1364 
annual open enrollment period dur-
ing which an Exchange-eligible indi-
vidual or employer may elect to en-
roll 
in 
an 
Exchange-participating 
health benefits plan for the following 
plan year and an enrollment period 
for affordability credits under sub-
title C. Such periods shall be during 
September through November of each 
year, or such other time that would 
maximize 
timeliness 
of 
income 
verification for purposes of such sub-
title. The open enrollment period 
shall not be less than 30 days. 
(B) 
SPECIAL
ENROLLMENT.—The 
Commissioner shall also provide for 
special enrollment periods to take 
into account special circumstances of 
individuals and employers, such as an 
individual who— 
(i) loses acceptable coverage; 
(ii) experiences a change in 
marital or other dependent sta-
tus; 
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(iii) moves outside the service 
area 
of 
the 
Exchange-partici-
pating health benefits plan in 
which the individual is enrolled; 
or 
(iv) experiences a significant 
change in income. 
(C) ENROLLMENT
INFORMATION.— 
The Commissioner shall provide for 
the broad dissemination of informa-
tion to prospective enrollees on the 
enrollment process, including before 
each open enrollment period. In car-
rying out the previous sentence, the 
Commissioner may work with other 
appropriate entities to facilitate such 
provision of information. 
(3) AUTOMATIC ENROLLMENT FOR NON- 
MEDICAID ELIGIBLE INDIVIDUALS.— 
(A) IN
GENERAL.—The Commis-
sioner shall provide for a process 
under which individuals who are Ex-
change-eligible individuals described 
in subparagraph (B) are automati-
cally enrolled under an appropriate 
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Exchange-participating health bene-
fits plan. Such process may involve a 
random assignment or some other 
form of assignment that takes into ac-
count the health care providers used 
by the individual involved or such 
other relevant factors as the Commis-
sioner may specify. 
(B) SUBSIDIZED
INDIVIDUALS
DE-
SCRIBED.—An individual described in 
this subparagraph is an Exchange-eli-
gible individual who is either of the 
following: 
(i) AFFORDABILITY
CREDIT
ELI-
GIBLE
INDIVIDUALS.—The 
indi-
vidual— 
(I) has applied for, and 
been determined eligible for, 
affordability 
credits 
under 
subtitle C; 
(II) has not opted out from 
receiving such affordability 
credit; and 
(III) does not otherwise 
enroll in another Exchange- 
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participating health benefits 
plan. 
(ii) INDIVIDUALS ENROLLED IN A 
TERMINATED PLAN.—The individual 
is enrolled in an Exchange-par-
ticipating health benefits plan 
that is terminated (during or at 
the end of a plan year) and who 
does not otherwise enroll in an-
other 
Exchange-participating 
health benefits plan. 
(4) DIRECT PAYMENT OF PREMIUMS TO 
PLANS.—Under the enrollment process, in-
dividuals enrolled in an Exchange-par-
ticipating health benefits plan shall pay 
such plans directly, and not through the 
Commissioner or the Health Insurance 
Exchange. 
(c) COVERAGE
INFORMATION
AND
ASSIST-
ANCE.— 
(1) 
COVERAGE
INFORMATION.—The 
Commissioner shall provide for the broad 
dissemination 
of 
information 
on 
Ex-
change-participating 
health 
benefits 
plans offered under this title. Such infor-
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mation shall be provided in a compara-
tive manner, and shall include informa-
tion on benefits, premiums, cost-sharing, 
quality, provider networks, and con-
sumer satisfaction. 
(2) 
CONSUMER
ASSISTANCE
WITH 
CHOICE.—To provide assistance to Ex-
change-eligible individuals and employ-
ers, the Commissioner shall— 
(A) provide for the operation of a 
toll-free telephone hotline to respond 
to requests for assistance and main-
tain an Internet website through 
which individuals may obtain infor-
mation on coverage under Exchange- 
participating health benefits plans 
and file complaints; 
(B) develop and disseminate in-
formation to Exchange-eligible enroll-
ees on their rights and responsibil-
ities; 
(C) assist Exchange-eligible indi-
viduals in selecting Exchange-partici-
pating health benefits plans and ob-
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taining benefits through such plans; 
and 
(D) 
ensure 
that 
the 
Internet 
website described in subparagraph 
(A) and the information described in 
subparagraph (B) is developed using 
plain language (as defined in section 
133(a)(2)). 
