The Patient Protection and Affordable Care Act (ACA) is a comprehensive law that 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.1 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.
This issue brief updates an earlier CHRT brief and focuses on ACA grants that were awarded from when the law was signed (March 23, 2010) until the end of fiscal year 2013 (September 30, 2013).2 This brief examines grant programs funded by the ACA, how funds have been distributed to states and local organizations, and the effects of budget sequestration on future ACA funding. This brief also includes an analysis of ACA funding in Michigan during fiscal years 2012 and 2013.
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 ACA initiatives (see Appendix 1) are funded through mandatory spending that does not require further Congressional approval. In total, the ACA included approximately $105 billion3 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 (FY2014–FY2015).4 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.5 Most grant programs under the ACA have been funded through mandatory spending. In order to administer new grant programs, the ACA created a number of new funding sources in the following categories: For a list of funding sources for select ACA programs by fiscal year, see Appendix 1. As expected, states with large populations, like California and New York, received the most awarded funding, with approximately $2.1 billion and $1.1 billion, respectively. Colorado, Kentucky, and Oregon (ranked 22nd, 26th, and 27th in population, respectively) also all ranked in the top 10 in total awarded funding. All three of these states established their own state-based health insurance exchanges, while both Florida and Georgia (ranked 4th and 8th in population, respectively) finished outside the top 10 in funding. Vermont received the most funding per capita with $375.75. See Appendix 2 for full details of state-level funding. The amount of funding awarded under the Affordable Care Act has increased every fiscal year since the law was signed in 2010, totaling nearly $15.1 billion. The priorities of funding have also changed over this period. In the short FY2010 funding period (March to September 2010), HHS awarded nearly half (48.9 percent) of ACA funding to health workforce development programs, mostly from the Prevention and Public Health Fund, in anticipation of increased primary care demand in 2014. However, workforce spending has decreased each year since FY2010, while health center and market reforms programs have been the most funded ACA programs with $4.9 billion (32.4 percent) and $4.4 billion (29.2 percent) in total funding, respectively. Another prominent category of funding was for maternal and child health programs with $1.4 billion (9.3 percent). Much of this funding was to support the Maternal, Infant, and Early Childhood Home Visitation Program ($976.5 million). In terms of organizations receiving ACA funding awards, state agencies were the leading recipients over the four fiscal years, receiving nearly half (48.4 percent) of total funding. These funds were used to support a variety of activities, including health insurance exchange implementation ($3.9 billion), Early Childhood Home Visitation programs ($886.7 million), and long-term care demonstrations ($628.8 million). Health and community-based organizations also received a large share of funding with 36.7 percent. This includes many community health centers who were awarded funding to support service expansion and facility improvements, allowing them to serve a larger number of patients. College and universities were prominent recipients in FY2010 with 31.7 percent, but their share fell significantly to 5.1 percent in FY2013, as funding priorities shifted away from workforce training. Initially, the Budget Control Act (BCA) created the Joint Select Committee on Deficit Reduction (so-called “super committee”) to propose legislation to achieve $1.5 trillion in deficit reduction over the next decade. When the committee failed to reach an agreement, sequestration—cancellation of budgetary resources—took effect, beginning in March 2013.7 From FY2013 to FY2021, the sequester reduces federal spending by $1.2 trillion, including $216 billion in federal debt interest payments. The remaining $984 billion in cuts is split across nine years ($109 billion per year) and divided between defense and nondefense programs. Several nondefense entitlement programs—such as Social Security, veterans’ benefits, and Medicaid—are exempt from the sequester, but Medicare is subject to a 2 percent provider rate cut.8 The effects of sequestration on the ACA are mixed. Funding for major components of the ACA’s coverage expansion (Medicaid expansion and premium tax credits) are exempt from the sequester. However, cost-sharing subsidies, which help reduce out-of-pocket costs for lower income private insurance enrollees, are subject to the sequester. Mandatory funding for the ACA’s other programs (the focus of this brief) are generally subject to the sequester, with notable exceptions. For example, the $40.2 billion for the Children’s Health Insurance Program is exempt and funding cuts for community health centers is capped at 2 percent. Also, programs that are funded through a multi-year appropriation are exempt. For example, the Center for Medicare and Medicaid Innovation (CMI) is funded from FY2011 to FY2019 with $10 billion that is not obligated for specific years. Therefore, CMI and other similarly funded programs are exempt from the sequester.9 Overall, less than half of the $105 billion in mandatory spending described in this brief is subject to sequestration.
