Premium Reduction Act of 2019

II 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 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 ‘‘Premium Reduction 4 Act of 2019’’. 5 SEC. 2. INVISIBLE HIGH-RISK POOL AND REINSURANCE 6 PROGRAMS. 7 (a) STATE GRANTS UNDER WAIVERS.—Section 8 1332(a) of the Patient Protection and Affordable Care Act 9 (42 U.S.C. 18052(a)) is amended— 10 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1868 IS (1) by redesignating paragraphs (4), (5), and 1 (6) as paragraphs (6), (7), and (8), respectively; and 2 (2) by inserting after paragraph (3) the fol- 3 lowing: 4 ‘‘(4) FEDERAL FUNDING FOR INVISIBLE HIGH- 5 RISK POOL AND REINSURANCE PROGRAMS.— 6 ‘‘(A) ALLOCATIONS.— 7 ‘‘(i) METHODOLOGY.—Not later than 8 45 days after the date of enactment of this 9 Act, the Secretary, in consultation with the 10 National Association of Insurance Commis- 11 sioners, shall specify an allocation method- 12 ology for determining the amount of funds 13 appropriated under section 2(b) of the Pre- 14 mium Reduction Act of 2019 for a fiscal 15 year to be allocated for each State for pur- 16 poses of subparagraph (B) and section 2(c) 17 of the Premium Reduction Act of 2019. 18 ‘‘(ii) ANNUAL DETERMINATIONS.— 19 The Secretary shall determine the alloca- 20 tions to States described in clause (i) for 21 each calendar year, using the methodology 22 determined under clause (i) and taking 23 into consideration the experiences of other 24 States with respect to participation in an 25 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1868 IS Exchange and premium tax credits, cost- 1 sharing reductions, or small business cred- 2 its under sections 36B of the Internal Rev- 3 enue Code of 1986 or under part I of sub- 4 title E provided to residents of such 5 States. 6 ‘‘(B) STATE GRANTS.—From amounts ap- 7 propriated under section 2(b)(1) of the Pre- 8 mium Reduction Act of 2019 for a fiscal year, 9 the Secretary shall award grants to States for 10 each of fiscal years 2020 through 2023, in 11 amounts determined under subparagraph 12 (A)(ii), for the following purposes: 13 ‘‘(i) For each of fiscal years 2020 14 through 2024, out of amounts appro- 15 priated under subparagraph (A) of such 16 section 2(b)(1), for administrative costs of 17 the State associated with preparing and 18 submitting information described in para- 19 graph (1)(B) that includes an invisible 20 high-risk pool or reinsurance program that 21 meets the requirements of subsection 22 (f)(2), or costs associated with the estab- 23 lishment of such invisible high-risk pool or 24 reinsurance program. 25 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1868 IS ‘‘(ii) For each of fiscal years 2021 1 through 2023, out of amounts appro- 2 priated under subparagraph (B) of such 3 section 2(b)(1), for the establishment or 4 maintenance of invisible high-risk pools 5 and reinsurance programs that meet the 6 requirements of subsection (f)(2) and for 7 which the State has received a waiver 8 under this section. 9 ‘‘(C) BUDGET NEUTRALITY.—Funds 10 awarded to a State under a grant awarded 11 under subparagraph (B) shall not be taken into 12 account for purposes of determining under 13 paragraph (1) whether the State waiver is 14 budget neutral, or determining under subsection 15 (b)(1) whether the State waiver increases the 16 Federal deficit. 17 ‘‘(5) RECONCILIATION OF PASS THROUGH 18 FUNDING AND FUNDING FOR INVISIBLE HIGH-RISK 19 POOL AND REINSURANCE PROGRAMS.—In allocating 20 amounts under paragraphs (3) and (4), the Sec- 21 retary— 22 ‘‘(A) not later than November 1 of each 23 year, shall estimate the allocation for each 24 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1868 IS State under such paragraphs for the upcoming 1 calendar year; 2 ‘‘(B) not later than June 1 of each year, 3 shall revise the estimate of the allocations under 4 subparagraph (A) for each State for the current 5 calendar year; and 6 ‘‘(C) shall reconcile amounts to be paid to 7 each State under such paragraphs for the fol- 8 lowing calendar year by adjusting each State’s 9 allocation for the following calendar year to ac- 10 count for the revisions made under subpara- 11 graph (B).’’. 12 (b) APPROPRIATIONS.— 13 (1) IN GENERAL.—There are authorized to be 14 appropriated, and there are appropriated, to the 15 Secretary of Health and Human Services (referred 16 to in this section as the ‘‘Secretary’’), for the pur- 17 poses described in section 1332(a)(4)(B) of the Pa- 18 tient Protection and Affordable Care Act (as amend- 19 ed by subsection (a)) and subsection (c) of this sec- 20 tion, out of any funds in the Treasury not otherwise 21 appropriated— 22 (A) $500,000,000 for fiscal year 2020; and 23 (B) $5,000,000,000 for each of fiscal years 24 2021 through 2023. 25 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1868 IS (2) AVAILABLE UNTIL EXPENDED.—Amounts 1 appropriated under this subsection shall remain 2 available until expended. 3 (c) DEFAULT FEDERAL SAFEGUARD.— 4 (1) IN GENERAL.—For purposes of plan year 5 2021, in the case of a State that does not, by a date 6 specified by the Secretary for each such year, in con- 7 sultation with the National Association of Insurance 8 Commissioners, have in effect a waiver under section 9 1332 of the Patient Protection and Affordable Care 10 Act (42 U.S.C. 18052) that includes an invisible 11 high-risk pool or reinsurance program that meets 12 the requirements of subsection (f)(2) of such section 13 1332, the Secretary shall, from amounts appro- 14 priated under subsection (b), use the allocation de- 15 termined for the State under subsection (a)(4)(A) of 16 such section 1332 for plan year 2021 for the pur- 17 pose described in paragraph (2). Such allocation 18 shall be increased by the amount of pass through 19 funding that would be available under section 20 1332(a)(3) of the Patient Protection and Affordable 21 Care Act if the State obtained a waiver for an invis- 22 ible high-risk pool or reinsurance program under 23 such section. 