42 U.S.C. § 18091 — Requirement to maintain minimum es-

Page 9137 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 18091 3 See References in Text note below. 1 See References in Text note below. matched and representatives of applicable State health subsidy programs, promulgate standards governing the timing, contents, and procedures for data matching described in this subsection. Such standards shall take into ac- count administrative and other costs and the value of data matching to the establishment, verification, and updating of eligibility for ap- plicable State health subsidy programs. (d) Administrative authority (1) Agreements Subject to section 18081 of this title and sec- tion 6103(l)(21) of title 26 and any other re- quirement providing safeguards of privacy and data integrity, the Secretary may establish model agreements, and enter into agreements, for the sharing of data under this section. (2) Authority of exchange to contract out Nothing in this section shall be construed to— (A) prohibit contractual arrangements through which a State medicaid agency de- termines eligibility for all applicable State health subsidy programs, but only if such agency complies with the Secretary’s re- quirements ensuring reduced administrative costs, eligibility errors, and disruptions in coverage; or (B) change any requirement under title XIX 1 that eligibility for participation in a State’s medicaid program must be deter- mined by a public agency. (e) Applicable State health subsidy program In this section, the term ‘‘applicable State health subsidy program’’ means— (1) the program under this title 3 for the en- rollment in qualified health plans offered through an Exchange, including the premium tax credits under section 36B of title 26 and cost-sharing reductions under section 18071 of this title; (2) a State medicaid program under title XIX of the Social Security Act [42 U.S.C. 1396 et seq.]; (3) a State children’s health insurance pro- gram (CHIP) under title XXI of such Act [42 U.S.C. 1397aa et seq.]; and (4) a State program under section 18051 of this title establishing qualified basic health plans. (Pub. L. 111–148, title I, § 1413, Mar. 23, 2010, 124 Stat. 233.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in subsecs. (a), (d)(2)(B), and (e)(2), (3), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Titles XIX and XXI of the Act are classified generally to subchapters XIX (§ 1396 et seq.) and XXI (§ 1397aa et seq.), respectively, of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables. This title, where footnoted in subsec. (e)(1), is title I of Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 130, which en- acted this chapter and enacted, amended, and trans- ferred numerous other sections and notes in the Code. For complete classification of title I to the Code, see Tables. § 18084. Premium tax credit and cost-sharing re- duction payments disregarded for Federal and federally-assisted programs For purposes of determining the eligibility of any individual for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds— (1) any credit or refund allowed or made to any individual by reason of section 36B of title 26 (as added by section 1401) 1 shall not be taken into account as income and shall not be taken into account as resources for the month of receipt and the following 2 months; and (2) any cost-sharing reduction payment or advance payment of the credit allowed under such section 36B that is made under section 18071 or 18082 of this title shall be treated as made to the qualified health plan in which an individual is enrolled and not to that indi- vidual. (Pub. L. 111–148, title I, § 1415, Mar. 23, 2010, 124 Stat. 237.) Editorial Notes REFERENCES IN TEXT Section 1401, referred to in par. (1), means section 1401 of Pub. L. 111–148. SUBCHAPTER V—SHARED RESPONSIBILITY FOR HEALTH CARE PART A—INDIVIDUAL RESPONSIBILITY § 18091. Requirement to maintain minimum es- sential coverage; findings Congress makes the following findings: (1) In general The individual responsibility requirement provided for in this section (in this section re- ferred to as the ‘‘requirement’’) is commercial and economic in nature, and substantially af- fects interstate commerce, as a result of the effects described in paragraph (2). (2) Effects on the national economy and inter- state commerce The effects described in this paragraph are the following: (A) The requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased. In the ab- sence of the requirement, some individuals would make an economic and financial deci- sion to forego health insurance coverage and attempt to self-insure, which increases fi- nancial risks to households and medical pro- viders. (B) Health insurance and health care serv- ices are a significant part of the national economy. National health spending is pro- Page 9138 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 18092 jected to increase from $2,500,000,000,000, or 17.6 percent of the economy, in 2009 to $4,700,000,000,000 in 2019. Private health in- surance spending is projected to be $854,000,000,000 in 2009, and pays for medical supplies, drugs, and equipment that are shipped in interstate commerce. Since most health insurance is sold by national or