PPACA and the Continuing Resolution

The continuing resolution that needs to be passed sometime soon to keep the government open will deal with PPACA.  There are currently two big things not included in the resolution.  One may prompt a veto threat (I assess that at 10% probability) and the other has been baked into the cake for over a year now.

The big new thing that is not in the continuing resolution at this time is an appropriation to fund the risk corridors.  The Hill explains:

The language, buried deep in the 1,603-page bill, is a victory for conservative opponents of the healthcare law. It would prevent new government funds from flowing to ObamaCare’s so-called risk corridors, a three-year program established to subsidize insurer losses in order to keep premiums stable.

A commonly used tool in public policy, risk corridors have become a political football since Sen. Marco Rubio (R-Fla.) highlighted the ObamaCare provision as a “bailout” in November of last year. Since then, activists with Heritage Action and other groups have repeatedly sought to kill the payments in major fiscal negotiations.

The “cromnibus” spending bill would allow the government to continue collecting payments from insurers that post better-than-expected results under ObamaCare and passing them to companies that do worse. But it would not permit the Centers for Medicare and Medicaid Services to make additional funds available for insurers that are struggling.

Risk corridors are used to create incentives for insurers to participate in fuzzily defined markets.  Insurers that price in a way that attracts only healthy populations send money to insurers who have to cover the sicker parts of the population.  Medicare Part D has permanant two-way risk corridors.  PPACA had temporary three year risk corridors authorized but the money was not appropriated to pay for them past the FY2014.  The Congressional Research Service issued an opinion that the PPACA language  was too fuzzy and did not explicitly appropriate  money to go back out.

What are the work-arounds?

Nicholas Bagley at the Incidental Economist has made an argument in the past that the Department of Health and Human Services has a work-around to a non-appropriation language and that would be to argue that a revolving fund had been authorized.

 the administration will read the ACA to establish a “revolving fund” for the risk corridor program. As explained in the “Red Book”— GAO’s bible of appropriations law—an agency that gets money from an outside source normally has to deposit that money in the federal treasury. Nothing comes out of the treasury without an appropriations statute. An agency with a revolving fund, however, can deposit receipts into the fund and then draw on those receipts as necessary to carry out the fund’s purposes….

The reason, oddly enough, involves Medicare Part D. In the ACA, Congress didn’t specify how the risk corridor program should be administered. It did say, however, that the program “shall be based on” the risk corridor program established under Part D. And guess what? Part D’s risk corridor program operates through a revolving fund called the “Medicare Prescription Drug Account.”

If the Part D program works through a revolving fund, a risk corridor program “based on” the Part D program should arguably work through the same kind of fund. That’s especially so given §1342’s subsequent references to “payments in” and “payments out.” In and out of … what?

If I was a political appointee, I would not be advancing this argument until after King is decided as I would not want to piss off Chief Justice Roberts.  But I would keep this in my back-pocket as an option.

The other choice is to accept this.  Risk corridor payments for 2014 will be paid out.  2014 was always going to be the fuzziest year on risk pool definition as no one had a clue who would sign up, when they would sign up and what they would need.  2015 is far clearer, and 2016 should see almost normal operations.  The removal of the risk corridor provision for 2015 and 2016 will see a couple of insurers who probably would have left by 2017 leave a year early but this is not a fatal blow.  It is a shiny object for the Tea Baggers Two Minute hate.

The other provision that was not extended was the enhanced payments for primary care physicians who served Medicaid patients.  The original law bumped up primary care provider pay for certain primary care codes from Medicaid rates to Medicare rates.  The feds would pick up the entire tab plus administrative costs and use the states as pass through entities.  This pay bump was for just two calendar years, 2013 and 2014.  The pay bump expires on December 31, 2014 and then rates will drop in most states by 30% to 50%.  Some states (6 I think) are continuing the bump with state funds, and several more states already had high Medicaid reimbursement rates.  Arkansas and Iowa will drop reimbursement rates for PCPs for traditional Medicaid patients, but their Exchange covered Medicaid patients will still pay high rates for their PCPs.

The bet which I had always thought was a low probability bet was that money for extended enhanced payments went to high income doctors who are likely to vote Republican and therefore it could pass a Republican House even as the money helped poor people.

There is a proposal to extend the payment enhancement for another two years as well as broaden its applicability to more provider types and services. This bill would cost $11 billion over two years, and it would be a good idea. I don’t think it will pass. The Republican Party is more opposed to anything that benefits poor people and potentially Obama than in sending money to very high income individuals.

