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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

TITLE I

4

SEC. 101. ELIMINATION OF LIMITATION ON RECAPTURE OF

5

EXCESS ADVANCE PAYMENTS OF PREMIUM

6

TAX CREDITS.

7

Subparagraph (B) of section 36B(f)(2) of the Inter-

8 nal Revenue Code of 1986 is amended by adding at the
9 end the following new clause:
10

‘‘(iii) NONAPPLICABILITY

OF LIMITA-

11

TION.—This

subparagraph shall not apply

12

to any taxable year beginning during the

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1

period beginning on January 1, 2018, and

2

ending on December 31, 2019.’’.

3
4

SEC. 102. PREMIUM TAX CREDIT.

(a) MODIFICATION

OF

DEFINITION

OF

QUALIFIED

5 HEALTH PLAN.—
6

(1) IN

GENERAL.—Section

36B(c)(3)(A) of the

7

Internal Revenue Code of 1986 is amended by in-

8

serting before the period at the end the following:

9

‘‘or a plan that includes coverage for abortions

10

(other than any abortion necessary to save the life

11

of the mother or any abortion with respect to a

12

pregnancy that is the result of an act of rape or in-

13

cest)’’.

14

(2) EFFECTIVE

DATE.—The

amendment made

15

by this subsection shall apply to taxable years begin-

16

ning after December 31, 2017.

17

(b) REPEAL.—

18

(1) IN

GENERAL.—Subpart

C of part IV of sub-

19

chapter A of chapter 1 of the Internal Revenue Code

20

of 1986 is amended by striking section 36B.

21

(2) EFFECTIVE

DATE.—The

amendment made

22

by this subsection shall apply to taxable years begin-

23

ning after December 31, 2019.

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1

SEC. 103. MODIFICATIONS TO SMALL BUSINESS TAX CRED-

2

IT.

3

(a) SUNSET.—

4

(1) IN

GENERAL.—Section

45R of the Internal

5

Revenue Code of 1986 is amended by adding at the

6

end the following new subsection:

7

‘‘(j) SHALL NOT APPLY.—This section shall not

8 apply with respect to amounts paid or incurred in taxable
9 years beginning after December 31, 2019.’’.
(2) EFFECTIVE

10

DATE.—The

amendment made

11

by this subsection shall apply to taxable years begin-

12

ning after December 31, 2019.

13

(b) DISALLOWANCE

OF

SMALL EMPLOYER HEALTH

14 INSURANCE EXPENSE CREDIT
15
16

CLUDES

FOR

PLAN WHICH IN-

COVERAGE FOR ABORTION.—
(1) IN

GENERAL.—Subsection

(h) of section

17

45R of the Internal Revenue Code of 1986 is

18

amended—

19

(A) by striking ‘‘Any term’’ and inserting

20

the following:

21

‘‘(1) IN

22

GENERAL.—Any

term’’, and

(B) by adding at the end the following new

23

paragraph:

24

‘‘(2) EXCLUSION

OF HEALTH PLANS INCLUDING

ABORTION.—The

term ‘qualified

25

COVERAGE

26

health plan’ does not include any health plan that

FOR

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1

includes coverage for abortions (other than any

2

abortion necessary to save the life of the mother or

3

any abortion with respect to a pregnancy that is the

4

result of an act of rape or incest).’’.

5

(2) EFFECTIVE

DATE.—The

amendments made

6

by this subsection shall apply to taxable years begin-

7

ning after December 31, 2017.

8
9

SEC. 104. INDIVIDUAL MANDATE.

(a) IN GENERAL.—Section 5000A(c) of the Internal

10 Revenue Code of 1986 is amended—
11
12
13

(1) in paragraph (2)(B)(iii), by striking ‘‘2.5
percent’’ and inserting ‘‘Zero percent’’, and
(2) in paragraph (3)—
(A) by striking ‘‘$695’’ in subparagraph

14
15

(A) and inserting ‘‘$0’’, and

16

(B) by striking subparagraph (D).

17

(b) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to months beginning after Decem19 ber 31, 2015.
20
21

SEC. 105. EMPLOYER MANDATE.

(a) IN GENERAL.—

22

(1) Paragraph (1) of section 4980H(c) of the

23

Internal Revenue Code of 1986 is amended by in-

24

serting ‘‘($0 in the case of months beginning after

25

December 31, 2015)’’ after ‘‘$2,000’’.

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1

(2) Paragraph (1) of section 4980H(b) of the

2

Internal Revenue Code of 1986 is amended by in-

3

serting ‘‘($0 in the case of months beginning after

4

December 31, 2015)’’ after ‘‘$3,000’’.

5

(b) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to months beginning after Decem7 ber 31, 2015.
8

SEC. 106. SHORT TERM ASSISTANCE FOR STATES AND MAR-

9

KET-BASED HEALTH CARE GRANT PROGRAM.

10

(a) IN GENERAL.—Section 2105 of the Social Secu-

11 rity Act (42 U.S.C. 1397ee) is amended by adding at the
12 end the following new subsections:
‘‘(h) SHORT-TERM ASSISTANCE

13
14

ERAGE AND

15

FOR

ACCESS DISRUPTION

AND

TO

ADDRESS COV-

PROVIDE SUPPORT

STATES.—

16

‘‘(1) APPROPRIATION.—There are authorized to

17

be appropriated, and are appropriated, out of monies

18

in

19

$10,000,000,000 for calendar year 2019, and

20

$15,000,000,000 for calendar year 2020, to the Ad-

21

ministrator of the Centers for Medicare & Medicaid

22

Services (in this subsection and subsection (i) re-

23

ferred to as the ‘Administrator’) to fund arrange-

24

ments with health insurance issuers to assist in the

25

purchase of health benefits coverage by addressing

the

Treasury

not

otherwise

obligated,

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1

coverage and access disruption and responding to

2

urgent health care needs within States. Funds ap-

3

propriated under this paragraph shall remain avail-

4

able until expended.

5

‘‘(2) PARTICIPATION

REQUIREMENTS.—

6

‘‘(A) GUIDANCE.—Not later than 30 days

7

after the date of enactment of this subsection,

8

the Administrator shall issue guidance to health

9

insurance issuers regarding how to submit a no-

10

tice of intent to participate in the program es-

11

tablished under this subsection.

12

‘‘(B) NOTICE

OF

INTENT

TO

PARTICI-

13

PATE.—To

be eligible for funding for a cal-

14

endar year under this subsection, a health in-

15

surance issuer shall submit to the Adminis-

16

trator a notice of intent to participate not later

17

than March 31 of the previous calendar year, in

18

such form and manner as specified by the Ad-

19

ministrator, and 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

(4); and

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1

‘‘(ii) such information as the Adminis-

2

trator may require to carry out this sub-

3

section.

4

‘‘(3)

PROCEDURE

5

FUNDS.—The

6

under this subsection to States for each of calendar

7

years 2019 and 2020 in the following manner:

FOR

DISTRIBUTION

OF

Administrator shall distribute funds

8

‘‘(A) 5 percent of the funds appropriated

9

for the year shall distributed to low-density

10

States (as defined in subsection (i)(7)(B)(i)).

11

‘‘(B) 95 percent of the funds appropriated

12

for the year shall be distributed among States

13

that are not low-density States in a manner

14

that takes into account the proportion of each

15

State’s population that are low-income individ-

16

uals (as defined in subsection (i)(5)(H)), based

17

on the most recent data available.

18

‘‘(4) USE

OF FUNDS.—Funds

provided to a

19

health insurance issuer under paragraph (1) shall be

20

subject to the requirements of paragraphs (1)(D)

21

and (11) of subsection (i) in the same manner as

22

such requirements apply to States receiving pay-

23

ments under subsection (i) and shall be used only

24

for the activities specified in paragraph (1)(A)(ii) of

25

subsection (i).

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1
2
3

‘‘(i) MARKET-BASED HEALTH CARE GRANT PROGRAM.—

‘‘(1) APPLICATION

AND

CERTIFICATION

RE-

4

QUIREMENTS.—To

5

funds under this subsection, a State shall submit to

6

the Administrator an application, not later than

7

March 31, 2019, in the case of allotments for cal-

8

endar year 2020, and not later than March 31 of

9

the previous year, in the case of allotments for any

10

subsequent calendar year) and in such form and

11

manner as specified by the Administrator, that con-

12

tains the following:

13
14

be eligible for an allotment of

‘‘(A) A description of how the funds will be
used to do 1 or more of the following:

15

‘‘(i) To establish or maintain a pro-

16

gram or mechanism to help high-risk indi-

17

viduals in the purchase of health benefits

18

coverage, including by reducing premium

19

costs for such individuals, who have or are

20

projected to have a high rate of utilization

21

of health services, as measured by cost,

22

and who do not have access to health in-

23

surance coverage offered through an em-

24

ployer, enroll in health insurance coverage

25

under a plan offered in the individual mar-

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1

ket

(within

the

meaning

of

section

2

5000A(f)(1)(C) of the Internal Revenue

3

Code of 1986).

4

‘‘(ii) To establish or maintain a pro-

5

gram to enter into arrangements with

6

health insurance issuers to assist in the

7

purchase of health benefits coverage by

8

stabilizing premiums and promoting State

9

health insurance market participation and

10

choice in plans offered in the individual

11

market (within the meaning of section

12

5000A(f)(1)(C) of the Internal Revenue

13

Code of 1986).

14

‘‘(iii) To provide payments for health

15

care providers for the provision of health

16

care services, as specified by the Adminis-

17

trator.

18

‘‘(iv) To provide health insurance cov-

19

erage by funding assistance to reduce out-

20

of-pocket costs, such as copayments, coin-

21

surance, and deductibles, of individuals en-

22

rolled in plans offered in the individual

23

market (within the meaning of section

24

5000A(f)(1)(C) of the Internal Revenue

25

Code of 1986).

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1

‘‘(v) To establish or maintain a pro-

2

gram or mechanism to help individuals

3

purchase health benefits coverage, includ-

4

ing by reducing premium costs for plans

5

offered in the individual market (within

6

the meaning of section 5000A(f)(1)(C) of

7

the Internal Revenue Code of 1986) for in-

8

dividuals who do not have access to health

9

insurance coverage offered through an em-

10

ployer.
‘‘(vi) Subject to subparagraph (D)

11
12

and

paragraph

13

health insurance coverage for individuals

14

who are eligible for medical assistance

15

under a State plan under title XIX by es-

16

tablishing

17

with health insurance issuers to provide

18

such coverage.

or

(4)(B)(iii),

maintaining

to

provide

relationships

19

‘‘(vii) Assist in the purchase of health

20

benefits coverage by establishing or main-

21

taining a program or mechanism, as speci-

22

fied by the State, to establish coverage

23

programs through arrangements with man-

24

aged care organizations for the provision of

25

health care services to individuals who are

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1

not eligible for medical assistance or child

2

health assistance under the State plans

3

under title XIX or this title.

4

‘‘(B) A description of how the State shall

5

maintain access to adequate and affordable

6

health insurance coverage for individuals with

7

pre-existing conditions.

8

‘‘(C) A certification that the funds pro-

9

vided under this subsection shall only be used

10

for the activities specified in subparagraph (A).

11

‘‘(D) A certification that none of the funds

12

provided under this subsection shall be used by

13

the State for an expenditure that is attributable

14

to an intergovernmental transfer, certified pub-

15

lic expenditure, or any other expenditure to fi-

16

nance the non-Federal share of expenditures re-

17

quired under any provision of law, including

18

under the State plans established under this

19

title and title XIX or under a waiver of such

20

plans.

21

‘‘(E) A certification that the State will en-

22

sure compliance with sections 2714, 2725,

23

2726, 2727, and 2753 of the Public Health

24

Service Act (42 U.S.C. 300gg–14, 300gg–25,

25

300gg–26, 3-00gg–27, 300gg–53), including

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1

with respect to any program or mechanism

2

funded by allotments under this subsection.

3

‘‘(F) Such other information as necessary

4

for the Administrator to carry out this sub-

5

section.

6

‘‘(2) ELIGIBILITY.—Only the 50 States and the

7

District of Columbia shall be eligible for an allot-

8

ment and payments under this subsection and all

9

references in this subsection to a State shall be

10

treated as only referring to the 50 States and the

11

District of Columbia.

12

‘‘(3) ONE-TIME

APPLICATION.—If

an applica-

13

tion of a State submitted under this subsection is

14

approved by the Administrator for a year, the appli-

15

cation shall be deemed to be approved by the Admin-

16

istrator for that year and each subsequent year

17

through December 31, 2026.

18

‘‘(4) MARKET-BASED

19

LOTMENTS AND PAYMENTS.—

HEALTH CARE GRANT AL-

20

‘‘(A) APPROPRIATION.—For the purpose of

21

providing allotments to States under this sub-

22

section, there is appropriated to the Adminis-

23

trator, out of any money in the Treasury not

24

otherwise appropriated—

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1
2
3
4
5
6
7
8
9
10
11
12
13

‘‘(i)

for

calendar

year

2020,

year

2021,

calendar

year

2022,

calendar

year

2023,

year

2024,

year

2025,

year

2026,

$146,000,000,000;
‘‘(ii)

for

calendar

$146,000,000,000;
‘‘(iii)

for

$157,000,000,000;
‘‘(iv)

for

$168,000,000,000;
‘‘(v)

for

calendar

$179,000,000,000;
‘‘(vi)

for

calendar

$190,000,000,000; and
‘‘(vii)

for

calendar

14

$190,000,000,000.

15

‘‘(B) ALLOTMENTS;

16
17

AVAILABILITY OF AL-

LOTMENTS.—

‘‘(i) IN

GENERAL.—In

the case of a

18

State with an application approved under

19

this subsection with respect to a calendar

20

year, the Administrator shall allot to the

21

State for the year, from amounts appro-

22

priated for such year under subparagraph

23

(A), the amount determined for the State

24

and year under paragraph (5).

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2
3

‘‘(ii) AVAILABILITY

OF ALLOTMENTS;

UNUSED AMOUNTS.—

‘‘(I) IN

GENERAL.—Amounts

al-

4

lotted to a State for a calendar year

5

under this subparagraph shall remain

6

available for obligation by the State

7

through December 31 of the second

8

calendar year following the year for

9

which the allotment is made, except

10

that in no case shall amounts appro-

11

priated for any year before calendar

12

year 2027 remain available for obliga-

13

tion by a State after December 31,

14

2026.

15

‘‘(II) UNUSED

AMOUNTS TO BE
REDUCTION.—

16

USED

17

Amounts allotted to a State for a cal-

18

endar year that remain unobligated on

19

April 1 of the following year shall be

20

deposited into the general fund of the

21

Treasury and shall be used for deficit

22

reduction

23

‘‘(iii) LIMITATION.—

24
25

FOR

‘‘(I) IN

DEFICIT

GENERAL.—Subject

to

subclause (II), in no case may a State

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1

use more than 15 percent of the

2

amount allotted to the State for a

3

year under this subparagraph for the

4

purpose described in clause (vi) of

5

paragraph (1)(A).

6

‘‘(II) EXCEPTION.—The Admin-

7

istrator may permit a State to use not

8

more than 20 percent of the amount

9

allotted to the State for a year under

10

this subparagraph for the purpose de-

11

scribed in clause (vi) of paragraph

12

(1)(A) if the State submits an appli-

13

cation to waive the restriction in sub-

14

clause (I) and the Administrator de-

15

termines that the State is using such

16

amounts allotted to the State to sup-

17

plement, and not supplant, State ex-

18

penditures on the State plan under

19

title XIX.

20

‘‘(C) RESERVATION

21
22

OF FUNDS FOR AD-

VANCED PAYMENTS TO STATES IN 2020.—

‘‘(i) IN

GENERAL.—Subject

to clause

23

(ii)(II), from the amount appropriated for

24

calendar year 2020, $10,000,000,000 shall

25

be reserved for the purpose of increasing

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1

State allotments for calendar year 2020

2

under paragraph (8).
‘‘(ii) AVAILABILITY

3

OF

RESERVED

FUNDS.—

4

‘‘(I) IN

5

GENERAL.—Funds

re-

6

served under clause (i) shall be avail-

7

able for the purpose described in such

8

clause until December 31, 2020.
‘‘(II) AVAILABILITY

9

FOR 2026 AL-

10

LOTMENTS.—To

the extent that any

11

funds reserved under clause (i) remain

12

after December 31, 2020, such funds

13

shall be available for making allot-

14

ments to States for calendar year

15

2026.

16

‘‘(D) ANNUAL

DISTRIBUTION OF FUNDS

STATES.—Each

calendar year, beginning

17

TO

18

with calendar year 2020, the Administrator

19

shall distribute funds, from the amount allotted

20

to each State that has an application approved

21

under this subsection for a calendar year, to

22

each such State for the year, in accordance with

23

paragraph (6).

24
25

‘‘(E) REQUIRED

USE OF FUNDS.—Not

less

than 50 percent of the funds paid to a State

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1

under this subsection for a calendar year shall

2

be used by the State to provide assistance (in

3

a manner consistent with the uses described in

4

paragraph (1)(A)) to individuals whose income

5

(as determined under section 1902(e)(14) (re-

6

lating to modified adjusted gross income))

7

equals or exceeds 45 percent but does not ex-

8

ceed 295 percent of the poverty line (as defined

9

in section 2110(c)(5)) applicable to a family of

10

the size involved.

11

‘‘(5)

12

DETERMINATION

OF

ALLOTMENT

AMOUNTS.—

13

‘‘(A) CALENDAR

14

‘‘(i) IN

YEAR 2020.—

GENERAL.—Subject

to clause

15

(v) and the succeeding subparagraphs of

16

this paragraph, the amount determined

17

under this paragraph for a State for cal-

18

endar year 2020 shall be equal to the

19

State’s base period amount, as defined in

20

clause (ii).

