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 Legislative & Policy Corner

You Are Invited!
Last week, the U.S. Senate passed a continuing resolution (CR) that will assure continued funding for federal government programs including the Title V Maternal and Child Health (MCH) Services Block Grant through March 2013. You are invited to participate in a MEMBERS-ONLY call today, Monday, Sept. 24, at 1 p.m. EST hosted by AMCHP to discuss this and provide an update on other related federal budget developments. During this call, we will discuss the FY 2013 budget continuing resolution, sequestration and FY 2014 budget. We hope you will join us for this important update and dialogue. Click here to RSVP.

To join the call, dial 800-403-7802. Following the call, AMCHP will distribute a fact sheet on the federal budget with key dates and deadlines and the potential impact on the Title V MCH Services Block Grant.

Six-Month Funding Bill
FY 2013 begins on Oct. 1, 2012, and because Congress failed to approve any of the annual appropriations bills this year, they recently approved a continuing resolution funding the federal government through Mar. 27, 2013, at the level established by the Budget Control Act of 2011. This funding level is $1.047 trillion and represents a 0.6 percent increase over the FY 2012 appropriated level. It is unclear how Congress will finalize the FY 2013 appropriation bills for the remainder of the fiscal year. According to a recent media report, Sen. Harkin (D-IA) chairman of the Labor, Health and Human Services and Education Appropriation Subcommittee indicated that Congress may approve another continuing resolution funding the federal government from March 2013 through October 2013 at the level established by the Budget Control Act. It is important to note that this continuing resolution DOES NOT delay or repeal the sequester. Sequestration is scheduled to occur on Jan. 2, 2013. 

Office of Management and Budget Report on Sequestration
Late last week, the White House Office of Management and Budget (OMB) released a report on sequestration. It is no surprise that the report states that sequestration will be devastating. It confirms that nondefense discretionary spending will be cut by 8.2 percent and for the Title V MCH Services Block Grant; this represents an approximate $50 million cut. The report also states that nonexempt mandatory programs such as the Maternal Infant and Early Childhood Education Program, the Prevention and Public Health Fund will be cut by 7.6 percent.

However, according to a preliminary analysis by the Association of State and Territorial Health Officials (ASTHO), reductions to public health programs associated with the sequester will likely fall disproportionally on grants to outside entities, which includes state and local public health agencies. Because federal agencies also have fixed costs, such as space and utilities often in centralized accounts that will be reduced, these cuts will then be passed back to programs that may result in deeper cuts than 8.4 percent. The resulting impact on state and local grantees will likely be higher than an 8.4 percent reduction and could easily approach 11 percent or higher. ASTHO also points out that to achieve this level of reduction, programs that award funds competitively and not through a statutorily determined formula may reduce the overall number of grants, which may result in some grant funding being lost entirely. Moreover, ASTHO indicates that during the aforementioned continuing resolution the executive branch will likely allocate federal resources very conservatively. Funding made available as early as the first quarter of the fiscal year even prior to the sequestration order may be more tightly controlled or possibly held back pending decisions on how to implement sequestration.

It is important to note that to date OMB has not issued official guidance on how sequestration will be administered particularly as it relates to grants to states and local entities. 

The bottom line for states is that the next couple of months will undoubtedly lead to confusion about the federal budgeting process. Brent Ewig and Carolyn Mullen will be available to answer any questions.

Click here to view the OMB report.

Click here to view the AMCHP Frequently Asked Questions about sequestration.

States Move toward Selection of Essential Health Benefits Benchmark
The Essential Health Benefits Bulletin released by the U.S. Department of Health and Human Services (HHS) in December 2011 indicates that states should select a benchmark plan for the essential health benefits during the third quarter of 2012. This approach allows states to select a benchmark plan that reflects the scope of services offered by a “typical employer plan” to be included in health plans offered in the individual and small group markets, both inside and outside of the affordable insurance exchanges. While some state-level MCH experts may have a “seat at the table” during the selection process of the benchmark plan, and some may be monitoring developments, it is still important to understand where gaps in the selected benchmark plan may exist. The American Academy of Pediatrics recently released a report on essential health benefits for children. The report can be found here. For more information on the report, click here.