COVER Now Act
Bill: H.R.3961 | Sponsor: Rep. Doggett, Lloyd (D-TX)
Policy area: Health

Summary:
Cover Outstanding Vulnerable Expansion-eligible Residents Now Act or the COVER Now Act
This bill establishes a demonstration program to allow local governments to provide health benefits to the Medicaid expansion population in states that have not expanded Medicaid.
Under the program, local governments may provide coverage for individuals who are newly eligible for Medicaid under the Patient Protection and Affordable Care Act (i.e., the Medicaid expansion population) for a maximum of 10 years, or until their respective states expand Medicaid. The bill provides a 100% federal matching rate for the first three years of program participation.
The bill prohibits states from taking certain actions against participating localities, such as withholding funding, increasing taxes, or restricting provider participation. States that violate these requirements are subject to certain funding penalties.

To amend title XIX of the Social Security Act to provide for a 
    demonstration project under the Medicaid program for political 
subdivisions of States to provide medical assistance for the expansion 
         population under such program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Cover Outstanding Vulnerable 
Expansion-eligible Residents Now Act'' or ``COVER Now Act''.

SEC. 2. DEMONSTRATION PROJECT FOR POLITICAL SUBDIVISIONS OF STATES TO 
              PROVIDE MEDICAL ASSISTANCE FOR MEDICAID EXPANSION 
              POPULATION.

    (a) In General.--Section 1902 of the Social Security Act is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (86), by striking at the end 
                ``and'';
                    (B) in paragraph (87), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by inserting after paragraph (87) the following 
                new paragraph:
            ``(88) provide, at the option of the qualifying political 
        subdivisions of a State, for a demonstration project described 
        in subsection (tt).''; and
            (2) by adding at the end the following new subsection:
    ``(tt) Demonstration Project for Political Subdivisions of States 
To Provide Medical Assistance for Expansion Population.--
            ``(1) In general.--Notwithstanding section subsection 
        (a)(5), the Secretary shall conduct a demonstration project 
        under which the Secretary shall, subject to paragraph (9), 
        select qualifying political subdivisions described in paragraph 
        (2) to provide, in accordance with the requirements of this 
        subsection, medical assistance for individuals described in 
        subclause (VIII) of subsection (a)(10)(A)(i) who reside in such 
        political subdivisions in accordance with the timeline 
        specified under paragraph (8).
            ``(2) Waiver authority.--The Secretary may waive the 
        requirements of paragraphs (1) and (5) of subsection relating 
        to statewideness and relating to single state agency, 
        respectively.
            ``(3) Qualifying political subdivision.--A qualifying 
        political subdivision described in this paragraph is--
                    ``(A) a political subdivision--
                            ``(i) located in a State that has not 
                        elected to provide medical assistance for 
                        individuals described in subclause (VIII) of 
                        subsection (a)(10)(A)(i) as of the date of the 
                        enactment of this subsection; and
                            ``(ii) submits an application to the 
                        Secretary--
                                    ``(I) at such time, in such manner, 
                                and containing such information as the 
                                Secretary may require; and
                                    ``(II) which has undergone a 
                                process for public notice and comment 
                                at the political subdivision level, 
                                including public hearings, sufficient 
                                to ensure a meaningful level of public 
                                input; or
                    ``(B) any number of political subdivisions 
                described in subparagraph (A) which form a partnership 
                for purposes of implementing the demonstration project 
                under this subsection.
            ``(4) Length of demonstration project.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                qualifying political subdivision selected to 
                participate in the demonstration project under this 
                subsection or partnership described in paragraph (3)(B) 
                (referred to in this subsection as a `participating 
                political subdivision') shall provide medical 
                assistance for individuals described in subclause 
                (VIII) of subsection (a)(10)(A)(i) for seven years or 
                through the day before the date on which the State in 
                which such political subdivision is located provides 
                for medical assistance under the State plan (or a 
                waiver of such plan) for such individuals, whichever is 
                shorter.
                    ``(B) Extension.--A participating political 
                subdivision that participates in the demonstration 
                project under this subsection for five years may extend 
                its participation in the demonstration project by 
                submitting an application to the Secretary at such 
                time, in such manner, and containing such information 
                as the Secretary may require. Under such extension, 
                such political subdivision shall provide medical 
                assistance for individuals described in subclause 
                (VIII) of subsection (a)(10)(A)(i) for up to an 
                additional five years or through the day before the 
                date on which the State in which such political 
                subdivision is located provides for medical assistance 
                under the State plan (or a waiver of such plan) for 
                such individuals, whichever is shorter.
