Highlights of the President's HHS FY 2016 Budget


The President's 2016 Budget is designed to bring middle class economics into the 21st Century. This Budget shows what we can do if we invest in America's future and commit to an economy that rewards hard work, generates rising incomes, and allows everyone to share in the prosperity of a growing America. It lays out a strategy to strengthen our middle class and help America's hard-working families get ahead in a time of relentless economic and technological change. And it makes the critical investments needed to accelerate and sustain economic growth in the long run, including in research, education, training, and infrastructure.

These proposals will help working families feel more secure with paychecks that go further, help American workers upgrade their skills so they can compete for higher-paying jobs, and help create the conditions for our businesses to keep generating good new jobs for our workers to fill, while also fulfilling our most basic responsibility to keep Americans safe. We will make these investments, and end the harmful spending cuts known as sequestration, by cutting inefficient spending and reforming our broken tax code to make sure everyone pays their fair share. We can do all this while also putting our Nation on a more sustainable fiscal path. The Budget achieves about $1.8 trillion in deficit reduction, primarily from reforms to health programs, our tax code, and immigration.

The Department of Health and Human Services (HHS) is the principal federal department charged with protecting the health of all Americans and providing essential human services. The Budget prioritizes core services and programs and makes targeted investments in training and support of health care providers, innovative biomedical research, food and drug safety, mental health services, health care for American Indians and Alaska natives, early childhood programs, and services for other vulnerable populations.

Funding Highlights:

The President’s FY 2016 Budget provides $83.8 billion in discretionary funding for the Department of Health and Human Services to help make coverage affordable, drive down long-term health care costs, and improve care for millions of Americans, as well as to train new health care providers, address public health priorities, assist vulnerable populations, and support medical research. The Budget includes:

  • Supporting the Affordable Care Act’s health coverage gains that are already providing insurance for millions of Americans through the operation of Health Insurance Marketplaces and the delivery of subsidies to make coverage affordable.
  • Serving approximately 28.6 million patients in FY 2016 at more than 9,000 health center sites in medically underserved communities throughout the country.
  • Making strategic investments in our nation’s health care workforce to ensure rural communities and other underserved populations have access to doctors and other providers.
  • Reforming health care delivery by finding better ways to deliver care, pay providers, and distribute information.
  • Reducing the prevalence and impact of opioid use disorders, including heroin abuse, by investing in a new, aggressive, multi-pronged initiative.
  • Promoting innovative medical research to maintain the nation’s leadership in the life sciences including research into Alzheimer’s disease.
  • Building on the FY 2015 Ebola emergency funding, the Budget continues to support the Global Health Security Agenda.
  • Advancing product development efforts to support procurement of next-generation medical countermeasures against chemical, biological, radiological, and nuclear threats.
  • Accelerating progress in scientific and public health efforts to detect, prevent, and control illness and death related to antibiotic-resistant infections.
  • Ensuring that young Americans are kept safe and are able to achieve their full potential through significant new investments in early education, including an additional $82 billion over ten years to ensure that all low- and moderate-income working families with young children have access to high-quality child care.
  • Improving the Medicare Appeals process to increase adjudication capacity and implement new strategies to alleviate the current backlog.


The Budget proposes targeted reforms to Medicare and Medicaid that are projected to save more than $400 billion over the next decade. These reforms will improve the long term sustainability of Medicare and Medicaid by increasing the efficiency of health care delivery while enhancing the quality of care for the elderly, children, low income families, and people with disabilities.


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Improving Access to Quality and Affordable Health Care

Implementing the Affordable Care Act.

The Budget fully funds the ongoing implementation of the Affordable Care Act’s health insurance coverage improvements through the operation of Health Insurance Marketplaces and the premium tax credits and cost sharing assistance to help make coverage affordable, drive down long-term health care costs, and improve care for millions of citizens.

Preserving coverage through the Children’s Health Insurance Program.

The Children’s Health Insurance Program (CHIP) currently serves over 8 million children of working parents who are not eligible for Medicaid. The Budget extends funding for CHIP, which ends in 2015, through 2019, ensuring continued, comprehensive, affordable coverage for these children. The proposal is paid for through an increase in tobacco taxes that will help reduce youth smoking and save lives.

Improving Access to Medicaid Home and Community-Based Services.

