text: Senate Republican leaders unveiled what they called a "discussion draft" of their long-awaited health care bill, a part of the party's ongoing efforts to repeal and replace the Affordable Care Act. 
   
   Interested in Health Care Overhaul? Add Health Care Overhaul as an interest to stay up to date on the latest Health Care Overhaul news, video, and analysis from ABC News. Add Interest 
   
   Five Republican senators have already come out in opposition to the Senate bill, the Better Care Reconciliation Act, jeopardizing its passage. 
   
   Critics on both sides of the aisle said the bill, which was drafted behind closed doors by a small group of Senate leaders and committee staffers, has been shrouded in secrecy. 
   
   Trump told reporters Thursday that there will be "a little negotiation, but it's going to be very good." 
   
   Republicans 'not ready' to support the bill 
   
   GOP Sens. Ted Cruz of Texas, Ron Johnson of Wisconsin, Mike Lee of Utah and Rand Paul of Kentucky released a joint statement saying, "Currently, for a variety of reasons, we are not ready to vote for this bill, but we are open to negotiation and obtaining more information before it is brought to the floor." 
   
   They added, "There are provisions in this draft that represent an improvement to our current health care system, but it does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs." 
   
   In a separate statement, Paul said he'll oppose the bill "in its current form, but I remain open to negotiations." 
   
   "The current bill does not repeal Obamacare. It does not keep our promises to the American people," he said. 
   
   On Friday, Sen. Dean Heller, R-Nev., joined the group, saying at a press conference that "this bill is not the answer, it's simply not the answer." 
   
   "In this form, I will not support it," said Heller. 
   
   Sen. Susan Collins, R-Maine, told reporters Thursday she has "not yet had the opportunity to read the text of the bill, and the details really matter." 
   
   "I see some positive features of this bill that are improvements over the House, and I see some negative features based on my first analysis," she said. "I don't like the provision that eliminates federal funding for Planned Parenthood. It makes no sense to single out Planned Parenthood from all the Medicaid providers. There's already a ban against using federal funds for abortions, so there's absolutely no need for that." 
   
   A vote from Collins, who has been willing to break from her party, would be key to ensuring the bill's passage. 
   
   Senate Republicans can afford to lose only two of their members to pass the bill, assuming Democrats remain united in their opposition. 
   
   Republicans acknowledge tough road ahead for bill 
   
   As members left a meeting about the bill, many said they were encouraged by their first impressions of the text but were hesitant to say if it would clear the 50 vote threshold for passage. 
   
   "There's a lot to digest. It's very complicated," Sen. Pat Toomey, R-Pa., said as he left the gathering. 
   
   Some Republicans said they liked how the Senate bill calculates the value of tax credits to help individuals pay for insurance. 
   
   While the House bill linked the tax credits to age only, the Senate bill considers age, income and geographical area. 
   
   "A person making about $12,000 a year will have more access and a lower cost of health insurance. And that's a really good thing," said Sen. Tim Scott, R-S.C. 
   
   But Sen. John Thune, R-S.D., a member of Senate leadership, acknowledged that the draft would not pass in its current form. 
   
   "Right now the challenge is, how do we get to 50?" he said. 
   
   Senate Majority Leader Mitch McConnell indicated that he wants to get a vote before the July 4 legislative recess. 
   
   Democrats and ACA supporters unhappy 
   
   The bill's release was met with significant opposition from Democrats and other supporters of the Affordable Care Act. 
   
   Under current law, all insurance plans have to include, at a minimum, specified essential health benefits, including ambulance service, hospitalization, maternity care and prescription drug coverage. Under the Senate bill, states would be allowed to apply for waivers from those regulations and essentially scrap them to write their own rules. 
   
   As the bill was being unveiled, a large demonstration formed outside McConnell's office, with people in wheelchairs staging a die-in and protesters chanting that no changes be made to Medicaid. Demonstrators were physically removed by Capitol Police officers. 
   
   Congressional Democrats were also forceful in their condemnation. 
   
   Senate Minority Leader Chuck Schumer slammed the Senate bill as "every bit as bad" as the American Health Care Act passed in the House. 
   
   "The president said the Senate bill needed heart. The way this bill cuts health care is heartless," Schumer said Thursday. "The president said the house bill was mean. The Senate bill may be meaner." 
   
   He continued, "The Senate Republican health care bill is a wolf in sheep's clothing, only this wolf has even sharper teeth than the House bill." 
   
   During her weekly press conference, House Minority Leader Nancy Pelosi said it's important to stop the legislation, which she called "a tax bill disguised as a health care bill." 
   
   Top medical organizations call on the Senate to reject the bill 
   
   So far, the Senate health care bill has not gotten any backing from top health or medical organizations. The American Public Health Association, the American Psychiatric Association and the American College of Obstetrics and Gynecology released statements urging the Senate to reject the Better Care Reconciliation Act and expressed concerns over the closed-door negotiation process. 
   
   "The Senate proposal represents a significant move in the wrong direction, resulting in fewer people having access to insurance, fewer patient protections and less coverage for essential behavioral health care," American Psychiatric Association's CEO and medical director, Saul Levin, said in a statement. 
   
   The American Public Health Association attacked the bill's closed-door shaping as "legislative malpractice." 
   
   The American College of Obstetrics and Gynecology said, "Despite numerous efforts to collaborate and provide input throughout this process, women's health expertise was rejected. It is reckless for legislation that will have such an immense impact on Americans' lives and the economy to proceed without opportunity for public hearings or any external commentary." 
   
   ABC News' John Parkinson, Mariam Khan and MaryAlice Parks contributed to this story. ||||| Senate Majority Leader Mitch McConnell is pushing for a vote on the bill as early as next Thursday, ahead of Congress' July 4 recess. | Getty Full text: New Senate GOP health care bill 
   
   
   
   
   
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   ERN17282 Discussion Draft S.L.C. 
   
   AMENDMENT NO.llll Calendar No.lll 
   
   Purpose: In the nature of a substitute. 
   
   IN THE SENATE OF THE UNITED STATES—115th Cong., 1st Sess. 
   
   H. R. 1628 
   
   To provide for reconciliation pursuant to title II of the 
   
   concurrent resolution on the budget for fiscal year 2017. 
   
   Referred to the Committee on llllllllll and 
   
   ordered to be printed 
   
   Ordered to lie on the table and to be printed 
   
   AMENDMENT IN THE NATURE OF A SUBSTITUTE intended 
   
   to be proposed by lllllll 
   
   Viz: 
   
   1 Strike all after the enacting clause and insert the fol- 
   
   2 lowing: 
   
   3 SECTION 1. SHORT TITLE. 
   
   4 This Act may be cited as the ‘‘Better Care Reconcili- 
   
   5 ation Act of 2017’’. 
   
   6 TITLE I 
   
   7 SEC. 101. ELIMINATION OF LIMITATION ON RECAPTURE OF 
   
   8 EXCESS ADVANCE PAYMENTS OF PREMIUM 
   
   9 TAX CREDITS. 
   
   10 Subparagraph (B) of section 36B(f)(2) of the Inter- 
   
   11 nal Revenue Code of 1986 is amended by adding at the 
   
   12 end the following new clause: 
   
   2 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(iii) NONAPPLICABILITY OF LIMITA- 
   
   2 TION.—This subparagraph shall not apply 
   
   3 to taxable years ending after December 31, 
   
   4 2017.’’. 
   
   5 SEC. 102. RESTRICTIONS FOR THE PREMIUM TAX CREDIT. 
   
   6 (a) ELIGIBILITY FOR CREDIT.— 
   
   7 (1) IN GENERAL.—Section 36B(c)(1) of the In- 
   
   8 ternal Revenue Code of 1986 is amended— 
   
   9 (A) by striking ‘‘equals or exceeds 100 per- 
   
   10 cent but does not exceed 400 percent’’ in sub- 
   
   11 paragraph (A) and inserting ‘‘does not exceed 
   
   12 350 percent’’, and 
   
   13 (B) by striking subparagraph (B) and re- 
   
   14 designating subparagraphs (C) and (D) as sub- 
   
   15 paragraphs (B) and (C), respectively. 
   
   16 (2) TREATMENT OF CERTAIN ALIENS.— 
   
   17 (A) IN GENERAL.—Paragraph (2) of sec- 
   
   18 tion 36B(e) of the Internal Revenue Code of 
   
   19 1986 is amended by striking ‘‘an alien lawfully 
   
   20 present in the United States’’ and inserting ‘‘a 
   
   21 qualified alien (within the meaning of section 
   
   22 431 of the Personal Responsibility and Work 
   
   23 Opportunity Reconciliation Act of 1996)’’. 
   
   24 (B) AMENDMENTS TO PATIENT PROTEC- 
   
   25 TION AND AFFORDABLE CARE ACT.— 
   
   3 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (i) Section 1411(a)(1) of the Patient 
   
   2 Protection and Affordable Care Act is 
   
   3 amended by striking ‘‘or an alien lawfully 
   
   4 present in the United States’’ and insert- 
   
   5 ing ‘‘or a qualified alien (within the mean- 
   
   6 ing of section 431 of the Personal Respon- 
   
   7 sibility and Work Opportunity Reconcili- 
   
   8 ation Act of 1996)’’. 
   
   9 (ii) Section 1411(c)(2)(B) of such Act 
   
   10 is amended by striking ‘‘an alien lawfully 
   
   11 present in the United States’’ each place it 
   
   12 appears in clauses (i)(I) and (ii)(II) and 
   
   13 inserting ‘‘a qualified alien (within the 
   
   14 meaning of section 431 of the Personal Re- 
   
   15 sponsibility and Work Opportunity Rec- 
   
   16 onciliation Act of 1996)’’. 
   
   17 (iii) Section 1412(d) of such Act is 
   
   18 amended— 
   
   19 (I) by striking ‘‘not lawfully 
   
   20 present in the United States’’ and in- 
   
   21 serting ‘‘not citizens or nationals of 
   
   22 the United States or qualified aliens 
   
   23 (within the meaning of section 431 of 
   
   24 the Personal Responsibility and Work 
   
   4 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 Opportunity Reconciliation Act of 
   
   2 1996)’’, and 
   
   3 (II) by striking ‘‘INDIVIDUALS 
   
   4 NOT LAWFULLY PRESENT’’ in the 
   
   5 heading and inserting ‘‘CERTAIN 
   
   6 ALIENS’’. 
   
   7 (b) MODIFICATION OF LIMITATION ON PREMIUM AS- 
   
   8 SISTANCE AMOUNT.— 
   
   9 (1) USE OF BENCHMARK PLAN.—Section 
   
   10 36B(b) of the Internal Revenue Code of 1986 is 
   
   11 amended— 
   
   12 (A) by striking ‘‘applicable second lowest 
   
   13 cost silver plan’’ each place it appears in para- 
   
   14 graph (2)(B)(i) and (3)(C) and inserting ‘‘ap- 
   
   15 plicable median cost benchmark plan’’, 
   
   16 (B) by striking ‘‘such silver plan’’ in para- 
   
   17 graph (3)(C) and inserting ‘‘such benchmark 
   
   18 plan’’, and 
   
   19 (C) in paragraph (3)(B)— 
   
   20 (i) by redesignating clauses (i) and 
   
   21 (ii) as clauses (iii) and (iv), respectively, 
   
   22 and by striking all that precedes clause 
   
   23 (iii) (as so redesignated) and inserting the 
   
   24 following: 
   
   5 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(B) APPLICABLE MEDIAN COST BENCH- 
   
   2 MARK PLAN.—The applicable median cost 
   
   3 benchmark plan with respect to any applicable 
   
   4 taxpayer is the qualified health plan offered in 
   
   5 the individual market in the rating area in 
   
   6 which the taxpayer resides which— 
   
   7 ‘‘(i) provides a level of coverage that 
   
   8 is designed to provide benefits that are ac- 
   
   9 tuarially equivalent to 58 percent of the 
   
   10 full actuarial value of the benefits (as de- 
   
   11 termined under rules similar to the rules of 
   
   12 paragraphs (2) and (3) of section 1302(d) 
   
   13 of the Patient Protection and Affordable 
   
   14 Care Act) provided under the plan, 
   
   15 ‘‘(ii) has a premium which is the me- 
   
   16 dian premium of all qualified health plans 
   
   17 described in clause (i) which are offered in 
   
   18 the individual market in such rating area 
   
   19 (or, in any case in which no such plan has 
   
   20 such median premium, has a premium 
   
   21 nearest (but not in excess of) such median 
   
   22 premium),’’, and 
   
   23 (ii) by striking ‘‘clause (ii)(I)’’ in the 
   
   24 flush text at the end and inserting ‘‘clause 
   
   25 (iv)(I)’’. 
   
   6 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (2) MODIFICATION OF APPLICABLE PERCENT- 
   
   2 AGE.—Section 36B(b)(3)(A) of the Internal Revenue 
   
   3 Code of 1986 is amended— 
   
   4 (A) in clause (i), by striking ‘‘from the ini- 
   
   5 tial premium percentage’’ and all that follows 
   
   6 and inserting ‘‘from the initial percentage to 
   
   7 the final percentage specified in such table for 
   
   8 such income tier with respect to a taxpayer of 
   
   9 the age involved: 
   
   ‘‘In the case of 
   
   household income 
   
   (expressed as a 
   
   percent of the 
   
   poverty line) 
   
   within the following 
   
   income 
   
   tier: 
   
   Up to Age 29 Age 30-39 Age 40-49 Age 50-59 Over Age 59 
   
   10 (B) by striking ‘‘0.504’’ in clause (ii)(III) 
   
   11 and inserting ‘‘0.4’’, and 
   
   12 (C) by adding at the end the following new 
   
   13 clause: 
   
   14 ‘‘(iii) AGE DETERMINATIONS.—For 
   
   15 purposes of clause (i), the age of the tax- 
   
   16 payer taken into account under clause (i) 
   
   17 with respect to any taxable year is the age 
   
   18 attained before the close of the taxable 
   
   19 year by the oldest individual taken into ac- 
   
   7 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 count on such taxpayer’s return who is 
   
   2 covered by a qualified health plan taken 
   
   3 into account under paragraph (2)(A).’’. 
   
   4 (c) ELIMINATION OF ELIGIBILITY EXCEPTIONS FOR 
   
   5 EMPLOYER-SPONSORED COVERAGE.— 
   
   6 (1) IN GENERAL.—Section 36B(c)(2) of the In- 
   
   7 ternal Revenue Code of 1986 is amended by striking 
   
   8 subparagraph (C). 
   
   9 (2) AMENDMENTS RELATED TO QUALIFIED 
   
   10 SMALL EMPLOYER HEALTH REIMBURSEMENT AR- 
   
   11 RANGEMENTS.—Section 36B(c)(4) of such Code is 
   
   12 amended— 
   
   13 (A) by striking ‘‘which constitutes afford- 
   
   14 able coverage’’ in subparagraph (A), 
   
   15 (B) by striking ‘‘the amount described in 
   
   16 subparagraph (C)(i)(II) for such month’’ in 
   
   17 subparagraph (B) and inserting ‘‘1/12 of the 
   
   18 employee’s permitted benefit (as defined in sec- 
   
   19 tion 9831(d)(3)(C)) under such arrangement’’, 
   
   20 (C) by striking subparagraphs (C) and (F) 
   
   21 and redesignating subparagraphs (D) and (E) 
   
   22 as subparagraphs (C) and (D), respectively, and 
   
   23 (D) in subparagraph (D), as so redesig- 
   
   24 nated, by striking ‘‘subparagraph (C)(i)(II)’’ 
   
   25 and inserting ‘‘subparagraph (B)’’. 
   
   8 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (d) MODIFICATION OF DEFINITION OF QUALIFIED 
   
   2 HEALTH PLAN.— 
   
   3 (1) IN GENERAL.—Section 36B(c)(3)(A) of the 
   
   4 Internal Revenue Code of 1986 is amended by in- 
   
   5 serting before the period at the end the following: 
   
   6 ‘‘or a plan that includes coverage for abortions 
   
   7 (other than any abortion necessary to save the life 
   
   8 of the mother or any abortion with respect to a 
   
   9 pregnancy that is the result of an act of rape or in- 
   
   10 cest)’’. 
   
   11 (2) EFFECTIVE DATE.—The amendment made 
   
   12 by this subsection shall apply to taxable years begin- 
   
   13 ning after December 31, 2017. 
   
   14 (e) INCREASED PENALTY ON ERRONEOUS CLAIMS OF 
   
   15 CREDIT.—Section 6676(a) of the Internal Revenue Code 
   
   16 of 1986 is amended by inserting ‘‘(25 percent in the case 
   
   17 of a claim for refund or credit relating to the health insur- 
   
   18 ance coverage credit under section 36B)’’ after ‘‘20 per- 
   
   19 cent’’. 
   
   20 (f) EFFECTIVE DATE.—Except as otherwise provided 
   
   21 in this section, the amendments made by this section shall 
   
   22 apply to taxable years beginning after December 31, 2019. 
   
   23 SEC. 103. MODIFICATIONS TO SMALL BUSINESS TAX CRED- 
   
   24 IT. 
   
   25 (a) SUNSET.— 
   
   9 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (1) IN GENERAL.—Section 45R of the Internal 
   
   2 Revenue Code of 1986 is amended by adding at the 
   
   3 end the following new subsection: 
   
   4 ‘‘(j) SHALL NOT APPLY.—This section shall not 
   
   5 apply with respect to amounts paid or incurred in taxable 
   
   6 years beginning after December 31, 2019.’’. 
   
   7 (2) EFFECTIVE DATE.—The amendment made 
   
   8 by this subsection shall apply to taxable years begin- 
   
   9 ning after December 31, 2019. 
   
   10 (b) DISALLOWANCE OF SMALL EMPLOYER HEALTH 
   
   11 INSURANCE EXPENSE CREDIT FOR PLAN WHICH IN- 
   
   12 CLUDES COVERAGE FOR ABORTION.— 
   
   13 (1) IN GENERAL.—Subsection (h) of section 
   
   14 45R of the Internal Revenue Code of 1986 is 
   
   15 amended— 
   
   16 (A) by striking ‘‘Any term’’ and inserting 
   
   17 the following: 
   
   18 ‘‘(1) IN GENERAL.—Any term’’, and 
   
   19 (B) by adding at the end the following new 
   
   20 paragraph: 
   
   21 ‘‘(2) EXCLUSION OF HEALTH PLANS INCLUDING 
   
   22 COVERAGE FOR ABORTION.—The term ‘qualified 
   
   23 health plan’ does not include any health plan that 
   
   24 includes coverage for abortions (other than any 
   
   25 abortion necessary to save the life of the mother or 
   
   10 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 any abortion with respect to a pregnancy that is the 
   
   2 result of an act of rape or incest).’’. 
   
   3 (2) EFFECTIVE DATE.—The amendments made 
   
   4 by this subsection shall apply to taxable years begin- 
   
   5 ning after December 31, 2017. 
   
   6 SEC. 104. INDIVIDUAL MANDATE. 
   
   7 (a) IN GENERAL.—Section 5000A(c) of the Internal 
   
   8 Revenue Code of 1986 is amended— 
   
   9 (1) in paragraph (2)(B)(iii), by striking ‘‘2.5 
   
   10 percent’’ and inserting ‘‘Zero percent’’, and 
   
   11 (2) in paragraph (3)— 
   
   12 (A) by striking ‘‘$695’’ in subparagraph 
   
   13 (A) and inserting ‘‘$0’’, and 
   
   14 (B) by striking subparagraph (D). 
   
   15 (b) EFFECTIVE DATE.—The amendments made by 
   
   16 this section shall apply to months beginning after Decem- 
   
   17 ber 31, 2015. 
   
   18 SEC. 105. EMPLOYER MANDATE. 
   
   19 (a) IN GENERAL.— 
   
   20 (1) Paragraph (1) of section 4980H(c) of the 
   
   21 Internal Revenue Code of 1986 is amended by in- 
   
   22 serting ‘‘($0 in the case of months beginning after 
   
   23 December 31, 2015)’’ after ‘‘$2,000’’. 
   
   24 (2) Paragraph (1) of section 4980H(b) of the 
   
   25 Internal Revenue Code of 1986 is amended by in- 
   
   11 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 serting ‘‘($0 in the case of months beginning after 
   
   2 December 31, 2015)’’ after ‘‘$3,000’’. 
   
   3 (b) EFFECTIVE DATE.—The amendments made by 
   
   4 this section shall apply to months beginning after Decem- 
   
   5 ber 31, 2015. 
   
   6 SEC. 106. STATE STABILITY AND INNOVATION PROGRAM. 
   
   7 (a) IN GENERAL.—Section 2105 of the Social Secu- 
   
   8 rity Act (42 U.S.C. 1397ee) is amended by adding at the 
   
   9 end the following new subsections: 
   
   10 ‘‘(h) SHORT-TERM ASSISTANCE TO ADDRESS COV- 
   
   11 ERAGE AND ACCESS DISRUPTION AND PROVIDE SUPPORT 
   
   12 FOR STATES.— 
   
   13 ‘‘(1) APPROPRIATION.—There are authorized to 
   
   14 be appropriated, and are appropriated, out of monies 
   
   15 in the Treasury not otherwise obligated, 
   
   16 $15,000,000,000 for each of calendar years 2018 
   
   17 and 2019, and $10,000,000,000 for each of calendar 
   
   18 years 2020 and 2021, to the Administrator of the 
   
   19 Centers for Medicare & Medicaid Services (in this 
   
   20 subsection and subsection (i) referred to as the ‘Ad- 
   
   21 ministrator’) to fund arrangements with health in- 
   
   22 surance issuers to address coverage and access dis- 
   
   23 ruption and respond to urgent health care needs 
   
   24 within States. Funds appropriated under this para- 
   
   25 graph shall remain available until expended. 
   
   12 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(2) PARTICIPATION REQUIREMENTS.— 
   
   2 ‘‘(A) GUIDANCE.—Not later than 30 days 
   
   3 after the date of enactment of this subsection, 
   
   4 the Administrator shall issue guidance to health 
   
   5 insurance issuers regarding how to submit a no- 
   
   6 tice of intent to participate in the program es- 
   
   7 tablished under this subsection. 
   
   8 ‘‘(B) NOTICE OF INTENT TO PARTICI- 
   
   9 PATE.—To be eligible for funding under this 
   
   10 subsection, a health insurance issuer shall sub- 
   
   11 mit to the Administrator a notice of intent to 
   
   12 participate at such time (but, in the case of 
   
   13 funding for calendar year 2018, not later than 
   
   14 35 days after the date of enactment of this sub- 
   
   15 section and, in the case of funding for calendar 
   
   16 year 2019, 2020, or 2021, not later than March 
   
   17 31 of the previous year) and in such form and 
   
   18 manner as specified by the Administrator and 
   
   19 containing— 
   
   20 ‘‘(i) a certification that the health in- 
   
   21 surance issuer will use the funds in accord- 
   
   22 ance with the requirements of paragraph 
   
   23 (5); and 
   
   13 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(ii) such information as the Adminis- 
   
   2 trator may require to carry out this sub- 
   
   3 section. 
   
   4 ‘‘(3) PROCEDURE FOR DISTRIBUTION OF 
   
   5 FUNDS.—The Administrator shall determine an ap- 
   
   6 propriate procedure for providing and distributing 
   
   7 funds under this subsection. 
   
   8 ‘‘(4) NO MATCH.—Neither the State percentage 
   
   9 applicable to payments to States under subsection 
   
   10 (i)(5)(B) nor any other matching requirement shall 
   
   11 apply to funds provided to health insurance issuers 
   
   12 under this subsection. 
   
   13 ‘‘(5) USE OF FUNDS.—Funds provided to a 
   
   14 health insurance issuer under paragraph (1) shall be 
   
   15 subject to the requirements of paragraphs (1)(D) 
   
   16 and (7) of subsection (i) in the same manner as 
   
   17 such requirements apply to States receiving pay- 
   
   18 ments under subsection (i) and shall be used for the 
   
   19 activities specified in paragraph (1)(A)(ii) of sub- 
   
   20 section (i). 
   
   21 ‘‘(i) LONG-TERM STATE STABILITY AND INNOVATION 
   
   22 PROGRAM.— 
   
   23 ‘‘(1) APPLICATION AND CERTIFICATION RE- 
   
   24 QUIREMENTS.—To be eligible for an allotment of 
   
   25 funds under this subsection, a State shall submit to 
   
   14 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 the Administrator an application, not later than 
   
   2 March 31, 2018, in the case of allotments for cal- 
   
   3 endar year 2019, and not later than March 31 of 
   
   4 the previous year, in the case of allotments for any 
   
   5 subsequent calendar year) and in such form and 
   
   6 manner as specified by the Administrator, that con- 
   
   7 tains the following: 
   
   8 ‘‘(A) A description of how the funds will be 
   
   9 used to do 1 or more of the following: 
   
   10 ‘‘(i) To establish or maintain a pro- 
   
   11 gram or mechanism to provide financial as- 
   
   12 sistance to help high-risk individuals, in- 
   
   13 cluding by reducing premium costs for 
   
   14 such individuals, who have or are projected 
   
   15 to have a high rate of utilization of health 
   
   16 services, as measured by cost, and who do 
   
   17 not have access to health insurance cov- 
   
   18 erage offered through an employer, enroll 
   
   19 in health insurance coverage under a plan 
   
   20 offered in the individual market (within 
   
   21 the meaning of section 5000A(f)(1)(C) of 
   
   22 the Internal Revenue Code of 1986). 
   
   23 ‘‘(ii) To establish or maintain a pro- 
   
   24 gram to enter into arrangements with 
   
   25 health insurance issuers to help stabilize 
   
   15 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 premiums and promote State health insur- 
   
   2 ance market participation and choice in 
   
   3 plans offered in the individual market 
   
   4 (within the meaning of section 
   
   5 5000A(f)(1)(C) of the Internal Revenue 
   
   6 Code of 1986). 
   
   7 ‘‘(iii) To provide payments for health 
   
   8 care providers for the provision of health 
   
   9 care services, as specified by the Adminis- 
   
   10 trator. 
   
   11 ‘‘(iv) To provide assistance to reduce 
   
   12 out-of-pocket costs, such as copayments, 
   
   13 coinsurance, and deductibles, of individuals 
   
   14 enrolled in plans offered in the individual 
   
   15 market (within the meaning of section 
   
   16 5000A(f)(1)(C) of the Internal Revenue 
   
   17 Code of 1986). 
   
   18 ‘‘(B) A certification that the State shall 
   
   19 make, from non-Federal funds, expenditures for 
   
   20 1 or more of the activities specified in subpara- 
   
   21 graph (A) in an amount that is not less than 
   
   22 the State percentage required for the year 
   
   23 under paragraph (5)(B)(ii). 
   
   16 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(C) A certification that the funds pro- 
   
   2 vided under this subsection shall only be used 
   
   3 for the activities specified in subparagraph (A). 
   
   4 ‘‘(D) A certification that none of the funds 
   
   5 provided under this subsection shall be used by 
   
   6 the State for an expenditure that is attributable 
   
   7 to an intergovernmental transfer, certified pub- 
   
   8 lic expenditure, or any other expenditure to fi- 
   
   9 nance the non-Federal share of expenditures re- 
   
   10 quired under any provision of law, including 
   
   11 under the State plans established under this 
   
   12 title and title XIX or under a waiver of such 
   
   13 plans. 
   
   14 ‘‘(E) Such other information as necessary 
   
   15 for the Administrator to carry out this sub- 
   
   16 section. 
   
   17 ‘‘(2) ELIGIBILITY.—Only the 50 States and the 
   
   18 District of Columbia shall be eligible for an allot- 
   
   19 ment and payments under this subsection and all 
   
   20 references in this subsection to a State shall be 
   
   21 treated as only referring to the 50 States and the 
   
   22 District of Columbia. 
   
   23 ‘‘(3) ONE-TIME APPLICATION.—If an applica- 
   
   24 tion of a State submitted under this subsection is 
   
   25 approved by the Administrator for a year, the appli- 
   
   17 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 cation shall be deemed to be approved by the Admin- 
   
   2 istrator for that year and each subsequent year 
   
   3 through December 31, 2026. 
   
   4 ‘‘(4) LONG-TERM STATE STABILITY AND INNO- 
   
   5 VATION ALLOTMENTS.— 
   
   6 ‘‘(A) APPROPRIATION; TOTAL ALLOT- 
   
   7 MENT.—For the purpose of providing allot- 
   
   8 ments to States under this subsection, there is 
   
   9 appropriated, out of any money in the Treasury 
   
   10 not otherwise appropriated— 
   
   11 ‘‘(i) for calendar year 2019, 
   
   12 $8,000,000,000; 
   
   13 ‘‘(ii) for calendar year 2020, 
   
   14 $14,000,000,000; 
   
   15 ‘‘(iii) for calendar year 2021, 
   
   16 $14,000,000,000; 
   
   17 ‘‘(iv) for calendar year 2022, 
   
   18 $6,000,000,000; 
   
   19 ‘‘(v) for calendar year 2023, 
   
   20 $6,000,000,000; 
   
   21 ‘‘(vi) for calendar year 2024, 
   
   22 $5,000,000,000; 
   
   23 ‘‘(vii) for calendar year 2025, 
   
   24 $5,000,000,000; and 
   
   18 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(viii) for calendar year 2026, 
   
   2 $4,000,000,000. 
   
   3 ‘‘(B) ALLOTMENTS.— 
   
   4 ‘‘(i) IN GENERAL.—In the case of a 
   
   5 State with an application approved under 
   
   6 this subsection with respect to a year, the 
   
   7 Administrator shall allot to the State, in 
   
   8 accordance with an allotment methodology 
   
   9 specified by the Administrator that ensures 
   
   10 that the spending requirement in para- 
   
   11 graph (6) is met for the year, from 
   
   12 amounts appropriated for such year under 
   
   13 subparagraph (A), such amount as speci- 
   
   14 fied by the Administrator with respect to 
   
   15 the State and application and year. 
   
