S. 2073 — State Public Option Act

This section establishes a new optional Medicaid eligibility category under the Social Security Act for state residents not eligible under any other Medicaid provision and not concurrently enrolled in another health insurance plan, effective January 1, 2026 (codified at 42 U.S.C. 1396a(a)(10)(A)(ii)(XXIV) and (uu)). Such individuals are eligible for at least benchmark coverage equivalent to specified minimum essential coverage options (via amendments to 42 U.S.C. 1396a(k)(1) and 1396b(i)(26)). States may impose actuarially sound premiums (varying by ACA factors such as age and tobacco use, capped at 8.5% of family household income), deductibles, and cost-sharing subject to ACA limitations (42 U.S.C. 1396o(k)); premiums and charges offset federal medical assistance payments, with states remitting 50% of any excess premiums over such expenditures; and federal funding includes a 90% match rate for related administrative costs (42 U.S.C. 1396b(a)(7)). (As background, Medicaid provides health coverage to low-income individuals, families, pregnant women, children, elderly, and people with disabilities; this buy-in enables coverage expansion to working-age adults lacking other options via premium payments.)

This section directs the Secretary of Health and Human Services to (1) review Medicaid quality measures in use under the program and, not later than January 1, 2030, update them as necessary to ensure appropriateness for individuals eligible to buy into Medicaid coverage under new subclause (XXIV) of section 1902(a)(10)(A)(ii); (2) review and, not later than January 1, 2032, update state reporting requirements to include such measures; and (3) award grants to states for updating and implementing the measures using funds appropriated under subsection (d). Subsection (d) appropriates $50 million for FY2026, to remain available until expended.

This section renews and expands the requirement under Medicaid state plans for payment of primary care services (as defined in section 1902(jj) of the Social Security Act) at a rate of not less than 100% of the Medicare Part B rate applicable to such services and physicians (or the 2009 Medicare conversion factor if greater, whichever is higher), now applicable (1) to services furnished in 2013 and 2014 by physicians with a primary specialty in family medicine, general internal medicine, or pediatric medicine and (2) beginning the first day of the first month after enactment of the State Public Option Act, to such physicians (if self-attesting to board certification), board-certified obstetrician-gynecologists (if self-attesting), supervised advanced practice clinicians, rural health clinics and federally qualified health centers reimbursing specified providers, and nurse practitioners, physician assistants, or certified nurse-midwives working in accordance with state law (with payments ensuring such practitioners receive at least the Medicare Part B amount). It extends the enhanced federal matching payment rate (FMAP) available under section 1905(dd) for such services through one year after enactment of the State Public Option Act (from prior expiration after 2015). (As background, these provisions originally increased Medicaid primary care payments to Medicare levels during 2013-2014 to improve access but expired; the renewal and expansion aims to support additional primary care providers serving Medicaid enrollees, who are predominantly low-income children, families, pregnant women, elderly, and disabled individuals.) This section further excludes primary care services furnished in hospital emergency departments from the definition of primary care services and requires Medicaid managed care contracts to ensure payments for such services meet the specified rates (with documentation and allowance for compliant capitation or value-based arrangements).

This section revises the enhanced Federal Medical Assistance Percentage (FMAP) schedule in SSA section 1905(y)(1) for states providing Medicaid coverage to newly eligible individuals (i.e., adults with family incomes up to 133% of the federal poverty level under the ACA expansion) by replacing fixed calendar years with consecutive 12-month periods beginning when the state first provides such coverage: (1) 100% FMAP for the first three such periods (from 2014-2016); (2) 95% for the fourth (from 2017); (3) 94% for the fifth (from 2018); (4) 93% for the sixth (from 2019); and (5) 90% for the seventh and thereafter (from 2020 and thereafter). (Thus, late-adopting states receive the 100% FMAP subsidy for longer.)

This section requires state Medicaid plans to cover comprehensive sexual and reproductive health care services—including abortion services and abortion-related services—as a mandatory benefit, effective for medical assistance furnished on or after January 1, 2026. It (1) adds these services to the definition of medical assistance; (2) requires their inclusion as a condition of state plan approval for coverage of specified mandatory eligibility groups; and (3) mandates their coverage in benchmark and benchmark-equivalent plans.