IB 

Union Calendar No. 30 

115TH CONGRESS 

1ST SESSION H. R. 1628 

[Report No. 115–52] 

To provide for reconciliation pursuant to title II of the concurrent resolution 

on the budget for fiscal year 2017. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 20, 2017 

Mrs. BLACK from the Committee on the Budget, reported the following bill; 

which was committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 


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A BILL 

To provide for reconciliation pursuant to title II of the 

concurrent resolution on the budget for fiscal year 2017. 


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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 

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. 

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. 

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. Premium tax credit. 

Sec. 204. Small business tax credit. 

Sec. 205. Individual mandate. 


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Sec. 206. Employer mandate. 

Sec. 207. Repeal of the tax on employee health insurance premiums and health 

plan benefits. 

Sec. 208. Repeal of tax on over-the-counter medications. 

Sec. 209. Repeal of increase of tax on health savings accounts. 

Sec. 210. Repeal of limitations on contributions to flexible spending accounts. 

Sec. 211. Repeal of medical device excise tax. 

Sec. 212. Repeal of elimination of deduction for expenses allocable to medicare 

part D subsidy. 

Sec. 213. Repeal of increase in income threshold for determining medical care 

deduction. 

Sec. 214. Repeal of Medicare tax increase. 

Sec. 215. Refundable tax credit for health insurance coverage. 

Sec. 216. Maximum contribution limit to health savings account increased to 

amount of deductible and out-of-pocket limitation. 

Sec. 217. Allow both spouses to make catch-up contributions to the same health 

savings account. 

Sec. 218. 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— 


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

2 end; 

3 (2) in paragraph (3)— 

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

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

6 and 

7 (B) by striking the semicolon at the end 

8 and inserting a period; and 

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

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

11 funds made available by such section 4002, the unobli12 gated balance at the end of fiscal year 2018 is rescinded. 

13 SEC. 102. COMMUNITY HEALTH CENTER PROGRAM. 

14 Effective as if included in the enactment of the Medi15 care Access and CHIP Reauthorization Act of 2015 (Pub16 lic Law 114–10, 129 Stat. 87), paragraph (1) of section 

17 221(a) of such Act is amended by inserting ‘‘, and an ad18 ditional $422,000,000 for fiscal year 2017’’ after ‘‘2017’’. 

19 SEC. 103. FEDERAL PAYMENTS TO STATES. 

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

21 1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or 

22 2105(a)(1) of the Social Security Act (42 U.S.C. 704(a), 

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

24 1397bb(a)(7), 1397ee(a)(1)), or the terms of any Med25 icaid waiver in effect on the date of enactment of this Act 


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

2 Security Act (42 U.S.C. 1315, 1396n), for the 1-year pe3 riod beginning on the date of the enactment of this Act, 

4 no Federal funds provided from a program referred to in 

5 this subsection that is considered direct spending for any 

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

7 a prohibited entity, whether made directly to the prohib8 ited entity or through a managed care organization under 

9 contract with the State. 

10 (b) DEFINITIONS.—In this section: 

11 (1) PROHIBITED ENTITY.—The term ‘‘prohib12 ited entity’’ means an entity, including its affiliates, 

13 subsidiaries, successors, and clinics— 

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

15 this Act— 

16 (i) is an organization described in sec17 tion 501(c)(3) of the Internal Revenue 

18 Code of 1986 and exempt from tax under 

19 section 501(a) of such Code; 

20 (ii) is an essential community provider 

21 described in section 156.235 of title 45, 

22 Code of Federal Regulations (as in effect 

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

24 is primarily engaged in family planning 


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1 services, reproductive health, and related 

2 medical care; and 

3 (iii) provides for abortions, other than 

4 an abortion— 

5 (I) if the pregnancy is the result 

6 of an act of rape or incest; or 

7 (II) in the case where a woman 

8 suffers from a physical disorder, phys9 ical injury, or physical illness that 

10 would, as certified by a physician, 

11 place the woman in danger of death 

12 unless an abortion is performed, in13 cluding a life-endangering physical 

14 condition caused by or arising from 

15 the pregnancy itself; and 

16 (B) for which the total amount of Federal 

17 and State expenditures under the Medicaid pro18 gram under title XIX of the Social Security Act 

19 in fiscal year 2014 made directly to the entity 

20 and to any affiliates, subsidiaries, successors, or 

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

22 to any affiliates, subsidiaries, successors, or 

23 clinics of the entity as part of a nationwide 

24 health care provider network, exceeded 

25 $350,000,000. 


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

2 spending’’ has the meaning given that term under 

3 section 250(c) of the Balanced Budget and Emer4 gency Deficit Control Act of 1985 (2 U.S.C. 900(c)). 

5 Subtitle B—Medicaid Program 

6 Enhancement 

7 SEC. 111. REPEAL OF MEDICAID PROVISIONS. 

8 The Social Security Act is amended— 

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

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

11 ‘‘and provided that any such election shall cease 

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

13 election shall be made after that date’’ before 

14 the semicolon at the end; and 

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

16 ‘‘and ending December 31, 2019,’’ after ‘‘Janu17 ary 1, 2014,’’; 

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

19 1396n(k)(2)), by striking ‘‘during the period de20 scribed in paragraph (1)’’ and inserting ‘‘on or after 

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

22 January 1, 2020’’; and 

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

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

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1 ing ‘‘under clause (i)(VIII) or clause (ii)(XX) of sec2 tion 1902(a)(10)(A) before January 1, 2020, section 

3 1902(a)(10)(A)(i)(IX),’’. 

4 SEC. 112. REPEAL OF MEDICAID EXPANSION. 

5 (a) IN GENERAL.—Section 1902(a)(10)(A) of the So6 cial Security Act (42 U.S.C. 1396a(a)(10)(A)) is amend7 ed— 

8 (1) in clause (i)(VIII), by inserting ‘‘at the op9 tion of a State,’’ after ‘‘January 1, 2014,’’; and 

10 (2) in clause (ii)(XX), by inserting ‘‘and ending 

11 December 31, 2019,’’ after ‘‘2014,’’. 

12 (b) TERMINATION OF EFMAP FOR NEW ACA EX13 PANSION ENROLLEES.—Section 1905 of the Social Secu14 rity Act (42 U.S.C. 1396d) is amended— 

15 (1) in subsection (y)(1), in the matter preceding 

16 subparagraph (A), by striking ‘‘with respect to’’ and 

17 all that follows through ‘‘shall be’’ and inserting 

18 ‘‘with respect to amounts expended before January 

19 1, 2020, by such State for medical assistance for 

20 newly eligible individuals described in subclause 

21 (VIII) of section 1902(a)(10)(A)(i) who are enrolled 

22 under the State plan (or a waiver of the plan) before 

23 such date and with respect to amounts expended 

24 after such date by such State for medical assistance 

25 for individuals described in such subclause who were 


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1 enrolled under such plan (or waiver of such plan) as 

2 of December 31, 2019, and who do not have a break 

3 in eligibility for medical assistance under such State 

4 plan (or waiver) for more than one month after such 

5 date, shall be’’; and 

6 (2) in subsection (z)(2)— 

7 (A) in subparagraph (A), by striking 

8 ‘‘medical assistance for individuals’’ and all that 

9 follows through ‘‘shall be’’ and inserting 

10 ‘‘amounts expended before January 1, 2020, by 

11 such State for medical assistance for individuals 

12 described in section 1902(a)(10)(A)(i)(VIII) 

13 who are nonpregnant childless adults with re14 spect to whom the State may require enrollment 

15 in benchmark coverage under section 1937 and 

16 who are enrolled under the State plan (or a 

17 waiver of the plan) before such date and with 

18 respect to amounts expended after such date by 

19 such State for medical assistance for individuals 

20 described in such section, who are nonpregnant 

21 childless adults with respect to whom the State 

22 may require enrollment in benchmark coverage 

23 under section 1937, who were enrolled under 

24 such plan (or waiver of such plan) as of Decem25 ber 31, 2019, and who do not have a break in 


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1 eligibility for medical assistance under such 

2 State plan (or waiver) for more than one month 

3 after such date, shall be’’; and 

4 (B) in subparagraph (B)(ii)— 

5 (i) in subclause (III), by adding 

6 ‘‘and’’ at the end; and 

7 (ii) by striking subclauses (IV), (V), 

8 and (VI) and inserting the following new 

9 subclause: 

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

11 percent.’’. 

12 (c) SUNSET OF ESSENTIAL HEALTH BENEFITS RE13 QUIREMENT.—Section 1937(b)(5) of the Social Security 

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

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

16 after December 31, 2019.’’. 

17 SEC. 113. ELIMINATION OF DSH CUTS. 

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

19 1396r–4(f)) is amended— 

20 (1) in paragraph (7)— 

21 (A) in subparagraph (A)— 

22 (i) in clause (i)— 

23 (I) in the matter preceding sub24 clause (I), by striking ‘‘2025’’ and in25 serting ‘‘2019’’; and 


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1 (ii) in clause (ii)— 

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

3 ‘‘and’’ at the end; 

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

5 the semicolon at the end and inserting 

6 a period; and 

7 (III) by striking subclauses (III) 

8 through (VIII); and 

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

10 subparagraph: 

11 ‘‘(C) EXEMPTION FROM EXEMPTION FOR

12 NON-EXPANSION STATES.— 

13 ‘‘(i) IN GENERAL.—In the case of a 

14 State that is a non-expansion State for a 

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

16 apply to the DSH allotment for such State 

17 and fiscal year. 

18 ‘‘(ii) NO CHANGE IN REDUCTION FOR

19 EXPANSION STATES.—In the case of a 

20 State that is an expansion State for a fis21 cal year, the DSH allotment for such State 

22 and fiscal year shall be determined as if 

23 clause (i) did not apply. 

24 ‘‘(iii) NON-EXPANSION AND EXPAN25 SION STATE DEFINED.— 


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1 ‘‘(I) The term ‘expansion State’ 

2 means with respect to a fiscal year, a 

3 State that, as of July 1 of the pre4 ceding fiscal year, provides for eligi5 bility under clause (i)(VIII) or 

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

7 medical assistance under this title (or 

8 a waiver of the State plan approved 

9 under section 1115). 

10 ‘‘(II) The term ‘non-expansion 

11 State’ means, with respect to a fiscal 

12 year, a State that is not an expansion 

13 State.’’; and 

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

15 2025’’ and inserting ‘‘fiscal year 2019’’. 

16 SEC. 114. REDUCING STATE MEDICAID COSTS. 

17 (a) LETTING STATES DISENROLL HIGH DOLLAR

18 LOTTERY WINNERS.— 

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

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

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

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

23 (e)(15)’’; and 

24 (B) in subsection (e)— 


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

2 modified adjusted gross income), by adding 

3 at the end the following new subparagraph: 

4 ‘‘(J) TREATMENT OF CERTAIN LOTTERY

5 WINNINGS AND INCOME RECEIVED AS A LUMP

6 SUM.— 

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

8 individual who is the recipient of qualified 

9 lottery winnings (pursuant to lotteries oc10 curring on or after January 1, 2020) or 

11 qualified lump sum income (received on or 

12 after such date) and whose eligibility for 

13 medical assistance is determined based on 

14 the application of modified adjusted gross 

15 income under subparagraph (A), a State 

16 shall, in determining such eligibility, in17 clude such winnings or income (as applica18 ble) as income received— 

19 ‘‘(I) in the month in which such 

20 winnings or income (as applicable) is 

21 received if the amount of such 

22 winnings or income is less than 

23 $80,000; 

24 ‘‘(II) over a period of 2 months 

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1 come (as applicable) is greater than or 

2 equal to $80,000 but less than 

3 $90,000; 

4 ‘‘(III) over a period of 3 months 

5 if the amount of such winnings or in6 come (as applicable) is greater than or 

7 equal to $90,000 but less than 

8 $100,000; and 

9 ‘‘(IV) over a period of 3 months 

10 plus 1 additional month for each in11 crement of $10,000 of such winnings 

12 or income (as applicable) received, not 

13 to exceed a period of 120 months (for 

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

15 more), if the amount of such winnings 

16 or income is greater than or equal to 

17 $100,000. 

18 ‘‘(ii) COUNTING IN EQUAL INSTALL19 MENTS.—For purposes of subclauses (II), 

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

21 income to which such subclause applies 

22 shall be counted in equal monthly install23 ments over the period of months specified 

24 under such subclause. 


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1 ‘‘(iii) HARDSHIP EXEMPTION.—An in2 dividual whose income, by application of 

3 clause (i), exceeds the applicable eligibility 

4 threshold established by the State, may 

5 continue to be eligible for medical assist6 ance to the extent that the State deter7 mines, under procedures established by the 

8 State under the State plan (or in the case 

9 of a waiver of the plan under section 1115, 

10 incorporated in such waiver), or as other11 wise established by such State in accord12 ance with such standards as may be speci13 fied by the Secretary, that the denial of eli14 gibility of the individual would cause an 

15 undue medical or financial hardship as de16 termined on the basis of criteria estab17 lished by the Secretary. 

18 ‘‘(iv) NOTIFICATIONS AND ASSIST19 ANCE REQUIRED IN CASE OF LOSS OF ELI20 GIBILITY.—A State shall, with respect to 

21 an individual who loses eligibility for med22 ical assistance under the State plan (or a 

23 waiver of such plan) by reason of clause 

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

25 loses such eligibility, inform the individual 


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1 of the date on which the individual would 

2 no longer be considered ineligible by reason 

3 of such clause to receive medical assistance 

4 under the State plan or under any waiver 

5 of such plan and the date on which the in6 dividual would be eligible to reapply to re7 ceive such medical assistance. 

8 ‘‘(v) QUALIFIED LOTTERY WINNINGS

9 DEFINED.—In this subparagraph, the term 

10 ‘qualified lottery winnings’ means winnings 

11 from a sweepstakes, lottery, or pool de12 scribed in paragraph (3) of section 4402 of 

13 the Internal Revenue Code of 1986 or a 

14 lottery operated by a multistate or multi15 jurisdictional lottery association, including 

16 amounts awarded as a lump sum payment. 

