S. 2032 — Choose Medicare Act

This section establishes Medicare part E public health plans under a new title XXII of the Social Security Act, available in the individual, small group, and large group markets. These plans are qualified health plans under ACA section 1301(a) that (1) provide essential health benefits under ACA section 1302(b), all items and services covered under Medicare (title XVIII), gold-level coverage under ACA section 1302(d)(1)(C), and abortions and all reproductive services (preempting state prohibitions on such coverage); (2) are offered through Exchanges (including SHOP Exchanges) in the individual and small group markets; and (3) include employer-sponsored options in the small and large group markets with portability for individuals who lose employment-based eligibility. Eligibility for enrollment is limited to U.S. residents who are not entitled to or enrolled in Medicare (title XVIII), Medicaid (title XIX), or CHIP (title XXI). Premiums are set to fully cover benefits and administrative costs, adjusted by market and rating area, and compliant with Public Health Service Act rating requirements (including for large group plans). Providers are reimbursed at negotiated rates no lower than Medicare rates and no higher than average Exchange issuer rates in the aggregate, with automatic participation for current Medicare providers, a process for others to join, and balance billing limits mirroring Medicare rules.

This section amends Section 18B of the Fair Labor Standards Act of 1938 (29 U.S.C. 218b), which requires employers to provide written notice to employees about state health insurance Exchanges (i.e., ACA Marketplaces), by (1) requiring employers that do not offer an eligible employer-sponsored health plan or offer one that is unaffordable or fails to provide minimum value to refer full-time employees (as defined in IRC §4980H(c)) to a state Exchange navigator (or equivalent entity) at hiring or, for current employees, on the effective date; and (2) setting the navigator referral effective date at two years after enactment of the Choose Medicare Act (while retaining the existing March 1, 2013, effective date for the notice requirement). It further directs the Comptroller General to study, and report by January 1, 2030, on the impact of these requirements on uninsured rates nationwide and by state. Finally, it authorizes appropriations for grants to ACA navigators (42 U.S.C. 18031(i)) to address capacity limitations.

This section establishes an annual out-of-pocket limit on cost-sharing for Medicare Parts A and B (fee-for-service) beneficiaries beginning in 2027, after which such individuals incur no further cost-sharing for the year. (Medicare Parts A and B currently impose no overall cap on beneficiary out-of-pocket spending.) The limit is $6,700 for 2027, adjusted annually thereafter by the percentage change in the medical care component of the Consumer Price Index for All Urban Consumers (rounded to the nearest $5); out-of-pocket cost-sharing includes deductibles, coinsurance, copayments, and costs for otherwise covered services after benefits exhaustion (excluding non-covered services and excess charges for non-assigned services), regardless of payment source. The Secretary must announce the limit annually beginning in 2026.

This section enhances the premium tax credit for Affordable Care Act (ACA) Marketplace health insurance by (1) changing the benchmark plan used to calculate the credit from the applicable second lowest cost silver plan (70% actuarial value) to the applicable second lowest cost gold plan (80% actuarial value), and (2) eliminating the 400% of federal poverty level upper income limit on eligibility while permanently establishing the expanded applicable percentage table for required contributions (previously temporary). The changes apply to taxable years beginning after December 31, 2025. (Thus, subsidies increase for eligible enrollees due to the higher benchmark premium, and higher-income individuals become eligible.)

This section revises the Affordable Care Act's cost-sharing reduction (CSR) program, which reduces enrollees' out-of-pocket costs (e.g., deductibles, copays) in exchange plans for individuals with household incomes between 100% and 400% of the federal poverty level (FPL). (1) Changes eligibility from silver level qualified health plans (QHPs) to gold level QHPs; (2) retains the existing out-of-pocket limit reductions (two-thirds for 100-200% FPL, one-half for 200-300% FPL, and one-third for 300-400% FPL) but replaces the additional reductions with new actuarial value (AV) targets—i.e., the plan's share of total allowed benefit costs—of 94% (100-133% FPL), 92% (133-150% FPL), 90% (150-200% FPL), 85% (200-300% FPL), and 80% (300-400% FPL), up from prior AV caps of 94% (100-150% FPL approximately), 87% (150-200% FPL), 73% (200-250% FPL), and 70% (250-400% FPL); and (3) updates statutory AV coordination caps to conform. The changes apply to plan years beginning after December 31, 2025.

This section establishes a reinsurance and affordability fund program, to be administered by the Secretary in consultation with the National Association of Insurance Commissioners, to enable each state for plan years beginning during the 2026-2028 period to either (1) provide reinsurance payments to health insurance issuers for individuals enrolled in individual market coverage or (2) provide assistance to reduce such individuals' out-of-pocket costs (e.g., copayments, coinsurance, premiums, deductibles) for qualified health plans offered through an Exchange. There is appropriated $30 billion for FY2026 through FY2028 to establish and administer the program. (As background, this revives a mechanism akin to the temporary reinsurance program under ACA §1341, which operated from 2014-2016 to stabilize individual market premiums by reimbursing issuers for high-cost enrollees.)

This section expands the prohibition on discriminatory premium rates for health insurance coverage in the individual and group markets (from individual and small group markets only) by striking the limitation to "small" group market and eliminating the special rule for large group market coverage offered through a state Exchange. Premium rates may vary only by individual or family coverage, rating area, age (not more than 3-to-1 for adults), and tobacco use (not more than 1.5-to-1); no other factors are permitted. (Thus, these rules now apply uniformly to all fully insured group health plans, including large employer plans.) The changes apply to plans offered in the first plan year beginning after enactment and any plan year thereafter.

This section revises health insurance rate review requirements under Section 2794 of the Public Health Service Act (i.e., requiring the Secretary of Health and Human Services and states to review potentially excessive or unjustified premium increases) by expanding them to cover potentially excessive, unjustified, or unfairly discriminatory rates (previously limited to unreasonable premium increases); authorizes states to impose more protective requirements; directs the Secretary to determine whether states or the Secretary will conduct reviews and corrective actions (e.g., denying rates, modifying rates, or requiring rebates); and imposes civil monetary penalties for noncompliance, including potential ineligibility for qualified health plan status. It makes conforming terminology changes throughout Section 2794 and related provisions of the Patient Protection and Affordable Care Act. The section applies these rate review protections to grandfathered health plans (i.e., plans enrolled in as of March 23, 2010, generally exempt from many Affordable Care Act requirements) for plan years beginning on or after January 1, 2026 (previously inapplicable). Amendments take effect on the date of enactment and must be implemented for health plans beginning no later than January 1, 2026.

This section expresses the sense of Congress that (1) the federal government, acting as an insurer, employer, or health care provider, should serve as a model by ensuring coverage of all reproductive services; and (2) all restrictions on coverage of reproductive services in the private insurance market should end.