II 

115TH CONGRESS 

1ST SESSION S. 1970 

To establish a public health plan. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 17, 2017 

Mr. BENNET (for himself, Mr. KAINE, and Mrs. FEINSTEIN) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To establish a public health plan. 

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

3 SECTION 1. SHORT TITLE. 

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

5 of 2017’’. 

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

8 The Social Security Act is amended by adding at the 

9 end the following new title: 


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1 ‘‘TITLE XXII—MEDICARE 

2 EXCHANGE HEALTH PLAN 

3 ‘‘SEC. 2201. ESTABLISHMENT. 

4 ‘‘(a) ESTABLISHMENT OF PLAN.— 

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

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

10 ‘‘(2) TIMEFRAME.— 

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

13 ‘‘(i) IN GENERAL.—In accordance 

14 with clause (ii), the Secretary shall make 

15 the health plan available in the individual 

16 market, in certain rating areas, for plan 

17 year 2020 and each subsequent plan year, 

18 and increase the availability such that the 

19 plan is available in the individual market 

20 to all residents of all rating areas in the 

21 United States for plan year 2023 and each 

22 subsequent plan year. 

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

25 initially will make the health plan availVerDate Sep 11 2014 02:58 Oct 18, 2017 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1970.IS S1970

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1 able, the Secretary shall give priority to 

2 rating areas in which— 

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

6 Health Benefit Exchange (referred to 

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

8 ‘‘(II) there is a shortage of 

9 health providers or lack of competition 

10 that results in a high cost of health 

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

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

15 the small group market in all rating areas for 

16 plan year 2024. 

17 ‘‘(b) ESTABLISHMENT OF FUNDS.— 

18 ‘‘(1) PLAN RESERVE FUND.— 

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

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

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


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

3 Treasury not otherwise obligated, to the Plan 

4 Reserve Fund for fiscal year 2018. 

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

6 established in the Treasury of the United States a 

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

8 the Secretary of Health and Human Services, acting 

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

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

14 States. There are authorized to be appropriated to 

15 the Data and Technology Fund such sums as may 

16 be necessary for fiscal year 2018. 

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

18 such regulations as may be necessary to carry out this 

19 title. 

20 ‘‘SEC. 2202. AVAILABILITY OF PLAN. 

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

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

23 period for which enrollment is sought— 


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

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

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

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

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

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

13 ‘‘SEC. 2203. PLAN REQUIREMENTS. 

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

15 shall comply with all requirements of subtitle D of title 

16 I of the Patient Protection and Affordable Care Act (42 

17 U.S.C. 18021 et seq.) and title XXVII of the Public 

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

19 to qualified health plans, and such health plan shall be 

20 a qualified health plan, including for purposes of the Inter21 nal Revenue Code of 1986. 

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

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

24 level version of the plan, in accordance with section 

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


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

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

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

6 ‘‘SEC. 2204. ADMINISTRATIVE CONTRACTING. 

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

8 contracts for the purpose of performing administrative 

9 functions (including functions described in subsection 

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

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

14 public health insurance option as the Secretary has under 

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

16 with respect to title XVIII. 

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

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

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

21 alternative payment model under section 2209(h). 

22 ‘‘SEC. 2205. DATA COLLECTION. 

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


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

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

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

6 disparities, with respect to the health plan. 

7 ‘‘SEC. 2206. PREMIUMS; RISK POOLS; REINSURANCE. 

8 ‘‘(a) PREMIUM AMOUNTS.—The Secretary shall es9 tablish premiums for the health plan that cover the full 

10 actuarial cost of offering such plan, including the adminis11 trative costs of offering such plan. Such premiums shall 

12 vary geographically and between the small group market 

13 and the individual market in accordance with differences 

14 in the cost of providing such coverage. If, for any plan 

15 year, the amount collected in premiums exceeds the 

16 amount required for health care benefits and administra17 tive costs in that plan year, such excess amounts shall re18 main available to the Secretary to administer the health 

19 plan and finance beneficiary costs in subsequent years. 

20 ‘‘(b) RISK POOL.—All enrollees in the health plan 

21 within a State shall be members of a single risk pool, ex22 cept that the Secretary may establish separate risk pools 

23 for the individual market and small group market if the 

24 State has not exercised its authority under section 


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1 1312(c)(3) of the Patient Protection and Affordable Care 

2 Act (42 U.S.C. 18032(c)(3)). 

3 ‘‘(c) REINSURANCE.—Notwithstanding subsection 

4 (b), the Secretary may establish a mechanism to pool the 

5 costs of the highest-cost patients on a nationwide basis 

6 to the extent such costs are not already pooled pursuant 

7 to section 1343 of the Patient Protection and Affordable 

8 Care Act (42 U.S.C. 18063). 

9 ‘‘SEC. 2207. REIMBURSEMENT RATES. 

10 ‘‘(a) MEDICARE RATES.— 

11 ‘‘(1) IN GENERAL.—Except as provided in para12 graph (2) and subsections (b) and (c) and subject to 

13 subsection (d), the Secretary shall reimburse health 

14 care providers furnishing items and services under 

15 the health plan at rates determined for equivalent 

16 items and services under the original Medicare fee17 for-service program under parts A and B of title 

18 XVIII. 

19 ‘‘(2) AUTHORITY TO INCREASE PAYMENTS

20 RATES IN RURAL AREAS.—If the Secretary deter21 mines appropriate, the Secretary may increase the 

22 reimbursements rates described in paragraph (1) by 

23 up to 25 percent for items and services furnished in 

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


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

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

3 negotiated by the Secretary. Such negotiations may be in 

4 conjunction with negotiations for covered part D drugs 

5 under part D of title XVIII. 

