Title: Keeping Health Insurance Affordable Act of 2017
Policy area: Health

Summary:
Keeping Health Insurance Affordable Act of 2017
This bill alters and establishes several programs relating to health insurance and prescription drugs. Among other changes, the bill

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1511 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                S. 1511

 To bring stability to the individual insurance market, make insurance 
 coverage more affordable, lower prescription drug prices, and improve 
                               Medicaid.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 29, 2017

  Mr. Cardin introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To bring stability to the individual insurance market, make insurance 
 coverage more affordable, lower prescription drug prices, and improve 
                               Medicaid.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Keeping Health 
Insurance Affordable Act of 2017''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
              TITLE I--MARKETPLACE STABILITY AND SECURITY

Sec. 101. Individual Market Reinsurance Fund.
Sec. 102. Public health insurance option.
               TITLE II--HEALTH CARE FINANCIAL ASSISTANCE

Sec. 201. Increase in eligibility for premium assistance tax credits.
Sec. 202. Enhancements for reduced cost sharing.
                        TITLE III--DRUG PRICING

Sec. 301. Requiring drug manufacturers to provide drug rebates for 
                            drugs dispensed to low-income individuals.
Sec. 302. Negotiation of prices for medicare prescription drugs.
Sec. 303. Guaranteed prescription drug benefits.
Sec. 304. Full reimbursement for qualified retiree prescription drug 
                            plans.
              TITLE IV--MEDICAID COLLABORATIVE CARE MODELS

Sec. 401. Enhanced FMAP for medical assistance provided through a 
                            collaborative care model.

              TITLE I--MARKETPLACE STABILITY AND SECURITY

SEC. 101. INDIVIDUAL MARKET REINSURANCE FUND.

    (a) Establishment of Fund.--
            (1) In general.--There is established the ``Individual 
        Market Reinsurance Fund'' to be administered by the Secretary 
        to provide funding for an individual market stabilization 
        reinsurance program in each State that complies with the 
        requirements of this section.
            (2) Funding.--There is appropriated to the Fund, out of any 
        moneys in the Treasury not otherwise appropriated, such sums as 
        are necessary to carry out this section (other than subsection 
        (c)) for each calendar year beginning with 2018. Amounts 
        appropriated to the Fund shall remain available without fiscal 
        or calendar year limitation to carry out this section.
    (b) Individual Market Reinsurance Program.--
            (1) Use of funds.--The Secretary shall use amounts in the 
        Fund to establish a reinsurance program under which the 
        Secretary shall make reinsurance payments to health insurance 
        issuers with respect to high-cost individuals enrolled in 
        qualified health plans offered by such issuers that are not 
        grandfathered health plans or transitional health plans for any 
        plan year beginning with the 2018 plan year. This subsection 
        constitutes budget authority in advance of appropriations Acts 
        and represents the obligation of the Secretary to provide 
        payments from the Fund in accordance with this subsection.
            (2) Amount of payment.--The payment made to a health 
        insurance issuer under subsection (a) with respect to each 
        high-cost individual enrolled in a qualified health plan issued 
        by the issuer that is not a grandfathered health plan or a 
        transitional health plan shall equal 80 percent of the lesser 
        of--
                    (A) the amount (if any) by which the individual's 
                claims incurred during the plan year exceeds--
                            (i) in the case of the 2018, 2019, or 2020 
                        plan year, $50,000; and
                            (ii) in the case of any other plan year, 
                        $100,000; or
                    (B) for plan years described in--
                            (i) subparagraph (A)(i), $450,000; and
                            (ii) subparagraph (A)(ii), $400,000.
            (3) Indexing.--In the case of plan years beginning after 
        2018, the dollar amounts that appear in subparagraphs (A) and 
        (B) of paragraph (2) shall each be increased by an amount equal 
        to--
                    (A) such amount; multiplied by
                    (B) the premium adjustment percentage specified 
                under section 1302(c)(4) of the Affordable Care Act, 
                but determined by substituting ``2018'' for ``2013''.
            (4) Payment methods.--
                    (A) In general.--Payments under this subsection 
                shall be based on such a method as the Secretary 
                determines. The Secretary may establish a payment 
                method by which interim payments of amounts under this 
                subsection are made during a plan year based on the 
                Secretary's best estimate of amounts that will be 
                payable after obtaining all of the information.
                    (B) Requirement for provision of information.--
                            (i) Requirement.--Payments under this 
                        subsection to a health insurance issuer are 
                        conditioned upon the furnishing to the 
                        Secretary, in a form and manner specified by 
                        the Secretary, of such information as may be 
                        required to carry out this subsection.
                            (ii) Restriction on use of information.--
                        Information disclosed or obtained pursuant to 
                        clause (i) is subject to the HIPAA privacy and 
                        security law, as defined in section 3009(a) of 
                        the Public Health Service Act (42 U.S.C. 300jj-
                        19(a)).
            (5) Secretary flexibility for budget neutral revisions to 
        reinsurance payment specifications.--If the Secretary 
        determines appropriate, the Secretary may substitute higher 
        dollar amounts for the dollar amounts specified under 
        subparagraphs (A) and (B) of paragraph (2) (and adjusted under 
        paragraph (3), if applicable) if the Secretary certifies that 
        such substitutions, considered together, neither increase nor 
        decease the total projected payments under this subsection.
    (c) Outreach and Enrollment.--
