II 

Calendar No. 120 

115TH CONGRESS 

1ST SESSION H. R. 1628 

IN THE SENATE OF THE UNITED STATES 

JUNE 7, 2017 

Received; read the first time 

JUNE 8, 2017 

Read twice and placed on the calendar 

AN ACT 

To provide for reconciliation pursuant to title II of the 

concurrent resolution on the budget for fiscal year 2017. 

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 ‘‘American Health Care 

5 Act of 2017’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents of this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—ENERGY AND COMMERCE 

Subtitle A—Patient Access to Public Health Programs 


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Sec. 101. The Prevention and Public Health Fund. 

Sec. 102. Community health center program. 

Sec. 103. Federal payments to States. 

Subtitle B—Medicaid Program Enhancement 

Sec. 111. Repeal of Medicaid provisions. 

Sec. 112. Repeal of Medicaid expansion. 

Sec. 113. Elimination of DSH cuts. 

Sec. 114. Reducing State Medicaid costs. 

Sec. 115. Safety net funding for non-expansion States. 

Sec. 116. Providing incentives for increased frequency of eligibility redeterminations. 

Sec. 117. Permitting States to apply a work requirement for nondisabled, nonelderly, nonpregnant adults under Medicaid. 

Subtitle C—Per Capita Allotment for Medical Assistance 

Sec. 121. Per capita allotment for medical assistance. 

Subtitle D—Patient Relief and Health Insurance Market Stability 

Sec. 131. Repeal of cost-sharing subsidy. 

Sec. 132. Patient and State Stability Fund. 

Sec. 133. Continuous health insurance coverage incentive. 

Sec. 134. Increasing coverage options. 

Sec. 135. Change in permissible age variation in health insurance premium 

rates. 

Subtitle E—Implementation Funding 

Sec. 141. American Health Care Implementation Fund. 

TITLE II—COMMITTEE ON WAYS AND MEANS 

Subtitle A—Repeal and Replace of Health-Related Tax Policy 

Sec. 201. Recapture excess advance payments of premium tax credits. 

Sec. 202. Additional modifications to premium tax credit. 

Sec. 203. Small business tax credit. 

Sec. 204. Individual mandate. 

Sec. 205. Employer mandate. 

Sec. 206. Repeal of the tax on employee health insurance premiums and health 

plan benefits. 

Sec. 207. Repeal of tax on over-the-counter medications. 

Sec. 208. Repeal of increase of tax on health savings accounts. 

Sec. 209. Repeal of limitations on contributions to flexible spending accounts. 

Sec. 210. Repeal of medical device excise tax. 

Sec. 211. Repeal of elimination of deduction for expenses allocable to medicare 

part D subsidy. 

Sec. 212. Reduction of income threshold for determining medical care deduction. 

Sec. 213. Repeal of Medicare tax increase. 

Sec. 214. Refundable tax credit for health insurance coverage. 

Sec. 215. Maximum contribution limit to health savings account increased to 

amount of deductible and out-of-pocket limitation. 

Sec. 216. Allow both spouses to make catch-up contributions to the same health 

savings account. 


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Sec. 217. Special rule for certain medical expenses incurred before establishment of health savings account. 

Subtitle B—Repeal of Certain Consumer Taxes 

Sec. 221. Repeal of tax on prescription medications. 

Sec. 222. Repeal of health insurance tax. 

Subtitle C—Repeal of Tanning Tax 

Sec. 231. Repeal of tanning tax. 

Subtitle D—Remuneration From Certain Insurers 

Sec. 241. Remuneration from certain insurers. 

Subtitle E—Repeal of Net Investment Income Tax 

Sec. 251. Repeal of net investment income tax. 

1 TITLE I—ENERGY AND 

2 COMMERCE 

3 Subtitle A—Patient Access to 

4 Public Health Programs 

5 SEC. 101. THE PREVENTION AND PUBLIC HEALTH FUND. 

6 (a) IN GENERAL.—Subsection (b) of section 4002 of 

7 the Patient Protection and Affordable Care Act (42 

8 U.S.C. 300u–11), as amended by section 5009 of the 21st 

9 Century Cures Act, is amended— 

10 (1) in paragraph (2), by adding ‘‘and’’ at the 

11 end; 

12 (2) in paragraph (3)— 

13 (A) by striking ‘‘each of fiscal years 2018 

14 and 2019’’ and inserting ‘‘fiscal year 2018’’; 

15 and 

16 (B) by striking the semicolon at the end 

17 and inserting a period; and 


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1 (3) by striking paragraphs (4) through (8). 

2 (b) RESCISSION OF UNOBLIGATED FUNDS.—Of the 

3 funds made available by such section 4002, the unobli4 gated balance at the end of fiscal year 2018 is rescinded. 

5 SEC. 102. COMMUNITY HEALTH CENTER PROGRAM. 

6 Effective as if included in the enactment of the Medi7 care Access and CHIP Reauthorization Act of 2015 (Pub8 lic Law 114–10, 129 Stat. 87), paragraph (1) of section 

9 221(a) of such Act is amended by inserting ‘‘, and an ad10 ditional $422,000,000 for fiscal year 2017’’ after ‘‘2017’’. 

11 SEC. 103. FEDERAL PAYMENTS TO STATES. 

12 (a) IN GENERAL.—Notwithstanding section 504(a), 

13 1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or 

14 2105(a)(1) of the Social Security Act (42 U.S.C. 704(a), 

15 1396a(a)(23), 1396b(a), 1397a, 1397d(a)(4), 

16 1397bb(a)(7), 1397ee(a)(1)), or the terms of any Med17 icaid waiver in effect on the date of enactment of this Act 

18 that is approved under section 1115 or 1915 of the Social 

19 Security Act (42 U.S.C. 1315, 1396n), for the 1-year pe20 riod beginning on the date of the enactment of this Act, 

21 no Federal funds provided from a program referred to in 

22 this subsection that is considered direct spending for any 

23 year may be made available to a State for payments to 

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1 ited entity or through a managed care organization under 

2 contract with the State. 

3 (b) DEFINITIONS.—In this section: 

4 (1) PROHIBITED ENTITY.—The term ‘‘prohib5 ited entity’’ means an entity, including its affiliates, 

6 subsidiaries, successors, and clinics— 

7 (A) that, as of the date of enactment of 

8 this Act— 

9 (i) is an organization described in sec10 tion 501(c)(3) of the Internal Revenue 

11 Code of 1986 and exempt from tax under 

12 section 501(a) of such Code; 

13 (ii) is an essential community provider 

14 described in section 156.235 of title 45, 

15 Code of Federal Regulations (as in effect 

16 on the date of enactment of this Act), that 

17 is primarily engaged in family planning 

18 services, reproductive health, and related 

19 medical care; and 

20 (iii) provides for abortions, other than 

21 an abortion— 

22 (I) if the pregnancy is the result 

23 of an act of rape or incest; or 

24 (II) in the case where a woman 

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1 ical injury, or physical illness that 

2 would, as certified by a physician, 

3 place the woman in danger of death 

4 unless an abortion is performed, in5 cluding a life-endangering physical 

6 condition caused by or arising from 

7 the pregnancy itself; and 

8 (B) for which the total amount of Federal 

9 and State expenditures under the Medicaid pro10 gram under title XIX of the Social Security Act 

11 in fiscal year 2014 made directly to the entity 

12 and to any affiliates, subsidiaries, successors, or 

13 clinics of the entity, or made to the entity and 

14 to any affiliates, subsidiaries, successors, or 

15 clinics of the entity as part of a nationwide 

16 health care provider network, exceeded 

17 $350,000,000. 

18 (2) DIRECT SPENDING.—The term ‘‘direct 

19 spending’’ has the meaning given that term under 

20 section 250(c) of the Balanced Budget and Emer21 gency Deficit Control Act of 1985 (2 U.S.C. 900(c)). 

22 Subtitle B—Medicaid Program 

23 Enhancement 

24 SEC. 111. REPEAL OF MEDICAID PROVISIONS. 

25 The Social Security Act is amended— 


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1 (1) in section 1902 (42 U.S.C. 1396a)— 

2 (A) in subsection (a)(47)(B), by inserting 

3 ‘‘and provided that any such election shall cease 

4 to be effective on January 1, 2020, and no such 

5 election shall be made after that date’’ before 

6 the semicolon at the end; and 

7 (B) in subsection (l)(2)(C), by inserting 

8 ‘‘and ending December 31, 2019,’’ after ‘‘Janu9 ary 1, 2014,’’; 

10 (2) in section 1915(k)(2) (42 U.S.C. 

11 1396n(k)(2)), by striking ‘‘during the period de12 scribed in paragraph (1)’’ and inserting ‘‘on or after 

13 the date referred to in paragraph (1) and before 

14 January 1, 2020’’; and 

15 (3) in section 1920(e) (42 U.S.C. 1396r–1(e)), 

16 by striking ‘‘under clause (i)(VIII), clause (i)(IX), or 

17 clause (ii)(XX) of subsection (a)(10)(A)’’ and insert18 ing ‘‘under clause (i)(VIII) or clause (ii)(XX) of sec19 tion 1902(a)(10)(A) before January 1, 2020, section 

20 1902(a)(10)(A)(i)(IX),’’. 

21 SEC. 112. REPEAL OF MEDICAID EXPANSION. 

22 (a) IN GENERAL.—Title XIX of the Social Security 

23 Act (42 U.S.C. 1396 et seq.) is amended— 

24 (1) in section 1902 (42 U.S.C. 1396a)— 

25 (A) in subsection (a)(10)(A)— 


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1 (i) in clause (i)(VIII), by inserting 

2 ‘‘and ending December 31, 2019,’’ after 

3 ‘‘2014,’’; 

4 (ii) in clause (ii)(XX), by inserting 

5 ‘‘and ending December 31, 2017,’’ after 

6 ‘‘2014,’’; and 

7 (iii) in clause (ii), by adding at the 

8 end the following new subclause: 

9 ‘‘(XXIII) beginning January 1, 

10 2020— 

11 ‘‘(aa) who are expansion enrollees 

12 (as defined in subsection (nn)(1)); or 

13 ‘‘(bb) who are grandfathered ex14 pansion enrollees (as defined in sub15 section (nn)(2));’’; and 

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

17 subsection: 

18 ‘‘(nn) EXPANSION ENROLLEES.—In this title: 

19 ‘‘(1) IN GENERAL.—The term ‘expansion en20 rollee’ means an individual— 

21 ‘‘(A) who is under 65 years of age; 

22 ‘‘(B) who is not pregnant; 

23 ‘‘(C) who is not entitled to, or enrolled for, 

24 benefits under part A of title XVIII, or enrolled 

25 for benefits under part B of title XVIII; 


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1 ‘‘(D) who is not described in any of sub2 clauses (I) through (VII) of subsection 

3 (a)(10)(A)(i); and 

4 ‘‘(E) whose income (as determined under 

5 subsection (e)(14)) does not exceed 133 percent 

6 of the poverty line (as defined in section 

7 2110(c)(5)) applicable to a family of the size in8 volved. 

9 ‘‘(2) GRANDFATHERED EXPANSION ENROLL10 EES.—The term ‘grandfathered expansion enrollee’ 

11 means an expansion enrollee who— 

12 ‘‘(A) was enrolled under the State plan 

13 under this title (or under a waiver of such plan) 

14 as of December 31, 2019; and 

15 ‘‘(B) does not have a break in eligibility 

16 for medical assistance under such State plan 

17 (or waiver) for more than one month after such 

18 date. 

19 ‘‘(3) APPLICATION OF RELATED PROVISIONS.— 

20 Any reference in subsection (a)(10)(G), (k), or (gg) 

21 of this section or in section 1903, 1905(a), 1920(e), 

22 or 1937(a)(1)(B) to individuals described in sub23 clause (VIII) of subsection (a)(10)(A)(i) shall be 

24 deemed to include a reference to expansion enrollees 

25 (including grandfathered expansion enrollees).’’; and 


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1 (2) in section 1905 (42 U.S.C. 1396d)— 

2 (A) in subsection (y)(1), in the matter pre3 ceding subparagraph (A)— 

4 (i) by inserting ‘‘and that has elected 

5 to cover newly eligible individuals before 

6 March 1, 2017’’ after ‘‘that is one of the 

7 50 States or the District of Columbia’’; 

8 and 

9 (ii) by inserting after ‘‘subclause 

10 (VIII) of section 1902(a)(10)(A)(i)’’ the 

11 following: ‘‘who, for periods after Decem12 ber 31, 2019, are grandfathered expansion 

13 enrollees (as defined in section 

14 1902(nn)(2))’’; and 

15 (B) in subsection (z)(2)— 

16 (i) in subparagraph (A), by inserting 

17 after ‘‘section 1937’’ the following: ‘‘and, 

18 for periods after December 31, 2019, who 

19 are grandfathered expansion enrollees (as 

20 defined in section 1902(nn)(2))’’; and 

21 (ii) in subparagraph (B)(ii)— 

22 (I) in subclause (III), by adding 

23 ‘‘and’’ at the end; and 


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1 (II) by striking subclauses (IV), 

2 (V), and (VI) and inserting the fol3 lowing new subclause: 

4 ‘‘(IV) 2017 and each subsequent year is 80 

5 percent.’’. 

6 (b) SUNSET OF ESSENTIAL HEALTH BENEFITS RE7 QUIREMENT.—Section 1937(b)(5) of the Social Security 

8 Act (42 U.S.C. 1396u–7(b)(5)) is amended by adding at 

9 the end the following: ‘‘This paragraph shall not apply 

10 after December 31, 2019.’’. 

11 SEC. 113. ELIMINATION OF DSH CUTS. 

12 Section 1923(f) of the Social Security Act (42 U.S.C. 

13 1396r–4(f)) is amended— 

14 (1) in paragraph (7)— 

15 (A) in subparagraph (A)— 

16 (i) in clause (i)— 

17 (I) in the matter preceding sub18 clause (I), by striking ‘‘2025’’ and in19 serting ‘‘2019’’; and 

20 (ii) in clause (ii)— 

21 (I) in subclause (I), by adding 

22 ‘‘and’’ at the end; 

23 (II) in subclause (II), by striking 

24 the semicolon at the end and inserting 

25 a period; and 


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1 (III) by striking subclauses (III) 

2 through (VIII); and 

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

4 subparagraph: 

5 ‘‘(C) EXEMPTION FROM REDUCTION FOR

6 NON-EXPANSION STATES.— 

7 ‘‘(i) IN GENERAL.—In the case of a 

8 State that is a non-expansion State for a 

9 fiscal year, subparagraph (A)(i) shall not 

10 apply to the DSH allotment for such State 

11 and fiscal year. 

12 ‘‘(ii) NO CHANGE IN REDUCTION FOR

13 EXPANSION STATES.—In the case of a 

14 State that is an expansion State for a fis15 cal year, the DSH allotment for such State 

16 and fiscal year shall be determined as if 

17 clause (i) did not apply. 

18 ‘‘(iii) NON-EXPANSION AND EXPAN19 SION STATE DEFINED.— 

20 ‘‘(I) The term ‘expansion State’ 

21 means with respect to a fiscal year, a 

22 State that, as of July 1 of the pre23 ceding fiscal year, provides for eligi24 bility under clause (i)(VIII) or 

25 (ii)(XX) of section 1902(a)(10)(A) for 


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1 medical assistance under this title (or 

2 a waiver of the State plan approved 

3 under section 1115). 

4 ‘‘(II) The term ‘non-expansion 

5 State’ means, with respect to a fiscal 

6 year, a State that is not an expansion 

7 State.’’; and 

8 (2) in paragraph (8), by striking ‘‘fiscal year 

9 2025’’ and inserting ‘‘fiscal year 2019’’. 

10 SEC. 114. REDUCING STATE MEDICAID COSTS. 

11 (a) LETTING STATES DISENROLL HIGH DOLLAR

12 LOTTERY WINNERS.— 

13 (1) IN GENERAL.—Section 1902 of the Social 

14 Security Act (42 U.S.C. 1396a) is amended— 

15 (A) in subsection (a)(17), by striking 

16 ‘‘(e)(14), (e)(14)’’ and inserting ‘‘(e)(14), 

17 (e)(15)’’; and 

18 (B) in subsection (e)— 

19 (i) in paragraph (14) (relating to 

20 modified adjusted gross income), by adding 

21 at the end the following new subparagraph: 

22 ‘‘(J) TREATMENT OF CERTAIN LOTTERY

23 WINNINGS AND INCOME RECEIVED AS A LUMP

24 SUM.— 


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1 ‘‘(i) IN GENERAL.—In the case of an 

2 individual who is the recipient of qualified 

3 lottery winnings (pursuant to lotteries oc4 curring on or after January 1, 2020) or 

5 qualified lump sum income (received on or 

6 after such date) and whose eligibility for 

7 medical assistance is determined based on 

8 the application of modified adjusted gross 

9 income under subparagraph (A), a State 

10 shall, in determining such eligibility, in11 clude such winnings or income (as applica12 ble) as income received— 

13 ‘‘(I) in the month in which such 

14 winnings or income (as applicable) is 

15 received if the amount of such 

16 winnings or income is less than 

17 $80,000; 

18 ‘‘(II) over a period of 2 months 

19 if the amount of such winnings or in20 come (as applicable) is greater than or 

21 equal to $80,000 but less than 

22 $90,000; 

23 ‘‘(III) over a period of 3 months 

24 if the amount of such winnings or in25 come (as applicable) is greater than or 


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1 equal to $90,000 but less than 

2 $100,000; and 

3 ‘‘(IV) over a period of 3 months 

4 plus 1 additional month for each in5 crement of $10,000 of such winnings 

6 or income (as applicable) received, not 

7 to exceed a period of 120 months (for 

8 winnings or income of $1,260,000 or 

9 more), if the amount of such winnings 

10 or income is greater than or equal to 

11 $100,000. 

12 ‘‘(ii) COUNTING IN EQUAL INSTALL13 MENTS.—For purposes of subclauses (II), 

14 (III), and (IV) of clause (i), winnings or 

15 income to which such subclause applies 

16 shall be counted in equal monthly install17 ments over the period of months specified 

18 under such subclause. 

19 ‘‘(iii) HARDSHIP EXEMPTION.—An in20 dividual whose income, by application of 

21 clause (i), exceeds the applicable eligibility 

22 threshold established by the State, may 

23 continue to be eligible for medical assist24 ance to the extent that the State deter25 mines, under procedures established by the 


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1 State under the State plan (or in the case 

2 of a waiver of the plan under section 1115, 

3 incorporated in such waiver), or as other4 wise established by such State in accord5 ance with such standards as may be speci6 fied by the Secretary, that the denial of eli7 gibility of the individual would cause an 

8 undue medical or financial hardship as de9 termined on the basis of criteria estab10 lished by the Secretary. 

