II 
Calendar No. 120 
115TH CONGRESS 
1ST SESSION H. R. 1628 
IN THE SENATE OF THE UNITED STATES 
JUNE 7, 2017 
Received; read the first time 
JUNE 8, 2017 
Read twice and placed on the calendar 
AN ACT 
To provide for reconciliation pursuant to title II of the 
concurrent resolution on the budget for fiscal year 2017. 
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 
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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. 
Sec. 117. Permitting States to apply a work requirement for nondisabled, non-
elderly, nonpregnant adults under Medicaid. 
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. 
Subtitle E—Implementation Funding 
Sec. 141. American Health Care Implementation Fund. 
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. Small business tax credit. 
Sec. 204. Individual mandate. 
Sec. 205. Employer mandate. 
Sec. 206. Repeal of the tax on employee health insurance premiums and health 
plan benefits. 
Sec. 207. Repeal of tax on over-the-counter medications. 
Sec. 208. Repeal of increase of tax on health savings accounts. 
Sec. 209. Repeal of limitations on contributions to flexible spending accounts. 
Sec. 210. Repeal of medical device excise tax. 
Sec. 211. Repeal of elimination of deduction for expenses allocable to medicare 
part D subsidy. 
Sec. 212. Reduction of income threshold for determining medical care deduc-
tion. 
Sec. 213. Repeal of Medicare tax increase. 
Sec. 214. Refundable tax credit for health insurance coverage. 
Sec. 215. Maximum contribution limit to health savings account increased to 
amount of deductible and out-of-pocket limitation. 
Sec. 216. Allow both spouses to make catch-up contributions to the same health 
savings account. 
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(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 
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-
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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 
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-
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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. 
(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— 
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(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-
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.—Title XIX of the Social Security 
Act (42 U.S.C. 1396 et seq.) is amended— 
(1) in section 1902 (42 U.S.C. 1396a)— 
(A) in subsection (a)(10)(A)— 
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(i) in clause (i)(VIII), by inserting 
‘‘and ending December 31, 2019,’’ after 
‘‘2014,’’; 
(ii) in clause (ii)(XX), by inserting 
‘‘and ending December 31, 2017,’’ after 
‘‘2014,’’; and 
(iii) in clause (ii), by adding at the 
end the following new subclause: 
‘‘(XXIII) 
beginning 
January 
1, 
2020— 
‘‘(aa) who are expansion enrollees 
(as defined in subsection (nn)(1)); or 
‘‘(bb) who are grandfathered ex-
pansion enrollees (as defined in sub-
section (nn)(2));’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(nn) EXPANSION ENROLLEES.—In this title: 
‘‘(1) IN GENERAL.—The term ‘expansion en-
rollee’ means an individual— 
‘‘(A) who is under 65 years of age; 
‘‘(B) who is not pregnant; 
‘‘(C) who is not entitled to, or enrolled for, 
benefits under part A of title XVIII, or enrolled 
for benefits under part B of title XVIII; 
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‘‘(D) who is not described in any of sub-
clauses 
(I) 
through 
(VII) 
of 
subsection 
(a)(10)(A)(i); and 
‘‘(E) whose income (as determined under 
subsection (e)(14)) does not exceed 133 percent 
of the poverty line (as defined in section 
2110(c)(5)) applicable to a family of the size in-
volved. 
‘‘(2) GRANDFATHERED
EXPANSION
ENROLL-
EES.—The term ‘grandfathered expansion enrollee’ 
means an expansion enrollee who— 
‘‘(A) was enrolled under the State plan 
under this title (or under a waiver of such plan) 
as of December 31, 2019; and 
‘‘(B) does not have a break in eligibility 
for medical assistance under such State plan 
(or waiver) for more than one month after such 
date. 
‘‘(3) APPLICATION OF RELATED PROVISIONS.— 
Any reference in subsection (a)(10)(G), (k), or (gg) 
of this section or in section 1903, 1905(a), 1920(e), 
or 1937(a)(1)(B) to individuals described in sub-
clause (VIII) of subsection (a)(10)(A)(i) shall be 
deemed to include a reference to expansion enrollees 
(including grandfathered expansion enrollees).’’; and 
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section (d)(4)(A)(iii) but shall not be construed 
as including any expenditures attributable to 
the program under section 1928. In applying 
subparagraph (B), non-DSH supplemental pay-
ments (as defined in subsection (d)(4)(A)(ii)) 
and 
payments 
described 
in 
subsection 
(d)(4)(A)(iii) shall be treated as fully attrib-
utable to 1903A enrollees. 
‘‘(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’) for which pay-
ment is (or may otherwise be) made pursuant to sec-
tion 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: 
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‘‘(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 
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 and subject to para-
graph (4), the sum of the products, for each of the 
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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 and State— 
‘‘(A) for fiscal year 2020, an amount equal 
to— 
‘‘(i) the provisional FY19 target per 
capita amount for such enrollee category 
(as calculated under subsection (d)(5)) for 
the State; increased by 
‘‘(ii) the applicable annual inflation 
factor (as defined in paragraph (3)) for 
fiscal year 2020; and 
‘‘(B) for each succeeding fiscal year, an 
amount equal to— 
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‘‘(i) the target per capita medical as-
sistance expenditures (under subparagraph 
(A) or this subparagraph) for the 1903A 
enrollee category and State for the pre-
ceding fiscal year, increased by 
‘‘(ii) the applicable annual inflation 
factor for that succeeding fiscal year. 