                    ``(C) Automatic enrollment in case of states that 
                elect to provide medical assistance for expansion 
                population.--In the case of a participating political 
                subdivision whose participation in the demonstration 
                project under this subsection ends because the State in 
                which such political subdivision is located elects to 
                provide for medical assistance under the State plan (or 
                a waiver of such plan) for individuals described in 
                subclause (VIII) of subsection (a)(10)(A)(i), such 
                State shall automatically enroll under such State plan 
                (or waiver) any eligible and enrolled individual so 
                described receiving medical assistance from such 
                political subdivision and coverage for such individual 
                under such State plan (or waiver) beginning with the 
                first day on which the State provides medical 
                assistance under such State plan (or waiver) for 
                individuals described in subclause (VIII) of subsection 
                (a)(10)(A)(i).
            ``(5) Payments.--
                    ``(A) In general.--The Secretary shall pay a 
                participating political subdivision the Federal 
                matching percentage specified in subparagraph (B) for 
                amounts expended by such political subdivision to 
                provide medical assistance for individuals described in 
                subclause (VIII) of subsection (a)(10)(A)(i).
                    ``(B) Calculation of federal and non-federal 
                share.--Except as provided under clause (ii) and 
                subparagraph (C), the calculation and payment of the 
                Federal and non-Federal share of expenditures for 
                medical assistance under a demonstration described in 
                paragraph (1) shall be calculated in accordance with 
                section 1903 as if the qualifying political subdivision 
                was a State.
                    ``(C) Federal matching percentage.--The Federal 
                matching percentage specified in this subparagraph, 
                with respect to a participating political subdivision 
                and the demonstration project under this subsection, 
                is--
                            ``(i) 100 percent for calendar quarters in 
                        the first three years that such political 
                        subdivision participates in such demonstration 
                        project, if applicable;
                            ``(ii) with respect to a participating 
                        political subdivision which--
                                    ``(I) includes a rural political 
                                subdivision (as defined by the Office 
                                of Management and Budget), 100 percent 
                                for calendar quarters in the fourth 
                                year that such political subdivision 
                                participates in such demonstration 
                                project, if applicable; and
                                    ``(II) does not include a rural 
                                political subdivision (as defined by 
                                the Office of Management and Budget), 
                                95 percent for calendar quarters in the 
                                fourth year that such political 
                                subdivision participates in such 
                                demonstration project, if applicable;
                            ``(iii) with respect to a participating 
                        political subdivision which--
                                    ``(I) includes a rural political 
                                subdivision (as defined by the Office 
                                of Management and Budget), 95 percent 
                                for calendar quarters in the fifth year 
                                that such political subdivision 
                                participates in such demonstration 
                                project, if applicable; and
                                    ``(II) does not include a rural 
                                political subdivision (as defined by 
                                the Office of Management and Budget), 
                                94 percent for calendar quarters in the 
                                fifth year that such political 
                                subdivision participates in such 
                                demonstration project, if applicable;
                            ``(iv) with respect to a participating 
                        political subdivision which--
                                    ``(I) includes a rural political 
                                subdivision (as defined by the Office 
                                of Management and Budget), 94 percent 
                                for calendar quarters in the sixth year 
                                that such political subdivision 
                                participates in such demonstration 
                                project, if applicable; and
                                    ``(II) does not include a rural 
                                political subdivision (as defined by 
                                the Office of Management and Budget), 
                                93 percent for calendar quarters in the 
                                sixth year that such political 
                                subdivision participates in such 
                                demonstration project, if applicable;
                            ``(v) with respect to a participating 
                        political subdivision which--
                                    ``(I) includes a rural political 
                                subdivision (as defined by the Office 
                                of Management and Budget), 93 percent 
                                for calendar quarters in the seventh 
                                year that such political subdivision 
                                participates in such demonstration 
                                project, if applicable; and
                                    ``(II) does not include a rural 
                                political subdivision (as defined by 
                                the Office of Management and Budget), 
                                90 percent for calendar quarters in the 
                                seventh year that such political 
                                subdivision participates in such 
                                demonstration project, if applicable; 
                                and
                            ``(vi) 90 percent for calendar quarters in 
                        the eighth year and any subsequent years 
                        thereafter that such political subdivision 
                        participates in such demonstration project, if 
                        applicable.
            ``(6) Comparability of benefits to essential health 
        benefits.--The medical assistance made available by a 
        participating political subdivision to individuals described in 
        subclause (VIII) of subsection (a)(10)(A)(i) shall consist of 
        coverage described in subsection (k)(1).
            ``(7) Reduction in federal funding for medical assistance 
        for states that take certain actions.--
                    ``(A) In general.--In the case of a State that does 
                any of the prohibited items described in subparagraph 
                (B), the Secretary shall withhold from the amount 
                otherwise payable under section 1903 an amount equal to 
                25 percent of the amount of administrative costs under 
                the State plan under title XIX during a calendar.
