Title: Premium Reduction Act of 2019
Policy area: Health

Summary:
Premium Reduction Act of 2019
This bill provides funding for grants for states to establish invisible high-risk pool and reinsurance programs through applications for state innovation waivers from certain health insurance coverage requirements.  A reinsurance program generally permits health insurance issuers to transfer a portion of the cost of the coverage for enrollees with large claims to the state, thus facilitating the enrollment of higher-risk individuals, including those with preexisting conditions. Similarly, an invisible high-risk pool generally identifies and enrolls higher-risk individuals and the state program pays a percentage of any insurance claims of such enrollees that exceed a predetermined amount.
In states that do not establish such programs, the Department of Health and Human Services (HHS) must make market stabilization payments to health insurance issuers.
The bill further directs HHS to expedite the review of state innovation waiver applications that include a high-risk pool or reinsurance program. States may model a waiver application on the application of a state that has an approved waiver for such a program.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1868 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 1868

 To provide support to States to establish invisible high-risk pool or 
                         reinsurance programs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 13, 2019

  Ms. Collins (for herself and Mr. Manchin) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide support to States to establish invisible high-risk pool or 
                         reinsurance programs.

    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 ``Premium Reduction Act of 2019''.

SEC. 2. INVISIBLE HIGH-RISK POOL AND REINSURANCE PROGRAMS.