17 ‘‘(vi) QUALIFIED LUMP SUM INCOME

18 DEFINED.—In this subparagraph, the term 

19 ‘qualified lump sum income’ means income 

20 that is received as a lump sum from one 

21 of the following sources: 

22 ‘‘(I) Monetary winnings from 

23 gambling (as defined by the Secretary 

24 and including monetary winnings from 

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1 tion 1955(b)(4) of title 18, United 

2 States Code). 

3 ‘‘(II) Income received as liquid 

4 assets from the estate (as defined in 

5 section 1917(b)(4)) of a deceased in6 dividual.’’; and 

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

8 and inserting ‘‘(15) EXCLUSION’’. 

9 (2) RULES OF CONSTRUCTION.— 

10 (A) INTERCEPTION OF LOTTERY WINNINGS

11 ALLOWED.—Nothing in the amendment made 

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

13 preventing a State from intercepting the State 

14 lottery winnings awarded to an individual in the 

15 State to recover amounts paid by the State 

16 under the State Medicaid plan under title XIX 

17 of the Social Security Act for medical assistance 

18 furnished to the individual. 

19 (B) APPLICABILITY LIMITED TO ELIGI20 BILITY OF RECIPIENT OF LOTTERY WINNINGS

21 OR LUMP SUM INCOME.—Nothing in the amend22 ment made by paragraph (1)(B)(i) shall be con23 strued, with respect to a determination of 

24 household income for purposes of a determina25 tion of eligibility for medical assistance under 


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1 the State plan under title XIX of the Social Se2 curity Act (42 U.S.C. 1396 et seq.) (or a waiver 

3 of such plan) made by applying modified ad4 justed gross income under subparagraph (A) of 

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

6 1396a(e)(14)), as limiting the eligibility for 

7 such medical assistance of any individual that is 

8 a member of the household other than the indi9 vidual (or the individual’s spouse) who received 

10 qualified lottery winnings or qualified lump-sum 

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

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

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

14 (b) REPEAL OF RETROACTIVE ELIGIBILITY.— 

15 (1) IN GENERAL.— 

16 (A) STATE PLAN REQUIREMENTS.—Section 

17 1902(a)(34) of the Social Security Act (42 

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

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

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

21 or after the month in which the individual made 

22 application’’. 

23 (B) DEFINITION OF MEDICAL ASSIST24 ANCE.—Section 1905(a) of the Social Security 

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1 ing ‘‘in or after the third month before the 

2 month in which the recipient makes application 

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

4 month in which the recipient makes application 

5 for assistance’’. 

6 (2) EFFECTIVE DATE.—The amendments made 

7 by paragraph (1) shall apply to medical assistance 

8 with respect to individuals whose eligibility for such 

9 assistance is based on an application for such assist10 ance made (or deemed to be made) on or after Octo11 ber 1, 2017. 

12 (c) ENSURING STATES ARE NOT FORCED TO PAY

13 FOR INDIVIDUALS INELIGIBLE FOR THE PROGRAM.— 

14 (1) IN GENERAL.—Section 1137(f) of the Social 

15 Security Act (42 U.S.C. 1320b–7(f)) is amended— 

16 (A) by striking ‘‘Subsections (a)(1) and 

17 (d)’’ and inserting ‘‘(1) Subsections (a)(1) and 

18 (d)’’; and 

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

20 paragraph: 

21 ‘‘(2)(A) Subparagraphs (A) and (B)(ii) of subsection 

22 (d)(4) shall not apply in the case of an initial determina23 tion made on or after the date that is 6 months after the 

24 date of the enactment of this paragraph with respect to 


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1 the eligibility of an alien described in subparagraph (B) 

2 for benefits under the program listed in subsection (b)(2). 

3 ‘‘(B) An alien described in this subparagraph is an 

4 individual declaring to be a citizen or national of the 

5 United States with respect to whom a State, in accordance 

6 with section 1902(a)(46)(B), requires— 

7 ‘‘(i) pursuant to 1902(ee), the submission of a 

8 social security number; or 

9 ‘‘(ii) pursuant to 1903(x), the presentation of 

10 satisfactory documentary evidence of citizenship or 

11 nationality.’’. 

12 (2) NO PAYMENTS FOR MEDICAL ASSISTANCE

13 PROVIDED BEFORE PRESENTATION OF EVIDENCE.— 

14 Section 1903(i)(22) of the Social Security Act (42 

15 U.S.C. 1396b(i)(22)) is amended— 

16 (A) by striking ‘‘with respect to amounts 

17 expended’’ and inserting ‘‘(A) with respect to 

18 amounts expended’’; 

19 (B) by inserting ‘‘and’’ at the end; and 

20 (C) by adding at the end the following new 

21 subparagraph: 

22 ‘‘(B) in the case of a State that elects to pro23 vide a reasonable period to present satisfactory doc24 umentary evidence of such citizenship or nationality 

25 pursuant to paragraph (2)(C) of section 1902(ee) or 


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1 paragraph (4) of subsection (x) of this section, for 

2 amounts expended for medical assistance for such an 

3 individual (other than an individual described in 

4 paragraph (2) of such subsection (x)) during such 

5 period;’’. 

6 (3) CONFORMING AMENDMENTS.—Section 

7 1137(d)(4) of the Social Security Act (42 U.S.C. 

8 1320b–7(d)(4)) is amended— 

9 (A) in subparagraph (A), in the matter 

10 preceding clause (i), by inserting ‘‘subject to 

11 subsection (f)(2),’’ before ‘‘the State’’; and 

12 (B) in subparagraph (B)(ii), by inserting 

13 ‘‘subject to subsection (f)(2),’’ before ‘‘pending 

14 such verification’’. 

15 (d) UPDATING ALLOWABLE HOME EQUITY LIMITS

16 IN MEDICAID.— 

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

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

19 amended— 

20 (A) in subparagraph (A), by striking ‘‘sub21 paragraphs (B) and (C)’’ and inserting ‘‘sub22 paragraph (B)’’; 

23 (B) by striking subparagraph (B); 

24 (C) by redesignating subparagraph (C) as 

25 subparagraph (B); and 


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1 (D) in subparagraph (B), as so redesig2 nated, by striking ‘‘dollar amounts specified in 

3 this paragraph’’ and inserting ‘‘dollar amount 

4 specified in subparagraph (A)’’. 

5 (2) EFFECTIVE DATE.— 

6 (A) IN GENERAL.—The amendments made 

7 by paragraph (1) shall apply with respect to eli8 gibility determinations made after the date that 

9 is 180 days after the date of the enactment of 

10 this section. 

11 (B) EXCEPTION FOR STATE LEGISLA12 TION.—In the case of a State plan under title 

13 XIX of the Social Security Act that the Sec14 retary of Health and Human Services deter15 mines requires State legislation in order for the 

16 respective plan to meet any requirement im17 posed by amendments made by this subsection, 

18 the respective plan shall not be regarded as fail19 ing to comply with the requirements of such 

20 title solely on the basis of its failure to meet 

21 such an additional requirement before the first 

22 day of the first calendar quarter beginning after 

23 the close of the first regular session of the 

24 State legislature that begins after the date of 

25 the enactment of this Act. For purposes of the 


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1 previous sentence, in the case of a State that 

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

3 session shall be considered to be a separate reg4 ular session of the State legislature. 

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

6 STATES. 

7 Title XIX of the Social Security Act is amended by 

8 inserting after section 1923 (42 U.S.C. 1396r–4) the fol9 lowing new section: 

10 ‘‘ADJUSTMENT IN PAYMENT FOR SERVICES OF SAFETY

11 NET PROVIDERS IN NON-EXPANSION STATES

12 ‘‘SEC. 1923A. (a) IN GENERAL.—Subject to the limi13 tations of this section, for each year during the period be14 ginning with 2018 and ending with 2021, each State that 

15 is one of the 50 States or the District of Columbia and 

16 that, as of July 1 of the preceding year, did not provide 

17 for eligibility under clause (i)(VIII) or (ii)(XX) of section 

18 1902(a)(10)(A) for medical assistance under this title (or 

19 a waiver of the State plan approved under section 1115) 

20 (each such State or District referred to in this section for 

21 the year as a ‘non-expansion State’) may adjust the pay22 ment amounts otherwise provided under the State plan 

23 under this title (or a waiver of such plan) to health care 

24 providers that provide health care services to individuals 

25 enrolled under this title (in this section referred to as ‘eli26 gible providers’). 


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1 ‘‘(b) INCREASE IN APPLICABLE FMAP.—Notwith2 standing section 1905(b), the Federal medical assistance 

3 percentage applicable with respect to expenditures attrib4 utable to a payment adjustment under subsection (a) for 

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

6 equal to— 

7 ‘‘(1) 100 percent for calendar quarters in cal8 endar years 2018, 2019, 2020, and 2021; and 

9 ‘‘(2) 95 percent for calendar quarters in cal10 endar year 2022. 

11 ‘‘(c) LIMITATIONS; DISQUALIFICATION OF STATES.— 

12 ‘‘(1) ANNUAL ALLOTMENT LIMITATION.—Pay13 ment under section 1903(a) shall not be made to a 

14 State with respect to any payment adjustment made 

15 under this section for all calendar quarters in a year 

16 in excess of the $2,000,000,000 multiplied by the 

17 ratio of— 

18 ‘‘(A) the population of the State with in19 come below 138 percent of the poverty line in 

20 2015 (as determined based the table entitled 

21 ‘Health Insurance Coverage Status and Type 

22 by Ratio of Income to Poverty Level in the Past 

23 12 Months by Age’ for the universe of the civil24 ian noninstitutionalized population for whom 

25 poverty status is determined based on the 2015 


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1 American Community Survey 1-Year Estimates, 

2 as published by the Bureau of the Census), to 

3 ‘‘(B) the sum of the populations under 

4 subparagraph (A) for all non-expansion States. 

5 ‘‘(2) LIMITATION ON PAYMENT ADJUSTMENT

6 AMOUNT FOR INDIVIDUAL PROVIDERS.—The amount 

7 of a payment adjustment under subsection (a) for an 

8 eligible provider may not exceed the provider’s costs 

9 incurred in furnishing health care services (as deter10 mined by the Secretary and net of payments under 

11 this title, other than under this section, and by unin12 sured patients) to individuals who either are eligible 

13 for medical assistance under the State plan (or 

14 under a waiver of such plan) or have no health in15 surance or health plan coverage for such services. 

16 ‘‘(d) DISQUALIFICATION IN CASE OF STATE COV17 ERAGE EXPANSION.—If a State is a non-expansion for a 

18 year and provides eligibility for medical assistance de19 scribed in subsection (a) during the year, the State shall 

20 no longer be treated as a non-expansion State under this 

21 section for any subsequent years.’’. 


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1 SEC. 116. PROVIDING INCENTIVES FOR INCREASED FRE2 QUENCY OF ELIGIBILITY REDETERMINA3 TIONS. 

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

5 Security Act (42 U.S.C. 1396a(e)(14)) (relating to modi6 fied adjusted gross income), as amended by section 

7 114(a)(1), is further amended by adding at the end the 

8 following: 

9 ‘‘(K) FREQUENCY OF ELIGIBILITY REDE10 TERMINATIONS.—Beginning on October 1, 

11 2017, and notwithstanding subparagraph (H), 

12 in the case of an individual whose eligibility for 

13 medical assistance under the State plan under 

14 this title (or a waiver of such plan) is deter15 mined based on the application of modified ad16 justed gross income under subparagraph (A) 

17 and who is so eligible on the basis of clause 

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

19 (a)(10)(A), a State shall redetermine such indi20 vidual’s eligibility for such medical assistance 

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

22 (b) CIVIL MONETARY PENALTY.—Section 1128A(a) 

23 of the Social Security Act (42 U.S.C. 1320a–7a(a)) is 

24 amended, in the matter following paragraph (10), by strik25 ing ‘‘(or, in cases under paragraph (3)’’ and inserting the 

26 following: ‘‘(or, in cases under paragraph (1) in which an 


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1 individual was knowingly enrolled on or after October 1, 

2 2017, pursuant to section 1902(a)(10)(A)(i)(VIII) for 

3 medical assistance under the State plan under title XIX 

4 whose income does not meet the income threshold specified 

5 in such section or in which a claim was presented on or 

6 after October 1, 2017, as a claim for an item or service 

7 furnished to an individual described in such section but 

8 whose enrollment under such State plan is not made on 

9 the basis of such individual’s meeting the income threshold 

10 specified in such section, $20,000 for each such individual 

11 or claim; in cases under paragraph (3)’’. 

12 (c) INCREASED ADMINISTRATIVE MATCHING PER13 CENTAGE.—For each calendar quarter during the period 

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

15 31, 2019, the Federal matching percentage otherwise ap16 plicable under section 1903(a) of the Social Security Act 

17 (42 U.S.C. 1396b(a)) with respect to State expenditures 

18 during such quarter that are attributable to meeting the 

19 requirement of section 1902(e)(14) (relating to determina20 tions of eligibility using modified adjusted gross income) 

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

22 respect to State expenditures attributable to activities car23 ried out by the State (and approved by the Secretary) to 

24 increase the frequency of eligibility redeterminations re25 quired by subparagraph (K) of such section (relating to 


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

2 added by subsection (a)). 