(3) USE
OF
OTHER
ENTITIES.—In car-
rying out this subsection, the Commis-
sioner may work with other appropriate 
entities to facilitate the dissemination of 
information under this subsection and to 
provide assistance as described in para-
graph (2). 
(d) SPECIAL DUTIES RELATED TO MEDICAID 
AND CHIP.— 
(1) 
COVERAGE
FOR
CERTAIN 
NEWBORNS.— 
(A) IN GENERAL.—In the case of a 
child born in the United States who 
at the time of birth is not otherwise 
covered under acceptable coverage, 
for the period of time beginning on 
the date of birth and ending on the 
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date the child otherwise is covered 
under acceptable coverage (or, if ear-
lier, the end of the month in which 
the 60-day period, beginning on the 
date of birth, ends), the child shall be 
deemed— 
(i) to be a non-traditional 
Medicaid eligible individual (as 
defined in subsection (e)(5)) for 
purposes of this division and 
Medicaid; and 
(ii) to have elected to enroll in 
Medicaid through the application 
of paragraph (3). 
(B) EXTENDED TREATMENT AS TRADI-
TIONAL
MEDICAID
ELIGIBLE
INDI-
VIDUAL.—In the case of a child de-
scribed in subparagraph (A) who at 
the end of the period referred to in 
such subparagraph is not otherwise 
covered under acceptable coverage, 
the child shall be deemed (until such 
time as the child obtains such cov-
erage or the State otherwise makes a 
determination of the child’s eligibility 
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for medical assistance under its Med-
icaid 
plan 
pursuant 
to 
section 
1943(c)(1) of the Social Security Act) 
to be a traditional Medicaid eligible 
individual 
described 
in 
section 
1902(l)(1)(B) of such Act. 
(2) CHIP TRANSITION.—A child who, as 
of the day before the first day of Y1, is el-
igible for child health assistance under 
title XXI of the Social Security Act (in-
cluding a child receiving coverage under 
an arrangement described in section 
2101(a)(2) of such Act) is deemed as of 
such first day to be an Exchange-eligible 
individual unless the individual is a tra-
ditional Medicaid eligible individual as of 
such day. 
(3) AUTOMATIC
ENROLLMENT
OF
MED-
ICAID
ELIGIBLE
INDIVIDUALS
INTO
MED-
ICAID.—The Commissioner shall provide 
for a process under which an individual 
who is described in section 202(d)(3) and 
has not elected to enroll in an Exchange- 
participating health benefits plan is auto-
matically enrolled under Medicaid. 
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(4) 
NOTIFICATIONS.—The 
Commis-
sioner shall notify each State in Y1 and 
for purposes of section 1902(gg)(1) of the 
Social Security Act (as added by section 
1703(a)) whether the Health Insurance 
Exchange can support enrollment of chil-
dren described in paragraph (2) in such 
State in such year. 
(e) MEDICAID COVERAGE FOR MEDICAID ELI-
GIBLE INDIVIDUALS.— 
(1) IN GENERAL.— 
(A) CHOICE FOR LIMITED EXCHANGE- 
ELIGIBLE INDIVIDUALS.—As part of the 
enrollment process under subsection 
(b), the Commissioner shall provide 
the option, in the case of an Ex-
change-eligible individual described 
in section 202(d)(3), for the individual 
to elect to enroll under Medicaid in-
stead of under an Exchange-partici-
pating health benefits plan. Such an 
individual may change such election 
during an enrollment period under 
subsection (b)(2). 
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(B) MEDICAID ENROLLMENT OBLIGA-
TION.—An 
Exchange 
eligible 
indi-
vidual may apply, in the manner de-
scribed in section 241(b)(1), for a de-
termination of whether the individual 
is a Medicaid-eligible individual. If 
the individual is determined to be so 
eligible, the Commissioner, through 
the Medicaid memorandum of under-
standing, shall provide for the enroll-
ment of the individual under the 
State Medicaid plan in accordance 
with the Medicaid memorandum of 
understanding under paragraph (4). 