Once the Democrats lost the House, any extension of this program was dead.  Everyone has been expecting it although hoping for something else.

37 replies
  1. 1
    JPL says:

    The bill also includes a provision protecting farmers from attacks by fox on their animals. So there are risk protections for sheep but not for me.

  2. 2
    JPL says:

    Richard, I recently changed medicare plans. I had medicare advantage and switched to medigap. Since I’m under 65 1/2, it should not be a problem but I have not received notification yet. The insurance company did take money out of my account though. Should I still pay the medicare advantage plan until I receive official notification?

  3. 3
    richard mayhew says:

    @JPL: I don’t know. My first incliniation is to call the Medigap carrier and get written confirmation of your enrollment. Once you have that, call the Medicare Advantage provider and tell them to drop you.

  4. 4
    Chris says:

    Hi Richard-
    I am wondering whas going on in our marketplace here in NC. Last year Blue Cross and one other insurer (Coventry–hadnt heard of them before) were the only two available in my zip code. We had 9 plans total to choose from…7 were BCBS. THIS year…we have 30…good news! United Healthcare joined the marketplace (they were here in NC but not on the exchange) UHC had the reputation of being the cadillac expensive insurer. Well this year BCBS increased all their rates sharply (at least to me–a 48 y.o male in a pretty poor zip code) UHC is wayyyy cheaper…Like I got a gold UHC plan for almost 200 less a month than a silver BCBS plan. Whats happening here? Some market repositioning? BCBS lost a good bit last year..UHC trying to pick up more customers with cheaper plans this year which will increase sharpply next year? Just curious what are the machinations between these two companies..LOL

  5. 5
    richard mayhew says:

    @Chris: My bet is two fold.

    a) Blue Cross/Blue Shield probably picked up most of the sick people in 2014, so their risk pool is expensive for people who renew (remember renewers tend to be sicker than average as they already value their relationships with their providers) so they needed to go high.

    b) UHC wants to build marketshare so they went cheap
    b1) I don’t know if BCBS had only a broad network or a narrow network option and if UHC is offering narrow networks ( I think they are), so it could be as much a network differentiation driving the pricing as a membership loss leader strategy by UHC… I don’t know.

  6. 6
    Face says:

    I’m not sure “pissing off” Roberts should be a consideration. He’s been plenty non-pissed in the past and still found sufficient resolve to pass pure ideaological bullshit before.

  7. 7
    MomSense says:

    The Republicans have no interest in governance. Hell they think that government is the problem. They are constantly wanting to de-fund it, defeat it, and defend themselves from it. No one ever asks them what they propose to replace government with. Rejoin the UK? United States of Koch Subsidiaries? The other day I caught a bit of President Obama speaking to a business group in Las Vegas (I think that’s what was happening anyway) and talking about a new program he is doing to get private businesses to pay for basic infrastructure projects. I kept thinking that this is how the mighty US ends–bake sales to fill potholes.

    It is really discouraging. I just don’t know how you convince almost half the population that we do actually need to do things as a nation that cost money that aren’t war or weapons.

  8. 8
    MomSense says:


    I read an article a week or so ago that said Roberts was so pissed about the Executive Order on immigration that he was going to seek his revenge on healthcare subsidies.

  9. 9
    Elizabelle says:

    Richard: is there a podcast of your radio appearance last week? Could you post it, if so?

    Many thanks.

  10. 10
    sparrow says:

    @MomSense: I agree 100%. It is depressing. I sometimes dream about emigrating to Europe (my SO is European so isn’t so far-fetched), where things like “should government pay for roads/schools/healthcare” has been off the table for discussion & settled for far longer in most countries. Where whether a woman should have the right to an abortion really just isn’t any one elses business. I crave sanity. I’m tired, tired, tired of these people. I want to round them up in their own little pen, and let them play wild west all they want with each other. My parents would go in that group, and I’m not even sorry anymore.

  11. 11
    MomSense says:


    I crave sanity. I’m tired, tired, tired of these people. I want to round them up in their own little pen, and let them play wild west all they want with each other.

    Oh I so relate to that. I had a window of time when I could have emigrated to Norway and I totally blew it by not grabbing that opportunity.

  12. 12
    Yatsuno says:

    @MomSense: If that’s true he has no fucking place as head of the Supreme Court. He’s a law arbiter. If he can’t put aside his petty butthurts to accomplish that he should resign. Of course he won’t.

  13. 13
  14. 14
    Elizabelle says:

    @richard mayhew:

    Thank you Richard. I will listen and get back to you. Was sorry to miss your appearance in real time.

