President Donald Trump’s new budget proposal for 2019 could provide enough funding for the Affordable Care Act (ACA) cost-sharing reduction subsidy program to make $8.1 billion in outlays in 2019.

The program helps low-income ACA public exchange plan users handle their health insurance co-payments and deductibles.

Trump and officials in his administration cut off subsidy payments to health insurers in the middle of 2017, and they are still trying to repeal and replace the ACA. But the budget proposal shows that, if the proposal were adopted as written, outlays could increase a little next year, from an estimated total of $8 billion this year.

It’s not clear whether the estimated total for 2018 reflects the fact that the Trump administration has stopped making the subsidy payments.

(Related: Trump 2018 Budget Blueprint Could Help Health Insurance IT Vendors)

Trump has questioned whether the U.S. Department of Health and Human Services (HHS) has a valid authorization from Congress to make the CSR subsidy payments, but his administration says in a detailed discussion of the budget proposal that, under current law, insurers must offer reduced cost-sharing to eligible consumers.

“The [fiscal year] 2019 budget provides a mandatory appropriation for cost sharing reduction (CSR) payments for fiscal year 2018 through the end of calendar year 2019,” officials write.

Administration officials prepared the proposal to outline spending plans for federal fiscal year 2019, which starts Oct. 1, and, in some cases, for calendar year 2019.

The Trump administration was also in charge of a budget proposal for 2018 released about a year ago, but it was not clear then how much of the proposal for 2018 was the work of actual Trump administration officials and how much was the work of Obama administration holdovers. The new budget proposal was prepared with Trump administration appointees in place at the top of HHS and the Labor Department.

Members of Congress often start from scratch and develop budget proposals of their own, but the administration’s proposal creates the framework for the coming negotiations.

Links to budget-related documents are available here.

Here are six other facts about the budget proposal of interest to agents and brokers. Most are drawn from a detailed administration analysis of the HHS budget, available here.

1. Funding for the ill-fated ACA Consumer Operated and Oriented Plans could temporarily increase.

Some of the moderate Democrats who voted for the Affordable Care Act lobbied for making the Consumer Operated and Oriented Plan (CO-OP) program a substitute for a government-run “Medicare for all” option.

2019 (Image: Allison Bell/TA)

(Image: Allison Bell/TA)

The CO-OPs were nonprofit, member-owned health plans started with federal loans.

Most of the CO-OPs have faced severe financial problems, in part because of delays and sudden changes in federal ACA subsidy programs, and have already failed.

The Trump budget shows HHS spending no money on CO-OPs in 2019, but it shows spending on CO-OPs increasing to $259 million this year, from $82 million last year.

2. Some HHS agencies you may have never heard of could go away.

The Trump administration has proposed eliminating the Agency for Healthcare Research and Quality and the National Institute on Disability, Independent Living and Rehab Research, and folding whatever might be of value in their operations into the National Institutes of Health.

3. National Institutes of Health funding could fall sharply.

The Trump administration has proposed cutting the National Institutes of Health (NIH), which pays for medical research, to $3.7 billion, from $4.2 billion.

Funding for research on neurological disorders and stroke could fall slightly, to about $1.3 billion.

In the past, however, Congress has usually resisted when administrations have tried to make big cuts in medical research spending.

4. Spending on federal Affordable Care Act public exchange grant programs could wind down.

Drafters of the Affordable Care Act wanted the ACA public exchange programs to have an independent life of their own after a few years, and the Trump administration’s 2019 budget proposal would force the issue.

The proposal shows outlays dropping to $24 million in 2019, from $135 million this year, with the 2019 spending coming from unpaid obligations brought forward.

Employment at the office that oversees the public exchange grant programs could fall to zero, from 26 this year.

5. The Pre-Existing Condition Insurance Plans Program is still there, after a fashion.

The Pre-Existing Condition Insurance Plans (PCIP) Program was supposed to provide affordable coverage, on a guaranteed-issue basis, for people with serious health problems while HHS was setting up the major Affordable Care Act coverage programs that came to life in January 2014.

(Related: GAO Eyes PCIP Woes, Exchange Construction Efforts)

Enrollees turned out to be much sicker than anyone had expected, with about $30,000 per year in medical claims, and program managers quickly did what they could to hold down enrollment and limit spending on the people who had signed up for coverage.

It’s not clear whether PCIP managers ever paid many agents and brokers the modest fees they were supposed to pay producers who helped consumers sign up for PCIP coverage.

The program shut down in January 2014, when the ACA Medicaid expansion program, the birth of the ACA public exchange system, and the ACA ban on use of personal health information, other than age and smoking, in health insurance underwriting gave people with health problems new coverage options.

But the Trump administration budget shows that the program could still have $84 million in outlays this year and $56 million in outlays in 2019.

The outlays “reflect program close out and claims run out costs, as well as allowable administrative costs in the current year,” officials write.

6. Funding for many benefits-related agencies could be about the same as it is this year.

Funding for the Employee Benefits Security Administration (EBSA), the Labor Department arm in charge of overseeing group benefits, could increase to $189.5 million in 2019, from $184 million this year.

EBSA’s headcount could increase to 875, from 860 this year, although that would be down from a headcount of 913 in 2017.

Outlays at an Affordable Care Act-created agency, the Patient-Centered Outcomes Research Institute (PCORI), could increase to $98 million next year, from $32 million this year, with an infusion of cash made available by folding the Agency for Healthcare Research and Quality into NIH. The PCORI head count could hold steady at five.

— Read 5 Top Senate Budget Package Highlights, for Agents on ThinkAdvisor.


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