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Creates a federal waiver pathway that lets states run their own comprehensive, publicly administered universal health care plans starting with plan years on or after January 1, 2026. States can request waivers of many federal health program rules (including parts of the ACA, Medicare, Medicaid, CHIP, TRICARE, ERISA, and certain tax provisions) if the state plan meets coverage, affordability, reporting, and administration requirements and the federal government provides a passthrough payment in lieu of the federal programs it replaces. Sets application, review, reporting, and oversight rules: states must submit a 5-year plan to cover at least 95% of residents and a 10-year budget that is budget-neutral to the federal government; the Secretary must issue regulations and an independent assessment panel will review applications and periodic reports; failure to meet the 95% target can trigger technical assistance and possible waiver termination. The law requires special protections for American Indians and Alaska Natives and allows supplemental private coverage while requiring public administration of the state plan.
The bill lets States create publicly administered universal coverage programs with preserved federal funding flows and protections for reproductive and tribal health, but it relies on States to assume financial risk, meet strict coverage targets, and pass state enabling laws—creating potential fiscal pressure, political instability, and coverage disruption risks for residents.
Uninsured residents in participating States could gain near-universal coverage (plans must aim to cover ≥95% within five years), substantially reducing the uninsured population.
When a State assumes federal programs, the State receives an annual passthrough payment equal to aggregate federal spending (including premium tax credits and CSRs), preserving federal funding that would otherwise support those programs.
States get flexibility to design and publicly administer tailored universal coverage plans while still allowing supplemental private coverage, enabling local adaptation and preserving options for additional private benefits.
The bill does not create a dedicated new federal appropriation and requires States to demonstrate 10-year budget neutrality, meaning States may have to cut services, raise state taxes, or otherwise shift costs to residents if passthrough funding is insufficient.
If a State fails to reach the 95% coverage target within five years (plus a 12-month grace period), the waiver may be terminated, risking abrupt loss or disruption of coverage for beneficiaries.
Requiring State law to implement waivers creates political instability: a future legislature could repeal enabling statutes and end coverage programs created under the waiver.
Introduced July 15, 2025 by Ro Khanna · Last progress July 15, 2025