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House approves continuing resolution to withold ACA funding

Posted on March 7, 2013 | No Comments

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The US House of Representatives approved a continuing resolution (CR) yesterday that would deny necessary funding for several agencies to implement their respective portions of the Affordable Care Act (ACA). The bill, H.R. 933, was introduced on Monday by Appropriations Committee Chairman Hal Rogers (R-KY). Several specific funding denials include:

  • $949 million to the US Department of Health and Human Services (HHS) to aid in paying for the federal insurance exchanges.
  • $29 million to the Centers for Medicare and Medicaid Services (CMS) for Health Care Fraud and Abuse Control.
  • Funds requested by the Internal Revenue Service (IRS) for ACA tax provisions.

267 Members voted in favor of the bill.

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The Department of Treasury's Internal Revenue Service (IRS) published a final rule detailing the Affordable Care Act’s (ACA's) tax on certain medical devices. The rule will take effect in 2013. To help pay for the expansion of health coverage, the ACA imposes a 2.3-percent excise tax on the sale of any taxable medical device by the manufacturer or importer of the device starting in 2013. Although lawmakers initially considered a higher tax, the medical device industry ultimately succeeded in halving the amount of revenue that device taxes would raise. IRS also released a final rule that imposes fees on health insurers and plan sponsors to fund the Patient-Centered Outcomes Research Trust Fund. Insurers criticize the new fee, which they called a tax.
The Congressional Budget Office (CBO) released an analysis exploring various deficit reduction options. The CBO report reviews the magnitude and causes of the federal government’s budgetary imbalance, various options for bringing spending and taxes into closer alignment, and criteria that lawmakers and the public might use to evaluate different approaches to deficit reduction. According to the report, repealing of the Affordable Care Act's (ACA's) coverage expansion while keeping the rest of the law in place would generate $150 billion in 2020. Such a repeal would also increase the number of uninsured Americans to 29 million in the same year. CBO noted that the report does not mention the Medicare premium support model, as CBO does not have a current estimate of the proposal.
The Affordable Care Act's provisions to increase federal revenue through taxes on high-income workers are among the many proposals that policymakers will face next year, according to a new report released by the Congressional Research Service (CRS). The report provides an overview of the tax and spending policy changes set forth by the Act. Collectively referred to as the "fiscal cliff," these policies would extend current revenue policies (e.g., extending the Bush tax cuts) and change current spending policies (e.g., not allowing the Budget Control Act sequester to take effect) to increase the projected budget deficit relative to current law. The Congressional Budget Office (CBO) estimates that if current law remains in place, the budget deficit will fall by $502 billion between FY2012 and FY2013. In making these fiscal policy choices, Congress will have to weigh the benefits of deficit reduction against the potential implications of fiscal policy choices for the ongoing economic recovery. Maintaining current revenue and spending policies will add to the deficit, while increasing revenues and reducing spending, as under current law, could slow economic growth. Thus, deficit reduction measures must be balanced against concerns that spending cuts or tax increases could dampen an already weak economic recovery. CBO has concluded that allowing current law fiscal policies to take effect will dampen short-term economic growth, but accelerate long-term economic growth. Conversely, CBO has concluded that postponing the fiscal restraint would accelerate short-term economic growth, but dampen long-term economic growth. In that context, several policy observers have recommended implementing a credible medium-term plan that balances economic considerations with deficit reduction.
According to a report released by the Congressional Research Service (CRS) earlier this week, the impact of the sequestration on the Affordable Care Act (ACA) would be limited. The CRS brief reported that the ACA includes many provisions that provide a vast amount of support to increase coverage, fund states to establish exchanges, and test demonstration projects and programs. The report found that the majority of the Budget Control Act of 2011 cuts do not target the ACA's mandatory provisions to expand insurance coverage. Some mandatory ACA spending would be affected, such as the funds allocated to small-employer tax credits to help offset the cost of covering all employees. The other mandatory appropriations under the ACA would, for the most part, be subject to about a 7.6 percent reduction under the sequestration. Additionally, the Budget Control Act would reduce Medicare provider spending by approximately $11.1 billion in 2013. Medicaid spending is exempt from the law. In another report also released earlier this week, CRS outlined funding allocations for the discretionary ACA programs. The report cited the Congressional Budget Office (CBO) estimate that the ACA discretionary spending provisions, if fully funded, would result in about $106 billion worth of spending from 2010 to 2019. The CRS report found that most of this discretionary spending would be subject to an 8.2 percent reduction under the Budget Control Act.
The Congressional Budget Office (CBO), the legislative branch agency responsible for estimating the cost of legislation, issued two reports on July 24th related to the Affordable Care Act (ACA). The first report, revised cost and health insurance coverage estimates for the ACA in the wake of the Supreme Court ruling in NFIB v. Sebelius[1]. In that ruling, the Court concluded the individual requirement to purchase health insurance coverage, while not a reasonable exercise of congressional Commerce Clause authority, is constitutional as a tax under congressional Spending Clause authority. The Court also held that the ACA’s Medicaid expansion, requiring states to cover all non-elderly individuals with incomes below 133[2] percent of the federal poverty level was unconstitutional. However, rather than striking the requirement, the Court precluded the Secretary of the Department of Health and Human Services (HHS) from enforcing the mandate by withholding all Medicaid funds. As a result of the ruling, states now have the option of expanding coverage to 133 percent of the federal poverty level (FPL), and will receive enhanced federal matching funds as provided under the law, but are not required to expand coverage.[3]