Since the ACA became law in March 2010 through the most recent fiscal year ending in September 2013, Michigan has been awarded a total of $305.4 million in funding. The largest category of funding was for health centers ($124.3 million) with funding for market reform programs a distant second ($44.5 million). The State of Michigan, including the Department of Community Health, received the most funding over this period with $114.8 million; more than eight times more than the University of Michigan, the second highest recipient.
Funding in Michigan differed from the pattern at the national level to some degree. Nationally, market reform programs comprised about a third of total funding, but these programs only comprised 14 percent of Michigan funding in FY2012. On the other hand, funding for health centers was the largest category with 38 percent ($29.5 million), significantly more than the national rate. State agencies and health and community-based organizations were the leading types of recipients, receiving similar levels of ACA funding in Michigan in FY2012. For example, the Michigan Department of Community Health received $18.8 million for a variety of programs, including early childhood home visitation, public health infrastructure, and long-term care demonstrations. Twenty-nine community health centers received nearly $28.2 million in funding to expand services and/or make capital improvements. Health and community-based organizations were the leading type of recipients in FY2013 with $75.6 million (52 percent of total funding). Thirty-seven community health center organizations received $67 million in funding, primarily to support new and expanded services for their patients. Leading recipients include Cherry Street Services, Inc. ($5.5 million), InterCare Community Health Network ($5.4 million), and Detroit Community Health Connection ($4.2 million). (millions of dollars)13
Spending Provisions
ACA Funding From March 2010 through September 2013 (FY2010–FY2013)
FIGURE 1: FY2010–FY2013 ACA Grant Funding, by State
FIGURE 2: FY2010–FY2013 ACA Grant Funding, by Funding Category (in billions of dollars)
Funding Category FY2010 FY2011 FY2011 FY2013 Total
Funding % Funding % Funding % Funding % Funding %
Health Centers & NHSC $52,282,684 5.1% $858,050,478 33.3% $1,273,393,018 27.0% $2,712,182,031 40.1% $4,895,908,211 32.4%
Market Reform $94,788,294 9.2% $595,098,762 23.1% $1,550,466,832 32.9% $2,161,432,590 31.9% $4,401,786,478 29.2%
Health Workforce $503,257,248 48.9% $376,267,609 14.6% $278,087,601 5.9% $269,014,212 4.0% $1,426,626,670 9.5%
Maternal & Child Health $170,198,900 16.5% $307,913,334 11.9% $444,115,436 9.4% $476,106,240 7.0% $1,398,333,910 9.3%
Community-based Prevention $154,699,443 15.0% $393,864,014 15.3% $531,320,052 11.3% $266,567,948 3.9% $1,346,451,457 8.9%
Medicare $29,957,268 2.9% $2,490,094 0.1% $309,219,772 6.6% $483,057,010 7.1% $824,724,144 5.5%
Long-Term Care $23,724,075 2.3% $24,446,503 0.9% $304,561,646 6.5% $346,783,780 5.1% $699,516,004 4.6%
Medicaid & CHIP $0 0.0% $20,042,057 0.8% $22,392,267 0.5% $52,566,928 0.8% $95,001,252 0.6%
Total $1,028,907,912 100.0% $2,578,172,851 100.0% $4,713,556,624 100.0% $6,767,710,739 100.0% $15,088,348,126 100.0%
FIGURE 3: FY2010–FY2013 ACA Grant Funding, by Recipient Type (in billions of dollars)
Recipient Type FY2010 FY2011 FY2012 FY2013 Total
Funding % Funding % Funding % Funding % Funding %
