House Republicans are questioning why the Obama administration transferred money last year from the National Institutes of Health and the Centers for Disease Control and Prevention to pay for the operation of the federal health insurance marketplace.
"Now it appears that we are robbing Peter to pay Paul in order to finance the disaster that is HealthCare.Gov," said Rep. Jody Hice, a Republican congressman from suburban Atlanta.
Hice complained at a hearing Thursday that the Department of Health and Human Services shifted millions of dollars last year from those agencies to help pay the $1.4 billion cost of running the insurance marketplaces in 37 states, according to an HHS spending document.
But HHS officials say they have authority to move money between agencies that are under their jurisdiction. And they note that only about 0.25 percent of each department's funding — about 50 in all, including global health and AIDS and substance abuse treatment programs — was used to finance the exchange.
Congressional Democrats did not appropriate sufficient funding to support the startup and operation of the federally run exchange, partly because they expected most states to run their own marketplaces. More than three dozen states decided to rely on the federal government, leaving HHS scrambling to find money to do the job. In 2013, HHS took $454 million from the $15 billion Prevention and Public Health Fund, created by the health law, and $158 million from the health law's Health Insurance Reform Implementation Fund, according to the Congressional Research Service.
In 2014, the single largest dollar amount that was transferred within HHS — $34.2 million — came from the Low Income Home Energy Assistance program, which helps poor people heat their homes in winter. Another $12 million came from the National Cancer Institute and nearly $11 million came from the National Institute of Allergy and Infectious Diseases. In contrast, the state-run exchanges received an "indefinite appropriation" from Congress to support their operations until this year when they were supposed to become self-sufficient. However, the federal exchange could not tap that money. Both the state and federal exchanges are also supported by premium taxes paid by those buying health plans in the marketplaces.
HHS officials say they have used their authority to transfer funds from one budget category to another when faced with pressing needs before, including paying for cybersecurity protection, caring for unaccompanied children caught crossing the U.S.-Mexico border and helping states provide medicines to individuals living with AIDS.
Sabrina Corlette, senior research fellow at Georgetown University, said the Obama administration is doing the best it can with funding limitations from the law and a resistant Republican controlled Congress. "A successful launch of the exchanges and health reform in general is a huge priority for the administration and in their first year of operation the user fees (from the exchange) are not completely covering their costs," she said.
"They are having to run exchanges in more states than anyone anticipated ...and they did the best they could with the cards they were dealt," Corlette said.
Joe Antos, a health economist at the conservative American Enterprise Institute, agrees that officials can shift money between departments within their jurisdiction.
"There is no issue on whether they have the authority to do this," he said, "but the question is whether this is the best way to fund the federal exchange."
Antos questioned whether the federal exchange is costing the federal government more money not just because more states are using it than originally envisioned, but because of the technological problems that caused sign-up delays during the first open enrollment period in the fall of 2013.
President Obama's 2015 fiscal year budget proposed about $1.8 billion to operate the federal exchange, of which nearly $1.2 billion would come from the premium tax and $629 million would come from Centers for Medicare & Medicaid Services, according to a Congressional Research Service report last October.