CRS Reviews Mandatory Appropriations And Fund Transfers In ACA

The Patient Protection and Affordable Care Act (ACA) appropriates amounts for four special funds in support of new or existing grant programs and other activities. The Congressional Research Service (CRS) has updated its report on the ACA, indicating the specifics on ACA funding. Funds affected and not affected by the sequester also are reviewed.

The ACA provides money and categorizes it into four funds. The first fund provides a total of $11 billion over five years for community health centers and the National Health Service Corps, while a separate appropriation within that fund provides $1.5 billion for health center construction and renovation. The second fund supports comparative effectiveness research through fiscal year (FY) 2019 with a mix of appropriations and transfers from the Medicare trust funds. The third fund, for which ACA provides a permanent annual appropriation, is intended to support prevention, wellness, and other public health-related programs authorized under the Public Health Service Act (PHSA). The fourth fund is being used to cover the initial costs of ACA’s implementation, which provides funding for health workforce and for maternal and child health programs.

New funding. In addition to mandatory funding, the ACA also authorizes new funding for existing discretionary grant and other programs, as well as funding for a number of new discretionary grant programs and activities and provides for each an authorization of appropriations. Congress must appropriate funds for these programs, however.

Sequester. According to the CRS, basically, the FY 2013 mandatory appropriations in ACA are fully sequesterable at the rate applicable to nonexempt nondefense mandatory spending under the March 1, 2013, sequestration order. Several bills were introduced in the 112th Congress by lawmakers opposed to ACA, and many of these “saw legislative action,” according to CRS. Measures to repeal ACA and replace it with new law; repeal or amend specific ACA provisions; eliminate certain mandatory appropriations and rescind all unobligated funds; and block or otherwise delay ACA implementation were all proposals made in opposition to the Act. In fact, CRS noted, some of these bills have been reintroduced in the 113th Congress.

Although the mandatory spending was fully sequesterable, the sequestration order did not apply to unobligated ACA funds that were appropriated in a prior fiscal year, and are still available. The exemption for unobligated balances carried over from prior fiscal years does apply to a several ACA appropriations, and they remain available “until expended” or “without fiscal year limitation.” For example, the Pre-Existing Condition Insurance Program (PCIP), designed to provide health insurance coverage for eligible individuals who have been uninsured for six months and have a preexisting condition, may still use funding. The ACA appropriated $5 billion to the program in FY 2010, to remain available without fiscal year limitation. Any remaining funds are still available to pay claims against the PCIP that are in excess of the premiums collected from enrollees. Any unobligated PCIP funds in FY 2013 are exempt from sequestration.

Visit our News Library to read more news stories.