Obamacare Enrollment Continues If Government Shuts Down

Shutting down the government won’t shut down the health-care law.

In a quirk of the calendar, the start of enrollment for the Affordable Care Act and the first day of a shutdown would fall on the same day, Oct. 1. The good news for President Barack Obama is that cutting off funds for non-essential government programs in a shutdown wouldn’t stop funding for implementing his health care law, health policy experts said.

“A shutdown per se doesn’t stop the Affordable Care Act,” said Doug Holtz-Eakin, a former director of the Congressional Budget Office who now leads the American Action Forum, a Washington advocacy group opposed to the health law.

That’s because the 2010 law relies primarily on mandatory spending, which congressional inaction can’t stop. It’s the budget category used for benefits such as Medicare and Social Security.

If some Republicans succeed in shutting down the government, opponents of the health-care law can’t rely on a closure to impede the ability of new insurance exchanges to link with other agencies.

The exchanges must connect to computers at other federal agencies, including the Internal Revenue Service and the Homeland Security Department, in order to determine whether potential customers are eligible for coverage and for subsidies to help pay their premiums. Those connections probably wouldn’t be jeopardized by a shutdown, Holtz-Eakin said.

“None of these agencies will in their entirety shut down, and their computer infrastructure is a pretty essential thing,” he said.

Open Enrollment

The Oct. 1 kickoff of open enrollment for state and federal exchanges, where Americans can buy subsidized coverage under the act, coincides with the start of the new fiscal year. The government could temporarily shutdown if Congress fails to enact a short-term spending bill.

Affirmed by the U.S. Supreme Court, the health law is expected to provide insurance coverage for about 25 million Americans now lacking it, at a cost of about $1.8 trillion over the next decade. The fight in Washington is driven by Republicans from districts where opposition to Obama is strongest, inflamed by delays with the health law’s implementation and worries that it will hurt care for people who already have insurance.

Last-minute compromises have become standard in a divided Congress where lawmakers willing to work across the aisle are targeted by outside interest groups. The fiscal compromise that raised taxes for upper-income Americans was struck on New Year’s Day.

‘Several Times’

This time, the stopgap spending legislation “may well go back and forth from the House and Senate several times” before a final vote, Senator Ted Cruz, a Texas Republican leading the drive to defund Obama’s health law, said in a Sept. 20 statement.

So far, the new health insurance marketplaces under the Obama law, called exchanges, are supported by unlimited federal grants in 14 states that are running them on their own.

In 36 states where the government is building all or part of the exchanges, the government has found sources of money independent of Congress to do the work. These include $450 million in fees the government anticipates from insurers in 2014.

“Other sources of funding besides annual discretionary appropriations are available in FY 2014 and beyond to support exchange operations,” the Congressional Research Service wrote in July to Senator Tom Coburn, an Oklahoma Republican who opposes the health law while not supporting shutting down the government over the issue.

Shutdown Risk

When the Obama administration faced the risk of Congress shutting down the government, in December 2011, the Department of Health and Human Services said in a memo that it would keep the Affordable Care Act running.

Instead, congressional failure to fund the government would prompt the HHS to halt down programs that rely on “discretionary” spending, money that Congress has to renew every year.

These included the $30 billion National Institutes of Health, the biggest source of money for biomedical research in the world; anti-fraud programs at Medicare; programs for elderly people; Head Start grants for pre-kindergarten education; and grants for groups that care for people with HIV and AIDS.

The NIH wouldn’t make grants and would not admit any new patients to its research hospital in Bethesda, Maryland.

Chronic Diseases

The Centers for Disease Control and Prevention would halt “a variety of activities,” including programs aimed at preventing chronic diseases such as diabetes and encouraging public health. Programs intended to fight fraud in Medicare, the health plan for the elderly and disabled, “would have to end their operations,” the department said in its memo.

Joanne Peters, a spokeswoman for HHS, wouldn’t comment on the impact of a shutdown on the health law.

Trying to steer House Republicans away from a shutdown strategy this year are former Florida Governor Jeb Bush and Senator John McCain of Arizona. McCain, the party’s 2008 presidential nominee, said threatening a shutdown over Obama’s health plan is a “suicide note.”

Credit Rating

The public assigned Republicans the brunt of the blame for the 2011 debt-ceiling showdown that led to a downgrade in the U.S. credit rating, and even conservative Republicans warn their party would be faulted if there is a shutdown.

“We are structurally outnumbered here against a president and a White House,” said Representative Trent Franks, an Arizona Republican. The Democratic-led Senate will “simply strip” the defunding language from the bill “and send it back to us, and then we’re the ones that look like we’re shutting the government down,” he said.

Majority Leader Harry Reid has warned that any bill “that defunds Obamacare is dead -- dead.”

Republicans are “simply postponing the inevitable choice they must face -- pass a clean bill to fund the government or shut it down,” the Nevada Democrat said on Sept. 19.

Ultimately, House Speaker John Boehner will be forced to choose between shutting down the government and bringing for a vote a bill that doesn’t have the support of a majority his party members.

Speaker Boehner

While that risks a rebellion by anti-tax Tea Party lawmakers who may vow to oust him from the speaker’s chair, he’s shown it’s a chance he’s willing to take. Boehner relied on strong Democratic backing to pass last year’s legislation raising taxes and $50.7 billion in federal aid in January after Hurricane Sandy.

More likely than a shutdown is that Republicans will dig in on a proposal to delay the law as part of the debt-ceiling battle, based on interviews with a number of Republican lawmakers.

“Fighting for the delay makes a lot of sense to me since the president’s already delayed portions of it,” said Oklahoma Representative Tom Cole, a Republican deputy whip. “I just don’t want to put a gun to my own head and say ‘repeal it or I’m going to shoot,’” he said.

“The administration’s already put out all of these delays already,” said Representative James Lankford. “None of this is ready,” he said. “We’re willing to negotiate and say, ‘this is not ready, they know it, we know, let’s figure out how to resolve it.’”

Before it's here, it's on the Bloomberg Terminal.