11 ‘‘(iv) NOTIFICATIONS AND ASSIST12 ANCE REQUIRED IN CASE OF LOSS OF ELI13 GIBILITY.—A State shall, with respect to 

14 an individual who loses eligibility for med15 ical assistance under the State plan (or a 

16 waiver of such plan) by reason of clause 

17 (i), before the date on which the individual 

18 loses such eligibility, inform the individual 

19 of the date on which the individual would 

20 no longer be considered ineligible by reason 

21 of such clause to receive medical assistance 

22 under the State plan or under any waiver 

23 of such plan and the date on which the in24 dividual would be eligible to reapply to re25 ceive such medical assistance. 


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1 ‘‘(v) QUALIFIED LOTTERY WINNINGS

2 DEFINED.—In this subparagraph, the term 

3 ‘qualified lottery winnings’ means winnings 

4 from a sweepstakes, lottery, or pool de5 scribed in paragraph (3) of section 4402 of 

6 the Internal Revenue Code of 1986 or a 

7 lottery operated by a multistate or multi8 jurisdictional lottery association, including 

9 amounts awarded as a lump sum payment. 

10 ‘‘(vi) QUALIFIED LUMP SUM INCOME

11 DEFINED.—In this subparagraph, the term 

12 ‘qualified lump sum income’ means income 

13 that is received as a lump sum from one 

14 of the following sources: 

15 ‘‘(I) Monetary winnings from 

16 gambling (as defined by the Secretary 

17 and including monetary winnings from 

18 gambling activities described in sec19 tion 1955(b)(4) of title 18, United 

20 States Code). 

21 ‘‘(II) Income received as liquid 

22 assets from the estate (as defined in 

23 section 1917(b)(4)) of a deceased in24 dividual.’’; and 


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1 (ii) by striking ‘‘(14) EXCLUSION’’ 

2 and inserting ‘‘(15) EXCLUSION’’. 

3 (2) RULES OF CONSTRUCTION.— 

4 (A) INTERCEPTION OF LOTTERY WINNINGS

5 ALLOWED.—Nothing in the amendment made 

6 by paragraph (1)(B)(i) shall be construed as 

7 preventing a State from intercepting the State 

8 lottery winnings awarded to an individual in the 

9 State to recover amounts paid by the State 

10 under the State Medicaid plan under title XIX 

11 of the Social Security Act for medical assistance 

12 furnished to the individual. 

13 (B) APPLICABILITY LIMITED TO ELIGI14 BILITY OF RECIPIENT OF LOTTERY WINNINGS

15 OR LUMP SUM INCOME.—Nothing in the amend16 ment made by paragraph (1)(B)(i) shall be con17 strued, with respect to a determination of 

18 household income for purposes of a determina19 tion of eligibility for medical assistance under 

20 the State plan under title XIX of the Social Se21 curity Act (42 U.S.C. 1396 et seq.) (or a waiver 

22 of such plan) made by applying modified ad23 justed gross income under subparagraph (A) of 

24 section 1902(e)(14) of such Act (42 U.S.C. 

25 1396a(e)(14)), as limiting the eligibility for 


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1 such medical assistance of any individual that is 

2 a member of the household other than the indi3 vidual (or the individual’s spouse) who received 

4 qualified lottery winnings or qualified lump-sum 

5 income (as defined in subparagraph (J) of such 

6 section 1902(e)(14), as added by paragraph 

7 (1)(B)(i) of this subsection). 

8 (b) REPEAL OF RETROACTIVE ELIGIBILITY.— 

9 (1) IN GENERAL.— 

10 (A) STATE PLAN REQUIREMENTS.—Section 

11 1902(a)(34) of the Social Security Act (42 

12 U.S.C. 1396a(a)(34)) is amended by striking 

13 ‘‘in or after the third month before the month 

14 in which he made application’’ and inserting ‘‘in 

15 or after the month in which the individual made 

16 application’’. 

17 (B) DEFINITION OF MEDICAL ASSIST18 ANCE.—Section 1905(a) of the Social Security 

19 Act (42 U.S.C. 1396d(a)) is amended by strik20 ing ‘‘in or after the third month before the 

21 month in which the recipient makes application 

22 for assistance’’ and inserting ‘‘in or after the 

23 month in which the recipient makes application 

24 for assistance’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by paragraph (1) shall apply to medical assistance 

3 with respect to individuals whose eligibility for such 

4 assistance is based on an application for such assist5 ance made (or deemed to be made) on or after Octo6 ber 1, 2017. 

7 (c) UPDATING ALLOWABLE HOME EQUITY LIMITS IN

8 MEDICAID.— 

9 (1) IN GENERAL.—Section 1917(f)(1) of the 

10 Social Security Act (42 U.S.C. 1396p(f)(1)) is 

11 amended— 

12 (A) in subparagraph (A), by striking ‘‘sub13 paragraphs (B) and (C)’’ and inserting ‘‘sub14 paragraph (B)’’; 

15 (B) by striking subparagraph (B); 

16 (C) by redesignating subparagraph (C) as 

17 subparagraph (B); and 

18 (D) in subparagraph (B), as so redesig19 nated, by striking ‘‘dollar amounts specified in 

20 this paragraph’’ and inserting ‘‘dollar amount 

21 specified in subparagraph (A)’’. 

22 (2) EFFECTIVE DATE.— 

23 (A) IN GENERAL.—The amendments made 

24 by paragraph (1) shall apply with respect to eli25 gibility determinations made after the date that 


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1 is 180 days after the date of the enactment of 

2 this section. 

3 (B) EXCEPTION FOR STATE LEGISLA4 TION.—In the case of a State plan under title 

5 XIX of the Social Security Act that the Sec6 retary of Health and Human Services deter7 mines requires State legislation in order for the 

8 respective plan to meet any requirement im9 posed by amendments made by this subsection, 

10 the respective plan shall not be regarded as fail11 ing to comply with the requirements of such 

12 title solely on the basis of its failure to meet 

13 such an additional requirement before the first 

14 day of the first calendar quarter beginning after 

15 the close of the first regular session of the 

16 State legislature that begins after the date of 

17 the enactment of this Act. For purposes of the 

18 previous sentence, in the case of a State that 

19 has a 2-year legislative session, each year of the 

20 session shall be considered to be a separate reg21 ular session of the State legislature. 


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1 SEC. 115. SAFETY NET FUNDING FOR NON-EXPANSION 

2 STATES. 

3 Title XIX of the Social Security Act is amended by 

4 inserting after section 1923 (42 U.S.C. 1396r–4) the fol5 lowing new section: 

6 ‘‘ADJUSTMENT IN PAYMENT FOR SERVICES OF SAFETY

7 NET PROVIDERS IN NON-EXPANSION STATES

8 ‘‘SEC. 1923A. (a) IN GENERAL.—Subject to the limi9 tations of this section, for each year during the period be10 ginning with fiscal year 2018 and ending with fiscal year 

11 2022, each State that is one of the 50 States or the Dis12 trict of Columbia and that, as of July 1 of the preceding 

13 fiscal year, did not provide for eligibility under clause 

14 (i)(VIII) or (ii)(XX) of section 1902(a)(10)(A) for medical 

15 assistance under this title (or a waiver of the State plan 

16 approved under section 1115) (each such State or District 

17 referred to in this section for the fiscal year as a ‘non18 expansion State’) may adjust the payment amounts other19 wise provided under the State plan under this title (or a 

20 waiver of such plan) to health care providers that provide 

21 health care services to individuals enrolled under this title 

22 (in this section referred to as ‘eligible providers’) so long 

23 as the payment adjustment to such an eligible provider 

24 does not exceed the provider’s costs in furnishing health 

25 care services (as determined by the Secretary and net of 

26 payments under this title, other than under this section, 


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1 and by uninsured patients) to individuals who either are 

2 eligible for medical assistance under the State plan (or 

3 under a waiver of such plan) or have no health insurance 

4 or health plan coverage for such services. 

5 ‘‘(b) INCREASE IN APPLICABLE FMAP.—Notwith6 standing section 1905(b), the Federal medical assistance 

7 percentage applicable with respect to expenditures attrib8 utable to a payment adjustment under subsection (a) for 

9 which payment is permitted under subsection (c) shall be 

10 equal to— 

11 ‘‘(1) 100 percent for calendar quarters in fiscal 

12 years 2018, 2019, 2020, and 2021; and 

13 ‘‘(2) 95 percent for calendar quarters in fiscal 

14 year 2022. 

15 ‘‘(c) ANNUAL ALLOTMENT LIMITATION.—Payment 

16 under section 1903(a) shall not be made to a State with 

17 respect to any payment adjustment made under this sec18 tion for all calendar quarters in a fiscal year in excess 

19 of the $2,000,000,000 multiplied by the ratio of— 

20 ‘‘(1) the population of the State with income 

21 below 138 percent of the poverty line in 2015 (as de22 termined based the table entitled ‘Health Insurance 

23 Coverage Status and Type by Ratio of Income to 

24 Poverty Level in the Past 12 Months by Age’ for the 

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1 lation for whom poverty status is determined based 

2 on the 2015 American Community Survey 1–Year 

3 Estimates, as published by the Bureau of the Cen4 sus), to 

5 ‘‘(2) the sum of the populations under para6 graph (1) for all non-expansion States. 

7 ‘‘(d) DISQUALIFICATION IN CASE OF STATE COV8 ERAGE EXPANSION.—If a State is a non-expansion for a 

9 fiscal year and provides eligibility for medical assistance 

10 described in subsection (a) during the fiscal year, the 

11 State shall no longer be treated as a non-expansion State 

12 under this section for any subsequent fiscal years.’’. 

13 SEC. 116. PROVIDING INCENTIVES FOR INCREASED FRE14 QUENCY OF ELIGIBILITY REDETERMINA15 TIONS. 

16 (a) IN GENERAL.—Section 1902(e)(14) of the Social 

17 Security Act (42 U.S.C. 1396a(e)(14)) (relating to modi18 fied adjusted gross income), as amended by section 

19 114(a)(1), is further amended by adding at the end the 

20 following: 

21 ‘‘(K) FREQUENCY OF ELIGIBILITY REDE22 TERMINATIONS.—Beginning on October 1, 

23 2017, and notwithstanding subparagraph (H), 

24 in the case of an individual whose eligibility for 

25 medical assistance under the State plan under 


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1 this title (or a waiver of such plan) is deter2 mined based on the application of modified ad3 justed gross income under subparagraph (A) 

4 and who is so eligible on the basis of clause 

5 (i)(VIII) or clause (ii)(XX) of subsection 

6 (a)(10)(A), a State shall redetermine such indi7 vidual’s eligibility for such medical assistance 

8 no less frequently than once every 6 months.’’. 

9 (b) INCREASED ADMINISTRATIVE MATCHING PER10 CENTAGE.—For each calendar quarter during the period 

11 beginning on October 1, 2017, and ending on December 

12 31, 2019, the Federal matching percentage otherwise ap13 plicable under section 1903(a) of the Social Security Act 

14 (42 U.S.C. 1396b(a)) with respect to State expenditures 

15 during such quarter that are attributable to meeting the 

16 requirement of section 1902(e)(14) (relating to determina17 tions of eligibility using modified adjusted gross income) 

18 of such Act shall be increased by 5 percentage points with 

19 respect to State expenditures attributable to activities car20 ried out by the State (and approved by the Secretary) to 

21 increase the frequency of eligibility redeterminations re22 quired by subparagraph (K) of such section (relating to 

23 eligibility redeterminations made on a 6-month basis) (as 

24 added by subsection (a)). 


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1 SEC. 117. PERMITTING STATES TO APPLY A WORK RE2 QUIREMENT FOR NONDISABLED, NON3 ELDERLY, NONPREGNANT ADULTS UNDER 

4 MEDICAID. 

5 (a) IN GENERAL.—Section 1902 of the Social Secu6 rity Act (42 U.S.C. 1396a), as previously amended, is fur7 ther amended by adding at the end the following new sub8 section: 

9 ‘‘(oo) WORK REQUIREMENT OPTION FOR NON10 DISABLED, NONELDERLY, NONPREGNANT ADULTS.— 

11 ‘‘(1) IN GENERAL.—Beginning October 1, 

12 2017, subject to paragraph (3), a State may elect to 

13 condition medical assistance to a nondisabled, non14 elderly, nonpregnant individual under this title upon 

15 such an individual’s satisfaction of a work require16 ment (as defined in paragraph (2)). 

17 ‘‘(2) WORK REQUIREMENT DEFINED.—In this 

18 section, the term ‘work requirement’ means, with re19 spect to an individual, the individual’s participation 

20 in work activities (as defined in section 407(d)) for 

21 such period of time as determined by the State, and 

22 as directed and administered by the State. 

23 ‘‘(3) REQUIRED EXCEPTIONS.—States admin24 istering a work requirement under this subsection 

25 may not apply such requirement to— 


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1 ‘‘(A) a woman during pregnancy through 

2 the end of the month in which the 60-day pe3 riod (beginning on the last day of her preg4 nancy) ends; 

5 ‘‘(B) an individual who is under 19 years 

6 of age; 

7 ‘‘(C) an individual who is the only parent 

8 or caretaker relative in the family of a child 

9 who has not attained 6 years of age or who is 

10 the only parent or caretaker of a child with dis11 abilities; or 

12 ‘‘(D) an individual who is married or a 

13 head of household and has not attained 20 

14 years of age and who— 

15 ‘‘(i) maintains satisfactory attendance 

16 at secondary school or the equivalent; or 

17 ‘‘(ii) participates in education directly 

18 related to employment.’’. 

19 (b) INCREASE IN MATCHING RATE FOR IMPLEMEN20 TATION.—Section 1903 of the Social Security Act (42 

21 U.S.C. 1396b) is amended by adding at the end the fol22 lowing: 

23 ‘‘(aa) The Federal matching percentage otherwise ap24 plicable under subsection (a) with respect to State admin25 istrative expenditures during a calendar quarter for which 


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1 the State receives payment under such subsection shall, 

2 in addition to any other increase to such Federal matching 

3 percentage, be increased for such calendar quarter by 5 

4 percentage points with respect to State expenditures at5 tributable to activities carried out by the State (and ap6 proved by the Secretary) to implement subsection (oo) of 

7 section 1902.’’. 

8 Subtitle C—Per Capita Allotment 

9 for Medical Assistance 

10 SEC. 121. PER CAPITA ALLOTMENT FOR MEDICAL ASSIST11 ANCE. 

12 Title XIX of the Social Security Act is amended— 

13 (1) in section 1903 (42 U.S.C. 1396b)— 

14 (A) in subsection (a), in the matter before 

15 paragraph (1), by inserting ‘‘and section 

16 1903A(a)’’ after ‘‘except as otherwise provided 

17 in this section’’; and 

18 (B) in subsection (d)(1), by striking ‘‘to 

19 which’’ and inserting ‘‘to which, subject to sec20 tion 1903A(a),’’; and 

21 (2) by inserting after such section 1903 the fol22 lowing new section: 


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1 ‘‘SEC. 1903A. PER CAPITA-BASED CAP ON PAYMENTS FOR 

2 MEDICAL ASSISTANCE. 

3 ‘‘(a) APPLICATION OF PER CAPITA CAP ON PAY4 MENTS FOR MEDICAL ASSISTANCE EXPENDITURES.— 

5 ‘‘(1) IN GENERAL.—If a State has excess ag6 gregate medical assistance expenditures (as defined 

7 in paragraph (2)) for a fiscal year (beginning with 

8 fiscal year 2020), the amount of payment to the 

9 State under section 1903(a)(1) for each quarter in 

the following fiscal year shall be reduced by 1 10 ⁄4 of 

11 the excess aggregate medical assistance payments 

12 (as defined in paragraph (3)) for that previous fiscal 

13 year. In this section, the term ‘State’ means only the 

14 50 States and the District of Columbia. 

15 ‘‘(2) EXCESS AGGREGATE MEDICAL ASSISTANCE

16 EXPENDITURES.—In this subsection, the term ‘ex17 cess aggregate medical assistance expenditures’ 

18 means, for a State for a fiscal year, the amount (if 

19 any) by which— 

20 ‘‘(A) the amount of the adjusted total med21 ical assistance expenditures (as defined in sub22 section (b)(1)) for the State and fiscal year; ex23 ceeds 

24 ‘‘(B) the amount of the target total med25 ical assistance expenditures (as defined in sub26 section (c)) for the State and fiscal year. 


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1 ‘‘(3) EXCESS AGGREGATE MEDICAL ASSISTANCE

2 PAYMENTS.—In this subsection, the term ‘excess ag3 gregate medical assistance payments’ means, for a 

4 State for a fiscal year, the product of— 

5 ‘‘(A) the excess aggregate medical assist6 ance expenditures (as defined in paragraph (2)) 

7 for the State for the fiscal year; and 

8 ‘‘(B) the Federal average medical assist9 ance matching percentage (as defined in para10 graph (4)) for the State for the fiscal year. 

11 ‘‘(4) FEDERAL AVERAGE MEDICAL ASSISTANCE

12 MATCHING PERCENTAGE.—In this subsection, the 

13 term ‘Federal average medical assistance matching 

14 percentage’ means, for a State for a fiscal year, the 

15 ratio (expressed as a percentage) of— 

16 ‘‘(A) the amount of the Federal payments 

17 that would be made to the State under section 

18 1903(a)(1) for medical assistance expenditures 

19 for calendar quarters in the fiscal year if para20 graph (1) did not apply; to 

21 ‘‘(B) the amount of the medical assistance 

22 expenditures for the State and fiscal year. 

23 ‘‘(b) ADJUSTED TOTAL MEDICAL ASSISTANCE EX24 PENDITURES.—Subject to subsection (g), the following 

25 shall apply: 


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1 ‘‘(1) IN GENERAL.—In this section, the term 

2 ‘adjusted total medical assistance expenditures’ 

3 means, for a State— 

4 ‘‘(A) for fiscal year 2016, the product of— 

5 ‘‘(i) the amount of the medical assist6 ance expenditures (as defined in paragraph 

7 (2)) for the State and fiscal year, reduced 

8 by the amount of any excluded expendi9 tures (as defined in paragraph (3)) for the 

10 State and fiscal year otherwise included in 

11 such medical assistance expenditures; and 

12 ‘‘(ii) the 1903A FY16 population per13 centage (as defined in paragraph (4)) for 

14 the State; or 

15 ‘‘(B) for fiscal year 2019 or a subsequent 

16 fiscal year, the amount of the medical assist17 ance expenditures (as defined in paragraph (2)) 

18 for the State and fiscal year that is attributable 

19 to 1903A enrollees, reduced by the amount of 

20 any excluded expenditures (as defined in para21 graph (3)) for the State and fiscal year other22 wise included in such medical assistance ex23 penditures and includes non-DSH supplemental 

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1 section (d)(4)(A)(iii) but shall not be construed 

2 as including any expenditures attributable to 

3 the program under section 1928. In applying 

4 subparagraph (B), non-DSH supplemental pay5 ments (as defined in subsection (d)(4)(A)(ii)) 

6 and payments described in subsection 

7 (d)(4)(A)(iii) shall be treated as fully attrib8 utable to 1903A enrollees. 

