November 24, 2014
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Can RI ObamaCare program survive a government shutdown?

Even official sources have lost track of the number of times the Republican-controlled House of Representatives has passed measures to repeal, delay, defund or somehow kill the Affordable Care Act (ACA), better known as ObamaCare, since it became law in 2010. But all agree it's somewhere north of 40, and it's unprecedented.

Their most recent attempt, an ambitious bill to shut down the entire federal government if ObamaCare funds are not cut off, comes just days before Americans would finally be able to enroll for health care insurance through exchanges under the ACA.

In Rhode Island, the exchange is named HealthSource RI. It's set up and run by the state, rather than by the federal government, under an executive order signed in 2011 by Governor Lincoln Chafee. The goal is to make affordable health insurance available to most Rhode Islanders most efficiently. Rhode Island was one of just 17 states to take that option, and got a $65 million federal grant to make HSRI work.

Even though it will eventually be self-supporting, right now HSRI needs that federal grant money to survive.

But the current federal budget year ends on Sept. 30, one day before HSRI is set to open for business on Oct. 1. Last Friday, the House voted 230-189 along party lines to approve a stop-gap spending bill to fund the government through mid-December, but only if no money goes to fund ObamaCare.

Some sort of shutdown is nearly inevitable. The temporary spending bill is now in the Senate where it stands almost no chance of passing with the ObamaCare provision. Even if it did, President Obama has already said he will veto it. Still, Senate rules say it must be introduced, debated and voted on. The ObamaCare defunding portion will probably be stripped out, and the bill will then bounce back to the House for another vote.

What happens then is anyone's guess, but it almost certainly can't occur until after the budget deadline. There just isn't enough time.

The longest shutdown the nation has experienced prior to this also came from a Republican-controlled House back in 1995. It started on Dec. 16 and ran until the following Jan. 6, 1996.

Federal funding for the HSRI rollout itself may not be the stumbling block it appears. In a Sept. 24 e-mail, HRSI spokesperson Dara Chadwick wrote, "Federal resources are already in place to operate HealthSource RI for 2014 ... [and we] are currently working through the state budget process to determine funding beyond that."

The reason funding could be available in spite of a shutdown, according to a report last weekend from the D.C.-based Center on Budget Policy, a non-profit think-tank, is that the grant money to operate HSRI and other insurance exchanges may be classified as "permanent appropriations," made when the ACA became law in 2010. If that's the case, they'll continue to flow to HSRI to pay for employee salaries and for contractors, for equipment and supplies.

The ambiguity stems from the fact that Rhode Island did not receive the $65 million grant up front; it's not all sitting in a local bank account. Instead, HSRI draws funds from the grant as needed. The ability to do that during a government shutdown is still not completely resolved. A memo from the White House Office of Management and Budget, made public late last week, told federal agencies they would be able to continue "entitlement programs such as social security benefits, for which an indefinite appropriation provides the funding."

During the 1995-96 shutdown, most social security employees and those at other essential service agencies continued to work and get paid. Those that didn't got back pay when it was over.

The Center on Budget Policy's analysis of the OMB memo is that it covers people working on the ACA rollout as well. One of the problems with that analysis is that a 2013 shutdown will occur under completely different circumstances than the one 18 years ago; plus, paying for the startup of ObamaCare isn't the same as funding the continuing operation of the 80-year-old Social Security Administration.

In a news release on this subject, OMB explained that federal agencies are still looking at pertinent legal rulings and updating their plans for weathering a shutdown.

"Determinations about specific programs are being actively reviewed as agencies undertake this process," it said.

What is also not clear is whether data essential for HSRI to operate will be maintained during a shutdown.

HSRI needs an ongoing Information Technology stream provided by various federal agencies and private data companies to provide individuals and small businesses with the correct insurance plan for their particular situation. Income records from the IRS, for example, will allow people to know their eligibility for expanded Medicaid insurance, and to get the subsidies or tax credit quotes they are eligible for.

This IT component is called the "federal data services hub." It's big, technical and requires a lot of ongoing maintenance. What's implied by the OMB memo is that the hub may continue to function under certain, but not all, circumstances. Details on those circumstances were not available as this article was being written.

But the effect of an interruption of the data services hub, in reality, would likely be minimal anyway. Subsidies to lower the premiums for low- and middle-income single people and families will be paid directly to the insurance companies issuing the policies themselves. And that won't happen until the policies go into effect on or after Jan. 1, 2014.

Likewise, earned tax credits for small businesses won't apply until they file their 2014 tax returns in 2015.

If the United States Government is still shutdown by then, there will be a lot more to worry about than health insurance premiums.

So, will the rollout of HSRI survive the government shutdown? The short answer is: Most probably yes. The frustrating part is that this was always going to be a difficult birth, only now it will be even more so.

Dara Chadwick summed up HSRI's position on a federal shutdown when asked about it two weeks ago at a health care reform briefing in Warwick. She said, "We work under an executive order from the governor of Rhode Island, not the federal government.

"We're going straight ahead on this."


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