I 
115TH CONGRESS 
1ST SESSION 
H. R. 635 
To amend the Public Health Service Act to establish a public health insurance 
option, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 24, 2017 
Ms. SCHAKOWSKY (for herself, Mr. DEUTCH, Ms. NORTON, Ms. MATSUI, Mr. 
ENGEL, Ms. PINGREE, Mr. POLIS, Mr. ELLISON, Mr. TAKANO, Mr. 
SCOTT of Virginia, Mr. POCAN, Mr. SARBANES, Ms. MCCOLLUM, Mr. 
LEWIS of Georgia, and Ms. MOORE) introduced the following bill; which 
was referred to the Committee on Energy and Commerce 
A BILL 
To amend the Public Health Service Act to establish a public 
health insurance option, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Consumer Health Op-
tions and Insurance Competition Enhancement Act’’ or 
the ‘‘CHOICE Act’’. 
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SEC. 2. PUBLIC HEALTH INSURANCE OPTION. 
(a) IN GENERAL.—Part C of title XXVII of the Pub-
lic Health Service Act (42 U.S.C. 300gg–91) is amended 
by adding at the end the following: 
‘‘SEC. 2795. PUBLIC HEALTH INSURANCE OPTION. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.—For plan years beginning 
in 2019, the Secretary shall establish, and provide 
for the offering through the Exchanges, of a quali-
fied health plan (in this Act referred to as the ‘pub-
lic health insurance option’) that provides value, 
choice, competition, and stability of affordable, high- 
quality coverage throughout the United States in ac-
cordance with this section. 
‘‘(2) PRIMARY RESPONSIBILITY.—In designing 
the public health insurance option, the primary re-
sponsibility of the Secretary shall be to create an af-
fordable health plan without compromising quality 
or access to care. 
‘‘(b) ADMINISTRATING THE PUBLIC HEALTH INSUR-
ANCE OPTION.— 
‘‘(1) OFFERED THROUGH EXCHANGES.— 
‘‘(A) EXCLUSIVE
TO
EXCHANGES.—The 
public health insurance option shall be made 
available through the Exchanges. 
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‘‘(B) 
ENSURING
A
LEVEL
PLAYING 
FIELD.—Consistent with this section, the public 
health insurance option shall comply with re-
quirements under title I of the Patient Protec-
tion and Affordable Care Act, and the amend-
ments made by that title, that are applicable to 
health plans offered through the Exchanges, in-
cluding requirements related to benefits, benefit 
levels, provider networks, notices, consumer 
protections, and cost-sharing. 
‘‘(C) PROVISION OF BENEFIT LEVELS.— 
The public health insurance option shall offer 
bronze, silver, and gold plans. 
‘‘(2) ADMINISTRATIVE CONTRACTING.— 
‘‘(A) AUTHORITIES.—The Secretary may 
enter into contracts for the purpose of per-
forming administrative functions (including 
functions described in subsection (a)(4) of sec-
tion 1874A of the Social Security Act) with re-
spect to the public health insurance option in 
the same manner as the Secretary may enter 
into contracts under subsection (a)(1) of such 
section. The Secretary shall have the same au-
thority with respect to the public health insur-
ance option as the Secretary has under such 
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subsection (a)(1) and subsection (b) of section 
1874A of the Social Security Act with respect 
to title XVIII of such Act. 
‘‘(B) TRANSFER
OF
INSURANCE
RISK.— 
Any contract under this paragraph shall not in-
volve the transfer of insurance risk from the 
Secretary to the entity entering into such con-
tract with the Secretary. 
‘‘(3) OMBUDSMAN.— 
‘‘(A) 
ESTABLISHMENT.—The 
Secretary 
shall establish an office of the ombudsman for 
the public health insurance option. 
