What Happens to Health Law Money Already in State Coffers?

By: - June 25, 2012 12:00 am

If the U.S. Supreme Court declares all or parts of the national health law unconstitutional this week, legal experts say it is unclear what will happen to billions in federal money provided by the law that has already been sent to state and local governments, and private organizations.

To date, Washington has written checks for $13.7 billion, according to a federal funds tracker created by the Kaiser Family Foundation. Of that, 31 percent, or about $4.2 billion, has gone directly to state and local governments.

Even if the Affordable Care Act survives the high court review, Congress could attempt to repeal all or parts of the law, putting the billions already spent and billions more to come in question. “It’s definitely a concern,” says Matt Salo, director of the National Association of Medicaid Directors. “What the Congress giveth, the Congress can taketh away.”

Salo says it would be surprising if the federal government wanted a refund of money states have already spent, but Washington could take back funds that have been obligated but not spent.

The biggest chunk of state grants — $1.2 billion — went to insurance industry reforms and to create online shopping sites known as health insurance exchanges. Part of that money also went to pay claims for people with pre-existing conditions who became newly insured through the federal-state high-risk insurance pools that became available under the health law.

The second largest portion went for special projects primarily aimed at cost containment in Medicaid. These include grants for programs such as aging and disability resource centers designed to help people find community-based long-term care services. States also received grants to develop innovative approaches to caring for so-called dual-eligibles who qualify for both Medicaid and Medicare.

Money sent to state and local governments for public health and prevention initiatives totaled about $387 million and community health centers received $103 million, according to Kaiser.

In addition to grants, many states received increased federal matching funds for initiatives such as so-called “health homes,” which aim to provide better care for people with multiple chronic illnesses, and long-term care programs designed to keep elderly people and adults with disabilities out of nursing homes.

When you count the total amount of Affordable Care Act money that went to both government and private entities on a state-by-state basis, the District of Columbia comes out on top in dollars per capita, followed by Rhode Island, Montana, New Mexico, Alaska, Maine, Oregon, Michigan, Vermont and New Jersey. At the bottom of the list are Florida, Alabama, Indiana, Kansas, Arizona, Nevada, Virginia, Louisiana, Utah and Arkansas.

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Christine Vestal

Christine Vestal covers mental health and drug addiction for Stateline. Previously, she covered health care for McGraw-Hill and the Financial Times.