            (1) In general.--During the period that begins on January 
        1, 2018, and ends on December 31, 2020, the Secretary shall 
        award grants to eligible entities for the following purposes:
                    (A) Outreach and enrollment.--To carry out 
                outreach, public education activities, and enrollment 
                activities to raise awareness of the availability of, 
                and encourage enrollment in, qualified health plans.
                    (B) Assisting individuals transition to qualified 
                health plans.--To provide assistance to individuals who 
                are enrolled in health insurance coverage that is not a 
                qualified health plan enroll in a qualified health 
                plan.
                    (C) Assisting enrollment in public health 
                programs.--To facilitate the enrollment of eligible 
                individuals in the Medicare program or in a State 
                Medicaid program, as appropriate.
                    (D) Raising awareness of premium assistance and 
                cost-sharing reductions.--To distribute fair and 
                impartial information concerning enrollment in 
                qualified health plans and the availability of premium 
                assistance tax credits under section 36B of the 
                Internal Revenue Code of 1986 and cost-sharing 
                reductions under section 1402 of the Patient Protection 
                and Affordable Care Act, and to assist eligible 
                individuals in applying for such tax credits and cost-
                sharing reductions.
            (2) Eligible entities defined.--
                    (A) In general.--In this subsection, the term 
                ``eligible entity'' means--
                            (i) a State; or
                            (ii) a nonprofit community-based 
                        organization.
                    (B) Enrollment agents.--Such term includes a 
                licensed independent insurance agent or broker that has 
                an arrangement with a State or nonprofit community-
                based organization to enroll eligible individuals in 
                qualified health plans.
                    (C) Exclusions.--Such term does not include an 
                entity that--
                            (i) is a health insurance issuer; or
                            (ii) receives any consideration, either 
                        directly or indirectly, from any health 
                        insurance issuer in connection with the 
                        enrollment of any qualified individuals or 
                        employees of a qualified employer in a 
                        qualified health plan.
            (3) Priority.--In awarding grants under this subsection, 
        the Secretary shall give priority to awarding grants to States 
        or eligible entities in States that have geographic rating 
        areas at risk of having no qualified health plans in the 
        individual market.
            (4) Funding.--Out of any moneys in the Treasury not 
        otherwise appropriated, $500,000,000 is appropriated to the 
        Secretary for each of calendar years 2018 through 2020, to 
        carry out this subsection.
    (d) Reports to Congress.--
            (1) Annual report.--The Secretary shall submit a report to 
        Congress, not later than January 21, 2019, and each year 
        thereafter, that contains the following information for the 
        most recently ended year:
                    (A) The number and types of plans in each State's 
                individual market, specifying the number that are 
                qualified health plans, grandfathered health plans, or 
                health insurance coverage that is not a qualified 
                health plan.
                    (B) The impact of the reinsurance payments provided 
                under this section on the availability of coverage, 
                cost of coverage, and coverage options in each State.
                    (C) The amount of premiums paid by individuals in 
                each State by age, family size, geographic area in the 
                State's individual market, and category of health plan 
                (as described in subparagraph (A)).
                    (D) The process used to award funds for outreach 
                and enrollment activities awarded to eligible entities 
                under subsection (c), the amount of such funds awarded, 
                and the activities carried out with such funds.
                    (E) Such other information as the Secretary deems 
                relevant.
            (2) Evaluation report.--Not later than January 31, 2022, 
        the Secretary shall submit to Congress a report that--
                    (A) analyzes the impact of the funds provided under 
                this section on premiums and enrollment in the 
                individual market in all States; and
                    (B) contains a State-by-State comparison of the 
                design of the programs carried out by States with funds 
                provided under this section.
    (e) Definitions.--In this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of the Department of Health and Human Services.
            (2) Fund.--The term ``Fund'' means the Individual Market 
        Reinsurance Fund established under subsection (a).
            (3) Grandfathered health plan.--The term ``grandfathered 
        health plan'' has the meaning given that term in section 
        1251(e) of the Patient Protection and Affordable Care Act.
            (4) High-cost individual.--The term ``high-cost 
        individual'' means an individual enrolled in a qualified health 
        plan (other than a grandfathered health plan or a transitional 
        health plan) who incurs claims in excess of $50,000 during a 
        plan year.
            (5) State.--The term ``State'' means each of the 50 States 
        and the District of Columbia.
            (6) Transitional health plan.--The term ``transitional 
        health plan'' means a plan continued under the letter issued by 
        the Centers for Medicare & Medicaid Services on November 14, 
        2013, to the State Insurance Commissioners outlining a 
        transitional policy for coverage in the individual and small 
        group markets to which section 1251 of the Patient Protection 
        and Affordable Care Act does not apply, and under the extension 
        of the transitional policy for such coverage set forth in the 
        Insurance Standards Bulletin Series guidance issued by the 
        Centers for Medicare & Medicaid Services on March 5, 2014, 
        February 29, 2016, and February 13, 2017.