   16 ‘‘(ii) ANNUAL REDISTRIBUTION OF 
   
   17 PREVIOUS YEAR’S UNUSED FUNDS.— 
   
   18 ‘‘(I) IN GENERAL.— In carrying 
   
   19 out clause (i), with respect to a year 
   
   20 (beginning with 2021), the Adminis- 
   
   21 trator shall, not later than March 31 
   
   22 of such year— 
   
   23 ‘‘(aa) determine the amount 
   
   24 of funds, if any, remaining un- 
   
   19 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 used under subparagraph (A) 
   
   2 from the previous year; and 
   
   3 ‘‘(bb) if the Administrator 
   
   4 determines that any funds so re- 
   
   5 main from the previous year, re- 
   
   6 distribute such remaining funds 
   
   7 in accordance with an allotment 
   
   8 methodology specified by the Ad- 
   
   9 ministrator to States that have 
   
   10 submitted an application ap- 
   
   11 proved under this subsection for 
   
   12 the year. 
   
   13 ‘‘(II) APPLICABLE STATE PER- 
   
   14 CENTAGE.—The State percentage 
   
   15 specified for a year in paragraph 
   
   16 (5)(B)(ii) shall apply to funds redis- 
   
   17 tributed under subclause (I) in that 
   
   18 year. 
   
   19 ‘‘(C) AVAILABILITY OF ALLOTTED STATE 
   
   20 FUNDS.— 
   
   21 ‘‘(i) IN GENERAL.—Amounts allotted 
   
   22 to a State pursuant to subparagraph (B)(i) 
   
   23 for a year shall remain available for ex- 
   
   24 penditure by the State through the end of 
   
   25 the second succeeding year. 
   
   20 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(ii) AVAILABILITY OF AMOUNTS RE- 
   
   2 DISTRIBUTED.—Amounts redistributed to 
   
   3 a State under subparagraph (B)(ii) in a 
   
   4 year shall be available for expenditure by 
   
   5 the State through the end of the second 
   
   6 succeeding year. 
   
   7 ‘‘(5) PAYMENTS.— 
   
   8 ‘‘(A) ANNUAL PAYMENT OF ALLOT- 
   
   9 MENTS.—Subject to subparagraph (B), the Ad- 
   
   10 ministrator shall pay to each State that has an 
   
   11 application approved under this subsection for a 
   
   12 year, the allotment determined under paragraph 
   
   13 (4)(B) for the State for the year. 
   
   14 ‘‘(B) MATCH REQUIRED.— 
   
   15 ‘‘(i) IN GENERAL.—The Administrator 
   
   16 shall pay each State that has an applica- 
   
   17 tion approved under this subsection for a 
   
   18 year, the Federal percentage of the allot- 
   
   19 ment determined for the State under para- 
   
   20 graph (4)(B) for the year. 
   
   21 ‘‘(ii) FEDERAL AND STATE PERCENT- 
   
   22 AGES DEFINED.—For purposes of clause 
   
   23 (i), the Federal percentage is equal to 100 
   
   24 percent reduced by the State percentage 
   
   21 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 for that year, and the State percentage is 
   
   2 equal to— 
   
   3 ‘‘(I) in the case of calendar year 
   
   4 2019, 0 percent; 
   
   5 ‘‘(II) in the case of calendar year 
   
   6 2020, 0 percent; 
   
   7 ‘‘(III) in the case of calendar 
   
   8 year 2021, 0 percent; 
   
   9 ‘‘(IV) in the case of calendar 
   
   10 year 2022, 7 percent; 
   
   11 ‘‘(V) in the case of calendar year 
   
   12 2023, 14 percent; 
   
   13 ‘‘(VI) in the case of calendar 
   
   14 year 2024, 21 percent; 
   
   15 ‘‘(VII) in the case of calendar 
   
   16 year 2025, 28 percent; and 
   
   17 ‘‘(VIII) in the case of calendar 
   
   18 year 2026, 35 percent. 
   
   19 ‘‘(C) ADVANCE PAYMENT; RETROSPECTIVE 
   
   20 ADJUSTMENT.— 
   
   21 ‘‘(i) IN GENERAL.—If the Adminis- 
   
   22 trator deems it appropriate, the Adminis- 
   
   23 trator shall make payments under this sub- 
   
   24 section for each year on the basis of ad- 
   
   25 vance estimates of expenditures submitted 
   
   22 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 by the State and such other investigation 
   
   2 as the Administrator shall find necessary, 
   
   3 and shall reduce or increase the payments 
   
   4 as necessary to adjust for any overpayment 
   
   5 or underpayment for prior years. 
   
   6 ‘‘(ii) MISUSE OF FUNDS.—If the Ad- 
   
   7 ministrator determines that a State is not 
   
   8 using funds paid to the State under this 
   
   9 subsection in a manner consistent with the 
   
   10 description provided by the State in its ap- 
   
   11 plication approved under paragraph (1), 
   
   12 the Administrator may withhold payments, 
   
   13 reduce payments, or recover previous pay- 
   
   14 ments to the State under this subsection 
   
   15 as the Administrator deems appropriate. 
   
   16 ‘‘(D) FLEXIBILITY IN SUBMITTAL OF 
   
   17 CLAIMS.—Nothing in this subsection shall be 
   
   18 construed as preventing a State from claiming 
   
   19 as expenditures in the year expenditures that 
   
   20 were incurred in a previous year. 
   
   21 ‘‘(6) REQUIRED USE FOR PREMIUM STABILIZA- 
   
   22 TION AND INCENTIVES FOR INDIVIDUAL MARKET 
   
   23 PARTICIPATION.—In determining allotments for 
   
   24 States under this subsection for each of calendar 
   
   25 years 2019, 2020, and 2021, the Administrator shall 
   
   23 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ensure that at least $5,000,000,000 of the amounts 
   
   2 appropriated for each such year under paragraph 
   
   3 (4)(A) are used by States for the purposes described 
   
   4 in paragraph (1)(A)(ii) and in accordance with guid- 
   
   5 ance issued by the Administrator not later than 30 
   
   6 days after the date of enactment of this subsection 
   
   7 that specifies the parameters for the use of funds for 
   
   8 such purposes. 
   
   9 ‘‘(7) EXEMPTIONS.—Paragraphs (2), (3), (5), 
   
   10 (6), (8), (10), and (11) of subsection (c) do not 
   
   11 apply to payments under this subsection.’’. 
   
   12 (b) OTHER TITLE XXI AMENDMENTS.— 
   
   13 (1) Section 2101 of such Act (42 U.S.C. 
   
   14 1397aa) is amended— 
   
   15 (A) in subsection (a), in the matter pre- 
   
   16 ceding paragraph (1), by striking ‘‘The pur- 
   
   17 pose’’ and inserting ‘‘Except with respect to 
   
   18 short-term assistance activities under section 
   
   19 2105(h) and the Long-Term State Stability and 
   
   20 Innovation Program established in section 
   
   21 2105(i), the purpose’’; and 
   
   22 (B) in subsection (b), in the matter pre- 
   
   23 ceding paragraph (1), by inserting ‘‘subsection 
   
   24 (a) or (g) of’’ before ‘‘section 2105’’. 
   
   24 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (2) Section 2105(c)(1) of such Act (42 U.S.C. 
   
   2 1397ee(c)(1)) is amended by striking ‘‘and may not 
   
   3 include’’ and inserting ‘‘or to carry out short-term 
   
   4 assistance activities under subsection (h) or the 
   
   5 Long-Term State Stability and Innovation Program 
   
   6 established in subsection (i) and, except in the case 
   
   7 of funds made available under subsection (h) or (i), 
   
   8 may not include’’. 
   
   9 (3) Section 2106(a)(1) of such Act (42 U.S.C. 
   
   10 1397ff(a)(1)) is amended by inserting ‘‘subsection 
   
   11 (a) or (g) of’’ before ‘‘section 2105’’. 
   
   12 SEC. 107. BETTER CARE RECONCILIATION IMPLEMENTA- 
   
   13 TION FUND. 
   
   14 (a) IN GENERAL.—There is hereby established a Bet- 
   
   15 ter Care Reconciliation Implementation Fund (referred to 
   
   16 in this section as the ‘‘Fund’’) within the Department of 
   
   17 Health and Human Services to provide for Federal admin- 
   
   18 istrative expenses in carrying out this Act. 
   
   19 (b) FUNDING.—There is appropriated to the Fund, 
   
   20 out of any funds in the Treasury not otherwise appro- 
   
   21 priated, $500,000,000. 
   
   25 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 SEC. 108. REPEAL OF THE TAX ON EMPLOYEE HEALTH IN- 
   
   2 SURANCE PREMIUMS AND HEALTH PLAN 
   
   3 BENEFITS. 
   
   4 (a) IN GENERAL.—Chapter 43 of the Internal Rev- 
   
   5 enue Code of 1986 is amended by striking section 4980I. 
   
   6 (b) EFFECTIVE DATE.—The amendment made by 
   
   7 subsection (a) shall apply to taxable years beginning after 
   
   8 December 31, 2019. 
   
   9 (c) SUBSEQUENT EFFECTIVE DATE.—The amend- 
   
   10 ment made by subsection (a) shall not apply to taxable 
   
   11 years beginning after December 31, 2025, and chapter 43 
   
   12 of the Internal Revenue Code of 1986 is amended to read 
   
   13 as such chapter would read if such subsection had never 
   
   14 been enacted. 
   
   15 SEC. 109. REPEAL OF TAX ON OVER-THE-COUNTER MEDICA- 
   
   16 TIONS. 
   
   17 (a) HSAS.—Subparagraph (A) of section 223(d)(2) 
   
   18 of the Internal Revenue Code of 1986 is amended by strik- 
   
   19 ing ‘‘Such term’’ and all that follows through the period. 
   
   20 (b) ARCHER MSAS.—Subparagraph (A) of section 
   
   21 220(d)(2) of the Internal Revenue Code of 1986 is amend- 
   
   22 ed by striking ‘‘Such term’’ and all that follows through 
   
   23 the period. 
   
   24 (c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS 
   
   25 AND HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec- 
   
   26 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 tion 106 of the Internal Revenue Code of 1986 is amended 
   
   2 by striking subsection (f). 
   
   3 (d) EFFECTIVE DATES.— 
   
   4 (1) DISTRIBUTIONS FROM SAVINGS AC- 
   
   5 COUNTS.—The amendments made by subsections (a) 
   
   6 and (b) shall apply to amounts paid with respect to 
   
   7 taxable years beginning after December 31, 2016. 
   
   8 (2) REIMBURSEMENTS.—The amendment made 
   
   9 by subsection (c) shall apply to expenses incurred 
   
   10 with respect to taxable years beginning after Decem- 
   
   11 ber 31, 2016. 
   
   12 SEC. 110. REPEAL OF TAX ON HEALTH SAVINGS ACCOUNTS. 
   
   13 (a) HSAS.—Section 223(f)(4)(A) of the Internal 
   
   14 Revenue Code of 1986 is amended by striking ‘‘20 per- 
   
   15 cent’’ and inserting ‘‘10 percent’’. 
   
   16 (b) ARCHER MSAS.—Section 220(f)(4)(A) of the In- 
   
   17 ternal Revenue Code of 1986 is amended by striking ‘‘20 
   
   18 percent’’ and inserting ‘‘15 percent’’. 
   
   19 (c) EFFECTIVE DATE.—The amendments made by 
   
   20 this section shall apply to distributions made after Decem- 
   
   21 ber 31, 2016. 
   
   22 SEC. 111. REPEAL OF LIMITATIONS ON CONTRIBUTIONS TO 
   
   23 FLEXIBLE SPENDING ACCOUNTS. 
   
   24 (a) IN GENERAL.—Section 125 of the Internal Rev- 
   
   25 enue Code of 1986 is amended by striking subsection (i). 
   
   27 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (b) EFFECTIVE DATE.—The amendment made by 
   
   2 this section shall apply to plan years beginning after De- 
   
   3 cember 31, 2017. 
   
   4 SEC. 112. REPEAL OF TAX ON PRESCRIPTION MEDICA- 
   
   5 TIONS. 
   
   6 Subsection (j) of section 9008 of the Patient Protec- 
   
   7 tion and Affordable Care Act is amended to read as fol- 
   
   8 lows: 
   
   9 ‘‘(j) REPEAL.—This section shall apply to calendar 
   
   10 years beginning after December 31, 2010, and ending be- 
   
   11 fore January 1, 2018.’’. 
   
   12 SEC. 113. REPEAL OF MEDICAL DEVICE EXCISE TAX. 
   
   13 Section 4191 of the Internal Revenue Code of 1986 
   
   14 is amended by adding at the end the following new sub- 
   
   15 section: 
   
   16 ‘‘(d) APPLICABILITY.—The tax imposed under sub- 
   
   17 section (a) shall not apply to sales after December 31, 
   
   18 2017.’’. 
   
   19 SEC. 114. REPEAL OF HEALTH INSURANCE TAX. 
   
   20 Subsection (j) of section 9010 of the Patient Protec- 
   
   21 tion and Affordable Care Act is amended by striking ‘‘, 
   
   22 and’’ at the end of paragraph (1) and all that follows 
   
   23 through ‘‘2017’’. 
   
   28 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 SEC. 115. REPEAL OF ELIMINATION OF DEDUCTION FOR 
   
   2 EXPENSES ALLOCABLE TO MEDICARE PART D 
   
   3 SUBSIDY. 
   
   4 (a) IN GENERAL.—Section 139A of the Internal Rev- 
   
   5 enue Code of 1986 is amended by adding at the end the 
   
   6 following new sentence: ‘‘This section shall not be taken 
   
   7 into account for purposes of determining whether any de- 
   
   8 duction is allowable with respect to any cost taken into 
   
   9 account in determining such payment.’’. 
   
   10 (b) EFFECTIVE DATE.—The amendment made by 
   
   11 this section shall apply to taxable years beginning after 
   
   12 December 31, 2016. 
   
   13 SEC. 116. REPEAL OF CHRONIC CARE TAX. 
   
   14 (a) IN GENERAL.—Subsection (a) of section 213 of 
   
   15 the Internal Revenue Code of 1986 is amended by striking 
   
   16 ‘‘10 percent’’ and inserting ‘‘7.5 percent’’. 
   
   17 (b) EFFECTIVE DATE.—The amendment made by 
   
   18 this section shall apply to taxable years beginning after 
   
   19 December 31, 2016. 
   
   20 SEC. 117. REPEAL OF MEDICARE TAX INCREASE. 
   
   21 (a) IN GENERAL.—Subsection (b) of section 3101 of 
   
   22 the Internal Revenue Code of 1986 is amended to read 
   
   23 as follows: 
   
   24 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 
   
   25 imposed by the preceding subsection, there is hereby im- 
   
   26 posed on the income of every individual a tax equal to 1.45 
   
   29 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 percent of the wages (as defined in section 3121(a)) re- 
   
   2 ceived by such individual with respect to employment (as 
   
   3 defined in section 3121(b).’’. 
   
   4 (b) SECA.—Subsection (b) of section 1401 of the In- 
   
   5 ternal Revenue Code of 1986 is amended to read as fol- 
   
   6 lows: 
   
   7 ‘‘(b) HOSPITAL INSURANCE.—In addition to the tax 
   
   8 imposed by the preceding subsection, there shall be im- 
   
   9 posed for each taxable year, on the self-employment in- 
   
   10 come of every individual, a tax equal to 2.9 percent of the 
   
   11 amount of the self-employment income for such taxable 
   
   12 year.’’. 
   
   13 (c) EFFECTIVE DATE.—The amendments made by 
   
   14 this section shall apply with respect to remuneration re- 
   
   15 ceived after, and taxable years beginning after, December 
   
   16 31, 2022. 
   
   17 SEC. 118. REPEAL OF TANNING TAX. 
   
   18 (a) IN GENERAL.—The Internal Revenue Code of 
   
   19 1986 is amended by striking chapter 49. 
   
   20 (b) EFFECTIVE DATE.—The amendment made by 
   
   21 this section shall apply to services performed after Sep- 
   
   22 tember 30, 2017. 
   
   23 SEC. 119. REPEAL OF NET INVESTMENT TAX. 
   
   24 (a) IN GENERAL.—Subtitle A of the Internal Rev- 
   
   25 enue Code of 1986 is amended by striking chapter 2A. 
   
   30 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (b) EFFECTIVE DATE.—The amendment made by 
   
   2 this section shall apply to taxable years beginning after 
   
   3 December 31, 2016. 
   
   4 SEC. 120. REMUNERATION. 
   
   5 Paragraph (6) of section 162(m) of the Internal Rev- 
   
   6 enue Code of 1986 is amended by adding at the end the 
   
   7 following new subparagraph: 
   
   8 ‘‘(I) TERMINATION.—This paragraph shall 
   
   9 not apply to taxable years beginning after De- 
   
   10 cember 31, 2016.’’. 
   
   11 SEC. 121. MAXIMUM CONTRIBUTION LIMIT TO HEALTH SAV- 
   
   12 INGS ACCOUNT INCREASED TO AMOUNT OF 
   
   13 DEDUCTIBLE AND OUT-OF-POCKET LIMITA- 
   
   14 TION. 
   
   15 (a) SELF-ONLY COVERAGE.—Section 223(b)(2)(A) 
   
   16 of the Internal Revenue Code of 1986 is amended by strik- 
   
   17 ing ‘‘$2,250’’ and inserting ‘‘the amount in effect under 
   
   18 subsection (c)(2)(A)(ii)(I)’’. 
   
   19 (b) FAMILY COVERAGE.—Section 223(b)(2)(B) of 
   
   20 such Code is amended by striking ‘‘$4,500’’ and inserting 
   
   21 ‘‘the amount in effect under subsection (c)(2)(A)(ii)(II)’’. 
   
   22 (c) COST-OF-LIVING ADJUSTMENT.—Section 
   
   23 223(g)(1) of such Code is amended— 
   
   24 (1) by striking ‘‘subsections (b)(2) and’’ both 
   
   25 places it appears and inserting ‘‘subsection’’, and 
   
   31 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (2) in subparagraph (B), by striking ‘‘deter- 
   
   2 mined by’’ and all that follows through ‘‘ ‘calendar 
   
   3 year 2003’.’’ and inserting ‘‘determined by sub- 
   
   4 stituting ‘calendar year 2003’ for ‘calendar year 
   
   5 1992’ in subparagraph (B) thereof.’’. 
   
   6 (d) EFFECTIVE DATE.—The amendments made by 
   
   7 this section shall apply to taxable years beginning after 
   
   8 December 31, 2017. 
   
   9 SEC. 122. ALLOW BOTH SPOUSES TO MAKE CATCH-UP CON- 
   
   10 TRIBUTIONS TO THE SAME HEALTH SAVINGS 
   
   11 ACCOUNT. 
   
   12 (a) IN GENERAL.—Section 223(b)(5) of the Internal 
   
   13 Revenue Code of 1986 is amended to read as follows: 
   
   14 ‘‘(5) SPECIAL RULE FOR MARRIED INDIVIDUALS 
   
   15 WITH FAMILY COVERAGE.— 
   
   16 ‘‘(A) IN GENERAL.—In the case of individ- 
   
   17 uals who are married to each other, if both 
   
   18 spouses are eligible individuals and either 
   
   19 spouse has family coverage under a high de- 
   
   20 ductible health plan as of the first day of any 
   
   21 month— 
   
   22 ‘‘(i) the limitation under paragraph 
   
   23 (1) shall be applied by not taking into ac- 
   
   24 count any other high deductible health 
   
   25 plan coverage of either spouse (and if such 
   
   32 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 spouses both have family coverage under 
   
   2 separate high deductible health plans, only 
   
   3 one such coverage shall be taken into ac- 
   
   4 count), 
   
   5 ‘‘(ii) such limitation (after application 
   
   6 of clause (i)) shall be reduced by the ag- 
   
   7 gregate amount paid to Archer MSAs of 
   
   8 such spouses for the taxable year, and 
   
   9 ‘‘(iii) such limitation (after application 
   
   10 of clauses (i) and (ii)) shall be divided 
   
   11 equally between such spouses unless they 
   
   12 agree on a different division. 
   
   13 ‘‘(B) TREATMENT OF ADDITIONAL CON- 
   
   14 TRIBUTION AMOUNTS.—If both spouses referred 
   
   15 to in subparagraph (A) have attained age 55 
   
   16 before the close of the taxable year, the limita- 
   
   17 tion referred to in subparagraph (A)(iii) which 
   
   18 is subject to division between the spouses shall 
   
   19 include the additional contribution amounts de- 
   
   20 termined under paragraph (3) for both spouses. 
   
   21 In any other case, any additional contribution 
   
   22 amount determined under paragraph (3) shall 
   
   23 not be taken into account under subparagraph 
   
   24 (A)(iii) and shall not be subject to division be- 
   
   25 tween the spouses.’’. 
   
   33 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (b) EFFECTIVE DATE.—The amendment made by 
   
   2 this section shall apply to taxable years beginning after 
   
   3 December 31, 2017. 
   
   4 SEC. 123. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES 
   
   5 INCURRED BEFORE ESTABLISHMENT OF 
   
   6 HEALTH SAVINGS ACCOUNT. 
   
   7 (a) IN GENERAL.—Section 223(d)(2) of the Internal 
   
   8 Revenue Code of 1986 is amended by adding at the end 
   
   9 the following new subparagraph: 
   
   10 ‘‘(D) TREATMENT OF CERTAIN MEDICAL 
   
   11 EXPENSES INCURRED BEFORE ESTABLISHMENT 
   
   12 OF ACCOUNT.—If a health savings account is 
   
   13 established during the 60-day period beginning 
   
   14 on the date that coverage of the account bene- 
   
   15 ficiary under a high deductible health plan be- 
   
   16 gins, then, solely for purposes of determining 
   
   17 whether an amount paid is used for a qualified 
   
   18 medical expense, such account shall be treated 
   
   19 as having been established on the date that 
   
   20 such coverage begins.’’. 
   
   21 (b) EFFECTIVE DATE.—The amendment made by 
   
   22 this subsection shall apply with respect to coverage under 
   
   23 a high deductible health plan beginning after December 
   
   24 31, 2017. 
   
   34 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 SEC. 124. FEDERAL PAYMENTS TO STATES. 
   
   2 (a) IN GENERAL.—Notwithstanding section 504(a), 
   
   3 1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or 
   
   4 2105(a)(1) of the Social Security Act (42 U.S.C. 704(a), 
   
   5 1396a(a)(23), 1396b(a), 1397a, 1397d(a)(4), 
   
   6 1397bb(a)(7), 1397ee(a)(1)), or the terms of any Med- 
   
   7 icaid waiver in effect on the date of enactment of this Act 
   
   8 that is approved under section 1115 or 1915 of the Social 
   
   9 Security Act (42 U.S.C. 1315, 1396n), for the 1-year pe- 
   
   10 riod beginning on the date of enactment of this Act, no 
   
   11 Federal funds provided from a program referred to in this 
   
   12 subsection that is considered direct spending for any year 
   
   13 may be made available to a State for payments to a pro- 
   
   14 hibited entity, whether made directly to the prohibited en- 
   
   15 tity or through a managed care organization under con- 
   
   16 tract with the State. 
   
   17 (b) DEFINITIONS.—In this section: 
   
   18 (1) PROHIBITED ENTITY.—The term ‘‘prohib- 
   
   19 ited entity’’ means an entity, including its affiliates, 
   
   20 subsidiaries, successors, and clinics— 
   
   21 (A) that, as of the date of enactment of 
   
   22 this Act— 
   
   23 (i) is an organization described in sec- 
   
   24 tion 501(c)(3) of the Internal Revenue 
   
   25 Code of 1986 and exempt from tax under 
   
   26 section 501(a) of such Code; 
   
   35 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (ii) is an essential community provider 
   
   2 described in section 156.235 of title 45, 
   
   3 Code of Federal Regulations (as in effect 
   
   4 on the date of enactment of this Act), that 
   
   5 is primarily engaged in family planning 
   
   6 services, reproductive health, and related 
   
   7 medical care; and 
   
   8 (iii) provides for abortions, other than 
   
   9 an abortion— 
   
   10 (I) if the pregnancy is the result 
   
   11 of an act of rape or incest; or 
   
   12 (II) in the case where a woman 
   
   13 suffers from a physical disorder, phys- 
   
   14 ical injury, or physical illness that 
   
   15 would, as certified by a physician, 
   
   16 place the woman in danger of death 
   
   17 unless an abortion is performed, in- 
   
   18 cluding a life-endangering physical 
   
   19 condition caused by or arising from 
   
   20 the pregnancy itself; and 
   
   21 (B) for which the total amount of Federal 
   
   22 and State expenditures under the Medicaid pro- 
   
   23 gram under title XIX of the Social Security Act 
   
   24 in fiscal year 2014 made directly to the entity 
   
   25 and to any affiliates, subsidiaries, successors, or 
   
   36 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 clinics of the entity, or made to the entity and 
   
   2 to any affiliates, subsidiaries, successors, or 
   
   3 clinics of the entity as part of a nationwide 
   
   4 health care provider network, exceeded 
   
   5 $350,000,000. 
   
   6 (2) DIRECT SPENDING.—The term ‘‘direct 
   
   7 spending’’ has the meaning given that term under 
   
   8 section 250(c) of the Balanced Budget and Emer- 
   
   9 gency Deficit Control Act of 1985 (2 U.S.C. 900(c)). 
   
   10 SEC. 125. MEDICAID PROVISIONS. 
   
   11 The Social Security Act is amended— 
   
   12 (1) in section 1902 (42 U.S.C. 1396a)— 
   
   13 (A) in subsection (a)(47)(B), by inserting 
   
   14 ‘‘and provided that any such election shall cease 
   
   15 to be effective on January 1, 2020, and no such 
   
   16 election shall be made after that date’’ before 
   
   17 the semicolon at the end; and 
   
   18 (B) in subsection (l)(2)(C), by inserting 
   
   19 ‘‘and ending December 31, 2019,’’ after ‘‘Janu- 
   
   20 ary 1, 2014,’’; 
   
   21 (2) in section 1915(k)(2) (42 U.S.C. 
   
   22 1396n(k)(2)), by striking ‘‘during the period de- 
   
   23 scribed in paragraph (1)’’ and inserting ‘‘on or after 
   
   24 the date referred to in paragraph (1) and before 
   
   25 January 1, 2020’’; and 
   
   37 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (3) in section 1920(e) (42 U.S.C. 1396r–1(e)), 
   
   2 by striking ‘‘under clause (i)(VIII), clause (i)(IX), or 
   
   3 clause (ii)(XX) of subsection (a)(10)(A)’’ and insert- 
   
   4 ing ‘‘under clause (i)(VIII) or clause (ii)(XX) of sec- 
   
   5 tion 1902(a)(10)(A) before January 1, 2020, section 
   
   6 1902(a)(10)(A)(i)(IX),’’. 
   
   7 SEC. 126. MEDICAID EXPANSION. 
   
   8 (a) IN GENERAL.—Title XIX of the Social Security 
   
   9 Act (42 U.S.C. 1396 et seq.) is amended— 
   
   10 (1) in section 1902 (42 U.S.C. 1396a)— 
   
   11 (A) in subsection (a)(10)(A)— 
   
   12 (i) in clause (i)(VIII), by inserting 
   
   13 ‘‘and ending December 31, 2019,’’ after 
   
   14 ‘‘2014,’’; and 
   
   15 (ii) in clause (ii), in subclause (XX), 
   
   16 by inserting ‘‘and ending December 31, 
   
   17 2017,’’ after ‘‘2014,’’, and by adding at 
   
   18 the end the following new subclause: 
   
   19 ‘‘(XXIII) beginning January 1, 2020, 
   
   20 who are expansion enrollees (as defined in 
   
   21 subsection (nn)(1));’’; and 
   
   22 (B) by adding at the end the following new 
   
   23 subsection: 
   
   24 ‘‘(nn) EXPANSION ENROLLEES.— 
   
   38 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(1) IN GENERAL.—In this title, the term ‘ex- 
   
   2 pansion enrollee’ means an individual— 
   
   3 ‘‘(A) who is under 65 years of age; 
   
   4 ‘‘(B) who is not pregnant; 
   
   5 ‘‘(C) who is not entitled to, or enrolled for, 
   
   6 benefits under part A of title XVIII, or enrolled 
   
   7 for benefits under part B of title XVIII; 
   
   8 ‘‘(D) who is not described in any of sub- 
   
   9 clauses (I) through (VII) of subsection 
   
   10 (a)(10)(A)(i); and 
   
   11 ‘‘(E) whose income (as determined under 
   
   12 subsection (e)(14)) does not exceed 133 percent 
   
   13 of the poverty line (as defined in section 
   
   14 2110(c)(5)) applicable to a family of the size in- 
   
   15 volved. 
   
