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Life Health > Health Insurance > Health Insurance

Budget Deal Could Chip Away at PPACA Funding

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The new federal budget deal could leave most Affordable Care Act implementation funding intact but lead to some reductions.

The negotiators who hammered out the “final continuing resolution” for fiscal year 2011 are hoping it will win enough votes from Republicans in the House to pass a measure that would provide funding to keep the federal government operating for the rest of the fiscal year.

Republican and Democratic negotiators have tried to show Republicans who are worried about trillion-dollar federal budget deficits that they are serious about controlling spending by making about $40 billion in cuts.

Federal fiscal year 2011 started Oct. 1, 2010.

The passage of the proposed continuing resolution “in the House and Senate will mark the end of an arduous and long-overdue budget process initiated by the failure of the previous Democrat-controlled Congress to pass a budget or enact a single one of the 12 annual appropriations bills last year,” Appropriations Committee officials say.

Although the size of the proposed spending reduction is small in comparison with the budget deficit, it “is nearly 5 times larger than any other cut in history, and is the result of this new Republican majority’s commitment to bring about real change in the way Washington spends the people’s money,” Appropriations Committee Chairman Hal Rogers, R-Ky, says in a statement about the deal

The House recently approved a long series of bills that would cut funding for implementing parts of the Affordable Care Act – the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act.

The House also has passed H.R. 1, a general Affordable Care Act de-funding bill.

The H.R. 1 Affordable Care Act de-funding riders “have not been included in this bill,” according to a summary prepared by Democrats on the House Appropriations Committee.

Republicans on the committee say the agreement would cut funding for the U.S. departments of Labor and Health and Human Services, and related agencies, by $5.5 billion, to about $158 billion.

A series of Affordable Care Act spending reduction provisions starts on page 337 of the agreement proposal PDF.

Section 1857 would cancel $2.2 billion funding for the Consumer Operated and Oriented Plan Program (CO-OP) program, which is supposed to create a nonprofit, member-owned alternative to for-profit health plans and government health programs. Democrats in the Senate pushed for creation of the CO-OP program as a way to reach a compromise between Democrats who wanted PPACA to set up a “single-payer,” government-run health insurance program and Democrats who opposed the idea of creating a single-payer system.

The proposal also would cancel a program that would provide vouchers for employees that want to opt out of employer-sponsored health plans and instead sign up for subsidized coverage through a new system of health insurance exchanges.

Sen. Ron Wyden, D-Ore., pushed for the voucher program as a way to give workers an affordable alternative to group health coverage. Employers would pay penalties if employees used the vouchers to buy coverage through a new system of health insurance exchanges that is supposed to start up in 2014. Employers have argued that the program would expose them to substantial new financial risks, even if they sponsor group health plans. Both employer groups and labor groups say the program could destabilize group health plans by encouraging younger, healthier employees to choose exchange coverage.

Other proposal provisions would:

  • Require the U.S. Government Accountability Office (GAO) to report on the costs and processes of implementing PPACA. The report would have to include a list of the contracts and consultants hired in connection with PPACA implementation.
  • Require the GAO to report on federal agency efforts to give employers or plans waivers of PPACA restrictions on annual benefits limits.
  • Require the chief actuary for the Centers forMedicare and Medicaid Services report on the impact of the guaranteed issue, guaranteed renewal, and community rating provisions in PPACA.

Other federal budget coverage from National Underwriter Life & Health:


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