State Public Option Act

II 116TH CONGRESS 1ST SESSION S. 489 To establish a State public option through Medicaid to provide Americans with the choice of a high-quality, low-cost health insurance plan. IN THE SENATE OF THE UNITED STATES FEBRUARY 14, 2019 Mr. SCHATZ (for himself, Mr. HEINRICH, Mr. WHITEHOUSE, Mr. MURPHY, Ms. BALDWIN, Mr. MARKEY, Mrs. GILLIBRAND, Ms. KLOBUCHAR, Mr. BLUMENTHAL, Ms. ROSEN, Mr. MERKLEY, Ms. HARRIS, Mr. LEAHY, Mr. BOOKER, Mr. UDALL, Ms. SMITH, Ms. WARREN, Ms. HIRONO, Mr. BROWN, Mr. REED, Mrs. SHAHEEN, Ms. CORTEZ MASTO, and Mr. DUR- BIN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To establish a State public option through Medicaid to pro- vide Americans with the choice of a high-quality, low- cost health insurance plan. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘State Public Option 4 Act’’. 5 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 2 •S 489 IS SEC. 2. MEDICAID BUY-IN OPTION. 1 (a) IN GENERAL.—Section 1902 of the Social Secu- 2 rity Act (42 U.S.C. 1396a) is amended— 3 (1) in subsection (a)(10)— 4 (A) in subparagraph (A)(ii)— 5 (i) in subclause (XXI), by striking ‘‘; 6 or’’ and inserting a semicolon; 7 (ii) in subclause (XXII), by adding 8 ‘‘or’’ at the end; and 9 (iii) by adding at the end the fol- 10 lowing new subclause: 11 ‘‘(XXIII) beginning January 1, 12 2020, who are residents of the State 13 and are not concurrently enrolled in 14 another health insurance coverage 15 plan, subject, in the case of individ- 16 uals described in subsection (qq) and 17 notwithstanding section 1916 (except 18 for subsection (k) of such section), to 19 payment of premiums or other cost- 20 sharing charges;’’; and 21 (B) in the matter following subparagraph 22 (G), in clause (XV), by inserting ‘‘or subsection 23 (qq)’’ after ‘‘described in subparagraph 24 (A)(i)(VIII)’’; and 25 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 3 •S 489 IS (2) by adding at the end the following new sub- 1 section: 2 ‘‘(qq) PREVIOUSLY UNDESCRIBED INDIVIDUALS.— 3 Individuals described in this subsection are individuals 4 who are— 5 ‘‘(1) described in subclause (XXIII) of sub- 6 section (a)(10)(A)(ii); and 7 ‘‘(2) are not described in any other subclause of 8 such subsection or any other provision in this Act 9 which provides for eligibility for medical assist- 10 ance.’’. 11 (b) PROVISION OF AT LEAST MINIMUM COVERAGE.— 12 (1) IN GENERAL.—Section 1902(k)(1) of the 13 Social Security Act (42 U.S.C. 1396a(k)(1)) is 14 amended by inserting ‘‘or an individual described in 15 subsection (qq)’’ after ‘‘an individual described in 16 subclause (VIII) of subsection (a)(10)(A)(i)’’ each 17 place it appears. 18 (2) CONFORMING AMENDMENT.—Section 19 1903(i)(26) of the Social Security Act (42 U.S.C. 20 1396b(i)(26)) is amended by striking ‘‘individuals 21 described in subclause (VIII) of subsection 22 (a)(10)(A)(i)’’ and inserting ‘‘individuals described 23 in subsection (a)(10)(A)(i)(VIII) or (qq) of section 24 1902’’. 25 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 4 •S 489 IS (c) FEDERAL FINANCIAL PARTICIPATION IN BUY-IN 1 PROGRAM.— 2 (1) ENHANCED MATCH FOR ADMINISTRATIVE 3 EXPENSES.—Section 1903(a) of the Social Security 4 Act (42 U.S.C. 1396b(a)) is amended— 5 (A) by redesignating paragraph (7) as 6 paragraph (8); and 7 (B) by inserting after paragraph (6) the 8 following new paragraph: 9 ‘‘(7) an amount equal to 90 percent of the 10 sums expended during such quarter which are at- 11 tributable to reasonable administrative expenses re- 12 lated to the administration of a Medicaid buy-in pro- 13 gram for individuals described in section 14 1902(a)(10)(A)(ii)(XXIII); plus’’. 15 (2) TREATMENT OF PREMIUM AND COST-SHAR- 16 ING REVENUES FROM MEDICAID BUY-IN PROGRAM.— 17 (A) IN GENERAL.—For purposes of section 18 1903(a)(1) of the Social Security Act (42 19 U.S.C. 1396b(a)(1)), for any fiscal quarter dur- 20 ing which a State collects premiums, cost-shar- 21 ing, or similar charges under subsection (k) of 22 section 1916 of such Act (42 U.S.C. 1396o) (as 23 added by this Act), including any advance pay- 24 ments of premium tax credits under section 25 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 5 •S 489 IS 1412 of the Patient Protection and Affordable 1 Care Act or payments for cost-sharing reduc- 2 tions under section 1402 of such Act that are 3 received by the State, the total amount ex- 4 pended during such quarter as medical assist- 5 ance for individuals who buy into Medicaid cov- 6 erage under subclause (XXIII) of section 7 1902(a)(10)(A)(ii) of the Social Security Act 8 (as added by this Act) shall be reduced by the 9 amount of such premiums or charges. 