Health Center Federal Policy

The Sequester Deadline is Quickly Approaching Again

by Abigail Pinkele

After a brief sigh of relief, the numerous self-imposed fiscal deadlines implemented by Congress are quickly approaching again. As outlined in a previous blog, under HR 8, the American Taxpayer Relief Act of 2012, the “sequester”- or across the board cut for all government programs- was delayed for two months, setting the new deadline for March 1, right before the expiration of the Continuing Resolution (CR) currently funding the government on March 27th. Fortunately, Congress was able to cross the debt ceiling extension off their long to-do list with surprising ease, but averting the sequester again may prove to be a more complicated lift.

The impact of the sequester on health centers will be significant. As previously discussed in this blog, the Office of Management and Budget (OMB) released a report in September outlining the potential impact of the original sequester. Under the original sequester, health centers were facing a combined $167 million funding reduction. However, the delay of the sequester from January 1, 2013 to March 1, 2013 coupled with newly sequester eligible funding changes the actual percentage in across the board cuts and the effect on health centers.

The sequester delay in HR 8 was paid for with $24 billion in revenue. In addition, the extension of Emergency Unemployment benefits in the fiscal cliff deal and disaster funding provided for Hurricane Sandy are likely to be considered “sequester-eligible,” that is subject to the cuts. The two month delay and extra funding sources will result in change to the across the board sequester cuts for programs that had already been subject to sequester, including the Health Centers program.  Absent a new report from OMB  on the sequester, we are relying on data provided by the Center on Budget and Policy Priorities (CBPP), which can be viewed here, on the new across-the-board reduction percentages.

Under the unofficial CBPP estimates, health center discretionary funding would be subject to a 5.1% cut and the Health Center Trust Fund would be subject to the 2% cut (per the Graham, Rudman, Hollings Safety Net Provider Cap). Homeless and public housing funding in the Health Center Trust Fund are still separated out and subject to a 5.3% cut. Based on the CBPP report, if the sequester were to go through on March 1st, health centers would now lose $115 million in total funding: $79 million in discretionary community health center funding, $27 million in the Health Center Trust Fund, and $11 million in public housing and homeless trust fund dollars. With those new numbers, 894,000 health center patients would lose access to care.

With 24 days remaining until the March 1st deadline, little action has occurred on the Hill to avert the sequester. However, we are increasingly concerned with the number of reports in the media from individuals on both sides of the aisle who seem to think, despite warnings of the negative economic impact, the sequester will go through this time because Congress may  be unwilling to strike a deal.

It is imperative health center advocates continue to keep the issue of sequestration on the front burner. Averting the sequester will be key to protecting health center grant funding from significant cuts. Advocates will be receiving Action Alerts regarding sequestration soon, but should not hesitate to contact their Members of Congress to ensure health centers have the continued ability to serve patients in need.

1 Comment

  1. Can you give an estimate of the impact on individual centers (% of award)? I can’t tell since I am not sure what percent of our funding comes from which account. I’d like to be able to put a dollar figure on our funding reduction so I can better make the case to our Congressional delegation.

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