IH

1 ‘‘(bb) the sum of the num2 ber of such individuals for all 

3 States described in clause (vi) for 

4 the third preceding year. 

5 ‘‘(vi) STATES DESCRIBED.—For pur6 poses of clause (v), a State is described in 

7 this clause, with respect to 2019, 2020, 

8 and 2021, if the State satisfies either of 

9 the following criterion: 

10 ‘‘(I) The ratio described in sub11 clause (II) of clause (v) that would be 

12 determined for such State by sub13 stituting ‘2015’ for each reference in 

14 such subclause to ‘the third preceding 

15 year’ and by substituting ‘all such 

16 States’ for the reference in item (bb) 

17 of such subclause to ‘all States de18 scribed in clause (vi)’ is greater than 

19 the ratio described in such subclause 

20 that would be determined for such 

21 State by substituting ‘2013’ for each 

22 reference in such subclause to ‘the 

23 third preceding year’ and by sub24 stituting ‘all such States’ for the refVerDate Sep 11 2014 03:23 Dec 21, 2017 Jkt 079200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4695.IH H4695

SSpencer on DSKBBXCHB2PROD with BILLS
13 

•HR 4695 IH

1 erence in item (bb) of such subclause 

2 to ‘all States described in clause (vi)’. 

3 ‘‘(II) The State has fewer than 

4 three health insurance issuers offering 

5 qualified health plans through the Ex6 change for 2017. 

7 ‘‘(B) FOR 2022 THROUGH 2028.—For pur8 poses of paragraph (1), the amount determined 

9 under this paragraph for a year (beginning with 

10 2022) during the period described in section 

11 2201 for a State is an amount determined in 

12 accordance with an allocation methodology spec13 ified by the Administrator which— 

14 ‘‘(i) takes into consideration the ad15 justed incurred claims of such State, the 

16 number of residents of such State who for 

17 the previous year were not enrolled in a 

18 health plan or otherwise did not have 

19 health insurance coverage (including 

20 through a Federal or State health pro21 gram) and whose income is below 100 per22 cent of the poverty line applicable to a 

23 family of the size involved, and the number 

24 of health insurance issuers participating in 


SSpencer on DSKBBXCHB2PROD with BILLS
14 

•HR 4695 IH

1 the insurance market in such State for 

2 such year; 

3 ‘‘(ii) is established after consultation 

4 with health care consumers, health insur5 ance issuers, State insurance commis6 sioners, and other stakeholders and after 

7 taking into consideration additional cost 

8 and risk factors that may inhibit health 

9 care consumer and health insurance issuer 

10 participation; and 

11 ‘‘(iii) reflects the goals of improving 

12 the health insurance risk pool, promoting a 

13 more competitive health insurance market, 

14 and increasing choice for health care con15 sumers. 

16 ‘‘(c) ANNUAL DISTRIBUTION OF PREVIOUS YEAR’S

17 REMAINING FUNDS.— In carrying out subsection (b), the 

18 Administrator shall, with respect to a year (beginning with 

19 2022 and ending with 2028), not later than March 31 of 

20 such year— 

21 ‘‘(1) determine the amount of funds, if any, 

22 from the amounts appropriated under subsection (a) 

23 for the previous year but not allocated for such pre24 vious year; and 


SSpencer on DSKBBXCHB2PROD with BILLS
15 

•HR 4695 IH

1 ‘‘(2) if the Administrator determines that any 

2 funds were not so allocated for such previous year, 

3 allocate such remaining funds, in accordance with 

4 the allocation methodology specified pursuant to 

5 subsection (b)(2)(B), with, respect to a year before 

6 2028, any remaining funds being made available for 

7 allocations to States for the subsequent year. 

8 ‘‘(d) AVAILABILITY.—Amounts appropriated under 

9 subsection (a) for a year and allocated to States in accord10 ance with this section shall remain available for expendi11 ture through December 31, 2028. 

12 ‘‘(e) CONDITIONS FOR AND LIMITATIONS ON RE13 CEIPT OF FUNDS.—The Secretary may not make an allo14 cation under this title for a State, with respect to a pur15 pose described in section 2202 in the case of an allocation 

16 that would be made to a State pursuant to section 

17 2203(a), if the State does not agree that the State will 

18 make available non-Federal contributions towards such 

19 purpose in an amount equal to— 

20 ‘‘(1) for 2020, 5 percent of the amount allo21 cated under this subsection to such State for such 

22 year and purpose; and 

23 ‘‘(2) for 2021 and each subsequent year 

24 through 2028, 10 percent of the amount allocated 


SSpencer on DSKBBXCHB2PROD with BILLS
16 

•HR 4695 IH

1 under this subsection to such State for such year 

2 and purpose.’’. 

