I 115th CONGRESS 1st Session H. R. 4695 IN THE HOUSE OF REPRESENTATIVES December 20, 2017 Mr. Schrader (for himself, Mr. Reed , Mr. Gottheimer , Mr. Lance , Mr. Bera , Mr. Trott , Mrs. Murphy of Florida , Mr. Thompson of Pennsylvania , Mr. O'Halleran , Mr. Costello of Pennsylvania , Mr. Suozzi , Mr. Dent , Mr. Panetta , Mr. Curbelo of Florida , Ms. Sinema , Mr. Fitzpatrick , Mr. Soto , Mr. Katko , Mr. Lipinski , Mr. Faso , Ms. Esty of Connecticut , Mr. Costa , Mr. Nolan , Mr. Schneider , Mr. Peters , and Mr. Welch ) introduced the following bill; which was referred to the Committee on Energy and Commerce , and in addition to the Committee on Ways and Means , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Patient Protection and Affordable Care Act to provide for stabilization in the individual health insurance market, and for other purposes.

1. Short title This Act may be cited as the Bipartisan Market Stabilization and Innovation Act of 2017 . 2. Funding for PPACA Exchange plans cost-sharing reductions Section 1402 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18071 ) is amended by adding at the end the following new subsection: (g) Funding (1) In general Out of any funds in the Treasury not otherwise appropriated, there is appropriated such sums as may be necessary for payments under this section, including through advance payment under section 1412(c)(3). Funds appropriated under this paragraph shall remain available for obligation until expended. (2) Reports The Secretary shall for 2017 and each subsequent year submit to the Committee on Energy and Commerce, the Committee on Ways and Means, and the Committee on Appropriations of the House of Representatives and the Committee on Finance, the Committee on Health, Education, Labor, and Pensions, and the Committee on Appropriations of the Senate an annual report on— (A) the amount of payments made under this section with respect to such year; (B) the effects of such payments on the costs of health insurance in the individual market; and (C) the projected costs of health insurance in the individual market over the subsequent year. . 3. Patient and State Stability Fund The Social Security Act ( 42 U.S.C. 301 et seq.) is amended by adding at the end the following new title: XXII Patient and State Stability Fund 2201. Establishment of program There is hereby established the Patient and State Stability Fund to be administered by the Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services (in this section referred to as the Administrator ), to provide funding, in accordance with this title, to the 50 States and the District of Columbia (each referred to in this section as a State ) during the period, subject to section 2204(c), beginning on January 1, 2019, and ending on December 31, 2028, for the purposes described in section 2202. 2202. Use of funds A State may use the funds allocated to the State under this title for any of the following purposes: (1) Helping, through the provision of financial assistance, high-risk individuals who do not have access to health insurance coverage offered through an employer enroll in health insurance coverage. (2) Providing incentives to appropriate entities to enter into arrangements with the State to help stabilize premiums for health insurance coverage in the individual market, as such markets are defined by the State. (3) Reducing the cost for providing health insurance coverage in the individual market and small group market to individuals who have, or are projected to have, a high rate of utilization of health services (as measured by cost) and to individuals who have high costs of health insurance coverage due to the low density population of the State in which they reside. (4) Promoting participation in the individual market and small group market in the State and increasing health insurance options available through such market. (5) Providing assistance to reduce out-of-pocket costs, such as copayments, coinsurance, premiums, and deductibles, of individuals enrolled in health insurance coverage in the State. 2203. State eligibility and approval; Default safeguard (a) Encouraging State options for allocations (1) In general To be eligible for an allocation of funds under this title for a year during the period described in section 2201 for use for one or more purposes described in section 2202, a State shall submit to the Administrator an application at such time (not later than March 31 of the previous year) and in such form and manner as specified by the Administrator and containing— (A) a description of how the funds will be used for such purposes; (B) a certification that the State will make, from non-Federal funds, expenditures for such purposes in an amount that is not less than the State percentage required for the year under section 2204(e)(1); and (C) such other information as the Administrator may require. (2) Administrator Determination Timeline (A) In general The Administrator shall make a determination as to the approval or disapproval of an application not later than 90 days after the receipt of such application. (B) Expedited Determination The Administrator shall make a determination as to the approval or disapproval of an application not later than 45 days after the receipt of such application if such application— (i) is submitted in response to an urgent situation, with respect to areas in the State that the Administrator determines are at risk for excessive premium increases or having no health plans offered in the applicable health insurance market for the current or following plan year; or (ii) resembles an application that is the same or substantially similar to an application that the Administrator has already approved for another State. (3) Period of approval If an application of a State is approved for a year, with respect to a purpose described in section 2202, such application shall also be treated as approved, with respect to such purpose, for each of the