SEC. 102. PUBLIC HEALTH INSURANCE OPTION.

    (a) In General.--Part 3 of subtitle D of title I of the Patient 
Protection and Affordable Care Act (Public Law 111-148) is amended by 
adding at the end the following new section:

``SEC. 1325. PUBLIC HEALTH INSURANCE OPTION.

    ``(a) Establishment and Administration of a Public Health Insurance 
Option.--
            ``(1) Establishment.--For years beginning with 2018, the 
        Secretary of Health and Human Services (in this subtitle 
        referred to as the `Secretary') shall provide for the offering 
        through Exchanges established under this title of a health 
        benefits plan (in this Act referred to as the `public health 
        insurance option') that ensures choice, competition, and 
        stability of affordable, high-quality coverage throughout the 
        United States in accordance with this section. In designing the 
        option, the Secretary's primary responsibility is to create a 
        low-cost plan without compromising quality or access to care.
            ``(2) Offering through exchanges.--
                    ``(A) Exclusive to exchanges.--The public health 
                insurance option shall only be made available through 
                Exchanges established under this title.
                    ``(B) Ensuring a level playing field.--Consistent 
                with this section, the public health insurance option 
                shall comply with requirements that are applicable 
                under this title to health benefits plans offered 
                through such Exchanges, including requirements related 
                to benefits, benefit levels, provider networks, 
                notices, consumer protections, and cost sharing.
                    ``(C) Provision of benefit levels.--The public 
                health insurance option--
                            ``(i) shall offer bronze, silver, and gold 
                        plans; and
                            ``(ii) may offer platinum plans.
            ``(3) Administrative contracting.--The Secretary may enter 
        into contracts for the purpose of performing administrative 
        functions (including functions described in subsection (a)(4) 
        of section 1874A of the Social Security Act) with respect to 
        the public health insurance option in the same manner as the 
        Secretary may enter into contracts under subsection (a)(1) of 
        such section. The Secretary has the same authority with respect 
        to the public health insurance option as the Secretary has 
        under subsections (a)(1) and (b) of section 1874A of the Social 
        Security Act with respect to title XVIII of such Act. Contracts 
        under this subsection shall not involve the transfer of 
        insurance risk to such entity.
            ``(4) Ombudsman.--The Secretary shall establish an office 
        of the ombudsman for the public health insurance option which 
        shall have duties with respect to the public health insurance 
        option similar to the duties of the Medicare Beneficiary 
        Ombudsman under section 1808(c)(2) of the Social Security Act. 
        In addition, such office shall work with States to ensure that 
        information and notice is provided that the public health 
        insurance option is one of the health plans available through 
        an Exchange.
            ``(5) Data collection.--The Secretary shall collect such 
        data as may be required to establish premiums and payment rates 
        for the public health insurance option and for other purposes 
        under this section, including to improve quality and to reduce 
        racial, ethnic, and other disparities in health and health 
        care.
            ``(6) Access to federal courts.--The provisions of Medicare 
        (and related provisions of title II of the Social Security Act) 
        relating to access of Medicare beneficiaries to Federal courts 
        for the enforcement of rights under Medicare, including with 
        respect to amounts in controversy, shall apply to the public 
        health insurance option and individuals enrolled under such 
        option under this title in the same manner as such provisions 
        apply to Medicare and Medicare beneficiaries.
    ``(b) Premiums and Financing.--
            ``(1) Establishment of premiums.--
                    ``(A) In general.--The Secretary shall establish 
                geographically adjusted premium rates for the public 
                health insurance option--
                            ``(i) in a manner that complies with the 
                        premium rules under paragraph (3); and
                            ``(ii) at a level sufficient to fully 
                        finance the costs of--
                                    ``(I) health benefits provided by 
                                the public health insurance option; and
                                    ``(II) administrative costs related 
                                to operating the public health 
                                insurance option.
                    ``(B) Contingency margin.--In establishing premium 
                rates under subparagraph (A), the Secretary shall 
                include an appropriate amount for a contingency margin.
            ``(2) Account.--
                    ``(A) Establishment.--There is established in the 
                Treasury of the United States an account for the 
                receipts and disbursements attributable to the 
                operation of the public health insurance option, 
                including the start-up funding under subparagraph (B). 
                Section 1854(g) of the Social Security Act shall apply 
                to receipts described in the previous sentence in the 
                same manner as such section applies to payments or 
                premiums described in such section.
                    ``(B) Start-up funding.--
                            ``(i) In general.--In order to provide for 
                        the establishment of the public health 
                        insurance option there is hereby appropriated 
                        to the Secretary, out of any funds in the 
                        Treasury not otherwise appropriated, 
                        $2,000,000,000. In order to provide for initial 
                        claims reserves before the collection of 
                        premiums, there is hereby appropriated to the 
                        Secretary, out of any funds in the Treasury not 
                        otherwise appropriated, such sums as necessary 
                        to cover 90 days worth of claims reserves based 
                        on projected enrollment.
                            ``(ii) Amortization of start-up funding.--
                        The Secretary shall provide for the repayment 
                        of the startup funding provided under clause 
                        (i) to the Treasury in an amortized manner over 
                        the 10-year period beginning with 2018.
                            ``(iii) Limitation on funding.--Nothing in 
                        this subsection shall be construed as 
                        authorizing any additional appropriations to 
                        the account, other than such amounts as are 
                        otherwise provided with respect to other health 
                        benefits plans participating under the Exchange 
                        involved.
            ``(3) Insurance rating rules.--The premium rate charged for 
        the public health insurance option may not vary except as 
        provided under section 2701 of the Public Health Service Act.
    ``(c) Payment Rates for Items and Services.--
            ``(1) Rates established by secretary.--
                    ``(A) In general.--The Secretary shall establish 
                payment rates for the public health insurance option 
                for services and health care providers consistent with 
                this subsection and may change such payment rates in 
                accordance with subsection (d).
                    ``(B) Initial payment rules.--
                            ``(i) In general.--During 2018, 2019, and 
                        2020, the Secretary shall set the payment rates 
                        under this subsection for services and 
                        providers described in subparagraph (A) equal 
                        to the payment rates for equivalent services 
                        and providers under parts A and B of Medicare, 
                        subject to clause (ii), paragraph (4), and 
                        subsection (d).
                            ``(ii) Exceptions.--The Secretary may 
                        determine the extent to which Medicare 
                        adjustments applicable to base payment rates 
                        under parts A and B of Medicare for graduate 
                        medical education and disproportionate share 
                        hospitals shall apply under this section.
                    ``(C) For new services.--The Secretary shall modify 
                payment rates described in subparagraph (B) in order to 
                accommodate payments for services, such as well-child 
                visits, that are not otherwise covered under Medicare.