‘‘(3) APPLICABLE
ANNUAL
INFLATION
FAC-
TOR.—In paragraph (2), the term ‘applicable annual 
inflation factor’ means, for a fiscal year— 
‘‘(A) for each of the 1903A enrollee cat-
egories described in subparagraphs (C), (D), 
and (E) of subsection (e)(2), the percentage in-
crease in the medical care component of the 
consumer price index for all urban consumers 
(U.S. city average) from September of the pre-
vious fiscal year to September of the fiscal year 
involved; and 
‘‘(B) for each of the 1903A enrollee cat-
egories described in subparagraphs (A) and (B) 
of subsection (e)(2), the percentage increase de-
scribed in subparagraph (A) plus 1 percentage 
point. 
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‘‘(4) DECREASE
IN
TARGET
EXPENDITURES 
FOR REQUIRED EXPENDITURES BY CERTAIN POLIT-
ICAL SUBDIVISIONS.— 
‘‘(A) IN GENERAL.—In the case of a State 
that had a DSH allotment under section 
1923(f) for fiscal year 2016 that was more than 
6 times the national average of such allotments 
for all the States for such fiscal year and that 
requires political subdivisions within the State 
to contribute funds towards medical assistance 
or other expenditures under the State plan 
under this title (or under a waiver of such plan) 
for a fiscal year (beginning with fiscal year 
2020), the target total medical assistance ex-
penditures for such State and fiscal year shall 
be decreased by the amount that political sub-
divisions in the State are required to contribute 
under the plan (or waiver) without reimburse-
ment from the State for such fiscal year, other 
than contributions described in subparagraph 
(B). 
‘‘(B) EXCEPTIONS.—The contributions de-
scribed in this subparagraph are the following: 
‘‘(i) Contributions required by a State 
from a political subdivision that, as of the 
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first day of the calendar year in which the 
fiscal year involved begins— 
‘‘(I) has a population of more 
than 5,000,000, as estimated by the 
Bureau of the Census; and 
‘‘(II) imposes a local income tax 
upon its residents. 
‘‘(ii) Contributions required by a 
State from a political subdivision for ad-
ministrative expenses if the State required 
such contributions from such subdivision 
without reimbursement from the State as 
of January 1, 2017. 
‘‘(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. 
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‘‘(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— 
‘‘(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. 
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‘‘(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; 
‘‘(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 
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similar expenditure (as defined by the Sec-
retary). 
‘‘(B) For each 1903A enrollee category, 
the number of 1903A enrollees for the State in 
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 and pool payment percent-
age is equal to the ratio (expressed as a per-
centage) of— 
‘‘(i) the total amount of non-DSH 
supplemental expenditures (as defined in 
subparagraph (A)(ii)) and payments de-
scribed in subparagraph (A)(iii) for the 
State for fiscal 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 and pool pay-
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ment percentage for the State (as cal-
culated under subparagraph (C)); divided 
by 
‘‘(ii) the number calculated under sub-
paragraph (B) for the State for the en-
rollee category. 
‘‘(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 
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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 
and subject to subsection (i)(1)(B), 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 indi-
viduals: 
‘‘(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). 
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‘‘(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 
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). 
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‘‘(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-
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. 
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‘‘(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 
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 
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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 
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 
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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-
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). 
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‘‘(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; 
‘‘(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). 
‘‘(i) 
FLEXIBLE
BLOCK
GRANT
OPTION
FOR 
STATES.— 
‘‘(1) IN GENERAL.—In the case of a State that 
elects the option of applying this subsection for a 
10-fiscal-year period (beginning no earlier than fiscal 
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year 2020 and, at the State option, for any suc-
ceeding 10-fiscal-year period) and that has a plan 
approved by the Secretary under paragraph (2) to 
carry out the option for such period— 
‘‘(A) the State shall receive, instead of 
amounts otherwise payable to the State under 
this title for medical assistance for block grant 
individuals within the applicable block grant 
category (as defined in paragraph (6)) for the 
State during the period in which the election is 
in effect, the amount specified in paragraph 
(4); 
‘‘(B) the previous provisions of this section 
shall be applied as if— 
‘‘(i) block grant individuals within the 
applicable block grant category for the 
State and period were not section 1903A 
enrollees for each 10-fiscal year period for 
which the State elects to apply this sub-
section; and 
‘‘(ii) if such option is not extended at 
the end of a 10-fiscal-year-period, the per 
capita limitations under such previous pro-
visions shall again apply after such period 
and such limitations shall be applied as if 
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the election under this subsection had 
never taken place; 
‘‘(C) the payment under this subsection 
may only be used consistent with the State plan 
under paragraph (2) for block grant health care 
assistance (as defined in paragraph (7)); and 
‘‘(D) with respect to block grant individ-
uals within the applicable block grant category 
for the State for which block grant health care 
assistance is made available under this sub-
section, such assistance shall be instead of med-
ical assistance otherwise provided to the indi-
vidual under this title. 
