The Biden administration released portions of the president’s budget request for fiscal year (FY) 2024 on March 9. While the annual exercise provides a blueprint of the White House’s priorities and spending proposals across all federal departments and agencies, final funding and policy decisions will be determined by Congress.
The budget proposal proposes to extend the life of the Medicare program and to expand access to care for underserved populations by including $1.7 trillion in mandatory budget authority for the Department of Health and Human Services (HHS) to support Medicare, Medicaid, and the Children’s Health Insurance Program.
According to the HHS Budget in Brief, the request proposes $144.7 billion in discretionary budget authority for the Department of Health and Human Services (HHS), a $17 billion (13.3%) increase over FY 2023, including substantial increases for the Centers for Disease Control and Prevention (CDC)and the new Advanced Research Projects Agency for Health (ARPA-H), among other programs.
Upon the budget's release, AAMC President and CEO David J. Skorton, MD, and Chief Public Policy Officer Danielle Turnipseed, JD, issued a statement noting, “The AAMC appreciates that President Biden’s FY 2024 budget request proposes investments in programs and initiatives critical to improving the nation’s health, along with plans to strengthen Medicare and make strategic investments in Medicaid, which are vital to maintaining access to care for millions of Americans.”
As in FY 2023, the administration proposes $20 billion available over five years for a new mandatory pandemic preparedness fund to supplement appropriations for related activities at the CDC ($6.1 billion), NIH ($2.7 billion), Administration for Strategic Preparedness and Response (ASPR, $10.5 billion), and the Food and Drug Administration ($670 million).
Proposals related to research, public health, and health care agencies and programs that impact academic medicine are described below. Additional details on the president’s proposal are expected in the coming days, when agencies and programs release Congressional Justifications for FY 2024 funding and other components of the White House budget request.
National Institutes of Health (NIH)
The president proposes $48.3 billion for NIH’s base budget, a $811 million (1.7%) increase over the comparable FY 2023 funding level, and $2.5 billion for the Advanced Research Projects Agency for Health (ARPA-H), a $1 billion (67%) boost over FY 2023. Additionally, the budget requests a supplement to NIH’s base budget with $2.7 billion in mandatory funding for pandemic preparedness, and proposes to extend mandatory funding for the 21st Century Cures Act Cancer Moonshot initiative with $1.45 billion in each of FYs 2025 and 2026.
The Ad Hoc Group for Medical Research, an NIH advocacy coalition convened by the AAMC, issued a statement expressing concern that “the proposed base budget request for FY 2024 does not even come close to keeping pace with biomedical inflation, to say nothing of allowing the NIH to expand its capacity. Underinvesting in NIH’s annual base budget is to the detriment of patients today and tomorrow, undermines the future medical research workforce, and threatens to weaken U.S. competitiveness with global adversaries.” .”
Centers for Disease Control and Prevention (CDC)
The budget proposes a total program funding level of $11.6 billion for the CDC, including funding from the Prevention and Public Health Fund and other sources, an increase of $2.4 billion (25.6%) over the comparable FY 2023 enacted levels.
Agency for Healthcare Research and Quality (AHRQ)
The president’s proposal requests $448 million for AHRQ, representing a $74 million (20%) increase over FY 2023, with another $116 million scheduled to go to the agency from the Patient-Centered Outcomes Research Trust Fund in FY 2024. The AAMC joined the Friends of AHRQ in recommending $500 million for the agency’s base in FY 2024.
Health Resources and Services Administration (HRSA)
The president proposes $9.2 billion for HRSA discretionary funding, $285 million (3%) less than the FY 2023 level, primarily the result of the president’s request eliminating $1.5 billion in congressionally-directed spending for one-time projects. The budget proposes $1.1 billion for the HRSA Title VII health professions and Title VIII nursing workforce development and diversity programs, a $220 million (25%) increase over FY 2023 enacted levels. Within that total, the budget requests $113 million, which is an $11 million or 10.8% increase over FY 2023, for the workforce diversity programs, and $25 million for the Supporting the Mental Health of the Health Professions Workforce program, authorized by the AAMC-endorsed Dr. Lorna Breen Health Care Provider Protection Act (P.L. 117-105).
