March 5, 2014:
Just in case Congress doesn’t pass President Barack Obama’s fiscal 2015 budget plan, officials at the Department of Health and Human Services say they have other options for finding the money they need to implement the health care law.
The law is expected to generate $1.2 billion in user fees—including those on health insurers who participate in its online marketplaces, or exchanges. The administration’s budget requests an additional $600 million to help run the federal marketplace, call centers and other outreach efforts, said Ellen Murray, assistant HHS secretary for financial resources.
If Congress doesn’t agree, she said, the secretary’s office has the authority to transfer funds from existing accounts, or to tap the agency’s non-recurring expense fund, which allows the agency to take money from expired accounts and use it for information technology and other capital investments.
“We would be looking at all those resources, as we are doing this year,” Murray said at a news briefing Tuesday about the budget. “But our expectation and hope is that Congress will provide the dollars we need.”
Funding for the federal exchange has been a trouble spot before. The health law provided funding for states to run their own exchanges, but because of strong Republican opposition to the law, more than half the states opted to let the federal government do that job instead. The law did not have adequate funding for such a large effort, and HHS officials have taken the money from other accounts.
Congressional Republicans, who have tried to defund all or part of the health law, balked before at adding money for the health law and are highly unlikely to approve an administration request for additional implementation funding. In addition, in December the House and Senate Budget Committee chairs, Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., agreed to a budget deal that set federal government spending caps for fiscal 2015 and rolled back some of the automatic spending cuts known as “sequestration.”
Ryan and House Republicans are widely expected to put forth and pass a fiscal 2015 budget plan to outline the party’s spending priorities before midterm elections this fall where they are fighting to win control of the Senate and maintain or increase their majority in the House. Murray has said she is not pursuing a budget resolution this spring. “This budget year is settled and it wouldn’t be productive to relitigate it so soon after our two-year deal,” she said.
As it laid out its fiscal 2015 budget plans Tuesday, the administration also said it is proposing trimming $402 billion from Medicare, Medicaid and other federal health programs “by implementing payment innovations and other reforms that encourage high quality and efficient care.”
Some of those provisions were contained in previous budget plans, including last year’s proposal. Those ideas include:
• Asking higher-income Medicare beneficiaries to pay more for coverage.
• Requiring future retirees to pay higher copays for outpatient services such as doctor’s visits and home health care.
• Reducing hospitals’ and other providers’ Medicare reimbursements.
• Increasing the rebates that drug makers are required to pay for drugs dispensed to Medicare’s poorest beneficiaries.
Obama’s budget would also extend for an extra year a provision in the health law that pays Medicaid primary care providers at the same rates as those in Medicare.
Groups representing Medicare recipients expressed concern that the 2015 budget proposal may be shifting costs to the elderly.
“Instead of shifting additional costs onto Medicare beneficiaries, we must look for savings throughout the entire health care system, as the rising cost of health care threatens people of all ages,” said AARP Executive Vice President Nancy A. LeaMond.
Hospitals, doctors and other Medicare providers, already dealing with payment reductions mandated by the health law and sequestration cuts, said Obama’s plan would cause additional harm. “Even before these new reductions, Medicare and Medicaid reimburse hospitals for less than the cost of providing services. Moreover, one in four hospitals operate totally in the red,”
American Hospital Association President Rich Umbdenstock said in a statement. “The administration’s proposal would impact access to the latest treatments and technologies, and may bring about longer waits for care and fewer caregivers to treat our nation’s sickest patients. “
House Ways and Means Committee Chairman Dave Camp, R-Mich., criticized the Obama for ignoring “what he once saw as a crisis in our entitlement programs.” He added, in a statement, “By leaving out any reforms to protect and preserve Social Security and Medicare, the President has chosen to provide political cover in an election year rather than provide solutions for our nation’s seniors and future generations.”