9 ‘‘(2) MEDICAL ASSISTANCE EXPENDITURES.— 

10 In this section, the term ‘medical assistance expendi11 tures’ means, for a State and fiscal year, the med12 ical assistance payments as reported by medical 

13 service category on the Form CMS-64 quarterly ex14 pense report (or successor to such a report form, 

15 and including enrollment data and subsequent ad16 justments to any such report, in this section referred 

17 to collectively as a ‘CMS-64 report’) for which pay18 ment is (or may otherwise be) made pursuant to sec19 tion 1903(a)(1). 

20 ‘‘(3) EXCLUDED EXPENDITURES.—In this sec21 tion, the term ‘excluded expenditures’ means, for a 

22 State and fiscal year, expenditures under the State 

23 plan (or under a waiver of such plan) that are at24 tributable to any of the following: 


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1 ‘‘(A) DSH.—Payment adjustments made 

2 for disproportionate share hospitals under sec3 tion 1923. 

4 ‘‘(B) MEDICARE COST-SHARING.—Pay5 ments made for medicare cost-sharing (as de6 fined in section 1905(p)(3)). 

7 ‘‘(C) SAFETY NET PROVIDER PAYMENT AD8 JUSTMENTS IN NON-EXPANSION STATES.—Pay9 ment adjustments under subsection (a) of sec10 tion 1923A for which payment is permitted 

11 under subsection (c) of such section. 

12 ‘‘(4) 1903A FY 16 POPULATION PERCENTAGE.— 

13 In this subsection, the term ‘1903A FY16 popu14 lation percentage’ means, for a State, the Sec15 retary’s calculation of the percentage of the actual 

16 medical assistance expenditures, as reported by the 

17 State on the CMS–64 reports for calendar quarters 

18 in fiscal year 2016, that are attributable to 1903A 

19 enrollees (as defined in subsection (e)(1)). 

20 ‘‘(c) TARGET TOTAL MEDICAL ASSISTANCE EXPEND21 ITURES.— 

22 ‘‘(1) CALCULATION.—In this section, the term 

23 ‘target total medical assistance expenditures’ means, 

24 for a State for a fiscal year and subject to para25 graph (4), the sum of the products, for each of the 


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1 1903A enrollee categories (as defined in subsection 

2 (e)(2)), of— 

3 ‘‘(A) the target per capita medical assist4 ance expenditures (as defined in paragraph (2)) 

5 for the enrollee category, State, and fiscal year; 

6 and 

7 ‘‘(B) the number of 1903A enrollees for 

8 such enrollee category, State, and fiscal year, as 

9 determined under subsection (e)(4). 

10 ‘‘(2) TARGET PER CAPITA MEDICAL ASSISTANCE

11 EXPENDITURES.—In this subsection, the term ‘tar12 get per capita medical assistance expenditures’ 

13 means, for a 1903A enrollee category and State— 

14 ‘‘(A) for fiscal year 2020, an amount equal 

15 to— 

16 ‘‘(i) the provisional FY19 target per 

17 capita amount for such enrollee category 

18 (as calculated under subsection (d)(5)) for 

19 the State; increased by 

20 ‘‘(ii) the applicable annual inflation 

21 factor (as defined in paragraph (3)) for 

22 fiscal year 2020; and 

23 ‘‘(B) for each succeeding fiscal year, an 

24 amount equal to— 


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1 ‘‘(i) the target per capita medical as2 sistance expenditures (under subparagraph 

3 (A) or this subparagraph) for the 1903A 

4 enrollee category and State for the pre5 ceding fiscal year, increased by 

6 ‘‘(ii) the applicable annual inflation 

7 factor for that succeeding fiscal year. 

8 ‘‘(3) APPLICABLE ANNUAL INFLATION FAC9 TOR.—In paragraph (2), the term ‘applicable annual 

10 inflation factor’ means, for a fiscal year— 

11 ‘‘(A) for each of the 1903A enrollee cat12 egories described in subparagraphs (C), (D), 

13 and (E) of subsection (e)(2), the percentage in14 crease in the medical care component of the 

15 consumer price index for all urban consumers 

16 (U.S. city average) from September of the pre17 vious fiscal year to September of the fiscal year 

18 involved; and 

19 ‘‘(B) for each of the 1903A enrollee cat20 egories described in subparagraphs (A) and (B) 

21 of subsection (e)(2), the percentage increase de22 scribed in subparagraph (A) plus 1 percentage 

23 point. 


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1 ‘‘(4) DECREASE IN TARGET EXPENDITURES

2 FOR REQUIRED EXPENDITURES BY CERTAIN POLIT3 ICAL SUBDIVISIONS.— 

4 ‘‘(A) IN GENERAL.—In the case of a State 

5 that had a DSH allotment under section 

6 1923(f) for fiscal year 2016 that was more than 

7 6 times the national average of such allotments 

8 for all the States for such fiscal year and that 

9 requires political subdivisions within the State 

10 to contribute funds towards medical assistance 

11 or other expenditures under the State plan 

12 under this title (or under a waiver of such plan) 

13 for a fiscal year (beginning with fiscal year 

14 2020), the target total medical assistance ex15 penditures for such State and fiscal year shall 

16 be decreased by the amount that political sub17 divisions in the State are required to contribute 

18 under the plan (or waiver) without reimburse19 ment from the State for such fiscal year, other 

20 than contributions described in subparagraph 

21 (B). 

22 ‘‘(B) EXCEPTIONS.—The contributions de23 scribed in this subparagraph are the following: 

24 ‘‘(i) Contributions required by a State 

25 from a political subdivision that, as of the 


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1 first day of the calendar year in which the 

2 fiscal year involved begins— 

3 ‘‘(I) has a population of more 

4 than 5,000,000, as estimated by the 

5 Bureau of the Census; and 

6 ‘‘(II) imposes a local income tax 

7 upon its residents. 

8 ‘‘(ii) Contributions required by a 

9 State from a political subdivision for ad10 ministrative expenses if the State required 

11 such contributions from such subdivision 

12 without reimbursement from the State as 

13 of January 1, 2017. 

14 ‘‘(d) CALCULATION OF FY19 PROVISIONAL TARGET

15 AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.—Sub16 ject to subsection (g), the following shall apply: 

17 ‘‘(1) CALCULATION OF BASE AMOUNTS FOR FIS18 CAL YEAR 2016.—For each State the Secretary shall 

19 calculate (and provide notice to the State not later 

20 than April 1, 2018, of) the following: 

21 ‘‘(A) The amount of the adjusted total 

22 medical assistance expenditures (as defined in 

23 subsection (b)(1)) for the State for fiscal year 

24 2016. 


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1 ‘‘(B) The number of 1903A enrollees for 

2 the State in fiscal year 2016 (as determined 

3 under subsection (e)(4)). 

4 ‘‘(C) The average per capita medical as5 sistance expenditures for the State for fiscal 

6 year 2016 equal to— 

7 ‘‘(i) the amount calculated under sub8 paragraph (A); divided by 

9 ‘‘(ii) the number calculated under sub10 paragraph (B). 

11 ‘‘(2) FISCAL YEAR 2019 AVERAGE PER CAPITA

12 AMOUNT BASED ON INFLATING THE FISCAL YEAR

13 2016 AMOUNT TO FISCAL YEAR 2019 BY CPI-MED14 ICAL.—The Secretary shall calculate a fiscal year 

15 2019 average per capita amount for each State 

16 equal to— 

17 ‘‘(A) the average per capita medical assist18 ance expenditures for the State for fiscal year 

19 2016 (calculated under paragraph (1)(C)); in20 creased by 

21 ‘‘(B) the percentage increase in the med22 ical care component of the consumer price index 

23 for all urban consumers (U.S. city average) 

24 from September, 2016 to September, 2019. 


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1 ‘‘(3) AGGREGATE AND AVERAGE EXPENDI2 TURES PER CAPITA FOR FISCAL YEAR 2019.—The 

3 Secretary shall calculate for each State the fol4 lowing: 

5 ‘‘(A) The amount of the adjusted total 

6 medical assistance expenditures (as defined in 

7 subsection (b)(1)) for the State for fiscal year 

8 2019. 

9 ‘‘(B) The number of 1903A enrollees for 

10 the State in fiscal year 2019 (as determined 

11 under subsection (e)(4)). 

12 ‘‘(4) PER CAPITA EXPENDITURES FOR FISCAL

13 YEAR 2019 FOR EACH 1903A ENROLLEE CATEGORY.— 

14 The Secretary shall calculate (and provide notice to 

15 each State not later than January 1, 2020, of) the 

16 following: 

17 ‘‘(A)(i) For each 1903A enrollee category, 

18 the amount of the adjusted total medical assist19 ance expenditures (as defined in subsection 

20 (b)(1)) for the State for fiscal year 2019 for in21 dividuals in the enrollee category, calculated by 

22 excluding from medical assistance expenditures 

23 those expenditures attributable to expenditures 

24 described in clause (iii) or non-DSH supple25 mental expenditures (as defined in clause (ii)). 


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1 ‘‘(ii) In this paragraph, the term ‘non2 DSH supplemental expenditure’ means a pay3 ment to a provider under the State plan (or 

4 under a waiver of the plan) that— 

5 ‘‘(I) is not made under section 1923; 

6 ‘‘(II) is not made with respect to a 

7 specific item or service for an individual; 

8 ‘‘(III) is in addition to any payments 

9 made to the provider under the plan (or 

10 waiver) for any such item or service; and 

11 ‘‘(IV) complies with the limits for ad12 ditional payments to providers under the 

13 plan (or waiver) imposed pursuant to sec14 tion 1902(a)(30)(A), including the regula15 tions specifying upper payment limits 

16 under the State plan in part 447 of title 

17 42, Code of Federal Regulations (or any 

18 successor regulations). 

19 ‘‘(iii) An expenditure described in this 

20 clause is an expenditure that meets the criteria 

21 specified in subclauses (I), (II), and (III) of 

22 clause (ii) and is authorized under section 1115 

23 for the purposes of funding a delivery system 

24 reform pool, uncompensated care pool, a des25 ignated state health program, or any other 


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1 similar expenditure (as defined by the Sec2 retary). 

3 ‘‘(B) For each 1903A enrollee category, 

4 the number of 1903A enrollees for the State in 

5 fiscal year 2019 in the enrollee category (as de6 termined under subsection (e)(4)). 

7 ‘‘(C) For fiscal year 2016, the State’s non8 DSH supplemental and pool payment percent9 age is equal to the ratio (expressed as a per10 centage) of— 

11 ‘‘(i) the total amount of non-DSH 

12 supplemental expenditures (as defined in 

13 subparagraph (A)(ii)) and payments de14 scribed in subparagraph (A)(iii) for the 

15 State for fiscal year 2016; to 

16 ‘‘(ii) the amount described in sub17 section (b)(1)(A) for the State for fiscal 

18 year 2016. 

19 ‘‘(D) For each 1903A enrollee category an 

20 average medical assistance expenditures per 

21 capita for the State for fiscal year 2019 for the 

22 enrollee category equal to— 

23 ‘‘(i) the amount calculated under sub24 paragraph (A) for the State, increased by 

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1 ment percentage for the State (as cal2 culated under subparagraph (C)); divided 

3 by 

4 ‘‘(ii) the number calculated under sub5 paragraph (B) for the State for the en6 rollee category. 

7 ‘‘(5) PROVISIONAL FY19 PER CAPITA TARGET

8 AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.— 

9 Subject to subsection (f)(2), the Secretary shall cal10 culate for each State a provisional FY19 per capita 

11 target amount for each 1903A enrollee category 

12 equal to the average medical assistance expenditures 

13 per capita for the State for fiscal year 2019 (as cal14 culated under paragraph (4)(D)) for such enrollee 

15 category multiplied by the ratio of— 

16 ‘‘(A) the product of— 

17 ‘‘(i) the fiscal year 2019 average per 

18 capita amount for the State, as calculated 

19 under paragraph (2); and 

20 ‘‘(ii) the number of 1903A enrollees 

21 for the State in fiscal year 2019, as cal22 culated under paragraph (3)(B); to 

23 ‘‘(B) the amount of the adjusted total 

24 medical assistance expenditures for the State 


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1 for fiscal year 2019, as calculated under para2 graph (3)(A). 

3 ‘‘(e) 1903A ENROLLEE; 1903A ENROLLEE CAT4 EGORY.—Subject to subsection (g), for purposes of this 

5 section, the following shall apply: 

6 ‘‘(1) 1903A ENROLLEE.—The term ‘1903A en7 rollee’ means, with respect to a State and a month 

8 and subject to subsection (i)(1)(B), any Medicaid 

9 enrollee (as defined in paragraph (3)) for the month, 

10 other than such an enrollee who for such month is 

11 in any of the following categories of excluded indi12 viduals: 

13 ‘‘(A) CHIP.—An individual who is pro14 vided, under this title in the manner described 

15 in section 2101(a)(2), child health assistance 

16 under title XXI. 

17 ‘‘(B) IHS.—An individual who receives 

18 any medical assistance under this title for serv19 ices for which payment is made under the third 

20 sentence of section 1905(b). 

21 ‘‘(C) BREAST AND CERVICAL CANCER

22 SERVICES ELIGIBLE INDIVIDUAL.—An indi23 vidual who is entitled to medical assistance 

24 under this title only pursuant to section 

25 1902(a)(10)(A)(ii)(XVIII). 


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1 ‘‘(D) PARTIAL-BENEFIT ENROLLEES.—An 

2 individual who— 

3 ‘‘(i) is an alien who is entitled to med4 ical assistance under this title only pursu5 ant to section 1903(v)(2); 

6 ‘‘(ii) is entitled to medical assistance 

7 under this title only pursuant to subclause 

8 (XII) or (XXI) of section 

9 1902(a)(10)(A)(ii) (or pursuant to a waiv10 er that provides only comparable benefits); 

11 ‘‘(iii) is a dual eligible individual (as 

12 defined in section 1915(h)(2)(B)) and is 

13 entitled to medical assistance under this 

14 title (or under a waiver) only for some or 

15 all of medicare cost-sharing (as defined in 

16 section 1905(p)(3)); or 

17 ‘‘(iv) is entitled to medical assistance 

18 under this title and for whom the State is 

19 providing a payment or subsidy to an em20 ployer for coverage of the individual under 

21 a group health plan pursuant to section 

22 1906 or section 1906A (or pursuant to a 

23 waiver that provides only comparable bene24 fits). 


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1 ‘‘(2) 1903A ENROLLEE CATEGORY.—The term 

2 ‘1903A enrollee category’ means each of the fol3 lowing: 

4 ‘‘(A) ELDERLY.—A category of 1903A en5 rollees who are 65 years of age or older. 

6 ‘‘(B) BLIND AND DISABLED.—A category 

7 of 1903A enrollees (not described in the pre8 vious subparagraph) who are eligible for med9 ical assistance under this title on the basis of 

10 being blind or disabled. 

11 ‘‘(C) CHILDREN.—A category of 1903A 

12 enrollees (not described in a previous subpara13 graph) who are children under 19 years of age. 

14 ‘‘(D) EXPANSION ENROLLEES.—A cat15 egory of 1903A enrollees (not described in a 

16 previous subparagraph) for whom the amounts 

17 expended for medical assistance are subject to 

18 an increase or change in the Federal medical 

19 assistance percentage under subsection (y) or 

20 (z)(2), respectively, of section 1905. 

21 ‘‘(E) OTHER NONELDERLY, NONDISABLED, 

22 NON-EXPANSION ADULTS.—A category of 

23 1903A enrollees who are not described in any 

24 previous subparagraph. 


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1 ‘‘(3) MEDICAID ENROLLEE.—The term ‘Med2 icaid enrollee’ means, with respect to a State for a 

3 month, an individual who is eligible for medical as4 sistance for items or services under this title and en5 rolled under the State plan (or a waiver of such 

6 plan) under this title for the month. 

7 ‘‘(4) DETERMINATION OF NUMBER OF 1903A

8 ENROLLEES.—The number of 1903A enrollees for a 

9 State and fiscal year, and, if applicable, for a 1903A 

10 enrollee category, is the average monthly number of 

11 Medicaid enrollees for such State and fiscal year 

12 (and, if applicable, in such category) that are re13 ported through the CMS–64 report under (and sub14 ject to audit under) subsection (h). 

15 ‘‘(f) SPECIAL PAYMENT RULES.— 

16 ‘‘(1) APPLICATION IN CASE OF RESEARCH AND

17 DEMONSTRATION PROJECTS AND OTHER WAIVERS.— 

18 In the case of a State with a waiver of the State 

19 plan approved under section 1115, section 1915, or 

20 another provision of this title, this section shall 

21 apply to medical assistance expenditures and medical 

22 assistance payments under the waiver, in the same 

23 manner as if such expenditures and payments had 

24 been made under a State plan under this title and 

25 the limitations on expenditures under this section 


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1 shall supersede any other payment limitations or 

2 provisions (including limitations based on a per cap3 ita limitation) otherwise applicable under such a 

4 waiver. 

5 ‘‘(2) TREATMENT OF STATES EXPANDING COV6 ERAGE AFTER FISCAL YEAR 2016.—In the case of a 

7 State that did not provide for medical assistance for 

8 the 1903A enrollee category described in subsection 

9 (e)(2)(D) during fiscal year 2016 but which provides 

10 for such assistance for such category in a subse11 quent year, the provisional FY19 per capita target 

12 amount for such enrollee category under subsection 

13 (d)(5) shall be equal to the provisional FY19 per 

14 capita target amount for the 1903A enrollee cat15 egory described in subsection (e)(2)(E). 

16 ‘‘(3) IN CASE OF STATE FAILURE TO REPORT

17 NECESSARY DATA.—If a State for any quarter in a 

18 fiscal year (beginning with fiscal year 2019) fails to 

19 satisfactorily submit data on expenditures and en20 rollees in accordance with subsection (h)(1), for such 

21 fiscal year and any succeeding fiscal year for which 

22 such data are not satisfactorily submitted— 

23 ‘‘(A) the Secretary shall calculate and 

24 apply subsections (a) through (e) with respect 

25 to the State as if all 1903A enrollee categories 


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1 for which such expenditure and enrollee data 

2 were not satisfactorily submitted were a single 

3 1903A enrollee category; and 

4 ‘‘(B) the growth factor otherwise applied 

5 under subsection (c)(2)(B) shall be decreased 

6 by 1 percentage point. 