21

‘‘(ii) BASE

PERIOD AMOUNT.—In

this

22

paragraph, the term ‘base period amount’

23

means, with respect to a State, the sum of

24

the following amounts:

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1

‘‘(I) The amount, increased by

2

the State growth factor described in

3

clause (iv)(I), of Federal payments—

4

‘‘(aa) that were made to the

5

State during the State’s premium

6

assistance base period (as defined

7

in clause (iii)) for medical assist-

8

ance

9

under clause (i)(VIII) or (ii)(XX)

10

of section 1902(a)(10)(A) (in-

11

cluding medical assistance pro-

12

vided to individuals who are not

13

newly eligible (as defined in sec-

14

tion 1905(y)(2)) individuals de-

15

scribed in subclause (VIII) of

16

section 1902(a)(10)(A)(i)); or

provided

to

individuals

17

‘‘(bb) that would have been

18

made to a State during the

19

State’s premium assistance base

20

period for medical assistance pro-

21

vided to individuals who would

22

have been described in section

23

1902(a)(10)(A)(i)(VIII) (without

24

regard to the first sunset date in

25

such section) but who were pro-

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1

vided such assistance under a

2

title XIX State plan waiver that

3

made medical assistance available

4

to all individuals described in

5

such subsection whose income did

6

not exceed 100 percent of the

7

poverty line and that was in ef-

8

fect on September 1, 2017, if

9

such assistance was treated as

10

assistance under such section.

11

‘‘(II) The amount, increased by

12

the State growth factor described in

13

clause (iv)(II), of Federal payments

14

made to the State during the State’s

15

premium assistance base period for

16

operating a Basic Health Program

17

under section 1331 of the Patient

18

Protection and Affordable Care Act

19

during such period.

20

‘‘(III) The amount, increased by

21

the State growth factor described in

22

clause (iv)(II), of advance payments

23

of premium assistance credits allow-

24

able under section 36B of the Internal

25

Revenue Code of 1986 made under

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1

section 1412(a) of the Patient Protec-

2

tion and Affordable Care Act during

3

the State’s premium assistance base

4

period on behalf of individuals who

5

purchased insurance through the Ex-

6

change established for or by the State

7

pursuant to title I of such Act.

8

‘‘(IV) The amount, increased by

9

the State growth factor described in

10

clause (iv)(II), of Federal payments

11

for cost-sharing reductions provided

12

during the State’s premium assistance

13

base period under section 1402 of

14

such Act to individuals who purchased

15

insurance through the Exchange es-

16

tablished for or by the State pursuant

17

to title I of such Act.

18

‘‘(iii) PREMIUM

19
20

ASSISTANCE BASE PE-

RIOD.—

‘‘(I) IN

GENERAL.—In

this para-

21

graph, the term ‘premium assistance

22

base period’ means, with respect to a

23

State, a period of 4 consecutive fiscal

24

quarters selected by the State.

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1

‘‘(II)

TIMELINE.—Each

State

2

shall submit its selection of a pre-

3

mium assistance base period to the

4

Administrator not later than July 1,

5

2018.

6

‘‘(III) PARAMETERS.—In select-

7

ing a premium assistance base period

8

under this clause, a State shall—

9

‘‘(aa) only select a period of

10

4 consecutive fiscal quarters for

11

which all the data necessary to

12

make

13

under this paragraph is available,

14

as determined by the Adminis-

15

trator; and

determinations

required

16

‘‘(bb) shall not select any

17

period of 4 consecutive fiscal

18

quarters that begins with a fiscal

19

quarter earlier than the first

20

quarter of fiscal year 2014 or

21

ends with a fiscal quarter later

22

than the first fiscal quarter of

23

2018.

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22
‘‘(iv) GROWTH

1

FACTORS.—The

growth

2

factor described in this clause for a State

3

is—

4

‘‘(I) for the amount described in

5

subclause (I) of clause (i), the pro-

6

jected percentage increase in Medicaid

7

expenditures from the last month of

8

the State’s premium assistance base

9

period to November of 2019, as deter-

10

mined by the Medicaid and CHIP

11

Payment and Access Commission; and

12

‘‘(II) for the amounts described

13

in subclauses (II), (III), and (IV) of

14

clause (i), the percentage increase in

15

the medical care component of the

16

consumer price index for all urban

17

consumers (U.S. city average) from

18

the last month of the State’s premium

19

assistance base period to November of

20

2019.

21

‘‘(v) HIGH-SPENDING

LOW-DENSITY

22

STATE ADJUSTMENT.—In

the case of a

23

State that, during its premium assistance

24

base period, is a low-density State (as de-

25

fined in paragraph (7)(B)(i)) and has

 LYN17751

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23
1

health care spending per capita that is

2

greater than 20 percent above the mean

3

health care spending per capita for all

4

States, as determined by the Adminis-

5

trator, the Administrator shall increase the

6

base period amount determined for such

7

State under clause (ii) by an amount that

8

is equal to the product of—

9

‘‘(I) the base period amount de-

10

termined for the State under clause

11

(ii); and

12

‘‘(II) the percentage by which the

13

State’s health care spending per cap-

14

ita during the premium assistance

15

base period is greater than the mean

16

health care spending per capita for all

17

States during such period.

18

‘‘(vi) DEADLINE

19
20

AND CALCULATION

OF PRELIMINARY BASE PERIOD AMOUNT.—

‘‘(I) IN

GENERAL.—The

Admin-

21

istrator shall notify each State of its

22

base period amount not later than

23

November 1, 2019.

24
25

‘‘(II) PRELIMINARY
AMOUNT.—If

BASE PERIOD

the Administrator does

 LYN17751

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24
1

not have the data required to make

2

the determinations under this sub-

3

paragraph, the Administrator shall—

4

‘‘(aa) calculate a preliminary

5

base period amount for each

6

State based on the most recent

7

data available;

8

‘‘(bb) notify each State of

9

such preliminary amount by the

10

date specified in subclause (I);

11

and

12

‘‘(cc) shall calculate the base

13

period amount for each State and

14

notify such State of such amount

15

as soon as practicable after the

16

necessary data becomes available.

17

‘‘(B) CALENDAR

YEARS

2021

THROUGH

18

2026.—Subject

19

of this paragraph, for each of calendar years

20

2021 through 2026, the amount determined

21

under this paragraph for a State and calendar

22

year shall be equal to—
‘‘(i) for calendar year 2021, the sum

23
24

to the succeeding subparagraphs

of—

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1

‘‘(I) an amount equal to 9⁄10 of

2

the amount determined under this

3

paragraph for the State for calendar

4

year 2020; and

5

‘‘(II) an amount equal to 1⁄10 of

6

the low-income population amount (as

7

defined in subparagraph (I)) for the

8

State for calendar year 2021;

9

‘‘(ii) for calendar year 2022, the sum

10

of—

11

‘‘(I) an amount equal to 8⁄10 of

12

the amount determined under this

13

paragraph for the State for calendar

14

year 2021; and

15

‘‘(II) an amount equal to 2⁄10 of

16

the low-income population amount for

17

the State for calendar year 2022;

18

‘‘(iii) for calendar year 2023, the sum

19

of—

20

‘‘(I) an amount equal to 7⁄10 of

21

the amount determined under this

22

paragraph for the State for calendar

23

year 2022; and

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1

‘‘(II) an amount equal to 3⁄10 of

2

the low-income population amount for

3

the State for calendar year 2023;

4

‘‘(iv) for calendar year 2024, the sum

5

of—

6

‘‘(I) an amount equal to 6⁄10 of

7

the amount determined under this

8

paragraph for the State for calendar

9

year 2023; and

10

‘‘(II) an amount equal to 4⁄10 of

11

the low-income population amount for

12

the State for calendar year 2024;

13

‘‘(v) for calendar year 2025, the sum

14

of—

15

‘‘(I) an amount equal to 5⁄10 of

16

the amount determined under this

17

paragraph for the State for calendar

18

year 2024; and

19

‘‘(II) an amount equal to 5⁄10 of

20

the low-income population amount for

21

the State for calendar year 2025; and

22

‘‘(vi) for calendar year 2026, the sum

23

of—

24

‘‘(I) an amount equal to 4⁄10 of

25

the amount determined under this

 LYN17751

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27
1

paragraph for the State for calendar

2

year 2025; and

3

‘‘(II) an amount equal to 6⁄10 of

4

the low-income population amount for

5

the State for calendar year 2026.

6
7

‘‘(C) POPULATION
‘‘(i) IN

RISK ADJUSTMENT.—

GENERAL.—Subject

to clauses

8

(ii), (iii), and (iv), for each calendar year

9

after 2022, the Administrator shall adjust

10

the amount determined for each State for

11

the year under subparagraph (B) so that

12

the amount is equal to the product of—

13
14

‘‘(I) the amount so determined
for the State and year; and

15

‘‘(II) the population risk index

16

(as defined in subparagraph (J)) for

17

the State and year.

18

‘‘(ii) PHASE-IN

OF POPULATION RISK

19

ADJUSTMENT.—For

each of calendar years

20

2023 through 2025, the amount of the ad-

21

justment determined for a State for a year

22

under clause (i) shall be reduced—

23
24

‘‘(I) in calendar year 2023, by 75
percent;

 LYN17751

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28
‘‘(II) in calendar year 2024, by

1
2

50 percent; and
‘‘(III) in calendar year 2025, by

3
4

25 percent.

5

‘‘(iii) CAP

ON RISK ADJUSTMENT.—In

6

no case shall the Administrator increase or

7

reduce the amount determined for a State

8

and year under subparagraph (B) by an

9

amount that is greater than 10 percent of

10
11

the amount so determined.
‘‘(iv) NON-APPLICATION
DATA.—If

DUE TO IN-

in any calendar

12

SUFFICIENT

13

year the Administrator determines that

14

there is insufficient data available to make

15

the adjustment under this subparagraph

16

for the year, the Administrator may elect

17

not to make the adjustment for such year.

18

‘‘(D) STATE

19

JUSTMENT FACTOR.—

20

‘‘(i)

IN

SPECIFIC POPULATION AD-

GENERAL.—For

calendar

21

years after 2022, the Administrator may

22

adjust the amount determined for a State

23

for a year under subparagraph (B) and ad-

24

justed under subparagraph (C) according

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29
1

to a population adjustment factor devel-

2

oped by the Administrator.

3

‘‘(ii) DEVELOPMENT

OF POPULATION

FACTOR.—Not

later than

4

ADJUSTMENT

5

July 31, 2021, the Administrator shall de-

6

velop a State specific population adjust-

7

ment factor that accounts for legitimate

8

factors that impact the health care expend-

9

itures in a State beyond the clinical char-

10

acteristics of the low-income individuals in

11

the State. Such factors may include State

12

demographics, wage rates, cost of care, in-

13

come levels, and other factors as deter-

14

mined by the Administrator.

15

‘‘(E) 2026

REDUCTION FOR STATES RE-

16

CEIVING ADVANCED PAYMENTS IN 2020.—For

17

calendar year 2026, the amount determined for

18

a State for such year under subparagraph (B)

19

and adjusted under subparagraphs (C) and (D),

20

shall be reduced by the amount of any increase

21

to the State’s allotment for calendar year 2020

22

under paragraph (8).

23

‘‘(F) REDISTRIBUTION
the

extent

OF

UNALLOTTED

24

AMOUNTS.—To

that

the

total

25

amount of State allotments determined for a

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30
1

calendar year under this paragraph (after any

2

adjustments under (C), (D), and (E)) is less

3

than the amount appropriated for the year

4

under paragraph (4)(A), the amount of each

5

State’s allotment shall be increased by an

6

amount equal to the product of—

7

‘‘(i) the amount by which such appro-

8

priated amount exceeds the total amount

9

of State allotments determined for the

10
11

year; and
‘‘(ii) the ratio that—

12

‘‘(I) the number of low-income

13

individuals (as defined in subpara-

14

graph (H)) in the State for the year;

15

bears to

16

‘‘(II) the number of low-income

17

individuals in all States for the year.

18
19

‘‘(G) LIMITATIONS.—
‘‘(i) IN

GENERAL.—In

no case shall

20

the total amount of State allotments (in-

21

cluding any adjustments under subpara-

22

graphs (C), (D), (E), and (F)) determined

23

for a calendar year under this paragraph

24

exceed the amount appropriated for a cal-

25

endar year under paragraph (4)(A) (in-

 LYN17751

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31
1

creased, in the case of calendar year 2026,

2

by any available amounts described in

3

paragraph (4)(C)(ii)(II)).

4

‘‘(ii) CAP

ON ANNUAL INCREASE.—In

5

no case shall the amount of a State’s allot-

6

ment (including any adjustments under

7

subparagraphs (C), (D), (E), and (F)) de-

8

termined for a calendar year after 2020

9

under this paragraph exceed an amount

10

that is equal to—

11

‘‘(I) the amount of the State’s al-

12

lotment for the preceding calendar

13

year; increased by

14

‘‘(II) 25 percent.

15

‘‘(iii) PRORATION.—If the amount ap-

16

propriated for a calendar year under para-

17

graph (4)(A) (increased, in the case of cal-

18

endar year 2026, by any available amounts

19

described in paragraph (4)(C)(ii)(II)) is

20

less than the total amount of State allot-

21

ments determined for such year under this

22

paragraph (after any adjustments under

23

subparagraphs (C), (D), (E), and (F)), the

24

amount allotted to each State for such

25

year shall be reduced proportionally.

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32
‘‘(H) LOW-INCOME

1

INDIVIDUAL.—In

this

2

paragraph, the term ‘low-income individual’

3

means an individual—
‘‘(i) who is a citizen or legal resident;

4
and

5
6

‘‘(ii) whose income (as determined

7

under section 1902(e)(14) (relating to

8

modified adjusted gross income)) equals or

9

exceeds 45 percent but does not exceed

10

133 percent of the poverty line (as defined

11

in section 2110(c)(5)) applicable to a fam-

12

ily of the size involved.

13

‘‘(I) LOW-INCOME

14

The

15

means, for a State and calendar year, the prod-

16

uct of—

17
18
19

term

POPULATION AMOUNT.—

‘low-income

population

amount’

‘‘(i) the amount appropriated for the
year under paragraph (4)(A); and
‘‘(ii) the ratio that—

20

‘‘(I) the number of low-income

21

individuals (as defined in subpara-

22

graph (H)) in the State for the pre-

23

ceding calendar year (as determined

24

by the Administrator based on the

25

most recent data available); bears to

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33
1

‘‘(II) the number of low-income

2

individuals in all States for such pre-

3

ceding calendar year (as determined

4

by the Administrator based on the

5

most recent data available).

6

‘‘(J) POPULATION

RISK INDEX.—The

term

7

‘population risk index’ means, for a State for a

8

calendar year, the ratio of—

9

‘‘(i) the sum of the products, for each

10

of the clinical risk categories (as defined in

11

subparagraph (K)(i)), of—

12

‘‘(I) the clinical risk factor for

13

the category (as defined in subpara-

14

graph (L)); and

15

‘‘(II) the number of low-income

16

individuals for the State, year, and

17

category; to

18

‘‘(ii) the number of enrollees in the

19

State.

20

‘‘(K) CLINICAL

21

‘‘(i) IN

RISK CATEGORY.—

GENERAL.—The

term ‘clinical

22

risk category’ means a grouping of low-in-

23

come individuals based on their clinical

24

characteristics that is established by the

25

Administrator under this subparagraph.

 LYN17751

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1

‘‘(ii)

METHODOLOGY

ESTAB-

FOR

2

LISHING CATEGORIES AND ASSIGNING IN-

3

DIVIDUALS TO A CATEGORY.—The

4

istrator shall select a methodology for es-

5

tablishing clinical risk categories and for

6

assigning low-income individuals to such

7

categories, except that any methodology se-

8

lected by the Administrator shall meet the

9

following requirements:

Admin-

10

‘‘(I) The methodology shall be

11

composed of exhaustive and mutually

12

exclusive risk categories such that

13

every low-income individual is as-

14

signed to a risk category and each in-

15

dividual may be assigned to only one

16

risk category.

17

‘‘(II) The methodology shall ac-

18

count for clinical characteristics of in-

19

dividuals

20

health care expenditures.

that

impact

per

capita

21

‘‘(III) The methodology shall ac-

22

count for the chronic illness burden

23

associated

24

chronic diseases and be composed of

25

risk categories that explicitly differen-

with

multiple

comorbid

 LYN17751

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1

tiate individuals based on their sever-

2

ity of illness.

3

‘‘(IV) The methodology shall in-

4

clude risk categories that account for

5

complex pediatric enrollees.

6

‘‘(V) The methodology for assign-

7

ing individuals to such clinical risk

8

categories shall be based on character-

9

istics of individuals contained in data

10

routinely collected in administrative

11

claims data and shall be capable of

12

utilizing pharmacy data and func-

13

tional health status data when such

14

data becomes routinely available.

15

‘‘(VI) To the extent possible, the

16

methodology shall be a methodology

17

that has been implemented for the

18

purpose of determining per capita

19

payments by a State plan under title

20

XIX to a managed care entity respon-

21

sible for providing or arranging for

22

services for a population of enrollees

23

that includes enrollees with complex

24

pediatric conditions and enrollees who

 LYN17751

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36
1

are eligible for benefits under both ti-

2

tles XVIII and XIX.

3

‘‘(iii) TIMELINE.—
‘‘(I) IN

4

GENERAL.—The

Admin-

5

istrator shall select the methodology

6

for establishing clinical risk categories

7

and assigning low-income individuals

8

to such categories not later than Jan-

9

uary 1, 2022.
‘‘(II) ANNUAL

10

UPDATES.—Not

11

later than 15 days prior to the begin-

12

ning of each calendar year, the Ad-

13

ministrator shall make publicly avail-

14

able updates to the methodology se-

15

lected under subclause (I).

16

‘‘(L) CLINICAL

RISK FACTOR.—The

term

17

‘clinical risk factor’ means, with respect to each

18

clinical risk category and calendar year, the

19

ratio of—

20

‘‘(i) the average per capita amount of

21

expenditures for all States for the previous

22

calendar year for low-income individuals in

23

the category; to

24

‘‘(ii) the average per capita amount of

25

expenditures for all States for the previous

 LYN17751

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37
1

calendar year for all low-income individuals

2

in such category.