3 Subtitle C—Per Capita Allotment 

4 for Medical Assistance 

5 SEC. 121. PER CAPITA ALLOTMENT FOR MEDICAL ASSIST6 ANCE. 

7 Title XIX of the Social Security Act is amended— 

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

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

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

11 1903A(a)’’ after ‘‘except as otherwise provided 

12 in this section’’; and 

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

14 which’’ and inserting ‘‘to which, subject to sec15 tion 1903A(a),’’; and 

16 (2) by inserting after such section 1903 the fol17 lowing new section: 

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

19 MEDICAL ASSISTANCE. 

20 ‘‘(a) APPLICATION OF PER CAPITA CAP ON PAY21 MENTS FOR MEDICAL ASSISTANCE EXPENDITURES.— 

22 ‘‘(1) IN GENERAL.—If a State has excess ag23 gregate medical assistance expenditures (as defined 

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

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


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

the following fiscal year shall be reduced by 1 2 ⁄4 of 

3 the excess aggregate medical assistance payments 

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

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

6 50 States and the District of Columbia. 

7 ‘‘(2) EXCESS AGGREGATE MEDICAL ASSISTANCE

8 EXPENDITURES.—In this subsection, the term ‘ex9 cess aggregate medical assistance expenditures’ 

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

11 any) by which— 

12 ‘‘(A) the amount of the adjusted total med13 ical assistance expenditures (as defined in sub14 section (b)(1)) for the State and fiscal year; ex15 ceeds 

16 ‘‘(B) the amount of the target total med17 ical assistance expenditures (as defined in sub18 section (c)) for the State and fiscal year. 

19 ‘‘(3) EXCESS AGGREGATE MEDICAL ASSISTANCE

20 PAYMENTS.—In this subsection, the term ‘excess ag21 gregate medical assistance payments’ means, for a 

22 State for a fiscal year, the product of— 

23 ‘‘(A) the excess aggregate medical assist24 ance expenditures (as defined in paragraph (2)) 

25 for the State for the fiscal year; and 


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1 ‘‘(B) the Federal average medical assist2 ance matching percentage (as defined in para3 graph (4)) for the State for the fiscal year. 

4 ‘‘(4) FEDERAL AVERAGE MEDICAL ASSISTANCE

5 MATCHING PERCENTAGE.—In this subsection, the 

6 term ‘Federal average medical assistance matching 

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

8 ratio (expressed as a percentage) of— 

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

10 that would be made to the State under section 

11 1903(a)(1) for medical assistance expenditures 

12 for calendar quarters in the fiscal year if para13 graph (1) did not apply; to 

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

15 expenditures for the State and fiscal year. 

16 ‘‘(b) ADJUSTED TOTAL MEDICAL ASSISTANCE EX17 PENDITURES.—Subject to subsection (g), the following 

18 shall apply: 

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

20 ‘adjusted total medical assistance expenditures’ 

21 means, for a State— 

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

23 ‘‘(i) the amount of the medical assist24 ance expenditures (as defined in paragraph 

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


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1 by the amount of any excluded expendi2 tures (as defined in paragraph (3)) for the 

3 State and fiscal year otherwise included in 

4 such medical assistance expenditures; and 

5 ‘‘(ii) the 1903A FY16 population per6 centage (as defined in paragraph (4)) for 

7 the State; or 

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

9 fiscal year, the amount of the medical assist10 ance expenditures (as defined in paragraph (2)) 

11 for the State and fiscal year that is attributable 

12 to 1903A enrollees, reduced by the amount of 

13 any excluded expenditures (as defined in para14 graph (3)) for the State and fiscal year other15 wise included in such medical assistance ex16 penditures. 

17 ‘‘(2) MEDICAL ASSISTANCE EXPENDITURES.— 

18 In this section, the term ‘medical assistance expendi19 tures’ means, for a State and fiscal year, the med20 ical assistance payments as reported by medical 

21 service category on the Form CMS-64 quarterly ex22 pense report (or successor to such a report form, 

23 and including enrollment data and subsequent ad24 justments to any such report, in this section referred 

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1 sult from providing medical assistance under the 

2 State plan (including under a waiver of the plan) for 

3 which payment is (or may otherwise be) made pur4 suant to section 1903(a)(1). 

5 ‘‘(3) EXCLUDED EXPENDITURES.—In this sec6 tion, the term ‘excluded expenditures’ means, for a 

7 State and fiscal year, expenditures under the State 

8 plan (or under a waiver of such plan) that are at9 tributable to any of the following: 

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

11 for disproportionate share hospitals under sec12 tion 1923. 

13 ‘‘(B) MEDICARE COST-SHARING.—Pay14 ments made for medicare cost-sharing (as de15 fined in section 1905(p)(3)). 

16 ‘‘(C) SAFETY NET PROVIDER PAYMENT AD17 JUSTMENTS IN NON-EXPANSION STATES.—Pay18 ment adjustments under subsection (a) of sec19 tion 1923A for which payment is permitted 

20 under subsection (c) of such section. 

21 ‘‘(4) 1903A FY 16 POPULATION PERCENTAGE.— 

22 In this subsection, the term ‘1903A FY16 popu23 lation percentage’ means, for a State, the Sec24 retary’s calculation of the percentage of the actual 

25 medical assistance expenditures, as reported by the 


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1 State on the CMS–64 reports for calendar quarters 

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

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

4 ‘‘(c) TARGET TOTAL MEDICAL ASSISTANCE EXPEND5 ITURES.— 

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

7 ‘target total medical assistance expenditures’ means, 

8 for a State for a fiscal year, the sum of the prod9 ucts, for each of the 1903A enrollee categories (as 

10 defined in subsection (e)(2)), of— 

11 ‘‘(A) the target per capita medical assist12 ance expenditures (as defined in paragraph (2)) 

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

14 and 

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

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

17 determined under subsection (e)(4). 

18 ‘‘(2) TARGET PER CAPITA MEDICAL ASSISTANCE

19 EXPENDITURES.—In this subsection, the term ‘tar20 get per capita medical assistance expenditures’ 

21 means, for a 1903A enrollee category, State, and a 

22 fiscal year, an amount equal to— 

23 ‘‘(A) the provisional FY19 target per cap24 ita amount for such enrollee category (as calVerDate Sep 11 2014 23:17 Mar 20, 2017 Jkt 069200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\H1628.RH H1628

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1 culated under subsection (d)(5)) for the State; 

2 increased by 

3 ‘‘(B) the percentage increase in the med4 ical care component of the consumer price index 

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

6 from September of 2019 to September of the 

7 fiscal year involved. 

8 ‘‘(d) CALCULATION OF FY19 PROVISIONAL TARGET

9 AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.—Sub10 ject to subsection (g), the following shall apply: 

11 ‘‘(1) CALCULATION OF BASE AMOUNTS FOR FIS12 CAL YEAR 2016.—For each State the Secretary shall 

13 calculate (and provide notice to the State not later 

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

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

16 medical assistance expenditures (as defined in 

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

18 2016. 

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

20 the State in fiscal year 2016 (as determined 

21 under subsection (e)(4)). 

22 ‘‘(C) The average per capita medical as23 sistance expenditures for the State for fiscal 

24 year 2016 equal to— 


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1 ‘‘(i) the amount calculated under sub2 paragraph (A); divided by 

3 ‘‘(ii) the number calculated under sub4 paragraph (B). 

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

6 AMOUNT BASED ON INFLATING THE FISCAL YEAR

7 2016 AMOUNT TO FISCAL YEAR 2019 BY CPI-MED8 ICAL.—The Secretary shall calculate a fiscal year 

9 2019 average per capita amount for each State 

10 equal to— 

11 ‘‘(A) the average per capita medical assist12 ance expenditures for the State for fiscal year 

13 2016 (calculated under paragraph (1)(C)); in14 creased by 

15 ‘‘(B) the percentage increase in the med16 ical care component of the consumer price index 

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

18 from September, 2016 to September, 2019. 

19 ‘‘(3) AGGREGATE AND AVERAGE EXPENDI20 TURES PER CAPITA FOR FISCAL YEAR 2019.—The 

21 Secretary shall calculate for each State the fol22 lowing: 

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

24 medical assistance expenditures (as defined in 


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

2 2019. 

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

4 the State in fiscal year 2019 (as determined 

5 under subsection (e)(4)). 

6 ‘‘(4) PER CAPITA EXPENDITURES FOR FISCAL

7 YEAR 2019 FOR EACH 1903A ENROLLEE CATEGORY.— 

8 The Secretary shall calculate (and provide notice to 

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

10 following: 

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

12 the amount of the adjusted total medical assist13 ance expenditures (as defined in subsection 

14 (b)(1)) for the State for fiscal year 2019 for in15 dividuals in the enrollee category, calculated by 

16 excluding from medical assistance expenditures 

17 those expenditures attributable to expenditures 

18 described in clause (iii) or non-DSH supple19 mental expenditures (as defined in clause (ii)). 

20 ‘‘(ii) In this paragraph, the term ‘non21 DSH supplemental expenditure’ means a pay22 ment to a provider under the State plan (or 

23 under a waiver of the plan) that— 

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


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

2 specific item or service for an individual; 

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

4 made to the provider under the plan (or 

5 waiver) for any such item or service; and 

6 ‘‘(IV) complies with the limits for ad7 ditional payments to providers under the 

8 plan (or waiver) imposed pursuant to sec9 tion 1902(a)(30)(A), including the regula10 tions specifying upper payment limits 

11 under the State plan in part 447 of title 

12 42, Code of Federal Regulations (or any 

13 successor regulations). 

14 ‘‘(iii) An expenditure described in this 

15 clause is an expenditure that meets the criteria 

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

17 clause (ii) and is authorized under section 1115 

18 for the purposes of funding a delivery system 

19 reform pool, uncompensated care pool, a des20 ignated state health program, or any other 

21 similar expenditure (as defined by the Sec22 retary). 

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

24 the number of 1903A enrollees for the State in 


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1 fiscal year 2019 in the enrollee category (as de2 termined under subsection (e)(4)). 

3 ‘‘(C) For fiscal year 2016, the State’s non4 DSH supplemental payment percentage is equal 

5 to the ratio (expressed as a percentage) of— 

6 ‘‘(i) the total amount of non-DSH 

7 supplemental expenditures (as defined in 

8 subparagraph (A)(ii)) for the State for fis9 cal year 2016; to 

10 ‘‘(ii) the amount described in sub11 section (b)(1)(A) for the State for fiscal 

12 year 2016. 

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

14 average medical assistance expenditures per 

15 capita for the State for fiscal year 2019 for the 

16 enrollee category equal to— 

17 ‘‘(i) the amount calculated under sub18 paragraph (A) for the State, increased by 

19 the non-DSH supplemental payment per20 centage for the State (as calculated under 

21 subparagraph (C)); divided by 

22 ‘‘(ii) the number calculated under sub23 paragraph (B) for the State for the en24 rollee category. 


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1 ‘‘(5) PROVISIONAL FY19 PER CAPITA TARGET

2 AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.— 

3 Subject to subsection (f)(2), the Secretary shall cal4 culate for each State a provisional FY19 per capita 

5 target amount for each 1903A enrollee category 

6 equal to the average medical assistance expenditures 

7 per capita for the State for fiscal year 2019 (as cal8 culated under paragraph (4)(D)) for such enrollee 

9 category multiplied by the ratio of— 

10 ‘‘(A) the product of— 

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

12 capita amount for the State, as calculated 

13 under paragraph (2); and 

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

15 for the State in fiscal year 2019, as cal16 culated under paragraph (3)(B); to 

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

18 medical assistance expenditures for the State 

19 for fiscal year 2019, as calculated under para20 graph (3)(A). 

21 ‘‘(e) 1903A ENROLLEE; 1903A ENROLLEE CAT22 EGORY.—Subject to subsection (g), for purposes of this 

23 section, the following shall apply: 

24 ‘‘(1) 1903A ENROLLEE.—The term ‘1903A en25 rollee’ means, with respect to a State and a month, 


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1 any Medicaid enrollee (as defined in paragraph (3)) 

2 for the month, other than such an enrollee who for 

3 such month is in any of the following categories of 

4 excluded individuals: 

5 ‘‘(A) CHIP.—An individual who is pro6 vided, under this title in the manner described 

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

8 under title XXI. 

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

10 any medical assistance under this title for serv11 ices for which payment is made under the third 

12 sentence of section 1905(b). 

13 ‘‘(C) BREAST AND CERVICAL CANCER

14 SERVICES ELIGIBLE INDIVIDUAL.—An indi15 vidual who is entitled to medical assistance 

16 under this title only pursuant to section 

17 1902(a)(10)(A)(ii)(XVIII). 

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

19 individual who— 

20 ‘‘(i) is an alien who is entitled to med21 ical assistance under this title only pursu22 ant to section 1903(v)(2); 

23 ‘‘(ii) is entitled to medical assistance 

24 under this title only pursuant to subclause 

25 (XII) or (XXI) of section 


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1 1902(a)(10)(A)(ii) (or pursuant to a waiv2 er that provides only comparable benefits); 

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

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

5 entitled to medical assistance under this 

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

7 all of medicare cost-sharing (as defined in 

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

9 ‘‘(iv) is entitled to medical assistance 

10 under this title and for whom the State is 

11 providing a payment or subsidy to an em12 ployer for coverage of the individual under 

13 a group health plan pursuant to section 

14 1906 or section 1906A (or pursuant to a 

15 waiver that provides only comparable bene16 fits). 

17 ‘‘(2) 1903A ENROLLEE CATEGORY.—The term 

18 ‘1903A enrollee category’ means each of the fol19 lowing: 

20 ‘‘(A) ELDERLY.—A category of 1903A en21 rollees who are 65 years of age or older. 

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

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1 ical assistance under this title on the basis of 

2 being blind or disabled. 

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

4 enrollees (not described in a previous subpara5 graph) who are children under 19 years of age. 

6 ‘‘(D) EXPANSION ENROLLEES.—A cat7 egory of 1903A enrollees (not described in a 

8 previous subparagraph) for whom the amounts 

9 expended for medical assistance are subject to 

10 an increase or change in the Federal medical 

11 assistance percentage under subsection (y) or 

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

13 ‘‘(E) OTHER NONELDERLY, NONDISABLED, 

14 NON-EXPANSION ADULTS.—A category of 

15 1903A enrollees who are not described in any 

16 previous subparagraph. 