In the case of such an enrollment, the 
State shall provide for the same peri-
odic redetermination of eligibility 
under Medicaid as would otherwise 
apply if the individual had directly 
applied for medical assistance to the 
State Medicaid agency. 
(2) NON-TRADITIONAL
MEDICAID
ELIGI-
BLE INDIVIDUALS.—In the case of a non-tra-
ditional Medicaid eligible individual de-
scribed in section 202(d)(3) who elects to 
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enroll under Medicaid under paragraph 
(1)(A), the Commissioner shall provide for 
the enrollment of the individual under 
the State Medicaid plan in accordance 
with the Medicaid memorandum of un-
derstanding under paragraph (4). 
(3) COORDINATED
ENROLLMENT
WITH 
STATE
THROUGH
MEMORANDUM
OF
UNDER-
STANDING.—The Commissioner, in con-
sultation with the Secretary of Health 
and Human Services, shall enter into a 
memorandum 
of 
understanding 
with 
each State (each in this division referred 
to as a ‘‘Medicaid memorandum of under-
standing’’) with respect to coordinating 
enrollment of individuals in Exchange- 
participating health benefits plans and 
under the State’s Medicaid program con-
sistent with this section and to otherwise 
coordinate the implementation of the 
provisions of this division with respect to 
the 
Medicaid 
program. 
Such 
memo-
randum shall permit the exchange of in-
formation consistent with the limitations 
described in section 1902(a)(7) of the So-
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1375 
cial Security Act. Nothing in this section 
shall be construed as permitting such 
memorandum to modify or vitiate any re-
quirement of a State Medicaid plan. 
(4) MEDICAID
ELIGIBLE
INDIVIDUALS.— 
For purposes of this division: 
(A) 
MEDICAID
ELIGIBLE
INDI-
VIDUAL.—The term ‘‘Medicaid eligible 
individual’’ means an individual who 
is eligible for medical assistance 
under Medicaid. 
(B) TRADITIONAL
MEDICAID
ELIGI-
BLE
INDIVIDUAL.—The 
term 
‘‘tradi-
tional Medicaid eligible individual’’ 
means a Medicaid eligible individual 
other than an individual who is— 
(i) a Medicaid eligible indi-
vidual by reason of the applica-
tion of subclause (VIII) of section 
1902(a)(10)(A)(i) of the Social Se-
curity Act; or 
(ii) a childless adult not de-
scribed in section 1902(a)(10)(A) 
or (C) of such Act (as in effect as 
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of the day before the date of the 
enactment of this Act). 
(C) NON-TRADITIONAL MEDICAID ELI-
GIBLE INDIVIDUAL.—The term ‘‘non-tra-
ditional Medicaid eligible individual’’ 
means a Medicaid eligible individual 
who is not a traditional Medicaid eli-
gible individual. 
(f) EFFECTIVE CULTURALLY
AND LINGUIS-
TICALLY
APPROPRIATE
COMMUNICATION.—In 
carrying out this section, the Commissioner 
shall establish effective methods for commu-
nicating in plain language and a culturally 
and linguistically appropriate manner. 
SEC. 206. OTHER FUNCTIONS. 
(a) COORDINATION OF AFFORDABILITY CRED-
ITS.—The Commissioner shall coordinate the 
distribution of affordability premium and 
cost-sharing credits under subtitle C to QHBP 
offering entities offering Exchange-partici-
pating health benefits plans. 
(b) COORDINATION OF RISK POOLING.—The 
Commissioner shall establish a mechanism 
whereby there is an adjustment made of the 
premium amounts payable among QHBP of-
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fering 
entities 
offering 
Exchange-partici-
pating health benefits plans of premiums col-
lected for such plans that takes into account 
(in a manner specified by the Commissioner) 
the differences in the risk characteristics of 
individuals and employers enrolled under the 
different Exchange-participating health bene-
fits plans offered by such entities so as to min-
imize the impact of adverse selection of en-
rollees among the plans offered by such enti-
ties. 
