Appropriations and Fund Transfers in the Patient Protection and Affordable Care Act (ACA)

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C.Stephen Redhead
Specialist in Health Policy

Amongits many provisions, the Patient Protection and Affordable Care Act (ACA)restructures the private health insurance market, sets minimum standardsfor health coverage, and, beginning in 2014, mandates that most U.S.residents obtain health insurance coverage or pay a penalty. The lawprovides for the establishment by 2014 of state-based health insurance exchangesfor the purchase of private health insurance. Qualifying individuals andfamilies will be able to receive federal subsidies to reduce the cost ofpurchasing coverage through the exchanges. ACA also expands eligibilityfor Medicaid; amends the Medicare program in ways that are intended to reducethe growth in spending; and makes other changes to the tax code, Medicare,Medicaid, and many other federal programs.

In addition, ACA appropriates billions of dollars to support new or existinggrant programs and other activities. These mandatory appropriationsinclude funds for a temporary insurance program for individuals who havebeen uninsured for several months and have a preexisting condition, as wellas funding for states to plan and establish exchanges. ACA also providesfunding for various Medicare and Medicaid demonstration programs, for thecreation of a Center for Medicare and Medicaid Innovation to test andimplement innovative payment and service delivery models, and for anindependent board to provide Congress with proposals for reducing Medicare costgrowth and improving quality of care for Medicare beneficiaries.

ACA provides funding for health workforce and maternal and child healthprograms, and establishes three multi-billion dollar funds. The first fundwill provide a total of $11 billion over five years in funding forcommunity health centers and the National Health Service Corps. (A separateappropriation provides $1.5 billion for health center construction andrenovation.) The second fund will support comparative effectivenessresearch through FY2019 with a mixture of appropriations and transfersfrom the Medicare trust funds. The third fund, for which ACA provides apermanent annual appropriation, is intended to support prevention, wellness,and other public health-related programs and activities authorized underthe Public Health Service Act (PHSA).

According to the Office of Management and Budget’s preliminary estimates, theFY2013 mandatory appropriations in ACA would, in general, be subject to a7.6% reduction under a sequestration order triggered by the Budget ControlAct.

Lawmakers opposed to ACA have introduced numerous bills in the 112th Congress,several of which have seen legislative action. They include measures torepeal ACA and replace it with new law; repeal or amend specific ACAprovisions; eliminate certain mandatory appropriations and rescind allunobligated funds; and block or otherwise delay ACA implementation.

In addition to the mandatory appropriations discussed in this report, ACAauthorizes new funding for numerous existing discretionary grant and otherprograms, primarily ones authorized under the PHSA. The law also creates anumber of new discretionary grant programs and activities and provides foreach an authorization of appropriations. Funding for all these discretionaryprograms and activities is subject to action by congressionalappropriators. A companion product, CRS Report R41390, DiscretionarySpending in the Patient Protection and Affordable Care Act (ACA), summarizesall the provisions in ACA that include an authorization of appropriations.


Date of Report: October 26, 2012
Number of Pages: 32
Order Number: R41301
Price: $29.95

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