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Public Statements

Letter to Colleague

Letter

By:
Date:
Location: Unknown

Today Ranking Member Henry A. Waxman and Subcommittee Ranking Member Frank Pallone, Jr. circulated a summary of the recent CBO budget estimate of H.R. 1213, a bill to repeal the funding from the Affordable Care Act for states to establish transparent and competitive insurance exchanges. According to the CBO, the bill cuts $14 billion over 10 years at the expense of low and moderate income Americans being able to access insurance.

The full text of the dear colleague is below.

May 2, 2011

Dear Colleague:

The Congressional Budget Office (CBO) budget estimate of H.R. 1213, a bill to repeal the funding for states to establish exchanges from the Affordable Care Act (ACA), shows it cuts $14 billion over 10 years at the expense of low and moderate income Americans being able to access insurance. H.R. 1213 repeals funding in the ACA that will allow states to establish truly transparent and competitive insurance markets -- exchanges.

Undermining State Based Reform. According to CBO, without the federal assistance, fewer states would be able to set up and operate state run exchanges. Currently 49 states, the District of Columbia and 4 territories have gotten beyond ideology to govern; they applied for exchange grants and are working diligently to find out what type of marketplace is best for their families and businesses.

Two Million Fewer People Enrolled in Health Insurance Through Exchanges. Due to a lack of reliable funding, exchange establishment, enrollment and other operations will be delayed. According to CBO, this will result in "lower enrollment by an estimated 5 percent to 10 percent below the levels expected under current law between 2014 and 2016. In 2015, we estimate that there would be almost 2 million fewer people enrolled in state exchanges."

Increases Costs to Employers. According to CBO, "the number of people offered insurance through an employer is expected to increase in response to the reduced availability and desirability of exchanges."

500,000 More People will be Uninsured. According to CBO, "the number of people without health insurance is expected to increase by about half a million in 2015."

Increases Premiums. Given the tight fiscal budgets in most states, CBO finds that the loss of this support will cause some that still want to establish and operate their own state exchange marketplace to offset their losses with insurance surcharges. These will have the effect of raising health insurance premiums.

85% of the Cuts on People. 85 percent of the total $14 billion in cuts come at the expense of low and moderate income Americans not being able to access health insurance through exchanges. According to CBO, "most of the budgetary effect of eliminating grants for states under H.R. 1213 would come from reductions in subsidies for health insurance purchased through exchanges."

Grant money for states is limited. The actual money provided to states is estimated to be $1.9 billion between 2012 and 2015. The ACA prohibits any of these funds from being used by states beyond January 1, 2015, and the exchanges must be self sustaining. This refutes the false criticism that exchange grants are an open ended spigot that the Secretary will use to plug state deficit holes.

The estimate is available at http://www.cbo.gov/ftpdocs/121xx/doc12158/hr1213.pdf.

Sincerely,
Henry A. Waxman
Ranking Member

Frank Pallone, Jr.
Ranking Member
Subcommittee on Health


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