17 ‘‘(3) MEDICAID ENROLLEE.—The term ‘Med18 icaid enrollee’ means, with respect to a State for a 

19 month, an individual who is eligible for medical as20 sistance for items or services under this title and en21 rolled under the State plan (or a waiver of such 

22 plan) under this title for the month. 

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

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

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


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1 enrollee category, is the average monthly number of 

2 Medicaid enrollees for such State and fiscal year 

3 (and, if applicable, in such category) that are re4 ported through the CMS–64 report under (and sub5 ject to audit under) subsection (h). 

6 ‘‘(f) SPECIAL PAYMENT RULES.— 

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

8 DEMONSTRATION PROJECTS AND OTHER WAIVERS.— 

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

10 plan approved under section 1115, section 1915, or 

11 another provision of this title, this section shall 

12 apply to medical assistance expenditures and medical 

13 assistance payments under the waiver, in the same 

14 manner as if such expenditures and payments had 

15 been made under a State plan under this title and 

16 the limitations on expenditures under this section 

17 shall supersede any other payment limitations or 

18 provisions (including limitations based on a per cap19 ita limitation) otherwise applicable under such a 

20 waiver. 

21 ‘‘(2) TREATMENT OF STATES EXPANDING COV22 ERAGE AFTER FISCAL YEAR 2016.—In the case of a 

23 State that did not provide for medical assistance for 

24 the 1903A enrollee category described in subsection 

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


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1 for such assistance for such category in a subse2 quent year, the provisional FY19 per capita target 

3 amount for such enrollee category under subsection 

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

5 capita target amount for the 1903A enrollee cat6 egory described in subsection (e)(2)(E). 

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

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

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

10 satisfactorily submit data on expenditures and en11 rollees in accordance with subsection (h)(1), for such 

12 fiscal year and any succeeding fiscal year for which 

13 such data are not satisfactorily submitted— 

14 ‘‘(A) the Secretary shall calculate and 

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

16 to the State as if all 1903A enrollee categories 

17 for which such expenditure and enrollee data 

18 were not satisfactorily submitted were a single 

19 1903A enrollee category; and 

20 ‘‘(B) the growth factor otherwise applied 

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

22 by 1 percentage point. 

23 ‘‘(g) RECALCULATION OF CERTAIN AMOUNTS FOR

24 DATA ERRORS.—The amounts and percentage calculated 

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


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1 State for fiscal year 2016, and the amounts of the ad2 justed total medical assistance expenditures calculated 

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

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

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

6 subsequent fiscal year, may be adjusted by the Secretary 

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

8 manner, and time, and containing such information relat9 ing to data errors that support such appeal, as the Sec10 retary specifies) that the Secretary determines to be valid, 

11 except that any adjustment by the Secretary under this 

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

13 the target total medical assistance expenditures exceeding 

14 2 percent. 

15 ‘‘(h) REQUIRED REPORTING AND AUDITING OF

16 CMS–64 DATA; TRANSITIONAL INCREASE IN FEDERAL

17 MATCHING PERCENTAGE FOR CERTAIN ADMINISTRATIVE

18 EXPENSES.— 

19 ‘‘(1) REPORTING.—In addition to the data re20 quired on form Group VIII on the CMS–64 report 

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

22 required to be submitted (for each quarter beginning 

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

24 data on medical assistance expenditures within such 

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1 cluding each 1903A enrollee category and each cat2 egory of excluded individuals under subsection 

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

4 such enrollee categories, as the Secretary determines 

5 are necessary (including timely guidance published 

6 as soon as possible after the date of the enactment 

7 of this section) in order to implement this section 

8 and to enable States to comply with the requirement 

9 of this paragraph on a timely basis. 

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

11 for each State an audit of the number of individuals 

12 and expenditures reported through the CMS–64 re13 port for fiscal year 2016, fiscal year 2019, and each 

14 subsequent fiscal year, which audit may be con15 ducted on a representative sample (as determined by 

16 the Secretary). 

17 ‘‘(3) TEMPORARY INCREASE IN FEDERAL

18 MATCHING PERCENTAGE TO SUPPORT IMPROVED

19 DATA REPORTING SYSTEMS FOR FISCAL YEARS 2018

20 AND 2019.—For amounts expended during calendar 

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

22 before October 1, 2019— 

23 ‘‘(A) the Federal matching percentage ap24 plied under section 1903(a)(3)(A)(i) shall be in25 creased by 10 percentage points to 100 percent; 


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1 ‘‘(B) the Federal matching percentage ap2 plied under section 1903(a)(3)(B) shall be in3 creased by 25 percentage points to 100 percent; 

4 and 

5 ‘‘(C) the Federal matching percentage ap6 plied under section 1903(a)(7) shall be in7 creased by 10 percentage points to 60 percent 

8 but only with respect to amounts expended that 

9 are attributable to a State’s additional adminis10 trative expenditures to implement the data re11 quirements of paragraph (1).’’. 

12 Subtitle D—Patient Relief and 

13 Health Insurance Market Stability 

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

15 (a) IN GENERAL.—Section 1402 of the Patient Pro16 tection and Affordable Care Act is repealed. 

17 (b) EFFECTIVE DATE.—The repeal made by sub18 section (a) shall apply to cost-sharing reductions (and pay19 ments to issuers for such reductions) for plan years begin20 ning after December 31, 2019. 

21 SEC. 132. PATIENT AND STATE STABILITY FUND. 

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

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


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1 ‘‘TITLE XXII—PATIENT AND 

2 STATE STABILITY FUND 

3 ‘‘SEC. 2201. ESTABLISHMENT OF PROGRAM. 

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

5 Stability Fund’ to be administered by the Secretary of 

6 Health and Human Services, acting through the Adminis7 trator of the Centers for Medicare & Medicaid Services 

8 (in this section referred to as the ‘Administrator’), to pro9 vide funding, in accordance with this title, to the 50 States 

10 and the District of Columbia (each referred to in this sec11 tion as a ‘State’) during the period, subject to section 

12 2204(c), beginning on January 1, 2018, and ending on 

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

14 2202. 

15 ‘‘SEC. 2202. USE OF FUNDS. 

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

17 under this title for any of the following purposes: 

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

19 assistance, high-risk individuals who do not have ac20 cess to health insurance coverage offered through an 

21 employer enroll in health insurance coverage in the 

22 individual market in the State, as such market is de23 fined by the State (whether through the establish24 ment of a new mechanism or maintenance of an ex25 isting mechanism for such purpose). 


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1 ‘‘(2) Providing incentives to appropriate entities 

2 to enter into arrangements with the State to help 

3 stabilize premiums for health insurance coverage in 

4 the individual market, as such markets are defined 

5 by the State. 

6 ‘‘(3) Reducing the cost for providing health in7 surance coverage in the individual market and small 

8 group market, as such markets are defined by the 

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

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

11 measured by cost). 

12 ‘‘(4) Promoting participation in the individual 

13 market and small group market in the State and in14 creasing health insurance options available through 

15 such market. 

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

17 dental care services (whether preventive or medically 

18 necessary); vision care services (whether preventive 

19 or medically necessary); prevention, treatment, or re20 covery support services for individuals with mental 

21 or substance use disorders; or any combination of 

22 such services. 

23 ‘‘(6) Providing payments, directly or indirectly, 

24 to health care providers for the provision of such 


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1 health care services as are specified by the Adminis2 trator. 

3 ‘‘(7) Providing assistance to reduce out-of-pock4 et costs, such as copayments, coinsurance, pre5 miums, and deductibles, of individuals enrolled in 

6 health insurance coverage in the State. 

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

8 SAFEGUARD. 

9 ‘‘(a) ENCOURAGING STATE OPTIONS FOR ALLOCA10 TIONS.— 

11 ‘‘(1) IN GENERAL.—To be eligible for an alloca12 tion of funds under this title for a year during the 

13 period described in section 2201 for use for one or 

14 more purposes described in section 2202, a State 

15 shall submit to the Administrator an application at 

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

17 not later than 45 days after the date of the enact18 ment of this title and, in the case of allocations for 

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

20 previous year) and in such form and manner as 

21 specified by the Administrator and containing— 

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

23 used for such purposes; 

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

25 make, from non-Federal funds, expenditures for 


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1 such purposes in an amount that is not less 

2 than the State percentage required for the year 

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

4 ‘‘(C) such other information as the Admin5 istrator may require. 

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

7 submitted is approved unless the Administrator noti8 fies the State submitting the application, not later 

9 than 60 days after the date of the submission of 

10 such application, that the application has been de11 nied for not being in compliance with any require12 ment of this title and of the reason for such denial. 

13 ‘‘(3) ONE-TIME APPLICATION.—If an applica14 tion of a State is approved for a year, with respect 

15 to a purpose described in section 2202, such applica16 tion shall be treated as approved, with respect to 

17 such purpose, for each subsequent year through 

18 2026. 

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

20 PROGRAM.—Any program receiving funds from an 

21 allocation for a State under this title, including pur22 suant to subsection (b), shall be considered to be a 

23 ‘State health care program’ for purposes of sections 

24 1128, 1128A, and 1128B. 

25 ‘‘(b) DEFAULT FEDERAL SAFEGUARD.— 


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1 ‘‘(1) IN GENERAL.— 

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

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

4 does not submit an application under subsection 

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

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

7 case of a State that does submit such an appli8 cation by such date that is not approved, sub9 ject to section 2204(e), the Administrator, in 

10 consultation with the State insurance commis11 sioner, shall use the allocation that would other12 wise be provided to the State under this title 

13 for such year, in accordance with paragraph 

14 (2), for such State. 

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

16 a State that does not have in effect an approved 

17 application under this section for 2019 or a 

18 subsequent year beginning during the period 

19 described in section 2201, subject to section 

20 2204(e), the Administrator, in consultation with 

21 the State insurance commissioner, shall use the 

22 allocation that would otherwise be provided to 

23 the State under this title for such year, in ac24 cordance with paragraph (2), for such State. 


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1 ‘‘(2) REQUIRED USE FOR MARKET STABILIZA2 TION PAYMENTS TO ISSUERS.—Subject to section 

3 2204(a), an allocation for a State made pursuant to 

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

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

6 State by providing payments to appropriate entities 

7 described in such section with respect to claims that 

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

9 under this title for 2020 or a subsequent year dur10 ing the period specified in section 2201, such dollar 

11 amount specified by the Administrator), but do not 

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

13 made under this title for 2020 or a subsequent year 

14 during such period, such dollar amount specified by 

15 the Administrator), in an amount equal to 75 per16 cent (or, with respect to allocations made under this 

17 title for 2020 or a subsequent year during such pe18 riod, such percentage specified by the Administrator) 

19 of the amount of such claims. 

20 ‘‘SEC. 2204. ALLOCATIONS. 

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

22 allocations for States (including pursuant to section 

23 2203(b)) under this title there is appropriated, out of any 

24 money in the Treasury not otherwise appropriated— 

25 ‘‘(1) for 2018, $15,000,000,000; 


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1 ‘‘(2) for 2019, $15,000,000,000; 

2 ‘‘(3) for 2020, $10,000,000,000; 

3 ‘‘(4) for 2021, $10,000,000,000; 

4 ‘‘(5) for 2022, $10,000,000,000; 

5 ‘‘(6) for 2023, $10,000,000,000; 

6 ‘‘(7) for 2024, $10,000,000,000; 

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

8 ‘‘(9) for 2026, $10,000,000,000. 

9 ‘‘(b) ALLOCATIONS.— 

10 ‘‘(1) PAYMENT.— 

11 ‘‘(A) IN GENERAL.—From amounts appro12 priated under subsection (a) for a year, the Ad13 ministrator shall, with respect to a State and 

14 not later than the date specified under subpara15 graph (B) for such year, allocate, subject to 

16 subsection (e), for such State (including pursu17 ant to section 2203(b)) the amount determined 

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

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

20 subparagraph (A), the date specified in this 

21 subparagraph is— 

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

23 after the date of the enactment of this 

24 title; and 


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

2 January 1 of the respective year. 

3 ‘‘(2) ALLOCATION AMOUNT DETERMINA4 TIONS.— 

5 ‘‘(A) FOR 2018 AND 2019.— 

6 ‘‘(i) IN GENERAL.—For purposes of 

7 paragraph (1), the amount determined 

8 under this paragraph for 2018 and 2019 

9 for a State is an amount equal to the sum 

10 of— 

11 ‘‘(I) the relative incurred claims 

12 amount described in clause (ii) for 

13 such State and year; and 

14 ‘‘(II) the relative uninsured and 

15 issuer participation amount described 

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

17 ‘‘(ii) RELATIVE INCURRED CLAIMS

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

19 relative incurred claims amount described 

20 in this clause for a State for 2018 and 

21 2019 is the product of— 

22 ‘‘(I) 85 percent of the amount 

23 appropriated under subsection (a) for 

24 the year; and 


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1 ‘‘(II) the relative State incurred 

2 claims proportion described in clause 

3 (iii) for such State and year. 

4 ‘‘(iii) RELATIVE STATE INCURRED

5 CLAIMS PROPORTION.—The relative State 

6 incurred claims proportion described in 

7 this clause for a State and year is the 

8 amount equal to the ratio of— 

9 ‘‘(I) the adjusted incurred claims 

10 by the State, as reported through the 

11 medical loss ratio annual reporting 

12 under section 2718 of the Public 

13 Health Service Act for the third pre14 vious year; to 

15 ‘‘(II) the sum of such adjusted 

16 incurred claims for all States, as so 

17 reported, for such third previous year. 