subsequent 4 years, but in no case shall an application be approved for a year after 2028. (4) Treatment as a State Health Care Program Any program receiving funds from an allocation for a State under this title, including pursuant to subsection (b), shall be considered to be a State health care program for purposes of sections 1128, 1128A, and 1128B. (b) Default Federal safeguard (1) In general In the case of a State that does not have in effect an approved application under this section for 2019 or a subsequent year beginning during the period described in section 2201, subject to section 2204(e), the Administrator, in consultation with the State insurance commissioner, shall use the allocation that would otherwise be provided to the State under this title for such year, in accordance with paragraph (2), for such State. (2) Required use for market stabilization payments to issuers Subject to section 2204(a), an allocation for a State made pursuant to paragraph (1) for a year shall be used to carry out the purpose described in section 2202(2) in such State by providing payments to appropriate entities described in such section with respect to claims that exceed $50,000 (or, with respect to allocations made under this title for 2020 or a subsequent year during the period specified in section 2201, such dollar amount specified by the Administrator), but do not exceed $350,000 (or, with respect to allocations made under this title for 2020 or a subsequent year during such period, such dollar amount specified by the Administrator), in an amount equal to 75 percent (or, with respect to allocations made under this title for 2020 or a subsequent year during such period, such percentage specified by the Administrator) of the amount of such claims. 2204. Allocations (a) Appropriation For the purpose of providing allocations for States (including pursuant to section 2203(b)) under this title there is appropriated, out of any money in the Treasury not otherwise appropriated, $11,500,000,000 for each of 2019 through 2028. (b) Allocations (1) Payment From amounts appropriated under subsection (a) for a year, the Administrator shall, with respect to a State and not later than January 1 of such year, allocate, subject to subsection (e), for such State (including pursuant to section 2203(b)) the amount determined for such State and year under paragraph (2). (2) Allocation amount determinations (A) For 2019 through 2021 (i) In general For purposes of paragraph (1), the amount determined under this paragraph for each of 2019 through 2021 for a State is an amount equal to the sum of— (I) the relative incurred claims amount described in clause (ii) for such State and year; and (II) the relative uninsured and issuer participation amount described in clause (iv) for such State and year. (ii) Relative incurred claims amount For purposes of clause (i), the relative incurred claims amount described in this clause for a State for 2019, 2020, and 2021 is the product of— (I) 90 percent of the amount appropriated under subsection (a) for the year; and (II) the relative State incurred claims proportion described in clause (iii) for such State and year. (iii) Relative State incurred claims proportion The relative State incurred claims proportion described in this clause for a State and year is the amount equal to the ratio of— (I) the adjusted incurred claims by the State, as reported through the medical loss ratio annual reporting under section 2718 of the Public Health Service Act for the third previous year; to (II) the sum of such adjusted incurred claims for all States, as so reported, for such third previous year. (iv) Relative uninsured and issuer participation amount For purposes of clause (i), the relative uninsured and issuer participation amount described in this clause for a State for 2019, 2020, and 2021 is the product of— (I) 10 percent of the amount appropriated under subsection (a) for the year; and (II) the relative State uninsured and issuer participation proportion described in clause (v) for such State and year. (v) Relative State uninsured and issuer participation proportion The relative State uninsured and issuer participation proportion described in this clause for a State and year is— (I) in the case of a State not described in clause (vi) for such year, 0; and (II) in the case of a State described in clause (vi) for such year, the amount equal to the ratio of— (aa) the number of individuals residing in such State who for the third preceding year were not enrolled in a health plan or otherwise did not have health insurance coverage (including through a Federal or State health program) and whose income is below 100 percent of the poverty line applicable to a family of the size involved; to (bb) the sum of the number of such individuals for all States described in clause (vi) for the third preceding year. (vi) States described For purposes of clause (v), a State is described in this clause, with respect to 2019, 2020, and 2021, if the State satisfies either of the following criterion: (I) The ratio described in subclause (II) of clause (v) that would be determined for such State by substituting 2015 for each reference in such subclause to the third preceding year and by substituting all such States for the reference in item (bb) of such subclause to all States described in clause (vi) is greater than the ratio described in such subclause that would be determined for such State by substituting 2013 for each reference in such subclause to the third preceding year and by substituting all such States for the reference in item (bb) of such subclause to all States described in clause (vi) . (II) The State has fewer than three health insurance issuers offering qualified health plans through the Exchange for 2017. (B) For 2022 through 2028 For purposes of paragraph (1), the amount determined under this paragraph for a year (beginning with 2022) during the period described in section 2201 for a State