Sarah A. Lister
Specialist in Public Health and Epidemiology
Bernadette Fernandez
Specialist in Health Care Financing
Annie L. Mach
Analyst in Health Care Financing
In March 2010, the 111th Congress passed health reform legislation, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA; P.L. 111-152) and other laws. Among other provisions, ACA increases access to health insurance, expands private health insurance requirements regarding coverage and benefits, and requires the creation of health insurance exchanges to provide individuals and small employers with access to insurance.1 Many of ACA’s insurance market reforms are already in effect. Remaining reforms become effective on January 1, 2014. At that time, coverage will be available on a guaranteed issue basis, pre-existing condition exclusions will be prohibited,2 and states or the federal government will be required to establish exchanges (structured marketplaces for the sale and purchase of health insurance3).
In order to help individuals with pre-existing conditions obtain health insurance coverage until 2014, ACA established a temporary high-risk pool (HRP) program. Individuals who have been uninsured for at least six months, have been denied coverage because of a pre-existing condition, and are U.S. citizens (or legally residing in the United States) are eligible for coverage under the ACA HRP, known as the Pre-Existing Condition Insurance Plan (PCIP). States may run their own programs or have the Department of Health and Human Services (HHS) do so. ACA provided a $5 billion appropriation to pay claims and administrative costs in excess of premiums. Although national enrollment in PCIP has been lower than expected, costs per participant have exceeded initial estimates. In February 2013, the Centers for Medicare & Medicaid Services (CMS) advised PCIP contractors to suspend program enrollment, in order that CMS would have the funds needed to cover the costs of those already enrolled through the program’s end on January 1, 2014.4
ACA also authorizes a number of public health activities aimed, for example, at preventing common chronic diseases such as heart disease and cancer; addressing racial, ethnic, and gender disparities in health; expanding the numbers of primary care providers; and other purposes.5 In addition, ACA appropriates billions of dollars to support new or existing grant programs and other activities, such as PCIP.6 ACA also established the Prevention and Public Health Fund (PPHF) and provided it with a permanent annual appropriation. PPHF funds are to be transferred by the HHS Secretary “for prevention, wellness, and public health activities.... ”7 The PPHF receives an appropriation of $1 billion per fiscal year from FY2013 through FY2017, after which annual appropriations increase incrementally, becoming $2 billion per fiscal year for FY2022 and thereafter. PPHF amounts for FY2013 through FY2021 are subject to sequestration under the Budget Control Act (BCA, P.L. 112-25).8
On April 17, 2013, the House Committee on Energy and Commerce reported H.R. 1549, the Helping Sick Americans Now Act. H.R. 1549 would (1) replenish the PCIP account with more than $3 billion transferred from the PPHF, (2) re-open PCIP enrollment, and (3) eliminate the PCIP eligibility requirement of a six-month uninsured period. As discussed in this report, the bill’s proposed PPHF transfer appears sufficient to sustain PCIP through its sunset date. However, the loss of PPHF funds for several fiscal years could likely reduce total spending in a number of HHS accounts, particularly at the Centers for Disease Control and Prevention (CDC), to, or below, pre-ACA program levels. (See the later section of this report, “Annual Appropriations”.)
This report describes provisions in H.R. 1549, and provides overviews of PCIP and the PPHF. Appendix A presents current law (ACA as amended) authorizing and appropriating PCIP Appendix B presents current law (ACA as amended) authorizing and appropriating the PPHF.
Date of Report: April 25, 2013
Number of Pages: 14
Order Number: R43046
Price: $29.95
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