State Agencies $413,566,073 40.2% $1,156,079,315 44.8% $2,556,842,691 54.2% $3,173,665,145 46.9% $7,300,153,224 48.4%
Health & Community-based Organizations $227,237,982 22.1% $845,777,732 32.8% $1,569,968,810 33.3% $2,890,813,698 42.7% $5,533,798,222 36.7%
State Colleges & Universities $214,741,842 20.9% $295,074,140 11.4% $221,325,706 4.7% $204,629,115 3.0% $935,770,803 6.2%
Private Colleges & Universities $111,447,387 10.8% $125,811,491 4.9% $149,172,323 3.2% $140,951,843 2.1% $527,383,044 3.5%
Local Agencies $51,739,532 5.0% $131,209,562 5.1% $186,403,814 4.0% $296,984,029 4.4% $666,336,937 4.4%
Tribal Organizations $6,947,621 0.7% $20,061,733 0.8% $21,198,266 0.4% $39,325,988 0.6% $87,533,608 0.6%
Other $3,227,475 0.3% $4,158,878 0.2% $8,645,014 0.2% $21,340,921 0.3% $37,372,288 0.2%
Total $1,028,907,912 100.0% $2,578,172,851 100.0% $4,713,556,624 100.0% $6,767,710,739 100.0% $15,088,348,126 100.0%
ACA Funding and the Effects of Budget Sequestration
FIGURE 4: Effects of Budget Sequestration, by ACA Program
ACA Funding Program Estimated Program Cost, FY2014–FY2023 (billions) BCA Sequestration Effects
Medicaid and the Children’s Health Insurance Program $710 Exempt from sequestration
Premium Tax Credits $920 Exempt from sequestration
Cost-sharing Reduction Subsidies $149 Subject to full sequestration
Other Mandatory Spending Approximately $105 Generally subject to full sequestration with notable exceptions:
Discretionary Spending Approximately $100 Subject to full sequestration
The ACA in Michigan
FIGURE 5: Top 10 Michigan Institutions Receiving ACA Grant Funding (FY2010–FY2013)
Recipient Funding Total
State of Michigan $114,758,645
University of Michigan $13,791,245
Cherry Street Services, Inc. $12,976,478
Family Health Center, Inc. $11,228,852
Wayne State University $8,900,771
Michigan Public Health Institute $8,050,537
Family Medical Center of Michigan, Inc. $6,545,795
Family Health Center of Battle Creek $6,282,251
Lakeland Immediate Care Center $5,609,116
Detroit Community Health Connection $5,460,729
ACA Funding in Michigan, Fiscal Year 2012
FIGURE 6: Michigan FY2012 Grant Funding, by Funding Category
Funding Category Total Funding
Health Centers & NHSC $29,488,496
Community-based Prevention $10,987,219
Market Reform $10,855,572
Maternal & Child Health $10,250,010
Health Workforce $7,523,864
Medicare $6,440,664
Long-Term Care $1,336,133
Total $76,881,958
FIGURE 7: Michigan FY2012 Grant Funding, by Recipient Category
Recipient Type Total Funding
Health & Community-based Organizations $33,491,349
State Agencies $31,603,580
State Colleges & Universities $6,216,946
Tribal Organizations $2,044,531
Other Organizations $1,643,798
Local Agencies $1,313,333
Private Colleges & Universities $568,421
Total $76,881,958
Michigan award highlights in FY2012 include:
Top 10 recipients of ACA grants in FY2012 were:
ACA Funding in Michigan, Fiscal Year 2013
FIGURE 8: Michigan FY2013 Grant Funding, by Funding Category
Funding Category Total Funding
Health Centers & NHSC $68,673,902
Market Reform $27,004,635
Maternal & Child Health $16,025,686
Long-Term Care $11,603,896
Medicare $10,944,386
Health Workforce $6,574,351
Community-based Prevention $4,149,258
Medicaid & CHIP $1,000,000
Total $145,976,114
FIGURE 9: Michigan FY2013 Grant Funding, by Recipient Category
Recipient Type Total Funding
Health & Community-based Organizations $75,576,141
State Agencies $58,356,396
