The continuing resolution that needs to be passed sometime soon to keep the government open will deal with PPACA. There are currently two big things not included in the resolution. One may prompt a veto threat (I assess that at 10% probability) and the other has been baked into the cake for over a year now.
The big new thing that is not in the continuing resolution at this time is an appropriation to fund the risk corridors. The Hill explains:
The language, buried deep in the 1,603-page bill, is a victory for conservative opponents of the healthcare law. It would prevent new government funds from flowing to ObamaCare’s so-called risk corridors, a three-year program established to subsidize insurer losses in order to keep premiums stable.
A commonly used tool in public policy, risk corridors have become a political football since Sen. Marco Rubio (R-Fla.) highlighted the ObamaCare provision as a “bailout” in November of last year. Since then, activists with Heritage Action and other groups have repeatedly sought to kill the payments in major fiscal negotiations.
The “cromnibus” spending bill would allow the government to continue collecting payments from insurers that post better-than-expected results under ObamaCare and passing them to companies that do worse. But it would not permit the Centers for Medicare and Medicaid Services to make additional funds available for insurers that are struggling.
Risk corridors are used to create incentives for insurers to participate in fuzzily defined markets. Insurers that price in a way that attracts only healthy populations send money to insurers who have to cover the sicker parts of the population. Medicare Part D has permanant two-way risk corridors. PPACA had temporary three year risk corridors authorized but the money was not appropriated to pay for them past the FY2014. The Congressional Research Service issued an opinion that the PPACA language was too fuzzy and did not explicitly appropriate money to go back out.
What are the work-arounds?
Nicholas Bagley at the Incidental Economist has made an argument in the past that the Department of Health and Human Services has a work-around to a non-appropriation language and that would be to argue that a revolving fund had been authorized.
the administration will read the ACA to establish a “revolving fund” for the risk corridor program. As explained in the “Red Book”— GAO’s bible of appropriations law—an agency that gets money from an outside source normally has to deposit that money in the federal treasury. Nothing comes out of the treasury without an appropriations statute. An agency with a revolving fund, however, can deposit receipts into the fund and then draw on those receipts as necessary to carry out the fund’s purposes….
The reason, oddly enough, involves Medicare Part D. In the ACA, Congress didn’t specify how the risk corridor program should be administered. It did say, however, that the program “shall be based on” the risk corridor program established under Part D. And guess what? Part D’s risk corridor program operates through a revolving fund called the “Medicare Prescription Drug Account.”
If the Part D program works through a revolving fund, a risk corridor program “based on” the Part D program should arguably work through the same kind of fund. That’s especially so given §1342’s subsequent references to “payments in” and “payments out.” In and out of … what?
If I was a political appointee, I would not be advancing this argument until after King is decided as I would not want to piss off Chief Justice Roberts. But I would keep this in my back-pocket as an option.
The other choice is to accept this. Risk corridor payments for 2014 will be paid out. 2014 was always going to be the fuzziest year on risk pool definition as no one had a clue who would sign up, when they would sign up and what they would need. 2015 is far clearer, and 2016 should see almost normal operations. The removal of the risk corridor provision for 2015 and 2016 will see a couple of insurers who probably would have left by 2017 leave a year early but this is not a fatal blow. It is a shiny object for the Tea Baggers Two Minute hate.
The other provision that was not extended was the enhanced payments for primary care physicians who served Medicaid patients. The original law bumped up primary care provider pay for certain primary care codes from Medicaid rates to Medicare rates. The feds would pick up the entire tab plus administrative costs and use the states as pass through entities. This pay bump was for just two calendar years, 2013 and 2014. The pay bump expires on December 31, 2014 and then rates will drop in most states by 30% to 50%. Some states (6 I think) are continuing the bump with state funds, and several more states already had high Medicaid reimbursement rates. Arkansas and Iowa will drop reimbursement rates for PCPs for traditional Medicaid patients, but their Exchange covered Medicaid patients will still pay high rates for their PCPs.
The bet which I had always thought was a low probability bet was that money for extended enhanced payments went to high income doctors who are likely to vote Republican and therefore it could pass a Republican House even as the money helped poor people.
There is a proposal to extend the payment enhancement for another two years as well as broaden its applicability to more provider types and services. This bill would cost $11 billion over two years, and it would be a good idea. I don’t think it will pass. The Republican Party is more opposed to anything that benefits poor people and potentially Obama than in sending money to very high income individuals.
Once the Democrats lost the House, any extension of this program was dead. Everyone has been expecting it although hoping for something else.