3

‘‘(6) PAYMENTS.—

4

‘‘(A) IN

GENERAL.—The

Administrator

5

shall pay to each State that has an application

6

approved under this subsection for a year, from

7

the amount allotted to the State under para-

8

graph (4)(B) for the year, an amount equal to

9

the State’s expenditures for the year on the ac-

10

tivities described by the State in its application

11

approved under paragraph (1).

12
13
14

‘‘(B) ADVANCE

PAYMENT; RETROSPECTIVE

ADJUSTMENT.—

‘‘(i) IN

GENERAL.—If

the Adminis-

15

trator deems it appropriate, the Adminis-

16

trator shall make payments under this sub-

17

section for each 6 month period in a year

18

on the basis of advance estimates of ex-

19

penditures submitted by the State and

20

such other investigation as the Adminis-

21

trator shall find necessary, and shall re-

22

duce or increase the payments as necessary

23

to adjust for any overpayment or under-

24

payment for prior periods.

 LYN17751

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38
‘‘(ii) MISUSE

1

OF FUNDS.—If

the Ad-

2

ministrator determines that a State is not

3

using funds paid to the State under this

4

subsection in a manner consistent with the

5

description provided by the State in its ap-

6

plication approved under paragraph (1) or

7

is inappropriately withholding payments

8

owed to providers of services or health in-

9

surance issuers, the Administrator may

10

withhold payments, reduce payments, or

11

recover previous payments to the State

12

under this subsection as the Administrator

13

deems appropriate.

14

‘‘(C)

FLEXIBILITY

IN

SUBMITTAL

OF

15

CLAIMS.—Nothing

16

construed as preventing a State from claiming

17

as expenditures in the year expenditures that

18

were incurred in a previous year.

19

‘‘(7) CONTINGENCY

20

‘‘(A) IN

in this subsection shall be

FUND.—

GENERAL.—From

the amount ap-

21

propriated under subparagraph (C), the Admin-

22

istrator may increase the allotment amount de-

23

termined under paragraph (5) for each of cal-

24

endar years 2020 and 2021 for any State that

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39
1

is a low-density State, a non-expansion State,

2

or an expansion State for the year.

3
4

‘‘(B) DEFINITIONS.—In this paragraph:
‘‘(i) LOW-DENSITY

STATE DEFINED.—

5

The term ‘low-density State’ means, with

6

respect to a calendar year, a State that

7

has a population density of less than 30 in-

8

dividuals per square mile, based on the

9

most recent data available from the Bu-

10
11

reau of the Census.
‘‘(ii) NON-EXPANSION

STATE.—The

12

term ‘non-expansion State’ means a State

13

that—
‘‘(I) is not a low-density State;

14
15

and

16

‘‘(II) did not provide eligibility

17

under section 1902(a)(10)(A)(i)(VIII)

18

for medical assistance under the State

19

plan under title XIX on September 1,

20

2017 (or did not provide eligibility for

21

individuals described in such section

22

under a waiver of the State plan ap-

23

proved under section 1115).

24

‘‘(iii) EXPANSION

25

STATE.—The

term

‘expansion State’ means a State that—

 LYN17751

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40
‘‘(I) is not a low-density State;

1
and

2

‘‘(II) is not a non-expansion

3

State.

4
5

‘‘(C) FUNDING.—

6

‘‘(i) IN

GENERAL.—There

is appro-

7

priated, out of any money in the Treasury

8

not

9

$6,000,000,000 for calendar year 2020,

10

and $5,000,000,000 for calendar year

11

2021, for the purpose of carrying out this

12

paragraph.

13

otherwise

‘‘(ii) RESERVATION

appropriated,

OF FUNDS.—The

14

Administrator shall reserve, for each of

15

calendar years 2020 and 2021, from the

16

funds appropriated for each such year

17

under clause (i)—

18

‘‘(I) 25 percent of such funds for

19

the purpose of increasing the grant

20

amounts for States that are low-den-

21

sity States;

22

‘‘(II) 50 percent of such funds

23

for the purpose of increasing the

24

grant amounts for States that are

25

non-expansion States; and

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41
1

‘‘(III) 25 percent of such funds

2

for the purpose of increasing the

3

grant amounts for States that are ex-

4

pansion States.

5
6

‘‘(8) ADVANCE
‘‘(A) IN

PAYMENT FUND.—

GENERAL.—From

the amount re-

7

served under paragraph (4)(C), the Adminis-

8

trator may increase the allotment amount de-

9

termined under paragraph (5) for calendar year

10

2020 for any State that applies for an increase

11

under this paragraph by the amount determined

12

for the State under subparagraph (B).

13

‘‘(B) AMOUNT

OF INCREASE.—Subject

to

14

subparagraph (C), the Administrator shall in-

15

crease the allotment amount determined under

16

paragraph (5) for a State for calendar year

17

2020 by the amount requested by the State, ex-

18

cept that in no case shall the Administrator in-

19

crease a State’s allotment amount by an

20

amount that exceeds 5 percent of the amount

21

so determined.

22

‘‘(C) PRORATION

RULE.—If

the amount

23

reserved under paragraph (4)(C) is less than

24

the total amount of increases requested by

25

States under this paragraph, the amount of the

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42
1

increase for each State shall be reduced propor-

2

tionally.

3

‘‘(D) DISREGARD

OF INCREASE.—The

al-

4

lotment for calendar year 2021 for a State that

5

receives an increase to its allotment for cal-

6

endar year 2020 under this paragraph shall be

7

determined without regard to such increase.

8

‘‘(9) EQUITY

9

‘‘(A) IN

FOR LATE-EXPANDING STATES.—
GENERAL.—From

the amount ap-

10

propriated under subparagraph (D), with re-

11

spect to any State that is a late-expanding

12

State, the Secretary shall increase the amount

13

of the allotment determined under paragraph

14

(5) for the State for each of calendar years

15

2023 through 2026 by the amount determined

16

for the State and year under subparagraph (B).

17

‘‘(B) AMOUNT

OF INCREASE.—The

amount

18

determined under this subparagraph for a late-

19

expanding State for a calendar year is an

20

amount equal to the product of—

21

‘‘(i) the amount appropriated for the

22

calendar year under subparagraph (D);

23

and

24

‘‘(ii) the ratio that—

 LYN17751

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43
1

‘‘(I) the number of low-income

2

individuals (as defined in paragraph

3

(5)(H)) in the State for the preceding

4

calendar year (as determined by the

5

Administrator based on the most re-

6

cent data available); bears to

7

‘‘(II) the number of low-income

8

individuals (as so defined) in all late-

9

expanding States for the preceding

10
11

calendar year (as so determined).
‘‘(C) LATE-EXPANDING

STATE.—In

this

12

paragraph, the term ‘late-expanding State’

13

means a State that did not provide eligibility

14

under section 1902(a)(10)(A)(i)(VIII) for med-

15

ical assistance under the State plan under title

16

XIX on December 31, 2016, but which subse-

17

quently provided eligibility under such section.

18

‘‘(D) FUNDING.—For the purpose of in-

19

creasing State allotments under this paragraph,

20

there is appropriated to the Administrator, out

21

of any money in the Treasury not otherwise ap-

22

propriated, $750,000,000 for each of calendar

23

years 2023 through 2026.

24

‘‘(10) CONTINUED

25

AVAILABILITY

THROUGH FUNDING FOR 1332 WAIVERS.—

OF

PASS-

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44
‘‘(A) IN

1

GENERAL.—With

respect to any

2

State waiver granted under section 1332 of the

3

Patient Protection and Affordable Care Act be-

4

fore the date of enactment of this subsection,

5

for each year such waiver is in effect that be-

6

gins after December 31, 2019, and before Jan-

7

uary 1, 2023, the Secretary shall make pay-

8

ments under this subsection, from the amount

9

made available under subparagraph (B), to

10

such State in the same manner that the Sec-

11

retary would have made payments to such State

12

under subsection (a)(3) of such section 1332 if

13

section 36B of the Internal Revenue Code of

14

1986, as in effect on the day before the date of

15

enactment of this subsection, were still in ef-

16

fect.

17

‘‘(B) APPROPRIATION.—For the purpose of

18

making the payments to States described in

19

subparagraph (A), there is appropriated to the

20

Secretary, out of any money in the Treasury

21

not otherwise appropriated, $500,000,000 for

22

calendar year 2020, to remain available until

23

December 31, 2023.

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1

‘‘(11) EXEMPTIONS.—Paragraphs (2), (3), (5),

2

(6), (8), (10), and (11) of subsection (c) do not

3

apply to payments under this subsection.’’.

4

(b) OTHER TITLE XXI AMENDMENTS.—

5
6

(1) Section 2101 of such Act (42 U.S.C.
1397aa) is amended—

7

(A) in subsection (a), in the matter pre-

8

ceding paragraph (1), by striking ‘‘The pur-

9

pose’’ and inserting ‘‘Except with respect to

10

short-term assistance activities under section

11

2105(h) and the Market-Based Health Care

12

Grant Program established in section 2105(i),

13

the purpose’’; and

14

(B) in subsection (b), in the matter pre-

15

ceding paragraph (1), by inserting ‘‘subsection

16

(a) or (g) of’’ before ‘‘section 2105’’.

17

(2) Section 2105(c)(1) of such Act (42 U.S.C.

18

1397ee(c)(1)) is amended by striking ‘‘and may not

19

include’’ and inserting ‘‘or to carry out short-term

20

assistance activities under subsection (h) or the

21

Market-Based Health Care Grant Program estab-

22

lished in subsection (i) and, except in the case of

23

funds made available under subsection (h) or (i),

24

may not include’’.

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1

(3) Section 2106(a)(1) of such Act (42 U.S.C.

2

1397ff(a)(1)) is amended by inserting ‘‘subsection

3

(a) or (g) of’’ before ‘‘section 2105’’.

4

SEC. 107. BETTER CARE RECONCILIATION IMPLEMENTA-

5

TION FUND.

(a) IN GENERAL.—There is hereby established a Bet-

6

7 ter Care Reconciliation Implementation Fund (referred to
8 in this section as the ‘‘Fund’’) within the Department of
9 Health and Human Services to provide for Federal admin10 istrative expenses in carrying out this Act.
(b) FUNDING.—There is appropriated to the Fund,

11

12 out of any funds in the Treasury not otherwise appro13 priated, $2,000,000,000.
14

SEC. 108. REPEAL OF TAX ON OVER-THE-COUNTER MEDICA-

15

TIONS.

(a) HSAS.—Subparagraph (A) of section 223(d)(2)

16

17 of the Internal Revenue Code of 1986 is amended by strik18 ing ‘‘Such term’’ and all that follows through the period.
(b) ARCHER MSAS.—Subparagraph (A) of section

19

20 220(d)(2) of the Internal Revenue Code of 1986 is amend21 ed by striking ‘‘Such term’’ and all that follows through
22 the period.
(c) HEALTH FLEXIBLE SPENDING ARRANGEMENTS

23
24

AND

HEALTH REIMBURSEMENT ARRANGEMENTS.—Sec-

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1 tion 106 of the Internal Revenue Code of 1986 is amended
2 by striking subsection (f).
3

(d) EFFECTIVE DATES.—
(1)

4

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. 109. 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 per15 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 Decem21 ber 31, 2016.
22
23

SEC. 110. REPEAL OF MEDICAL DEVICE EXCISE TAX.

Section 4191 of the Internal Revenue Code of 1986

24 is amended by adding at the end the following new sub25 section:

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1

‘‘(d) APPLICABILITY.—The tax imposed under sub-

2 section (a) shall not apply to sales after December 31,
3 2017.’’.
4

SEC. 111. REPEAL OF ELIMINATION OF DEDUCTION FOR

5

EXPENSES ALLOCABLE TO MEDICARE PART D

6

SUBSIDY.

7

(a) IN GENERAL.—Section 139A of the Internal Rev-

8 enue Code of 1986 is amended by adding at the end the
9 following new sentence: ‘‘This section shall not be taken
10 into account for purposes of determining whether any de11 duction is allowable with respect to any cost taken into
12 account in determining such payment.’’.
13

(b) EFFECTIVE DATE.—The amendment made by

14 this section shall apply to taxable years beginning after
15 December 31, 2016.
16
17
18

SEC. 112. PURCHASE OF INSURANCE FROM HEALTH SAVINGS ACCOUNT.

(a) IN GENERAL.—Paragraph (2) of section 223(d)

19 of the Internal Revenue Code of 1986 is amended—
20

(1) by striking ‘‘and any dependent (as defined

21

in section 152, determined without regard to sub-

22

sections (b)(1), (b)(2), and (d)(1)(B) thereof) of

23

such individual’’ in subparagraph (A) and inserting

24

‘‘any dependent (as defined in section 152, deter-

25

mined without regard to subsections (b)(1), (b)(2),

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1

and (d)(1)(B) thereof) of such individual, and any

2

child (as defined in section 152(f)(1)) of such indi-

3

vidual who has not attained the age of 27 before the

4

end of such individual’s taxable year’’,

5
6

(2) by striking subparagraph (B) and inserting
the following:
‘‘(B) HEALTH

7

INSURANCE MAY NOT BE

8

PURCHASED FROM ACCOUNT.—Except

as pro-

9

vided in subparagraph (C), subparagraph (A)

10

shall not apply to any payment for insurance.’’,

11

and

12

(3) by striking ‘‘or’’ at the end of subparagraph

13

(C)(iii), by striking the period at the end of subpara-

14

graph (C)(iv) and inserting ‘‘, or’’, and by adding at

15

the end the following:

16

‘‘(v) a high deductible health plan but

17

only to the extent of the portion of such

18

expense in excess of—

19

‘‘(I) any amount allowable as a

20

credit under section 36B for the tax-

21

able year with respect to such cov-

22

erage,

23

‘‘(II) any amount allowable as a

24

deduction under section 162(l) with

25

respect to such coverage, or

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1

‘‘(III) any amount excludable

2

from gross income with respect to

3

such coverage under section 106 (in-

4

cluding by reason of section 125) or

5

402(l).’’.

6

(b) EFFECTIVE DATE.—The amendments made by

7 this section shall apply with respect to amounts paid for
8 expenses incurred for, and distributions made for, cov9 erage under a high deductible health plan beginning after
10 December 31, 2017.
11

SEC. 113. 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 strik17 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
25

(1) by striking ‘‘subsections (b)(2) and’’ both
places it appears and inserting ‘‘subsection’’, and

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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. 114. 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

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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.’’.

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1

(b) EFFECTIVE DATE.—The amendment made by

2 this section shall apply to taxable years beginning after
3 December 31, 2017.
4

SEC. 115. SPECIAL RULE FOR CERTAIN MEDICAL EXPENSES

5

INCURRED

6

HEALTH SAVINGS ACCOUNT.

7

BEFORE

ESTABLISHMENT

OF

(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:
‘‘(D) TREATMENT

10

OF CERTAIN MEDICAL

11

EXPENSES INCURRED BEFORE ESTABLISHMENT

12

OF ACCOUNT.—If

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

a health savings account is

(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.

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1

SEC. 116. EXCLUSION FROM HSAS OF HIGH DEDUCTIBLE

2

HEALTH PLANS INCLUDING COVERAGE FOR

3

ABORTION.

4

(a) IN GENERAL.—Subparagraph (C) of section

5 223(d)(2) of the Internal Revenue Code of 1986 is amend6 ed by adding at the end the following flush sentence:
7

‘‘A high deductible health plan shall not be

8

treated as described in clause (v) if such plan

9

includes coverage for abortions (other than any

10

abortion necessary to save the life of the mother

11

or any abortion with respect to a pregnancy

12

that is the result of an act of rape or incest).’’.

13

(b) EFFECTIVE DATE.—The amendment made by

14 this section shall apply with respect to coverage under a
15 high deductible health plan beginning after December 31,
16 2017.
17
18

SEC. 117. FEDERAL PAYMENTS TO STATES.

(a) IN GENERAL.—Notwithstanding section 504(a),

19 1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or
20 2105(a)(1) of the Social Security Act (42 U.S.C. 704(a),
21 1396a(a)(23),

1396b(a),

1397a,

1397d(a)(4),

22 1397bb(a)(7), 1397ee(a)(1)), or the terms of any Med23 icaid waiver in effect on the date of enactment of this Act
24 that is approved under section 1115 or 1915 of the Social
25 Security Act (42 U.S.C. 1315, 1396n), for the 1-year pe26 riod beginning on the date of enactment of this Act, no

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1 Federal funds provided from a program referred to in this
2 subsection that is considered direct spending for any year
3 may be made available to a State for payments to a pro4 hibited entity, whether made directly to the prohibited en5 tity or through a managed care organization under con6 tract with the State.
7
8
9
10
11
12

(b) DEFINITIONS.—In this section:
(1) PROHIBITED

ENTITY.—The

term ‘‘prohib-

ited entity’’ means an entity, including its affiliates,
subsidiaries, successors, and clinics—
(A) that, as of the date of enactment of
this Act—

13

(i) is an organization described in sec-

14

tion 501(c)(3) of the Internal Revenue

15

Code of 1986 and exempt from tax under

16

section 501(a) of such Code;

17

(ii) is an essential community provider

18

described in section 156.235 of title 45,

19

Code of Federal Regulations (as in effect

20

on the date of enactment of this Act), that

21

is primarily engaged in family planning

22

services, reproductive health, and related

23

medical care; and

24
25

(iii) provides for abortions, other than
an abortion—

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(I) if the pregnancy is the result

1

of an act of rape or incest; or

2
3

(II) in the case where a woman

4

suffers from a physical disorder, phys-

5

ical injury, or physical illness that

6

would, as certified by a physician,

7

place the woman in danger of death

8

unless an abortion is performed, in-

9

cluding a life-endangering physical

10

condition caused by or arising from

11

the pregnancy itself; and

12

(B) for which the total amount of Federal

13

and State expenditures under the Medicaid pro-

14

gram under title XIX of the Social Security Act

15

in fiscal year 2014 made directly to the entity

16

and to any affiliates, subsidiaries, successors, or

17

clinics of the entity, or made to the entity and

18

to any affiliates, subsidiaries, successors, or

19

clinics of the entity as part of a nationwide

20

health

21

$1,000,000.

