ObamaCare Funding Set To Plunge In '15

Investor's Business Daily

Fasten your seat belts. Turbulence lies ahead for ObamaCare as funding streams for three programs are set to nose-dive.

Millions of children could lose coverage, and millions more insured via Medicaid or ObamaCare plans could have an even tougher time finding a doctor.

These funding cliffs weren't driven by policy but by politics: Provide short-term funding to get ObamaCare off the ground, then cut it off — at least on paper — to make the budget forecasts look better over 10 years.

Now, with the money set to dry up next year, a push has begun to save funding for all three programs at an annual cost approaching $13 billion.

The first bumps could be felt at the start of 2015, when the Affordable Care Act's boost in funding for Medicaid primary care doctors is set to expire.

The law temporarily provided funds to lift Medicaid's reimbursement rates, putting them on par with Medicare's for 2013 and 2014 at a cost of $11 billion.

With physician access already a worry before the Medicaid expansion, the boost in doctors' pay was meant to open doors for millions of new beneficiaries.

Medicaid's Funding CliffThe prospect that Medicaid reimbursements will revert to about two-thirds of Medicare's rate raises concerns again as to what kind of access poor and near-poor patients will receive.

The White House has proposed spending an extra $5.4 billion in calendar-year 2015 to extend higher Medicaid reimbursements for primary-care doctors and broaden eligibility to include physician assistants and nurse practitioners.

Yet the chances that Republicans will agree to allocate more funds to ObamaCare look dim.

Congress has stepped up to prevent a similar plunge in Medicare reimbursements, avoiding the ire of politically powerful seniors as well as doctors. But it's unclear whether Medicaid rates will enjoy the same protection. Beyond the challenge of finding offsetting cuts (or extra revenue), the GOP would have to forfeit leverage to demand more far-reaching changes to a law that its members oppose.

Access problems could intensify in September 2015. ObamaCare provided $11 billion over five years to boost the capacity of community health centers, a key source of care in low-income, medically underserved areas. Most of the money goes to clinics where reimbursements and co-pays often don't cover the cost of care.

"The 2015 funding cliff would leave health centers unable to sustain current caseloads, sharply damaging primary-care access for the insured and uninsured alike and potentially leading to more costly increases in specialty, emergency and inpatient care," warned researchers at George Washington University's Milken Institute School of Public Health.

The nation's 9,000 community health sites will treat an estimated 25.6 million patients this year, but that number could drop as much as 6.7 million by 2020 without new resources, they warn.

The CHIP Family GlitchA third upcoming cliff would see funding for the Children's Health Insurance Program, or CHIP, sink from $12.5 billion in fiscal 2015 to $9.1 billion the next year and $5.7 billion thereafter.

As the Kaiser Family Foundation explained, the bulk of CHIP financing was set to expire after 2015 "to reduce costs for the ACA (Affordable Care Act) in the CBO score" of the law.

The thinking back in 2009 may have been that children in families earning too much for Medicaid could go from CHIP into subsidized coverage via the ObamaCare exchanges. But an IRS regulation could put affordable coverage out of reach for 1.9 million children covered under CHIP, the Government Accountability Office (GAO) has estimated.

Those children are in families where one modest-earning parent is offered employer coverage deemed affordable under the law, meaning it costs no more than 9.5% of adjusted income.

Individuals with an offer of affordable coverage are denied access to exchange subsidies. The problem — known as the "family glitch" — is that while individual coverage may meet affordability requirements, covering the kids and a spouse may be unaffordable. Yet families in this situation would be denied tax credits to buy ObamaCare coverage. Many could wind up uninsured.

In June, the Medicaid and CHIP Payment and Access Commission, whose members are appointed by the GAO head, proposed a two-year CHIP extension costing up to $5 billion a year. It would avoid an immediate loss of coverage and provide more time to assess the impact of transitioning children into less-robust exchange coverage.

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