‘‘(2) STATE PLAN FOR ADMINISTERING BLOCK 
GRANT OPTION.— 
‘‘(A) IN GENERAL.—No payment shall be 
made under this subsection to a State pursuant 
to an election for a 10-fiscal-year period under 
paragraph (1) unless the State has a plan, ap-
proved under subparagraph (B), for such period 
that specifies— 
‘‘(i) the applicable block grant cat-
egory with respect to which the State will 
apply the option under this subsection for 
such period; 
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‘‘(ii) the conditions for eligibility of 
block grant individuals within such appli-
cable block grant category for block grant 
health care assistance under the option, 
which shall be instead of other conditions 
for eligibility under this title, except that 
in the case of a State that has elected the 
applicable block grant category described 
in— 
‘‘(I) subparagraph (A) of para-
graph (6), the plan must provide for 
eligibility for pregnant women and 
children required to be provided med-
ical 
assistance 
under 
subsections 
(a)(10)(A)(i) and (e)(4) of section 
1902; or 
‘‘(II) subparagraph (B) of para-
graph (6), the plan must provide for 
eligibility for pregnant women re-
quired to be provided medical assist-
ance under subsection (a)(10)(A)(i); 
and 
‘‘(iii) the types of items and services, 
the amount, duration, and scope of such 
services, the cost-sharing with respect to 
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such services, and the method for delivery 
of block grant health care assistance under 
this subsection, which shall be instead of 
the such types, amount, duration, and 
scope, cost-sharing, and methods of deliv-
ery for medical assistance otherwise re-
quired under this title, except that the plan 
must provide for assistance for— 
‘‘(I) hospital care; 
‘‘(II) surgical care and treat-
ment; 
‘‘(III) medical care and treat-
ment; 
‘‘(IV) obstetrical and prenatal 
care and treatment; 
‘‘(V) prescribed drugs, medicines, 
and prosthetic devices; 
‘‘(VI) other medical supplies and 
services; and 
‘‘(VII) health care for children 
under 18 years of age. 
‘‘(B) REVIEW AND APPROVAL.—A plan de-
scribed in subparagraph (A) shall be deemed 
approved by the Secretary unless the Secretary 
determines, within 30 days after the date of the 
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Secretary’s receipt of the plan, that the plan is 
incomplete or actuarially unsound and, with re-
spect to such plan and its implementation 
under this subsection, the requirements of para-
graphs (1), (10)(B), (17), and (23) of section 
1902(a) shall not apply. 
‘‘(3) AMOUNT OF BLOCK GRANT FUNDS.— 
‘‘(A) FOR
INITIAL
FISCAL
YEAR.—The 
block grant amount under this paragraph for a 
State for the initial fiscal year in the first 10- 
fiscal-year period is equal to the sum of the 
products (for each applicable block grant cat-
egory for such State and period) of— 
‘‘(i) the target per capita medical as-
sistance expenditures for such State for 
such fiscal year (under subsection (c)(2)); 
‘‘(ii) the number of 1903A enrollees 
for such category and State for fiscal year 
2019, as determined under subsection 
(e)(4); and 
‘‘(iii) the Federal average medical as-
sistance matching percentage (as defined 
in subsection (a)(4)) for the State for fis-
cal year 2019. 
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‘‘(B) 
FOR
ANY
SUBSEQUENT
FISCAL 
YEAR.—The block grant amount under this 
paragraph for a State for each succeeding fiscal 
year (in any 10-fiscal-year period) is equal to 
the block grant amount under subparagraph 
(A) (or this subparagraph) for the State for the 
previous fiscal year increased by the annual in-
crease in the consumer price index for all urban 
consumers (all items; U.S. city average) for the 
fiscal year involved. 
‘‘(C) 
AVAILABILITY
OF
ROLLOVER 
FUNDS.—The block grant amount under this 
paragraph for a State for a fiscal year shall re-
main available to the State for expenditures 
under this subsection for the succeeding fiscal 
year but only if an election is in effect under 
this subsection for the State in such succeeding 
fiscal year. 
‘‘(4) FEDERAL PAYMENT AND STATE RESPONSI-
BILITY.—The Secretary shall pay to each State with 
an election in effect under this subsection for a fiscal 
year, from its block grant amount under paragraph 
(3) available for such fiscal year, an amount for 
each quarter of such fiscal year equal to the en-
hanced FMAP described in the first sentence of sec-
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tion 2105(b) of the total amount expended under the 
State plan under this subsection during such quar-
ter, and the State is responsible for the balance of 
funds to carry out such plan. 
‘‘(5) BLOCK GRANT INDIVIDUAL DEFINED.—In 
this subsection, the term ‘block grant individual’ 
means, with respect to a State for a 10-fiscal-year 
period, an individual who is not disabled (as defined 
for purposes of the State plan) and who is within an 
applicable block grant category for the State and 
such period. 
‘‘(6) APPLICABLE BLOCK GRANT CATEGORY DE-
FINED.—In this subsection, the term ‘applicable 
block grant category’ means with respect to a State 
for a 10-fiscal-year period, either of the following as 
specified by the State for such period in its plan 
under paragraph (2)(A)(i): 
‘‘(A) 2 ENROLLEE CATEGORIES.—Both of 
the following 1903A enrollee categories: 
‘‘(i) CHILDREN.—The 1903A enrollee 
category specified in subparagraph (C) of 
subsection (e)(2). 
‘‘(ii) 
OTHER
NONELDERLY, 
NON-
DISABLED, NON-EXPANSION ADULTS.—The 
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1903A enrollee category specified in sub-
paragraph (E) of such subsection. 
‘‘(B) OTHER NONELDERLY, NONDISABLED, 
NON-EXPANSION ADULTS.—Only the 1903A en-
rollee category specified in subparagraph (E) of 
subsection (e)(2). 
‘‘(7) BLOCK
GRANT
HEALTH
CARE
ASSIST-
ANCE.—In this subsection, the term ‘block grant 
health care assistance’ means assistance for health- 
care-related items and medical services for block 
grant individuals within the applicable block grant 
category for the State and 10-fiscal-year period in-
volved who are low-income individuals (as defined by 
the State). 
