H.R. 1425 — what changed

Subtitle D of title I of the Patient Protection and Affordable Care Act is amended by inserting after part 5 (42 U.S.C. 18061 et seq.) the following new part:

“6 Improve Health Insurance Affordability Fund

“1351. Establishment of program

changed “There is hereby established the “Improve Health Insurance Affordability 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, part, to the 50 States and the District of Columbia (each referred to in this section as a “State”) beginning on January 1, 2020, for the purposes described in section 1352.

“1352. Use of funds

“(a) In general—A State shall use the funds allocated to the State under this part for one of the following purposes:

“(1) To provide reinsurance payments to health insurance issuers with respect to individuals enrolled under individual health insurance coverage (other than through a plan described in subsection (b)) offered by such issuers.

“(2) To provide assistance (other than through payments described in paragraph (1)) to reduce out-of-pocket costs, such as copayments, coinsurance, premiums, and deductibles, of individuals enrolled under qualified health plans offered on the individual market through an Exchange.

“(b) Exclusion of certain grandfathered and transitional plans—For purposes of subsection (a), a plan described in this subsection is the following:

“(1) A grandfathered health plan (as defined in section 1251).

changed “(2) A plan (commonly referred to as a “transitional 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 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, February 13, 2017, and April 9, 2018, and March 25, 2019, or under any subsequent extensions thereof.

added “(3) Student health insurance coverage (as defined in section 147.145 of title 45, Code of Federal Regulations).

“1353. State eligibility and approval; Default safeguard

“(a) Encouraging State options for allocations

added “(1) In general—To be eligible for an allocation of funds under this part for a year (beginning with 2020), a State shall submit to the Administrator an application at such time (but, in the case of allocations for 2020, not later than 90 days after the date of the enactment of this part and, in the case of allocations for a subsequent year, not later than March 1 of the previous year) and in such form and manner as specified by the Administrator containing—

removed “(1) In general—To be eligible for an allocation of funds under this part for a year (beginning with 2020), a State shall submit to the Administrator an application at such time (but, in the case of allocations for 2020, not later than 90 days after the date of the enactment of this title and, in the case of allocations for a subsequent year, not later than March 31 of the previous year) and in such form and manner as specified by the Administrator containing—

“(A) a description of how the funds will be used; and

“(B) such other information as the Administrator may require.

“(2) Automatic approval—An application so submitted is approved unless the Administrator notifies the State submitting the application, not later than 60 days after the date of the submission of such application, that the application has been denied for not being in compliance with any requirement of this part and of the reason for such denial.

“(3) 5-year application approval—If an application of a State is approved for a purpose described in section 1352 for a year, such application shall be treated as approved for such purpose for each of the subsequent 4 years.

added “(4) Revocation of approval—The approval of an application of a State, with respect to a purpose described in section 1352, may be revoked if the State fails to use funds provided to the State under this section for such purpose or otherwise fails to comply with the requirements of this section.

“(b) Default Federal safeguard

removed “(1) 2020—For allocations made under this part for 2020, in the case of a State that does not submit an application under subsection (a) by the 90-day submission date applicable to such year under subsection (a)(1) and in the case of a State that does submit such an application by such date that is not approved, the Administrator, in consultation with the State insurance commissioner, shall use, in accordance with paragraph (3), the allocation that would otherwise be provided to the State under this part for such year for such State.

removed “(2) 2021 and subsequent years—In the case of a State that does not have in effect an approved application under this section for 2021 or a subsequent year, the Administrator, in consultation with the State insurance commissioner, shall use, in accordance with paragraph (3), the allocation that would otherwise be provided to the State under this part for such year for such State.

changed “(3) Specified use—An allocation for a State made pursuant to paragraph (1) or (2) for a year shall be used to carry out the purpose described in section 1352(1) “(1) 2020—For 2020, in such the case of a State that does not submit an application under subsection (a) by providing reinsurance payments to health insurance issuers with respect the 90-day submission date applicable to attachment range claims (as defined such year under subsection (a)(1) and in section 1354(b)(2), using the dollar amounts specified in subparagraph (B) case of a State that does submit such section for an application by such year) date that is not approved, the Administrator, in an amount equal to consultation with the percentage (specified for such year by State insurance commissioner, shall, from the Secretary amount calculated under paragraph (4) for such subparagraph) of year, carry out the amount of purpose described in paragraph (3) in such claims.State for such year.

added “(2) 2021 and subsequent years—For 2021 or a subsequent year, in the case of a State that does not have in effect an approved application under this section for such year, the Administrator, in consultation with the State insurance commissioner, shall, from the amount calculated under paragraph (4) for such year, carry out the purpose described in paragraph (3) in such State for such year.

added “(3) Specified use—The amount described in paragraph (4), with respect to 2020 or a subsequent year, shall be used to carry out the purpose described in section 1352(a)(1) in each State described in paragraph (1) or (2) for such year, as applicable, by providing reinsurance payments to health insurance issuers with respect to attachment range claims (as defined in section 1354(b)(2)), using the dollar amounts specified in subparagraph (B) of such section for such year) in an amount equal to, subject to paragraph (5), the percentage (specified for such year by the Secretary under such subparagraph) of the amount of such claims.

added “(4) Amount described—The amount described in this paragraph, with respect to 2020 or a subsequent year, is the amount equal to the total sum of amounts that the Secretary would otherwise estimate under section 1354(b)(2)(A)(i) for such year for each State described in paragraph (1) or (2) for such year, as applicable, if each such State were not so described for such year.

added “(5) Adjustment—For purposes of this subsection, the Secretary may apply a percentage under paragraph (3) with respect to a year that is less than the percentage otherwise specified in section 1354(b)(2)(B) for such year, if the cost of paying the total eligible attachment range claims for States described in this subsection for such year at such percentage otherwise specified would exceed the amount calculated under paragraph (4) for such year.