7 ‘‘(g) RECALCULATION OF CERTAIN AMOUNTS FOR

8 DATA ERRORS.—The amounts and percentage calculated 

9 under paragraphs (1) and (4)(C) of subsection (d) for a 

10 State for fiscal year 2016, and the amounts of the ad11 justed total medical assistance expenditures calculated 

12 under subsection (b) and the number of Medicaid enrollees 

13 and 1903A enrollees determined under subsection (e)(4) 

14 for a State for fiscal year 2016, fiscal year 2019, and any 

15 subsequent fiscal year, may be adjusted by the Secretary 

16 based upon an appeal (filed by the State in such a form, 

17 manner, and time, and containing such information relat18 ing to data errors that support such appeal, as the Sec19 retary specifies) that the Secretary determines to be valid, 

20 except that any adjustment by the Secretary under this 

21 subsection for a State may not result in an increase of 

22 the target total medical assistance expenditures exceeding 

23 2 percent. 

24 ‘‘(h) REQUIRED REPORTING AND AUDITING OF

25 CMS–64 DATA; TRANSITIONAL INCREASE IN FEDERAL


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1 MATCHING PERCENTAGE FOR CERTAIN ADMINISTRATIVE

2 EXPENSES.— 

3 ‘‘(1) REPORTING.—In addition to the data re4 quired on form Group VIII on the CMS–64 report 

5 form as of January 1, 2017, in each CMS-64 report 

6 required to be submitted (for each quarter beginning 

7 on or after October 1, 2018), the State shall include 

8 data on medical assistance expenditures within such 

9 categories of services and categories of enrollees (in10 cluding each 1903A enrollee category and each cat11 egory of excluded individuals under subsection 

12 (e)(1)) and the numbers of enrollees within each of 

13 such enrollee categories, as the Secretary determines 

14 are necessary (including timely guidance published 

15 as soon as possible after the date of the enactment 

16 of this section) in order to implement this section 

17 and to enable States to comply with the requirement 

18 of this paragraph on a timely basis. 

19 ‘‘(2) AUDITING.—The Secretary shall conduct 

20 for each State an audit of the number of individuals 

21 and expenditures reported through the CMS–64 re22 port for fiscal year 2016, fiscal year 2019, and each 

23 subsequent fiscal year, which audit may be con24 ducted on a representative sample (as determined by 

25 the Secretary). 


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1 ‘‘(3) TEMPORARY INCREASE IN FEDERAL

2 MATCHING PERCENTAGE TO SUPPORT IMPROVED

3 DATA REPORTING SYSTEMS FOR FISCAL YEARS 2018

4 AND 2019.—For amounts expended during calendar 

5 quarters beginning on or after October 1, 2017, and 

6 before October 1, 2019— 

7 ‘‘(A) the Federal matching percentage ap8 plied under section 1903(a)(3)(A)(i) shall be in9 creased by 10 percentage points to 100 percent; 

10 ‘‘(B) the Federal matching percentage ap11 plied under section 1903(a)(3)(B) shall be in12 creased by 25 percentage points to 100 percent; 

13 and 

14 ‘‘(C) the Federal matching percentage ap15 plied under section 1903(a)(7) shall be in16 creased by 10 percentage points to 60 percent 

17 but only with respect to amounts expended that 

18 are attributable to a State’s additional adminis19 trative expenditures to implement the data re20 quirements of paragraph (1). 

21 ‘‘(i) FLEXIBLE BLOCK GRANT OPTION FOR

22 STATES.— 

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

24 elects the option of applying this subsection for a 

25 10-fiscal-year period (beginning no earlier than fiscal 


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1 year 2020 and, at the State option, for any suc2 ceeding 10-fiscal-year period) and that has a plan 

3 approved by the Secretary under paragraph (2) to 

4 carry out the option for such period— 

5 ‘‘(A) the State shall receive, instead of 

6 amounts otherwise payable to the State under 

7 this title for medical assistance for block grant 

8 individuals within the applicable block grant 

9 category (as defined in paragraph (6)) for the 

10 State during the period in which the election is 

11 in effect, the amount specified in paragraph 

12 (4); 

13 ‘‘(B) the previous provisions of this section 

14 shall be applied as if— 

15 ‘‘(i) block grant individuals within the 

16 applicable block grant category for the 

17 State and period were not section 1903A 

18 enrollees for each 10-fiscal year period for 

19 which the State elects to apply this sub20 section; and 

21 ‘‘(ii) if such option is not extended at 

22 the end of a 10-fiscal-year-period, the per 

23 capita limitations under such previous pro24 visions shall again apply after such period 

25 and such limitations shall be applied as if 


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1 the election under this subsection had 

2 never taken place; 

3 ‘‘(C) the payment under this subsection 

4 may only be used consistent with the State plan 

5 under paragraph (2) for block grant health care 

6 assistance (as defined in paragraph (7)); and 

7 ‘‘(D) with respect to block grant individ8 uals within the applicable block grant category 

9 for the State for which block grant health care 

10 assistance is made available under this sub11 section, such assistance shall be instead of med12 ical assistance otherwise provided to the indi13 vidual under this title. 

14 ‘‘(2) STATE PLAN FOR ADMINISTERING BLOCK

15 GRANT OPTION.— 

16 ‘‘(A) IN GENERAL.—No payment shall be 

17 made under this subsection to a State pursuant 

18 to an election for a 10-fiscal-year period under 

19 paragraph (1) unless the State has a plan, ap20 proved under subparagraph (B), for such period 

21 that specifies— 

22 ‘‘(i) the applicable block grant cat23 egory with respect to which the State will 

24 apply the option under this subsection for 

25 such period; 


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1 ‘‘(ii) the conditions for eligibility of 

2 block grant individuals within such appli3 cable block grant category for block grant 

4 health care assistance under the option, 

5 which shall be instead of other conditions 

6 for eligibility under this title, except that 

7 in the case of a State that has elected the 

8 applicable block grant category described 

9 in— 

10 ‘‘(I) subparagraph (A) of para11 graph (6), the plan must provide for 

12 eligibility for pregnant women and 

13 children required to be provided med14 ical assistance under subsections 

15 (a)(10)(A)(i) and (e)(4) of section 

16 1902; or 

17 ‘‘(II) subparagraph (B) of para18 graph (6), the plan must provide for 

19 eligibility for pregnant women re20 quired to be provided medical assist21 ance under subsection (a)(10)(A)(i); 

22 and 

23 ‘‘(iii) the types of items and services, 

24 the amount, duration, and scope of such 

25 services, the cost-sharing with respect to 


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1 such services, and the method for delivery 

2 of block grant health care assistance under 

3 this subsection, which shall be instead of 

4 the such types, amount, duration, and 

5 scope, cost-sharing, and methods of deliv6 ery for medical assistance otherwise re7 quired under this title, except that the plan 

8 must provide for assistance for— 

9 ‘‘(I) hospital care; 

10 ‘‘(II) surgical care and treat11 ment; 

12 ‘‘(III) medical care and treat13 ment; 

14 ‘‘(IV) obstetrical and prenatal 

15 care and treatment; 

16 ‘‘(V) prescribed drugs, medicines, 

17 and prosthetic devices; 

18 ‘‘(VI) other medical supplies and 

19 services; and 

20 ‘‘(VII) health care for children 

21 under 18 years of age. 

22 ‘‘(B) REVIEW AND APPROVAL.—A plan de23 scribed in subparagraph (A) shall be deemed 

24 approved by the Secretary unless the Secretary 

25 determines, within 30 days after the date of the 


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1 Secretary’s receipt of the plan, that the plan is 

2 incomplete or actuarially unsound and, with re3 spect to such plan and its implementation 

4 under this subsection, the requirements of para5 graphs (1), (10)(B), (17), and (23) of section 

6 1902(a) shall not apply. 

7 ‘‘(3) AMOUNT OF BLOCK GRANT FUNDS.— 

8 ‘‘(A) FOR INITIAL FISCAL YEAR.—The 

9 block grant amount under this paragraph for a 

10 State for the initial fiscal year in the first 10- 

11 fiscal-year period is equal to the sum of the 

12 products (for each applicable block grant cat13 egory for such State and period) of— 

14 ‘‘(i) the target per capita medical as15 sistance expenditures for such State for 

16 such fiscal year (under subsection (c)(2)); 

17 ‘‘(ii) the number of 1903A enrollees 

18 for such category and State for fiscal year 

19 2019, as determined under subsection 

20 (e)(4); and 

21 ‘‘(iii) the Federal average medical as22 sistance matching percentage (as defined 

23 in subsection (a)(4)) for the State for fis24 cal year 2019. 


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1 ‘‘(B) FOR ANY SUBSEQUENT FISCAL

2 YEAR.—The block grant amount under this 

3 paragraph for a State for each succeeding fiscal 

4 year (in any 10-fiscal-year period) is equal to 

5 the block grant amount under subparagraph 

6 (A) (or this subparagraph) for the State for the 

7 previous fiscal year increased by the annual in8 crease in the consumer price index for all urban 

9 consumers (all items; U.S. city average) for the 

10 fiscal year involved. 

11 ‘‘(C) AVAILABILITY OF ROLLOVER

12 FUNDS.—The block grant amount under this 

13 paragraph for a State for a fiscal year shall re14 main available to the State for expenditures 

15 under this subsection for the succeeding fiscal 

16 year but only if an election is in effect under 

17 this subsection for the State in such succeeding 

18 fiscal year. 

19 ‘‘(4) FEDERAL PAYMENT AND STATE RESPONSI20 BILITY.—The Secretary shall pay to each State with 

21 an election in effect under this subsection for a fiscal 

22 year, from its block grant amount under paragraph 

23 (3) available for such fiscal year, an amount for 

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1 tion 2105(b) of the total amount expended under the 

2 State plan under this subsection during such quar3 ter, and the State is responsible for the balance of 

4 funds to carry out such plan. 

5 ‘‘(5) BLOCK GRANT INDIVIDUAL DEFINED.—In 

6 this subsection, the term ‘block grant individual’ 

7 means, with respect to a State for a 10-fiscal-year 

8 period, an individual who is not disabled (as defined 

9 for purposes of the State plan) and who is within an 

10 applicable block grant category for the State and 

11 such period. 

12 ‘‘(6) APPLICABLE BLOCK GRANT CATEGORY DE13 FINED.—In this subsection, the term ‘applicable 

14 block grant category’ means with respect to a State 

15 for a 10-fiscal-year period, either of the following as 

16 specified by the State for such period in its plan 

17 under paragraph (2)(A)(i): 

18 ‘‘(A) 2 ENROLLEE CATEGORIES.—Both of 

19 the following 1903A enrollee categories: 

20 ‘‘(i) CHILDREN.—The 1903A enrollee 

21 category specified in subparagraph (C) of 

22 subsection (e)(2). 

23 ‘‘(ii) OTHER NONELDERLY, NON24 DISABLED, NON-EXPANSION ADULTS.—The 


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1 1903A enrollee category specified in sub2 paragraph (E) of such subsection. 

3 ‘‘(B) OTHER NONELDERLY, NONDISABLED, 

4 NON-EXPANSION ADULTS.—Only the 1903A en5 rollee category specified in subparagraph (E) of 

6 subsection (e)(2). 

7 ‘‘(7) BLOCK GRANT HEALTH CARE ASSIST8 ANCE.—In this subsection, the term ‘block grant 

9 health care assistance’ means assistance for health10 care-related items and medical services for block 

11 grant individuals within the applicable block grant 

12 category for the State and 10-fiscal-year period in13 volved who are low-income individuals (as defined by 

14 the State). 

15 ‘‘(8) AUDITING.—As a condition of receiving 

16 funds under this subsection, a State shall contract 

17 with an independent entity to conduct audits of its 

18 expenditures made with respect to activities funded 

19 under this subsection for each fiscal year for which 

20 the State elects to apply this subsection to ensure 

21 that such funds are used consistent with this sub22 section and shall make such audits available to the 

23 Secretary upon the request of the Secretary.’’. 


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1 Subtitle D—Patient Relief and 

2 Health Insurance Market Stability 

3 SEC. 131. REPEAL OF COST-SHARING SUBSIDY. 

4 (a) IN GENERAL.—Section 1402 of the Patient Pro5 tection and Affordable Care Act is repealed. 

6 (b) EFFECTIVE DATE.—The repeal made by sub7 section (a) shall apply to cost-sharing reductions (and pay8 ments to issuers for such reductions) for plan years begin9 ning after December 31, 2019. 

10 SEC. 132. PATIENT AND STATE STABILITY FUND. 

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

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

13 ‘‘TITLE XXII—PATIENT AND 

14 STATE STABILITY FUND 

15 ‘‘SEC. 2201. ESTABLISHMENT OF PROGRAM. 

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

17 Stability Fund’ to be administered by the Secretary of 

18 Health and Human Services, acting through the Adminis19 trator of the Centers for Medicare & Medicaid Services 

20 (in this section referred to as the ‘Administrator’), to pro21 vide funding, in accordance with this title, to the 50 States 

22 and the District of Columbia (each referred to in this sec23 tion as a ‘State’) during the period, subject to section 

24 2204(c), beginning on January 1, 2018, and ending on 


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1 December 31, 2026, for the purposes described in section 

2 2202. 

3 ‘‘SEC. 2202. USE OF FUNDS. 

4 ‘‘(a) IN GENERAL.—Subject to subsections (b) and 

5 (c), a State may use the funds allocated to the State under 

6 this title for any of the following purposes: 

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

8 assistance, high-risk individuals who do not have ac9 cess to health insurance coverage offered through an 

10 employer enroll in health insurance coverage in the 

11 individual market in the State, as such market is de12 fined by the State (whether through the establish13 ment of a new mechanism or maintenance of an ex14 isting mechanism for such purpose). 

15 ‘‘(2) Providing incentives to appropriate entities 

16 to enter into arrangements with the State to help 

17 stabilize premiums for health insurance coverage in 

18 the individual market, as such markets are defined 

19 by the State. 

20 ‘‘(3) Reducing the cost for providing health in21 surance coverage in the individual market and small 

22 group market, as such markets are defined by the 

23 State, to individuals who have, or are projected to 

24 have, a high rate of utilization of health services (as 

25 measured by cost) and to individuals who have high 


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1 costs of health insurance coverage due to the low 

2 density population of the State in which they reside. 

3 ‘‘(4) Promoting participation in the individual 

4 market and small group market in the State and in5 creasing health insurance options available through 

6 such market. 

7 ‘‘(5) Promoting access to preventive services; 

8 dental care services (whether preventive or medically 

9 necessary); vision care services (whether preventive 

10 or medically necessary); or any combination of such 

11 services. 

12 ‘‘(6) Maternity coverage and newborn care. 

13 ‘‘(7) Prevention, treatment, or recovery support 

14 services for individuals with mental or substance use 

15 disorders, focused on either or both of the following: 

16 ‘‘(A) Direct inpatient or outpatient clinical 

17 care for treatment of addiction and mental ill18 ness. 

19 ‘‘(B) Early identification and intervention 

20 for children and young adults with serious men21 tal illness. 

22 ‘‘(8) Providing payments, directly or indirectly, 

23 to health care providers for the provision of such 

24 health care services as are specified by the Adminis25 trator. 


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1 ‘‘(9) Providing assistance to reduce out-of-pock2 et costs, such as copayments, coinsurance, pre3 miums, and deductibles, of individuals enrolled in 

4 health insurance coverage in the State. 

5 ‘‘(b) REQUIRED USE OF INCREASE IN ALLOT6 MENT.—A State shall use the additional allocation pro7 vided to the State from the funds appropriated under the 

8 second sentence of section 2204(a) for each year only for 

9 the purposes described in paragraphs (6) and (7) of sub10 section (a). 

11 ‘‘(c) REQUIRED USE OF ADDITIONAL INCREASE TO

12 CERTAIN WAIVER STATES TO PROVIDE FINANCIAL

13 HARDSHIP ASSISTANCE.—A State shall use the additional 

14 allocation provided to the State from the funds appro15 priated under the last sentence of section 2204(a) only 

16 in accordance with such last sentence. 

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

18 SAFEGUARD. 

19 ‘‘(a) ENCOURAGING STATE OPTIONS FOR ALLOCA20 TIONS.— 

21 ‘‘(1) IN GENERAL.—To be eligible for an alloca22 tion of funds under this title for a year during the 

23 period described in section 2201 for use for one or 

24 more purposes described in section 2202, a State 

25 shall submit to the Administrator an application at 


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1 such time (but, in the case of allocations for 2018, 

2 not later than 45 days after the date of the enact3 ment of this title and, in the case of allocations for 

4 a subsequent year, not later than March 31 of the 

5 previous year) and in such form and manner as 

6 specified by the Administrator and containing— 

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

8 used for such purposes; 

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

10 make, from non-Federal funds, expenditures for 

11 such purposes in an amount that is not less 

12 than the State percentage required for the year 

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

14 ‘‘(C) such other information as the Admin15 istrator may require. 

16 ‘‘(2) AUTOMATIC APPROVAL.—An application so 

17 submitted is approved unless the Administrator noti18 fies the State submitting the application, not later 

19 than 60 days after the date of the submission of 

20 such application, that the application has been de21 nied for not being in compliance with any require22 ment of this title and of the reason for such denial. 

23 ‘‘(3) ONE-TIME APPLICATION.—If an applica24 tion of a State is approved for a year, with respect 

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1 tion shall be treated as approved, with respect to 

2 such purpose, for each subsequent year through 

3 2026. 

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

5 PROGRAM.—Any program receiving funds from an 

6 allocation for a State under this title, including pur7 suant to subsection (b), shall be considered to be a 

8 ‘State health care program’ for purposes of sections 

9 1128, 1128A, and 1128B. 

10 ‘‘(b) DEFAULT FEDERAL SAFEGUARD.— 

11 ‘‘(1) IN GENERAL.— 

12 ‘‘(A) 2018.—For allocations made under 

13 this title for 2018, in the case of a State that 

14 does not submit an application under subsection 

15 (a) by the 45-day submission date applicable to 

16 such year under subsection (a)(1) and in the 

17 case of a State that does submit such an appli18 cation by such date that is not approved, sub19 ject to section 2204(e), the Administrator, in 

20 consultation with the State insurance commis21 sioner, shall use the allocation that would other22 wise be provided to the State under this title 

23 for such year, in accordance with paragraph 

24 (2), for such State. 


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1 ‘‘(B) 2019 THROUGH 2026.—In the case of 

2 a State that does not have in effect an approved 

3 application under this section for 2019 or a 

4 subsequent year beginning during the period 

5 described in section 2201, subject to section 

6 2204(e), the Administrator, in consultation with 

7 the State insurance commissioner, shall use the 

8 allocation that would otherwise be provided to 

9 the State under this title for such year, in ac10 cordance with paragraph (2), for such State. 

