The Centers for Medicare & Medicaid Services (CMS) could see big changes in private health insurance programs spending in federal fiscal year 2013.
The budget for one major private health insurance program could fall more than 98% as spending on others soars.
The Obama administration talks about CMS private programs funding in the 2013 U.S. Department of Health and Human Services (HHS) budget proposal.
Fiscal year 2013 starts Oct. 1.
The private health insurance programs budget pays for CMS to set up and run programs created by the Patient Protection and Affordable Care Act of 2010 (PPACA).
CMS is not the only HHS agency implementing PPACA, and HHS is not the only federal department implementing PPACA.
HHS has a separate health insurance reform implementation fund. The budget there increased to $411 million this year, from $208 million in 2011. The budget could fall back to $344 million in the coming year.
The Employee Benefits Services Administration, an arm of the U.S. Labor Department, talks about its PPACA projects in its 2013 budget proposal.
The Internal Revenue Service, an arm of the U.S. Treasury Department that would be responsible for enforcing PPACA tax subsidy and penalty provisions, mentions PPACA only briefly in its budget outline.
CMS is the HHS agency that has budget line items for the biggest, best-known PPACA efforts.
Overall private programs spending could drop 13%, to $4.1 billion.
The Early Retiree Reinsurance Program (ERRP) – a PPACA program that’s been subsidizing health benefits for some early retirees – would get only $28 million, down from $2 billion. CMS officials recently announced that ERRP will be closing two years early because early retiree health plan sponsors used up the funding.
Spending on construction of the new PPACA health insurance distribution exchanges would increase 20%, to $1.1 billion. PPACA calls for the exchanges to start selling health insurance to individuals and small groups in 2014.
The CMS budget also includes big increases for the Consumer Operated and Oriented Plan (CO-OP) program and the Pre-Existing Condition Insurance Plan (PCIP) program.
The CO-OP program is supposed to provide seed loans that groups can use to start nonprofit, member-owned health insurers. CO-OP funding could jump to $803 million, from $93 million this year.
The PCIP program has been providing health coverage for uninsured people with health problems who are unable to buy ordinary commercial health insurance.
Starting in 2014, PPACA is supposed to require all health insurers to sell coverage on a guaranteed-issue, mostly community-rated basis, with no extra charges for people with health problems. Congress put the PCIP program in PPACA to give people who already had health problems some relief while they were waiting for 2014.
PCIP enrollment has been much lower than PPACA drafters had predicted but the medical expenses of the people who have signed up for coverage have been much higher than expected. Some states have warned that their federal PCIP money is running out.
The 2013 CMS budget proposal would increase PCIP funding 31%, to $2.1 billion.