The budget request proposes a new investment of $28 million to fund the Health Care Workforce Innovation Program, intended to promote innovative approaches to recruiting, supporting, and training new providers to address workforce shortage concerns.
The budget proposes $176 million in discretionary funding (an increase of $50 million or 40% over FY 2023 enacted levels) and $790 million in mandatory funding for the National Health Service Corps (NHSC). Additionally, the president’s budget request proposes to continue FY 2023 funding levels for the Children’s Hospitals Graduate Medical Education (CHGME) program at $385 million, and the Rural Residency Planning and Development program at $13 million. The budget proposes a $38 million (31.9%) increase in mandatory funding for Teaching Health Centers graduate medical education.
The budget proposes to extend the life of the Hospital Insurance Trust Fund by at least 25 years without cutting benefits or imposing provider cuts. The budget would achieve this by increasing the Medicare tax rate on individuals making more than $400,000 per year and directing revenue raised though the Net Investment Income Tax to the Medicare Hospital Insurance Trust Fund, as well as expanding the HHS Secretary’s ability to negotiate the price of certain high-cost drugs.
Prescription Drug Pricing
The budget illustrates the administration’s ongoing interest in lowering the cost of prescription drugs by building upon policies and programs included in the Inflation Reduction Act (IRA) (P.L. 117-169). The IRA established the Medicare Prescription Drug Negotiation Program, which authorizes the HHS Secretary to negotiate prices for certain high expenditure drugs covered by Medicare Parts B and D [refer to Washington Highlights, August 15, 2022]. The budget proposes to strengthen this negotiation power by increasing the number of drugs subject to negotiation and makes drugs eligible for negotiation sooner after their launch. The budget also proposes to extend negotiations into Medicaid and the Children’s Health Insurance Program (CHIP) by permitting the HHS Secretary to negotiate for additional rebates on behalf of states. The budget also includes a proposal to cap the price of insulin at $35 per month in the commercial market. This provision was originally included in the House-passed Build Back Better Act (H.R. 5376), but was removed from the reconciliation package following the Senate parliamentarian’s ruling that the proposal did not comply with the rules of the reconciliation process [refer to Washington Highlights, July 29].
The 340B Drug Pricing Program
The budget proposes $17 million (a $5 million increase over FY 2023 enacted levels) to support HRSA’s oversight of the 340B Drug Pricing Program. These funds would be used to help the agency conduct additional audits of drug manufacturers and covered entities, as well as implement system improvements to support the Administrative Dispute Resolution process [refer to Washington Highlights, Feb. 3]. The budget also proposes to provide HRSA with the regulatory authority necessary to require covered entities to annually report how they use their 340B savings to benefit the communities they serve.
Mental and Behavioral Health
The budget includes key investments to support the administration’s Behavioral Health Strategy, which aims to “remove barriers to care and services” while “promoting person-centered behavioral health care.” The budget proposes to expand access to behavioral health services for Medicare beneficiaries by requiring Medicare to cover three behavioral health visits without cost-sharing and allowing Medicare to identify and designate additional behavioral health professionals to enroll in and be paid by Medicare (e.g., clinical social workers, peer support workers, or certified addiction counselors). The budget also proposes to apply the 2008 Mental Health Parity and Addiction Equity Act to the Medicare program and eliminate the 190-day lifetime limit on psychiatric hospital services under Medicare.
The budget also aims to convert the Certified Community Behavioral Health Clinic (CCBHC) demonstration model into a permanent program. Established in 2014, the CCBHC demonstration model provides states with enhanced federal Medicaid funds to support participating behavioral health clinics in providing a wide range of community-based mental health, substance use, and crisis response services. The Bipartisan Safer Communities Act extended existing demonstrations and expanded opportunities for states to implement demonstrations [refer to Washington Highlights, June 24]. The budget proposes to convert any new or existing CCBHC demonstration model into a permanent Medicaid state plan option.