    (a) State Grants Under Waivers.--Section 1332(a) of the Patient 
Protection and Affordable Care Act (42 U.S.C. 18052(a)) is amended--
            (1) by redesignating paragraphs (4), (5), and (6) as 
        paragraphs (6), (7), and (8), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Federal funding for invisible high-risk pool and 
        reinsurance programs.--
                    ``(A) Allocations.--
                            ``(i) Methodology.--Not later than 45 days 
                        after the date of enactment of this Act, the 
                        Secretary, in consultation with the National 
                        Association of Insurance Commissioners, shall 
                        specify an allocation methodology for 
                        determining the amount of funds appropriated 
                        under section 2(b) of the Premium Reduction Act 
                        of 2019 for a fiscal year to be allocated for 
                        each State for purposes of subparagraph (B) and 
                        section 2(c) of the Premium Reduction Act of 
                        2019.
                            ``(ii) Annual determinations.--The 
                        Secretary shall determine the allocations to 
                        States described in clause (i) for each 
                        calendar year, using the methodology determined 
                        under clause (i) and taking into consideration 
                        the experiences of other States with respect to 
                        participation in an Exchange and premium tax 
                        credits, cost-sharing reductions, or small 
                        business credits under sections 36B of the 
                        Internal Revenue Code of 1986 or under part I 
                        of subtitle E provided to residents of such 
                        States.
                    ``(B) State grants.--From amounts appropriated 
                under section 2(b)(1) of the Premium Reduction Act of 
                2019 for a fiscal year, the Secretary shall award 
                grants to States for each of fiscal years 2020 through 
                2023, in amounts determined under subparagraph (A)(ii), 
                for the following purposes:
                            ``(i) For each of fiscal years 2020 through 
                        2024, out of amounts appropriated under 
                        subparagraph (A) of such section 2(b)(1), for 
                        administrative costs of the State associated 
                        with preparing and submitting information 
                        described in paragraph (1)(B) that includes an 
                        invisible high-risk pool or reinsurance program 
                        that meets the requirements of subsection 
                        (f)(2), or costs associated with the 
                        establishment of such invisible high-risk pool 
                        or reinsurance program.
                            ``(ii) For each of fiscal years 2021 
                        through 2023, out of amounts appropriated under 
                        subparagraph (B) of such section 2(b)(1), for 
                        the establishment or maintenance of invisible 
                        high-risk pools and reinsurance programs that 
                        meet the requirements of subsection (f)(2) and 
                        for which the State has received a waiver under 
                        this section.
                    ``(C) Budget neutrality.--Funds awarded to a State 
                under a grant awarded under subparagraph (B) shall not 
                be taken into account for purposes of determining under 
                paragraph (1) whether the State waiver is budget 
                neutral, or determining under subsection (b)(1) whether 
                the State waiver increases the Federal deficit.
            ``(5) Reconciliation of pass through funding and funding 
        for invisible high-risk pool and reinsurance programs.--In 
        allocating amounts under paragraphs (3) and (4), the 
        Secretary--
                    ``(A) not later than November 1 of each year, shall 
                estimate the allocation for each State under such 
                paragraphs for the upcoming calendar year;
                    ``(B) not later than June 1 of each year, shall 
                revise the estimate of the allocations under 
                subparagraph (A) for each State for the current 
                calendar year; and
                    ``(C) shall reconcile amounts to be paid to each 
                State under such paragraphs for the following calendar 
                year by adjusting each State's allocation for the 
                following calendar year to account for the revisions 
                made under subparagraph (B).''.
    (b) Appropriations.--
            (1) In general.--There are authorized to be appropriated, 
        and there are appropriated, to the Secretary of Health and 
        Human Services (referred to in this section as the 
        ``Secretary''), for the purposes described in section 
        1332(a)(4)(B) of the Patient Protection and Affordable Care Act 
        (as amended by subsection (a)) and subsection (c) of this 
        section, out of any funds in the Treasury not otherwise 
        appropriated--
                    (A) $500,000,000 for fiscal year 2020; and
                    (B) $5,000,000,000 for each of fiscal years 2021 
                through 2023.
            (2) Available until expended.--Amounts appropriated under 
        this subsection shall remain available until expended.
    (c) Default Federal Safeguard.--
            (1) In general.--For purposes of plan year 2021, in the 
        case of a State that does not, by a date specified by the 
        Secretary for each such year, in consultation with the National 
        Association of Insurance Commissioners, have in effect a waiver 
        under section 1332 of the Patient Protection and Affordable 
        Care Act (42 U.S.C. 18052) that includes an invisible high-risk 
        pool or reinsurance program that meets the requirements of 
        subsection (f)(2) of such section 1332, the Secretary shall, 
        from amounts appropriated under subsection (b), use the 
        allocation determined for the State under subsection (a)(4)(A) 
        of such section 1332 for plan year 2021 for the purpose 
        described in paragraph (2). Such allocation shall be increased 
        by the amount of pass through funding that would be available 
        under section 1332(a)(3) of the Patient Protection and 
        Affordable Care Act if the State obtained a waiver for an 
        invisible high-risk pool or reinsurance program under such 
        section.
            (2) Required use for market stabilization payments to 
        issuers.--The Secretary shall use any allocation for a State 
        made pursuant to paragraph (1) to help stabilize premiums for 
        health insurance coverage in the individual market in such 
        State by providing payments to health insurance issuers, using 
        payment parameters and a methodology determined by the 
        Secretary.
    (d) Invisible High-Risk Pools and Reinsurance Programs.--
            (1) In general.--Section 1332 of the Patient Protection and 
        Affordable Care Act (42 U.S.C. 18052) is amended by adding at 
        the end the following:
    ``(f) Invisible High-Risk Pools and Reinsurance Programs.--
            ``(1) Funding.--With respect to a State that has received a 
        waiver under this section to establish an invisible high-risk 
        pool or reinsurance program described in paragraph (2), the 
        State may fund such program, in whole or in part, using one or 
        both of the following:
                    ``(A) Amounts received through a grant described in 
                subsection (a)(4)(B).
                    ``(B) All of, or a portion of, the payments made to 
                the State as described in subsection (a)(3), consistent 
                with the information the State provides under 
                subsection (a)(1)(B).
            ``(2) Program design.--An invisible high-risk pool or 
        reinsurance program described in this paragraph is a program 
        that meets any of the following:
                    ``(A) An invisible high-risk pool, as defined by 
                the State, under which health insurance issuers, with 
                respect to designated individuals who experience higher 
                than average health costs as determined by the State, 
                and are enrolled in health insurance coverage offered 
                in the individual market, cede risk to the pool, 
                without affecting the premium paid by the designated 
                individuals or their terms of coverage. With respect to 
                such pool, the State, or an entity operating the pool 
                on behalf of the State, shall establish--
                            ``(i) the premium amount the ceding issuer 
                        shall pay to the reinsurance pool;
                            ``(ii) the applicable attachment points or 
                        coinsurance percentages if the ceding issuer 
                        retains any portion of the risk under ceded 
                        policies; and
                            ``(iii) the mechanism by which high-risk 
                        individuals are designated for cession to the 
                        pool, which may include a list of designated 
                        high-cost health conditions.
                    ``(B) A reinsurance program, as defined by the 
                State, that assumes a portion of the risk for 
                individuals who experience higher than average health 
                costs as determined by the State, in a manner 
                substantially similar to the reinsurance program that 
                operated in the State in accordance with section 1341.
                    ``(C) A reinsurance program established by the 
                State not otherwise described in this paragraph.
                    ``(D) A program based on another State's 
                reinsurance program--
                            ``(i) described in subparagraph (A), (B), 
                        or (C), for which an application has been 
                        approved under this subsection; or
                            ``(ii) which was implemented prior to 
                        September 1, 2019, and which the Secretary 
                        determines meets the requirements of 
                        subparagraph (A).
            ``(3) Expedited approval.--
                    ``(A) In general.--The Secretary shall provide an 
                expedited approval process for an application under 
                subsection (a)(1)--
                            ``(i) with respect to an invisible high-
                        risk pool or reinsurance program described in 
                        subparagraph (A), (B), or (D) of paragraph (2); 
                        or
                            ``(ii) that uses a template form designed 
                        by the Administrator of the Centers for 
                        Medicare & Medicaid Services, in consultation 
                        with the Secretary of the Treasury, for an 
                        application based on a program that is the same 
                        or substantially the same as a program 
                        implemented in accordance with an application 
                        previously approved under this subsection.
                    ``(B) Timeframe.--The Secretary shall make a 
                determination on an application eligible for expedited 
                review under subparagraph (A) not later than 90 days 
                after receipt of such application.
                    ``(C) Standard of review.--Nothing in this 
                paragraph shall be construed as affecting the 
                requirements under subsection (a)(1) with respect to an 
                application approved in accordance with the process 
                under subparagraph (A).''.
            (2) Application.--Section 1332(a)(1)(B)(i) of the Patient 
        Protection and Affordable Care Act (42 U.S.C. 
        18052(a)(1)(B)(i)) is amended by inserting ``, including, as 
        applicable, a description of the State's plan to use any 
        amounts awarded to the State under paragraph (4) to support an 
        invisible high-risk pool or reinsurance program consistent with 
        subsection (f) and such information about such program as the 
        Secretary may require'' before the semicolon.
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