‘‘(8) AUDITING.—As a condition of receiving 
funds under this subsection, a State shall contract 
with an independent entity to conduct audits of its 
expenditures made with respect to activities funded 
under this subsection for each fiscal year for which 
the State elects to apply this subsection to ensure 
that such funds are used consistent with this sub-
section and shall make such audits available to the 
Secretary upon the request of the Secretary.’’. 
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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: 
‘‘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 
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December 31, 2026, for the purposes described in section 
2202. 
‘‘SEC. 2202. USE OF FUNDS. 
‘‘(a) IN GENERAL.—Subject to subsections (b) and 
(c), 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). 
‘‘(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) and to individuals who have high 
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costs of health insurance coverage due to the low 
density population of the State in which they reside. 
‘‘(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); or any combination of such 
services. 
‘‘(6) Maternity coverage and newborn care. 
‘‘(7) Prevention, treatment, or recovery support 
services for individuals with mental or substance use 
disorders, focused on either or both of the following: 
‘‘(A) Direct inpatient or outpatient clinical 
care for treatment of addiction and mental ill-
ness. 
‘‘(B) Early identification and intervention 
for children and young adults with serious men-
tal illness. 
‘‘(8) Providing payments, directly or indirectly, 
to health care providers for the provision of such 
health care services as are specified by the Adminis-
trator. 
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‘‘(9) 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. 
‘‘(b) REQUIRED
USE
OF
INCREASE
IN
ALLOT-
MENT.—A State shall use the additional allocation pro-
vided to the State from the funds appropriated under the 
second sentence of section 2204(a) for each year only for 
the purposes described in paragraphs (6) and (7) of sub-
section (a). 
‘‘(c) REQUIRED USE OF ADDITIONAL INCREASE TO 
CERTAIN
WAIVER
STATES
TO
PROVIDE
FINANCIAL 
HARDSHIP ASSISTANCE.—A State shall use the additional 
allocation provided to the State from the funds appro-
priated under the last sentence of section 2204(a) only 
in accordance with such last sentence. 
‘‘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 
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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 
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-
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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.— 
‘‘(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. 
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‘‘(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. 
‘‘(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-
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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; 
‘‘(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. 
The amount otherwise appropriated under the previous 
sentence for 2020 shall be increased by $15,000,000,000, 
to be used and available under subsection (d) only for the 
purposes described in paragraphs (6) and (7) of section 
2202(a). The amount otherwise appropriated under this 
subsection shall be increased by $8,000,000,000 for the 
period beginning with 2018 and ending with 2023, to be 
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allocated to States with a waiver in effect under section 
2701(b) of the Public Health Service Act with respect to 
the purpose described in paragraph (1)(C) of such section, 
in accordance with an allocation methodology specified by 
the Secretary that takes into account the relative alloca-
tion of other amounts appropriated under this subsection 
among such States, and to be used by (and made available 
under subsection (d), for any year during such period that 
such waiver is in effect, to) such States for the purpose 
of providing assistance to reduce premiums or other out- 
of-pocket costs of individuals who are subject to an in-
crease in the monthly premium rate for health insurance 
coverage as a result of such waiver. 
‘‘(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). 
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‘‘(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 
‘‘(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 
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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 
‘‘(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-
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sured and issuer participation amount de-
scribed in this clause for a State for 2018 
and 2019 is the product of— 
‘‘(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 
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otherwise did not have health in-
surance 
coverage 
(including 
through a Federal or State 
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 ratio described in sub-
clause (II) of clause (v) that would be 
determined for such State by sub-
stituting ‘2015’ for each reference in 
such subclause to ‘the third preceding 
year’ and by substituting ‘all such 
States’ for the reference in item (bb) 
of such subclause to ‘all States de-
scribed in clause (vi)’ is greater than 
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the ratio described in such subclause 
that would be determined for such 
State by substituting ‘2013’ for each 
reference in such subclause to ‘the 
third preceding year’ and by sub-
stituting ‘all such States’ for the ref-
erence in item (bb) of such subclause 
to ‘all States described in clause (vi)’. 
‘‘(II) The State has 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 
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 
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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 
‘‘(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— 
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‘‘(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-
vious year, to be used by the Administrator for 
such States, to carry out the Federal Invisible 
Risk Sharing Program in such States under 
section 2205; 
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-
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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; 
‘‘(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; 
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‘‘(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— 
‘‘(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; 
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‘‘(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. 
‘‘SEC. 2205. FEDERAL INVISIBLE RISK SHARING PROGRAM. 
‘‘(a) IN GENERAL.—There is established within the 
Patient and State Stability Fund a Federal Invisible Risk 
Sharing Program (in this section referred to as the ‘Pro-
gram’), to be administered by the Secretary of Health and 
Human Services, acting through the Administrator of the 
Centers for Medicare & Medicaid Services (in this section 
referred to as the ‘Administrator’), to provide payments 
to health insurance issuers with respect to claims for eligi-
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ble individuals for the purpose of lowering premiums for 
health insurance coverage offered in the individual market. 
‘‘(b) FUNDING.— 
‘‘(1) APPROPRIATION.—For the purpose of pro-
viding funding for the Program there is appro-
priated, out of any money in the Treasury not other-
wise appropriated, $15,000,000,000 for the period 
beginning on January 1, 2018, and ending on De-
cember 31, 2026. 
‘‘(2) USE
OF
UNALLOCATED
FUNDS.—Funds 
provided under section 2204(c)(2)(B) to carry out 
this section are in addition to the amount appro-
priated under paragraph (1). 
