"Subtitle B-Making Coverage Affordable

"SEC. 3111. SUPPORT FOR AFFORDABLE HEALTH COVERAGE.

(a) COST SHARING FOR A BASIC PLAN.-

(1) BASIC PLAN.-The Secretary shall estab-

lish at least the following tiers of cost sharing for el

igible individuals:

(A) A tier for a basic plan in which- (i) subject to the variation permitted under paragraph (2), a qualified health

plan shall provide coverage for not less than 76 percent of the total allowed costs of the benefit provided; and

(ii) subject to the variation permitted under paragraph (2), the out of pocket limitation for the plan shall not be greater than the out of pocket limitation applicable under section 223(d)(2) of the Internal Revenue Code of 1986. (B) A tier in which-

(i) the cost sharing percentage is equal to the cost sharing percentage of the basic plan increased by 8 percentage points; and

(ii) the dollar value of the out of pocket limitation is 50 percent of the dol-lar value of the out of pocket limitation of the basic plan. (C) A tier in which-

(i) the cost sharing percentage is equal to the cost sharing percentage of the basic plan increased by 17 percentage points; and

(ii) the dollar value of the out of pocket limitation that is 15 percent of the

dollar value of the out of pocket limitation of the basic plan. (2) ALLOWING VARIABILITY TO ACCOUNT FOR COSTS.-The Secretary may increase or decrease-

(A) the cost sharing percentage specified in subparagraphs (A)(i), (B)(i), or (C)(i) of paragraph (1) by not more than 2 percentage points; or

(B) the dollar value of the out of pocket limitation specified in subparagraphs (A)(ii), (B)(ii), or (C)(ii) of paragraph (1) by not more than 5 percent of the applicable dollar value. (3) REDETERMINATIONS.-The Secretary

may, not more frequently than once each year and in accordance with paragraph (2), redetermine the cost sharing percentage or the out of pocket limitation under paragraph (1).

(4) OUT OF POCKET.-For purposes of this section, the term out of pocket shall include all ex-penditures for covered benefits (as provided for with respect to high deductible health plans under section 223(d)(2) of the Internal Revenue Code of 1986). (b) PAYMENT OF CREDITS.-

(1) IN GENERAL.-The Secretary shall, with respect to an eligible individual (as defined in sub-

section (i)) and on behalf of such individual, pay a

premium credit to the Gateway through which the

individual is enrolled in the qualified health plan in

volved. Such Gateway shall remit an amount equal

to such credit to the qualified health plan in which

such individual is enrolled. (2) AMOUNT.- (A) IN GENERAL.-Subject to the index-ing provision described in paragraph (6), and the limitation described in paragraph (4), the amount of a credit with respect to an eligible individual under subparagraph (A) shall be an amount determined by the Secretary so that the eligible individual involved is not required to pay in the case of an individual with a modified adjusted gross income that does not exceed 500 percent of the poverty line for a family of the size involved, an amount that exceeds 10 per-cent of such individuals income. (B) REDUCTIONS BASED ON INCOME.- The amount that an eligible individual is re-quired to pay under subparagraph (A) shall be ratably reduced to 1 percent of income in the case of an eligible individual with a modified adjusted gross income that does not exceed 150

percent of the poverty line for a family of the size involved. (3) SIMPLIFIED SCHEDULE.-The Secretary

may establish a schedule of premium credits under this subsection in dollar amounts to simplify the ad-ministration of this section so long as any such schedule does not significantly change the value of the premium credits described in paragraph (2).

(4) LIMITATION OF CREDITS.-

(A) IN GENERAL.-A credit under para-graph (1) may not exceed the amount of the reference premium for the individual involved.