   16 ‘‘(2) APPLICATION OF RELATED PROVISIONS.— 
   
   17 Any reference in subsection (a)(10)(G), (k), or (gg) 
   
   18 of this section or in section 1903, 1905(a), 1920(e), 
   
   19 or 1937(a)(1)(B) to individuals described in sub- 
   
   20 clause (VIII) of subsection (a)(10)(A)(i) shall be 
   
   21 deemed to include a reference to expansion enroll- 
   
   22 ees.’’; and 
   
   23 (2) in section 1905 (42 U.S.C. 1396d)— 
   
   24 (A) in subsection (y)(1)— 
   
   39 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (i) in the matter preceding subpara- 
   
   2 graph (A), by striking ‘‘, with respect to’’ 
   
   3 and all that follows through ‘‘shall be equal 
   
   4 to’’ and inserting ‘‘and that has elected to 
   
   5 cover newly eligible individuals before 
   
   6 March 1, 2017, with respect to amounts 
   
   7 expended by such State before January 1, 
   
   8 2020, for medical assistance for newly eli- 
   
   9 gible individuals described in subclause 
   
   10 (VIII) of section 1902(a)(10)(A)(i), and, 
   
   11 with respect to amounts expended by such 
   
   12 State after December 31, 2019, and before 
   
   13 January 1, 2024, for medical assistance 
   
   14 for expansion enrollees (as defined in sec- 
   
   15 tion 1902(nn)(1)), shall be equal to the 
   
   16 higher of the percentage otherwise deter- 
   
   17 mined for the State and year under sub- 
   
   18 section (b) (without regard to this sub- 
   
   19 section) and’’; 
   
   20 (ii) in subparagraph (D), by striking 
   
   21 ‘‘and’’ after the semicolon; 
   
   22 (iii) by striking subparagraph (E) and 
   
   23 inserting the following new subparagraphs: 
   
   24 ‘‘(E) 90 percent for calendar quarters in 
   
   25 2020; 
   
   40 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(F) 85 percent for calendar quarters in 
   
   2 2021; 
   
   3 ‘‘(G) 80 percent for calendar quarters in 
   
   4 2022; and 
   
   5 ‘‘(H) 75 percent for calendar quarters in 
   
   6 2023.’’; and 
   
   7 (iv) by adding after and below sub- 
   
   8 paragraph (H) (as added by clause (iii)), 
   
   9 the following flush sentence: 
   
   10 ‘‘The Federal medical assistance percentage deter- 
   
   11 mined for a State and year under subsection (b) 
   
   12 shall apply to expenditures for medical assistance to 
   
   13 newly eligible individuals (as so described) and ex- 
   
   14 pansion enrollees (as so defined), in the case of a 
   
   15 State that has elected to cover newly eligible individ- 
   
   16 uals before March 1, 2017, for calendar quarters 
   
   17 after 2023, and, in the case of any other State, for 
   
   18 calendar quarters (or portions of calendar quarters) 
   
   19 after February 28, 2017.’’; and 
   
   20 (B) in subsection (z)(2)— 
   
   21 (i) in subparagraph (A)— 
   
   22 (I) by inserting ‘‘through 2023’’ 
   
   23 after ‘‘each year thereafter’’; and 
   
   24 (II) by striking ‘‘shall be equal 
   
   25 to’’ and inserting ‘‘and, for periods 
   
   41 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 after December 31, 2019 and before 
   
   2 January 1, 2024, who are expansion 
   
   3 enrollees (as defined in section 
   
   4 1902(nn)(1)) shall be equal to the 
   
   5 higher of the percentage otherwise de- 
   
   6 termined for the State and year under 
   
   7 subsection (b) (without regard to this 
   
   8 subsection) and’’; and 
   
   9 (ii) in subparagraph (B)(ii)— 
   
   10 (I) in subclause (III), by adding 
   
   11 ‘‘and’’ at the end; and 
   
   12 (II) by striking subclauses (IV), 
   
   13 (V), and (VI) and inserting the fol- 
   
   14 lowing new subclause: 
   
   15 ‘‘(IV) 2017 and each subsequent year 
   
   16 through 2023 is 80 percent.’’. 
   
   17 (b) SUNSET OF ESSENTIAL HEALTH BENEFITS RE- 
   
   18 QUIREMENT.—Section 1937(b)(5) of the Social Security 
   
   19 Act (42 U.S.C. 1396u–7(b)(5)) is amended by adding at 
   
   20 the end the following: ‘‘This paragraph shall not apply 
   
   21 after December 31, 2019.’’. 
   
   22 SEC. 127. RESTORING FAIRNESS IN DSH ALLOTMENTS. 
   
   23 Section 1923(f)(7) of the Social Security Act (42 
   
   24 U.S.C. 1396r–4(f)(7)) is amended by adding at the end 
   
   25 the following new subparagraph: 
   
   42 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(C) NON-EXPANSION STATES.— 
   
   2 ‘‘(i) IN GENERAL.—In the case of a 
   
   3 State that is a non-expansion State for a 
   
   4 fiscal year— 
   
   5 ‘‘(I) subparagraph (A) shall not 
   
   6 apply to the DSH allotment for such 
   
   7 State and fiscal year; and 
   
   8 ‘‘(II) the DSH allotment for the 
   
   9 State for fiscal year 2020 shall be in- 
   
   10 creased by the amount calculated ac- 
   
   11 cording to clause (iii). 
   
   12 ‘‘(ii) NO CHANGE IN REDUCTION FOR 
   
   13 EXPANSION STATES.—In the case of a 
   
   14 State that is an expansion State for a fis- 
   
   15 cal year, the DSH allotment for such State 
   
   16 and fiscal year shall be determined as if 
   
   17 clause (i) did not apply. 
   
   18 ‘‘(iii) AMOUNT CALCULATED.—For 
   
   19 purposes of clause (i)(II), the amount cal- 
   
   20 culated according to this clause for a non- 
   
   21 expansion State is the following: 
   
   22 ‘‘(I) For each State, the Sec- 
   
   23 retary shall calculate a ratio equal to 
   
   24 the State’s fiscal year 2016 DSH al- 
   
   25 lotment divided by the number of indi- 
   
   43 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 viduals enrolled in the State plan 
   
   2 under this title for such fiscal year. 
   
   3 ‘‘(II) The Secretary shall identify 
   
   4 the States whose ratio as so deter- 
   
   5 mined is below the national average of 
   
   6 such ratio for all States. 
   
   7 ‘‘(III) The amount calculated 
   
   8 pursuant to this clause is an amount 
   
   9 that, if added to the State’s fiscal 
   
   10 year 2016 DSH allotment, would in- 
   
   11 crease the ratio calculated pursuant to 
   
   12 subclause (I) up to the national aver- 
   
   13 age for all States. 
   
   14 ‘‘(iv) DISREGARD OF INCREASE.—The 
   
   15 DSH allotment for a non-expansion State 
   
   16 for the second, third, and fourth quarters 
   
   17 of fiscal year 2024 and fiscal years there- 
   
   18 after shall be determined as if there had 
   
   19 been no increase in the State’s DSH allot- 
   
   20 ment for fiscal year 2020 under clause 
   
   21 (i)(II). 
   
   22 ‘‘(v) NON-EXPANSION AND EXPANSION 
   
   23 STATE DEFINED.—In this subparagraph: 
   
   24 ‘‘(I) The term ‘expansion State’ 
   
   25 means with respect to a fiscal year, a 
   
   44 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 State that, as of the date of enact- 
   
   2 ment of this subparagraph, provided 
   
   3 for eligibility under clause (i)(VIII) or 
   
   4 (ii)(XX) of section 1902(a)(10)(A) for 
   
   5 medical assistance under this title (or 
   
   6 a waiver of the State plan approved 
   
   7 under section 1115). 
   
   8 ‘‘(II) The term ‘non-expansion 
   
   9 State’ means, with respect to a fiscal 
   
   10 year, a State that is not an expansion 
   
   11 State.’’. 
   
   12 SEC. 128. REDUCING STATE MEDICAID COSTS. 
   
   13 (a) IN GENERAL.— 
   
   14 (1) STATE PLAN REQUIREMENTS.—Section 
   
   15 1902(a)(34) of the Social Security Act (42 U.S.C. 
   
   16 1396a(a)(34)) is amended by striking ‘‘in or after 
   
   17 the third month before the month in which he made 
   
   18 application’’ and inserting ‘‘in or after the month in 
   
   19 which the individual made application’’. 
   
   20 (2) DEFINITION OF MEDICAL ASSISTANCE.— 
   
   21 Section 1905(a) of the Social Security Act (42 
   
   22 U.S.C. 1396d(a)) is amended by striking ‘‘in or 
   
   23 after the third month before the month in which the 
   
   24 recipient makes application for assistance’’ and in- 
   
   45 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 serting ‘‘in or after the month in which the recipient 
   
   2 makes application for assistance’’. 
   
   3 (b) EFFECTIVE DATE.—The amendments made by 
   
   4 subsection (a) shall apply to medical assistance with re- 
   
   5 spect to individuals whose eligibility for such assistance 
   
   6 is based on an application for such assistance made (or 
   
   7 deemed to be made) on or after October 1, 2017. 
   
   8 SEC. 129. PROVIDING SAFETY NET FUNDING FOR NON-EX- 
   
   9 PANSION STATES. 
   
   10 Title XIX of the Social Security Act is amended by 
   
   11 inserting after section 1923 (42 U.S.C. 1396r–4) the fol- 
   
   12 lowing new section: 
   
   13 ‘‘ADJUSTMENT IN PAYMENT FOR SERVICES OF SAFETY 
   
   14 NET PROVIDERS IN NON-EXPANSION STATES 
   
   15 ‘‘SEC. 1923A. (a) IN GENERAL.—Subject to the limi- 
   
   16 tations of this section, for each year during the period be- 
   
   17 ginning with fiscal year 2018 and ending with fiscal year 
   
   18 2022, each State that is one of the 50 States or the Dis- 
   
   19 trict of Columbia and that, as of July 1 of the preceding 
   
   20 fiscal year, did not provide for eligibility under clause 
   
   21 (i)(VIII) or (ii)(XX) of section 1902(a)(10)(A) for medical 
   
   22 assistance under this title (or a waiver of the State plan 
   
   23 approved under section 1115) (each such State or District 
   
   24 referred to in this section for the fiscal year as a ‘non- 
   
   25 expansion State’) may adjust the payment amounts other- 
   
   26 wise provided under the State plan under this title (or a 
   
   46 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 waiver of such plan) to health care providers that provide 
   
   2 health care services to individuals enrolled under this title 
   
   3 (in this section referred to as ‘eligible providers’) so long 
   
   4 as the payment adjustment to such an eligible provider 
   
   5 does not exceed the provider’s costs in furnishing health 
   
   6 care services (as determined by the Secretary and net of 
   
   7 payments under this title, other than under this section, 
   
   8 and by uninsured patients) to individuals who either are 
   
   9 eligible for medical assistance under the State plan (or 
   
   10 under a waiver of such plan) or have no health insurance 
   
   11 or health plan coverage for such services. 
   
   12 ‘‘(b) INCREASE IN APPLICABLE FMAP.—Notwith- 
   
   13 standing section 1905(b), the Federal medical assistance 
   
   14 percentage applicable with respect to expenditures attrib- 
   
   15 utable to a payment adjustment under subsection (a) for 
   
   16 which payment is permitted under subsection (c) shall be 
   
   17 equal to— 
   
   18 ‘‘(1) 100 percent for calendar quarters in fiscal 
   
   19 years 2018, 2019, 2020, and 2021; and 
   
   20 ‘‘(2) 95 percent for calendar quarters in fiscal 
   
   21 year 2022. 
   
   22 ‘‘(c) ANNUAL ALLOTMENT LIMITATION.—Payment 
   
   23 under section 1903(a) shall not be made to a State with 
   
   24 respect to any payment adjustment made under this sec- 
   
   47 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 tion for all calendar quarters in a fiscal year in excess 
   
   2 of the $2,000,000,000 multiplied by the ratio of— 
   
   3 ‘‘(1) the population of the State with income 
   
   4 below 138 percent of the poverty line in 2015 (as de- 
   
   5 termined based the table entitled ‘Health Insurance 
   
   6 Coverage Status and Type by Ratio of Income to 
   
   7 Poverty Level in the Past 12 Months by Age’ for the 
   
   8 universe of the civilian noninstitutionalized popu- 
   
   9 lation for whom poverty status is determined based 
   
   10 on the 2015 American Community Survey 1–Year 
   
   11 Estimates, as published by the Bureau of the Cen- 
   
   12 sus), to 
   
   13 ‘‘(2) the sum of the populations under para- 
   
   14 graph (1) for all non-expansion States. 
   
   15 ‘‘(d) DISQUALIFICATION IN CASE OF STATE COV- 
   
   16 ERAGE EXPANSION.—If a State is a non-expansion for a 
   
   17 fiscal year and provides eligibility for medical assistance 
   
   18 described in subsection (a) during the fiscal year, the 
   
   19 State shall no longer be treated as a non-expansion State 
   
   20 under this section for any subsequent fiscal years.’’. 
   
   21 SEC. 130. ELIGIBILITY REDETERMINATIONS. 
   
   22 (a) IN GENERAL.—Section 1902(e)(14) of the Social 
   
   23 Security Act (42 U.S.C. 1396a(e)(14)) (relating to modi- 
   
   24 fied adjusted gross income) is amended by adding at the 
   
   25 end the following: 
   
   48 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(J) FREQUENCY OF ELIGIBILITY REDE- 
   
   2 TERMINATIONS.—Beginning on October 1, 
   
   3 2017, and notwithstanding subparagraph (H), 
   
   4 in the case of an individual whose eligibility for 
   
   5 medical assistance under the State plan under 
   
   6 this title (or a waiver of such plan) is deter- 
   
   7 mined based on the application of modified ad- 
   
   8 justed gross income under subparagraph (A) 
   
   9 and who is so eligible on the basis of clause 
   
   10 (i)(VIII), (ii)(XX), or (ii)(XXIII) of subsection 
   
   11 (a)(10)(A), at the option of the State, the State 
   
   12 plan may provide that the individual’s eligibility 
   
   13 shall be redetermined every 6 months (or such 
   
   14 shorter number of months as the State may 
   
   15 elect).’’. 
   
   16 (b) INCREASED ADMINISTRATIVE MATCHING PER- 
   
   17 CENTAGE.—For each calendar quarter during the period 
   
   18 beginning on October 1, 2017, and ending on December 
   
   19 31, 2019, the Federal matching percentage otherwise ap- 
   
   20 plicable under section 1903(a) of the Social Security Act 
   
   21 (42 U.S.C. 1396b(a)) with respect to State expenditures 
   
   22 during such quarter that are attributable to meeting the 
   
   23 requirement of section 1902(e)(14) (relating to determina- 
   
   24 tions of eligibility using modified adjusted gross income) 
   
   25 of such Act shall be increased by 5 percentage points with 
   
   49 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 respect to State expenditures attributable to activities car- 
   
   2 ried out by the State (and approved by the Secretary) to 
   
   3 exercise the option described in subparagraph (J) of such 
   
   4 section (relating to eligibility redeterminations made on a 
   
   5 6-month or shorter basis) (as added by subsection (a)) to 
   
   6 increase the frequency of eligibility redeterminations. 
   
   7 SEC. 131. OPTIONAL WORK REQUIREMENT FOR NON- 
   
   8 DISABLED, NONELDERLY, NONPREGNANT IN- 
   
   9 DIVIDUALS. 
   
   10 (a) IN GENERAL.—Section 1902 of the Social Secu- 
   
   11 rity Act (42 U.S.C. 1396a), as previously amended, is fur- 
   
   12 ther amended by adding at the end the following new sub- 
   
   13 section: 
   
   14 ‘‘(oo) OPTIONAL WORK REQUIREMENT FOR NON- 
   
   15 DISABLED, NONELDERLY, NONPREGNANT INDIVID- 
   
   16 UALS.— 
   
   17 ‘‘(1) IN GENERAL.—Beginning October 1, 
   
   18 2017, subject to paragraph (3), a State may elect to 
   
   19 condition medical assistance to a nondisabled, non- 
   
   20 elderly, nonpregnant individual under this title upon 
   
   21 such an individual’s satisfaction of a work require- 
   
   22 ment (as defined in paragraph (2)). 
   
   23 ‘‘(2) WORK REQUIREMENT DEFINED.—In this 
   
   24 section, the term ‘work requirement’ means, with re- 
   
   25 spect to an individual, the individual’s participation 
   
   50 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 in work activities (as defined in section 407(d)) for 
   
   2 such period of time as determined by the State, and 
   
   3 as directed and administered by the State. 
   
   4 ‘‘(3) REQUIRED EXCEPTIONS.—States admin- 
   
   5 istering a work requirement under this subsection 
   
   6 may not apply such requirement to— 
   
   7 ‘‘(A) a woman during pregnancy through 
   
   8 the end of the month in which the 60-day pe- 
   
   9 riod (beginning on the last day of her preg- 
   
   10 nancy) ends; 
   
   11 ‘‘(B) an individual who is under 19 years 
   
   12 of age; 
   
   13 ‘‘(C) an individual who is the only parent 
   
   14 or caretaker relative in the family of a child 
   
   15 who has not attained 6 years of age or who is 
   
   16 the only parent or caretaker of a child with dis- 
   
   17 abilities; or 
   
   18 ‘‘(D) an individual who is married or a 
   
   19 head of household and has not attained 20 
   
   20 years of age and who— 
   
   21 ‘‘(i) maintains satisfactory attendance 
   
   22 at secondary school or the equivalent; or 
   
   23 ‘‘(ii) participates in education directly 
   
   24 related to employment.’’. 
   
   51 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (b) INCREASE IN MATCHING RATE FOR IMPLEMEN- 
   
   2 TATION.—Section 1903 of the Social Security Act (42 
   
   3 U.S.C. 1396b) is amended by adding at the end the fol- 
   
   4 lowing: 
   
   5 ‘‘(aa) The Federal matching percentage otherwise ap- 
   
   6 plicable under subsection (a) with respect to State admin- 
   
   7 istrative expenditures during a calendar quarter for which 
   
   8 the State receives payment under such subsection shall, 
   
   9 in addition to any other increase to such Federal matching 
   
   10 percentage, be increased for such calendar quarter by 5 
   
   11 percentage points with respect to State expenditures at- 
   
   12 tributable to activities carried out by the State (and ap- 
   
   13 proved by the Secretary) to implement subsection (oo) of 
   
   14 section 1902.’’. 
   
   15 SEC. 132. PROVIDER TAXES. 
   
   16 Section 1903(w)(4)(C) of the Social Security Act (42 
   
   17 U.S.C. 1396b(w)(4)(C)) is amended by adding at the end 
   
   18 the following new clause: 
   
   19 ‘‘(iii) For purposes of clause (i), a de- 
   
   20 termination of the existence of an indirect 
   
   21 guarantee shall be made under paragraph 
   
   22 (3)(i) of section 433.68(f) of title 42, Code 
   
   23 of Federal Regulations, as in effect on 
   
   24 June 1, 2017, except that— 
   
   52 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(I) for fiscal year 2021, ‘5.8 
   
   2 percent’ shall be substituted for ‘6 
   
   3 percent’ each place it appears; 
   
   4 ‘‘(II) for fiscal year 2022, ‘5.6 
   
   5 percent’ shall be substituted for ‘6 
   
   6 percent’ each place it appears; 
   
   7 ‘‘(III) for fiscal year 2023, ‘5.4 
   
   8 percent’ shall be substituted for ‘6 
   
   9 percent’ each place it appears; 
   
   10 ‘‘(IV) for fiscal year 2024, ‘5.2 
   
   11 percent’ shall be substituted for ‘6 
   
   12 percent’ each place it appears; and 
   
   13 ‘‘(V) for fiscal year 2025 and 
   
   14 each subsequent fiscal year, ‘5 per- 
   
   15 cent’ shall be substituted for ‘6 per- 
   
   16 cent’ each place it appears.’’. 
   
   17 SEC. 133. PER CAPITA ALLOTMENT FOR MEDICAL ASSIST- 
   
   18 ANCE. 
   
   19 Title XIX of the Social Security Act is amended— 
   
   20 (1) in section 1903 (42 U.S.C. 1396b)— 
   
   21 (A) in subsection (a), in the matter before 
   
   22 paragraph (1), by inserting ‘‘and section 
   
   23 1903A(a)’’ after ‘‘except as otherwise provided 
   
   24 in this section’’; and 
   
   53 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (B) in subsection (d)(1), by striking ‘‘to 
   
   2 which’’ and inserting ‘‘to which, subject to sec- 
   
   3 tion 1903A(a),’’; and 
   
   4 (2) by inserting after such section 1903 the fol- 
   
   5 lowing new section: 
   
   6 ‘‘SEC. 1903A. PER CAPITA-BASED CAP ON PAYMENTS FOR 
   
   7 MEDICAL ASSISTANCE. 
   
   8 ‘‘(a) APPLICATION OF PER CAPITA CAP ON PAY- 
   
   9 MENTS FOR MEDICAL ASSISTANCE EXPENDITURES.— 
   
   10 ‘‘(1) IN GENERAL.—If a State which is one of 
   
   11 the 50 States or the District of Columbia has excess 
   
   12 aggregate medical assistance expenditures (as de- 
   
   13 fined in paragraph (2)) for a fiscal year (beginning 
   
   14 with fiscal year 2020), the amount of payment to 
   
   15 the State under section 1903(a)(1) for each quarter 
   
   in the following fiscal year shall be reduced by 1 16 ⁄4 of 
   
   17 the excess aggregate medical assistance payments 
   
   18 (as defined in paragraph (3)) for that previous fiscal 
   
   19 year. In this section, the term ‘State’ means only the 
   
   20 50 States and the District of Columbia. 
   
   21 ‘‘(2) EXCESS AGGREGATE MEDICAL ASSISTANCE 
   
   22 EXPENDITURES.—In this subsection, the term ‘ex- 
   
   23 cess aggregate medical assistance expenditures’ 
   
   24 means, for a State for a fiscal year, the amount (if 
   
   25 any) by which— 
   
   54 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(A) the amount of the adjusted total med- 
   
   2 ical assistance expenditures (as defined in sub- 
   
   3 section (b)(1)) for the State and fiscal year; ex- 
   
   4 ceeds 
   
   5 ‘‘(B) the amount of the target total med- 
   
   6 ical assistance expenditures (as defined in sub- 
   
   7 section (c)) for the State and fiscal year. 
   
   8 ‘‘(3) EXCESS AGGREGATE MEDICAL ASSISTANCE 
   
   9 PAYMENTS.—In this subsection, the term ‘excess ag- 
   
   10 gregate medical assistance payments’ means, for a 
   
   11 State for a fiscal year, the product of— 
   
   12 ‘‘(A) the excess aggregate medical assist- 
   
   13 ance expenditures (as defined in paragraph (2)) 
   
   14 for the State for the fiscal year; and 
   
   15 ‘‘(B) the Federal average medical assist- 
   
   16 ance matching percentage (as defined in para- 
   
   17 graph (4)) for the State for the fiscal year. 
   
   18 ‘‘(4) FEDERAL AVERAGE MEDICAL ASSISTANCE 
   
   19 MATCHING PERCENTAGE.—In this subsection, the 
   
   20 term ‘Federal average medical assistance matching 
   
   21 percentage’ means, for a State for a fiscal year, the 
   
   22 ratio (expressed as a percentage) of— 
   
   23 ‘‘(A) the amount of the Federal payments 
   
   24 that would be made to the State under section 
   
   25 1903(a)(1) for medical assistance expenditures 
   
   55 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 for calendar quarters in the fiscal year if para- 
   
   2 graph (1) did not apply; to 
   
   3 ‘‘(B) the amount of the medical assistance 
   
   4 expenditures for the State and fiscal year. 
   
   5 ‘‘(5) PER CAPITA BASE PERIOD.— 
   
   6 ‘‘(A) IN GENERAL.—In this section, the 
   
   7 term ‘per capita base period’ means, with re- 
   
   8 spect to a State, a period of 8 consecutive fiscal 
   
   9 quarters selected by the State. 
   
   10 ‘‘(B) TIMELINE.—Each State shall submit 
   
   11 its selection of per capita base period to the 
   
   12 Secretary not later than January 1, 2018. 
   
   13 ‘‘(C) PARAMETERS.—In selecting a per 
   
   14 capita base period under this paragraph, a 
   
   15 State shall— 
   
   16 ‘‘(i) only select a period of 8 consecu- 
   
   17 tive fiscal quarters for which all the data 
   
   18 necessary to make determinations required 
   
   19 under this section is available, as deter- 
   
   20 mined by the Secretary; and 
   
   21 ‘‘(ii) shall not select any period of 8 
   
   22 consecutive fiscal quarters that begins with 
   
   23 a fiscal quarter earlier than the first quar- 
   
   24 ter of fiscal year 2014 or ends with a fiscal 
   
   56 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 quarter later than the third fiscal quarter 
   
   2 of 2017. 
   
   3 ‘‘(D) ADJUSTMENT BY THE SECRETARY.— 
   
   4 If the Secretary determines that a State took 
   
   5 actions after the date of enactment of this sec- 
   
   6 tion (including making retroactive adjustments 
   
   7 to supplemental payment data in a manner that 
   
   8 affects a fiscal quarter in the per capita base 
   
   9 period) to diminish the quality of the data from 
   
   10 the per capita base period used to make deter- 
   
   11 minations under this section, the Secretary may 
   
   12 adjust the data as the Secretary deems appro- 
   
   13 priate. 
   
   14 ‘‘(b) ADJUSTED TOTAL MEDICAL ASSISTANCE EX- 
   
   15 PENDITURES.—Subject to subsection (g), the following 
   
   16 shall apply: 
   
   17 ‘‘(1) IN GENERAL.—In this section, the term 
   
   18 ‘adjusted total medical assistance expenditures’ 
   
   19 means, for a State— 
   
   20 ‘‘(A) for the State’s per capita base period 
   
   21 (as defined in subsection (a)(5)), the product 
   
   22 of— 
   
   23 ‘‘(i) the amount of the medical assist- 
   
   24 ance expenditures (as defined in paragraph 
   
   25 (2) and adjusted under paragraph (5)) for 
   
   57 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 the State and period, reduced by the 
   
   2 amount of any excluded expenditures (as 
   
   3 defined in paragraph (3) and adjusted 
   
   4 under paragraph (5)) for the State and pe- 
   
   5 riod otherwise included in such medical as- 
   
   6 sistance expenditures; and 
   
   7 ‘‘(ii) the 1903A base period popu- 
   
   8 lation percentage (as defined in paragraph 
   
   9 (4)) for the State; or 
   
   10 ‘‘(B) for fiscal year 2019 or a subsequent 
   
   11 fiscal year, the amount of the medical assist- 
   
   12 ance expenditures (as defined in paragraph (2)) 
   
   13 for the State and fiscal year that is attributable 
   
   14 to 1903A enrollees, reduced by the amount of 
   
   15 any excluded expenditures (as defined in para- 
   
   16 graph (3)) for the State and fiscal year other- 
   
   17 wise included in such medical assistance ex- 
   
   18 penditures and includes non-DSH supplemental 
   
   19 payments (as defined in subsection 
   
   20 (d)(4)(A)(ii)) and payments described in sub- 
   
   21 section (d)(4)(A)(iii) but shall not be construed 
   
   22 as including any expenditures attributable to 
   
   23 the program under section 1928 (relating to 
   
   24 State pediatric vaccine distribution programs). 
   
   25 In applying subparagraph (B), non-DSH sup- 
   
   58 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 plemental payments (as defined in subsection 
   
   2 (d)(4)(A)(ii)) and payments described in sub- 
   
   3 section (d)(4)(A)(iii) shall be treated as fully at- 
   
   4 tributable to 1903A enrollees. 
   
   5 ‘‘(2) MEDICAL ASSISTANCE EXPENDITURES.— 
   
   6 In this section, the term ‘medical assistance expendi- 
   
   7 tures’ means, for a State and fiscal year or per cap- 
   
   8 ita base period, the medical assistance payments as 
   
   9 reported by medical service category on the Form 
   
   10 CMS-64 quarterly expense report (or successor to 
   
   11 such a report form, and including enrollment data 
   
   12 and subsequent adjustments to any such report, in 
   
   13 this section referred to collectively as a ‘CMS-64 re- 
   
   14 port’) for quarters in the year or base period for 
   
   15 which payment is (or may otherwise be) made pur- 
   
   16 suant to section 1903(a)(1), adjusted, in the case of 
   
   17 a per capita base period, under paragraph (5). 
   
   18 ‘‘(3) EXCLUDED EXPENDITURES.—In this sec- 
   
   19 tion, the term ‘excluded expenditures’ means, for a 
   
   20 State and fiscal year or per capita base period, ex- 
   
   21 penditures under the State plan (or under a waiver 
   
   22 of such plan) that are attributable to any of the fol- 
   
   23 lowing: 
   
   59 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(A) DSH.—Payment adjustments made 
   
   2 for disproportionate share hospitals under sec- 
   
   3 tion 1923. 
   
   4 ‘‘(B) MEDICARE COST-SHARING.—Pay- 
   
   5 ments made for medicare cost-sharing (as de- 
   
   6 fined in section 1905(p)(3)). 
   
   7 ‘‘(C) SAFETY NET PROVIDER PAYMENT AD- 
   
   8 JUSTMENTS IN NON-EXPANSION STATES.—Pay- 
   
   9 ment adjustments under subsection (a) of sec- 
   
   10 tion 1923A for which payment is permitted 
   
   11 under subsection (c) of such section. 
   
   12 ‘‘(4) 1903A BASE PERIOD POPULATION PER- 
   
   13 CENTAGE.—In this subsection, the term ‘1903A base 
   
   14 period population percentage’ means, for a State, 
   
   15 the Secretary’s calculation of the percentage of the 
   
   16 actual medical assistance expenditures, as reported 
   
   17 by the State on the CMS–64 reports for calendar 
   
   18 quarters in the State’s per capita base period, that 
   
   19 are attributable to 1903A enrollees (as defined in 
   
   20 subsection (e)(1)). 
   
   21 ‘‘(5) ADJUSTMENTS FOR PER CAPITA BASE PE- 
   
   22 RIOD.—In calculating medical assistance expendi- 
   
   23 tures under paragraph (2) and excluded expendi- 
   
   24 tures under paragraph (3) for a State for the State’s 
   
   25 per capita base period, the total amount of each type 
   
   60 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 of expenditure for the State and base period shall be 
   
   2 divided by 2. 
   