‘‘(B) DUTIES.—Such ombudsman shall— 
‘‘(i) have duties with respect to the 
public health insurance option similar to 
the duties of the Medicare Beneficiary Om-
budsman under section 1808(c)(2) of the 
Social Security Act; and 
‘‘(ii) work with States to ensure that 
information and notice is provided that the 
public health insurance option is one of the 
health plans available through an Ex-
change. 
‘‘(4) STATE ADVISORY COUNCIL.— 
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‘‘(A) ESTABLISHMENT.—A State may es-
tablish a public or nonprofit entity to serve as 
the State Advisory Council to provide rec-
ommendations to the Secretary on the oper-
ations and policies of the public health insur-
ance option offered through the Exchange oper-
ating in the State. 
‘‘(B) RECOMMENDATIONS.—A State Advi-
sory Council established under subparagraph 
(A) shall provide recommendations on at least 
the following: 
‘‘(i) Policies and procedures to inte-
grate quality improvement and cost con-
tainment mechanisms into the health care 
delivery system. 
‘‘(ii) Mechanisms to facilitate public 
awareness of the availability of the public 
health insurance option. 
‘‘(iii) Alternative payment models and 
value-based insurance design under the 
public health insurance option that encour-
age quality improvement and cost control. 
‘‘(C) MEMBERS.—The members of any 
State Advisory Council shall be representatives 
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of the public and include health care consumers 
and health care providers. 
‘‘(D) APPLICABILITY
OF
RECOMMENDA-
TIONS.—The Secretary may apply the rec-
ommendations of a State Advisory Council to 
the public health insurance option in that State, 
in any other State, or in all States. 
‘‘(5) DATA COLLECTION.—The Secretary shall 
collect such data as may be required— 
‘‘(A) to establish rates for premiums and 
health care provider reimbursement under sub-
section (c); and 
‘‘(B) for other purposes under this section, 
including to improve quality, and reduce racial, 
ethnic, and other disparities, in health and 
health care. 
‘‘(c) FINANCING THE PUBLIC HEALTH INSURANCE 
OPTION.— 
‘‘(1) PREMIUMS.— 
‘‘(A) 
ESTABLISHMENT.—The 
Secretary 
shall establish geographically adjusted premium 
rates for the public health insurance option— 
‘‘(i) in a manner that complies with 
the requirement for premium rates under 
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subparagraph (C) and considers the data 
collected under subsection (b)(4); and 
‘‘(ii) at a level sufficient to fully fi-
nance— 
‘‘(I) the costs of health benefits 
provided by the public health insur-
ance option; and 
‘‘(II) administrative costs related 
to operating the public health insur-
ance option. 
‘‘(B) CONTINGENCY
MARGIN.—In estab-
lishing premium rates under subparagraph (A), 
the Secretary shall include an appropriate 
amount for a contingency margin. 
‘‘(C) VARIATIONS IN PREMIUM RATES.— 
The premium rate charged for the public health 
insurance option may not vary except as pro-
vided under section 2701. 
‘‘(2) HEALTH CARE PROVIDER PAYMENT RATES 
FOR ITEMS AND SERVICES.— 
‘‘(A) IN GENERAL.— 
‘‘(i) RATES NEGOTIATED BY THE SEC-
RETARY.—Not later than January 1, 2018, 
and except as provided in clause (ii), the 
Secretary shall, through a negotiated 
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agreement with health care providers, es-
tablish rates for reimbursing health care 
providers for providing the benefits covered 
by the public health insurance option. 
‘‘(ii) 
MEDICARE
REIMBURSEMENT 
RATES.—If the Secretary and health care 
providers are unable to reach a negotiated 
agreement on a reimbursement rate, the 
Secretary shall reimburse providers at 
rates determined for equivalent items and 
services under the original medicare fee- 
for-service program under parts A and B 
of title XVIII of the Social Security Act. 
‘‘(iii) FOR NEW SERVICES.—The Sec-
retary shall modify reimbursement rates 
described in clause (ii) in order to accom-
modate payments for services, such as 
well-child visits, that are not otherwise cov-
ered under the original medicare fee-for- 
service program. 
