II 

115TH CONGRESS 

1ST SESSION S. 194 

To amend the Public Health Service Act to establish a public health insurance 

option, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 23, 2017 

Mr. WHITEHOUSE (for himself, Mr. BROWN, and Mr. FRANKEN) introduced 

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

on Health, Education, Labor, and Pensions 

A BILL 

To amend the Public Health Service Act to establish a public 

health insurance option, 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 ‘‘Consumer Health Op5 tions and Insurance Competition Enhancement Act’’ or 

6 the ‘‘CHOICE Act’’. 

7 SEC. 2. PUBLIC HEALTH INSURANCE OPTION. 

8 (a) IN GENERAL.—Part C of title XXVII of the Pub9 lic Health Service Act (42 U.S.C. 300gg–91) is amended 

10 by adding at the end the following: 


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1 ‘‘SEC. 2795. PUBLIC HEALTH INSURANCE OPTION. 

2 ‘‘(a) ESTABLISHMENT.— 

3 ‘‘(1) IN GENERAL.—For plan years beginning 

4 in 2019, the Secretary shall establish, and provide 

5 for the offering through the Exchanges, of a quali6 fied health plan (in this Act referred to as the ‘pub7 lic health insurance option’) that provides value, 

8 choice, competition, and stability of affordable, high9 quality coverage throughout the United States in ac10 cordance with this section. 

11 ‘‘(2) PRIMARY RESPONSIBILITY.—In designing 

12 the public health insurance option, the primary re13 sponsibility of the Secretary shall be to create an af14 fordable health plan without compromising quality 

15 or access to care. 

16 ‘‘(b) ADMINISTRATING THE PUBLIC HEALTH INSUR17 ANCE OPTION.— 

18 ‘‘(1) OFFERED THROUGH EXCHANGES.— 

19 ‘‘(A) EXCLUSIVE TO EXCHANGES.—The 

20 public health insurance option shall be made 

21 available through the Exchanges. 

22 ‘‘(B) ENSURING A LEVEL PLAYING

23 FIELD.—Consistent with this section, the public 

24 health insurance option shall comply with re25 quirements under title I of the Patient Protec26 tion and Affordable Care Act, and the amendVerDate Sep 11 2014 00:11 Jan 31, 2017 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S194.IS S194

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1 ments made by that title, that are applicable to 

2 health plans offered through the Exchanges, in3 cluding requirements related to benefits, benefit 

4 levels, provider networks, notices, consumer 

5 protections, and cost-sharing. 

6 ‘‘(C) PROVISION OF BENEFIT LEVELS.— 

7 The public health insurance option shall offer 

8 bronze, silver, and gold plans. 

9 ‘‘(2) ADMINISTRATIVE CONTRACTING.— 

10 ‘‘(A) AUTHORITIES.—The Secretary may 

11 enter into contracts for the purpose of per12 forming administrative functions (including 

13 functions described in subsection (a)(4) of sec14 tion 1874A of the Social Security Act) with re15 spect to the public health insurance option in 

16 the same manner as the Secretary may enter 

17 into contracts under subsection (a)(1) of such 

18 section. The Secretary shall have the same au19 thority with respect to the public health insur20 ance option as the Secretary has under such 

21 subsection (a)(1) and subsection (b) of section 

22 1874A of the Social Security Act with respect 

23 to title XVIII of such Act. 

24 ‘‘(B) TRANSFER OF INSURANCE RISK.— 

25 Any contract under this paragraph shall not inVerDate Sep 11 2014 00:11 Jan 31, 2017 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S194.IS S194

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1 volve the transfer of insurance risk from the 

2 Secretary to the entity entering into such con3 tract with the Secretary. 

4 ‘‘(3) STATE ADVISORY COUNCIL.— 

5 ‘‘(A) ESTABLISHMENT.—A State may es6 tablish a public or nonprofit entity to serve as 

7 the State Advisory Council to provide rec8 ommendations to the Secretary on the oper9 ations and policies of the public health insur10 ance option offered through the Exchange oper11 ating in the State. 

