Premium Reduction Act of 2019

To provide support to States to establish invisible high-risk pool or reinsurance programs. 1. Short title This Act may be cited as the Premium Reduction Act of 2019 2. Invisible high-risk pool and reinsurance programs (a) State grants under waivers Section 1332(a) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18052(a) (1) by redesignating paragraphs (4), (5), and (6) as paragraphs (6), (7), and (8), respectively; and (2) by inserting after paragraph (3) the following: (4) Federal funding for invisible high-risk pool and reinsurance programs (A) Allocations (i) Methodology Not later than 45 days after the date of enactment of this Act, the Secretary, in consultation with the National Association of Insurance Commissioners, shall specify an allocation methodology for determining the amount of funds appropriated under section 2(b) of the Premium Reduction Act of 2019 Premium Reduction Act of 2019 (ii) Annual determinations The Secretary shall determine the allocations to States described in clause (i) for each calendar year, using the methodology determined under clause (i) and taking into consideration the experiences of other States with respect to participation in an Exchange and premium tax credits, cost-sharing reductions, or small business credits under sections 36B of the Internal Revenue Code of 1986 or under part I of subtitle E provided to residents of such States. (B) State grants From amounts appropriated under section 2(b)(1) of the Premium Reduction Act of 2019 (i) For each of fiscal years 2020 through 2024, out of amounts appropriated under subparagraph (A) of such section 2(b)(1), for administrative costs of the State associated with preparing and submitting information described in paragraph (1)(B) that includes an invisible high-risk pool or reinsurance program that meets the requirements of subsection (f)(2), or costs associated with the establishment of such invisible high-risk pool or reinsurance program. (ii) For each of fiscal years 2021 through 2023, out of amounts appropriated under subparagraph (B) of such section 2(b)(1), for the establishment or maintenance of invisible high-risk pools and reinsurance programs that meet the requirements of subsection (f)(2) and for which the State has received a waiver under this section. (C) Budget neutrality Funds awarded to a State under a grant awarded under subparagraph (B) shall not be taken into account for purposes of determining under paragraph (1) whether the State waiver is budget neutral, or determining under subsection (b)(1) whether the State waiver increases the Federal deficit. (5) Reconciliation of pass through funding and funding for invisible high-risk pool and reinsurance programs In allocating amounts under paragraphs (3) and (4), the Secretary— (A) not later than November 1 of each year, shall estimate the allocation for each State under such paragraphs for the upcoming calendar year; (B) not later than June 1 of each year, shall revise the estimate of the allocations under subparagraph (A) for each State for the current calendar year; and (C) shall reconcile amounts to be paid to each State under such paragraphs for the following calendar year by adjusting each State’s allocation for the following calendar year to account for the revisions made under subparagraph (B). . (b) Appropriations (1) In general There are authorized to be appropriated, and there are appropriated, to the Secretary of Health and Human Services (referred to in this section as the Secretary (A) $500,000,000 for fiscal year 2020; and (B) $5,000,000,000 for each of fiscal years 2021 through 2023. (2) Available until expended Amounts appropriated under this subsection shall remain available until expended. (c) Default Federal safeguard (1) In general For purposes of plan year 2021, in the case of a State that does not, by a date specified by the Secretary for each such year, in consultation with the National Association of Insurance Commissioners, have in effect a waiver under section 1332 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18052 (2) Required use for market stabilization payments to issuers The Secretary shall use any allocation for a State made pursuant to paragraph (1) to help stabilize premiums for health insurance coverage in the individual market in such State by providing payments to health insurance issuers, using payment parameters and a methodology determined by the Secretary. (d) Invisible high-Risk pools and reinsurance programs (1) In general Section 1332 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18052 (f) Invisible high-Risk pools and reinsurance programs (1) Funding With respect to a State that has received a waiver under this section to establish an invisible high-risk pool or reinsurance program described in paragraph (2), the State may fund such program, in whole or in part, using one or both of the following: (A) Amounts received through a grant described in subsection (a)(4)(B). (B) All of, or a portion of, the payments made to the State as described in subsection (a)(3), consistent with the information the State provides under subsection (a)(1)(B). (2) Program design An invisible high-risk pool or reinsurance program described in this paragraph is a program that meets any of the following: (A) An invisible high-risk pool, as defined by the State, under which health insurance issuers, with respect to designated individuals who experience higher than average health costs as determined by the State, and are enrolled in health insurance coverage offered in the individual market, cede risk to the pool, without affecting the premium paid by the designated individuals or their terms of coverage. With respect to such pool, the State, or an entity operating the pool on behalf of the State, shall establish— (i) the premium amount the ceding issuer shall pay to the reinsurance pool; (ii) the applicable attachment points or coinsurance percentages if the ceding issuer retains any portion of the risk under ceded policies; and (iii) the mechanism by which high-risk individuals are designated for cession to the pool, which may include a list of designated high-cost health conditions. (B) A reinsurance program, as defined by the State, that assumes a portion of the risk for individuals who experience higher than average health costs as determined by the State, in a manner substantially similar to the reinsurance program that operated in the State in accordance with section 1341. (C) A reinsurance program established by the State not otherwise described in this paragraph. (D) A program based on another State’s reinsurance program— (i) described in subparagraph (A), (B), or (C), for which an application has been approved under this subsection; or (ii) which was implemented prior to September 1, 2019, and which the Secretary determines meets the requirements of subparagraph (A). (3) Expedited approval (A) In general The Secretary shall provide an expedited approval process for an application under subsection (a)(1)— (i) with respect to an invisible high-risk pool or reinsurance program described in subparagraph (A), (B), or (D) of paragraph (2); or (ii) that uses a template form designed by the Administrator of the Centers for Medicare & Medicaid Services, in consultation with the Secretary of the Treasury, for an application based on a program that is the same or substantially the same as a program implemented in accordance with an application previously approved under this subsection. (B) Timeframe The Secretary shall make a determination on an application eligible for expedited review under subparagraph (A) not later than 90 days after receipt of such application. (C) Standard of review Nothing in this paragraph shall be construed as affecting the requirements under subsection (a)(1) with respect to an application approved in accordance with the process under subparagraph (A). . (2) Application Section 1332(a)(1)(B)(i) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18052(a)(1)(B)(i) , including, as applicable, a description of the State’s plan to use any amounts awarded to the State under paragraph (4) to support an invisible high-risk pool or reinsurance program consistent with subsection (f) and such information about such program as the Secretary may require

Summary: Premium Reduction Act of 2019 This bill provides funding for grants for states to establish invisible high-risk pool and reinsurance programs through applications for state innovation waivers from certain health insurance coverage requirements. A reinsurance program generally permits health insurance issuers to transfer a portion of the cost of the coverage for enrollees with large claims to the state, thus facilitating the enrollment of higher-risk individuals, including those with preexisting conditions. Similarly, an invisible high-risk pool generally identifies and enrolls higher-risk individuals and the state program pays a percentage of any insurance claims of such enrollees that exceed a predetermined amount. In states that do not establish such programs, the Department of Health and Human Services (HHS) must make market stabilization payments to health insurance issuers. The bill further directs HHS to expedite the review of state innovation waiver applications that include a high-risk pool or reinsurance program. States may model a waiver application on the application of a state that has an approved waiver for such a program.