I 

111TH CONGRESS 

2D SESSION H. R. 5808 

To amend the Patient Protection and Affordable Care Act to establish a 

public health insurance option. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 21, 2010 

Ms. WOOLSEY (for herself, Ms. BALDWIN, Mr. BECERRA, Mr. BLUMENAUER, 

Mr. BOSWELL, Ms. CORRINE BROWN of Florida, Mrs. CAPPS, Mr. 

CAPUANO, Mr. CARSON of Indiana, Mrs. CHRISTENSEN, Ms. CHU, Ms. 

CLARKE, Mr. CLAY, Mr. CLEAVER, Mr. CLYBURN, Mr. COHEN, Mr. CONYERS, Mr. CUMMINGS, Mr. DAVIS of Illinois, Mr. DEFAZIO, Mr. DOYLE, 

Ms. EDWARDS of Maryland, Mr. ELLISON, Mr. ENGEL, Ms. ESHOO, Mr. 

FARR, Mr. FATTAH, Mr. FILNER, Mr. FRANK of Massachusetts, Ms. 

FUDGE, Mr. GARAMENDI, Mr. GRAYSON, Mr. AL GREEN of Texas, Mr. 

GENE GREEN of Texas, Mr. GRIJALVA, Mr. GUTIERREZ, Mr. HALL of 

New York, Mr. HARE, Ms. HARMAN, Mr. HASTINGS of Florida, Mr. HINCHEY, Ms. HIRONO, Mr. HOLT, Mr. HONDA, Mr. JACKSON of Illinois, 

Ms. JACKSON LEE of Texas, Mr. JOHNSON of Georgia, Ms. EDDIE BERNICE JOHNSON of Texas, Ms. KAPTUR, Mr. KENNEDY, Mr. KILDEE, Ms. 

KILPATRICK of Michigan, Mr. KUCINICH, Mr. LANGEVIN, Ms. LEE of 

California, Mr. LEWIS of Georgia, Ms. ZOE LOFGREN of California, Mr. 

LUJA ́N, Mrs. MALONEY, Mr. MARKEY of Massachusetts, Ms. MATSUI, 

Ms. MCCOLLUM, Mr. MCDERMOTT, Mr. MCGOVERN, Ms. MOORE of Wisconsin, Mr. MORAN of Virginia, Mr. MURPHY of Connecticut, Mr. NADLER of New York, Mrs. NAPOLITANO, Ms. NORTON, Mr. OBERSTAR, Mr. 

OLVER, Mr. PASTOR of Arizona, Mr. PAYNE, Ms. PINGREE of Maine, Mr. 

POLIS of Colorado, Mr. PRICE of North Carolina, Mr. RANGEL, Ms. 

RICHARDSON, Mr. ROTHMAN of New Jersey, Ms. ROYBAL-ALLARD, Mr. 

RUSH, Mr. RYAN of Ohio, Ms. LINDA T. SA ́NCHEZ of California, Mr. 

SARBANES, Ms. SCHAKOWSKY, Mr. SCOTT of Virginia, Mr. SERRANO, Ms. 

SHEA-PORTER, Mr. SHERMAN, Mr. SIRES, Ms. SLAUGHTER, Ms. SPEIER, 

Mr. STARK, Mr. THOMPSON of Mississippi, Mr. THOMPSON of California, 

Mr. TIERNEY, Mr. TONKO, Mr. TOWNS, Ms. VELA ́ZQUEZ, Ms. WATERS, 

Ms. WATSON, Mr. WATT, Mr. WELCH, Mr. WU, Mr. YARMUTH, Mr. 

DEUTCH, Mr. DELAHUNT, Mr. PIERLUISI, Mr. ACKERMAN, Mr. ISRAEL, 

Mrs. LOWEY, Mr. SCHIFF, Mr. DOGGETT, Mr. BERMAN, Ms. TSONGAS, 

Mr. HIGGINS, Mr. SABLAN, Ms. DEGETTE, Mr. WEINER, Mr. MICHAUD, 

Ms. DELAURO, Mr. GEORGE MILLER of California, Mr. WAXMAN, Mr. 

LARSON of Connecticut, Mr. LEVIN, Mr. PALLONE, Mr. ANDREWS, and 


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Mrs. DAVIS of California) introduced the following bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To amend the Patient Protection and Affordable Care Act 

to establish a public health insurance option. 

