II 

116TH CONGRESS 

1ST SESSION S. 1868 

To provide support to States to establish invisible high-risk pool or 

reinsurance programs. 

IN THE SENATE OF THE UNITED STATES 

JUNE 13, 2019 

Ms. COLLINS (for herself and Mr. MANCHIN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To provide support to States to establish invisible high-risk 

pool or reinsurance programs. 

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 ‘‘Premium Reduction 

5 Act of 2019’’. 

6 SEC. 2. INVISIBLE HIGH-RISK POOL AND REINSURANCE 

7 PROGRAMS. 

8 (a) STATE GRANTS UNDER WAIVERS.—Section 

9 1332(a) of the Patient Protection and Affordable Care Act 

10 (42 U.S.C. 18052(a)) is amended— 


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1 (1) by redesignating paragraphs (4), (5), and 

2 (6) as paragraphs (6), (7), and (8), respectively; and 

3 (2) by inserting after paragraph (3) the fol4 lowing: 

5 ‘‘(4) FEDERAL FUNDING FOR INVISIBLE HIGH6 RISK POOL AND REINSURANCE PROGRAMS.— 

7 ‘‘(A) ALLOCATIONS.— 

8 ‘‘(i) METHODOLOGY.—Not later than 

9 45 days after the date of enactment of this 

10 Act, the Secretary, in consultation with the 

11 National Association of Insurance Commis12 sioners, shall specify an allocation method13 ology for determining the amount of funds 

14 appropriated under section 2(b) of the Pre15 mium Reduction Act of 2019 for a fiscal 

16 year to be allocated for each State for pur17 poses of subparagraph (B) and section 2(c) 

18 of the Premium Reduction Act of 2019. 

19 ‘‘(ii) ANNUAL DETERMINATIONS.— 

20 The Secretary shall determine the alloca21 tions to States described in clause (i) for 

22 each calendar year, using the methodology 

23 determined under clause (i) and taking 

24 into consideration the experiences of other 

25 States with respect to participation in an 


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1 Exchange and premium tax credits, cost2 sharing reductions, or small business cred3 its under sections 36B of the Internal Rev4 enue Code of 1986 or under part I of sub5 title E provided to residents of such 

6 States. 

7 ‘‘(B) STATE GRANTS.—From amounts ap8 propriated under section 2(b)(1) of the Pre9 mium Reduction Act of 2019 for a fiscal year, 

10 the Secretary shall award grants to States for 

11 each of fiscal years 2020 through 2023, in 

12 amounts determined under subparagraph 

13 (A)(ii), for the following purposes: 

14 ‘‘(i) For each of fiscal years 2020 

15 through 2024, out of amounts appro16 priated under subparagraph (A) of such 

17 section 2(b)(1), for administrative costs of 

18 the State associated with preparing and 

19 submitting information described in para20 graph (1)(B) that includes an invisible 

21 high-risk pool or reinsurance program that 

22 meets the requirements of subsection 

23 (f)(2), or costs associated with the estab24 lishment of such invisible high-risk pool or 

25 reinsurance program. 


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1 ‘‘(ii) For each of fiscal years 2021 

2 through 2023, out of amounts appro3 priated under subparagraph (B) of such 

4 section 2(b)(1), for the establishment or 

5 maintenance of invisible high-risk pools 

6 and reinsurance programs that meet the 

7 requirements of subsection (f)(2) and for 

8 which the State has received a waiver 

9 under this section. 

10 ‘‘(C) BUDGET NEUTRALITY.—Funds 

11 awarded to a State under a grant awarded 

12 under subparagraph (B) shall not be taken into 

13 account for purposes of determining under 

14 paragraph (1) whether the State waiver is 

15 budget neutral, or determining under subsection 

16 (b)(1) whether the State waiver increases the 

17 Federal deficit. 

18 ‘‘(5) RECONCILIATION OF PASS THROUGH

19 FUNDING AND FUNDING FOR INVISIBLE HIGH-RISK

20 POOL AND REINSURANCE PROGRAMS.—In allocating 

21 amounts under paragraphs (3) and (4), the Sec22 retary— 

23 ‘‘(A) not later than November 1 of each 

24 year, shall estimate the allocation for each 


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1 State under such paragraphs for the upcoming 

2 calendar year; 

3 ‘‘(B) not later than June 1 of each year, 

4 shall revise the estimate of the allocations under 

5 subparagraph (A) for each State for the current 

6 calendar year; and 

7 ‘‘(C) shall reconcile amounts to be paid to 

8 each State under such paragraphs for the fol9 lowing calendar year by adjusting each State’s 

10 allocation for the following calendar year to ac11 count for the revisions made under subpara12 graph (B).’’. 

13 (b) APPROPRIATIONS.— 

14 (1) IN GENERAL.—There are authorized to be 

15 appropriated, and there are appropriated, to the 

16 Secretary of Health and Human Services (referred 

17 to in this section as the ‘‘Secretary’’), for the pur18 poses described in section 1332(a)(4)(B) of the Pa19 tient Protection and Affordable Care Act (as amend20 ed by subsection (a)) and subsection (c) of this sec21 tion, out of any funds in the Treasury not otherwise 

22 appropriated— 

23 (A) $500,000,000 for fiscal year 2020; and 

24 (B) $5,000,000,000 for each of fiscal years 

25 2021 through 2023. 


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1 (2) AVAILABLE UNTIL EXPENDED.—Amounts 

2 appropriated under this subsection shall remain 

3 available until expended. 

