Health Center Federal Policy

House Budget Update: Reconciliation Proposal from Energy and Commerce Slated for Markup This Week – Includes Medicaid Cuts

We blogged last week with updates on the House and Senate budget process, noting that this Friday (April 27th) is the deadline for committees including Energy and Commerce to submit their reconciliation proposals to the Budget Committee for saving billions of dollars – and replacing the Budget Control Act sequester – over the next decade.  The Energy and Commerce Committee will meet this Tuesday and Wednesday to mark up and consider a number of proposals slated to save a total of $97 billion over ten years.  The committee has now published full legislative text on their website, which includes a number of proposals that have been passed by the Energy and Commerce Committee already and will impact Medicaid and the Affordable Care Act. Health center funding is not included in these budget reduction proposals.  Below is the rundown of the health-related changes the committee is reported to propose this week (estimated 10-year savings in parentheses):

ACA:

  • Repeal the Prevention Public Health Fund, rescinding unobligated funds (~$11-12 billion);
  • Repeal unlimited State Exchange Grants, rescinding unobligated funds (~$14 billion); and
  • Defund the Consumer Operated and Oriented Plan (CO-OP) program, rescinding unobligated funds (~$700 million).

Medicaid:

  • Repeal Maintenance of Effort in Medicaid and CHIP currently in place, prohibiting states from restricting eligibility to below December 2010 levels (~$2.1 billion);
  • Repeal the increase in the federal Medicaid funding cap and match rate for territories, bringing the match rate back down to 50% (PPACA increased the match rate to 55% and raised the cap by $6.3 billion over ten years) (~$6.3 billion);
  • Adjust the provider tax threshold down to 5.5% (threshold is 6% under current law) (~$10-11 billion); and
  • Rebase Disproportionate Share Hospital (DSH) payments (~$4.1 billion).

Although health center funding is not identified by the Committee, the proposals put forward by Energy and Commerce will impact safety net providers and health center patients.  We will be watching the markup closely this week so keep tuning into the blog for more information and detail as news breaks.