(c) SPECIAL INSPECTOR GENERAL FOR THE 
HEALTH INSURANCE EXCHANGE.— 
(1) 
ESTABLISHMENT; 
APPOINTMENT.— 
There is hereby established the Office of 
the Special Inspector General for the 
Health Insurance Exchange, to be headed 
by a Special Inspector General for the 
Health Insurance Exchange (in this sub-
section referred to as the ‘‘Special Inspec-
tor General’’) to be appointed by the 
President, by and with the advice and 
consent of the Senate. The nomination of 
an individual as Special Inspector Gen-
eral shall be made as soon as practicable 
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after the establishment of the program 
under this subtitle. 
(2) DUTIES.—The Special Inspector 
General shall— 
(A) conduct, supervise, and co-
ordinate audits, evaluations and in-
vestigations of the Health Insurance 
Exchange to protect the integrity of 
the Health Insurance Exchange, as 
well as the health and welfare of par-
ticipants in the Exchange; 
(B) report both to the Commis-
sioner and to the Congress regarding 
program and management problems 
and 
recommendations 
to 
correct 
them; 
(C) have other duties (described 
in paragraphs (2) and (3) of section 
121 of division A of Public Law 110– 
343) in relation to the duties de-
scribed in the previous subpara-
graphs; and 
(D) have the authorities provided 
in section 6 of the Inspector General 
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Act of 1978 in carrying out duties 
under this paragraph. 
(3) APPLICATION OF OTHER SPECIAL IN-
SPECTOR GENERAL PROVISIONS.—The provi-
sions of subsections (b) (other than para-
graphs (1) and (3)), (d) (other than para-
graph (1)), and (e) of section 121 of divi-
sion A of the Emergency Economic Sta-
bilization Act of 2009 (Public Law 110– 
343) shall apply to the Special Inspector 
General under this subsection in the 
same manner as such provisions apply to 
the Special Inspector General under such 
section. 
(4) REPORTS.—Not later than one year 
after the confirmation of the Special In-
spector General, and annually thereafter, 
the Special Inspector General shall sub-
mit to the appropriate committees of 
Congress a report summarizing the ac-
tivities of the Special Inspector General 
during the one year period ending on the 
date such report is submitted. 
(5) TERMINATION.—The Office of the 
Special Inspector General shall terminate 
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five years after the date of the enactment 
of this Act. 
SEC. 207. HEALTH INSURANCE EXCHANGE TRUST FUND. 
(a) ESTABLISHMENT OF HEALTH INSURANCE 
EXCHANGE
TRUST
FUND.—There is created 
within the Treasury of the United States a 
trust fund to be known as the ‘‘Health Insur-
ance Exchange Trust Fund’’ (in this section 
referred to as the ‘‘Trust Fund’’), consisting of 
such amounts as may be appropriated or 
credited to the Trust Fund under this section 
or any other provision of law. 
(b) PAYMENTS
FROM
TRUST
FUND.—The 
Commissioner shall pay from time to time 
from the Trust Fund such amounts as the 
Commissioner determines are necessary to 
make payments to operate the Health Insur-
ance Exchange, including payments under 
subtitle C (relating to affordability credits). 
(c) TRANSFERS TO TRUST FUND.— 
(1) DEDICATED
PAYMENTS.—There is 
hereby appropriated to the Trust Fund 
amounts equivalent to the following: 
(A) TAXES ON INDIVIDUALS NOT OB-
TAINING
ACCEPTABLE
COVERAGE.—The 
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bajohnson on DSK2BSOYB1PROD with BILLS
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amounts received in the Treasury 
under section 59B of the Internal 
Revenue Code of 1986 (relating to re-
quirement of health insurance cov-
erage for individuals). 
(B) EMPLOYMENT TAXES ON EMPLOY-
ERS
NOT
PROVIDING
ACCEPTABLE
COV-
ERAGE.—The amounts received in the 
Treasury under section 3111(c) of the 
Internal Revenue Code of 1986 (relat-
ing to employers electing to not pro-
vide health benefits). 
(C) EXCISE
TAX
ON
FAILURES
TO 
MEET
CERTAIN
HEALTH
COVERAGE
RE-
QUIREMENTS.—The amounts received 
in 
the 
Treasury 
under 
section 
4980H(b) (relating to excise tax with 
respect to failure to meet health cov-
erage participation requirements). 
