CRS Updates Report on Efforts to Block ACA Via Appropriations

Congress remains deeply divided over implementation of the Patient Protection and Affordable Care Act (ACA), the health reform law enacted in March 2010. Since the ACA's enactment, lawmakers opposed to specific provisions in the ACA or the entire law have repeatedly debated its implementation and considered bills to repeal, defund, delay, or otherwise amend the law.

In addition to considering ACA repeal or amendment in authorizing legislation, some lawmakers have used the annual appropriations process in an effort to eliminate funding for the ACA's implementation and address other aspects of the law. ACA-related provisions have been included in enacted appropriations acts each year since the ACA became law. In October 2013, disagreement between the Republican-led House and Democratic-controlled Senate over the inclusion of ACA language in a temporary spending bill for the new fiscal year (i.e., FY2014) resulted in a partial shutdown of government operations that lasted 16 days.

The House Appropriations Committee has added numerous ACA-related provisions to annual appropriations acts since the Republicans regained control of the House in 2011. Most of these provisions were included in the Departments of Labor, Health and Human Services, Education, and Related Agencies ("Labor-HHS-ED") Appropriations Act, which funds the Centers for Medicare & Medicaid Services (CMS). A few were incorporated in the Financial Services and General Government ("Financial Services") Appropriations Act, which funds the Internal Revenue Service (IRS). By comparison, the Labor-HHS-ED and Financial Services appropriations bills drafted by the Senate Appropriations Committee were largely free of any ACA-related provisions while the committee remained under Democratic control through 2014.

Congressional appropriators have used a number of legislative options available to them through the appropriations process in an effort to defund, delay, or otherwise address implementation of the ACA. First, they have denied CMS and the IRS any new funding to cover the administrative costs of ACA implementation. Second, House appropriators repeatedly have added limitations (often referred to as riders) to the Labor-HHS-ED and Financial Services appropriations bills to prohibit CMS and the IRS from using discretionary funds provided in the bills for ACA implementation activities. To date, the ACA limitation provisions added by House appropriators have been removed during negotiations with the Senate. None of them have been included in any of the enacted appropriations acts.

Third, House appropriators have incorporated ACA-related legislative language in the Labor-HHS-ED appropriations bills. For example, appropriators have included language to rescind (i.e., cancel) certain mandatory funding provided by the ACA.

Finally, congressional appropriators have added to recent Labor-HHS-ED appropriations acts several reporting and other administrative requirements regarding implementation of the ACA. These include instructing the HHS Secretary to establish a website with information on the allocation of funding from the Prevention and Public Health Fund and to provide an accounting of administrative spending on ACA implementation.

                               Contents

Congress remains deeply divided over implementation of the Patient Protection and Affordable Care Act (ACA), the health reform law enacted in March 2010.¹ Since the ACA's enactment, lawmakers opposed to specific provisions in the ACA or the entire law have repeatedly debated its implementation and considered bills to repeal, defund, delay, or otherwise amend the law.

To date, most of this legislative activity has taken place in the House, which reverted to Republican control in 2011. Over the past four years, the Republican-led House has passed numerous ACA-related bills, including legislation that would repeal the entire law. There has been far less debate in the Senate, which remained under Democratic control through 2014. Most of the ACA legislation that passed the House during this period was not considered in the Senate. However, a few bills to amend specific elements of the ACA that attracted sufficiently broad and bipartisan support were approved by both the House and the Senate and signed into law. Now that Republicans control both chambers of Congress, opponents of the ACA see new opportunities to pass and send to the President legislation that would change the law.

In addition to considering ACA repeal or amendment in authorizing legislation, some lawmakers have used the annual appropriations process in an effort to eliminate funding for the ACA's implementation and address other concerns they have with the law. ACA-related provisions have been included in enacted appropriations acts each year since the ACA became law. In October 2013, disagreement between the House and Senate over the inclusion of ACA language in a temporary spending bill for the new fiscal year (i.e., FY2014) resulted in a partial shutdown of government operations that lasted 16 days.