                    ``(D) Prescription drugs.--Payment rates under this 
                subsection for prescription drugs that are not paid for 
                under part A or part B of Medicare shall be at rates 
                negotiated by the Secretary.
            ``(2) Subsequent periods; provider network.--
                    ``(A) Subsequent periods.--Beginning with 2021 and 
                for subsequent years, the Secretary shall continue to 
                use an administrative process to set such rates in 
                order to promote payment accuracy, to ensure adequate 
                beneficiary access to providers, and to promote 
                affordability and the efficient delivery of medical 
                care consistent with subsection (a)(1). Such rates 
                shall not be set at levels expected to increase average 
                medical costs per enrollee covered under the public 
                health insurance option beyond what would be expected 
                if the process under paragraph (1)(B) were continued, 
                as certified by the Office of the Actuary of the 
                Centers for Medicare & Medicaid Services.
                    ``(B) Establishment of a provider network.--Health 
                care providers participating under Medicare are 
                participating providers in the public health insurance 
                option unless they opt out in a process established by 
                the Secretary.
            ``(3) Administrative process for setting rates.--Chapter 5 
        of title 5, United States Code, shall apply to the process for 
        the initial establishment of payment rates under this 
        subsection but not to the specific methodology for establishing 
        such rates or the calculation of such rates.
            ``(4) Construction.--Nothing in this section shall be 
        construed as limiting the Secretary's authority to correct for 
        payments that are excessive or deficient, taking into account 
        the provisions of subsection (a)(1) and any appropriate 
        adjustments based on the demographic characteristics of 
        enrollees covered under the public health insurance option, but 
        in no case shall the correction of payments under this 
        paragraph result in a level of expenditures per enrollee that 
        exceeds the level of expenditures that would have occurred 
        under paragraph (1)(B), as certified by the Office of the 
        Actuary of the Centers for Medicare & Medicaid Services.
            ``(5) Construction.--Nothing in this section shall be 
        construed as affecting the authority of the Secretary to 
        establish payment rates, including payments to provide for the 
        more efficient delivery of services, such as the initiatives 
        provided for under subsection (d).
            ``(6) Limitations on review.--There shall be no 
        administrative or judicial review of a payment rate or 
        methodology established under this subsection or under 
        subsection (d).
    ``(d) Modernized Payment Initiatives and Delivery System Reform.--
            ``(1) In general.--For plan years beginning with 2018, the 
        Secretary may utilize innovative payment mechanisms and 
        policies to determine payments for items and services under the 
        public health insurance option. The payment mechanisms and 
        policies under this subsection may include patient-centered 
        medical home and other care management payments, accountable 
        care organizations, value-based purchasing, bundling of 
        services, differential payment rates, performance or 
        utilization based payments, partial capitation, and direct 
        contracting with providers. Payment rates under such payment 
        mechanisms and policies shall not be set at levels expected to 
        increase average medical costs per enrollee covered under the 
        public health insurance option beyond what would be expected if 
        the process under subsection (c)(1)(B) were continued, as 
        certified by the Office of the Actuary of the Centers for 
        Medicare & Medicaid Services.
            ``(2) Requirements for innovative payments.--The Secretary 
        shall design and implement the payment mechanisms and policies 
        under this subsection in a manner that--
                    ``(A) seeks to--
                            ``(i) improve health outcomes;
                            ``(ii) reduce health disparities (including 
                        racial, ethnic, and other disparities);
                            ``(iii) provide efficient and affordable 
                        care;
                            ``(iv) address geographic variation in the 
                        provision of health services; or
                            ``(v) prevent or manage chronic illness; 
                        and
                    ``(B) promotes care that is integrated, patient-
                centered, high-quality, and efficient.
            ``(3) Encouraging the use of high value services.--To the 
        extent allowed by the benefit standards applied to all health 
        benefits plans participating under the Exchange involved, the 
        public health insurance option may modify cost sharing and 
        payment rates to encourage the use of services that promote 
        health and value.
            ``(4) Non-uniformity permitted.--Nothing in this subtitle 
        shall prevent the Secretary from varying payments based on 
        different payment structure models (such as accountable care 
        organizations and medical homes) under the public health 
        insurance option for different geographic areas.
    ``(e) Provider Participation.--
            ``(1) In general.--The Secretary shall establish conditions 
        of participation for health care providers under the public 
        health insurance option.
            ``(2) Licensure or certification.--The Secretary shall not 
        allow a health care provider to participate in the public 
        health insurance option unless such provider is appropriately 
        licensed or certified under State law.
            ``(3) Payment terms for providers.--
                    ``(A) Physicians.--The Secretary shall provide for 
                the annual participation of physicians under the public 
                health insurance option, for which payment may be made 
                for services furnished during the year, in one of 2 
                classes:
                            ``(i) Preferred physicians.--Those 
                        physicians who agree to accept the payment rate 
                        established under this section (without regard 
                        to cost-sharing) as the payment in full.
                            ``(ii) Participating, non-preferred 
                        physicians.--Those physicians who agree not to 
                        impose charges (in relation to the payment rate 
                        described in subsection (c) for such 
                        physicians) that exceed the ratio permitted 
                        under section 1848(g)(2)(C) of the Social 
                        Security Act.
                    ``(B) Other providers.--The Secretary shall provide 
                for the participation (on an annual or other basis 
                specified by the Secretary) of health care providers 
                (other than physicians) under the public health 
                insurance option under which payment shall only be 
                available if the provider agrees to accept the payment 
                rate established under subsection (c) (without regard 
                to cost-sharing) as the payment in full.
            ``(4) Exclusion of certain providers.--The Secretary shall 
        exclude from participation under the public health insurance 
        option a health care provider that is excluded from 
        participation in a Federal health care program (as defined in 
        section 1128B(f) of the Social Security Act).
    ``(f) Application of Fraud and Abuse Provisions.--Provisions of law 
(other than criminal law provisions) identified by the Secretary by 
regulation, in consultation with the Inspector General of the 
Department of Health and Human Services, that impose sanctions with 
respect to waste, fraud, and abuse under Medicare, such as the False 
Claims Act (31 U.S.C. 3729 et seq.), shall also apply to the public 
health insurance option.
    ``(g) Medicare Defined.--For purposes of this section, the term 
`Medicare' means the health insurance programs under title XVIII of the 
Social Security Act.''.
    (b) Conforming Amendments.--
            (1) Treatment as qualified health plan.--Section 1301(a)(2) 
        of the Patient Protection and Affordable Care Act is amended--
                    (A) in the heading, by inserting ``, the public 
                health insurance option,'' before ``and''; and
                    (B) by inserting ``the public health insurance 
                option under section 1325,'' before ``and a multi-State 
                plan''.
            (2) Level playing field.--Section 1324(a) of such Act is 
        amended by inserting ``the public health insurance option under 
        section 1325,'' before ``or a multi-State qualified health 
        plan''.

