Republicans never got their chance to chop down President Barack Obama’s health care law, but that doesn’t mean it’s safe from the clippers as Congress looks for solutions for tough fiscal times.
The Affordable Care Act brings in a lot of new taxes and savings, but it also dishes out as much as $1.7 trillion in new spending over the next decade — money that looks awfully tempting to lawmakers scrounging around for ways to fund other projects or pay down the deficit.
Continue Reading And even Democrats may be forced to take a look as battles over the debt limit, deficit reduction and entitlement reform heat up. Obama and Senate Democrats have already reluctantly tapped into the law for revenue for things they want to get done.Twice, as part of bipartisan deals, they agreed to increase the amount Americans must pay if they get too generous a subsidy in the insurance exchanges. The first time was to pay for the 2010 doc fix to avoid deep physician fee cuts under Medicare, and the second time was to offset the cost of repealing new 1099 tax reporting requirements that both parties considered burdensome on businesses.
Last February, Obama signed legislation slashing $5 billion from the Prevention and Public Health Fund to help pay for a continuation of payroll tax breaks and other initiatives. The health care law gave the fund $15 billion in its first 10 years.
And just a few weeks ago, lawmakers agreed to cut funding for nonprofit health insurance cooperatives to help pay for another one-year doc fix. That was in the last-minute fiscal cliff deal.
Although the White House takes issue with the Congressional Budget Office’s $1.7 trillion estimate for 2012to 2022, there are still plenty of funds and juicy options on the shelf if lawmakers get hungry enough — that is, if Democrats would agree to them. Here are some potential targets:
Reclaim excess subsidies
One option is to require insurance subsidy recipients to pay back 100 percent of overpayments, which would raise $44 billion over 10 years, according to CBO.
The law provides lower-income Americans tax credits to help them buy insurance, but if their earnings change midyear, putting them in a different income bracket, they can end up pocketing more than they’re eligible for. So-called clawbacks would require them to return those subsidies down to the last dime.
House Republicans voted for that option last spring, but Democrats said the proposal would go too far, because poor Americans might end up owing the government thousands of dollars at the end of the year. Liberal health care advocates are already unhappy Congress increased the clawbacks — so increasing the amount low-income people would have to repay could be a hard sell.
“The fact that it was made even more rigorous, it has the potential of being an enormous problem,” said Ron Pollack, executive director of Families USA, which strongly supports the health law. “This clawback affects people even if they were trying to do all the right things.”
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