is an amount determined in accordance with an allocation methodology specified by the Administrator which— (i) takes into consideration the adjusted incurred claims of such State, the number of residents of such State who for the previous year were not enrolled in a health plan or otherwise did not have health insurance coverage (including through a Federal or State health program) and whose income is below 100 percent of the poverty line applicable to a family of the size involved, and the number of health insurance issuers participating in the insurance market in such State for such year; (ii) is established after consultation with health care consumers, health insurance issuers, State insurance commissioners, and other stakeholders and after taking into consideration additional cost and risk factors that may inhibit health care consumer and health insurance issuer participation; and (iii) reflects the goals of improving the health insurance risk pool, promoting a more competitive health insurance market, and increasing choice for health care consumers. (c) Annual distribution of previous year’s remaining funds In carrying out subsection (b), the Administrator shall, with respect to a year (beginning with 2022 and ending with 2028), not later than March 31 of such year— (1) determine the amount of funds, if any, from the amounts appropriated under subsection (a) for the previous year but not allocated for such previous year; and (2) if the Administrator determines that any funds were not so allocated for such previous year, allocate such remaining funds, in accordance with the allocation methodology specified pursuant to subsection (b)(2)(B), with, respect to a year before 2028, any remaining funds being made available for allocations to States for the subsequent year. (d) Availability Amounts appropriated under subsection (a) for a year and allocated to States in accordance with this section shall remain available for expenditure through December 31, 2028. (e) Conditions for and limitations on receipt of funds The Secretary may not make an allocation under this title for a State, with respect to a purpose described in section 2202 in the case of an allocation that would be made to a State pursuant to section 2203(a), if the State does not agree that the State will make available non-Federal contributions towards such purpose in an amount equal to— (1) for 2020, 5 percent of the amount allocated under this subsection to such State for such year and purpose; and (2) for 2021 and each subsequent year through 2028, 10 percent of the amount allocated under this subsection to such State for such year and purpose. . 4. Modifications to waiver for State innovation Section 1332 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18052 ) is amended— (1) in subsection (a)(3), in the first sentence, by striking individuals and small employers and all that follows through the State had not received such waiver and inserting the Secretary determines that there would be a reduction in the Federal deficit during the waiver period, the Secretary shall provide for a means by which the amount of such reduction ; and (2) in subsection (d)— (A) in paragraph (1), by striking 180 days and inserting subject to paragraph (3), 90 days ; and (B) by adding at the end the following new paragraph: (3) Expedited determination With respect to any application under subsection (a)(1) submitted on or after the date of enactment of this paragraph (or any such application submitted prior to such date of enactment and under review by the Secretary as of such date of enactment), the Secretary shall make a determination on such application, using the criteria for approval otherwise applicable under this section, not later than 45 days after the receipt of such application, and shall allow the public notice and comment at the State and Federal levels described under subsection (a)(4) to occur concurrently if such State application— (A) is submitted in response to an urgent situation, with respect to areas in the State that the Secretary determines are at risk for excessive premium increases or having no health plans offered in the applicable health insurance market for the current or following plan year; or (B) is for a waiver that is the same or substantially similar to a waiver that the Secretary already has approved for another State. . 5. Employer mandate adjustment (a) Increasing the size of applicable large employers Paragraph (2) of section 4980H(c) of the Internal Revenue Code of 1986 is amended by striking 50 and inserting 500 each place such term appears. (b) Increasing the hours required To qualify as full-Time employees (1) In general Subparagraph (A) of section 4980H(c)(4) of the Internal Revenue Code of 1986 is amended by striking 30 and inserting 40 . (2) Full-Time equivalents Subparagraph (E) of section 4980H(c)(2) of the Internal Revenue Code of 1986 is amended by striking 120 and inserting 160 . (c) Effective date The amendments made by this section shall apply to months beginning after December 31, 2017. 6. Repeal of medical device excise tax Section 4191 is amended by adding at the end the following new subsection: (d) Applicability The tax imposed under subsection (a) shall not apply to sales after December 31, 2017. . 7. Offering health plans in more than one State Not later than 1 year after the date of enactment of this Act, the Secretary of Health and Human Services, in consultation with the National Association of Insurance Commissioners, shall issue regulations for the implementation of health care choice compacts established under section 1333 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18053 ) to allow for the offering of health plans in more than one State. 8. Sense of Congress It is the sense of Congress that the provisions of this Act should not increase the deficit, and any projected costs of such provisions should be offset with policies to negate any projected deficit increase.