‘‘(c) OPERATION OF PROGRAM.— 
‘‘(1) IN GENERAL.—The Administrator shall es-
tablish, after consultation with health care con-
sumers, health insurance issuers, State insurance 
commissioners, and other stakeholders and after tak-
ing into consideration high cost health conditions 
and other health trends that generate high cost, pa-
rameters for the operation of the Program consistent 
with this section and consistent with the same limi-
tation on payment with respect to health insurance 
coverage that applies to payment with respect health 
benefits coverage under section 2105(c)(7). 
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‘‘(2) DEADLINE FOR INITIAL OPERATION.—Not 
later than 60 days after the date of the enactment 
of this title, the Administrator shall establish suffi-
cient parameters to specify how the Program will op-
erate for plan year 2018. 
‘‘(3) STATE
OPERATION
OF
PROGRAM.—The 
Administrator shall establish a process for a State to 
operate the Program in such State beginning with 
plan year 2020. 
‘‘(d) DETAILS OF PROGRAM.—The parameters for 
the Program shall include the following: 
‘‘(1) ELIGIBLE INDIVIDUALS.—A definition for 
eligible individuals. 
‘‘(2) HEALTH STATUS STATEMENTS.—The de-
velopment and use of health status statements with 
respect to such individuals. 
‘‘(3) STANDARDS FOR QUALIFICATION.— 
‘‘(A) AUTOMATIC
QUALIFICATION.—The 
identification of health conditions that auto-
matically qualify individuals as eligible individ-
uals at the time of application for health insur-
ance coverage. 
‘‘(B) 
VOLUNTARY
QUALIFICATION.—A 
process under which health insurance issuers 
may voluntarily qualify individuals, who do not 
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automatically qualify under subparagraph (A), 
as eligible individuals at the time of application 
for such coverage. 
‘‘(4) PERCENTAGE
OF
INSURANCE
PREMIUMS 
TO BE APPLIED.—The percentage of the premiums 
paid, to health insurance issuers for health insur-
ance coverage by eligible individuals, that shall be 
collected and deposited to the credit (and available 
for the use) of the Program. 
‘‘(5) ATTACHMENT DOLLAR AMOUNT AND PAY-
MENT PROPORTION.—The dollar amount of claims 
for eligible individuals after which the Program will 
provide payments to health insurance issuers and 
the proportion of such claims above such dollar 
amount that the Program will pay.’’. 
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 
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(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.—Subject to the succeeding 
provisions of this section, a health insurance issuer 
offering health insurance coverage in the individual 
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 
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 
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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 that (through 
presentation of certifications described in sec-
tion 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 36B 
of the Internal Revenue Code of 1986), during 
the look-back period that is with respect to such 
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 
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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. 
‘‘(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- 
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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 
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-
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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 (or, in the case of a State with 
a waiver under subsection (b) in effect for such a plan 
year, the ratio applied for such plan year in accordance 
with such waiver)’’. 
SEC. 136. PERMITTING STATES TO WAIVE CERTAIN ACA RE-
QUIREMENTS TO ENCOURAGE FAIR HEALTH 
INSURANCE PREMIUMS. 
(a) IN GENERAL.—Section 2701 of the Public Health 
Service Act (42 U.S.C. 300gg) is amended by adding at 
the end the following new subsection: 
‘‘(b) PERMISSIBLE STATE WAIVER TO ENCOURAGE 
FAIR HEALTH INSURANCE PREMIUMS.— 
‘‘(1) IN GENERAL.—A State may submit an ap-
plication to the Secretary for one or more of the fol-
lowing purposes: 
‘‘(A) In the case of plan years beginning 
on or after January 1, 2018, to apply, subject 
to 
paragraph 
(5), 
under 
subsection 
(a)(1)(A)(iii), instead of the ratio specified in 
such subsection, a higher ratio specified by the 
State (consistent with section 2707(c)). 
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‘‘(B) In the case of plan years beginning 
on or after January 1, 2020, for health insur-
ance coverage offered in the individual or small 
group market in such State, to apply, subject to 
paragraph (5), instead of the essential health 
benefits specified under subsection (b) of sec-
tion 1302 of the Patient Protection and Afford-
able Care Act, essential health benefits as speci-
fied by the State. 
‘‘(C) In the case of a State that has in 
place a program that carries out the purpose 
described in paragraph (1) or (2) of section 
2202(a) of the Social Security Act or partici-
pates in the program established under section 
2205 of such Act, for health insurance offered 
in the individual market in such State, with re-
spect to an individual who is an applicable pol-
icyholder of such coverage with respect to an 
enforcement period (as defined in section 
2710A(b)) applicable to enrollments for a plan 
year beginning with plan year 2019 (or, in the 
case of enrollments during a special enrollment 
period, beginning with plan year 2018), to— 
‘‘(i) subject to paragraph (5), not 
apply any increase to the monthly premium 
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rate that would otherwise apply under sec-
tion 2710A to such individual for such cov-
erage; and 
‘‘(ii) instead, subject to paragraph 
(5)— 
‘‘(I) apply subsection (a)(1) as if 
health status were included as a fac-
tor described in subparagraph (A) of 
such subsection; and 
‘‘(II) not apply section 2705(b). 
‘‘(2) DEFAULT APPROVAL.—An application sub-
mitted under paragraph (1) is approved unless the 
Secretary notifies the State submitting the applica-
tion, not later than 60 days after the date of the 
submission of such application, that the application 
has been denied for not being in compliance with 
any requirement of paragraph (3) and of the reason 
for such denial. 
‘‘(3) REQUIREMENTS.—The requirements of 
this paragraph, with respect to an application sub-
mitted under paragraph (1), are the following: 
‘‘(A) The application is submitted at such 
time, and in such manner, as the Secretary may 
require. 
