Understanding the federal spending deal and how it affects the ACA

Photo: Tim Evanson via Flickr

Photo: Tim Evanson via Flickr

We’ve just posted a tip sheet to help you understand four main ways the big year-end tax and spending deal passed by Congress affected the Affordable Care Act.

The limits on paying health plans their full risk corridor payments (what Marco Rubio insists on calling an “insurance bailout”) was renewed for another year. Three taxes that helped finance the ACA – the Cadillac tax, the medical device tax and the health insurance tax – were delayed or suspended for two years (one year for the insurance levy.) The tip sheet explains them, looks a bit at what could happen next and includes links for more reading and analysis. We’re also updating the relevant sections of our health reform glossary and key concepts.

One other comment: I’ve seen the deal described as “the biggest change yet” to Obamacare. I think if you modify that to the “biggest legislative change yet” to Obamacare, it would be accurate. It’s significant, don’t get me wrong. And we really won’t know how (or whether) the funding holes get addressed until we know who the next president is – and what the party balance will be in the Senate.

But I’d still argue at this point that the Supreme Court’s decision in 2012 to make Medicaid optional for the states in 2012 was bigger. It kept millions of poor people from getting covered and created “haves” and “have-nots” among states. It also hurt hospitals and other health care providers in non-expansion states. Plus, it had huge political ramifications, creating another platform for conservative governors to continue attacking and undermining the ACA. The politics and the implementation challenges remain entwined to this day.

A few years from now, will we look back at the budget deal as the “unraveling” moment of the health law? If a Democrat is elected president, the law probably will endure but change – without sacrificing core elements. (For the Bernie Sanders backers reading this: even he said in one of the debates that single payer won’t happen in the near term and he does welcome the ACA as a starting point). If a Republican becomes president, he may not succeed in repealing the law, but it’s naive to think that nothing would change – and that would be true even if these taxes were intact. The budget deal was a pivot point – but precisely where we pivot to is not yet known.

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