September 17, 2012
The Patient Protection and Affordable Care Act (ACA) is a comprehensive law with the potential to affect the health of Americans in many ways. The ACA reduces the number of uninsured Americans by expanding eligibility for Medicaid and offering tax credits for the purchase of private insurance.i In addition, the ACA makes investments to expand access to care, reform the health care delivery system, implement broad private insurance reforms, and enhance the public health infrastructure.
Many of these reforms and investments are paid for through direct public funding included in the law. Specifically, the ACA includes much of the funding necessary for creating health insurance exchanges, growing the capacity of the healthcare workforce, expanding primary care capacity through community health centers, and several other initiatives. While many major ACA provisions, such as the insurance coverage expansions, will not go into effect until 2014, many others have already been implemented and funded through federal grants to state governments, community-based organizations, colleges, and local agencies.
This issue brief focuses on ACA grants that were awarded during a shortened fiscal year 2010 (March 23, 2010 to September 30, 2010) and fiscal year 2011 (October 1, 2010 to September 30, 2011). This brief also examines other current and planned grant spending in the ACA and how funds have been distributed to states for a variety of programs.
i The ACA expands coverage in 2014 through tax credits for private insurance and increasing eligibility for Medicaid. The estimated gross cost of this coverage expansion is $975 from FY2011 to FY2019, according to the Congressional Budget Office Report “CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010” from March 2011. Since these provisions are funded outside federal budget process, they are not included in non-discretionary appropriations.
There are two types of federal spending, discretionary and mandatory (also known as non-discretionary). For both types, Congress must authorize an entity of the federal government to spend money for a specific purpose. Appropriations for mandatory spending are included in the original authorizing law and thus exempted from the annual budget process. On the other hand, Congress must appropriate funds for discretionary spending during the budget process. It is important to note that Congress is not required to appropriate the full amounts authorized for discretionary programs. Therefore, discretionary programs could receive less funding than was originally authorized in legislation.
The ACA includes both discretionary and mandatory spending to fund its programs, but many key ACA initiatives are funded through mandatory spending that does not require further Congressional approval. Appendix 1 In total, the ACA included $101.25 billion in mandatory spending from fiscal years 2010 through 2019.ii By the end of fiscal year 2011, the U.S. Department of Health and Human Services (HHS) had awarded nearly $3.6 billion in grants under the ACA.iii Most grant programs under the ACA have been funded through mandatory spending.
The ACA contains a number of new funding sources, within the following categories:
For a list of funding sources for select ACA programs by implementation year, see Appendix 1.
ii Based on CHRT calculations from the Congressional Research Service report “Appropriations and Fund Transfers in the Patient Protection and Affordable Care Act” from February 2011. Appropriations for state grants for health insurance exchange planning and implementation are not included, since the Secretary of HHS has discretion to spend amounts necessary for these grants. As of May 16, 2012, HHS had awarded nearly $1 billion in planning and implementation grants for health insurance exchanges. http://www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html
iii Tracking Accountability in Government Grants System (TAGGS) available at http://taggs.hhs.gov.
iv As of May 16, 2012, HHS has awarded approximately$ 849 million in Level One and Level Two funding, $117 million in Early Innovator grants, and $47 million in exchange planning grants. http://www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html
Awards were limited in FY2010 due to the shorter funding period (March 2010 to September 2010) and to allow time for HHS and other agencies to prepare for the increase in spending under the ACA. Of the ACA’s many grant programs, 36 were actively funded in FY2010.
HHS awarded a total of $1.03 billion in FY2010 to states and the District of Columbia. California and New York, received the most awards in 2010, with approximately $83 million and $66 million, respectively. The bottom two states were South Dakota and Wyoming, each receiving less than $6 million. The District of Columbia received the most funding per capita with $38.26. Figure 1 See Appendix 2 for full details of state-level funding.
