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Trump's 2018 Budget Makes Room for ACA Programs

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The administration of President Donald Trump has proposed a budget for fiscal year 2018 that could lead to increases in spending on major Affordable Care Act programs and on U.S. Department of Labor benefits compliance efforts.

(Related: Trump Budget Blueprint Could Help Health Insurance IT Vendors)

The budget proposal includes two-track health program spending projections. In one scenario, spending on Affordable Care Act health insurance premium tax credits could rise, and spending on the ACA cost-sharing reduction subsidy program could also rise.

The budget could also provide a modest increase in operating funding for the Employee Benefits Security Administration, the arm of the U.S. Department of Labor in charge of enforcing health law requirements, privacy requirements, mental health parity requirements and other requirements at employers.

Budget Basics

Federal fiscal year 2018 starts Oct. 1.

The main budget document calls for the federal government to increase the amount of revenue it collects 5.6%, to $3.7 trillion, and increase spending about 0.8%, to $4.1 trillion.

The administration is predicting that its budget proposal would cut the size of the budget deficit 27%, to $440 billion. 

The proposal calls for the government to shift to more use of block grants to help states Medicaid, and away from the current funding system. The budget shows that shift could hold federal Medicaid funding steady in 2018 and 2019, but that it could lead to a total of $610 billion in cuts starting in 2020. The cuts would start at $10 billion in 2020 and rise to more than $100 billion starting in 2025.

Some analysts have cited the deep cuts proposed for Medicaid and other social welfare programs as a reason the proposal is unlikely to have much in common with what the federal government really spends in fiscal year 2018.

ACA Program Funding 

Trump and Republicans have been trying to replace the current Affordable Care Act premium tax credit subsidy program with a new program. 

The U.S. House of Representatives has gone to court to question whether the U.S. Department of Health and Human Services and the Centers for Medicare & Medicaid Services, the HHS agency that runs Affordable Care Act programs, has the authorization to spend any money on the cost-sharing reduction program. The program helps poor people who use ACA public exchange plans pay their deductibles and co-payments.

The Trump administration’s budget proposal sections for HHS and for the Internal Revenue Service, an arm of the U.S. Treasury Department, show that the administration is preparing for two possibilities: a world with the Affordable Care Act in place and a world without the law in place.

Money (Image: Thinkstock)

(Image: Thinkstock)

If Congress repeals or replaces the Affordable Care Act, the premium tax credit and cost-sharing reduction subsidy programs could go away in 2018, according to the budget proposal for the IRS.

If the Affordable Care Act stays in effect, premiums tax credit spending could increase to $32 billion next year, from $30 billion this year, and from $28 billion in 2016.

Cost-sharing reduction subsidy program spending could increase to $6.3 billion, from $5.8 billion this year, and from $5 billion in 2016.

The HHS budget proposal entries show that:

Outlays on the Affordable Care Act risk-adjustment program, which is supposed to shift cash from individual and small-group health plans with low-risk enrollees to those with high-risk enrollees, could increase to $6.9 billion, from $4.7 billion.

Spending on Affordable Care Act public exchange program administration funding could fall to $17 million, from $24 million this year.

Total exchange system support outlays could fall to $59 million, from $287 million this year. This appears to be the result of a planned phase out of exchange start-up support included in the Affordable Care Act exchange provisions.

Spending on state Affordable Care Act health insurance rate review activities could fall to $26 million, from $28 million this year.


The Employee Benefits Security Administration section in the Labor Department’s budget section shows that spending on that agency could increase 1.6% in 2018, to $192 million.

The EBSA budget section also gives a little information on the agency’s compliance efforts.

The agency conducted 2,335 investigations in 2016 but does not have an estimate of how many it will conduct this year or in 2018.

The agency expects to recover just $548 million in assets for benefit plan participants this year, down from $710 million in 2016, even the number of inquiries received could increase to 250,000 this year, from 193,669 last year. The agency hopes to increase the recovery total to $608 million in 2017. 

The Office of Management and Budget, the Executive Branch agency that prepares the White House budget proposal and manages budget negotiations with Congress, has posted a large packet of budget materials on the web.

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