Report Gauges Effects of Cutting Funding for Health Reform Law
Permanently defunding the federal health reform law would increase the number of uninsured U.S. residents and potentially end the Medicare prescription drug program, among other effects, according to a recent report by the Congressional Budget Office and the Joint Committee on Taxation, CQ Today reports (Ethridge, CQ Today, 5/26.)
The report was requested by Rep. Henry Waxman (D-Calif.) (Baker, "Healthwatch," The Hill, 5/26). It comes after a number of attempts by Republicans to defund aspects of the overhaul.
According to CBO, a permanent funding ban likely could:
- Decrease the number of U.S. residents who obtain coverage under the law;
- Significantly decrease the number of people getting health plan coverage through state health insurance exchanges;
- Slow the implementation of the exchanges;
- Prohibit the federal government from setting up the exchanges on states' behalf;
- Prevent enforcement of the individual mandate;
- Stop financing for HHS to implement recommendations from the Independent Payment Advisory Board, which is charged with offering strategies to limit Medicare spending growth;
- Complicate the enrollment process for people newly eligible for Medicaid and CHIP, which will be expanded under the overhaul; and
- Stop the IRS from modifying forms to designate tax changes under the law (CQ Today, 5/26).
The report also found that a funding ban could prevent Medicare from establishing contracts to administer its Part D drug program, as well as its Medicare Advantage program. CBO said, "As contracts expired on December 31, 2012, there would probably be nothing to replace them and therefore no MA and Part D plans" ("Healthwatch," The Hill, 5/26).
Report Cannot Estimate Fiscal Effects of Defunding
CBO and JCT said they could not accurately estimate how defunding would affect the federal budget because exact figures are too difficult to extrapolate, CQ Today reports. The report stated the agencies "cannot estimate the magnitude" of the effect of defunding "or even whether the effects would, on balance, increase or decrease budget deficits," since a funding ban would decrease spending in some areas but increase costs in others.
A House-passed fiscal year 2011 spending bill (HR 1) would have barred using appropriated funds to pay workers or contractors to implement that law. CBO estimated that the proposal would have reduced the deficit by $1.4 billion in 2011, but increased deficits by $6 billion from 2012 through 2021. CBO said the effect of a permanent ban likely "would be much greater" than the spending bill (CQ Today, 5/26).
CBO Director Douglas Elmendorf also noted that it is "very difficult for CBO and JCT to determine with any certainty how affected agencies would resolve the conflict between tasks required by the health care laws and the lack of funding to administer those requirements" (Daly, Modern Healthcare, 5/26).