MLA's Weekly Health Care Wrap-Up: 2.17.12

February 17, 2012

Federal Health Care Update

President Releases FY13 Budget

President Obama this week released his FY13 budget with mixed implications for health programs. The Centers for Disease Control and Prevention (CDC) took the biggest hit, experiencing cuts totaling about 20 percent. In addition, the CDC budget cut funding for the Community Transformation Grant program, the signature initiative of the Prevention and Public Health Fund. The Prevention and Public Health Fund included as part of the Affordable Care Act (ACA) is also targeted in the budget and will likely experience significant cuts as part of the SGR deal discussed further below. While funding for the National Institutes of Health (NIH) was held flat, other health agencies received funding increases. The Agency for Healthcare Research and Quality (AHRQ) experienced a small bump, while the Centers for Medicare and Medicaid Services (CMS) emerged the big budget winner. Specifically, CMS received a $1 billion funding increase, with an estimated $574 million of that allocated for “federally facilitated exchange operations and oversight of state-based Exchanges in FY 2013.” In addition, the Department of Treasury request includes $267 million for new IT and 573 FTEs to monitor compliance with the individual mandate and determine who might be eligible for exemptions. The debate will now shift to Congress, where many eyes will turn to Senate Democrats who have failed to pass a budget in more than 1,000 days. House Budget Chairman Paul Ryan is expected to release his budget sometime this spring. The President’s budget can be found here.

Congress Approves SGR, Payroll Tax Cut Deal

House and Senate conferees this week reached a deal on a 10-month extension of the payroll tax cuts put in place by the Obama administration as well as a 10-month fix of the sustainable growth rate (SGR) formula, among other provisions. While the payroll tax cuts will be extended without “offsets,” the deal pays for the SGR fix and other provisions by cutting the Prevention and Public Health Fund by $5 billion; “rebasing” Medicaid DSH in 2021; repealing the Medicaid provisions in the ACA specific to Louisiana – aka the “Louisiana Purchase;” as well as a cut to Medicare “bad debt” payments. The House and Senate passed the deal earlier today (Friday). The package received 293 votes in the House and just 60 votes in the Senate. The legislation is now headed to President Obama for his signature.

From the States

For full coverage of state exchange activities, check out this week's State of the States: Health Insurance Exchange Developments here.

North Carolina. On Thursday, the Department of Health and Human Services (HHS) granted the state partial approval of its medical loss ratio (MLR) waiver request. HHS has granted seven states some form of an MLR waiver. North Carolina will operate with a 75 percent MLR in 2011, moving to the full 80 percent in 2012.

Wisconsin. Also on Thursday, the Obama administration denied Wisconsin’s request for a waiver from the MLR requirements included as part of the ACA. The state was the tenth to be denied a MLR waiver, joining Delaware, Florida, Indiana, Kansas, Louisiana, Michigan, North Dakota, Oklahoma and Texas.

Around Town

The Small Business Majority has released a report examining design issues for California’s small business exchange. The report can be found here.

The Kaiser Family Foundation has released a new analysis exploring how the coverage expansion provisions in the ACA will impact local communities. The analysis can be found here.

Jeff Zients, Acting Director of the Office of Management and Budget, offers an overview of the president’s budget on the OMB blog. The overview is available here.

Diane Archer and Theodore Marmor discuss the differences between Medicare and private insurance on the Health Affairs Blog, while Chris Fleming promotes a new Health Affairs report exploring the effectiveness of using NCQA guidelines to evaluate PCMH. Diane and Theodore's discussion can be found here, Chris' post can be found here.

ASPE is out with a report detailing the number of people who have gained access to preventive health benefits under the ACA. The report can be found here.

Calendar: Looking Ahead

The House and Senate are on recess and will return to Washington the week of February 27.

Monday, February 20.

Wednesday, February 22.


"The president's budget stands in sharp contrast to last year's Republican budget much of which we expect to see again this year. We need to get serious about debts and deficits in this country, but we must do it in a responsible way."

- Rep. Chris Van Hollen (D-Md.) on the President's Budget.

“Instead of taking the opportunity to provide real leadership and address the serious fiscal challenges facing our country, the president offered a partisan, election-year budget that ratchets up spending while ignoring the biggest drivers of our debt and calls for massive tax increases on hardworking families and small businesses."

- House Majority Leader Eric Cantor (R-Va.) on the President's budget.