Senate Democrats

Key Obama Budget Investments in Quality, Affordable Health Care for All Americans

President Obama’s Fiscal Year 2010Budget Request includes critical investments in a number of important health care programs.  This Fact Sheet provides a summary of those proposed investments.  Congress will take these recommendations under consideration, along with its own priorities, as it works to complete the Fiscal Year 2010 appropriations process in keeping with the Fiscal Year 2010 Budget Resolution (S. Con. Res. 13).

President Obama’s Budget Request responds to Americans’ urgent need for health reform, establishing a deficit-neutral reserve fund of $635 billion, a down payment on reform legislation to reign in skyrocketing health care costs that American families now face and align incentives to give health care providers every tool necessary to provide quality health care to every patient.  The Budget Request and the substantial investments in providing quality, affordable health care to all Americans made in the American Recovery and Reinvestment Act(Recovery Act) (P.L. 111-5) demonstrate President Obama’s and Congress’ commitment to health reform. 

Quality, Affordable Health Care for All Americans

Children’s Health Insurance Program.  The Children’s Health Insurance Program (CHIP) provides health insurance to millions of children in families that earn too much money to qualify for Medicaid, but not enough to afford private insurance coverage.  Earlier this year, Congress passed and the President signed the Children’s Health Insurance Program Reauthorization Act (P.L. 111-3), which provides an additional $44 million over five years, allowing as many as four million uninsured children to enroll in this successful program.  This is an important step to ensuring that the nearly nine million uninsured children in our country gain access to health insurance coverage.  The previous President vetoed two bipartisan reauthorizations of CHIP, so President Obama’s support and prioritization of CHIP, by signing CHIPRA and including full funding for the program in his Fiscal Year 2010 Budget Request, is a welcome change. 

Medicaid.  In Fiscal Year 2010, approximately 53 million Americans will rely on Medicaid for their health care needs.  Medicaid is funded jointly by the federal and state governments.  In the Recovery Act, Congress provided a temporary increase in federal funding for Medicaid, helping states respond to increased unemployment rates and more individuals qualifying for Medicaid.  The Budget Request includes $1.5 billion in savings to Medicaid in Fiscal Year 2010 through legislative proposals that increase the rebates the Medicaid program receives from pharmaceutical manufacturers and increases efficiency and accountability within the program.

Medicare.  Approximately 47 million Americans depend on Medicare for their health care.  In stark contrast to budget proposals offered by the previous Administration, the President’s Budget Request offers legislative and administrative proposals designed to align incentives toward quality health care, promote efficiency and accountability, and encourage shared responsibility.  The Medicare legislative proposals, including incentive payments for the quality of care provided, policies to reduce hospital readmissions, bundled payments to support better coordination of patient care, and many others, contribute $520 million in Fiscal Year 2010 and $287.5 billion over 10 years toward health care reform.

Significantly, in keeping with recommendations made by the Medicare Payment Advisory Commission (MedPAC), an independent panel that advises Congress regarding Medicare payment policies, the President proposes to eliminate billions of dollars in overpayments to private insurance companies that treat some Medicare beneficiaries through the private Medicare Advantage program.  The Congressional Budget Office estimates that eliminating these overpayments would save taxpayers $157 billion over ten years.  The budget proposes a competitive bidding system which will allow the market, not Medicare, to set appropriate Medicare Advantage payment rates.

The Budget Request also includes a proposal to increase payment accuracy and accountability, and provides a $125 million increase for Health Care Fraud and Abuse Control (HCFAC), for a total Fiscal Year 2010 investment of $1.5 billion.  Included in HCFAC program is the Medicare Integrity Program (MIP), which, according to the Budget Request, returns $13 to the Medicare Trust Fund for every $1 spent. 

Health Professions Workforce.  The Budget Request includes $1 billion for health professions programs designed to increase the number of providers practicing in underserved areas.  Included in this total is $169 million for the National Health Service Corps (a $34 million increase over the Fiscal Year 2009 level) and $263 million to address the nursing workforce shortage (an increase of $92 million) for the Nurse Loan Repayment and Scholarship Program and the Nursing Workforce Development programs

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.  In addition to the $2 billion investment in health centers made as part of the Recovery Act, the budget requests $2.2 billion to maintain health centers in Fiscal Year 2010.

Rural Health Care.  The Budget Request includes $125 million to improve access to health care in rural areas, including $55 million for Rural Health Care Services, Outreach, Network, and Quality Improvement grants, $9 million for state offices of rural health, and $8 million for telehealth grants. 

Indian Health Service.  The Indian Health Service (IHS) and tribal partners provide primary care and behavioral and community health services to American Indians and Alaska Natives.  The Budget Request includes $4.6 billion for the IHS, an increase of $454 million over the Fiscal Year 2009 level, and the largest proposed increase for the agency in 20 years.  This request builds on the $85 million investment in IHS included in the Recovery Act

Ensuring Safety and Advancing Public Health

Food and Drug Administration.  The Food and Drug Administration (FDA) protects the public health by regulating our nation’s drugs, biological products, medical devices, food supply and cosmetics.  The Budget Request includes $3.2 billion for the FDA, a net program level increase of $511 million over the Fiscal Year 2009 funding level.  This includes $1 billion for food safety, a $259 million increase over Fiscal Year 2009, to give the FDA more of the resources it needs to address the food safety challenges facing the nation.

Pandemic Influenza Preparedness.  As the country and the world respond to the H.R.1N1 influenza A virus, the Budget Request includes $584 million for pandemic influenza preparedness activities at the FDA, the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH), within the Office of the Secretary, and through the Public Health and Social Services Emergency Fund (PHSSEF).  This includes a $276 million one-time investment in advanced development activities to build vaccine production capacity and support next generation antivirals, among other activities.  Finally, the President has requested $1.5 billion for pandemic flu preparedness funding in the Fiscal Year 2009 Supplemental Appropriations bill, which was approved by the Senate Appropriations Committee on May 14, 2009.

Autism Spectrum Disorders.  The Budget Request includes $211 million at NIH, CDC, and the Health Resources and Services Administration (HRSA) for research, treatment, screenings, surveillance, public health, and support services for children and families affected by Autism Spectrum Disorders.

Chronic Disease Prevention.  Chronic diseases are among the most prevalent, costly and preventable health problems, and investing in their prevention is a key component of health reform.  The Budget Request includes $1 billion for Health Promotion, a $19 million increase above the Fiscal Year 2009 level.  This includes $896 million for Chronic Disease Prevention, Health Promotion, and Genomics activities, and $142 million for Birth Defects, Developmental Disabilities, Disability and Health. 

Mental Health and Substance Related Disorders.  The Budget requests $3.5 billion for the Substance Abuse and Mental Health Services Administration (SAMHSA), a $59 million increase above the Fiscal Year 2009 level.  SAMHSA supports recovery for people dealing with or at risk of a substance related disorder or mental illness, and supports state and local efforts to improve the availability of quality prevention and treatment services.

Investing in Scientific Research

National Institutes of Health.  The Budget Request includes $31 billion for the NIH, an increase of $443 million over the Fiscal Year 2009 funding level, and builds on the $10.4 billion investment in the NIH Congress and the President made in the Recovery Act.  This includes more than $6 billion to support cancer research, a first step in an initiative to double NIH cancer research funding over eight years.