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Statutory Text

SEC. 1331 [42 U.S.C. 18051]. STATE FLEXIBILITY TO ESTABLISH BASIC
HEALTH PROGRAMS FOR LOW-INCOME INDIVIDUALS NOT
ELIGIBLE FOR MEDICAID.
(a) ESTABLISHMENT OF PROGRAM.— (1) IN GENERAL.—The Secretary shall establish a basic
health program meeting the requirements of this section under
which a State may enter into contracts to offer 1 or more
standard health plans providing at least the essential health
benefits described in section 1302(b) to eligible individuals in
lieu of offering such individuals coverage through an Exchange.
(2) CERTIFICATIONS AS TO BENEFIT COVERAGE AND COSTS.—
Such program shall provide that a State may not establish a
basic health program under this section unless the State establishes
to the satisfaction of the Secretary, and the Secretary
certifies, that—
(A) in the case of an eligible individual enrolled in a
standard health plan offered through the program, the
State provides—
(i) that the amount of the monthly premium an eligible
individual is required to pay for coverage under
the standard health plan for the individual and the individual’s
dependents does not exceed the amount of
the monthly premium that the eligible individual
would have been required to pay (in the rating area in
which the individual resides) if the individual had enrolled
in the applicable second lowest cost silver plan
(as defined in section 36B(b)(3)(B) of the Internal Revenue
Code of 1986) offered to the individual through
an Exchange; and
(ii) that the cost-sharing an eligible individual is
required to pay under the standard health plan does
not exceed—
(I) the cost-sharing required under a platinum
plan in the case of an eligible individual with
household income not in excess of 150 percent of
the poverty line for the size of the family involved;
and
(II) the cost-sharing required under a gold
plan in the case of an eligible individual not described
in subclause (I); and
(B) the benefits provided under the standard health
plans offered through the program cover at least the essential
health benefits described in section 1302(b).
For purposes of subparagraph (A)(i), the amount of the monthly
premium an individual is required to pay under either the
standard health plan or the applicable second lowest cost silver
plan shall be determined after reduction for any premium tax
credits and cost-sharing reductions allowable with respect to
either plan.
(b) STANDARD HEALTH PLAN.—In this section, the term ‘‘standard
heath plan’’ means a health benefits plan that the State contracts
with under this section—
(1) under which the only individuals eligible to enroll are
eligible individuals;
(2) that provides at least the essential health benefits described
in section 1302(b); and
(3) in the case of a plan that provides health insurance
coverage offered by a health insurance issuer, that has a medical
loss ratio of at least 85 percent.
(c) CONTRACTING PROCESS.—
(1) IN GENERAL.—A State basic health program shall establish
a competitive process for entering into contracts with
standard health plans under subsection (a), including negotiation
of premiums and cost-sharing and negotiation of benefits
in addition to the essential health benefits described in section
1302(b).
(2) SPECIFIC ITEMS TO BE CONSIDERED.—A State shall, as
part of its competitive process under paragraph (1), include at
least the following:
(A) INNOVATION.—Negotiation with offerors of a standard
health plan for the inclusion of innovative features in
the plan, including— (i) care coordination and care management for enrollees,
especially for those with chronic health conditions;
(ii) incentives for use of preventive services; and
(iii) the establishment of relationships between
providers and patients that maximize patient involvement
in health care decision-making, including providing
incentives for appropriate utilization under the
plan.
(B) HEALTH AND RESOURCE DIFFERENCES.—Consideration
of, and the making of suitable allowances for, differences
in health care needs of enrollees and differences
in local availability of, and access to, health care providers.
Nothing in this subparagraph shall be construed as allowing
discrimination on the basis of pre-existing conditions
or other health status-related factors.
(C) MANAGED CARE.—Contracting with managed care
systems, or with systems that offer as many of the attributes
of managed care as are feasible in the local health
care market.
(D) PERFORMANCE MEASURES.—Establishing specific
performance measures and standards for issuers of standard
health plans that focus on quality of care and improved
health outcomes, requiring such plans to report to
the State with respect to the measures and standards, and
making the performance and quality information available
to enrollees in a useful form.
(3) ENHANCED AVAILABILITY.—
(A) MULTIPLE PLANS.—A State shall, to the maximum
extent feasible, seek to make multiple standard health
plans available to eligible individuals within a State to ensure
individuals have a choice of such plans.
(B) REGIONAL COMPACTS.—A State may negotiate a regional
compact with other States to include coverage of eligible
individuals in all such States in agreements with
issuers of standard health plans.
(4) COORDINATION WITH OTHER STATE PROGRAMS.—A State
shall seek to coordinate the administration of, and provision of
benefits under, its program under this section with the State
medicaid program under title XIX of the Social Security Act,
the State child health plan under title XXI of such Act, and
other State-administered health programs to maximize the efficiency
of such programs and to improve the continuity of care.
(d) TRANSFER OF FUNDS TO STATES.—
(1) IN GENERAL.—If the Secretary determines that a State
electing the application of this section meets the requirements
of the program established under subsection (a), the Secretary
shall transfer to the State for each fiscal year for which 1 or
more standard health plans are operating within the State the
amount determined under paragraph (3).
