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FY2013 budget targets Medicare and Medicaid

Posted on February 13, 2012 | No Comments

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Today, President Obama released the fiscal year 2013 (FY2013) budget. The budget totals $940.9 billion, and outlays $76.7 billion for the Department of Health and Human Services: 56 percent for Medicare, 30 percent for Medicaid and 8 percent for discretionary programs. The department will use these funds to invest in health care, disease prevention, social services, and scientific research.

The budget seeks $358.5 billion in savings in Medicare and Medicaid, principally through reduced payments to health care providers and avoidance of tougher measures. These cuts in Medicare’s payments to health care providers would total about $267 million over the next decade. Medicare savings would total $302.8 billion over 10 years by adjusting the structure of the Medicare benefit to encourage beneficiaries to seek value in their health care choices, and encouraging high-quality, efficient care, and increasing the availability of generic drugs and biologics. The Budget includes $55.7 billion in savings over 10 years to make Medicaid more flexible, efficient, and accountable while strengthening Medicaid program integrity. Together, the FY 2013 discretionary budget request and these legislative proposals allow HHS to support the Administration’s challenging yet complementary goals of investing in the future and establishing a sustainable fiscal outlook.

Centers for Medicare & Medicaid Services (CMS) could see a $1 billion increase in funding to $4.8 billion for 2013. About $860 million of those increased dollars are already earmarked for development of federal health insurance exchanges. The remainder will be applied to other ACA programs. The budget requests $1 billion to continue implementing the Affordable Care Act; $2 billion for the Administration on Aging to help seniors remain independent; $599 million for effectiveness research; and more than $8 billion for the Head Start program.

Preventative and public health services took a hit in the FY2013 budget.  The President proposed to cut base funding for the CDC by $660 million, including its signature Community Transformation Grant program (cut by $80 million), and suggested a reduction in the Prevention and Public Health Fund (Fund) by $4.5 billion over the next ten years.  The 11 percent cut to CDC’s budget authority is the largest cut within the U.S. Department of Health and Human Services (HHS), a $1.4 billion cut (over 20 percent) since Fiscal Year 2010.

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