This report summarizes the ACA-related language added to annual appropriations legislation by congressional appropriators since the ACA was signed into law. The information is presented in Table 1. While a detailed examination of the ACA itself is beyond the scope of this report, a brief overview of the ACA's core provisions and its impact on federal spending is provided as context for the material in the table.² This report will be updated to reflect key developments in the annual appropriations process.

A companion report, CRS Report R43289, Legislative Actions to Repeal, Defund, or Delay the Affordable Care Act, summarizes the authorizing legislation to amend the ACA that has been enacted since 2010. It also reviews all the ACA legislation taken up and passed by the House during this period.

A Brief Overview of the ACA

The ACA made significant changes to the way U.S. health care is financed, organized, and delivered. Its primary goal is to increase access to affordable health care for the medically uninsured and underinsured. To that end, the law included a complex set of interconnected provisions that address the private health insurance market.

First, the ACA requires health insurers to comply with a set of federal standards ("market reforms") to ensure that individuals may purchase, keep, and renew coverage that provides a minimum level of benefits and consumer protections, with some limits on costs. Second, the law establishes competitive private health insurance exchanges (also known as marketplaces) through which individuals and small employers are able to compare and enroll in qualified health plans.

Exchanges operate in every state and the District of Columbia. They are administered by states or by the federal government, or through a partnership between the state and federal governments. Qualified individuals who enroll in exchange plans may receive financial assistance if they meet income and certain other requirements. Refundable tax credits are available to individuals and families with incomes between 100% and 400% of the federal poverty level (FPL) to help pay the insurance premium. The premium tax credits are available upon enrollment so that eligible individuals and families can choose to receive the subsidy immediately rather than wait until they file taxes the following year. In addition, certain individuals and families receiving the tax credit may be eligible for cost-sharing subsidies to reduce their out-of-pocket costs (e.g., deductibles, copays) when receiving health services. Small employers with fewer than 25 full-time equivalent employees (FTEs) may also use the exchanges to purchase insurance coverage for their employees and may qualify for a tax credit to help cover the cost of providing that coverage.

In June 2015, the U.S. Supreme Court in King v. Burwell ruled that the premium tax credits are available to all qualified individuals who enroll in exchange plans and meet the necessary income and other requirements, regardless of whether the exchange is administered by the state or the federal government.³

Third, the ACA's "individual mandate" requires most U.S. citizens and legal residents to obtain coverage. Those who remain uninsured may have to pay a penalty unless they qualify for an exemption. The individual mandate is intended to encourage healthy individuals to participate in the insurance market and not wait until they get sick to buy coverage. Finally, the law requires larger employers with 50 or more FTEs to offer health coverage that meets affordability and adequacy standards for their full-time employees and those workers' dependents. Employers who do not comply with these requirements may be subject to a tax if one or more of their employees purchase coverage through an exchange and receive a subsidy. The purpose of the ACA's employer requirements is to encourage larger firms to maintain affordable and adequate coverage for their employees.

The ACA coupled its private insurance provisions with the requirement that states expand their Medicaid programs to cover all nonelderly individuals with incomes up to 138% FPL. Those with higher incomes, up to 400% FPL, may be eligible to get subsidized coverage through an exchange. In June 2012, the U.S. Supreme Court in NFIB v. Sebelius found the Medicaid expansion to be unconstitutionally coercive and prohibited the federal government from enforcing it.⁴ The Court's decision made Medicaid expansion optional for states.

In addition to expanding access to insurance coverage, the ACA contains hundreds of other provisions that address health care access, costs, and quality. They include new programs to test alternative ways of delivering and paying for health care. The law also includes new taxes and fees as well as adjustments to Medicare payments to hospitals and other health care providers. These provisions are designed to offset the federal spending on exchange subsidies and Medicaid expansion.