22

(2) DIRECT

care

provider

network,

SPENDING.—The

exceeded

term ‘‘direct

23

spending’’ has the meaning given that term under

24

section 250(c) of the Balanced Budget and Emer-

25

gency Deficit Control Act of 1985 (2 U.S.C. 900(c)).

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1
2

SEC. 118. MEDICAID.

The Social Security Act (42 U.S.C. 301 et seq.) is

3 amended—
4
5

(1) in section 1902—
(A) in subsection (a)(10)(A)—

6

(i) in each of clauses (i)(VIII) and

7

(ii)(XX), by inserting ‘‘and ending Sep-

8

tember 1, 2017 (or, in the case of a State

9

that provided for medical assistance under

10

this subclause on July 1, 2016, December

11

31, 2019),’’ after ‘‘January 1, 2014,’’; and

12

(ii) in clause (i), by adding at the end

13
14
15

the following new subclause:
‘‘(X) beginning January 1, 2020,
who—

16

‘‘(aa) are Indians;

17

‘‘(bb) are described in sub-

18

clause (VIII) (without regard to

19

the sunset dates in such sub-

20

clause);

21

‘‘(cc) reside in a State that

22

provided for medical assistance

23

under such subclause on Decem-

24

ber 31, 2019;

25

‘‘(dd) were enrolled under

26

the State plan under this title (or

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1

a waiver of such plan) on Decem-

2

ber 31, 2019; and

3

‘‘(ee) after December 31,

4

2019, do not have a break in eli-

5

gibility for medical assistance

6

under the State plan under this

7

title for such a period of time as

8

the State may specify (but which

9

in no case shall be less than 6

10

months);’’ and

11

(B) in subsection (a)(47)(B), by inserting

12

‘‘and provided that any such election shall cease

13

to be effective on January 1, 2020, and no such

14

election shall be made after that date’’ before

15

the semicolon at the end;

16

(2) in section 1905—

17

(A) in subsection (y)(1), by striking the

18

semicolon at the end of subparagraph (D) and

19

all that follows through ‘‘thereafter’’; and

20

(B) in subsection (z)(2)—

21

(i) in subparagraph (A), by inserting

22

‘‘through 2019’’ after ‘‘each year there-

23

after’’; and

24

(ii) in subparagraph (B)(ii):

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1

(I) in subclause (V), by striking

2

‘‘2018 is 90’’ inserting ‘‘2018 and

3

2019 is 90 percent’’; and

4

(II) in subclause (VI) by striking

5

‘‘2019 and each subsequent year is 90

6

percent’’ and inserting ‘‘2020 and

7

each subsequent year is 0 percent’’;

8

(3) in section 1915(k)(2), by striking ‘‘during

9

the period described in paragraph (1)’’ and inserting

10

‘‘on or after the date referred to in paragraph (1)

11

and before January 1, 2020’’;

12

(4) in section 1920(e), by adding at the end the

13

following: ‘‘This subsection shall not apply after De-

14

cember 31, 2019.’’;

15

(5) in section 1937(b)(5), by adding at the end

16

the following: ‘‘This paragraph shall not apply after

17

December 31, 2019.’’; and

18
19
20
21
22

(6) in section 1943(a), by inserting ‘‘and before
January 1, 2020,’’ after ‘‘January 1, 2014,’’.
SEC. 119. REDUCING STATE MEDICAID COSTS.

(a) IN GENERAL.—
(1)

STATE

PLAN

REQUIREMENTS.—Section

23

1902(a)(34) of the Social Security Act (42 U.S.C.

24

1396a(a)(34)) is amended by striking ‘‘in or after

25

the third month’’ and all that follows through ‘‘indi-

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1

vidual)’’ and inserting ‘‘in or after the second month

2

before the month in which the individual (or, in the

3

case of a deceased individual, another individual act-

4

ing on the individual’s behalf) made application (or,

5

in the case of an individual who is 65 years of age

6

or older or who is eligible for medical assistance

7

under the plan on the basis of being blind or dis-

8

abled, in or after the month before such second

9

month)’’.

10

(2) DEFINITION

OF MEDICAL ASSISTANCE.—

11

Section 1905(a) of the Social Security Act (42

12

U.S.C. 1396d(a)) is amended by striking ‘‘in or

13

after the third month before the month in which the

14

recipient makes application for assistance’’ and in-

15

serting ‘‘in or after the second month before the

16

month in which the recipient makes application for

17

assistance, or, in the case of a recipient who is 65

18

years of age or older or who is eligible for medical

19

assistance on the basis of being blind or disabled at

20

the time application is made, in or after the month

21

before such second month,’’.

22

(b) EFFECTIVE DATE.—The amendments made by

23 subsection (a) shall apply to medical assistance with re24 spect to individuals whose eligibility for such assistance

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1 is based on an application for such assistance made (or
2 deemed to be made) on or after October 1, 2017.
3
4

SEC. 120. ELIGIBILITY REDETERMINATIONS.

(a) IN GENERAL.—Section 1902(e)(14) of the Social

5 Security Act (42 U.S.C. 1396a(e)(14)) (relating to modi6 fied adjusted gross income) is amended by adding at the
7 end the following:
8

‘‘(J) FREQUENCY

9

TERMINATIONS.—Beginning

OF ELIGIBILITY REDE-

on

October

1,

10

2017, and notwithstanding subparagraph (H),

11

in the case of an individual whose eligibility for

12

medical assistance under the State plan under

13

this title (or a waiver of such plan) is deter-

14

mined based on the application of modified ad-

15

justed gross income under subparagraph (A)

16

and who is so eligible on the basis of clause

17

(i)(VIII) or (ii)(XX) of subsection (a)(10)(A),

18

at the option of the State, the State plan may

19

provide that the individual’s eligibility shall be

20

redetermined every 6 months (or such shorter

21

number of months as the State may elect).’’.

22

(b) INCREASED ADMINISTRATIVE MATCHING PER-

23

CENTAGE.—For

each calendar quarter during the period

24 beginning on October 1, 2017, and ending on December
25 31, 2019, the Federal matching percentage otherwise ap-

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1 plicable under section 1903(a) of the Social Security Act
2 (42 U.S.C. 1396b(a)) with respect to State expenditures
3 during such quarter that are attributable to meeting the
4 requirement of section 1902(e)(14) (relating to determina5 tions of eligibility using modified adjusted gross income)
6 of such Act shall be increased by 5 percentage points with
7 respect to State expenditures attributable to activities car8 ried out by the State (and approved by the Secretary) to
9 exercise the option described in subparagraph (J) of such
10 section (relating to eligibility redeterminations made on a
11 6-month or shorter basis) (as added by subsection (a)) to
12 increase the frequency of eligibility redeterminations.
13

SEC.

121.

OPTIONAL

WORK

REQUIREMENT

FOR

NON-

14

DISABLED, NONELDERLY, NONPREGNANT IN-

15

DIVIDUALS.

16

(a) IN GENERAL.—Section 1902 of the Social Secu-

17 rity Act (42 U.S.C. 1396a), as previously amended, is fur18 ther amended by adding at the end the following new sub19 section:
20

‘‘(oo) OPTIONAL WORK REQUIREMENT

21

DISABLED,

22

UALS.—

23

NONELDERLY,

‘‘(1) IN

FOR

NONPREGNANT

GENERAL.—Beginning

NON-

INDIVID-

October 1,

24

2017, subject to paragraph (3), a State may elect to

25

condition medical assistance to a nondisabled, non-

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1

elderly, nonpregnant individual under this title upon

2

such an individual’s satisfaction of a work require-

3

ment (as defined in paragraph (2)).

4

‘‘(2) WORK

REQUIREMENT DEFINED.—In

this

5

section, the term ‘work requirement’ means, with re-

6

spect to an individual, the individual’s participation

7

in work activities (as defined in section 407(d)) for

8

such period of time as determined by the State, and

9

as directed and administered by the State.

10

‘‘(3) REQUIRED

EXCEPTIONS.—States

admin-

11

istering a work requirement under this subsection

12

may not apply such requirement to—

13

‘‘(A) a woman during pregnancy through

14

the end of the month in which the 60-day pe-

15

riod (beginning on the last day of her preg-

16

nancy) ends;

17
18

‘‘(B) an individual who is under 19 years
of age;

19

‘‘(C) an individual who is the only parent

20

or caretaker relative in the family of a child

21

who has not attained 6 years of age or who is

22

the only parent or caretaker of a child with dis-

23

abilities;

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1

‘‘(D) an individual who is married or a

2

head of household and has not attained 20

3

years of age and who—
‘‘(i) maintains satisfactory attendance

4

at secondary school or the equivalent; or

5

‘‘(ii) participates in education directly

6
7

related to employment;

8

‘‘(E) an individual who is a regular partici-

9

pant in an inpatient or intensive outpatient

10

drug addiction or alcoholic treatment and reha-

11

bilitation program that satisfies such criteria as

12

the State shall require; or

13

‘‘(F) an individual who is a full-time stu-

14

dent at an institution of higher education as de-

15

fined in sections 101 and 102 of the Higher

16

Education Act of 1965.’’.

17
18

(b) INCREASE
TATION.—Section

IN

MATCHING RATE

FOR

IMPLEMEN-

1903 of the Social Security Act (42

19 U.S.C. 1396b) is amended by adding at the end the fol20 lowing:
21

‘‘(aa) The Federal matching percentage otherwise ap-

22 plicable under subsection (a) with respect to State admin23 istrative expenditures during a calendar quarter for which
24 the State receives payment under such subsection shall,
25 in addition to any other increase to such Federal matching

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65
1 percentage, be increased for such calendar quarter by 5
2 percentage points with respect to State expenditures at3 tributable to activities carried out by the State (and ap4 proved by the Secretary) to implement subsection (oo) of
5 section 1902.’’.
6
7

SEC. 122. PROVIDER TAXES.

Section 1903(w)(4)(C) of the Social Security Act (42

8 U.S.C. 1396b(w)(4)(C)) is amended by adding at the end
9 the following new clause:
10

‘‘(iii) For purposes of clause (i), a de-

11

termination of the existence of an indirect

12

guarantee shall be made under paragraph

13

(3)(i) of section 433.68(f) of title 42, Code

14

of Federal Regulations, as in effect on

15

June 1, 2017, except that—

16

‘‘(I) for fiscal year 2021, ‘5.6

17

percent’ shall be substituted for ‘6

18

percent’ each place it appears;

19

‘‘(II) for fiscal year 2022, ‘5.2

20

percent’ shall be substituted for ‘6

21

percent’ each place it appears;

22

‘‘(III) for fiscal year 2023, ‘4.8

23

percent’ shall be substituted for ‘6

24

percent’ each place it appears;

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1

‘‘(IV) for fiscal year 2024, ‘4.4

2

percent’ shall be substituted for ‘6

3

percent’ each place it appears; and

4

‘‘(V) for fiscal year 2025 and

5

each subsequent fiscal year, ‘4 per-

6

cent’ shall be substituted for ‘6 per-

7

cent’ each place it appears.’’.

8

SEC. 123. PER CAPITA ALLOTMENT FOR MEDICAL ASSIST-

9
10

ANCE.

(a) IN GENERAL.—Title XIX of the Social Security

11 Act is amended—
12

(1) in section 1903 (42 U.S.C. 1396b)—

13

(A) in subsection (a), in the matter before

14

paragraph (1), by inserting ‘‘and section

15

1903A(a)’’ after ‘‘except as otherwise provided

16

in this section’’; and

17

(B) in subsection (d)(1), by striking ‘‘to

18

which’’ and inserting ‘‘to which, subject to sec-

19

tion 1903A(a),’’; and

20

(2) by inserting after such section 1903 the fol-

21
22

lowing new section:
‘‘SEC. 1903A. PER CAPITA-BASED CAP ON PAYMENTS FOR

23
24
25

MEDICAL ASSISTANCE.

‘‘(a) APPLICATION
MENTS FOR

OF

PER CAPITA CAP

ON

PAY-

MEDICAL ASSISTANCE EXPENDITURES.—

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1

‘‘(1) IN

GENERAL.—If

a State which is one of

2

the 50 States or the District of Columbia has excess

3

aggregate medical assistance expenditures (as de-

4

fined in paragraph (2)) for a fiscal year (beginning

5

with fiscal year 2020), the amount of payment to

6

the State under section 1903(a)(1) for each quarter

7

in the following fiscal year shall be reduced by 1⁄4 of

8

the excess aggregate medical assistance payments

9

(as defined in paragraph (3)) for that previous fiscal

10

year. In this section, the term ‘State’ means only the

11

50 States and the District of Columbia.

12

‘‘(2) EXCESS

AGGREGATE MEDICAL ASSISTANCE

13

EXPENDITURES.—In

this subsection, the term ‘ex-

14

cess aggregate medical assistance expenditures’

15

means, for a State for a fiscal year, the amount (if

16

any) by which—

17

‘‘(A) the amount of the adjusted total med-

18

ical assistance expenditures (as defined in sub-

19

section (b)(1)) for the State and fiscal year; ex-

20

ceeds

21

‘‘(B) the amount of the target total med-

22

ical assistance expenditures (as defined in sub-

23

section (c)) for the State and fiscal year.

24

‘‘(3) EXCESS

25

PAYMENTS.—In

AGGREGATE MEDICAL ASSISTANCE

this subsection, the term ‘excess ag-

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1

gregate medical assistance payments’ means, for a

2

State for a fiscal year, the product of—

3

‘‘(A) the excess aggregate medical assist-

4

ance expenditures (as defined in paragraph (2))

5

for the State for the fiscal year; and

6

‘‘(B) the Federal average medical assist-

7

ance matching percentage (as defined in para-

8

graph (4)) for the State for the fiscal year.

9

‘‘(4) FEDERAL

AVERAGE MEDICAL ASSISTANCE

10

MATCHING PERCENTAGE.—In

this subsection, the

11

term ‘Federal average medical assistance matching

12

percentage’ means, for a State for a fiscal year, the

13

ratio (expressed as a percentage) of—

14

‘‘(A) the amount of the Federal payments

15

that would be made to the State under section

16

1903(a)(1) for medical assistance expenditures

17

for calendar quarters in the fiscal year if para-

18

graph (1) did not apply; to

19

‘‘(B) the amount of the medical assistance

20

expenditures for the State and fiscal year.

21

‘‘(5) PER

22

CAPITA BASE PERIOD.—

‘‘(A) IN

GENERAL.—In

this section, the

23

term ‘per capita base period’ means, with re-

24

spect to a State, a period of 8 (or, in the case

25

of a State selecting a period under subpara-

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1

graph (D), not less than 4) consecutive fiscal

2

quarters selected by the State.

3

‘‘(B) TIMELINE.—Each State shall submit

4

its selection of a per capita base period to the

5

Secretary not later than January 1, 2018.

6

‘‘(C) PARAMETERS.—In selecting a per

7

capita base period under this paragraph, a

8

State shall—

9

‘‘(i) only select a period of 8 (or, in

10

the case of a State selecting a base period

11

under subparagraph (D), not less than 4)

12

consecutive fiscal quarters for which all the

13

data necessary to make determinations re-

14

quired under this section is available, as

15

determined by the Secretary; and

16

‘‘(ii) shall not select any period of 8

17

(or, in the case of a State selecting a base

18

period under subparagraph (D), not less

19

than 4) consecutive fiscal quarters that be-

20

gins with a fiscal quarter earlier than the

21

first quarter of fiscal year 2014 or ends

22

with a fiscal quarter later than the third

23

fiscal quarter of 2017.

24

‘‘(D) BASE

25

STATES.—

PERIOD FOR LATE-EXPANDING

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1

‘‘(i) IN

GENERAL.—In

the case of a

2

State that did not provide for medical as-

3

sistance for the 1903A enrollee category

4

described in subsection (e)(2)(D) as of the

5

first day of the fourth fiscal quarter of fis-

6

cal year 2015 but which provided for such

7

assistance for such category in a subse-

8

quent fiscal quarter that is not later than

9

the fourth quarter of fiscal year 2016, the

10

State may select a per capita base period

11

that is less than 8 consecutive fiscal quar-

12

ters, but in no case shall the period se-

13

lected be less than 4 consecutive fiscal

14

quarters.

15

‘‘(ii) APPLICATION

OF

OTHER

RE-

16

QUIREMENTS.—Except

17

that a per capita base period be a period

18

of 8 consecutive fiscal quarters, all other

19

requirements of this paragraph shall apply

20

to a per capita base period selected under

21

this subparagraph.

22

for the requirement

‘‘(iii) APPLICATION

OF BASE PERIOD

23

ADJUSTMENTS.—The

24

amounts for per capita base periods re-

25

quired

under

adjustments

subsections

(b)(5)

to

and

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1

(d)(4)(E) shall be applied to amounts for

2

per capita base periods selected under this

3

subparagraph by substituting ‘divided by

4

the ratio that the number of quarters in

5

the base period bears to 4’ for ‘divided by

6

2’.

7

‘‘(E) ADJUSTMENT

BY THE SECRETARY.—

8

If the Secretary determines that a State took

9

actions after the date of enactment of this sec-

10

tion (including making retroactive adjustments

11

to supplemental payment data in a manner that

12

affects a fiscal quarter in the per capita base

13

period) to diminish the quality of the data from

14

the per capita base period used to make deter-

15

minations under this section, the Secretary may

16

adjust the data as the Secretary deems appro-

17

priate.

18
19

‘‘(b) ADJUSTED TOTAL MEDICAL ASSISTANCE EXPENDITURES.—Subject

to subsection (g), the following

20 shall apply:
21

‘‘(1) IN

GENERAL.—In

this section, the term

22

‘adjusted total medical assistance expenditures’

23

means, for a State—

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72
1

‘‘(A) for the State’s per capita base period

2

(as defined in subsection (a)(5)), the product

3

of—

4

‘‘(i) the amount of the medical assist-

5

ance expenditures (as defined in paragraph

6

(2) and adjusted under paragraph (5)) for

7

the State and period, reduced by the

8

amount of any excluded expenditures (as

9

defined in paragraph (3) and adjusted

10

under paragraph (5)) for the State and pe-

11

riod otherwise included in such medical as-

12

sistance expenditures; and

13

‘‘(ii) the 1903A base period popu-

14

lation percentage (as defined in paragraph

15

(4)) for the State; or

16

‘‘(B) for fiscal year 2019 or a subsequent

17

fiscal year, the amount of the medical assist-

18

ance expenditures (as defined in paragraph (2))

19

for the State and fiscal year that is attributable

20

to 1903A enrollees, reduced by the amount of

21

any excluded expenditures (as defined in para-

22

graph (3)) for the State and fiscal year other-

23

wise included in such medical assistance ex-

24

penditures and includes non-DSH supplemental

25

payments

(as

defined

in

subsection

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1

(d)(4)(A)(ii)) and payments described in sub-

2

section (d)(4)(A)(iii) but shall not be construed

3

as including any expenditures attributable to

4

the program under section 1928 (relating to

5

State pediatric vaccine distribution programs).