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

3 SECTION 1. PUBLIC HEALTH INSURANCE OPTION. 

4 (a) IN GENERAL.—Part III of subtitle D of title I 

5 of the Patient Protection and Affordable Care Act (Public 

6 Law 111–148) is amended by adding at the end the fol7 lowing new section: 

8 ‘‘SEC. 1325. PUBLIC HEALTH INSURANCE OPTION. 

9 ‘‘(a) ESTABLISHMENT AND ADMINISTRATION OF A

10 PUBLIC HEALTH INSURANCE OPTION.— 

11 ‘‘(1) ESTABLISHMENT.—For years beginning 

12 with 2014, the Secretary of Health and Human 

13 Services (in this subtitle referred to as the ‘Sec14 retary’) shall provide for the offering through Ex15 changes established under this title of a health bene16 fits plan (in this Act referred to as the ‘public health 

17 insurance option’) that ensures choice, competition, 

18 and stability of affordable, high-quality coverage 

19 throughout the United States in accordance with 


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1 this section. In designing the option, the Secretary’s 

2 primary responsibility is to create a low-cost plan 

3 without compromising quality or access to care. 

4 ‘‘(2) OFFERING THROUGH EXCHANGES.— 

5 ‘‘(A) EXCLUSIVE TO THE EXCHANGE.— 

6 The public health insurance option shall only be 

7 made available through Exchanges established 

8 under this title. 

9 ‘‘(B) ENSURING A LEVEL PLAYING

10 FIELD.—Consistent with this section, the public 

11 health insurance option shall comply with re12 quirements that are applicable under this title 

13 to health benefits plans offered through such 

14 Exchanges, including requirements related to 

15 benefits, benefit levels, provider networks, no16 tices, consumer protections, and cost sharing. 

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

18 The public health insurance option— 

19 ‘‘(i) shall offer bronze, silver, and gold 

20 plans; and 

21 ‘‘(ii) may offer platinum plans. 

22 ‘‘(3) ADMINISTRATIVE CONTRACTING.—The 

23 Secretary may enter into contracts for the purpose 

24 of performing administrative functions (including 

25 functions described in subsection (a)(4) of section 


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1 1874A of the Social Security Act) with respect to 

2 the public health insurance option in the same man3 ner as the Secretary may enter into contracts under 

4 subsection (a)(1) of such section. The Secretary has 

5 the same authority with respect to the public health 

6 insurance option as the Secretary has under sub7 sections (a)(1) and (b) of section 1874A of the So8 cial Security Act with respect to title XVIII of such 

9 Act. Contracts under this subsection shall not in10 volve the transfer of insurance risk to such entity. 

11 ‘‘(4) OMBUDSMAN.—The Secretary shall estab12 lish an office of the ombudsman for the public 

13 health insurance option which shall have duties with 

14 respect to the public health insurance option similar 

15 to the duties of the Medicare Beneficiary Ombuds16 man under section 1808(c)(2) of the Social Security 

17 Act. In addition, such office shall work with States 

18 to ensure that information and notice is provided 

19 that the public health insurance option is one of the 

20 health plans available through an Exchange. 

21 ‘‘(5) DATA COLLECTION.—The Secretary shall 

22 collect such data as may be required to establish 

23 premiums and payment rates for the public health 

24 insurance option and for other purposes under this 

25 section, including to improve quality and to reduce 


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1 racial, ethnic, and other disparities in health and 

2 health care. 

3 ‘‘(6) ACCESS TO FEDERAL COURTS.—The provi4 sions of Medicare (and related provisions of title II 

5 of the Social Security Act) relating to access of 

6 Medicare beneficiaries to Federal courts for the en7 forcement of rights under Medicare, including with 

8 respect to amounts in controversy, shall apply to the 

9 public health insurance option and individuals en10 rolled under such option under this title in the same 

11 manner as such provisions apply to Medicare and 

12 Medicare beneficiaries. 

13 ‘‘(b) PREMIUMS AND FINANCING.— 

14 ‘‘(1) ESTABLISHMENT OF PREMIUMS.— 

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

16 establish geographically adjusted premium rates 

17 for the public health insurance option— 

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

19 the premium rules under paragraph (3); 

20 and 

21 ‘‘(ii) at a level sufficient to fully fi22 nance the costs of— 

23 ‘‘(I) health benefits provided by 

24 the public health insurance option; 

25 and 


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1 ‘‘(II) administrative costs related 

2 to operating the public health insur3 ance option. 