ACA's Impact on Federal Spending

Implementation of the ACA is affecting both mandatory and discretionary spending. Mandatory spending -- also referred to as direct spending -- is controlled through authorizing laws.⁵ It includes spending on entitlement programs such as Medicare and Social Security. Authorizing laws may provide permanent or temporary appropriations or other forms of budget authority for such spending. When the authorizing law contains no appropriations, mandatory programs may be funded through the annual appropriations process. This is sometimes referred to as "appropriated mandatory" or "appropriated entitlement" spending.⁶Discretionary spending is both controlled and funded through the annual appropriations process. It typically covers the routine costs of running federal agencies and offices, including wages and salaries.⁷

Federal spending on ACA implementation can be grouped into three categories: (1) mandatory spending on expanding insurance coverage, (2) mandatory spending on other programs, and (3) discretionary spending. Each of these categories is briefly discussed below.

Mandatory Spending on Expanding Insurance Coverage

This category accounts for most of the federal spending under the ACA. It includes the exchange subsidies (i.e., premium tax credits and cost-sharing subsidies), the federal government's share of the costs of Medicaid expansion, and tax credits for small employers. The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) projected that this and other ACA mandatory spending (discussed in the second category, below) would be more than offset by (1) revenues from the ACA's new taxes and fees, and (2) savings from the law's adjustments to Medicare provider payments that are projected to slow the rate of growth of Medicare spending.⁸

Mandatory Spending on Other Programs

The ACA authorized new Medicare and Medicaid spending. For example, it phased out the Medicare prescription drug benefit "donut hole" through a combination of subsidies and manufacturer discounts, and it increased Medicare payments for primary care services and medical education. The ACA also included numerous appropriations that are providing billions of dollars of mandatory funding to support grant programs and other activities authorized by the law.⁹ For example, the law funded temporary insurance programs for targeted groups prior to the exchanges becoming operational, and it provided funding for grants to states to plan and establish health insurance exchanges. The ACA included a permanent appropriation, available for 10-year periods, for the Center for Medicare & Medicaid Innovation (CMMI), within the Centers for Medicare & Medicaid Services (CMS), to test and implement innovative health care payment and service delivery models.

In addition, the ACA created four special funds and appropriated amounts to each one. First, the Community Health Center Fund (CHCF) has provided almost $11 billion over five years (FY2011-FY2015) for the federal health centers program and the National Health Service Corps.¹⁰ Second, the Patient-Centered Outcomes Research Trust Fund (PCORTF) is supporting patient-centered comparative clinical effectiveness research through FY2019 with a mix of appropriations, fees on health plans, and transfers from the Medicare trust funds. Third, the Prevention and Public Health Fund (PPHF), for which the ACA provided a permanent annual appropriation, is supporting prevention, wellness, and other public health-related programs and activities. Finally, the Health Insurance Reform Implementation Fund (HIRIF), for which the ACA appropriated $1 billion, helped pay for the initial administrative costs of implementing the law.

Discretionary Spending

The ACA is affecting discretionary spending in two ways. First, the law created numerous new discretionary grant programs and provided each of them with an authorization of appropriations. To date, however, few of these programs have received discretionary funding through annual appropriations acts, though several of them have been supported with mandatory funds from the PPHF.¹¹ Second, the two agencies primarily responsible for implementing the ACA's provisions to expand insurance coverage -- CMS's Center for Consumer Information and Insurance Oversight (CCIIO) and the Internal Revenue Service (IRS) -- are incurring significant costs in connection with administering and enforcing the law. Both agencies requested increases in funding in each of their past four budget submissions (i.e., FY2013-FY2016) to help pay for ACA implementation. But congressional appropriators have not provided either agency with any additional discretionary funds. CMS instead has relied on funding from other sources to support the federal health insurance exchange (Healthcare.gov) and other ACA implementation activities. Those sources include discretionary fund transfers from other accounts, amounts from the Nonrecurring Expenses Fund (NEF),¹² ACA mandatory funds (i.e., HIRIF, PPHF), and, more recently, user fees assessed on health insurers that participate in the federal exchange.¹³