The administration supports providing long-term care services in the most appropriate setting for elderly individuals and persons with disabilities. The Budget allows states to expand eligibility for home and community-based services under state plan options and to offer full Medicaid eligibility to medically needy individuals who access these services. The Budget also proposes a pilot program to create a comprehensive Medicaid long-term care state plan option for up to five states. Participating states would be authorized to provide long-term care services across the continuum of care under one authority, creating equal access to home and community-based care and nursing facility care. This proposal works to end the institutional bias in long-term care and simplify state administration.

Bringing Mental Health Out of the Shadows.

Mental and physical health comorbidity results in decreased length and quality of life, and increased functional impairment and cost. Patients diagnosed with a serious mental illness die 25 years earlier than other Americans, and they are also among the least likely to seek treatment. The Budget includes an increase of $58 million, to total $185 million, within the Centers for Disease Control and Prevention and the Substance Abuse and Mental Health Services Administration for the President’s Now is the Time initiative to make sure students and young adults get treatment for mental health issues, and provide nationwide data to better understand how and when firearms are used in violence deaths and inform future research and prevention strategies.

Investing in Native American Health Care.

The Budget provides the Indian Health Service (IHS) with $5.1 billion, an increase of $461 million over the 2015 Enacted level, which will expand both direct health care services and the Purchased/Referred Care program, and allow IHS to make significant progress on construction of health care clinics and sanitation facilities across Indian Country. The Budget also proposes to shift Contract Support Costs to a mandatory appropriation beginning in FY 2017; IHS and BIA will consult broadly with Tribes on this new approach prior to implementation.

Improving Access to Health Care Services.

Across the United States, 1,300 health centers operate over 9,000 primary care sites that serve as high-quality, dependable sources of primary care services in communities. The Budget invests $4.2 billion, including $2.7 billion in new mandatory resources, in the Health Centers program in 2016 to support services for an estimated 28.6 million patients. This funding level will enable health centers to expand services to 1.1 million additional patients. In total, the Budget provides $8.1 billion in new mandatory resources over three years so that health centers can continue to serve their patients.

Improving Access to High-Quality Health Care Providers.

The Budget includes new funding to implement innovative policies to train new health care providers and ensure that the future health care workforce is prepared to deliver high-quality and efficient health care services. The Budget invests $810 million in 2016 and $2.1 billion from 2017-2020 in the National Health Services Corps to place and maintain 15,000 health care providers in the areas of the Nation that need them most. To encourage and enhance training of primary care practitioners, and other physicians in high-need specialties, the Budget proposes $5.25 billion over 10 years to support 13,000 new medical school graduate residents through a new competitive graduate medical education program that incentivizes high-quality physician training. To continue encouraging provider participation in Medicaid, the Budget extends increased payments for primary care services delivered by certain physicians through 2016, with modifications to expand provider eligibility and better target primary care services.


The FY 2016 Budget provides $2.3 billion for the Ryan White HIV/AIDS Program to support cities, states, and local community-based organizations that provide HIV related services to more than half a million people each year who do not have sufficient health care coverage or financial resources for coping with HIV. The Budget includes $900 million for the AIDS Drug Assistance Program to ensure that people living with HIV have access to life-saving antiretroviral medications. The Budget also includes an increase of $100 million for the National Institutes of Health to expand research on preventing, treating, and finding a cure for HIV/AIDS, and $12.6 million for domestic HIV/AIDS prevention within the Centers for Disease Control and Prevention to further implement the National HIV/AIDS Strategy.

Effective Health Insurance Initiative.

The Budget includes $30 million for a new project to develop evidence about how changes in health insurance benefit packages impact health care utilization, costs, and outcomes. This project, which is an example of the administration’s commitment to incorporating evidence and evaluation into policy solutions, will use the gold standard randomized controlled trial study design. It will build on and update the groundbreaking Health Insurance Experiment begun in 1971 supported by the then-Department of Health, Education, and Welfare. This new effort is needed to rigorously examine how modern health insurance plans can be redesigned to maximize health status and quality, while minimizing unnecessary costs.

Health Care Delivery Reform.

Since passage of the Affordable Care Act, the administration has developed an aggressive agenda to reform how our system delivers health care. This means avoiding costly mistakes and readmissions, keeping patients healthy, rewarding quality instead of quantity, and creating the health information technology infrastructure that enables new payment and delivery models to work. Such reforms aim to slow growth in health care costs, which will help to reduce unnecessary spending for all Americans. Building on the lessons learned and success from existing initiatives, the Budget supports efforts to reform the health care delivery system by finding better ways to deliver care, pay providers, and distribute information so that individuals can receive the right care, at the right time, at the right price.