4 ‘‘(B) CONTINGENCY MARGIN.—In estab5 lishing premium rates under subparagraph (A), 

6 the Secretary shall include an appropriate 

7 amount for a contingency margin. 

8 ‘‘(2) ACCOUNT.— 

9 ‘‘(A) ESTABLISHMENT.—There is estab10 lished in the Treasury of the United States an 

11 account for the receipts and disbursements at12 tributable to the operation of the public health 

13 insurance option, including the start-up funding 

14 under subparagraph (B). Section 1854(g) of 

15 the Social Security Act shall apply to receipts 

16 described in the previous sentence in the same 

17 manner as such section applies to payments or 

18 premiums described in such section. 

19 ‘‘(B) START-UP FUNDING.— 

20 ‘‘(i) IN GENERAL.—In order to pro21 vide for the establishment of the public 

22 health insurance option there is hereby ap23 propriated to the Secretary, out of any 

24 funds in the Treasury not otherwise appro25 priated, $2,000,000,000. In order to proVerDate Mar 15 2010 03:55 Jul 22, 2010 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5808.IH H5808

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1 vide for initial claims reserves before the 

2 collection of premiums, there is hereby ap3 propriated to the Secretary, out of any 

4 funds in the Treasury not otherwise appro5 priated, such sums as necessary to cover 

6 90 days worth of claims reserves based on 

7 projected enrollment. 

8 ‘‘(ii) AMORTIZATION OF START-UP

9 FUNDING.—The Secretary shall provide for 

10 the repayment of the startup funding pro11 vided under clause (i) to the Treasury in 

12 an amortized manner over the 10-year pe13 riod beginning with 2014. 

14 ‘‘(iii) LIMITATION ON FUNDING.— 

15 Nothing in this subsection shall be con16 strued as authorizing any additional appro17 priations to the account, other than such 

18 amounts as are otherwise provided with re19 spect to other health benefits plans partici20 pating under the Exchange involved. 

21 ‘‘(3) INSURANCE RATING RULES.—The pre22 mium rate charged for the public health insurance 

23 option may not vary except as provided under sec24 tion 2701 of the Public Health Service Act. 

25 ‘‘(c) PAYMENT RATES FOR ITEMS AND SERVICES.— 


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1 ‘‘(1) RATES ESTABLISHED BY SECRETARY.— 

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

3 establish payment rates for the public health in4 surance option for services and health care pro5 viders consistent with this subsection and may 

6 change such payment rates in accordance with 

7 subsection (d). 

8 ‘‘(B) INITIAL PAYMENT RULES.— 

9 ‘‘(i) IN GENERAL.—During 2014, 

10 2015, and 2016, the Secretary shall set 

11 the payment rates under this subsection 

12 for services and providers described in sub13 paragraph (A) equal to the payment rates 

14 for equivalent services and providers under 

15 parts A and B of Medicare, subject to 

16 clause (ii), paragraphs (2)(A) and (4), and 

17 subsection (d). 

18 ‘‘(ii) EXCEPTIONS.— 

19 ‘‘(I) PRACTITIONERS’ SERV20 ICES.—Payment rates for practi21 tioners’ services otherwise established 

22 under the fee schedule under section 

23 1848 of the Social Security Act shall 

24 be applied without regard to the pro25 visions under subsection (f) of such 


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1 section and the update under sub2 section (d)(4) under such section for a 

3 year as applied under this paragraph 

4 shall be not less than 1 percent. 

5 ‘‘(II) ADJUSTMENTS.—The Sec6 retary may determine the extent to 

7 which Medicare adjustments applica8 ble to base payment rates under parts 

9 A and B of Medicare for graduate 

10 medical education and dispropor11 tionate share hospitals shall apply 

12 under this section. 

13 ‘‘(C) FOR NEW SERVICES.—The Secretary 

14 shall modify payment rates described in sub15 paragraph (B) in order to accommodate pay16 ments for services, such as well-child visits, that 

17 are not otherwise covered under Medicare. 

18 ‘‘(D) PRESCRIPTION DRUGS.—Payment 

19 rates under this subsection for prescription 

20 drugs that are not paid for under part A or 

21 part B of Medicare shall be at rates negotiated 

22 by the Secretary. 

23 ‘‘(2) INCENTIVES FOR PARTICIPATING PRO24 VIDERS.— 

25 ‘‘(A) INITIAL INCENTIVE PERIOD.— 


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1 ‘‘(i) IN GENERAL.—The Secretary 

2 shall provide, in the case of services de3 scribed in clause (ii) furnished during 

4 2014, 2015, and 2016, for payment rates 

5 that are 5 percent greater than the rates 

6 established under paragraph (1). 