(2) USE OF FUNDS.—A State shall establish a trust for the
deposit of the amounts received under paragraph (1) and
amounts in the trust fund shall only be used to reduce the premiums
and cost-sharing of, or to provide additional benefits for, eligible individuals enrolled in standard health plans within
the State. Amounts in the trust fund, and expenditures of
such amounts, shall not be included in determining the
amount of any non-Federal funds for purposes of meeting any
matching or expenditure requirement of any federally-funded
program.
(3) AMOUNT OF PAYMENT.—
(A) SECRETARIAL DETERMINATION.—
(i) IN GENERAL.—[As revised by section
10104(o)(1)] The amount determined under this paragraph
for any fiscal year is the amount the Secretary
determines is equal to 95 percent of the premium tax
credits under section 36B of the Internal Revenue
Code of 1986, and the cost-sharing reductions under
section 1402, that would have been provided for the
fiscal year to eligible individuals enrolled in standard
health plans in the State if such eligible individuals
were allowed to enroll in qualified health plans
through an Exchange established under this subtitle.
(ii) SPECIFIC REQUIREMENTS.—The Secretary shall
make the determination under clause (i) on a per enrollee
basis and shall take into account all relevant
factors necessary to determine the value of the premium
tax credits and cost-sharing reductions that
would have been provided to eligible individuals described
in clause (i), including the age and income of
the enrollee, whether the enrollment is for self-only or
family coverage, geographic differences in average
spending for health care across rating areas, the
health status of the enrollee for purposes of determining
risk adjustment payments and reinsurance
payments that would have been made if the enrollee
had enrolled in a qualified health plan through an Exchange,
and whether any reconciliation of the credit or
cost-sharing reductions would have occurred if the enrollee
had been so enrolled. This determination shall
take into consideration the experience of other States
with respect to participation in an Exchange and such
credits and reductions provided to residents of the
other States, with a special focus on enrollees with income
below 200 percent of poverty.
(iii) CERTIFICATION.—The Chief Actuary of the
Centers for Medicare & Medicaid Services, in consultation
with the Office of Tax Analysis of the Department
of the Treasury, shall certify whether the methodology
used to make determinations under this subparagraph,
and such determinations, meet the requirements
of clause (ii). Such certifications shall be based
on sufficient data from the State and from comparable
States about their experience with programs created
by this Act.
(B) CORRECTIONS.—The Secretary shall adjust the
payment for any fiscal year to reflect any error in the determinations
under subparagraph (A) for any preceding
fiscal year.
(4) APPLICATION OF SPECIAL RULES.—The provisions of section
1303 shall apply to a State basic health program, and to
standard health plans offered through such program, in the
same manner as such rules apply to qualified health plans.
(e) ELIGIBLE INDIVIDUAL.— (1) IN GENERAL.—In this section, the term ‘‘eligible individual’’
means, with respect to any State, an individual—
(A) who a resident of the State who is not eligible to
enroll in the State’s medicaid program under title XIX of
the Social Security Act for benefits that at a minimum consist
of the essential health benefits described in section
1302(b);
(B) [As revised by section 10104(o)(2)]whose household
income exceeds 133 percent but does not exceed 200
percent of the poverty line for the size of the family involved,
or, in the case of an alien lawfully present in the
United States, whose income is not greater than 133 percent
of the poverty line for the size of the family involved
but who is not eligible for the Medicaid program under
title XIX of the Social Security Act by reason of such alien
status;
(C) who is not eligible for minimum essential coverage
(as defined in section 5000A(f) of the Internal Revenue
Code of 1986) or is eligible for an employer-sponsored plan
that is not affordable coverage (as determined under section
5000A(e)(2) of such Code); and
(D) who has not attained age 65 as of the beginning
of the plan year.
Such term shall not include any individual who is not a qualified
individual under section 1312 who is eligible to be covered
by a qualified health plan offered through an Exchange.
(2) ELIGIBLE INDIVIDUALS MAY NOT USE EXCHANGE.—An eligible
individual shall not be treated as a qualified individual
under section 1312 eligible for enrollment in a qualified health
plan offered through an Exchange established under section
1311.
(f) SECRETARIAL OVERSIGHT.—The Secretary shall each year
conduct a review of each State program to ensure compliance with
the requirements of this section, including ensuring that the State
program meets—
(1) eligibility verification requirements for participation in
the program;
(2) the requirements for use of Federal funds received by
the program; and
(3) the quality and performance standards under this section.
(g) STANDARD HEALTH PLAN OFFERORS.—A State may provide
that persons eligible to offer standard health plans under a basic
health program established under this section may include a licensed
health maintenance organization, a licensed health insurance
insurer, or a network of health care providers established to
offer services under the program.
(h) DEFINITIONS.—Any term used in this section which is also
used in section 36B of the Internal Revenue Code of 1986 shall
have the meaning given such term by such section.