I 
115TH CONGRESS 
1ST SESSION H. R. 4094 
To establish a public health plan. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 23, 2017 
Mr. HIGGINS of New York (for himself, Mr. LARSON of Connecticut, Mr. 
COURTNEY, Mr. SCOTT of Virginia, Mr. O’ROURKE, and Mr. POLIS) in-
troduced the following bill; which was referred to the Committee on En-
ergy and Commerce, and in addition to the Committee on Ways and 
Means, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To establish a public health plan. 
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 ‘‘Medicare-X Choice Act 
of 2017’’. 
SEC. 2. ESTABLISHMENT AND ADMINISTRATION OF A PUB-
LIC HEALTH PLAN. 
The Social Security Act is amended by adding at the 
end the following new title: 
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‘‘TITLE XXII—MEDICARE 
EXCHANGE HEALTH PLAN 
‘‘SEC. 2201. ESTABLISHMENT. 
‘‘(a) ESTABLISHMENT OF PLAN.— 
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a coordinated and low-cost health plan, to be 
known as the ‘Medicare Exchange health plan’ (re-
ferred to in this section as the ‘health plan’) to pro-
vide access to quality health care for enrollees. 
‘‘(2) TIMEFRAME.— 
‘‘(A) 
INDIVIDUAL
MARKET
AVAIL-
ABILITY.— 
‘‘(i) IN
GENERAL.—In accordance 
with clause (ii), the Secretary shall make 
the health plan available in the individual 
market, in certain rating areas, for plan 
year 2020 and each subsequent plan year, 
and increase the availability such that the 
plan is available in the individual market 
to all residents of all rating areas in the 
United States for plan year 2023 and each 
subsequent plan year. 
‘‘(ii) PRIORITY
AREAS.—In deter-
mining in which rating areas the Secretary 
initially will make the health plan avail-
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able, the Secretary shall give priority to 
rating areas in which— 
‘‘(I) not more than 1 health in-
surance issuer offers plans on the ap-
plicable State or Federal American 
Health Benefit Exchange (referred to 
in this title as the ‘Exchange’); or 
‘‘(II) there is a shortage of 
health providers or lack of competition 
that results in a high cost of health 
care services, including health profes-
sional shortage areas and rural areas. 
‘‘(B) SMALL GROUP MARKET.—The Sec-
retary shall make the health plan available in 
the small group market in all rating areas for 
plan year 2024. 
‘‘(b) ESTABLISHMENT OF FUNDS.— 
‘‘(1) PLAN RESERVE FUND.— 
‘‘(A) IN GENERAL.—There is established in 
the Treasury of the United States a ‘Plan Re-
serve Fund’, to be administered by the Sec-
retary of Health and Human Services, for pur-
poses of establishing the Medicare Exchange 
health plan and administering such plan, con-
sisting of amounts appropriated to such fund. 
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‘‘(B) APPROPRIATION.—There is appro-
priated $1,000,000,000, out of monies in the 
Treasury not otherwise obligated, to the Plan 
Reserve Fund for fiscal year 2018. 
‘‘(2) DATA AND TECHNOLOGY FUND.—There is 
established in the Treasury of the United States a 
‘Data and Technology Fund’, to be administered by 
the Secretary of Health and Human Services, acting 
through the Chief Actuary of the Centers for Medi-
care & Medicaid Services, for purposes of updating 
technology and performing data collection under sec-
tion 2205 in order to establish appropriate pre-
miums for all geographic regions of the United 
States. There are authorized to be appropriated to 
the Data and Technology Fund such sums as may 
be necessary for fiscal year 2018. 
‘‘(c) RULEMAKING.—The Secretary may promulgate 
such regulations as may be necessary to carry out this 
title. 
‘‘SEC. 2202. AVAILABILITY OF PLAN. 