State Colleges & Universities $4,854,416
Local Agencies $3,834,807
Tribal Organizations $2,454,007
Private Colleges & Universities $900,347
Total $145,976,114
Michigan award highlights in FY2013 include:
Top 10 recipients of ACA grants in FY2013 were:
Appendix 1: Funding of Select ACA Programs, by Year
Funding Category (Program) ACA Section FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 10-year total
Market Reform
Review health insurance premiums §1003 $250 $250
Consumer insurance assistance §1002 $30 $30
Exchange planning and establishment §1311 HHS secretary may determine amounts to be appropriated as necessary from FY2010 until January 1, 2015. TBD
Health Centers & NHSC
School-based health centers §4101(a) $50 $50 $50 $50 $200
Community health center capital §10503(c) $1.5 billion total for FY2011 through FY2015 $1,500
Community health center services §10503(b)(1) $1,000 $1,200 $1,500 $2,200 $3,600 $9,500
Community-based Prevention
Prevention and Public Health Fund §4002 $500 $750 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,250 $1,250 $9,750
Maternal & Child Health
Early childhood home visitation §2951 $100 $250 $350 $400 $400 $1,500
Personal responsibility education §2953 $75 $75 $75 $75 $75 $375
Health Workforce
Health workforce demonstration §5507(a) $85 $85 $85 $85 $85 $425
Medicaid & CHIP
Prevention and wellness incentives §4108 $100 million total for CY2011 through CY2015. $100
Childhood obesity demonstration §4306 $25 million total for FY2010 through FY2014. $25
Medicare
Center for Medicare and Medicaid Innovation §3021(a) $5 $10 billion total for FY2011 through FY2019, and $10 billion for each future decade. $10,005
Independence at home demonstration §3024 $5 $5 $5 $5 $5 $5 $30
Long-term Care
Money Follows the Person demonstration §2403 $450 $450 $450 $450 $450 $450 $2,700
State aging and disability resource centers §2405 $10 $10 $10 $10 $10 $50
Appendix 2: ACA Grant Funding, by State (FY2010–FY2013)
State 2012 Total 2012 Rank 2013 Total 2013 Rank 2012 Per Capita 2012 Per Capita Ranking 2013 Per Capita 2013 Per Capita Ranking 2010—2013 Total 2010–2013 Ranking 2010–2013 Per Capita 2010–2013 Per Capita Ranking
Alabama $49,894,363 32 $82,800,907 26 $10.35 37 $17.10 32 $173,241,572 32 $35.77 38
Alaska $22,169,748 45 $50,218,150 40 $30.31 10 $67.66 5 $101,607,435 45 $136.90 5
Arizona $82,279,928 22 $79,649,863 28 $12.56 27 $12.00 44 $224,280,051 25 $33.80 41
Arkansas $65,172,620 29 $101,427,875 19 $22.10 19 $34.20 13 $207,240,395 29 $69.88 18
California $559,213,281 1 $1,204,860,033 1 $14.70 25 $31.34 17 $2,109,248,266 1 $54.87 26
Colorado $127,761,337 11 $221,376,319 7 $24.63 16 $42.02 10 $406,108,542 10 $77.09 14
Connecticut $172,470,942 7 $110,050,073 18 $48.04 5 $30.58 18 $344,991,475 13 $95.87 10
Delaware $20,780,644 48 $31,310,829 47 $22.66 21 $33.78 14 $66,114,589 48 $71.34 16
District of Columbia $106,160,170 15 $48,334,305 42 $167.89 2 $74.59 4 $211,625,436 27 $326.58 2
Florida $83,867,768 21 $183,778,808 9 $4.34 48 $9.39 51 $353,113,671 12 $18.04 51
Georgia $70,217,585 26 $142,147,931 14 $7.08 47 $14.16 36 $268,774,295 19 $26.78 48
Hawaii $106,510,418 14 $166,004,371 10 $76.50 4 $117.86 2 $310,904,991 15 $220.73 3
Idaho $44,836,785 36 $36,609,543 45 $28.10 14 $22.74 22 $106,863,029 43 $66.38 21
Illinois $126,421,724 12 $288,513,960 5 $9.82 32 $22.37 23 $546,218,664 5 $42.35 32
Indiana $46,173,843 34 $66,630,200 31 $7.06 42 $10.15 49 $180,344,402 30 $27.47 46
