IB 
Union Calendar No. 30 
115TH CONGRESS 
1ST SESSION H. R. 1628 
[Report No. 115–52] 
To provide for reconciliation pursuant to title II of the concurrent resolution 
on the budget for fiscal year 2017. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 20, 2017 
Mrs. BLACK from the Committee on the Budget, reported the following bill; 
which was committed to the Committee of the Whole House on the State 
of the Union and ordered to be printed 
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A BILL 
To provide for reconciliation pursuant to title II of the 
concurrent resolution on the budget for fiscal year 2017. 
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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 ‘‘American Health Care 
Act of 2017’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents of this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
TITLE I—ENERGY AND COMMERCE 
Subtitle A—Patient Access to Public Health Programs 
Sec. 101. The Prevention and Public Health Fund. 
Sec. 102. Community health center program. 
Sec. 103. Federal payments to States. 
Subtitle B—Medicaid Program Enhancement 
Sec. 111. Repeal of Medicaid provisions. 
Sec. 112. Repeal of Medicaid expansion. 
Sec. 113. Elimination of DSH cuts. 
Sec. 114. Reducing State Medicaid costs. 
Sec. 115. Safety net funding for non-expansion States. 
Sec. 116. Providing incentives for increased frequency of eligibility redetermina-
tions. 
Subtitle C—Per Capita Allotment for Medical Assistance 
Sec. 121. Per capita allotment for medical assistance. 
Subtitle D—Patient Relief and Health Insurance Market Stability 
Sec. 131. Repeal of cost-sharing subsidy. 
Sec. 132. Patient and State Stability Fund. 
Sec. 133. Continuous health insurance coverage incentive. 
Sec. 134. Increasing coverage options. 
Sec. 135. Change in permissible age variation in health insurance premium 
rates. 
TITLE II—COMMITTEE ON WAYS AND MEANS 
Subtitle A—Repeal and Replace of Health-Related Tax Policy 
Sec. 201. Recapture excess advance payments of premium tax credits. 
Sec. 202. Additional modifications to premium tax credit. 
Sec. 203. Premium tax credit. 
Sec. 204. Small business tax credit. 
Sec. 205. Individual mandate. 
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Sec. 206. Employer mandate. 
Sec. 207. Repeal of the tax on employee health insurance premiums and health 
plan benefits. 
Sec. 208. Repeal of tax on over-the-counter medications. 
Sec. 209. Repeal of increase of tax on health savings accounts. 
Sec. 210. Repeal of limitations on contributions to flexible spending accounts. 
Sec. 211. Repeal of medical device excise tax. 
Sec. 212. Repeal of elimination of deduction for expenses allocable to medicare 
part D subsidy. 
Sec. 213. Repeal of increase in income threshold for determining medical care 
deduction. 
Sec. 214. Repeal of Medicare tax increase. 
Sec. 215. Refundable tax credit for health insurance coverage. 
Sec. 216. Maximum contribution limit to health savings account increased to 
amount of deductible and out-of-pocket limitation. 
Sec. 217. Allow both spouses to make catch-up contributions to the same health 
savings account. 
Sec. 218. Special rule for certain medical expenses incurred before establish-
ment of health savings account. 
Subtitle B—Repeal of Certain Consumer Taxes 
Sec. 221. Repeal of tax on prescription medications. 
Sec. 222. Repeal of health insurance tax. 
Subtitle C—Repeal of Tanning Tax 
Sec. 231. Repeal of tanning tax. 
Subtitle D—Remuneration From Certain Insurers 
Sec. 241. Remuneration from certain insurers. 
Subtitle E—Repeal of Net Investment Income Tax 
Sec. 251. Repeal of net investment income tax. 
TITLE I—ENERGY AND 
COMMERCE 
Subtitle A—Patient Access to 
Public Health Programs 
SEC. 101. THE PREVENTION AND PUBLIC HEALTH FUND. 
(a) IN GENERAL.—Subsection (b) of section 4002 of 
the Patient Protection and Affordable Care Act (42 
U.S.C. 300u–11), as amended by section 5009 of the 21st 
Century Cures Act, is amended— 
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(1) in paragraph (2), by adding ‘‘and’’ at the 
end; 
(2) in paragraph (3)— 
(A) by striking ‘‘each of fiscal years 2018 
and 2019’’ and inserting ‘‘fiscal year 2018’’; 
and 
(B) by striking the semicolon at the end 
and inserting a period; and 
(3) by striking paragraphs (4) through (8). 
(b) RESCISSION OF UNOBLIGATED FUNDS.—Of the 
funds made available by such section 4002, the unobli-
gated balance at the end of fiscal year 2018 is rescinded. 
SEC. 102. COMMUNITY HEALTH CENTER PROGRAM. 
Effective as if included in the enactment of the Medi-
care Access and CHIP Reauthorization Act of 2015 (Pub-
lic Law 114–10, 129 Stat. 87), paragraph (1) of section 
221(a) of such Act is amended by inserting ‘‘, and an ad-
ditional $422,000,000 for fiscal year 2017’’ after ‘‘2017’’. 
SEC. 103. FEDERAL PAYMENTS TO STATES. 
(a) IN GENERAL.—Notwithstanding section 504(a), 
1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or 
2105(a)(1) of the Social Security Act (42 U.S.C. 704(a), 
1396a(a)(23), 
1396b(a), 
1397a, 
1397d(a)(4), 
1397bb(a)(7), 1397ee(a)(1)), or the terms of any Med-
icaid waiver in effect on the date of enactment of this Act 
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that is approved under section 1115 or 1915 of the Social 
Security Act (42 U.S.C. 1315, 1396n), for the 1-year pe-
riod beginning on the date of the enactment of this Act, 
no Federal funds provided from a program referred to in 
this subsection that is considered direct spending for any 
year may be made available to a State for payments to 
a prohibited entity, whether made directly to the prohib-
ited entity or through a managed care organization under 
contract with the State. 
(b) DEFINITIONS.—In this section: 
(1) PROHIBITED ENTITY.—The term ‘‘prohib-
ited entity’’ means an entity, including its affiliates, 
subsidiaries, successors, and clinics— 
(A) that, as of the date of enactment of 
this Act— 
(i) is an organization described in sec-
tion 501(c)(3) of the Internal Revenue 
Code of 1986 and exempt from tax under 
section 501(a) of such Code; 
(ii) is an essential community provider 
described in section 156.235 of title 45, 
Code of Federal Regulations (as in effect 
on the date of enactment of this Act), that 
is primarily engaged in family planning 
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services, reproductive health, and related 
medical care; and 
(iii) provides for abortions, other than 
an abortion— 
(I) if the pregnancy is the result 
of an act of rape or incest; or 
(II) in the case where a woman 
suffers from a physical disorder, phys-
ical injury, or physical illness that 
would, as certified by a physician, 
place the woman in danger of death 
unless an abortion is performed, in-
cluding a life-endangering physical 
condition caused by or arising from 
the pregnancy itself; and 
(B) for which the total amount of Federal 
and State expenditures under the Medicaid pro-
gram under title XIX of the Social Security Act 
in fiscal year 2014 made directly to the entity 
and to any affiliates, subsidiaries, successors, or 
clinics of the entity, or made to the entity and 
to any affiliates, subsidiaries, successors, or 
clinics of the entity as part of a nationwide 
health 
care 
provider 
network, 
exceeded 
$350,000,000. 
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(2) DIRECT
SPENDING.—The term ‘‘direct 
spending’’ has the meaning given that term under 
section 250(c) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 (2 U.S.C. 900(c)). 
Subtitle B—Medicaid Program 
Enhancement 
SEC. 111. REPEAL OF MEDICAID PROVISIONS. 
The Social Security Act is amended— 
(1) in section 1902 (42 U.S.C. 1396a)— 
(A) in subsection (a)(47)(B), by inserting 
‘‘and provided that any such election shall cease 
to be effective on January 1, 2020, and no such 
election shall be made after that date’’ before 
the semicolon at the end; and 
(B) in subsection (l)(2)(C), by inserting 
‘‘and ending December 31, 2019,’’ after ‘‘Janu-
ary 1, 2014,’’; 
(2) 
in 
section 
1915(k)(2) 
(42 
U.S.C. 
1396n(k)(2)), by striking ‘‘during the period de-
scribed in paragraph (1)’’ and inserting ‘‘on or after 
the date referred to in paragraph (1) and before 
January 1, 2020’’; and 
(3) in section 1920(e) (42 U.S.C. 1396r–1(e)), 
by striking ‘‘under clause (i)(VIII), clause (i)(IX), or 
clause (ii)(XX) of subsection (a)(10)(A)’’ and insert-
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ing ‘‘under clause (i)(VIII) or clause (ii)(XX) of sec-
tion 1902(a)(10)(A) before January 1, 2020, section 
1902(a)(10)(A)(i)(IX),’’. 
SEC. 112. REPEAL OF MEDICAID EXPANSION. 
(a) IN GENERAL.—Section 1902(a)(10)(A) of the So-
cial Security Act (42 U.S.C. 1396a(a)(10)(A)) is amend-
ed— 
(1) in clause (i)(VIII), by inserting ‘‘at the op-
tion of a State,’’ after ‘‘January 1, 2014,’’; and 
(2) in clause (ii)(XX), by inserting ‘‘and ending 
December 31, 2019,’’ after ‘‘2014,’’. 
(b) TERMINATION OF EFMAP FOR NEW ACA EX-
PANSION ENROLLEES.—Section 1905 of the Social Secu-
rity Act (42 U.S.C. 1396d) is amended— 
(1) in subsection (y)(1), in the matter preceding 
subparagraph (A), by striking ‘‘with respect to’’ and 
all that follows through ‘‘shall be’’ and inserting 
‘‘with respect to amounts expended before January 
1, 2020, by such State for medical assistance for 
newly eligible individuals described in subclause 
(VIII) of section 1902(a)(10)(A)(i) who are enrolled 
under the State plan (or a waiver of the plan) before 
such date and with respect to amounts expended 
after such date by such State for medical assistance 
for individuals described in such subclause who were 
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enrolled under such plan (or waiver of such plan) as 
of December 31, 2019, and who do not have a break 
in eligibility for medical assistance under such State 
plan (or waiver) for more than one month after such 
date, shall be’’; and 
(2) in subsection (z)(2)— 
(A) in subparagraph (A), by striking 
‘‘medical assistance for individuals’’ and all that 
follows through ‘‘shall be’’ and inserting 
‘‘amounts expended before January 1, 2020, by 
such State for medical assistance for individuals 
described in section 1902(a)(10)(A)(i)(VIII) 
who are nonpregnant childless adults with re-
spect to whom the State may require enrollment 
in benchmark coverage under section 1937 and 
who are enrolled under the State plan (or a 
waiver of the plan) before such date and with 
respect to amounts expended after such date by 
such State for medical assistance for individuals 
described in such section, who are nonpregnant 
childless adults with respect to whom the State 
may require enrollment in benchmark coverage 
under section 1937, who were enrolled under 
such plan (or waiver of such plan) as of Decem-
ber 31, 2019, and who do not have a break in 
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eligibility for medical assistance under such 
State plan (or waiver) for more than one month 
after such date, shall be’’; and 
(B) in subparagraph (B)(ii)— 
(i) in subclause (III), by adding 
‘‘and’’ at the end; and 
(ii) by striking subclauses (IV), (V), 
and (VI) and inserting the following new 
subclause: 
‘‘(IV) 2017 and each subsequent year is 80 
percent.’’. 
(c) SUNSET OF ESSENTIAL HEALTH BENEFITS RE-
QUIREMENT.—Section 1937(b)(5) of the Social Security 
Act (42 U.S.C. 1396u–7(b)(5)) is amended by adding at 
the end the following: ‘‘This paragraph shall not apply 
after December 31, 2019.’’. 
SEC. 113. ELIMINATION OF DSH CUTS. 
Section 1923(f) of the Social Security Act (42 U.S.C. 
1396r–4(f)) is amended— 
(1) in paragraph (7)— 
(A) in subparagraph (A)— 
(i) in clause (i)— 
(I) in the matter preceding sub-
clause (I), by striking ‘‘2025’’ and in-
serting ‘‘2019’’; and 
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(ii) in clause (ii)— 
(I) in subclause (I), by adding 
‘‘and’’ at the end; 
(II) in subclause (II), by striking 
the semicolon at the end and inserting 
a period; and 
(III) by striking subclauses (III) 
through (VIII); and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(C) EXEMPTION FROM EXEMPTION FOR 
NON-EXPANSION STATES.— 
‘‘(i) IN GENERAL.—In the case of a 
State that is a non-expansion State for a 
fiscal year, subparagraph (A)(i) shall not 
apply to the DSH allotment for such State 
and fiscal year. 
‘‘(ii) NO CHANGE IN REDUCTION FOR 
EXPANSION
STATES.—In the case of a 
State that is an expansion State for a fis-
cal year, the DSH allotment for such State 
and fiscal year shall be determined as if 
clause (i) did not apply. 
‘‘(iii) NON-EXPANSION
AND
EXPAN-
SION STATE DEFINED.— 
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‘‘(I) The term ‘expansion State’ 
means with respect to a fiscal year, a 
State that, as of July 1 of the pre-
ceding fiscal year, provides for eligi-
bility 
under 
clause 
(i)(VIII) 
or 
(ii)(XX) of section 1902(a)(10)(A) for 
medical assistance under this title (or 
a waiver of the State plan approved 
under section 1115). 
‘‘(II) The term ‘non-expansion 
State’ means, with respect to a fiscal 
year, a State that is not an expansion 
State.’’; and 
(2) in paragraph (8), by striking ‘‘fiscal year 
2025’’ and inserting ‘‘fiscal year 2019’’. 
SEC. 114. REDUCING STATE MEDICAID COSTS. 
(a) LETTING STATES DISENROLL HIGH DOLLAR 
LOTTERY WINNERS.— 
(1) IN GENERAL.—Section 1902 of the Social 
Security Act (42 U.S.C. 1396a) is amended— 
(A) in subsection (a)(17), by striking 
‘‘(e)(14), (e)(14)’’ and inserting ‘‘(e)(14), 
(e)(15)’’; and 
(B) in subsection (e)— 
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(i) in paragraph (14) (relating to 
modified adjusted gross income), by adding 
at the end the following new subparagraph: 
‘‘(J) TREATMENT
OF
CERTAIN
LOTTERY 
WINNINGS AND INCOME RECEIVED AS A LUMP 
SUM.— 
‘‘(i) IN GENERAL.—In the case of an 
individual who is the recipient of qualified 
lottery winnings (pursuant to lotteries oc-
curring on or after January 1, 2020) or 
qualified lump sum income (received on or 
after such date) and whose eligibility for 
medical assistance is determined based on 
the application of modified adjusted gross 
income under subparagraph (A), a State 
shall, in determining such eligibility, in-
clude such winnings or income (as applica-
ble) as income received— 
‘‘(I) in the month in which such 
winnings or income (as applicable) is 
received if the amount of such 
winnings or income is less than 
$80,000; 
‘‘(II) over a period of 2 months 
if the amount of such winnings or in-
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come (as applicable) is greater than or 
equal to $80,000 but less than 
$90,000; 
‘‘(III) over a period of 3 months 
if the amount of such winnings or in-
come (as applicable) is greater than or 
equal to $90,000 but less than 
$100,000; and 
‘‘(IV) over a period of 3 months 
plus 1 additional month for each in-
crement of $10,000 of such winnings 
or income (as applicable) received, not 
to exceed a period of 120 months (for 
winnings or income of $1,260,000 or 
more), if the amount of such winnings 
or income is greater than or equal to 
$100,000. 
‘‘(ii) COUNTING IN EQUAL INSTALL-
MENTS.—For purposes of subclauses (II), 
(III), and (IV) of clause (i), winnings or 
income to which such subclause applies 
shall be counted in equal monthly install-
ments over the period of months specified 
under such subclause. 
