House Passes Bills Repealing State Funding for Health Exchanges, Restricting Funding for Abortions

House_of_Representatives2.GIFReturning from a two-week recess, the House of Representatives continued its reassessment of healthcare reform this week. On Tuesday the House approved by a 238-183 vote a bill that would repeal mandatory funding established by the Affordable Care Act to provide grants to states to establish health insurance exchanges. Specifically, H.R. 1213 would repeal section 1311 of the health care reform law, which appropriates funds to the U.S. Department of Health and Human Services (HHS) to make grants to states for planning and establishing health exchanges. According to a newly-released analysis (pdf) of the bill by the Congressional Budget Office (CBO), repealing this funding provision would reduce the deficit by about $14 billion over the next decade, but it would also likely delay the establishment of the exchanges and subsequent participant enrollment. The CBO report explains:

Because of the reduced availability of funds to set up exchanges under H.R. 1213, states that establish exchanges without federal funding also may face greater challenges in becoming fully operational. We assume that such challenges for states and the federal government would temporarily limit the desirability of exchanges as an alternative to other sources of coverage, reduce the capacity of some exchanges to process enrollment and ultimately lower enrollment by an estimated 5 percent to 10 percent below the levels expected under current law between 2014 and 2016.

The report states that the anticipated reduction in enrollment would require an additional surcharge for participating health insurers in order to offset the loss of the grant funds. This surcharge would then likely result in a slight increase in premiums for the plans offered in the exchanges.

The CBO also predicts that if the bill is enacted, the number of people offered insurance through an employer will be expected to increase “in response to the reduced availability and desirability of exchanges.” The report estimates that “roughly half of the people who will not enroll in exchanges under H.R. 1213 will be covered by employer-sponsored insurance.”

The House also took up the controversial No Taxpayer Funding For Abortion Act (H.R. 3), approving it 251-175. Among other things, this bill would eliminate the tax credit for private funds used to pay for, or purchase insurance that covers, abortion, except under certain circumstances such as rape or incest. It would bar any federal tax credit for amounts paid for abortion or for health benefit plans that include coverage for abortion, and prohibit the inclusion of abortion as part of any health care service furnished in a health care facility “owned or operated” by the Federal government or by any Federal employee. The bill would also broadly protect any health care entity from government discrimination because the entity refuses to provide abortion-related services; create a new private right of action for enforcing this protection; and limit the Hyde Amendment protections – which preserve the right for “any” managed care provider to offer abortion coverage – to only those providers considered “non Federal.” According to a report (pdf) issued by the House Committee on the Judiciary, “it is not clear who might fall in or outside this category, and whether any insurer who participates in an exchange established under the Affordable Care Act might be considered a Federal provider for purposes of H.R. 3.”

With respect to the nondiscrimination protections, the report notes that over and above existing health service provider conscience protections, Section 311 of H.R. 3 would protect “anyone who faces even a threat of discrimination, regardless of whether actual discrimination ever occurs.” The report acknowledges the breadth and vagueness of this provision, noting, “Because section 311 does not define ‘discrimination,’ it is unclear what types of state actions might leave states at risk of a lawsuit and loss of Federal funding.”

On Wednesday, the House also approved by a 235-191 vote H.R. 1214, a bill that would repeal mandatory funding for school-based health center construction.

Although they have been passed by the House, these bills face tougher odds in the Senate, as well as a possible veto threat from the President if they gain Senate approval.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.