18 ‘‘(iv) RELATIVE UNINSURED AND

19 ISSUER PARTICIPATION AMOUNT.—For 

20 purposes of clause (i), the relative unin21 sured and issuer participation amount de22 scribed in this clause for a State for 2018 

23 and 2019 is the product of— 


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1 ‘‘(I) 15 percent of the amount 

2 appropriated under subsection (a) for 

3 the year; and 

4 ‘‘(II) the relative State uninsured 

5 and issuer participation proportion de6 scribed in clause (v) for such State 

7 and year. 

8 ‘‘(v) RELATIVE STATE UNINSURED

9 AND ISSUER PARTICIPATION PROPOR10 TION.—The relative State uninsured and 

11 issuer participation proportion described in 

12 this clause for a State and year is— 

13 ‘‘(I) in the case of a State not 

14 described in clause (vi) for such year, 

15 0; and 

16 ‘‘(II) in the case of a State de17 scribed in clause (vi) for such year, 

18 the amount equal to the ratio of— 

19 ‘‘(aa) the number of individ20 uals residing in such State who 

21 for the third preceding year were 

22 not enrolled in a health plan or 

23 otherwise did not have health in24 surance coverage (including 

25 through a Federal or State 


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1 health program) and whose in2 come is below 100 percent of the 

3 poverty line applicable to a family 

4 of the size involved; to 

5 ‘‘(bb) the sum of the num6 ber of such individuals for all 

7 States described in clause (vi) for 

8 the third preceding year. 

9 ‘‘(vi) STATES DESCRIBED.—For pur10 poses of clause (v), a State is described in 

11 this clause, with respect to 2018 and 2019, 

12 if the State satisfies either of the following 

13 criterion: 

14 ‘‘(I) The number of individuals 

15 residing in such State and described 

16 in clause (v)(II)(aa) was higher in 

17 2015 than 2013. 

18 ‘‘(II) The State have fewer than 

19 three health insurance issuers offering 

20 qualified health plans through the Ex21 change for 2017. 

22 ‘‘(B) FOR 2020 THROUGH 2026.—For pur23 poses of paragraph (1), the amount determined 

24 under this paragraph for a year (beginning with 

25 2020) during the period described in section 


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1 2201 for a State is an amount determined in 

2 accordance with an allocation methodology spec3 ified by the Administrator which— 

4 ‘‘(i) takes into consideration the ad5 justed incurred claims of such State, the 

6 number of residents of such State who for 

7 the previous year were not enrolled in a 

8 health plan or otherwise did not have 

9 health insurance coverage (including 

10 through a Federal or State health pro11 gram) and whose income is below 100 per12 cent of the poverty line applicable to a 

13 family of the size involved, and the number 

14 of health insurance issuers participating in 

15 the insurance market in such State for 

16 such year; 

17 ‘‘(ii) is established after consultation 

18 with health care consumers, health insur19 ance issuers, State insurance commis20 sioners, and other stakeholders and after 

21 taking into consideration additional cost 

22 and risk factors that may inhibit health 

23 care consumer and health insurance issuer 

24 participation; and 


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1 ‘‘(iii) reflects the goals of improving 

2 the health insurance risk pool, promoting a 

3 more competitive health insurance market, 

4 and increasing choice for health care con5 sumers. 

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

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

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

9 2020 and ending with 2027), not later than March 31 of 

10 such year— 

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

12 from the amounts appropriated under subsection (a) 

13 for the previous year but not allocated for such pre14 vious year; and 

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

16 funds were not so allocated for such previous year, 

17 allocate such remaining funds, in accordance with 

18 the allocation methodology specified pursuant to 

19 subsection (b)(2)(B)— 

20 ‘‘(A) to States that have submitted an ap21 plication approved under section 2203(a) for 

22 such previous year for any purpose for which 

23 such an application was approved; and 

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

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1 vious year, to be used by the Administrator for 

2 such States, to carry out the purpose described 

3 in section 2202(2) in such States by providing 

4 payments to appropriate entities described in 

5 such section with respect to claims that exceed 

6 $1,000,000; 

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

8 funds being made available for allocations to States 

9 for the subsequent year. 

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

11 subsection (a) for a year and allocated to States in accord12 ance with this section shall remain available for expendi13 ture through December 31, 2027. 

14 ‘‘(e) CONDITIONS FOR AND LIMITATIONS ON RE15 CEIPT OF FUNDS.—The Secretary may not make an allo16 cation under this title for a State, with respect to a pur17 pose described in section 2202— 

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

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

20 State does not agree that the State will make avail21 able non-Federal contributions towards such purpose 

22 in an amount equal to— 

23 ‘‘(A) for 2020, 7 percent of the amount al24 located under this subsection to such State for 

25 such year and purpose; 


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

2 allocated under this subsection to such State 

3 for such year and purpose; 

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

5 allocated under this subsection to such State 

6 for such year and purpose; 

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

8 allocated under this subsection to such State 

9 for such year and purpose; 

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

11 allocated under this subsection to such State 

12 for such year and purpose; 

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

14 allocated under this subsection to such State 

15 for such year and purpose; and 

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

17 allocated under this subsection to such State 

18 for such year and purpose; 

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

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

21 State does not agree that the State will make avail22 able non-Federal contributions towards such purpose 

23 in an amount equal to— 


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

2 allocated under this subsection to such State 

3 for such year and purpose; 

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

5 allocated under this subsection to such State 

6 for such year and purpose; and 

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

8 allocated under this subsection to such State 

9 for such year and purpose; 

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

11 allocated under this subsection to such State 

12 for such year and purpose; 

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

14 allocated under this subsection to such State 

15 for such year and purpose; 

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

17 allocated under this subsection to such State 

18 for such year and purpose; and 

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

20 allocated under this subsection to such State 

21 for such year and purpose; or 

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

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

24 section 2105 if such allocation were payment made 

25 under such section.’’. 


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1 SEC. 133. CONTINUOUS HEALTH INSURANCE COVERAGE IN2 CENTIVE. 

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

4 Health Service Act is amended— 

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

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

7 rate’’; 

8 (2) by redesignating the second section 2709 as 

9 section 2710; and 

10 (3) by adding at the end the following new sec11 tion: 

12 ‘‘SEC. 2710A. ENCOURAGING CONTINUOUS HEALTH INSUR13 ANCE COVERAGE. 

14 ‘‘(a) PENALTY APPLIED.— 

15 ‘‘(1) IN GENERAL.—Notwithstanding section 

16 2701, subject to the succeeding provisions of this 

17 section, a health insurance issuer offering health in18 surance coverage in the individual or small group 

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

20 applicable policyholder of such coverage with respect 

21 to an enforcement period applicable to enrollments 

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

23 in the case of enrollments during a special enroll24 ment period, beginning with plan year 2018), in25 crease the monthly premium rate otherwise applica26 ble to such individual for such coverage during each 


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1 month of such period, by an amount determined 

2 under paragraph (2). 

3 ‘‘(2) AMOUNT OF PENALTY.—The amount de4 termined under this paragraph for an applicable pol5 icyholder enrolling in health insurance coverage de6 scribed in paragraph (1) for a plan year, with re7 spect to each month during the enforcement period 

8 applicable to enrollments for such plan year, is the 

9 amount that is equal to 30 percent of the monthly 

10 premium rate otherwise applicable to such applicable 

11 policyholder for such coverage during such month. 

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

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

14 ‘applicable policyholder’ means, with respect to 

15 months of an enforcement period and health insur16 ance coverage, an individual who— 

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

18 such months; 

19 ‘‘(B) cannot demonstrate (through presen20 tation of certifications described in section 

21 2704(e) or in such other manner as may be 

22 specified in regulations, such as a return or 

23 statement made under section 6055(d) or 36C 

24 of the Internal Revenue Code of 1986), during 

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


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1 enforcement period, there was not a period of 

2 at least 63 continuous days during which the 

3 individual did not have creditable coverage (as 

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

5 credited in accordance with paragraphs (2) and 

6 (3) of such section); and 

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

8 been enrolled under dependent coverage under a 

9 group health plan or health insurance coverage 

10 by reason of section 2714 and such dependent 

11 coverage of such individual ceased because of 

12 the age of such individual, is not enrolling dur13 ing the first open enrollment period following 

14 the date on which such coverage so ceased. 

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

16 period’ means, with respect to an enforcement period 

17 applicable to an enrollment of an individual for a 

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

19 case of an enrollment of an individual during a spe20 cial enrollment period, beginning with plan year 

21 2018) in health insurance coverage described in sub22 section (a)(1), the 12-month period ending on the 

23 date the individual enrolls in such coverage for such 

24 plan year. 


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1 ‘‘(3) ENFORCEMENT PERIOD.—The term ‘en2 forcement period’ means— 

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

4 special enrollment period for plan year 2018, 

5 the period beginning with the first month that 

6 is during such plan year and that begins subse7 quent to such date of enrollment, and ending 

8 with the last month of such plan year; and 

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

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

11 month period beginning on the first day of the 

12 respective plan year.’’. 

13 SEC. 134. INCREASING COVERAGE OPTIONS. 

14 Section 1302 of the Patient Protection and Afford15 able Care Act (42 U.S.C. 18022) is amended— 

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

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

18 ‘‘subsection (e)’’; and 

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

20 following: 

21 ‘‘(5) SUNSET.—The provisions of this sub22 section shall not apply after December 31, 2019, 

23 and after such date any reference to this subsection 

24 or level of coverage or plan described in this sub25 section and any requirement under law applying 


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

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

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

4 SEC. 135. CHANGE IN PERMISSIBLE AGE VARIATION IN 

5 HEALTH INSURANCE PREMIUM RATES. 

6 Section 2701(a)(1)(A)(iii) of the Public Health Serv7 ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)), as inserted by sec8 tion 1201(4) of the Patient Protection and Affordable 

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

10 section 2707(c))’’ the following: ‘‘or, for plan years begin11 ning on or after January 1, 2018, as the Secretary may 

12 implement through interim final regulation, 5 to 1 for 

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

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

15 State involved may provide’’. 

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 23:17 Mar 20, 2017 Jkt 069200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\H1628.RH 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 

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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 This paragraph shall not apply with respect to cov12 erage provided for any month beginning after De13 cember 31, 2019.’’. 

14 (C) OTHER CONFORMING AMENDMENTS.— 

15 (i) Section 36B(b)(2)(A) is amended 

16 by striking ‘‘and which were enrolled’’ and 

17 all that follows and inserting ‘‘, or’’. 

18 (ii) Section 36B(b)(3)(B)(i) is amend19 ed by striking ‘‘the same Exchange’’ and 

20 all that follows and inserting ‘‘the Ex21 change through which such taxpayer is 

22 permitted to obtain coverage, and’’. 

23 (b) MODIFICATION OF APPLICABLE PERCENTAGE.— 

24 Section 36B(b)(3)(A) of such Code is amended to read 

25 as follows: 


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1 ‘‘(A) APPLICABLE PERCENTAGE.— 

2 ‘‘(i) IN GENERAL.—The applicable 

3 percentage for any taxable year shall be 

4 the percentage such that the applicable 

5 percentage for any taxpayer whose house6 hold income is within an income tier speci7 fied in the following table shall increase, on 

8 a sliding scale in a linear manner, from the 

9 initial percentage to the final percentage 

10 specified in such table for such income tier 

11 with respect to a taxpayer of the age in12 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 

13 ‘‘(ii) AGE DETERMINATIONS.— 

14 ‘‘(I) IN GENERAL.—For purposes 

15 of clause (i), the age of the taxpayer 

16 taken into account under clause (i) 

17 with respect to any taxable year is the 

18 age attained by such taxpayer before 

19 the close of such taxable year. 


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1 ‘‘(II) JOINT RETURNS.—In the 

2 case of a joint return, the age of the 

3 older spouse shall be taken into ac4 count under clause (i). 

5 ‘‘(iii) INDEXING.—In the case of any 

6 taxable year beginning in calendar year 

7 2019, the initial and final percentages con8 tained in clause (i) shall be adjusted to re9 flect— 

10 ‘‘(I) the excess (if any) of the 

11 rate of premium growth for the period 

12 beginning with calendar year 2013 

13 and ending with calendar year 2018, 

14 over the rate of income growth for 

15 such period, and 

16 ‘‘(II) in addition to any adjust17 ment under subclause (I), the excess 

18 (if any) of the rate of premium 

19 growth for calendar year 2018, over 

20 the rate of growth in the consumer 

21 price index for calendar year 2018. 

22 ‘‘(iv) FAILSAFE.—Clause (iii)(II) shall 

23 apply only if the aggregate amount of pre24 mium tax credits under this section and 

25 cost-sharing reductions under section 1402 


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1 of the Patient Protection and Affordable 

2 Care Act for calendar year 2018 exceeds 

3 an amount equal to 0.504 percent of the 

4 gross domestic product for such calendar 

5 year.’’. 

6 (b) EFFECTIVE DATE.— 

7 (1) IN GENERAL.—Except as otherwise pro8 vided in this subsection, the amendments made by 

9 this section shall apply to taxable years beginning 

10 after December 31, 2017. 

11 (2) ADVANCE PAYMENT NOT APPLICABLE TO

12 OFF-EXCHANGE COVERAGE.—The amendment made 

13 by subsection (a)(4)(A) shall take effect on January 

14 1, 2018. 

15 (3) REPORTING.—The amendment made by 

16 subsection (a)(4)(B) shall apply to coverage provided 

17 for months beginning after December 31, 2017. 

18 (4) MODIFICATION OF APPLICABLE PERCENT19 AGE.—The amendment made by subsection (b) shall 

20 apply to taxable years beginning after December 31, 

21 2018. 

22 SEC. 203. PREMIUM TAX CREDIT. 

23 (a) REPEAL OF PREMIUM TAX CREDIT.—Section 

24 36B of the Internal Revenue Code of 1986 is amended 

25 by adding at the end the following new subsection: 


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1 ‘‘(h) TERMINATION.—No credit shall be allowed 

2 under this section with respect to any coverage month 

3 which begins after December 31, 2019.’’. 

