Senate Democrats

Democratic Budget Resolution Makes Urgently Needed Investments in Health Care

This week, the Senate will debate the Fiscal Year 2010 Budget Resolution (S. Con. Res. 13), a fiscally responsible budget plan that addresses the fiscal and economic crises inherited from the Bush Administration and lays the foundation for the long-term economic security of the United States.  The Budget Resolution makes significant investments to promote clean energy and reduce our dependence on oil, reform our health care system, and make excellence in education a reality. 

After years of neglect and funding cuts under the Bush Administration, our budget is built on the belief that quality, affordable, accessible health care is necessary for all Americans and is critical to our long-term economic recovery. 

Eight Years of Inaction Led to High Costs and a Rising Number of Uninsured

Skyrocketing health care costs are contributing to the current economic crisis, weighing heavily on family, business and government budgets.  Health insurance premiums have doubled in the past eight years and, when combined with increasing out-of-pocket costs like co-payments and deductibles, more Americans than ever struggle to get the health care they need.[1]  Increasing medical costs contribute to bankruptcies, foreclosures, and burden American businesses trying to remain competitive in the global economy. [2],[3],[4]  

In the past eight years, an additional 6.9 million Americans have lost their health insurance coverage, and 45.7 million Americans are now uninsured.[5]  Furthermore, nearly 160 million Americans with employer-based health insurance are only a pink slip away from losing their coverage.  Every one percentage point increase in the unemployment rate is associated with an increase of more than one million uninsured.[6]

The Democratic Budget Resolution Prioritizes America’s Health

The Budget Resolution reflects the American people’s priorities for health care and lays the groundwork for our nation’s long-term economic security.  Our budget builds on investments already made during this Congress and recognizes that reforming our health care system is essential to ensuring fiscal stability, economic strength, and the well-being of all Americans. 

Supporting Health Care Reform. The President’s budget and the Budget Resolution acknowledge that we have a moral imperative to accomplish fiscally-responsible health care reform this year, and recent economic events have demonstrated we also have an economic incentive to do so.  The Congressional Budget Office (CBO) estimates that, absent changes in federal law, total spending on health care will rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, and close to 50 percent in 2082.[7]  The Budget Resolution recognizes that this course is not sustainable, and includes a deficit-neutral reserve fund to facilitate the passage of legislation that modernizes our health care system, mirroring the President’s eight principles for health reform and focusing on our common goals of constraining costs, expanding access, and improving quality.  Inclusion of this reserve fund provides flexibility for authorizing Committees to consider reform proposals and determine the appropriate spending level and offsets required to get control of runaway health care spending, restore fiscal sustainability to federal health programs, and make health care affordable for families, businesses, and governments.

Substantial improvements to our health care system may require upfront investments, and delivery system reforms may not yield immediate savings.  Recognizing this, the Budget Resolution provides necessary flexibility, allowing health reform legislation to be fully offset only over the 2009 to 2019 period, and provides that such legislation be fiscally sustainable over the long-term.

Promoting Community Health Centers. Federally Qualified Health Centers (FQHCs), including community health centers, migrant health centers, and health care centers for the homeless, provide primary health care and social services for Americans who do not have other access to care.  In 2007, more than 16 million people received care through these health centers, 91 percent of whom have incomes below 200 percent of the federal poverty level.  The Budget Resolution recognizes the critical role these centers play in our health care safety net, and building on the $2.5 billion investment included in the American Recovery and Reinvestment Act (P.L. 111-5), provides $2.9 billion for FQHCs in 2010, a $798 million increase above the 2009 enacted level.

Investing in Biomedical Research.  The National Institutes of Health (NIH) are the leading source of biomedical research and play an essential role in improving human health and extending lives.  The 27 Institutes and Centers provide leadership and financial support to researchers in every state and throughout the world.  Despite the prominence and importance of the NIH, however, lack of sufficient funding during the previous Administration threatens the pace of biomedical research and, if not addressed, could delay cures and treatments now within reach.  The Budget Resolution builds on the $10 billion investment in the NIH included in the American Recovery and Reinvestment Act (P.L. 111-5) by supporting funding for the NIH.

Improving Access to Health Care Professionals.  Health care professionals are in high demand and short supply, a problem that is likely to become worse due to an aging workforce and an aging population demanding increased care.  The Budget Resolution refocuses attention on this critical need by prioritizing programs to ensure Americans have access to health professionals.

  • The Budget Resolution supports the Health Professions program, which trains health professionals to respond to the needs of special and underserved populations as well as to increase the racial and ethnic diversity of the health care workforce. 
  • The National Health Service Corps also plays an important role in maintaining our health care safety net by placing primary health care providers in our nation’s underserved communities, and the Budget Resolution prioritizes this important work.
  • Absent Executive or Congressional action, physicians face a substantial cut in Medicare reimbursement in 2010, which causes some physicians to questions their participation in this critical program.  The Budget Resolution provides a deficit-neutral reserve fund to avoid these scheduled cuts in physician reimbursement, and to encourage physicians to train in primary care, ensuring an adequate supply of primary care residents and physicians. 

Strengthening the Food and Drug Administration.  Members of Congress and the public have been increasingly concerned about the Food and Drug Administration’s ability to ensure the safety of the food, prescription drugs, and medical devices sold in the United States.  The Budget Resolution includes a deficit-neutral reserve fund to facilitate the consideration of legislation giving the Food and Drug Administration (FDA) authority to regulate products and to assess user fees on manufacturers or importers of those products, to cover the cost of FDA’s regulatory activities. 

Lowering Prescription Drug Prices. American consumers pay the highest prices for prescription drugs in the world, and these high prices reduce access to life-saving medications, particularly for the millions of Americans who lack prescription drug coverage.  The Budget Resolution recognizes the need to help Americans access lower-cost prescription drugs, and allows use of a reserve fund for deficit-neutral legislation permitting the safe importation of prescription drugs approved by the FDA, from a specified list of countries. 

Investing in Child Nutrition.  The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides grant funding to states to support healthy nutrition options for mothers and their children and infants.  In addition to WIC, the School Breakfast and the National School Lunch Programs, the Summer Food Service Program (SFSP), and the Child and Adult Care Food Program (CACFP) provide critical assistance to children and families in need.  Recognizing the importance of child nutrition and the WIC programs, particularly during times of economic distress, the Budget Resolution includes a reserve fund to allow for the reauthorization of these important programs. 

[1]      The average annual premium cost for family health coverage in 2008 was $12,608, compared with $6,438 in 200. Kaiser Family Foundation and Health Research and Educational Trust, “Employer Health Benefits 2008″(Menlo Park, CA), Kaiser Family Foundation (2008), available here.

[2]      C.T. Robertson, R. Egelhof, and M. Hoke, “Get Sick, Get Out: The Medical Causes of Home Foreclosures,” Health Matrix, 18 (2008): 65-105, available here.

[3]      Elizabeth Warren, “Sick and Broke,” Washington Post, February 9, 2005.

[4]      Len M. Nichols and Sarah Axeen, “Employer Health Costs in a Global Economy: A Competitive Disadvantage for U.S. Firms,” New American Foundation (May 2008).

[5]      U.S. Census Bureau, Health Insurance Coverage: 2007, available here.

[6]      Stan Dorn et al., “Medicaid, SCHIP, and Economic Downturn: Policy Challenges and Policy Responses,” Kaiser Commission on Medicaid and the Uninsured (April 2008), available here.

[7]      Congressional Budget Office, “Budget Options Volume I: Health Care” (December 2008), available here.