                    ``(B) Prohibited items.--For purposes of 
                subparagraph (A), a State may not--
                            ``(i) shift the costs of providing medical 
                        assistance to individuals enrolled under a 
                        State plan under title XIX to a political 
                        subdivision that establishes a demonstration 
                        project under this subsection by disenrolling 
                        such individuals from the State plan to the 
                        demonstration project of the political 
                        subdivision;
                            ``(ii) withhold or reduce any kind of 
                        funding or State support to political 
                        subdivision on account of the political 
                        subdivision's establishment of a demonstration 
                        project;
                            ``(iii) increase taxes on taxpayers of a 
                        political subdivision on account of the 
                        political subdivision's establishment of a 
                        demonstration project;
                            ``(iv) require a political subdivision to 
                        increase or lower a tax rate required by the 
                        political subdivision on account of the 
                        political subdivision's establishment of a 
                        demonstration project;
                            ``(v) prohibit a political subdivision from 
                        participating in a demonstration project 
                        pursuant to this subsection;
                            ``(vi) prohibit a political subdivision 
                        from participating in a Federal demonstration 
                        project, establishing or expanding a health 
                        coverage program, contracting or otherwise 
                        entering into an agreement with the Centers for 
                        Medicare & Medicaid Services, or receiving 
                        Federal funding directly from a Federal agency;
                            ``(vii) prohibit a health care provider, 
                        hospital, federally qualified health center, or 
                        rural health clinic from--
                                    ``(I) accepting patients with 
                                health coverage provided by a political 
                                subdivision;
                                    ``(II) accepting payments from a 
                                political subdivision;
                                    ``(III) making payments, including 
                                taxes, to a political subdivision; or
                                    ``(IV) participating in the State 
                                Medicaid program on account of 
                                participation in a demonstration 
                                project pursuant to this subsection;
                            ``(viii) refuse to allow a political 
                        subdivision to rely on State Medicaid systems 
                        and state Medicaid agency staff to implement a 
                        demonstration project, including--
                                    ``(I) the State's Medicaid 
                                eligibility check and enrollment 
                                system;
                                    ``(II) provider payment system;
                                    ``(III) claims processing system;
                                    ``(IV) fair hearing system; and
                                    ``(V) Federal reporting requirement 
                                system; or
                            ``(ix) take any other punitive action 
                        against a political subdivision that establish 
                        a demonstration project.
            ``(8) Timeline specified.--For purposes of paragraph (1), 
        the timeline specified in this paragraph shall require--
                    ``(A) not later than 180 days after the date of the 
                enactment of this subsection, the Secretary to 
                promulgate any regulations necessary to carry out this 
                subsection, including--
                            ``(i) the application requirements for a 
                        political subdivision to apply for a 
                        demonstration project, criteria on which 
                        applications will be reviewed, and how long 
                        political subdivisions have to begin the 
                        demonstration once an application is approved; 
                        and
                            ``(ii) the application of all requirements 
                        under section 1903 to a participating political 
                        subdivision as if it was a State;
                    ``(B) not later than 180 days after receiving an 
                application from a qualifying political subdivision 
                described in paragraph (3), the Secretary to transmit a 
                notice to such qualifying political subdivision of the 
                application's approval or rejection, and in case of a 
                rejection an explanation for the rejection; and
                    ``(C) not later than 7 years after the approval of 
                an application, the Secretary to transmit a notice to 
                such qualifying political subdivision of the 
                application's approval or rejection for an extension 
                under this subsection.
            ``(9) Limitation on number of demonstration projects.--The 
        Secretary may not approve more than 100 demonstration projects 
        under this subsection, which may consist of demonstration 
        projects implemented by a single participating political 
        subdivision or implemented as partnerships formed by multiple 
        participating political subdivisions (as described in paragraph 
        (3)(B)).
            ``(10) Application without regard to budget neutrality.--
        The Secretary shall not require, as a condition for carrying 
        out the demonstration project under this subsection, that the 
        demonstration project ensure that such model is budget neutral 
        initially with respect to expenditures under the applicable 
        title.
            ``(11) Report.--Not later than 4 years after the first date 
        of the demonstration project, the Secretary shall submit a 
        report to Congress on--
                    ``(A) the effect of the demonstration project on--
                            ``(i) the number of beneficiaries enrolled 
                        in demonstration projects under this 
                        subsection; and
                            ``(ii) the amount of uncompensated care 
                        costs for State Medicaid plans; and
                    ``(B) whether any States with a demonstration 
                project under this subsection have expanded Medicaid 
                coverage under the Patient Protection and Affordable 
                Care Act.''.
    (b) Payment to States.--Section 1903(a) of the Social Security Act 
(42 U.S.C. 1396b(a)) is amended--
            (1) in paragraph (6)(B), by striking at the end ``plus'';
            (2) in paragraph (7), by striking the period at the end and 
        inserting ``; plus''; and
            (3) by adding at the end the following new paragraph:
            ``(8) an amount equal to an increase of 5 percentage points 
        to Federal matching percentage for administrative costs for 
        every 100,000 individuals described in paragraph (1) of section 
        1115(g) who are enrolled in a demonstration project of a 
        participating political subdivision (as referred to in 
        paragraph (4)(A) of such section) during a calendar quarter.''.
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