The Prevention and Public Health Fund and the market reform provisions in the ACA funded most active grant programs. In anticipation of the need for expanded primary care capacity in 2014, HHS committed one-half of the FY2010 Prevention and Public Health Fund budget to health workforce development programs instead of traditional community-based public health programs. This investment in health workforce made workforce funding the largest category of grants ($503 million), more than twice as much as community-based prevention programs (approximately $209 million), the next largest category. Figure 2 Another prominent category of ACA funding was for maternal and child health programs, which received $116 million. Much of this funding was distributed to states for Maternal, Infant, and Early Childhood Home Visiting programs ($103 million).
|Funding Category||Total Funding|
|Maternal and Child Health||$116,312,534|
State agencies were the leading recipient of ACA funding awards in FY2010, with nearly $414 million. Figure 3 These funds were used to support a wide variety of programs and initiatives, including Maternal, Infant, and Early Childhood Home Visiting programs ($85 million); health insurance exchange planning ($48 million); insurance premium reviews ($46 million); and personal responsibility pregnancy prevention ($44 million). Community-based health organizations, along with public and private colleges and universities, also received significant amounts of ACA funding, particularly to support primary care training and residency programs.
|Recipient Type||Total Funding|
|Health & Community-based Organizations||$225,577,854|
|State Colleges & Universities||$214,741,842|
|Private Colleges & Universities||$111,447,387|
Nationally, ACA funding more than doubled in FY2011 to more than $2.5 billion as FY2011 was the first full fiscal year of ACA implementation. The number of actively funded grant programs under the ACA increased from 36 in FY2010 to 47 in FY2011. As in FY2010, California again received the most funding in FY2011, with nearly $258 million in grants. Figure 4
Ohio, New York, Massachusetts, and Oregon each received grants totaling more than $100 million. Only two states—North Dakota and Delaware—were awarded less than $10 million. The District of Columbia again received the largest amount of funding per capita. See Appendix 2 for full details of state-level funding.
Funding for community health centers comprised the largest category of grant funding in FY2011 with more than $858 million. Figure 5 Much of this funding was awarded for capital expenditures, with $716 million awarded to community health centers and $94 million awarded to school-based health centers. The next largest category was for grants to states for programs to reform the private insurance industry ($595 million), including grants to continue planning and to begin establishing health insurance exchanges ($463 million). Community-based prevention programs were also awarded funding ($436 million) for a variety of programs, including nearly $108 million in Community Transformation Grants.
|Funding Category||Total Funding|
|Maternal and Child Health||$250,486,728|
|Medicaid & CHIP||$20,042,057|
In FY2011, state agencies again received the most ACA grant funding with more than $1.1 billion. Figure 6 More than one-third of this funding was awarded for state planning and implementation of health insurance exchanges ($427 million). State agencies were also awarded funds to continue operating Maternal, Infant, and Early Childhood Home Visiting programs ($216 million) and insurance premium Rate Review programs ($102 million). Similar to FY2010, community health centers continued to receive significant funding ($840 million), with most of funding for capital development ($632 million). Public and private colleges and universities experienced modest increases in funding from their FY2010 levels as Prevention and Public Health Fund funding shifted away from workforce training and toward traditional public health programs.
|Recipient Type||Total Funding|
|Health & Community-based Organizations||$839,988,927|
|State Colleges & Universities||$295,074,140|
|Private Colleges & Universities||$125,811,491|
The ACA includes nearly $4 billion in non-discretionary funding explicitly for FY2012, not including funding allocated across multiple years.v Assuming that the ACA is implemented as planned, total spending is scheduled to increase over previous years as new grant programs are introduced and agencies are established. Of course, scheduled increases could change over time. For example, as part of the Middle Class Tax Relief and Job Creation Act of 2012, the Prevention and Public Health Fund was cut from $15 billion to $9.75 billion over its first 10 years to offset the costs of extending temporary tax cuts and preventing a large cut in Medicare payments to physicians.
Some states have also returned grant funding for ACA programs. Four states—Delaware, Florida, North Dakota, and Pennsylvania—experienced a drop in total ACA funding from FY2010 to FY2011 even though the ACA was in effect for all of FY2011. Oklahoma, Kansas, and Wisconsin were three of seven states to receive Early Innovator Grants to develop infrastructure for health insurance exchanges. Oklahoma returned its $54 million award, reducing its state total to $35.3 million.vi Kansas returned its grant, worth $31.5 million, dropping its total to $14.1 million.vii Wisconsin also returned its grant, worth $38 million, reducing its total to $41 million.viii These states cited a desire to maintain flexibility in the future as a primary reason for returning the awards. Although the return of these grants was announced in 2011, they will be reflected in the funding levels for FY2012.