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

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

9 health plan that are not items and services provided under 

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

11 A and B of title XVIII. 

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

14 value-based payment arrangements, in making payments 

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

17 ‘‘SEC. 2208. PARTICIPATING PROVIDERS. 

18 ‘‘(a) IN GENERAL.—A health care provider that is 

19 enrolled under the Medicare program under section 

20 1866(j) or is a participating provider under a State Med21 icaid plan under title XIX on the date of enactment of 

22 this Act shall be a participating provider under the health 

23 plan. 

24 ‘‘(b) ADDITIONAL PROVIDERS.—The Secretary shall 

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1 scribed in subsection (a) to become a participating pro2 vider under the health plan. 

3 ‘‘(c) OPT-OUT.—The Secretary shall establish a proc4 ess by which a health care provider that is a participating 

5 provider under the health plan pursuant to subsection (a) 

6 or (b) may opt-out of being such a participating provider. 

7 ‘‘(d) REQUIREMENT TO PARTICIPATE IN ORDER TO

8 BE ENROLLED UNDER MEDICARE.—Beginning January 

9 1, 2019, a health care provider may not be enrolled under 

10 the Medicare program under section 1866(j) unless the 

11 provider is also a participating provider under the health 

12 plan. 

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

14 HEALTH PLAN. 

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

16 plan year 2020, the Secretary may utilize innovative pay17 ment mechanisms and policies to determine payments for 

18 items and services under the health plan. The payment 

19 mechanisms and policies under this section may include 

20 patient-centered medical home and other care manage21 ment payments, accountable care organizations, value22 based purchasing, bundling of services, differential pay23 ment rates, performance or utilization based payments, 

24 telehealth, remote patient monitoring, partial capitation, 

25 and direct contracting with providers. 


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

2 The Secretary shall design and implement the payment 

3 mechanisms and policies under this section in a manner 

4 that— 

5 ‘‘(1) seeks to— 

6 ‘‘(A) improve health outcomes; 

7 ‘‘(B) reduce health disparities (including 

8 racial, ethnic, and other disparities); 

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

10 ‘‘(D) address geographic variation in the 

11 provision of health services; or 

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

13 and 

14 ‘‘(2) promotes care that is integrated, patient15 centered, quality, and efficient. 

16 ‘‘(c) ENCOURAGING THE USE OF HIGH-VALUE SERV17 ICES.—To the extent allowed by the benefit standards ap18 plied to all health benefits plans participating in the Ex19 changes (as described in section 2202(b)), the health plan 

20 may modify cost-sharing and payment rates to encourage 

21 the use of services that promote health and value. 

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

23 The Secretary shall monitor and evaluate the progress of 

24 payment and delivery system reforms under this section 


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1 and shall seek to implement such reforms subject to the 

2 following: 

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

4 payment and delivery system reform successful in 

5 improving quality and reducing costs, the Secretary 

6 shall implement such reform on as large a geo7 graphic scale as practical and economical. 

8 ‘‘(2) The Secretary may delay the implementa9 tion of such a reform in geographic areas in which 

10 such implementation would place the public health 

11 insurance option at a competitive disadvantage. 

12 ‘‘(3) The Secretary may prioritize implementa13 tion of such a reform in high-cost geographic areas 

14 or otherwise in order to reduce total program costs 

15 or to promote high-value care. 

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

17 this section shall prevent the Secretary from varying pay18 ments based on different payment structure models (such 

19 as accountable care organizations and medical homes) 

20 under the health plan for different geographic areas. 

21 ‘‘(f) INTEGRATION WITH SOCIAL SERVICES.—The 

22 Secretary shall establish processes and, when appropriate, 

23 collaborate with other agencies to integrate medical care 

24 under the health plan with food, housing, transportation, 


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1 and income assistance if the Secretary determines that 

2 such integration is expected to— 

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

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

6 increasing spending. 

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

8 integration of telehealth tools that increase patient access 

9 to medical care, particularly in remote or underserved 

10 areas, if the Secretary determines that such integration 

11 is expected to— 

12 ‘‘(1) reduce spending without reducing the qual13 ity of patient care; or 

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

15 increasing spending. 

16 ‘‘(h) ALTERNATIVE PAYMENT MODEL.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall evalu18 ate the possibility of providing incentives, and, if ap19 propriate, apply incentives, for enrollees in the 

20 health plan who receive services from providers who 

21 are participating in an alternative payment model 

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

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

24 TRADITIONAL MEDICARE.—Nothing in this section 

25 shall preclude the Secretary from using alternative 


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

2 are in use under title XVIII. 

3 ‘‘SEC. 2210. NO EFFECT ON MEDICARE BENEFITS OR MEDI4 CARE TRUST FUNDS. 

5 ‘‘Nothing in this title shall— 

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

7 XVIII; or 

8 ‘‘(2) impact the Federal Hospital Insurance 

9 Trust Fund under section 1817 or the Federal Sup10 plementary Medical Insurance Trust Fund under 

11 section 1841 (including the Medicare Prescription 

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

13 SEC. 3. AUTHORITY TO NEGOTIATE FAIR PRICES FOR MEDI14 CARE PRESCRIPTION DRUGS. 

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

16 Security Act (42 U.S.C. 1395w–111) is amended by strik17 ing subsection (i). 

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

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

20 of this Act. 

Æ 


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