06 Mar Budget proposal phases out some PPACA funding

Originally posted March 04, 2014 by Allison Bell on https://www.lifehealthpro.com

Managers of some new Patient Protection and Affordable Care Act (PPACA) programs will have to wean themselves off of PPACA startup funding.

The Obama administration has included cuts in several sources of the PPACA grant money that has been flowing into state government and state public health insurance exchange offices the past few years.

The administration posted the proposal on the White House website today.

The budget would affect spending in fiscal year 2015, which starts Oct. 1.

An appendix that gives some details on the U.S. Department of Health and Human Services (HHS) funding proposal shows that outlays on state regulators’ commercial health insurance premium review operations would fall to $50 million, from $80 million this year.

Gross spending on the Pre-existing Condition Insurance Plan (PCIP) program — a “risk pool” program for people who could not qualify to buy conventional major medical coverage before the PPACA ban on use of personal health status information took effect — would fall to 0, from about $1 billion this year.

Total new budget obligations for PPACA public exchange construction would fall to $836 million, from $1.3 billion, and gross outlays would fall to $1.9 billion, from $2.4 billion.

New budget obligations for Consumer Operated and Oriented Plan (CO-OP) carriers — the new member-owned, nonprofit carriers created by PPACA — would drop to zero, from $221 million this year.

Elsewhere in the administration’s budget proposal:

• Obligations for tax credit subsidies for private PPACA exchange plans — “qualified health plans” (QHPs) — and for QHP cost-sharing subsidies could increase to $60 billion, from $38 billion for 2014 and from nothing last year.
• Spending on a new, temporary, PPACA “risk corridor” program — a program that’s supposed to protect QHP issuers against underwriting losses — could total $5.5 billion. The risk corridors program is supposed to be funded mainly by health insurers in the commercial individual and small group markets that earn underwriting profits, but the federal government may have to chip in if the entire individual market and the entire small-group market do poorly.
• Two of other PPACA “3 R’s” risk management programs — the temporary PPACA reinsurance program and a permanent risk adjustment program — are supposed to get their money solely from insurer contributions. The reinsurance program would get $20 million for administration and pay out about $10 billion in reinsurance payments. The risk administration program would start with $3.4 billion in budget authority.
• Families in the top 3 percent in terms of taxable income would face a 28 percent cap on their ability to use itemized deductions and some other tax breaks to reduce tax liability. The cap would apply to employers’ group health and retirement plan contributions.