Iowa $75,184,489 25 $56,305,427 35 $24.46 17 $18.23 29 $169,610,833 33 $54.92 25
Kansas $22,383,474 44 $53,878,605 37 $7.76 49 $18.56 28 $130,811,384 40 $45.07 31
Kentucky $128,906,469 10 $230,924,576 6 $29.43 12 $52.47 6 $423,304,382 9 $96.18 9
Louisiana $45,014,958 35 $79,349,610 29 $9.78 33 $17.11 31 $179,895,358 31 $38.80 35
Maine $31,096,915 40 $54,988,568 36 $23.40 18 $41.36 11 $120,227,792 42 $90.42 11
Maryland $189,846,862 5 $128,418,739 16 $32.26 9 $21.62 25 $391,614,581 11 $65.92 22
Massachusetts $175,794,311 6 $215,390,813 8 $26.45 15 $32.17 16 $555,297,340 4 $82.93 12
Michigan $76,881,958 24 $145,976,114 13 $7.78 39 $14.77 34 $305,419,137 16 $30.90 43
Minnesota $147,539,763 8 $91,702,973 22 $27.43 13 $16.93 33 $286,946,671 18 $52.97 28
Mississippi $31,476,999 39 $62,489,289 33 $10.55 31 $20.87 26 $139,437,438 38 $46.58 29
Missouri $48,936,996 33 $80,042,634 27 $8.13 41 $13.26 41 $209,167,270 28 $34.64 40
Montana $42,561,844 38 $49,057,089 41 $42.34 6 $48.42 8 $122,290,848 41 $120.71 7
Nebraska $27,092,093 42 $25,525,708 48 $14.60 24 $13.65 38 $84,618,347 47 $45.24 30
Nevada $89,655,911 18 $35,007,194 46 $32.50 8 $12.55 43 $151,471,965 37 $54.32 27
New Hampshire $30,737,172 41 $47,605,832 43 $23.27 22 $35.99 12 $103,217,693 44 $78.03 13
New Jersey $88,263,783 19 $88,481,987 23 $9.96 38 $9.94 50 $241,418,805 21 $27.12 47
New Mexico $80,948,282 23 $94,244,916 20 $38.81 7 $44.90 9 $233,083,516 23 $111.06 8
New York $341,721,104 2 $545,638,224 2 $17.46 23 $27.74 19 $1,100,467,976 2 $55.96 24
North Carolina $69,172,467 27 $125,655,399 17 $7.09 44 $12.74 42 $299,686,849 17 $30.39 44
North Dakota $11,312,227 49 $18,103,986 50 $16.17 28 $25.38 21 $43,109,256 50 $60.43 23
Ohio $101,800,697 16 $155,289,240 11 $8.82 45 $13.45 40 $432,302,179 8 $37.43 37
Oklahoma -$6,616,861 51 $53,551,292 38 -$1.73 51 $13.92 37 $153,834,348 36 $39.99 34
Oregon $59,322,107 30 $346,617,221 3 $15.21 26 $88.11 3 $531,029,441 6 $134.99 6
Pennsylvania $122,720,218 13 $131,800,436 15 $9.61 36 $10.30 48 $334,386,001 14 $26.14 49
Rhode Island $86,613,277 20 $51,985,351 39 $82.47 3 $49.55 7 $168,329,797 34 $160.44 4
South Carolina $44,265,120 37 $85,577,685 25 $9.37 34 $17.93 30 $166,297,579 35 $34.84 39
South Dakota $20,981,802 47 $22,598,919 49 $25.18 20 $26.81 20 $59,866,354 49 $71.01 17
Tennessee $94,958,156 17 $92,302,406 21 $14.71 30 $14.17 35 $267,592,256 20 $41.09 33
Texas $222,237,000 3 $289,905,312 4 $8.53 46 $10.93 46 $632,542,076 3 $23.85 50
Utah $23,027,098 43 $39,274,505 44 $8.06 40 $13.53 39 $91,092,761 46 $31.39 42
Vermont $135,140,650 9 $78,926,595 30 $215.88 1 $126.05 1 $235,274,764 22 $375.75 1
Virginia $68,893,903 28 $87,652,669 24 $8.42 43 $10.59 47 $230,385,159 24 $27.83 45
Washington $221,056,871 4 $153,537,547 12 $32.05 11 $21.98 24 $486,543,827 7 $69.66 19
West Virginia $21,976,193 46 $61,189,402 34 $11.84 29 $32.96 15 $139,353,650 39 $75.06 15
Wisconsin $51,896,099 31 $63,510,403 32 $9.06 35 $11.05 45 $218,485,719 26 $38.02 36
Wyoming $6,825,061 50 $11,490,906 51 $11.84 50 $19.71 27 $39,257,961 51 $67.35 20
Total $4,713,556,624 $6,767,710,739 $15.02 $21.38 $15,088,348,126 $47.67
Suggested citation: Fangmeier, Joshua; Eller, Patrice; Udow-Phillips, Marianne. Affordable Care Act Funding: An Analysis of Grant Programs under Health Care Reform — FY2010–FY2013. December 2013. Center for Healthcare Research & Transformation. Ann Arbor, MI.