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‘‘(iii) HARDSHIP EXEMPTION.—An in-
dividual whose income, by application of 
clause (i), exceeds the applicable eligibility 
threshold established by the State, may 
continue to be eligible for medical assist-
ance to the extent that the State deter-
mines, under procedures established by the 
State under the State plan (or in the case 
of a waiver of the plan under section 1115, 
incorporated in such waiver), or as other-
wise established by such State in accord-
ance with such standards as may be speci-
fied by the Secretary, that the denial of eli-
gibility of the individual would cause an 
undue medical or financial hardship as de-
termined on the basis of criteria estab-
lished by the Secretary. 
‘‘(iv) NOTIFICATIONS
AND
ASSIST-
ANCE REQUIRED IN CASE OF LOSS OF ELI-
GIBILITY.—A State shall, with respect to 
an individual who loses eligibility for med-
ical assistance under the State plan (or a 
waiver of such plan) by reason of clause 
(i), before the date on which the individual 
loses such eligibility, inform the individual 
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of the date on which the individual would 
no longer be considered ineligible by reason 
of such clause to receive medical assistance 
under the State plan or under any waiver 
of such plan and the date on which the in-
dividual would be eligible to reapply to re-
ceive such medical assistance. 
‘‘(v) QUALIFIED LOTTERY WINNINGS 
DEFINED.—In this subparagraph, the term 
‘qualified lottery winnings’ means winnings 
from a sweepstakes, lottery, or pool de-
scribed in paragraph (3) of section 4402 of 
the Internal Revenue Code of 1986 or a 
lottery operated by a multistate or multi-
jurisdictional lottery association, including 
amounts awarded as a lump sum payment. 
‘‘(vi) QUALIFIED LUMP SUM INCOME 
DEFINED.—In this subparagraph, the term 
‘qualified lump sum income’ means income 
that is received as a lump sum from one 
of the following sources: 
‘‘(I) Monetary winnings from 
gambling (as defined by the Secretary 
and including monetary winnings from 
gambling activities described in sec-
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tion 1955(b)(4) of title 18, United 
States Code). 
‘‘(II) Income received as liquid 
assets from the estate (as defined in 
section 1917(b)(4)) of a deceased in-
dividual.’’; and 
(ii) by striking ‘‘(14) EXCLUSION’’ 
and inserting ‘‘(15) EXCLUSION’’. 
(2) RULES OF CONSTRUCTION.— 
(A) INTERCEPTION OF LOTTERY WINNINGS 
ALLOWED.—Nothing in the amendment made 
by paragraph (1)(B)(i) shall be construed as 
preventing a State from intercepting the State 
lottery winnings awarded to an individual in the 
State to recover amounts paid by the State 
under the State Medicaid plan under title XIX 
of the Social Security Act for medical assistance 
furnished to the individual. 
(B) APPLICABILITY
LIMITED
TO
ELIGI-
BILITY OF RECIPIENT OF LOTTERY WINNINGS 
OR LUMP SUM INCOME.—Nothing in the amend-
ment made by paragraph (1)(B)(i) shall be con-
strued, with respect to a determination of 
household income for purposes of a determina-
tion of eligibility for medical assistance under 
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the State plan under title XIX of the Social Se-
curity Act (42 U.S.C. 1396 et seq.) (or a waiver 
of such plan) made by applying modified ad-
justed gross income under subparagraph (A) of 
section 1902(e)(14) of such Act (42 U.S.C. 
1396a(e)(14)), as limiting the eligibility for 
such medical assistance of any individual that is 
a member of the household other than the indi-
vidual (or the individual’s spouse) who received 
qualified lottery winnings or qualified lump-sum 
income (as defined in subparagraph (J) of such 
section 1902(e)(14), as added by paragraph 
(1)(B)(i) of this subsection). 
(b) REPEAL OF RETROACTIVE ELIGIBILITY.— 
(1) IN GENERAL.— 
(A) STATE PLAN REQUIREMENTS.—Section 
1902(a)(34) of the Social Security Act (42 
U.S.C. 1396a(a)(34)) is amended by striking 
‘‘in or after the third month before the month 
in which he made application’’ and inserting ‘‘in 
or after the month in which the individual made 
application’’. 
(B) DEFINITION
OF
MEDICAL
ASSIST-
ANCE.—Section 1905(a) of the Social Security 
Act (42 U.S.C. 1396d(a)) is amended by strik-
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ing ‘‘in or after the third month before the 
month in which the recipient makes application 
for assistance’’ and inserting ‘‘in or after the 
month in which the recipient makes application 
for assistance’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to medical assistance 
with respect to individuals whose eligibility for such 
assistance is based on an application for such assist-
ance made (or deemed to be made) on or after Octo-
ber 1, 2017. 
(c) ENSURING STATES ARE NOT FORCED TO PAY 
FOR INDIVIDUALS INELIGIBLE FOR THE PROGRAM.— 
(1) IN GENERAL.—Section 1137(f) of the Social 
Security Act (42 U.S.C. 1320b–7(f)) is amended— 
(A) by striking ‘‘Subsections (a)(1) and 
(d)’’ and inserting ‘‘(1) Subsections (a)(1) and 
(d)’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2)(A) Subparagraphs (A) and (B)(ii) of subsection 
(d)(4) shall not apply in the case of an initial determina-
tion made on or after the date that is 6 months after the 
date of the enactment of this paragraph with respect to 
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the eligibility of an alien described in subparagraph (B) 
for benefits under the program listed in subsection (b)(2). 
‘‘(B) An alien described in this subparagraph is an 
individual declaring to be a citizen or national of the 
United States with respect to whom a State, in accordance 
with section 1902(a)(46)(B), requires— 
‘‘(i) pursuant to 1902(ee), the submission of a 
social security number; or 
‘‘(ii) pursuant to 1903(x), the presentation of 
satisfactory documentary evidence of citizenship or 
nationality.’’. 
(2) NO PAYMENTS FOR MEDICAL ASSISTANCE 
PROVIDED BEFORE PRESENTATION OF EVIDENCE.— 
Section 1903(i)(22) of the Social Security Act (42 
U.S.C. 1396b(i)(22)) is amended— 
(A) by striking ‘‘with respect to amounts 
expended’’ and inserting ‘‘(A) with respect to 
amounts expended’’; 
(B) by inserting ‘‘and’’ at the end; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(B) in the case of a State that elects to pro-
vide a reasonable period to present satisfactory doc-
umentary evidence of such citizenship or nationality 
pursuant to paragraph (2)(C) of section 1902(ee) or 
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paragraph (4) of subsection (x) of this section, for 
amounts expended for medical assistance for such an 
individual (other than an individual described in 
paragraph (2) of such subsection (x)) during such 
period;’’. 
(3) 
CONFORMING
AMENDMENTS.—Section 
1137(d)(4) of the Social Security Act (42 U.S.C. 
1320b–7(d)(4)) is amended— 
(A) in subparagraph (A), in the matter 
preceding clause (i), by inserting ‘‘subject to 
subsection (f)(2),’’ before ‘‘the State’’; and 
(B) in subparagraph (B)(ii), by inserting 
‘‘subject to subsection (f)(2),’’ before ‘‘pending 
such verification’’. 
(d) UPDATING ALLOWABLE HOME EQUITY LIMITS 
IN MEDICAID.— 
(1) IN
GENERAL.—Section 1917(f)(1) of the 
Social Security Act (42 U.S.C. 1396p(f)(1)) is 
amended— 
(A) in subparagraph (A), by striking ‘‘sub-
paragraphs (B) and (C)’’ and inserting ‘‘sub-
paragraph (B)’’; 
(B) by striking subparagraph (B); 
(C) by redesignating subparagraph (C) as 
subparagraph (B); and 
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(D) in subparagraph (B), as so redesig-
nated, by striking ‘‘dollar amounts specified in 
this paragraph’’ and inserting ‘‘dollar amount 
specified in subparagraph (A)’’. 
(2) EFFECTIVE DATE.— 
(A) IN GENERAL.—The amendments made 
by paragraph (1) shall apply with respect to eli-
gibility determinations made after the date that 
is 180 days after the date of the enactment of 
this section. 
(B) EXCEPTION
FOR
STATE
LEGISLA-
TION.—In the case of a State plan under title 
XIX of the Social Security Act that the Sec-
retary of Health and Human Services deter-
mines requires State legislation in order for the 
respective plan to meet any requirement im-
posed by amendments made by this subsection, 
the respective plan shall not be regarded as fail-
ing to comply with the requirements of such 
title solely on the basis of its failure to meet 
such an additional requirement before the first 
day of the first calendar quarter beginning after 
the close of the first regular session of the 
State legislature that begins after the date of 
the enactment of this Act. For purposes of the 
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previous sentence, in the case of a State that 
has a 2-year legislative session, each year of the 
session shall be considered to be a separate reg-
ular session of the State legislature. 
SEC. 115. SAFETY NET FUNDING FOR NON-EXPANSION 
STATES. 
Title XIX of the Social Security Act is amended by 
inserting after section 1923 (42 U.S.C. 1396r–4) the fol-
lowing new section: 
‘‘ADJUSTMENT IN PAYMENT FOR SERVICES OF SAFETY 
NET PROVIDERS IN NON-EXPANSION STATES 
‘‘SEC. 1923A. (a) IN GENERAL.—Subject to the limi-
tations of this section, for each year during the period be-
ginning with 2018 and ending with 2021, each State that 
is one of the 50 States or the District of Columbia and 
that, as of July 1 of the preceding year, did not provide 
for eligibility under clause (i)(VIII) or (ii)(XX) of section 
1902(a)(10)(A) for medical assistance under this title (or 
a waiver of the State plan approved under section 1115) 
(each such State or District referred to in this section for 
the year as a ‘non-expansion State’) may adjust the pay-
ment amounts otherwise provided under the State plan 
under this title (or a waiver of such plan) to health care 
providers that provide health care services to individuals 
enrolled under this title (in this section referred to as ‘eli-
gible providers’). 
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‘‘(b) INCREASE IN APPLICABLE FMAP.—Notwith-
standing section 1905(b), the Federal medical assistance 
percentage applicable with respect to expenditures attrib-
utable to a payment adjustment under subsection (a) for 
which payment is permitted under subsection (c) shall be 
equal to— 
‘‘(1) 100 percent for calendar quarters in cal-
endar years 2018, 2019, 2020, and 2021; and 
‘‘(2) 95 percent for calendar quarters in cal-
endar year 2022. 
‘‘(c) LIMITATIONS; DISQUALIFICATION OF STATES.— 
‘‘(1) ANNUAL ALLOTMENT LIMITATION.—Pay-
ment under section 1903(a) shall not be made to a 
State with respect to any payment adjustment made 
under this section for all calendar quarters in a year 
in excess of the $2,000,000,000 multiplied by the 
ratio of— 
‘‘(A) the population of the State with in-
come below 138 percent of the poverty line in 
2015 (as determined based the table entitled 
‘Health Insurance Coverage Status and Type 
by Ratio of Income to Poverty Level in the Past 
12 Months by Age’ for the universe of the civil-
ian noninstitutionalized population for whom 
poverty status is determined based on the 2015 
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American Community Survey 1-Year Estimates, 
as published by the Bureau of the Census), to 
‘‘(B) the sum of the populations under 
subparagraph (A) for all non-expansion States. 
‘‘(2) LIMITATION
ON
PAYMENT
ADJUSTMENT 
AMOUNT FOR INDIVIDUAL PROVIDERS.—The amount 
of a payment adjustment under subsection (a) for an 
eligible provider may not exceed the provider’s costs 
incurred in furnishing health care services (as deter-
mined by the Secretary and net of payments under 
this title, other than under this section, and by unin-
sured patients) to individuals who either are eligible 
for medical assistance under the State plan (or 
under a waiver of such plan) or have no health in-
surance or health plan coverage for such services. 
‘‘(d) DISQUALIFICATION IN CASE OF STATE COV-
ERAGE EXPANSION.—If a State is a non-expansion for a 
year and provides eligibility for medical assistance de-
scribed in subsection (a) during the year, the State shall 
no longer be treated as a non-expansion State under this 
section for any subsequent years.’’. 
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SEC. 116. PROVIDING INCENTIVES FOR INCREASED FRE-
QUENCY 
OF 
ELIGIBILITY 
REDETERMINA-
TIONS. 
(a) IN GENERAL.—Section 1902(e)(14) of the Social 
Security Act (42 U.S.C. 1396a(e)(14)) (relating to modi-
fied adjusted gross income), as amended by section 
114(a)(1), is further amended by adding at the end the 
following: 
‘‘(K) FREQUENCY OF ELIGIBILITY REDE-
TERMINATIONS.—Beginning 
on 
October 
1, 
2017, and notwithstanding subparagraph (H), 
in the case of an individual whose eligibility for 
medical assistance under the State plan under 
this title (or a waiver of such plan) is deter-
mined based on the application of modified ad-
justed gross income under subparagraph (A) 
and who is so eligible on the basis of clause 
(i)(VIII) or clause (ii)(XX) of subsection 
(a)(10)(A), a State shall redetermine such indi-
vidual’s eligibility for such medical assistance 
no less frequently than once every 6 months.’’. 
(b) CIVIL MONETARY PENALTY.—Section 1128A(a) 
of the Social Security Act (42 U.S.C. 1320a–7a(a)) is 
amended, in the matter following paragraph (10), by strik-
ing ‘‘(or, in cases under paragraph (3)’’ and inserting the 
following: ‘‘(or, in cases under paragraph (1) in which an 
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individual was knowingly enrolled on or after October 1, 
2017, pursuant to section 1902(a)(10)(A)(i)(VIII) for 
medical assistance under the State plan under title XIX 
whose income does not meet the income threshold specified 
in such section or in which a claim was presented on or 
after October 1, 2017, as a claim for an item or service 
furnished to an individual described in such section but 
whose enrollment under such State plan is not made on 
the basis of such individual’s meeting the income threshold 
specified in such section, $20,000 for each such individual 
or claim; in cases under paragraph (3)’’. 
(c) INCREASED ADMINISTRATIVE MATCHING PER-
CENTAGE.—For each calendar quarter during the period 
beginning on October 1, 2017, and ending on December 
31, 2019, the Federal matching percentage otherwise ap-
plicable under section 1903(a) of the Social Security Act 
(42 U.S.C. 1396b(a)) with respect to State expenditures 
during such quarter that are attributable to meeting the 
requirement of section 1902(e)(14) (relating to determina-
tions of eligibility using modified adjusted gross income) 
of such Act shall be increased by 5 percentage points with 
respect to State expenditures attributable to activities car-
ried out by the State (and approved by the Secretary) to 
increase the frequency of eligibility redeterminations re-
quired by subparagraph (K) of such section (relating to 
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eligibility redeterminations made on a 6-month basis) (as 
added by subsection (a)). 
Subtitle C—Per Capita Allotment 
for Medical Assistance 
SEC. 121. PER CAPITA ALLOTMENT FOR MEDICAL ASSIST-
ANCE. 
Title XIX of the Social Security Act is amended— 
(1) in section 1903 (42 U.S.C. 1396b)— 
(A) in subsection (a), in the matter before 
paragraph (1), by inserting ‘‘and section 
1903A(a)’’ after ‘‘except as otherwise provided 
in this section’’; and 
(B) in subsection (d)(1), by striking ‘‘to 
which’’ and inserting ‘‘to which, subject to sec-
tion 1903A(a),’’; and 
(2) by inserting after such section 1903 the fol-
lowing new section: 
‘‘SEC. 1903A. PER CAPITA-BASED CAP ON PAYMENTS FOR 
MEDICAL ASSISTANCE. 