7 ‘‘(ii) SERVICES DESCRIBED.—The 

8 services described in this clause are items 

9 and professional services, under the public 

10 health insurance option by a physician or 

11 other health care practitioner who partici12 pates in both Medicare and the public 

13 health insurance option. 

14 ‘‘(iii) SPECIAL RULES.—A pediatrician 

15 and any other health care practitioner who 

16 is a type of practitioner that does not typi17 cally participate in Medicare (as deter18 mined by the Secretary) shall also be eligi19 ble for the increased payment rates under 

20 clause (i). 

21 ‘‘(B) SUBSEQUENT PERIODS.—Beginning 

22 with 2017 and for subsequent years, the Sec23 retary shall continue to use an administrative 

24 process to set such rates in order to promote 

25 payment accuracy, to ensure adequate beneVerDate Mar 15 2010 03:55 Jul 22, 2010 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5808.IH H5808

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1 ficiary access to providers, and to promote af2 fordability and the efficient delivery of medical 

3 care consistent with subsection (a)(1). Such 

4 rates shall not be set at levels expected to in5 crease average medical costs per enrollee cov6 ered under the public health insurance option 

7 beyond what would be expected if the process 

8 under paragraph (1)(B) and subparagraph (A) 

9 were continued, as certified by the Office of the 

10 Actuary of the Centers for Medicare & Medicaid 

11 Services. 

12 ‘‘(C) ESTABLISHMENT OF A PROVIDER

13 NETWORK.—Health care providers participating 

14 under Medicare are participating providers in 

15 the public health insurance option unless they 

16 opt out in a process established by the Sec17 retary. 

18 ‘‘(3) ADMINISTRATIVE PROCESS FOR SETTING

19 RATES.—Chapter 5 of title 5, United States Code 

20 shall apply to the process for the initial establish21 ment of payment rates under this subsection but not 

22 to the specific methodology for establishing such 

23 rates or the calculation of such rates. 

24 ‘‘(4) CONSTRUCTION.—Nothing in this section 

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1 ity to correct for payments that are excessive or defi2 cient, taking into account the provisions of sub3 section (a)(1) and any appropriate adjustments 

4 based on the demographic characteristics of enrollees 

5 covered under the public health insurance option, 

6 but in no case shall the correction of payments 

7 under this paragraph result in a level of expendi8 tures per enrollee that exceeds the level of expendi9 tures that would have occurred under paragraphs 

10 (1)(B) and (2)(A), as certified by the Office of the 

11 Actuary of the Centers for Medicare & Medicaid 

12 Services. 

13 ‘‘(5) CONSTRUCTION.—Nothing in this section 

14 shall be construed as affecting the authority of the 

15 Secretary to establish payment rates, including pay16 ments to provide for the more efficient delivery of 

17 services, such as the initiatives provided for under 

18 subsection (d). 

19 ‘‘(6) LIMITATIONS ON REVIEW.—There shall be 

20 no administrative or judicial review of a payment 

21 rate or methodology established under this sub22 section or under subsection (d). 

23 ‘‘(d) MODERNIZED PAYMENT INITIATIVES AND DE24 LIVERY SYSTEM REFORM.— 


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

2 with 2014, the Secretary may utilize innovative pay3 ment mechanisms and policies to determine pay4 ments for items and services under the public health 

5 insurance option. The payment mechanisms and 

6 policies under this subsection may include patient7 centered medical home and other care management 

8 payments, accountable care organizations, value9 based purchasing, bundling of services, differential 

10 payment rates, performance or utilization based pay11 ments, partial capitation, and direct contracting with 

12 providers. Payment rates under such payment mech13 anisms and policies shall not be set at levels ex14 pected to increase average medical costs per enrollee 

15 covered under the public health insurance option be16 yond what would be expected if the process under 

17 paragraphs (1)(B) and (2)(A) of subsection (c) were 

18 continued, as certified by the Office of the Actuary 

19 of the Centers for Medicare & Medicaid Services. 

