President Obama’s FY 2016 Budget Proposal To Fully Fund ACA

On Monday, President Obama unveiled a $4 trillion budget request for fiscal year 2016 that includes a number of health care initiatives, the AP/San Francisco Chronicle reports (AP/San Francisco Chronicle, 2/3).

Heath Savings

The proposal calls for $399 billion in savings over 10 years from Medicare, Medicaid and other HHS programs. Specifically, the budget request would:

-Save $116 billion over 10 years through reduced Medicare payments to drugmakers (Pear, New York Times, 2/2);
-Provide the HHS secretary with the authority to negotiate prices for high-cost drugs and biologics within Medicare Part D (Armour/Burton, Wall Street Journal, 2/2);
-Save more than $100 billion over 10 years by lowering inflation adjustments for providers who offer post-hospitalization care to Medicare beneficiaries;
-Save $11 billion in Medicare and Medicaid costs over 10 years by banning agreements between prescription and brand-name drugmakers to delay the introduction of lower-cost generics (New York Times, 2/2);
-Save nearly $3 billion over 10 years from initiatives to reduce fraud and abuse in Medicare, Medicaid and the Children’s Health Insurance Program, including mandating that providers receive prior authorization to be reimbursed for using advanced imaging and power mobility devices and direct states to track providers who prescribe large amounts of drugs to Medicare beneficiaries (Wall Street Journal, 2/2);
-Reduce payments from Medicare to many small rural hospitals, teaching hospitals, nursing homes and HMOs that provide care to beneficiaries with disabilities and elderly U.S. residents;
-Reduce payments by $16 billion over 10 years for graduate medical education;
-Reduce the projected growth payments to Medicare Advantage plans by $43 billion over 10 years and “improve payment accuracy for Medicare Advantage”;
-Reduce Medicare hospital payments to cover “bad debt,” or bills that they are unable to collect from beneficiaries (New York Times, 2/2);
-Beginning in 2019, charge higher-income Medicare beneficiaries higher premiums in some instances; and
-Beginning in 2019, create additional charges for new Medicare beneficiaries — including copayments for Medicare beneficiaries who use home care services — alterations to the Part B deductible and a surcharge on Medigap premiums (AP/San Francisco Chronicle, 2/3).

Food Safety Proposal

The budget request also calls for the creation of a new federal agency within HHS focused on food safety, AP/U-T San Diego reports.

Such duties currently are split between USDA — which oversees food safety for processed eggs and meat — and FDA, which oversees food safety for other food types. In addition, several other federal entities, including the Department of Commerce and the Environmental Protection Agency, currently have roles in overseeing food safety.

The new agency would consolidate the food safety arms of USDA and FDA into one agency, which also would coordinate with local and state health departments, a task mostly carried out now by CDC. The changes would need to be approved by Congress (Jalonick, AP/U-T San Diego, 2/2).
Other Proposals

In addition, the budget proposal would:

-Continue funding for the BRAIN initiative (Dennis, “Federal Eye,” Washington Post, 2/2);
-Eliminate the sequester’s 2% reduction in payments from Medicare to service providers;
-Fully fund the Affordable Care Act;
-Increase spending for veterans’ health care by 7.4% over current funding, to $60 billion (AP/San Francisco Chronicle, 2/3);
-Increase HHS discretionary spending for FY 2016 by $4.8 billion, to $83.8 billion;
-Increase NIH discretionary spending for FY 2016 to $31.31 billion, compared with $30.31 billion in 2015;
-Increase FDA funding for FY 2016 by 9%, to $4.9 billion, with most of the new funding going toward implementation of the Food Safety Modernization Act, as well as one-time funding of $25 million to help combat Ebola (Wall Street Journal, 2/2);
-Increase funding for programs run by the Substance Abuse and Mental Health Services Administration, CDC and other federal agencies to combat prescription drug misuse;
-Increase funding to states to expand prescription drug monitoring programs and to help more first responders use naloxone, a drug that helps counter the effects of opioid overdoses (Viebeck, The Hill, 2/2).
-Extend CHIP funding through 2019, paid for by increasing tobacco taxes in 2016 from nearly $1.01 a pack to about $1.95 a pack (AP/San Francisco Chronicle, 2/3); and
-Spend an additional $5 billion over 10 years to expand Medicare benefits by eliminating the current 190-day lifetime cap on coverage for inpatient care in psychiatric hospitals (New York Times, 2/2).

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