11 ‘‘(2) REQUIRED USE FOR MARKET STABILIZA12 TION PAYMENTS TO ISSUERS.—Subject to section 

13 2204(a), an allocation for a State made pursuant to 

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

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

16 State by providing payments to appropriate entities 

17 described in such section with respect to claims that 

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

19 under this title for 2020 or a subsequent year dur20 ing the period specified in section 2201, such dollar 

21 amount specified by the Administrator), but do not 

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

23 made under this title for 2020 or a subsequent year 

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1 cent (or, with respect to allocations made under this 

2 title for 2020 or a subsequent year during such pe3 riod, such percentage specified by the Administrator) 

4 of the amount of such claims. 

5 ‘‘SEC. 2204. ALLOCATIONS. 

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

7 allocations for States (including pursuant to section 

8 2203(b)) under this title there is appropriated, out of any 

9 money in the Treasury not otherwise appropriated— 

10 ‘‘(1) for 2018, $15,000,000,000; 

11 ‘‘(2) for 2019, $15,000,000,000; 

12 ‘‘(3) for 2020, $10,000,000,000; 

13 ‘‘(4) for 2021, $10,000,000,000; 

14 ‘‘(5) for 2022, $10,000,000,000; 

15 ‘‘(6) for 2023, $10,000,000,000; 

16 ‘‘(7) for 2024, $10,000,000,000; 

17 ‘‘(8) for 2025, $10,000,000,000; and 

18 ‘‘(9) for 2026, $10,000,000,000. 

19 The amount otherwise appropriated under the previous 

20 sentence for 2020 shall be increased by $15,000,000,000, 

21 to be used and available under subsection (d) only for the 

22 purposes described in paragraphs (6) and (7) of section 

23 2202(a). The amount otherwise appropriated under this 

24 subsection shall be increased by $8,000,000,000 for the 

25 period beginning with 2018 and ending with 2023, to be 


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1 allocated to States with a waiver in effect under section 

2 2701(b) of the Public Health Service Act with respect to 

3 the purpose described in paragraph (1)(C) of such section, 

4 in accordance with an allocation methodology specified by 

5 the Secretary that takes into account the relative alloca6 tion of other amounts appropriated under this subsection 

7 among such States, and to be used by (and made available 

8 under subsection (d), for any year during such period that 

9 such waiver is in effect, to) such States for the purpose 

10 of providing assistance to reduce premiums or other out11 of-pocket costs of individuals who are subject to an in12 crease in the monthly premium rate for health insurance 

13 coverage as a result of such waiver. 

14 ‘‘(b) ALLOCATIONS.— 

15 ‘‘(1) PAYMENT.— 

16 ‘‘(A) IN GENERAL.—From amounts appro17 priated under subsection (a) for a year, the Ad18 ministrator shall, with respect to a State and 

19 not later than the date specified under subpara20 graph (B) for such year, allocate, subject to 

21 subsection (e), for such State (including pursu22 ant to section 2203(b)) the amount determined 

23 for such State and year under paragraph (2). 


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1 ‘‘(B) SPECIFIED DATE.—For purposes of 

2 subparagraph (A), the date specified in this 

3 subparagraph is— 

4 ‘‘(i) for 2018, the date that is 45 days 

5 after the date of the enactment of this 

6 title; and 

7 ‘‘(ii) for 2019 and subsequent years, 

8 January 1 of the respective year. 

9 ‘‘(2) ALLOCATION AMOUNT DETERMINA10 TIONS.— 

11 ‘‘(A) FOR 2018 AND 2019.— 

12 ‘‘(i) IN GENERAL.—For purposes of 

13 paragraph (1), the amount determined 

14 under this paragraph for 2018 and 2019 

15 for a State is an amount equal to the sum 

16 of— 

17 ‘‘(I) the relative incurred claims 

18 amount described in clause (ii) for 

19 such State and year; and 

20 ‘‘(II) the relative uninsured and 

21 issuer participation amount described 

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

23 ‘‘(ii) RELATIVE INCURRED CLAIMS

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

25 relative incurred claims amount described 


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1 in this clause for a State for 2018 and 

2 2019 is the product of— 

3 ‘‘(I) 85 percent of the amount 

4 appropriated under subsection (a) for 

5 the year; and 

6 ‘‘(II) the relative State incurred 

7 claims proportion described in clause 

8 (iii) for such State and year. 

9 ‘‘(iii) RELATIVE STATE INCURRED

10 CLAIMS PROPORTION.—The relative State 

11 incurred claims proportion described in 

12 this clause for a State and year is the 

13 amount equal to the ratio of— 

14 ‘‘(I) the adjusted incurred claims 

15 by the State, as reported through the 

16 medical loss ratio annual reporting 

17 under section 2718 of the Public 

18 Health Service Act for the third pre19 vious year; to 

20 ‘‘(II) the sum of such adjusted 

21 incurred claims for all States, as so 

22 reported, for such third previous year. 

23 ‘‘(iv) RELATIVE UNINSURED AND

24 ISSUER PARTICIPATION AMOUNT.—For 

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1 sured and issuer participation amount de2 scribed in this clause for a State for 2018 

3 and 2019 is the product of— 

4 ‘‘(I) 15 percent of the amount 

5 appropriated under subsection (a) for 

6 the year; and 

7 ‘‘(II) the relative State uninsured 

8 and issuer participation proportion de9 scribed in clause (v) for such State 

10 and year. 

11 ‘‘(v) RELATIVE STATE UNINSURED

12 AND ISSUER PARTICIPATION PROPOR13 TION.—The relative State uninsured and 

14 issuer participation proportion described in 

15 this clause for a State and year is— 

16 ‘‘(I) in the case of a State not 

17 described in clause (vi) for such year, 

18 0; and 

19 ‘‘(II) in the case of a State de20 scribed in clause (vi) for such year, 

21 the amount equal to the ratio of— 

22 ‘‘(aa) the number of individ23 uals residing in such State who 

24 for the third preceding year were 

25 not enrolled in a health plan or 


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1 otherwise did not have health in2 surance coverage (including 

3 through a Federal or State 

4 health program) and whose in5 come is below 100 percent of the 

6 poverty line applicable to a family 

7 of the size involved; to 

8 ‘‘(bb) the sum of the num9 ber of such individuals for all 

10 States described in clause (vi) for 

11 the third preceding year. 

12 ‘‘(vi) STATES DESCRIBED.—For pur13 poses of clause (v), a State is described in 

14 this clause, with respect to 2018 and 2019, 

15 if the State satisfies either of the following 

16 criterion: 

17 ‘‘(I) The ratio described in sub18 clause (II) of clause (v) that would be 

19 determined for such State by sub20 stituting ‘2015’ for each reference in 

21 such subclause to ‘the third preceding 

22 year’ and by substituting ‘all such 

23 States’ for the reference in item (bb) 

24 of such subclause to ‘all States de25 scribed in clause (vi)’ is greater than 


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1 the ratio described in such subclause 

2 that would be determined for such 

3 State by substituting ‘2013’ for each 

4 reference in such subclause to ‘the 

5 third preceding year’ and by sub6 stituting ‘all such States’ for the ref7 erence in item (bb) of such subclause 

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

9 ‘‘(II) The State has fewer than 

10 three health insurance issuers offering 

11 qualified health plans through the Ex12 change for 2017. 

13 ‘‘(B) FOR 2020 THROUGH 2026.—For pur14 poses of paragraph (1), the amount determined 

15 under this paragraph for a year (beginning with 

16 2020) during the period described in section 

17 2201 for a State is an amount determined in 

18 accordance with an allocation methodology spec19 ified by the Administrator which— 

20 ‘‘(i) takes into consideration the ad21 justed incurred claims of such State, the 

22 number of residents of such State who for 

23 the previous year were not enrolled in a 

24 health plan or otherwise did not have 

25 health insurance coverage (including 


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1 through a Federal or State health pro2 gram) and whose income is below 100 per3 cent of the poverty line applicable to a 

4 family of the size involved, and the number 

5 of health insurance issuers participating in 

6 the insurance market in such State for 

7 such year; 

8 ‘‘(ii) is established after consultation 

9 with health care consumers, health insur10 ance issuers, State insurance commis11 sioners, and other stakeholders and after 

12 taking into consideration additional cost 

13 and risk factors that may inhibit health 

14 care consumer and health insurance issuer 

15 participation; and 

16 ‘‘(iii) reflects the goals of improving 

17 the health insurance risk pool, promoting a 

18 more competitive health insurance market, 

19 and increasing choice for health care con20 sumers. 

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

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

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

24 2020 and ending with 2027), not later than March 31 of 

25 such year— 


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

2 from the amounts appropriated under subsection (a) 

3 for the previous year but not allocated for such pre4 vious year; and 

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

6 funds were not so allocated for such previous year, 

7 allocate such remaining funds, in accordance with 

8 the allocation methodology specified pursuant to 

9 subsection (b)(2)(B)— 

10 ‘‘(A) to States that have submitted an ap11 plication approved under section 2203(a) for 

12 such previous year for any purpose for which 

13 such an application was approved; and 

14 ‘‘(B) for States for which allocations were 

15 made pursuant to section 2203(b) for such pre16 vious year, to be used by the Administrator for 

17 such States, to carry out the Federal Invisible 

18 Risk Sharing Program in such States under 

19 section 2205; 

20 with, respect to a year before 2027, any remaining 

21 funds being made available for allocations to States 

22 for the subsequent year. 

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

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1 ance with this section shall remain available for expendi2 ture through December 31, 2027. 

3 ‘‘(e) CONDITIONS FOR AND LIMITATIONS ON RE4 CEIPT OF FUNDS.—The Secretary may not make an allo5 cation under this title for a State, with respect to a pur6 pose described in section 2202— 

7 ‘‘(1) in the case of an allocation that would be 

8 made to a State pursuant to section 2203(a), if the 

9 State does not agree that the State will make avail10 able non-Federal contributions towards such purpose 

11 in an amount equal to— 

12 ‘‘(A) for 2020, 7 percent of the amount al13 located under this subsection to such State for 

14 such year and purpose; 

15 ‘‘(B) for 2021, 14 percent of the amount 

16 allocated under this subsection to such State 

17 for such year and purpose; 

18 ‘‘(C) for 2022, 21 percent of the amount 

19 allocated under this subsection to such State 

20 for such year and purpose; 

21 ‘‘(D) for 2023, 28 percent of the amount 

22 allocated under this subsection to such State 

23 for such year and purpose; 


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1 ‘‘(E) for 2024, 35 percent of the amount 

2 allocated under this subsection to such State 

3 for such year and purpose; 

4 ‘‘(F) for 2025, 42 percent of the amount 

5 allocated under this subsection to such State 

6 for such year and purpose; and 

7 ‘‘(G) for 2026, 50 percent of the amount 

8 allocated under this subsection to such State 

9 for such year and purpose; 

10 ‘‘(2) in the case of an allocation that would be 

11 made for a State pursuant to section 2203(b), if the 

12 State does not agree that the State will make avail13 able non-Federal contributions towards such purpose 

14 in an amount equal to— 

15 ‘‘(A) for 2020, 10 percent of the amount 

16 allocated under this subsection to such State 

17 for such year and purpose; 

18 ‘‘(B) for 2021, 20 percent of the amount 

19 allocated under this subsection to such State 

20 for such year and purpose; and 

21 ‘‘(C) for 2022, 30 percent of the amount 

22 allocated under this subsection to such State 

23 for such year and purpose; 


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1 ‘‘(D) for 2023, 40 percent of the amount 

2 allocated under this subsection to such State 

3 for such year and purpose; 

4 ‘‘(E) for 2024, 50 percent of the amount 

5 allocated under this subsection to such State 

6 for such year and purpose; 

7 ‘‘(F) for 2025, 50 percent of the amount 

8 allocated under this subsection to such State 

9 for such year and purpose; and 

10 ‘‘(G) for 2026, 50 percent of the amount 

11 allocated under this subsection to such State 

12 for such year and purpose; or 

13 ‘‘(3) if such an allocation for such purpose 

14 would not be permitted under subsection (c)(7) of 

15 section 2105 if such allocation were payment made 

16 under such section. 

17 ‘‘SEC. 2205. FEDERAL INVISIBLE RISK SHARING PROGRAM. 

18 ‘‘(a) IN GENERAL.—There is established within the 

19 Patient and State Stability Fund a Federal Invisible Risk 

20 Sharing Program (in this section referred to as the ‘Pro21 gram’), to be administered by the Secretary of Health and 

22 Human Services, acting through the Administrator of the 

23 Centers for Medicare & Medicaid Services (in this section 

24 referred to as the ‘Administrator’), to provide payments 

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1 ble individuals for the purpose of lowering premiums for 

2 health insurance coverage offered in the individual market. 

3 ‘‘(b) FUNDING.— 

4 ‘‘(1) APPROPRIATION.—For the purpose of pro5 viding funding for the Program there is appro6 priated, out of any money in the Treasury not other7 wise appropriated, $15,000,000,000 for the period 

8 beginning on January 1, 2018, and ending on De9 cember 31, 2026. 

10 ‘‘(2) USE OF UNALLOCATED FUNDS.—Funds 

11 provided under section 2204(c)(2)(B) to carry out 

12 this section are in addition to the amount appro13 priated under paragraph (1). 

14 ‘‘(c) OPERATION OF PROGRAM.— 

15 ‘‘(1) IN GENERAL.—The Administrator shall es16 tablish, after consultation with health care con17 sumers, health insurance issuers, State insurance 

18 commissioners, and other stakeholders and after tak19 ing into consideration high cost health conditions 

20 and other health trends that generate high cost, pa21 rameters for the operation of the Program consistent 

22 with this section and consistent with the same limi23 tation on payment with respect to health insurance 

24 coverage that applies to payment with respect health 

25 benefits coverage under section 2105(c)(7). 


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1 ‘‘(2) DEADLINE FOR INITIAL OPERATION.—Not 

2 later than 60 days after the date of the enactment 

3 of this title, the Administrator shall establish suffi4 cient parameters to specify how the Program will op5 erate for plan year 2018. 

6 ‘‘(3) STATE OPERATION OF PROGRAM.—The 

7 Administrator shall establish a process for a State to 

8 operate the Program in such State beginning with 

9 plan year 2020. 

10 ‘‘(d) DETAILS OF PROGRAM.—The parameters for 

11 the Program shall include the following: 

12 ‘‘(1) ELIGIBLE INDIVIDUALS.—A definition for 

13 eligible individuals. 

14 ‘‘(2) HEALTH STATUS STATEMENTS.—The de15 velopment and use of health status statements with 

16 respect to such individuals. 

17 ‘‘(3) STANDARDS FOR QUALIFICATION.— 

18 ‘‘(A) AUTOMATIC QUALIFICATION.—The 

19 identification of health conditions that auto20 matically qualify individuals as eligible individ21 uals at the time of application for health insur22 ance coverage. 

23 ‘‘(B) VOLUNTARY QUALIFICATION.—A 

24 process under which health insurance issuers 

25 may voluntarily qualify individuals, who do not 


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1 automatically qualify under subparagraph (A), 

2 as eligible individuals at the time of application 

3 for such coverage. 

4 ‘‘(4) PERCENTAGE OF INSURANCE PREMIUMS

5 TO BE APPLIED.—The percentage of the premiums 

6 paid, to health insurance issuers for health insur7 ance coverage by eligible individuals, that shall be 

8 collected and deposited to the credit (and available 

9 for the use) of the Program. 

10 ‘‘(5) ATTACHMENT DOLLAR AMOUNT AND PAY11 MENT PROPORTION.—The dollar amount of claims 

12 for eligible individuals after which the Program will 

13 provide payments to health insurance issuers and 

14 the proportion of such claims above such dollar 

15 amount that the Program will pay.’’. 

16 SEC. 133. CONTINUOUS HEALTH INSURANCE COVERAGE IN17 CENTIVE. 

18 Subpart I of part A of title XXVII of the Public 

19 Health Service Act is amended— 

20 (1) in section 2701(a)(1)(B), by striking ‘‘such 

21 rate’’ and inserting ‘‘subject to section 2710A, such 

22 rate’’; 

23 (2) by redesignating the second section 2709 as 

24 section 2710; and 


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1 (3) by adding at the end the following new sec2 tion: 

3 ‘‘SEC. 2710A. ENCOURAGING CONTINUOUS HEALTH INSUR4 ANCE COVERAGE. 

5 ‘‘(a) PENALTY APPLIED.— 

6 ‘‘(1) IN GENERAL.—Subject to the succeeding 

7 provisions of this section, a health insurance issuer 

8 offering health insurance coverage in the individual 

9 market shall, in the case of an individual who is an 

10 applicable policyholder of such coverage with respect 

11 to an enforcement period applicable to enrollments 

12 for a plan year beginning with plan year 2019 (or, 

13 in the case of enrollments during a special enroll14 ment period, beginning with plan year 2018), in15 crease the monthly premium rate otherwise applica16 ble to such individual for such coverage during each 

17 month of such period, by an amount determined 

18 under paragraph (2). 

19 ‘‘(2) AMOUNT OF PENALTY.—The amount de20 termined under this paragraph for an applicable pol21 icyholder enrolling in health insurance coverage de22 scribed in paragraph (1) for a plan year, with re23 spect to each month during the enforcement period 

24 applicable to enrollments for such plan year, is the 

25 amount that is equal to 30 percent of the monthly 


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1 premium rate otherwise applicable to such applicable 

2 policyholder for such coverage during such month. 

3 ‘‘(b) DEFINITIONS.—For purposes of this section: 

4 ‘‘(1) APPLICABLE POLICYHOLDER.—The term 

5 ‘applicable policyholder’ means, with respect to 

6 months of an enforcement period and health insur7 ance coverage, an individual who— 

8 ‘‘(A) is a policyholder of such coverage for 

9 such months; 

10 ‘‘(B) cannot demonstrate that (through 

11 presentation of certifications described in sec12 tion 2704(e) or in such other manner as may 

13 be specified in regulations, such as a return or 

14 statement made under section 6055(d) or 36B 

15 of the Internal Revenue Code of 1986), during 

16 the look-back period that is with respect to such 

17 enforcement period, there was not a period of 

18 at least 63 continuous days during which the 

19 individual did not have creditable coverage (as 

20 defined in paragraph (1) of section 2704(c) and 

21 credited in accordance with paragraphs (2) and 

22 (3) of such section); and 

23 ‘‘(C) in the case of an individual who had 

24 been enrolled under dependent coverage under a 

25 group health plan or health insurance coverage 


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1 by reason of section 2714 and such dependent 

2 coverage of such individual ceased because of 

3 the age of such individual, is not enrolling dur4 ing the first open enrollment period following 

5 the date on which such coverage so ceased. 

