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 Legislative & Policy Corner


Sequestration Accelerates a Period of Turmoil for MCH
Right before midnight on Friday, Mar. 1, the White House Office of Management and Budget (OMB) issued the official sequestration order to federal agencies via a memorandum entitled “Issuance of the Sequestration Order Pursuant To Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985.”

The order is accompanied by a report, “that provides calculations of the amounts and percentages by which various budgetary resources are required to be reduced, and a listing of the reductions required for each non-exempt budget account." Below are the public health agency specifics included in the report:

  •  Centers for Disease Control and Prevention (CDC) – $289 million
  •  Health Resources and Services Administration (HRSA) – $365 million
  •  WIC – $333 million
  •  National Institutes of Health (NIH) – $1.5 billion
  •  Substance Abuse and Mental Health Services Administration (SAMHSA) – $168 million

Please note, the publically available reductions at this point are largely at the overall agency or account level. However, it is expected each program, project and activity within these accounts will be reduced by five percent, including the Title V MCH Services Block Grant. Additionally, according to the OMB cover letter, “Because these cuts must be achieved over only seven months instead of 12, the effective percentage reductions will be approximately 13 percent for non-exempt defense programs and 9 percent for non-exempt nondefense programs.”

The order states that, “agencies shall apply the same percentage reduction to all programs, projects, and activities within a budget account, as required by [the Balanced Budget and Emergency Deficit Control Act.] Agencies should operate in a matter that is consistent with guidance provided by OMB in Memorandum 13-03, Planning for Uncertainty with Respect to Fiscal Year 2013 Budgetary Resources and Memorandum 13-05, Agency Responsibilities for Implementation of Potential Joint Committee Sequestration.”

While specific details at the program level are not yet available, our initial analysis of the OMB report confirms that public health systems supported by CDC, HRSA and SAMHSA will be absorbing $822 million in cumulative cuts over the next seven months. Factoring in WIC, the total rises to nearly $1.2 billion dollars and that excludes an additional $1.5 billion in NIH cuts.

Additional details about the level of cuts and impact on state programs should be coming from the U.S. Department of Health and Human Services (HHS) over the next couple of weeks. For additional information about sequestration and the AMCHP strategy moving forward, please view our recent legislative alert, which includes an important request to share information on the projected impact of sequestration on MCH programs and populations in your state.

Please feel free to contact Brent Ewig or Carolyn Mullen from the AMCHP policy team with any questions or concerns.

Up Next – The Continuing Resolution
According to media reports, the House and Senate expect to introduce spending bills funding the federal government for the remainder of the fiscal year from Mar. 27-Oct.1. It is unclear at this point if this legislation will include any provision to “undo” or minimize the sequester, but funding levels included in the bill will likely reflect the recent sequester order from OMB. AMCHP will be closely following the developments associated with the introduction and approval of this legislation in the next couple of weeks.

Health Reform Implementation

Few Changes in Final EHB Rule
HHS released the final essential health benefits rule (EHB) on Feb. 20. Essential health benefits are the core set of items covered by all insurance plans that are offered both inside and outside the health insurance marketplace. AMCHP provided comments on several key issues related to habilitation services, the age limit for pediatric services, among others. AMCHP suggested that for habilitation services, if states do not define habilitation services, then HHS should provide a definition rather than the insurer and the definition should be that of the National Association of Insurance Commissioners. HHS did not accept this suggestion. AMCHP also provided comments recommending the age limit for pediatric services be raised to 21; the final rule sets the federal limit at 19 but allows states to increase this maximum age in defining pediatric services. Centers for Medicare & Medicaid Services (CMS) provided a fact sheet on the essential health benefits final rule. AMCHP will continue to monitor and analyze the potential impact on MCH populations and state implementation of these health insurance reforms.

New and Updated Frequently Asked Questions
CMS provided an updated frequently asked questions sheet on several issues related to the ACA, including the Basic Health Plan (BHP) implementation, the Federal Medical Assistance Percentages (FMAP) for the new adult population, pregnant women coverage, and children’s coverage. Notably, HHS announced that it is delaying the release of guidance for the BHP by one year for an operational program by 2015.

Navigator and In-Person Assistors
HHS hosted a webinar on navigators and in-person assisters on Feb. 25. The webinar reviewed the roles of in-person assisters and navigators and the important role they will play when health insurance marketplaces open for enrollment in October 2013. The webinar highlighted funding mechanisms for the navigator program. States that will be running their marketplace are responsible for funding the navigator program. Therefore, interested organizations should refer to the state health insurance marketplace for more information. For those states where the federal government will be running the health insurance marketplace, funding announcements for organizations that wish to apply to become navigators will be in two rounds, the first in June 2013 and the second in September 2013. HHS encourages organizations that have not applied for federal funding in the past, visit to prepare for the process since the turnaround time for applications is anticipated to be short. For more information, visit the website.

Final Market Rule
On Feb. 22, CMS released the final rule on health insurance market reforms. The rule finalizes guidance for guaranteed availability of coverage, fair health insurance premiums, single risk pool, guaranteed renewability of coverage, catastrophic plans, and rate review. This provides details on some of the key provisions of the ACA, that those with a preexisting condition can no longer be denied health insurance coverage.

State Innovation Models
On Feb. 21, HHS announced the award of “nearly $300 million in awards will provide flexibility and support to states to help them deliver high-quality health care, lower costs, and improve their health system performance. HHS also is releasing a new report titled Medicaid Moving Forward, which underscores the innovative efforts states and HHS have already undertaken to improve care and lower costs in their Medicaid programs.”