President Obama Releases his FY 2015 Budget Proposal
President Obama Releases his FY 2015 Budget Proposal

On Wednesday, March 4th, President Obama released his Budget for fiscal year (FY) 2015. For the first time ever, funding for the Department of Health and Human Services (HHS) is expected to exceed $1 trillion (with a T!). This includes a combination of proposed funds for discretionary programs, which only comprise 8 percent of the HHS budget, and an estimate of spending under mandatory programs like Medicare and Medicaid, which comprise the other 92 percent.

Some highlights include:

  • Overall funding for the Health Resources and Services Administration is proposed at $10.8 billion, which represents a $1.8 billion increase over the current fiscal year. Included within this number are significant policy increases for Community Health Centers and Health Workforce programs.
  • Funding for the National Institutes of Health is proposed at $30 billion, which is just over $200 million more than current funding levels.
  • Spending for Medicare is expected to increase to $522 billion, a $9 billion increase current spending. Medicaid spending is expected to increase to $331 billion in FY 2015, which is $23 billion more than this year.
  • The Budget includes a total of $1.8 billion in FY 2015 for the operation of the federal health insurance marketplace, which includes both $629 million requested from Congress and the remainder collected from the insurance industry via user fees and risk adjustment.

Funding the government is a Constitutionally required duty of the Congress, but law requires that the President submit a Budget to the Congress each year. This Budget serves a number of purposes. At its core, it is a statement of the President’s priorities within a resource-constrained environment. It recommends to the Congress the President’s desired funding levels – including both increases and decreases – for programs across the government.

The Budget also includes proposed changes to laws and regulations that govern entitlement spending like Medicare. In some cases, the Administration may be able to act unilaterally on regulatory changes that may impact spending, but substantive changes in law (e.g. changing program benefits or retirement age) would require action by Congress, which has become rare in recent years.

Additionally, the President’s Budget includes estimates of total government spending and deficits both in the short and long-term. Even still, the Congressional Budget Office produces its own estimates, which are the estimates by which the Congress must abide.

At the end of the day, the Budget itself, however, largely does not enact anything. The Congress must still pass annual appropriations bills and changes to entitlement law. As we all know, that has become easier said than done in recent years. Congress has increasingly relied on stop gap funding measures known as continuing resolutions, which essentially just copy and paste prior years’ policies and funding levels.  And opening up any changes to entitlement spending in the health care world has been a can of worms that brings us back to debates over overturning the Affordable Care Act altogether. Congress has until September 30th to pass funding measures for FY 2015.