[Budget of the United States Government]
[V. Preparing For the 21st Century]
[5. Strengthening Health Care]
[From the U.S. Government Publishing Office, www.gpo.gov]


 
                      5.  STRENGTHENING HEALTH CARE

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  Nothing is more critical to the securities of our families, the strength of our communities. Health is
something we take for granted until we or our loved ones don't have it anymore.
 
                                      President Clinton
                                      August 1998
 

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   Today, the health of the American people is better than ever. Last 
year, infant mortality reached an all-time low and the average life span 
for Americans reached an all-time high. Major progress was made toward 
preventing and controlling diseases. For the first time in 20 years, 
cancer death rates declined, and AIDS dropped out of the top 10 causes 
of death. Not only were immunizations at record high levels, but the 
large, historical disparities for immunizing children of different races 
were curbed. These gains were matched by the slowest growth in health 
care spending in almost 40 years.
   These improvements reflect the extraordinary commitment of President 
Clinton to making health care more affordable, accessible, and 
effective. Even without the passage of any significant health care 
legislation last year, the Administration took significant steps toward 
this goal. Medicare beneficiaries gained access to new preventive 
benefits, managed care choices, and low-income protections. The no-
tolerance approach toward Medicare fraud was stepped up, yielding 
hundreds of millions of dollars in savings. While the President's 
Patients' Bill of Rights, with its strong and enforceable measures, did 
not become law last year, the President took executive action to extend 
patient protections to the 85 million Americans covered by Federal 
health plans, including Medicare and Medicaid beneficiaries and Federal 
employees. He also took immediate actions to improve the quality of care 
in nursing homes. The President also worked with States to expand health 
coverage to the 43 million uninsured Americans. All but three States 
started enrolling over 2.5 million uninsured children in the new 
Children's Health Insurance Program (CHIP); over 10 Federal agencies 
have joined with the private sector to help enroll the millions of 
uninsured children eligible for Medicaid, as well as CHIP; and the 
President authorized a new regulation that provides States the option to 
cover two-parent families in Medicaid.
  The budget builds on these accomplishments with initiatives that 
include:
   Responding to the need for assistance with long-term care: 
          The budget includes: a $6 billion initiative that includes a 
          tax credit to compensate for the cost of long-term care 
          services; a new National Family Caregivers Program; a national 
          campaign educating Medicare beneficiaries about long-term care 
          options; and a proposal to provide the authority to allow the 
          Federal Government to offer private long-term care insurance 
          to its employees at group rates. It also includes a new 
          investment to strengthen nursing home quality; an innovative 
          housing initiative to create and integrate assisted living 
          facilities and Medicaid home and community-based long-term 
          care; and a new Medicaid option that equalizes eligibility for 
          people with long-term care needs in community settings.
   Improving access to health insurance: The budget provides 
          more than $4 billion over five years for: expanding new health 
          insurance options for people ages 55 to 65; increasing access 
          to insurance for small businesses through purchasing 
          coalitions; extending Medicare and Medicaid to workers with 
          disabilities; restoring Medicaid eligibility to legal 
          immigrants affected by welfare reform; extending Medicaid 
          eligibility to foster children up to age 21; improving the 
          transitional Medicaid for people moving from welfare to work; 
          and providing States with

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          additional funds for children's health insurance outreach.
   Safeguarding and improving public health: In order to protect 
          and advance public health, the budget supports: a stringent 
          tobacco control policy; a new $1 billion program over five 
          years that funds local communities to integrate traditional 
          safety net providers (e.g., public hospitals and clinics) into 
          networks that help the uninsured; and important initiatives to 
          address coverage of cancer clinical trials, the challenges of 
          AIDS, bioterrorism, asthma, mental health, and racial 
          disparities in health status.
   Improving fiscal soundness of Medicare and Medicaid: The 
          budget proposes aggressive efforts to reduce Medicare fraud, 
          waste and abuse, and to improve the management of Medicare and 
          Medicaid.

Long-Term Care

  The need for long-term care will surely be one of the great challenges 
as the baby boom generation ages. Unlike acute care, long-term care is 
rarely paid for by private insurance or Medicare, requiring out-of-
pocket expenditures. It also takes a financial and emotional toll on 
family and friends on whom the burden of unpaid care often falls. The 
budget proposes a multi-faceted initiative, as follows:

  Tax Credit for Long-Term Care: This tax credit will help people with 
chronic illness or the families with whom they live. People with 
significant long-term care needs or their care givers would receive a 
$1,000 tax credit beginning in 2000. Approximately two million people 
would benefit, at a cost of $5.5 billion.
  National Family Care Givers Program: This program is designed to 
assist approximately 250,000 families caring for elderly relatives who 
are chronically ill or disabled. The budget invests $125 million to 
support a care giver support system in all States that provides 
information, education, counseling, and respite services directly to 
care-giving families.
  National Long-Term Care Information Campaign: This campaign will help 
Medicare beneficiaries and their families better understand their long-
term care options. Information for Medicare beneficiaries would include 
an explanation of long-term care coverage under the Medicare and 
Medicaid programs, private long-term care insurance, and other consumer 
information.
  Private Long-Term Care Insurance for Federal Employees: This proposal 
will make group long-term care insurance available to Federal employees, 
annuitants, and their families. Employees would pay the full cost of 
insurance premiums, which, at group rates, are expected to be 10 to 15 
percent lower than the individual rates otherwise available.
  Medicaid Initiatives to Encourage Expansion of Home and Community-
Based Long-Term Care Options: This initiative gives States the option of 
expanding Medicaid eligibility for people with incomes up to 300 percent 
of the Supplementary Security Income (SSI) level who need nursing home 
care but choose to live in the community, extending its reach from only 
those at this income level who live in nursing homes. Competitive 
capital grants will also be provided for the conversion of Section 202 
elderly housing projects to assisted living facilities. Grants are 
available when States agree to provide new Medicaid home and community 
based services in the facility.
  Nursing Home Quality Initiative: On July 21, 1998, the President 
announced an initiative to strengthen nursing home enforcement tools and 
Federal oversight of nursing home quality and safety standards. As part 
of this initiative, the Administration will work with the States to 
improve their nursing home inspection systems, crack down on nursing 
homes that repeatedly violate safety rules, and require nursing homes to 
conduct criminal background checks on all new employees.