6 ‘‘(2) LOOK-BACK PERIOD.—The term ‘look-back 

7 period’ means, with respect to an enforcement period 

8 applicable to an enrollment of an individual for a 

9 plan year beginning with plan year 2019 (or, in the 

10 case of an enrollment of an individual during a spe11 cial enrollment period, beginning with plan year 

12 2018) in health insurance coverage described in sub13 section (a)(1), the 12-month period ending on the 

14 date the individual enrolls in such coverage for such 

15 plan year. 

16 ‘‘(3) ENFORCEMENT PERIOD.—The term ‘en17 forcement period’ means— 

18 ‘‘(A) with respect to enrollments during a 

19 special enrollment period for plan year 2018, 

20 the period beginning with the first month that 

21 is during such plan year and that begins subse22 quent to such date of enrollment, and ending 

23 with the last month of such plan year; and 

24 ‘‘(B) with respect to enrollments for plan 

25 year 2019 or a subsequent plan year, the 12- 


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1 month period beginning on the first day of the 

2 respective plan year.’’. 

3 SEC. 134. INCREASING COVERAGE OPTIONS. 

4 Section 1302 of the Patient Protection and Afford5 able Care Act (42 U.S.C. 18022) is amended— 

6 (1) in subsection (a)(3), by inserting ‘‘and with 

7 respect to a plan year before plan year 2020’’ after 

8 ‘‘subsection (e)’’; and 

9 (2) in subsection (d), by adding at the end the 

10 following: 

11 ‘‘(5) SUNSET.—The provisions of this sub12 section shall not apply after December 31, 2019, 

13 and after such date any reference to this subsection 

14 or level of coverage or plan described in this sub15 section and any requirement under law applying 

16 such a level of coverage or plan shall have no force 

17 or effect (and such a requirement shall be applied as 

18 if this section had been repealed).’’. 

19 SEC. 135. CHANGE IN PERMISSIBLE AGE VARIATION IN 

20 HEALTH INSURANCE PREMIUM RATES. 

21 Section 2701(a)(1)(A)(iii) of the Public Health Serv22 ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)), as inserted by sec23 tion 1201(4) of the Patient Protection and Affordable 

24 Care Act, is amended by inserting after ‘‘(consistent with 

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1 ning on or after January 1, 2018, as the Secretary may 

2 implement through interim final regulation, 5 to 1 for 

3 adults (consistent with section 2707(c)) or such other 

4 ratio for adults (consistent with section 2707(c)) as the 

5 State involved may provide (or, in the case of a State with 

6 a waiver under subsection (b) in effect for such a plan 

7 year, the ratio applied for such plan year in accordance 

8 with such waiver)’’. 

9 SEC. 136. PERMITTING STATES TO WAIVE CERTAIN ACA RE10 QUIREMENTS TO ENCOURAGE FAIR HEALTH 

11 INSURANCE PREMIUMS. 

12 (a) IN GENERAL.—Section 2701 of the Public Health 

13 Service Act (42 U.S.C. 300gg) is amended by adding at 

14 the end the following new subsection: 

15 ‘‘(b) PERMISSIBLE STATE WAIVER TO ENCOURAGE

16 FAIR HEALTH INSURANCE PREMIUMS.— 

17 ‘‘(1) IN GENERAL.—A State may submit an ap18 plication to the Secretary for one or more of the fol19 lowing purposes: 

20 ‘‘(A) In the case of plan years beginning 

21 on or after January 1, 2018, to apply, subject 

22 to paragraph (5), under subsection 

23 (a)(1)(A)(iii), instead of the ratio specified in 

24 such subsection, a higher ratio specified by the 

25 State (consistent with section 2707(c)). 


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1 ‘‘(B) In the case of plan years beginning 

2 on or after January 1, 2020, for health insur3 ance coverage offered in the individual or small 

4 group market in such State, to apply, subject to 

5 paragraph (5), instead of the essential health 

6 benefits specified under subsection (b) of sec7 tion 1302 of the Patient Protection and Afford8 able Care Act, essential health benefits as speci9 fied by the State. 

10 ‘‘(C) In the case of a State that has in 

11 place a program that carries out the purpose 

12 described in paragraph (1) or (2) of section 

13 2202(a) of the Social Security Act or partici14 pates in the program established under section 

15 2205 of such Act, for health insurance offered 

16 in the individual market in such State, with re17 spect to an individual who is an applicable pol18 icyholder of such coverage with respect to an 

19 enforcement period (as defined in section 

20 2710A(b)) applicable to enrollments for a plan 

21 year beginning with plan year 2019 (or, in the 

22 case of enrollments during a special enrollment 

23 period, beginning with plan year 2018), to— 

24 ‘‘(i) subject to paragraph (5), not 

25 apply any increase to the monthly premium 


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1 rate that would otherwise apply under sec2 tion 2710A to such individual for such cov3 erage; and 

4 ‘‘(ii) instead, subject to paragraph 

5 (5)— 

6 ‘‘(I) apply subsection (a)(1) as if 

7 health status were included as a fac8 tor described in subparagraph (A) of 

9 such subsection; and 

10 ‘‘(II) not apply section 2705(b). 

11 ‘‘(2) DEFAULT APPROVAL.—An application sub12 mitted under paragraph (1) is approved unless the 

13 Secretary notifies the State submitting the applica14 tion, not later than 60 days after the date of the 

15 submission of such application, that the application 

16 has been denied for not being in compliance with 

17 any requirement of paragraph (3) and of the reason 

18 for such denial. 

19 ‘‘(3) REQUIREMENTS.—The requirements of 

20 this paragraph, with respect to an application sub21 mitted under paragraph (1), are the following: 

22 ‘‘(A) The application is submitted at such 

23 time, and in such manner, as the Secretary may 

24 require. 


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1 ‘‘(B) The application specifies how the ap2 proval of such application will provide for one 

3 or more of the following: 

4 ‘‘(i) Reducing average premiums for 

5 health insurance coverage in the State. 

6 ‘‘(ii) Increasing enrollment in health 

7 insurance coverage in the State. 

8 ‘‘(iii) Stabilizing the market for health 

9 insurance coverage in the State. 

10 ‘‘(iv) Stabilizing premiums for individ11 uals with pre-existing conditions. 

12 ‘‘(v) Increasing the choice of health 

13 plans in the State. 

14 ‘‘(C) The application specifies the period 

15 for which the waiver is to be effective, con16 sistent with paragraph (4). 

17 ‘‘(D) In the case of an application for pur18 poses of paragraph (1)(A), the application 

19 specifies the higher ratio to be applied pursuant 

20 to such paragraph. 

21 ‘‘(E) In the case of an application for pur22 poses of paragraph (1)(B), the application 

23 specifies the essential health benefits to be ap24 plied pursuant to such paragraph. 


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1 ‘‘(F) In the case of an application for pur2 poses of paragraph (1)(C), the application dem3 onstrates that the State has in place a program 

4 that carries out the purpose described in para5 graph (1) or (2) of section 2202(a) of the So6 cial Security Act or participates in the program 

7 established under section 2205 of such Act. 

8 ‘‘(4) TERM OF WAIVER.— 

9 ‘‘(A) IN GENERAL.—No waiver for a State 

10 under this subsection may extend over a period 

11 of longer than 10 years unless the State re12 quests continuation of such waiver, and such re13 quest shall be deemed granted unless the Sec14 retary, within 90 days after the date of its sub15 mission to the Secretary, either denies such re16 quest in writing or informs the State in writing 

17 with respect to any additional information 

18 which is needed in order to make a final deter19 mination with respect to the request. 

20 ‘‘(B) SPECIAL RULE.—A waiver applied for 

21 by a State under paragraph (1)(C) may only be 

22 effective for a period during which the State— 

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1 graph (1) or (2) of section 2202(a) of the 

2 Social Security Act; or 

3 ‘‘(ii) participates in the program es4 tablished under section 2205 of such Act. 

5 ‘‘(5) NON-APPLICATION RULES.— 

6 ‘‘(A) SPECIFIED NON-APPLICATION PROVI7 SIONS.—In no case may a waiver for purposes 

8 of paragraph (1) apply with respect to any of 

9 the following provisions: 

10 ‘‘(i) Section 1301 of the Patient Pro11 tection and Affordable Care Act, to the ex12 tent that such section applies to qualified 

13 health plans offered through the CO-OP 

14 program under section 1322 of such Act or 

15 multi-State plans under section 1334 of 

16 such Act. 

17 ‘‘(ii) Sections 1312(d)(3)(D), 1331, 

18 1332, 1333, and 1334 of such Act. 

19 ‘‘(B) HOLD HARMLESS.—Any standard or 

20 requirement adopted by a State pursuant to the 

21 terms of a waiver approved under this sub22 section shall be deemed to comply with section 

23 1252 of the Patient Protection and Affordable 

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1 ment relates to a Federal or State law de2 scribed in subsection (b)(2) of such section (re3 lating to rating).’’. 

4 (b) APPLICATION TO ESSENTIAL HEALTH BENE5 FITS.—Section 1302(a)(1) of the Patient Protection and 

6 Affordable Care Act (42 U.S.C. 18022(a)(1)) is amended 

7 by inserting ‘‘(or, in the case of health insurance coverage 

8 offered in the individual or small group market in a State 

9 for which there is an applicable waiver in effect under sec10 tion 2701(b) of the Public Health Service Act for a plan 

11 year, the essential health benefits applicable under such 

12 waiver)’’ after ‘‘subsection (b)’’. 

13 SEC. 137. CONSTRUCTIONS. 

14 (a) NO GENDER RATING.—Nothing in this Act shall 

15 be construed as permitting health insurance issuers to dis16 criminate in rates for health insurance coverage by gender. 

17 (b) NO LIMITING ACCESS TO COVERAGE FOR INDI18 VIDUALS WITH PREEXISTING CONDITIONS.—Nothing in 

19 this Act shall be construed as permitting health insurance 

20 issuers to limit access to health coverage for individuals 

21 with preexisting conditions. 


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1 Subtitle E—Implementation 

2 Funding 

3 SEC. 141. AMERICAN HEALTH CARE IMPLEMENTATION 

4 FUND. 

5 (a) IN GENERAL.—There is hereby established an 

6 American Health Care Implementation Fund (referred to 

7 in this section as the ‘‘Fund’’) within the Department of 

8 Health and Human Services to carry out sections 121, 

9 132, 202, and 214 (including the amendments made by 

10 such sections). 

11 (b) FUNDING.—There is appropriated to the Fund, 

12 out of any funds in the Treasury not otherwise appro13 priated, $1,000,000,000 for Federal administrative ex14 penses to carry out the sections described in subsection 

15 (a) (including the amendments made by such sections). 

16 TITLE II—COMMITTEE ON WAYS 

17 AND MEANS 

18 Subtitle A—Repeal and Replace of 

19 Health-Related Tax Policy 

20 SEC. 201. RECAPTURE EXCESS ADVANCE PAYMENTS OF 

21 PREMIUM TAX CREDITS. 

22 Subparagraph (B) of section 36B(f)(2) of the Inter23 nal Revenue Code of 1986 is amended by adding at the 

24 end the following new clause: 


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1 ‘‘(iii) NONAPPLICABILITY OF LIMITA2 TION.—This subparagraph shall not apply 

3 to taxable years beginning after December 

4 31, 2017, and before January 1, 2020.’’. 

5 SEC. 202. ADDITIONAL MODIFICATIONS TO PREMIUM TAX 

6 CREDIT. 

7 (a) MODIFICATION OF DEFINITION OF QUALIFIED

8 HEALTH PLAN.— 

9 (1) IN GENERAL.—Section 36B(c)(3)(A) of the 

10 Internal Revenue Code of 1986 is amended— 

11 (A) by inserting ‘‘(determined without re12 gard to subparagraphs (A), (C)(ii), and (C)(iv) 

13 of paragraph (1) thereof and without regard to 

14 whether the plan is offered on an Exchange)’’ 

15 after ‘‘1301(a) of the Patient Protection and 

16 Affordable Care Act’’, and 

17 (B) by striking ‘‘shall not include’’ and all 

18 that follows and inserting ‘‘shall not include any 

19 health plan that— 

20 ‘‘(i) is a grandfathered health plan or 

21 a grandmothered health plan, or 

22 ‘‘(ii) includes coverage for abortions 

23 (other than any abortion necessary to save 

24 the life of the mother or any abortion with 


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1 respect to a pregnancy that is the result of 

2 an act of rape or incest).’’. 

3 (2) DEFINITION OF GRANDMOTHERED HEALTH

4 PLAN.—Section 36B(c)(3) of such Code is amended 

5 by adding at the end the following new subpara6 graph: 

7 ‘‘(C) GRANDMOTHERED HEALTH PLAN.— 

8 ‘‘(i) IN GENERAL.—The term 

9 ‘grandmothered health plan’ means health 

10 insurance coverage which is offered in the 

11 individual health insurance market as of 

12 October 1, 2013, and is permitted to be of13 fered in such market after January 1, 

14 2014, as a result of CCIIO guidance. 

15 ‘‘(ii) CCIIO GUIDANCE DEFINED.— 

16 The term ‘CCIIO guidance’ means the let17 ter issued by the Centers for Medicare & 

18 Medicaid Services on November 14, 2013, 

19 to the State Insurance Commissioners out20 lining a transitional policy for non-grand21 fathered coverage in the individual health 

22 insurance market, as subsequently ex23 tended and modified (including by a com24 munication entitled ‘Insurance Standards 

25 Bulletin Series—INFORMATION—ExVerDate Sep 11 2014 23:30 Jun 08, 2017 Jkt 069000 PO 00000 Frm 00094 Fmt 6652 Sfmt 6201 E:\BILLS\H1628.PCS H1628

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1 tension of Transitional Policy through Cal2 endar Year 2017’ issued on February 29, 

3 2016, by the Director of the Center for 

4 Consumer Information & Insurance Over5 sight of such Centers). 

6 ‘‘(iii) INDIVIDUAL HEALTH INSUR7 ANCE MARKET.—The term ‘individual 

8 health insurance market’ means the mar9 ket for health insurance coverage (as de10 fined in section 9832(b)) offered to individ11 uals other than in connection with a group 

12 health plan (within the meaning of section 

13 5000(b)(1)).’’. 

14 (3) CONFORMING AMENDMENT RELATED TO

15 ABORTION COVERAGE.—Section 36B(c)(3) of such 

16 Code, as amended by paragraph (2), is amended by 

17 adding at the end the following new subparagraph: 

18 ‘‘(D) CERTAIN RULES RELATED TO ABOR19 TION.— 

20 ‘‘(i) OPTION TO PURCHASE SEPARATE

21 COVERAGE OR PLAN.—Nothing in subpara22 graph (A) shall be construed as prohibiting 

23 any individual from purchasing separate 

24 coverage for abortions described in such 

25 subparagraph, or a health plan that inVerDate Sep 11 2014 23:30 Jun 08, 2017 Jkt 069000 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 E:\BILLS\H1628.PCS H1628

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1 cludes such abortions, so long as no credit 

2 is allowed under this section with respect 

3 to the premiums for such coverage or plan. 

4 ‘‘(ii) OPTION TO OFFER COVERAGE OR

5 PLAN.—Nothing in subparagraph (A) shall 

6 restrict any health insurance issuer offer7 ing a health plan from offering separate 

8 coverage for abortions described in such 

9 subparagraph, or a plan that includes such 

10 abortions, so long as premiums for such 

11 separate coverage or plan are not paid for 

12 with any amount attributable to the credit 

13 allowed under this section (or the amount 

14 of any advance payment of the credit 

15 under section 1412 of the Patient Protec16 tion and Affordable Care Act). 

17 ‘‘(iii) OTHER TREATMENTS.—The 

18 treatment of any infection, injury, disease, 

19 or disorder that has been caused by or ex20 acerbated by the performance of an abor21 tion shall not be treated as an abortion for 

22 purposes of subparagraph (A).’’. 

23 (4) CONFORMING AMENDMENTS RELATED TO

24 OFF-EXCHANGE COVERAGE.— 


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1 (A) ADVANCE PAYMENT NOT APPLICA2 BLE.—Section 1412 of the Patient Protection 

3 and Affordable Care Act is amended by adding 

4 at the end the following new subsection: 

5 ‘‘(f) EXCLUSION OF OFF-EXCHANGE COVERAGE.— 

6 Advance payments under this section, and advance deter7 minations under section 1411, with respect to any credit 

8 allowed under section 36B shall not be made with respect 

9 to any health plan which is not enrolled in through an 

10 Exchange.’’. 

11 (B) REPORTING.—Section 6055(b) of the 

12 Internal Revenue Code of 1986 is amended by 

13 adding at the end the following new paragraph: 

14 ‘‘(3) INFORMATION RELATING TO OFF-EX15 CHANGE PREMIUM CREDIT ELIGIBLE COVERAGE.—If 

16 minimum essential coverage provided to an indi17 vidual under subsection (a) consists of a qualified 

18 health plan (as defined in section 36B(c)(3)) which 

19 is not enrolled in through an Exchange established 

20 under title I of the Patient Protection and Afford21 able Care Act, a return described in this subsection 

22 shall include— 

23 ‘‘(A) a statement that such plan is a quali24 fied health plan (as defined in section 

25 36B(c)(3)), 


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1 ‘‘(B) the premiums paid with respect to 

2 such coverage, 

3 ‘‘(C) the months during which such cov4 erage is provided to the individual, 

5 ‘‘(D) the adjusted monthly premium for 

6 the applicable second lowest cost silver plan (as 

7 defined in section 36B(b)(3)) for each such 

8 month with respect to such individual, and 

9 ‘‘(E) such other information as the Sec10 retary may prescribe.’’. 

11 (C) OTHER CONFORMING AMENDMENTS.— 

12 (i) Section 36B(b)(2)(A) of such Code 

13 is amended by striking ‘‘and which were 

14 enrolled’’ and all that follows and inserting 

15 ‘‘, or’’. 

16 (ii) Section 36B(b)(3)(B)(i) of such 

17 Code is amended by striking ‘‘the same 

18 Exchange’’ and all that follows and insert19 ing ‘‘the Exchange through which such 

20 taxpayer is permitted to obtain coverage, 

21 and’’. 

22 (iii) Section 36B(c)(2)(A)(i) of such 

23 Code is amended by striking ‘‘that was en24 rolled in through an Exchange established 


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1 by the State under section 1311 of the Pa2 tient Protection and Affordable Care Act’’. 