   3 ‘‘(c) TARGET TOTAL MEDICAL ASSISTANCE EXPEND- 
   
   4 ITURES.— 
   
   5 ‘‘(1) CALCULATION.—In this section, the term 
   
   6 ‘target total medical assistance expenditures’ means, 
   
   7 for a State for a fiscal year and subject to para- 
   
   8 graph (4), the sum of the products, for each of the 
   
   9 1903A enrollee categories (as defined in subsection 
   
   10 (e)(2)), of— 
   
   11 ‘‘(A) the target per capita medical assist- 
   
   12 ance expenditures (as defined in paragraph (2)) 
   
   13 for the enrollee category, State, and fiscal year; 
   
   14 and 
   
   15 ‘‘(B) the number of 1903A enrollees for 
   
   16 such enrollee category, State, and fiscal year, as 
   
   17 determined under subsection (e)(4). 
   
   18 ‘‘(2) TARGET PER CAPITA MEDICAL ASSISTANCE 
   
   19 EXPENDITURES.—In this subsection, the term ‘tar- 
   
   20 get per capita medical assistance expenditures’ 
   
   21 means, for a 1903A enrollee category and State— 
   
   22 ‘‘(A) for fiscal year 2020, an amount equal 
   
   23 to— 
   
   24 ‘‘(i) the provisional FY19 target per 
   
   25 capita amount for such enrollee category 
   
   61 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (as calculated under subsection (d)(5)) for 
   
   2 the State; increased by 
   
   3 ‘‘(ii) the applicable annual inflation 
   
   4 factor (as defined in paragraph (3)) for 
   
   5 fiscal year 2020; and 
   
   6 ‘‘(B) for each succeeding fiscal year, an 
   
   7 amount equal to— 
   
   8 ‘‘(i) the target per capita medical as- 
   
   9 sistance expenditures (under subparagraph 
   
   10 (A) or this subparagraph) for the 1903A 
   
   11 enrollee category and State for the pre- 
   
   12 ceding fiscal year; increased by 
   
   13 ‘‘(ii) the applicable annual inflation 
   
   14 factor for that succeeding fiscal year. 
   
   15 ‘‘(3) APPLICABLE ANNUAL INFLATION FAC- 
   
   16 TOR.—In paragraph (2), the term ‘applicable annual 
   
   17 inflation factor’ means— 
   
   18 ‘‘(A) for fiscal years before 2025— 
   
   19 ‘‘(i) for each of the 1903A enrollee 
   
   20 categories described in subparagraphs (C), 
   
   21 (D), and (E) of subsection (e)(2), the per- 
   
   22 centage increase in the medical care com- 
   
   23 ponent of the consumer price index for all 
   
   24 urban consumers (U.S. city average) from 
   
   62 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 September of the previous fiscal year to 
   
   2 September of the fiscal year involved; and 
   
   3 ‘‘(ii) for each of the 1903A enrollee 
   
   4 categories described in subparagraphs (A) 
   
   5 and (B) of subsection (e)(2), the percent- 
   
   6 age increase described in clause (i) plus 1 
   
   7 percentage point; and 
   
   8 ‘‘(B) for fiscal years after 2024, for all 
   
   9 1903A enrollee categories, the percentage in- 
   
   10 crease in the consumer price index for all urban 
   
   11 consumers (U.S. city average) from September 
   
   12 of the previous fiscal year to September of the 
   
   13 fiscal year involved. 
   
   14 ‘‘(4) DECREASE IN TARGET EXPENDITURES 
   
   15 FOR REQUIRED EXPENDITURES BY CERTAIN POLIT- 
   
   16 ICAL SUBDIVISIONS.— 
   
   17 ‘‘(A) IN GENERAL.—In the case of a State 
   
   18 that had a DSH allotment under section 
   
   19 1923(f) for fiscal year 2016 that was more than 
   
   20 6 times the national average of such allotments 
   
   21 for all the States for such fiscal year and that 
   
   22 requires political subdivisions within the State 
   
   23 to contribute funds towards medical assistance 
   
   24 or other expenditures under the State plan 
   
   25 under this title (or under a waiver of such plan) 
   
   63 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 for a fiscal year (beginning with fiscal year 
   
   2 2020), the target total medical assistance ex- 
   
   3 penditures for such State and fiscal year shall 
   
   4 be decreased by the amount that political sub- 
   
   5 divisions in the State are required to contribute 
   
   6 under the plan (or waiver) without reimburse- 
   
   7 ment from the State for such fiscal year, other 
   
   8 than contributions described in subparagraph 
   
   9 (B). 
   
   10 ‘‘(B) EXCEPTIONS.—The contributions de- 
   
   11 scribed in this subparagraph are the following: 
   
   12 ‘‘(i) Contributions required by a State 
   
   13 from a political subdivision that, as of the 
   
   14 first day of the calendar year in which the 
   
   15 fiscal year involved begins— 
   
   16 ‘‘(I) has a population of more 
   
   17 than 5,000,000, as estimated by the 
   
   18 Bureau of the Census; and 
   
   19 ‘‘(II) imposes a local income tax 
   
   20 upon its residents. 
   
   21 ‘‘(ii) Contributions required by a 
   
   22 State from a political subdivision for ad- 
   
   23 ministrative expenses if the State required 
   
   24 such contributions from such subdivision 
   
   64 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 without reimbursement from the State as 
   
   2 of January 1, 2017. 
   
   3 ‘‘(5) ADJUSTMENTS TO STATE EXPENDITURES 
   
   4 TARGETS TO PROMOTE PROGRAM EQUITY ACROSS 
   
   5 STATES.— 
   
   6 ‘‘(A) IN GENERAL.—Beginning with fiscal 
   
   7 year 2020, the target per capita medical assist- 
   
   8 ance expenditures for a 1903A enrollee cat- 
   
   9 egory, State, and fiscal year, as determined 
   
   10 under paragraph (2), shall be adjusted (subject 
   
   11 to subparagraph (C)(i)) in accordance with this 
   
   12 paragraph. 
   
   13 ‘‘(B) ADJUSTMENT BASED ON LEVEL OF 
   
   14 PER CAPITA SPENDING FOR 1903A ENROLLEE 
   
   15 CATEGORIES.—Subject to subparagraph (C), 
   
   16 with respect to a State, fiscal year, and 1903A 
   
   17 enrollee category, if the State’s per capita cat- 
   
   18 egorical medical assistance expenditures (as de- 
   
   19 fined in subparagraph (D)) for the State and 
   
   20 category in the preceding fiscal year— 
   
   21 ‘‘(i) exceed the mean per capita cat- 
   
   22 egorical medical assistance expenditures 
   
   23 for the category for all States for such pre- 
   
   24 ceding year by not less than 25 percent, 
   
   25 the State’s target per capita medical as- 
   
   65 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 sistance expenditures for such category for 
   
   2 the fiscal year involved shall be reduced by 
   
   3 a percentage that shall be determined by 
   
   4 the Secretary but which shall not be less 
   
   5 than 0.5 percent or greater than 2 percent; 
   
   6 or 
   
   7 ‘‘(ii) are less than the mean per capita 
   
   8 categorical medical assistance expenditures 
   
   9 for the category for all States for such pre- 
   
   10 ceding year by not less than 25 percent, 
   
   11 the State’s target per capita medical as- 
   
   12 sistance expenditures for such category for 
   
   13 the fiscal year involved shall be increased 
   
   14 by a percentage that shall be determined 
   
   15 by the Secretary but which shall not be 
   
   16 less than 0.5 percent or greater than 2 
   
   17 percent. 
   
   18 ‘‘(C) RULES OF APPLICATION.— 
   
   19 ‘‘(i) BUDGET NEUTRALITY REQUIRE- 
   
   20 MENT.—In determining the appropriate 
   
   21 percentages by which to adjust States’ tar- 
   
   22 get per capita medical assistance expendi- 
   
   23 tures for a category and fiscal year under 
   
   24 this paragraph, the Secretary shall make 
   
   25 such adjustments in a manner that does 
   
   66 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 not result in a net increase in Federal pay- 
   
   2 ments under this section for such fiscal 
   
   3 year, and if the Secretary cannot adjust 
   
   4 such expenditures in such a manner there 
   
   5 shall be no adjustment under this para- 
   
   6 graph for such fiscal year. 
   
   7 ‘‘(ii) ASSUMPTION REGARDING STATE 
   
   8 EXPENDITURES.—For purposes of clause 
   
   9 (i), in the case of a State that has its tar- 
   
   10 get per capita medical assistance expendi- 
   
   11 tures for a 1903A enrollee category and 
   
   12 fiscal year increased under this paragraph, 
   
   13 the Secretary shall assume that the cat- 
   
   14 egorical medical assistance expenditures 
   
   15 (as defined in subparagraph (D)(ii)) for 
   
   16 such State, category, and fiscal year will 
   
   17 equal such increased target medical assist- 
   
   18 ance expenditures. 
   
   19 ‘‘(iii) NONAPPLICATION TO LOW-DEN- 
   
   20 SITY STATES.—This paragraph shall not 
   
   21 apply to any State that has a population 
   
   22 density of less than 15 individuals per 
   
   23 square mile, based on the most recent data 
   
   24 available from the Bureau of the Census. 
   
   67 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(iv) DISREGARD OF ADJUSTMENT.— 
   
   2 Any adjustment under this paragraph to 
   
   3 target medical assistance expenditures for 
   
   4 a State, 1903A enrollee category, and fis- 
   
   5 cal year shall be disregarded when deter- 
   
   6 mining the target medical assistance ex- 
   
   7 penditures for such State and category for 
   
   8 a succeeding year under paragraph (2). 
   
   9 ‘‘(v) APPLICATION FOR FISCAL YEARS 
   
   10 2020 AND 2021.—In fiscal years 2020 and 
   
   11 2021, the Secretary shall apply this para- 
   
   12 graph by deeming all categories of 1903A 
   
   13 enrollees to be a single category. 
   
   14 ‘‘(D) PER CAPITA CATEGORICAL MEDICAL 
   
   15 ASSISTANCE EXPENDITURES.— 
   
   16 ‘‘(i) IN GENERAL.—In this paragraph, 
   
   17 the term ‘per capita categorical medical as- 
   
   18 sistance expenditures’ means, with respect 
   
   19 to a State, 1903A enrollee category, and 
   
   20 fiscal year, an amount equal to— 
   
   21 ‘‘(I) the categorical medical ex- 
   
   22 penditures (as defined in clause (ii)) 
   
   23 for the State, category, and year; di- 
   
   24 vided by 
   
   68 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(II) the number of 1903A en- 
   
   2 rollees for the State, category, and 
   
   3 year. 
   
   4 ‘‘(ii) CATEGORICAL MEDICAL ASSIST- 
   
   5 ANCE EXPENDITURES.—The term ‘categor- 
   
   6 ical medical assistance expenditures’ 
   
   7 means, with respect to a State, 1903A en- 
   
   8 rollee category, and fiscal year, an amount 
   
   9 equal to the total medical assistance ex- 
   
   10 penditures (as defined in paragraph (2)) 
   
   11 for the State and fiscal year that are at- 
   
   12 tributable to 1903A enrollees in the cat- 
   
   13 egory, excluding any excluded expenditures 
   
   14 (as defined in paragraph (3)) for the State 
   
   15 and fiscal year that are attributable to 
   
   16 1903A enrollees in the category. 
   
   17 ‘‘(d) CALCULATION OF FY19 PROVISIONAL TARGET 
   
   18 AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.—Sub- 
   
   19 ject to subsection (g), the following shall apply: 
   
   20 ‘‘(1) CALCULATION OF BASE AMOUNTS FOR PER 
   
   21 CAPITA BASE PERIOD.—For each State the Sec- 
   
   22 retary shall calculate (and provide notice to the 
   
   23 State not later than April 1, 2018, of) the following: 
   
   24 ‘‘(A) The amount of the adjusted total 
   
   25 medical assistance expenditures (as defined in 
   
   69 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 subsection (b)(1)) for the State for the State’s 
   
   2 per capita base period. 
   
   3 ‘‘(B) The number of 1903A enrollees for 
   
   4 the State in the State’s per capita base period 
   
   5 (as determined under subsection (e)(4)). 
   
   6 ‘‘(C) The average per capita medical as- 
   
   7 sistance expenditures for the State for the 
   
   8 State’s per capita base period equal to— 
   
   9 ‘‘(i) the amount calculated under sub- 
   
   10 paragraph (A); divided by 
   
   11 ‘‘(ii) the number calculated under sub- 
   
   12 paragraph (B). 
   
   13 ‘‘(2) FISCAL YEAR 2019 AVERAGE PER CAPITA 
   
   14 AMOUNT BASED ON INFLATING THE PER CAPITA 
   
   15 BASE PERIOD AMOUNT TO FISCAL YEAR 2019 BY CPI- 
   
   16 MEDICAL.—The Secretary shall calculate a fiscal 
   
   17 year 2019 average per capita amount for each State 
   
   18 equal to— 
   
   19 ‘‘(A) the average per capita medical assist- 
   
   20 ance expenditures for the State for the State’s 
   
   21 per capita base period (calculated under para- 
   
   22 graph (1)(C)); increased by 
   
   23 ‘‘(B) the percentage increase in the med- 
   
   24 ical care component of the consumer price index 
   
   25 for all urban consumers (U.S. city average) 
   
   70 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 from the last month of the State’s per capita 
   
   2 base period to September of fiscal year 2019. 
   
   3 ‘‘(3) AGGREGATE AND AVERAGE EXPENDI- 
   
   4 TURES PER CAPITA FOR FISCAL YEAR 2019.—The 
   
   5 Secretary shall calculate for each State the fol- 
   
   6 lowing: 
   
   7 ‘‘(A) The amount of the adjusted total 
   
   8 medical assistance expenditures (as defined in 
   
   9 subsection (b)(1)) for the State for fiscal year 
   
   10 2019. 
   
   11 ‘‘(B) The number of 1903A enrollees for 
   
   12 the State in fiscal year 2019 (as determined 
   
   13 under subsection (e)(4)). 
   
   14 ‘‘(4) PER CAPITA EXPENDITURES FOR FISCAL 
   
   15 YEAR 2019 FOR EACH 1903A ENROLLEE CATEGORY.— 
   
   16 The Secretary shall calculate (and provide notice to 
   
   17 each State not later than January 1, 2020, of) the 
   
   18 following: 
   
   19 ‘‘(A)(i) For each 1903A enrollee category, 
   
   20 the amount of the adjusted total medical assist- 
   
   21 ance expenditures (as defined in subsection 
   
   22 (b)(1)) for the State for fiscal year 2019 for in- 
   
   23 dividuals in the enrollee category, calculated by 
   
   24 excluding from medical assistance expenditures 
   
   25 those expenditures attributable to expenditures 
   
   71 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 described in clause (iii) or non-DSH supple- 
   
   2 mental expenditures (as defined in clause (ii)). 
   
   3 ‘‘(ii) In this paragraph, the term ‘non- 
   
   4 DSH supplemental expenditure’ means a pay- 
   
   5 ment to a provider under the State plan (or 
   
   6 under a waiver of the plan) that— 
   
   7 ‘‘(I) is not made under section 1923; 
   
   8 ‘‘(II) is not made with respect to a 
   
   9 specific item or service for an individual; 
   
   10 ‘‘(III) is in addition to any payments 
   
   11 made to the provider under the plan (or 
   
   12 waiver) for any such item or service; and 
   
   13 ‘‘(IV) complies with the limits for ad- 
   
   14 ditional payments to providers under the 
   
   15 plan (or waiver) imposed pursuant to sec- 
   
   16 tion 1902(a)(30)(A), including the regula- 
   
   17 tions specifying upper payment limits 
   
   18 under the State plan in part 447 of title 
   
   19 42, Code of Federal Regulations (or any 
   
   20 successor regulations). 
   
   21 ‘‘(iii) An expenditure described in this 
   
   22 clause is an expenditure that meets the criteria 
   
   23 specified in subclauses (I), (II), and (III) of 
   
   24 clause (ii) and is authorized under section 1115 
   
   25 for the purposes of funding a delivery system 
   
   72 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 reform pool, uncompensated care pool, a des- 
   
   2 ignated State health program, or any other 
   
   3 similar expenditure (as defined by the Sec- 
   
   4 retary). 
   
   5 ‘‘(B) For each 1903A enrollee category, 
   
   6 the number of 1903A enrollees for the State in 
   
   7 fiscal year 2019 in the enrollee category (as de- 
   
   8 termined under subsection (e)(4)). 
   
   9 ‘‘(C) For the State’s per capita base pe- 
   
   10 riod, the State’s non-DSH supplemental and 
   
   11 pool payment percentage is equal to the ratio 
   
   12 (expressed as a percentage) of— 
   
   13 ‘‘(i) the total amount of non-DSH 
   
   14 supplemental expenditures (as defined in 
   
   15 subparagraph (A)(ii) and adjusted under 
   
   16 subparagraph (E)) and payments described 
   
   17 in subparagraph (A)(iii) (and adjusted 
   
   18 under subparagraph (E)) for the State for 
   
   19 the period; to 
   
   20 ‘‘(ii) the amount described in sub- 
   
   21 section (b)(1)(A) for the State for the 
   
   22 State’s per capita base period. 
   
   23 ‘‘(D) For each 1903A enrollee category an 
   
   24 average medical assistance expenditures per 
   
   73 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 capita for the State for fiscal year 2019 for the 
   
   2 enrollee category equal to— 
   
   3 ‘‘(i) the amount calculated under sub- 
   
   4 paragraph (A) for the State, increased by 
   
   5 the non-DSH supplemental and pool pay- 
   
   6 ment percentage for the State (as cal- 
   
   7 culated under subparagraph (C)); divided 
   
   8 by 
   
   9 ‘‘(ii) the number calculated under sub- 
   
   10 paragraph (B) for the State for the en- 
   
   11 rollee category. 
   
   12 ‘‘(E) For purposes of subparagraph (C)(i), 
   
   13 in calculating the total amount of non-DSH 
   
   14 supplemental expenditures and payments de- 
   
   15 scribed in subparagraph (A)(iii) for a State for 
   
   16 the per capita base period, the total amount of 
   
   17 such expenditures and the total amount of such 
   
   18 payments for the State and base period shall 
   
   19 each be divided by 2. 
   
   20 ‘‘(5) PROVISIONAL FY19 PER CAPITA TARGET 
   
   21 AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.— 
   
   22 Subject to subsection (f)(2), the Secretary shall cal- 
   
   23 culate for each State a provisional FY19 per capita 
   
   24 target amount for each 1903A enrollee category 
   
   25 equal to the average medical assistance expenditures 
   
   74 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 per capita for the State for fiscal year 2019 (as cal- 
   
   2 culated under paragraph (4)(D)) for such enrollee 
   
   3 category multiplied by the ratio of— 
   
   4 ‘‘(A) the product of— 
   
   5 ‘‘(i) the fiscal year 2019 average per 
   
   6 capita amount for the State, as calculated 
   
   7 under paragraph (2); and 
   
   8 ‘‘(ii) the number of 1903A enrollees 
   
   9 for the State in fiscal year 2019, as cal- 
   
   10 culated under paragraph (3)(B); to 
   
   11 ‘‘(B) the amount of the adjusted total 
   
   12 medical assistance expenditures for the State 
   
   13 for fiscal year 2019, as calculated under para- 
   
   14 graph (3)(A). 
   
   15 ‘‘(e) 1903A ENROLLEE; 1903A ENROLLEE CAT- 
   
   16 EGORY.—Subject to subsection (g), for purposes of this 
   
   17 section, the following shall apply: 
   
   18 ‘‘(1) 1903A ENROLLEE.—The term ‘1903A en- 
   
   19 rollee’ means, with respect to a State and a month 
   
   20 and subject to subsection (i)(1)(B), any Medicaid 
   
   21 enrollee (as defined in paragraph (3)) for the month, 
   
   22 other than such an enrollee who for such month is 
   
   23 in any of the following categories of excluded indi- 
   
   24 viduals: 
   
   75 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(A) CHIP.—An individual who is pro- 
   
   2 vided, under this title in the manner described 
   
   3 in section 2101(a)(2), child health assistance 
   
   4 under title XXI. 
   
   5 ‘‘(B) IHS.—An individual who receives 
   
   6 any medical assistance under this title for serv- 
   
   7 ices for which payment is made under the third 
   
   8 sentence of section 1905(b). 
   
   9 ‘‘(C) BREAST AND CERVICAL CANCER 
   
   10 SERVICES ELIGIBLE INDIVIDUAL.—An indi- 
   
   11 vidual who is eligible for medical assistance 
   
   12 under this title only on the basis of section 
   
   13 1902(a)(10)(A)(ii)(XVIII). 
   
   14 ‘‘(D) PARTIAL-BENEFIT ENROLLEES.—An 
   
   15 individual who— 
   
   16 ‘‘(i) is an alien who is eligible for 
   
   17 medical assistance under this title only on 
   
   18 the basis of section 1903(v)(2); 
   
   19 ‘‘(ii) is eligible for medical assistance 
   
   20 under this title only on the basis of sub- 
   
   21 clause (XII) or (XXI) of section 
   
   22 1902(a)(10)(A)(ii) (or on the basis of a 
   
   23 waiver that provides only comparable bene- 
   
   24 fits); 
   
   76 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(iii) is a dual eligible individual (as 
   
   2 defined in section 1915(h)(2)(B)) and is 
   
   3 eligible for medical assistance under this 
   
   4 title (or under a waiver) only for some or 
   
   5 all of medicare cost-sharing (as defined in 
   
   6 section 1905(p)(3)); or 
   
   7 ‘‘(iv) is eligible for medical assistance 
   
   8 under this title and for whom the State is 
   
   9 providing a payment or subsidy to an em- 
   
   10 ployer for coverage of the individual under 
   
   11 a group health plan pursuant to section 
   
   12 1906 or section 1906A (or pursuant to a 
   
   13 waiver that provides only comparable bene- 
   
   14 fits). 
   
   15 ‘‘(E) BLIND AND DISABLED CHILDREN.— 
   
   16 An individual who— 
   
   17 ‘‘(i) is a child under 19 years of age; 
   
   18 and 
   
   19 ‘‘(ii) is eligible for medical assistance 
   
   20 under this title on the basis of being blind 
   
   21 or disabled. 
   
   22 ‘‘(2) 1903A ENROLLEE CATEGORY.—The term 
   
   23 ‘1903A enrollee category’ means each of the fol- 
   
   24 lowing: 
   
   77 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(A) ELDERLY.—A category of 1903A en- 
   
   2 rollees who are 65 years of age or older. 
   
   3 ‘‘(B) BLIND AND DISABLED.—A category 
   
   4 of 1903A enrollees (not described in the pre- 
   
   5 vious subparagraph) who— 
   
   6 ‘‘(i) are 19 years of age or older; and 
   
   7 ‘‘(ii) are eligible for medical assistance 
   
   8 under this title on the basis of being blind 
   
   9 or disabled. 
   
   10 ‘‘(C) CHILDREN.—A category of 1903A 
   
   11 enrollees (not described in a previous subpara- 
   
   12 graph) who are children under 19 years of age. 
   
   13 ‘‘(D) EXPANSION ENROLLEES.—A cat- 
   
   14 egory of 1903A enrollees (not described in a 
   
   15 previous subparagraph) who are eligible for 
   
   16 medical assistance under this title only on the 
   
   17 basis of clause (i)(VIII), (ii)(XX), or 
   
   18 (ii)(XXIII) of section 1902(a)(10)(A). 
   
   19 ‘‘(E) OTHER NONELDERLY, NONDISABLED, 
   
   20 NON-EXPANSION ADULTS.—A category of 
   
   21 1903A enrollees who are not described in any 
   
   22 previous subparagraph. 
   
   23 ‘‘(3) MEDICAID ENROLLEE.—The term ‘Med- 
   
   24 icaid enrollee’ means, with respect to a State for a 
   
   25 month, an individual who is eligible for medical as- 
   
   78 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 sistance for items or services under this title and en- 
   
   2 rolled under the State plan (or a waiver of such 
   
   3 plan) under this title for the month. 
   
   4 ‘‘(4) DETERMINATION OF NUMBER OF 1903A 
   
   5 ENROLLEES.—The number of 1903A enrollees for a 
   
   6 State and fiscal year or the State’s per capita base 
   
   7 period, and, if applicable, for a 1903A enrollee cat- 
   
   8 egory, is the average monthly number of Medicaid 
   
   9 enrollees for such State and fiscal year or base pe- 
   
   10 riod (and, if applicable, in such category) that are 
   
   11 reported through the CMS–64 report under (and 
   
   12 subject to audit under) subsection (h). 
   
   13 ‘‘(f) SPECIAL PAYMENT RULES.— 
   
   14 ‘‘(1) APPLICATION IN CASE OF RESEARCH AND 
   
   15 DEMONSTRATION PROJECTS AND OTHER WAIVERS.— 
   
   16 In the case of a State with a waiver of the State 
   
   17 plan approved under section 1115, section 1915, or 
   
   18 another provision of this title, this section shall 
   
   19 apply to medical assistance expenditures and medical 
   
   20 assistance payments under the waiver, in the same 
   
   21 manner as if such expenditures and payments had 
   
   22 been made under a State plan under this title and 
   
   23 the limitations on expenditures under this section 
   
   24 shall supersede any other payment limitations or 
   
   25 provisions (including limitations based on a per cap- 
   
   79 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ita limitation) otherwise applicable under such a 
   
   2 waiver. 
   
   3 ‘‘(2) TREATMENT OF STATES EXPANDING COV- 
   
   4 ERAGE AFTER FISCAL YEAR 2016.—In the case of a 
   
   5 State that did not provide for medical assistance for 
   
   6 the 1903A enrollee category described in subsection 
   
   7 (e)(2)(D) during fiscal year 2016 but which provides 
   
   8 for such assistance for such category in a subse- 
   
   9 quent year, the provisional FY19 per capita target 
   
   10 amount for such enrollee category under subsection 
   
   11 (d)(5) shall be equal to the provisional FY19 per 
   
   12 capita target amount for the 1903A enrollee cat- 
   
   13 egory described in subsection (e)(2)(E). 
   
   14 ‘‘(3) IN CASE OF STATE FAILURE TO REPORT 
   
   15 NECESSARY DATA.—If a State for any quarter in a 
   
   16 fiscal year (beginning with fiscal year 2019) fails to 
   
   17 satisfactorily submit data on expenditures and en- 
   
   18 rollees in accordance with subsection (h)(1), for such 
   
   19 fiscal year and any succeeding fiscal year for which 
   
   20 such data are not satisfactorily submitted— 
   
   21 ‘‘(A) the Secretary shall calculate and 
   
   22 apply subsections (a) through (e) with respect 
   
   23 to the State as if all 1903A enrollee categories 
   
   24 for which such expenditure and enrollee data 
   
   80 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 were not satisfactorily submitted were a single 
   
   2 1903A enrollee category; and 
   
   3 ‘‘(B) the growth factor otherwise applied 
   
   4 under subsection (c)(2)(B) shall be decreased 
   
   5 by 1 percentage point. 
   
   6 ‘‘(g) RECALCULATION OF CERTAIN AMOUNTS FOR 
   
   7 DATA ERRORS.—The amounts and percentage calculated 
   
   8 under paragraphs (1) and (4)(C) of subsection (d) for a 
   
   9 State for the State’s per capita base period, and the 
   
   10 amounts of the adjusted total medical assistance expendi- 
   
   11 tures calculated under subsection (b) and the number of 
   
   12 Medicaid enrollees and 1903A enrollees determined under 
   
   13 subsection (e)(4) for a State for the State’s per capita 
   
   14 base period, fiscal year 2019, and any subsequent fiscal 
   
   15 year, may be adjusted by the Secretary based upon an ap- 
   
   16 peal (filed by the State in such a form, manner, and time, 
   
   17 and containing such information relating to data errors 
   
   18 that support such appeal, as the Secretary specifies) that 
   
   19 the Secretary determines to be valid, except that any ad- 
   
   20 justment by the Secretary under this subsection for a 
   
   21 State may not result in an increase of the target total 
   
   22 medical assistance expenditures exceeding 2 percent. 
   
   23 ‘‘(h) REQUIRED REPORTING AND AUDITING; TRANSI- 
   
   24 TIONAL INCREASE IN FEDERAL MATCHING PERCENTAGE 
   
   25 FOR CERTAIN ADMINISTRATIVE EXPENSES.— 
   
   81 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(1) REPORTING OF CMS–64 DATA.— 
   
   2 ‘‘(A) IN GENERAL.—In addition to the 
   
   3 data required on form Group VIII on the CMS– 
   
   4 64 report form as of January 1, 2017, in each 
   
   5 CMS-64 report required to be submitted (for 
   
   6 each quarter beginning on or after October 1, 
   
   7 2018), the State shall include data on medical 
   
   8 assistance expenditures within such categories 
   
   9 of services and categories of enrollees (including 
   
   10 each 1903A enrollee category and each category 
   
   11 of excluded individuals under subsection (e)(1)) 
   
   12 and the numbers of enrollees within each of 
   
   13 such enrollee categories, as the Secretary deter- 
   
   14 mines are necessary (including timely guidance 
   
   15 published as soon as possible after the date of 
   
   16 the enactment of this section) in order to imple- 
   
   17 ment this section and to enable States to com- 
   
   18 ply with the requirement of this paragraph on 
   
   19 a timely basis. 
   
   20 ‘‘(B) REPORTING ON QUALIFIED INPA- 
   
   21 TIENT PSYCHIATRIC HOSPITAL SERVICES.—Not 
   
   22 later than 60 days after the date of the enact- 
   
   23 ment of this section, the Secretary shall modify 
   
   24 the CMS–64 report form to require that States 
   
   25 submit data with respect to medical assistance 
   
   82 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 expenditures for qualified inpatient psychiatric 
   
   2 hospital services (as defined in section 
   
   3 1905(h)(3)). 
   