6

In applying subparagraph (B), non-DSH sup-

7

plemental payments (as defined in subsection

8

(d)(4)(A)(ii)) and payments described in sub-

9

section (d)(4)(A)(iii) shall be treated as fully at-

10

tributable to 1903A enrollees.

11

‘‘(2) MEDICAL

ASSISTANCE EXPENDITURES.—

12

In this section, the term ‘medical assistance expendi-

13

tures’ means, for a State and fiscal year or per cap-

14

ita base period, the medical assistance payments as

15

reported by medical service category on the Form

16

CMS-64 quarterly expense report (or successor to

17

such a report form, and including enrollment data

18

and subsequent adjustments to any such report, in

19

this section referred to collectively as a ‘CMS-64 re-

20

port’) for quarters in the year or base period for

21

which payment is (or may otherwise be) made pur-

22

suant to section 1903(a)(1), adjusted, in the case of

23

a per capita base period, under paragraph (5).

24
25

‘‘(3) EXCLUDED

EXPENDITURES.—In

this sec-

tion, the term ‘excluded expenditures’ means, for a

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1

State and fiscal year or per capita base period, ex-

2

penditures under the State plan (or under a waiver

3

of such plan) that are attributable to any of the fol-

4

lowing:

5

‘‘(A) DSH.—Payment adjustments made

6

for disproportionate share hospitals under sec-

7

tion 1923.

8
9
10
11

‘‘(B)

MEDICARE

COST-SHARING.—Pay-

ments made for medicare cost-sharing (as defined in section 1905(p)(3)).
‘‘(C) EXPENDITURES

FOR PUBLIC HEALTH

12

EMERGENCIES.—Any

expenditures that are sub-

13

ject to a public health emergency exclusion

14

under paragraph (6).

15

‘‘(4) 1903A

BASE PERIOD POPULATION PER-

16

CENTAGE.—In

17

period population percentage’ means, for a State,

18

the Secretary’s calculation of the percentage of the

19

actual medical assistance expenditures, as reported

20

by the State on the CMS–64 reports for calendar

21

quarters in the State’s per capita base period, that

22

are attributable to 1903A enrollees (as defined in

23

subsection (e)(1)).

24
25

this subsection, the term ‘1903A base

‘‘(5) ADJUSTMENTS
RIOD.—In

FOR PER CAPITA BASE PE-

calculating medical assistance expendi-

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75
1

tures under paragraph (2) and excluded expendi-

2

tures under paragraph (3) for a State for the State’s

3

per capita base period, the total amount of each type

4

of expenditure for the State and base period shall be

5

divided by 2.

6

‘‘(6) AUTHORITY

TO EXCLUDE STATE EXPENDI-

7

TURES FROM CAPS DURING PUBLIC HEALTH EMER-

8

GENCY.—

9

‘‘(A) IN

GENERAL.—During

the period

10

that begins on January 1, 2020, and ends on

11

December 31, 2024, the Secretary may exclude,

12

from a State’s medical assistance expenditures

13

for a fiscal year or portion of a fiscal year that

14

occurs during such period, an amount that shall

15

not exceed the amount determined under sub-

16

paragraph (B) for the State and year or portion

17

of a year if—

18

‘‘(i) a public health emergency de-

19

clared by the Secretary pursuant to section

20

319 of the Public Health Service Act ex-

21

isted within the State during such year or

22

portion of a year; and

23
24

‘‘(ii) the Secretary determines that
such an exemption would be appropriate.

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1

‘‘(B) MAXIMUM

AMOUNT

OF

ADJUST-

2

MENT.—The

amount excluded for a State and

3

fiscal year or portion of a fiscal year under this

4

paragraph shall not exceed the amount by

5

which—

6

‘‘(i) the amount of State expenditures

7

for medical assistance for 1903A enrollees

8

in areas of the State which are subject to

9

a declaration described in subparagraph

10

(A)(i) for the fiscal year or portion of a fis-

11

cal year; exceeds

12

‘‘(ii) the amount of such expenditures

13

for such enrollees in such areas during the

14

most recent fiscal year or portion of a fis-

15

cal year of equal length to the portion of

16

a fiscal year involved during which no such

17

declaration was in effect.

18

‘‘(C) AGGREGATE

LIMITATION ON EXCLU-

19

SIONS AND ADDITIONAL BLOCK GRANT PAY-

20

MENTS.—The

21

tures excluded under this paragraph and addi-

22

tional

23

1903B(c)(3)(E) for the period described in sub-

24

paragraph (A) shall not exceed $5,000,000,000.

aggregate amount of expendi-

payments

made

under

section

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1

‘‘(D) REVIEW.—If the Secretary exercises

2

the authority under this paragraph with respect

3

to a State for a fiscal year or portion of a fiscal

4

year, the Secretary shall, not later than 6

5

months after the declaration described in sub-

6

paragraph (A)(i) ceases to be in effect, conduct

7

an audit of the State’s medical assistance ex-

8

penditures for 1903A enrollees during the year

9

or portion of a year to ensure that all of the ex-

10

penditures so excluded were made for the pur-

11

pose of ensuring that the health care needs of

12

1903A enrollees in areas affected by a public

13

health emergency are met.

14
15

‘‘(c) TARGET TOTAL MEDICAL ASSISTANCE EXPENDITURES.—

16

‘‘(1) CALCULATION.—In this section, the term

17

‘target total medical assistance expenditures’ means,

18

for a State for a fiscal year, the sum of the prod-

19

ucts, for each of the 1903A enrollee categories (as

20

defined in subsection (e)(2)), of—

21

‘‘(A) the target per capita medical assist-

22

ance expenditures (as defined in paragraph (2))

23

for the enrollee category, State, and fiscal year;

24

and

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1

‘‘(B) the number of 1903A enrollees for

2

such enrollee category, State, and fiscal year, as

3

determined under subsection (e)(4).

4

‘‘(2) TARGET

PER CAPITA MEDICAL ASSISTANCE

5

EXPENDITURES.—In

6

get per capita medical assistance expenditures’

7

means, for a 1903A enrollee category and State—
‘‘(A) for fiscal year 2020, an amount equal

8
9

this subsection, the term ‘tar-

to—

10

‘‘(i) the provisional FY19 target per

11

capita amount for such enrollee category

12

(as calculated under subsection (d)(5)) for

13

the State; increased by

14

‘‘(ii) the applicable annual inflation

15

factor (as defined in paragraph (3)) for

16

fiscal year 2020; and

17

‘‘(B) for each succeeding fiscal year, an

18

amount equal to—

19

‘‘(i) the target per capita medical as-

20

sistance expenditures (under subparagraph

21

(A) or this subparagraph) for the 1903A

22

enrollee category and State for the pre-

23

ceding fiscal year; increased by

24
25

‘‘(ii) the applicable annual inflation
factor for that succeeding fiscal year.

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1

‘‘(3) APPLICABLE

2

TOR.—In

3

inflation factor’ means—

4

ANNUAL

INFLATION

FAC-

paragraph (2), the term ‘applicable annual

‘‘(A) for fiscal years before 2025—

5

‘‘(i) for each of the 1903A enrollee

6

categories described in subparagraphs (C)

7

and (D) of subsection (e)(2), the percent-

8

age increase in the medical care component

9

of the consumer price index for all urban

10

consumers (U.S. city average) from Sep-

11

tember of the previous fiscal year to Sep-

12

tember of the fiscal year involved; and

13

‘‘(ii) for each of the 1903A enrollee

14

categories described in subparagraphs (A)

15

and (B) of subsection (e)(2), the percent-

16

age increase described in clause (i) plus 1

17

percentage point; and

18

‘‘(B) for fiscal years after 2024—

19

‘‘(i) for each of the 1903A enrollee

20

categories described in subparagraphs (C)

21

and (D) of subsection (e)(2), the percent-

22

age increase in the consumer price index

23

for all urban consumers (U.S. city average)

24

from September of the previous fiscal year

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1

to September of the fiscal year involved;

2

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 in the medical care component

7

of the consumer price index for all urban

8

consumers (U.S. city average) from Sep-

9

tember of the previous fiscal year to Sep-

10
11

tember of the fiscal year involved.
‘‘(4) ADJUSTMENTS

TO STATE EXPENDITURES

12

TARGETS TO PROMOTE PROGRAM EQUITY ACROSS

13

STATES.—

14

‘‘(A) IN

GENERAL.—Beginning

with fiscal

15

year 2020, the target per capita medical assist-

16

ance expenditures for a 1903A enrollee cat-

17

egory, State, and fiscal year, as determined

18

under paragraph (2), shall be adjusted (subject

19

to subparagraph (C)(i)) in accordance with this

20

paragraph.

21

‘‘(B) ADJUSTMENT

BASED ON LEVEL OF

22

PER CAPITA SPENDING FOR 1903A ENROLLEE

23

CATEGORIES.—Subject

24

with respect to a State, fiscal year, and 1903A

25

enrollee category, if the State’s per capita cat-

to subparagraph (C),

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1

egorical medical assistance expenditures (as de-

2

fined in subparagraph (D)) for the State and

3

category in the preceding fiscal year—

4

‘‘(i) exceed the mean per capita cat-

5

egorical medical assistance expenditures

6

for the category for all States for such pre-

7

ceding year by not less than 25 percent,

8

the State’s target per capita medical as-

9

sistance expenditures for such category for

10

the fiscal year involved shall be reduced by

11

a percentage that shall be determined by

12

the Secretary but which shall not be less

13

than 0.5 percent or greater than 2 percent;

14

or

15

‘‘(ii) are less than the mean per capita

16

categorical medical assistance expenditures

17

for the category for all States for such pre-

18

ceding year by not less than 25 percent,

19

the State’s target per capita medical as-

20

sistance expenditures for such category for

21

the fiscal year involved shall be increased

22

by a percentage that shall be determined

23

by the Secretary but which shall not be

24

less than 0.5 percent or greater than 3

25

percent.

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1
2

‘‘(C) RULES

OF APPLICATION.—

‘‘(i) BUDGET

NEUTRALITY REQUIRE-

3

MENT.—In

4

percentages by which to adjust States’ tar-

5

get per capita medical assistance expendi-

6

tures for a category and fiscal year under

7

this paragraph, the Secretary shall make

8

such adjustments in a manner that does

9

not result in a net increase in Federal pay-

10

ments under this section for such fiscal

11

year, and if the Secretary cannot adjust

12

such expenditures in such a manner there

13

shall be no adjustment under this para-

14

graph for such fiscal year.

15

determining the appropriate

‘‘(ii) ASSUMPTION

REGARDING STATE

16

EXPENDITURES.—For

purposes of clause

17

(i), in the case of a State that has its tar-

18

get per capita medical assistance expendi-

19

tures for a 1903A enrollee category and

20

fiscal year increased under this paragraph,

21

the Secretary shall assume that the cat-

22

egorical medical assistance expenditures

23

(as defined in subparagraph (D)(ii)) for

24

such State, category, and fiscal year will

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1

equal such increased target medical assist-

2

ance expenditures.

3

‘‘(iii) NONAPPLICATION

TO LOW-DEN-

4

SITY STATES.—This

5

apply to any State that has a population

6

density of less than 15 individuals per

7

square mile, based on the most recent data

8

available from the Bureau of the Census.

9

paragraph shall not

‘‘(iv) APPLICATION

FOR FISCAL YEARS

10

2020 AND 2021.—In

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

15
16

fiscal years 2020 and

CAPITA CATEGORICAL MEDICAL

ASSISTANCE EXPENDITURES.—

‘‘(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

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1

‘‘(II) the number of 1903A en-

2

rollees for the State, category, and

3

year.

4

‘‘(ii) CATEGORICAL

5

ANCE EXPENDITURES.—The

6

ical

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

medical

‘‘(d) CALCULATION

OF

MEDICAL ASSIST-

assistance

term ‘categorexpenditures’

FY19 PROVISIONAL TARGET

18 AMOUNT FOR EACH 1903A ENROLLEE CATEGORY.—Sub19 ject to subsection (g), the following shall apply:
20

‘‘(1) CALCULATION

21

CAPITA BASE PERIOD.—For

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

OF BASE AMOUNTS FOR PER

each State the Sec-

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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—
‘‘(i) the amount calculated under sub-

9
10

paragraph (A); divided by
‘‘(ii) the number calculated under sub-

11
12
13

paragraph (B).
‘‘(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

17

year 2019 average per capita amount for each State

18

equal to—

Secretary shall calculate a fiscal

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)

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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

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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

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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

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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

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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
16

‘‘(e) 1903A ENROLLEE; 1903A ENROLLEE CATEGORY.—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 section 1903B(d)(6)(B), any Med-

21

icaid enrollee (as defined in paragraph (3)) for the

22

month, other than such an enrollee who for such

23

month is in any of the following categories of ex-

24

cluded individuals:

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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

INDIVIDUAL.—An

indi-

10

SERVICES

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
15

ELIGIBLE

‘‘(D) PARTIAL-BENEFIT

ENROLLEES.—An

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

22

1902(a)(10)(A)(ii) (or on the basis of a

23

waiver that provides only comparable bene-

24

fits);

(XII)

or

(XXI)

of

section

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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

16

AND DISABLED CHILDREN.—

An individual who—
‘‘(i) is a child under 19 years of age;

17
and

18
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:

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1
2
3

‘‘(A) ELDERLY.—A category of 1903A enrollees who are 65 years of age or older.
‘‘(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) OTHER

NONELDERLY, NONDISABLED,

14

NON-EXPANSION

ADULTS.—A

category

15

1903A enrollees who are not described in any

16

previous subparagraph.

17

‘‘(3) MEDICAID

ENROLLEE.—The

of

term ‘Med-

18

icaid enrollee’ means, with respect to a State for a

19

month, an individual who is eligible for medical as-

20

sistance for items or services under this title and en-

21

rolled under the State plan (or a waiver of such

22

plan) under this title for the month.

23

‘‘(4) DETERMINATION

OF NUMBER OF 1903A

24

ENROLLEES.—The

number of 1903A enrollees for a

25

State and fiscal year or the State’s per capita base

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1

period, and, if applicable, for a 1903A enrollee cat-

2

egory, is the average monthly number of Medicaid

3

enrollees for such State and fiscal year or base pe-

4

riod (and, if applicable, in such category) that are

5

reported through the CMS–64 report under (and

6

subject to audit under) subsection (h).

7

‘‘(f) SPECIAL PAYMENT RULES.—

8

‘‘(1) APPLICATION

IN CASE OF RESEARCH AND

9

DEMONSTRATION PROJECTS AND OTHER WAIVERS.—

10

In the case of a State with a waiver of the State

11

plan approved under section 1115, section 1915, or

12

another provision of this title, this section shall

13

apply to medical assistance expenditures and medical

14

assistance payments under the waiver, in the same

15

manner as if such expenditures and payments had

16

been made under a State plan under this title and

17

the limitations on expenditures under this section

18

shall supersede any other payment limitations or

19

provisions (including limitations based on a per cap-

20

ita limitation) otherwise applicable under such a

21

waiver.

22

‘‘(2) IN

CASE OF STATE FAILURE TO REPORT

23

NECESSARY DATA.—If

a State for any quarter in a

24

fiscal year (beginning with fiscal year 2019) fails to

25

satisfactorily submit data on expenditures and en-

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1

rollees in accordance with subsection (h)(1), for such

2

fiscal year and any succeeding fiscal year for which

3

such data are not satisfactorily submitted—

4

‘‘(A) the Secretary shall calculate and

5

apply subsections (a) through (e) with respect

6

to the State as if all 1903A enrollee categories

7

for which such expenditure and enrollee data

8

were not satisfactorily submitted were a single

9

1903A enrollee category; and

10

‘‘(B) the growth factor otherwise applied

11

under subsection (c)(2)(B) shall be decreased

12

by 1 percentage point.

13

‘‘(g) RECALCULATION

OF

CERTAIN AMOUNTS

FOR

14 DATA ERRORS.—The amounts and percentage calculated
15 under paragraphs (1) and (4)(C) of subsection (d) for a
16 State for the State’s per capita base period, and the
17 amounts of the adjusted total medical assistance expendi18 tures calculated under subsection (b) and the number of
19 Medicaid enrollees and 1903A enrollees determined under
20 subsection (e)(4) for a State for the State’s per capita
21 base period, fiscal year 2019, and any subsequent fiscal
22 year, may be adjusted by the Secretary based upon an ap23 peal (filed by the State in such a form, manner, and time,
24 and containing such information relating to data errors
25 that support such appeal, as the Secretary specifies) that

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1 the Secretary determines to be valid, except that any ad2 justment by the Secretary under this subsection for a
3 State may not result in an increase of the target total
4 medical assistance expenditures exceeding 2 percent.
‘‘(h) REQUIRED REPORTING AND AUDITING; TRANSI-

5
6

TIONAL INCREASE IN

7

FOR

8
9

FEDERAL MATCHING PERCENTAGE

CERTAIN ADMINISTRATIVE EXPENSES.—
‘‘(1) REPORTING
‘‘(A) IN

OF CMS–64 DATA.—

GENERAL.—In

addition to the

10

data required on form Group VIII on the CMS–

11

64 report form as of January 1, 2017, in each

12

CMS-64 report required to be submitted (for

13

each quarter beginning on or after October 1,

14

2018), the State shall include data on medical

15

assistance expenditures within such categories

16

of services and categories of enrollees (including

17

each 1903A enrollee category and each category

18

of excluded individuals under subsection (e)(1))

19

and the numbers of enrollees within each of

20

such enrollee categories, as the Secretary deter-

21

mines are necessary (including timely guidance

22

published as soon as possible after the date of

23

the enactment of this section) in order to imple-

24

ment this section and to enable States to com-

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1

ply with the requirement of this paragraph on

2

a timely basis.

