America suffers from a health care cost crisis; skyrocketing health care costs strain family budgets, undermine the competitiveness of American businesses, and are unsustainable for federal and state governments. Too many Americans live in fear of the astronomical costs they will incur if they or their families experience an unexpected health care emergency. Senate Democrats remain committed to quality, affordable health care for all Americans. During the 111th Congress, Democrats have passed critical legislation supporting this goal, and President Obama’s Fiscal Year 2010Budget Request demonstrates a shared focus on economic recovery and health reform.
Earlier this year, Senate Democrats passed the Children’s Health Insurance Program Reauthorization Act of 2009(CHIPRA), which reauthorized the Children’s Health Insurance Program to continue and expand access to health insurance for lower-income children. The legislation was signed into law by President Obama (P.L. 111-3) on February 4, 2009.
In February, Congress enacted and the President signed the American Recovery and Reinvestment Act of 2009(Recovery Act) (P.L. 111-5) to spur economic recovery and to make investments in our long-term economic strength. The Recovery Act provided crucial funding to states facing budget shortfalls due to the severe economic downturn. A recent report found that 36 states have attempted to close their budget gaps by eliminating or reducing critical social services, including health care. The funding provided by the Recovery Act has mitigated some of the effects of these cuts, allowing many states to maintain their programs, save jobs, and create new opportunities for work.
In March, Congress passed and President Obama signed the Omnibus Appropriations Act of 2009(Omnibus), (P.L. 111-8), which provided the funding necessary to continue government services throughout Fiscal Year 2009, including for the Department of Health and Human Services. This legislation provided critical funding for health care programs on which millions of Americans depend.
In April, Congress agreed to its Fiscal Year 2010 Budget Resolution (S.Con.Res.13), which reflects Americans’ priorities for health care. The Budget Resolution builds on investments made in CHIPRA, the Recovery Act, and the Omnibus, setting the stage for health reform that will provide quality, affordable health care to all Americans.
Finally, in May, President Obama sent his Fiscal Year 2010 Budget Request to Congress. The Budget Request emphasizes 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 all each patient.
Taken together, these initiatives move towards reducing health care costs and ensuring quality, affordable health care for all Americans. Given the strain that health care costs place on American families and businesses, making critical investments in our nation’s health care will strengthen the economy and help lead to long-term economic prosperity.
Health Coverage for Americans Who Need it Now
It’s clear we have a health care cost crisis in America; health care costs consume a growing share of families’ incomes, even for families with health coverage. Democrats’ efforts during the past few months have focused on providing help to families with an immediate need for health coverage, while making long-term investments in our health care infrastructure to bring down costs for all Americans over time.
Ensuring a healthy future for our children. The Children’s Health Insurance Program (CHIP) provides health coverage to millions of children in families that earn too much money to qualify for Medicaid, but not enough to afford private insurance. Earlier this year, Congress passed and the President signed the Children’s Health Insurance Program Reauthorization Act (CHIPRA) (P.L. 111-3), which authorized 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 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.
Health coverage for the poorest Americans. In Fiscal Year 2010, approximately 53 million Americans will rely on Medicaid for their health care needs. Medicaid is funded jointly by the federal government and state governments. In the Recovery Act, Congress provided a temporary increase of approximately $86 billion in federal funding for Medicaid, helping states respond to increased unemployment rates and more individuals qualifying for Medicaid. The Budget Request also includes $1.5 billion in savings to Medicaid in Fiscal Year 2010 through legislative proposals that would increase the rebates the Medicaid program receives from pharmaceutical manufacturers and increase efficiency and accountability within the program.
Caring for elderly Americans. Approximately 47 million Americans depend on Medicare for their health care. The Omnibus provided $45 million for outreach to seniors to help newly-eligible individuals understand which Medicare benefits are available to them. The President’s Budget Request also seeks to improve Medicare through legislative and administrative proposals designed to align incentives toward quality health care, promote efficiency and accountability, and encourage shared responsibility.
Helping the recently unemployed get back on their feet. Sixty-one percent of the non-elderly population receives health insurance through an employer. The Recovery Act provided a temporary subsidy to individuals recently laid off so that they can maintain their health coverage. Some recently unemployed individuals will be eligible for a nine-month subsidy to cover 65 percent of the cost of maintaining their employer-sponsored coverage (also known as COBRA).
Coverage for the ‘uninsurable.’ Some individuals are denied affordable health care coverage because of pre-existing medical conditions. The Omnibus provided $75 million for state high-risk insurance pools that offer more affordable health insurance to nearly 200,000 individuals with high-risk medical conditions, and the Budget Request also includes $75 million for this important program.
