ACA survives budget battle but wounded by rollout debacle

This fall, the Patient Protection and Affordable Care Act was at the heart of the world-rattling political fight between House Republicans, Senate Democrats and President Barack Obama over how to fund the government in 2014 and raise the nation's borrowing authority. With the global economy dependent on America's ability to make good on its debt, all eyes were on the rickety U.S. healthcare system. But Obamacare survived the showdown, only to face grave new perils a short time later.

House and Senate leaders spent weeks in September and October trading temporary spending bills that would fund government operations after Sept. 30. Under pressure from their Tea Party right, Republican leaders decided to carry out their long-standing promise to gut the healthcare reform law. Each House version included measures to delay, defund, or eliminate major provisions—even if that meant shutting down the government or causing the U.S. to go into debt default. Obama and Senate Democrats held firm, refusing to negotiate on the law or budget issues until the government funding and deficit ceiling issues were at least temporarily resolved.

To the delight of medical device manufacturers, one possible compromise that gained bipartisan support was to delay or repeal the law's medical device tax, which took effect last January and is expected to raise $29.1 billion over 10 years to help pay for the law's insurance coverage expansion. But that proposal alarmed healthcare reform supporters because it could prompt hospitals and other healthcare stakeholders to ask for similar relief from the law's taxes, fees and payment cuts, thus unraveling the law's financing.

The compromise efforts failed, forcing the first government shutdown in 17 years. Meanwhile, Oct. 1, the first day of the shutdown, also was the launch date of open enrollment on the federal and state-run insurance exchanges, the linchpins of expanded coverage under the ACA. HHS had to oversee this enormous task with more than half of its employees furloughed.

Fortunately for the Obama administration, congressional Republicans' attention for several weeks on killing the Affordable Care Act took the focus off the disastrous rollout of the federal exchange serving 36 states. From Day 1, HealthCare.gov was riddled with severe technical problems, causing massive frustration for millions of consumers who tried to shop for plans and sign up for coverage. It caused political peril for Democrats, political opportunity for Republicans and danger for the president's landmark effort to extend health coverage to nearly all Americans.

After remaining mum for much of October, the White House pivoted, calling in Jeffrey Zients, the former acting director of the Office of Management and Budget, to oversee major website repairs. In a speech in late October, Obama announced a “tech surge” to fix the problems and provided a toll-free phone number for Americans to call for help in signing up for coverage.

After more than two weeks of a government shutdown, Senate and House Republicans stepped back from the brink of a government debt default and grudgingly agreed to a spending bill that funds the government through Jan. 15, raises the debt ceiling through Feb. 7—and leaves the ACA intact. It merely requires the HHS secretary to submit a report showing how the department is making sure it verifies that people applying for premium tax credits and reductions in cost-sharing are eligible to receive them. Similarly, HHS' inspector general must file a report next summer about the effectiveness of those procedures.

As soon as the government reopened Oct. 17, Republicans shifted their focus to the catastrophic rollout of HealthCare.gov, demanding more information about what led to the failed launch and how it could have been prevented. HHS Secretary Kathleen Sebelius and CMS Administrator Marilyn Tavenner faced grillings before House and Senate committees, with several Republicans calling for Sebelius to be sacked. Both officials apologized for the website's failures, which Sebelius called a “debacle.”

“I'm accountable to you for fixing these problems, and I'm committed to earning your confidence back by fixing the site,” she told the House Energy and Commerce Committee in October.

Administration officials have promised to have HealthCare.gov running smoothly for most users by late November. Acknowledging the federal website's host of problems, the administration extended the deadline for consumers to buy insurance by six weeks to March 31, or else face a penalty. That reprieve didn't stop lawmakers in both parties from calling for a delay in the individual mandate until the federal website is fully functional. A number of nervous House and Senate Democrats facing re-election in 2014 joined in these calls.

On top of the website woes, the administration faced what could be an even bigger political problem when hundreds of thousands of people with individual-market health plans started receiving cancellation letters in October from their insurers notifying them that they would have to switch to new plans because their old plans did not meet Obamacare requirements. Republicans and some Democrats reminded the president that he had repeatedly promised that people could keep their existing coverage if they liked it.

Sen. Mary Landrieu (D-La.) introduced a bill to allow people to keep their current health plan as long as they stay current with their premium payments. In the House, Rep. Fred Upton (R-Mich.) introduced a similar measure.

Meanwhile, House Republicans and Senate Democrats are meeting in a new budget conference committee established by the October temporary spending bill to negotiate over broader fiscal issues. Republicans are demanding cuts and changes in Medicare, Medicaid and Social Security, while Democrats are insisting on at least some new revenue, such as ending various corporate tax breaks. They have until Dec. 13, or else the budget showdown hijinks will start all over.

Healthcare industry groups find themselves in the political cross-hairs once again, worried about facing another round of payment cuts on top of the sequestration cuts that were extended by the October budget deal.

Follow Jessica Zigmond on Twitter: @MHjzigmond