H.R. 1425: The Patient Protection and Affordable Care Enhancement Act

NCHC Writer

House Democrats unveiled H.R. 1425 which would expand and protect key elements of the Affordable Care Act (ACA). Key provisions of H.R. 1425 include expanding subsidies and eligibility requirements for state-level exchanges. Importantly, states would have the ability to expand premium tax credits beyond 400% of the federal poverty line.  H.R. 1425 also fixes the ACA family glitch, where families received premium subsidies based on the affordability of an individual’s employer-sponsored plan, regardless of if the plan was affordable for the entire family. In 2018, The Commonwealth Fund found that 13.8% of U.S. working-age adults were uninsured, and even more were left underinsured. H.R. 1425’s provisions would expand access to affordable health insurance, while simultaneously reducing the prevalence of short-term limited duration plans, which are often harmful. Below is a summary of key policy provisions that relate to NCHC’s policy priorities.

Title I—Lowering health care costs and protecting people with pre-existing conditions

  • Section 101. Improving affordability by expanding premium assistance for consumers. States are able to give premium tax credits beyond 400% of the federal poverty line. The tax credits will be given on a sliding scale. This would expand access to health insurance in the state exchanges while also ensuring the affordability of the insurance provided.
  • Section 1352. Use of funds. States would be allowed to use federal dollars to provide reinsurance payments to insurance companies providing individual coverage in the exchanges.  
  • Section 107. Rescinding the short-term limited duration insurance regulation. The HHS Secretary would no longer be able to implement or enforce the final rule on short-term limited duration insurance policies. These policies would no longer be widely advertised or promoted for purchase.
  • Section 109. Requiring marketplace outreach, educational activities, and annual enrollment targets. States would receive additional funding to advertise and educate the public on market exchanges with the goal of increasing enrollment numbers.
  • Section 113. Improving awareness of health coverage options. HHS would be required to publicly advertise COBRA continuation coverage on the Department of Labor website. Each notice would include information on the state exchanges, eligibility requirements for COBRA coverage, and other pertinent information.
  • Section 114. Promoting state innovations to expand coverage. States would receive additional funding and grants to promote greater enrollment in individual and small group markets.

Title II—Encouraging Medicaid expansion and strengthening the Medicaid Program

  • Section 202. Providing 12-months of continuous eligibility for Medicaid and CHIP. Individuals who qualify for Medicaid and CHIP are eligible for coverage for 12 months after they are deemed eligible
  • Section 204. Reducing the administrative FMAP for nonexpansion states. States would receive less federal funding for their Medicaid programs if they choose not to expand.
  • Section 206. Primary care pay increase. Reimbursement rates for primary care physicians would increase for certain services.

Title III—Lowering prices through fair drug price negotiation

  • Section 301. Establishing a fair drug pricing program. This program, known as the Fair Price Negotiation Program, would negotiate a fair price for specific high-priced, single-source drugs. The Program would carry the administrative burden to negotiate prices with manufacturers, and also publish a list of selected drugs that would be subjected to negotiation.
  • Section 1191. Establishment of a program. The Program described above would conduct negotiations with manufacturers to determine the average international market price, or AIM price for negotiation-eligible drugs. Drug prices in the following countries would be used for comparison: Australia, Canada, France, Germany, Japan, and The United Kingdom.
  • Section 1192. Selection of negotiation-eligible drugs as selected drugs. During the first year of the initial price applicability year, the HHS Secretary would select a minimum of 25 negotiation-eligible drugs. Then, the Secretary would select 50 drugs in the subsequent year. The Secretary would choose drugs based on the those with the greatest net spending in the United States. Negotiation-eligible drugs include covered Part D drugs, other high-cost drugs, and insulin.
  • Section 1193. Manufacturer agreements. The HHS Secretary and the manufacturer would negotiate the price of the drug and then relay the determined maximum fair price eligible individuals, hospitals, and physicians.  If a drug does not have an AIM price, then the Secretary will determine the amount based on the weighted average price. The Secretary would determine the price based on research and development costs, market data, production and distribution costs, and comparisons to existing therapeutic alternatives.
  • Section 1195. Publication of maximum fair prices. The HHS Secretary would publish the maximum price for each drug negotiated under the new Program.
  • Section 1198. Civil monetary penalty. Manufacturers would be forced to pay excess taxes if they do not comply with the new Program.