Health Care Infrastructure Investments for Long-Term Cost Containment
Health Professions Workforce. Medical professionals are in high demand and short supply, a problem that is likely to grow as medical personnel reach retirement age and the aging population demands increased care. The Recovery Act provided $500 million to address workforce shortages and the Omnibus directed $842 million to train doctors and other medical personnel providing improved access to critical health care services. The Budget Resolution also supports programs that train health care providers to respond to the needs of underserved population, such as the National Health Service Corps, which places primary health care professionals in underserved communities. The Budget Request mirrors this commitment by including $1 billion for health professions programs designed to increase the number of providers practicing in underserved areas. This funding level includes $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 had incomes below 200 percent of the federal poverty level. The Recovery Act included $500 million for the operation of the nation’s community health centers, and $1.5 billion for construction and equipment at these vital centers. The Omnibus provided an additional $2.2 billion for community health centers, and the Budget Resolution recognizes the critical role these centers play in our health care safety net and builds on these investments by providing $2.9 billion for FQHCs in Fiscal Year 2010, an $800 million increase above the Fiscal Year 2009 level. The President’s Budget Request includes $2.2 billion for health centers in Fiscal Year 2010.
Private Electronic Medical Records. Investments in health information technology (IT) have the potential to save billions of dollars by reducing health care costs and ensuring Americans get the care they need, when they need it, while maintaining the privacy Americans value so highly. In a medical emergency, Americans deserve the peace of mind that comes with knowing all their critical health information is available to the doctor treating them, and is not available to anyone else. The Recovery Act invested $19 billion in the modernization and implementation of health IT. This investment will help avoid medical errors that occur when doctors lack complete information about their patient’s medical history and will help reduce costs by ensuring patients don’t receive duplicate tests or diagnostic procedures, simply because documentation of the original test was not readily available.
Patient-centered health research. Americans know their doctors want what’s best for them, and patient-centered health research gives doctors the tools they need to provide the best care for every individual. Information is power, and patient-centered health research empowers doctors with independent, unbiased research on what works and what doesn’t for each patient. As part of the Recovery Act, Democrats invested $1.1 billion in the research doctors need to ensure every American gets the care they need, when they need it.
Eliminating Waste, Fraud, and Abuse. Up to one-third of our nation’s health care spending does not improve health outcomes, meaning $700 billion of health spending per year does not make us any healthier. Fraud and abuse are also of serious concern, and while it is very difficult to determine the exact amount of taxpayer funds lost to waste, fraud, and abuse, the government must do a better job of ensuring patients, businesses, and the government pay only for appropriate, legitimate health care services, and not for bad actors trying to game the system.
In keeping with recommendations made by the Medicare Payment Advisory Commission (MedPAC), an independent panel that advises Congress regarding Medicare payment policies, the Budget Request 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 funding 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.
Rural Health Care. The Omnibus provided $289 million for programs designed to help rural communities address their unique health care challenges. These funds will support more than 1,200 small, rural hospitals which will serve more than 700,000 rural residents in underserved communities. The Budget Request includes $125 million to improve health care access 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 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 public health by regulating our nation’s drugs, biological products, medical devices, food supply and cosmetics. Members of Congress and the public have been increasingly concerned about the ability of the FDA to ensure the safety of these products. The Budget Resolution includes a deficit-neutral reserve fund to facilitate the consideration of legislation giving the 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. 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. The President has requested an additional $1.5 billion for pandemic flu preparedness, which is included in the Fiscal Year 2009 Supplemental Appropriations bill approved by the Senate Appropriations Committee.
Autism Spectrum Disorders. The Omnibus included $63.4 million for efforts to prevent autism and support children and families affected by Autism Spectrum Disorders. The Budget Request builds on this investment, including $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 with autism and their families.
Prevention and Wellness Programs. 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 Recovery Act included over $650 million for prevention and wellness programs to keep our communities healthy and productive. The Omnibus provided an additional $882 million for prevention and wellness activities, including $25 million to provide colorectal cancer screening and follow-up care. 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.
Immunization. The Vaccines for Children (VFC) program provides mandatory funding for free vaccines to children who meet several eligibility criteria. The Section 317 vaccines program is a discretionary program, and the Budget Request includes $558 million for Section 317, building on the $300 million investment in this successful program made in the Recovery Act.
Mental Health and Substance Related Disorders. The Budget Request includes $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 Recovery Act and the Omnibus directed more than $40 billion to the National Institutes of Health (NIH) for biomedical research in areas such as cancer, Alzheimer’s, heart disease, diabetes and stem cells. These investments could lead to new cures and treatments, and will address debilitating health conditions that prevent our workforce from reaching optimal productivity. The Budget Request builds on this investment, including $31 billion for the NIH, an increase of $443 million over the Fiscal Year 2009 funding level. Included in the Budget Request is more than $6 billion to support cancer research, the first step in an initiative to double NIH cancer research funding over eight years.
Quality, Affordable Health Care for All Americans
Efforts by Senate Democrats during the 111th Congress have focused on helping families with an immediate need for health coverage while making long-term investments in our health care infrastructure to bring down costs for all Americans over time. Senate Democrats will build on these successes as Congress considers reform legislation to ensure quality, affordable health care for all Americans.
 Center on Budget and Policy Priorities, An Update on State Budget Cuts, May 13, 2009, available at http://www.cbpp.org/cms/index.cfm?fa=view&id=1214.
 P.R. Orszag for the Congressional Budget Office, “Increasing the Value of Federal Spending on Health Care,” Testimony before the Committee on the Budget, U.S. House of Representatives, (July 16, 2008), available at: http://www.cbo.gov/ftpdocs/95xx/doc9563/07-16-HealthReform.pdf.