By: Allen Pinn, Coordinator, Policy

On Thursday, March 9, President Biden released his budget proposal for fiscal year 2024, his first such one with a divided Congress. While this is merely a non-binding proposal, it marks the start of the Congressional budget process and lays out the President’s funding and other policy priorities for the coming year. The $6.9 trillion proposal includes $4.2 trillion in mandatory spending and $1.9 trillion in discretionary spending. During the State of the Union address, President Biden, notably garnered a unanimous applause to protect Social Security and Medicare from budget cuts. However, as the deadline to raise the debt ceiling looms, all eyes will be on how feasible those protections and protections of the Medicaid program will be.

Below are key provisions that reference the health care system.

Health Care Provision Highlights

Medicare

The solvency of Medicare is a significant focus of the Administration. The proposal includes efforts to extend Medicare solvency for an additional 25 years. The proposal includes an increase of the Medicare tax rate from 3.8% to 5% on households with an annual income of over $400,000. The budget also includes proposals to limit Medicare Part D cost-sharing for high-value generic drugs for no more than $2 and expand the number of drugs eligible for negotiation in Medicare.

Medicaid

Disappointingly, not mentioned in last month’s State of the Union, was the future of Medicaid. After the end of the Public Health Emergency, millions of individuals will be unenrolled from Medicaid coverage, due to the end of the public health emergency (PHE) and the continuous enrollment provisions of Medicaid that were linked to the PHE. The budget includes proposals expanding Medicaid-like coverage to citizens in states that have not expanded Medicaid under the Affordable Care Act. The proposal also includes an investment of $150 billion over a decade to expand Medicaid home and community-based services, services vital to individuals in the patient and disability communities.

Health Equity

The budget proposal would invest $471 million to reduce maternal mortality & morbidity rates, strengthen the perinatal health workforce, and expand maternal health care in rural communities. In addition to these maternal health initiatives, the proposal would also require states to provide postpartum coverage for up to 12 months for Medicaid beneficiaries.

To address the current health care workforce crisis, the National Health Service Corps (NHSC) would be provided $966 million to expand its workforce. The NHSC gives health care professionals scholarships/loan repayments in exchange for providing care in underserved communities.

Agency Budget Highlights

• Advanced Research Projects Agency for Health (ARPA-H) – $2.5 billion ($1 billion increase)
• Centers for Disease Control and Prevention – $11.5 billion ($2.4 billion increase)
• Food and Drug Administration – $7.2 billion (10% increase)
• National Institutes for Health – $44.2 billion (1.7% increase)
• National Science Foundation – $11.3 billion (18.5% increase)

Conclusion

It is ultimately within Congress’ role to determine funding levels. Speaker McCarthy and House Republicans have not released a version of their budget, and it is believed that Republicans’ proposal will be capped at 2022 levels; a significant difference between the Biden administration’s proposal. As health care costs rise and a battle over the debt ceiling emerges, the National Health Council will continue to monitor all aspects of the budget process pertinent to the patient community.