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‘‘(B) The application specifies how the ap-
proval of such application will provide for one 
or more of the following: 
‘‘(i) Reducing average premiums for 
health insurance coverage in the State. 
‘‘(ii) Increasing enrollment in health 
insurance coverage in the State. 
‘‘(iii) Stabilizing the market for health 
insurance coverage in the State. 
‘‘(iv) Stabilizing premiums for individ-
uals with pre-existing conditions. 
‘‘(v) Increasing the choice of health 
plans in the State. 
‘‘(C) The application specifies the period 
for which the waiver is to be effective, con-
sistent with paragraph (4). 
‘‘(D) In the case of an application for pur-
poses of paragraph (1)(A), the application 
specifies the higher ratio to be applied pursuant 
to such paragraph. 
‘‘(E) In the case of an application for pur-
poses of paragraph (1)(B), the application 
specifies the essential health benefits to be ap-
plied pursuant to such paragraph. 
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‘‘(F) In the case of an application for pur-
poses of paragraph (1)(C), the application dem-
onstrates that the State has in place a program 
that carries out the purpose described in para-
graph (1) or (2) of section 2202(a) of the So-
cial Security Act or participates in the program 
established under section 2205 of such Act. 
‘‘(4) TERM OF WAIVER.— 
‘‘(A) IN GENERAL.—No waiver for a State 
under this subsection may extend over a period 
of longer than 10 years unless the State re-
quests continuation of such waiver, and such re-
quest shall be deemed granted unless the Sec-
retary, within 90 days after the date of its sub-
mission to the Secretary, either denies such re-
quest in writing or informs the State in writing 
with respect to any additional information 
which is needed in order to make a final deter-
mination with respect to the request. 
‘‘(B) SPECIAL RULE.—A waiver applied for 
by a State under paragraph (1)(C) may only be 
effective for a period during which the State— 
‘‘(i) has in place a program that car-
ries out the purpose described in para-
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graph (1) or (2) of section 2202(a) of the 
Social Security Act; or 
‘‘(ii) participates in the program es-
tablished under section 2205 of such Act. 
‘‘(5) NON-APPLICATION RULES.— 
‘‘(A) SPECIFIED NON-APPLICATION PROVI-
SIONS.—In no case may a waiver for purposes 
of paragraph (1) apply with respect to any of 
the following provisions: 
‘‘(i) Section 1301 of the Patient Pro-
tection and Affordable Care Act, to the ex-
tent that such section applies to qualified 
health plans offered through the CO-OP 
program under section 1322 of such Act or 
multi-State plans under section 1334 of 
such Act. 
‘‘(ii) Sections 1312(d)(3)(D), 1331, 
1332, 1333, and 1334 of such Act. 
‘‘(B) HOLD HARMLESS.—Any standard or 
requirement adopted by a State pursuant to the 
terms of a waiver approved under this sub-
section shall be deemed to comply with section 
1252 of the Patient Protection and Affordable 
Care Act and subsection (a) of section 1324 of 
such Act, insofar as such standard or require-
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ment relates to a Federal or State law de-
scribed in subsection (b)(2) of such section (re-
lating to rating).’’. 
(b) APPLICATION
TO ESSENTIAL HEALTH BENE-
FITS.—Section 1302(a)(1) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18022(a)(1)) is amended 
by inserting ‘‘(or, in the case of health insurance coverage 
offered in the individual or small group market in a State 
for which there is an applicable waiver in effect under sec-
tion 2701(b) of the Public Health Service Act for a plan 
year, the essential health benefits applicable under such 
waiver)’’ after ‘‘subsection (b)’’. 
SEC. 137. CONSTRUCTIONS. 
(a) NO GENDER RATING.—Nothing in this Act shall 
be construed as permitting health insurance issuers to dis-
criminate in rates for health insurance coverage by gender. 
(b) NO LIMITING ACCESS TO COVERAGE FOR INDI-
VIDUALS WITH PREEXISTING CONDITIONS.—Nothing in 
this Act shall be construed as permitting health insurance 
issuers to limit access to health coverage for individuals 
with preexisting conditions. 
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Subtitle E—Implementation 
Funding 
SEC. 141. AMERICAN HEALTH CARE IMPLEMENTATION 
FUND. 
(a) IN GENERAL.—There is hereby established an 
American Health Care Implementation Fund (referred to 
in this section as the ‘‘Fund’’) within the Department of 
Health and Human Services to carry out sections 121, 
132, 202, and 214 (including the amendments made by 
such sections). 
(b) FUNDING.—There is appropriated to the Fund, 
out of any funds in the Treasury not otherwise appro-
priated, $1,000,000,000 for Federal administrative ex-
penses to carry out the sections described in subsection 
(a) (including the amendments made by such sections). 
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.’’. 
(C) OTHER CONFORMING AMENDMENTS.— 
(i) Section 36B(b)(2)(A) of such Code 
is amended by striking ‘‘and which were 
enrolled’’ and all that follows and inserting 
‘‘, or’’. 
(ii) Section 36B(b)(3)(B)(i) of such 
Code is amended by striking ‘‘the same 
Exchange’’ and all that follows and insert-
ing ‘‘the Exchange through which such 
taxpayer is permitted to obtain coverage, 
and’’. 
(iii) Section 36B(c)(2)(A)(i) of such 
Code is amended by striking ‘‘that was en-
rolled in through an Exchange established 
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by the State under section 1311 of the Pa-
tient Protection and Affordable Care Act’’. 