(2) APPROPRIATIONS TO COVER GOVERN-
MENT
CONTRIBUTIONS.—There are hereby 
appropriated, out of any moneys in the 
Treasury not otherwise appropriated, to 
the Trust Fund, an amount equivalent to 
the amount of payments made from the 
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Trust Fund under subsection (b) plus 
such amounts as are necessary reduced 
by the amounts deposited under para-
graph (1). 
(d) APPLICATION OF CERTAIN RULES.—Rules 
similar to the rules of subchapter B of chapter 
98 of the Internal Revenue Code of 1986 shall 
apply with respect to the Trust Fund. 
SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH 
INSURANCE EXCHANGES. 
(a) IN GENERAL.—If— 
(1) a State (or group of States, subject 
to the approval of the Commissioner) ap-
plies to the Commissioner for approval of 
a State-based Health Insurance Exchange 
to operate in the State (or group of 
States); and 
(2) the Commissioner approves such 
State-based Health Insurance Exchange, 
then, subject to subsections (c) and (d), the 
State-based Health Insurance Exchange shall 
operate, instead of the Health Insurance Ex-
change, with respect to such State (or group 
of States). The Commissioner shall approve a 
State-based Health Insurance Exchange if it 
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meets the requirements for approval under 
subsection (b). 
(b) REQUIREMENTS
FOR
APPROVAL.—The 
Commissioner may not approve a State-based 
Health Insurance Exchange under this sec-
tion unless the following requirements are 
met: 
(1) The State-based Health Insurance 
Exchange must demonstrate the capacity 
to and provide assurances satisfactory to 
the Commissioner that the State-based 
Health Insurance Exchange will carry 
out the functions specified for the Health 
Insurance Exchange in the State (or 
States) involved, including— 
(A) negotiating and contracting 
with QHBP offering entities for the 
offering 
of 
Exchange-participating 
health benefits plan, which satisfy 
the standards and requirements of 
this title and title I; 
(B) enrolling Exchange-eligible in-
dividuals and employers in such State 
in such plans; 
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(C) the establishment of sufficient 
local offices to meet the needs of Ex-
change-eligible individuals and em-
ployers; 
(D) 
administering 
affordability 
credits under subtitle B using the 
same methodologies (and at least the 
same income verification methods) as 
would otherwise apply under such 
subtitle and at a cost to the Federal 
Government which does exceed the 
cost to the Federal Government if 
this section did not apply; and 
(E) enforcement activities con-
sistent with federal requirements. 
(2) There is no more than one Health 
Insurance Exchange operating with re-
spect to any one State. 
(3) The State provides assurances sat-
isfactory to the Commissioner that ap-
proval of such an Exchange will not re-
sult in any net increase in expenditures 
to the Federal Government. 
(4) The State provides for reporting 
of such information as the Commissioner 
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determines and assurances satisfactory 
to the Commissioner that it will vigor-
ously enforce violations of applicable re-
quirements. 
(5) Such other requirements as the 
Commissioner may specify. 
(c) CEASING OPERATION.— 
(1) IN GENERAL.—A State-based Health 
Insurance Exchange may, at the option of 
each State involved, and only after pro-
viding timely and reasonable notice to 
the Commissioner, cease operation as 
such an Exchange, in which case the 
Health Insurance Exchange shall operate, 
instead of such State-based Health Insur-
ance Exchange, with respect to such 
State (or States). 
(2) TERMINATION; HEALTH
INSURANCE 
EXCHANGE RESUMPTION OF FUNCTIONS.—The 
Commissioner may terminate the ap-
proval (for some or all functions) of a 
State-based Health Insurance Exchange 
under this section if the Commissioner 
determines that such Exchange no longer 
meets the requirements of subsection (b) 
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or is no longer capable of carrying out 
such functions in accordance with the re-
quirements of this subtitle. In lieu of ter-
minating such approval, the Commis-
sioner may temporarily assume some or 
all functions of the State-based Health In-
surance Exchange until such time as the 
Commissioner 
determines 
the 
State- 
based Health Insurance Exchange meets 
such requirements of subsection (b) and 
is capable of carrying out such functions 
in accordance with the requirements of 
this subtitle. 
(3) EFFECTIVENESS.—The ceasing or 
termination of a State-based Health In-
surance Exchange under this subsection 
shall be effective in such time and man-
ner as the Commissioner shall specify. 