               TITLE II--HEALTH CARE FINANCIAL ASSISTANCE

SEC. 201. INCREASE IN ELIGIBILITY FOR PREMIUM ASSISTANCE TAX CREDITS.

    (a) In General.--Subparagraph (A) of section 36B(c)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``400 percent'' 
and inserting ``600 percent''.
    (b) Conforming Amendment.--The table contained in clause (i) of 
section 36B(b)(3)(A)(i) of the Internal Revenue Code of 1986 is amended 
by striking ``400%'' and inserting ``600%''.
    (c) Reconciliation of Credit and Advance Credit.--Clause (i) of 
section 36B(f)(2)(B) of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``In the case of'' and all that follows 
        through ``the amount of'' and inserting ``The amount of''; and
            (2) by striking ``but less than 400%'' in the table.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 202. ENHANCEMENTS FOR REDUCED COST SHARING.

    (a) Modification of Amount.--
            (1) In general.--Section 1402(c)(2) of the Patient 
        Protection and Affordable Care Act is amended to read as 
        follows:
            ``(2) Additional reduction.--The Secretary shall establish 
        procedures under which the issuer of a qualified health plan to 
        which this section applies shall further reduce cost-sharing 
        under the plan in a manner sufficient to--
                    ``(A) in the case of an eligible insured whose 
                household income is not less than 100 percent but not 
                more than 200 percent of the poverty line for a family 
                of the size involved, increase the plan's share of the 
                total allowed costs of benefits provided under the plan 
                to 95 percent of such costs;
                    ``(B) in the case of an eligible insured whose 
                household income is more than 200 percent but not more 
                than 300 percent of the poverty line for a family of 
                the size involved, increase the plan's share of the 
                total allowed costs of benefits provided under the plan 
                to 90 percent of such costs; and
                    ``(C) in the case of an eligible insured whose 
                household income is more than 300 percent but not more 
                than 400 percent of the poverty line for a family of 
                the size involved, increase the plan's share of the 
                total allowed costs of benefits provided under the plan 
                to 85 percent of such costs.''.
            (2) Conforming amendment.--Clause (i) of section 
        1402(c)(1)(B) of such Act is amended to read as follows:
                            ``(i) In general.--The Secretary shall 
                        ensure the reduction under this paragraph shall 
                        not result in an increase in the plan's share 
                        of the total allowed costs of benefits provided 
                        under the plan above--
                                    ``(I) 95 percent in the case of an 
                                eligible insured described in paragraph 
                                (2)(A);
                                    ``(II) 90 percent in the case of an 
                                eligible insured described in paragraph 
                                (2)(B); and
                                    ``(III) 85 percent in the case of 
                                an eligible insured described in 
                                paragraph (2)(C).''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning after December 31, 2017.
    (b) Funding.--Section 1402 of the Patient Protection and Affordable 
Care Act is amended by adding at the end the following new subsection:
    ``(g) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated to the Secretary such sums as may 
be necessary for payments under this section.''.

                        TITLE III--DRUG PRICING

SEC. 301. REQUIRING DRUG MANUFACTURERS TO PROVIDE DRUG REBATES FOR 
              DRUGS DISPENSED TO LOW-INCOME INDIVIDUALS.

