Affordable Care Act funding: An analysis of grant programs under health care reform

December 17, 2013

Magnifying glass over the words "Affordable Care Act ACA"This brief examines grant programs funded by the Affordable Care Act (ACA), how funds have been distributed to states and local organizations, and the effects of budget sequestration on future ACA funding.

The ACA aims to expand health insurance coverage and introduce health care delivery reforms that improve quality and lower costs. The ACA is designed to reduce the number of uninsured Americans by expanding eligibility for Medicaid and offering tax credits for the purchase of private insurance. Beginning in 2014, the ACA expanded coverage through Medicaid expansion (in states that approved expansion), tax credits for individuals and families to purchase private insurance, and small business tax credits. In addition, the ACA makes investments to expand access to care, implement broad private insurance reforms, and enhance the public health infrastructure.

Many of these reforms and investments are paid for through direct spending included in the law. Specifically, the ACA included much of the funding necessary for creating the state-based health insurance exchanges (also known as marketplaces) as well as the federally-facilitated exchanges, growing the health care workforce, expanding community health centers and several other initiatives.

he ACA includes both discretionary and mandatory spending to fund its programs, but many ACA initiatives (see Appendix 1, page 13) are funded through mandatory spending that does not require further Congressional approval. In total, the ACA included approximately $105
billion in mandatory spending from fiscal years 2010 through 2019, including $40.2 billion to fund the Children’s Health Insurance Program (CHIP) for two years (FY 2014-FY2015). By the end of fiscal year 2013, the U.S. Department of Health and Human Services (HHS) had awarded nearly $15.1 billion in grants under the ACA. Most grant programs under the ACA have been funded through mandatory spending.