3

‘‘(B) REPORTING

ON

INPA-

QUALIFIED

4

TIENT PSYCHIATRIC HOSPITAL SERVICES.—Not

5

later than 60 days after the date of the enact-

6

ment of this section, the Secretary shall modify

7

the CMS–64 report form to require that States

8

submit data with respect to medical assistance

9

expenditures for qualified inpatient psychiatric

10

hospital

11

1905(h)(3)).

12

services

(as

‘‘(C) REPORTING

defined

ON

in

section

CHILDREN

CONDITIONS.—Not

WITH

later

13

COMPLEX

14

than January 1, 2020, the Secretary shall mod-

15

ify the CMS–64 report form to require that

16

States submit data with respect to individuals

17

who—

MEDICAL

18

‘‘(i) are enrolled in a State plan under

19

this title or title XXI or under a waiver of

20

such plan;

21

‘‘(ii) are under 21 years of age; and

22

‘‘(iii) have a chronic medical condition

23
24
25

or serious injury that—
‘‘(I) affects two or more body
systems;

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1

‘‘(II) affects cognitive or physical

2

functioning (such as reducing the abil-

3

ity to perform the activities of daily

4

living, including the ability to engage

5

in movement or mobility, eat, drink,

6

communicate, or breathe independ-

7

ently); and

8

‘‘(III) either—

9

‘‘(aa)

requires

intensive

10

healthcare interventions (such as

11

multiple medications, therapies,

12

or durable medical equipment)

13

and intensive care coordination to

14

optimize health and avoid hos-

15

pitalizations or emergency de-

16

partment visits; or

17

‘‘(bb) meets the criteria for

18

medical complexity under existing

19

risk

20

using a recognized, publicly avail-

21

able pediatric grouping system

22

(such as the pediatric complex

23

conditions classification system

24

or the Pediatric Medical Com-

25

plexity Algorithm) selected by the

adjustment

methodologies

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1

Secretary in close collaboration

2

with the State agencies respon-

3

sible

4

plans under this title and a na-

5

tional panel of pediatric, pedi-

6

atric specialty, and pediatric sub-

7

specialty experts.

8

‘‘(2) AUDITING

for

administering

OF CMS–64 DATA.—The

State

Sec-

9

retary shall conduct for each State an audit of the

10

number of individuals and expenditures reported

11

through the CMS–64 report for the State’s per cap-

12

ita base period, fiscal year 2019, and each subse-

13

quent fiscal year, which audit may be conducted on

14

a representative sample (as determined by the Sec-

15

retary).

16

‘‘(3) AUDITING

OF STATE SPENDING.—The

In-

17

spector General of the Department of Health and

18

Human Services shall conduct an audit (which shall

19

be conducted using random sampling, as determined

20

by the Inspector General) of each State’s spending

21

under this section not less than once every 3 years.

22

‘‘(4)

TEMPORARY

INCREASE

IN

FEDERAL

SUPPORT

IMPROVED

23

MATCHING

24

DATA REPORTING SYSTEMS FOR FISCAL YEARS 2018

25

AND 2019.—In

PERCENTAGE

TO

the case of any State that selects as

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1

its per capita base period the most recent 8 consecu-

2

tive quarter period for which the data necessary to

3

make the determinations required under this section

4

is available, for amounts expended during calendar

5

quarters beginning on or after October 1, 2017, and

6

before October 1, 2019—

7

‘‘(A) the Federal matching percentage ap-

8

plied under section 1903(a)(3)(A)(i) shall be in-

9

creased by 10 percentage points to 100 percent;

10

and

11

‘‘(B) the Federal matching percentage ap-

12

plied under section 1903(a)(3)(B) shall be in-

13

creased by 25 percentage points to 100 per-

14

cent.’’.

15

(b) ENSURING ACCESS

TO

HOME

AND

COMMUNITY

16 BASED SERVICES.—Section 1915 of the Social Security
17 Act (42 U.S.C. 1396n) is amended by adding at the end
18 the following new subsection:
19
20
21

‘‘(l) INCENTIVE PAYMENTS
NITY-BASED

FOR

HOME

AND

COMMU-

SERVICES.—

‘‘(1) IN

GENERAL.—The

Secretary shall estab-

22

lish a demonstration project (referred to in this sub-

23

section as the ‘demonstration project’) under which

24

eligible States may make HCBS payment adjust-

25

ments for the purpose of continuing to provide and

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1

improving the quality of home and community-based

2

services provided under a waiver under subsection

3

(c) or (d) or a State plan amendment under sub-

4

section (i).

5

‘‘(2) SELECTION

OF ELIGIBLE STATES.—

6

‘‘(A) APPLICATION.—A State seeking to

7

participate in the demonstration project shall

8

submit to the Secretary, at such time and in

9

such manner as the Secretary shall require, an

10

application that includes—

11

‘‘(i) an assurance that any HCBS

12

payment adjustment made by the State

13

under this subsection will comply with the

14

health and welfare and financial account-

15

ability safeguards taken by the State under

16

subsection (c)(2)(A); and

17

‘‘(ii) such other information and as-

18

surances as the Secretary shall require.

19

‘‘(B) SELECTION.—The Secretary shall se-

20

lect States to participate in the demonstration

21

project on a competitive basis except that, in

22

making selections under this paragraph, the

23

Secretary shall give priority to any State that

24

is one of the 15 States in the United States

25

with the lowest population density, as deter-

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1

mined by the Secretary based on data from the

2

Bureau of the Census.

3

‘‘(3) TERM

OF DEMONSTRATION PROJECT.—

4

The demonstration project shall be conducted for the

5

4-year period beginning on January 1, 2020, and

6

ending on December 31, 2023.

7
8
9

‘‘(4) STATE

ALLOTMENTS

AND

INCREASED

FMAP FOR PAYMENT ADJUSTMENTS.—

‘‘(A) IN

GENERAL.—

‘‘(i) ANNUAL

10

ALLOTMENT.—Subject

11

to clause (ii), for each year of the dem-

12

onstration project, the Secretary shall allot

13

an amount to each State that is an eligible

14

State for the year.
‘‘(ii)

15

LIMITATION

ON

FEDERAL

16

SPENDING.—The

17

may be allotted to eligible States under

18

clause (i) for all years of the demonstra-

19

tion

20

$8,000,000,000, and in no case may the

21

aggregate amount of payments made by

22

the Secretary to eligible States for pay-

23

ment adjustments under this subsection

24

exceed such amount.

project

aggregate amount that

shall

not

exceed

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1

‘‘(B) FMAP

APPLICABLE TO HCBS PAY-

2

MENT ADJUSTMENTS.—For

3

demonstration project, notwithstanding section

4

1905(b) but subject to the limitations described

5

in subparagraph (C), the Federal medical as-

6

sistance percentage applicable with respect to

7

expenditures by an eligible State that are at-

8

tributable to HCBS payment adjustments shall

9

be equal to (and shall in no case exceed) 100

10
11

each year of the

percent.
‘‘(C) INDIVIDUAL

PROVIDER AND ALLOT-

12

MENT LIMITATIONS.—Payment

under section

13

1903(a) shall not be made to an eligible State

14

for expenditures for a year that are attributable

15

to an HCBS payment adjustment—

16

‘‘(i) that is paid to a single provider

17

and exceeds a percentage which shall be

18

established by the Secretary of the pay-

19

ment otherwise made to the provider; or

20

‘‘(ii) to the extent that the aggregate

21

amount of HCBS payment adjustments

22

made by the State in the year exceeds the

23

amount allotted to the State for the year

24

under clause (i).

25

‘‘(5) REPORTING

AND EVALUATION.—

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1

‘‘(A) IN

GENERAL.—As

a condition of re-

2

ceiving the increased Federal medical assistance

3

percentage described in paragraph (4)(B), each

4

eligible State shall collect and report informa-

5

tion, as determined necessary by the Secretary,

6

for the purposes of providing Federal oversight

7

and evaluating the State’s compliance with the

8

health and welfare and financial accountability

9

safeguards taken by the State under subsection

10

(c)(2)(A).

11

‘‘(B) FORMS.—Expenditures by eligible

12

States on HCBS payment adjustments shall be

13

separately reported on the CMS-64 Form and

14

in T-MSIS.

15

‘‘(6) DEFINITIONS.—In this subsection:

16
17
18
19
20
21
22
23
24

‘‘(A) ELIGIBLE

STATE.—The

term ‘eligible

State’ means a State that—
‘‘(i) is one of the 50 States or the
District of Columbia;
‘‘(ii) has in effect—
‘‘(I) a waiver under subsection
(c) or (d); or
‘‘(II) a State plan amendment
under subsection (i);

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1
2
3

‘‘(iii) submits an application under
paragraph (2)(A); and
‘‘(iv) is selected by the Secretary to

4

participate in the demonstration project.

5

‘‘(B) HCBS

PAYMENT ADJUSTMENT.—The

6

term ‘HCBS payment adjustment’ means a

7

payment adjustment made by an eligible State

8

to the amount of payment otherwise provided

9

under a waiver under subsection (c) or (d) or

10

a State plan amendment under subsection (i)

11

for a home and community-based service which

12

is provided to a 1903A enrollee (as defined in

13

section 1903A(e)(1)) who is in the enrollee cat-

14

egory described in subparagraph (A) or (B) of

15

section 1903A(e)(2).’’.

16
17

SEC. 124. FLEXIBLE BLOCK GRANT OPTION FOR STATES.

Title XIX of the Social Security Act, as previously

18 amended, is further amended by inserting after section
19 1903A the following new section:
20
21

‘‘SEC. 1903B. MEDICAID FLEXIBILITY PROGRAM.

‘‘(a) IN GENERAL.—Beginning with fiscal year 2020,

22 any State (as defined in subsection (e)) that has an appli23 cation approved by the Secretary under subsection (b)
24 may conduct a Medicaid Flexibility Program to provide
25 targeted health assistance to program enrollees.

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1
2

‘‘(b) STATE APPLICATION.—
‘‘(1) IN

GENERAL.—To

be eligible to conduct a

3

Medicaid Flexibility Program, a State shall submit

4

an application to the Secretary that meets the re-

5

quirements of this subsection.

6

‘‘(2) CONTENTS

OF APPLICATION.—An

applica-

7

tion under this subsection shall include the fol-

8

lowing:

9

‘‘(A) A description of the proposed Med-

10

icaid Flexibility Program and how the State will

11

satisfy the requirements described in subsection

12

(d).

13
14

‘‘(B) The proposed conditions for eligibility
of program enrollees.

15

‘‘(C) A description of the types, amount,

16

duration, and scope of services which will be of-

17

fered as targeted health assistance under the

18

program, including a description of the pro-

19

posed package of services which will be provided

20

to program enrollees to whom the State would

21

otherwise be required to make medical assist-

22

ance available under section 1902(a)(10)(A)(i).

23

‘‘(D) A description of how the State will

24

notify individuals currently enrolled in the State

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1

plan for medical assistance under this title of

2

the transition to such program.

3
4

‘‘(E) Statements certifying that the State
agrees to—

5

‘‘(i) submit regular enrollment data

6

with respect to the program to the Centers

7

for Medicare & Medicaid Services at such

8

time and in such manner as the Secretary

9

may require;

10

‘‘(ii) submit timely and accurate data

11

to the Transformed Medicaid Statistical

12

Information System (T–MSIS);

13

‘‘(iii) report annually to the Secretary

14

on adult health quality measures imple-

15

mented under the program and informa-

16

tion on the quality of health care furnished

17

to program enrollees under the program as

18

part of the annual report required under

19

section 1139B(d)(1);

20

‘‘(iv) submit such additional data and

21

information not described in any of the

22

preceding clauses of this subparagraph but

23

which the Secretary determines is nec-

24

essary for monitoring, evaluation, or pro-

25

gram integrity purposes, including—

 LYN17751

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1

‘‘(I) survey data, such as the

2

data from Consumer Assessment of

3

Healthcare Providers and Systems

4

(CAHPS) surveys;

5

‘‘(II) birth certificate data; and

6

‘‘(III) clinical patient data for

7

quality measurements which may not

8

be present in a claim, such as labora-

9

tory data, body mass index, and blood

10

pressure; and

11

‘‘(v) on an annual basis, conduct a re-

12

port evaluating the program and make

13

such report available to the public.

14

‘‘(F) An information technology systems

15

plan demonstrating that the State has the capa-

16

bility to support the technological administra-

17

tion of the program and comply with reporting

18

requirements under this section.

19
20

‘‘(G) A statement of the goals of the proposed program, which shall include—

21

‘‘(i) goals related to quality, access,

22

rate of growth targets, consumer satisfac-

23

tion, and outcomes;

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109
1

‘‘(ii) a plan for monitoring and evalu-

2

ating the program to determine whether

3

such goals are being met; and

4

‘‘(iii) a proposed process for the State,

5

in consultation with the Centers for Medi-

6

care & Medicaid Services, to take remedial

7

action to make progress on unmet goals.

8

‘‘(H) Such other information as the Sec-

9
10
11

retary may require.
‘‘(3) STATE
‘‘(A) IN

NOTICE AND COMMENT PERIOD.—
GENERAL.—Before

submitting an

12

application under this subsection, a State shall

13

make the application publicly available for a 30

14

day notice and comment period.

15

‘‘(B) NOTICE

AND COMMENT PROCESS.—

16

During the notice and comment period de-

17

scribed in subparagraph (A), the State shall

18

provide opportunities for a meaningful level of

19

public input, which shall include public hearings

20

on the proposed Medicaid Flexibility Program.

21

‘‘(4) FEDERAL

NOTICE

AND

COMMENT

PE-

22

RIOD.—The

Secretary shall not approve of any ap-

23

plication to conduct a Medicaid Flexibility Program

24

without making such application publicly available

25

for a 30 day notice and comment period.

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1

‘‘(5) TIMELINE
‘‘(A) IN

2

FOR SUBMISSION.—

GENERAL.—A

State may submit

3

an application under this subsection to conduct

4

a Medicaid Flexibility Program that would

5

begin in the next fiscal year at any time, sub-

6

ject to subparagraph (B).

7

‘‘(B) DEADLINES.—Each year beginning

8

with 2019, the Secretary shall specify a dead-

9

line for submitting an application under this

10

subsection to conduct a Medicaid Flexibility

11

Program that would begin in the next fiscal

12

year, but such deadline shall not be earlier than

13

60 days after the date that the Secretary pub-

14

lishes the amounts of State block grants as re-

15

quired under subsection (c)(4).

16
17

‘‘(c) FINANCING.—
‘‘(1) IN

GENERAL.—For

each fiscal year during

18

which a State is conducting a Medicaid Flexibility

19

Program, the State shall receive, instead of amounts

20

otherwise payable to the State under this title for

21

medical

22

amount specified in paragraph (3)(A).

assistance

23

‘‘(2) AMOUNT

24

‘‘(A)

25

IN

for

program

enrollees,

the

OF BLOCK GRANT FUNDS.—
GENERAL.—The

block

grant

amount under this paragraph for a State and

 LYN17751

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111
1

year shall be equal to the amount determined

2

under subparagraph (B) for the State and year.

3
4

‘‘(B) ENROLLEE
‘‘(i) FOR

CATEGORY AMOUNTS.—

INITIAL YEAR.—Subject

to

5

subparagraph (C), for the first fiscal year

6

in which a Medicaid Flexibility Program is

7

conducted by a State, the amount deter-

8

mined under this subparagraph for the

9

State and year shall be equal to the Fed-

10

eral average medical assistance matching

11

percentage

12

1903A(a)(4)) for the State and year multi-

13

plied by the product of—

(as

defined

in

section

14

‘‘(I) the target per capita medical

15

assistance expenditures (as defined in

16

section 1903A(c)(2)) for the State

17

and year; and

18

‘‘(II) the number of 1903A en-

19

rollees in the category described in

20

section 1903A(e)(2)(D) for the State

21

for the second fiscal year preceding

22

such first fiscal year, increased by the

23

percentage increase in State popu-

24

lation from such second preceding fis-

25

cal year to such first fiscal year, based

 LYN17751

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112
1

on the best available estimates of the

2

Bureau of the Census.

3

‘‘(ii) FOR

ANY SUBSEQUENT YEAR.—

4

For any fiscal year that is not the first fis-

5

cal year in which a Medicaid Flexibility

6

Program is conducted by the State, the

7

block grant amount under this paragraph

8

for the State and year shall be equal to the

9

amount determined for the State for the

10

most recent previous fiscal year in which

11

the State conducted a Medicaid Flexibility

12

Program, except that such amount shall be

13

increased by the percentage increase in the

14

consumer price index for all urban con-

15

sumers (U.S. city average) from April of

16

the second fiscal year preceding the fiscal

17

year involved to April of the fiscal year

18

preceding the fiscal year involved.

19

‘‘(C) CAP

ON TOTAL POPULATION OF 1903A

20

ENROLLEES FOR PURPOSES OF BLOCK GRANT

21

CALCULATION.—

22

‘‘(i) IN

GENERAL.—In

calculating the

23

amount of a block grant for the first year

24

in which a Medicaid Flexibility Program is

25

conducted by the State under subpara-

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113
1

graph (B)(i), the total number of 1903A

2

enrollees in the category described in sec-

3

tion 1903A(e)(2)(D) for the State and

4

year shall not exceed the adjusted number

5

of base period enrollees for the State (as

6

defined in clause (ii)).

7

‘‘(ii) ADJUSTED

NUMBER OF BASE PE-

ENROLLEES.—The

term ‘adjusted

8

RIOD

9

number of base period enrollees’ means,

10

with respect to a State, the number of

11

1903A enrollees in the enrollee category

12

described in section 1903A(e)(2)(D) for

13

the State for the State’s per capita base

14

period

15

1903A(e)(4)), increased by the percentage

16

increase, if any, in the total State popu-

17

lation from the last April in the State’s per

18

capita base period to April of the fiscal

19

year preceding the fiscal year involved (de-

20

termined using the best available data

21

from the Bureau of the Census) plus 3

22

percentage points.