3 SEC. 4. MODIFICATIONS TO WAIVER FOR STATE INNOVA4 TION. 

5 Section 1332 of the Patient Protection and Afford6 able Care Act (42 U.S.C. 18052) is amended— 

7 (1) in subsection (a)(3), in the first sentence, 

8 by striking ‘‘individuals and small employers’’ and 

9 all that follows through ‘‘the State had not received 

10 such waiver’’ and inserting ‘‘the Secretary deter11 mines that there would be a reduction in the Federal 

12 deficit during the waiver period, the Secretary shall 

13 provide for a means by which the amount of such re14 duction’’; and 

15 (2) in subsection (d)— 

16 (A) in paragraph (1), by striking ‘‘180 

17 days’’ and inserting ‘‘subject to paragraph (3), 

18 90 days’’; and 

19 (B) by adding at the end the following new 

20 paragraph: 

21 ‘‘(3) EXPEDITED DETERMINATION.—With re22 spect to any application under subsection (a)(1) sub23 mitted on or after the date of enactment of this 

24 paragraph (or any such application submitted prior 

25 to such date of enactment and under review by the 


SSpencer on DSKBBXCHB2PROD with BILLS
17 

•HR 4695 IH

1 Secretary as of such date of enactment), the Sec2 retary shall make a determination on such applica3 tion, using the criteria for approval otherwise appli4 cable under this section, not later than 45 days after 

5 the receipt of such application, and shall allow the 

6 public notice and comment at the State and Federal 

7 levels described under subsection (a)(4) to occur 

8 concurrently if such State application— 

9 ‘‘(A) is submitted in response to an urgent 

10 situation, with respect to areas in the State 

11 that the Secretary determines are at risk for ex12 cessive premium increases or having no health 

13 plans offered in the applicable health insurance 

14 market for the current or following plan year; 

15 or 

16 ‘‘(B) is for a waiver that is the same or 

17 substantially similar to a waiver that the Sec18 retary already has approved for another 

19 State.’’. 

20 SEC. 5. EMPLOYER MANDATE ADJUSTMENT. 

21 (a) INCREASING THE SIZE OF APPLICABLE LARGE

22 EMPLOYERS.—Paragraph (2) of section 4980H(c) of the 

23 Internal Revenue Code of 1986 is amended by striking 

24 ‘‘50’’ and inserting ‘‘500’’ each place such term appears. 


SSpencer on DSKBBXCHB2PROD with BILLS
18 

•HR 4695 IH

1 (b) INCREASING THE HOURS REQUIRED TO QUALIFY

2 AS FULL-TIME EMPLOYEES.— 

3 (1) IN GENERAL.—Subparagraph (A) of section 

4 4980H(c)(4) of the Internal Revenue Code of 1986 

5 is amended by striking ‘‘30’’ and inserting ‘‘40’’. 

6 (2) FULL-TIME EQUIVALENTS.—Subparagraph 

7 (E) of section 4980H(c)(2) of the Internal Revenue 

8 Code of 1986 is amended by striking ‘‘120’’ and in9 serting ‘‘160’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to months beginning after Decem12 ber 31, 2017. 

13 SEC. 6. REPEAL OF MEDICAL DEVICE EXCISE TAX. 

14 Section 4191 is amended by adding at the end the 

15 following new subsection: 

16 ‘‘(d) APPLICABILITY.—The tax imposed under sub17 section (a) shall not apply to sales after December 31, 

18 2017.’’. 

19 SEC. 7. OFFERING HEALTH PLANS IN MORE THAN ONE 

20 STATE. 

21 Not later than 1 year after the date of enactment 

22 of this Act, the Secretary of Health and Human Services, 

23 in consultation with the National Association of Insurance 

24 Commissioners, shall issue regulations for the implemen25 tation of health care choice compacts established under 


SSpencer on DSKBBXCHB2PROD with BILLS
19 

•HR 4695 IH

1 section 1333 of the Patient Protection and Affordable 

2 Care Act (42 U.S.C. 18053) to allow for the offering of 

3 health plans in more than one State. 

4 SEC. 8. SENSE OF CONGRESS. 

5 It is the sense of Congress that the provisions of this 

6 Act should not increase the deficit, and any projected costs 

7 of such provisions should be offset with policies to negate 

8 any projected deficit increase. 

Æ 


SSpencer on DSKBBXCHB2PROD with BILLS