   4 ‘‘(C) REPORTING ON CHILDREN WITH 
   
   5 COMPLEX MEDICAL CONDITIONS.—Not later 
   
   6 than January 1, 2020, the Secretary shall mod- 
   
   7 ify the CMS–64 report form to require that 
   
   8 States submit data with respect to individuals 
   
   9 who— 
   
   10 ‘‘(i) are enrolled in a State plan under 
   
   11 this title or title XXI or under a waiver of 
   
   12 such plan; 
   
   13 ‘‘(ii) are under 21 years of age; and 
   
   14 ‘‘(iii) have a chronic medical condition 
   
   15 or serious injury that— 
   
   16 ‘‘(I) affects two or more body 
   
   17 systems; 
   
   18 ‘‘(II) affects cognitive or physical 
   
   19 functioning (such as reducing the abil- 
   
   20 ity to perform the activities of daily 
   
   21 living, including the ability to engage 
   
   22 in movement or mobility, eat, drink, 
   
   23 communicate, or breathe independ- 
   
   24 ently); and 
   
   25 ‘‘(III) either— 
   
   83 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(aa) requires intensive 
   
   2 healthcare interventions (such as 
   
   3 multiple medications, therapies, 
   
   4 or durable medical equipment) 
   
   5 and intensive care coordination to 
   
   6 optimize health and avoid hos- 
   
   7 pitalizations or emergency de- 
   
   8 partment visits; or 
   
   9 ‘‘(bb) meets the criteria for 
   
   10 medical complexity under existing 
   
   11 risk adjustment methodologies 
   
   12 using a recognized, publicly avail- 
   
   13 able pediatric grouping system 
   
   14 (such as the pediatric complex 
   
   15 conditions classification system 
   
   16 or the Pediatric Medical Com- 
   
   17 plexity Algorithm) selected by the 
   
   18 Secretary in close collaboration 
   
   19 with the State agencies respon- 
   
   20 sible for administering State 
   
   21 plans under this title and a na- 
   
   22 tional panel of pediatric, pedi- 
   
   23 atric specialty, and pediatric sub- 
   
   24 specialty experts. 
   
   84 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(2) AUDITING OF CMS–64 DATA.—The Sec- 
   
   2 retary shall conduct for each State an audit of the 
   
   3 number of individuals and expenditures reported 
   
   4 through the CMS–64 report for the State’s per cap- 
   
   5 ita base period, fiscal year 2019, and each subse- 
   
   6 quent fiscal year, which audit may be conducted on 
   
   7 a representative sample (as determined by the Sec- 
   
   8 retary). 
   
   9 ‘‘(3) AUDITING OF STATE SPENDING.—The In- 
   
   10 spector General of the Department of Health and 
   
   11 Human Services shall conduct an audit (which shall 
   
   12 be conducted using random sampling, as determined 
   
   13 by the Inspector General) of each State’s spending 
   
   14 under this section not less than once every 3 years. 
   
   15 ‘‘(4) TEMPORARY INCREASE IN FEDERAL 
   
   16 MATCHING PERCENTAGE TO SUPPORT IMPROVED 
   
   17 DATA REPORTING SYSTEMS FOR FISCAL YEARS 2018 
   
   18 AND 2019.—In the case of any State that selects as 
   
   19 its per capita base period the most recent 8 consecu- 
   
   20 tive quarter period for which the data necessary to 
   
   21 make the determinations required under this section 
   
   22 is available, for amounts expended during calendar 
   
   23 quarters beginning on or after October 1, 2017, and 
   
   24 before October 1, 2019— 
   
   85 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(A) the Federal matching percentage ap- 
   
   2 plied under section 1903(a)(3)(A)(i) shall be in- 
   
   3 creased by 10 percentage points to 100 percent; 
   
   4 ‘‘(B) the Federal matching percentage ap- 
   
   5 plied under section 1903(a)(3)(B) shall be in- 
   
   6 creased by 25 percentage points to 100 percent; 
   
   7 and 
   
   8 ‘‘(C) the Federal matching percentage ap- 
   
   9 plied under section 1903(a)(7) shall be in- 
   
   10 creased by 10 percentage points to 60 percent 
   
   11 but only with respect to amounts expended that 
   
   12 are attributable to a State’s additional adminis- 
   
   13 trative expenditures to implement the data re- 
   
   14 quirements of paragraph (1). 
   
   15 ‘‘(5) HHS REPORT ON ADOPTION OF T–MSIS 
   
   16 DATA.—Not later than January 1, 2025, the Sec- 
   
   17 retary shall submit to Congress a report making rec- 
   
   18 ommendations as to whether data from the Trans- 
   
   19 formed Medicaid Statistical Information System 
   
   20 would be preferable to CMS–64 report data for pur- 
   
   21 poses of making the determinations necessary under 
   
   22 this section.’’. 
   
   86 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 SEC. 134. FLEXIBLE BLOCK GRANT OPTION FOR STATES. 
   
   2 Title XIX of the Social Security Act, as amended by 
   
   3 section 133, is further amended by inserting after section 
   
   4 1903A the following new section: 
   
   5 ‘‘SEC. 1903B. MEDICAID FLEXIBILITY PROGRAM. 
   
   6 ‘‘(a) IN GENERAL.—Beginning with fiscal year 2020, 
   
   7 any State (as defined in subsection (e)) that has an appli- 
   
   8 cation approved by the Secretary under subsection (b) 
   
   9 may conduct a Medicaid Flexibility Program to provide 
   
   10 targeted health assistance to program enrollees. 
   
   11 ‘‘(b) STATE APPLICATION.— 
   
   12 ‘‘(1) IN GENERAL.—To be eligible to conduct a 
   
   13 Medicaid Flexibility Program, a State shall submit 
   
   14 an application to the Secretary that meets the re- 
   
   15 quirements of this subsection. 
   
   16 ‘‘(2) CONTENTS OF APPLICATION.—An applica- 
   
   17 tion under this subsection shall include the fol- 
   
   18 lowing: 
   
   19 ‘‘(A) A description of the proposed Med- 
   
   20 icaid Flexibility Program and how the State will 
   
   21 satisfy the requirements described in subsection 
   
   22 (d). 
   
   23 ‘‘(B) The proposed conditions for eligibility 
   
   24 of program enrollees. 
   
   25 ‘‘(C) A description of the types, amount, 
   
   26 duration, and scope of services which will be of- 
   
   87 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 fered as targeted health assistance under the 
   
   2 program, including a description of the pro- 
   
   3 posed package of services which will be provided 
   
   4 to program enrollees to whom the State would 
   
   5 otherwise be required to make medical assist- 
   
   6 ance available under section 1902(a)(10)(A)(i). 
   
   7 ‘‘(D) A description of how the State will 
   
   8 notify individuals currently enrolled in the State 
   
   9 plan for medical assistance under this title of 
   
   10 the transition to such program. 
   
   11 ‘‘(E) Statements certifying that the State 
   
   12 agrees to— 
   
   13 ‘‘(i) submit regular enrollment data 
   
   14 with respect to the program to the Centers 
   
   15 for Medicare & Medicaid Services at such 
   
   16 time and in such manner as the Secretary 
   
   17 may require; 
   
   18 ‘‘(ii) submit timely and accurate data 
   
   19 to the Transformed Medicaid Statistical 
   
   20 Information System (T–MSIS); 
   
   21 ‘‘(iii) report annually to the Secretary 
   
   22 on adult health quality measures imple- 
   
   23 mented under the program and informa- 
   
   24 tion on the quality of health care furnished 
   
   25 to program enrollees under the program as 
   
   88 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 part of the annual report required under 
   
   2 section 1139B(d)(1); 
   
   3 ‘‘(iv) submit such additional informa- 
   
   4 tion not described in any of the preceding 
   
   5 clauses of this subparagraph but which the 
   
   6 Secretary determines is necessary for mon- 
   
   7 itoring, evaluation, or program integrity 
   
   8 purposes, including— 
   
   9 ‘‘(I) survey data, such as the 
   
   10 data from Consumer Assessment of 
   
   11 Healthcare Providers and Systems 
   
   12 (CAHPS) surveys; 
   
   13 ‘‘(II) birth certificate data; and 
   
   14 ‘‘(III) clinical patient data for 
   
   15 quality measurements which may not 
   
   16 be present in a claim, such as labora- 
   
   17 tory data, body mass index, and blood 
   
   18 pressure; and 
   
   19 ‘‘(v) on an annual basis, conduct a re- 
   
   20 port evaluating the program and make 
   
   21 such report available to the public. 
   
   22 ‘‘(F) An information technology systems 
   
   23 plan demonstrating that the State has the capa- 
   
   24 bility to support the technological administra- 
   
   89 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 tion of the program and comply with reporting 
   
   2 requirements under this section. 
   
   3 ‘‘(G) A statement of the goals of the pro- 
   
   4 posed program, which shall include— 
   
   5 ‘‘(i) goals related to quality, access, 
   
   6 rate of growth targets, consumer satisfac- 
   
   7 tion, and outcomes; 
   
   8 ‘‘(ii) a plan for monitoring and evalu- 
   
   9 ating the program to determine whether 
   
   10 such goals are being met; and 
   
   11 ‘‘(iii) a proposed process for the State, 
   
   12 in consultation with the Centers for Medi- 
   
   13 care & Medicaid Services, to take remedial 
   
   14 action to make progress on unmet goals. 
   
   15 ‘‘(H) Such other information as the Sec- 
   
   16 retary may require. 
   
   17 ‘‘(3) STATE NOTICE AND COMMENT PERIOD.— 
   
   18 ‘‘(A) IN GENERAL.—Before submitting an 
   
   19 application under this subsection, a State shall 
   
   20 make the application publicly available for a 30 
   
   21 day notice and comment period. 
   
   22 ‘‘(B) NOTICE AND COMMENT PROCESS.— 
   
   23 During the notice and comment period de- 
   
   24 scribed in subparagraph (A), the State shall 
   
   25 provide opportunities for a meaningful level of 
   
   90 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 public input, which shall include public hearings 
   
   2 on the proposed Medicaid Flexibility Program. 
   
   3 ‘‘(4) FEDERAL NOTICE AND COMMENT PE- 
   
   4 RIOD.—The Secretary shall not approve of any ap- 
   
   5 plication to conduct a Medicaid Flexibility Program 
   
   6 without making such application publicly available 
   
   7 for a 30 day notice and comment period. 
   
   8 ‘‘(5) TIMELINE FOR SUBMISSION.— 
   
   9 ‘‘(A) IN GENERAL.—A State may submit 
   
   10 an application under this subsection to conduct 
   
   11 a Medicaid Flexibility Program that would 
   
   12 begin in the next fiscal year at any time, sub- 
   
   13 ject to subparagraph (B). 
   
   14 ‘‘(B) DEADLINES.—Each year beginning 
   
   15 with 2019, the Secretary shall specify a dead- 
   
   16 line for submitting an application under this 
   
   17 subsection to conduct a Medicaid Flexibility 
   
   18 Program that would begin in the next fiscal 
   
   19 year, but such deadline shall not be earlier than 
   
   20 60 days after the date that the Secretary pub- 
   
   21 lishes the amounts of State block grants as re- 
   
   22 quired under subsection (c)(4). 
   
   23 ‘‘(c) FINANCING.— 
   
   24 ‘‘(1) IN GENERAL.—For each fiscal year during 
   
   25 which a State is conducting a Medicaid Flexibility 
   
   91 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 Program, the State shall receive, instead of amounts 
   
   2 otherwise payable to the State under this title for 
   
   3 medical assistance for program enrollees, the 
   
   4 amount specified in paragraph (3)(A). 
   
   5 ‘‘(2) AMOUNT OF BLOCK GRANT FUNDS.— 
   
   6 ‘‘(A) FOR INITIAL YEAR.—Subject to sub- 
   
   7 paragraph (C), for the first fiscal year in which 
   
   8 a State conducts a Medicaid Flexibility Pro- 
   
   9 gram, the block grant amount under this para- 
   
   10 graph for the State and year shall be equal to 
   
   11 the Federal average medical assistance match- 
   
   12 ing percentage (as defined in section 
   
   13 1903A(a)(4)) for the State and year multiplied 
   
   14 by the product of— 
   
   15 ‘‘(i) the target per capita medical as- 
   
   16 sistance expenditures (as defined in section 
   
   17 1903A(c)(2)) for the State and year for 
   
   18 the enrollee category described in section 
   
   19 1903A(e)(2)(E); and 
   
   20 ‘‘(ii) the number of 1903A enrollees in 
   
   21 such category for the State for the second 
   
   22 fiscal year preceding such first fiscal year, 
   
   23 increased by the percentage increase in 
   
   24 State population from such second pre- 
   
   25 ceding fiscal year to such first fiscal year, 
   
   92 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 based on the best available estimates of the 
   
   2 Bureau of the Census. 
   
   3 ‘‘(B) FOR ANY SUBSEQUENT YEAR.—For 
   
   4 any fiscal year that is not the first fiscal year 
   
   5 in which a State conducts a Medicaid Flexibility 
   
   6 Program, the block grant amount under this 
   
   7 paragraph for the State and year shall be equal 
   
   8 to the block grant amount determined for the 
   
   9 State for the most recent previous fiscal year in 
   
   10 which the State conducted a Medicaid Flexi- 
   
   11 bility Program, except that such amount shall 
   
   12 be increased by the percentage increase in the 
   
   13 consumer price index for all urban consumers 
   
   14 (U.S. city average) from April of the second fis- 
   
   15 cal year preceding the fiscal year involved to 
   
   16 April of the fiscal year preceding the fiscal year 
   
   17 involved. 
   
   18 ‘‘(C) CAP ON TOTAL POPULATION OF 1903A 
   
   19 ENROLLEES FOR PURPOSES OF BLOCK GRANT 
   
   20 CALCULATION.— 
   
   21 ‘‘(i) IN GENERAL.—In calculating the 
   
   22 amount of a block grant for the first year 
   
   23 in which a State conducts a Medicaid 
   
   24 Flexibility Program under subparagraph 
   
   25 (A), the total number of 1903A enrollees 
   
   93 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 in the 1903A enrollee category described in 
   
   2 section 1903A(e)(2)(E) for the State and 
   
   3 year shall not exceed the adjusted number 
   
   4 of base period non-expansion enrollees for 
   
   5 the State (as defined in clause (ii)). 
   
   6 ‘‘(ii) ADJUSTED NUMBER OF 2016 
   
   7 NON-EXPANSION ENROLLEES.—The term 
   
   8 ‘adjusted number of base period non-ex- 
   
   9 pansion enrollees’ means, with respect to a 
   
   10 State, the number of 1903A enrollees in 
   
   11 the enrollee category described in section 
   
   12 1903A(e)(2)(E) for the State for the 
   
   13 State’s per capita base period (as deter- 
   
   14 mined under section 1903A(e)(4)), in- 
   
   15 creased by the percentage increase, if any, 
   
   16 in the total State population from the last 
   
   17 April in the State’s per capita base period 
   
   18 to April of the fiscal year preceding the fis- 
   
   19 cal year involved (determined using the 
   
   20 best available data from the Bureau of the 
   
   21 Census) plus 3 percentage points. 
   
   22 ‘‘(D) AVAILABILITY OF ROLLOVER 
   
   23 FUNDS.— 
   
   24 ‘‘(i) IN GENERAL.—To the extent that 
   
   25 the block grant amount available to a 
   
   94 
   
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   1 State for a fiscal year under this para- 
   
   2 graph exceeds the amount of Federal pay- 
   
   3 ments made to the State for such fiscal 
   
   4 year under paragraph (3)(A), the Sec- 
   
   5 retary shall make such funds available to 
   
   6 the State for the succeeding fiscal year if 
   
   7 the State— 
   
   8 ‘‘(I) satisfies the State mainte- 
   
   9 nance of effort requirement under 
   
   10 paragraph (3)(B); and 
   
   11 ‘‘(II) is conducting a Medicaid 
   
   12 Flexibility Program in such suc- 
   
   13 ceeding fiscal year. 
   
   14 ‘‘(ii) USE OF FUNDS.—Section 
   
   15 1903(i)(17) shall not apply to funds made 
   
   16 available to a State under this subpara- 
   
   17 graph and a State may use such funds for 
   
   18 other State health programs (as defined or 
   
   19 approved by the Secretary) or for any 
   
   20 other purpose which is consistent with the 
   
   21 quality standards established by the Sec- 
   
   22 retary under clause (iii). 
   
   23 ‘‘(iii) QUALITY STANDARDS.— 
   
   24 ‘‘(I) IN GENERAL.—Not later 
   
   25 than January 1, 2020, the Secretary 
   
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   1 shall establish quality standards appli- 
   
   2 cable to a State’s use of funds made 
   
   3 available to the State under this sub- 
   
   4 paragraph. 
   
   5 ‘‘(II) ALLOWABLE USES.—In es- 
   
   6 tablishing quality standards under 
   
   7 this clause, the Secretary shall not 
   
   8 prohibit a State from using such 
   
   9 funds for— 
   
   10 ‘‘(aa) a program that is not 
   
   11 related to health care, provided 
   
   12 that using the funds for such 
   
   13 program is otherwise consistent 
   
   14 with the standards; or 
   
   15 ‘‘(bb) the State maintenance 
   
   16 of effort expenditures required 
   
   17 under paragraph (3)(B). 
   
   18 ‘‘(3) FEDERAL PAYMENT AND STATE MAINTE- 
   
   19 NANCE OF EFFORT.— 
   
   20 ‘‘(A) FEDERAL PAYMENT.—Subject to sub- 
   
   21 paragraph (D), the Secretary shall pay to each 
   
   22 State conducting a Medicaid Flexibility Pro- 
   
   23 gram under this section for a fiscal year, from 
   
   24 its block grant amount under paragraph (2) for 
   
   25 such year, an amount for each quarter of such 
   
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   1 year equal to the Federal average medical as- 
   
   2 sistance percentage (as defined in section 
   
   3 1903A(a)(4)) of the total amount expended 
   
   4 under the program during such quarter, and 
   
   5 the State is responsible for the balance of the 
   
   6 funds to carry out such program. 
   
   7 ‘‘(B) STATE MAINTENANCE OF EFFORT 
   
   8 EXPENDITURES.—For each year during which a 
   
   9 State is conducting a Medicaid Flexibility Pro- 
   
   10 gram, the State shall make expenditures for 
   
   11 targeted health assistance under the program in 
   
   12 an amount equal to the product of— 
   
   13 ‘‘(i) the block grant amount deter- 
   
   14 mined for the State and year under para- 
   
   15 graph (2); and 
   
   16 ‘‘(ii) the enhanced FMAP described in 
   
   17 the first sentence of section 2105(b) for 
   
   18 the State and year. 
   
   19 ‘‘(C) REDUCTION IN BLOCK GRANT 
   
   20 AMOUNT FOR STATES FAILING TO MEET MOE 
   
   21 REQUIREMENT.— 
   
   22 ‘‘(i) IN GENERAL.—In the case of a 
   
   23 State conducting a Medicaid Flexibility 
   
   24 Program that makes expenditures for tar- 
   
   25 geted health assistance under the program 
   
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   1 for a fiscal year in an amount that is less 
   
   2 than the required amount for the fiscal 
   
   3 year under subparagraph (B), the amount 
   
   4 of the block grant determined for the State 
   
   5 under paragraph (2) for the succeeding fis- 
   
   6 cal year shall be reduced by the amount by 
   
   7 which such expenditures are less than such 
   
   8 required amount. 
   
   9 ‘‘(ii) DISREGARD OF REDUCTION.— 
   
   10 For purposes of determining the amount of 
   
   11 a State block grant under paragraph (2), 
   
   12 any reduction made under this subpara- 
   
   13 graph to a State’s block grant amount in 
   
   14 a previous fiscal year shall be disregarded. 
   
   15 ‘‘(iii) APPLICATION TO STATES THAT 
   
   16 TERMINATE PROGRAM.—In the case of a 
   
   17 State described in clause (i) that termi- 
   
   18 nates the State Medicaid Flexibility Pro- 
   
   19 gram under subsection (d)(2)(B) and such 
   
   20 termination is effective with the end of the 
   
   21 fiscal year in which the State fails to make 
   
   22 the required amount of expenditures under 
   
   23 subparagraph (B), the reduction amount 
   
   24 determined for the State and succeeding 
   
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   1 fiscal year under clause (i) shall be treated 
   
   2 as an overpayment under this title. 
   
   3 ‘‘(D) REDUCTION FOR NONCOMPLIANCE.— 
   
   4 If the Secretary determines that a State con- 
   
   5 ducting a Medicaid Flexibility Program is not 
   
   6 complying with the requirements of this section, 
   
   7 the Secretary may withhold payments, reduce 
   
   8 payments, or recover previous payments to the 
   
   9 State under this section as the Secretary deems 
   
   10 appropriate. 
   
   11 ‘‘(4) DETERMINATION AND PUBLICATION OF 
   
   12 BLOCK GRANT AMOUNT.—Beginning in 2019 and 
   
   13 each year thereafter, the Secretary shall determine 
   
   14 for each State, regardless of whether the State is 
   
   15 conducting a Medicaid Flexibility Program or has 
   
   16 submitted an application to conduct such a program, 
   
   17 the amount of the block grant for the State under 
   
   18 paragraph (2) which would apply for the upcoming 
   
   19 fiscal year if the State were to conduct such a pro- 
   
   20 gram in such fiscal year, and shall publish such de- 
   
   21 terminations not later than June 1 of each year. 
   
   22 ‘‘(d) PROGRAM REQUIREMENTS.— 
   
   23 ‘‘(1) IN GENERAL.—No payment shall be made 
   
   24 under this section to a State conducting a Medicaid 
   
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   1 Flexibility Program unless such program meets the 
   
   2 requirements of this subsection. 
   
   3 ‘‘(2) TERM OF PROGRAM.— 
   
   4 ‘‘(A) IN GENERAL.—A State Medicaid 
   
   5 Flexibility Program approved under subsection 
   
   6 (b)— 
   
   7 ‘‘(i) shall be conducted for not less 
   
   8 than 1 program period; 
   
   9 ‘‘(ii) at the option of the State, may 
   
   10 be continued for succeeding program peri- 
   
   11 ods without resubmitting an application 
   
   12 under subsection (b), provided that— 
   
   13 ‘‘(I) the State provides notice to 
   
   14 the Secretary of its decision to con- 
   
   15 tinue the program; and 
   
   16 ‘‘(II) no significant changes are 
   
   17 made to the program; and 
   
   18 ‘‘(iii) shall be subject to termination 
   
   19 only by the State, which may terminate the 
   
   20 program by making an election under sub- 
   
   21 paragraph (B). 
   
   22 ‘‘(B) ELECTION TO TERMINATE PRO- 
   
   23 GRAM.— 
   
   24 ‘‘(i) IN GENERAL.—Subject to clause 
   
   25 (ii), a State conducting a Medicaid Flexi- 
   
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   1 bility Program may elect to terminate the 
   
   2 program effective with the first day after 
   
   3 the end of the program period in which the 
   
   4 State makes the election. 
   
   5 ‘‘(ii) TRANSITION PLAN REQUIRE- 
   
   6 MENT.—A State may not elect to termi- 
   
   7 nate a Medicaid Flexibility Program unless 
   
   8 the State has in place an appropriate tran- 
   
   9 sition plan approved by the Secretary. 
   
   10 ‘‘(iii) EFFECT OF TERMINATION.—If a 
   
   11 State elects to terminate a Medicaid Flexi- 
   
   12 bility Program, the per capita cap limita- 
   
   13 tions under section 1903A shall apply ef- 
   
   14 fective with the day described in clause (i), 
   
   15 and such limitations shall be applied as if 
   
   16 the State had never conducted a Medicaid 
   
   17 Flexibility Program. 
   
   18 ‘‘(3) PROVISION OF TARGETED HEALTH ASSIST- 
   
   19 ANCE.— 
   
   20 ‘‘(A) IN GENERAL.—A State Medicaid 
   
   21 Flexibility Program shall provide targeted 
   
   22 health assistance to program enrollees and such 
   
   23 assistance shall be instead of medical assistance 
   
   24 which would otherwise be provided to the enroll- 
   
   25 ees under this title. 
   
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   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(B) CONDITIONS FOR ELIGIBILITY.— 
   
   2 ‘‘(i) IN GENERAL.—A State con- 
   
   3 ducting a Medicaid Flexibility Program 
   
   4 shall establish conditions for eligibility of 
   
   5 program enrollees, which shall be instead 
   
   6 of other conditions for eligibility under this 
   
   7 title, except that the program must provide 
   
   8 for eligibility for program enrollees to 
   
   9 whom the State would otherwise be re- 
   
   10 quired to make medical assistance available 
   
   11 under section 1902(a)(10)(A)(i). 
   
   12 ‘‘(ii) MAGI.—Any determination of 
   
   13 income necessary to establish the eligibility 
   
   14 of a program enrollee for purposes of a 
   
   15 State Medicaid Flexibility Program shall 
   
   16 be made using modified adjusted gross in- 
   
   17 come in accordance with section 
   
   18 1902(e)(14). 
   
   19 ‘‘(4) BENEFITS AND SERVICES.— 
   
   20 ‘‘(A) REQUIRED SERVICES.—In the case of 
   
   21 program enrollees to whom the State would oth- 
   
   22 erwise be required to make medical assistance 
   
   23 available under section 1902(a)(10)(A)(i), a 
   
   24 State conducting a Medicaid Flexibility Pro- 
   
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   ERN17282 Discussion Draft S.L.C. 
   
   1 gram shall provide as targeted health assistance 
   
   2 the following types of services: 
   
   3 ‘‘(i) Inpatient and outpatient hospital 
   
   4 services. 
   
   5 ‘‘(ii) Laboratory and X-ray services. 
   
   6 ‘‘(iii) Nursing facility services for indi- 
   
   7 viduals aged 21 and older. 
   
   8 ‘‘(iv) Physician services. 
   
   9 ‘‘(v) Home health care services (in- 
   
   10 cluding home nursing services, medical 
   
   11 supplies, equipment, and appliances). 
   
   12 ‘‘(vi) Rural health clinic services (as 
   
   13 defined in section 1905(l)(1)). 
   
   14 ‘‘(vii) Federally-qualified health center 
   
   15 services (as defined in section 1905(l)(2)). 
   
   16 ‘‘(viii) Family planning services and 
   
   17 supplies. 
   
   18 ‘‘(ix) Nurse midwife services. 
   
   19 ‘‘(x) Certified pediatric and family 
   
   20 nurse practitioner services. 
   
   21 ‘‘(xi) Freestanding birth center serv- 
   
   22 ices (as defined in section 1905(l)(3)). 
   
   23 ‘‘(xii) Emergency medical transpor- 
   
   24 tation. 
   
   25 ‘‘(xiii) Non-cosmetic dental services. 
   
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   1 ‘‘(xiv) Pregnancy-related services, in- 
   
   2 cluding postpartum services for the 12- 
   
   3 week period beginning on the last day of a 
   
   4 pregnancy. 
   
   5 ‘‘(B) OPTIONAL BENEFITS.—A State may, 
   
   6 at its option, provide services in addition to the 
   
   7 services described in subparagraph (A) as tar- 
   
   8 geted health assistance under a Medicaid Flexi- 
   
   9 bility Program. 
   
   10 ‘‘(C) BENEFIT PACKAGES.— 
   
   11 ‘‘(i) IN GENERAL.—The targeted 
   
   12 health assistance provided by a State to 
   
   13 any group of program enrollees under a 
   
   14 Medicaid Flexibility Program shall have an 
   
   15 aggregate actuarial value that is equal to 
   
   16 at least 95 percent of the aggregate actu- 
   
   17 arial value of the benchmark coverage de- 
   
   18 scribed in subsection (b)(1) of section 1937 
   
   19 or benchmark-equivalent coverage de- 
   
   20 scribed in subsection (b)(2) of such sec- 
   
   21 tion, as such subsections were in effect 
   
   22 prior to the enactment of the Patient Pro- 
   
   23 tection and Affordable Care Act. 
   
   24 ‘‘(ii) AMOUNT, DURATION, AND SCOPE 
   
   25 OF BENEFITS.—Subject to clause (i), the 
   
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   1 State shall determine the amount, dura- 
   
   2 tion, and scope with respect to services 
   
   3 provided as targeted health assistance 
   
   4 under a Medicaid Flexibility Program, in- 
   
   5 cluding with respect to services that are re- 
   
   6 quired to be provided to certain program 
   
   7 enrollees under subparagraph (A) except 
   
   8 as otherwise provided under such subpara- 
   
   9 graph. 
   
   10 ‘‘(iii) MENTAL HEALTH AND SUB- 
   
   11 STANCE USE DISORDER COVERAGE AND 
   
   12 PARITY.—The targeted health assistance 
   
   13 provided by a State to program enrollees 
   
   14 under a Medicaid Flexibility Program shall 
   
   15 include mental health services and sub- 
   
   16 stance use disorder services and the finan- 
   
   17 cial requirements and treatment limitations 
   
   18 applicable to such services under the pro- 
   
   19 gram shall comply with the requirements 
   
   20 of section 2726 of the Public Health Serv- 
   
   21 ice Act in the same manner as such re- 
   
   22 quirements apply to a group health plan. 
   
   23 ‘‘(iv) PRESCRIPTION DRUGS.—If the 
   
   24 targeted health assistance provided by a 
   
   25 State to program enrollees under a Med- 
   
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   1 icaid Flexibility Program includes assist- 
   
   2 ance for covered outpatient drugs, such 
   
   3 drugs shall be subject to a rebate agree- 
   
   4 ment that complies with the requirements 
   
   5 of section 1927, and any requirements ap- 
   
   6 plicable to medical assistance for covered 
   
   7 outpatient drugs under a State plan (in- 
   
   8 cluding the requirement that the State pro- 
   
   9 vide information to a manufacturer) shall 
   
   10 apply in the same manner to targeted 
   
   11 health assistance for covered outpatient 
   
   12 drugs under a Medicaid Flexibility Pro- 
   
   13 gram. 
   
   14 ‘‘(D) COST SHARING.—A State conducting 
   
   15 a Medicaid Flexibility Program may impose 
   
   16 premiums, deductibles, cost-sharing, or other 
   
   17 similar charges, except that the total annual ag- 
   
   18 gregate amount of all such charges imposed 
   
   19 with respect to all program enrollees in a family 
   
   20 shall not exceed 5 percent of the family’s in- 
   
   21 come for the year involved. 
   
