| NEW YORK, Sept 21
NEW YORK, Sept 21 U.S. State officials behind
the launch of President Barack Obama's healthcare reform on Oct.
1 say they could weather a federal government shutdown, though
the scenario would add new pressure to the political attacks and
technical issues that have weighed on the program's
Several officials running new state-based insurance
exchanges that are due to open for enrollment next month said
they expected to have access to funds in the case of a shutdown,
which if it happens, would also start on Oct. 1, the beginning
of the the fiscal year.
But they were unsure of the consequences for the federal
agencies they work with, in part because they have not been
briefed by the Centers for Medicare & Medicaid Services (CMS),
the agency taking the lead in implementing the reform law.
The exchanges are key to the success of "Obamacare," as they
aim to help millions of uninsured Americans receive benefits by
providing government subsidies to buy insurance.
Officials involved in building the online marketplaces have
already warned of technical bumps and glitches in the first few
weeks after they go live, contributing to a slow start to
Independent experts believe that "the effects of a
government shutdown on the implementation of the ACA (Affordable
Care Act) are likely to be pretty small," said Paul Van de
Water, a policy analyst at the Center on Budget and Policy
Priorities, a Washington-based non-profit think tank.
The main reason, he said, is that the money flowing to the
16 states and the nation's capital that are running their own
ACA exchange is what's called a "permanent appropriation,"
enshrined in the 2010 healthcare reform law. Because the funds
are not subject to annual appropriations, they will continue to
be available to states that need to pay employees and
contractors and buy equipment and supplies.
What is even less clear is the ability of the U.S.
Department of Health and Human Services to operate a federal
data "hub" that underpins both the state-run exchanges and the
34 state exchanges that fall under the purview of the
The possibility of a federal government shutdown became more
likely late last week, when congressional Republicans voted to
fund the government but not the implementation of Obama's
The Democrat-controlled Senate is unlikely to go along. If
the two chambers cannot agree on a spending bill by Sept. 30, it
will trigger a government shutdown the next day.
Previous shutdowns, as well as a memo issued by the White
House Office of Management and Budget (OMB) last week, shed some
light on how another one would affect the rollout of the ACA.
OMB told federal agencies that they could continue to run
"entitlement programs, such as social security benefits, for
which an indefinite appropriation provides the funding."
During the longest government shutdown, from Dec. 16, 1995,
to Jan.6, 1996, similar procedure allowed almost all employees
of the Social Security Administration to continue working (and
get paid), because Social Security "is a permanent program" that
does not require annual appropriations from Congress to operate,
said Van de Water.
The benefits established under the healthcare reform law,
including federal subsidies to help people pay insurance
premiums, "are also entitlements provided in permanent law," he
said. "Under the OMB memo it seems highly likely that CMS would
conclude that the people necessary to carry out the ACA could
continue to work."
Federal employees working on Obamacare could therefore keep
reporting to their desks even if they are not deemed
"essential." OMB defines essential employees as those "providing
for the national security," which means the military continues
to operate during a government shutdown, or "the safety of life
and property," which means people such as meat inspectors, FBI
agents and federal prison guards remain on the job.
CMS referred questions about who would work and what
ACA-related functions would be affected by a shutdown to OMB. In
a statement, OMB spokesman Steven Posner said "agencies are
still in the process of reviewing relevant legal requirements
and updating their plans. Determinations about specific programs
are being actively reviewed as agencies undertake this process."
KEEPING THE HUB OPEN
Another key question concerns how a shutdown would affect
Obamacare's core information technology (IT) component, called
the federal data services hub.
The hub funnels personal information, such as income, from
databases at the Internal Revenue Service, other federal
agencies and private data companies back to the state exchanges,
indicating whether someone is eligible for federal subsidies to
purchase health insurance.
"I have not been provided any information from CMS on
whether the hub would operate" in the event of a government
shutdown, said Rocky King, executive director of Cover Oregon,
that state's Obamacare marketplace.
That will depend on how CMS interprets OMB's directive in
two areas: contractors and information technology.
Contractors led by CGI Group Inc and Quality
Software Services Inc have built and will operate much of the
information technology (IT) underpinning the exchanges. Even if
the data hub is allowed to operate during a government shutdown,
"it needs continuous maintenance," said Michael Marchand,
spokesman for Washington Health Plan Finder, that state's ACA
OMB says that a contractor "may continue to proceed with its
work" during a shutdown if the agency it's working for "already
obligated funds representing the entire price under a contract"
before the shutdown.
"This seems to say that if there is an issued contract, the
contractors can keep working," said Van de Water.
CMS declined to say whether the IT contracts for Obamacare
meet that criterion.
IT operations are allowed to continue only under limited
circumstances, according to the OMB memo. One circumstance is if
"their continuation is necessarily implied from a congressional
authorization or appropriation of other continued functions."
States running their own Obamacare exchanges are also
uncertain about whether their own employees will get paid in the
event of a shutdown, and whether they will have access to the
federal grants that support their operations. The ambiguity
stems from the fact that the grants, totaling tens and even
hundreds of millions of dollars, did not come in the form of a
lump payment deposited in a state's bank account.
"These are draw-down grants so the money is not in our
bank," said Oregon's King, referring to a system in which the
federal government deposits funds in accounts that states draw
from as expenses are incurred. "No information has been shared
with me that we would be prevented from continuing that
draw-down, but I just don't know."
Kevin Counihan, chief of Connecticut's Access Health CT
exchange, said he should have enough money to operate for about
four months in the event of a shutdown. Should the federal data
hub not be operational, the state could still accept
applications, he said. Officials in Colorado also said their
exchange would function, but the state would have to make
adjustments if the shutdown was prolonged.
Federal payments to subsidize insurance for eligible buyers
- those with incomes less than four times the federal poverty
level, or $62,040 for a couple - would not be in jeopardy
because they are due just before coverage begins, not when
someone enrolls. Anyone buying health insurance by Dec. 15,
2013, is covered as of Jan. 1, 2014.