(b) MODIFICATION OF APPLICABLE PERCENTAGE.— 
Section 36B(b)(3)(A) of such Code is amended to read 
as follows: 
‘‘(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 
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100 
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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. 
‘‘(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. 
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‘‘(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 
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.’’. 
(c) 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. 
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SEC. 203. 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. 204. 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. 205. 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. 206. 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, 
2026.’’. 
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SEC. 207. 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, 2016. 
(2) REIMBURSEMENTS.—The amendment made 
by subsection (c) shall apply to expenses incurred 
with respect to taxable years beginning after Decem-
ber 31, 2016. 
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SEC. 208. 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, 2016. 
SEC. 209. 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, 2016. 
SEC. 210. 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, 
2016.’’. 
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SEC. 211. 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, 2016. 
SEC. 212. REDUCTION OF INCOME THRESHOLD FOR DETER-
MINING MEDICAL CARE DEDUCTION. 
(a) IN GENERAL.—Subsection (a) of section 213 of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘10 percent’’ and inserting ‘‘5.8 percent’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
SEC. 213. 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-
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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.’’. 
(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, 2022. 
SEC. 214. REFUNDABLE TAX CREDIT FOR HEALTH INSUR-
ANCE COVERAGE. 
(a) IN GENERAL.—Section 36B of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A 
QUALIFIED HEALTH PLAN. 
‘‘(a) ALLOWANCE OF PREMIUM TAX CREDIT.—In the 
case of an individual, there shall be allowed as a credit 
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against the tax imposed by this subtitle for the taxable 
year the sum of the monthly credit amounts with respect 
to such taxpayer for calendar months during such taxable 
year which are eligible coverage months appropriately 
taken into account under subsection (b)(2) with respect 
to the taxpayer or any qualifying family member of the 
taxpayer. 
‘‘(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 
‘‘(B) the amount paid for a qualified 
health plan 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.— 
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36B(d)(2)(B), as in effect for taxable years be-
ginning before January 1, 2020) for such tax-
able year, over 
‘‘(B) $75,000 (twice such amount in the 
case of a joint return). 
‘‘(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, 
with respect to any individual, any month if, as of the first 
day of such month, the individual meets the following re-
quirements: 
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‘‘(1) The individual is covered by a health in-
surance coverage which is certified by the State in 
which such insurance is offered as coverage that 
meets the requirements for qualified health plans 
under subsection (f). 
‘‘(2) The individual is not eligible for— 
‘‘(A) coverage under a group health plan 
(within the meaning of section 5000(b)(1)) 
other than coverage under a plan substantially 
all of the coverage of which is of excepted bene-
fits described in section 9832(c), or 
‘‘(B) 
coverage 
described 
in 
section 
5000A(f)(1)(A). 
‘‘(3) The individual 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)). 
‘‘(4) The individual is not incarcerated, other 
than incarceration pending the disposition of 
charges. 
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‘‘(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 a qualified health plan which also 
covers the taxpayer (in the case of a joint return, ei-
ther spouse). 
‘‘(f) QUALIFIED HEALTH PLAN.—For purposes of 
this section, the term ‘qualified health plan’ means any 
health insurance coverage (as defined in section 9832(b)) 
if— 
‘‘(1) such coverage is offered in the individual 
health insurance market within a State (within the 
meaning of section 5000A(f)(1)(C)), 
‘‘(2) substantially all of such coverage is not of 
excepted benefits described in section 9832(c), 
‘‘(3) such coverage does not consist of short- 
term limited duration insurance (within the meaning 
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of section 2791(b)(5) of the Public Health Service 
Act), 
‘‘(4) such coverage is not a grandfathered 
health plan (as defined in section 1251 of the Pa-
tient Protection and Affordable Care Act) or a 
grandmothered health plan (as defined in section 
36B(c)(3)(C) as in effect for taxable years beginning 
before January 1, 2020), and 
‘‘(5) such coverage does not include coverage 
for abortions (other than any abortion necessary to 
save the life of the mother or any abortion with re-
spect to a pregnancy that is the result of an act of 
rape or incest). 
‘‘(g) SPECIAL RULES.— 
‘‘(1) MARRIED COUPLES MUST FILE JOINT RE-
TURN.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), if the taxpayer is married 
(within the meaning of section 7703) at the 
close of the taxable year, no credit shall be al-
lowed under this section to such taxpayer unless 
such taxpayer and the taxpayer’s spouse file a 
joint return for such taxable year. 
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‘‘(B) EXCEPTION
FOR
CERTAIN
TAX-
PAYERS.—Subparagraph (A) shall not apply to 
any married taxpayer who— 
‘‘(i) is living apart from the taxpayer’s 
spouse at the time the taxpayer files the 
tax return, 
‘‘(ii) is unable to file a joint return be-
cause such taxpayer is a victim of domestic 
abuse or spousal abandonment, 
‘‘(iii) certifies on the tax return that 
such taxpayer meets the requirements of 
clauses (i) and (ii), and 
‘‘(iv) has not met the requirements of 
clauses (i), (ii), and (iii) for each of the 3 
preceding taxable years. 
‘‘(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-
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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 any qualified health plan with 
respect to such individual for such month shall 
be taken into account. 
‘‘(3) COORDINATION WITH MEDICAL EXPENSE 
DEDUCTION.—Amounts 
described 
in 
subsection 
(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) 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 
1412 of the Patient Protection and Affordable 
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Care Act 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— 
‘‘(i) the aggregate amount paid on be-
half of such taxpayer under such section 
1412 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). 