   22 ‘‘(5) ADMINISTRATION OF PROGRAM.—Each 
   
   23 State conducting a Medicaid Flexibility Program 
   
   24 shall do the following: 
   
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   1 ‘‘(A) SINGLE AGENCY.—Designate a single 
   
   2 State agency responsible for administering the 
   
   3 program. 
   
   4 ‘‘(B) ENROLLMENT SIMPLIFICATION AND 
   
   5 COORDINATION WITH STATE HEALTH INSUR- 
   
   6 ANCE EXCHANGES.—Provide for simplified en- 
   
   7 rollment processes (such as online enrollment 
   
   8 and reenrollment and electronic verification) 
   
   9 and coordination with State health insurance 
   
   10 exchanges. 
   
   11 ‘‘(C) BENEFICIARY PROTECTIONS.—Estab- 
   
   12 lish a fair process (which the State shall de- 
   
   13 scribe in the application required under sub- 
   
   14 section (b)) for individuals to appeal adverse 
   
   15 eligibility determinations with respect to the 
   
   16 program. 
   
   17 ‘‘(6) APPLICATION OF REST OF TITLE XIX.— 
   
   18 ‘‘(A) IN GENERAL.—To the extent that a 
   
   19 provision of this section is inconsistent with an- 
   
   20 other provision of this title, the provision of this 
   
   21 section shall apply. 
   
   22 ‘‘(B) APPLICATION OF SECTION 1903A.— 
   
   23 With respect to a State that is conducting a 
   
   24 Medicaid Flexibility Program, section 1903A 
   
   25 shall be applied as if program enrollees were 
   
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   1 not 1903A enrollees for each program period 
   
   2 during which the State conducts the program. 
   
   3 ‘‘(C) WAIVERS AND STATE PLAN AMEND- 
   
   4 MENTS.— 
   
   5 ‘‘(i) IN GENERAL.—In the case of a 
   
   6 State conducting a Medicaid Flexibility 
   
   7 Program that has in effect a waiver or 
   
   8 State plan amendment, such waiver or 
   
   9 amendment shall not apply with respect to 
   
   10 the program, targeted health assistance 
   
   11 provided under the program, or program 
   
   12 enrollees. 
   
   13 ‘‘(ii) REPLICATION OF WAIVER OR 
   
   14 AMENDMENT.—In designing a Medicaid 
   
   15 Flexibility Program, a State may mirror 
   
   16 provisions of a waiver or State plan 
   
   17 amendment described in clause (i) in the 
   
   18 program to the extent that such provisions 
   
   19 are otherwise consistent with the require- 
   
   20 ments of this section. 
   
   21 ‘‘(iii) EFFECT OF TERMINATION.—In 
   
   22 the case of a State described in clause (i) 
   
   23 that terminates its program under sub- 
   
   24 section (d)(2)(B), any waiver or amend- 
   
   25 ment which was limited pursuant to sub- 
   
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   1 paragraph (A) shall cease to be so limited 
   
   2 effective with the effective date of such ter- 
   
   3 mination. 
   
   4 ‘‘(D) NONAPPLICATION OF PROVISIONS.— 
   
   5 With respect to the design and implementation 
   
   6 of Medicaid Flexibility Programs conducted 
   
   7 under this section, paragraphs (1), (10)(B), 
   
   8 (17), and (23) of section 1902(a), as well as 
   
   9 any other provision of this title (except for this 
   
   10 section and as otherwise provided by this sec- 
   
   11 tion) that the Secretary deems appropriate, 
   
   12 shall not apply. 
   
   13 ‘‘(e) DEFINITIONS.—For purposes of this section: 
   
   14 ‘‘(1) MEDICAID FLEXIBILITY PROGRAM.—The 
   
   15 term ‘Medicaid Flexibility Program’ means a State 
   
   16 program for providing targeted health assistance to 
   
   17 program enrollees funded by a block grant under 
   
   18 this section. 
   
   19 ‘‘(2) PROGRAM ENROLLEE.— 
   
   20 ‘‘(A) IN GENERAL.—The term ‘program 
   
   21 enrollee’ means, with respect to a State that is 
   
   22 conducting a Medicaid Flexibility Program, an 
   
   23 individual who is a 1903A enrollee (as defined 
   
   24 in section 1903A(e)(1)) who is in the 1903A 
   
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   1 enrollee category described in section 
   
   2 1903A(e)(2)(E). 
   
   3 ‘‘(B) RULE OF CONSTRUCTION.—For pur- 
   
   4 poses of section 1903A(e)(3), eligibility and en- 
   
   5 rollment of an individual under a Medicaid 
   
   6 Flexibility Program shall be deemed to be eligi- 
   
   7 bility and enrollment under a State plan (or 
   
   8 waiver of such plan) under this title. 
   
   9 ‘‘(3) PROGRAM PERIOD.—The term ‘program 
   
   10 period’ means, with respect to a State Medicaid 
   
   11 Flexibility Program, a period of 5 consecutive fiscal 
   
   12 years that begins with either— 
   
   13 ‘‘(A) the first fiscal year in which the State 
   
   14 conducts the program; or 
   
   15 ‘‘(B) the next fiscal year in which the 
   
   16 State conducts such a program that begins 
   
   17 after the end of a previous program period. 
   
   18 ‘‘(4) STATE.—The term ‘State’ means one of 
   
   19 the 50 States or the District of Columbia. 
   
   20 ‘‘(5) TARGETED HEALTH ASSISTANCE.—The 
   
   21 term ‘targeted health assistance’ means assistance 
   
   22 for health-care-related items and medical services for 
   
   23 program enrollees.’’. 
   
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   1 SEC. 135. MEDICAID AND CHIP QUALITY PERFORMANCE 
   
   2 BONUS PAYMENTS. 
   
   3 Section 1903 of the Social Security Act (42 U.S.C. 
   
   4 1396b) is amended by adding at the end the following new 
   
   5 subsection: 
   
   6 ‘‘(aa) QUALITY PERFORMANCE BONUS PAYMENTS.— 
   
   7 ‘‘(1) INCREASED FEDERAL SHARE.—With re- 
   
   8 spect to each of fiscal years 2023 through 2026, in 
   
   9 the case of one of the 50 States or the District of 
   
   10 Columbia (each referred to in this subsection as a 
   
   11 ‘State’) that— 
   
   12 ‘‘(A) equals or exceeds the qualifying 
   
   13 amount (as established by the Secretary) of 
   
   14 lower than expected aggregate medical assist- 
   
   15 ance expenditures (as defined in paragraph (4)) 
   
   16 for that fiscal year; and 
   
   17 ‘‘(B) submits to the Secretary, in accord- 
   
   18 ance with such manner and format as specified 
   
   19 by the Secretary and for the performance pe- 
   
   20 riod (as defined by the Secretary) for such fis- 
   
   21 cal year— 
   
   22 ‘‘(i) information on the applicable 
   
   23 quality measures identified under para- 
   
   24 graph (3) with respect to each category of 
   
   25 Medicaid eligible individuals under the 
   
   26 State plan or a waiver of such plan; and 
   
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   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(ii) a plan for spending a portion of 
   
   2 additional funds resulting from application 
   
   3 of this subsection on quality improvement 
   
   4 within the State plan under this title or 
   
   5 under a waiver of such plan, 
   
   6 the Federal matching percentage otherwise ap- 
   
   7 plied under subsection (a)(7) for such fiscal 
   
   8 year shall be increased by such percentage (as 
   
   9 determined by the Secretary) so that the aggre- 
   
   10 gate amount of the resulting increase pursuant 
   
   11 to this subsection for the State and fiscal year 
   
   12 does not exceed the State allotment established 
   
   13 under paragraph (2) for the State and fiscal 
   
   14 year. 
   
   15 ‘‘(2) ALLOTMENT DETERMINATION.—The Sec- 
   
   16 retary shall establish a formula for computing State 
   
   17 allotments under this paragraph for each fiscal year 
   
   18 described in paragraph (1) such that— 
   
   19 ‘‘(A) such an allotment to a State is deter- 
   
   20 mined based on the performance, including im- 
   
   21 provement, of such State under this title and 
   
   22 title XXI with respect to the quality measures 
   
   23 submitted under paragraph (3) by such State 
   
   24 for the performance period (as defined by the 
   
   25 Secretary) for such fiscal year; and 
   
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   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(B) the total of the allotments under this 
   
   2 paragraph for all States for the period of the 
   
   3 fiscal years described in paragraph (1) is equal 
   
   4 to $8,000,000,000. 
   
   5 ‘‘(3) QUALITY MEASURES REQUIRED FOR 
   
   6 BONUS PAYMENTS.—For purposes of this subsection, 
   
   7 the Secretary shall, pursuant to rulemaking and 
   
   8 after consultation with State agencies administering 
   
   9 State plans under this title, identify and publish 
   
   10 (and update as necessary) peer-reviewed quality 
   
   11 measures (which shall include health care and long- 
   
   12 term care outcome measures and may include the 
   
   13 quality measures that are overseen or developed by 
   
   14 the National Committee for Quality Assurance or 
   
   15 the Agency for Healthcare Research and Quality or 
   
   16 that are identified under section 1139A or 1139B) 
   
   17 that are quantifiable, objective measures that take 
   
   18 into account the clinically appropriate measures of 
   
   19 quality for different types of patient populations re- 
   
   20 ceiving benefits or services under this title or title 
   
   21 XXI. 
   
   22 ‘‘(4) LOWER THAN EXPECTED AGGREGATE 
   
   23 MEDICAL ASSISTANCE EXPENDITURES.—In this sub- 
   
   24 section, the term ‘lower than expected aggregate 
   
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   ERN17282 Discussion Draft S.L.C. 
   
   1 medical assistance expenditures’ means, with respect 
   
   2 to a State the amount (if any) by which— 
   
   3 ‘‘(A) the amount of the adjusted total med- 
   
   4 ical assistance expenditures for the State and 
   
   5 fiscal year determined in section 1903A(b)(1) 
   
   6 without regard to the 1903A enrollee category 
   
   7 described in section 1903A(e)(2)(E); is less 
   
   8 than 
   
   9 ‘‘(B) the amount of the target total med- 
   
   10 ical assistance expenditures for the State and 
   
   11 fiscal year determined in section 1903A(c) with- 
   
   12 out regard to the 1903A enrollee category de- 
   
   13 scribed in section 1903A(e)(2)(E).’’. 
   
   14 SEC. 136. GRANDFATHERING CERTAIN MEDICAID WAIVERS; 
   
   15 PRIORITIZATION OF HCBS WAIVERS. 
   
   16 (a) MANAGED CARE WAIVERS.— 
   
   17 (1) IN GENERAL.—In the case of a State with 
   
   18 a grandfathered managed care waiver, the State 
   
   19 may, at its option through a State plan amendment, 
   
   20 continue to implement the managed care delivery 
   
   21 system that is the subject of such waiver in per- 
   
   22 petuity under the State plan under title XIX of the 
   
   23 Social Security Act (or a waiver of such plan) with- 
   
   24 out submitting an application to the Secretary for a 
   
   25 new waiver to implement such managed care delivery 
   
   114 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 system, so long as the terms and conditions of the 
   
   2 waiver involved (other than such terms and condi- 
   
   3 tions that relate to budget neutrality as modified 
   
   4 pursuant to section 1903A(f)(1) of the Social Secu- 
   
   5 rity Act) are not modified. 
   
   6 (2) MODIFICATIONS.— 
   
   7 (A) IN GENERAL.—If a State with a 
   
   8 grandfathered managed care waiver seeks to 
   
   9 modify the terms or conditions of such a waiv- 
   
   10 er, the State shall submit to the Secretary an 
   
   11 application for approval of a new waiver under 
   
   12 such modified terms and conditions. 
   
   13 (B) APPROVAL OF MODIFICATION.— 
   
   14 (i) IN GENERAL.—An application de- 
   
   15 scribed in subparagraph (A) is deemed ap- 
   
   16 proved unless the Secretary, not later than 
   
   17 90 days after the date on which the appli- 
   
   18 cation is submitted, submits to the State— 
   
   19 (I) a denial; or 
   
   20 (II) a request for more informa- 
   
   21 tion regarding the application. 
   
   22 (ii) ADDITIONAL INFORMATION.—If 
   
   23 the Secretary requests additional informa- 
   
   24 tion, the Secretary has 30 days after a 
   
   25 State submission in response to the Sec- 
   
   115 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 retary’s request to deny the application or 
   
   2 request more information. 
   
   3 (3) GRANDFATHERED MANAGED CARE WAIVER 
   
   4 DEFINED.—In this subsection, the term ‘‘grand- 
   
   5 fathered managed care waiver’’ means the provisions 
   
   6 of a waiver or an experimental, pilot, or demonstra- 
   
   7 tion project that relate to the authority of a State 
   
   8 to implement a managed care delivery system under 
   
   9 the State plan under title XIX of such Act (or under 
   
   10 a waiver of such plan under section 1115 of such 
   
   11 Act) that— 
   
   12 (A) is approved by the Secretary of Health 
   
   13 and Human Services under section 1915(b), 
   
   14 1932, or 1115(a)(1) of the Social Security Act 
   
   15 (42 U.S.C. 1396n(b), 1396u–2, 1315(a)(1)) as 
   
   16 of January 1, 2017; and 
   
   17 (B) has been renewed by the Secretary not 
   
   18 less than 1 time. 
   
   19 (b) HCBS WAIVERS.—The Secretary of Health and 
   
   20 Human Services shall implement procedures encouraging 
   
   21 States to adopt or extend waivers related to the authority 
   
   22 of a State to make medical assistance available for home 
   
   23 and community-based services under the State plan under 
   
   24 title XIX of the Social Security Act if the State determines 
   
   25 that such waivers would improve patient access to services. 
   
   116 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 SEC. 137. COORDINATION WITH STATES. 
   
   2 Title XIX of the Social Security Act is amended by 
   
   3 inserting after section 1904 (42 U.S.C. 1396d) the fol- 
   
   4 lowing: 
   
   5 ‘‘COORDINATION WITH STATES 
   
   6 ‘‘SEC. 1904A. No proposed rule (as defined in section 
   
   7 551(4) of title 5, United States Code) implementing or 
   
   8 interpreting any provision of this title shall be finalized 
   
   9 on or after January 1, 2018, unless the Secretary— 
   
   10 ‘‘(1) provides for a process under which the 
   
   11 Secretary or the Secretary’s designee solicits advice 
   
   12 from each State’s State agency responsible for ad- 
   
   13 ministering the State plan under this title (or a 
   
   14 waiver of such plan) and State Medicaid Director— 
   
   15 ‘‘(A) on a regular, ongoing basis on mat- 
   
   16 ters relating to the application of this title that 
   
   17 are likely to have a direct effect on the oper- 
   
   18 ation or financing of State plans under this title 
   
   19 (or waivers of such plans); and 
   
   20 ‘‘(B) prior to submission of any final pro- 
   
   21 posed rule, plan amendment, waiver request, or 
   
   22 proposal for a project that is likely to have a di- 
   
   23 rect effect on the operation or financing of 
   
   24 State plans under this title (or waivers of such 
   
   25 plans); 
   
   117 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(2) accepts and considers written and oral 
   
   2 comments from a bipartisan, nonprofit, professional 
   
   3 organization that represents State Medicaid Direc- 
   
   4 tors, and from any State agency administering the 
   
   5 plan under this title, regarding such proposed rule; 
   
   6 and 
   
   7 ‘‘(3) incorporates in the preamble to the pro- 
   
   8 posed rule a summary of comments referred to in 
   
   9 paragraph (2) and the Secretary’s response to such 
   
   10 comments.’’. 
   
   11 SEC. 138. OPTIONAL ASSISTANCE FOR CERTAIN INPATIENT 
   
   12 PSYCHIATRIC SERVICES. 
   
   13 (a) STATE OPTION.—Section 1905 of the Social Se- 
   
   14 curity Act (42 U.S.C. 1396d) is amended— 
   
   15 (1) in subsection (a)— 
   
   16 (A) in paragraph (16)— 
   
   17 (i) by striking ‘‘and, (B)’’ and insert- 
   
   18 ing ‘‘(B)’’; and 
   
   19 (ii) by inserting before the semicolon 
   
   20 at the end the following: ‘‘, and (C) subject 
   
   21 to subsection (h)(4), qualified inpatient 
   
   22 psychiatric hospital services (as defined in 
   
   23 subsection (h)(3)) for individuals who are 
   
   24 over 21 years of age and under 65 years 
   
   25 of age’’; and 
   
   118 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (B) in the subdivision (B) that follows 
   
   2 paragraph (29), by inserting ‘‘(other than serv- 
   
   3 ices described in subparagraph (C) of para- 
   
   4 graph (16) for individuals described in such 
   
   5 subparagraph)’’ after ‘‘patient in an institution 
   
   6 for mental diseases’’; and 
   
   7 (2) in subsection (h), by adding at the end the 
   
   8 following new paragraphs: 
   
   9 ‘‘(3) For purposes of subsection (a)(16)(C), the term 
   
   10 ‘qualified inpatient psychiatric hospital services’ means, 
   
   11 with respect to individuals described in such subsection, 
   
   12 services described in subparagraph (B) of paragraph (1) 
   
   13 that are not otherwise covered under subsection 
   
   14 (a)(16)(A) and are furnished— 
   
   15 ‘‘(A) in an institution (or distinct part thereof) 
   
   16 which is a psychiatric hospital (as defined in section 
   
   17 1861(f)); and 
   
   18 ‘‘(B) with respect to such an individual, for a 
   
   19 period not to exceed 30 consecutive days in any 
   
   20 month and not to exceed 90 days in any calendar 
   
   21 year. 
   
   22 ‘‘(4) As a condition for a State including qualified 
   
   23 inpatient psychiatric hospital services as medical assist- 
   
   24 ance under subsection (a)(16)(C), the State must (during 
   
   25 the period in which it furnishes medical assistance under 
   
   119 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 this title for services and individuals described in such 
   
   2 subsection)— 
   
   3 ‘‘(A) maintain at least the number of licensed 
   
   4 beds at psychiatric hospitals owned, operated, or 
   
   5 contracted for by the State that were being main- 
   
   6 tained as of the date of the enactment of this para- 
   
   7 graph or, if higher, as of the date the State applies 
   
   8 to the Secretary to include medical assistance under 
   
   9 such subsection; and 
   
   10 ‘‘(B) maintain on an annual basis a level of 
   
   11 funding expended by the State (and political subdivi- 
   
   12 sions thereof) other than under this title from non- 
   
   13 Federal funds for inpatient services in an institution 
   
   14 described in paragraph (3)(A), and for active psy- 
   
   15 chiatric care and treatment provided on an out- 
   
   16 patient basis, that is not less than the level of such 
   
   17 funding for such services and care as of the date of 
   
   18 the enactment of this paragraph or, if higher, as of 
   
   19 the date the State applies to the Secretary to include 
   
   20 medical assistance under such subsection.’’. 
   
   21 (b) SPECIAL MATCHING RATE.—Section 1905(b) of 
   
   22 the Social Security Act (42 U.S.C. 1395d(b)) is amended 
   
   23 by adding at the end the following: ‘‘Notwithstanding the 
   
   24 previous provisions of this subsection, the Federal medical 
   
   25 assistance percentage shall be 50 percent with respect to 
   
   120 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 medical assistance for services and individuals described 
   
   2 in subsection (a)(16)(C).’’. 
   
   3 (c) EFFECTIVE DATE.—The amendments made by 
   
   4 this section shall apply to qualified inpatient psychiatric 
   
   5 hospital services furnished on or after October 1, 2018. 
   
   6 SEC. 139. SMALL BUSINESS HEALTH PLANS. 
   
   7 (a) TAX TREATMENT OF SMALL BUSINESS HEALTH 
   
   8 PLANS.—For purposes of applying subchapter B of chap- 
   
   9 ter 100 of the Internal Revenue Code of 1986, title XXVII 
   
   10 of the Public Health Service Act (42 U.S.C. 300gg et 
   
   11 seq.), and part 7 of title I of the Employee Retirement 
   
   12 Income Security Act of 1974 (29 U.S.C. 1181 et seq.), 
   
   13 a small business health plan as defined in section 801(a) 
   
   14 of the Employee Retirement Income Security Act of 1974 
   
   15 that is offered to employees shall be treated as a group 
   
   16 health plan, as defined in section 2791 of the Public 
   
   17 Health Service Act (42 U.S.C. 300gg–91). 
   
   18 (b) IN GENERAL.—Subtitle B of title I of the Em- 
   
   19 ployee Retirement Income Security Act of 1974 (29 
   
   20 U.S.C. 1021 et seq.) is amended by adding at the end 
   
   21 the following new part: 
   
   121 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘PART 8—RULES GOVERNING SMALL BUSINESS 
   
   2 RISK SHARING POOLS 
   
   3 ‘‘SEC. 801. SMALL BUSINESS HEALTH PLANS. 
   
   4 ‘‘(a) IN GENERAL.—For purposes of this part, the 
   
   5 term ‘small business health plan’ means a fully insured 
   
   6 group health plan, offered by a health insurance issuer in 
   
   7 the large group market, whose sponsor is described in sub- 
   
   8 section (b). 
   
   9 ‘‘(b) SPONSOR.—The sponsor of a group health plan 
   
   10 is described in this subsection if— 
   
   11 ‘‘(1) such sponsor is a qualified sponsor and re- 
   
   12 ceives certification by the Secretary; 
   
   13 ‘‘(2) is organized and maintained in good faith, 
   
   14 with a constitution and bylaws specifically stating its 
   
   15 purpose and providing for periodic meetings on at 
   
   16 least an annual basis; 
   
   17 ‘‘(3) is established as a permanent entity; 
   
   18 ‘‘(4) is established for a purpose other than 
   
   19 providing health benefits to its members, such as an 
   
   20 organization established as a bona fide trade asso- 
   
   21 ciation; and 
   
   22 ‘‘(5) does not condition membership on the 
   
   23 basis of a minimum group size. 
   
   122 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘SEC. 802. FILING FEE AND CERTIFICATION OF SMALL 
   
   2 BUSINESS HEALTH PLANS. 
   
   3 ‘‘(a) FILING FEE.—A small business health plan 
   
   4 shall pay to the Secretary at the time of filing an applica- 
   
   5 tion for certification under subsection (b) a filing fee in 
   
   6 the amount of $5,000, which shall be available to the Sec- 
   
   7 retary for the sole purpose of administering the certifi- 
   
   8 cation procedures applicable with respect to small business 
   
   9 health plans. 
   
   10 ‘‘(b) CERTIFICATION.— 
   
   11 ‘‘(1) IN GENERAL.—Not later than 6 months 
   
   12 after the date of enactment of this part, the Sec- 
   
   13 retary shall prescribe by interim final rule a proce- 
   
   14 dure under which the Secretary— 
   
   15 ‘‘(A) will certify a qualified sponsor of a 
   
   16 small business health plan, upon receipt of an 
   
   17 application that includes the information de- 
   
   18 scribed in paragraph (2); 
   
   19 ‘‘(B) may provide for continued certifi- 
   
   20 cation of small business health plans under this 
   
   21 part; and 
   
   22 ‘‘(C) shall provide for the revocation of a 
   
   23 certification if the applicable authority finds 
   
   24 that the small business health plan involved 
   
   25 fails to comply with the requirements of this 
   
   26 part. 
   
   123 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(2) INFORMATION TO BE INCLUDED IN APPLI- 
   
   2 CATION FOR CERTIFICATION.—An application for 
   
   3 certification under this part meets the requirements 
   
   4 of this section only if it includes, in a manner and 
   
   5 form which shall be prescribed by the applicable au- 
   
   6 thority by regulation, at least the following informa- 
   
   7 tion: 
   
   8 ‘‘(A) Identifying information. 
   
   9 ‘‘(B) States in which the plan intends to 
   
   10 do business. 
   
   11 ‘‘(C) Bonding requirements. 
   
   12 ‘‘(D) Plan documents. 
   
   13 ‘‘(E) Agreements with service providers. 
   
   14 ‘‘(c) FILING NOTICE OF CERTIFICATION WITH 
   
   15 STATES.—A certification granted under this part to a 
   
   16 small business health plan shall not be effective unless 
   
   17 written notice of such certification is filed with the appli- 
   
   18 cable State authority of each State in which the small 
   
   19 business health plans operate. 
   
   20 ‘‘(d) NOTICE OF MATERIAL CHANGES.—In the case 
   
   21 of any small business health plan certified under this part, 
   
   22 descriptions of material changes in any information which 
   
   23 was required to be submitted with the application for the 
   
   24 certification under this part shall be filed in such form 
   
   25 and manner as shall be prescribed by the applicable au- 
   
   124 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 thority by regulation. The applicable authority may re- 
   
   2 quire by regulation prior notice of material changes with 
   
   3 respect to specified matters which might serve as the basis 
   
   4 for suspension or revocation of the certification. 
   
   5 ‘‘(e) NOTICE REQUIREMENTS FOR VOLUNTARY TER- 
   
   6 MINATION.—A small business health plan which is or has 
   
   7 been certified under this part may terminate (upon or at 
   
   8 any time after cessation of accruals in benefit liabilities) 
   
   9 only if the board of trustees, not less than 60 days before 
   
   10 the proposed termination date— 
   
   11 ‘‘(1) provides to the participants and bene- 
   
   12 ficiaries a written notice of intent to terminate stat- 
   
   13 ing that such termination is intended and the pro- 
   
   14 posed termination date; 
   
   15 ‘‘(2) develops a plan for winding up the affairs 
   
   16 of the plan in connection with such termination in 
   
   17 a manner which will result in timely payment of all 
   
   18 benefits for which the plan is obligated; and 
   
   19 ‘‘(3) submits such plan in writing to the appli- 
   
   20 cable authority. 
   
   21 ‘‘(f) OVERSIGHT OF CERTIFIED PLAN SPONSORS.— 
   
   22 The Secretary has the discretion to determine whether any 
   
   23 person has violated or is about to violate any provision 
   
   24 of this part, and may conduct periodic review of certified 
   
   25 small business health plan sponsors, consistent with sec- 
   
   125 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 tion 504, and apply the requirements of sections 518, 519, 
   
   2 and 520. 
   
   3 ‘‘(g) EXPEDITED AND DEEMED CERTIFICATION.— 
   
   4 ‘‘(1) IN GENERAL.—If the Secretary fails to act 
   
   5 on a complete application for certification under this 
   
   6 section within 90 days of receipt of such complete 
   
   7 application, the applying small business health plan 
   
   8 sponsor shall be deemed certified until such time as 
   
   9 the Secretary may deny for cause the application for 
   
   10 certification. 
   
   11 ‘‘(2) PENALTY.—The Secretary may assess a 
   
   12 penalty against the board of trustees and plan spon- 
   
   13 sor (jointly and severally) of a small business health 
   
   14 plan sponsor that is deemed certified under para- 
   
   15 graph (1) of up to $500,000 in the event the Sec- 
   
   16 retary determines that the application for certifi- 
   
   17 cation of such small business health plan sponsor 
   
   18 was willfully or with gross negligence incomplete or 
   
   19 inaccurate. 
   
   20 ‘‘(h) MODIFICATIONS.—The Secretary shall, through 
   
   21 promulgation and implementation of such regulations as 
   
   22 the Secretary may reasonably determine necessary or ap- 
   
   23 propriate, and in consultation with a balanced spectrum 
   
   24 of effected entities and persons, modify the implementa- 
   
   25 tion and application of this part to accommodate with min- 
   
   126 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 imum disruption such changes to State or Federal law 
   
   2 provided in this part and the (and the amendments made 
   
   3 by such Act) or in regulations issued thereto. 
   
   4 ‘‘SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND 
   
   5 BOARDS OF TRUSTEES. 
   
   6 ‘‘(a) BOARD OF TRUSTEES.—The Secretary shall en- 
   
   7 sure that Board of Trustees of a small business health 
   
   8 plan certified under this part complies with the require- 
   
   9 ments such Secretary sets forth with respect to fiscal con- 
   
   10 trol and rules of operation and financial controls. 
   
   11 ‘‘(b) TREATMENT OF FRANCHISES.—In the case of 
   
   12 a group health plan that is established and maintained 
   
   13 by a franchisor for a franchisor or for its franchisees— 
   
   14 ‘‘(1) the requirements of subsection (a) and sec- 
   
   15 tion 801(a) shall be deemed met if such require- 
   
   16 ments would otherwise be met if the franchisor were 
   
   17 deemed to be the sponsor referred to in section 
   
   18 801(b) and each franchisee were deemed to be a 
   
   19 member (of the sponsor) referred to in section 
   
   20 801(b); and 
   
   21 ‘‘(2) the requirements of section 804(a)(1) shall 
   
   22 be deemed met. 
   
   127 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘SEC. 804. PARTICIPATION AND COVERAGE REQUIRE- 
   
   2 MENTS. 
   
   3 ‘‘(a) COVERED EMPLOYERS AND INDIVIDUALS.—The 
   
   4 requirements of this subsection are met with respect to 
   
   5 a small business health plan if, under the terms of the 
   
   6 plan— 
   
   7 ‘‘(1) each participating employer must be— 
   
   8 ‘‘(A) a member of the sponsor; 
   
   9 ‘‘(B) the sponsor; or 
   
   10 ‘‘(C) an affiliated member of the sponsor, 
   
   11 except that, in the case of a sponsor which is 
   
   12 a professional association or other individual- 
   
   13 based association, if at least one of the officers, 
   
   14 directors, or employees of an employer, or at 
   
   15 least one of the individuals who are partners in 
   
   16 an employer and who actively participates in 
   
   17 the business, is a member or such an affiliated 
   
   18 member of the sponsor, participating employers 
   
   19 may also include such employer; and 
   
   20 ‘‘(2) all individuals commencing coverage under 
   
   21 the plan after certification under this part must 
   
   22 be— 
   
   23 ‘‘(A) active or retired owners (including 
   
   24 self-employed individuals), officers, directors, or 
   
   25 employees of, or partners in, participating em- 
   
   26 ployers; or 
   
   128 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(B) the dependents of individuals de- 
   
   2 scribed in subparagraph (A). 
   
