Choose Medicare Act
The Choose Medicare Act would create a new public health plan option called Medicare part E (Part E) that would be offered in the individual, small group, and large group health insurance markets, including through the ACA exchanges. Part E plans would be required to meet ACA-qualified health plan (QHP) standards, provide essential health benefits, include gold-level coverage, and explicitly cover abortions and all reproductive services. The bill would also generally preempt state laws that would prohibit Part E plans from offering abortion coverage. In addition to establishing Part E, the bill makes related changes to premiums, provider payments, and administrative processes; expands premium subsidies toward gold-level plans; expands protections against excessive rate increases; creates a new reinsurance/affordability fund for the individual market; expands rating rules to large employers; and broadens navigator referrals for ACA coverage. It also adds a new out-of-pocket cap for Medicare Part A/B beneficiaries and includes a funding and implementation timeline that begins in 2026–2027. In short, the bill would introduce a government-backed public option (Part E) that competes with private coverage on ACA exchanges, guarantees abortion coverage within those plans, and accompanies a set of accompanying reforms intended to lower cost-sharing, broaden subsidies, and strengthen rate oversight and market stability.
Key Points
- 1Medicare part E public health plans
- 2- Establishes Medicare part E plans offered in individual, small group, and large group markets; plans must be QHPs, provide essential benefits, gold-level coverage, and cover abortion/reproductive services; states cannot block abortion coverage in Part E plans.
- 3- The Secretary negotiates provider rates and sets a rate schedule; participating providers include current Medicare providers and others via a new qualification process; balance-billing limits mirror those in Medicare.
- 4Enrollment, eligibility, and employer participation
- 5- Part E plans would be offered through Federal and State Exchanges (including SHOP). Eligible individuals include most U.S. residents not already enrolled in Medicare Part XVIII, Medicaid, or certain State programs.
- 6- Employers can voluntarily offer Part E options for small and large groups starting in the first plan year after enactment; the Secretary can act as a third-party administrator for group plans upon sponsor request; portability provisions allow maintained Part E coverage if employment ends.
- 7Premiums, cost sharing, and provider payments
- 8- Premiums for Part E plans would vary by market type and rating area and must fully finance benefits and administration.
- 9- The Secretary would set provider payment rates, aiming not to be lower than Medicare Part XVIII rates in aggregate and not higher than average rates paid by other issuers on the Exchanges; alternative payment models would be used where appropriate.
- 10- Affects prescription drug coverage by applying Part E treatment similar to certain drugs under Part XI.
- 11Funding and start-up timeline
- 12- Start-up funding of $2 billion in FY 2026 and initial reserves for a 90-day claims period; reproductive health funds are exempt from general restrictions on reproductive service funding.
- 13- A sense of Congress encourages universal reproductive health coverage by the federal government and calls for private market reform on reproductive service restrictions.
- 14Additional market reforms and protections
- 15- Expands rating rules to large group markets (removing small-market language from 2701 and applying rules broadly).
- 16- Adds new protections against excessive, unjustified, or unfairly discriminatory rates; lets states impose stricter rate review and corrective actions (with federal coordination); grandfathered plans are brought under these protections for plan years beginning in 2026.
- 17- Establishes a new Reinsurance and Affordability Fund for the individual market (1341A) with a $30 billion appropriation for 2026–2028 to support reinsurance payments or out-of-pocket cost reductions.
- 18Benefits for subsidy and cost-sharing programs
- 19- Premium assistance credits would use gold-level plans as the benchmark (instead of the default silver benchmark) and certain eligibility rules would be permanently extended, broadening access to subsidies.
- 20- Enhanced cost-sharing reductions would raise the plan’s share of covered costs in tiers tied to poverty levels (e.g., 94%/92%/90%/85%/80% cost-sharing responsibility), subject to specific income thresholds and plan designs.
- 21Administrative and study requirements
- 22- Requires a study by the Comptroller General on how the FLSA Section 18B navigator requirements (and related amendments) affect coverage rates.
- 23- Authorized funding to strengthen navigator capacity.