‘‘(5) 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 an eligible coverage 
month, the sum determined under subsection 
(b)(1)(A) with respect to the taxpayer shall be 
reduced (but not below zero) by 1⁄12 of the per-
mitted 
benefit 
(as 
defined 
in 
section 
9831(d)(3)(C)) under such arrangement for 
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each such month such arrangement is provided 
to such taxpayer. 
‘‘(B) 
QUALIFIED
SMALL
EMPLOYER 
HEALTH
REIMBURSEMENT
ARRANGEMENT.— 
For purposes of this paragraph, the term 
‘qualified small employer health reimbursement 
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’. 
‘‘(6) CERTAIN
RULES
RELATED
TO
NON-
QUALIFIED HEALTH PLANS.—The rules of section 
36B(c)(3)(D), as in effect for taxable years begin-
ning before January 1, 2020, shall apply with re-
spect to subsection (f)(5). 
‘‘(7) 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), 
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the $75,000 amount in subsection (c)(2)(B), 
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— 
‘‘(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. 
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‘‘(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. 
‘‘(8) RULES
RELATED
TO
STATE
CERTIFI-
CATION OF QUALIFIED HEALTH PLANS.—A certifi-
cation shall not be taken into account under sub-
section (d)(1) unless such certification is made avail-
able to the public and meets such other require-
ments as the Secretary may provide. 
‘‘(9) REGULATIONS.—The Secretary may pre-
scribe such regulations and other guidance as may 
be necessary or appropriate to carry out this section 
and section 1412 of the Patient Protection and Af-
fordable Care Act.’’. 
(b) 
ADVANCE
PAYMENT
OF
CREDIT.—Section 
1412(f) of the Patient Protection and Affordable Care 
Act, as added by section 202, is amended to read as fol-
lows: 
‘‘(f) APPLICATION TO CERTAIN PLANS.—The Sec-
retary and the Secretary of the Treasury shall prescribe 
such regulations as each respective Secretary may deem 
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necessary in order to establish and operate the advance 
payment program established under this section for indi-
viduals covered under qualified health plans (whether en-
rolled in through an Exchange or otherwise) in such a 
manner that protects taxpayer information (including 
names, taxpayer identification numbers, and other con-
fidential information), provides robust verification of all 
information necessary to establish eligibility of taxpayer 
for advance payments under this section, ensures proper 
and timely payments to appropriate health providers, and 
protects program integrity to the maximum extent fea-
sible.’’. 
(c) INCREASED PENALTY ON ERRONEOUS CLAIMS OF 
CREDIT.—Section 6676(a) of the Internal Revenue Code 
of 1986 is amended by inserting ‘‘(25 percent in the case 
of a claim for refund or credit relating to the health insur-
ance coverage credit under section 36B)’’. 
(d) 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 para-
graph (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 coverage described in section 
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36B(d)(2) in connection with employment with the 
employer.’’. 
(e) COORDINATION WITH OTHER TAX BENEFITS.— 
(1) CREDIT FOR HEALTH INSURANCE COSTS OF 
ELIGIBLE
INDIVIDUALS.—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 36B(d)) 
for purposes of section 36B with respect to the 
taxpayer or any of the taxpayer’s qualifying 
family members (as defined in section 36B(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 section 7527 and section 1412 
of the Patient Protection and Afford-
able Care Act, over 
‘‘(II) the sum of the credits al-
lowed under this section (determined 
without regard to paragraph (1)) and 
section 36B (determined without re-
gard to subsection (g)(4)(A) thereof) 
for such taxable year, and 
‘‘(ii) section 36B(g)(4)(B) shall not 
apply with respect to such taxpayer for 
such taxable year.’’. 
(2) TRADE OR BUSINESS DEDUCTION.—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 amount of the credit allowable to such taxpayer 
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under section 36B (determined without regard to 
subsection (g)(4)(A) thereof) for such taxable year.’’. 
(f) 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. 215. 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. 216. 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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HR 1628 PCS
SEC. 217. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 
INCURRED 
BEFORE 
ESTABLISHMENT 
OF 
HEALTH SAVINGS ACCOUNT. 
(a) IN GENERAL.—Section 223(d)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(D) TREATMENT OF CERTAIN MEDICAL 
EXPENSES INCURRED BEFORE ESTABLISHMENT 
OF ACCOUNT.—If a health savings account is 
established during the 60-day period beginning 
on the date that coverage of the account bene-
ficiary under a high deductible health plan be-
gins, then, solely for purposes of determining 
whether an amount paid is used for a qualified 
medical expense, such account shall be treated 
as having been established on the date that 
such coverage begins.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to coverage beginning 
after December 31, 2017. 
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130 
HR 1628 PCS
Subtitle D—Remuneration From 
Certain Insurers 
SEC. 241. REMUNERATION FROM CERTAIN INSURERS. 
Paragraph (6) of section 162(m) of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subparagraph: 
‘‘(I) TERMINATION.—This paragraph shall 
not apply to taxable years beginning after De-
cember 31, 2016.’’. 
Subtitle E—Repeal of Net 
Investment Income Tax 
SEC. 251. REPEAL OF NET INVESTMENT INCOME TAX. 
(a) IN GENERAL.—Subtitle A of the Internal Rev-
enue Code of 1986 is amended by striking chapter 2A. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2016. 
Passed the House of Representatives May 4, 2017. 
Attest: 
KAREN L. HAAS, 
Clerk. 
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Calendar No. 120 
115TH CONGRESS 
1ST SESSION 
H. R. 1628 
AN ACT 
To provide for reconciliation pursuant to title II of 
the concurrent resolution on the budget for fiscal 
year 2017. 
JUNE 8, 2017 
Read twice and placed on the calendar 
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