4 (b) REPEAL OF ADVANCE PAYMENT OF, AND ELIGI5 BILITY DETERMINATION FOR, PREMIUM TAX CREDIT.— 

6 Section 1412 of the Patient Protection and Affordable 

7 Care Act, as amended by the preceding provisions of this 

8 subtitle, is amended by adding at the end the following 

9 new subsection: 

10 ‘‘(g) TERMINATION WITH RESPECT TO PREMIUM

11 TAX CREDIT.—Effective January 1, 2020, no provision of 

12 this section or section 1411 shall apply to the credit al13 lowed under section 36B of the Internal Revenue Code of 

14 1986 (or to the advance payment of, or determination of 

15 eligibility for, such credit or payment).’’. 

16 (c) EFFECTIVE DATES.— 

17 (1) PREMIUM TAX CREDIT.—The amendment 

18 made by subsection (a) shall apply to months begin19 ning after December 31, 2019, in taxable years end20 ing after such date. 

21 (2) ELIGIBILITY DETERMINATIONS.—The 

22 amendment made by subsection (b) shall take effect 

23 on January 1, 2020. 


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1 SEC. 204. 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, 

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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. 205. 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. 206. 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. 207. 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 2025.’’. 


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1 SEC. 208. 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, 2017. 

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, 2017. 


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1 SEC. 209. 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, 2017. 

12 SEC. 210. 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, 2017. 

19 SEC. 211. 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 2017.’’. 


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1 SEC. 212. 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, 2017. 

13 SEC. 213. REPEAL OF INCREASE IN INCOME THRESHOLD 

14 FOR DETERMINING MEDICAL CARE DEDUC15 TION. 

16 (a) IN GENERAL.—Subsection (a) of section 213 of 

17 the Internal Revenue Code of 1986 is amended by striking 

18 ‘‘10 percent’’ and inserting ‘‘7.5 percent’’. 

19 (b) EXTENSION OF SPECIAL RULE.—Subsection (f) 

20 of section 213 of such Code is amended— 

21 (1) by striking ‘‘2017’’ and inserting ‘‘2018’’, 

22 and 

23 (2) by striking ‘‘AND 2016’’ and inserting 

24 ‘‘2016, AND 2017’’. 

25 (c) EFFECTIVE DATE.— 


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1 (1) IN GENERAL.—The amendment made by 

2 subsection (a) shall apply to taxable years beginning 

3 after December 31, 2017. 

4 (2) EXTENSION OF SPECIAL RULE.—The 

5 amendments made by subsection (b) shall apply to 

6 taxable years beginning after December 31, 2016. 

7 SEC. 214. REPEAL OF MEDICARE TAX INCREASE. 

8 (a) IN GENERAL.—Subsection (b) of section 3101 of 

9 the Internal Revenue Code of 1986 is amended to read 

10 as follows: 

11 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 

12 imposed by the preceding subsection, there is hereby im13 posed on the income of every individual a tax equal to 1.45 

14 percent of the wages (as defined in section 3121(a)) re15 ceived by such individual with respect to employment (as 

16 defined in section 3121(b)).’’. 

17 (b) SECA.—Subsection (b) of section 1401 of the In18 ternal Revenue Code of 1986 is amended to read as fol19 lows: 

20 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 

21 imposed by the preceding subsection, there shall be im22 posed for each taxable year, on the self-employment in23 come of every individual, a tax equal to 2.9 percent of the 

24 amount of the self-employment income for such taxable 

25 year.’’. 


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

2 this section shall apply with respect to remuneration re3 ceived after, and taxable years beginning after, December 

4 31, 2017. 

5 SEC. 215. REFUNDABLE TAX CREDIT FOR HEALTH INSUR6 ANCE COVERAGE. 

7 (a) IN GENERAL.—Subpart C of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 is amended by inserting after section 36B the fol10 lowing new section: 

11 ‘‘SEC. 36C. HEALTH INSURANCE COVERAGE. 

12 ‘‘(a) IN GENERAL.—In the case of an individual, 

13 there shall be allowed as a credit against the tax imposed 

14 by this subtitle for the taxable year the sum of the month15 ly credit amounts with respect to such taxpayer for cal16 endar months during such taxable year. 

17 ‘‘(b) MONTHLY CREDIT AMOUNTS.— 

18 ‘‘(1) IN GENERAL.—The monthly credit amount 

19 with respect to any taxpayer for any calendar month 

20 is the lesser of— 

21 ‘‘(A) the sum of the monthly limitation 

22 amounts determined under subsection (c) with 

23 respect to the taxpayer and the taxpayer’s 

24 qualifying family members for such month, or 


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1 ‘‘(B) the amount paid for eligible health 

2 insurance for the taxpayer and the taxpayer’s 

3 qualifying family members for such month. 

4 ‘‘(2) ELIGIBLE COVERAGE MONTH REQUIRE5 MENT.—No amount shall be taken into account 

6 under subparagraph (A) or (B) of paragraph (1) 

7 with respect to any individual for any month unless 

8 such month is an eligible coverage month with re9 spect to such individual. 

10 ‘‘(c) MONTHLY LIMITATION AMOUNTS.— 

11 ‘‘(1) IN GENERAL.—The monthly limitation 

12 amount with respect to any individual for any eligible coverage month during any taxable year is 1 13 ⁄12

14 of— 

15 ‘‘(A) $2,000 in the case of an individual 

16 who has not attained age 30 as of the begin17 ning of such taxable year, 

18 ‘‘(B) $2,500 in the case of an individual 

19 who has attained age 30 but who has not at20 tained age 40 as of such time, 

21 ‘‘(C) $3,000 in the case of an individual 

22 who has attained age 40 but who has not at23 tained age 50 as of such time, 


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1 ‘‘(D) $3,500 in the case of an individual 

2 who has attained age 50 but who has not at3 tained age 60 as of such time, and 

4 ‘‘(E) $4,000 in the case of an individual 

5 who has attained age 60 as of such time. 

6 ‘‘(2) LIMITATION BASED ON MODIFIED AD7 JUSTED GROSS INCOME.— 

8 ‘‘(A) IN GENERAL.—The amount otherwise 

9 determined under subsection (b)(1)(A) (without 

10 regard to this subparagraph but after any other 

11 adjustment of such amount under this section) 

12 for the taxable year shall be reduced (but not 

13 below zero) by 10 percent of the excess (if any) 

14 of— 

15 ‘‘(i) the taxpayer’s modified adjusted 

16 gross income for such taxable year, over 

17 ‘‘(ii) $75,000 (twice such amount in 

18 the case of a joint return). 

19 ‘‘(B) MODIFIED ADJUSTED GROSS IN20 COME.—For purposes of this paragraph, the 

21 term ‘modified adjusted gross income’ means 

22 adjusted gross income increased by— 

23 ‘‘(i) any amount excluded from gross 

24 income under section 911, 


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1 ‘‘(ii) any amount of interest received 

2 or accrued by the taxpayer during the tax3 able year which is exempt from tax, and 

4 ‘‘(iii) an amount equal to the portion 

5 of the taxpayer’s social security benefits 

6 (as defined in section 86(d)) which is not 

7 included in gross income under section 86 

8 for the taxable year. 

9 ‘‘(3) OTHER LIMITATIONS.— 

10 ‘‘(A) AGGREGATE DOLLAR LIMITATION.— 

11 The sum of the monthly limitation amounts 

12 taken into account under this section with re13 spect to any taxpayer for any taxable year shall 

14 not exceed $14,000. 

15 ‘‘(B) MAXIMUM NUMBER OF INDIVIDUALS

16 TAKEN INTO ACCOUNT.—With respect to any 

17 taxpayer for any month, monthly limitation 

18 amounts shall be taken into account under this 

19 section only with respect to the 5 oldest individ20 uals with respect to whom monthly limitation 

21 amounts could (without regard to this subpara22 graph) otherwise be so taken into account. 

23 ‘‘(d) ELIGIBLE COVERAGE MONTH.—For purposes of 

24 this section, the term ‘eligible coverage month’ means, 


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1 with respect to any individual, any month if, as of the first 

2 day of such month, the individual— 

3 ‘‘(1) is covered by eligible health insurance, 

4 ‘‘(2) is not eligible for other specified coverage, 

5 ‘‘(3) is either— 

6 ‘‘(A) a citizen or national of the United 

7 States, or 

8 ‘‘(B) a qualified alien (within the meaning 

9 of section 431 of the Personal Responsibility 

10 and Work Opportunity Reconciliation Act of 

11 1996 (8 U.S.C. 1641)), and 

12 ‘‘(4) is not incarcerated, other than incarcer13 ation pending the disposition of charges. 

14 ‘‘(e) QUALIFYING FAMILY MEMBER.—For purposes 

15 of this section, the term ‘qualifying family member’ 

16 means— 

17 ‘‘(1) in the case of a joint return, the taxpayer’s 

18 spouse, 

19 ‘‘(2) any dependent of the taxpayer, and 

20 ‘‘(3) with respect to any eligible coverage 

21 month, any child (as defined in section 152(f)(1)) of 

22 the taxpayer who as of the end of the taxable year 

23 has not attained age 27 if such child is covered for 

24 such month under eligible health insurance which 


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1 also covers the taxpayer (in the case of a joint re2 turn, either spouse). 

3 ‘‘(f) ELIGIBLE HEALTH INSURANCE.—For purposes 

4 of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘eligible health 

6 insurance’ means any health insurance coverage (as 

7 defined in section 9832(b)) if— 

8 ‘‘(A) such coverage is either— 

9 ‘‘(i) offered in the individual health 

10 insurance market within a State, or 

11 ‘‘(ii) is unsubsidized COBRA continu12 ation coverage, 

13 ‘‘(B) such coverage is not a grandfathered 

14 health plan (as defined in section 1251 of the 

15 Patient Protection and Affordable Care Act) or 

16 a grandmothered health plan, 

17 ‘‘(C) substantially all of such coverage is 

18 not of excepted benefits described in section 

19 9832(c), 

20 ‘‘(D) such coverage does not include cov21 erage for abortions (other than any abortion 

22 necessary to save the life of the mother or any 

23 abortion with respect to a pregnancy that is the 

24 result of an act of rape or incest), 


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1 ‘‘(E) such coverage does not consist of 

2 short-term limited duration insurance (as de3 fined by the Secretary), and 

4 ‘‘(F) the State in which such insurance is 

5 offered certifies that such coverage meets the 

6 requirements of this paragraph. 

7 ‘‘(2) RULES RELATED TO STATE CERTIFI8 CATION.— 

9 ‘‘(A) CERTIFICATION MADE AVAILABLE TO

10 PUBLIC.—A certification shall not be taken into 

11 account under paragraph (1)(E) unless such 

12 certification is made available to the public and 

13 meets such other requirements as the Secretary 

14 may provide. 

15 ‘‘(B) SPECIAL RULE FOR UNSUBSIDIZED

16 COBRA CONTINUATION COVERAGE.—In the case 

17 of unsubsidized COBRA continuation cov18 erage— 

19 ‘‘(i) paragraph (1)(E) shall be applied 

20 by substituting ‘the plan administrator (as 

21 defined in section 414(g)) of the health 

22 plan’ for ‘the State in which such insur23 ance is offered’, and 

24 ‘‘(ii) the requirements of subpara25 graph (A) shall be treated as satisfied if 


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1 the certification meets such requirements 

2 as the Secretary may provide. 

3 ‘‘(3) GRANDMOTHERED HEALTH PLAN.— 

4 ‘‘(A) IN GENERAL.—The term 

5 ‘grandmothered health plan’ means health in6 surance coverage which is offered in the indi7 vidual health insurance market as of January 1, 

8 2013, and is permitted to be offered in such 

9 market after January 1, 2014, as a result of 

10 CCIIO guidance. 

11 ‘‘(B) CCIIO GUIDANCE DEFINED.—The 

12 term ‘CCIIO guidance’ means the letter issued 

13 by the Centers for Medicare & Medicaid Serv14 ices on November 14, 2013, to the State Insur15 ance Commissioners outlining a transitional pol16 icy for non-grandfathered coverage in the indi17 vidual health insurance market, as subsequently 

18 extended and modified (including by a commu19 nication entitled ‘Insurance Standards Bulletin 

20 Series—INFORMATION—Extension of Tran21 sitional Policy through Calendar Year 2017’ 

22 issued on February 29, 2016, by the Director 

23 of the Center for Consumer Information & In24 surance Oversight of such Centers). 


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1 ‘‘(4) INDIVIDUAL HEALTH INSURANCE MAR2 KET.—The term ‘individual health insurance mar3 ket’ means the market for health insurance coverage 

4 (as defined in section 9832(b)) offered to individuals 

5 other than in connection with a group health plan 

6 (within the meaning of section 5000(b)(1)). 

7 ‘‘(g) OTHER SPECIFIED COVERAGE.—For purposes 

8 of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘other specified 

10 coverage’ means any of the following: 

11 ‘‘(A) Coverage under a group health plan 

12 (within the meaning of section 5000(b)(1)) 

13 other than— 

14 ‘‘(i) coverage under a plan substan15 tially all of the coverage of which is of ex16 cepted benefits described in section 

17 9832(c), and 

18 ‘‘(ii) COBRA continuation coverage. 

19 ‘‘(B) Coverage under the Medicare pro20 gram under part A of title XVIII of the Social 

21 Security Act. 

22 ‘‘(C) Coverage under the Medicaid pro23 gram under title XIX of the Social Security 

24 Act. 


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1 ‘‘(D) Coverage under the CHIP program 

2 under title XXI of the Social Security Act. 

3 ‘‘(E) Medical coverage under chapter 55 of 

4 title 10, United States Code, including coverage 

5 under the TRICARE program. 

6 ‘‘(F) Coverage under a health care pro7 gram under chapter 17 or 18 of title 38, United 

8 States Code, as determined by the Secretary of 

9 Veterans Affairs, in coordination with the Sec10 retary of Health and Human Services and the 

11 Secretary of the Treasury. 

12 ‘‘(G) Coverage under a health plan under 

13 section 2504(e) of title 22, United States Code 

14 (relating to Peace Corps volunteers). 

