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Thursday, September 24, 2015

Upcoming Fiscal Fights in Congress: What They Mean for Health Care

Jane Sheehan

Senior Federal Relations Manager

The clock is ticking for Congress to tackle a series of upcoming financial hurdles, including balancing the federal budget and appropriating funding for fiscal year 2016. Congress must pass a spending deal by October 1 or the federal government will shut down. In the process, lawmakers may target the Affordable Care Act (ACA), Medicaid, and other vital health care programs that serve low-income Americans in an effort to cut spending. Some members of Congress have vowed to use the upcoming fiscal fight to advance partisan issues like defunding Planned Parenthood or repealing the ACA. 

Congressional standoff likely over federal funding, set to expire September 30

Congress must pass a spending deal by October 1. While Speaker of the House John Boehner’s resignation announcement puts the threat of a government shutdown on the back burner, the fight will likely be pushed to December 11, when the short-term funding runs out. While leaders in both the House of Representatives and the Senate have stated that they hope to avoid a government shutdown, signs are pointing to a tense standoff over federal funding for Planned Parenthood, especially in the House, where Republican leadership has struggled to control its base.  

It seems less likely that repealing the ACA (either partially or fully) will be part of any September fiscal year 2016 funding decision, but the issue will likely resurface later this year. For example, just last week (and despite new Census Bureau data that shows 8.8 million Americans gained access to health insurance in 2014), a conservative wing of the House released a proposal that eliminates funding to enforce the ACA, along with stripping funding for Planned Parenthood. 

As Congress debates which programs to cut, attacks on the ACA and Medicaid likely to continue

Sequestration: Additional threats to health care programs this fall could result from tough spending decisions lawmakers face as a result of “sequestration.” A law passed a few years ago, the Budget Control Act of 2011, requires Congress to cap domestic spending and implement arbitrary and harmful across-the-board cuts, known as sequestration. The law directs that, beginning in 2014, the sequestration cuts would come from lowering the caps, or limits on spending for domestic programs. 

While the president and Congress passed measures in 2013 that would provide sequestration relief, those measures will expire in 2016. Lawmakers must agree this fall on how to proceed in order to lower the deficit and alleviate future sequestration. 

Health care programs may be a target as lawmakers look for ways to lower the deficit through spending cuts. Replacing these caps will require Congress to find offsets elsewhere to avoid increasing the deficit. Since Republicans have long opposed tax increases, it is possible that they will propose cutting entitlement programs like Medicaid. 

Federal debt limit: On top of all these pressing decisions, Congress must raise the federal debt limit in mid-November or early December to increase the government’s borrowing authority and prevent a default on the national debt. 

For context, the last time the limit needed to be raised, in 2011, those negotiations resulted in the Budget Control Act and sequestration, so the stakes are high. It’s important to remember that any of the above fiscal fights could be riddled with controversial provisions, known as legislative riders, which have little to do with the overarching legislation and that attack important health programs, like the ACA and Medicaid.

Budget reconciliation: Some members of Congress are still eyeing budget reconciliation as a way to target provisions of the ACA they don’t like, such as the individual and employer mandates and the medical device tax, along with federal funding for Planned Parenthood. Though President Obama would veto a reconciliation bill that repeals important health care programs, getting such a bill to the President’s desk would represent an important milestone for ACA opponents. 

House bills would deny health coverage to low-income people who need it most

Meanwhile, the House Energy and Commerce Committee recently held a hearing to consider a bill that would change the way Medicaid counts lump-sum income. This bill purportedly goes after big lottery winners on Medicaid, who are few, but it would cause many low-income people to be denied health coverage. Despite the fact that Medicaid is a very efficient program with little fraud or waste, the Committee’s actions prove that some view it as an easy target for cuts. It’s possible that other changes to Medicaid, like the lump-sum bill, could come up again this fall as part of negotiations on the budget and federal spending.

Instead of passing bills and maintaining programs that responsibly fund our nation’s priorities and help low- and moderate-income families, some legislators are rallying behind proposals that threaten affordable, high-quality health coverage and care for vulnerable Americans. Although President Obama is sure to veto anything that repeals the ACA or harms Medicaid, time is running out to pass spending legislation, and we will be tracking these efforts closely this fall.