‘‘(a) ELIGIBILITY.—An individual shall be eligible to 
enroll in the health plan if such individual, for the entire 
period for which enrollment is sought— 
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‘‘(1) is a qualified individual within the mean-
ing of section 1312 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18032); and 
‘‘(2) is not eligible for benefits under the Medi-
care program under title XVIII. 
‘‘(b) EXCHANGES.—In accordance with the time-
frame under section 2201(a)(2), the health plan shall be 
made available through the American Health Benefit Ex-
changes described in sections 1311 and 1321 of the Pa-
tient Protection and Affordable Care Act (42 U.S.C. 
18031, 18041), including the Small Business Health Op-
tions Program Exchange. 
‘‘SEC. 2203. PLAN REQUIREMENTS. 
‘‘(a) GENERAL REQUIREMENTS.—The health plan 
shall comply with all requirements of subtitle D of title 
I of the Patient Protection and Affordable Care Act (42 
U.S.C. 18021 et seq.) and title XXVII of the Public 
Health Service Act (42 U.S.C. 300gg et seq.) applicable 
to qualified health plans, and such health plan shall be 
a qualified health plan, including for purposes of the Inter-
nal Revenue Code of 1986. 
‘‘(b) LEVELS OF COVERAGE.—The Secretary— 
‘‘(1) shall make available a silver level and gold 
level version of the plan, in accordance with section 
1301(a)(1)(C)(ii); and 
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‘‘(2) may make available no more than 2 
versions of the plan for each of the 4 levels of cov-
erage described in subparagraphs (A) through (D) of 
section 1302(d)(1) of the Patient Protection and Af-
fordable Care Act (42 U.S.C. 18022(d)(1)). 
‘‘SEC. 2204. ADMINISTRATIVE CONTRACTING. 
‘‘(a) IN GENERAL.—The Secretary may enter into 
contracts for the purpose of performing administrative 
functions (including functions described in subsection 
(a)(4) of section 1874A) with respect to the health plan 
in the same manner as the Secretary may enter into con-
tracts under subsection (a)(1) of such section. The Sec-
retary shall have the same authority with respect to the 
public health insurance option as the Secretary has under 
such subsection (a)(1) and subsection (b) of section 1874A 
with respect to title XVIII. 
‘‘(b) TRANSFER OF INSURANCE RISK.—Any contract 
under subsection (a) shall not involve the transfer of in-
surance risk from the Secretary to the entity entering into 
such contract with the Secretary, except in the case of an 
alternative payment model under section 2209(h). 
‘‘SEC. 2205. DATA COLLECTION. 
‘‘Subject to all applicable privacy requirements, in-
cluding the requirements under the regulations promul-
gated pursuant to section 264(c) of the Health Insurance 
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Portability and Accountability Act of 1996 (42 U.S.C. 
1320d–2 note), the Secretary may collect data from State 
insurance commissioners and other relevant entities to es-
tablish rates for premiums and for other purposes includ-
ing to improve quality, and reduce racial, ethnic, and other 
disparities, with respect to the health plan. 
‘‘SEC. 2206. PREMIUMS; RISK POOLS; REINSURANCE. 
‘‘(a) PREMIUM AMOUNTS.—The Secretary shall es-
tablish premiums for the health plan that cover the full 
actuarial cost of offering such plan, including the adminis-
trative costs of offering such plan. Such premiums shall 
vary geographically and between the small group market 
and the individual market in accordance with differences 
in the cost of providing such coverage. If, for any plan 
year, the amount collected in premiums exceeds the 
amount required for health care benefits and administra-
tive costs in that plan year, such excess amounts shall re-
main available to the Secretary to administer the health 
plan and finance beneficiary costs in subsequent years. 
‘‘(b) RISK POOL.—All enrollees in the health plan 
within a State shall be members of a single risk pool, ex-
cept that the Secretary may establish separate risk pools 
for the individual market and small group market if the 
State has not exercised its authority under section 
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1312(c)(3) of the Patient Protection and Affordable Care 
Act (42 U.S.C. 18032(c)(3)). 