(d) RETENTION OF AUTHORITY.— 
(1) 
AUTHORITY
RETAINED.—Enforce-
ment authorities of the Commissioner 
shall be retained by the Commissioner. 
(2) DISCRETION TO RETAIN ADDITIONAL 
AUTHORITY.—The 
Commissioner 
may 
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specify functions of the Health Insurance 
Exchange that— 
(A) may not be performed by a 
State-based 
Health 
Insurance 
Ex-
change under this section; or 
(B) may be performed by the 
Commissioner and by such a State- 
based Health Insurance Exchange. 
(e) REFERENCES.—In the case of a State- 
based Health Insurance Exchange, except as 
the Commissioner may otherwise specify 
under subsection (d), any references in this 
subtitle to the Health Insurance Exchange or 
to the Commissioner in the area in which the 
State-based Health Insurance Exchange oper-
ates shall be deemed a reference to the State- 
based Health Insurance Exchange and the 
head of such Exchange, respectively. 
(f) FUNDING.—In the case of a State-based 
Health Insurance Exchange, there shall be as-
sistance provided for the operation of such 
Exchange in the form of a matching grant 
with a State share of expenditures required. 
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Subtitle B—Public Health 
Insurance Option 
SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A 
PUBLIC HEALTH INSURANCE OPTION AS AN 
EXCHANGE-QUALIFIED 
HEALTH 
BENEFITS 
PLAN. 
(a) ESTABLISHMENT.—For years beginning 
with Y1, the Secretary of Health and Human 
Services (in this subtitle referred to as the 
‘‘Secretary’’) shall provide for the offering of 
an Exchange-participating health benefits 
plan (in this division referred to as the ‘‘pub-
lic health insurance option’’) that ensures 
choice, competition, and stability of afford-
able, high quality coverage throughout the 
United States in accordance with this sub-
title. In designing the option, the Secretary’s 
primary responsibility is to create a low-cost 
plan without compromising quality or access 
to care. 
(b) OFFERING
AS
AN
EXCHANGE-PARTICI-
PATING HEALTH BENEFITS PLAN.— 
(1) EXCLUSIVE TO THE EXCHANGE.—The 
public health insurance option shall only 
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be made available through the Health In-
surance Exchange. 
(2) ENSURING A LEVEL PLAYING FIELD.— 
Consistent with this subtitle, the public 
health insurance option shall comply 
with requirements that are applicable 
under this title to an Exchange-partici-
pating health benefits plan, including re-
quirements related to benefits, benefit 
levels, provider networks, notices, con-
sumer protections, and cost sharing. 
(3) PROVISION OF BENEFIT LEVELS.—The 
public health insurance option— 
(A) shall offer basic, enhanced, 
and premium plans; and 
(B) may offer premium-plus plans. 
(c) 
ADMINISTRATIVE
CONTRACTING.—The 
Secretary may enter into contracts for the 
purpose of performing administrative func-
tions (including functions described in sub-
section (a)(4) of section 1874A of the Social Se-
curity Act) with respect to the public health 
insurance option in the same manner as the 
Secretary may enter into contracts under sub-
section (a)(1) of such section. The Secretary 
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be treated as a QHBP offering entity offering 
an Exchange-participating health benefits 
plan. 
(g) ACCESS TO FEDERAL COURTS.—The pro-
visions of Medicare (and related provisions of 
title II of the Social Security Act) relating to 
access of Medicare beneficiaries to Federal 
courts for the enforcement of rights under 
Medicare, including with respect to amounts 
in controversy, shall apply to the public 
health insurance option and individuals en-
rolled under such option under this title in 
the same manner as such provisions apply to 
Medicare and Medicare beneficiaries. 
SEC. 222. PREMIUMS AND FINANCING. 
(a) ESTABLISHMENT OF PREMIUMS.— 
(1) IN GENERAL.—The Secretary shall 
establish 
geographically-adjusted 
pre-
mium rates for the public health insur-
ance option in a manner— 
(A) that complies with the pre-
mium rules established by the Com-
missioner under section 113 for Ex-
change-participating health benefit 
plans; and 
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(B) at a level sufficient to fully fi-
nance the costs of— 
(i) health benefits provided by 
the public health insurance op-
tion; and 
(ii) administrative costs re-
lated to operating the public 
health insurance option. 