re- gional health insurance companies, health insurance is sold in interstate commerce and claims payments flow through interstate commerce. (C) The requirement, together with the other provisions of this Act, will add mil- lions of new consumers to the health insur- ance market, increasing the supply of, and demand for, health care services, and will in- crease the number and share of Americans who are insured. (D) The requirement achieves near-uni- versal coverage by building upon and strengthening the private employer-based health insurance system, which covers 176,000,000 Americans nationwide. In Massa- chusetts, a similar requirement has strengthened private employer-based cov- erage: despite the economic downturn, the number of workers offered employer-based coverage has actually increased. (E) The economy loses up to $207,000,000,000 a year because of the poorer health and shorter lifespan of the uninsured. By signifi- cantly reducing the number of the unin- sured, the requirement, together with the other provisions of this Act, will signifi- cantly reduce this economic cost. (F) The cost of providing uncompensated care to the uninsured was $43,000,000,000 in 2008. To pay for this cost, health care pro- viders pass on the cost to private insurers, which pass on the cost to families. This cost- shifting increases family premiums by on average over $1,000 a year. By significantly reducing the number of the uninsured, the requirement, together with the other provi- sions of this Act, will lower health insurance premiums. (G) 62 percent of all personal bankruptcies are caused in part by medical expenses. By significantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will im- prove financial security for families. (H) Under the Employee Retirement In- come Security Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health Service Act (42 U.S.C. 201 et seq.), and this Act, the Federal Government has a significant role in regu- lating health insurance. The requirement is an essential part of this larger regulation of economic activity, and the absence of the re- quirement would undercut Federal regula- tion of the health insurance market. (I) Under sections 2704 and 2705 of the Pub- lic Health Service Act [42 U.S.C. 300gg–3, 300gg–4] (as added by section 1201 of this Act), if there were no requirement, many in- dividuals would wait to purchase health in- surance until they needed care. By signifi- cantly increasing health insurance coverage, the requirement, together with the other provisions of this Act, will minimize this ad- verse selection and broaden the health insur- ance risk pool to include healthy individ- uals, which will lower health insurance pre- miums. The requirement is essential to cre- ating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold. (J) Administrative costs for private health insurance, which were $90,000,000,000 in 2006, are 26 to 30 percent of premiums in the cur- rent individual and small group markets. By significantly increasing health insurance coverage and the size of purchasing pools, which will increase economies of scale, the requirement, together with the other provi- sions of this Act, will significantly reduce administrative costs and lower health insur- ance premiums. The requirement is essential to creating effective health insurance mar- kets that do not require underwriting and eliminate its associated administrative costs. (3) Supreme Court ruling In United States v. South-Eastern Under- writers Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation. (Pub. L. 111–148, title I, § 1501(a), title X, § 10106(a), Mar. 23, 2010, 124 Stat. 242, 907.) Editorial Notes REFERENCES IN TEXT This Act, referred to in par. (2)(C), (E) to (J), is Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 119, known as the Pa- tient Protection and Affordable Care Act. For complete classification of this Act to the Code, see Short Title note set out under section 18001 of this title and Tables. The Employee Retirement Income Security Act of 1974, referred to in par. (2)(H), is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829, which is classified principally to chap- ter 18 (§ 1001 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Tables. The Public Health Service Act, referred to in par. (2)(H), is act July 1, 1944, ch. 373, 58 Stat. 682, which is classified generally to chapter 6A (§ 201 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 201 of this title and Tables. AMENDMENTS 2010—Par. (2). Pub. L. 111–148, § 10106(a), amended par. (2) generally. Prior to amendment, par. (2) described ef- fects of the individual responsibility requirement on the national economy and interstate commerce. § 18092. Notification of nonenrollment Not later than June 30 of each year, the Sec- retary of the Treasury, acting through the In- ternal Revenue Service and in consultation with the Secretary of Health and Human Services, shall send a notification to each individual who files an individual income tax return and who is not enrolled in minimum essential coverage (as defined in section 5000A of title 26). Such notifi- cation shall contain information on the services available through the Exchange operating in the State in which such individual resides.