- The newly proposed HHS Budget for fiscal year (FY) 2019 says a repeal and replace of the Affordable Care Act (ACA) would save the government trillions, while restructuring Medicare and Medicaid could produce federal savings.
The budget incorporates a repeal and replace of the ACA modeled after the Graham-Cassidy-Heller-Johnson Bill, which includes modernization of Medicaid financing and repeal of the ACA’s Medicaid expansion.
The White House views ACA repeal as an opportunity to reduce the necessary operating budget for HHS by $303 billion from FY 2019 to FY 2028. The agency also said that the US government could end up saving a total of $679 billion over a decade because of the ACA repeal.
The budget includes block grant funding for state Medicaid and Medicare programs. The budget also encourages states to implement work and community engagement requirements for Medicaid eligibility through the 1115 Medicaid waiver program.
The budget focuses on addressing the nation’s opioid crisis by allocating $10 billion across HHS programs. The funding is intended to prevent over-prescribing of opioids, improve patient education, and support related activities to manage opioid safety risk.
“The President’s budget makes investments and reforms that are vital to making our health and human services programs work for Americans and to sustaining them for future generations,” HHS Secretary Alex Azar said in a public statement.
“In particular, it supports our four priorities here at HHS: addressing the opioid crisis, bringing down the high price of prescription drugs, increasing the affordability and accessibility of health insurance, and improving Medicare in ways that push our health system toward paying for value rather than volume.”
HHS plans to increase benefit spending for Medicare’s 61 million beneficiaries by $71 billion, for a total FY 2019 budget of $768.6 billion.
The budget includes $209.4 billion for Part A spending, $210.1 billion in Part B spending, $247.6 billion in Part C spending, and $101.5 billion in Part D spending.
HHS would be able to spend $733 million on administrative improvements to reduce fraud and waste in the Medicare program, which is expected to save the program $903 billion from 2019 to 2027. HHS also expects investments towards improving Medicare appeals process to save $1.1 billion from 2019 to 2027.
The 2019 budget increases the Medicaid budget by $18.1 billion, which would bump state administration Medicaid funding to $21 billion and total benefits funding to $398 billion.
President Trump estimates that significant legislative changes to Medicaid, including repealing the ACA, using a block grant system to fund Medicaid, promoting the use of 1115 waivers, and investing in fraud and abuse prevention, could lead to $1.43 trillion in government savings from 2019 to 2027.
The budget focuses funds on other administrative improvements such as a $3.5 billion allocation to improve Medicaid, Medicare, and CHIP management.
If the budget is approved, it could generate more political uncertainty surrounding the ACA and how states receive funding for public payer programs.