Funding may also be affected by the sequestration process under the Budget Control Act of 2011, which was triggered by the failure of the Joint Select Committee on Deficit Reduction (also known as the “super committee”) to agree on a plan to decrease the federal deficit. The sequestration process aims to reduce the deficit by $1.2 trillion by cutting funding for certain domestic programs and defense spending from 2013 to 2021.ix The resulting cuts to non-defense spending will likely reduce funding for ACA programs. While ACA-funded initiatives are designed to influence the future delivery of health care, the size and nature of future ACA-funded programs remains uncertain.
v Based on CHRT calculations from the Congressional Research Service report “Appropriations and Fund Transfers in the Patient Protection and Affordable Care Act” from February 2011.
vi Oklahoma Gov. Mary Falling announced on April 14, 2011 that Oklahoma would return its $54 million Early Innovator Grant. http://www.ok.gov/triton/modules/newsroom/newsroom_article.php?id=223&article_id=1601
vii Kansas Gov. Sam Brownback announced on August 9, 2011 that Kansas would return its $31.5 million Early Innovator grant. https://governor.ks.gov/media-room/media-releases/2011/08/09/kansas-to-opt-out-of-early-innovator-grant
viii Wisconsin Gov. Scott Walker announced on January 18, 2012 that Wisconsin would return its $38 million Early Innovator Grant. http://walker.wi.gov/Default.aspx?Page=84c6be7e-6bf7-47bb-949a-7330dd644579
ix The $1.2 trillion sequester includes $492 billion in defense cuts, $492 billion in non-defense discretionary funding cuts, and $216 billion in reduced debt serving costs, http://www.bipartisanpolicy.org/blog/2011/11/bca-sequester
The Affordable Care Act funds many of its programs through grants to state governments, community-based organizations, colleges, and local agencies. Many organizations across Michigan have been active in applying for and receiving grant funding to implement ACA reforms, improve health care access, and invest in the public health infrastructure.
For FY2010 and FY2011, Michigan received a total of $82.6 million in ACA grant awards. The largest category of funding was for health workforce training and development ($26.5 million) with funding for community health centers a close second ($26.1 million). The State of Michigan, including the Department of Community Health, received the most funding in this two-year period with $27.1 million; nearly triple the amount of the next highest recipient. Figure 7
|State of Michigan||$27,106,892|
|Family Health Center, Inc.||$9,670,241|
|University of Michigan||$8,321,408|
|Cherry Street Services, Inc.||$6,318,432|
|Wayne State University||$5,736,624|
|Michigan State University||$3,427,616|
|Center for Family Health, Inc.||$3,400,000|
|Grand Valley State University||$2,341,318|
|Inter-Tribal Council of Michigan, Inc.||$2,075,080|
Michigan received more than $29 million in ACA grants in FY2010, ranking 10th in total state awards. Per-person, however, Michigan ranked 39th. Appendix 2
Funding in Michigan followed a pattern similar to the national level, with grants for the health workforce as the largest category by a large margin with $18.1 million. Figure 8 Many of these workforce grants were funded by the Prevention and Public Health Fund, which prioritized workforce development in FY2010.
|Funding Category||Funding Total|
|Maternal and Child Health||$2,633,673|
Colleges and universities in Michigan received much of this health workforce grant funding, making this the largest recipient category. Figure 9 For example, funding was awarded to the University of Michigan ($4.5 million), Wayne State University ($3.1 million), and Michigan State University ($2.4 million) for health workforce development.
|Recipient Category||Funding Total|
|State Colleges & Universities||$13,903,858|
|Health & Community-based Organizations||$4,400,966|
|Private Colleges & Universities||$1,463,377|
Michigan award highlights in FY2010 include:
The top 10 recipients of ACA grants in FY2010 were:
Michigan received $53 million in FY2011, nearly double the amount received in FY2010. However, Michigan’s grant totals fell relative to other states, from 10th to 14th. Appendix 2 Per capita grant funding also declined from 39th to 44th nationally.