‘‘(a) APPLICATION OF PER CAPITA CAP ON PAY-
MENTS FOR MEDICAL ASSISTANCE EXPENDITURES.— 
‘‘(1) IN GENERAL.—If a State has excess ag-
gregate medical assistance expenditures (as defined 
in paragraph (2)) for a fiscal year (beginning with 
fiscal year 2020), the amount of payment to the 
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State under section 1903(a)(1) for each quarter in 
the following fiscal year shall be reduced by 1⁄4 of 
the excess aggregate medical assistance payments 
(as defined in paragraph (3)) for that previous fiscal 
year. In this section, the term ‘State’ means only the 
50 States and the District of Columbia. 
‘‘(2) EXCESS AGGREGATE MEDICAL ASSISTANCE 
EXPENDITURES.—In this subsection, the term ‘ex-
cess aggregate medical assistance expenditures’ 
means, for a State for a fiscal year, the amount (if 
any) by which— 
‘‘(A) the amount of the adjusted total med-
ical assistance expenditures (as defined in sub-
section (b)(1)) for the State and fiscal year; ex-
ceeds 
‘‘(B) the amount of the target total med-
ical assistance expenditures (as defined in sub-
section (c)) for the State and fiscal year. 
‘‘(3) EXCESS AGGREGATE MEDICAL ASSISTANCE 
PAYMENTS.—In this subsection, the term ‘excess ag-
gregate medical assistance payments’ means, for a 
State for a fiscal year, the product of— 
‘‘(A) the excess aggregate medical assist-
ance expenditures (as defined in paragraph (2)) 
for the State for the fiscal year; and 
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‘‘(B) the Federal average medical assist-
ance matching percentage (as defined in para-
graph (4)) for the State for the fiscal year. 
‘‘(4) FEDERAL AVERAGE MEDICAL ASSISTANCE 
MATCHING
PERCENTAGE.—In this subsection, the 
term ‘Federal average medical assistance matching 
percentage’ means, for a State for a fiscal year, the 
ratio (expressed as a percentage) of— 
‘‘(A) the amount of the Federal payments 
that would be made to the State under section 
1903(a)(1) for medical assistance expenditures 
for calendar quarters in the fiscal year if para-
graph (1) did not apply; to 
‘‘(B) the amount of the medical assistance 
expenditures for the State and fiscal year. 
‘‘(b) ADJUSTED TOTAL MEDICAL ASSISTANCE EX-
PENDITURES.—Subject to subsection (g), the following 
shall apply: 
‘‘(1) IN GENERAL.—In this section, the term 
‘adjusted total medical assistance expenditures’ 
means, for a State— 
‘‘(A) for fiscal year 2016, the product of— 
‘‘(i) the amount of the medical assist-
ance expenditures (as defined in paragraph 
(2)) for the State and fiscal year, reduced 
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by the amount of any excluded expendi-
tures (as defined in paragraph (3)) for the 
State and fiscal year otherwise included in 
such medical assistance expenditures; and 
‘‘(ii) the 1903A FY16 population per-
centage (as defined in paragraph (4)) for 
the State; or 
‘‘(B) for fiscal year 2019 or a subsequent 
fiscal year, the amount of the medical assist-
ance expenditures (as defined in paragraph (2)) 
for the State and fiscal year that is attributable 
to 1903A enrollees, reduced by the amount of 
any excluded expenditures (as defined in para-
graph (3)) for the State and fiscal year other-
wise included in such medical assistance ex-
penditures. 
‘‘(2) MEDICAL ASSISTANCE EXPENDITURES.— 
In this section, the term ‘medical assistance expendi-
tures’ means, for a State and fiscal year, the med-
ical assistance payments as reported by medical 
service category on the Form CMS-64 quarterly ex-
pense report (or successor to such a report form, 
and including enrollment data and subsequent ad-
justments to any such report, in this section referred 
to collectively as a ‘CMS-64 report’) that directly re-
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sult from providing medical assistance under the 
State plan (including under a waiver of the plan) for 
which payment is (or may otherwise be) made pur-
suant to section 1903(a)(1). 
‘‘(3) EXCLUDED EXPENDITURES.—In this sec-
tion, the term ‘excluded expenditures’ means, for a 
State and fiscal year, expenditures under the State 
plan (or under a waiver of such plan) that are at-
tributable to any of the following: 
‘‘(A) DSH.—Payment adjustments made 
for disproportionate share hospitals under sec-
tion 1923. 
‘‘(B) 
MEDICARE
COST-SHARING.—Pay-
ments made for medicare cost-sharing (as de-
fined in section 1905(p)(3)). 
‘‘(C) SAFETY NET PROVIDER PAYMENT AD-
JUSTMENTS IN NON-EXPANSION STATES.—Pay-
ment adjustments under subsection (a) of sec-
tion 1923A for which payment is permitted 
under subsection (c) of such section. 
‘‘(4) 1903A FY 16 POPULATION PERCENTAGE.— 
In this subsection, the term ‘1903A FY16 popu-
lation percentage’ means, for a State, the Sec-
retary’s calculation of the percentage of the actual 
medical assistance expenditures, as reported by the 
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State on the CMS–64 reports for calendar quarters 
in fiscal year 2016, that are attributable to 1903A 
enrollees (as defined in subsection (e)(1)). 
‘‘(c) TARGET TOTAL MEDICAL ASSISTANCE EXPEND-
ITURES.— 
‘‘(1) CALCULATION.—In this section, the term 
‘target total medical assistance expenditures’ means, 
for a State for a fiscal year, the sum of the prod-
ucts, for each of the 1903A enrollee categories (as 
defined in subsection (e)(2)), of— 
‘‘(A) the target per capita medical assist-
ance expenditures (as defined in paragraph (2)) 
for the enrollee category, State, and fiscal year; 
and 
‘‘(B) the number of 1903A enrollees for 
such enrollee category, State, and fiscal year, as 
determined under subsection (e)(4). 
‘‘(2) TARGET PER CAPITA MEDICAL ASSISTANCE 
EXPENDITURES.—In this subsection, the term ‘tar-
get per capita medical assistance expenditures’ 
means, for a 1903A enrollee category, State, and a 
fiscal year, an amount equal to— 
‘‘(A) the provisional FY19 target per cap-
ita amount for such enrollee category (as cal-
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culated under subsection (d)(5)) for the State; 
increased by 
‘‘(B) the percentage increase in the med-
ical care component of the consumer price index 
for all urban consumers (U.S. city average) 
from September of 2019 to September of the 
fiscal year involved. 
‘‘(d) CALCULATION OF FY19 PROVISIONAL TARGET 
AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.—Sub-
ject to subsection (g), the following shall apply: 
‘‘(1) CALCULATION OF BASE AMOUNTS FOR FIS-
CAL YEAR 2016.—For each State the Secretary shall 
calculate (and provide notice to the State not later 
than April 1, 2018, of) the following: 
‘‘(A) The amount of the adjusted total 
medical assistance expenditures (as defined in 
subsection (b)(1)) for the State for fiscal year 
2016. 
‘‘(B) The number of 1903A enrollees for 
the State in fiscal year 2016 (as determined 
under subsection (e)(4)). 
‘‘(C) The average per capita medical as-
sistance expenditures for the State for fiscal 
year 2016 equal to— 
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‘‘(i) the amount calculated under sub-
paragraph (A); divided by 
‘‘(ii) the number calculated under sub-
paragraph (B). 
‘‘(2) FISCAL YEAR 2019 AVERAGE PER CAPITA 
AMOUNT BASED ON INFLATING THE FISCAL YEAR 
2016 AMOUNT TO FISCAL YEAR 2019 BY CPI-MED-
ICAL.—The Secretary shall calculate a fiscal year 
2019 average per capita amount for each State 
equal to— 
‘‘(A) the average per capita medical assist-
ance expenditures for the State for fiscal year 
2016 (calculated under paragraph (1)(C)); in-
creased by 
‘‘(B) the percentage increase in the med-
ical care component of the consumer price index 
for all urban consumers (U.S. city average) 
from September, 2016 to September, 2019. 
‘‘(3) AGGREGATE
AND
AVERAGE
EXPENDI-
TURES PER CAPITA FOR FISCAL YEAR 2019.—The 
Secretary shall calculate for each State the fol-
lowing: 
‘‘(A) The amount of the adjusted total 
medical assistance expenditures (as defined in 
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subsection (b)(1)) for the State for fiscal year 
2019. 
‘‘(B) The number of 1903A enrollees for 
the State in fiscal year 2019 (as determined 
under subsection (e)(4)). 
‘‘(4) PER CAPITA EXPENDITURES FOR FISCAL 
YEAR 2019 FOR EACH 1903A ENROLLEE CATEGORY.— 
The Secretary shall calculate (and provide notice to 
each State not later than January 1, 2020, of) the 
following: 
‘‘(A)(i) For each 1903A enrollee category, 
the amount of the adjusted total medical assist-
ance expenditures (as defined in subsection 
(b)(1)) for the State for fiscal year 2019 for in-
dividuals in the enrollee category, calculated by 
excluding from medical assistance expenditures 
those expenditures attributable to expenditures 
described in clause (iii) or non-DSH supple-
mental expenditures (as defined in clause (ii)). 
‘‘(ii) In this paragraph, the term ‘non- 
DSH supplemental expenditure’ means a pay-
ment to a provider under the State plan (or 
under a waiver of the plan) that— 
‘‘(I) is not made under section 1923; 
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‘‘(II) is not made with respect to a 
specific item or service for an individual; 
‘‘(III) is in addition to any payments 
made to the provider under the plan (or 
waiver) for any such item or service; and 
‘‘(IV) complies with the limits for ad-
ditional payments to providers under the 
plan (or waiver) imposed pursuant to sec-
tion 1902(a)(30)(A), including the regula-
tions specifying upper payment limits 
under the State plan in part 447 of title 
42, Code of Federal Regulations (or any 
successor regulations). 
‘‘(iii) An expenditure described in this 
clause is an expenditure that meets the criteria 
specified in subclauses (I), (II), and (III) of 
clause (ii) and is authorized under section 1115 
for the purposes of funding a delivery system 
reform pool, uncompensated care pool, a des-
ignated state health program, or any other 
similar expenditure (as defined by the Sec-
retary). 
‘‘(B) For each 1903A enrollee category, 
the number of 1903A enrollees for the State in 
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fiscal year 2019 in the enrollee category (as de-
termined under subsection (e)(4)). 
‘‘(C) For fiscal year 2016, the State’s non- 
DSH supplemental payment percentage is equal 
to the ratio (expressed as a percentage) of— 
‘‘(i) the total amount of non-DSH 
supplemental expenditures (as defined in 
subparagraph (A)(ii)) for the State for fis-
cal year 2016; to 
‘‘(ii) the amount described in sub-
section (b)(1)(A) for the State for fiscal 
year 2016. 
‘‘(D) For each 1903A enrollee category an 
average medical assistance expenditures per 
capita for the State for fiscal year 2019 for the 
enrollee category equal to— 
‘‘(i) the amount calculated under sub-
paragraph (A) for the State, increased by 
the non-DSH supplemental payment per-
centage for the State (as calculated under 
subparagraph (C)); divided by 
‘‘(ii) the number calculated under sub-
paragraph (B) for the State for the en-
rollee category. 
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‘‘(5) PROVISIONAL FY19 PER CAPITA TARGET 
AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.— 
Subject to subsection (f)(2), the Secretary shall cal-
culate for each State a provisional FY19 per capita 
target amount for each 1903A enrollee category 
equal to the average medical assistance expenditures 
per capita for the State for fiscal year 2019 (as cal-
culated under paragraph (4)(D)) for such enrollee 
category multiplied by the ratio of— 
‘‘(A) the product of— 
‘‘(i) the fiscal year 2019 average per 
capita amount for the State, as calculated 
under paragraph (2); and 
‘‘(ii) the number of 1903A enrollees 
for the State in fiscal year 2019, as cal-
culated under paragraph (3)(B); to 
‘‘(B) the amount of the adjusted total 
medical assistance expenditures for the State 
for fiscal year 2019, as calculated under para-
graph (3)(A). 
‘‘(e) 1903A ENROLLEE; 1903A ENROLLEE CAT-
EGORY.—Subject to subsection (g), for purposes of this 
section, the following shall apply: 
‘‘(1) 1903A ENROLLEE.—The term ‘1903A en-
rollee’ means, with respect to a State and a month, 
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any Medicaid enrollee (as defined in paragraph (3)) 
for the month, other than such an enrollee who for 
such month is in any of the following categories of 
excluded individuals: 
‘‘(A) CHIP.—An individual who is pro-
vided, under this title in the manner described 
in section 2101(a)(2), child health assistance 
under title XXI. 
‘‘(B) IHS.—An individual who receives 
any medical assistance under this title for serv-
ices for which payment is made under the third 
sentence of section 1905(b). 
‘‘(C) BREAST
AND
CERVICAL
CANCER 
SERVICES
ELIGIBLE
INDIVIDUAL.—An indi-
vidual who is entitled to medical assistance 
under this title only pursuant to section 
1902(a)(10)(A)(ii)(XVIII). 
‘‘(D) PARTIAL-BENEFIT ENROLLEES.—An 
individual who— 
‘‘(i) is an alien who is entitled to med-
ical assistance under this title only pursu-
ant to section 1903(v)(2); 
‘‘(ii) is entitled to medical assistance 
under this title only pursuant to subclause 
(XII) 
or 
(XXI) 
of 
section 
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1902(a)(10)(A)(ii) (or pursuant to a waiv-
er that provides only comparable benefits); 
‘‘(iii) is a dual eligible individual (as 
defined in section 1915(h)(2)(B)) and is 
entitled to medical assistance under this 
title (or under a waiver) only for some or 
all of medicare cost-sharing (as defined in 
section 1905(p)(3)); or 
‘‘(iv) is entitled to medical assistance 
under this title and for whom the State is 
providing a payment or subsidy to an em-
ployer for coverage of the individual under 
a group health plan pursuant to section 
1906 or section 1906A (or pursuant to a 
waiver that provides only comparable bene-
fits). 
‘‘(2) 1903A ENROLLEE CATEGORY.—The term 
‘1903A enrollee category’ means each of the fol-
lowing: 
‘‘(A) ELDERLY.—A category of 1903A en-
rollees who are 65 years of age or older. 
‘‘(B) BLIND AND DISABLED.—A category 
of 1903A enrollees (not described in the pre-
vious subparagraph) who are eligible for med-
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ical assistance under this title on the basis of 
being blind or disabled. 
‘‘(C) CHILDREN.—A category of 1903A 
enrollees (not described in a previous subpara-
graph) who are children under 19 years of age. 
‘‘(D) EXPANSION
ENROLLEES.—A cat-
egory of 1903A enrollees (not described in a 
previous subparagraph) for whom the amounts 
expended for medical assistance are subject to 
an increase or change in the Federal medical 
assistance percentage under subsection (y) or 
(z)(2), respectively, of section 1905. 
‘‘(E) OTHER NONELDERLY, NONDISABLED, 
NON-EXPANSION
ADULTS.—A 
category 
of 
1903A enrollees who are not described in any 
previous subparagraph. 
‘‘(3) MEDICAID ENROLLEE.—The term ‘Med-
icaid enrollee’ means, with respect to a State for a 
month, an individual who is eligible for medical as-
sistance for items or services under this title and en-
rolled under the State plan (or a waiver of such 
plan) under this title for the month. 
‘‘(4) DETERMINATION
OF
NUMBER
OF
1903A 
ENROLLEES.—The number of 1903A enrollees for a 
State and fiscal year, and, if applicable, for a 1903A 
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enrollee category, is the average monthly number of 
Medicaid enrollees for such State and fiscal year 
(and, if applicable, in such category) that are re-
ported through the CMS–64 report under (and sub-
ject to audit under) subsection (h). 
