House GOP Budget Proposes Defunding Health-Care Reform

U.S. House Republicans have followed through on their pledge to defund the Affordable Care Act, including the exchange establishment grant program that's funding state efforts to implement health insurance marketplaces.
by | July 17, 2012

U.S. House Republicans have followed through on their pledge to defund the Affordable Care Act (ACA), including the exchange establishment grant program that's funding state efforts to develop online health insurance marketplaces.

According to a budget outline released Tuesday, the House Appropriations Committee has proposed a U.S. Department of Health and Human Services (HHS) budget that's $1.8 billion below what President Barack Obama requested in his FY 2013 budget and $1.3 billion below last year's level. The majority of reductions, $1.4 billion, are targeted to the Centers for Medicare and Medicaid Services (CMS), which is responsible for overseeing much of the ACA's implementation at the state level.

The House appropriations bill explicitly prohibits new funding for the CMS Center for Consumer Information and Insurance Oversight (CCIIO), which is heading the distribution of health exchange establishment grants to states and instituting other market reforms. The legislation forbids any funding for "activities developed, administered or implemented" by CCIIO, which would include exchange planning.

A House Appropriations aide confirmed to Governing that the proposal would eliminate the exchange grants.

“This legislation reflects our strong commitment to reduce over-regulation and unnecessary, ineffective spending that feeds the nation’s deficits and hampers economic growth," said Hal Rogers (R-Ky.), the committee's chairman, in a statement.

HHS has already awarded more than $850 million in establishment grants to 34 states and the District of Columbia to develop the online insurance marketplaces that are expected to serve up to 20 million people starting in 2014. Obama requested another $1 billion for FY 2013 to fund state development of the exchanges. Federal money is expected to pay for almost all state-level planning through 2014.

As Governing reported last week, nine states applied for exchange establishment grants during the most recent application period, which ended June 28. Two of them, California and New York, are requesting nearly $300 million combined to pay for their exchange planning.

The appropriations subcommittee for Labor, Health and Human Services will debate the budget proposal Wednesday.

The U.S. House voted last week to repeal the full ACA for the 33rd time. Most Hill watchers consider it highly unlikely that the U.S. Senate would vote to repeal or defund the law, and the White House has expressed staunch opposition to reversing the president's most comprehensive legislative achievement.

This story was updated at 1:00 p.m. Tuesday.

Governing is tracking the health exchange grant process in the map below.

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