The budget includes several proposals designed to improve access to comprehensive behavioral health services for individuals with commercial insurance coverage. The budget would require that commercial insurance plans cover at least three behavioral health visits and three primary care visits per year without cost-sharing. In addition, the budget would strengthen enforcement of mental health parity standards by requiring insurers to use medical necessity criteria consistent with those developed by nonprofit medical specialty associations, as well as authorize the Secretaries of the Departments of Health and Human Services, Labor, and Treasury to regulate network adequacy for behavioral health services.
Access to Coverage and Care
The budget seeks to make permanent the enhanced premium tax credits, which were originally established under the American Rescue Plan Act (P.L. 117-2), and subsequently extended through 2025 by the Inflation Reduction Act (P.L. 117-169). This proposal would expand access to coverage by permanently removing required contributions for individuals and families making between 100 and 150 percent of the federal poverty level (FPL), as well as limit contributions towards benchmark plans to 8.5 percent of income. The budget would also remove the 400 percent FPL cap on premium tax credit eligibility.
The budget also aims to strengthen access to coverage and care under the Medicaid program. The budget proposes to close the so-called “Medicaid coverage gap” by proving “Medicaid-like coverage” to individuals residing in states that have refused to expand Medicaid. It would also provide financial incentives for states to “maintain existing expansions.” The budget seeks to improve oversight of Medicaid managed care plans by directing plans to achieve a medical loss ratio of at least 85 percent and requiring states to collect remittances from plans that fail to meet this threshold.
Maternal Health and Mortality
The budget proposes $471 million to support the White House Blueprint for Addressing the Maternal Health Crisis, which aims to “improve maternal morbidity and mortality rates and address persistent disparities” [refer to Washington Highlights, July 1]. The budget also would require states to provide 12 months of continuous Medicaid coverage during the post-partum period. The budget proposes to invest $276 million in HRSA programs designed to reduce maternal morbidity and mortality. The FY 2024 budget also provides funding to support the NIH’s Implementing a Maternal Health and Pregnancy Outcomes Vision for Everyone (IMPROVE) initiative, which supports research on interventions to prevent maternal morbidity and mortality.
The budget reiterates the Biden administration’s commitment to expanding access to telehealth services. The budget specifically requests $45 million for HRSA to promote telehealth, an 18% increase over FY 2023 enacted levels.
Health Care Readiness and Recovery and Other Preparedness Investments
The proposal requests $312 million for the Health Care Readiness and Recovery program, formerly known as the Hospital Preparedness Program, within the Administration for Strategic Preparedness and Response (ASPR), a funding level $7 million (2.3%) higher than the FY 2023 omnibus.
In addition to the proposed new mandatory HHS-wide Pandemic Preparedness fund described above, the request proposes to bolster appropriations over final FY 2023 funding levels for the Biomedical Advanced Research and Development Authority (BARDA), the Strategic National Stockpile, and the National Disaster Medical System.
Other Departments and Agencies
Department of Veterans Affairs (VA) Medical and Prosthetic Research
The president’s request includes $938 million in discretionary spending for VA research in FY 2024. This represents a $22 million or 2.4% increase over FY 2023 enacted funding levels.
National Science Foundation (NSF)
The president’s budget proposes $11.3 billion for the NSF in FY 2024, a $1.8 billion (19%) increase over the comparable FY 2023 funding level.
Department of Education
Within the Department of Education, the administration proposes legislative changes to permanently make student loan forgiveness tax exempt. Additionally, the administration continues to support expanding federal student aid to Deferred Action for Childhood Arrivals (DACA) recipients.
The budget proposes $102.3 million for FY 2024 for the Strengthening Historically Black Graduate Institutions program, which provides support to Historically Black Colleges and Universities (HBCU) medical and other health professions schools. The budget would provide $350 million for the Research Infrastructure Investments program for HBCUs, Tribal Controlled Colleges and Universities, and minority-serving institutions that would support both planning and implementation grants designed to promote transformational investments in research infrastructure, including physical infrastructure and human capital development.