23
24

(as

‘‘(3) FEDERAL

determined

under

section

PAYMENT AND STATE MAINTE-

NANCE OF EFFORT.—

 LYN17751

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114
1

‘‘(A) FEDERAL

PAYMENT.—Subject

to sub-

2

paragraphs (D) and (E), the Secretary shall

3

pay to each State conducting a Medicaid Flexi-

4

bility Program under this section for a fiscal

5

year, from its block grant amount under para-

6

graph (2) for such year, an amount for each

7

quarter of such year equal to the Federal aver-

8

age medical assistance percentage (as defined in

9

section 1903A(a)(4)) of the total amount ex-

10

pended under the program during such quarter

11

as targeted health assistance, and the State is

12

responsible for the balance of the funds to carry

13

out such program.

14

‘‘(B) STATE

15

EXPENDITURES.—For

16

State is conducting a Medicaid Flexibility Pro-

17

gram, the State shall make expenditures for

18

targeted health assistance under the program in

19

an amount equal to the product of—

MAINTENANCE OF EFFORT

each year during which a

20

‘‘(i) the block grant amount deter-

21

mined for the State and year under para-

22

graph (2); and

23

‘‘(ii) the enhanced FMAP described in

24

the first sentence of section 2105(b) for

25

the State and year.

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115
1

‘‘(C)

REDUCTION

IN

BLOCK

GRANT

2

AMOUNT FOR STATES FAILING TO MEET MOE

3

REQUIREMENT.—

4

‘‘(i) IN

GENERAL.—In

the case of a

5

State conducting a Medicaid Flexibility

6

Program that makes expenditures for tar-

7

geted health assistance under the program

8

for a fiscal year in an amount that is less

9

than the required amount for the fiscal

10

year under subparagraph (B), the amount

11

of the block grant determined for the State

12

under paragraph (2) for the succeeding fis-

13

cal year shall be reduced by the amount by

14

which such expenditures are less than such

15

required amount.

16

‘‘(ii) DISREGARD

OF REDUCTION.—

17

For purposes of determining the amount of

18

a State block grant under paragraph (2),

19

any reduction made under this subpara-

20

graph to a State’s block grant amount in

21

a previous fiscal year shall be disregarded.

22

‘‘(iii) APPLICATION

TO STATES THAT

23

TERMINATE PROGRAM.—In

the case of a

24

State described in clause (i) that termi-

25

nates the State Medicaid Flexibility Pro-

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116
1

gram under subsection (d)(2)(B) and such

2

termination is effective with the end of the

3

fiscal year in which the State fails to make

4

the required amount of expenditures under

5

subparagraph (B), the reduction amount

6

determined for the State and succeeding

7

fiscal year under clause (i) shall be treated

8

as an overpayment under this title.

9

‘‘(D) REDUCTION

FOR NONCOMPLIANCE.—

10

If the Secretary determines that a State con-

11

ducting a Medicaid Flexibility Program is not

12

complying with the requirements of this section,

13

the Secretary may withhold payments, reduce

14

payments, or recover previous payments to the

15

State under this section as the Secretary deems

16

appropriate.

17
18
19

‘‘(E) ADDITIONAL

FEDERAL

PAYMENTS

DURING PUBLIC HEALTH EMERGENCY.—

‘‘(i) IN

GENERAL.—In

the case of a

20

State and fiscal year or portion of a fiscal

21

year for which the Secretary has excluded

22

expenditures under section 1903A(b)(6), if

23

the State has uncompensated targeted

24

health assistance expenditures for the year

25

or portion of a year, the Secretary may

 LYN17751

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117
1

make an additional payment to such State

2

equal to the Federal average medical as-

3

sistance percentage (as defined in section

4

1903A(a)(4)) for the year or portion of a

5

year of the amount of such uncompensated

6

targeted health assistance expenditures, ex-

7

cept that the amount of such payment

8

shall not exceed the amount determined for

9

the State and year or portion of a year

10
11

under clause (ii).
‘‘(ii) MAXIMUM

AMOUNT

PAYMENT.—The

OF

ADDI-

amount deter-

12

TIONAL

13

mined for a State and fiscal year or por-

14

tion of a fiscal year under this subpara-

15

graph shall not exceed the Federal average

16

medical assistance percentage (as defined

17

in section 1903A(a)(4)) for such year or

18

portion of a year of the amount by

19

which—

20

‘‘(I) the amount of State expend-

21

itures for targeted health assistance

22

for program enrollees in areas of the

23

State which are subject to a declara-

24

tion

described

in

section

 LYN17751

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118
1

1903A(b)(6)(A)(i) for the year or por-

2

tion of a year; exceeds

3

‘‘(II) the amount of such expend-

4

itures for such enrollees in such areas

5

during the most recent fiscal year in-

6

volved (or portion of a fiscal year of

7

equal length to the portion of a fiscal

8

year involved) during which no such

9

declaration was in effect.

10

‘‘(iii)

UNCOMPENSATED
ASSISTANCE.—In

TARGETED

this subpara-

11

HEALTH

12

graph, the term ‘uncompensated targeted

13

health

14

with respect to a State and fiscal year or

15

portion of a fiscal year, an amount equal

16

to the amount (if any) by which—

assistance

expenditures’

means,

17

‘‘(I) the total amount expended

18

by the State under the program for

19

targeted health assistance for the year

20

or portion of a year; exceeds

21

‘‘(II) the amount equal to the

22

amount of the block grant (reduced,

23

in the case of a portion of a year, to

24

the same proportion of the full block

25

grant amount that the portion of the

 LYN17751

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119
1

year bears to the whole year) divided

2

by the Federal average medical assist-

3

ance percentage for the year or por-

4

tion of a year.

5

‘‘(iv)

REVIEW.—If

the

Secretary

6

makes a payment to a State for a fiscal

7

year or portion of a fiscal year, the Sec-

8

retary shall, not later than 6 months after

9

the

declaration

described

in

section

10

1903A(b)(6)(A)(i) ceases to be in effect,

11

conduct an audit of the State’s targeted

12

health assistance expenditures for program

13

enrollees during the year or portion of a

14

year to ensure that all of the expenditures

15

for which the additional payment was

16

made were made for the purpose of ensur-

17

ing that the health care needs of program

18

enrollees in areas affected by a public

19

health emergency are met.

20

‘‘(4) DETERMINATION

AND PUBLICATION OF

21

BLOCK GRANT AMOUNT.—Beginning

in 2019 and

22

each year thereafter, the Secretary shall determine

23

for each State, regardless of whether the State is

24

conducting a Medicaid Flexibility Program or has

25

submitted an application to conduct such a program,

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120
1

the amount of the block grant for the State under

2

paragraph (2) which would apply for the upcoming

3

fiscal year if the State were to conduct such a pro-

4

gram in such fiscal year, and shall publish such de-

5

terminations not later than June 1 of each year.

6

‘‘(d) PROGRAM REQUIREMENTS.—

7

‘‘(1) IN

GENERAL.—No

payment shall be made

8

under this section to a State conducting a Medicaid

9

Flexibility Program unless such program meets the

10
11
12

requirements of this subsection.
‘‘(2) TERM

OF PROGRAM.—

‘‘(A) IN

GENERAL.—A

State Medicaid

13

Flexibility Program approved under subsection

14

(b)—

15
16

‘‘(i) shall be conducted for not less
than 1 program period;

17

‘‘(ii) at the option of the State, may

18

be continued for succeeding program peri-

19

ods without resubmitting an application

20

under subsection (b), provided that—

21

‘‘(I) the State provides notice to

22

the Secretary of its decision to con-

23

tinue the program; and

24
25

‘‘(II) no significant changes are
made to the program; and

 LYN17751

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121
1

‘‘(iii) shall be subject to termination

2

only by the State, which may terminate the

3

program by making an election under sub-

4

paragraph (B).

5

‘‘(B) ELECTION

6
7

TO

TERMINATE

PRO-

GRAM.—

‘‘(i) IN

GENERAL.—Subject

to clause

8

(ii), a State conducting a Medicaid Flexi-

9

bility Program may elect to terminate the

10

program effective with the first day after

11

the end of the program period in which the

12

State makes the election.

13

‘‘(ii) TRANSITION

PLAN

REQUIRE-

14

MENT.—A

15

nate a Medicaid Flexibility Program unless

16

the State has in place an appropriate tran-

17

sition plan approved by the Secretary.

18

State may not elect to termi-

‘‘(iii) EFFECT

OF TERMINATION.—If

a

19

State elects to terminate a Medicaid Flexi-

20

bility Program, the per capita cap limita-

21

tions under section 1903A shall apply ef-

22

fective with the day described in clause (i),

23

and such limitations shall be applied as if

24

the State had never conducted a Medicaid

25

Flexibility Program.

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122
1
2
3

‘‘(3) PROVISION

OF TARGETED HEALTH ASSIST-

ANCE.—

‘‘(A) IN

GENERAL.—A

State Medicaid

4

Flexibility Program shall provide targeted

5

health assistance to program enrollees and such

6

assistance shall be instead of medical assistance

7

which would otherwise be provided to the enroll-

8

ees under this title.

9

‘‘(B) CONDITIONS

10

‘‘(i) IN

FOR ELIGIBILITY.—

GENERAL.—A

State con-

11

ducting a Medicaid Flexibility Program

12

shall establish conditions for eligibility of

13

program enrollees, which shall be instead

14

of other conditions for eligibility under this

15

title, except that the program must provide

16

for eligibility for program enrollees to

17

whom the State would otherwise be re-

18

quired to make medical assistance available

19

under section 1902(a)(10)(A)(i).

20

‘‘(ii) MAGI.—Any determination of

21

income necessary to establish the eligibility

22

of a program enrollee for purposes of a

23

State Medicaid Flexibility Program shall

24

be made using modified adjusted gross in-

 LYN17751

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123
1

come

2

1902(e)(14).

3
4

in

‘‘(4) BENEFITS

accordance

with

section

AND SERVICES.—

‘‘(A) REQUIRED

SERVICES.—In

the case of

5

program enrollees to whom the State would oth-

6

erwise be required to make medical assistance

7

available under section 1902(a)(10)(A)(i), a

8

State conducting a Medicaid Flexibility Pro-

9

gram shall provide as targeted health assistance

10
11
12

the following types of services:
‘‘(i) Inpatient and outpatient hospital
services.

13

‘‘(ii) Laboratory and X-ray services.

14

‘‘(iii) Nursing facility services for indi-

15

viduals aged 21 and older.

16

‘‘(iv) Physician services.

17

‘‘(v) Home health care services (in-

18

cluding home nursing services, medical

19

supplies, equipment, and appliances).

20
21

‘‘(vi) Rural health clinic services (as
defined in section 1905(l)(1)).

22

‘‘(vii) Federally-qualified health center

23

services (as defined in section 1905(l)(2)).

24

‘‘(viii) Family planning services and

25

supplies.

 LYN17751

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124
1

‘‘(ix) Nurse midwife services.

2

‘‘(x) Certified pediatric and family

3
4
5
6
7

nurse practitioner services.
‘‘(xi) Freestanding birth center services (as defined in section 1905(l)(3)).
‘‘(xii) Emergency medical transportation.

8

‘‘(xiii) Non-cosmetic dental services.

9

‘‘(xiv) Pregnancy-related services, in-

10

cluding postpartum services for the 12-

11

week period beginning on the last day of a

12

pregnancy.

13

‘‘(B) OPTIONAL

BENEFITS.—A

State may,

14

at its option, provide services in addition to the

15

services described in subparagraph (A) as tar-

16

geted health assistance under a Medicaid Flexi-

17

bility Program.

18

‘‘(C) BENEFIT

19

‘‘(i)

IN

PACKAGES.—
GENERAL.—The

targeted

20

health assistance provided by a State to

21

any group of program enrollees under a

22

Medicaid Flexibility Program shall have an

23

aggregate actuarial value that is equal to

24

at least 95 percent of the aggregate actu-

25

arial value of the benchmark coverage de-

 LYN17751

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125
1

scribed in subsection (b)(1) of section 1937

2

or

3

scribed in subsection (b)(2) of such sec-

4

tion, as such subsections were in effect

5

prior to the enactment of the Patient Pro-

6

tection and Affordable Care Act.

benchmark-equivalent

coverage

de-

7

‘‘(ii) AMOUNT,

8

OF BENEFITS.—Subject

9

State shall determine the amount, dura-

10

tion, and scope with respect to services

11

provided as targeted health assistance

12

under a Medicaid Flexibility Program, in-

13

cluding with respect to services that are re-

14

quired to be provided to certain program

15

enrollees under subparagraph (A) except

16

as otherwise provided under such subpara-

17

graph.

18

DURATION, AND SCOPE

‘‘(iii) MENTAL

to clause (i), the

HEALTH

AND

SUB-

19

STANCE USE DISORDER COVERAGE AND

20

PARITY.—The

21

provided by a State to program enrollees

22

under a Medicaid Flexibility Program shall

23

include mental health services and sub-

24

stance use disorder services and the finan-

25

cial requirements and treatment limitations

targeted health assistance

 LYN17751

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126
1

applicable to such services under the pro-

2

gram shall comply with the requirements

3

of section 2726 of the Public Health Serv-

4

ice Act in the same manner as such re-

5

quirements apply to a group health plan.

6

‘‘(iv) PRESCRIPTION

DRUGS.—If

the

7

targeted health assistance provided by a

8

State to program enrollees under a Med-

9

icaid Flexibility Program includes assist-

10

ance for covered outpatient drugs, such

11

drugs shall be subject to a rebate agree-

12

ment that complies with the requirements

13

of section 1927, and any requirements ap-

14

plicable to medical assistance for covered

15

outpatient drugs under a State plan (in-

16

cluding the requirement that the State pro-

17

vide information to a manufacturer) shall

18

apply in the same manner to targeted

19

health assistance for covered outpatient

20

drugs under a Medicaid Flexibility Pro-

21

gram.

22

‘‘(D) COST

SHARING.—A

State conducting

23

a Medicaid Flexibility Program may impose

24

premiums, deductibles, cost-sharing, or other

25

similar charges, except that the total annual ag-

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127
1

gregate amount of all such charges imposed

2

with respect to all program enrollees in a family

3

shall not exceed 5 percent of the family’s in-

4

come for the year involved.

5

‘‘(5) ADMINISTRATION

OF

PROGRAM.—Each

6

State conducting a Medicaid Flexibility Program

7

shall do the following:

8
9
10
11

‘‘(A) SINGLE

AGENCY.—Designate

a single

State agency responsible for administering the
program.
‘‘(B) ENROLLMENT

SIMPLIFICATION AND

12

COORDINATION WITH STATE HEALTH INSUR-

13

ANCE EXCHANGES.—Provide

14

rollment processes (such as online enrollment

15

and reenrollment and electronic verification)

16

and coordination with State health insurance

17

exchanges.

18

‘‘(C) BENEFICIARY

for simplified en-

PROTECTIONS.—Estab-

19

lish a fair process (which the State shall de-

20

scribe in the application required under sub-

21

section (b)) for individuals to appeal adverse

22

eligibility determinations with respect to the

23

program.

24

‘‘(6) APPLICATION

OF REST OF TITLE XIX.—

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1

‘‘(A) IN

GENERAL.—To

the extent that a

2

provision of this section is inconsistent with an-

3

other provision of this title, the provision of this

4

section shall apply.

5

‘‘(B) APPLICATION

OF SECTION 1903A.—

6

With respect to a State that is conducting a

7

Medicaid Flexibility Program, section 1903A

8

shall be applied as if program enrollees were

9

not 1903A enrollees for each program period

10

during which the State conducts the program.

11
12
13

‘‘(C) WAIVERS

AND STATE PLAN AMEND-

MENTS.—

‘‘(i) IN

GENERAL.—In

the case of a

14

State conducting a Medicaid Flexibility

15

Program that has in effect a waiver or

16

State plan amendment, such waiver or

17

amendment shall not apply with respect to

18

the program, targeted health assistance

19

provided under the program, or program

20

enrollees.

21

‘‘(ii) REPLICATION

OF

WAIVER

OR

22

AMENDMENT.—In

designing a Medicaid

23

Flexibility Program, a State may mirror

24

provisions of a waiver or State plan

25

amendment described in clause (i) in the

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1

program to the extent that such provisions

2

are otherwise consistent with the require-

3

ments of this section.

4

‘‘(iii) EFFECT

OF TERMINATION.—In

5

the case of a State described in clause (i)

6

that terminates its program under sub-

7

section (d)(2)(B), any waiver or amend-

8

ment which was limited pursuant to sub-

9

paragraph (A) shall cease to be so limited

10

effective with the effective date of such ter-

11

mination.

12

‘‘(D) NONAPPLICATION

OF PROVISIONS.—

13

With respect to the design and implementation

14

of Medicaid Flexibility Programs conducted

15

under this section, paragraphs (1), (10)(B),

16

(17), and (23) of section 1902(a), as well as

17

any other provision of this title (except for this

18

section and as otherwise provided by this sec-

19

tion) that the Secretary deems appropriate,

20

shall not apply.

21
22

‘‘(e) DEFINITIONS.—For purposes of this section:
‘‘(1) MEDICAID

FLEXIBILITY PROGRAM.—The

23

term ‘Medicaid Flexibility Program’ means a State

24

program for providing targeted health assistance to

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1

program enrollees funded by a block grant under

2

this section.

3
4

‘‘(2) PROGRAM
‘‘(A) IN

ENROLLEE.—
GENERAL.—The

term ‘program

5

enrollee’ means, with respect to a State that is

6

conducting a Medicaid Flexibility Program for

7

a program period, an individual who is a 1903A

8

enrollee (as defined in section 1903A(e)(1)) who

9

is in the 1903A enrollee category described in

10
11

section 1903A(e)(2)(D).
‘‘(B) RULE

OF CONSTRUCTION.—For

pur-

12

poses of section 1903A(e)(3), eligibility and en-

13

rollment of an individual under a Medicaid

14

Flexibility Program shall be deemed to be eligi-

15

bility and enrollment under a State plan (or

16

waiver of such plan) under this title.