(2) CONTINGENCY
MARGIN.—In estab-
lishing premium rates under paragraph 
(1), the Secretary shall include an appro-
priate amount for a contingency margin. 
(b) ACCOUNT.— 
(1) ESTABLISHMENT.—There is estab-
lished in the Treasury of the United 
States an Account for the receipts and 
disbursements attributable to the oper-
ation of the public health insurance op-
tion, 
including 
the 
start-up 
funding 
under paragraph (2). Section 1854(g) of 
the Social Security Act shall apply to re-
ceipts described in the previous sentence 
in the same manner as such section ap-
plies to payments or premiums described 
in such section. 
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(2) START-UP FUNDING.— 
(A) IN GENERAL.—In order to pro-
vide for the establishment of the pub-
lic health insurance option there is 
hereby appropriated to the Secretary, 
out of any funds in the Treasury not 
otherwise 
appropriated, 
$2,000,000,000. In order to provide for 
initial claims reserves before the col-
lection of premiums, there is hereby 
appropriated to the Secretary, out of 
any funds in the Treasury not other-
wise appropriated, such sums as nec-
essary to cover 90 days worth of 
claims reserves based on projected 
enrollment. 
(B) 
AMORTIZATION
OF
START-UP 
FUNDING.—The Secretary shall pro-
vide for the repayment of the startup 
funding 
provided 
under 
subpara-
graph (A) to the Treasury in an amor-
tized manner over the 10-year period 
beginning with Y1. 
(C) LIMITATION ON FUNDING.—Noth-
ing in this section shall be construed 
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as authorizing any additional appro-
priations to the Account, other than 
such amounts as are otherwise pro-
vided with respect to other Exchange- 
participating health benefits plans. 
SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES. 
(a) RATES ESTABLISHED BY SECRETARY.— 
(1) IN GENERAL.—The Secretary shall 
establish payment rates for the public 
health insurance option for services and 
health care providers consistent with this 
section and may change such payment 
rates in accordance with section 224. 
(2) INITIAL PAYMENT RULES.— 
(A) IN
GENERAL.—Except as pro-
vided in subparagraph (B) and sub-
section (b)(1), during Y1, Y2, and Y3, 
the Secretary shall base the payment 
rates under this section for services 
and providers described in paragraph 
(1) on the payment rates for similar 
services and providers under parts A 
and B of Medicare. 
(B) EXCEPTIONS.— 
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(i) PRACTITIONERS’ SERVICES.— 
Payment rates for practitioners’ 
services 
otherwise 
established 
under the fee schedule under sec-
tion 1848 of the Social Security 
Act shall be applied without re-
gard to the provisions under sub-
section (f) of such section and the 
update under subsection (d)(4) 
under such section for a year as 
applied 
under 
this 
paragraph 
shall be not less than 1 percent. 
(ii) 
ADJUSTMENTS.—The 
Sec-
retary may determine the extent 
to which Medicare adjustments 
applicable to base payment rates 
under parts A and B of Medicare 
shall apply under this subtitle. 
(3) FOR NEW SERVICES.—The Secretary 
shall modify payment rates described in 
paragraph (2) in order to accommodate 
payments for services, such as well-child 
visits, that are not otherwise covered 
under Medicare. 
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(4) 
PRESCRIPTION
DRUGS.—Payment 
rates under this section for prescription 
drugs that are not paid for under part A 
or part B of Medicare shall be at rates ne-
gotiated by the Secretary. 
(b) INCENTIVES
FOR PARTICIPATING PRO-
VIDERS.— 
(1) INITIAL INCENTIVE PERIOD.— 
(A) IN
GENERAL.—The Secretary 
shall provide, in the case of services 
described in subparagraph (B) fur-
nished during Y1, Y2, and Y3, for pay-
ment rates that are 5 percent greater 
than the rates established under sub-
section (a). 
(B) 
SERVICES
DESCRIBED.—The 
services described in this subpara-
graph are items and professional 
services, under the public health in-
surance option by a physician or 
other health care practitioner who 
participates in both Medicare and the 
public health insurance option. 
(C) SPECIAL
RULES.—A pediatri-
cian and any other health care practi-
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