    (a) In General.--Section 1860D-2 of the Social Security Act (42 
U.S.C. 1395w-102) is amended--
            (1) in subsection (e)(1), in the matter preceding 
        subparagraph (A), by inserting ``and subsection (f)'' after 
        ``this subsection''; and
            (2) by adding at the end the following new subsection:
    ``(f) Prescription Drug Rebate Agreement for Rebate Eligible 
Individuals.--
            ``(1) Requirement.--
                    ``(A) In general.--For plan years beginning on or 
                after January 1, 2019, in this part, the term `covered 
                part D drug' does not include any drug or biological 
                product that is manufactured by a manufacturer that has 
                not entered into and have in effect a rebate agreement 
                described in paragraph (2).
                    ``(B) 2018 plan year requirement.--Any drug or 
                biological product manufactured by a manufacturer that 
                declines to enter into a rebate agreement described in 
                paragraph (2) for the period beginning on January 1, 
                2018, and ending on December 31, 2018, shall not be 
                included as a `covered part D drug' for the subsequent 
                plan year.
            ``(2) Rebate agreement.--A rebate agreement under this 
        subsection shall require the manufacturer to provide to the 
        Secretary a rebate for each rebate period (as defined in 
        paragraph (6)(B)) ending after December 31, 2017, in the amount 
        specified in paragraph (3) for any covered part D drug of the 
        manufacturer dispensed after December 31, 2017, to any rebate 
        eligible individual (as defined in paragraph (6)(A)) for which 
        payment was made by a PDP sponsor or MA organization under this 
        part for such period, including payments passed through the 
        low-income and reinsurance subsidies under sections 1860D-14 
        and 1860D-15(b), respectively. Such rebate shall be paid by the 
        manufacturer to the Secretary not later than 30 days after the 
        date of receipt of the information described in section 1860D-
        12(b)(7), including as such section is applied under section 
        1857(f)(3), or 30 days after the receipt of information under 
        subparagraph (D) of paragraph (3), as determined by the 
        Secretary. Insofar as not inconsistent with this subsection, 
        the Secretary shall establish terms and conditions of such 
        agreement relating to compliance, penalties, and program 
        evaluations, investigations, and audits that are similar to the 
        terms and conditions for rebate agreements under paragraphs (3) 
        and (4) of section 1927(b).
            ``(3) Rebate for rebate eligible medicare drug plan 
        enrollees.--
                    ``(A) In general.--The amount of the rebate 
                specified under this paragraph for a manufacturer for a 
                rebate period, with respect to each dosage form and 
                strength of any covered part D drug provided by such 
                manufacturer and dispensed to a rebate eligible 
                individual, shall be equal to the product of--
                            ``(i) the total number of units of such 
                        dosage form and strength of the drug so 
                        provided and dispensed for which payment was 
                        made by a PDP sponsor or an MA organization 
                        under this part for the rebate period, 
                        including payments passed through the low-
                        income and reinsurance subsidies under sections 
                        1860D-14 and 1860D-15(b), respectively; and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the Medicaid rebate amount 
                                (as defined in subparagraph (B)) for 
                                such form, strength, and period, 
                                exceeds
                                    ``(II) the average Medicare drug 
                                program rebate eligible rebate amount 
                                (as defined in subparagraph (C)) for 
                                such form, strength, and period.
                    ``(B) Medicaid rebate amount.--For purposes of this 
                paragraph, the term `Medicaid rebate amount' means, 
                with respect to each dosage form and strength of a 
                covered part D drug provided by the manufacturer for a 
                rebate period--
                            ``(i) in the case of a single source drug 
                        or an innovator multiple source drug, the 
                        amount specified in paragraph (1)(A)(ii)(II) or 
                        (2)(C) of section 1927(c) plus the amount, if 
                        any, specified in subparagraph (A)(ii) of 
                        paragraph (2) of such section, for such form, 
                        strength, and period; or
                            ``(ii) in the case of any other covered 
                        outpatient drug, the amount specified in 
                        paragraph (3)(A)(i) of such section for such 
                        form, strength, and period.
                    ``(C) Average medicare drug program rebate eligible 
                rebate amount.--For purposes of this subsection, the 
                term `average Medicare drug program rebate eligible 
                rebate amount' means, with respect to each dosage form 
                and strength of a covered part D drug provided by a 
                manufacturer for a rebate period, the sum, for all PDP 
                sponsors under part D and MA organizations 
                administering an MA-PD plan under part C, of--
                            ``(i) the product, for each such sponsor or 
                        organization, of--
                                    ``(I) the sum of all rebates, 
                                discounts, or other price concessions 
                                (not taking into account any rebate 
                                provided under paragraph (2) or any 
                                discounts under the program under 
                                section 1860D-14A) for such dosage form 
                                and strength of the drug dispensed, 
                                calculated on a per-unit basis, but 
                                only to the extent that any such 
                                rebate, discount, or other price 
                                concession applies equally to drugs 
                                dispensed to rebate eligible Medicare 
                                drug plan enrollees and drugs dispensed 
                                to PDP and MA-PD enrollees who are not 
                                rebate eligible individuals; and
                                    ``(II) the number of the units of 
                                such dosage and strength of the drug 
                                dispensed during the rebate period to 
                                rebate eligible individuals enrolled in 
                                the prescription drug plans 
                                administered by the PDP sponsor or the 
                                MA-PD plans administered by the MA 
                                organization; divided by
                            ``(ii) the total number of units of such 
                        dosage and strength of the drug dispensed 
                        during the rebate period to rebate eligible 
                        individuals enrolled in all prescription drug 
                        plans administered by PDP sponsors and all MA-
                        PD plans administered by MA organizations.
                    ``(D) Use of estimates.--The Secretary may 
                establish a methodology for estimating the average 
                Medicare drug program rebate eligible rebate amounts 
                for each rebate period based on bid and utilization 
                information under this part and may use these estimates 
                as the basis for determining the rebates under this 
                section. If the Secretary elects to estimate the 
                average Medicare drug program rebate eligible rebate 
                amounts, the Secretary shall establish a reconciliation 
                process for adjusting manufacturer rebate payments not 
                later than 3 months after the date that manufacturers 
                receive the information collected under section 1860D-
                12(b)(7)(B).
            ``(4) Length of agreement.--The provisions of paragraph (4) 
        of section 1927(b) (other than clauses (iv) and (v) of 
        subparagraph (B)) shall apply to rebate agreements under this 
