State Health Care Premium Reduction Act of 2021

To amend the Patient Protection and Affordable Care Act to establish a health insurance affordability fund, and for other purposes. 1. Short title This Act may be cited as the State Health Care Premium Reduction Act of 2021 2. Establishing a health insurance affordability fund (a) In general Subtitle D of title I of the Patient Protection and Affordable Care Act is amended by inserting after part 5 ( 42 U.S.C. 18061 6 Improve Health Insurance Affordability Fund 1351. Establishment of program There is hereby established the Improve Health Insurance Affordability Fund Administrator State 1352. Use of funds (a) In general A State shall use the funds allocated to the State under this part for one of the following purposes: (1) To provide reinsurance payments to health insurance issuers with respect to individuals enrolled under individual health insurance coverage (other than through a plan described in subsection (b)) offered by such issuers. (2) To provide assistance (other than through payments described in paragraph (1)) to reduce out-of-pocket costs, such as copayments, coinsurance, premiums, and deductibles, of individuals enrolled under qualified health plans offered on the individual market through an Exchange and of individuals enrolled under standard health plans offered through a basic health program established under section 1331. (b) Exclusion of certain grandfathered and transitional plans For purposes of subsection (a), a plan described in this subsection is the following: (1) A grandfathered health plan (as defined in section 1251). (2) A plan (commonly referred to as a transitional plan (3) Student health insurance coverage (as defined in section 147.145 of title 45, Code of Federal Regulations). 1353. State eligibility and approval; Default safeguard (a) Encouraging State options for allocations (1) In general To be eligible for an allocation of funds under this part for a year (beginning with 2023), a State shall submit to the Administrator an application at such time (but, in the case of allocations for 2023, not later than 90 days after the date of the enactment of this part and, in the case of allocations for a subsequent year, not later than March 1 of the previous year) and in such form and manner as specified by the Administrator containing— (A) a description of how the funds will be used; and (B) such other information as the Administrator may require. (2) Automatic approval An application so submitted is approved unless the Administrator notifies the State submitting the application, not later than 60 days after the date of the submission of such application, that the application has been denied for not being in compliance with any requirement of this part and of the reason for such denial. (3) 5 If an application of a State is approved for a purpose described in section 1352 for a year, such application shall be treated as approved for such purpose for each of the subsequent 4 years. (4) Revocation of approval The approval of an application of a State, with respect to a purpose described in section 1352, may be revoked if the State fails to use funds provided to the State under this section for such purpose or otherwise fails to comply with the requirements of this section. (b) Default Federal safeguard (1) 2023 For 2023, in the case of a State that does not submit an application under subsection (a) by the 90-day submission date applicable to such year under subsection (a)(1) and in the case of a State that does submit such an application by such date that is not approved, the Administrator, in consultation with the State insurance commissioner, shall, from the amount calculated under paragraph (4) for such year, carry out the purpose described in paragraph (3) in such State for such year. (2) 2024 For 2024 or a subsequent year, in the case of a State that does not have in effect an approved application under this section for such year, the Administrator, in consultation with the State insurance commissioner, shall, from the amount calculated under paragraph (4) for such year, carry out the purpose described in paragraph (3) in such State for such year. (3) Specified use The amount described in paragraph (4), with respect to 2023 or a subsequent year, shall be used to carry out the purpose described in section 1352(a)(1) in each State described in paragraph (1) or (2) for such year, as applicable, by providing reinsurance payments to health insurance issuers with respect to attachment range claims (as defined in section 1354(b)(2)), using the dollar amounts specified in subparagraph (B) of such section for such year) in an amount equal to, subject to paragraph (5), the percentage (specified for such year by the Secretary under such subparagraph) of the amount of such claims. (4) Amount described The amount described in this paragraph, with respect to 2023 or a subsequent year, is the amount equal to the total sum of amounts that the Secretary would otherwise estimate under section 1354(b)(2)(A)(i) for such year for each State described in paragraph (1) or (2) for such year, as applicable, if each such State were not so described for such year. (5) Adjustment For purposes of this subsection, the Secretary may apply a percentage under paragraph (3) with respect to a year that is less than the percentage otherwise specified in section 1354(b)(2)(B) for such year, if the cost of paying the total eligible attachment range claims for