Trump’s Budget Would Cut HHS Funding 21%; Azar Approves

The White House calls for an increase in funding for veterans healthcare services, while proposing cuts to HHS and a repeal of the Affordable Care Act.

President Donald Trump released his budget proposal Monday for fiscal year 2019. It includes overall reductions in nondefense spending while also increasing funding for veterans healthcare services.

The White House’s $4.4 trillion budget request to Congress comes days after a two-year, $300 billion bipartisan budget deal was signed into law following the second government shutdown in as many months.

Though Congress is unlikely to vote on a singular budget, the various provisions listed in the executive proposal outline the legislative agenda the Trump administration would like to pursue in 2018.

“I applaud President Trump for laying out his vision for the country in today’s budget request and welcome his partnership as the Energy and Commerce Committee works to tackle several shared priorities," said Rep. Greg Walden, R-Ore., chairman of the House Committee on Energy and Commerce in a statement. "Many of the administration’s other proposals to lower health care costs complement our continued commitment to addressing the cost drivers across every facet of our nation’s health care system."

Below is a breakdown of the proposals affecting the healthcare world, including cuts to the Department of Health and Human Services (HHS), Medicare, a repeal-and-replace plan for the Affordable Care Act (ACA), and more money for veterans healthcare.

Major cuts to HHS

The proposal features a $68.4 billion budgetary line for HHS, a 21% reduction in funding compared to FY 2017. The budget also proposes a $451 million cut to training programs for health professionals, arguing the initiatives “lack evidence that they significantly improve the nation’s health workforce.”

If adopted, the policies would extend Medicare’s solvency by eight years, according to the budget proposal. Current projections estimate Medicare will become insolvent by 2029. The Trump administration also proposed a limit on Medicaid reimbursements to federal providers at no more than the cost of providing services to beneficiaries.

“The President’s budget makes investments and reforms that are vital to making our health and human services programs work for Americans and to sustaining them for future generations," said HHS Secretary Alex Azar in a statement. "In particular, it supports our four priorities here at HHS: addressing the opioid crisis, bringing down the high price of prescription drugs, increasing the affordability and accessibility of health insurance, and improving Medicare in ways that push our health system toward paying for value rather than volume."

Bundled payments for community-based medication-assisted treatment would see an opportunity to expand through the budget proposal, with the White House highlighting a new Medicare reimbursement for methadone treatment.

Medicare beneficiaries would also be able to save for out-of-pocket costs by allowing tax deductible contributions to health savings accounts associated with high deductible health plans offered by employers or Medicare Advantage.

The budget proposes a ‘$5 returned for every $1 spent’ policy for the Medicare Health Care Fraud and Abuse Control, a $45 million increase compared to FY 2017 which totals $770 million,. The White House believes the additional funding will bolster the program’s efforts to “identify and prevent fraudulent or improper payments from being paid in the first place.”

Two-part ACA repeal

Arguing that “national healthcare spending trends are unsustainable,” the budget offers a solution in the form a two-part repeal of the Affordable Care Act.

Modeled on the Graham-Cassidy proposal, the first step would focus on providing block grants to states for healthcare spending plans.

The Market-Based Health Care Grant Program, the new block grant program, would offer states and consumers with options outside of the ACA’s “insurance rules and pricing restrictions.” The administration believes this will address high premium costs and rising deductibles.

The second part of the plan focuses on Medicaid reform, specifically the repeal of Medicaid expansion spurred on by the ACA, as well as reducing “state gimmicks” like provider taxes. This move would shift federal authority over healthcare access to states, which could in turn design individualized plans.

Major increase for veterans healthcare

Continuing with a campaign promise to address issues facing veterans, Trump’s budget proposal includes an increase in spending for veterans healthcare programs over the next three fiscal years.

For FY 2019, the Veterans Health Administration would receive $70.7 billion, a 9.6% increase compared to FY 2017. By 2020, that number rises to $75.6 billion in advance appropriations for VA medical care program costs.

This covers 9.3 million enrollees in the Veterans Affairs health system.

Additionally, the budget provides $8.6 billion for veterans mental health and suicide prevention programs, and $11.9 billion would be used to enhance and expand veterans’ access to high-quality community care.

The administration proposes the consolidation of the Veterans Choice Program and other community care programs into a new, unified program: the Veteran Coordinated Access & Rewarding Experiences program.