3 (b) MODIFICATION OF APPLICABLE PERCENTAGE.— 

4 Section 36B(b)(3)(A) of such Code is amended to read 

5 as follows: 

6 ‘‘(A) APPLICABLE PERCENTAGE.— 

7 ‘‘(i) IN GENERAL.—The applicable 

8 percentage for any taxable year shall be 

9 the percentage such that the applicable 

10 percentage for any taxpayer whose house11 hold income is within an income tier speci12 fied in the following table shall increase, on 

13 a sliding scale in a linear manner, from the 

14 initial percentage to the final percentage 

15 specified in such table for such income tier 

16 with respect to a taxpayer of the age in17 volved: 

‘‘In the case of 

household income 

(expressed as a 

percent of the 

poverty line) 

within the following income 

tier: 

Up to Age 29 Age 30-39 Age 40-49 Age 50-59 Over Age 59 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Initial 

% 

Final 

% 

Up to 133% 2 2 2 2 2 2 2 2 2 2 

133%-150% 3 4 3 4 3 4 3 4 3 4 

150%-200% 4 4.3 4 5.3 4 6.3 4 7.3 4 8.3 

200%-250% 4.3 4.3 5.3 5.9 6.3 8.05 7.3 9 8.3 10 

250%-300% 4.3 4.3 5.9 5.9 8.05 8.35 9 10.5 10 11.5 

300%-400% 4.3 4.3 5.9 5.9 8.35 8.35 10.5 10.5 11.5 11.5 

18 ‘‘(ii) AGE DETERMINATIONS.— 

19 ‘‘(I) IN GENERAL.—For purposes 

20 of clause (i), the age of the taxpayer 


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1 taken into account under clause (i) 

2 with respect to any taxable year is the 

3 age attained by such taxpayer before 

4 the close of such taxable year. 

5 ‘‘(II) JOINT RETURNS.—In the 

6 case of a joint return, the age of the 

7 older spouse shall be taken into ac8 count under clause (i). 

9 ‘‘(iii) INDEXING.—In the case of any 

10 taxable year beginning in calendar year 

11 2019, the initial and final percentages con12 tained in clause (i) shall be adjusted to re13 flect— 

14 ‘‘(I) the excess (if any) of the 

15 rate of premium growth for the period 

16 beginning with calendar year 2013 

17 and ending with calendar year 2018, 

18 over the rate of income growth for 

19 such period, and 

20 ‘‘(II) in addition to any adjust21 ment under subclause (I), the excess 

22 (if any) of the rate of premium 

23 growth for calendar year 2018, over 

24 the rate of growth in the consumer 

25 price index for calendar year 2018. 


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1 ‘‘(iv) FAILSAFE.—Clause (iii)(II) shall 

2 apply only if the aggregate amount of pre3 mium tax credits under this section and 

4 cost-sharing reductions under section 1402 

5 of the Patient Protection and Affordable 

6 Care Act for calendar year 2018 exceeds 

7 an amount equal to 0.504 percent of the 

8 gross domestic product for such calendar 

9 year.’’. 

10 (c) EFFECTIVE DATE.— 

11 (1) IN GENERAL.—Except as otherwise pro12 vided in this subsection, the amendments made by 

13 this section shall apply to taxable years beginning 

14 after December 31, 2017. 

15 (2) ADVANCE PAYMENT NOT APPLICABLE TO

16 OFF-EXCHANGE COVERAGE.—The amendment made 

17 by subsection (a)(4)(A) shall take effect on January 

18 1, 2018. 

19 (3) REPORTING.—The amendment made by 

20 subsection (a)(4)(B) shall apply to coverage provided 

21 for months beginning after December 31, 2017. 

22 (4) MODIFICATION OF APPLICABLE PERCENT23 AGE.—The amendment made by subsection (b) shall 

24 apply to taxable years beginning after December 31, 

25 2018. 


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1 SEC. 203. SMALL BUSINESS TAX CREDIT. 

2 (a) IN GENERAL.—Section 45R of the Internal Rev3 enue Code of 1986 is amended by adding at the end the 

4 following new subsection: 

5 ‘‘(j) SHALL NOT APPLY.—This section shall not 

6 apply with respect to amounts paid or incurred in taxable 

7 years beginning after December 31, 2019.’’. 

8 (b) DISALLOWANCE OF SMALL EMPLOYER HEALTH

9 INSURANCE EXPENSE CREDIT FOR PLAN WHICH IN10 CLUDES COVERAGE FOR ABORTION.—Subsection (h) of 

11 section 45R of the Internal Revenue Code of 1986 is 

12 amended— 

13 (1) by striking ‘‘Any term’’ and inserting the 

14 following: 

15 ‘‘(1) IN GENERAL.—Any term’’; and 

16 (2) by adding at the end the following new 

17 paragraph: 

18 ‘‘(2) EXCLUSION OF HEALTH PLANS INCLUDING

19 COVERAGE FOR ABORTION.— 

20 ‘‘(A) IN GENERAL.—The term ‘qualified 

21 health plan’ does not include any health plan 

22 that includes coverage for abortions (other than 

23 any abortion necessary to save the life of the 

24 mother or any abortion with respect to a preg25 nancy that is the result of an act of rape or in26 cest). 


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1 ‘‘(B) CERTAIN RULES RELATED TO ABOR2 TION.— 

3 ‘‘(i) OPTION TO PURCHASE SEPARATE

4 COVERAGE OR PLAN.—Nothing in subpara5 graph (A) shall be construed as prohibiting 

6 any employer from purchasing for its em7 ployees separate coverage for abortions de8 scribed in such subparagraph, or a health 

9 plan that includes such abortions, so long 

10 as no credit is allowed under this section 

11 with respect to the employer contributions 

12 for such coverage or plan. 

13 ‘‘(ii) OPTION TO OFFER COVERAGE OR

14 PLAN.—Nothing in subparagraph (A) shall 

15 restrict any health insurance issuer offer16 ing a health plan from offering separate 

17 coverage for abortions described in such 

18 subparagraph, or a plan that includes such 

19 abortions, so long as such separate cov20 erage or plan is not paid for with any em21 ployer contribution eligible for the credit 

22 allowed under this section. 

23 ‘‘(iii) OTHER TREATMENTS.—The 

24 treatment of any infection, injury, disease, 

25 or disorder that has been caused by or exVerDate Sep 11 2014 23:30 Jun 08, 2017 Jkt 069000 PO 00000 Frm 00103 Fmt 6652 Sfmt 6201 E:\BILLS\H1628.PCS H1628

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1 acerbated by the performance of an abor2 tion shall not be treated as an abortion for 

3 purposes of subparagraph (A).’’. 

4 (c) EFFECTIVE DATES.— 

5 (1) IN GENERAL.—The amendment made by 

6 subsection (a) shall apply to taxable years beginning 

7 after December 31, 2019. 

8 (2) DISALLOWANCE OF SMALL EMPLOYER

9 HEALTH INSURANCE EXPENSE CREDIT FOR PLAN

10 WHICH INCLUDES COVERAGE FOR ABORTION.—The 

11 amendments made by subsection (b) shall apply to 

12 taxable years beginning after December 31, 2017. 

13 SEC. 204. INDIVIDUAL MANDATE. 

14 (a) IN GENERAL.—Section 5000A(c) of the Internal 

15 Revenue Code of 1986 is amended— 

16 (1) in paragraph (2)(B)(iii), by striking ‘‘2.5 

17 percent’’ and inserting ‘‘Zero percent’’, and 

18 (2) in paragraph (3)— 

19 (A) by striking ‘‘$695’’ in subparagraph 

20 (A) and inserting ‘‘$0’’, and 

21 (B) by striking subparagraph (D). 

22 (b) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to months beginning after Decem24 ber 31, 2015. 


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1 SEC. 205. EMPLOYER MANDATE. 

2 (a) IN GENERAL.— 

3 (1) Paragraph (1) of section 4980H(c) of the 

4 Internal Revenue Code of 1986 is amended by in5 serting ‘‘($0 in the case of months beginning after 

6 December 31, 2015)’’ after ‘‘$2,000’’. 

7 (2) Paragraph (1) of section 4980H(b) of the 

8 Internal Revenue Code of 1986 is amended by in9 serting ‘‘($0 in the case of months beginning after 

10 December 31, 2015)’’ after ‘‘$3,000’’. 

11 (b) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to months beginning after Decem13 ber 31, 2015. 

14 SEC. 206. REPEAL OF THE TAX ON EMPLOYEE HEALTH IN15 SURANCE PREMIUMS AND HEALTH PLAN 

16 BENEFITS. 

17 Section 4980I of the Internal Revenue Code of 1986 

18 is amended by adding at the end the following new sub19 section: 

20 ‘‘(h) SHALL NOT APPLY.—No tax shall be imposed 

21 under this section with respect to any taxable period be22 ginning after December 31, 2019, and before January 1, 

23 2026.’’. 


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1 SEC. 207. REPEAL OF TAX ON OVER-THE-COUNTER MEDICA2 TIONS. 

3 (a) HSAS.—Subparagraph (A) of section 223(d)(2) 

4 of the Internal Revenue Code of 1986 is amended by strik5 ing ‘‘Such term’’ and all that follows through the period. 

6 (b) ARCHER MSAS.—Subparagraph (A) of section 

7 220(d)(2) of the Internal Revenue Code of 1986 is amend8 ed by striking ‘‘Such term’’ and all that follows through 

9 the period. 

10 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS

11 AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec12 tion 106 of the Internal Revenue Code of 1986 is amended 

13 by striking subsection (f) and by redesignating subsection 

14 (g) as subsection (f). 

15 (d) EFFECTIVE DATES.— 

16 (1) DISTRIBUTIONS FROM SAVINGS AC17 COUNTS.—The amendments made by subsections (a) 

18 and (b) shall apply to amounts paid with respect to 

19 taxable years beginning after December 31, 2016. 

20 (2) REIMBURSEMENTS.—The amendment made 

21 by subsection (c) shall apply to expenses incurred 

22 with respect to taxable years beginning after Decem23 ber 31, 2016. 


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1 SEC. 208. REPEAL OF INCREASE OF TAX ON HEALTH SAV2 INGS ACCOUNTS. 

3 (a) HSAS.—Section 223(f)(4)(A) of the Internal 

4 Revenue Code of 1986 is amended by striking ‘‘20 per5 cent’’ and inserting ‘‘10 percent’’. 

6 (b) ARCHER MSAS.—Section 220(f)(4)(A) of the In7 ternal Revenue Code of 1986 is amended by striking ‘‘20 

8 percent’’ and inserting ‘‘15 percent’’. 

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

10 this section shall apply to distributions made after Decem11 ber 31, 2016. 

12 SEC. 209. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO 

13 FLEXIBLE SPENDING ACCOUNTS. 

14 (a) IN GENERAL.—Section 125 of the Internal Rev15 enue Code of 1986 is amended by striking subsection (i). 

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

17 this section shall apply to taxable years beginning after 

18 December 31, 2016. 

19 SEC. 210. REPEAL OF MEDICAL DEVICE EXCISE TAX. 

20 Section 4191 of the Internal Revenue Code of 1986 

21 is amended by adding at the end the following new sub22 section: 

23 ‘‘(d) APPLICABILITY.—The tax imposed under sub24 section (a) shall not apply to sales after December 31, 

25 2016.’’. 


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1 SEC. 211. REPEAL OF ELIMINATION OF DEDUCTION FOR 

2 EXPENSES ALLOCABLE TO MEDICARE PART D 

3 SUBSIDY. 

4 (a) IN GENERAL.—Section 139A of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following new sentence: ‘‘This section shall not be taken 

7 into account for purposes of determining whether any de8 duction is allowable with respect to any cost taken into 

9 account in determining such payment.’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2016. 

13 SEC. 212. REDUCTION OF INCOME THRESHOLD FOR DETER14 MINING MEDICAL CARE DEDUCTION. 

15 (a) IN GENERAL.—Subsection (a) of section 213 of 

16 the Internal Revenue Code of 1986 is amended by striking 

17 ‘‘10 percent’’ and inserting ‘‘5.8 percent’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2016. 

21 SEC. 213. REPEAL OF MEDICARE TAX INCREASE. 

22 (a) IN GENERAL.—Subsection (b) of section 3101 of 

23 the Internal Revenue Code of 1986 is amended to read 

24 as follows: 

25 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 

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1 posed on the income of every individual a tax equal to 1.45 

2 percent of the wages (as defined in section 3121(a)) re3 ceived by such individual with respect to employment (as 

4 defined in section 3121(b)).’’. 

5 (b) SECA.—Subsection (b) of section 1401 of the In6 ternal Revenue Code of 1986 is amended to read as fol7 lows: 

8 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 

9 imposed by the preceding subsection, there shall be im10 posed for each taxable year, on the self-employment in11 come of every individual, a tax equal to 2.9 percent of the 

12 amount of the self-employment income for such taxable 

13 year.’’. 

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

15 this section shall apply with respect to remuneration re16 ceived after, and taxable years beginning after, December 

17 31, 2022. 

18 SEC. 214. REFUNDABLE TAX CREDIT FOR HEALTH INSUR19 ANCE COVERAGE. 

20 (a) IN GENERAL.—Section 36B of the Internal Rev21 enue Code of 1986 is amended to read as follows: 

22 ‘‘SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A 

23 QUALIFIED HEALTH PLAN. 

24 ‘‘(a) ALLOWANCE OF PREMIUM TAX CREDIT.—In the 

25 case of an individual, there shall be allowed as a credit 


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1 against the tax imposed by this subtitle for the taxable 

2 year the sum of the monthly credit amounts with respect 

3 to such taxpayer for calendar months during such taxable 

4 year which are eligible coverage months appropriately 

5 taken into account under subsection (b)(2) with respect 

6 to the taxpayer or any qualifying family member of the 

7 taxpayer. 

8 ‘‘(b) MONTHLY CREDIT AMOUNTS.— 

9 ‘‘(1) IN GENERAL.—The monthly credit amount 

10 with respect to any taxpayer for any calendar month 

11 is the lesser of— 

12 ‘‘(A) the sum of the monthly limitation 

13 amounts determined under subsection (c) with 

14 respect to the taxpayer and the taxpayer’s 

15 qualifying family members for such month, or 

16 ‘‘(B) the amount paid for a qualified 

17 health plan for the taxpayer and the taxpayer’s 

18 qualifying family members for such month. 

19 ‘‘(2) ELIGIBLE COVERAGE MONTH REQUIRE20 MENT.—No amount shall be taken into account 

21 under subparagraph (A) or (B) of paragraph (1) 

22 with respect to any individual for any month unless 

23 such month is an eligible coverage month with re24 spect to such individual. 

25 ‘‘(c) MONTHLY LIMITATION AMOUNTS.— 


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1 ‘‘(1) IN GENERAL.—The monthly limitation 

2 amount with respect to any individual for any eligible coverage month during any taxable year is 1 3 ⁄12

4 of— 

5 ‘‘(A) $2,000 in the case of an individual 

6 who has not attained age 30 as of the begin7 ning of such taxable year, 

8 ‘‘(B) $2,500 in the case of an individual 

9 who has attained age 30 but who has not at10 tained age 40 as of such time, 

11 ‘‘(C) $3,000 in the case of an individual 

12 who has attained age 40 but who has not at13 tained age 50 as of such time, 

14 ‘‘(D) $3,500 in the case of an individual 

15 who has attained age 50 but who has not at16 tained age 60 as of such time, and 

17 ‘‘(E) $4,000 in the case of an individual 

18 who has attained age 60 as of such time. 

19 ‘‘(2) LIMITATION BASED ON MODIFIED AD20 JUSTED GROSS INCOME.—The credit allowed under 

21 subsection (a) with respect to any taxpayer for any 

22 taxable year shall be reduced (but not below zero) by 

23 10 percent of the excess (if any) of— 

24 ‘‘(A) the taxpayer’s modified adjusted 

25 gross income (as defined in section 


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1 36B(d)(2)(B), as in effect for taxable years be2 ginning before January 1, 2020) for such tax3 able year, over 

4 ‘‘(B) $75,000 (twice such amount in the 

5 case of a joint return). 

6 ‘‘(3) OTHER LIMITATIONS.— 

7 ‘‘(A) AGGREGATE DOLLAR LIMITATION.— 

8 The sum of the monthly limitation amounts 

9 taken into account under this section with re10 spect to any taxpayer for any taxable year shall 

11 not exceed $14,000. 

12 ‘‘(B) MAXIMUM NUMBER OF INDIVIDUALS

13 TAKEN INTO ACCOUNT.—With respect to any 

14 taxpayer for any month, monthly limitation 

15 amounts shall be taken into account under this 

16 section only with respect to the 5 oldest individ17 uals with respect to whom monthly limitation 

18 amounts could (without regard to this subpara19 graph) otherwise be so taken into account. 

20 ‘‘(d) ELIGIBLE COVERAGE MONTH.—For purposes of 

21 this section, the term ‘eligible coverage month’ means, 

22 with respect to any individual, any month if, as of the first 

23 day of such month, the individual meets the following re24 quirements: 


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1 ‘‘(1) The individual is covered by a health in2 surance coverage which is certified by the State in 

3 which such insurance is offered as coverage that 

4 meets the requirements for qualified health plans 

5 under subsection (f). 

6 ‘‘(2) The individual is not eligible for— 

7 ‘‘(A) coverage under a group health plan 

8 (within the meaning of section 5000(b)(1)) 

9 other than coverage under a plan substantially 

10 all of the coverage of which is of excepted bene11 fits described in section 9832(c), or 

12 ‘‘(B) coverage described in section 

13 5000A(f)(1)(A). 

14 ‘‘(3) The individual is either— 

15 ‘‘(A) a citizen or national of the United 

16 States, or 

17 ‘‘(B) a qualified alien (within the meaning 

18 of section 431 of the Personal Responsibility 

19 and Work Opportunity Reconciliation Act of 

20 1996 (8 U.S.C. 1641)). 

21 ‘‘(4) The individual is not incarcerated, other 

22 than incarceration pending the disposition of 

23 charges. 


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1 ‘‘(e) QUALIFYING FAMILY MEMBER.—For purposes 

2 of this section, the term ‘qualifying family member’ 

3 means— 

4 ‘‘(1) in the case of a joint return, the taxpayer’s 

5 spouse, 

6 ‘‘(2) any dependent of the taxpayer, and 

7 ‘‘(3) with respect to any eligible coverage 

8 month, any child (as defined in section 152(f)(1)) of 

9 the taxpayer who as of the end of the taxable year 

10 has not attained age 27 if such child is covered for 

11 such month under a qualified health plan which also 

12 covers the taxpayer (in the case of a joint return, ei13 ther spouse). 