States described in this subsection for such year at such percentage otherwise specified would exceed the amount calculated under paragraph (4) for such year. 1354. Allocations (a) Appropriation For the purpose of providing allocations for States under subsection (b) and payments under section 1353(b) there is appropriated, out of any money in the Treasury not otherwise appropriated, $10,000,000,000 for 2023 and each subsequent year. (b) Allocations (1) Payment (A) In general From amounts appropriated under subsection (a) for a year, the Secretary shall, with respect to a State not described in section 1353(b) for such year and not later than the date specified under subparagraph (B) for such year, allocate for such State the amount determined for such State and year under paragraph (2). (B) Specified date For purposes of subparagraph (A), the date specified in this subparagraph is— (i) for 2023, the date that is 45 days after the date of the enactment of this part; and (ii) for 2024 or a subsequent year, January 1 of the respective year. (C) Notifications of allocation amounts For 2024 and each subsequent year, the Secretary shall notify each State of the amount determined for such State under paragraph (2) for such year by not later than January 1 of the previous year. (2) Allocation amount determinations (A) In general For purposes of paragraph (1), the amount determined under this paragraph for a year for a State described in paragraph (1)(A) for such year is the amount equal to— (i) the amount that the Secretary estimates would be expended under this part for such year on attachment range claims of individuals residing in such State if such State used such funds only for the purpose described in paragraph (1) of section 1352(a) at the dollar amounts and percentage specified under subparagraph (B) for such year; minus (ii) the amount, if any, by which the Secretary determines— (I) the estimated amount of premium tax credits under section 36B (II) the estimated amount of premium tax credits under section 36B For purposes of the previous sentence and section 1353(b)(3), the term attachment range claims (B) Specifications For purposes of subparagraph (A) and section 1353(b)(3), the Secretary shall determine the dollar amounts and the percentage to be specified under this subparagraph for a year in a manner to ensure that the total amount of expenditures under this part for such year is estimated to equal the total amount appropriated for such year under subsection (a) if such expenditures were used solely for the purpose described in paragraph (1) of section 1352(a) for attachment range claims at the dollar amounts and percentage so specified for such year. (3) Availability Funds allocated to a State under this subsection for a year shall remain available through the end of the subsequent year. . (b) Basic Health Program funding adjustments Section 1331 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18051 (1) in subsection (a), by adding at the end the following new paragraph: (3) Provision of information on qualified health plan premiums (A) In general The program described in paragraph (1) shall provide that a State may not establish a basic health program unless such State furnishes to the Secretary, with respect to each qualified health plan offered in such State during a year that receives any reinsurance payment from funds made available under part 6 for such year, the adjusted premium amount (as defined in subparagraph (B)) for each such plan and year. (B) Adjusted premium amount defined For purposes of subparagraph (A), the term adjusted premium amount ; and (2) in subsection (d)(3)(A)(ii), by adding at the end the following new sentence: In making such determination, the Secretary shall calculate the value of such premium tax credits that would have been provided to such individuals enrolled through a basic health program established by a State during a year using the adjusted premium amounts (as defined in subsection (a)(3)(B)) for qualified health plans offered in such State during such year.

Summary: State Health Care Premium Reduction Act of 2021 This bill establishes and provides funding for the Improve Health Insurance Affordability Fund. States must use allocated funds to (1) issue reinsurance payments to health insurers (i.e., reimbursements to protect insurers against exceedingly high claims) for individual health insurance coverage, or (2) provide other assistance to reduce out-of-pocket costs (e.g., copayments, coinsurance, and deductibles) for qualified health plans offered in the individual market through an exchange. Reinsurance payments using such funds may not be applied to (1) grandfathered health plans in place on March 23, 2010, (2) non-grandfathered transitional plans meeting specified requirements identified by the Centers for Medicare &amp; Medicaid Services (CMS), or (3) student health insurance plans provided by institutions of higher education. The bill appropriates $10 billion per year for the fund, which the CMS must distribute to states in accordance with a specified methodology based on the estimated amount of reinsurance payments for individuals in a state during the given year, subject to specified deductions. Additionally, states must submit applications explaining how they will use such funds. In the event that a state does not submit an application, the bill directs the CMS to allocate the calculated funding amount to reinsurance programs in that state.