        subsection in the same manner as such paragraph applies to a 
        rebate agreement under such section.
            ``(5) Other terms and conditions.--The Secretary shall 
        establish other terms and conditions of the rebate agreement 
        under this subsection, including terms and conditions related 
        to compliance, that are consistent with this subsection.
            ``(6) Definitions.--In this subsection and section 1860D-
        12(b)(7):
                    ``(A) Rebate eligible individual.--The term `rebate 
                eligible individual' means--
                            ``(i) a subsidy eligible individual (as 
                        defined in section 1860D-14(a)(3)(A));
                            ``(ii) a Medicaid beneficiary treated as a 
                        subsidy eligible individual under clause (v) of 
                        section 1860D-14(a)(3)(B); and
                            ``(iii) any part D eligible individual not 
                        described in clause (i) or (ii) who is 
                        determined for purposes of the State plan under 
                        title XIX to be eligible for medical assistance 
                        under clause (i), (iii), or (iv) of section 
                        1902(a)(10)(E).
                    ``(B) Rebate period.--The term `rebate period' has 
                the meaning given such term in section 1927(k)(8).''.
    (b) Reporting Requirement for the Determination and Payment of 
Rebates by Manufacturers Related to Rebate for Rebate Eligible Medicare 
Drug Plan Enrollees.--
            (1) Requirements for pdp sponsors.--Section 1860D-12(b) of 
        the Social Security Act (42 U.S.C. 1395w-112(b)) is amended by 
        adding at the end the following new paragraph:
            ``(7) Reporting requirement for the determination and 
        payment of rebates by manufacturers related to rebate for 
        rebate eligible medicare drug plan enrollees.--
                    ``(A) In general.--For purposes of the rebate under 
                section 1860D-2(f) for contract years beginning on or 
                after January 1, 2019, each contract entered into with 
                a PDP sponsor under this part with respect to a 
                prescription drug plan shall require that the sponsor 
                comply with subparagraphs (B) and (C).
                    ``(B) Report form and contents.--Not later than a 
                date specified by the Secretary, a PDP sponsor of a 
                prescription drug plan under this part shall report to 
                each manufacturer--
                            ``(i) information (by National Drug Code 
                        number) on the total number of units of each 
                        dosage, form, and strength of each drug of such 
                        manufacturer dispensed to rebate eligible 
                        Medicare drug plan enrollees under any 
                        prescription drug plan operated by the PDP 
                        sponsor during the rebate period;
                            ``(ii) information on the price discounts, 
                        price concessions, and rebates for such drugs 
                        for such form, strength, and period;
                            ``(iii) information on the extent to which 
                        such price discounts, price concessions, and 
                        rebates apply equally to rebate eligible 
                        Medicare drug plan enrollees and PDP enrollees 
                        who are not rebate eligible Medicare drug plan 
                        enrollees; and
                            ``(iv) any additional information that the 
                        Secretary determines is necessary to enable the 
                        Secretary to calculate the average Medicare 
                        drug program rebate eligible rebate amount (as 
                        defined in paragraph (3)(C) of such section), 
                        and to determine the amount of the rebate 
                        required under this section, for such form, 
                        strength, and period.
                Such report shall be in a form consistent with a 
                standard reporting format established by the Secretary.
                    ``(C) Submission to secretary.--Each PDP sponsor 
                shall promptly transmit a copy of the information 
                reported under subparagraph (B) to the Secretary for 
                the purpose of audit oversight and evaluation.
                    ``(D) Confidentiality of information.--The 
                provisions of subparagraph (D) of section 1927(b)(3), 
                relating to confidentiality of information, shall apply 
                to information reported by PDP sponsors under this 
                paragraph in the same manner that such provisions apply 
                to information disclosed by manufacturers or 
                wholesalers under such section, except--
                            ``(i) that any reference to `this section' 
                        in clause (i) of such subparagraph shall be 
                        treated as being a reference to this section;
                            ``(ii) the reference to the Director of the 
                        Congressional Budget Office in clause (iii) of 
                        such subparagraph shall be treated as including 
                        a reference to the Medicare Payment Advisory 
                        Commission; and
                            ``(iii) clause (iv) of such subparagraph 
                        shall not apply.
                    ``(E) Oversight.--Information reported under this 
                paragraph may be used by the Inspector General of the 
                Department of Health and Human Services for the 
                statutorily authorized purposes of audit, 
                investigation, and evaluations.
                    ``(F) Penalties for failure to provide timely 
                information and provision of false information.--In the 
                case of a PDP sponsor--
                            ``(i) that fails to provide information 
                        required under subparagraph (B) on a timely 
                        basis, the sponsor is subject to a civil money 
                        penalty in the amount of $10,000 for each day 
                        in which such information has not been 
                        provided; or
                            ``(ii) that knowingly (as defined in 
                        section 1128A(i)) provides false information 
                        under such subparagraph, the sponsor is subject 
                        to a civil money penalty in an amount not to 
                        exceed $100,000 for each item of false 
                        information.
                Such civil money penalties are in addition to other 
                penalties as may be prescribed by law. The provisions 
                of section 1128A (other than subsections (a) and (b)) 
                shall apply to a civil money penalty under this 
                subparagraph in the same manner as such provisions 
                apply to a penalty or proceeding under section 
                1128A(a).''.
            (2) Application to ma organizations.--Section 1857(f)(3) of 
        the Social Security Act (42 U.S.C. 1395w-27(f)(3)) is amended 
        by adding at the end the following:
                    ``(D) Reporting requirement related to rebate for 
                rebate eligible medicare drug plan enrollees.--Section 
                1860D-12(b)(7).''.
    (c) Deposit of Rebates Into Medicare Prescription Drug Account.--
Section 1860D-16(c) of the Social Security Act (42 U.S.C. 1395w-116(c)) 
is amended by adding at the end the following new paragraph:
            ``(6) Rebate for rebate eligible medicare drug plan 
        enrollees.--Amounts paid under a rebate agreement under section 
        1860D-2(f) shall be deposited into the Account.''.
    (d) Exclusion From Determination of Best Price and Average 
Manufacturer Price Under Medicaid.--
            (1) Exclusion from best price determination.--Section 
        1927(c)(1)(C)(ii)(I) of the Social Security Act (42 U.S.C. 
        1396r-8(c)(1)(C)(ii)(I)) is amended by inserting ``and amounts 
        paid under a rebate agreement under section 1860D-2(f)'' after 
        ``this section''.
            (2) Exclusion from average manufacturer price 
        determination.--Section 1927(k)(1)(B)(i) of the Social Security 
        Act (42 U.S.C. 1396r-8(k)(1)(B)(i)) is amended--
                    (A) in subclause (IV), by striking ``and'' after 
                the semicolon;
                    (B) in subclause (V), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
                                    ``(VI) amounts paid under a rebate 
                                agreement under section 1860D-2(f).''.

