HR7023-119

What This Bill Does

The Affordable CHOICE Act adds a public health insurance option to the Affordable Care Act Exchanges. Beginning with plan years on or after January 1, 2027, the HHS Secretary must establish and offer a qualified health plan through the Exchanges that provides affordable, high-quality coverage without compromising quality or access. The public option is offered exclusively by the Secretary, not by a health insurance issuer, and generally must comply with Exchange plan rules on benefits, benefit levels, provider networks, notices, consumer protections, and cost-sharing. It must offer bronze, silver, and gold plans. The Secretary may contract for administrative functions without transferring insurance risk. States may create public or nonprofit State Advisory Councils with consumers and providers to recommend provider-network design, delivery-system improvements, public awareness, alternative payment models, and value-based insurance design. The Secretary must collect data for premium and reimbursement rates and disparity reduction. Premiums must be geographically adjusted, sufficient to finance benefits and administrative costs, and include a contingency margin. Provider reimbursement is negotiated by January 1, 2026, with fallback to original Medicare fee-for-service rates for equivalent items and services and negotiated or Medicare-based rates for prescription drugs. A Treasury account is created for receipts and disbursements, start-up funding and 90 days of claims reserves are authorized, start-up funding is repaid over ten years beginning in 2027, and providers licensed under State law can participate, with Medicare and Medicaid providers included unless they opt out.

Who Benefits and How

Exchange consumers benefit from a federal public option that could add competition, bronze/silver/gold choices, and stable coverage in markets with limited private options. Patients benefit if provider participation and value-based design preserve access and improve quality. State Advisory Council members, including consumers and providers, benefit from a formal channel to shape state-level public option operations. Medicare and Medicaid providers may gain a new patient pool unless they opt out. HHS gains authority to collect data, set premiums, negotiate reimbursement, and use administrative contractors.

Who Bears the Burden and How

HHS staff must build a national Exchange plan, set premiums, negotiate provider and drug rates, collect data, manage contractors, administer a Treasury account, repay start-up funding, and oversee provider participation. Private health insurers face new federal competition on the Exchanges. Health care providers must decide whether to participate or opt out and may be paid Medicare-based fallback rates if negotiations fail. Federal taxpayers provide start-up funds and claims reserves, with repayment over ten years. State Advisory Councils require staffing, public input, and recommendations.

Key Provisions

• Establishes a federal public health insurance option through ACA Exchanges for plan years beginning in 2027.
• Requires bronze, silver, and gold public option plans that follow Exchange benefit, network, notice, consumer-protection, and cost-sharing rules.
• Authorizes HHS administrative contracting while keeping insurance risk with the Secretary.
• Authorizes State Advisory Councils with consumers and providers to recommend public option policies.
• Requires geographically adjusted premiums sufficient to finance benefits and administrative costs.
• Requires negotiated provider and drug reimbursement rates with Medicare-based fallback rates.
• Authorizes start-up funding, 90 days of claims reserves, and 10-year repayment to Treasury.