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Will the group health dam break, or just leak a little?

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Whether the Patient Protection and Affordable Care Act (PPACA) health insurance exchanges will work was one of the questions that kept coming up today at a hearing on the U.S. Department of Health and Human Services (HHS) fiscal year 2014 budget proposal.

Fiscal year 2014 will start Oct. 1.

A Senate Finance subcommittee and two House subcommittees — one part of the Energy and Commerce Committee, the other part of the Ways and Means Committee — have called HHS Secretary Kathleen Sebelius to Capitol Hill in the past two weeks.

Today, Sebelius appeared before the Labor, Health and Human Services, Education and Related Agencies Subcommittee at the Senate Appropriations Committee.

Sebelius recently announced that she would be using about $360 million from a Prevention and Public Health Fund created by PPACA to pay for PPACA exchange marketing and enrollment activities.

Both Republicans and Democrats criticized HHS for using prevention fund money for purposes other than public health activities.

Sen. Tom Harkin, D-Iowa, the chair of the subcommittee, said he was angry about the HHS decision to cut its $40 million share of prevention fund funding for the Racial and Ethnic Approaches to Community Health (REACH) program, a program that provides funding for efforts to reduce health disparities.

“I am beyond upset — beyond upset — that the administration helped pay for the Affordable Care Act in fiscal year 2013 by raiding the Public Health and Prevention Fund,” Harkin said. 

Sebelius said the Obama administration’s HHS budget proposal represents difficult decisions, but that officials believe that connecting people with medical homes and ongoing sources of medical insurance is “the single most successful way to make sure that preventive benefits are available to every family and to every person.”

The money will be spent only on telling members of vulnerable groups about their options, not on building the exchanges, Sebelius said.

Sen. Mike Johanns, R-Neb., talked about the effects of PPACA on access to commercial group health coverage.

He and others talked about reports of small employers trying to keep employment under 50, to avoid the possiblity that they might be subject to the PPACA penalties on employers that fail to provide a minimum level of health benefits.

“People are going to lose their insurance,” Johanns said. “They already are…. I think that, once the dam breaks, it’s going to be a mess…. The economics are just too big.”

Sebelius argued that critics had made similar predictions about the group health market in Massachusetts, and that the percentage of employers offering health benefits has increased since that state introduced its health exchange program.

During previous hearings, lawmakers have asked questions reflecting the difficulty they have had with understanding PPACA details and keeping track of implementation efforts.

During today’s hearing, Sen. Lamar Alexander, R-Tenn., asked why the Obama administration had issued regulations that set the cut-off between part-time and full-time workers at 30 hours per week.

Sebelius said the agencies set the cut-off at 30 hours per week because that was the cut-off set by PPACA.

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