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Letter to Democratic Caucus - Defunding ACA Would Wreak Havoc on Medicare, Other Health Programs


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Ways and Means Committee Ranking Member Sander Levin (D-MI), Energy and Commerce Committee Ranking Member Henry A. Waxman (D-CA), and respective Health Subcommittee Ranking Members Jim McDermott (D-WA) and Frank Pallone Jr. (D-NJ) today sent the following "Dear Colleague" letter to members of the Democratic Caucus, highlighting the havoc that would be wreaked on Medicare and other health programs -- undermining health care for a third of Americans -- by defunding the Affordable Care Act.

Republican Obsession with Defunding ACA Will Wreak Havoc on Medicare and Other Federal Health Programs, Undermine Health Care for 1/3 of All Americans

Dear Democratic Colleague:

We all understand that 25 million Americans would lose access to health coverage if Republicans defund the Affordable Care Act (ACA), but what many people do not know is that the Republican efforts to defund the ACA will also wreak havoc on Medicare and other federal health programs. Defunding ACA would disrupt provider payments under Medicare, Medicaid and the Children's Health Insurance Program (CHIP) and threaten access to care for more than 100 million seniors, people with disabilities, children and pregnant women.

Defunding the ACA would also increase out-of-pocket costs for senior citizens and people with disabilities who need prescription medicines, annual check-ups, mammograms, tobacco cessation programs and other important care. HHS first detailed the damage from defunding ACA in 2011; this letter also summarizes the potential damage to Medicare and other federal health programs.

Brings Medicare Provider Payments to A Grinding Halt. Defunding ACA implementation would disrupt Medicare provider payments, wreaking havoc on program operations. Under a defunding scenario, the Centers for Medicare and Medicaid Services (CMS) would be prohibited from continuing to pay providers at rates established in the ACA, negatively affecting the wide array of providers whose payment systems were improved under that law. Provider payments would stop while CMS figured out what payment rates to use instead. One of the most extreme repercussions is that CMS would not be able to pay Medicare Advantage plans. The ACA created a new system for MA plans, but CMS would not be able to pay plans under this system and there is no alternative payment system in place. Defunding would thus result in a significant disruption for the 14.5 million beneficiaries participating in MA plans, and significantly higher costs for taxpayers and beneficiaries. This short-sighted and vindictive tactic to undermine the ACA would unwind a successful multi-year effort to lead the nation to a smarter, better, more value-driven Medicare payment system and would raise overall program costs.

Stops Medicare and Medicaid Efforts to Fight Fraud. The ACA provided the Inspector General and the Department of Justice with critical new authorities to put fraudsters out of business and behind bars. Defunding the ACA and prohibiting CMS from implementing it stops those new authorities in their tracks, undermining ongoing efforts to fight fraud. New provider screening and enrollment systems would be halted, hindering the program's ability to fight fraud.

Ends New Medicare Benefits. Defunding the ACA means Medicare can no longer pay claims for benefit improvements created in the ACA, such as additional prescription drug coverage, the annual wellness exam and free preventive care.

Forces People with Disabilities and Elderly into Institutions. The ACA included new options for States to keep people out of institutions and living in their homes. States would lose this funding, forcing tens of thousands of the most vulnerable patients into nursing homes and potentially leading to greater health care costs. Defunding the ACA also denies resources needed to implement protections against nursing home abuse -- such as federal background checks on employees in these homes.

Causes Millions of Americans to Immediately Lose Health Coverage. The six states that elected to offer Medicaid coverage to low-income adults in advance of 2014 would be forced to drop that coverage. Additionally, defunding the ACA would effectively shut down the Medicaid program in Puerto Rico, the U.S. Virgin Islands and other territories -- rescinding funding already provided for Medicaid over the next six years.

Defunds the Children's Health Insurance Program. The ACA funded the Children's Health Insurance Program (CHIP), which provides coverage to nearly 11 million children in moderate income families through 2015. The Republican approach would rescind the funding the ACA provided -- $13 billion in 2014 alone -- effectively ending this insurance coverage for the vast majority of children covered under CHIP.

In sum, while it is obvious that the Republican effort to defund and delay ACA hurts coverage for millions of struggling middle-class individuals and families, we wanted to make it clear that this dangerous obsession has far-reaching, damaging implications in Medicare and elsewhere. If you have any questions or need additional information, feel free to contact the Democratic staff on the Committee on Ways and Means or the Committee on Energy and Commerce.


Rep. Sander Levin
Rep. Henry Waxman
Rep. Jim McDermott
Rep. Frank Pallone

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