‘‘(f) SPECIAL PAYMENT RULES.— 
‘‘(1) APPLICATION IN CASE OF RESEARCH AND 
DEMONSTRATION PROJECTS AND OTHER WAIVERS.— 
In the case of a State with a waiver of the State 
plan approved under section 1115, section 1915, or 
another provision of this title, this section shall 
apply to medical assistance expenditures and medical 
assistance payments under the waiver, in the same 
manner as if such expenditures and payments had 
been made under a State plan under this title and 
the limitations on expenditures under this section 
shall supersede any other payment limitations or 
provisions (including limitations based on a per cap-
ita limitation) otherwise applicable under such a 
waiver. 
‘‘(2) TREATMENT OF STATES EXPANDING COV-
ERAGE AFTER FISCAL YEAR 2016.—In the case of a 
State that did not provide for medical assistance for 
the 1903A enrollee category described in subsection 
(e)(2)(D) during fiscal year 2016 but which provides 
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for such assistance for such category in a subse-
quent year, the provisional FY19 per capita target 
amount for such enrollee category under subsection 
(d)(5) shall be equal to the provisional FY19 per 
capita target amount for the 1903A enrollee cat-
egory described in subsection (e)(2)(E). 
‘‘(3) IN CASE OF STATE FAILURE TO REPORT 
NECESSARY DATA.—If a State for any quarter in a 
fiscal year (beginning with fiscal year 2019) fails to 
satisfactorily submit data on expenditures and en-
rollees in accordance with subsection (h)(1), for such 
fiscal year and any succeeding fiscal year for which 
such data are not satisfactorily submitted— 
‘‘(A) the Secretary shall calculate and 
apply subsections (a) through (e) with respect 
to the State as if all 1903A enrollee categories 
for which such expenditure and enrollee data 
were not satisfactorily submitted were a single 
1903A enrollee category; and 
‘‘(B) the growth factor otherwise applied 
under subsection (c)(2)(B) shall be decreased 
by 1 percentage point. 
‘‘(g) RECALCULATION OF CERTAIN AMOUNTS FOR 
DATA ERRORS.—The amounts and percentage calculated 
under paragraphs (1) and (4)(C) of subsection (d) for a 
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State for fiscal year 2016, and the amounts of the ad-
justed total medical assistance expenditures calculated 
under subsection (b) and the number of Medicaid enrollees 
and 1903A enrollees determined under subsection (e)(4) 
for a State for fiscal year 2016, fiscal year 2019, and any 
subsequent fiscal year, may be adjusted by the Secretary 
based upon an appeal (filed by the State in such a form, 
manner, and time, and containing such information relat-
ing to data errors that support such appeal, as the Sec-
retary specifies) that the Secretary determines to be valid, 
except that any adjustment by the Secretary under this 
subsection for a State may not result in an increase of 
the target total medical assistance expenditures exceeding 
2 percent. 
‘‘(h) REQUIRED
REPORTING
AND
AUDITING
OF 
CMS–64 DATA; TRANSITIONAL INCREASE IN FEDERAL 
MATCHING PERCENTAGE FOR CERTAIN ADMINISTRATIVE 
EXPENSES.— 
‘‘(1) REPORTING.—In addition to the data re-
quired on form Group VIII on the CMS–64 report 
form as of January 1, 2017, in each CMS-64 report 
required to be submitted (for each quarter beginning 
on or after October 1, 2018), the State shall include 
data on medical assistance expenditures within such 
categories of services and categories of enrollees (in-
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cluding each 1903A enrollee category and each cat-
egory of excluded individuals under subsection 
(e)(1)) and the numbers of enrollees within each of 
such enrollee categories, as the Secretary determines 
are necessary (including timely guidance published 
as soon as possible after the date of the enactment 
of this section) in order to implement this section 
and to enable States to comply with the requirement 
of this paragraph on a timely basis. 
‘‘(2) AUDITING.—The Secretary shall conduct 
for each State an audit of the number of individuals 
and expenditures reported through the CMS–64 re-
port for fiscal year 2016, fiscal year 2019, and each 
subsequent fiscal year, which audit may be con-
ducted on a representative sample (as determined by 
the Secretary). 
‘‘(3) 
TEMPORARY
INCREASE
IN
FEDERAL 
MATCHING
PERCENTAGE
TO
SUPPORT
IMPROVED 
DATA REPORTING SYSTEMS FOR FISCAL YEARS 2018 
AND 2019.—For amounts expended during calendar 
quarters beginning on or after October 1, 2017, and 
before October 1, 2019— 
‘‘(A) the Federal matching percentage ap-
plied under section 1903(a)(3)(A)(i) shall be in-
creased by 10 percentage points to 100 percent; 
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‘‘(B) the Federal matching percentage ap-
plied under section 1903(a)(3)(B) shall be in-
creased by 25 percentage points to 100 percent; 
and 
‘‘(C) the Federal matching percentage ap-
plied under section 1903(a)(7) shall be in-
creased by 10 percentage points to 60 percent 
but only with respect to amounts expended that 
are attributable to a State’s additional adminis-
trative expenditures to implement the data re-
quirements of paragraph (1).’’. 
Subtitle D—Patient Relief and 
Health Insurance Market Stability 
SEC. 131. REPEAL OF COST-SHARING SUBSIDY. 
(a) IN GENERAL.—Section 1402 of the Patient Pro-
tection and Affordable Care Act is repealed. 
(b) EFFECTIVE DATE.—The repeal made by sub-
section (a) shall apply to cost-sharing reductions (and pay-
ments to issuers for such reductions) for plan years begin-
ning after December 31, 2019. 
SEC. 132. PATIENT AND STATE STABILITY FUND. 
The Social Security Act (42 U.S.C. 301 et seq.) is 
amended by adding at the end the following new title: 
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‘‘TITLE XXII—PATIENT AND 
STATE STABILITY FUND 
‘‘SEC. 2201. ESTABLISHMENT OF PROGRAM. 
‘‘There is hereby established the ‘Patient and State 
Stability Fund’ to be administered by the Secretary of 
Health and Human Services, acting through the Adminis-
trator of the Centers for Medicare & Medicaid Services 
(in this section referred to as the ‘Administrator’), to pro-
vide funding, in accordance with this title, to the 50 States 
and the District of Columbia (each referred to in this sec-
tion as a ‘State’) during the period, subject to section 
2204(c), beginning on January 1, 2018, and ending on 
December 31, 2026, for the purposes described in section 
2202. 
‘‘SEC. 2202. USE OF FUNDS. 
‘‘A State may use the funds allocated to the State 
under this title for any of the following purposes: 
‘‘(1) Helping, through the provision of financial 
assistance, high-risk individuals who do not have ac-
cess to health insurance coverage offered through an 
employer enroll in health insurance coverage in the 
individual market in the State, as such market is de-
fined by the State (whether through the establish-
ment of a new mechanism or maintenance of an ex-
isting mechanism for such purpose). 
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‘‘(2) Providing incentives to appropriate entities 
to enter into arrangements with the State to help 
stabilize premiums for health insurance coverage in 
the individual market, as such markets are defined 
by the State. 
‘‘(3) Reducing the cost for providing health in-
surance coverage in the individual market and small 
group market, as such markets are defined by the 
State, to individuals who have, or are projected to 
have, a high rate of utilization of health services (as 
measured by cost). 
‘‘(4) Promoting participation in the individual 
market and small group market in the State and in-
creasing health insurance options available through 
such market. 
‘‘(5) Promoting access to preventive services; 
dental care services (whether preventive or medically 
necessary); vision care services (whether preventive 
or medically necessary); prevention, treatment, or re-
covery support services for individuals with mental 
or substance use disorders; or any combination of 
such services. 
‘‘(6) Providing payments, directly or indirectly, 
to health care providers for the provision of such 
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health care services as are specified by the Adminis-
trator. 
‘‘(7) Providing assistance to reduce out-of-pock-
et costs, such as copayments, coinsurance, pre-
miums, and deductibles, of individuals enrolled in 
health insurance coverage in the State. 
‘‘SEC. 2203. STATE ELIGIBILITY AND APPROVAL; DEFAULT 
SAFEGUARD. 
‘‘(a) ENCOURAGING STATE OPTIONS FOR ALLOCA-
TIONS.— 
‘‘(1) IN GENERAL.—To be eligible for an alloca-
tion of funds under this title for a year during the 
period described in section 2201 for use for one or 
more purposes described in section 2202, a State 
shall submit to the Administrator an application at 
such time (but, in the case of allocations for 2018, 
not later than 45 days after the date of the enact-
ment of this title and, in the case of allocations for 
a subsequent year, not later than March 31 of the 
previous year) and in such form and manner as 
specified by the Administrator and containing— 
‘‘(A) a description of how the funds will be 
used for such purposes; 
‘‘(B) a certification that the State will 
make, from non-Federal funds, expenditures for 
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such purposes in an amount that is not less 
than the State percentage required for the year 
under section 2204(e)(1); and 
‘‘(C) such other information as the Admin-
istrator may require. 
‘‘(2) AUTOMATIC APPROVAL.—An application so 
submitted is approved unless the Administrator noti-
fies the State submitting the application, not later 
than 60 days after the date of the submission of 
such application, that the application has been de-
nied for not being in compliance with any require-
ment of this title and of the reason for such denial. 
‘‘(3) ONE-TIME APPLICATION.—If an applica-
tion of a State is approved for a year, with respect 
to a purpose described in section 2202, such applica-
tion shall be treated as approved, with respect to 
such purpose, for each subsequent year through 
2026. 
‘‘(4) TREATMENT AS A STATE HEALTH CARE 
PROGRAM.—Any program receiving funds from an 
allocation for a State under this title, including pur-
suant to subsection (b), shall be considered to be a 
‘State health care program’ for purposes of sections 
1128, 1128A, and 1128B. 
‘‘(b) DEFAULT FEDERAL SAFEGUARD.— 
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‘‘(1) IN GENERAL.— 
‘‘(A) 2018.—For allocations made under 
this title for 2018, in the case of a State that 
does not submit an application under subsection 
(a) by the 45-day submission date applicable to 
such year under subsection (a)(1) and in the 
case of a State that does submit such an appli-
cation by such date that is not approved, sub-
ject to section 2204(e), the Administrator, in 
consultation with the State insurance commis-
sioner, shall use the allocation that would other-
wise be provided to the State under this title 
for such year, in accordance with paragraph 
(2), for such State. 
‘‘(B) 2019 THROUGH 2026.—In the case of 
a State that does not have in effect an approved 
application under this section for 2019 or a 
subsequent year beginning during the period 
described in section 2201, subject to section 
2204(e), the Administrator, in consultation with 
the State insurance commissioner, shall use the 
allocation that would otherwise be provided to 
the State under this title for such year, in ac-
cordance with paragraph (2), for such State. 
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‘‘(2) REQUIRED USE FOR MARKET STABILIZA-
TION
PAYMENTS
TO
ISSUERS.—Subject to section 
2204(a), an allocation for a State made pursuant to 
paragraph (1) for a year shall be used to carry out 
the purpose described in section 2202(2) in such 
State by providing payments to appropriate entities 
described in such section with respect to claims that 
exceed $50,000 (or, with respect to allocations made 
under this title for 2020 or a subsequent year dur-
ing the period specified in section 2201, such dollar 
amount specified by the Administrator), but do not 
exceed $350,000 (or, with respect to allocations 
made under this title for 2020 or a subsequent year 
during such period, such dollar amount specified by 
the Administrator), in an amount equal to 75 per-
cent (or, with respect to allocations made under this 
title for 2020 or a subsequent year during such pe-
riod, such percentage specified by the Administrator) 
of the amount of such claims. 
‘‘SEC. 2204. ALLOCATIONS. 
‘‘(a) APPROPRIATION.—For the purpose of providing 
allocations for States (including pursuant to section 
2203(b)) under this title there is appropriated, out of any 
money in the Treasury not otherwise appropriated— 
‘‘(1) for 2018, $15,000,000,000; 
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‘‘(2) for 2019, $15,000,000,000; 
‘‘(3) for 2020, $10,000,000,000; 
‘‘(4) for 2021, $10,000,000,000; 
‘‘(5) for 2022, $10,000,000,000; 
‘‘(6) for 2023, $10,000,000,000; 
‘‘(7) for 2024, $10,000,000,000; 
‘‘(8) for 2025, $10,000,000,000; and 
‘‘(9) for 2026, $10,000,000,000. 
‘‘(b) ALLOCATIONS.— 
‘‘(1) PAYMENT.— 
‘‘(A) IN GENERAL.—From amounts appro-
priated under subsection (a) for a year, the Ad-
ministrator shall, with respect to a State and 
not later than the date specified under subpara-
graph (B) for such year, allocate, subject to 
subsection (e), for such State (including pursu-
ant to section 2203(b)) 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 2018, the date that is 45 days 
after the date of the enactment of this 
title; and 
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‘‘(ii) for 2019 and subsequent years, 
January 1 of the respective year. 
‘‘(2) 
ALLOCATION
AMOUNT
DETERMINA-
TIONS.— 
‘‘(A) FOR 2018 AND 2019.— 
‘‘(i) IN
GENERAL.—For purposes of 
paragraph (1), the amount determined 
under this paragraph for 2018 and 2019 
for a State is an amount equal to the sum 
of— 
‘‘(I) the relative incurred claims 
amount described in clause (ii) for 
such State and year; and 
‘‘(II) the relative uninsured and 
issuer participation amount described 
in clause (iv) for such State and year. 
‘‘(ii) RELATIVE
INCURRED
CLAIMS 
AMOUNT.—For purposes of clause (i), the 
relative incurred claims amount described 
in this clause for a State for 2018 and 
2019 is the product of— 
‘‘(I) 85 percent of the amount 
appropriated under subsection (a) for 
the year; and 
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‘‘(II) the relative State incurred 
claims proportion described in clause 
(iii) for such State and year. 
‘‘(iii) RELATIVE
STATE
INCURRED 
CLAIMS PROPORTION.—The relative State 
incurred claims proportion described in 
this clause for a State and year is the 
amount equal to the ratio of— 
‘‘(I) the adjusted incurred claims 
by the State, as reported through the 
medical loss ratio annual reporting 
under section 2718 of the Public 
Health Service Act for the third pre-
vious year; to 
‘‘(II) the sum of such adjusted 
incurred claims for all States, as so 
reported, for such third previous year. 
‘‘(iv) 
RELATIVE
UNINSURED
AND 
ISSUER
PARTICIPATION
AMOUNT.—For 
purposes of clause (i), the relative unin-
sured and issuer participation amount de-
scribed in this clause for a State for 2018 
and 2019 is the product of— 
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‘‘(I) 15 percent of the amount 
appropriated under subsection (a) for 
the year; and 
‘‘(II) the relative State uninsured 
and issuer participation proportion de-
scribed in clause (v) for such State 
and year. 
‘‘(v) RELATIVE
STATE
UNINSURED 
AND
ISSUER
PARTICIPATION
PROPOR-
TION.—The relative State uninsured and 
issuer participation proportion described in 
this clause for a State and year is— 
‘‘(I) in the case of a State not 
described in clause (vi) for such year, 
0; and 
‘‘(II) in the case of a State de-
scribed in clause (vi) for such year, 
the amount equal to the ratio of— 
‘‘(aa) the number of individ-
uals residing in such State who 
for the third preceding year were 
not enrolled in a health plan or 
otherwise did not have health in-
surance 
coverage 
(including 
through a Federal or State 
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health program) and whose in-
come is below 100 percent of the 
poverty line applicable to a family 
of the size involved; to 
‘‘(bb) the sum of the num-
ber of such individuals for all 
States described in clause (vi) for 
the third preceding year. 
‘‘(vi) STATES DESCRIBED.—For pur-
poses of clause (v), a State is described in 
this clause, with respect to 2018 and 2019, 
if the State satisfies either of the following 
criterion: 
‘‘(I) The number of individuals 
residing in such State and described 
in clause (v)(II)(aa) was higher in 
2015 than 2013. 
