Analysis of Health Care Provisions Included in Biden Administration FY 2022 Budget Request

Today, Friday May 28, President Joe Biden unveiled his Fiscal Year (FY) 2022 budget request, the first of his presidency. The $6 trillion proposal calls for $1.7 trillion in discretionary spending and $4.0 trillion in mandatory spending. Historically, the president’s budget request kicks off the congressional budget process, serving as a starting point for lawmakers to determine funding levels and national spending priorities. Congress is under no obligation to adopt all or any of the president’s budget. Instead the president’s budget request is used to indicate the president’s recommended spending and revenue levels along with policies the administration wants to prioritize. In April, the administration released a “skinny” budget that contained details on discretionary, or appropriated, spending and policies, but no discussion on mandatory spending or revenue policies in areas such as Medicare, Medicaid and Social Security.

The FY 2022 budget focuses primarily on the president’s two recent policy proposals: American Jobs Plan and American Families Plan. Health care provisions included in both the packages and the budget are:

The American Jobs Plan

• Expanding Medicaid home- and community-based services and strengthen the home care workforce; ($400 billion);
• Increasing community health and hospital resilience by funding critical infrastructure; ($1.5 billion);
• Upgrading federal hospitals (i.e., Veterans Health Administration facility maintenance and modernization; $27.3 billion); and
• Preparing America for future pandemics through funding to the Department of Health and Human Services, Department of Defense and Department of Energy. ($30 billion).

The American Families Plan

• Making permanent the American Rescue Plan expansion of the premium tax credit ($163 billion); and
• Investing in maternal health to reduce maternal mortality and morbidity rates nationwide ($3.0 billion).

Presidents Health Care Agenda

Additionally, the FY 2022 budget outlines the president’s health care vision. The policies outlined here are what the president campaigned on, but are not accounted for in the budget with specific costs or savings. Thus, they are considered to be aspirational goals of the administration. These policies include:

• Allowing Medicare to negotiate payment for certain high-cost drugs;
• Requiring drug manufacturers to pay rebates when drug prices rise faster than inflation;
• Increasing Medicare benefits to include dental, hearing and vision coverage;
• Eliminating Medicaid funding caps for Puerto Rico and territories while aligning their matching rate with states;
• Creating a public option that would be available through the ACA marketplace;
• Allowing people age 60 and older the option to enroll in Medicare with the same premium and benefits; and
• Extending coverage by providing premium-free Medicaid-like coverage through a federal public option in states that have not expanded Medicaid.

As mentioned above, the President’s budget request starts the congressional budget process. The budget presented by the Biden administration provides an aspirational roadmap to what the president would like to be implemented, how much Congress integrates these ideas into their own remains to be seen.

The House Appropriations Committee is planning to do subcommittee markups of their FY 2022 spending bills in June, with floor passage expected in July. It is currently unknown when the Senate Appropriations Committee plans to markup their bills, but it will most likely lag behind the House.

Although the current budget release does not contain specifics on granular items, more details will arise when agencies release their specific budgets, usually occurring a few weeks following the President’s budget. Brownstein will continue to monitor all aspects of this and will provide further information as the process unfolds.

This document is intended to provide you with general information regarding the Biden Administration's FY 2022 Budget Request. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.