Health care overhaul rolls on despite budget havoc

March 1, 2013 - 2:30 PM

WASHINGTON (AP) — Airline schedules, food inspections, IRS taxpayer assistance and deployments of Navy ships could all be hampered by the government's automatic spending cuts.

But President Barack Obama's health care law — a program Republicans have spent the last three years trying to kill — will roll out on time, the administration says.

Only a small fraction of the $1.6 trillion the Affordable Care Act spends to cover the uninsured over the next decade is subject to the so-called sequester. The cuts were to go into effect Friday, after Obama and congressional Republicans failed to agree on a mix of spending cuts and tax increases to staunch government red ink.

"Consumers in every state will have access (to coverage) when open enrollment begins on Oct. 1, 2013," Health and Human Services spokeswoman Erin Shields Britt told The Associated Press, when asked whether the budget cuts will delay the implementation of Obama's signature domestic program.

Dubbed "Obamacare" by its foes, the Affordable Care Act — ACA for short — has demonstrated staying power. It survived a Supreme Court challenge, last year's presidential election and more than 30 votes in the GOP-led House to eliminate, defund or otherwise scale it back.

Now it seems the program will lurch through a budget crisis that could disrupt other government functions and emerge largely unscathed.

Health and Human Services, the government department putting the law into place, says it doesn't have final estimates of the effect the budget cuts will have on its employees. But the department says it is working to prepare for the reductions in a way that minimizes the impact on its mission. HHS already oversees Medicare and Medicaid, which provide coverage to about 100 million people. The new law will add another 30 million people to the coverage rolls.

"It's galling that Obamacare is not being touched," said Rep. Joe Barton, R-Texas, a veteran of the 1990s budget struggles that forced a partial government shutdown. Delaying the rollout of the health care law for two years could have saved enough money to take the place of the sequester, he said.

Some independent experts see irony in the situation. Others say the administration must be bluffing, and surely the cuts will slow the health law in some way.

"It's so strange that the one thing Republicans were so ticked off at was the ACA, and now, when it comes time for reductions in spending, for all practical purposes the ACA gets a pass," said Bill Hoagland, senior vice president at the Bipartisan Policy Center, and formerly a long-serving GOP budget aide in Congress.

New York University professor Paul Light, an expert on the workings of the federal bureaucracy, said he suspects the Obama administration is talking big when its officials assert the health care law will keep humming along untouched.

"I would say it's the Obama administration's hubris and rhetorical flourishes," Light said. "On the one hand the administration is claiming sequestration is the end of days, and on the other hand they say it's not going to hurt implementation of their favorite programs."

Hoagland, the budget expert, said some of the explanation for the ACA's apparent good fortune has to do with the way automatic cuts have been structured in the past, ever since the idea came into use during the 1980s.

For example, tax credits have traditionally been exempted from automatic cuts. The health care law's major subsidies to help uninsured people buy private health coverage are structured as tax credits. So is the ACA's assistance for small businesses. The tax credits for individuals and families will be available next year, when new insurance markets open up.

Traditionally, major safety-net programs have also gotten a pass from automatic cuts. And the other big chunk of ACA money is for expanding Medicaid, the health insurance program for low-income people.

One account in the health care law does appear to be in jeopardy. Starting next year, it would provide added help for people struggling with insurance copayments. It's neither a tax credit nor a recognized safety net program.

Shai Akabas, a senior policy analyst at the Bipartisan Policy Center, estimates the automatic cuts will claim $7 billion out $108 billion for that cost-sharing assistance, if sequestration stays in place.

Call it a ding.