The ACA Prevention and Public Health Fund: In Brief

Contents

• Background and Summary
• Authority and Funding Distributions
• Scope of PPHF-Funded Activities

Background and Summary

Section 4002 of the Affordable Care Act (ACA, P.L. 111-148, as amended) established the Prevention and Public Health Fund (PPHF, or "the Fund") and funded it with a permanent annual appropriation to be administered by the Secretary of Health and Human Services (HHS).¹ The PPHF authority directs the HHS Secretary to transfer amounts from the Fund to HHS agencies for prevention, wellness, and public health activities.

Under the ACA, the PPHF's annual appropriation would have increased from $500 million for FY2010 to $2 billion for FY2015 and each subsequent fiscal year. Congress has amended the provision two times, using a portion of PPHF funds as an offset for the costs of other activities. The Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96) reduced PPHF appropriations for FY2013 through FY2021. The 21^st Century Cures Act (P.L. 114-255) reduced PPHF appropriations for FY2018 through FY2024.² See the text box below and the Appendix for original and current law appropriations amounts.

The PPHF is intended to support an "expanded and sustained national investment in prevention and public health programs."³ PPHF amounts for each fiscal year are available to the Secretary beginning October 1, the start of the respective fiscal year. Congress may explicitly direct the distribution of PPHF funds, and did so for FY2014 through FY2017.⁴ In general, PPHF funds have been distributed to HHS agencies in the Public Health Service.⁵

For FY2010 through FY2013, the HHS Secretary determined the distribution of PPHF funds, transferring the majority of total PPHF appropriations for those years to the Centers for Disease Control and Prevention (CDC). For FY2013 the Secretary used almost half of the available PPHF appropriation to implement ACA insurance exchanges, prompting objections from both supporters and opponents of the Fund.⁶ Table 1 presents annual transfers of PPHF funds to HHS agencies.

Since FY2014, Congress has directed PPHF transfers using the annual appropriations process, also providing most of each annual appropriation to the CDC. The Secretary generally used the PPHF to fund a mix of preexisting activities and activities newly authorized under the ACA. In contrast, Congress has favored funding preexisting activities. Table 2 presents congressionally directed PPHF transfers for FY2014 through FY2017.

For some programs, the PPHF contribution for FY2016 made up more than half of total program funding.⁷ Examples include CDC immunization grants to states (54%) and tobacco prevention activities (60%). The CDC lead poisoning prevention program received 100% of its FY2016 funding from the PPHF. In addition, PPHF transfers accounted for about one-third of the funds for the Garrett Lee Smith suicide prevention grants to states, administered by the Substance Abuse and Mental Health Services Administration (SAMHSA).⁸

Since PPHF funds have already been appropriated, an administration's annual budget does not request these funds. Rather, it sets out the administration's plan to distribute and use PPHF funds for a given fiscal year. The Trump Administration budget proposal for FY2018 would transfer $841 million of the $900 million available to the CDC. The remaining $60 million reflects sequestration. No additional HHS agencies are proposed to receive PPHF funds for FY2018. If PPHF funds were to become unavailable, additional appropriations would be needed to sustain programmatic activities at the levels provided in recent Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations acts.⁹

Since the ACA was enacted in 2010, Congress has considered several proposals to repeal the Fund and rescind any unobligated balance.¹⁰ For example, in the 114^th Congress, the Restoring Americans' Healthcare Freedom Reconciliation Act of 2015 (H.R. 3762) was passed in both chambers.¹¹ It was vetoed by President Obama, and the House failed to override the veto. In the 115^th Congress, the American Health Care Act (H.R. 1628) would repeal the PPHF, beginning in FY2019, and rescind any prior-year unobligated balances remaining after FY2018.¹² The bill was passed by the House on May 4, 2017.

As with the ACA in general, the PPHF has sparked some controversy. Concerns have included the broad discretion given to the Secretary to administer a sizeable permanent appropriation and some specific uses of the Fund, such as community infrastructure projects (e.g., playgrounds and bike lanes) and ACA implementation activities.¹³

The Congressional Budget Office (CBO) has estimated the budgetary effects of PPHF repeal as proposed by House-passed H.R. 1628.¹⁴ CBO estimated budget authority over the 10-year period of FY2017-FY2026 at $12.0 billion, the sum of annual appropriations to the Fund for those years. It estimated outlays (i.e., the amount that would potentially be saved by the repeal) of $8.8 billion for the same period. (For grant programs, the main form of PPHF spending, outlays may occur over several years following the grant award.)