  15. 15
    Tommy says:


    The other day I caught a bit of President Obama speaking to a business group in Las Vegas (I think that’s what was happening anyway) and talking about a new program he is doing to get private businesses to pay for basic infrastructure projects.

    I am going to rant on this for a few days (at least). I keep hearing that it is too hard to do this or that from an infrastructure point-of-view. BS. I live in a small rural town of 8,700 people. We get our power through a co-op of other small towns. They told us to continue getting our power we needed to upgrade our electrical infrastructure.

    So guess what we did. We drove poles into the ground and pulled wire. Done in under a month. We didn’t complain, we just did it. When I hear we can’t do this or we can’t do that I just want to scream. Of course we can.

  16. 16
    MomSense says:


    The problem is not that infrastructure is hard. The problem is that we have had 30 + years of a Republican ideology that wants to drown government in a bathtub. The problem is compounded by the fact that we have a blah President and a Republican opposition determined to undermine his Presidency no matter the cost.

    You live in a white, Republican town with a decent tax base. They want to provide nice things to the nice white Republicans in your town. It’s not difficulty that prevents the Republican Congress from funding infrastructure. It’s cynical power grabbing rooted in racism and fucked up ideology.

  17. 17
    satby says:

    @MomSense: Just quoted you on FB because for sure that’s true!

  18. 18
    satby says:

    @MomSense: And again. Truth.

    In fact and to expand that, I’ve never met a Repuke who wasn’t totally OK with all the spending in the world as long as it went to them and people in their circle. IGMFU, oh, and we’ll take yours too!

  19. 19
    MomSense says:


    I’m feeling feisty this morning. I added boxing to my workout yesterday thinking it would be fun–and now I’m infused with some sort of fight mentality. Weird.

  20. 20
    Tommy says:


    You live in a white, Republican town with a decent tax base.

    And I don’t disagree, because what you said is a fact. 98.7% white community. A nice tax base. But in an election where we voted 57% for McCain (and of course I live in IL) we also voted 63% to raise our own taxes to build a new $60M high school. We figured out how to fill out paperwork and got $750,000 from the Recovery Act to wire all government buildings with fiber. Built out a fiber backbone.

    I may be stupid, I most likely am, but I refuse to think that just because my town is mostly white and Republican that we can’t replicate what we do in towns that are not both white and Republican.

  21. 21
    skerry says:

    @Tommy: @satby: Tommy, read satby’s comment. It’s great that your community will spend money to improve itself. The fact remains that they support politicians who will not spend money to improve us nationally or in other communities. You town likes nice things for itself. Would it spend money to help East St. Louis?

  22. 22
    Tommy says:

    @satby: Everything Momsense said about my town is true. But this.

    The mayor and city council are not even full-time jobs. We hired a city manager in like 2001. We went from a town of 5,500 in the 2000 Census to 8,700 in the 2010 Census. The guy was a rock star. It came out a few years ago the city manager was a raging liberal. So for some reason nobody knows, they fired him.

    Right near an election. We got on the ballot the ability to recall any elected official. We voted at 83% for it. And said, well hire back the guy or else. We hired him back.

  23. 23
    MomSense says:


    Ok but you are still not spending your town’s tax dollars on people who are not nice, white Republicans. How do your state reps and senators vote on state spending bills.

  24. 24
    Tommy says:

    @skerry: East St. Louis is both a good and bad example to use at the same time. Of course the community needs help. I don’t think it is a stretch to argue it is one of the worse communities in the entire United States. But, and this is as a card carrying liberal, we’ve gave them a TON of money in the past and nothing changed. In fact things got worse.

    Look I totally get what you are saying. And much of it true. But I just don’t buy we can’t do great things, build out our infastructure nationwide, not just in my town. I just don’t buy it.

  25. 25
    smintheus says:

    Meanwhile, get a load of this whinging asshole complaining that she and her sick husband were forced (able) to buy good, cheap insurance that also covers things that they personally won’t ever need to use. And this after she supported Obama’s election in 2008!!! Such a betrayal.

  26. 26
    satby says:

    @Tommy: The point isn’t if an individual town manager is any political ideology, it’s that his job is by definition to do stuff FOR THAT TOWN. Everybody likes goodies; the difference is that most Republicans will not pass any taxes to pay for goodies that they or their families don’t directly benefit from. Your tax base isn’t paying for anything outside your town, and by voting Republican, the people who do make sure it stays that way. Because that’s the platform of the party.

