Overall, the Department of Health and Human Services’ proposed discretionary budget of $76.4 billion would barely budge under the Obama administration’s spending plan. However, this masks some notable shifts in how the money would be allocated.
The budget text declares that one of the administration’s “highest priorities” is to fund implementation of the 2010 health-care law that is among the president’s signature achievements. This includes assisting states with developing the complex technical infrastructure needed to set up the law’s “exchanges” — or state-based marketplaces through which individuals and small businesses will be able to purchase private health insurance with federal subsidies beginning in 2014. The administration is also developing federally facilitated versions of the exchanges to stand up in states that are unable or unwilling to run their own in time.
Support for these efforts contributes to a $993 million, or 26 percent increase in funding, for the Centers for Medicare and Medicaid Services (CMS), the agency with primary responsibility for carrying out the health care law.
Meanwhile, funding for the National Institutes of Health remains flat, while programs such as those within the Substance Abuse and Mental Health Services Administration would be cut.
The administration has also proposed a variety of measures to curb the long-term growth of mandatory spending on Medicare, the entitlement program offering health insurance to the elderly and some disabled populations. This include charging a co-payment for certain kinds of home health services and applying a surcharge on Medicare beneficiaries who purchase Medigap policies — which reduce the initial amount they must pay out of pocket as their deductible. (Research suggests that the more individuals pay for health services out of pocket, the less likely they are to consume unnecessarily expensive care.) Nonetheless, despite projected savings from such measures, mandatory spending on Medicare would increase by 9 percent to $524 billion in 2013 under this budget.