‘‘(II) The State have fewer than 
three health insurance issuers offering 
qualified health plans through the Ex-
change for 2017. 
‘‘(B) FOR 2020 THROUGH 2026.—For pur-
poses of paragraph (1), the amount determined 
under this paragraph for a year (beginning with 
2020) during the period described in section 
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2201 for a State is an amount determined in 
accordance with an allocation methodology spec-
ified by the Administrator which— 
‘‘(i) takes into consideration the ad-
justed incurred claims of such State, the 
number of residents of such State who for 
the previous year were not enrolled in a 
health plan or otherwise did not have 
health 
insurance 
coverage 
(including 
through a Federal or State health pro-
gram) and whose income is below 100 per-
cent of the poverty line applicable to a 
family of the size involved, and the number 
of health insurance issuers participating in 
the insurance market in such State for 
such year; 
‘‘(ii) is established after consultation 
with health care consumers, health insur-
ance issuers, State insurance commis-
sioners, and other stakeholders and after 
taking into consideration additional cost 
and risk factors that may inhibit health 
care consumer and health insurance issuer 
participation; and 
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‘‘(iii) reflects the goals of improving 
the health insurance risk pool, promoting a 
more competitive health insurance market, 
and increasing choice for health care con-
sumers. 
‘‘(c) ANNUAL DISTRIBUTION OF PREVIOUS YEAR’S 
REMAINING FUNDS.— In carrying out subsection (b), the 
Administrator shall, with respect to a year (beginning with 
2020 and ending with 2027), not later than March 31 of 
such year— 
‘‘(1) determine the amount of funds, if any, 
from the amounts appropriated under subsection (a) 
for the previous year but not allocated for such pre-
vious year; and 
‘‘(2) if the Administrator determines that any 
funds were not so allocated for such previous year, 
allocate such remaining funds, in accordance with 
the allocation methodology specified pursuant to 
subsection (b)(2)(B)— 
‘‘(A) to States that have submitted an ap-
plication approved under section 2203(a) for 
such previous year for any purpose for which 
such an application was approved; and 
‘‘(B) for States for which allocations were 
made pursuant to section 2203(b) for such pre-
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vious year, to be used by the Administrator for 
such States, to carry out the purpose described 
in section 2202(2) in such States by providing 
payments to appropriate entities described in 
such section with respect to claims that exceed 
$1,000,000; 
with, respect to a year before 2027, any remaining 
funds being made available for allocations to States 
for the subsequent year. 
‘‘(d) AVAILABILITY.—Amounts appropriated under 
subsection (a) for a year and allocated to States in accord-
ance with this section shall remain available for expendi-
ture through December 31, 2027. 
‘‘(e) CONDITIONS FOR AND LIMITATIONS ON RE-
CEIPT OF FUNDS.—The Secretary may not make an allo-
cation under this title for a State, with respect to a pur-
pose described in section 2202— 
‘‘(1) in the case of an allocation that would be 
made to a State pursuant to section 2203(a), if the 
State does not agree that the State will make avail-
able non-Federal contributions towards such purpose 
in an amount equal to— 
‘‘(A) for 2020, 7 percent of the amount al-
located under this subsection to such State for 
such year and purpose; 
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‘‘(B) for 2021, 14 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(C) for 2022, 21 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(D) for 2023, 28 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(E) for 2024, 35 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(F) for 2025, 42 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; and 
‘‘(G) for 2026, 50 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(2) in the case of an allocation that would be 
made for a State pursuant to section 2203(b), if the 
State does not agree that the State will make avail-
able non-Federal contributions towards such purpose 
in an amount equal to— 
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‘‘(A) for 2020, 10 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(B) for 2021, 20 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; and 
‘‘(C) for 2022, 30 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(D) for 2023, 40 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(E) for 2024, 50 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; 
‘‘(F) for 2025, 50 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; and 
‘‘(G) for 2026, 50 percent of the amount 
allocated under this subsection to such State 
for such year and purpose; or 
‘‘(3) if such an allocation for such purpose 
would not be permitted under subsection (c)(7) of 
section 2105 if such allocation were payment made 
under such section.’’. 
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SEC. 133. CONTINUOUS HEALTH INSURANCE COVERAGE IN-
CENTIVE. 
Subpart I of part A of title XXVII of the Public 
Health Service Act is amended— 
(1) in section 2701(a)(1)(B), by striking ‘‘such 
rate’’ and inserting ‘‘subject to section 2710A, such 
rate’’; 
(2) by redesignating the second section 2709 as 
section 2710; and 
(3) by adding at the end the following new sec-
tion: 
‘‘SEC. 2710A. ENCOURAGING CONTINUOUS HEALTH INSUR-
ANCE COVERAGE. 
‘‘(a) PENALTY APPLIED.— 
‘‘(1) IN
GENERAL.—Notwithstanding section 
2701, subject to the succeeding provisions of this 
section, a health insurance issuer offering health in-
surance coverage in the individual or small group 
market shall, in the case of an individual who is an 
applicable policyholder of such coverage with respect 
to an enforcement period applicable to enrollments 
for a plan year beginning with plan year 2019 (or, 
in the case of enrollments during a special enroll-
ment period, beginning with plan year 2018), in-
crease the monthly premium rate otherwise applica-
ble to such individual for such coverage during each 
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month of such period, by an amount determined 
under paragraph (2). 
‘‘(2) AMOUNT OF PENALTY.—The amount de-
termined under this paragraph for an applicable pol-
icyholder enrolling in health insurance coverage de-
scribed in paragraph (1) for a plan year, with re-
spect to each month during the enforcement period 
applicable to enrollments for such plan year, is the 
amount that is equal to 30 percent of the monthly 
premium rate otherwise applicable to such applicable 
policyholder for such coverage during such month. 
‘‘(b) DEFINITIONS.—For purposes of this section: 
‘‘(1) APPLICABLE
POLICYHOLDER.—The term 
‘applicable policyholder’ means, with respect to 
months of an enforcement period and health insur-
ance coverage, an individual who— 
‘‘(A) is a policyholder of such coverage for 
such months; 
‘‘(B) cannot demonstrate (through presen-
tation of certifications described in section 
2704(e) or in such other manner as may be 
specified in regulations, such as a return or 
statement made under section 6055(d) or 36C 
of the Internal Revenue Code of 1986), during 
the look-back period that is with respect to such 
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enforcement period, there was not a period of 
at least 63 continuous days during which the 
individual did not have creditable coverage (as 
defined in paragraph (1) of section 2704(c) and 
credited in accordance with paragraphs (2) and 
(3) of such section); and 
‘‘(C) in the case of an individual who had 
been enrolled under dependent coverage under a 
group health plan or health insurance coverage 
by reason of section 2714 and such dependent 
coverage of such individual ceased because of 
the age of such individual, is not enrolling dur-
ing the first open enrollment period following 
the date on which such coverage so ceased. 
‘‘(2) LOOK-BACK PERIOD.—The term ‘look-back 
period’ means, with respect to an enforcement period 
applicable to an enrollment of an individual for a 
plan year beginning with plan year 2019 (or, in the 
case of an enrollment of an individual during a spe-
cial enrollment period, beginning with plan year 
2018) in health insurance coverage described in sub-
section (a)(1), the 12-month period ending on the 
date the individual enrolls in such coverage for such 
plan year. 
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‘‘(3) ENFORCEMENT
PERIOD.—The term ‘en-
forcement period’ means— 
‘‘(A) with respect to enrollments during a 
special enrollment period for plan year 2018, 
the period beginning with the first month that 
is during such plan year and that begins subse-
quent to such date of enrollment, and ending 
with the last month of such plan year; and 
‘‘(B) with respect to enrollments for plan 
year 2019 or a subsequent plan year, the 12- 
month period beginning on the first day of the 
respective plan year.’’. 
SEC. 134. INCREASING COVERAGE OPTIONS. 
Section 1302 of the Patient Protection and Afford-
able Care Act (42 U.S.C. 18022) is amended— 
(1) in subsection (a)(3), by inserting ‘‘and with 
respect to a plan year before plan year 2020’’ after 
‘‘subsection (e)’’; and 
(2) in subsection (d), by adding at the end the 
following: 
‘‘(5) SUNSET.—The provisions of this sub-
section shall not apply after December 31, 2019, 
and after such date any reference to this subsection 
or level of coverage or plan described in this sub-
section and any requirement under law applying 
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such a level of coverage or plan shall have no force 
or effect (and such a requirement shall be applied as 
if this section had been repealed).’’. 
SEC. 135. CHANGE IN PERMISSIBLE AGE VARIATION IN 
HEALTH INSURANCE PREMIUM RATES. 
Section 2701(a)(1)(A)(iii) of the Public Health Serv-
ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)), as inserted by sec-
tion 1201(4) of the Patient Protection and Affordable 
Care Act, is amended by inserting after ‘‘(consistent with 
section 2707(c))’’ the following: ‘‘or, for plan years begin-
ning on or after January 1, 2018, as the Secretary may 
implement through interim final regulation, 5 to 1 for 
adults (consistent with section 2707(c)) or such other 
ratio for adults (consistent with section 2707(c)) as the 
State involved may provide’’. 
TITLE II—COMMITTEE ON WAYS 
AND MEANS 
Subtitle A—Repeal and Replace of 
Health-Related Tax Policy 
SEC. 201. RECAPTURE EXCESS ADVANCE PAYMENTS OF 
PREMIUM TAX CREDITS. 
Subparagraph (B) of section 36B(f)(2) of the Inter-
nal Revenue Code of 1986 is amended by adding at the 
end the following new clause: 
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‘‘(iii) NONAPPLICABILITY OF LIMITA-
TION.—This subparagraph shall not apply 
to taxable years beginning after December 
31, 2017, and before January 1, 2020.’’. 
SEC. 202. ADDITIONAL MODIFICATIONS TO PREMIUM TAX 
CREDIT. 
(a) MODIFICATION OF DEFINITION OF QUALIFIED 
HEALTH PLAN.— 
(1) IN GENERAL.—Section 36B(c)(3)(A) of the 
Internal Revenue Code of 1986 is amended— 
(A) by inserting ‘‘(determined without re-
gard to subparagraphs (A), (C)(ii), and (C)(iv) 
of paragraph (1) thereof and without regard to 
whether the plan is offered on an Exchange)’’ 
after ‘‘1301(a) of the Patient Protection and 
Affordable Care Act’’, and 
(B) by striking ‘‘shall not include’’ and all 
that follows and inserting ‘‘shall not include any 
health plan that— 
‘‘(i) is a grandfathered health plan or 
a grandmothered health plan, or 
‘‘(ii) includes coverage for abortions 
(other than any abortion necessary to save 
the life of the mother or any abortion with 
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respect to a pregnancy that is the result of 
an act of rape or incest).’’. 
(2) DEFINITION OF GRANDMOTHERED HEALTH 
PLAN.—Section 36B(c)(3) of such Code is amended 
by adding at the end the following new subpara-
graph: 
‘‘(C) GRANDMOTHERED HEALTH PLAN.— 
‘‘(i) 
IN
GENERAL.—The 
term 
‘grandmothered health plan’ means health 
insurance coverage which is offered in the 
individual health insurance market as of 
October 1, 2013, and is permitted to be of-
fered in such market after January 1, 
2014, as a result of CCIIO guidance. 
‘‘(ii) CCIIO GUIDANCE
DEFINED.— 
The term ‘CCIIO guidance’ means the let-
ter issued by the Centers for Medicare & 
Medicaid Services on November 14, 2013, 
to the State Insurance Commissioners out-
lining a transitional policy for non-grand-
fathered coverage in the individual health 
insurance market, as subsequently ex-
tended and modified (including by a com-
munication entitled ‘Insurance Standards 
Bulletin 
Series—INFORMATION—Ex-
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tension of Transitional Policy through Cal-
endar Year 2017’ issued on February 29, 
2016, by the Director of the Center for 
Consumer Information & Insurance Over-
sight of such Centers). 
‘‘(iii) INDIVIDUAL
HEALTH
INSUR-
ANCE
MARKET.—The 
term 
‘individual 
health insurance market’ means the mar-
ket for health insurance coverage (as de-
fined in section 9832(b)) offered to individ-
uals other than in connection with a group 
health plan (within the meaning of section 
5000(b)(1)).’’. 
(3) CONFORMING
AMENDMENT
RELATED
TO 
ABORTION
COVERAGE.—Section 36B(c)(3) of such 
Code, as amended by paragraph (2), is amended by 
adding at the end the following new subparagraph: 
‘‘(D) CERTAIN RULES RELATED TO ABOR-
TION.— 
‘‘(i) OPTION TO PURCHASE SEPARATE 
COVERAGE OR PLAN.—Nothing in subpara-
graph (A) shall be construed as prohibiting 
any individual from purchasing separate 
coverage for abortions described in such 
subparagraph, or a health plan that in-
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cludes such abortions, so long as no credit 
is allowed under this section with respect 
to the premiums for such coverage or plan. 
‘‘(ii) OPTION TO OFFER COVERAGE OR 
PLAN.—Nothing in subparagraph (A) shall 
restrict any health insurance issuer offer-
ing a health plan from offering separate 
coverage for abortions described in such 
subparagraph, or a plan that includes such 
abortions, so long as premiums for such 
separate coverage or plan are not paid for 
with any amount attributable to the credit 
allowed under this section (or the amount 
of any advance payment of the credit 
under section 1412 of the Patient Protec-
tion and Affordable Care Act). 
‘‘(iii) 
OTHER
TREATMENTS.—The 
treatment of any infection, injury, disease, 
or disorder that has been caused by or ex-
acerbated by the performance of an abor-
tion shall not be treated as an abortion for 
purposes of subparagraph (A).’’. 
(4) CONFORMING
AMENDMENTS
RELATED
TO 
OFF-EXCHANGE COVERAGE.— 
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(A) ADVANCE
PAYMENT
NOT
APPLICA-
BLE.—Section 1412 of the Patient Protection 
and Affordable Care Act is amended by adding 
at the end the following new subsection: 
‘‘(f) EXCLUSION OF OFF-EXCHANGE COVERAGE.— 
Advance payments under this section, and advance deter-
minations under section 1411, with respect to any credit 
allowed under section 36B shall not be made with respect 
to any health plan which is not enrolled in through an 
Exchange.’’. 
(B) REPORTING.—Section 6055(b) of the 
Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph: 
‘‘(3) INFORMATION
RELATING
TO
OFF-EX-
CHANGE PREMIUM CREDIT ELIGIBLE COVERAGE.—If 
minimum essential coverage provided to an indi-
vidual under subsection (a) consists of a qualified 
health plan (as defined in section 36B(c)(3)) which 
is not enrolled in through an Exchange established 
under title I of the Patient Protection and Afford-
able Care Act, a return described in this subsection 
shall include— 
‘‘(A) a statement that such plan is a quali-
fied 
health 
plan 
(as 
defined 
in 
section 
36B(c)(3)), 
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‘‘(B) the premiums paid with respect to 
such coverage, 
‘‘(C) the months during which such cov-
erage is provided to the individual, 
‘‘(D) the adjusted monthly premium for 
the applicable second lowest cost silver plan (as 
defined in section 36B(b)(3)) for each such 
month with respect to such individual, and 
‘‘(E) such other information as the Sec-
retary may prescribe. 
This paragraph shall not apply with respect to cov-
erage provided for any month beginning after De-
cember 31, 2019.’’. 
(C) OTHER CONFORMING AMENDMENTS.— 
(i) Section 36B(b)(2)(A) is amended 
by striking ‘‘and which were enrolled’’ and 
all that follows and inserting ‘‘, or’’. 
