April 25, 2013

Health Care Policy Update: Health Care Law’s Prevention “Slush Fund”

Section 4002 of the President’s health care law put $15 billion into the Prevention and Public Health Fund (PPHF) over a 10-year period. After 10 years, the law mandates the PPHF receive $2 billion per year forever. The Secretary of Health and Human Services has nearly unlimited authority to spend these dollars.

The health care law explicitly states that the PPHF must fund innovative prevention and wellness strategies that “help restrain the rate of growth in private and public sector health care costs”. The law goes on to say the HHS Secretary can transfer money in the PPHF fund “to accounts within the [HHS] to increase funding … for prevention, wellness, and public health activities including prevention research, health screenings, and initiatives such as the Community Transformation grant program, the Education and Outreach Campaign Regarding Preventative Benefits, and immunization programs.”

In April 2013, however, HHS released its long-delayed distribution plan for the fiscal year 2013 PPHF funds. The department intends to transfer $454 million – almost half of the $949 million available for the fiscal year – to the Centers for Medicare and Medicaid Services to help pay for ongoing health care law implementation activities. This includes the Administration’s creation of the law’s federal insurance exchange, as well as public relations campaigns.

The Obama Administration is using the PPHF as a slush fund to implement its health care law. Even the law’s staunchest supporters say the PPHF was never intended to be used as a piggy bank to finance and promote the law’s implementation. What remains unclear is exactly how much money Secretary Sebelius has transferred within the HHS budget to implement the health care law. That is why the House Committee on Oversight and Government Reform requested that she provide a detailed financial account showing the exact funding sources HHS will use to set up and operate the federal exchange, as well as the slick PR campaign designed to sell it.

Republicans do not support creating Washington slush funds that secretly finance and expand existing government programs without oversight. The American people deserve to know exactly how much it is going to cost to implement the health care law. Unfortunately, the “most transparent Administration in history” doesn’t want to open up its books and show them.

Health Care Headlines

The New York Times: “Part Time Work Becomes Full-Time Wait for Better Job” Paul Dales, senior economist for Capital Economics, said, “There is another reason to believe that part-time employment will stay higher for longer, namely the incentives to employ part-time workers created by Obama’s health care reforms.”

Associated Press: “Governments May Push Workers Out of Employer Health Care and into Health Exchange” In a quest to save money, political leaders in Washington state are exploring a proposal that would shift some government workers out of their current health plans and onto the insurance exchange developed under President Barack Obama’s health care law.

The Washington Post: Opinion: “We Still Have a Health Care Spending Problem” The idea that we have licked the problem of health care cost increases is no more probable today than it was in the past. Our nation has made no fundamental change in how health care is paid for or delivered.

The Hill: “Study Predicts Rise in Healthcare Cost Growth by 2019” A stronger U.S. economy will contribute to a rise in the growth of healthcare costs over the next six years, ending the current record-breaking slowdown, according to a new study. The Kaiser Family Foundation predicted that by 2019, annual healthcare cost growth will be closer to historic averages – over seven percent compared to 3.9 percent between 2009 and 2011.

Reuters: Op-Ed: “President Must Address Obamacare ‘Train Wreck’” Senate Republican Leader Mitch McConnell writes that “[w]hen even a key architect of Obamacare says the law’s implementation will resemble a ‘train wreck,’ it is clear that its biggest remaining supporters need to finally level with the American people about what’s in store – starting with President Barack Obama.  The President must step into the breach and explain to the public that skyrocketing premiums and a raft of new taxes, penalties, and fees are coming their way.”

Issue Tag: Health Care