“1354. Allocations

added “(a) Appropriation—For the purpose of providing allocations for States under subsection (b) and payments under section 1353(b) there is appropriated, out of any money in the Treasury not otherwise appropriated, $10,000,000,000 for 2020 and each subsequent year.

removed “(a) Appropriation—For the purpose of providing allocations for States under this part there is appropriated, out of any money in the Treasury not otherwise appropriated $10,000,000,000 for 2020 and each subsequent year.

“(b) Allocations

“(1) Payment

added “(A) In general—From amounts appropriated under subsection (a) for a year, the Secretary shall, with respect to a State not described in section 1353(b) for such year and not later than the date specified under subparagraph (B) for such year, allocate for such State the amount determined for such State and year under paragraph (2).

removed “(A) In general—From amounts appropriated under subsection (a) for a year, the Secretary shall, with respect to a State and not later than the date specified under subparagraph (B) for such year, allocate for such State the amount determined for such State and year under paragraph (2).

“(B) Specified date—For purposes of subparagraph (A), the date specified in this subparagraph is—

added “(i) for 2020, the date that is 45 days after the date of the enactment of this part; and

removed “(i) for 2020, the date that is 45 days after the date of the enactment of this title; and

“(ii) for 2021 or a subsequent year, January 1 of the respective year.

“(C) Notifications of allocation amounts—For 2021 and each subsequent year, the Secretary shall notify each State of the amount determined for such State under paragraph (2) for such year by not later than January 1 of the previous year.

“(2) Allocation amount determinations

removed “(A) In general—For purposes of paragraph (1), the amount determined under this paragraph for a year for a State is the amount that the Secretary estimates would be expended under this part for such year on attachment range claims of individuals residing in such State if all States used such funds only for the purpose described in paragraph (1) of section 1352 at the dollar amounts and percentage specified under subparagraph (B) for such year. For purposes of the previous sentence and section 1353(b)(3), the term attachment range claims means, with respect to an individual, the claims for such individual that exceed a dollar amount specified by the Secretary for a year, but do not exceed a ceiling dollar amount specified by the Secretary for such year, under subparagraph (B).

removed “(B) Specifications—For purposes of subparagraph (A) and section 1353(b)(3), the Secretary shall determine the dollar amounts and the percentage to be specified under subparagraph (A) for a year in a manner to ensure that the total amount of expenditures under this part for such year is estimated to equal the total amount appropriated for such year under subsection (a) if such expenditures were used solely for the purpose described in paragraph (1) of section 1352 for attachment range claims at the dollar amounts and percentage so specified for such year.

removed “(3) Availability—Funds allocated to a State under this subsection for a year shall remain available through the end of the subsequent year.

removed “(c) Annual distribution of previous year’s remaining funds

changed “(1) “(A) In general—In carrying out subsection (b), general—For purposes of paragraph (1), the Secretary shall, with respect to amount determined under this paragraph for a year (beginning with 2021), not later than March 31 of for a State described in paragraph (1)(A) for such year—year is the amount equal to—

changed “(A) determine “(i) the amount that the Secretary estimates would be expended under this part for such year on attachment range claims of funds, individuals residing in such State if any, from such State used such funds only for the purpose described in paragraph (1) of section 1352(a) at the dollar amounts appropriated and percentage specified under subsection (a) for the previous year but not allocated subparagraph (B) for such previous year; andminus

changed “(B) “(ii) the amount, if any, by which the Secretary determines that any funds were not so allocated for such previous year, allocate such remaining funds to States for such year, in accordance with paragraph (2).determines—

changed “(2) Allocation methodology—For purposes “(I) the estimated amount of paragraph (1), premium tax credits under section 36B of the total remaining funds to be allocated for a year pursuant to such paragraph, the Secretary shall allocate to each State an amount Internal Revenue Code of 1986 that bears the same ratio to such total remaining funds as the amount allocated pursuant to subsection (b) would be attributable to individuals residing in such State for such year bears to the total allocations made under such subsection for such year.”without application of this part; exceeds

added “(II) the estimated amount of premium tax credits under section 36B of the Internal Revenue Code of 1986 that would be attributable to individuals residing in such State for such year if such State were a State described in section 1353(b) for such year.

added “(B) Specifications—For purposes of subparagraph (A) and section 1353(b)(3), the Secretary shall determine the dollar amounts and the percentage to be specified under this subparagraph for a year in a manner to ensure that the total amount of expenditures under this part for such year is estimated to equal the total amount appropriated for such year under subsection (a) if such expenditures were used solely for the purpose described in paragraph (1) of section 1352(a) for attachment range claims at the dollar amounts and percentage so specified for such year.

added “(3) Availability—Funds allocated to a State under this subsection for a year shall remain available through the end of the subsequent year.”