WASHINGTON — The White House released a 2020 budget proposal Monday that included what one official called a historic number of budget cuts as well as an initiative aimed at ending the HIV epidemic.
The budget “will have more reductions in spending than any president in history ever proposed,” including a 5% overall cut in non-defense spending. He also outlined measures to lower drug prices, “everything from speeding generics to market to eliminating cost-sharing for generics. We also want to change the incentive structures in Medicare that lead to higher list prices … We also offer for the first time a real out-of-pocket cap for seniors so they can receive certainty that their out-of-pocket costs are over.”
The $4.7 trillion budget includes $1.29 trillion for the Department of Health and Human Services (HHS). Specific budget allocations — listed as “program level” allocations — include:
- $6.1 billion for the FDA (12% increase from last year)
- $10.7 billion for the Health Resources and Services Administration (8% decrease)
- $7.3 billion for the Indian Health Service (6% increase)
- $12 billion for the CDC (1% decrease)
- $34.4 billion for the NIH (13% decrease) — includes $256 million to consolidate the Agency for Healthcare Research and Quality into NIH
- $6.3 billion for the Centers for Medicare & Medicaid Services (4% decrease)
- $43 million for the Office of the National Coordinator for Health Information Technology (28% decrease)
An overview released by HHS lays out the administration’s goals for the budget proposal. For example, “The FY [fiscal year] 2020 Medicare budget aligns incentives within the Part D program to lower drug costs, continues to drive Medicare toward a value-based payment system, and combats the opioid crisis,” it says. “The FY 2020 Medicaid budget provides additional flexibility to states, puts Medicaid on a path to fiscal stability by restructuring its financing and reducing waste, and refocuses on the low-income populations Medicaid was originally intended to serve: the elderly, people with disabilities, children, and pregnant women.”
The administration is proposing “significant” reforms to the welfare system that will generate $327 billion in savings, the official said on the conference call. One of these is expanding work requirements to all beneficiaries of welfare programs, including Medicaid as well as food stamps and Temporary Assistance to Needy Families. “For individuals between 18 and 65, we expect them to work, be engaged in job training, or have ‘community engagement,'” such as volunteering,” the official said.
Expanding the work requirements to all state Medicaid programs would be a big change, since currently only seven states have been granted a waiver to implement such a requirement for their Medicaid programs. In Arkansas, the first state to begin dropping enrollees who didn’t meet the requirement, one in five Medicaid beneficiaries have lost their coverage as a result.
The proposal also supports using block grants or per-capita caps for the Medicaid program, meaning that states would get a capped amount of federal funds to spend on Medicaid beneficiaries. “The Administration recognizes that the only way to reform Medicaid and set it on a sound fiscal path is by putting states on equal footing with the federal government to implement comprehensive Medicaid financing reform through a per-capita cap or block grant,” the White House said in its “Budget for a Better America” document.
The budget also includes $291 million to start a multi-year initiative to end HIV in the U.S. by 2030. “This new initiative aims to reduce new HIV infections by 75% in the next 5 years and by 90% in the next 10 years, averting more than 250,000 HIV infections in that span,” HHS said in a statement. “Recent data show our progress reducing the number of new HIV infections has plateaued, and there are new threats to the progress that has been made, the most significant being the opioid crisis: 1 in 10 new HIV infections occur among people who inject drugs.”
Reactions to the budget proposal were mixed. “The Alliance for a Stronger FDA is quite pleased with the proposed increase in appropriated funding for [the] FDA,” the organization, which includes patient groups, providers, and drugmakers, said in a statement. “The agency will be able to apply new monies to important programs that benefit the American people, as well as hire needed scientific personnel to carry out the FDA’s far-ranging mission.”
The American Cancer Society Cancer Action Network (ACS CAN) noted that the proposal includes a nearly $900 million cut for the National Cancer Institute (NCI). “If passed, the proposed cut to NIH and NCI funding would squander years of renewed momentum and progress in advancing discovery in cancer and other chronic diseases,” said ACS CAN President Lisa Lacasse. “These investments have long enjoyed strong bipartisan support and have led to incredible understanding in how to detect, diagnose, and treat cancer that still claims the lives of more than 600,000 Americans each year.”