12 ‘‘(B) RECOMMENDATIONS.—A State Advi13 sory Council established under subparagraph 

14 (A) shall provide recommendations on at least 

15 the following: 

16 ‘‘(i) Policies and procedures to inte17 grate quality improvement and cost con18 tainment mechanisms into the health care 

19 delivery system. 

20 ‘‘(ii) Mechanisms to facilitate public 

21 awareness of the availability of the public 

22 health insurance option. 

23 ‘‘(iii) Alternative payment models and 

24 value-based insurance design under the 


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1 public health insurance option that encour2 age quality improvement and cost control. 

3 ‘‘(C) MEMBERS.—The members of any 

4 State Advisory Council shall be representatives 

5 of the public and include health care consumers 

6 and health care providers. 

7 ‘‘(D) APPLICABILITY OF RECOMMENDA8 TIONS.—The Secretary may apply the rec9 ommendations of a State Advisory Council to 

10 the public health insurance option in that State, 

11 in any other State, or in all States. 

12 ‘‘(4) DATA COLLECTION.—The Secretary shall 

13 collect such data as may be required— 

14 ‘‘(A) to establish rates for premiums and 

15 health care provider reimbursement under sub16 section (c); and 

17 ‘‘(B) for other purposes under this section, 

18 including to improve quality, and reduce racial, 

19 ethnic, and other disparities, in health and 

20 health care. 

21 ‘‘(c) FINANCING THE PUBLIC HEALTH INSURANCE

22 OPTION.— 

23 ‘‘(1) PREMIUMS.— 


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1 ‘‘(A) ESTABLISHMENT.—The Secretary 

2 shall establish geographically adjusted premium 

3 rates for the public health insurance option— 

4 ‘‘(i) in a manner that complies with 

5 the requirement for premium rates under 

6 subparagraph (C) and considers the data 

7 collected under subsection (b)(4); and 

8 ‘‘(ii) at a level sufficient to fully fi9 nance— 

10 ‘‘(I) the costs of health benefits 

11 provided by the public health insur12 ance option; and 

13 ‘‘(II) administrative costs related 

14 to operating the public health insur15 ance option. 

16 ‘‘(B) CONTINGENCY MARGIN.—In estab17 lishing premium rates under subparagraph (A), 

18 the Secretary shall include an appropriate 

19 amount for a contingency margin. 

20 ‘‘(C) VARIATIONS IN PREMIUM RATES.— 

21 The premium rate charged for the public health 

22 insurance option may not vary except as pro23 vided under section 2701. 

24 ‘‘(2) HEALTH CARE PROVIDER PAYMENT RATES

25 FOR ITEMS AND SERVICES.— 


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1 ‘‘(A) IN GENERAL.— 

2 ‘‘(i) RATES NEGOTIATED BY THE SEC3 RETARY.—Not later than January 1, 2018, 

4 and except as provided in clause (ii), the 

5 Secretary shall, through a negotiated 

6 agreement with health care providers, es7 tablish rates for reimbursing health care 

8 providers for providing the benefits covered 

9 by the public health insurance option. 

10 ‘‘(ii) MEDICARE REIMBURSEMENT

11 RATES.—If the Secretary and health care 

12 providers are unable to reach a negotiated 

13 agreement on a reimbursement rate, the 

14 Secretary shall reimburse providers at 

15 rates determined for equivalent items and 

16 services under the original medicare fee17 for-service program under parts A and B 

18 of title XVIII of the Social Security Act. 

19 ‘‘(iii) FOR NEW SERVICES.—The Sec20 retary shall modify reimbursement rates 

21 described in clause (ii) in order to accom22 modate payments for services, such as 

23 well-child visits, that are not otherwise cov24 ered under the original medicare fee-for25 service program. 


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1 ‘‘(B) PRESCRIPTION DRUGS.—Any pay2 ment rate under this subsection for a prescrip3 tion drug shall be at a rate negotiated by the 

4 Secretary. If the Secretary is unable to reach a 

5 negotiated agreement on such a reimbursement 

6 rate, the Secretary shall use rates determined 

7 for equivalent drugs paid for under the original 

8 medicare fee-for-service program. The Secretary 

9 shall modify such rates in order to accommo10 date payments for drugs that are not otherwise 

11 covered under the original medicare fee-for12 service program. 

