On Monday, March 11, President Joe Biden unveiled his fiscal year (FY) 2025 budget request, the fourth of his presidency. The $7.3 trillion proposal calls for approximately $1.9 trillion in discretionary spending, $4.4 trillion in mandatory spending and $965 million in net interest. The budget proposes new measures to expand access to quality and affordable health care, lower costs, strengthen Medicare and Medicaid programs, invest in behavioral health care, bolster medical innovation and strengthen public health infrastructure. It also touts administration efforts to invest in women’s health research, protect reproductive rights, ensure robust access to mental health care, deliver resources to address the overdose epidemic, lower drug costs through the Inflation Reduction Act (IRA), rebuild supply chains and promote health equity.
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.
A more detailed breakdown of the Department of Health and Human Services’ (HHS) budget request can be found here. The FY 2025 budget contains numerous health initiatives and priorities including:
- Reduces Drug and Other Health Care Costs for All Americans.
- Expands the IRA’s inflation rebates and $2,000 out-of-pocket prescription drug cost cap beyond Medicare and into the commercial market.
- Extends the $35 cost-sharing cap for a month’s supply of covered insulin products to the commercial market.
- Limits Medicare Part D cost-sharing for high-value generic drugs to no more than $2 for Medicare beneficiaries.
- Increases the pace of drug price negotiations by bringing more drugs into negotiation sooner after they launch.
- Authorizes HHS to negotiate supplemental drug rebates on behalf of interested states to pool purchasing power.
- Makes permanent the expanded Affordable Care Act (ACA) premium tax credits that were extended in the IRA.
- Provides Medicaid-like coverage to individuals in states that have not adopted Medicaid expansion, paired with financial incentives to ensure states maintain their existing expansions.
- Allows banning “facility fees” for telehealth and certain outpatient services in commercial insurance.
- Funds the continued implementation of the No Surprises Act.
- Honors America’s Commitment to Seniors and Americans in Need.
- Extends solvency of the Medicare Hospital Insurance (HI) trust fund indefinitely by ensuring high-income individuals pay their fair share.
- Proposes limiting the portion of Medicaid and CHIP managed care dollars spent on administration and incentivizing more investment in health care services by establishing a medical loss ratio.
- $150 billion over 10 years to improve and expand Medicaid home and community-based services (HCBS).
- Shifts funding for nursing home surveys from discretionary to mandatory beginning in 2026 and increases funding to cover 100% of statutorily mandated surveys.
- Proposes requiring greater transparency of nursing facility ownership and increasing the inspection of facilities with serious safety deficiencies.
- Invests in the Health and Well-Being of Families and the Next Generation.
- $390 million, a 36% increase above the 2023 enacted level, for the Title X Family Planning program to increase the number of patients served to 3.6 million.
- Transforms Behavioral Health Care.
- $1 billion to advance health information technology adoption and engagement in interoperability for certain behavioral health providers.
- Increases funding for the Children’s Mental Health Initiative by $50 million.
- Expands access to behavioral health services through investments in Certified Community Behavioral Health Clinics and Community Mental Health Centers.
- Doubles funding for the Mental Health Crisis Partnership Program.
- Invests in strengthening the behavioral health workforce, including integration into primary care settings.
- Proposes to extend incentive payment programs for Medicare providers in areas with clinician shortages to a broader set of clinicians, including behavioral health clinicians.
- Expands coverage of mental health benefits and strengthens the network of behavioral health providers in commercial insurance.
- Increases funding for the State Opioid Response grant program.
- Invests in a new technical assistance center to strengthen health providers’ understanding and treatment of substance use and women’s mental health.
- Invests in Medical Innovation, Scientific Breakthroughs and the Treatments of Tomorrow.
- $2 billion increase across the National Cancer Institute, Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC) and cancer projects at the Advanced Research Projects Agency for Health (ARPA-H).
- Additional mandatory funds for the Indian Health Service (IHS) beginning in 2026.
- Proposes creating a nationwide network of centers of excellence and innovation in women’s health.
- Doubles existing funding for the Office of Research on Women’s Health at the National Institutes of Health (NIH).
- Advances Health Equity.
- $376 million, an increase of $82 million above the 2023 enacted level, to support the ongoing implementation of the White House Blueprint for Addressing the Maternal Health Crisis.
- Expands Medicaid maternal health support services during the pregnancy and postpartum period by incentivizing states to reimburse a broad range of providers, including doulas, community health workers, peer support initiatives and nurse home visiting programs.
- $8 billion in discretionary resources in 2025, a 12% increase over the 2021 enacted level, for clinical services, preventative health, facilities construction, contract support costs and tribal leases at IHS.
- Proposes all IHS resources as mandatory beginning in 2026.
- Reauthorizes and increases funding for the Special Diabetes Program for Indians.
- Invests in direct primary care and mental health care services, expanded infrastructure and assistance for rural hospitals to remain open and provide high-quality services.
- Protects and Strengthens Public Health and Health Infrastructure.
- $2.5 billion in discretionary and mandatory funds over 10 years at CDC to support an evidence-based community violence initiative to address the causes of violence in communities and help reduce health inequities that characterize violence.
- $60 million for gun violence research across CDC and NIH.
- $9.8 billion in discretionary and mandatory funding for the Prevention and Public Health Fund, an increase of $499 million over the 2023 enacted level.
- $20 billion in mandatory funding for HHS public health agencies in support of the administration’s biodefense priorities as outlined in the 2022 National Biodefense Strategy and Implementation Plan for Countering Biological Threats, Enhancing Pandemic Preparedness, and Achieving Global Health Security.
- $75 million in the Administration for Strategic Preparedness and Response (ASPR) to manufacture more essential medicines, medical countermeasures and critical inputs in the United States.
- $12 million to strengthen FDA’s capacity to identify and address potential disruptions and shortage threats.
- Expands end-to-end supply chain visibility to priority FDA-designated essential medicines and devices to prepare for and mitigate potential shortages.
- Creates a new office to coordinate agency-wide activities on supply chain resilience and shortage mitigation efforts for drugs, biologics, medical devices and critical foods.
- Proposes a national program to significantly expand screening, testing, treatment, prevention and monitoring of hepatitis C infections in the United States.
- Proposes a new mandatory program to guarantee PrEP at no cost for all uninsured and underinsured individuals.
- Proposes a new Vaccines for Adults program to provide uninsured adults with access to routine and outbreak vaccines at no cost.
- Invests in protecting the health care system from cyber threats and includes funding for ASPR to coordinate cybersecurity efforts.
- $800 million to help high-need, low-resourced hospitals cover the upfront costs associated with implementing essential cybersecurity practices.
- $500 million for an incentive program to encourage all hospitals to invest in advanced cybersecurity practices.
- $141 million to continue strengthening HHS’s ability to protect and defend HHS systems and information, including $11 million to expand and enhance HHS’ capacity to protect the privacy and security of health information.
- Invests in HHS’ role in promoting the use of artificial intelligence (AI) in health care and public health while protecting against its risks.
As mentioned above, the president’s budget request starts the congressional budget and appropriations process. The budget presented by the Biden administration provides an aspirational roadmap to what the president would like to be implemented and how much Congress integrates these ideas into their own remains to be seen. Agency heads will soon be called to testify before Congress on their respective budget proposals. HHS Secretary Xavier Becerra will testify before the Senate Finance Committee on March 14, and is expected to testify before both the House Energy and Commerce Committee and House Ways and Means Committee soon. Brownstein will continue to monitor and will provide further information as the process unfolds.
THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING THE HEALTH CARE IMPLICATIONS OF PRESIDENT BIDEN'S FY25 BUDGET. 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.