H.R. 1549: Helping Sick Americans Now Act

H.R. 1549

Helping Sick Americans Now Act

Sponsor
Rep. Joe Pitts

Date
April 24, 2013 (113th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

On Wednesday, April 24, 2013, the House will consider H.R. 1549, the Helping Sick Americans Now Act, under a rule.  H.R. 1549 was introduced by Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA) on April 15, 2013 and has 16 cosponsors.  The bill was marked up in the House Committee on Energy and Commerce and ordered to be reported on April 17, 2013 by a vote of 27-20.[1]



[1] See Committee Report 113-45 page 6 for Committee votes.

Bill Summary

H.R. 1549 redirects funding to the Pre-existing Condition Insurance Program (PCIP) from the Prevention and Public Health Fund (PPHF) for fiscal years 2013 through 2016.  In recent weeks, Secretary Sebelius has used the PPHF to implement the health exchanges of Obamacare.  In addition, the bill eliminates the requirement that enrollees go without insurance coverage for the six months prior to enrolling in the program as a condition of eligibility.  The bill would direct approximately $4 billion to the PCIP, thus preventing Secretary Sebelius from using the PHPF to implement Obamacare for four years while providing $840 million in deficit reduction.

Background

Prior to the passage of the Patient Protection and Affordable Care Act (PPACA) approximately 35 states provided coverage to individuals with pre-existing conditions through high risk pools.  High risk pools are programs created for individuals who have been otherwise denied coverage in the private insurance market.  States, which typically contract with private health carriers to administer the programs, provide non-profit insurance coverage to individuals – thus ensuring coverage regardless of a pre-existing condition.[1]  According to CRS, approximately “four million individuals were eligible in states with high risk pools between 2005 and 2007. However, in 2008 only a total of 199,020 were enrolled in the 34 state programs.”[2]

Section 1101 of PPACA established the temporary federal high risk pool program, known as the Pre-existing Condition Insurance Program (PCIP).  PCIP is intended to provide transitional coverage to those individuals with pre-existing conditions through December 31, 2013.  On January 1, 2014, health insurers will be prohibited from denying coverage based on a pre-existing condition.  Under PCIP, the Secretary may operate the temporary federal program directly or contract with eligible entities, including states or non-profit entities, to administer.  Currently, 27 states operate their own high risk pool program, with the Department of Health and Human Services operating the program for the remaining 23 states and the District of Columbia. 

PPACA appropriated $5 billion to pay the claims and the administrative costs that are associated with the PCIP that are in excess of the premiums collected from enrollees.[3]  It is important to note that at the time of enactment, concern was expressed that funding for the temporary program was inadequate.  According to CRS, “Richard Foster, the chief actuary of the Centers for Medicare and Medicaid Services, estimates that by 2011 or 2012 the initial funding will be exhausted.”  Moreover, CRS reports that “CBO concurs that $5 billion will not be enough to cover the costs of all the applicants through 2013.”[4]

On February 13, 2013, the Centers for Medicare and Medicaid Services announced it was suspending enrollment in the program due to financial constraints, including barring states from accepting new applications.  The announcement was made despite the fact that enrollment was 30 percent less than anticipated.  At the time of enactment, 375,000 individuals were expected to enroll. However, to date 107,139 individuals are participating in the program.[5]  Because the Centers for Medicare and Medicaid Services closed enrollment, Americans with pre-existing conditions have nowhere to go.

H.R. 1549 would provide funding for the temporary program through December 31, 2013 by transferring funds from the Prevention and Public Health Fund (PPHF).  Section 4002 of PPACA established the PPHF, which is intended to be used by the Secretary at her discretion.  The PPHF has been used in prior years to fund programs for (1) higher taxes on food and soda, (2) promoting pet neutering and (3) stopping the construction of fast food restaurants.[6]  In recent weeks, Secretary Sebelius has used the fund to implement the core structure of Obamacare.  It is important to note that $5 billion was taken from the PPHF to offset H.R. 3630, the Middle Class Tax Relief and Job Creation Act (See Roll Call #72).



[2] See id at page 3

[3] See id at page 3.

[4] See id at page 4.

[6] See  http://energycommerce.house.gov/obamacare-funnels-taxpayer-dollars-grant-program-funds-pet-neutering-bike-clubs-and-lobbying-efforts-to-increase-taxes.

Cost

According to CBO estimates, enacting the legislation would result in a decrease in net direct spending of $840 million over the 2013-2023 period; therefore, pay as you go procedures apply.  Enacting H.R. 1549 would not affect revenues. 

H.R. 1549 contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

Amendments

1.  Representative Pitts (R-PA) Amendment #9 – amendment terminates the Prevention and Public Health Fund after 2016 and authorizes $5 billion for an optional state-based high risk pool program for calendar year 2014.  The optional state-based high risk pool program would be subject to appropriations and includes Hyde protections.   Together with the base bill, the amendment will reduce the deficit by $8 billion.

2.  Representative Brownley (D-CA) #6 – amendment requires that within 90 days of enactment of H.R. 1549, the Secretary of Health and Human Services shall prepare a report to Congress detailing the exact amount of money to be transferred out of the Prevention and Public Health Fund and how the transfer will impact the access of uninsured and underinsured children, adolescents, and adults to immunization programs, Alzheimer’s disease education and prevention programs, and the Baby Friendly Hospital Initiative and maternal care programs.