Federal Shutdown Ends; Deal Includes One Small ACA Provision

Early Thursday morning, President Obama signed into law a bill (HR 2775) to end a 16-day federal shutdown and raise the national debt ceiling, the Washington Post reports (Montgomery/Helderman, Washington Post, 10/17).

The legislation -- which was developed by Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) -- was approved in the Senate, 81-18, and in the House, 285-144 (Weisman/Parker, New York Times, 10/16).

The legislation immediately reopened the federal government by extending current funding levels -- which include mandated cuts under sequestration -- through Jan. 15 and raising the debt ceiling until Feb. 7 (Meyer, Modern Healthcare, 10/16). The bill also requires lawmakers to convene a budget conference to negotiate issues, such as budget deficits and spending levels. They must issue a report on their progress by Dec. 13, but they are not required to reach an agreement.

The legislation also sets new procedures for HHS to strengthen income verification for individuals who receive federal subsidies to help them purchase coverage on the Affordable Care Act's insurance exchanges (AP/ABC News, 10/17). According to the Los Angeles Times' "The Economy Hub," the provision requires the HHS secretary to report to Congress by Jan. 1 on the procedures in place to verify subsidy eligibility, and then report on those techniques' effectiveness by July 1, 2014 (Hiltzik, "The Economy Hub," Los Angeles Times, 10/16).

Although the Obama administration said all along that it would not accept any changes to the ACA as part of a debt deal, White House spokesperson Jay Carney on Wednesday defended the inclusion of the provision. He said, "The income verification provision ... was negotiated by Senate Democrats and Senate Republicans and is a modest adjustment to the existing Affordable Care Act law," adding, "We've always said we were willing to make improvements and adjustments to the law. Ransom would be a wholly different thing" (Felsenthal, Reuters, 10/16).

Although the shutdown started in large part because of a disagreement over whether to defund the ACA, the final deal included only a small ACA provision that appears to solve a problem that "doesn't even exist," "The Economy Hub" reports.

In July, HHS issued a final rule for the exchange's income verification process, which the Washington Post reported would "significantly scale back" the law's verification requirement for those receiving federally subsidized coverage. The move was criticized by Republicans, who raised concerns that individuals would cheat the exchanges and obtain undeserved subsidies.

However, the only portion of the verification process the final rule delayed was a requirement that employers report their employee insurance provisions to the government, which typically is reported by workers, according to "The Economy Hub."

Under the rule, HHS still would require applicants' income be verified against their IRS and Social Security records, and when that cannot be achieved, checked against employer records submitted to Equifax. The rule also allows state exchanges to check a statistically valid sample of applicants in cases where an applicant claims income more than 10% below what IRS and Social Security records show, and where there is no Equifax data ("The Economy Hub," Los Angeles Times, 10/16).

Although they failed to win major concessions against the ACA during negotiations on a deal to reopen the federal government, Republican leaders already are looking ahead to the upcoming House-Senate budget conference to achieve major cuts to entitlement programs, The Hill's "On The Money" reports.

House Budget Committee Chair Paul Ryan (R-Wis.) -- who will co-chair the budget conference -- said he plans to push for significant changes to Medicare and Medicaid that would help control government spending (Wasson et al., "On The Money," The Hill, 10/17).

Meanwhile, some conservative Republicans -- including Sen. Marco Rubio (R-Fla.) -- have said they will continue to fight against the ACA during the upcoming budget negotiations.

During a speech on the Senate floor on Wednesday, Rubio said, "Tonight the government will be reopened and the debt limit will be lifted, but our real problems will still be here." He added, "Now Obamacare is going to start hurting real people and there will be a mad scramble in this town to try to get rid of it" (Cox, "Floor Action Blog," The Hill, 10/16).