‘‘(c) REINSURANCE.—Notwithstanding subsection 
(b), the Secretary may establish a mechanism to pool the 
costs of the highest-cost patients on a nationwide basis 
to the extent such costs are not already pooled pursuant 
to section 1343 of the Patient Protection and Affordable 
Care Act (42 U.S.C. 18063). 
‘‘SEC. 2207. REIMBURSEMENT RATES. 
‘‘(a) MEDICARE RATES.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2) and subsections (b) and (c) and subject to 
subsection (d), the Secretary shall reimburse health 
care providers furnishing items and services under 
the health plan at rates determined for equivalent 
items and services under the original Medicare fee- 
for-service program under parts A and B of title 
XVIII. 
‘‘(2) AUTHORITY
TO
INCREASE
PAYMENTS 
RATES IN RURAL AREAS.—If the Secretary deter-
mines appropriate, the Secretary may increase the 
reimbursements rates described in paragraph (1) by 
up to 25 percent for items and services furnished in 
rural areas (as defined in section 1886(d)(2)(D)). 
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‘‘(b) PRESCRIPTION DRUGS.—Subject to subsection 
(d), payment rates for prescription drugs shall be at a rate 
negotiated by the Secretary. Such negotiations may be in 
conjunction with negotiations for covered part D drugs 
under part D of title XVIII. 
‘‘(c) ADDITIONAL ITEMS AND SERVICES.—Subject to 
subsection (d), the Secretary shall establish reimburse-
ment rates for any items and services provided under the 
health plan that are not items and services provided under 
the original Medicare fee-for-service program under parts 
A and B of title XVIII. 
‘‘(d) INNOVATIVE PAYMENT METHODS.—The Sec-
retary may utilize innovative payment methods, including 
value-based payment arrangements, in making payments 
for items and services (including prescription drugs) fur-
nished under the health plan. 
‘‘SEC. 2208. PARTICIPATING PROVIDERS. 
‘‘(a) IN GENERAL.—A health care provider that is 
enrolled under the Medicare program under section 
1866(j) or is a participating provider under a State Med-
icaid plan under title XIX on the date of enactment of 
this Act shall be a participating provider under the health 
plan. 
‘‘(b) ADDITIONAL PROVIDERS.—The Secretary shall 
establish a process to allow health care providers not de-
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scribed in subsection (a) to become a participating pro-
vider under the health plan. 
‘‘(c) OPT-OUT.—The Secretary shall establish a proc-
ess by which a health care provider that is a participating 
provider under the health plan pursuant to subsection (a) 
or (b) may opt-out of being such a participating provider. 
‘‘(d) REQUIREMENT TO PARTICIPATE IN ORDER TO 
BE ENROLLED UNDER MEDICARE.—Beginning January 
1, 2019, a health care provider may not be enrolled under 
the Medicare program under section 1866(j) unless the 
provider is also a participating provider under the health 
plan. 
‘‘SEC. 2209. DELIVERY SYSTEM REFORM FOR AN ENHANCED 
HEALTH PLAN. 
‘‘(a) IN GENERAL.—For plan years beginning with 
plan year 2020, the Secretary may utilize innovative pay-
ment mechanisms and policies to determine payments for 
items and services under the health plan. The payment 
mechanisms and policies under this section may include 
patient-centered medical home and other care manage-
ment payments, accountable care organizations, value- 
based purchasing, bundling of services, differential pay-
ment rates, performance or utilization based payments, 
telehealth, remote patient monitoring, partial capitation, 
and direct contracting with providers. 
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‘‘(b) REQUIREMENTS FOR INNOVATIVE PAYMENTS.— 
The Secretary shall design and implement the payment 
mechanisms and policies under this section in a manner 
that— 
‘‘(1) seeks to— 
‘‘(A) improve health outcomes; 
‘‘(B) reduce health disparities (including 
racial, ethnic, and other disparities); 
‘‘(C) provide efficient and affordable care; 
‘‘(D) address geographic variation in the 
provision of health services; or 
‘‘(E) prevent or manage chronic illness; 
and 
‘‘(2) promotes care that is integrated, patient- 
centered, quality, and efficient. 