(ii) Section 36B(b)(3)(B)(i) is amend-
ed by striking ‘‘the same Exchange’’ and 
all that follows and inserting ‘‘the Ex-
change through which such taxpayer is 
permitted to obtain coverage, and’’. 
(b) MODIFICATION OF APPLICABLE PERCENTAGE.— 
Section 36B(b)(3)(A) of such Code is amended to read 
as follows: 
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‘‘(A) APPLICABLE PERCENTAGE.— 
‘‘(i) IN
GENERAL.—The applicable 
percentage for any taxable year shall be 
the percentage such that the applicable 
percentage for any taxpayer whose house-
hold income is within an income tier speci-
fied in the following table shall increase, on 
a sliding scale in a linear manner, from the 
initial percentage to the final percentage 
specified in such table for such income tier 
with respect to a taxpayer of the age in-
volved: 
‘‘In the case of 
household income 
(expressed as a 
percent of the 
poverty line) 
within the fol-
lowing income 
tier: 
Up to Age 29 
Age 30-39 
Age 40-49 
Age 50-59 
Over Age 59 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Initial 
% 
Final 
% 
Up to 133% 
133%-150% 
150%-200% 
4.3 
5.3 
6.3 
7.3 
8.3 
200%-250% 
4.3 
4.3 
5.3 
5.9 
6.3 
8.05 
7.3 
8.3 
250%-300% 
4.3 
4.3 
5.9 
5.9 
8.05 
8.35 
10.5 
11.5 
300%-400% 
4.3 
4.3 
5.9 
5.9 
8.35 
8.35 
10.5 
10.5 
11.5 
11.5 
‘‘(ii) AGE DETERMINATIONS.— 
‘‘(I) IN GENERAL.—For purposes 
of clause (i), the age of the taxpayer 
taken into account under clause (i) 
with respect to any taxable year is the 
age attained by such taxpayer before 
the close of such taxable year. 
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‘‘(II) JOINT
RETURNS.—In the 
case of a joint return, the age of the 
older spouse shall be taken into ac-
count under clause (i). 
‘‘(iii) INDEXING.—In the case of any 
taxable year beginning in calendar year 
2019, the initial and final percentages con-
tained in clause (i) shall be adjusted to re-
flect— 
‘‘(I) the excess (if any) of the 
rate of premium growth for the period 
beginning with calendar year 2013 
and ending with calendar year 2018, 
over the rate of income growth for 
such period, and 
‘‘(II) in addition to any adjust-
ment under subclause (I), the excess 
(if any) of the rate of premium 
growth for calendar year 2018, over 
the rate of growth in the consumer 
price index for calendar year 2018. 
‘‘(iv) FAILSAFE.—Clause (iii)(II) shall 
apply only if the aggregate amount of pre-
mium tax credits under this section and 
cost-sharing reductions under section 1402 
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of the Patient Protection and Affordable 
Care Act for calendar year 2018 exceeds 
an amount equal to 0.504 percent of the 
gross domestic product for such calendar 
year.’’. 
(b) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2017. 
(2) ADVANCE PAYMENT NOT APPLICABLE TO 
OFF-EXCHANGE COVERAGE.—The amendment made 
by subsection (a)(4)(A) shall take effect on January 
1, 2018. 
(3) REPORTING.—The amendment made by 
subsection (a)(4)(B) shall apply to coverage provided 
for months beginning after December 31, 2017. 
(4) MODIFICATION OF APPLICABLE PERCENT-
AGE.—The amendment made by subsection (b) shall 
apply to taxable years beginning after December 31, 
2018. 
SEC. 203. PREMIUM TAX CREDIT. 
(a) REPEAL
OF PREMIUM TAX CREDIT.—Section 
36B of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new subsection: 
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‘‘(h) TERMINATION.—No credit shall be allowed 
under this section with respect to any coverage month 
which begins after December 31, 2019.’’. 
(b) REPEAL OF ADVANCE PAYMENT OF, AND ELIGI-
BILITY DETERMINATION FOR, PREMIUM TAX CREDIT.— 
Section 1412 of the Patient Protection and Affordable 
Care Act, as amended by the preceding provisions of this 
subtitle, is amended by adding at the end the following 
new subsection: 
‘‘(g) TERMINATION WITH RESPECT
TO PREMIUM 
TAX CREDIT.—Effective January 1, 2020, no provision of 
this section or section 1411 shall apply to the credit al-
lowed under section 36B of the Internal Revenue Code of 
1986 (or to the advance payment of, or determination of 
eligibility for, such credit or payment).’’. 
(c) EFFECTIVE DATES.— 
(1) PREMIUM
TAX
CREDIT.—The amendment 
made by subsection (a) shall apply to months begin-
ning after December 31, 2019, in taxable years end-
ing after such date. 
(2) 
ELIGIBILITY
DETERMINATIONS.—The 
amendment made by subsection (b) shall take effect 
on January 1, 2020. 
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SEC. 204. SMALL BUSINESS TAX CREDIT. 
(a) IN GENERAL.—Section 45R of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(j) SHALL NOT APPLY.—This section shall not 
apply with respect to amounts paid or incurred in taxable 
years beginning after December 31, 2019.’’. 
(b) DISALLOWANCE OF SMALL EMPLOYER HEALTH 
INSURANCE EXPENSE CREDIT
FOR PLAN WHICH IN-
CLUDES COVERAGE FOR ABORTION.—Subsection (h) of 
section 45R of the Internal Revenue Code of 1986 is 
amended— 
(1) by striking ‘‘Any term’’ and inserting the 
following: 
‘‘(1) IN GENERAL.—Any term’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) EXCLUSION OF HEALTH PLANS INCLUDING 
COVERAGE FOR ABORTION.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
health plan’ does not include any health plan 
that includes coverage for abortions (other than 
any abortion necessary to save the life of the 
mother or any abortion with respect to a preg-
nancy that is the result of an act of rape or in-
cest) . 
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‘‘(B) CERTAIN RULES RELATED TO ABOR-
TION.— 
‘‘(i) OPTION TO PURCHASE SEPARATE 
COVERAGE OR PLAN.—Nothing in subpara-
graph (A) shall be construed as prohibiting 
any employer from purchasing for its em-
ployees separate coverage for abortions de-
scribed in such subparagraph, or a health 
plan that includes such abortions, so long 
as no credit is allowed under this section 
with respect to the employer contributions 
for such coverage or plan. 
‘‘(ii) OPTION TO OFFER COVERAGE OR 
PLAN.—Nothing in subparagraph (A) shall 
restrict any health insurance issuer offer-
ing a health plan from offering separate 
coverage for abortions described in such 
subparagraph, or a plan that includes such 
abortions, so long as such separate cov-
erage or plan is not paid for with any em-
ployer contribution eligible for the credit 
allowed under this section. 
‘‘(iii) 
OTHER
TREATMENTS.—The 
treatment of any infection, injury, disease, 
or disorder that has been caused by or ex-
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acerbated by the performance of an abor-
tion shall not be treated as an abortion for 
purposes of subparagraph (A).’’. 
(c) EFFECTIVE DATES.— 
(1) IN
GENERAL.—The amendment made by 
subsection (a) shall apply to taxable years beginning 
after December 31, 2019. 
(2) DISALLOWANCE
OF
SMALL
EMPLOYER 
HEALTH
INSURANCE
EXPENSE
CREDIT
FOR
PLAN 
WHICH INCLUDES COVERAGE FOR ABORTION.—The 
amendments made by subsection (b) shall apply to 
taxable years beginning after December 31, 2017. 
SEC. 205. INDIVIDUAL MANDATE. 
(a) IN GENERAL.—Section 5000A(c) of the Internal 
Revenue Code of 1986 is amended— 
(1) in paragraph (2)(B)(iii), by striking ‘‘2.5 
percent’’ and inserting ‘‘Zero percent’’, and 
(2) in paragraph (3)— 
(A) by striking ‘‘$695’’ in subparagraph 
(A) and inserting ‘‘$0’’, and 
(B) by striking subparagraph (D). 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to months beginning after Decem-
ber 31, 2015. 
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SEC. 206. EMPLOYER MANDATE. 
(a) IN GENERAL.— 
(1) Paragraph (1) of section 4980H(c) of the 
Internal Revenue Code of 1986 is amended by in-
serting ‘‘($0 in the case of months beginning after 
December 31, 2015)’’ after ‘‘$2,000’’. 
(2) Paragraph (1) of section 4980H(b) of the 
Internal Revenue Code of 1986 is amended by in-
serting ‘‘($0 in the case of months beginning after 
December 31, 2015)’’ after ‘‘$3,000’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to months beginning after Decem-
ber 31, 2015. 
SEC. 207. REPEAL OF THE TAX ON EMPLOYEE HEALTH IN-
SURANCE PREMIUMS AND HEALTH PLAN 
BENEFITS. 
Section 4980I of the Internal Revenue Code of 1986 
is amended by adding at the end the following new sub-
section: 
‘‘(h) SHALL NOT APPLY.—No tax shall be imposed 
under this section with respect to any taxable period be-
ginning after December 31, 2019, and before January 1, 
2025.’’. 
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SEC. 208. REPEAL OF TAX ON OVER-THE-COUNTER MEDICA-
TIONS. 
(a) HSAS.—Subparagraph (A) of section 223(d)(2) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘Such term’’ and all that follows through the period. 
(b) ARCHER MSAS.—Subparagraph (A) of section 
220(d)(2) of the Internal Revenue Code of 1986 is amend-
ed by striking ‘‘Such term’’ and all that follows through 
the period. 
(c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS 
AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec-
tion 106 of the Internal Revenue Code of 1986 is amended 
by striking subsection (f) and by redesignating subsection 
(g) as subsection (f). 
(d) EFFECTIVE DATES.— 
(1) 
DISTRIBUTIONS
FROM
SAVINGS
AC-
COUNTS.—The amendments made by subsections (a) 
and (b) shall apply to amounts paid with respect to 
taxable years beginning after December 31, 2017. 
(2) REIMBURSEMENTS.—The amendment made 
by subsection (c) shall apply to expenses incurred 
with respect to taxable years beginning after Decem-
ber 31, 2017. 
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SEC. 209. REPEAL OF INCREASE OF TAX ON HEALTH SAV-
INGS ACCOUNTS. 
(a) HSAS.—Section 223(f)(4)(A) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘20 per-
cent’’ and inserting ‘‘10 percent’’. 
(b) ARCHER MSAS.—Section 220(f)(4)(A) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘20 
percent’’ and inserting ‘‘15 percent’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made after Decem-
ber 31, 2017. 
SEC. 210. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO 
FLEXIBLE SPENDING ACCOUNTS. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 is amended by striking subsection (i). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 211. REPEAL OF MEDICAL DEVICE EXCISE TAX. 
Section 4191 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new sub-
section: 
‘‘(d) APPLICABILITY.—The tax imposed under sub-
section (a) shall not apply to sales after December 31, 
2017.’’. 
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SEC. 212. REPEAL OF ELIMINATION OF DEDUCTION FOR 
EXPENSES ALLOCABLE TO MEDICARE PART D 
SUBSIDY. 
(a) IN GENERAL.—Section 139A of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new sentence: ‘‘This section shall not be taken 
into account for purposes of determining whether any de-
duction is allowable with respect to any cost taken into 
account in determining such payment.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 213. REPEAL OF INCREASE IN INCOME THRESHOLD 
FOR DETERMINING MEDICAL CARE DEDUC-
TION. 
(a) IN GENERAL.—Subsection (a) of section 213 of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘10 percent’’ and inserting ‘‘7.5 percent’’. 
(b) EXTENSION OF SPECIAL RULE.—Subsection (f) 
of section 213 of such Code is amended— 
(1) by striking ‘‘2017’’ and inserting ‘‘2018’’, 
and 
(2) by striking ‘‘AND 2016’’ and inserting 
‘‘2016, AND 2017’’. 
(c) EFFECTIVE DATE.— 
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(1) IN
GENERAL.—The amendment made by 
subsection (a) shall apply to taxable years beginning 
after December 31, 2017. 
(2) 
EXTENSION
OF
SPECIAL
RULE.—The 
amendments made by subsection (b) shall apply to 
taxable years beginning after December 31, 2016. 
SEC. 214. REPEAL OF MEDICARE TAX INCREASE. 
(a) IN GENERAL.—Subsection (b) of section 3101 of 
the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 
imposed by the preceding subsection, there is hereby im-
posed on the income of every individual a tax equal to 1.45 
percent of the wages (as defined in section 3121(a)) re-
ceived by such individual with respect to employment (as 
defined in section 3121(b)).’’. 
(b) SECA.—Subsection (b) of section 1401 of the In-
ternal Revenue Code of 1986 is amended to read as fol-
lows: 
‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 
imposed by the preceding subsection, there shall be im-
posed for each taxable year, on the self-employment in-
come of every individual, a tax equal to 2.9 percent of the 
amount of the self-employment income for such taxable 
year.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to remuneration re-
ceived after, and taxable years beginning after, December 
31, 2017. 
SEC. 215. REFUNDABLE TAX CREDIT FOR HEALTH INSUR-
ANCE COVERAGE. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 36B the fol-
lowing new section: 
‘‘SEC. 36C. HEALTH INSURANCE COVERAGE. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a credit against the tax imposed 
by this subtitle for the taxable year the sum of the month-
ly credit amounts with respect to such taxpayer for cal-
endar months during such taxable year. 
‘‘(b) MONTHLY CREDIT AMOUNTS.— 
‘‘(1) IN GENERAL.—The monthly credit amount 
with respect to any taxpayer for any calendar month 
is the lesser of— 
‘‘(A) the sum of the monthly limitation 
amounts determined under subsection (c) with 
respect to the taxpayer and the taxpayer’s 
qualifying family members for such month, or 
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‘‘(B) the amount paid for eligible health 
insurance for the taxpayer and the taxpayer’s 
qualifying family members for such month. 
‘‘(2) ELIGIBLE
COVERAGE
MONTH
REQUIRE-
MENT.—No amount shall be taken into account 
under subparagraph (A) or (B) of paragraph (1) 
with respect to any individual for any month unless 
such month is an eligible coverage month with re-
spect to such individual. 
‘‘(c) MONTHLY LIMITATION AMOUNTS.— 
‘‘(1) IN
GENERAL.—The monthly limitation 
amount with respect to any individual for any eligi-
ble coverage month during any taxable year is 1⁄12 
of— 
‘‘(A) $2,000 in the case of an individual 
who has not attained age 30 as of the begin-
ning of such taxable year, 
‘‘(B) $2,500 in the case of an individual 
who has attained age 30 but who has not at-
tained age 40 as of such time, 
‘‘(C) $3,000 in the case of an individual 
who has attained age 40 but who has not at-
tained age 50 as of such time, 
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‘‘(D) $3,500 in the case of an individual 
who has attained age 50 but who has not at-
tained age 60 as of such time, and 
‘‘(E) $4,000 in the case of an individual 
who has attained age 60 as of such time. 
‘‘(2) LIMITATION
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.— 
‘‘(A) IN GENERAL.—The amount otherwise 
determined under subsection (b)(1)(A) (without 
regard to this subparagraph but after any other 
adjustment of such amount under this section) 
for the taxable year shall be reduced (but not 
below zero) by 10 percent of the excess (if any) 
of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income for such taxable year, over 
‘‘(ii) $75,000 (twice such amount in 
the case of a joint return). 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of this paragraph, the 
term ‘modified adjusted gross income’ means 
adjusted gross income increased by— 
‘‘(i) any amount excluded from gross 
income under section 911, 
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‘‘(ii) any amount of interest received 
or accrued by the taxpayer during the tax-
able year which is exempt from tax, and 
‘‘(iii) an amount equal to the portion 
of the taxpayer’s social security benefits 
(as defined in section 86(d)) which is not 
included in gross income under section 86 
for the taxable year. 
