White House releases FY 2025 budget request
President Biden March 11 submitted to Congress his budget request for fiscal year 2025. The budget includes discussion of certain health care policies, such as coverage, prescription drugs, cybersecurity and Medicare solvency. The top-line budget request is not binding but can act as a starting point for Congress and the Administration as they begin the budget and appropriations debate to fund the government and improve health care.
The budget proposes to permanently extend premium tax credits for health coverage purchased through the Health Insurance Marketplace, which are currently scheduled to expire in 2025. It also calls for providing coverage to low-income individuals in states that have not expanded Medicaid. With respect to Medicaid and the Children’s Health Insurance Program, the budget allows states to extend existing 12-month continuous eligibility for all children to age 36 months and to provide continuous eligibility for children from birth up to age 6.
The budget expands the number of drugs subject to price negotiation under the Medicare program beyond the first 10 the Administration has already announced. Negotiated prices for the first 10 drugs will be effective in 2026. The new budget would require Medicare to select 15 more Part D drugs to negotiate in 2027, an additional 15 Part D or Part B drugs for 2028, and 20 more Part D or Part B drugs for each year after that. Additionally, the budget proposal extends the $2,000 Medicare cap on out-of-pocket prescription drug costs and $35 cost-sharing cap for insulin to include the commercial market. The proposal also limits Medicare Part D cost-sharing for high-value generic drugs to $2 per month.
The president’s budget proposes $1.3 billion in financial incentives to assist hospitals in defending against cyberattacks. Funds would be provided first to approximately 2,000 hospitals determined to have the greatest need for assistance; in later years smaller amounts would benefit all hospitals that implement enhanced cybersecurity practices. The budget also recommends new penalties for not meeting what the Administration defines as essential cybersecurity practices. Beginning in FY 2029, the Administration proposes to enforce adoption of essential practices, with hospitals failing to meet these standards facing penalties of up to 100% of the annual market basket increase. Beginning in FY 2031, they would face potential additional reductions of up to 1% from the base payment. Critical access hospitals that fail to adopt the essential practices would incur a payment reduction of up to 1%, with their total penalty capped.
The budget calls for extending the life of the Medicare Hospital Insurance trust fund by increasing Federal Insurance Contributions Act taxes on high-income earners and crediting to the trust fund certain other tax revenue as well as amounts attributed to Medicare prescription drug reform.
The budget request also would:
• Require all health plans to cover mental health and substance use disorder benefits and have an adequate network of behavioral health providers, and improve the Department of Labor’s ability to enforce the law.
• Ban facility fees for telehealth and certain outpatient services in the commercial insurance market.
• Permit the Centers for Medicare & Medicaid Services to publicly disclose all accrediting organization survey reports and require reporting of patient level demographic and social determinants of health data in quality measurement programs, among other new authorities.
• Extend the Medicare sequester through 2034.
AHA will continue to examine the president’s budget and will provide additional updates as necessary.