(B) REFERENCE PREMIUM.-In this sec-tion, the term reference premium means-

(i) with respect to an individual enrolling in coverage whose income does not exceed 200 percent of the poverty line for a family of the size involved, the weighted average annual premium of the 3 lowest cost qualified health plans that-

(I) meet the criteria for cost sharing and out of pocket limits described in subsection (a)(1)(C); and

(II) are offered in the community rating area in which the individual resides; (ii) with respect to an individual en

rolling in coverage whose income exceeds 200, but does not exceed 300, percent of the poverty line for a family of the size in-volved, the weighted average annual pre-mium of the 3 lowest cost qualified health plans that-

(I) meet the criteria for cost sharing and out of pocket limits described in subsection (a)(1)(A); and

(II) are offered in the community rating area in which the individual resides; and (iii) with respect to an individual en

rolling in coverage whose income exceeds 300, but does not exceed 500, percent of the poverty line for a family of the size in-volved, the weighted average annual pre-mium of the 3 lowest cost qualified health plans that-

(I) meet the criteria for cost sharing and out of pocket limits described in subsection (a)(1)(A); and

(II) are offered in the community rating area in which the individual resides.

(C) INDIVIDUALS ALLOWED TO ENROLL IN ANY PLAN.-Nothing in this section shall be construed to prohibit a qualified individual from enrolling in any qualified health plan. (5) METHOD OF CALCULATION.-

(A) CALCULATION OF SUBSIDY BASED ON ESSENTIAL HEALTH CARE BENEFITS.-In the case of a qualified health plan that provides re-imbursement for items or services that are not described in an applicable recommendation by the Medical Advisory Council under section 3103(h)(1), the reference premium shall be de-termined for purposes of paragraph (2) without regard to such reimbursement.

(B) RISK ADJUSTMENT.-The reference premium shall be determined for a standard population.

(C) RULE IN CASE OF FEWER PLANS.- In any case in which there are less than 3 qualified health plans offered in the community rating area in which the individual resides, the determinations made under paragraph (2) shall be based on the number of such qualified plans that are actually offered in the area. (6) INDEXING.-The percentages described in

paragraph (1) that specify the portion of the ref-erence premium that an individual or family is re-sponsible for paying shall be annually adjusted based on the percentage increase or decrease in the med-ical care component of the Consumer Price Index for all urban consumers (U.S. city average) during the preceding fiscal year. (c) STATE FLEXIBILITY.-A State may make pay-

ments to or on behalf of an eligible individual that- (1) are greater than the amounts required under this section; or (2) are intended to defray the costs of items or services not described in an applicable rec-ommendation by the Medical Advisory Council under section 3103(h); or (d) ELIGIBILITY DETERMINATIONS.- (1) RULE FOR ELIGIBILITY DETERMINA-TIONS.-The Secretary shall, by regulation, establish rules and procedures for-

(A) the submission of applications for payments under this section, including the elec-tronic submission and documents necessary for application and auto enrollment through the process described at section 3111(d);

(B) making determinations with respect to the eligibility of individuals submitting appli-cations under subparagraph (A) for payments under this section and informing individuals of such determinations;

(C) resolving appeals of such determinations; (D) redetermining eligibility on a periodic basis; and (E) making payments under this section.

(2) CALCULATION OF ELIGIBILITY.-For pur-poses of paragraph (1), the Secretary shall establish rules that permit eligibility to be calculated based on-

(A) the applicants income for the previous tax year; or

(B) in the case of an individual who is seeking payment under this section based on claiming a significant decrease in income-

(i) the applicants income for the

most recent period otherwise practicable;

or

(ii) the applicants declaration of es

timated annual income for the year in

volved. (3) DETERMINING ELIGIBILITY.-

(A) AUTHORITY OF THE SECRETARY.- The Secretary shall have the authority to make determinations (including redeterminations) with respect to the eligibility of individuals sub-mitting applications for credits under this sec-tion.

(B) DELEGATION OF AUTHORITY.-Ex-cept under the conditions described in subpara-graph (D), the Secretary shall delegate to a Gateway (and, upon request from such State or States, to the State or States in which such Gateway operates) the authority to carry out the activities described in subparagraph (A).

(C) REQUIREMENT FOR CONSISTENCY.- A Gateway (and, as applicable, the State or States in which such Gateway operates) shall carry out the activities described in subpara-graph (B) in a manner that is consistent with the regulations promulgated under paragraph (1).

(D) REVOCATION OF AUTHORITY.-If the Secretary determines that a Gateway (or the State or States in which such Gateway oper-ates) is carrying out the activities described in subparagraph (A) in a manner that is substan-tially inconsistent with the regulations promul-gated under paragraph (1), the Secretary may, after notice and opportunity for a hearing, re-voke the delegation of authority under subpara-graph (A). If the Secretary revokes the delega-tion of authority, the references to a Gateway in subparagraph (E) and (F) shall be deemed to be references to the Secretary.