The PPHF is both authorized and permanently appropriated through the language in the text box below.

Authority and Funding Distributions

PPHF funds are mandatory spending in that the authorizing law that established the PPHF also provided an appropriation of those funds each fiscal year. The annual appropriation of those funds does not cease after a certain time period, but rather occurs indefinitely under the law.¹⁶ Under the Budget Control Act of 2011 (BCA, P.L. 112-25), the PPHF appropriation is fully sequestrable at the applicable annual percentage rate for nonexempt nondefense mandatory spending, through FY2025.¹⁷ Whether the transfer of PPHF funds has been directed by the HHS Secretary or by Congress, those transfers have reflected PPHF amounts available after sequestration.

The actual distribution of PPHF funds by HHS agency for FY2010 through FY2017, and the distribution proposed by the Trump Administration for FY2018, are presented in Table 1.¹⁸ Congressionally directed PPHF transfers to specific activities for FY2014 through FY2017, and the distribution proposed by the Trump Administration for FY2018, are presented in Table 2.

Scope of PPHF-Funded Activities

The terms "prevention," "wellness," and "public health activities," describe allowable PPHF-funded activities. However, no PPHF-specific or generally applicable definitions of these terms appear to be found in the Public Health Service Act (PHSA), the ACA, or elsewhere in federal law. ACA was not accompanied by committee reports in either chamber. Finally, HHS has not published regulations, guidance, or other information to clarify the department's views about the types of activities that are within scope for PPHF funding, beyond those activities that have received transfers from the Fund in previous fiscal years.¹⁹

The Consolidated Appropriations Act, 2012, required HHS to establish a publicly available website to provide detailed information on the use of PPHF funds.²⁰ This instruction has been carried forward in subsequent appropriations acts. HHS is required to post on the PPHF website specific information on the program or activity receiving funds; announcements of funding opportunities; and each grant, cooperative agreement, or contract with a value of $25,000 or more awarded using PPHF funds. Annual and semiannual reporting requirements also apply. The website was established at https://www.hhs.gov/open/prevention.

As required, HHS published an annual report to Congress on PPHF spending for FY2012.²¹ The report notes spending (typically through grants or contracts) on the following types of activities, among others: (1) community prevention activities to improve health and reduce chronic disease risk factors, to reduce tobacco use, and to improve fitness and reduce obesity; (2) clinical prevention activities to improve access to important preventive services and definitive care for a variety of health needs; (3) behavioral health screening and integration with primary care; (4) public health infrastructure, workforce, and training; and (5) public health research and data collection. As shown in Table 1, to date, more than 75% of PPHF funds have been transferred to CDC.

As noted earlier, most PPHF funds have been distributed to HHS agencies in the Public Health Service.²² In its FY2013 annual report on the PPHF, HHS provided its rationale for transferring $454 million, almost half of the available FY2013 PPHF funds, to the Centers for Medicare & Medicaid Services (CMS, which is not a Public Health Service agency) for activities to support enrollment in the health insurance marketplace established under the ACA.²³ Among other things, the report states, "Studies have also shown that insurance coverage can lead to better health."²⁴

The Consolidated Appropriations Act, 2012, also contained a provision specifically prohibiting the use of PPHF funds for publicity or propaganda or other expenses related to activities designed to influence the enactment of legislation, regulations, administrative actions, or executive orders before Congress or state or local bodies.²⁵ This provision has also been carried forward in subsequent appropriations acts. It essentially reiterates a similar general restriction that applies to the use of any federal funds.²⁶

Appendix. PPHF Appropriations Under ACA and Current Law

The ACA appropriated increasing amounts to the PPHF for FY2010 through FY2014, and $2 billion per fiscal year in perpetuity thereafter. Amounts have been temporarily reduced twice since the ACA was enacted to provide funds as an offset for other activities. Table A-1 shows PPHF amounts originally made available for appropriation by the ACA, and amounts available under current law, reflecting the two reductions. PPHF amounts for FY2013 through FY2025 are subject to sequestration under the Budget Control Act (BCA, P.L. 112-25, as amended).

