U.S. President Obama added nearly $4 billion in his proposed 2014 budget
Wednesday to fund healthcare exchanges, food safety and expanded preschool.
The proposed 2014 budget provides $80 billion in discretionary funding for the
U.S. Department of Health and Human Services -- $3.9 billion above the 2012
enacted level. No budget was approved for 2013, so 2012 levels were maintained.
The new budget calls for $370 billion in Medicare spending cuts -- over 10 years
-- by negotiating better prescription drug prices, reducing management costs and
costs to hospitals, increasing enforcement to reduce fraud and having
higher-income beneficiaries pay more.
The budget calls for increases in premiums for those with high incomes for
Medicare Part B -- outpatient medical service -- and Part D -- outpatient
prescription drugs. For example, billionaire Warren Buffett and a retired
autoworker pay the same for Medicare Parts B and D now, but the budget raises
the cost of Medicare for high earners an estimated $580 billion over 10 years.
However, by combining Medicare deductibles for hospital and doctor's visits, all
beneficiaries might pay more by having to pay a single $500 deductible, instead
of a Part A hospital deductible of $1,184 and Part B outpatient deductible of
$147 each year.
The budget provides funding for the implementation of the Affordable Care Act's
exchanges and the delivery of premium tax credits, the cost sharing assistance
to make coverage affordable and increased support for states for expanded
Medicaid coverage for the working poor.
The Affordable Care Act, goes into effect Jan. 1, 2014, but the exchanges should
be in place by Oct. 1, 2013.
Healthcare reform was designed to be revenue neutral, meaning the additional
costs are paid for via program savings and increases in fees such as those for
medical devices or indoor suntanning.
For example, the budget cuts direct healthcare programs such as immunizations
and cancer screenings because these services for the uninsured and under-insured
will be financed via new insurance coverage and increased reimbursements for
safety net providers in 2014.
Hospital reimbursements are lowered because they will have fewer uninsured
patients to care for in emergency rooms because more patients will have health
insurance.
In addition, cuts to public health departments and community based organizations
will be offset by being able to bill third-party payers for HIV testing,
immunizations and substance abuse treatment.
The budget authorizes the Federal Trade Commission to block "pay for delay"
deals -- brand-name drug manufacturers pay generic suppliers to put off
releasing generic versions of medications -- for an estimated savings of $11
billion over 10 years.
The budget invests $1.4 billion in new Early Head Start-Child Care Partnerships.
This increase in spending is supposed to be offset by an increase in the tobacco
tax.
The funding for the U.S. Food and Drug Administration was increased by $820
million to improve food and drug import safety.
