President Joe Biden’s fiscal 2024 budget proposal claims that if enacted, it will make a real dent in the federal budget deficit, which now stands at $1.8 trillion. But the $6.8 trillion budget proposal is likely to do anything but cut the deficit, instead only expanding social spending programs and increasing taxes on high-income earners and corporations.
Not that the document, released by the Biden administration on March 9, will come to fruition. After all, even with the White House and Senate in Democratic hands, Republicans hold a House majority, albeit narrowly. Still, the Biden budget plan has its useful elements. It sets a helpful framework of where congressional Democrats and the Biden administration lie on spending toward one of the nation’s costliest endeavors, healthcare, particularly as congressional Republicans talk up the need for fiscal discipline as the national debt approaches $32 trillion.
15 MILLION COULD LOSE MEDICAID COVERAGE AS PANDEMIC-ERA CONTINUOUS ENROLLMENT END
The proposal includes several initiatives relating to Medicaid, the joint federal-state health insurance program that provides coverage to low-income and disabled adults and is a major driver of debt growth. One provision in the budget would make permanent subsidies to Medicaid from the 2010 Affordable Care Act, former President Barack Obama’s signature domestic achievement. Yet these subsidies were only supposed to be temporary during the COVID-19 pandemic.
Over the past three years, more than 20 million people gained Medicaid coverage after Congress expanded the program during the COVID-19 national health emergency. The move amplified the Medicaid population by more than 25%. But, with the federal emergency set to expire in April, states will begin to remove people who are no longer eligible.
To combat the administration’s coverage concerns and states that haven’t expanded Medicaid, the proposed budget would create “Medicaid-like coverage” for low-income adults in nonexpansion states. (Forty-one states have expanded Medicaid.) The exact definition is unclear, yet the Medicaid expansion would include additional “financial incentives to ensure States maintain their existing expansions.”
When enacted, the Affordable Care Act initially required states to expand Medicaid or they’d lose federal funding. However, the requisite was held unconstitutional in a 2012 Supreme Court case.
States that haven’t yet expanded Medicaid fear doing so could hurt existing Medicaid enrollees who seek care and blow up state budgets. North Carolina, which has a Republican-led legislature, is the most recent to expand.
The Biden budget proposal also intends to “make permanent the expanded premium tax credits,” which came to fruition during the pandemic.
The plan drew criticism from Sally Pipes, president and CEO of the Pacific Research Institute. Pipes said these provisions would distort the health market, leading to increased costs. That’s because healthcare expenditures are already expected to grow to $1.4 trillion in the current fiscal year, according to the Congressional Budget Office.
Specific Medicaid programs would get an additional $150 billion over 10 years, per the budget proposal. That includes Medicaid home and community-based services. HCBS provide opportunities for Medicaid beneficiaries to receive services in their own home or community rather than institutions or other isolated settings. These programs serve people with intellectual or developmental disabilities, physical disabilities, and mental illnesses, among others.
“The budget proposes a continued expansion of [HCBS]. While facilitating more seniors to stay in their homes is a welcome goal and something we know they value, the price tag, $150 billion over 10 years, is quite high, and research is mixed on whether HCBS reduces overall healthcare costs,” Markus Bjoerkheim, a postdoctoral research fellow with George Mason University’s Mercatus Center, told the Washington Examiner.
“The $150 billion price tag is especially high considering there are other far less expensive policies that would achieve the same goal of allowing seniors to age in place, improve their quality of life, and lower healthcare costs, such as allowing more low-skilled immigration,” he added.
The Biden budget also emphasizes the use of Medicaid managed care plans, the dominant delivery system for Medicaid enrollees. Some 72% of Medicaid beneficiaries are enrolled in comprehensive managed care organizations. The Biden budget would beef up enforcement of rules that allow the Centers for Medicare and Medicaid Services to mandate reimbursement when a plan is out of compliance rather than withholding all Medicaid matching funds from the federal government. The Biden budget predicts this will produce Medicaid savings of $1.5 billion over 10 years.
Conversely, the Center on Budget and Policy Priorities has praised the Biden budget as it relates to healthcare.
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“The budget takes significant steps toward universal health coverage and would improve health equity,” it announced in a release.
Writing the actual federal budgets, with line-item amounts in individual appropriations (spending) bills, comes next. In a divided Congress, this is sure to stir up conversations on the role of government in healthcare and its effect on taxpayers.