ACA Provisions in Enacted Appropriations Acts

The House Appropriations Committee has added numerous ACA-related provisions to annual appropriations acts since the Republicans regained control of the House in 2011. Most of these provisions were included in the Departments of Labor, Health and Human Services, Education, and Related Agencies ("Labor-HHS-ED") Appropriations Act, which funds CMS. A few were incorporated in the Financial Services and General Government ("Financial Services") Appropriations Act, which funds the IRS. By comparison, the Labor-HHS-ED and Financial Services appropriations bills drafted by the Senate Appropriations Committee, which was under Democratic control over the past four years, were largely free of any ACA-related provisions with one key exception. Each year, the Senate Labor-HHS-ED appropriations bill included instructions on the allocation of PPHF funding.

Congressional appropriators have used a number of legislative options available to them through the appropriations process in an effort to defund, delay, or otherwise address implementation of the ACA. First, they have denied CMS and the IRS any new funding to cover the administrative costs of ACA implementation. CMS requested substantial increases in funding for its Program Management account in the FY2013, FY2014, and FY2015 budgets. These new funds were to help support operation of the federally facilitated exchanges and other ACA-related activities. Congress, however, did not provide any additional discretionary funds for CMS in the enacted Labor-HHS-ED appropriations acts for FY2013-FY2015. Similarly, the IRS requested additional discretionary funds for each of those three years to support administration and enforcement of the ACA's tax provisions, including the premium tax credits and the individual mandate penalties. Again, congressional appropriators did not give the IRS the extra funds it requested.¹⁴ Both agencies have asked for additional ACA funding in the FY2016 budget.

Second, House appropriators repeatedly have added limitations (often referred to as riders) to the Labor-HHS-ED and Financial Services appropriations bills. Limitation provisions within appropriations measures are provisions that restrict the use of funds provided by the bill. They do this either by capping the amount of funding that may be used for a particular purpose or by prohibiting the use of any funds for a specific purpose. For example, House appropriators on multiple occasions added language prohibiting an agency from using any of the funds in its appropriations bill for ACA implementation activities. Limitation provisions also may be used to restrict the availability of funds for transfer.¹⁵ During the FY2011-FY2015 appropriations cycles the ACA limitation provisions added by House appropriators were removed during negotiations with the Senate. None of the provisions were incorporated into the final appropriations legislation agreed to by both chambers and signed into law.

Third, House appropriators have incorporated ACA-related legislative language in the Labor-HHS-ED appropriations bills. Unlike limitations, legislative provisions have the effect of making new law or changing existing law.¹⁶ As an example, appropriators included language to rescind (i.e., cancel) certain mandatory funding provided by the ACA. House rules prohibit legislative provisions in appropriations acts, while the rules of the Senate allow exceptions under some circumstances. However, special rules in the House (approved by the Rules Committee) and unanimous consent agreements in the Senate can be used to set aside each chamber's rules, including those that relate to legislating in appropriations measures.

Finally, congressional appropriators have added to recent Labor-HHS-ED appropriations acts several reporting and other administrative requirements regarding implementation of the ACA. These include instructing the HHS Secretary to establish a website with information on the allocation of PPHF funds and to provide an accounting of administrative spending on ACA implementation.

Table 1 summarizes the ACA-related legislative and other provisions that were incorporated in the enacted Labor-HHS-ED and Financial Services appropriations acts for each of FY2011-FY2015. For each fiscal year, the table also provides a brief overview of any legislative action taken by the House and Senate Appropriations Committees on their respective versions of the two appropriations bills prior to the two chambers reaching agreement on the final version of the legislation. This discussion lists all the ACA language added to the bills by the committees. As already noted, none of the ACA limitations added by the House appropriators were included in the enacted Labor-HHS-ED and Financial Services appropriations acts.