SEC. 302. NEGOTIATION OF PRICES FOR MEDICARE PRESCRIPTION DRUGS.

    Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111) 
is amended by striking subsection (i) (relating to noninterference) and 
inserting the following:
    ``(i) Negotiation; No National Formulary or Price Structure.--
            ``(1) Negotiation of prices with manufacturers.--In order 
        to ensure that beneficiaries enrolled under prescription drug 
        plans and MA-PD plans pay the lowest possible price, the 
        Secretary shall have and exercise authority similar to that of 
        other Federal entities that purchase prescription drugs in bulk 
        to negotiate contracts with manufacturers of covered part D 
        drugs, consistent with the requirements and in furtherance of 
        the goals of providing quality care and containing costs under 
        this part.
            ``(2) No national formulary or price structure.--In order 
        to promote competition under this part and in carrying out this 
        part, the Secretary may not require a particular formulary or 
        institute a price structure for the reimbursement of covered 
        part D drugs.''.

SEC. 303. GUARANTEED PRESCRIPTION DRUG BENEFITS.

    (a) In General.--Section 1860D-3 of the Social Security Act (42 
U.S.C. 1395w-103) is amended to read as follows:

      ``access to a choice of qualified prescription drug coverage

    ``Sec. 1860D-3.  (a) Assuring Access to a Choice of Coverage.--
            ``(1) Choice of at least three plans in each area.--
        Beginning on January 1, 2019, the Secretary shall ensure that 
        each part D eligible individual has available, consistent with 
        paragraph (2), a choice of enrollment in--
                    ``(A) a nationwide prescription drug plan offered 
                by the Secretary in accordance with subsection (b); and
                    ``(B) at least 2 qualifying plans (as defined in 
                paragraph (3)) in the area in which the individual 
                resides, at least one of which is a prescription drug 
                plan.
            ``(2) Requirement for different plan sponsors.--The 
        requirement in paragraph (1)(B) is not satisfied with respect 
        to an area if only one entity offers all the qualifying plans 
        in the area.
            ``(3) Qualifying plan defined.--For purposes of this 
        section, the term `qualifying plan' means--
                    ``(A) a prescription drug plan;
                    ``(B) an MA-PD plan described in section 
                1851(a)(2)(A)(i) that provides--
                            ``(i) basic prescription drug coverage; or
                            ``(ii) qualified prescription drug coverage 
                        that provides supplemental prescription drug 
                        coverage so long as there is no MA monthly 
                        supplemental beneficiary premium applied under 
                        the plan, due to the application of a credit 
                        against such premium of a rebate under section 
                        1854(b)(1)(C); or
                    ``(C) a nationwide prescription drug plan offered 
                by the Secretary in accordance with subsection (b).
    ``(b) HHS as PDP Sponsor for a Nationwide Prescription Drug Plan.--
            ``(1) In general.--The Secretary, acting through the 
        Administrator of the Centers for Medicare & Medicaid Services, 
        shall take such steps as may be necessary to qualify and serve 
        as a PDP sponsor and to offer a prescription drug plan that 
        offers basic prescription drug coverage throughout the United 
        States. Such a plan shall be in addition to, and not in lieu 
        of, other prescription drug plans offered under this part.
            ``(2) Premium; solvency; authorities.--In carrying out 
        paragraph (1), the Secretary--
                    ``(A) shall establish a premium in the amount of 
                $37 for months in 2019 and, for months in subsequent 
                years, in the amount specified in this paragraph for 
                months in the previous year increased by the annual 
                percentage increase described in section 1860D-2(b)(6) 
                (relating to growth in medicare prescription drug costs 
                per beneficiary) for the year involved;
                    ``(B) is deemed to have met any applicable solvency 
                and capital adequacy standards; and
                    ``(C) shall exercise such authorities (including 
                the use of regional or other pharmaceutical benefit 
                managers) as the Secretary determines necessary to 
                offer the prescription drug plan in the same or a 
                comparable manner as is the case for prescription drug 
                plans offered by private PDP sponsors.
    ``(c) Flexibility in Risk Assumed.--In order to ensure access 
pursuant to subsection (a) in an area the Secretary may approve limited 
risk plans under section 1860D-11(f) for the area.''.
    (b) Conforming Amendment.--Section 1860D-11(g) of the Social 
Security Act (42 U.S.C. 1395w-111(g)) is amended by adding at the end 
the following new paragraph:
            ``(8) Application.--This subsection shall not apply on or 
        after January 1, 2019.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2019.

SEC. 304. FULL REIMBURSEMENT FOR QUALIFIED RETIREE PRESCRIPTION DRUG 
              PLANS.

    (a) Elimination of True Out-of-Pocket Limitation.--Section 1860D-
2(b)(4)(C)(iii) of the Social Security Act (42 U.S.C. 1395w-
102(b)(4)(C)(iii)) is amended--
            (1) in subclause (III), by striking ``or'' at the end;
            (2) in subclause (IV), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following new subclause:
                                    ``(V) under a qualified retiree 
                                prescription drug plan (as defined in 
                                section 1860D-22(a)(2)).''.
    (b) Equalization of Subsidies.--Notwithstanding any other provision 
of law, the Secretary of Health and Human Services shall provide for 
such increase in the special subsidy payment amounts under section 
1860D-22(a)(3) of the Social Security Act (42 U.S.C. 1395w-132(a)(3)) 
as may be appropriate to provide for payments in the aggregate 
equivalent to the payments that would have been made under section 
1860D-15 of such Act (42 U.S.C. 1395w-115) if the individuals were not 
enrolled in a qualified retiree prescription drug plan. In making such 
computation, the Secretary shall not take into account the application 
of the amendments made by section 1202 of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173; 
117 Stat. 2480).
    (c) Effective Date.--This section, and the amendments made by this 
section, shall take effect on January 1, 2019.

              TITLE IV--MEDICAID COLLABORATIVE CARE MODELS

SEC. 401. ENHANCED FMAP FOR MEDICAL ASSISTANCE PROVIDED THROUGH A 
              COLLABORATIVE CARE MODEL.

    Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
amended--
            (1) in the first sentence of subsection (b)--
                    (A) by striking ``, and (5)'' and inserting ``, 
                (5)''; and
                    (B) by inserting ``, and (6) beginning January 1, 
                2018, the Federal medical assistance percentage shall 
                be 100 percent with respect to medical assistance 
                provided by a State for items and services delivered 
                through a collaborative care model (as defined in 
                subsection (ee)) or an evidence-based model (which may 
                be a collaborative care model) that integrates 
                behavioral health services into primary care 
                treatment'' before the period; and
            (2) by adding at the end the following new subsection:
    ``(ee) Collaborative Care Models.--
            ``(1) In general.--The term `collaborative care model' 
        means a model for providing health care to individuals which 
        adheres to the core services described in paragraph (2) and 
        under which each individual receiving care through the model 
        receives care from a collaborative team of providers described 
        in paragraph (3).
            ``(2) Core services.--The services described in this 
        paragraph are:
                    ``(A) Comprehensive care management.
                    ``(B) Care coordination and health promotion.
                    ``(C) Comprehensive transitional care from 
                inpatient settings to other settings, including 
                appropriate follow up.
                    ``(D) Individual and family support, which shall 
                include authorized representatives.
                    ``(E) Referral to community and social support 
                services, as appropriate.
                    ``(F) The use of health information technology to 
                link services, as feasible and appropriate.
            ``(3) Collaborative health team.--A team described in this 
        paragraph includes the following providers:
                    ``(A) A primary care provider such as a primary 
                care physician, an internist, a nurse practitioner, or 
                a physician's assistant.
                    ``(B) Care management staff which shall include a 
                member who is a registered professional nurse, a 
                clinical social worker, or a psychologist, and who 
                specializes in primary care management and is trained 
                to provide evidence based care coordination, brief 
                behavioral interventions, and to support treatments 
                (including medications) initiated by a primary care 
                physician.
                    ``(C) A psychiatric consultant who shall advise the 
                primary care provider as necessary (either in person or 
                remotely).''.
                                 <all>