Oct. 17—Congress voted Wednesday evening to reopen the partially closed federal government and undertake new debt reduction talks.

The deal to end the 16-day government shutdown included a provision reinforcing the Affordable Care Act’s (ACA’s) requirement for income verification of enrollees in subsidized coverage through the law’s new government insurance marketplaces. The shutdown occurred when government funding discussions deadlocked over Republican efforts to block implementation of the ACA. 

The measure funds federal government operations through Jan. 15 and lifts its $16.7 trillion borrowing limit, which was set to expire this week, through Feb. 7. The funding levels remain within the cuts included by the earlier sequester law, including a 2 percent cut to Medicare providers and insurers.

A bicameral conference committee also was established in the deal to negotiate debt reduction reforms by Dec. 13.

“It is my hope that a common, topline discretionary number for fiscal year 2014 will be established that will allow Congress to enact full-year appropriations bills and avoid shutdowns like this in the future,” Rep. Hal Rogers (R-Ky.), chairman of the House Appropriations Committee, said in a release. “And it is also my hope that Congress can address head-on the problem of unsustainable growth in our mandatory and entitlement programs, and work to reform our overly complicated, growth-stifling tax code.”

Analyzing the Deal

The required debt-reduction negotiations are likely to focus on major spending programs, such as Medicare, and may limit the likelihood a repeal of the sustainable growth rate (SGR) formula, said Chad Mulvany, director of healthcare finance policy, strategy, and development for HFMA. 

“They'll have enough on their plate to complicate finding an additional $175 billion in pay-fors,” Mulvany said about the estimated cost of eliminating SGR and its required cuts in physician payments.

The deal dropped several ACA changes that were discussed during intense negotiations, including proposals to repeal or delay of the law's medical device tax, a yearlong postponement of the individual mandate, and deletion of a $63 reinsurance tax that was sought by unions.

The only ACA-related provision required U.S. Health and Human Services Secretary Kathleen Sebelius to ensure the marketplaces, or exchanges, verify that people applying for subsidies to lower the cost of premiums and out-of-pocket costs for plans sold through the marketplaces. Republicans described the provision as a response to a recent federal regulation that allowed state-run exchanges to not confirm incomes before offering the subsidies.

Also required is a report to Congress by Jan. 1, 2014, detailing the eligibility determination procedures and a July 1 HHS Office of Inspector General report on their effectiveness.

Publication Date: Thursday, October 17, 2013