15 ‘‘(H) Coverage under the Nonappropriated 

16 Fund Health Benefits Program of the Depart17 ment of Defense, established under section 349 

18 of the National Defense Authorization Act for 

19 Fiscal Year 1995 (Public Law 103–337; 10 

20 U.S.C. 1587 note). 

21 ‘‘(2) SPECIAL RULE WITH RESPECT TO VET22 ERANS HEALTH PROGRAMS.—In the case of other 

23 specified coverage described in paragraph (1)(F), an 

24 individual shall not be treated as eligible for such 


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1 coverage unless such individual is enrolled in such 

2 coverage. 

3 ‘‘(h) UNSUBSIDIZED COBRA CONTINUATION COV4 ERAGE.—For purposes of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘unsubsidized 

6 COBRA continuation coverage’ means COBRA con7 tinuation coverage no portion of the premiums for 

8 which are subsidized by the employer. 

9 ‘‘(2) COBRA CONTINUATION COVERAGE.—The 

10 term ‘COBRA continuation coverage’ means con11 tinuation coverage provided pursuant to part 6 of 

12 subtitle B of title I of the Employee Retirement In13 come Security Act of 1974 (other than under section 

14 609), title XXII of the Public Health Service Act, 

15 section 4980B of the Internal Revenue Code of 1986 

16 (other than subsection (f)(1) of such section insofar 

17 as it relates to pediatric vaccines), or section 8905a 

18 of title 5, United States Code, or under a State pro19 gram that provides comparable continuation cov20 erage. Such term shall not include coverage under a 

21 health flexible spending arrangement. 

22 ‘‘(i) SPECIAL RULES.— 

23 ‘‘(1) MARRIED COUPLES MUST FILE JOINT RE24 TURN.—If the taxpayer is married (within the mean25 ing of section 7703) at the close of the taxable year, 


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1 no credit shall be allowed under this section to such 

2 taxpayer unless such taxpayer and the taxpayer’s 

3 spouse file a joint return for such taxable year. 

4 ‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.— 

5 ‘‘(A) IN GENERAL.—No credit shall be al6 lowed under this section to any individual who 

7 is a dependent with respect to another taxpayer 

8 for a taxable year beginning in the calendar 

9 year in which such individual’s taxable year be10 gins. 

11 ‘‘(B) COORDINATION WITH RULE FOR

12 OLDER CHILDREN.—In the case of any indi13 vidual who is a qualifying family member de14 scribed in subsection (e)(3) with respect to an15 other taxpayer for any month, in determining 

16 the amount of any credit allowable to such indi17 vidual under this section for any taxable year of 

18 such individual which includes such month, the 

19 monthly limitation amount with respect to such 

20 individual for such month shall be zero and no 

21 amount paid for eligible health insurance with 

22 respect to such individual for such month shall 

23 be taken into account. 

24 ‘‘(3) COORDINATION WITH MEDICAL EXPENSE

25 DEDUCTION.—Amounts described in subsection 


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1 (b)(1)(B) with respect to any month shall not be 

2 taken into account in determining the deduction al3 lowed under section 213 except to the extent that 

4 such amounts exceed the amount described in sub5 section (b)(1)(A) with respect to such month. 

6 ‘‘(4) INSURANCE WHICH COVERS OTHER INDI7 VIDUALS.—For purposes of this section, rules simi8 lar to the rules of section 213(d)(6) shall apply with 

9 respect to any contract for eligible health insurance 

10 under which amounts are payable for coverage of an 

11 individual other than the taxpayer and the tax12 payer’s qualifying family members. 

13 ‘‘(5) COORDINATION WITH ADVANCE PAYMENTS

14 OF CREDIT.—With respect to any taxable year— 

15 ‘‘(A) the amount which would (but for this 

16 subsection) be allowed as a credit to the tax17 payer under subsection (a) shall be reduced 

18 (but not below zero) by the aggregate amount 

19 paid on behalf of such taxpayer under section 

20 7529 for months beginning in such taxable 

21 year, and 

22 ‘‘(B) the tax imposed by section 1 for such 

23 taxable year shall be increased by the excess (if 

24 any) of— 


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1 ‘‘(i) the aggregate amount paid on be2 half of such taxpayer under section 7529 

3 for months beginning in such taxable year, 

4 over 

5 ‘‘(ii) the amount which would (but for 

6 this subsection) be allowed as a credit to 

7 the taxpayer under subsection (a). 

8 ‘‘(6) SPECIAL RULES FOR QUALIFIED SMALL

9 EMPLOYER HEALTH REIMBURSEMENT ARRANGE10 MENTS.— 

11 ‘‘(A) IN GENERAL.—If the taxpayer or any 

12 qualifying family member of the taxpayer is 

13 provided a qualified small employer health reim14 bursement arrangement for any eligible cov15 erage month, the sum determined under sub16 section (b)(1)(A) with respect to the taxpayer 

17 for such month shall be reduced (but not below 

zero) by 1 18 ⁄12 of the permitted benefit (as de19 fined in section 9831(d)(3)(C)) under such ar20 rangement. 

21 ‘‘(B) QUALIFIED SMALL EMPLOYER

22 HEALTH REIMBURSEMENT ARRANGEMENT.— 

23 For purposes of this paragraph, the term 

24 ‘qualified small employer health reimbursement 


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1 arrangement’ has the meaning given such term 

2 by section 9831(d)(2). 

3 ‘‘(C) COVERAGE FOR LESS THAN ENTIRE

4 YEAR.—In the case of an employee who is pro5 vided a qualified small employer health reim6 bursement arrangement for less than an entire 

7 year, subparagraph (A) shall be applied by sub8 stituting ‘the number of months during the year 

9 for which such arrangement was provided’ for 

10 ‘12’. 

11 ‘‘(7) CERTAIN RULES RELATED TO ABOR12 TION.— 

13 ‘‘(A) OPTION TO PURCHASE SEPARATE

14 COVERAGE OR PLAN.—Nothing in subsection 

15 (f)(1)(D) shall be construed as prohibiting any 

16 individual from purchasing separate coverage 

17 for abortions described in such subparagraph, 

18 or a health plan that includes such abortions, so 

19 long as no credit is allowed under this section 

20 with respect to the premiums for such coverage 

21 or plan. 

22 ‘‘(B) OPTION TO OFFER COVERAGE OR

23 PLAN.—Nothing in subsection (f)(1)(D) shall 

24 restrict any health insurance issuer offering a 

25 health plan from offering separate coverage for 


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1 abortions described in such clause, or a plan 

2 that includes such abortions, so long as pre3 miums for such separate coverage or plan are 

4 not paid for with any amount attributable to 

5 the credit allowed under this section. 

6 ‘‘(C) OTHER TREATMENTS.—The treat7 ment of any infection, injury, disease, or dis8 order that has been caused by or exacerbated 

9 by the performance of an abortion shall not be 

10 treated as an abortion for purposes of sub11 section (f)(1)(D). 

12 ‘‘(8) INFLATION ADJUSTMENT.— 

13 ‘‘(A) IN GENERAL.—In the case of any 

14 taxable year beginning in a calendar year after 

15 2020, each dollar amount in subsection (c)(1), 

16 the $75,000 amount in subsection (c)(2)(A)(ii), 

17 and the dollar amount in subsection (c)(3)(A), 

18 shall be increased by an amount equal to— 

19 ‘‘(i) such dollar amount, multiplied by 

20 ‘‘(ii) the cost-of-living adjustment de21 termined under section 1(f)(3) for the cal22 endar year in which the taxable year be23 gins, determined— 


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1 ‘‘(I) by substituting ‘calendar 

2 year 2019’ for ‘calendar year 1992’ in 

3 subparagraph (B) thereof, and 

4 ‘‘(II) by substituting for the CPI 

5 referred to section 1(f)(3)(A) the 

6 amount that such CPI would have 

7 been if the annual percentage increase 

8 in CPI with respect to each year after 

9 2019 had been one percentage point 

10 greater. 

11 ‘‘(B) TERMS RELATED TO CPI.— 

12 ‘‘(i) ANNUAL PERCENTAGE IN13 CREASE.—For purposes of subparagraph 

14 (A)(ii)(II), the term ‘annual percentage in15 crease’ means the percentage (if any) by 

16 which CPI for any year exceeds CPI for 

17 the prior year. 

18 ‘‘(ii) OTHER TERMS.—Terms used in 

19 this paragraph which are also used in sec20 tion 1(f)(3) shall have the same meanings 

21 as when used in such section. 

22 ‘‘(C) ROUNDING.—Any increase deter23 mined under subparagraph (A) shall be rounded 

24 to the nearest multiple of $50. 


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1 ‘‘(9) REGULATIONS.—The Secretary may pre2 scribe such regulations and other guidance as may 

3 be necessary or appropriate to carry out this section, 

4 section 6050X, and section 7529.’’. 

5 (b) ADVANCE PAYMENT OF CREDIT; EXCESS

6 HEALTH INSURANCE COVERAGE CREDIT PAYABLE TO

7 HEALTH SAVINGS ACCOUNT.—Chapter 77 of such Code 

8 is amended by adding at the end the following: 

9 ‘‘SEC. 7529. ADVANCE PAYMENT OF HEALTH INSURANCE 

10 COVERAGE CREDIT. 

11 ‘‘(a) GENERAL RULE.—Not later than January 1, 

12 2020, the Secretary, in consultation with the Secretary of 

13 Health and Human Services, the Secretary of Homeland 

14 Security, and the Commissioner of Social Security, shall 

15 establish a program (hereafter in this section referred to 

16 as the ‘advance payment program’) for making payments 

17 to providers of eligible health insurance on behalf of tax18 payers eligible for the credit under section 36C. 

19 ‘‘(b) LIMITATION.—The aggregate payments made 

20 under this section with respect to any taxpayer, deter21 mined as of any time during any calendar year, shall not 

22 exceed the monthly credit amounts determined with re23 spect to such taxpayer under section 36C for months dur24 ing such calendar year which have ended as of such time. 

25 ‘‘(c) ADMINISTRATION.— 


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1 ‘‘(1) IN GENERAL.—The advance payment pro2 gram shall, to the greatest extent practicable, use 

3 the methods and procedures used to administer the 

4 programs created under sections 1411 and 1412 of 

5 the Patient Protection and Affordable Care Act (de6 termined without regard to section 1412(f) of such 

7 Act) and each entity that is authorized to take any 

8 actions under the programs created under such sec9 tions (as so determined) shall, at the request of the 

10 Secretary, take such actions to the extent necessary 

11 to carry out this section. 

12 ‘‘(2) APPLICATION TO OFF-EXCHANGE COV13 ERAGE.—Except as otherwise provided by the Sec14 retary, for purposes of applying this subsection in 

15 the case of eligible health insurance which is not en16 rolled in through an Exchange established under 

17 title I of the Patient Protection and Affordable Care 

18 Act, the sections referred to in paragraph (1) shall 

19 be applied by treating references in such sections to 

20 an Exchange as references to the provider of such 

21 eligible health insurance (or, as the Secretary deter22 mines appropriate, to the licensed agent or broker 

23 with respect to such insurance), except that the Sec24 retary of Health and Human Services shall carry out 

25 the responsibilities of the Exchange under section 


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1 1411(e)(4) of the Patient Protection and Affordable 

2 Care Act (determined without regard to section 

3 1412(f) of such Act) in the case of such insurance. 

4 ‘‘(3) DOCUMENTATION REGARDING OTHER

5 SPECIFIED COVERAGE.— 

6 ‘‘(A) IN GENERAL.—The advance payment 

7 program shall provide that any individual ap8 plying to have payments made on their behalf 

9 under such program shall, if such individual (or 

10 any qualifying family member of such individual 

11 taken into account in determining the amount 

12 of the credit allowable under section 36C) is 

13 employed, submit a written statement from 

14 each employer of such individual or such quali15 fying family member stating whether such indi16 vidual or qualifying family member (as the case 

17 may be) is eligible for other specified coverage 

18 in connection with such employment. 

19 ‘‘(B) ISSUANCE OF STATEMENTS.—An em20 ployer shall, at the request of any employee, 

21 provide the statement under subparagraph (A) 

22 at such time, and in such form and manner, as 

23 the Secretary may provide. 

24 ‘‘(d) DEFINITIONS.—For purposes of this section, 

25 terms used in this section which are also used in section 


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1 36C shall have the same meaning as when used in section 

2 36C. 

3 ‘‘SEC. 7530. EXCESS HEALTH INSURANCE COVERAGE CRED4 IT PAYABLE TO HEALTH SAVINGS ACCOUNT. 

5 ‘‘(a) IN GENERAL.—At the request of an eligible tax6 payer, the Secretary shall make a payment to the trustee 

7 of the designated health savings account with respect to 

8 such taxpayer in an amount equal to the sum of the ex9 cesses (if any) described in subsection (c)(2) with respect 

10 to months in the taxable year. 

11 ‘‘(b) DESIGNATED HEALTH SAVINGS ACCOUNT.— 

12 The term ‘designated health savings account’ means a 

13 health savings account of an individual described in sub14 section (c)(3) which is identified by the eligible taxpayer 

15 for purposes of this section. 

16 ‘‘(c) ELIGIBLE TAXPAYER.—The term ‘eligible tax17 payer’ means, with respect to any taxable year, any tax18 payer if— 

19 ‘‘(1) such taxpayer is allowed a credit under 

20 section 36C for such taxable year, 

21 ‘‘(2) the amount described in subparagraph (A) 

22 of section 36C(b)(1) exceeds the amount described 

23 in subparagraph (B) of such section with respect to 

24 such taxpayer applied with respect to any month 

25 during such taxable year, and 


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1 ‘‘(3) the taxpayer or one or more of the tax2 payer’s qualifying family members (as defined in 

3 section 36C(e)) were eligible individuals (as defined 

4 in section 223(c)(1)) for one or more months during 

5 such taxable year. 