‘‘(3) OTHER LIMITATIONS.— 
‘‘(A) AGGREGATE DOLLAR LIMITATION.— 
The sum of the monthly limitation amounts 
taken into account under this section with re-
spect to any taxpayer for any taxable year shall 
not exceed $14,000. 
‘‘(B) MAXIMUM NUMBER OF INDIVIDUALS 
TAKEN INTO ACCOUNT.—With respect to any 
taxpayer for any month, monthly limitation 
amounts shall be taken into account under this 
section only with respect to the 5 oldest individ-
uals with respect to whom monthly limitation 
amounts could (without regard to this subpara-
graph) otherwise be so taken into account. 
‘‘(d) ELIGIBLE COVERAGE MONTH.—For purposes of 
this section, the term ‘eligible coverage month’ means, 
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with respect to any individual, any month if, as of the first 
day of such month, the individual— 
‘‘(1) is covered by eligible health insurance, 
‘‘(2) is not eligible for other specified coverage, 
‘‘(3) is either— 
‘‘(A) a citizen or national of the United 
States, or 
‘‘(B) a qualified alien (within the meaning 
of section 431 of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 
1996 (8 U.S.C. 1641)), and 
‘‘(4) is not incarcerated, other than incarcer-
ation pending the disposition of charges. 
‘‘(e) QUALIFYING FAMILY MEMBER.—For purposes 
of this section, the term ‘qualifying family member’ 
means— 
‘‘(1) in the case of a joint return, the taxpayer’s 
spouse, 
‘‘(2) any dependent of the taxpayer, and 
‘‘(3) with respect to any eligible coverage 
month, any child (as defined in section 152(f)(1)) of 
the taxpayer who as of the end of the taxable year 
has not attained age 27 if such child is covered for 
such month under eligible health insurance which 
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also covers the taxpayer (in the case of a joint re-
turn, either spouse). 
‘‘(f) ELIGIBLE HEALTH INSURANCE.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘eligible health 
insurance’ means any health insurance coverage (as 
defined in section 9832(b)) if— 
‘‘(A) such coverage is either— 
‘‘(i) offered in the individual health 
insurance market within a State, or 
‘‘(ii) is unsubsidized COBRA continu-
ation coverage, 
‘‘(B) such coverage is not a grandfathered 
health plan (as defined in section 1251 of the 
Patient Protection and Affordable Care Act) or 
a grandmothered health plan, 
‘‘(C) substantially all of such coverage is 
not of excepted benefits described in section 
9832(c), 
‘‘(D) such coverage does not include cov-
erage for abortions (other than any abortion 
necessary to save the life of the mother or any 
abortion with respect to a pregnancy that is the 
result of an act of rape or incest), 
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‘‘(E) such coverage does not consist of 
short-term limited duration insurance (as de-
fined by the Secretary), and 
‘‘(F) the State in which such insurance is 
offered certifies that such coverage meets the 
requirements of this paragraph. 
‘‘(2) RULES
RELATED
TO
STATE
CERTIFI-
CATION.— 
‘‘(A) CERTIFICATION MADE AVAILABLE TO 
PUBLIC.—A certification shall not be taken into 
account under paragraph (1)(E) unless such 
certification is made available to the public and 
meets such other requirements as the Secretary 
may provide. 
‘‘(B) SPECIAL
RULE
FOR
UNSUBSIDIZED 
COBRA CONTINUATION COVERAGE.—In the case 
of unsubsidized COBRA continuation cov-
erage— 
‘‘(i) paragraph (1)(E) shall be applied 
by substituting ‘the plan administrator (as 
defined in section 414(g)) of the health 
plan’ for ‘the State in which such insur-
ance is offered’, and 
‘‘(ii) the requirements of subpara-
graph (A) shall be treated as satisfied if 
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the certification meets such requirements 
as the Secretary may provide. 
‘‘(3) GRANDMOTHERED HEALTH PLAN.— 
‘‘(A) 
IN
GENERAL.—The 
term 
‘grandmothered health plan’ means health in-
surance coverage which is offered in the indi-
vidual health insurance market as of January 1, 
2013, and is permitted to be offered in such 
market after January 1, 2014, as a result of 
CCIIO guidance. 
‘‘(B) CCIIO GUIDANCE
DEFINED.—The 
term ‘CCIIO guidance’ means the letter issued 
by the Centers for Medicare & Medicaid Serv-
ices on November 14, 2013, to the State Insur-
ance Commissioners outlining a transitional pol-
icy for non-grandfathered coverage in the indi-
vidual health insurance market, as subsequently 
extended and modified (including by a commu-
nication entitled ‘Insurance Standards Bulletin 
Series—INFORMATION—Extension of Tran-
sitional Policy through Calendar Year 2017’ 
issued on February 29, 2016, by the Director 
of the Center for Consumer Information & In-
surance Oversight of such Centers). 
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‘‘(4) INDIVIDUAL
HEALTH
INSURANCE
MAR-
KET.—The term ‘individual health insurance mar-
ket’ means the market for health insurance coverage 
(as defined in section 9832(b)) offered to individuals 
other than in connection with a group health plan 
(within the meaning of section 5000(b)(1)). 
‘‘(g) OTHER SPECIFIED COVERAGE.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘other specified 
coverage’ means any of the following: 
‘‘(A) Coverage under a group health plan 
(within the meaning of section 5000(b)(1)) 
other than— 
‘‘(i) coverage under a plan substan-
tially all of the coverage of which is of ex-
cepted 
benefits 
described 
in 
section 
9832(c), and 
‘‘(ii) COBRA continuation coverage. 
‘‘(B) Coverage under the Medicare pro-
gram under part A of title XVIII of the Social 
Security Act. 
‘‘(C) Coverage under the Medicaid pro-
gram under title XIX of the Social Security 
Act. 
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‘‘(D) Coverage under the CHIP program 
under title XXI of the Social Security Act. 
‘‘(E) Medical coverage under chapter 55 of 
title 10, United States Code, including coverage 
under the TRICARE program. 
‘‘(F) Coverage under a health care pro-
gram under chapter 17 or 18 of title 38, United 
States Code, as determined by the Secretary of 
Veterans Affairs, in coordination with the Sec-
retary of Health and Human Services and the 
Secretary of the Treasury. 
‘‘(G) Coverage under a health plan under 
section 2504(e) of title 22, United States Code 
(relating to Peace Corps volunteers). 
‘‘(H) Coverage under the Nonappropriated 
Fund Health Benefits Program of the Depart-
ment of Defense, established under section 349 
of the National Defense Authorization Act for 
Fiscal Year 1995 (Public Law 103–337; 10 
U.S.C. 1587 note). 
‘‘(2) SPECIAL RULE WITH RESPECT TO VET-
ERANS HEALTH PROGRAMS.—In the case of other 
specified coverage described in paragraph (1)(F), an 
individual shall not be treated as eligible for such 
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coverage unless such individual is enrolled in such 
coverage. 
‘‘(h) UNSUBSIDIZED COBRA CONTINUATION COV-
ERAGE.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘unsubsidized 
COBRA continuation coverage’ means COBRA con-
tinuation coverage no portion of the premiums for 
which are subsidized by the employer. 
‘‘(2) COBRA CONTINUATION COVERAGE.—The 
term ‘COBRA continuation coverage’ means con-
tinuation coverage provided pursuant to part 6 of 
subtitle B of title I of the Employee Retirement In-
come Security Act of 1974 (other than under section 
609), title XXII of the Public Health Service Act, 
section 4980B of the Internal Revenue Code of 1986 
(other than subsection (f)(1) of such section insofar 
as it relates to pediatric vaccines), or section 8905a 
of title 5, United States Code, or under a State pro-
gram that provides comparable continuation cov-
erage. Such term shall not include coverage under a 
health flexible spending arrangement. 
‘‘(i) SPECIAL RULES.— 
‘‘(1) MARRIED COUPLES MUST FILE JOINT RE-
TURN.—If the taxpayer is married (within the mean-
ing of section 7703) at the close of the taxable year, 
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no credit shall be allowed under this section to such 
taxpayer unless such taxpayer and the taxpayer’s 
spouse file a joint return for such taxable year. 
‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.— 
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section to any individual who 
is a dependent with respect to another taxpayer 
for a taxable year beginning in the calendar 
year in which such individual’s taxable year be-
gins. 
‘‘(B) COORDINATION
WITH
RULE
FOR 
OLDER CHILDREN.—In the case of any indi-
vidual who is a qualifying family member de-
scribed in subsection (e)(3) with respect to an-
other taxpayer for any month, in determining 
the amount of any credit allowable to such indi-
vidual under this section for any taxable year of 
such individual which includes such month, the 
monthly limitation amount with respect to such 
individual for such month shall be zero and no 
amount paid for eligible health insurance with 
respect to such individual for such month shall 
be taken into account. 
‘‘(3) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—Amounts 
described 
in 
subsection 
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100 
(b)(1)(B) with respect to any month shall not be 
taken into account in determining the deduction al-
lowed under section 213 except to the extent that 
such amounts exceed the amount described in sub-
section (b)(1)(A) with respect to such month. 
‘‘(4) INSURANCE WHICH COVERS OTHER INDI-
VIDUALS.—For purposes of this section, rules simi-
lar to the rules of section 213(d)(6) shall apply with 
respect to any contract for eligible health insurance 
under which amounts are payable for coverage of an 
individual other than the taxpayer and the tax-
payer’s qualifying family members. 
‘‘(5) COORDINATION WITH ADVANCE PAYMENTS 
OF CREDIT.—With respect to any taxable year— 
‘‘(A) the amount which would (but for this 
subsection) be allowed as a credit to the tax-
payer under subsection (a) shall be reduced 
(but not below zero) by the aggregate amount 
paid on behalf of such taxpayer under section 
7529 for months beginning in such taxable 
year, and 
‘‘(B) the tax imposed by section 1 for such 
taxable year shall be increased by the excess (if 
any) of— 
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101 
‘‘(i) the aggregate amount paid on be-
half of such taxpayer under section 7529 
for months beginning in such taxable year, 
over 
‘‘(ii) the amount which would (but for 
this subsection) be allowed as a credit to 
the taxpayer under subsection (a). 
‘‘(6) SPECIAL
RULES
FOR
QUALIFIED
SMALL 
EMPLOYER
HEALTH
REIMBURSEMENT
ARRANGE-
MENTS.— 
‘‘(A) IN GENERAL.—If the taxpayer or any 
qualifying family member of the taxpayer is 
provided a qualified small employer health reim-
bursement arrangement for any eligible cov-
erage month, the sum determined under sub-
section (b)(1)(A) with respect to the taxpayer 
for such month shall be reduced (but not below 
zero) by 1⁄12 of the permitted benefit (as de-
fined in section 9831(d)(3)(C)) under such ar-
rangement. 
‘‘(B) 
QUALIFIED
SMALL
EMPLOYER 
HEALTH
REIMBURSEMENT
ARRANGEMENT.— 
For purposes of this paragraph, the term 
‘qualified small employer health reimbursement 
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102 
arrangement’ has the meaning given such term 
by section 9831(d)(2). 
‘‘(C) COVERAGE FOR LESS THAN ENTIRE 
YEAR.—In the case of an employee who is pro-
vided a qualified small employer health reim-
bursement arrangement for less than an entire 
year, subparagraph (A) shall be applied by sub-
stituting ‘the number of months during the year 
for which such arrangement was provided’ for 
‘12’. 
‘‘(7) CERTAIN
RULES
RELATED
TO
ABOR-
TION.— 
‘‘(A) OPTION
TO
PURCHASE
SEPARATE 
COVERAGE
OR
PLAN.—Nothing in subsection 
(f)(1)(D) shall be construed as prohibiting any 
individual from purchasing separate coverage 
for abortions described in such subparagraph, 
or a health plan that includes such abortions, so 
long as no credit is allowed under this section 
with respect to the premiums for such coverage 
or plan. 
‘‘(B) OPTION
TO
OFFER
COVERAGE
OR 
PLAN.—Nothing in subsection (f)(1)(D) shall 
restrict any health insurance issuer offering a 
health plan from offering separate coverage for 
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103 
abortions described in such clause, or a plan 
that includes such abortions, so long as pre-
miums for such separate coverage or plan are 
not paid for with any amount attributable to 
the credit allowed under this section. 
‘‘(C) OTHER
TREATMENTS.—The treat-
ment of any infection, injury, disease, or dis-
order that has been caused by or exacerbated 
by the performance of an abortion shall not be 
treated as an abortion for purposes of sub-
section (f)(1)(D). 
‘‘(8) INFLATION ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2020, each dollar amount in subsection (c)(1), 
the $75,000 amount in subsection (c)(2)(A)(ii), 
and the dollar amount in subsection (c)(3)(A), 
shall be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined— 
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‘‘(I) by substituting ‘calendar 
year 2019’ for ‘calendar year 1992’ in 
subparagraph (B) thereof, and 
‘‘(II) by substituting for the CPI 
referred to section 1(f)(3)(A) the 
amount that such CPI would have 
been if the annual percentage increase 
in CPI with respect to each year after 
2019 had been one percentage point 
greater. 
‘‘(B) TERMS RELATED TO CPI.— 
‘‘(i) 
ANNUAL
PERCENTAGE
IN-
CREASE.—For purposes of subparagraph 
(A)(ii)(II), the term ‘annual percentage in-
crease’ means the percentage (if any) by 
which CPI for any year exceeds CPI for 
the prior year. 
‘‘(ii) OTHER TERMS.—Terms used in 
this paragraph which are also used in sec-
tion 1(f)(3) shall have the same meanings 
as when used in such section. 
‘‘(C) ROUNDING.—Any increase deter-
mined under subparagraph (A) shall be rounded 
to the nearest multiple of $50. 
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‘‘(9) REGULATIONS.—The Secretary may pre-
scribe such regulations and other guidance as may 
be necessary or appropriate to carry out this section, 
section 6050X, and section 7529.’’. 
(b) ADVANCE
PAYMENT
OF
CREDIT; EXCESS 
HEALTH INSURANCE COVERAGE CREDIT PAYABLE TO 
HEALTH SAVINGS ACCOUNT.—Chapter 77 of such Code 
is amended by adding at the end the following: 
‘‘SEC. 7529. ADVANCE PAYMENT OF HEALTH INSURANCE 
COVERAGE CREDIT. 
‘‘(a) GENERAL RULE.—Not later than January 1, 
2020, the Secretary, in consultation with the Secretary of 
Health and Human Services, the Secretary of Homeland 
Security, and the Commissioner of Social Security, shall 
establish a program (hereafter in this section referred to 
as the ‘advance payment program’) for making payments 
to providers of eligible health insurance on behalf of tax-
payers eligible for the credit under section 36C. 
‘‘(b) LIMITATION.—The aggregate payments made 
under this section with respect to any taxpayer, deter-
mined as of any time during any calendar year, shall not 
exceed the monthly credit amounts determined with re-
spect to such taxpayer under section 36C for months dur-
ing such calendar year which have ended as of such time. 
‘‘(c) ADMINISTRATION.— 
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‘‘(1) IN GENERAL.—The advance payment pro-
gram shall, to the greatest extent practicable, use 
the methods and procedures used to administer the 
programs created under sections 1411 and 1412 of 
the Patient Protection and Affordable Care Act (de-
termined without regard to section 1412(f) of such 
Act) and each entity that is authorized to take any 
actions under the programs created under such sec-
tions (as so determined) shall, at the request of the 
Secretary, take such actions to the extent necessary 
to carry out this section. 