Prescription Drug and Heroin Abuse.

Every day, more than 100 people die as a result of drug overdose, and more than 6,700 are treated in emergency departments. Abuse of prescription and illicit drugs, such as heroin is an urgent public health concern. The Budget provides an additional $99 million above FY 2015 for programs across the Centers for Disease Control and Prevention, the Substance Abuse and Mental Health Services Administration, the Agency for Healthcare Research and Quality, and the Office of the National Coordinator for Health IT to decrease the rates of prescription drug abuse. The Budget increases funding for every state to maximize existing Prescription Drug Monitoring Programs. The Budget expands and improves Medication Assisted Treatment for people who misuse heroin and prescription opioids and funds new research on the use of Medication Assisted Treatment in primary care settings. The Budget also supports improved prescribing practices and increased dissemination of naloxone by first responders in an effort to prevent overdose deaths in high-risk communities.

Medicare Improvements to Increase Sustainability and Encourage High-Quality, Efficient Care.

The Budget proposes a robust set of initiatives to strengthen Medicare by more closely aligning payments with the costs of providing care, encouraging health care providers to deliver better care and better outcomes for their patients, and improving access to care for beneficiaries. Specifically, this includes investments to reform Medicare physician payments and accelerate physician participation in high-quality and efficient health care delivery systems. By eliminating Medicare's 190-day lifetime limit on inpatient services delivered in specialized psychiatric hospitals, the Budget seeks to improve access and care coordination for beneficiaries with mental illnesses. The Budget also includes structural changes to the financing of the program that will reduce federal subsidies to high income beneficiaries and create incentives for beneficiaries to seek high value services. In addition, the Budget includes proposals that would build a stronger foundation for Medicare's future by expanding value-based purchasing, strengthening quality incentives and reducing the risk of prescription drug abuse in Part D. The Medicare proposals in the Budget would extend the solvency of the Hospital Insurance trust fund by approximately five years.


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Driving Science and Research

Biomedical Research at the National Institutes of Health (NIH).

The Budget provides $31.3 billion to support biomedical research at NIH, providing over10,000 new NIH grants that will help us better understand the fundamental causes and mechanisms of disease. The Budget provides increased resources for Alzheimer’s, cancer and other diseases that affect millions of Americans and enhanced support for the BRAIN initiative that is helping to revolutionize our understanding of the human brain.

Preventing, Detecting, and Responding to Infectious Diseases, Both Abroad and at Home.

The Ebola epidemic in West Africa underscores the need to urgently strengthen global health security in countries around the world that are not equipped to handle Ebola, including the most vulnerable countries across Asia, the Middle East and Africa that have poor infrastructure, limited capacity, high population density, and major transport hubs. In addition, recent and ongoing outbreaks of Plague, Marburg, Lassa fever, the Middle East Respiratory Syndrome, and avian influenza, clearly demonstrate the need to immediately address global vulnerabilities. The Budget includes an increase of $12 million to expand the Global Health Security Agenda and increases funding to eradicate polio.

Strengthening Preparedness for all Health Threats, Including Naturally Occurring Hazards and Intentional Attacks.

The Budget includes $522 million to enhance the advanced development of next generation medical countermeasures against chemical, biological, radiological, and nuclear threats. The Budget also more than doubles support for Project BioShield, by providing $646 million to continue the federal government’s long-term commitment to the acquisition of new medical countermeasures. The government response to Ebola has highlighted the importance of sufficient funding and operational capabilities to facilitate an effective and coordinated response to public health crises that may not meet the current criteria for a national disaster or public health emergency declaration, such as those under the Stafford Act. Informed by lessons learned from the Ebola response, the Budget includes $110 million for HHS to strengthen the nation’s capability to plan for and respond to public health emergencies and enables potential changes in structure and capabilities to improve our public health emergency response.

Modernizing the Nation’s Food Safety System.

The Centers for Disease Control and Prevention has estimated that 48 million foodborne illnesses occur each year from contaminated foods. The Budget includes $1.6 billion total program resources to bolster food safety activities, including an increase of $303 million for the Food and Drug Administration to implement new safety standards under the Food Safety Modernization Act for domestic and imported foods. In addition, the President is seeking broad reorganization authority in the FY 2016 Budget. With this authority, the administration is proposing to consolidate the Department of Agriculture’s Food Safety Inspection Service and the food safety components of the Food and Drug Administration to create a single new food safety agency within HHS. The new agency would be charged with pursuing a modern, science-based food safety regulatory regime drawing on best practices of both agencies, with strong enforcement and recall mechanisms, expertise in risk assessment, and enforcement and research efforts across all food types based on scientifically supportable assessments of threats to public health.