17

‘‘(3) PROGRAM

PERIOD.—The

term ‘program

18

period’ means, with respect to a State Medicaid

19

Flexibility Program, a period of 5 consecutive fiscal

20

years that begins with either—

21
22

‘‘(A) the first fiscal year in which the State
conducts the program; or

23

‘‘(B) the next fiscal year in which the

24

State conducts such a program that begins

25

after the end of a previous program period.

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1
2
3

‘‘(4) STATE.—The term ‘State’ means one of
the 50 States or the District of Columbia.
‘‘(5) TARGETED

HEALTH

ASSISTANCE.—The

4

term ‘targeted health assistance’ means assistance

5

for health-care-related items and medical services for

6

program enrollees.’’.

7
8
9

SEC. 125. MEDICAID AND CHIP QUALITY PERFORMANCE
BONUS PAYMENTS.

Section 1903 of the Social Security Act (42 U.S.C.

10 1396b), as previously amended, is further amended by
11 adding at the end the following new subsection:
12
13

‘‘(bb) QUALITY PERFORMANCE BONUS PAYMENTS.—
‘‘(1) INCREASED

FEDERAL SHARE.—With

re-

14

spect to each of fiscal years 2023 through 2026, in

15

the case of one of the 50 States or the District of

16

Columbia (each referred to in this subsection as a

17

‘State’) that—

18

‘‘(A) equals or exceeds the qualifying

19

amount (as established by the Secretary) of

20

lower than expected aggregate medical assist-

21

ance expenditures (as defined in paragraph (4))

22

for that fiscal year; and

23

‘‘(B) submits to the Secretary, in accord-

24

ance with such manner and format as specified

25

by the Secretary and for the performance pe-

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1

riod (as defined by the Secretary) for such fis-

2

cal year—

3

‘‘(i) information on the applicable

4

quality measures identified under para-

5

graph (3) with respect to each category of

6

Medicaid eligible individuals under the

7

State plan or a waiver of such plan; and

8

‘‘(ii) a plan for spending a portion of

9

additional funds resulting from application

10

of this subsection on quality improvement

11

within the State plan under this title or

12

under a waiver of such plan,

13

the Federal matching percentage otherwise ap-

14

plied under subsection (a)(7) for such fiscal

15

year shall be increased by such percentage (as

16

determined by the Secretary) so that the aggre-

17

gate amount of the resulting increase pursuant

18

to this subsection for the State and fiscal year

19

does not exceed the State allotment established

20

under paragraph (2) for the State and fiscal

21

year.

22

‘‘(2) ALLOTMENT

DETERMINATION.—The

Sec-

23

retary shall establish a formula for computing State

24

allotments under this paragraph for each fiscal year

25

described in paragraph (1) such that—

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1

‘‘(A) such an allotment to a State is deter-

2

mined based on the performance, including im-

3

provement, of such State under this title and

4

title XXI with respect to the quality measures

5

submitted under paragraph (3) by such State

6

for the performance period (as defined by the

7

Secretary) for such fiscal year; and

8

‘‘(B) the total of the allotments under this

9

paragraph for all States for the period of the

10

fiscal years described in paragraph (1) is equal

11

to $8,000,000,000.

12

‘‘(3)

QUALITY

MEASURES

REQUIRED

FOR

13

BONUS PAYMENTS.—For

purposes of this subsection,

14

the Secretary shall, pursuant to rulemaking and

15

after consultation with State agencies administering

16

State plans under this title, identify and publish

17

(and update as necessary) peer-reviewed quality

18

measures (which shall include health care and long-

19

term care outcome measures and may include the

20

quality measures that are overseen or developed by

21

the National Committee for Quality Assurance or

22

the Agency for Healthcare Research and Quality or

23

that are identified under section 1139A or 1139B)

24

that are quantifiable, objective measures that take

25

into account the clinically appropriate measures of

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1

quality for different types of patient populations re-

2

ceiving benefits or services under this title or title

3

XXI.

4

‘‘(4) LOWER

THAN

EXPECTED

AGGREGATE

5

MEDICAL ASSISTANCE EXPENDITURES.—In

this sub-

6

section, the term ‘lower than expected aggregate

7

medical assistance expenditures’ means, with respect

8

to a State the amount (if any) by which—

9

‘‘(A) the amount of the adjusted total med-

10

ical assistance expenditures for the State and

11

fiscal year determined in section 1903A(b)(1)

12

without regard to the 1903A enrollee category

13

described in section 1903A(e)(2)(E); is less

14

than

15

‘‘(B) the amount of the target total med-

16

ical assistance expenditures for the State and

17

fiscal year determined in section 1903A(c) with-

18

out regard to the 1903A enrollee category de-

19

scribed in section 1903A(e)(2)(E).’’.

20
21
22

SEC. 126. OPTIONAL ASSISTANCE FOR CERTAIN INPATIENT
PSYCHIATRIC SERVICES.

(a) STATE OPTION.—Section 1905 of the Social Se-

23 curity Act (42 U.S.C. 1396d) is amended—
24
25

(1) in subsection (a)—
(A) in paragraph (16)—

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135
(i) by striking ‘‘and, (B)’’ and insert-

1

ing ‘‘(B)’’; and

2
3

(ii) by inserting before the semicolon

4

at the end the following: ‘‘, and (C) subject

5

to subsection (h)(4), qualified inpatient

6

psychiatric hospital services (as defined in

7

subsection (h)(3)) for individuals who are

8

over 21 years of age and under 65 years

9

of age’’; and

10

(B) in the subdivision (B) that follows

11

paragraph (29), by inserting ‘‘(other than serv-

12

ices described in subparagraph (C) of para-

13

graph (16) for individuals described in such

14

subparagraph)’’ after ‘‘patient in an institution

15

for mental diseases’’; and

16

(2) in subsection (h), by adding at the end the

17

following new paragraphs:

18

‘‘(3) For purposes of subsection (a)(16)(C), the term

19 ‘qualified inpatient psychiatric hospital services’ means,
20 with respect to individuals described in such subsection,
21 services described in subparagraph (B) of paragraph (1)
22 that

are

not

otherwise

covered

23 (a)(16)(A) and are furnished—

under

subsection

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1

‘‘(A) in an institution (or distinct part thereof)

2

which is a psychiatric hospital (as defined in section

3

1861(f)); and

4

‘‘(B) with respect to such an individual, for a

5

period not to exceed 30 consecutive days in any

6

month and not to exceed 90 days in any calendar

7

year.

8

‘‘(4) As a condition for a State including qualified

9 inpatient psychiatric hospital services as medical assist10 ance under subsection (a)(16)(C), the State must (during
11 the period in which it furnishes medical assistance under
12 this title for services and individuals described in such
13 subsection)—
14

‘‘(A) maintain at least the number of licensed

15

beds at psychiatric hospitals owned, operated, or

16

contracted for by the State that were being main-

17

tained as of the date of the enactment of this para-

18

graph or, if higher, as of the date the State applies

19

to the Secretary to include medical assistance under

20

such subsection; and

21

‘‘(B) maintain on an annual basis a level of

22

funding expended by the State (and political subdivi-

23

sions thereof) other than under this title from non-

24

Federal funds for inpatient services in an institution

25

described in paragraph (3)(A), and for active psy-

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1

chiatric care and treatment provided on an out-

2

patient basis, that is not less than the level of such

3

funding for such services and care as of the date of

4

the enactment of this paragraph or, if higher, as of

5

the date the State applies to the Secretary to include

6

medical assistance under such subsection.’’.

7

(b) SPECIAL MATCHING RATE.—Section 1905(b) of

8 the Social Security Act (42 U.S.C. 1395d(b)) is amended
9 by adding at the end the following: ‘‘Notwithstanding the
10 previous provisions of this subsection, the Federal medical
11 assistance percentage shall be 50 percent with respect to
12 medical assistance for services and individuals described
13 in subsection (a)(16)(C), except that, in the case of a
14 State for which the Federal medical assistance percentage
15 applicable to such assistance for such services and individ16 uals on September 30, 2018, was greater than 50 percent,
17 such greater percentage shall continue to apply with re18 spect to medical assistance provided by such State for
19 such services and individuals.’’.
20

(c) EFFECTIVE DATE.—The amendments made by

21 this section shall apply to qualified inpatient psychiatric
22 hospital services furnished on or after October 1, 2018.

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1

SEC. 127. ENHANCED FMAP FOR MEDICAL ASSISTANCE TO

2
3

ELIGIBLE INDIANS.

Section 1905(b) of the Social Security Act (42 U.S.C.

4 1396d(b)) is amended, in the third sentence, by inserting
5 ‘‘and with respect to amounts expended by a State as med6 ical assistance for services provided by any other provider
7 under the State plan to an individual who is an Indian
8 who is eligible for assistance under the State plan’’ before
9 the period.
10

SEC. 128. NON-APPLICATION OF DSH CUTS FOR STATES

11

WITH LOW MARKET-BASED HEALTH CARE

12

GRANT ALLOTMENTS; ONE-TIME DSH ALLOT-

13

MENT INCREASE FOR 2026.

14

Section 1923(f)(7) of the Social Security Act (42

15 U.S.C. 1396r–4(f)(7)) is amended by adding at the end
16 the following new subparagraph:
17

‘‘(C) LOW-GRANT

18

‘‘(i) IN

STATES.—

GENERAL.—For

each of fiscal

19

years 2021 through 2025, the amount of

20

the reduction specified under subparagraph

21

(B) for a State and fiscal year shall be re-

22

duced by the grant shortfall amount for

23

the State and year.

24
25

‘‘(ii) ONE-TIME
2026.—

INCREASE FOR FISCAL

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1

‘‘(I) IN

GENERAL.—Any

State

2

that has a grant shortfall amount for

3

fiscal year 2026 shall be eligible for a

4

one-time increase in the State’s DSH

5

allotment for fiscal year 2026 in the

6

amount described in subclause (II).

7

‘‘(II) AMOUNT

OF INCREASE.—

8

Subject to clause (III), the amount

9

described in this subclause for a State

10

shall be equal to—

11

‘‘(aa) the total amount of

12

the reductions specified for the

13

State under subparagraph (B)

14

for each of fiscal years 2018

15

through 2025; minus

16

‘‘(bb) the total amount of

17

any reductions for each of fiscal

18

years 2021 through 2025 under

19

clause (i).

20

‘‘(III) LIMITATION.—The amount

21

of the increase for a State and fiscal

22

year under this clause shall not exceed

23

the grant shortfall amount for the

24

State and year.

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1
2
3

‘‘(iii) GRANT

SHORTFALL

AMOUNT

GENERAL.—In

this sub-

DEFINED.—

‘‘(I) IN

4

paragraph, the term ‘grant shortfall

5

amount’ means, with respect to a

6

State and a fiscal year, the amount, if

7

any, by which the amount that was al-

8

lotted to the State under section

9

2105(i) for the last calendar year that

10

began before the end of such fiscal

11

year is less than—

12

‘‘(aa) the amount allotted to

13

such State under such section for

14

calendar year 2020; increased by

15

‘‘(bb)

the

percentage

in-

16

crease in the medical care compo-

17

nent of the consumer price index

18

for all urban consumers (U.S.

19

city average) from September of

20

2020 to September of the last

21

calendar year that ended before

22

the fiscal year involved.

23

‘‘(II)

LIMITATION.—For

fiscal

24

years before fiscal year 2026, in no

25

case shall the grant shortfall amount

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1

for a State and a fiscal year exceed

2

the amount of the reduction specified

3

under subparagraph (B) for the State

4

and fiscal year.’’.

5
6
7

SEC. 129. DETERMINATION OF FMAP FOR HIGH-POVERTY
STATES.

Section 1905(b) of the Social Security Act (42 U.S.C.

8 1396d) is amended in the first sentence—
9
10

(1) by striking ‘‘, and (5)’’ and inserting ‘‘,
(5)’’; and

11

(2) by inserting before the period the following:

12

‘‘, and (6) only for purposes of payments for medical

13

assistance under this title (excluding any such pay-

14

ments that are based on the enhanced FMAP de-

15

scribed in section 2105(b)), in the case of a State

16

for which the Secretary issued under the authority

17

of section 673(2) of the Omnibus Budget Reconcili-

18

ation Act of 1981 a separate poverty guideline for

19

2017 that is higher than the poverty guideline issued

20

by the Secretary for 2017 which is applicable to the

21

majority of States, the Federal medical assistance

22

percentage determined for such a State under this

23

subsection for the second, third, and fourth quarters

24

of fiscal year 2018, and for each fiscal year there-

25

after, shall be increased (after such determination

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1

but prior to any other increase which may be appli-

2

cable and in no case to exceed 100 percent) by, in

3

the case of the State with the highest separate pov-

4

erty guideline for 2017, 25 percent of the weighted

5

average (based on spending) of the Federal medical

6

assistance percentages determined for the fiscal year

7

for States which did not have a separate poverty

8

guideline issued for them for 2017, and in the case

9

of the State with the second highest separate pov-

10

erty guideline for 2017, 15 percent of the weighted

11

average (based on spending) of the Federal medical

12

assistance percentages determined for the fiscal year

13

for States which did not have a separate poverty

14

guideline issued for them for 2017’’.

TITLE II

15
16
17

SEC. 201. THE PREVENTION AND PUBLIC HEALTH FUND.

Subsection (b) of section 4002 of the Patient Protec-

18 tion and Affordable Care Act (42 U.S.C. 300u–11) is
19 amended—
20

(1) in paragraph (3), by striking ‘‘each of fiscal

21

years 2018 and 2019’’ and inserting ‘‘fiscal year

22

2018’’; and

23

(2) by striking paragraphs (4) through (8).

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2

SEC. 202. COMMUNITY HEALTH CENTER PROGRAM.

Effective as if included in the enactment of the Medi-

3 care Access and CHIP Reauthorization Act of 2015 (Pub4 lic Law 114–10, 129 Stat. 87), paragraph (1) of section
5 221(a) of such Act is amended by inserting ‘‘, and an ad6 ditional $422,000,000 for fiscal year 2017’’ after ‘‘2017’’.
7
8

SEC. 203. REPEAL OF COST-SHARING SUBSIDY PROGRAM.

(a) IN GENERAL.—Section 1402 of the Patient Pro-

9 tection and Affordable Care Act is repealed.
10

(b) EFFECTIVE DATE.—The repeal made by sub-

11 section (a) shall apply to cost-sharing reductions (and pay12 ments to issuers for such reductions) for plan years begin13 ning after December 31, 2019.
14

SEC. 204. CONDITIONS FOR RECEIVING MARKET-BASED

15
16

HEALTH CARE GRANT.

(a) NON-APPLICATION

OF

EXISTING RULES.—For

17 any of calendar years 2020 through 2026 for which a
18 State receives funds under subsection (i) of section 2105
19 of the Social Security Act (42 U.S.C. 1397ee), with re20 spect to health insurance coverage described in subsection
21 (d), the State may establish rules described in subsection
22 (c) and if any such rules conflict with a provision described
23 in subsection (b), such rules shall apply to such health
24 insurance coverage and the State shall be deemed to sat25 isfy the requirements of the conflicting provision in sub26 section (b).

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1

(b) NON-APPLICABLE PROVISIONS DESCRIBED.—The

2 provisions described in this subsection are the following:
3

(1) Subsections (b), (c), and (d) of section 1302

4

of the Patient Protection and Affordable Care Act

5

(42 U.S.C. 18022).

6

(2)

Clauses

(ii)

and

(iii)

of

section

7

2701(a)(1)(A) the Public Health Service Act (42

8

U.S.C. 300gg(a)(1)(A)).

9

(3) Subsections (a) and (c) of section 2707 of

10

the Public Health Service Act (42 U.S.C. 300gg–6).

11

(4) Section 2713 of the Public Health Service

12
13

Act (42 U.S.C. 300gg–13(a)).
(5) Section 1312(c)(1) of the Patient Protection

14

and Affordable Care Act (42 U.S.C. 18032(c)(1)).

15

(c) APPLICATION.—An application submitted by a

16 State under subsection (i) of section 2105 of the Social
17 Security Act (42 U.S.C. 1397ee), with respect to health
18 insurance coverage under a program or mechanism de19 scribed clause (i), (v), or (vii) of paragraph (1)(A) of such
20 subsection, or for which funding assistance is provided
21 under paragraph (1)(A)(iv) of such subsection, as applica22 ble, shall include a description of the following rules, which
23 shall be established by the State:
24

(1) The criteria by which, and the degree to

25

which, a health insurance issuer of such coverage

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1

may vary premium rates for such coverage, except

2

that in no case may an issuer vary premium rates

3

on the basis of sex or on the basis of genetic infor-

4

mation.

5

(2) Whether, and the degree to which, a health

6

insurance issuer of such coverage may require an in-

7

dividual, as a condition of enrollment or continued

8

enrollment in such coverage, to pay a premium or

9

contribution which is greater than the premium or

10

contribution for a similarly situated individual en-

11

rolled in such coverage.

12

(3) The benefits or levels of benefits which a

13

health insurance issuer of such coverage shall be re-

14

quired to include in such coverage.

15

(4) The number of risk pools into which a

16

health insurance issuer of such coverage may group

17

individuals enrolled in such coverage.

18

(d) HEALTH INSURANCE COVERAGE DESCRIBED.—

19 In this section, the term ‘‘health insurance coverage’’
20 means health insurance coverage that is—
21

(1) offered by a health insurance issuer in the

22

individual market under a program or mechanism

23

described in clause (i), (v), or (vii) of paragraph

24

(1)(A) of section 2105 of the Social Security Act, or

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1

for which funding assistance is provided under para-

2

graph (1)(A)(iv) of such section; and

3

(2) provided to an individual who is receiving a

4

direct benefit (which shall not include benefits de-

5

rived

6

2105(i)(1)(A)(ii) of the Social Security Act under a

7

State program that is funded by a grant under sec-

8

tion 2105(i) of the Social Security Act.

from

a

program

described

in

section