24 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1868 IS (2) REQUIRED USE FOR MARKET STABILIZA- 1 TION PAYMENTS TO ISSUERS.—The Secretary shall 2 use any allocation for a State made pursuant to 3 paragraph (1) to help stabilize premiums for health 4 insurance coverage in the individual market in such 5 State by providing payments to health insurance 6 issuers, using payment parameters and a method- 7 ology determined by the Secretary. 8 (d) INVISIBLE HIGH-RISK POOLS AND REINSURANCE 9 PROGRAMS.— 10 (1) IN GENERAL.—Section 1332 of the Patient 11 Protection and Affordable Care Act (42 U.S.C. 12 18052) is amended by adding at the end the fol- 13 lowing: 14 ‘‘(f) INVISIBLE HIGH-RISK POOLS AND REINSUR- 15 ANCE PROGRAMS.— 16 ‘‘(1) FUNDING.—With respect to a State that 17 has received a waiver under this section to establish 18 an invisible high-risk pool or reinsurance program 19 described in paragraph (2), the State may fund such 20 program, in whole or in part, using one or both of 21 the following: 22 ‘‘(A) Amounts received through a grant de- 23 scribed in subsection (a)(4)(B). 24 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 1868 IS ‘‘(B) All of, or a portion of, the payments 1 made to the State as described in subsection 2 (a)(3), consistent with the information the 3 State provides under subsection (a)(1)(B). 4 ‘‘(2) PROGRAM DESIGN.—An invisible high-risk 5 pool or reinsurance program described in this para- 6 graph is a program that meets any of the following: 7 ‘‘(A) An invisible high-risk pool, as defined 8 by the State, under which health insurance 9 issuers, with respect to designated individuals 10 who experience higher than average health costs 11 as determined by the State, and are enrolled in 12 health insurance coverage offered in the indi- 13 vidual market, cede risk to the pool, without af- 14 fecting the premium paid by the designated in- 15 dividuals or their terms of coverage. With re- 16 spect to such pool, the State, or an entity oper- 17 ating the pool on behalf of the State, shall es- 18 tablish— 19 ‘‘(i) the premium amount the ceding 20 issuer shall pay to the reinsurance pool; 21 ‘‘(ii) the applicable attachment points 22 or coinsurance percentages if the ceding 23 issuer retains any portion of the risk under 24 ceded policies; and 25 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 1868 IS ‘‘(iii) the mechanism by which high- 1 risk individuals are designated for cession 2 to the pool, which may include a list of 3 designated high-cost health conditions. 4 ‘‘(B) A reinsurance program, as defined by 5 the State, that assumes a portion of the risk for 6 individuals who experience higher than average 7 health costs as determined by the State, in a 8 manner substantially similar to the reinsurance 9 program that operated in the State in accord- 10 ance with section 1341. 11 ‘‘(C) A reinsurance program established by 12 the State not otherwise described in this para- 13 graph. 14 ‘‘(D) A program based on another State’s 15 reinsurance program— 16 ‘‘(i) described in subparagraph (A), 17 (B), or (C), for which an application has 18 been approved under this subsection; or 19 ‘‘(ii) which was implemented prior to 20 September 1, 2019, and which the Sec- 21 retary determines meets the requirements 22 of subparagraph (A). 23 ‘‘(3) EXPEDITED APPROVAL.— 24 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 1868 IS ‘‘(A) IN GENERAL.—The Secretary shall 1 provide an expedited approval process for an 2 application under subsection (a)(1)— 3 ‘‘(i) with respect to an invisible high- 4 risk pool or reinsurance program described 5 in subparagraph (A), (B), or (D) of para- 6 graph (2); or 7 ‘‘(ii) that uses a template form de- 8 signed by the Administrator of the Centers 9 for Medicare & Medicaid Services, in con- 10 sultation with the Secretary of the Treas- 11 ury, for an application based on a program 12 that is the same or substantially the same 13 as a program implemented in accordance 14 with an application previously approved 15 under this subsection. 16 ‘‘(B) TIMEFRAME.—The Secretary shall 17 make a determination on an application eligible 18 for expedited review under subparagraph (A) 19 not later than 90 days after receipt of such ap- 20 plication. 21 ‘‘(C) STANDARD OF REVIEW.—Nothing in 22 this paragraph shall be construed as affecting 23 the requirements under subsection (a)(1) with 24 respect to an application approved in accord- 25 VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 1868 IS ance with the process under subparagraph 1 (A).’’. 2 (2) APPLICATION.—Section 1332(a)(1)(B)(i) of 3 the Patient Protection and Affordable Care Act (42 4 U.S.C. 18052(a)(1)(B)(i)) is amended by inserting 5 ‘‘, including, as applicable, a description of the 6 State’s plan to use any amounts awarded to the 7 State under paragraph (4) to support an invisible 8 high-risk pool or reinsurance program consistent 9 with subsection (f) and such information about such 10 program as the Secretary may require’’ before the 11 semicolon. 12 Æ VerDate Sep 11 2014 18:36 Jun 17, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S1868.IS S1868 pamtmann on DSKBFK8HB2PROD with BILLS