4 (c) DEFAULT FEDERAL SAFEGUARD.— 

5 (1) IN GENERAL.—For purposes of plan year 

6 2021, in the case of a State that does not, by a date 

7 specified by the Secretary for each such year, in con8 sultation with the National Association of Insurance 

9 Commissioners, have in effect a waiver under section 

10 1332 of the Patient Protection and Affordable Care 

11 Act (42 U.S.C. 18052) that includes an invisible 

12 high-risk pool or reinsurance program that meets 

13 the requirements of subsection (f)(2) of such section 

14 1332, the Secretary shall, from amounts appro15 priated under subsection (b), use the allocation de16 termined for the State under subsection (a)(4)(A) of 

17 such section 1332 for plan year 2021 for the pur18 pose described in paragraph (2). Such allocation 

19 shall be increased by the amount of pass through 

20 funding that would be available under section 

21 1332(a)(3) of the Patient Protection and Affordable 

22 Care Act if the State obtained a waiver for an invis23 ible high-risk pool or reinsurance program under 

24 such section. 


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1 (2) REQUIRED USE FOR MARKET STABILIZA2 TION PAYMENTS TO ISSUERS.—The Secretary shall 

3 use any allocation for a State made pursuant to 

4 paragraph (1) to help stabilize premiums for health 

5 insurance coverage in the individual market in such 

6 State by providing payments to health insurance 

7 issuers, using payment parameters and a method8 ology determined by the Secretary. 

9 (d) INVISIBLE HIGH-RISK POOLS AND REINSURANCE

10 PROGRAMS.— 

11 (1) IN GENERAL.—Section 1332 of the Patient 

12 Protection and Affordable Care Act (42 U.S.C. 

13 18052) is amended by adding at the end the fol14 lowing: 

15 ‘‘(f) INVISIBLE HIGH-RISK POOLS AND REINSUR16 ANCE PROGRAMS.— 

17 ‘‘(1) FUNDING.—With respect to a State that 

18 has received a waiver under this section to establish 

19 an invisible high-risk pool or reinsurance program 

20 described in paragraph (2), the State may fund such 

21 program, in whole or in part, using one or both of 

22 the following: 

23 ‘‘(A) Amounts received through a grant de24 scribed in subsection (a)(4)(B). 


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1 ‘‘(B) All of, or a portion of, the payments 

2 made to the State as described in subsection 

3 (a)(3), consistent with the information the 

4 State provides under subsection (a)(1)(B). 

5 ‘‘(2) PROGRAM DESIGN.—An invisible high-risk 

6 pool or reinsurance program described in this para7 graph is a program that meets any of the following: 

8 ‘‘(A) An invisible high-risk pool, as defined 

9 by the State, under which health insurance 

10 issuers, with respect to designated individuals 

11 who experience higher than average health costs 

12 as determined by the State, and are enrolled in 

13 health insurance coverage offered in the indi14 vidual market, cede risk to the pool, without af15 fecting the premium paid by the designated in16 dividuals or their terms of coverage. With re17 spect to such pool, the State, or an entity oper18 ating the pool on behalf of the State, shall es19 tablish— 

20 ‘‘(i) the premium amount the ceding 

21 issuer shall pay to the reinsurance pool; 

22 ‘‘(ii) the applicable attachment points 

23 or coinsurance percentages if the ceding 

24 issuer retains any portion of the risk under 

25 ceded policies; and 


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1 ‘‘(iii) the mechanism by which high2 risk individuals are designated for cession 

3 to the pool, which may include a list of 

4 designated high-cost health conditions. 

5 ‘‘(B) A reinsurance program, as defined by 

6 the State, that assumes a portion of the risk for 

7 individuals who experience higher than average 

8 health costs as determined by the State, in a 

9 manner substantially similar to the reinsurance 

10 program that operated in the State in accord11 ance with section 1341. 

12 ‘‘(C) A reinsurance program established by 

13 the State not otherwise described in this para14 graph. 

15 ‘‘(D) A program based on another State’s 

16 reinsurance program— 

17 ‘‘(i) described in subparagraph (A), 

18 (B), or (C), for which an application has 

19 been approved under this subsection; or 

20 ‘‘(ii) which was implemented prior to 

21 September 1, 2019, and which the Sec22 retary determines meets the requirements 

23 of subparagraph (A). 

24 ‘‘(3) EXPEDITED APPROVAL.— 


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

2 provide an expedited approval process for an 

3 application under subsection (a)(1)— 

4 ‘‘(i) with respect to an invisible high5 risk pool or reinsurance program described 

6 in subparagraph (A), (B), or (D) of para7 graph (2); or 

8 ‘‘(ii) that uses a template form de9 signed by the Administrator of the Centers 

10 for Medicare & Medicaid Services, in con11 sultation with the Secretary of the Treas12 ury, for an application based on a program 

13 that is the same or substantially the same 

14 as a program implemented in accordance 

15 with an application previously approved 

16 under this subsection. 

17 ‘‘(B) TIMEFRAME.—The Secretary shall 

18 make a determination on an application eligible 

19 for expedited review under subparagraph (A) 

20 not later than 90 days after receipt of such ap21 plication. 

22 ‘‘(C) STANDARD OF REVIEW.—Nothing in 

23 this paragraph shall be construed as affecting 

24 the requirements under subsection (a)(1) with 

25 respect to an application approved in accordVerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868

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1 ance with the process under subparagraph 

2 (A).’’. 

3 (2) APPLICATION.—Section 1332(a)(1)(B)(i) of 

4 the Patient Protection and Affordable Care Act (42 

5 U.S.C. 18052(a)(1)(B)(i)) is amended by inserting 

6 ‘‘, including, as applicable, a description of the 

7 State’s plan to use any amounts awarded to the 

8 State under paragraph (4) to support an invisible 

9 high-risk pool or reinsurance program consistent 

10 with subsection (f) and such information about such 

11 program as the Secretary may require’’ before the 

12 semicolon. 

Æ 


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