   3 ‘‘(b) INDIVIDUAL MARKET UNAFFECTED.—The re- 
   
   4 quirements of this subsection are met with respect to a 
   
   5 small business health plan if, under the terms of the plan, 
   
   6 no participating employer may provide health insurance 
   
   7 coverage in the individual market for any employee not 
   
   8 covered under the plan, if such exclusion of the employee 
   
   9 from coverage under the plan is based on a health status- 
   
   10 related factor with respect to the employee and such em- 
   
   11 ployee would, but for such exclusion on such basis, be eligi- 
   
   12 ble for coverage under the plan. 
   
   13 ‘‘(c) PROHIBITION OF DISCRIMINATION AGAINST EM- 
   
   14 PLOYERS AND EMPLOYEES ELIGIBLE TO PARTICIPATE.— 
   
   15 The requirements of this subsection are met with respect 
   
   16 to a small business health plan if information regarding 
   
   17 all coverage options available under the plan is made read- 
   
   18 ily available to any employer eligible to participate. 
   
   19 ‘‘SEC. 805. DEFINITIONS; RENEWAL. 
   
   20 ‘‘(a) DEFINITIONS.—For purposes of this part: 
   
   21 ‘‘(1) AFFILIATED MEMBER.—The term ‘affili- 
   
   22 ated member’ means, in connection with a sponsor— 
   
   23 ‘‘(A) a person who is otherwise eligible to 
   
   24 be a member of the sponsor but who elects an 
   
   25 affiliated status with the sponsor, or 
   
   129 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(B) in the case of a sponsor with mem- 
   
   2 bers which consist of associations, a person who 
   
   3 is a member or employee of any such associa- 
   
   4 tion and elects an affiliated status with the 
   
   5 sponsor. 
   
   6 ‘‘(2) APPLICABLE STATE AUTHORITY.—The 
   
   7 term ‘applicable State authority’ means, with respect 
   
   8 to a health insurance issuer in a State, the State in- 
   
   9 surance commissioner or official or officials des- 
   
   10 ignated by the State to enforce the requirements of 
   
   11 title XXVII of the Public Health Service Act for the 
   
   12 State involved with respect to such issuer. 
   
   13 ‘‘(3) FRANCHISOR; FRANCHISEE.—The terms 
   
   14 ‘franchisor’ and ‘franchisee’ have the meanings given 
   
   15 such terms for purposes of sections 436.2(a) 
   
   16 through 436.2(c) of title 16, Code of Federal Regu- 
   
   17 lations (including any such amendments to such reg- 
   
   18 ulation after the date of enactment of this part). 
   
   19 ‘‘(4) HEALTH PLAN TERMS.—The terms ‘group 
   
   20 health plan’, ‘health insurance coverage’, and ‘health 
   
   21 insurance issuer’ have the meanings provided in sec- 
   
   22 tion 733. 
   
   23 ‘‘(5) INDIVIDUAL MARKET.— 
   
   24 ‘‘(A) IN GENERAL.—The term ‘individual 
   
   25 market’ means the market for health insurance 
   
   130 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 coverage offered to individuals other than in 
   
   2 connection with a group health plan. 
   
   3 ‘‘(B) TREATMENT OF VERY SMALL 
   
   4 GROUPS.— 
   
   5 ‘‘(i) IN GENERAL.—Subject to clause 
   
   6 (ii), such term includes coverage offered in 
   
   7 connection with a group health plan that 
   
   8 has fewer than 2 participants as current 
   
   9 employees or participants described in sec- 
   
   10 tion 732(d)(3) on the first day of the plan 
   
   11 year. 
   
   12 ‘‘(ii) STATE EXCEPTION.—Clause (i) 
   
   13 shall not apply in the case of health insur- 
   
   14 ance coverage offered in a State if such 
   
   15 State regulates the coverage described in 
   
   16 such clause in the same manner and to the 
   
   17 same extent as coverage in the small group 
   
   18 market (as defined in section 2791(e)(5) of 
   
   19 the Public Health Service Act) is regulated 
   
   20 by such State. 
   
   21 ‘‘(6) PARTICIPATING EMPLOYER.—The term 
   
   22 ‘participating employer’ means, in connection with a 
   
   23 small business health plan, any employer, if any in- 
   
   24 dividual who is an employee of such employer, a 
   
   25 partner in such employer, or a self-employed indi- 
   
   131 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 vidual who is such employer (or any dependent, as 
   
   2 defined under the terms of the plan, of such indi- 
   
   3 vidual) is or was covered under such plan in connec- 
   
   4 tion with the status of such individual as such an 
   
   5 employee, partner, or self-employed individual in re- 
   
   6 lation to the plan. 
   
   7 ‘‘(b) RENEWAL.—A participating employer in a small 
   
   8 business health plan shall not be deemed to be a plan 
   
   9 sponsor in applying requirements relating to coverage re- 
   
   10 newal.’’. 
   
   11 (c) PREEMPTION RULES.—Section 514 of the Em- 
   
   12 ployee Retirement Income Security Act of 1974 (29 
   
   13 U.S.C. 1144) is amended by adding at the end the fol- 
   
   14 lowing: 
   
   15 ‘‘(e) Except as provided in subsection (b)(4), the pro- 
   
   16 visions of this title shall supersede any and all State laws 
   
   17 insofar as they may now or hereafter preclude a health 
   
   18 insurance issuer from offering health insurance coverage 
   
   19 in connection with a small business health plan which is 
   
   20 certified under part 8.’’. 
   
   21 (d) PLAN SPONSOR.—Section 3(16)(B) of such Act 
   
   22 (29 U.S.C. 102(16)(B)) is amended by adding at the end 
   
   23 the following new sentence: ‘‘Such term also includes a 
   
   24 person serving as the sponsor of a small business health 
   
   25 plan under part 8.’’. 
   
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   ERN17282 Discussion Draft S.L.C. 
   
   1 (e) SAVINGS CLAUSE.—Section 731(c) of such Act is 
   
   2 amended by inserting ‘‘or part 8’’ after ‘‘this part’’. 
   
   3 (f) COOPERATION BETWEEN FEDERAL AND STATE 
   
   4 AUTHORITIES.—Section 506 of the Employee Retirement 
   
   5 Income Security Act of 1974 (29 U.S.C. 1136) is amended 
   
   6 by adding at the end the following new subsection: 
   
   7 ‘‘(d) CONSULTATION WITH STATES WITH RESPECT 
   
   8 TO SMALL BUSINESS HEALTH PLANS.— 
   
   9 ‘‘(1) AGREEMENTS WITH STATES.—The Sec- 
   
   10 retary shall consult with the State recognized under 
   
   11 paragraph (2) with respect to a small business 
   
   12 health plan regarding the exercise of— 
   
   13 ‘‘(A) the Secretary’s authority under sec- 
   
   14 tions 502 and 504 to enforce the requirements 
   
   15 for certification under part 8; and 
   
   16 ‘‘(B) the Secretary’s authority to certify 
   
   17 small business health plans under part 8 in ac- 
   
   18 cordance with regulations of the Secretary ap- 
   
   19 plicable to certification under part 8. 
   
   20 ‘‘(2) RECOGNITION OF DOMICILE STATE.—In 
   
   21 carrying out paragraph (1), the Secretary shall en- 
   
   22 sure that only one State will be recognized, with re- 
   
   23 spect to any particular small business health plan, 
   
   24 as the State with which consultation is required.’’. 
   
   133 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (g) EFFECTIVE DATE.—The amendments made by 
   
   2 this section shall take effect 1 year after the date of the 
   
   3 enactment of this Act. The Secretary of Labor shall first 
   
   4 issue all regulations necessary to carry out the amend- 
   
   5 ments made by this section within 6 months after the date 
   
   6 of the enactment of this Act. 
   
   7 TITLE II 
   
   8 SEC. 201. THE PREVENTION AND PUBLIC HEALTH FUND. 
   
   9 Subsection (b) of section 4002 of the Patient Protec- 
   
   10 tion and Affordable Care Act (42 U.S.C. 300u–11) is 
   
   11 amended by striking paragraphs (3) through (8). 
   
   12 SEC. 202. SUPPORT FOR STATE RESPONSE TO OPIOID CRI- 
   
   13 SIS. 
   
   14 There is authorized to be appropriated, and is appro- 
   
   15 priated, out of monies in the Treasury not otherwise obli- 
   
   16 gated, $2,000,000,000 for fiscal year 2018, to the Sec- 
   
   17 retary of Health and Human Services to provide grants 
   
   18 to States to support substance use disorder treatment and 
   
   19 recovery support services for individuals with mental or 
   
   20 substance use disorders. Funds appropriated under this 
   
   21 section shall remain available until expended. 
   
   22 SEC. 203. COMMUNITY HEALTH CENTER PROGRAM. 
   
   23 Effective as if included in the enactment of the Medi- 
   
   24 care Access and CHIP Reauthorization Act of 2015 (Pub- 
   
   25 lic Law 114–10, 129 Stat. 87), paragraph (1) of section 
   
   134 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 221(a) of such Act is amended by inserting ‘‘, and an ad- 
   
   2 ditional $422,000,000 for fiscal year 2017’’ after ‘‘2017’’. 
   
   3 SEC. 204. CHANGE IN PERMISSIBLE AGE VARIATION IN 
   
   4 HEALTH INSURANCE PREMIUM RATES. 
   
   5 Section 2701(a)(1)(A)(iii) of the Public Health Serv- 
   
   6 ice Act (42 U.S.C. 300gg(a)(1)(A)(iii)) is amended by in- 
   
   7 serting after ‘‘(consistent with section 2707(c))’’ the fol- 
   
   8 lowing: ‘‘or, for plan years beginning on or after January 
   
   9 1, 2019, 5 to 1 for adults (consistent with section 2707(c)) 
   
   10 or such other ratio for adults (consistent with section 
   
   11 2707(c)) as the State may determine’’. 
   
   12 SEC. 205. MEDICAL LOSS RATIO DETERMINED BY THE 
   
   13 STATE. 
   
   14 Section 2718(b) of the Public Health Service Act (42 
   
   15 U.S.C. 300gg–18(b)) is amended by adding at the end the 
   
   16 following: 
   
   17 ‘‘(4) SUNSET.—Paragraphs (1) through (3) 
   
   18 shall not apply for plan years beginning on or after 
   
   19 January 1, 2019, and after such date any reference 
   
   20 in law to such paragraphs shall have no force or ef- 
   
   21 fect. 
   
   22 ‘‘(5) MEDICAL LOSS RATIO DETERMINED BY 
   
   23 THE STATE.—For plan years beginning on or after 
   
   24 January 1, 2019, each State shall— 
   
   135 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(A) set the ratio of the amount of pre- 
   
   2 mium revenue a health insurance issuer offering 
   
   3 group or individual health insurance coverage 
   
   4 may expend on non-claims costs to the total 
   
   5 amount of premium revenue; and 
   
   6 ‘‘(B) determine the amount of any annual 
   
   7 rebate required to be paid to enrollees under 
   
   8 such coverage if the ratio of the amount of pre- 
   
   9 mium revenue expended by the issuer on non- 
   
   10 claims costs to the total amount of premium 
   
   11 revenue exceeds the ratio set by the State under 
   
   12 subparagraph (A).’’. 
   
   13 SEC. 206. WAIVERS FOR STATE INNOVATION. 
   
   14 (a) IN GENERAL.—Section 1332 of the Patient Pro- 
   
   15 tection and Affordable Care Act (42 U.S.C. 18052) is 
   
   16 amended— 
   
   17 (1) in subsection (a)— 
   
   18 (A) in paragraph (1)— 
   
   19 (i) in subparagraph (B)— 
   
   20 (I) by amending clause (i) to 
   
   21 read as follows: 
   
   22 ‘‘(i) a description of how the State 
   
   23 plan meeting the requirements of a waiver 
   
   24 under this section would, with respect to 
   
   136 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 health insurance coverage within the 
   
   2 State— 
   
   3 ‘‘(I) take the place of the require- 
   
   4 ments described in paragraph (2) that 
   
   5 are waived; and 
   
   6 ‘‘(II) provide for alternative 
   
   7 means of, and requirements for, in- 
   
   8 creasing access to comprehensive cov- 
   
   9 erage, reducing average premiums, 
   
   10 and increasing enrollment; and’’; and 
   
   11 (II) in clause (ii), by striking 
   
   12 ‘‘that is budget neutral for the Fed- 
   
   13 eral Government’’ and inserting ‘‘, 
   
   14 demonstrating that the State plan 
   
   15 does not increase the Federal deficit’’; 
   
   16 and 
   
   17 (ii) in subparagraph (C), by striking 
   
   18 ‘‘the law’’ and inserting ‘‘a law or has in 
   
   19 effect a certification’’; 
   
   20 (B) in paragraph (3)— 
   
   21 (i) by adding after the second sen- 
   
   22 tence the following: ‘‘A State may request 
   
   23 that all of, or any portion of, such aggre- 
   
   24 gate amount of such credits or reductions 
   
   137 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 be paid to the State as described in the 
   
   2 first sentence.’’; 
   
   3 (ii) in the paragraph heading, by 
   
   4 striking ‘‘PASS THROUGH OF FUNDING’’ 
   
   5 and inserting ‘‘FUNDING’’; 
   
   6 (iii) by striking ‘‘With respect’’ and 
   
   7 inserting the following: 
   
   8 ‘‘(A) PASS THROUGH OF FUNDING.—With 
   
   9 respect’’; and 
   
   10 (iv) by adding at the end the fol- 
   
   11 lowing: 
   
   12 ‘‘(B) ADDITIONAL FUNDING.—There is au- 
   
   13 thorized to be appropriated, and is appro- 
   
   14 priated, to the Secretary of Health and Human 
   
   15 Services, out of monies in the Treasury not oth- 
   
   16 erwise obligated, $2,000,000,000 for fiscal year 
   
   17 2017, to remain available until the end of fiscal 
   
   18 year 2019, to provide grants to States for pur- 
   
   19 poses of submitting an application for a waiver 
   
   20 granted under this section and implementing 
   
   21 the State plan under such waiver. 
   
   22 ‘‘(C) AUTHORITY TO USE LONG-TERM 
   
   23 STATE INNOVATION AND STABILITY ALLOT- 
   
   24 MENT.—If the State has an application for an 
   
   25 allotment under section 2105(i) of the Social 
   
   138 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 Security Act for the plan year, the State may 
   
   2 use the funds available under the State’s allot- 
   
   3 ment for the plan year to carry out the State 
   
   4 plan under this section, so long as such use is 
   
   5 consistent with the requirements of paragraphs 
   
   6 (1) and (7) of section 2105(i) of such Act 
   
   7 (other than paragraph (1)(B) of such section). 
   
   8 Any funds used to carry out a State plan under 
   
   9 this subparagraph shall not be considered in de- 
   
   10 termining whether the State plan increases the 
   
   11 Federal deficit.’’; and 
   
   12 (C) in paragraph (4), by adding at the end 
   
   13 the following: 
   
   14 ‘‘(D) EXPEDITED PROCESS.—The Sec- 
   
   15 retary shall establish an expedited application 
   
   16 and approval process that may be used if the 
   
   17 Secretary determines that such expedited proc- 
   
   18 ess is necessary to respond to an urgent or 
   
   19 emergency situation with respect to health in- 
   
   20 surance coverage within a State.’’; 
   
   21 (2) in subsection (b)— 
   
   22 (A) in paragraph (1)— 
   
   23 (i) in the matter preceding subpara- 
   
   24 graph (A)— 
   
   139 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (I) by striking ‘‘may’’ and insert- 
   
   2 ing ‘‘shall’’; and 
   
   3 (II) by striking ‘‘only if’’ and in- 
   
   4 serting ‘‘unless’’; and 
   
   5 (ii) by striking ‘‘plan—’’ and all that 
   
   6 follows through the period at the end of 
   
   7 subparagraph (D) and inserting ‘‘plan will 
   
   8 increase the Federal deficit, not taking 
   
   9 into account any amounts received through 
   
   10 a grant under subsection (a)(3)(B).’’; 
   
   11 (B) in paragraph (2)— 
   
   12 (i) in the paragraph heading, by in- 
   
   13 serting ‘‘OR CERTIFY’’ after ‘‘LAW’’; 
   
   14 (ii) in subparagraph (A), by inserting 
   
   15 before the period ‘‘, and a certification de- 
   
   16 scribed in this paragraph is a document, 
   
   17 signed by the Governor, and the State in- 
   
   18 surance commissioner, of the State, that 
   
   19 provides authority for State actions under 
   
   20 a waiver under this section, including the 
   
   21 implementation of the State plan under 
   
   22 subsection (a)(1)(B)’’; and 
   
   23 (iii) in subparagraph (B)— 
   
   24 (I) in the subparagraph heading, 
   
   25 by striking ‘‘OF OPT OUT’’; and 
   
   140 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 (II) by striking ‘‘ may repeal a 
   
   2 law’’ and all that follows through the 
   
   3 period at the end and inserting the 
   
   4 following: ‘‘may terminate the author- 
   
   5 ity provided under the waiver with re- 
   
   6 spect to the State by— 
   
   7 ‘‘(i) repealing a law described in sub- 
   
   8 paragraph (A); or 
   
   9 ‘‘(ii) terminating a certification de- 
   
   10 scribed in subparagraph (A), through a 
   
   11 certification for such termination signed by 
   
   12 the Governor, and the State insurance 
   
   13 commissioner, of the State.’’; 
   
   14 (3) in subsection (d)(2)(B), by striking ‘‘and 
   
   15 the reasons therefore’’ and inserting ‘‘and the rea- 
   
   16 sons therefore, and provide the data on which such 
   
   17 determination was made’’; and 
   
   18 (4) in subsection (e), by striking ‘‘No waiver’’ 
   
   19 and all that follows through the period at the end 
   
   20 and inserting the following: ‘‘A waiver under this 
   
   21 section— 
   
   22 ‘‘(1) shall be in effect for a period of 8 years 
   
   23 unless the State requests a shorter duration; 
   
   24 ‘‘(2) may be renewed for unlimited additional 8- 
   
   25 year periods upon application by the State; and 
   
   141 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 ‘‘(3) may not be cancelled by the Secretary be- 
   
   2 fore the expiration of the 8-year period (including 
   
   3 any renewal period under paragraph (2)).’’. 
   
   4 (b) APPLICABILITY.—Section 1332 of the Patient 
   
   5 Protection and Affordable Care Act (42 U.S.C. 18052) 
   
   6 shall apply as follows: 
   
   7 (1) In the case of a State for which a waiver 
   
   8 under such section was granted prior to the date of 
   
   9 enactment of this Act, such section 1332, as in ef- 
   
   10 fect on the day before the date of enactment of this 
   
   11 Act shall apply to the waiver and State plan. 
   
   12 (2) In the case of a State that submitted an ap- 
   
   13 plication for a waiver under such section prior to the 
   
   14 date of enactment of this Act, and which application 
   
   15 the Secretary of Health and Human Services has 
   
   16 not approved prior to such date, the State may elect 
   
   17 to have such section 1332, as in effect on the day 
   
   18 before the date of enactment of this Act, or such 
   
   19 section 1332, as amended by subsection (a), apply to 
   
   20 such application and State plan. 
   
   21 (3) In the case of a State that submits an ap- 
   
   22 plication for a waiver under such section on or after 
   
   23 the date of enactment of this Act, such section 1332, 
   
   24 as amended by subsection (a), shall apply to such 
   
   25 application and State plan. 
   
   142 
   
   ERN17282 Discussion Draft S.L.C. 
   
   1 SEC. 207. FUNDING FOR COST-SHARING PAYMENTS. 
   
   2 There is appropriated to the Secretary of Health and 
   
   3 Human Services, out of any money in the Treasury not 
   
   4 otherwise appropriated, such sums as may be necessary 
   
   5 for payments for cost-sharing reductions authorized by the 
   
   6 Patient Protection and Affordable Care Act (including ad- 
   
   7 justments to any prior obligations for such payments) for 
   
   8 the period beginning on the date of enactment of this Act 
   
   9 and ending on December 31, 2019. Notwithstanding any 
   
   10 other provision of this Act, payments and other actions 
   
   11 for adjustments to any obligations incurred for plan years 
   
   12 2018 and 2019 may be made through December 31, 2020. 
   
   13 SEC. 208. REPEAL OF COST-SHARING SUBSIDY PROGRAM. 
   
   14 (a) IN GENERAL.—Section 1402 of the Patient Pro- 
   
   15 tection and Affordable Care Act is repealed. 
   
   16 (b) EFFECTIVE DATE.—The repeal made by sub- 
   
   17 section (a) shall apply to cost-sharing reductions (and pay- 
   
   18 ments to issuers for such reductions) for plan years begin- 
   
   19 ning after December 31, 2019. 
   
   ||||| Shortly after the release of the Senate Republican health care bill on Thursday, a group of protesters — some wheelchair-bound or wearing medical devices — were dragged away by police from the hallway outside of Senate Majority Leader Mitch McConnell’s office. 
   
   The protesters were members of the national disability rights group ADAPT, who said the controversial health care bill is a direct threat to people with disabilities. 
   
   “We are at @SenateMajLdr demanding he stop the attacks on Disabled people’s freedom with #AHCA,” the group wrote on its Twitter page, including a video from the protest that appeared to show police officers carrying away one of the wheelchair-bound protesters. 
   
   Other footage shows protesters being removed by police from their wheelchairs and dragged or carried away. The Washington Post reported that several people were arrested during the protest. 
   
   Meanwhile, Sen. Chuck Schumer spoke out against the newly released Senate Republican health care bill on Thursday, calling the proposed legislation “heartless” and a “wolf in sheep’s clothing.” 
   
   “The way this bill cuts health care is heartless,” Schumer said on the Senate floor. “The president said the House bill was mean. The Senate bill may be meaner. The Senate Republican health care bill is a wolf in sheep’s clothing. Only this wolf has even sharper teeth than the House bill.” 
   
   “It’s clear that Republicans know that cutting Medicaid will hurt so many people in the middle class, so many in my home state of New York,” Schumer continued. “Republicans know that people want essential health benefits, so they’ve created a disguise by saying these changes won’t occur for a year.” 
   
   Schumer was far from the only one to slam the bill. After the closely guarded legislation — which was written entirely behind closed doors — was finally unveiled on Thursday morning, a protest formed outside Senate Majority Leader Mitch McConnell’s office in the Capitol. 
   
   Protest outside of McConnell's office after release of Senate healthcare bill pic.twitter.com/FfALhh52Rd — Vaughn Hillyard (@VaughnHillyard) June 22, 2017 
   
   House Minority Leader Nancy Pelosi also criticized the bill as a ruse, saying Thursday: This bill “is yet again a tax bill disguised as a health care bill. They need this in order to do their tax breaks for the high end to the tune of hundreds of billions of dollars. It’s unfortunate.” 
   
   Many other critics and Democratic leaders took to Twitter to express their anger and frustration. 
   
   If you're waiting for the right moment to call your Senator about Trumpcare, the moment is now. Don't wait until it's too late. 202-224-3121 — Hillary Clinton (@HillaryClinton) June 22, 2017 
   
   Minnesotans understand that the GOP health care bill will harm the well-being of millions of people in our state and across the country. — Sen. Al Franken (@SenFranken) June 22, 2017 
   
   Hi @SenateGOP, We will fight #Trumpcare like our lives depend on it—because they do. Signed, 
   
   All who believe health care is a human right — Women's March (@womensmarch) June 22, 2017 
   
   It's just this simple: The AHCA is a huge tax cut for the WEALTHY funded by GUTTING the United States health care system. — Mikel Jollett (@Mikel_Jollett) June 22, 2017 
   
   Health care bill sounds like it'll turn U.S. into a giant hunger games. @GOP wants the poor and sick to die off to free up resources for 1% — JW (@darkwavenyc) June 22, 2017 
   
   If you need treatment for opioid addiction, your plan may no longer cover it under #Trumpcare. — Chuck Schumer (@SenSchumer) June 22, 2017 
   
   We live in the wealthiest country on Earth; surely we can do better than what the Republican #healthcarebill promises. — Chuck Schumer (@SenSchumer) June 22, 2017 
   
   Schumer also tweeted out a message of warning about the bill, writing: “If you need treatment for opioid addiction, your plan may no longer cover it under #Trumpcare.” 
   
   “We live in the wealthiest country on Earth,” he added in a second tweet. “Surely we can do better than what the Republican #healthcarebill promises.” ||||| Senate Republicans on Thursday revealed the Better Care Reconciliation Act, their plan to repeal and replace the Affordable Care Act. 
   
   The bill asks low- and middle-income Americans to spend significantly more for less coverage. 
   
   The bill would roll back the Affordable Care Act’s expansion of the Medicaid program, which currently covers millions of low-income Americans, and include additional cuts to Medicaid. It would rework the individual market so that enrollees get less financial help to purchase less generous health insurance with higher deductibles. 
   
   Here is how the Senate bill works: 
   
   The Senate bill begins to phase out the Medicaid expansion in 2021 — and cuts the rest of the program ’s budget too. The Senate bill would end the Affordable Care Act’s expansion of Medicaid to millions of low-income Americans. This program has provided coverage to more Americans than the private marketplaces 
   
   The Senate bill would end the Affordable Care Act’s expansion of Medicaid to millions of low-income Americans. This program has provided coverage to more Americans than the private marketplaces It would also cut the rest of the public insurance program. Better Care would also limit government spending on the rest of the Medicaid program, giving states a set amount to spend per person rather than the insurance program’s currently open-ended funding commitment. 
   
   Better Care would also limit government spending on the rest of the Medicaid program, giving states a set amount to spend per person rather than the insurance program’s currently open-ended funding commitment. The Senate bill provides smaller subsidies for less generous health insurance plans with higher deductibles. The Affordable Care Act provides government help to anyone who earns less than 400 percent of the federal poverty line ($47,550 for an individual or $97,200 for a family of four). The people who earn the least get the most help. The Senate bill would make those subsidies much smaller for many people, and only provide the money to those earning less than 350 percent of the poverty line ($41,580 for individuals and $85,050 for a family of four). The Senate bill will tether the size of its tax credits to what it takes to purchase a skimpier health insurance plan than the type of plans Affordable Care Act subsidies were meant to buy. Essentially, these tax credits buy less health insurance. 
   
   The Affordable Care Act provides government help to anyone who earns less than 400 percent of the federal poverty line ($47,550 for an individual or $97,200 for a family of four). The people who earn the least get the most help. The Senate bill would make those subsidies much smaller for many people, and only provide the money to those earning less than 350 percent of the poverty line ($41,580 for individuals and $85,050 for a family of four). The Senate bill will tether the size of its tax credits to what it takes to purchase a skimpier health insurance plan than the type of plans Affordable Care Act subsidies were meant to buy. Essentially, these tax credits buy less health insurance. The Senate bill seems to allow states to opt out of Obamacare’s marketplaces and essential health benefits requirement. A new waiver process would allow states to overhaul their insurance markets, including ending the essential health benefit requirement and specific subsidies that benefit low income Americans, so long as those changes do not increase the deficit. 
   
   A new waiver process would allow states to overhaul their insurance markets, including ending the essential health benefit requirement and specific subsidies that benefit low income Americans, so long as those changes do not increase the deficit. The Senate bill repeals the individual mandate — and replaces it with a six-month waiting period. The bill gets rid of the Affordable Care Act’s unpopular requirement that nearly all Americans carry health coverage or pay a fine. The most recent version of the proposal includes a six-month waiting period for those who want individual coverage but have had more than a two-month break in coverage in the last year. 
   
   The bill gets rid of the Affordable Care Act’s unpopular requirement that nearly all Americans carry health coverage or pay a fine. The most recent version of the proposal includes a six-month waiting period for those who want individual coverage but have had more than a two-month break in coverage in the last year. The bill would cut taxes for the wealthy. Obamacare included tax increases that hit wealthy Americans hardest in order to pay for its coverage expansion. The AHCA would get rid of those taxes. Obamacare was one of the biggest redistributions of wealth from the rich to the poor ; the AHCA would reverse that. 
   
   Obamacare included tax increases that hit wealthy Americans hardest in order to pay for its coverage expansion. The AHCA would get rid of those taxes. Obamacare was ; the AHCA would reverse that. The Senate bill defunds Planned Parenthood for one year. This would mean Medicaid patients could no longer seek treatment at Planned Parenthood clinics. Experts expect this would result in low-income Americans getting less medical care and having more unintended pregnancies, as access to contraceptives would decline. 
   
   This would mean Medicaid patients could no longer seek treatment at Planned Parenthood clinics. Experts expect this would result in low-income Americans getting less medical care and having more unintended pregnancies, as access to contraceptives would decline. All in all, the replacement plan benefits people who are healthy and high-income, and disadvantages those who are sicker and lower-income. The replacement plan would make several changes to what health insurers can charge enrollees who purchase insurance on the individual market, as well as changing what benefits their plans must cover. In aggregate, these changes could be advantageous to younger and healthier enrollees who want skimpier (and cheaper) benefit packages. But they could be costly for older and sicker Obamacare enrollees who rely on the law’s current requirements, and would be asked to pay more for less generous coverage. 
   
   The Senate bill will end Medicaid expansion in 2021 — and cut the rest of the program too 
   
   One of the main ways Obamacare increased insurance coverage was by expanding the Medicaid program to cover millions more low-income Americans. Prior to the health law, the entitlement was restricted to specific groups of low-income Americans (pregnant women, for example, and the blind and disabled). 
   
   Obamacare opened up the program to anyone below 138 percent of the poverty line (about $15,000 for an individual) in the 31 states (plus the District of Columbia) that opted to participate. 
   