10 (B) TREATMENT OF EXCESS PREMIUMS.— 11 Each State that collects premiums or similar 12 charges under subsection (k) of section 1916 of 13 the Social Security Act (42 U.S.C. 1396o) (as 14 added by this Act) in a fiscal year shall pay to 15 the Secretary of Health and Human Services, 16 at such time and in such form and manner as 17 the Secretary shall specify, an amount equal to 18 50 percent of the amount, if any, by which— 19 (i) the total amount of such premiums 20 and charges collected by the State for such 21 year; exceeds 22 (ii) the total amount expended by the 23 State during such year as medical assist- 24 ance for individuals who buy into Medicaid 25 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 6 •S 489 IS coverage under subclause (XXIII) of sec- 1 tion 1902(a)(10)(A)(ii) of such Act (as 2 added by this Act). 3 (d) COST-SHARING REQUIREMENT.—Section 1916 of 4 the Social Security Act (42 U.S.C. 1396o) is amended by 5 adding at the end the following new subsection: 6 ‘‘(k) PREMIUMS AND COST-SHARING FOR INDIVID- 7 UALS PARTICIPATING IN MEDICAID BUY-IN PROGRAM.— 8 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 9 with respect to individuals who are eligible for med- 10 ical assistance under subsection 11 (a)(10)(A)(ii)(XXIII) of section 1902 and are de- 12 scribed in subsection (qq) of such section, a State 13 may— 14 ‘‘(A) impose premiums, deductibles, cost- 15 sharing, or other similar charges that are actu- 16 arially fair; and 17 ‘‘(B) vary the premium rate imposed on an 18 individual based only on the factors described in 19 section 2701(a)(1)(A) of the Public Health 20 Service Act and subject to the same limitations 21 on the weight which may be given to such fac- 22 tors under such section. 23 ‘‘(2) LIMITATIONS.— 24 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 7 •S 489 IS ‘‘(A) PREMIUMS.—The total amount of 1 premiums imposed for a year under this sub- 2 section with respect to all individuals described 3 in paragraph (1) in a family shall not exceed an 4 amount equal to 9.5 percent of the family’s 5 household income (as defined in section 6 36B(d)(2) of the Internal Revenue Code of 7 1986) for the year involved. 8 ‘‘(B) OTHER COST-SHARING.— 9 ‘‘(i) IN GENERAL.—The cost-sharing 10 limitations described in section 1302(c) of 11 the Patient Protection and Affordable Care 12 Act shall apply to cost-sharing (as defined 13 in such section) for medical assistance pro- 14 vided under section 15 1902(a)(10)(A)(ii)(XXIII) in the same 16 manner as such limitations apply to cost- 17 sharing under qualified health plans under 18 title I of such Act. 19 ‘‘(ii) AVAILABILITY OF COST-SHARING 20 REDUCTIONS.—Individuals provided med- 21 ical assistance under section 22 1902(a)(10)(A)(ii)(XXIII) and subject to 23 cost-sharing under this subsection are eli- 24 gible for cost-sharing reductions under sec- 25 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 8 •S 489 IS tion 1402 of the Patient Protection and 1 Affordable Care Act (subject to the income 2 eligibility threshold in subsection (b)(2) of 3 such section), and in applying such sec- 4 tion— 5 ‘‘(I) enrollment in a State plan 6 under section 7 1902(a)(10)(A)(ii)(XXIII) shall be 8 treated as coverage under a qualified 9 health plan in the silver level of cov- 10 erage in the individual market offered 11 through an Exchange established for 12 or by the State under title I of the 13 Patient Protection and Affordable 14 Care Act; and 15 ‘‘(II) the State agency admin- 16 istering such plan shall be treated as 17 the issuer of such plan. 18 ‘‘(3) PREMIUMS AND COST-SHARING FOR CER- 19 TAIN OTHER INDIVIDUALS.—If an individual is eligi- 20 ble for medical assistance under subsection 21 (a)(10)(A)(ii)(XXIII) of section 1902 and is not de- 22 scribed in subsection (qq) of such section, a State— 23 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 9 •S 489 IS ‘‘(A) shall not impose premiums and cost- 1 sharing on the individual under this subsection; 2 and 3 ‘‘(B) may impose premiums and cost-shar- 4 ing on the individual to the extent allowed by 5 another provision of this Act (other than sec- 6 tion 1902(a)(10)(A)(ii)(XXIII)) which provides 7 for eligibility for medical assistance, but only if 8 the individual is described in such other provi- 9 sion. 10 ‘‘(4) APPLICATION OF PREMIUM ASSISTANCE 11 TAX CREDITS.