Biden Unveils Plan for Medicare Funding in $6.8 Trillion Budget Proposal

President Biden unveiled a $6.8 trillion fiscal year 2024 budget proposal Thursday that includes $1.7 trillion for the Department of Health and Human Services (HHS), with some savings in the department’s budget going toward extending the Medicare trust fund’s solvency.

“I guarantee you I will protect Social Security and Medicare without any change,” Biden said during a speech at the Finishing Trades Institute in Philadelphia. “I won’t allow it to be gutted or eliminated, as [some] Republicans have threatened to do.”

Exactly half of the proposed HHS budget would be spent on Medicare, with another 33% spent on Medicaid. The remaining 17% would be divided up among discretionary programs (9%), other mandatory programs (5%), children’s entitlement programs such as the Children’s Health Insurance Program (CHIP; 2%), and the Temporary Assistance for Needy Families program (1%).

In the Medicare program, “the budget includes new revenues that will extend Part A Trust Fund solvency by at least 25 years without cutting benefits,” according to an HHS “Budget in Brief” document. Where would that money come from? The Biden administration would close a loophole that permits certain business owners to avoid paying Medicare taxes on some profits they get from passthrough businesses, and also would raise the Medicare tax rate on certain earned and unearned income, and the net investment income tax rate from 3.8% to 5% for the wealthiest Americans.

These and a few other changes, “together with savings from the budget’s prescription drug reforms, would extend the solvency of the Medicare Hospital Insurance Trust Fund by at least 25 years,” the budget proposal said. The budget also includes some increased benefits for Medicare beneficiaries, such as capping the copayment for certain high-value generic drugs provided under the Part D drug benefit at $2.

Asked at a press conference Thursday whether the proposed budget would cut any spending on the Medicare Advantage (MA) program — which has come under fire recently over some of the marketing techniques of some MA plan vendors — HHS Secretary Xavier Becerra said, “Unequivocally, no. This budget does not cut funding for Medicare Advantage plans; [instead] it increases funding” for them compared to last year. Becerra added, “And if you have seen those deceptive commercials, I hope as a journalist, you will write the truth so that … Medicare beneficiaries who are making the decisions about their Medicare benefits don’t get duped into going into the wrong place for the wrong plan for the wrong price.”

Other provisions of the proposed budget include:

• $48.6 billion for NIH, an increase of $920 million from its actual budget in fiscal year 2023. That includes $2.5 billion for the Advanced Research Projects Agency for Health (ARPA-H) and $716 million for the president’s “cancer moonshot” initiative.
• $7.2 billion for FDA, which includes $4 billion in discretionary budget authority and $3.3 billion in user fees. In addition, the “budget includes $20 billion in mandatory funding across HHS for pandemic preparedness, which is reflected in the Public Health and Social Services Emergency Fund. Of this total, $670 million is allocated to FDA,” according to the Budget in Brief document.
• $20 billion for CDC, which includes $340 million for the agency’s Data Modernization initiative. It also includes $100 million for the agency’s Center for Forecasting and Outbreak Analytics, launched in April 2022, as well as $55 million toward maintenance and repair of CDC facilities in an effort to chip away at a $194 million backlog in this area.
• $836 million to the 9-8-8 program, an increase of $334 million over the spending in fiscal year 2023. “This investment supports specialized services for LGBTQI+ youth and for Spanish speakers, invests significantly in local crisis centers, and develops a national media campaign,” according to the Budget in Brief document.

The document also noted that because HHS “is committed to protecting and strengthening access to reproductive healthcare,” the budget gives $512 million to the Title X family planning program to meet the increased need for family planning services. It also requires all health insurers to cover three primary care visits and three behavioral health visits per year “without charging a copayment, coinsurance, or deductible-related fee,” at a cost of $310 million over 10 years. In addition, the proposal requires states to provide 12 months of postpartum coverage in Medicaid and CHIP.

President Biden also discussed another healthcare highlight of his budget during his speech in Philadelphia. He said one night when he was a boy, his dad had a restless night’s sleep. “And I asked my mom the next morning, ‘What’s wrong with Dad?’ She said, ‘He just — his company said no more health insurance. They weren’t going to pay for it.'”

To help Americans with similar problems, the American Rescue Plan — which no Republicans voted for — expanded the subsidies available to enrollees in Affordable Care Act (ACA) plans, saving them an additional $800 per year on average, the president said. “My budget is going to make those savings permanent. We passed them up until now, but they will expire if I don’t get them done again.”

Healthcare groups were generally supportive of the budget proposal. “The president has once more demonstrated his commitment to ‘ending cancer as we know it,'” Lori Pierce, MD, board chair of the Association for Clinical Oncology, said in a statement. “The funding increases for NIH, NCI, and ARPA-H in his 2024 budget proposal would provide necessary support for key pillars of our nation’s biomedical research infrastructure.”

“We are particularly pleased to see the President’s budget featured requirements for 12 months of postpartum Medicaid coverage, permanent enhanced after-premium tax credits for [ACA] marketplace coverage, and support for home- and community-based services for dual eligibles,” Margaret Murray, CEO of the Association for Community Affiliated Plans, a trade group for safety net health plans, said in a statement. “These investments will help strengthen coverage and ultimately improve the health of the people these programs serve.”