Combating Antibiotic Resistant Bacteria (CARB).

As more strains of bacteria become resistant to an ever-larger number of antibiotics, our treatment choices become increasingly limited, expensive, and in some cases, nonexistent. If this problem continues to expand, a wide range of routine medical procedures could pose a significantly higher risk to patients of developing a potentially untreatable, antibiotic-resistant infection. Annually, at least 2 million illnesses and 23,000 deaths are cause by antibiotic-resistant bacteria. The administration has prioritized scientific and public health efforts to detect, prevent, and control illness and death related to antibiotic-resistant infections, consistent with the recently released National Strategy for Combating Antibiotic-Resistant Bacteria. The FY 2016 Budget includes a total of $993 million, an increase of $491 million across HHS to accelerate progress in these areas.

Precision Medicine.

The Budget includes $215 million to launch a Precision Medicine initiative that will accelerate our ability to develop prevention, diagnostic and treatment approaches tailored to individual patients. The Budget will catalyze key components of the Precision Medicine initiative through initial investments in the establishment of a national research group of a million or more Americans, expansion of research to define cancer subtypes and identify new therapeutic targets, accelerated development of promising new DNA-sequence-based diagnostic tests, and enhancement of interfaces for electronic health records and patient-generated data in assessment of individual health and population-level trends.


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Improving the Lives of Vulnerable Populations

Head Start.

Since 2008, Head Start funding has increased by more than $3.5 billion, and the Budget continues these historic gains by providing over $1.5 billion in additional funding over FY 2015 Enacted. This increased funding level includes an additional $150 million to expand access to high-quality early learning settings for tens of thousands of additional children through Early Head Start and the Early Head Start-Child Care Partnerships. Under this administration, the number of infants and toddlers served by Early Head Start has nearly doubled. The increased funding will ensure that every Head Start program provides services for a full-day and a full-school year, which research shows promotes better outcomes for young children.

Expanding Access to Quality Child Care for Working Families.

Research shows that access to affordable, quality child care can increase parents’ employment and earnings, while also promoting healthy child development. The Budget invests an additional $82 billion in mandatory funding over 10 years to ensure that all low- and moderate-income working families with children ages three or younger have access to quality, affordable child care. The Budget also provides a $266 million increase in discretionary funding in 2016 to help States implement the policies required by the new bipartisan child care law, designed to improve the safety and quality of care while giving parents the information they need to make good choices about their child care providers. The Budget also includes an additional $100 million to identify and test innovative child care models that better meet the needs of working families. In addition, the Budget proposes to reform and expand tax credits that help middle-class families afford the cost of child care.

Home Visiting.

The Budget invests $15 billion in mandatory funding over the next 10 years to extend and expand evidence-based, voluntary home visiting programs, which enable nurses, social workers, and other professionals to work with current and expecting parents to help families support their children’s development, identify any health and development issues and connect them to services when needed, and develop good parenting practices that foster healthy development and early learning. The program builds on research showing that home visiting programs can significantly improve maternal and child health, child development, learning, and success.

Promoting Upward Mobility.

Improving coordination and effectiveness of anti-poverty programs, is essential to moving families out of poverty and into the middle class. As part of the administration’s commitment to achieving economic mobility, the budget provides $1.5 billion over 5 years that states and localities will be able to use flexibly to implement evidence-based or promising strategies for helping individuals succeed in the labor market and improving economic mobility, children’s outcomes, and the ability of communities to expand opportunity. States and localities will also have more flexibility with up to four existing block grant programs in these projects. These Upward Mobility Projects will build on successful safety net programs, like the Supplemental Nutrition Assistance Program (SNAP), housing assistance and tax credits, that help families make ends meet and promote children’s health and educational outcomes.

Unaccompanied Children.