13 ‘‘(3) ACCOUNT.— 

14 ‘‘(A) ESTABLISHMENT.—There is estab15 lished in the Treasury of the United States an 

16 account for the receipts and disbursements at17 tributable to the operation of the public health 

18 insurance option, including the startup funding 

19 under subparagraph (C) and appropriations au20 thorized under subparagraph (D). 

21 ‘‘(B) PROHIBITION OF STATE IMPOSITION

22 OF TAXES.—Section 1854(g) of the Social Se23 curity Act shall apply to receipts and disburse24 ments described in subparagraph (A) in the 


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1 same manner as such section applies to pay2 ments or premiums described in such section. 

3 ‘‘(C) STARTUP FUNDING.— 

4 ‘‘(i) AUTHORIZATION OF FUNDING.— 

5 There are authorized to be appropriated 

6 such sums as may be necessary to estab7 lish the public health insurance option and 

8 cover 90 days of claims reserves based on 

9 projected enrollment. 

10 ‘‘(ii) AMORTIZATION OF STARTUP

11 FUNDING.—The Secretary shall provide for 

12 the repayment of the startup funding pro13 vided under clause (i) to the Treasury in 

14 an amortized manner over the 10-year pe15 riod beginning on January 1, 2019. 

16 ‘‘(D) ADDITIONAL AUTHORIZATION OF AP17 PROPRIATIONS.—To carry out paragraph (2) of 

18 subsection (b), there are authorized to be ap19 propriated such sums as may be necessary. 

20 ‘‘(d) HEALTH CARE PROVIDER PARTICIPATION.— 

21 ‘‘(1) PROVIDER PARTICIPATION.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 establish conditions of participation for health 

24 care providers under the public health insurance 

25 option. 


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1 ‘‘(B) LICENSURE OR CERTIFICATION.— 

2 The Secretary shall not allow a health care pro3 vider to participate in the public health insur4 ance option unless such provider is appro5 priately licensed or certified under State law. 

6 ‘‘(2) ESTABLISHMENT OF A PROVIDER NET7 WORK.— 

8 ‘‘(A) MEDICARE AND MEDICAID PARTICI9 PATING PROVIDERS.—A health care provider 

10 that is a participating provider of services or 

11 supplier under the Medicare program under 

12 title XVIII of the Social Security Act or under 

13 a State Medicaid plan under title XIX of such 

14 Act is a participating provider in the public 

15 health insurance option unless the health care 

16 provider opts out of participating in the public 

17 health insurance option through a process es18 tablished by the Secretary. 

19 ‘‘(B) ADDITIONAL PROVIDERS.—The Sec20 retary shall establish a process to allow health 

21 care providers not described in subparagraph 

22 (A) to become participating providers in the 

23 public health insurance option.’’. 

24 (b) CONFORMING AMENDMENTS.— 


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1 (1) TREATMENT AS A QUALIFIED HEALTH

2 PLAN.—Section 1301(a)(2) of the Patient Protection 

3 and Affordable Care Act (42 U.S.C. 18021(a)(2)) is 

4 amended— 

5 (A) in the paragraph heading, by inserting 

6 ‘‘, THE PUBLIC HEALTH INSURANCE OPTION,’’ 

7 before ‘‘AND’’; and 

8 (B) by inserting ‘‘the public health insur9 ance option under section 2795 of the Public 

10 Health Service Act,’’ before ‘‘and a multi-State 

11 plan’’. 

12 (2) LEVEL PLAYING FIELD.—Section 1324(a) 

13 of the Patient Protection and Affordable Care Act 

14 (42 U.S.C. 18044(a)) is amended by inserting ‘‘the 

15 public health insurance option under section 2795 of 

16 the Public Health Service Act,’’ before ‘‘or a multi17 State qualified health plan’’. 

Æ 


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