What do the fledgling federal health reform law (the “Affordable Care Act”) and the newly minted national debt-ceiling agreement between the Obama administration and Congress have in common? Surprisingly, more than you might think. That”™s because the Affordable Care Act is greatly reliant on federal money in order for it to succeed.
Much of the funding needed to implement key provisions of the Affordable Care Act (the exact amount is still unknown) could be in jeopardy if a new Congressional committee is unable to agree on at least $1.2 trillion in federal spending cuts over the next 10 years.
The new committee (dubbed a “super committee” by many Washington insiders) is charged with the difficult task of determining where to cut spending in order to satisfy the savings requirement in the debt-ceiling deal. The 12 committee members include Sens. Patty Murray, D-Wash., Max Baucus, D-Mont., John Kerry, D-Mass., John Kyl, R-Ariz., Pat Toomey, R-Pa., and Rob Portman R-Ohio. The representatives are James Clyburn, D-S.C., Chris Van Hollen, D-Md., Xavier Becerra, D-Calif., Dave Camp, R-Mich., Fred Upton, R-Mich., and Jeb Hensarling, R-Texas.
If this new committee can”™t find the necessary cuts, then experts predict that millions ”“ possibly billions ”“ of dollars earmarked for implementing the Affordable Care Act could be at risk. Such a loss in federal funding would be crippling to the success of federal health reform.
Politico recently reported that the health reform funds on the chopping block may include those aimed at providing federal grants to help states establish their federally-mandated health insurance exchanges. Speaking to Politico, Sen. John Barrasso, R-Wyoming, said, “There are at least 15 provisions (of the Affordable Care Act) that will find themselves subject to this trigger if the committee in not able to come up with other cuts.”
That”™s unwelcome news to states such as Connecticut, which is moving swiftly to create its own federally-required health insurance exchange.
Passed in this year”™s General Assembly session, PA 11-53 sets the framework for Connecticut to establish a fully operational health insurance exchange by 2014, as required by the Affordable Care Act. The exchange would be a new health insurance marketplace for individuals and small employers in Connecticut. Appointments to fill the state”™s 11-member board of directors for the new exchange are currently being made.
If any state, including Connecticut, is unable to make its exchange operational by 2014, then the Affordable Care Act requires the federal government to come in and set up the exchange for that state. Losing control of Connecticut”™s exchange is probably not something that state policymakers would welcome.
The prospect of any new obstacles blocking the creation of Connecticut”™s exchange is cause for concern. Because the success or failure of the Affordable Care Act depends on the availability of federal funding, its future is uncertain ”“ and the current debt crisis has made this reality abundantly clear.
But what”™s not clear is exactly what the impact of the debt-ceiling agreement will be on the fate of the Affordable Care Act, as well as Connecticut”™s soon-to-be-operational health insurance exchange.
Eric George is associate counsel at the Connecticut Business and Industry Association in Hartford. Reach him at eric.george@cbia.com