HHS is responsible for ensuring that unaccompanied children who are apprehended by immigration authorities are provided shelter until they can be placed with sponsors, usually parents or other relatives, who assume responsibility for their care while their immigration cases are processed . This past summer, the administration responded to a significant increase in the number of unaccompanied children who were apprehended on the southwest border, with an aggressive, coordinated federal response focused on providing humanitarian care for the children as well as on stronger deterrence, enforcement, foreign cooperation, and capacity for federal agencies to ensure that our border remains secure. In part as a result of those actions, the number of unaccompanied children apprehended at the border in FY 2015 is below FY 2014 and the number of children referred to ACF is projected to stabilize. To ensure ACF can take custody of all referred children in FY 2016, the Budget includes $948 million in base funding and creates a contingency fund that would trigger additional funds if caseloads exceed levels that could be supported with base funding..

Supporting Additional Refugees, Asylees, and other Humanitarian Arrivals.

HHS is a key partner in administration-wide efforts to support refugee, asylee and other new humanitarian arrivals eligible for refugee benefits. ACF’s programs help them begin new lives by providing time-limited cash and medical assistance, as well as social services including job training and English instruction so they can become self-sufficient as quickly as possible. The Budget includes an increase of $43 million to support a total of 143,000 new arrivals (75,000 refugees and 68,000 other humanitarian arrivals), an increase of 37 percent since FY 2008.

Low Income Home Energy Assistance Program.

The Budget includes $3.4 billion in discretionary funds for LIHEAP, the same as FY 2015 Enacted. A new mechanism will provide additional mandatory funds triggered by significant increases in the number of low-income households, the price of fuel, or extreme cold at the beginning of winter. To better promote both short and long-term strategies for serving low-income households, the Budget also proposes increased emphasis on activities that increase energy efficiency, such as weatherization.

Serving Older and Disabled Americans.

The Budget make key investments to address the needs of older Americans, many of whom require some level of assistance to continue living independently or semi-independently within their communities. These investments include an additional $60 million to provide 208 million meals to over 2 million older Americans nation-wide, of which $20 million will support new evidence-based innovations to help ensure that future funding for Nutrition Services programs is spent as efficiently as possible, maximizing the use of these funds. The Budget also contains an additional $38 million to fund in-home and community-based services to help older Americans live independently and with dignity, including support for over 28 million hours of assistance to seniors unable to perform daily activities; more than 23 million rides for critical activities such as visiting the doctor, pharmacy, or grocery stores; and nearly 8 million hours of adult day care.


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Strengthening the Department for Efficiency and Effectiveness


As cyber threats continue to multiply and become more complex, it is critical for government to ensure that its information systems are protected from any potential attacks. The Budget invests $73 million to manage and provide oversight to the HHS Cybersecurity Program. This investment is designed to reinforce and protect IT systems against the growing threats within the cyber community. This funding also supports HHS’s ability to quickly respond to evolving security threats and to better support ongoing infrastructure upgrades and ensure compliance with requirements of Federal Information Security Management Act.

Medicare Appeals.

To improve the efficiency of the Medicare appeals system and reduce the backlog of appeals awaiting adjudication at the Office of Medicare Hearings and Appeals (OMHA), the Budget includes a package of legislative proposals and invests additional resources to increase adjudication capacity and implement new business processes. OMHA received over 600,000 claims in FY 2013 and close to 1,000,000 claims in FY 2014. The Budget includes $270 million for OMHA to expand adjudicatory capacity in new field offices in order to address the backlog in the number of appeals and maintain the quality and accuracy of its decisions and a $36 million increase in the Centers for Medicare and Medicaid Services to fund discussions with providers to resolve disputes and participation in Administrative Law Judge Hearings.

Cutting Waste, Fraud, and Abuse in Medicare and Medicaid.

The administration has made targeting waste, fraud, and abuse in Medicare, Medicaid, and CHIP a priority and is aggressively implementing new tools for fraud prevention included in the Affordable Care Act. In FY 2013, the Health Care Fraud and Abuse Control (HCFAC) program's law enforcement efforts produced a record-breaking $4.3 billion in judgments, settlements, and recovery of taxpayer dollars from individuals trying to defraud federal health care programs serving seniors and taxpayers. In addition, ongoing enhancements to predictive analytic technologies similar to those used by private sector experts continue to help identify and prevent wasteful, abusive, and potentially fraudulent billing activities. To further protect seniors against the risk of identity theft and strengthen Medicare’s program integrity, the Budget proposes to continue the multiyear process of removing Social Security numbers from Medicare beneficiary identification cards. While these activities indicate progress, more remains to be done. Therefore, the Budget also proposes a series of policies to build on these efforts that will save nearly $3 billion over the next 10 years.


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