Sarah Kliff writes that “If the Supercommittee does not come up with enough savings, and the trigger cuts go into effect, the Affordable Care Act comes out in relatively decent shape.” She argues that “Medicaid, which will expand up to 133 percent of the Federal Poverty Line in 2014, is shielded from the trigger,” as are the premium subsidies. The provisions that are vulnerable to attack — the cost sharing assistance, exchange grants — would see “a trim and not a wipeout.” “A small cut on the federal level could, for example, throw a wrench in the plans for states looking set up exchanges, particularly in cash-strapped states. So while the cuts aren’t expected to be huge, they could still have an impact,” Kliff concludes.
I think this really understates that impact. Consider this full list of all the potential provisions that could be at risk (Sen. Barrasso’s office informs me that this is the same list they’re working off):
— Cost-sharing Subsidies (Section 1402): Approximately $111 billion from 2014-2021.
— Risk Adjustment (Section 1342): More than $100 billion from 2014-2021.
— Prevention and Public Health Fund (Section 4002): A total of $16.75 billion from 2013-2021.
— Rate Review Grants (Section 1003): Funds from the initial $250 million that remain available in 2014.
— High-Risk Pool Funding (Section 1101): Funds from the initial $5 billion that remain in 2013 and 2014.
— Health Insurance Cooperatives (Section 1322): $3.8 billion.
— Re-insurance for Early Retirees (Section 1102): $5 billion, but likely that the funds will be obligated before 2013.
— Health Insurance Exchange Administrative Grants (Section 1311): Unspecified amounts in FY2013 and FY 2014.
— Community Health Centers Fund (Section 10503(b)(1)): A total of $7.3 billion for FY2013 through 2015.
— Health Center Construction and Renovation (Section 10503 (c)): Funds remaining from the initial $1.5 billion remain available until FY 2015.
— National Health Service Corps (Section 10503 (b)(2)): A total of $900 million in mandatory funding for 2013, 2014, and 2015.
— Maternal, Infant, and Early Childhood Home Visiting Program (Section 2951): A total of $800 million in mandatory spending in 2013 and 2014.
— Personal Responsibility Education Programs (Section 2953): A total of $150 million for 2013 and 2014.
— School Based Health Centers (Section 4101): $50 million in FY 2013.
— Patient Centered Outcomes Research Trust Fund: A total of $1.05 billion between 2013 and 2019.
Certainly this isn’t the very heart of reform — not in the same way that the mandate is, anyway. But all of these pieces work together to improve the effectiveness of the law. So if the federal government is paying insurers less for the extra costs associated with lower patient cost-sharing, then insurers will increase premiums (causing the government to spend more on premium support), or try to avoid lower-income beneficiaries altogether.
Similarly, the money for the National Health Service Corps and the community health centers is necessary to provide the capacity to care for the newly insured. The risk adjustment is critical for ensuring the viability of the market reforms and the exchanges. And on down the list. Before long, you’re compromising on the very goals of reform — expanding access and lowering costs — and as you peel back provision after provision, you’re left with a much smaller, less ambitious, less progressive plan, that isn’t worth the nine or more months you spent working on it! Or, worse yet, pull on too many strings all at once and the whole thing unravels.
But what’s still even more alarming is that if these cuts become reality, they’ll establish a strong precedent for policy makers to use the law as a “pay for” on future legislation. If you’re going to reduce the cost sharing subsidies, why not go after the premiums? And so the trigger is a very painful fallback. Given where we are, lawmakers should fight for the best deal possible in the super committee — assuming the GOP agrees to revenue increases. And, if more health care advocates are elected in 2012, they may have the votes necessary to make changes that would cushion the blow to the law.