‘‘(2) APPLICATION
TO
OFF-EXCHANGE
COV-
ERAGE.—Except as otherwise provided by the Sec-
retary, for purposes of applying this subsection in 
the case of eligible health insurance which is not en-
rolled in through an Exchange established under 
title I of the Patient Protection and Affordable Care 
Act, the sections referred to in paragraph (1) shall 
be applied by treating references in such sections to 
an Exchange as references to the provider of such 
eligible health insurance (or, as the Secretary deter-
mines appropriate, to the licensed agent or broker 
with respect to such insurance), except that the Sec-
retary of Health and Human Services shall carry out 
the responsibilities of the Exchange under section 
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1411(e)(4) of the Patient Protection and Affordable 
Care Act (determined without regard to section 
1412(f) of such Act) in the case of such insurance. 
‘‘(3) 
DOCUMENTATION
REGARDING
OTHER 
SPECIFIED COVERAGE.— 
‘‘(A) IN GENERAL.—The advance payment 
program shall provide that any individual ap-
plying to have payments made on their behalf 
under such program shall, if such individual (or 
any qualifying family member of such individual 
taken into account in determining the amount 
of the credit allowable under section 36C) is 
employed, submit a written statement from 
each employer of such individual or such quali-
fying family member stating whether such indi-
vidual or qualifying family member (as the case 
may be) is eligible for other specified coverage 
in connection with such employment. 
‘‘(B) ISSUANCE OF STATEMENTS.—An em-
ployer shall, at the request of any employee, 
provide the statement under subparagraph (A) 
at such time, and in such form and manner, as 
the Secretary may provide. 
‘‘(d) DEFINITIONS.—For purposes of this section, 
terms used in this section which are also used in section 
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36C shall have the same meaning as when used in section 
36C. 
‘‘SEC. 7530. EXCESS HEALTH INSURANCE COVERAGE CRED-
IT PAYABLE TO HEALTH SAVINGS ACCOUNT. 
‘‘(a) IN GENERAL.—At the request of an eligible tax-
payer, the Secretary shall make a payment to the trustee 
of the designated health savings account with respect to 
such taxpayer in an amount equal to the sum of the ex-
cesses (if any) described in subsection (c)(2) with respect 
to months in the taxable year. 
‘‘(b) DESIGNATED HEALTH SAVINGS ACCOUNT.— 
The term ‘designated health savings account’ means a 
health savings account of an individual described in sub-
section (c)(3) which is identified by the eligible taxpayer 
for purposes of this section. 
‘‘(c) ELIGIBLE TAXPAYER.—The term ‘eligible tax-
payer’ means, with respect to any taxable year, any tax-
payer if— 
‘‘(1) such taxpayer is allowed a credit under 
section 36C for such taxable year, 
‘‘(2) the amount described in subparagraph (A) 
of section 36C(b)(1) exceeds the amount described 
in subparagraph (B) of such section with respect to 
such taxpayer applied with respect to any month 
during such taxable year, and 
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‘‘(3) the taxpayer or one or more of the tax-
payer’s qualifying family members (as defined in 
section 36C(e)) were eligible individuals (as defined 
in section 223(c)(1)) for one or more months during 
such taxable year. 
‘‘(d) CONTRIBUTIONS
TREATED
AS
ROLLOVERS, 
ETC.— 
‘‘(1) IN GENERAL.—Any amount paid the Sec-
retary to a health savings account under this section 
shall be treated for purposes of this title in the same 
manner as a rollover contribution described in sec-
tion 223(f)(5). 
‘‘(2) COORDINATION
WITH
LIMITATION
ON 
ROLLOVERS.—Any amount described in paragraph 
(1) shall not be taken into account in applying sec-
tion 223(f)(5)(B) with respect to any other amount 
and the limitation of section 223(f)(5)(B) shall not 
apply with respect to the application of paragraph 
(1). 
‘‘(e) FORM AND MANNER OF REQUEST.—The re-
quest referred to in subsection (a) shall be made at such 
time and in such form and manner as the Secretary may 
provide. To the extent that the Secretary determines fea-
sible, such request may identify more than one designated 
health savings account (and the amount to be paid to each 
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such account) provided that the aggregate of such pay-
ments with respect to any taxpayer for any taxable year 
do not exceed the excess described in subsection (c)(2). 
‘‘(f) TAXPAYERS WITH SERIOUSLY DELINQUENT 
TAX DEBT.—In the case of an individual who has a seri-
ously delinquent tax debt (as defined in section 7345(b)) 
which has not been fully satisfied— 
‘‘(1) if such individual is the eligible taxpayer 
(or, in the case of a joint return, either spouse), the 
Secretary shall not make any payment under this 
section with respect to such taxpayer, and 
‘‘(2) if such individual is the account bene-
ficiary (as defined in section 223(d)(3)) of any 
health savings account, the Secretary shall not make 
any payment under this section to such health sav-
ings account. 
‘‘(g) ADVANCE PAYMENT.—To the extent that the 
Secretary determines feasible, payment under this section 
may be made in advance on a monthly basis under rules 
similar to the rules of sections 7529 and 36C(i)(5)(B).’’. 
(c) INFORMATION REPORTING.— 
(1) REPORTING BY HEALTH INSURANCE PRO-
VIDERS.—Subpart B of part III of subchapter A of 
chapter 61 of such Code is amended by adding at 
the end the following new section: 
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‘‘SEC. 6050X. RETURNS BY HEALTH INSURANCE PROVIDERS 
RELATING 
TO 
HEALTH 
INSURANCE 
COV-
ERAGE CREDIT. 
‘‘(a) REQUIREMENT OF REPORTING.—Every person 
who provides eligible health insurance for any month of 
any calendar year with respect to any individual shall, at 
such time as the Secretary may prescribe, make the return 
described in subsection (b) with respect to each such indi-
vidual. With respect to any individual with respect to 
whom payments under section 7529 are made by the Sec-
retary, the reporting under subsection (b) shall be made 
on a monthly basis. 
‘‘(b) FORM AND MANNER OF RETURNS.—A return 
is described in this subsection if such return— 
‘‘(1) is in such form as the Secretary may pre-
scribe, and 
‘‘(2) contains, with respect to each policy of eli-
gible health insurance— 
‘‘(A) the name, address, and TIN of each 
individual covered under such policy, 
‘‘(B) the premiums paid with respect to 
such policy, 
‘‘(C) the amount of advance payments 
made on behalf of the individual under section 
7529, 
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‘‘(D) the months during which such health 
insurance is provided to the individual, 
‘‘(E) whether such policy constitutes a 
high deductible health plan (as defined in sec-
tion 223(c)(2)), and 
‘‘(F) such other information as the Sec-
retary may prescribe. 
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
QUIRED.—Every person required to make a return under 
subsection (a) shall furnish to each individual whose name 
is required to be set forth in such return a written state-
ment showing— 
‘‘(1) the name and address of the person re-
quired to make such return and the phone number 
of the information contact for such person, and 
‘‘(2) the information required to be shown on 
the return with respect to such individual. 
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the 
year following the calendar year to which such statement 
relates. 
‘‘(d) DEFINITIONS.—For purposes of this section, 
terms used in this section which are also used in section 
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36C shall have the same meaning as when used in section 
36C.’’. 
(2) 
REPORTING
BY
EMPLOYERS.—Section 
6051(a) of such Code is amended by striking ‘‘and’’ 
at the end of paragraph (14), by striking the period 
at the end of paragraph (15) and inserting ‘‘, and’’, 
and by inserting after paragraph (15) the following 
new paragraph: 
‘‘(16) each month with respect to which the em-
ployee is eligible for other specified coverage (as de-
fined in section 36C(g)) in connection with employ-
ment with the employer.’’. 
(3) ASSESSABLE PENALTIES.— 
(A) Section 6724(d)(1)(B) of such Code is 
amended by striking ‘‘or’’ at the end of clause 
(xxiv), by inserting ‘‘or’’ at the end of clause 
(xxv), and by inserting after clause (xxv) the 
following new clause: 
‘‘(xxvi) section 6050X (relating to re-
turns relating to health insurance coverage 
credit),’’. 
(B) Section 6724(d)(2) of such Code is 
amended by striking ‘‘or’’ at the end of sub-
paragraph (HH), by striking the period at the 
end of subparagraph (II) and inserting a 
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comma, and by adding after subparagraph (II) 
the following new subparagraphs: 
‘‘(JJ) section 6050X (relating to returns 
relating to health insurance coverage credit), or 
‘‘(KK) section 7529(c)(3) (relating to doc-
umentation regarding other specified cov-
erage).’’. 
(d) DISCLOSURES.—Paragraph (21) of section 
6103(l) of the Internal Revenue Code of 1986 is amend-
ed— 
(1) in subparagraph (A)— 
(A) by striking ‘‘any premium tax credit 
under section 36B or any cost-sharing reduc-
tion under section 1402 of the Patient Protec-
tion and Affordable Care Act or’’ and inserting 
‘‘any credit under section 36C’’, 
(B) by striking ‘‘, a State’s children’s 
health insurance program under title XXI of 
the Social Security Act, or a basic health pro-
gram under section 1331 of Patient Protection 
and Affordable Care Act’’ and inserting ‘‘or a 
State’s children’s health insurance program 
under title XXI of the Social Security Act’’, 
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(C) by striking ‘‘(as defined in section 
36B)’’ in clause (iv) and inserting ‘‘(as defined 
in section 36C(c)(2)(B))’’, and 
(D) by striking ‘‘or reduction’’ in clause 
(v), 
(2) in subparagraph (B)— 
(A) by striking ‘‘may disclose to an Ex-
change’’ and inserting ‘‘may disclose— 
‘‘(i) to an Exchange’’, and 
(B) by striking the period at the end and 
inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
clause: 
‘‘(ii) in the case of any credit under 
section 36C with respect to any health in-
surance, the amount of such credit (or the 
amount of any advance payment of such 
credit) to the provider of such insurance 
(or, as the Secretary determines appro-
priate, the licensed agent or broker with 
respect to such insurance).’’, and 
(3) in subparagraph (C)(i), by striking ‘‘amount 
of, any credit or reduction’’ and inserting ‘‘amount 
of any credit’’. 
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(e) INCREASED PENALTY ON ERRONEOUS CLAIMS OF 
CREDIT.—Section 6676(a) of such Code is amended by 
inserting ‘‘(25 percent in the case of a claim for refund 
or credit relating to the health insurance coverage credit 
under section 36C)’’ after ‘‘20 percent’’. 
(f) CONFORMING AMENDMENTS.— 
(1) Section 35(g) of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(14) COORDINATION
WITH
HEALTH
INSUR-
ANCE COVERAGE CREDIT.— 
‘‘(A) IN GENERAL.—An eligible coverage 
month to which the election under paragraph 
(11) applies shall not be treated as an eligible 
coverage month (as defined in section 36C(d)) 
for purposes of section 36C with respect to the 
taxpayer or any of the taxpayer’s qualifying 
family members (as defined in section 36C(e)). 
‘‘(B) COORDINATION WITH ADVANCE PAY-
MENTS
OF
HEALTH
INSURANCE
COVERAGE 
CREDIT.—In the case of a taxpayer who makes 
the election under paragraph (11) with respect 
to any eligible coverage month in a taxable year 
or on behalf of whom any advance payment is 
made under section 7527 with respect to any 
month in such taxable year— 
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‘‘(i) the tax imposed by this chapter 
for the taxable year shall be increased by 
the excess, if any, of— 
‘‘(I) the sum of any advance pay-
ments made on behalf of the taxpayer 
under sections 7527 and 7529 for 
months during such taxable year, over 
‘‘(II) the sum of the credits al-
lowed under this section (determined 
without regard to paragraph (1)) and 
section 36C (determined without re-
gard to subsection (i)(5)(A) thereof) 
for such taxable year, and 
‘‘(ii) section 36C(i)(5)(B) shall not 
apply with respect to such taxpayer for 
such taxable year.’’. 
(2) Section 162(l) of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(6) COORDINATION WITH HEALTH INSURANCE 
COVERAGE CREDIT.—The deduction otherwise allow-
able to a taxpayer under paragraph (1) for any tax-
able year shall be reduced (but not below zero) by 
the sum of— 
‘‘(A) the amount of the credit allowable to 
such taxpayer under section 36C (determined 
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without regard to subsection (i)(5)(A) thereof) 
for such taxable year, plus 
‘‘(B) the aggregate payments made with 
respect to the taxpayer under section 7530 for 
months during such taxable year.’’. 
(3) Section 1324(b)(2) of title 31, United 
States Code is amended— 
(A) by inserting ‘‘36C,’’ after ‘‘36B,’’, and 
(B) by striking ‘‘or 6431’’ and inserting 
‘‘6431, or 7530’’. 
(4) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by inserting after the 
item relating to section 36B the following new item: 
‘‘Sec. 36C. Health insurance coverage.’’. 
(5) The table of sections for subpart B of part 
III of subchapter A of chapter 61 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 6050X. Returns by health insurance providers relating to health insur-
ance coverage credit.’’. 
(6) The table of sections for chapter 77 of such 
Code is amended by adding at the end the following 
new items: 
‘‘Sec. 7529. Advance payment of health insurance coverage credit. 
‘‘Sec. 7530. Excess health insurance coverage credit payable to health savings 
account.’’. 
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(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to months beginning after Decem-
ber 31, 2019, in taxable years ending after such date. 
SEC. 216. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAV-
INGS ACCOUNT INCREASED TO AMOUNT OF 
DEDUCTIBLE AND OUT-OF-POCKET LIMITA-
TION. 
(a) SELF-ONLY COVERAGE.—Section 223(b)(2)(A) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘$2,250’’ and inserting ‘‘the amount in effect under 
subsection (c)(2)(A)(ii)(I)’’. 
(b) FAMILY COVERAGE.—Section 223(b)(2)(B) of 
such Code is amended by striking ‘‘$4,500’’ and inserting 
‘‘the amount in effect under subsection (c)(2)(A)(ii)(II)’’. 
(c) CONFORMING AMENDMENTS.—Section 223(g)(1) 
of such Code is amended— 
(1) by striking ‘‘subsections (b)(2) and’’ both 
places it appears and inserting ‘‘subsection’’, and 
(2) in subparagraph (B), by striking ‘‘deter-
mined by’’ and all that follows through ‘‘ ‘calendar 
year 2003’.’’ and inserting ‘‘determined by sub-
stituting ‘calendar year 2003’ for ‘calendar year 
1992’ in subparagraph (B) thereof .’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 217. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON-
TRIBUTIONS TO THE SAME HEALTH SAVINGS 
ACCOUNT. 
(a) IN GENERAL.—Section 223(b)(5) of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(5) SPECIAL RULE FOR MARRIED INDIVIDUALS 
WITH FAMILY COVERAGE.— 
‘‘(A) IN GENERAL.—In the case of individ-
uals who are married to each other, if both 
spouses are eligible individuals and either 
spouse has family coverage under a high de-
ductible health plan as of the first day of any 
month— 
‘‘(i) the limitation under paragraph 
(1) shall be applied by not taking into ac-
count any other high deductible health 
plan coverage of either spouse (and if such 
spouses both have family coverage under 
separate high deductible health plans, only 
one such coverage shall be taken into ac-
count), 
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‘‘(ii) such limitation (after application 
of clause (i)) shall be reduced by the ag-
gregate amount paid to Archer MSAs of 
such spouses for the taxable year, and 
‘‘(iii) such limitation (after application 
of clauses (i) and (ii)) shall be divided 
equally between such spouses unless they 
agree on a different division. 
‘‘(B) TREATMENT
OF
ADDITIONAL
CON-
TRIBUTION AMOUNTS.—If both spouses referred 
to in subparagraph (A) have attained age 55 
before the close of the taxable year, the limita-
tion referred to in subparagraph (A)(iii) which 
is subject to division between the spouses shall 
include the additional contribution amounts de-
termined under paragraph (3) for both spouses. 
In any other case, any additional contribution 
amount determined under paragraph (3) shall 
not be taken into account under subparagraph 
(A)(iii) and shall not be subject to division be-
tween the spouses.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
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