Government Shutdown

Disagreement between the Republican-controlled House and the Democrat-led Senate on whether to include ACA provisions in the FY2014 continuing resolution (CR) shut down programs and activities across the federal government in October 2013.

Congress took up consideration of the FY2014 CR to ensure continued funding for the government at the start of the new fiscal year (i.e., October 1) after lawmakers failed to complete legislative action on any of the FY2014 annual appropriations acts. The House tried three times to attach provisions to the CR to defund or delay ACA implementation. Each time the Senate rejected the House language. With no agreement in place at the start of FY2014, the resulting lapse in discretionary funding led to a partial shutdown of government operations.

Lawmakers finally reached agreement on legislative language on October 16, and the President signed the Continuing Appropriations Act, 2014, the following day to reopen the government.¹⁷ The measure funded the federal government through January 15, 2014, and did not include any provisions to defund or delay ACA implementation. Instead, it required the HHS Secretary to certify to Congress that the ACA health insurance exchanges were verifying the eligibility of individuals applying for subsidies to help cover the cost of purchasing insurance coverage. In January 2014, Congress completed action on the FY2014 appropriations process by approving the Consolidated Appropriations Act, 2014, which included all 12 annual appropriations acts for FY2014.¹⁸

ACA Provisions in FY2016 Appropriations Legislation

With Republicans in control of both chambers in the 114^th Congress, House and Senate appropriators may find it easier to coordinate their efforts to include ACA-related provisions in appropriations bills. Both the House and Senate Appropriations Committees have reported their respective FY2016 Labor-HHS-ED appropriations acts, and the two measures include multiple ACA limitations, legislative provisions, and reporting requirements. The bills incorporate most of the ACA language that was in the enacted FY2015 Labor-HHS-ED appropriations act. They also include other ACA funding rescissions, as well as limitation provisions that would prohibit using any of the funds appropriated by the bills for ACA implementation.

The limitation provisions would prohibit HHS (and the Labor Department) from using any discretionary funding to enforce the ACA's market reforms, operate the federal exchange, or administer other ACA programs. The provisions also would ban the use of other funding made available by the appropriations act to implement the ACA. For example, CMS would be prohibited from funding the Medicaid expansion. In addition, the House bill would prohibit CMS from collecting user fees from health insurers to help cover the costs of operating the federal exchange, and it would rescind $6.8 billion of the ACA's $10 billion appropriation for CMMI for the period FY2011-FY2019.

ACA opponents face challenges in getting these provisions enacted into law. Senate Republicans may need to persuade a handful of Democrats to join them to get to the 60 votes needed to debate and pass appropriations bills if the Democrats decide to filibuster the legislation. Moreover, an appropriations bill that contains limitations or other language intended to defund or otherwise impede ACA implementation is likely to be vetoed by the President. In that case, each chamber would require a two-thirds vote to override the veto.

Another option for ACA opponents would be to use the threat of a government shutdown at the beginning of the new fiscal year as leverage to try and get ACA limitations and other legislative provisions included in appropriations measures.

Table 1 summarizes the legislative action taken to date by House and Senate appropriators on the FY2016 Labor-HHS-ED and Financial Services appropriations bills and lists all the ACA language added to the bills. Congress did not complete its work on any of the FY2016 appropriations acts prior to the start of the fiscal year on October 1, 2015. On September 30, the President signed the Continuing Appropriations Act, 2016 (P.L. 114-53), which provides continuing appropriations through December 11, 2015.

     Table 1. ACA-Related Provisions in Appropriations Acts, FY2011-FY2016

² Numerous CRS products that provide more in-depth information on the many new programs and activities authorized and funded by the ACA are available at http://www.crs.gov/pages/subissue.aspx?cliid=3746&parentid=13&preview=False.

³King v. Burwell, No. 14-114 slip op. (June 25, 2015), http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf.