20 ‘‘(2) REQUIREMENTS FOR INNOVATIVE PAY21 MENTS.—The Secretary shall design and implement 

22 the payment mechanisms and policies under this 

23 subsection in a manner that— 

24 ‘‘(A) seeks to— 

25 ‘‘(i) improve health outcomes; 


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1 ‘‘(ii) reduce health disparities (includ2 ing racial, ethnic, and other disparities); 

3 ‘‘(iii) provide efficient and affordable 

4 care; 

5 ‘‘(iv) address geographic variation in 

6 the provision of health services; or 

7 ‘‘(v) prevent or manage chronic ill8 ness; and 

9 ‘‘(B) promotes care that is integrated, pa10 tient-centered, high quality, and efficient. 

11 ‘‘(3) ENCOURAGING THE USE OF HIGH VALUE

12 SERVICES.—To the extent allowed by the benefit 

13 standards applied to all health benefits plans partici14 pating under the Exchange involved, the public 

15 health insurance option may modify cost sharing and 

16 payment rates to encourage the use of services that 

17 promote health and value. 

18 ‘‘(4) NON-UNIFORMITY PERMITTED.—Nothing 

19 in this subtitle shall prevent the Secretary from 

20 varying payments based on different payment struc21 ture models (such as accountable care organizations 

22 and medical homes) under the public health insur23 ance option for different geographic areas. 

24 ‘‘(e) PROVIDER PARTICIPATION.— 


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1 ‘‘(1) IN GENERAL.—The Secretary shall estab2 lish conditions of participation for health care pro3 viders under the public health insurance option. 

4 ‘‘(2) LICENSURE OR CERTIFICATION.—The Sec5 retary shall not allow a health care provider to par6 ticipate in the public health insurance option unless 

7 such provider is appropriately licensed or certified 

8 under State law. 

9 ‘‘(3) PAYMENT TERMS FOR PROVIDERS.— 

10 ‘‘(A) PHYSICIANS.—The Secretary shall 

11 provide for the annual participation of physi12 cians under the public health insurance option, 

13 for which payment may be made for services 

14 furnished during the year, in one of 2 classes: 

15 ‘‘(i) PREFERRED PHYSICIANS.—Those 

16 physicians who agree to accept the pay17 ment rate established under this section 

18 (without regard to cost-sharing) as the 

19 payment in full. 

20 ‘‘(ii) PARTICIPATING, NON-PRE21 FERRED PHYSICIANS.—Those physicians 

22 who agree not to impose charges (in rela23 tion to the payment rate described in sub24 section (c) for such physicians) that exceed 


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1 the ratio permitted under section 

2 1848(g)(2)(C) of the Social Security Act. 

3 ‘‘(B) OTHER PROVIDERS.—The Secretary 

4 shall provide for the participation (on an annual 

5 or other basis specified by the Secretary) of 

6 health care providers (other than physicians) 

7 under the public health insurance option under 

8 which payment shall only be available if the 

9 provider agrees to accept the payment rate es10 tablished under subsection (c) (without regard 

11 to cost-sharing) as the payment in full. 

12 ‘‘(4) EXCLUSION OF CERTAIN PROVIDERS.— 

13 The Secretary shall exclude from participation under 

14 the public health insurance option a health care pro15 vider that is excluded from participation in a Fed16 eral health care program (as defined in section 

17 1128B(f) of the Social Security Act). 

18 ‘‘(f) APPLICATION OF FRAUD AND ABUSE PROVI19 SIONS.—Provisions of law (other than criminal law provi20 sions) identified by the Secretary by regulation, in con21 sultation with the Inspector General of the Department 

22 of Health and Human Services, that impose sanctions 

23 with respect to waste, fraud, and abuse under Medicare, 

24 such as the False Claims Act (31 U.S.C. 3729 et seq.), 

25 shall also apply to the public health insurance option. 


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1 ‘‘(g) MEDICARE DEFINED.—For purposes of this sec2 tion, the term ‘Medicare’ means the health insurance pro3 grams under title XVIII of the Social Security Act.’’. 

4 (b) CONFORMING AMENDMENTS.— 

5 (1) TREATMENT AS QUALIFIED HEALTH

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

7 and Affordable Care Act, as amended by section 

8 10104(a) of such Act, is amended— 

9 (A) in the heading, by inserting ‘‘, THE

10 PUBLIC HEALTH INSURANCE OPTION,’’ before 

11 ‘‘AND’’; and 

12 (B) by inserting ‘‘the public health insur13 ance option under section 1325,’’ before ‘‘and a 

14 multi-State plan’’. 

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

16 of such Act, as amended by section 10104(n) of such 

17 Act, is amended by inserting ‘‘the public health in18 surance option under section 1325,’’ before ‘‘or a 

19 multi-State qualified health plan’’. 

Æ 


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