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Thursday, May 19, 2011

Appropriations and Fund Transfers in the Patient Protection and Affordable Care Act (PPACA)

C. Stephen Redhead
Specialist in Health Policy

Among its many provisions, the Patient Protection and Affordable Care Act (PPACA, as amended) restructures the private health insurance market, sets minimum standards for health coverage, creates a mandate for most U.S. residents to obtain health insurance, and provides for the establishment by 2014 of insurance exchanges through which certain individuals and families will be able to receive federal subsidies to reduce the cost of purchasing that coverage. PPACA also expands eligibility for Medicaid; amends the Medicare program in ways that are intended to reduce the growth in Medicare spending that had been projected under preexisting law; imposes an excise tax on insurance plans found to have high premiums; and makes other changes to the tax code, Medicare, Medicaid, and many other federal programs.

PPACA includes numerous appropriations that provide billions of dollars to support new or existing grant programs and other activities. Several other provisions require the Secretary of Health and Human Services (HHS) to transfer amounts from the Medicare Part A and Part B trust funds for specified purposes. This report summarizes all those mandatory spending provisions. They include funding for a temporary insurance program for individuals who have been uninsured for several months and have a preexisting condition, as well as funding for states to plan and establish exchanges. PPACA also provides funding for various Medicare and Medicaid demonstration programs, for the creation of a Center for Medicare and Medicaid Innovation to test and implement innovative payment and service delivery models, and for an independent board to provide Congress with proposals for reducing Medicare cost growth and improving quality of care for Medicare beneficiaries.

In addition, PPACA appropriates funding for health workforce and maternal and child health programs, and establishes three multi-billion dollar funds. The first fund will provide a total of $11 billion over five years in supplementary funding for community health centers and the National Health Service Corps. (A separate appropriation provides $1.5 billion for health center construction and renovation.) The second fund will support comparative effectiveness research through FY2019 with a mixture of appropriations and fund transfers. The third fund, which is funded in perpetuity, is to support prevention, wellness, and other public health-related programs and activities authorized under the Public Health Service Act (PHSA).

Lawmakers opposed to PPACA have introduced numerous bills in the 112
th Congress, several of which have seen legislative action. They includes measures to (1) repeal PPACA and replace it with new law; (2) repeal or amend specific PPACA provisions; (3) eliminate certain mandatory appropriations and rescind all unobligated funds; and (4) block funding to implement PPACA.

This report will be updated to reflect recent PPACA funding announcements and legislative activity. In addition to the mandatory appropriations discussed herein, PPACA authorizes new funding for numerous existing discretionary grant and other programs and activities, primarily ones authorized under the PHSA. The law also creates a number of new discretionary grant programs and activities and provides for each an authorization of appropriations. Funding for all of these discretionary programs and activities is subject to action by congressional appropriators. A companion product, CRS Report R41390, Discretionary Funding in the Patient Protection and Affordable Care Act (PPACA), coordinated by C. Stephen Redhead, summarizes all the provisions in PPACA for which appropriations are authorized.

Date of Report: May 12, 2011
Number of Pages: 27
Order Number: R41301
Price: $29.95

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