⁴NFIB v. Sebelius, No. 11-393, slip op. (June 28, 2012), http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf. For more information, see CRS Report R42367, Medicaid and Federal Grant Conditions After NFIB v. Sebelius: Constitutional Issues and Analysis, by Kenneth R. Thomas.

⁵ Authorizing legislation generally refers to substantive legislation, reported by a committee (or committees) of jurisdiction other than the House or Senate Appropriations Committees, that establishes or continues the operation of a federal program or agency either indefinitely or for a specific period.

⁶ For further information on direct spending, see CRS Report RS20129, Entitlements and Appropriated Entitlements in the Federal Budget Process, by Bill Heniff Jr.

⁷ For further information on discretionary spending, see CRS Report R42388, The Congressional Appropriations Process: An Introduction, by Jessica Tollestrup.

⁸ U.S. Congressional Budget Office, letter to the Honorable Nancy Pelosi, Speaker, U.S. House of Representatives, providing an estimate of the direct spending and revenue effects of ACA, as amended by HCERA (March 20, 2010), http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/113xx/doc11379/amendreconprop.pdf.

⁹ For a summary of all the ACA's mandatory appropriations, and the status of obligation of those funds, see CRS Report R41301, Appropriations and Fund Transfers in the Affordable Care Act (ACA), by C. Stephen Redhead.

¹⁰ The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA; P.L. 114-10, 129 Stat. 87) extended CHCF funding for the health centers program and the NHSC for two years by appropriating a total of $3.910 billion to the fund for each of FY2016 and FY2017. Of that amount, $3.6 billion is for the health centers program and the remaining $310 million is for the NHSC.

¹¹ The ACA also reauthorized funding for many existing discretionary grant programs authorized under the Public Health Service Act; notably, the federal health workforce programs administered by the Health Resources and Services Administration (HRSA). The authorizations of appropriations for many of these programs expired prior to the ACA's enactment, though most of them were still receiving annual appropriations. The ACA also permanently reauthorized appropriations for the federal health centers program and for programs and services provided by the Indian Health Service (IHS). Congressional appropriators generally have continued to provide discretionary funding for these long-standing programs, though typically at funding levels below the amounts authorized by the ACA. For more details on all the authorizations (and reauthorizations) of discretionary funding in ACA, including the FY2011-FY2015 funding levels for programs that received an appropriation, see CRS Report R41390, Discretionary Spending Under the Affordable Care Act (ACA), coordinated by C. Stephen Redhead.

¹² The Nonrecurring Expenses Fund is an account within the Department of the Treasury. The HHS Secretary is authorized to transfer to the NEF unobligated balances of expired discretionary funds. NEF funds are available until expended for use by the HHS Secretary for capital acquisitions including facility and information technology infrastructure.

¹³ CMS has transferred more than half of the HIRIF funds to the IRS.

¹⁴ For more discussion on the budget requests for, and sources of, funding to cover the administrative costs of implementing the ACA, see CRS Report R41390, Discretionary Spending Under the Affordable Care Act (ACA), coordinated by C. Stephen Redhead.

¹⁵ For more discussion and analysis of limitation provisions, including the relevant House and Senate rules and the procedural issues that arise during floor consideration of general appropriations measures that include such provisions, see CRS Report R41634, Limitations in Appropriations Measures: An Overview of Procedural Issues, by Jessica Tollestrup.

¹⁶ CRS Report R41634, Limitations in Appropriations Measures: An Overview of Procedural Issues (see footnote 2) discusses the differences between limitations and legislative provisions in appropriations measures, and how to distinguish between the two.

¹⁷ P.L. 113-46, 127 Stat. 558. For more analysis of the various legal and procedural considerations arising from the use of the appropriations process to delay or defund the ACA, see CRS Report R43246, Affordable Care Act (ACA) and the Appropriations Process: FAQs Regarding Potential Legislative Changes and Effects of a Government Shutdown, coordinated by C. Stephen Redhead.

¹⁸ P.L. 113-76, 128 Stat. 5.