‘‘(c) ENCOURAGING THE USE OF HIGH-VALUE SERV-
ICES.—To the extent allowed by the benefit standards ap-
plied to all health benefits plans participating in the Ex-
changes (as described in section 2202(b)), the health plan 
may modify cost-sharing and payment rates to encourage 
the use of services that promote health and value. 
‘‘(d) PROMOTION OF DELIVERY SYSTEM REFORM.— 
The Secretary shall monitor and evaluate the progress of 
payment and delivery system reforms under this section 
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and shall seek to implement such reforms subject to the 
following: 
‘‘(1) To the extent that the Secretary finds a 
payment and delivery system reform successful in 
improving quality and reducing costs, the Secretary 
shall implement such reform on as large a geo-
graphic scale as practical and economical. 
‘‘(2) The Secretary may delay the implementa-
tion of such a reform in geographic areas in which 
such implementation would place the public health 
insurance option at a competitive disadvantage. 
‘‘(3) The Secretary may prioritize implementa-
tion of such a reform in high-cost geographic areas 
or otherwise in order to reduce total program costs 
or to promote high-value care. 
‘‘(e) NON-UNIFORMITY
PERMITTED.—Nothing in 
this section shall prevent the Secretary from varying pay-
ments based on different payment structure models (such 
as accountable care organizations and medical homes) 
under the health plan for different geographic areas. 
‘‘(f) INTEGRATION WITH SOCIAL SERVICES.—The 
Secretary shall establish processes and, when appropriate, 
collaborate with other agencies to integrate medical care 
under the health plan with food, housing, transportation, 
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and income assistance if the Secretary determines that 
such integration is expected to— 
‘‘(1) reduce spending without reducing the qual-
ity of patient care; or 
‘‘(2) improve the quality of patient care without 
increasing spending. 
‘‘(g) TELEHEALTH.—The Secretary shall ensure the 
integration of telehealth tools that increase patient access 
to medical care, particularly in remote or underserved 
areas, if the Secretary determines that such integration 
is expected to— 
‘‘(1) reduce spending without reducing the qual-
ity of patient care; or 
‘‘(2) improve the quality of patient care without 
increasing spending. 
‘‘(h) ALTERNATIVE PAYMENT MODEL.— 
‘‘(1) IN GENERAL.—The Secretary shall evalu-
ate the possibility of providing incentives, and, if ap-
propriate, apply incentives, for enrollees in the 
health plan who receive services from providers who 
are participating in an alternative payment model 
(as defined in section 1833(z)(3)(C)). 
‘‘(2) AUTHORITY TO USE APMS IN USE UNDER 
TRADITIONAL MEDICARE.—Nothing in this section 
shall preclude the Secretary from using alternative 
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payment models (as so defined) under this title that 
are in use under title XVIII. 
‘‘SEC. 2210. NO EFFECT ON MEDICARE BENEFITS OR MEDI-
CARE TRUST FUNDS. 
‘‘Nothing in this title shall— 
‘‘(1) affect the benefits available under title 
XVIII; or 
‘‘(2) impact the Federal Hospital Insurance 
Trust Fund under section 1817 or the Federal Sup-
plementary Medical Insurance Trust Fund under 
section 1841 (including the Medicare Prescription 
Drug Account within such Trust Fund).’’. 
SEC. 3. AUTHORITY TO NEGOTIATE FAIR PRICES FOR MEDI-
CARE PRESCRIPTION DRUGS. 
(a) IN GENERAL.—Section 1860D–11 of the Social 
Security Act (42 U.S.C. 1395w–111) is amended by strik-
ing subsection (i). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect on the date of the enactment 
of this Act. 
Æ 
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