(E) REQUIREMENT TO REPORT CHANGE IN STATUS.-

(i) IN GENERAL.-An individual that has been determined to be eligible for sub-sidies shall notify the Gateway of any changes that may affect such eligibility in a manner specified by the Secretary.

(ii) REDETERMINATION.-If the Gateway receives a notice from an indi-vidual under clause (i), the Gateway shall promptly redetermine the individuals eligi-bility for payments. (F) TERMINATION OF PAYMENTS.-The

Gateway shall terminate payments for an individual (after providing notice to the individual) if-

(i) the individual fails to provide information for purposes of subparagraph (E)(i) on a timely basis; or

(ii) the Gateway determines that the individual is no longer eligible for such payments.

(4) APPLICATION.-

(A) METHODS.-The process established under paragraph (1)(A) shall permit applica-tions in person, by mail, telephone, and the Internet.

(B) FORM AND CONTENTS.-An applica-tion under paragraph (1)(A) shall be in such form and manner as specified by the Secretary, and may require documentation.

(C) SUBMISSION.-An application under paragraph (1)(A) may be submitted to the Gateway, or to a State agency for a determina-tion under this section.

(D) ASSISTANCE.-A Gateway, or a State agency under this section, shall assist individ-uals in the filing of applications under para-graph (1)(A). (5) RECONCILIATION.-

(A) FILING OF STATEMENT.-In the case of an individual who has received payments under this section for a year and who is claim-ing a significant decrease (as determined by the Secretary) in income from such year, such indi-vidual shall file with the Secretary an income reconciliation statement, at such time, in such manner, and containing such information as the Secretary may require.

(B) RECONCILIATION.-

(i) IN GENERAL.-Based on and using the income reported in the statement filed by an individual under subparagraph (A), the Secretary shall compute the amount of payments that should have been provided to the individual for the year in-volved.

(ii) OVERPAYMENT OF PAYMENTS.- If the amount of payments provided to an individual for a year under this section was significantly greater (as determined by the Secretary) than the amount computed under clause (i), the individual shall be lia-ble to the Secretary for such excess amount. The Secretary may establish methods under which such liability may be assessed through a reduction in the amount of any credit otherwise applicable under section 3111 with respect to such in-dividual.

(iii) UNDERPAYMENT OF PAY-MENTS.-If the amount of payments pro-vided to an individual for a year under this section was less than the amount computed under clause (i), the Secretary shall pay to the individual the amount of such deficit. The Secretary may establish methods under which such payments may be pro-vided through an increase in the amount of any credit otherwise applicable under sec-tion 3111 with respect to such individual. (C) FAILURE TO FILE.-In the case of an individual who fails to file a statement for a year as required under subparagraph (A), the individual shall not be eligible for further pay-

ments until such statement is filed. The Sec-retary shall waive the application of this sub-paragraph if the individual establishes, to the satisfaction of the Secretary, good cause for the failure to file the statement on a timely basis. (6) OUTREACH.-The Gateway shall conduct

outreach activities to provide information to individ-uals that may potentially be eligible for payments under this section. Such activities shall include infor-mation on the application process with respect to such payments. (e) STATE DETERMINATIONS.-As a condition of its

State plan under title XIX of the Social Security Act, and the receipt of any Federal financial assistance under sec-tion 1903(a) of such Act, a State shall assist in making eligibility determinations under this title in accordance with this section.

(f) EXCLUSION FROM INCOME.-Amounts received by an individual under this section shall not be considered income for purposes of making eligibility determinations based on income or assets with respect to any other Fed-eral program.

(g) CONFLICT.-A Gateway may not establish rules that conflict with or prevent the application of regulations promulgated by the Secretary under this title.

(h) NO FEDERAL FUNDING.-Nothing in this Act shall allow Federal payments for individuals who are not lawfully present in the United States.

(i) APPROPRIATION.-Out of any funds in the Treasury of the United States not otherwise appropriated, there are appropriated such sums as may be necessary to carry out this section for each fiscal year.