Health centers were the largest source of funding to Michigan in FY2011 with $23.7 million, mirroring national trends. Figure 10 Much of this funding went toward capital development of community health centers ($18.7 million). School-based health centers were also awarded $4 million for capital development.
|Funding Category||Funding Total|
|Maternal and Child Health||$6,109,549|
Non-profit community health organizations, many of whom operate health centers, were the largest type of funding recipient in FY2011. Figure 11 For example, funding was awarded to Family Health Center, Inc. ($9.4 million), Cherry Street Services, Inc. ($5.9 million), and Center for Family Health, Inc. ($3.4 million) for capital development of community health centers.
|Recipient Category||Funding Total|
|Health & Community-based Organizations||$23,068,278|
|State Colleges & Universities||$6,785,378|
|Private Colleges & Universities||$905,775|
Michigan’s FY2011 award highlights include:
The top 10 recipients of ACA grants in FY2011 were:
Michigan received limited or no funding in the following categories of FY2011 funding:
x Medicare funding estimate provided by the staff of the Michigan Primary Care Transformation Project (MiPCT).
As implementation of the ACA continues, Michigan is expected to continue to receive federal grants to support programs and initiatives. On November 29, 2011, Michigan was awarded a Level One Establishment grant of $9.8 million to conduct additional analysis and planning for a health insurance exchange. This funding was subsequently blocked by Michigan’s legislative appropriations process.
However, Michigan has received other funding for FY2012, including $183,000 in awards for school-based health centers. If the ACA remains in effect as planned, Michigan can expect to receive more funding before the end of FY2012, as the application process moves along for other ACA programs.
|§1002, §1003, & §1311||Market Reform||$280||TBD|
|Grants to states to help establish insurance exchanges, review health insurance policies, and provide consumers insurance information||(Plus sums for exchange grants for FY2010 through FY2014 as necessary)|
|§2951||Maternal, Infant, and Early Childhood Home Visiting program||$100||$250||$350||$400||$400||$1,500|
|Grants to support home visitation and primary care for infants and young children at the local and tribal level|
|§2953||Personal Responsibility Education Program Grants||$75||$75||$75||$75||$75||$375|
|Grants for teen pregnancy prevention programs and related initiatives|
|§3021(a)||Center for Medicare and Medicaid Innovation||$5||$10,005|
|CMI conducts research and demonstration projects to improve efficacy and quality in Medicare, Medicaid and CHIP||(Plus $10 billion total for FY2011 through FY2019)|
|§4002||Prevention and Public Health Fund||$500||$750||$1,000||$1,000||$1,000||$1,000||$1,000||$1,000||$1,250||$1,250||$9,750|
|General fund to support grant programs focused on improving public health infrastructure and workforce development|
|§5601 & §10503||Federally Qualified Health Centers||$1,000||$1,200||$1,500||$2,200||$3,600||$11,000|
|Planning and expansion grants to increase the number of FQHCs nationwide||(Plus $1.5 billion total for community health center construction and renovation for FY2011 through FY2015)|
|§6301(e)||Patient-Centered Outcomes Research Institute||$10||$50||$150||$150||$150||$150||$150||$150||$150||$150||TBD|
|The PCORI funds studies of clinical effectiveness of various treatments||(Plus the net revenue from a fee levied on insurance policies and health plans for FY2013 through FY2019)|
|State||2010 Total||2010 Ranking||2011 Total||2011 Ranking||2010 Per Capita||2010 Per Capita Ranking||2011 Per Capita||2011 Per Capita Ranking||2010–2011 Total Change|
|District of Columbia||$23,019,161||16||$34,111,800||30||$38.26||1||$55.20||1||48%|
xi Tracking Accountability in Government Grants System (TAGGS).
Suggested citation: Fangmeier, Joshua; Tommasulo, Peter; Eller, Patrice; Udow-Phillips, Marianne. Affordable Care Act Funding: An Analysis of Grant Programs under Health Care Reform. September 2012. Center for Healthcare Research & Transformation. Ann Arbor, MI.