‘‘(B) PRESCRIPTION
DRUGS.—Any pay-
ment rate under this subsection for a prescrip-
tion drug shall be at a rate negotiated by the 
Secretary. If the Secretary is unable to reach a 
negotiated agreement on such a reimbursement 
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rate, the Secretary shall use rates determined 
for equivalent drugs paid for under the original 
medicare fee-for-service program. The Secretary 
shall modify such rates in order to accommo-
date payments for drugs that are not otherwise 
covered under the original medicare fee-for- 
service program. 
‘‘(3) ACCOUNT.— 
‘‘(A) ESTABLISHMENT.—There is estab-
lished in the Treasury of the United States an 
account for the receipts and disbursements at-
tributable to the operation of the public health 
insurance option, including the start-up funding 
under subparagraph (C) and appropriations au-
thorized under subparagraph (D). 
‘‘(B) PROHIBITION OF STATE IMPOSITION 
OF TAXES.—Section 1854(g) of the Social Se-
curity Act shall apply to receipts and disburse-
ments described in subparagraph (A) in the 
same manner as such section applies to pay-
ments or premiums described in such section. 
‘‘(C) START-UP FUNDING.— 
‘‘(i) AUTHORIZATION OF FUNDING.— 
There are authorized to be appropriated 
such sums as may be necessary to estab-
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lish the public health insurance option and 
cover 90 days of claims reserves based on 
projected enrollment. 
‘‘(ii) AMORTIZATION
OF
START-UP 
FUNDING.—The Secretary shall provide for 
the repayment of the startup funding pro-
vided under clause (i) to the Treasury in 
an amortized manner over the 10-year pe-
riod beginning on January 1, 2019. 
‘‘(D) ADDITIONAL AUTHORIZATION OF AP-
PROPRIATIONS.—To carry out paragraph (2) of 
subsection (b), there are authorized to be ap-
propriated such sums as may be necessary. 
‘‘(d) HEALTH CARE PROVIDER PARTICIPATION.— 
‘‘(1) PROVIDER PARTICIPATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish conditions of participation for health 
care providers under the public health insurance 
option. 
‘‘(B) LICENSURE
OR
CERTIFICATION.— 
The Secretary shall not allow a health care pro-
vider to participate in the public health insur-
ance option unless such provider is appro-
priately licensed or certified under State law. 
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‘‘(2) ESTABLISHMENT
OF
A
PROVIDER
NET-
WORK.— 
‘‘(A) MEDICARE AND MEDICAID PARTICI-
PATING
PROVIDERS.—A health care provider 
that is a participating provider of services or 
supplier under the Medicare program under 
title XVIII of the Social Security Act or under 
a State Medicaid plan under title XIX of such 
Act is a participating provider in the public 
health insurance option unless the health care 
provider opts out of participating in the public 
health insurance option through a process es-
tablished by the Secretary. 
‘‘(B) ADDITIONAL PROVIDERS.—The Sec-
retary shall establish a process to allow health 
care providers not described in subparagraph 
(A) to become participating providers in the 
public health insurance option.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) TREATMENT
AS
A
QUALIFIED
HEALTH 
PLAN.—Section 1301(a)(2) of the Patient Protection 
and Affordable Care Act (42 U.S.C. 18021(a)(2)) is 
amended— 
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(A) in the paragraph heading, by inserting 
‘‘, THE PUBLIC HEALTH INSURANCE OPTION,’’ 
before ‘‘AND’’; and 
(B) by inserting ‘‘the public health insur-
ance option under section 2795 of the Public 
Health Service Act,’’ before ‘‘and a multi-State 
plan’’. 
(2) LEVEL PLAYING FIELD.—Section 1324(a) 
of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18044(a)) is amended by inserting ‘‘the 
public health insurance option under section 2795 of 
the Public Health Service Act,’’ before ‘‘or a multi- 
State qualified health plan’’. 
Æ 
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