6 ‘‘(d) CONTRIBUTIONS TREATED AS ROLLOVERS, 

7 ETC.— 

8 ‘‘(1) IN GENERAL.—Any amount paid the Sec9 retary to a health savings account under this section 

10 shall be treated for purposes of this title in the same 

11 manner as a rollover contribution described in sec12 tion 223(f)(5). 

13 ‘‘(2) COORDINATION WITH LIMITATION ON

14 ROLLOVERS.—Any amount described in paragraph 

15 (1) shall not be taken into account in applying sec16 tion 223(f)(5)(B) with respect to any other amount 

17 and the limitation of section 223(f)(5)(B) shall not 

18 apply with respect to the application of paragraph 

19 (1). 

20 ‘‘(e) FORM AND MANNER OF REQUEST.—The re21 quest referred to in subsection (a) shall be made at such 

22 time and in such form and manner as the Secretary may 

23 provide. To the extent that the Secretary determines fea24 sible, such request may identify more than one designated 

25 health savings account (and the amount to be paid to each 


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1 such account) provided that the aggregate of such pay2 ments with respect to any taxpayer for any taxable year 

3 do not exceed the excess described in subsection (c)(2). 

4 ‘‘(f) TAXPAYERS WITH SERIOUSLY DELINQUENT

5 TAX DEBT.—In the case of an individual who has a seri6 ously delinquent tax debt (as defined in section 7345(b)) 

7 which has not been fully satisfied— 

8 ‘‘(1) if such individual is the eligible taxpayer 

9 (or, in the case of a joint return, either spouse), the 

10 Secretary shall not make any payment under this 

11 section with respect to such taxpayer, and 

12 ‘‘(2) if such individual is the account bene13 ficiary (as defined in section 223(d)(3)) of any 

14 health savings account, the Secretary shall not make 

15 any payment under this section to such health sav16 ings account. 

17 ‘‘(g) ADVANCE PAYMENT.—To the extent that the 

18 Secretary determines feasible, payment under this section 

19 may be made in advance on a monthly basis under rules 

20 similar to the rules of sections 7529 and 36C(i)(5)(B).’’. 

21 (c) INFORMATION REPORTING.— 

22 (1) REPORTING BY HEALTH INSURANCE PRO23 VIDERS.—Subpart B of part III of subchapter A of 

24 chapter 61 of such Code is amended by adding at 

25 the end the following new section: 


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1 ‘‘SEC. 6050X. RETURNS BY HEALTH INSURANCE PROVIDERS 

2 RELATING TO HEALTH INSURANCE COV3 ERAGE CREDIT. 

4 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

5 who provides eligible health insurance for any month of 

6 any calendar year with respect to any individual shall, at 

7 such time as the Secretary may prescribe, make the return 

8 described in subsection (b) with respect to each such indi9 vidual. With respect to any individual with respect to 

10 whom payments under section 7529 are made by the Sec11 retary, the reporting under subsection (b) shall be made 

12 on a monthly basis. 

13 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

14 is described in this subsection if such return— 

15 ‘‘(1) is in such form as the Secretary may pre16 scribe, and 

17 ‘‘(2) contains, with respect to each policy of eli18 gible health insurance— 

19 ‘‘(A) the name, address, and TIN of each 

20 individual covered under such policy, 

21 ‘‘(B) the premiums paid with respect to 

22 such policy, 

23 ‘‘(C) the amount of advance payments 

24 made on behalf of the individual under section 

25 7529, 


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1 ‘‘(D) the months during which such health 

2 insurance is provided to the individual, 

3 ‘‘(E) whether such policy constitutes a 

4 high deductible health plan (as defined in sec5 tion 223(c)(2)), and 

6 ‘‘(F) such other information as the Sec7 retary may prescribe. 

8 ‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID9 UALS WITH RESPECT TO WHOM INFORMATION IS RE10 QUIRED.—Every person required to make a return under 

11 subsection (a) shall furnish to each individual whose name 

12 is required to be set forth in such return a written state13 ment showing— 

14 ‘‘(1) the name and address of the person re15 quired to make such return and the phone number 

16 of the information contact for such person, and 

17 ‘‘(2) the information required to be shown on 

18 the return with respect to such individual. 

19 The written statement required under the preceding sen20 tence shall be furnished on or before January 31 of the 

21 year following the calendar year to which such statement 

22 relates. 

23 ‘‘(d) DEFINITIONS.—For purposes of this section, 

24 terms used in this section which are also used in section 


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1 36C shall have the same meaning as when used in section 

2 36C.’’. 

3 (2) REPORTING BY EMPLOYERS.—Section 

4 6051(a) of such Code is amended by striking ‘‘and’’ 

5 at the end of paragraph (14), by striking the period 

6 at the end of paragraph (15) and inserting ‘‘, and’’, 

7 and by inserting after paragraph (15) the following 

8 new paragraph: 

9 ‘‘(16) each month with respect to which the em10 ployee is eligible for other specified coverage (as de11 fined in section 36C(g)) in connection with employ12 ment with the employer.’’. 

13 (3) ASSESSABLE PENALTIES.— 

14 (A) Section 6724(d)(1)(B) of such Code is 

15 amended by striking ‘‘or’’ at the end of clause 

16 (xxiv), by inserting ‘‘or’’ at the end of clause 

17 (xxv), and by inserting after clause (xxv) the 

18 following new clause: 

19 ‘‘(xxvi) section 6050X (relating to re20 turns relating to health insurance coverage 

21 credit),’’. 

22 (B) Section 6724(d)(2) of such Code is 

23 amended by striking ‘‘or’’ at the end of sub24 paragraph (HH), by striking the period at the 

25 end of subparagraph (II) and inserting a 


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1 comma, and by adding after subparagraph (II) 

2 the following new subparagraphs: 

3 ‘‘(JJ) section 6050X (relating to returns 

4 relating to health insurance coverage credit), or 

5 ‘‘(KK) section 7529(c)(3) (relating to doc6 umentation regarding other specified cov7 erage).’’. 

8 (d) DISCLOSURES.—Paragraph (21) of section 

9 6103(l) of the Internal Revenue Code of 1986 is amend10 ed— 

11 (1) in subparagraph (A)— 

12 (A) by striking ‘‘any premium tax credit 

13 under section 36B or any cost-sharing reduc14 tion under section 1402 of the Patient Protec15 tion and Affordable Care Act or’’ and inserting 

16 ‘‘any credit under section 36C’’, 

17 (B) by striking ‘‘, a State’s children’s 

18 health insurance program under title XXI of 

19 the Social Security Act, or a basic health pro20 gram under section 1331 of Patient Protection 

21 and Affordable Care Act’’ and inserting ‘‘or a 

22 State’s children’s health insurance program 

23 under title XXI of the Social Security Act’’, 


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1 (C) by striking ‘‘(as defined in section 

2 36B)’’ in clause (iv) and inserting ‘‘(as defined 

3 in section 36C(c)(2)(B))’’, and 

4 (D) by striking ‘‘or reduction’’ in clause 

5 (v), 

6 (2) in subparagraph (B)— 

7 (A) by striking ‘‘may disclose to an Ex8 change’’ and inserting ‘‘may disclose— 

9 ‘‘(i) to an Exchange’’, and 

10 (B) by striking the period at the end and 

11 inserting ‘‘, and’’, and 

12 (C) by adding at the end the following new 

13 clause: 

14 ‘‘(ii) in the case of any credit under 

15 section 36C with respect to any health in16 surance, the amount of such credit (or the 

17 amount of any advance payment of such 

18 credit) to the provider of such insurance 

19 (or, as the Secretary determines appro20 priate, the licensed agent or broker with 

21 respect to such insurance).’’, and 

22 (3) in subparagraph (C)(i), by striking ‘‘amount 

23 of, any credit or reduction’’ and inserting ‘‘amount 

24 of any credit’’. 


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1 (e) INCREASED PENALTY ON ERRONEOUS CLAIMS OF

2 CREDIT.—Section 6676(a) of such Code is amended by 

3 inserting ‘‘(25 percent in the case of a claim for refund 

4 or credit relating to the health insurance coverage credit 

5 under section 36C)’’ after ‘‘20 percent’’. 

6 (f) CONFORMING AMENDMENTS.— 

7 (1) Section 35(g) of such Code is amended by 

8 adding at the end the following new paragraph: 

9 ‘‘(14) COORDINATION WITH HEALTH INSUR10 ANCE COVERAGE CREDIT.— 

11 ‘‘(A) IN GENERAL.—An eligible coverage 

12 month to which the election under paragraph 

13 (11) applies shall not be treated as an eligible 

14 coverage month (as defined in section 36C(d)) 

15 for purposes of section 36C with respect to the 

16 taxpayer or any of the taxpayer’s qualifying 

17 family members (as defined in section 36C(e)). 

18 ‘‘(B) COORDINATION WITH ADVANCE PAY19 MENTS OF HEALTH INSURANCE COVERAGE

20 CREDIT.—In the case of a taxpayer who makes 

21 the election under paragraph (11) with respect 

22 to any eligible coverage month in a taxable year 

23 or on behalf of whom any advance payment is 

24 made under section 7527 with respect to any 

25 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 sections 7527 and 7529 for 

7 months during such taxable year, over 

8 ‘‘(II) the sum of the credits al9 lowed under this section (determined 

10 without regard to paragraph (1)) and 

11 section 36C (determined without re12 gard to subsection (i)(5)(A) thereof) 

13 for such taxable year, and 

14 ‘‘(ii) section 36C(i)(5)(B) shall not 

15 apply with respect to such taxpayer for 

16 such taxable year.’’. 

17 (2) Section 162(l) of such Code is amended by 

18 adding at the end the following new paragraph: 

19 ‘‘(6) COORDINATION WITH HEALTH INSURANCE

20 COVERAGE CREDIT.—The deduction otherwise allow21 able to a taxpayer under paragraph (1) for any tax22 able year shall be reduced (but not below zero) by 

23 the sum of— 

24 ‘‘(A) the amount of the credit allowable to 

25 such taxpayer under section 36C (determined 


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1 without regard to subsection (i)(5)(A) thereof) 

2 for such taxable year, plus 

3 ‘‘(B) the aggregate payments made with 

4 respect to the taxpayer under section 7530 for 

5 months during such taxable year.’’. 

6 (3) Section 1324(b)(2) of title 31, United 

7 States Code is amended— 

8 (A) by inserting ‘‘36C,’’ after ‘‘36B,’’, and 

9 (B) by striking ‘‘or 6431’’ and inserting 

10 ‘‘6431, or 7530’’. 

11 (4) The table of sections for subpart C of part 

12 IV of subchapter A of chapter 1 of the Internal Rev13 enue Code of 1986 is amended by inserting after the 

14 item relating to section 36B the following new item: 

‘‘Sec. 36C. Health insurance coverage.’’. 

15 (5) The table of sections for subpart B of part 

16 III of subchapter A of chapter 61 of such Code is 

17 amended by adding at the end the following new 

18 item: 

‘‘Sec. 6050X. Returns by health insurance providers relating to health insurance coverage credit.’’. 

19 (6) The table of sections for chapter 77 of such 

20 Code is amended by adding at the end the following 

21 new items: 

‘‘Sec. 7529. Advance payment of health insurance coverage credit. 

‘‘Sec. 7530. Excess health insurance coverage credit payable to health savings 

account.’’. 


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1 (g) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to months beginning after Decem3 ber 31, 2019, in taxable years ending after such date. 

4 SEC. 216. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAV5 INGS ACCOUNT INCREASED TO AMOUNT OF 

6 DEDUCTIBLE AND OUT-OF-POCKET LIMITA7 TION. 

8 (a) SELF-ONLY COVERAGE.—Section 223(b)(2)(A) 

9 of the Internal Revenue Code of 1986 is amended by strik10 ing ‘‘$2,250’’ and inserting ‘‘the amount in effect under 

11 subsection (c)(2)(A)(ii)(I)’’. 

12 (b) FAMILY COVERAGE.—Section 223(b)(2)(B) of 

13 such Code is amended by striking ‘‘$4,500’’ and inserting 

14 ‘‘the amount in effect under subsection (c)(2)(A)(ii)(II)’’. 

15 (c) CONFORMING AMENDMENTS.—Section 223(g)(1) 

16 of such Code is amended— 

17 (1) by striking ‘‘subsections (b)(2) and’’ both 

18 places it appears and inserting ‘‘subsection’’, and 

19 (2) in subparagraph (B), by striking ‘‘deter20 mined by’’ and all that follows through ‘‘ ‘calendar 

21 year 2003’.’’ and inserting ‘‘determined by sub22 stituting ‘calendar year 2003’ for ‘calendar year 

23 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. 217. 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. 218. 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 Section 9008 of the Patient Protection and Afford6 able Care Act is amended by adding at the end the fol7 lowing new subsection: 

8 ‘‘(l) TERMINATION.—No fee shall be imposed under 

9 subsection (a)(1) with respect to any calendar year begin10 ning after December 31, 2017.’’. 

11 SEC. 222. REPEAL OF HEALTH INSURANCE TAX. 

12 Section 9010 of the Patient Protection and Afford13 able Care Act is amended by adding at the end the fol14 lowing new subsection: 

15 ‘‘(k) TERMINATION.—No fee shall be imposed under 

16 subsection (a)(1) with respect to any calendar year begin17 ning after December 31, 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 Decem24 ber 31, 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, 2017.’’. 

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, 2017. 


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Union Calendar No. 30 

115TH CONGRESS 

1ST SESSION H. R. 1628 

[Report No. 115–52] 

A BILL 

To provide for reconciliation pursuant to title II of 

year 2017. the concurrent resolution on the budget for fiscal 

MARCH 20, 2017 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 


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