—An individual who is required to pay 12 premiums under this subsection for a year for med- 13 ical assistance shall be eligible for a premium assist- 14 ance credit under section 36B of the Internal Rev- 15 enue Code to the same extent that such individual 16 would be eligible for a premium assistance credit 17 under such section if such individual had paid the 18 same amount in premiums for coverage under a 19 qualified health plan for such year.’’. 20 (e) MANAGED CARE.—Section 1932(a)(1)(A)(i) of 21 the Social Security Act (42 U.S.C. 1396u–2(a)(1)(A)(i)) 22 is amended by inserting ‘‘, including an individual who is 23 eligible for such assistance after buying into such coverage 24 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 10 •S 489 IS under section 1902(a)(10)(A)(ii)(XXIII),’’ after ‘‘the 1 State plan under this title’’. 2 (f) OFFERING BUY-IN PROGRAM ON STATE EX- 3 CHANGE; ENROLLMENT PERIODS.— 4 (1) IN GENERAL.—A State that has elected to 5 allow individuals to buy into Medicaid coverage 6 under section 1902(a)(10)(A)(ii)(XXIII) of the So- 7 cial Security Act (as added by this Act) shall allow 8 individuals to enroll in such coverage through the 9 Federal, federally facilitated, or State Exchange es- 10 tablished pursuant to title I of the Patient Protec- 11 tion and Affordable Care Act. 12 (2) ENROLLMENT PERIODS.—A State may limit 13 the enrollment of individuals into Medicaid coverage 14 under section 1902(a)(10)(A)(ii)(XXIII) of the So- 15 cial Security Act (as added by this Act) to the en- 16 rollment periods provided for under section 17 1311(c)(6) of the Patient Protection and Affordable 18 Care Act. 19 (g) APPLICATION OF ADVANCED PREMIUM TAX 20 CREDITS TO MEDICAID BUY-IN PLANS.— 21 (1) IN GENERAL.—Section 36B of the Internal 22 Revenue Code of 1986 is amended— 23 (A) in subsection (b)(3)(B), by adding at 24 the end the following new sentence: 25 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 11 •S 489 IS ‘‘If an applicable taxpayer resides in a rating 1 area in which no silver plan is offered on the 2 individual market but the taxpayer buys into 3 Medicaid coverage under section 4 1902(a)(10)(A)(ii)(XXIII) of the Social Secu- 5 rity Act, such Medicaid coverage shall be 6 deemed to be the applicable second lowest cost 7 silver plan with respect to such taxpayer.’’; and 8 (B) by adding at the end the following new 9 subsection: 10 ‘‘(h) APPLICATION TO INDIVIDUALS PURCHASING 11 MEDICAID COVERAGE.—In the case of any individual who 12 buys into Medicaid coverage under section 13 1902(a)(10)(A)(ii)(XXIII) of the Social Security Act, this 14 section shall be applied with the following modifications: 15 ‘‘(1) The amount determined under subsection 16 (b)(2)(A) shall be increased by the amount of the 17 monthly premiums paid for such coverage. 18 ‘‘(2) Subsection (c)(2)(A)(i) shall be applied by 19 treating coverage under the Medicaid program under 20 title XIX of the Social Security Act in the same 21 manner as a qualified health plan that was enrolled 22 in through an Exchange. 23 ‘‘(3) In applying subsection (c)(2)(B)— 24 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 12 •S 489 IS ‘‘(A) an individual shall not be considered 1 to be eligible for minimum essential coverage 2 described in section 5000A(f)(1)(A)(ii) by rea- 3 son of eligibility for medical assistance under a 4 State Medicaid program under section 5 1902(a)(10)(A)(ii)(XXIII); and 6 ‘‘(B) an individual who is not covered by 7 minimum essential coverage described in section 8 5000A(f)(1)(B) shall not be considered to be el- 9 igible for such coverage.’’. 10 (2) ADVANCED PAYMENT OF CREDIT.— 11 (A) IN GENERAL.—The Secretary of 12 Health and Human Services, in consultation 13 with the Secretary of the Treasury, shall estab- 14 lish a program under which— 15 (i) upon request of a State agency ad- 16 ministering a State Medicaid program 17 under title XIX of the Social Security Act, 18 advance determinations are made in a 19 manner similar to advanced determinations 20 under section 1412 of the Patient Protec- 21 tion and Affordable Care Act with respect 22 to the income eligibility of individuals en- 23 rolling in such program for the premium 24 tax credit allowable under section 36B of 25 VerDate Sep 11 2014 04:01 Feb 22, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S489.IS S489 kjohnson on DSK79L0C42 with BILLS 13 •S 489 IS the Internal Revenue Code of 1986 and 1 the cost-sharing reductions under section 2 1402 of the Patient Prote [Text truncated for display. 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