    I’m sick of people saying “my Republicans (local politicians, friends, family, whatever) are good people, they aren’t bad like Paul Ryan or Rand Paul”. Yeah, they are, because they vote for the party that espouses the views of the bad guys. The party has a platform, if they vote for Rs they’re voting for that platform, and all the attendant evil it enables. Period.

  27. 27
    satby says:


    Look I totally get what you are saying. And much of it true. But I just don’t buy we can’t do great things, build out our infrastructure nationwide, not just in my town. I just don’t buy it.

    Of course we could do it, in fact we would be doing that right now, except for the past 6 years national Republicans blocked every effort to do just that.

  28. 28
    Elizabelle says:


    Is that from the WaPost? Not clicking because I’ve let my sub lapse and am rationing my online exposure.

    But sounds like an article featured on the website over last few days.

  29. 29
    Tommy says:

    @satby: I did some research years ago. We built the Empire State Building in a year. One year from ground breaking to it being open. During WWII we retooled all our factories to almost overnight we built 22 battleships. 6 Aircraft carriers. Something like 6M jeeps/trucks in a few years. Oh and all the planes. Thousands of them.

    We had to do something so we did it. That was my initial point.

  30. 30
    skerry says:

    @Elizabelle: Yeah, It’s from the Washington Post. The author lives in California and the article is about her experience there. Took too long to get someone on the phone. Not sure about keeping her doctors. Price.

    The headline is that Obamacare has hurt her family, but reading the article I fail to see where or how. Her husband got cancer treatment. She’s relatively healthy. Here’s the part that irked me the most:

    3) The Affordable Care Act saved us money this year, but it didn’t alleviate our concerns about obtaining affordable medical care.

    What Obamacare hasn’t eliminated is worry: We’re deeply concerned about our ability to get quality medical care from doctors we trust. The day may soon come when we can’t afford the plans our doctors accept, or we’ll have to wait hours to seen. Will the best doctors flock to a cash-only model? How long can a good doctor be satisfied with the $39.75 the insurance company paid her for my annual check up a few months ago?

    She wants single payer, but she either doesn’t know that or won’t say that.

  31. 31
    skerry says:


    The prejudices of ignorance are more easily removed
    than the prejudices of interest;
    the first are all blindly adopted,
    the second willfully preferred.
    – George Bancroft

  32. 32
    D58826 says:

    @skerry: They might all be good questions but are beyond the scope of what Obamacare was designed to fix. This is the first time I’ve seen Obama blamed for ‘worry’, however.

  33. 33
    smintheus says:

    @D58826: Right, because from her description or her and her husband’s tenuous situation prior to ACA, they clearly had no worries at all about obtaining and keeping affordable medical insurance. None.

  34. 34
    Original Lee says:

    @skerry: My mom lives in a very red area, and many of the doctors are going to a concierge system. The docs still accept the insurance plans they always have, but now if she doesn’t pony up a $2500 up-front payment on Jan. 1 every year, she has an awful time getting in for an appointment.

    When she calls the office, unless it is an actual emergency, she gets shunted to a triage nurse who almost always tells her to wait a couple of days before calling for an appointment, and in the meantime to try some completely innocuous thing like taking two Tylenol and drinking lots of water. Last year, she ended up in the hospital twice because of this. You would think that they would have a marker in their records that when this woman calls, get her an appointment fast, but apparently not. We finally decided it was better and cheaper to hire an R.N. from the hospital to call the doctor for her than to pay the stupid concierge fee. Totally worth it, IMO, because the R.N. somehow knows exactly what to say to whom to get Mom an appointment within a day or two.

    So I wouldn’t say this person is completely unjustified in her concerns.

  35. 35
    chopper says:


    98.7% white community

    which means it’s easy for people to rationalize building things up because the benefits go to ‘the right people’.

    it’s easy for people to be gung-ho for the commons when the people on their street look like them, talk like them and go to the same church as them.

    fill your town up with black and brown folk and suddenly the white people will hem and haw about fixing anything at all.

  36. 36
    satby says:

    @Tommy: Your point is irrelevant to the discussion, it’s not what we can and can’t do in the sense of ability, it’s the lack of will and obstruction caused by one politiKKKal party and their enablers that prevents us from getting these things like infrastructure upgrades done.

  37. 37

    […] this is where we enter advant garde WTF policy experimentation. The Crominbus does not appropriate money to be sent out the door for this program. It still will be collecting […]

Trackbacks & Pingbacks

  1. […] this is where we enter advant garde WTF policy experimentation. The Crominbus does not appropriate money to be sent out the door for this program. It still will be collecting […]

Comments are closed.