   The Medicaid expansion gave states generous funding to cover this particular population. Typically, the federal government picks up about half the cost of the Medicaid program and states cover the rest. 
   
   For Medicaid expansion, however, the federal government currently pays 95 percent of the costs — an especially good deal for states meant to assuage their budget concerns during the original Obamacare debate. 
   
   The Senate bill would begin ratcheting down that Medicaid expansion funding in 2021. By 2024, states would get that same match rate they typically get to cover other populations. In 2021, for example, the match rate would fall to 90 percent, then decline in steps to 75 percent by 2023. 
   
   The Congressional Budget Office has projected in a separate analysis that this policy change would mean no additional states expand Medicaid — and that some current expansion states would drop out of the program, resulting in millions losing coverage. 
   
   “CBO anticipates some states that have already expanded their Medicaid programs would no longer offer that coverage,” the agency wrote in its analysis of the House bill, which makes a similar change. 
   
   The Senate bill would cut the rest of the Medicaid program too 
   
   There are significant changes to Medicaid in the Senate bill outside of the expansion too. This bill would convert Medicaid to a “per capita cap” system, where states would get a lump sum from the federal government for each enrollee. Or states would have the opportunity of a block grant — a sum of money untethered from the number of people involved. 
   
   This is very different from current Medicaid funding. Right now the federal government has an open-ended commitment to paying all of a Medicaid enrollee’s bills, regardless of how high they go. 
   
   The Senate bill would set different amounts for different groups of people. It envisions, for example, likely higher payments to cover Medicaid enrollees who are disabled (and tend to have higher costs) than Medicaid enrollees who are kids (generally healthy with lower costs). 
   
   The rate at which these payments grow is also important. The Senate bill would have the funding growth tethered to the Medical Consumer Price Index plus 1 percentage point through 2025, and then switch to the urban Consumer Price Index. Analysis of this type of proposal suggests this change would amount to funding cuts for Medicaid, as the program’s spending typically goes up faster than these growth rates. 
   
   We do not know exactly how much this bill would cut the Medicaid program because we are still waiting on an analysis from the CBO, which is expected to be released early next week. 
   
   vox-mark VoxCare Vox's email explaining the biggest news in health care, edited by Sarah Kliff Subscribe By signing up, you agree to our Privacy Policy and European users agree to the data transfer policy. For more newsletters, check out our newsletters page 
   
   The Senate bill would cut the subsidies for people on the individual market 
   
   The Affordable Care Act provides financial help to low- and middle-income Americans who purchase their own health coverage. It provides subsidies to people who earn less than 400 percent of the federal poverty line ($47,550 for an individual or $97,200 for a family of four) and gives the most generous help to people who earn the least. 
   
   For example: People who earn $17,000 are only expected to spend 3 percent of their income on premiums for a midlevel insurance plan — the government will kick in the rest. People who earn $40,000, however, are expected to spend 9.66 percent of their income on those monthly payments. 
   
   The Senate bill would overhaul these tax credits. It would make fewer people eligible for the help, limiting the subsidies to people who earn less than 350 percent of the poverty line ($41,580 for individuals and $85,050 for a family of four). 
   
   It would also allow people who earn less than the poverty line to qualify for tax credits; the Affordable Care Act makes those people ineligible for the subsidies because they were expected to receive coverage through the Medicaid expansion. 
   
   This became problematic, however, when the Supreme Court ruled that the Medicaid expansion had to be optional and 19 states decided not to adopt it. So this change would be an improvement for low-income Americans who live in places like Texas and Florida, which did not expand the program. They currently have access to no subsidies under the Affordable Care Act. 
   
   It would also change the definition of what counts as “affordable” health insurance to amount for a greater chunk of Obamacare enrollees’ income. Right now the Affordable Care Act counts health insurance as “affordable” if it costs less than 9.7 percent of an individual’s income (and a lower amount for lower-income Americans). You can see the table here: 
   
   The Senate bill would raise the amount individuals are expected to kick into their health plans for people who are low to middle income. A 60-year-old who earns $35,640 (300 percent of the poverty line) would be expected to spend 16.2 percent of her income ($5,773) before she gets any help from the government. You can see the chart that spells this out here: 
   
   Under the Affordable Care Act, she would only be expected to spend $3,442. 
   
   The Senate would subsidize less generous insurance. Under the health care law, the size of the tax credit is tethered to how much it costs to buy a midlevel health plan. The Affordable Care Act defines “midlevel” as a plan that, on average, covers 70 percent of enrollees’ costs. In insurance terms, this number is known as the “actuarial value,” and it’s used to give a sense of how much the typical enrollee pays out of pocket for coverage. 
   
   The Senate bill would tether its tax credits to less generous health insurance. Specifically, it would provide subsidies that make a plan with a 58 percent actuarial value (meaning, on average, it covers 58 percent of enrollees’ costs) affordable. 
   
   This means that the plans people could afford under the Senate bill would likely have more copays and higher deductibles as a way to bump up the amount enrollees have to chip in for their own coverage. Someone who has earnings right around the poverty line (about $12,000) would still be expected to spend 2 percent of her income on premiums. But in return, she’d get a health plan that covers less than what she gets under the Affordable Care Act. 
   
   The Senate bill would also bar Americans from using their tax credits to purchase a health plan that covers abortion. This requirement would take effect immediately, while other changes would not phase in until 2020. 
   
   The Senate bill allows states to opt-out of big Obamacare provisions, like the requirement to cover essential health benefits, through a re-vamped waiver process 
   
   The Senate bill overhauls a section of the Affordable Care Act that allows states to experiment with different ways to provide health insurance coverage. Under current law, states are allowed to propose different ways to deliver health insurance so long as the new plans “provide coverage that is at least as comprehensive as the coverage” defined under the ACA” and “cover at least a comparable number of residents.” In other words: as long as states can cover the same number of people with a similar plan, they’re allowed to experiment with things such as single-payer health care. 
   
   The Senate bill would allow states to seek waiver from key Obamacare requirements, things like the essential health benefits package, which requires health plans to cover key services like maternity care and prescription drugs. But the Senate bill would not require these new plans to cover as many people or provide comparable plans. It eliminates those requirements, and says states can get waivers as long as they don’t increase the deficit. 
   
   You can see the language that gets removed in this helpful tweet: 
   
   So this bill aims to totally gut 1332 coverage protections. pic.twitter.com/jcTgDGoEpH — Adrianna McIntyre (@onceuponA) June 22, 2017 
   
   Under these requirements, a state could ask for a waiver to allow insurers to longer cover things like maternity care or mental health services — two things that individual plans often left out before the Affordable Care Act mandates. They would not be bound by the current Affordable Care Act requirement that coverage under these waivers be just as generous as the standard plans. 
   
   The Senate bill eliminates the individual mandate — and replaces it with a six-month waiting period to penalize the uninsured 
   
   One of the Affordable Care Act’s least popular provisions was the requirement that nearly all Americans carry health insurance coverage or pay a fine. The reason this mandate existed was to convince healthy people to buy health insurance, which would hold down premiums for everyone else. 
   
   The Senate would eliminate the individual mandate by setting the penalty for not carrying health insurance to zero dollars. They can’t completely wipe it off the books due to the complex rules of the budget reconciliation process, but this would have the same effect. 
   
   The Senate bill replaces the individual mandate with a six-month waiting period for those who fail to maintain continuous health insurance coverage. Specifically, this means that those with a break in coverage longer than 63 days would have to wait at least six months from the date they file an application for health coverage to enroll in a plan. This is on top of the health care law’s open enrollment periods, which would still exist under the Senate plan. 
   
   The six-month waiting period fills a big policy gap in the first draft of the Better Care Reconciliation Act, which required health plans to accept all patients — but didn’t require all Americans to purchase coverage, as the Affordable Care Act does. Experts expected that this would cause a death spiral, where only the sickest patients purchase coverage and premiums skyrocket. 
   
   The new six-month waiting period aims to fix that problem. It is meant to nudge healthy people into purchasing coverage because they may fear the consequences of getting locked out of the market down the road. 
   
   The Senate bill repeals a long list of Obamacare taxes 
   
   The Senate bill will eliminate many of the taxes that financed the Affordable Care Act’s insurance expansion. It includes the repeal of: 
   
   A tax on investment income 
   
   A tax on the wealthy to finance the Medicare program 
   
   A tax on tanning salons 
   
   A tax on the health insurance industry 
   
   A tax on the medical device industry 
   
   Many of these tax changes would, as my colleagues have previously written, disproportionately benefit high-income Americans. 
   
   “The typical American, in short, isn’t going to see any money from these tax cuts,” Matt Yglesias has written. “But when you take all that money out of the system, something has to give. And in the case of the various iterations of Affordable Care Act repeal, the thing that gives is the quality of health insurance provided to Americans with below-average incomes or above-average health needs.” 
   
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   The Senate health bill: poor people pay more for worse insurance ||||| WASHINGTON—President Trump famously called the House plan to repeal and replace Obamacare “mean”—entreating Senate Republicans to make their version of the bill more generous. 
   
   Just hours before the Senate unveiled its draft legislation, he repeated that plea. 
   
   “I’ve been talking about a plan with more heart. I’ve said, ‘Add some money to it,'” Trump told a crowd in Iowa Wednesday night. 
   
   Now that the Senate’s plan is out, does it pass the White House test? Does it have more heart? 
   
   The short answer: a little. But it’s probably still mean. 
   
   If you’ve got preexisting conditions or rely on Obamacare’s health insurance subsidies, the Senate version of the legislation is certainly “nicer”—though still not as “nice” as Obamacare itself. On Medicaid, under the expansion? You’re ever so slightly better off than you would be under the House version of the bill, at least for a few years. 
   
   And if you’re one of the 59 million Americans who rely on traditional Medicaid, this legislation is actually significantly meaner. 
   
   The relative “meanness” of the legislation could still change—in either direction. Lawmakers said Thursday Senate Majority Leader Mitch McConnell of Kentucky is likely to make further changes as he works to convince reluctant members of his conference to back the plan ahead of an anticipated vote next Thursday. McConnell can spare just two Republican votes and still pass the measure, since no Democrat is expected to support it. 
   
   For now, several Senate Republicans are still evaluating whether the bill has gotten any nicer — and are quick to say it could yet change. Even the Senate health chairman, Lamar Alexander of Tennessee, demurred on the question after a Thursday briefing on the bill, saying he needed to read it more closely. 
   
   We took a look at the four of the major proposals from the Senate and whether they represent a softening of the House version of the legislation—or something meaner. 
   
   Changes to the health law’s subsidies 
   
   Senate Republicans have promised for months that they would make the tax credits included in the House’s health care measure more generous—and they have. The tax credits, like those in Obamacare, are aimed at helping people who don’t get health insurance through their job or a government program like Medicare or Medicaid afford a plan. 
   
   Obamacare’s tax credits were largely aimed at helping some of the poorest and oldest people in that category, which often meant that younger or wealthier people didn’t get as much financial help. House Republicans changed the way the subsidies are structured, to make more money available to younger and wealthier Americans, at the expense of the opposite group. They also included less money for the subsidies overall. 
   
   The Senate tempered that plan, returning to a subsidy structure nearly identical to the one laid out in Obamacare, though less generous. Beginning in 2020, the Senate version of the subsidies will focus more of the help on low-income people—including some of the people that Obamacare assumed would rely on Medicaid, in expansion states. People earning an annual salary of up to $47,550 this year could qualify for help under Obamacare; under the Senate plan that number drops to $41,580. For a family of four, Obamacare would have helped those earning up to $97,200; the Senate limits that amount to $85,050 this year. 
   
   There’s definitely more “heart” behind that move, especially for poorer or older Americans, or for those living in places with especially high health care costs. But the financial help remains less generous than the help available under current law. 
   
   Changes for people with preexisting conditions 
   
   An extremely controversial, last-minute amendment to the House-passed health care measure would have let states opt out of some of Obamacare’s most onerous health insurance requirements—including its rule that insurers charge everyone the same price for health insurance whether or not they suffer from a preexisting health condition. At least in some places, it could have returned some Americans to a time when insurers could jack up your insurance rates if they found out you were sick. 
   
   The Senate draft won’t let states waive that requirement—a much “nicer” measure for anyone with preexisting conditions. 
   
   But it will let states waive a whole host of other protections for Americans who don’t get their insurance through their job or a government program—like provisions that require insurance plans to cover certain benefits like care for people with autism or for new moms. People with preexisting conditions, then, might be able to get coverage—but depending on where they live, it might not actually cover services they need. 
   
   Whether it’s more or less nice, then, is up in the air—and probably depends on where you live. 
   
   Changes to Medicaid expansion 
   
   For states that expanded Medicaid, the Senate version of the package may be nicer than the House version—but only temporarily. Obamacare encouraged states to expand their Medicaid programs to adults with slightly higher annual incomes with an enticing offer of substantial federal funding. The House measure would essentially have cut off that extra funding abruptly in 2020. 
   
   The Senate draft instead begins winding down that extra funding in 2021, phasing it out more gradually over the following three years—at least in states that don’t end it sooner. 
   
   That’s a “nicer” path for the next few years, but, ultimately, it’s just as mean as before. 
   
   Changes to Medicaid 
   
   The “meanest” change to the Senate draft concerns the traditional Medicaid program, which provides health insurance for millions of low-income Americans. The House-passed package included huge, sweeping cuts to the federal funding for the program, worth a whopping $834 billion over the next 10 years. A nonpartisan analysis of the cuts found it would nix Medicaid coverage for some 14 million Americans. 
   
   Far from mitigating those cuts, the Senate version actually ramps them up more quickly, beginning in 2025. Researchers at the Urban Institute suggest the change would cut as much as an extra $63.7 billion from Medicaid in the year 2028 alone. That makes the draft decidedly “mean” for anyone relying on the program. 
   
   “States will have to fill this shortfall by raising taxes, cutting enrollment, reducing benefits, or reducing provider reimbursement—all of which are difficult choices,” Matthew Buettgens, a senior research associate at the Urban Institute, wrote. 
   
   Changes in funding for mental health and opioid addiction 
   
   The Senate came close to tempering one of the biggest criticisms levied against the White House and its support for the House-passed American Health Care Act: that it would be devastating to thousands in need of treatment for substance abuse, especially opioids. 
   
   The package passed by the House didn’t do much to address the opioid crisis, but it would put about $15 billion in funding toward expanding access to mental health services. That’s gone in the Senate version. 
   
   But what’s decidedly “mean” about this latest draft is a policy that’s absent from the measure. Two Republican senators from heavily impacted states—Rob Portman of Ohio and Shelley Moore Capito of West Virginia—pushed Senate leaders to include a staggering $4.5 billion for each of the next 10 years in funding to help people suffering from opioid addictions. 
   
   Instead, the package includes a $2 billion appropriation for 2018 alone—$43 billion less than the lawmakers had requested. 
   
   In the end, the Senate was never going to be able to deliver a measure that was a whole lot nicer, despite Trump’s pleas. 
   
   There’s a simple reason for that: making the package more generous requires more spending, and the congressional process Republicans are using limits how much they can spend. That process, reconciliation, requires their version of the legislation to generate as much budgetary savings as the House version did. That means their package can’t suddenly include tax credits that are 10 times more generous than the House bill, unless they cut other programs by trillions of dollars. 
   
   “It shows the bind Senate Republicans are in. The bill has to have the same amount of deficit reduction,” said Edwin Park, vice president for public policy at the Center on Budget and Policy Priorities, which has criticized the Republican plan. “Unless they’re changing the basic structure, you end up with the same results.” 
   
   Put simply, they’re boxed in. There’s no easy way to “add some money to it,” as Trump suggested. 
   
   Since the House plan was “mean,” the Senate plan is, too. 
   
   Lev Facher contributed reporting. 
   
   Republished with permission from STAT. This article originally appeared on June 22, 2017 ||||| Story highlights Senate Republicans unveiled the measure Thursday 
   
   The House previously passed their own legislation 
   
   Washington (CNN) President Donald Trump said Thursday "a little negotiation" is needed to add more heart to the "very good" health care bill, as Senate Republicans finally publicly released their legislation. 
   
   Trump has irked some Republicans by arguing the Senate bill needs more funding and "heart," suggesting the House bill was not compassionate enough to people who rely on health care. 
   
   On Thursday, asked by reporters whether the released bill meets his "heart" standard, Trump said it will take "a little negotiation, but it's going to be very good." 
   
   "I am very supportive of the Senate #HealthcareBill. Look forward to making it really special! Remember, ObamaCare is dead," he tweeted later in the day. 
   
   I am very supportive of the Senate #HealthcareBill. Look forward to making it really special! Remember, ObamaCare is dead. — Donald J. Trump (@realDonaldTrump) June 22, 2017 
   
   White House spokeswoman Sarah Huckabee Sanders said Thursday that the White House intends to be involved in those negotiations, despite the largely hands off approach Trump has personally taken in the crafting of the Senate bill. 
   
   Read More ||||| Tweet with a location 
   
   You can add location information to your Tweets, such as your city or precise location, from the web and via third-party applications. You always have the option to delete your Tweet location history. Learn more ||||| The Senate's health-care bill was written in such secrecy that as of Thursday morning, even many Republicans had not yet laid their eyes on the actual text. While Senate Majority Leader Mitch McConnell (R-Ky.) briefed the White House staff on the bill's details Wednesday, the actual document is only set to be made public Thursday. 
   
   Democrats have issued scathing statements condemning the Republicans for their closed-door tactics, but even some Republicans are feeling their patience splinter. Alaska Sen. Lisa Murkowski (R) issued a sarcastic answer to the Independent Journal Review's Haley Byrd after being asked if she'd seen the text: 
   
   I just asked Lisa Murkowski if she's seen any bill text this morning. "I am not a reporter, and I am not a lobbyist, so I've seen nothing." — Haley Byrd (@byrdinator) June 22, 2017 Just asked Senator Murkowski if she's annoyed that lobbyists have seen the health bill before her. Her one-word answer: "yes." — Paul McLeod (@pdmcleod) June 22, 2017 
   
   "As the Senate prepares to finally loop in the American public, already several news reports from outlets like The Washington Post and Politico have published what they're hearing is in the bill," Vox writes. "They are all sourced to lobbyists and aides." 
   
   Along with Sen. Rand Paul (R-Ky.), Murkowski is one of the Republicans' sharpest critics of the health-care bill, and her vote could be critical in deciding if it passes or not. In anticipation of pressure from the White House, she told Politico that if the bill "doesn't work for Alaska, it doesn't make any difference who's calling me." Jeva Lange ||||| If you’re wondering what will happen with the Senate’s effort to repeal Obamacare, I recommend you follow the words, actions and eventually the votes of four Republican senators over the next days or weeks: Susan Collins (Maine), Mike Lee (Utah), Lisa Murkowski (Alaska) and Rand Paul (Kentucky). 
   
   Why those four? First, they are part of a broader group of Republican senators who have been complaining about the GOP’s repeal-Obamacare process since the start of the year. Lee and Paul, along with Texas Sen. Ted Cruz, have generally worried that the Obamacare repeal may still leave too much of the law in place. “No Obamacare lite,” Paul wrote in February. 
   
   On the other ideological end, Collins and Murkowski — along with Sens. Bill Cassidy (Louisiana), Shelley Moore Capito (West Virginia), Cory Gardner (Colorado), Dean Heller (Nevada) and Rob Portman (Ohio) — have at times pushed back against repealing too much of Obamacare, worrying that the Republicans may not be doing enough to protect people on Medicaid or those with pre-existing conditions. 
   
   SENATOR STATE EXPANDED MEDICAID TRUMP MARGIN TRUMP SCORE Susan Collins -3 86.0% Rand Paul ✓ +30 87.8 Lisa Murkowski ✓ +15 92.9 Dean Heller ✓ -2 93.0 Ted Cruz +9 95.3 Cory Gardner ✓ -5 95.3 Mike Lee +18 95.3 Rob Portman ✓ +8 95.3 Shelley Moore Capito ✓ +42 97.6 Bill Cassidy ✓ +20 97.7 Senators who have expressed doubts about the Obamacare repeal Trump score measures how often members of Congress vote with Trump’s position on major legislation. Source: Kaiser Family Foundation 
   
   So any of these members could provide the three votes that would kill this bill. I chose those four because I would argue they would have the clearest rationales to stop an Obamacare repeal and be able to explain that vote to their Republican constituents. Based on our “Trump Score,” Collins and Murkowski are among the five Senate Republicans who most vote against Trump’s positions on major legislation. Collins has a reputation as a more moderate Republican and is in a state that Hillary Clinton carried in 2016. In 2010, Murkowski was defeated by a more conservative Republican in Alaska’s GOP primary, but then ran in the general election and won as a write-in candidate. 
   
   Also, both of these senators, unlike many of the others in the group of more moderate Republicans, have specifically complained about a provision in the bill that would effectively bar, for one year, Medicaid recipients from getting coverage at Planned Parenthood clinics. Republicans object to Planned Parenthood because it offers abortion services. (There is an existing ban on the use of federal funds to pay for abortions.) 
   
   I’m not saying other moderates won’t oppose this legislation. But if a coalition of more moderate members rises up to oppose this bill, it is very likely to include Collins and Murkowski. 
   
   On the conservative end, Cruz has been hinting that he wants to use this bill to show fellow Republicans that he can be a team player, working with the party instead of clashing with it as he did for much of 2013 and 2014. It’s hard to see him leading a lonely charge against this legislation. 
   
   In contrast, Paul in particular has been scathing. Speaking to reporters this week, before the bill’s official release, he called what he had seen of the Senate’s work on Obamacare repeal “weak-kneed.” Lee has also been a regular critic of the Senate’s bill, even before its release. And the Senate bill, like Obamacare, will use a system of tax credits that vary based on income, which makes it easier for poorer people to buy insurance. The House bill gave tax credits to people to purchase insurance based on age. That change could embolden both Paul and Lee further. 
   
   What else might affect these senators’ decisions and potentially those of their colleagues? First, how will outside groups react? Generally, groups representing patients, such as AARP, and medical groups, like the American College of Physicians, have been wary of this legislation. Will they try to aggressively mobilize their members against it? Perhaps more importantly, how will major conservative groups view the bill? One important factor in the initial failure of the House version of Obamacare repeal was that conservative groups felt it did not repeal enough of Obamacare. 
   
   Indeed, Philip Rocco, a political scientist at the Marquette University who co-wrote a book called “Obamacare Wars” that details the fights over the law in states from essentially the moment it passed, said it was particularly important to watch the moves of conservative groups such as Americans for Prosperity and Heritage Action in the context of Lee and Paul. He argued that if key parts of the conservative movement said this bill is enough of an Obamacare repeal, it will be hard for Lee and Paul to oppose it. 
   
   “I don’t think it’s right to think of them as lone wolves,” Rocco said. 
   
   Second, how will Republican House members, particularly the hard-to-please Freedom Caucus, view this legislation? Freedom Caucus members have been in contact with the Senate about the legislation, Alyssa Farah, the group’s spokesperson, told me. That said, it’s not clear if they have signed off on the final product. Republican senators will be leery of backing a bill that the Freedom Caucus does not want, since that means this legislation may not be able to pass the House. 
   
   Third, don’t forget the Congressional Budget Office. The CBO is expected to release its “score” of the bill next week. That will be a heavily covered news event. But it is unlikely to be very surprising, since this legislation is not radically different from the two House different bills that the House had evaluated by the CBO. Last month, Collins blasted the House version of this legislation, specifically citing numbers from the CBO report on it. 
   
   I have not included President Trump’s reaction as something to watch, because I’m not convinced he will be a major factor. His closed-door comments about the bill the House passed being “mean” were probably not helpful to Republicans, but it’s hard to see him publicly blasting the Senate bill or ultimately vetoing whatever legislation comes through Congress. I will acknowledge that the president’s behavior is unpredictable and that a strong denunciation of a Republican health care bill by a Republican president might shift things. 
   
   We don’t know where this process is headed. Senate Republicans say there could be a vote next week, but it could be put off if senators demand changes. A broad coalition of members could come to McConnell and say that they can’t back this bill, as what happened to the initial version. The House is still a wild card. 
   
   But this legislation will only be truly dead if it’s clear that at least three Senate Republicans are prepared to vote against it — or they actually do. And that gives a little power to this group of four senators. ||||| CLOSE Senate Republicans have unveiled their latest health care legislation, which aims to repeal and replace Obamacare. As expected, both side voiced bold and passionate reactions to the measure. USA TODAY 
   
   Minority Leader Chuck Schumer holds a news conference on the reaction of Senate Democratic leadership to the release of the draft of the GOP health care plan on June 22, 2017. (Photo: Michael Reynolds, European Pressphoto Agency) 
   
   WASHINGTON — After days of protesting GOP “secrecy” in crafting their health care bill, Senate Minority Leader Chuck Schumer of New York and other Democratic leaders began a strategy on Thursday of trying to slow down consideration of the proposal. 
   
   Their first steps were to get Republicans on record objecting calls for transparency. Senate Majority Leader Mitch McConnell of Kentucky turned down their requests for any changes to the House-passed Obamacare replacement to be public for 72 hours and be subject to a Congressional Budget Office analysis — though CBO is promising to release an analysis next week. 
   
   Ultimately, there’s not much Democrats can do to block the bill’s passage if enough Republicans fall in line, but they can make the process onerous. Democrats have been calling on the American public to weigh in against “Trumpcare.” 
   
   “Every American should be asking their Republican senators one simple question this weekend: Why do the wealthy deserve a tax cut more than we deserve health care?” Schumer said. 
   
   Republicans are using a budget procedure to pass the bill with a simple majority of 51 votes, rather than the 60 votes typically needed for legislation. 
   
   The rules allow Democrats — and Republicans — to offer unlimited amendments on the Senate floor next week, when it is expected to come up for a vote. But Democrats are effectively blocked from filibustering the bill. 
   
   The bigger obstacle for Republicans may be within their own party, with some conservatives saying the bill doesn't go far enough in repealing the Affordable Care Act and one moderate, Sen. Dean Heller of Nevada, saying he’s concerned about the impact of the bill on Medicaid patients. Democrats are united against it, meaning that McConnell can afford to lose only two GOP votes. 
   
   If the Senate passes its version, the House and Senate would have to settle on compromise legislation before it can be signed by President Trump. 
   
   Though Trump celebrated passage of the House version of the health care bill in May, he has since called it “mean” and said the Senate plan should have more “heart.” The House-passed health care bill, called the American Health Care Act, would lead to 23 million fewer people having health insurance by 2026, according to the Congressional Budget Office. 
   
   Read more: 
   
   During a news conference, Schumer edited a “Mean” poster with a marker to make it say “Meaner.” 
   
   He said the Senate bill would raise health care costs for middle-class and working-class families, kick millions off Medicaid, abandon people with pre-existing conditions and defund Planned Parenthood, making it harder for millions of women to obtain health care. 
   
   “It’s every bit as bad as the House bill, in some ways even worse,” he said. 
   
   Regardless the outcome, there’s not much of a downside for Democratic senators to be seen by their base as fighting the bill as robustly as possible. The Progressive Change Campaign Committee is soliciting signatures for a petition, calling on Democrats to tie up the Senate with thousands of amendments to the bill. 
   
   "The longer it takes to get a vote on this bill, the more public scrutiny it will receive, the more time there will be for opposition to build, and the more likely it is that three Republican senators will get cold feet about voting for it," the campaign writes in an email to supporters. 
   
   Progressive icon, Sen. Elizabeth Warren, D-Mass., characterized the fight in stark terms: “These cuts are blood money. People will die.” 
   
   Democrats have been hammering Republicans this week on the Senate floor for a lack of transparency on their bill that was drafted behind closed doors, arguing that Democrats held about 100 hearings and meetings on the Affordable Care Act before its passage in 2010. 
   
   Democrats began their protest earlier this week by using procedural tactics to stall Senate business, forcing the postponement of committee hearings. 
   
   Contributing: Erin Kelly and Eliza Collins 
   
   Read or Share this story: https://usat.ly/2sYwm5n
target: – Senate Republicans on Thursday finally unveiled their answer to the House bill to repeal and replace the Affordable Care Act, and Vox has an explainer of what's in it. Some major sticking points: The Better Care Reconciliation Act will ask poor and middle-class Americans to pay more for less coverage, and Medicaid would be cut after expansions are rolled back. Medicaid patients would be unable to get treatment at Planned Parenthood, which would be defunded for a year. The bill also includes a tax break for the wealthy. Here's what else you need to know: First, Politico has the full text of the 142-page document Republicans are calling a "discussion draft." Three Republican senators can defeat the bill by joining Democrats to vote against it. FiveThirtyEight reports the most likely candidates are Rand Paul and Mike Lee (who don't believe it goes far enough; Paul recently said he doesn't want "ObamaCare lite") and Susan Collins and Lisa Murkowski (who want more protections for Medicaid and pre-existing conditions). ABC News reports four Republican senators have already said they won't vote for the bill without more information and negotiation: Paul, Lee, Ron Johnson, and Ted Cruz. They released a joint statement saying the bill doesn't do enough to repeal ObamaCare. The bill's writing was cloaked in such secrecy that the Week reports as of Thursday morning quite a few Republican senators still had not seen it; Murkowski, for example, told a reporter, "I am not a reporter, and I am not a lobbyist, so I've seen nothing." President Trump had called the House bill "mean" and in need of "more heart." So Scientific American takes a look to see if the Senate version fulfills that requirement. When asked by a reporter if the Senate bill had enough heart, Trump called it "very good" but in need of "a little negotiation," CNN reports. According to People, police dragged protesters—some of them in wheelchairs or wearing medical devices—away from Mitch McConnell's office and arrested them. The protesters, members of a national disability rights group, say people with disabilities are threatened by the bill. Finally, USA Today reports Senate Democrats plan to fight the bill through procedural requests to slow down the process. They called for any changes to the House's bill to be made public for at least 72 hours and be subject to CBO analysis.