Author Contact Information

Footnotes

1.	For more information see CRS Report R41278, Public Health, Workforce, Quality, and Related Provisions in ACA: Summary and Timeline.
2.	Pursuant to P.L. 114-255, §5009, PPHF funds were reduced, but not eliminated, for several fiscal years. P.L. 114-255 also created a budgetary mechanism for several new accounts established by the law for certain activities. (See CRS Report R44720, The 21st Century Cures Act (Division A of P.L. 114-255).) Any subsequent reduction or repeal of PPHF funds would apply to current law amounts in the PPHF—that is, the amounts remaining after the reductions made by P.L. 114-255—and would have no effect on the new accounts established by P.L. 114-255.
3.	42 U.S.C. §300u–11(a).
4.	This congressional direction was contemplated by Section 4002(d) of the ACA, which provided, "The Committee on Appropriations of the Senate and the Committee on Appropriations of the House of Representatives may provide for the transfer of funds in the Fund to eligible activities under this section, subject to subsection (c)."
5.	CRS Report R44505, Public Health Service Agencies: Overview and Funding (FY2015-FY2017).
6.	See for example "HHS Takes $454 Million from Prevention Fund for Insurance Enrollment," Inside CMS, April 17, 2013.
7.	To date, HHS agencies have not published operating plans for FY2017. These plans are expected to display the portions of programmatic funding directed through appropriations laws to the PPHF, and any other sources.
8.	Congressional budget justifications for these agencies are available at http://www.hhs.gov/about/budget/index.html.
9.	See for example Lev Facher, "Obamacare Repeal and Trump's Spending Plan Put CDC Budget in Peril," STAT, March 7, 2017.
10.	CRS Report R43289, Legislative Actions in the 112th, 113th, and 114th Congresses to Repeal, Defund, or Delay the Affordable Care Act.
11.	CRS Report R44300, Provisions of the Senate Amendment to H.R. 3762.
12.	CRS Report R44785, H.R. 1628: The American Health Care Act (AHCA).
13.	See for example Rep. Joseph R. Pitts, "Repealing the Prevention and Public Health Fund," House debate, Congressional Record, vol. 157, April 13, 2011, pp. H2633-H2634.
14.	Congressional Budget Office, H.R. 1628, American Health Care Act of 2017, As Passed by the House of Representatives on May 4, 2017, May 24, 2017, cost estimate, https://www.cbo.gov/publication/52752.
15.	See footnote 17 for the definition of "sequestration."
16.	For more information, see CRS Report R44582, Overview of Funding Mechanisms in the Federal Budget Process, and Selected Examples.
17.	The BCA provides budget process mechanisms to reduce mandatory spending over an extended period through "sequestration." In general, sequestration involves largely across-the-board reductions that are made to certain categories of spending. As originally enacted, the sequestration of mandatory spending was scheduled to run through FY2021, but this period was incrementally extended to FY2025 by P.L. 113-67, P.L. 113-82, and P.L. 114-74. For more information, see the appendix to CRS Report R44691, Labor, Health and Human Services, and Education: FY2017 Appropriations.
18.	Further details on PPHF distributions to AHRQ, CDC, HRSA, and SAMHSA are provided in the respective agency budget tables in CRS Report R44505, Public Health Service Agencies: Overview and Funding (FY2015-FY2017); and HHS, "Prevention and Public Health Fund," funding distribution tables, https://www.hhs.gov/open/prevention.
19.	For more information about federal prevention activities and how they may be defined, see Government Accountability Office, Preventive Health Activities: Available Information on Federal Spending, Cost Savings, and International Comparisons Has Limitations, GAO-13-49, December 6, 2012, http://gao.gov/products/GAO-13-49.
20.	P.L. 112-74, §220, 125 Stat. 1085, December 23, 2011.
21.	HHS, "The Affordable Care Act and the Prevention and Public Health Fund: Report to Congress for FY2012," undated, http://www.hhs.gov/open/prevention/fy2012-allocation-pphf-funds.html.
22.	See CRS Report R44505, Public Health Service Agencies: Overview and Funding (FY2015-FY2017).
23.	HHS, "The Affordable Care Act and the Prevention and Public Health Fund Report to Congress for FY2013," undated, pp. 1, 4, and 8, http://www.hhs.gov/open/prevention/fy2013-allocation-pphf-funds.html.
24.	Ibid., p. 1.
25.	P.L. 112-74, §503, 125 Stat. 1110, December 23, 2011.
26.	See "Publicity or Propaganda Prohibitions" in CRS Report R44154, Lobbying Congress with Appropriated Funds: Restrictions on Federal Agencies and Officials.