HHS Wasting Our Money on Obamacare

HHS pushes out cash ahead of ruling


Much - if not all - of this funding was in the pipeline well before March. | Reuters
By J. LESTER FEDER & KATHRYN SMITH & KYLE CHENEY | 06/23/2012 10:34:53 AM EDT | Updated: 06/23/2012 12:10:41 PM EDT
Conservatives wanted the White House to stop spending on the health care law until the Supreme Court rules on whether it's constitutional.

But the administration has forged ahead, spending at least $2.7 billion since oral arguments in the case ended on March 28. That's more than double the amount that was handed out in the three-month period leading up to the arguments, according to a POLITICO review of funding announcements from the Department of Health and Human Services.

While much - if not all - of this funding was in the pipeline well before March, the timeline for handing out specific funds is not set in stone, which gives the agency leeway over the kinds of dollars it has been handing out.

And the stakes have increased as the date of a Supreme Court ruling approaches, because money that is spent won't have to be repaid, most likely. But remaining funds will dry up if the court strikes down the law.

The court is expected to announce its decision next week.

The $2.7 billion includes grants and awards that have been handed out since the Supreme Court arguments - including more than $90 million in funds for health insurance cooperatives that HHS announced Friday afternoon.

By contrast, the administration gave out about $1 billion in grants, loans and other awards during the three months before the Supreme Court arguments.

An HHS spokesperson strongly disputed the idea that there was any change in the timeline because of the court.

"This story is flat-out wrong. Since the passage of the Affordable Care Act more than two years ago, we have worked continuously to implement the law and to educate the American people about the benefits," the spokesperson said. "The premise of the story does not take into account the timeline of implementation."

Some Republicans have been pushing to halt all implementation of the law until the Supreme Court ruling comes out. Last year, for example, a draft of the House Labor-HHS appropriations bill, which provides funding for the health care agencies, would have frozen all spending on health reform until the court ruled. And Sen. Kay Bailey Hutchison (R-Texas) has been pushing a bill that would have blocked any more implementation of the law before the ruling.

House Labor-HHS Appropriations Subcommittee Chairman Denny Rehberg (R-Mont.), the author of the appropriations bill that would have put implementation funding on hold, blasted the latest HHS spending in a statement provided to POLITICO.

"It was irresponsible to spend a single dollar implementing the law before the Supreme Court rules, and I fought hard to prevent that money from being spent," Rehberg said.

Once this money's committed, there's probably no recovering it even if the Supreme Court strikes down the whole law, lamented Rep. Michael Burgess (R-Texas). "I don't know how the funding comes back," he said.

The Supreme Court could just strip parts of the law, like the individual mandate and the guaranteed coverage for people with pre-existing conditions, which wouldn't affect the kinds of funds HHS has released. But a ruling that strikes down the entire law isn't out of the question - and that could require a halt to the other health reform programs HHS has been funding.

HHS announced Friday that it had granted a combined $92.6 million dollars to capitalize health care CO-OPs - nonprofit insurance organizations intended to boost competition in places where the insurance market is heavily concentrated - in Vermont and Kentucky.

HHS has awarded $306.5 million to CO-OPs in other states since the arguments, and even made an award of $87.6 million on March 27, the second day of the Supreme Court hearing.

The largest single amount doled out since March was for awards from the Center for Medicare and Medicaid Innovation's "Innovation Challenge" to organizations testing more efficient ways of delivering care. It gave $772 million to 81 organizations on June 15, which was a follow-up to a $122.6 million batch of innovation grants awarded on May 8.

Another large chunk of funds went to help build or renovate community health centers. HHS Secretary Kathleen Sebelius announced $728 million in health center funding to 398 health centers on a May 1 visit to Philadelphia's Fairmount Primary Care Center. On Wednesday, the department awarded another $128.6 million to help expand 219 health centers.

Six states - including three states that are part of the challenge to the health care law - benefited from $181 million in grants announced in mid-May to help them set up health exchanges. The exchanges are new, state-based health insurance marketplaces that will go into effect in 2014 if the law is upheld.

And earlier this month, another four states - including three that are opposing the law -split $295.6 million in enhanced Medicaid funding provided by the law to encourage states to provide long-term care to patients in their homes.

Jonathan Allen contributed to this report.

This article first appeared on POLITICO Pro at 7:00 a.m. on June 23, 2012.