14 ‘‘(f) QUALIFIED HEALTH PLAN.—For purposes of 

15 this section, the term ‘qualified health plan’ means any 

16 health insurance coverage (as defined in section 9832(b)) 

17 if— 

18 ‘‘(1) such coverage is offered in the individual 

19 health insurance market within a State (within the 

20 meaning of section 5000A(f)(1)(C)), 

21 ‘‘(2) substantially all of such coverage is not of 

22 excepted benefits described in section 9832(c), 

23 ‘‘(3) such coverage does not consist of short24 term limited duration insurance (within the meaning 


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1 of section 2791(b)(5) of the Public Health Service 

2 Act), 

3 ‘‘(4) such coverage is not a grandfathered 

4 health plan (as defined in section 1251 of the Pa5 tient Protection and Affordable Care Act) or a 

6 grandmothered health plan (as defined in section 

7 36B(c)(3)(C) as in effect for taxable years beginning 

8 before January 1, 2020), and 

9 ‘‘(5) such coverage does not include coverage 

10 for abortions (other than any abortion necessary to 

11 save the life of the mother or any abortion with re12 spect to a pregnancy that is the result of an act of 

13 rape or incest). 

14 ‘‘(g) SPECIAL RULES.— 

15 ‘‘(1) MARRIED COUPLES MUST FILE JOINT RE16 TURN.— 

17 ‘‘(A) IN GENERAL.—Except as provided in 

18 subparagraph (B), if the taxpayer is married 

19 (within the meaning of section 7703) at the 

20 close of the taxable year, no credit shall be al21 lowed under this section to such taxpayer unless 

22 such taxpayer and the taxpayer’s spouse file a 

23 joint return for such taxable year. 


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1 ‘‘(B) EXCEPTION FOR CERTAIN TAX2 PAYERS.—Subparagraph (A) shall not apply to 

3 any married taxpayer who— 

4 ‘‘(i) is living apart from the taxpayer’s 

5 spouse at the time the taxpayer files the 

6 tax return, 

7 ‘‘(ii) is unable to file a joint return be8 cause such taxpayer is a victim of domestic 

9 abuse or spousal abandonment, 

10 ‘‘(iii) certifies on the tax return that 

11 such taxpayer meets the requirements of 

12 clauses (i) and (ii), and 

13 ‘‘(iv) has not met the requirements of 

14 clauses (i), (ii), and (iii) for each of the 3 

15 preceding taxable years. 

16 ‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.— 

17 ‘‘(A) IN GENERAL.—No credit shall be al18 lowed under this section to any individual who 

19 is a dependent with respect to another taxpayer 

20 for a taxable year beginning in the calendar 

21 year in which such individual’s taxable year be22 gins. 

23 ‘‘(B) COORDINATION WITH RULE FOR

24 OLDER CHILDREN.—In the case of any indi25 vidual who is a qualifying family member deVerDate Sep 11 2014 23:30 Jun 08, 2017 Jkt 069000 PO 00000 Frm 00116 Fmt 6652 Sfmt 6201 E:\BILLS\H1628.PCS H1628

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1 scribed in subsection (e)(3) with respect to an2 other taxpayer for any month, in determining 

3 the amount of any credit allowable to such indi4 vidual under this section for any taxable year of 

5 such individual which includes such month, the 

6 monthly limitation amount with respect to such 

7 individual for such month shall be zero and no 

8 amount paid for any qualified health plan with 

9 respect to such individual for such month shall 

10 be taken into account. 

11 ‘‘(3) COORDINATION WITH MEDICAL EXPENSE

12 DEDUCTION.—Amounts described in subsection 

13 (b)(1)(B) with respect to any month shall not be 

14 taken into account in determining the deduction al15 lowed under section 213 except to the extent that 

16 such amounts exceed the amount described in sub17 section (b)(1)(A) with respect to such month. 

18 ‘‘(4) COORDINATION WITH ADVANCE PAYMENTS

19 OF CREDIT.—With respect to any taxable year— 

20 ‘‘(A) the amount which would (but for this 

21 subsection) be allowed as a credit to the tax22 payer under subsection (a) shall be reduced 

23 (but not below zero) by the aggregate amount 

24 paid on behalf of such taxpayer under section 

25 1412 of the Patient Protection and Affordable 


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1 Care Act for months beginning in such taxable 

2 year, and 

3 ‘‘(B) the tax imposed by section 1 for such 

4 taxable year shall be increased by the excess (if 

5 any) of— 

6 ‘‘(i) the aggregate amount paid on be7 half of such taxpayer under such section 

8 1412 for months beginning in such taxable 

9 year, over 

10 ‘‘(ii) the amount which would (but for 

11 this subsection) be allowed as a credit to 

12 the taxpayer under subsection (a). 

13 ‘‘(5) SPECIAL RULES FOR QUALIFIED SMALL

14 EMPLOYER HEALTH REIMBURSEMENT ARRANGE15 MENTS.— 

16 ‘‘(A) IN GENERAL.—If the taxpayer or any 

17 qualifying family member of the taxpayer is 

18 provided a qualified small employer health reim19 bursement arrangement for an eligible coverage 

20 month, the sum determined under subsection 

21 (b)(1)(A) with respect to the taxpayer shall be 

reduced (but not below zero) by 1 22 ⁄12 of the per23 mitted benefit (as defined in section 

24 9831(d)(3)(C)) under such arrangement for 


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1 each such month such arrangement is provided 

2 to such taxpayer. 

3 ‘‘(B) QUALIFIED SMALL EMPLOYER

4 HEALTH REIMBURSEMENT ARRANGEMENT.— 

5 For purposes of this paragraph, the term 

6 ‘qualified small employer health reimbursement 

7 arrangement’ has the meaning given such term 

8 by section 9831(d)(2). 

9 ‘‘(C) COVERAGE FOR LESS THAN ENTIRE

10 YEAR.—In the case of an employee who is pro11 vided a qualified small employer health reim12 bursement arrangement for less than an entire 

13 year, subparagraph (A) shall be applied by sub14 stituting ‘the number of months during the year 

15 for which such arrangement was provided’ for 

16 ‘12’. 

17 ‘‘(6) CERTAIN RULES RELATED TO NON18 QUALIFIED HEALTH PLANS.—The rules of section 

19 36B(c)(3)(D), as in effect for taxable years begin20 ning before January 1, 2020, shall apply with re21 spect to subsection (f)(5). 

22 ‘‘(7) INFLATION ADJUSTMENT.— 

23 ‘‘(A) IN GENERAL.—In the case of any 

24 taxable year beginning in a calendar year after 

25 2020, each dollar amount in subsection (c)(1), 


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1 the $75,000 amount in subsection (c)(2)(B), 

2 and the dollar amount in subsection (c)(3)(A), 

3 shall be increased by an amount equal to— 

4 ‘‘(i) such dollar amount, multiplied by 

5 ‘‘(ii) the cost-of-living adjustment de6 termined under section 1(f)(3) for the cal7 endar year in which the taxable year be8 gins, determined— 

9 ‘‘(I) by substituting ‘calendar 

10 year 2019’ for ‘calendar year 1992’ in 

11 subparagraph (B) thereof, and 

12 ‘‘(II) by substituting for the CPI 

13 referred to section 1(f)(3)(A) the 

14 amount that such CPI would have 

15 been if the annual percentage increase 

16 in CPI with respect to each year after 

17 2019 had been one percentage point 

18 greater. 

19 ‘‘(B) TERMS RELATED TO CPI.— 

20 ‘‘(i) ANNUAL PERCENTAGE IN21 CREASE.—For purposes of subparagraph 

22 (A)(ii)(II), the term ‘annual percentage in23 crease’ means the percentage (if any) by 

24 which CPI for any year exceeds CPI for 

25 the prior year. 


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1 ‘‘(ii) OTHER TERMS.—Terms used in 

2 this paragraph which are also used in sec3 tion 1(f)(3) shall have the same meanings 

4 as when used in such section. 

5 ‘‘(C) ROUNDING.—Any increase deter6 mined under subparagraph (A) shall be rounded 

7 to the nearest multiple of $50. 

8 ‘‘(8) RULES RELATED TO STATE CERTIFI9 CATION OF QUALIFIED HEALTH PLANS.—A certifi10 cation shall not be taken into account under sub11 section (d)(1) unless such certification is made avail12 able to the public and meets such other require13 ments as the Secretary may provide. 

14 ‘‘(9) REGULATIONS.—The Secretary may pre15 scribe such regulations and other guidance as may 

16 be necessary or appropriate to carry out this section 

17 and section 1412 of the Patient Protection and Af18 fordable Care Act.’’. 

19 (b) ADVANCE PAYMENT OF CREDIT.—Section 

20 1412(f) of the Patient Protection and Affordable Care 

21 Act, as added by section 202, is amended to read as fol22 lows: 

23 ‘‘(f) APPLICATION TO CERTAIN PLANS.—The Sec24 retary and the Secretary of the Treasury shall prescribe 

25 such regulations as each respective Secretary may deem 


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1 necessary in order to establish and operate the advance 

2 payment program established under this section for indi3 viduals covered under qualified health plans (whether en4 rolled in through an Exchange or otherwise) in such a 

5 manner that protects taxpayer information (including 

6 names, taxpayer identification numbers, and other con7 fidential information), provides robust verification of all 

8 information necessary to establish eligibility of taxpayer 

9 for advance payments under this section, ensures proper 

10 and timely payments to appropriate health providers, and 

11 protects program integrity to the maximum extent fea12 sible.’’. 

13 (c) INCREASED PENALTY ON ERRONEOUS CLAIMS OF

14 CREDIT.—Section 6676(a) of the Internal Revenue Code 

15 of 1986 is amended by inserting ‘‘(25 percent in the case 

16 of a claim for refund or credit relating to the health insur17 ance coverage credit under section 36B)’’. 

18 (d) REPORTING BY EMPLOYERS.—Section 6051(a) of 

19 such Code is amended by striking ‘‘and’’ at the end of 

20 paragraph (14), by striking the period at the end of para21 graph (15) and inserting ‘‘, and’’, and by inserting after 

22 paragraph (15) the following new paragraph: 

23 ‘‘(16) each month with respect to which the em24 ployee is eligible for coverage described in section 


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1 36B(d)(2) in connection with employment with the 

2 employer.’’. 

3 (e) COORDINATION WITH OTHER TAX BENEFITS.— 

4 (1) CREDIT FOR HEALTH INSURANCE COSTS OF

5 ELIGIBLE INDIVIDUALS.—Section 35(g) of such 

6 Code is amended by adding at the end the following 

7 new paragraph: 

8 ‘‘(14) COORDINATION WITH HEALTH INSUR9 ANCE COVERAGE CREDIT.— 

10 ‘‘(A) IN GENERAL.—An eligible coverage 

11 month to which the election under paragraph 

12 (11) applies shall not be treated as an eligible 

13 coverage month (as defined in section 36B(d)) 

14 for purposes of section 36B with respect to the 

15 taxpayer or any of the taxpayer’s qualifying 

16 family members (as defined in section 36B(e)). 

17 ‘‘(B) COORDINATION WITH ADVANCE PAY18 MENTS OF HEALTH INSURANCE COVERAGE

19 CREDIT.—In the case of a taxpayer who makes 

20 the election under paragraph (11) with respect 

21 to any eligible coverage month in a taxable year 

22 or on behalf of whom any advance payment is 

23 made under section 7527 with respect to any 

24 month in such taxable year— 


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1 ‘‘(i) the tax imposed by this chapter 

2 for the taxable year shall be increased by 

3 the excess, if any, of— 

4 ‘‘(I) the sum of any advance pay5 ments made on behalf of the taxpayer 

6 under section 7527 and section 1412 

7 of the Patient Protection and Afford8 able Care Act, over 

9 ‘‘(II) the sum of the credits al10 lowed under this section (determined 

11 without regard to paragraph (1)) and 

12 section 36B (determined without re13 gard to subsection (g)(4)(A) thereof) 

14 for such taxable year, and 

15 ‘‘(ii) section 36B(g)(4)(B) shall not 

16 apply with respect to such taxpayer for 

17 such taxable year.’’. 

18 (2) TRADE OR BUSINESS DEDUCTION.—Section 

19 162(l) of such Code is amended by adding at the 

20 end the following new paragraph: 

21 ‘‘(6) COORDINATION WITH HEALTH INSURANCE

22 COVERAGE CREDIT.—The deduction otherwise allow23 able to a taxpayer under paragraph (1) for any tax24 able year shall be reduced (but not below zero) by 

25 the amount of the credit allowable to such taxpayer 


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1 under section 36B (determined without regard to 

2 subsection (g)(4)(A) thereof) for such taxable year.’’. 

3 (f) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to months beginning after Decem5 ber 31, 2019, in taxable years ending after such date. 

6 SEC. 215. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAV7 INGS ACCOUNT INCREASED TO AMOUNT OF 

8 DEDUCTIBLE AND OUT-OF-POCKET LIMITA9 TION. 

10 (a) SELF-ONLY COVERAGE.—Section 223(b)(2)(A) 

11 of the Internal Revenue Code of 1986 is amended by strik12 ing ‘‘$2,250’’ and inserting ‘‘the amount in effect under 

13 subsection (c)(2)(A)(ii)(I)’’. 

14 (b) FAMILY COVERAGE.—Section 223(b)(2)(B) of 

15 such Code is amended by striking ‘‘$4,500’’ and inserting 

16 ‘‘the amount in effect under subsection (c)(2)(A)(ii)(II)’’. 

17 (c) CONFORMING AMENDMENTS.—Section 223(g)(1) 

18 of such Code is amended— 

19 (1) by striking ‘‘subsections (b)(2) and’’ both 

20 places it appears and inserting ‘‘subsection’’, and 

21 (2) in subparagraph (B), by striking ‘‘deter22 mined by’’ and all that follows through ‘‘ ‘calendar 

23 year 2003’.’’ and inserting ‘‘determined by sub24 stituting ‘calendar year 2003’ for ‘calendar year 

25 1992’ in subparagraph (B) thereof.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2017. 

4 SEC. 216. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON5 TRIBUTIONS TO THE SAME HEALTH SAVINGS 

6 ACCOUNT. 

7 (a) IN GENERAL.—Section 223(b)(5) of the Internal 

8 Revenue Code of 1986 is amended to read as follows: 

9 ‘‘(5) SPECIAL RULE FOR MARRIED INDIVIDUALS

10 WITH FAMILY COVERAGE.— 

11 ‘‘(A) IN GENERAL.—In the case of individ12 uals who are married to each other, if both 

13 spouses are eligible individuals and either 

14 spouse has family coverage under a high de15 ductible health plan as of the first day of any 

16 month— 

17 ‘‘(i) the limitation under paragraph 

18 (1) shall be applied by not taking into ac19 count any other high deductible health 

20 plan coverage of either spouse (and if such 

21 spouses both have family coverage under 

22 separate high deductible health plans, only 

23 one such coverage shall be taken into ac24 count), 


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1 ‘‘(ii) such limitation (after application 

2 of clause (i)) shall be reduced by the ag3 gregate amount paid to Archer MSAs of 

4 such spouses for the taxable year, and 

5 ‘‘(iii) such limitation (after application 

6 of clauses (i) and (ii)) shall be divided 

7 equally between such spouses unless they 

8 agree on a different division. 

9 ‘‘(B) TREATMENT OF ADDITIONAL CON10 TRIBUTION AMOUNTS.—If both spouses referred 

11 to in subparagraph (A) have attained age 55 

12 before the close of the taxable year, the limita13 tion referred to in subparagraph (A)(iii) which 

14 is subject to division between the spouses shall 

15 include the additional contribution amounts de16 termined under paragraph (3) for both spouses. 

17 In any other case, any additional contribution 

18 amount determined under paragraph (3) shall 

19 not be taken into account under subparagraph 

20 (A)(iii) and shall not be subject to division be21 tween the spouses.’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2017. 


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1 SEC. 217. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 

2 INCURRED BEFORE ESTABLISHMENT OF 

3 HEALTH SAVINGS ACCOUNT. 

4 (a) IN GENERAL.—Section 223(d)(2) of the Internal 

5 Revenue Code of 1986 is amended by adding at the end 

6 the following new subparagraph: 

7 ‘‘(D) TREATMENT OF CERTAIN MEDICAL

8 EXPENSES INCURRED BEFORE ESTABLISHMENT

9 OF ACCOUNT.—If a health savings account is 

10 established during the 60-day period beginning 

11 on the date that coverage of the account bene12 ficiary under a high deductible health plan be13 gins, then, solely for purposes of determining 

14 whether an amount paid is used for a qualified 

15 medical expense, such account shall be treated 

16 as having been established on the date that 

17 such coverage begins.’’. 

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

19 this section shall apply with respect to coverage beginning 

20 after December 31, 2017. 


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1 Subtitle B—Repeal of Certain 

2 Consumer Taxes 

3 SEC. 221. REPEAL OF TAX ON PRESCRIPTION MEDICA4 TIONS. 

5 Subsection (j) of section 9008 of the Patient Protec6 tion and Affordable Care Act is amended to read as fol7 lows: 

8 ‘‘(j) REPEAL.—This section shall apply to calendar 

9 years beginning after December 31, 2010, and ending be10 fore January 1, 2017.’’. 

11 SEC. 222. REPEAL OF HEALTH INSURANCE TAX. 

12 Subsection (j) of section 9010 of the Patient Protec13 tion and Affordable Care Act is amended to read as fol14 lows: 

15 ‘‘(j) REPEAL.—This section shall apply to calendar 

16 years beginning after December 31, 2013, and ending be17 fore January 1, 2017.’’. 

18 Subtitle C—Repeal of Tanning Tax 

19 SEC. 231. REPEAL OF TANNING TAX. 

20 (a) IN GENERAL.—The Internal Revenue Code of 

21 1986 is amended by striking chapter 49. 

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

23 this section shall apply to services performed after June 

24 30, 2017. 


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1 Subtitle D—Remuneration From 

2 Certain Insurers 

3 SEC. 241. REMUNERATION FROM CERTAIN INSURERS. 

4 Paragraph (6) of section 162(m) of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following new subparagraph: 

7 ‘‘(I) TERMINATION.—This paragraph shall 

8 not apply to taxable years beginning after De9 cember 31, 2016.’’. 

10 Subtitle E—Repeal of Net 

11 Investment Income Tax 

12 SEC. 251. REPEAL OF NET INVESTMENT INCOME TAX. 

13 (a) IN GENERAL.—Subtitle A of the Internal Rev14 enue Code of 1986 is amended by striking chapter 2A. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2016. 

Passed the House of Representatives May 4, 2017. 

Attest: KAREN L. HAAS, 

Clerk. 


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Calendar No. 120 

115TH CONGRESS 

1ST SESSION H. R. 1628 

AN ACT 

To provide for reconciliation pursuant to title II of 

year 2017. the concurrent resolution on the budget for fiscal 

JUNE 8, 2017 

Read twice and placed on the calendar 


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