Improving Access to Health Care Coverage

   The President is committed to expanding access to health care, 
particularly to vulnerable groups such as children, the near-elderly who 
are not yet eligible for Medicare benefits, older displaced workers, and 
immigrants.

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  Health Insurance Options for People Aged 55 to 65: People between the 
ages of 55 and 65 often face special problems of access and 
affordability. Because of job and family transitions, fewer people in 
this age group have access to employer-based health insurance. And when 
they seek to purchase insurance on their own, many find the cost 
prohibitive, or coverage unavailable because private companies refuse to 
sell insurance to age groups with greater health risks.
   The budget includes the Daschle-Moynihan-Kennedy proposal that will 
help an estimated 300,000 members of this vulnerable population by 
either allowing them to pay for coverage through the Medicare system, or 
guaranteeing access to a private insurance plan.
   Allowing Americans between 62 and 65 to buy Medicare 
          coverage: This policy will give older Americans the security 
          of knowing that they have an affordable, high quality health 
          insurance option. Because this proposal is self-financing, it 
          protects the integrity of the Medicare Trust Funds.
   Expanding health insurance options for displaced workers: The 
          budget also offers the option of a Medicare ``buy-in'' to 
          workers between the ages of 55 and 62 who have lost company-
          sponsored health care coverage because their hours were scaled 
          back, or their employer relocated or stopped operations.
   Protecting retirees whose employer-based health benefits have 
          been abolished: This proposal targets ``broken promise'' 
          retirees between the ages of 55 and 65. Employers who have 
          canceled the insurance of these retirees would be required to 
          guarantee access to health insurance, by providing these 
          retirees the option to ``buy in'' to the company sponsored 
          plan at a fair price.

  Small Business Health Purchasing Coalitions: Fewer small businesses 
offer health insurance because of higher administrative costs and 
premiums relative to large businesses. As a result, nearly half of 
uninsured workers are in firms with fewer than 25 employees. This $44 
million initiative would provide a tax credit to small businesses who 
join voluntary coalitions to provide insurance coverage, establish a tax 
incentive to encourage foundations to fund the start-up costs of 
coalitions, and provide technical assistance through the Office of 
Personnel Management.
  Flexibility to Cover People With Disabilities: Building on a provision 
of the 1997 Balanced Budget Act (BBA), this proposal will give States 
broad flexibility to set higher income and resource standards in 
Medicaid to encourage people with disabilities to return to work. In 
addition, Medicaid will allow States that adopt the more generous income 
and resource standards to cover individuals who no longer meet SSI and 
Social Security Disabled Insurance (SSDI) disability criteria because of 
medical improvement. States offering new options would receive grants to 
develop support systems that help people with disabilities who return to 
work. The budget also creates a capped demonstration program allowing 
States to offer health coverage to individuals who meet an expanded 
definition of disability set by the States. This is intended to allow 
people with disabilities to retain health coverage while they work, 
potentially preventing illness and impoverishment. In addition, the 
budget would allow people with disabilities who leave SSDI to retain 
Medicare coverage. This provision ensures that, regardless of whether 
States have taken advantage of the Medicaid option, people who leave 
SSDI have access to affordable health coverage.
  Medicaid eligibiligy for legal immigrants: The budget would restore 
Medicaid benefits to three vulnerable groups of legal immigrants: 
children; pregnant women; and disabled immigrants whose eligibility for 
SSI would also be restored. As the President has pledged, and has 
achieved for other groups so affected, this would reverse an inequity 
enacted in welfare reform.
   Children: States would have the option to provide Medicaid 
          and CHIP coverage to qualified legal immigrant children who 
          entered the United States after the enactment of welfare 
          reform.
   Pregnant Women: States would have the option to provide 
          Medicaid coverage to qualified legal immigrants who become 
          pregnant and who entered the United States after enactment of 
          welfare reform. Such coverage would help reduce the num

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          ber of high-risk pregnancies, ensure healthier children, and 
          lower the cost of emergency Medicaid deliveries.
   SSI Recipients: The budget provides funding for Medicaid 
          benefits to immigrants who became eligible for the program as 
          a result of SSI restorations proposed in the budget.

  Other Medicaid Improvements: The budget supports a number of important 
initiatives to expand Medicaid and CHIP coverage, including:
   Children's Health Insurance Outreach: This initiative, 
          designed to inform eligible children and their families about 
          the CHIP program and Medicaid, will provide States with 
          flexibility to develop innovative and effective outreach 
          approaches.
   Transitional Medicaid simplification: The budget proposes to 
          simplify and improve transitional Medicaid programs to help 
          the working poor, whose income makes them ineligible for the 
          traditional Medicaid program. By eliminating burdensome 
          reporting requirements and giving States an incentive to serve 
          more working families, this proposal would help beneficiaries 
          retain temporary health insurance through Medicaid until they 
          can secure private insurance.
   Foster Care Medicaid benefits: The budget would give States 
          the choice to extend Medicaid eligibility to children up to 
          age 21 who were eligible for Foster Care assistance at age 18. 
          Continued access to medical, mental health, and rehabilitative 
          care beyond age 18 is critical to ensuring that these youth 
          can successfully make the transition from foster care to 
          independent living.
   Aid for the territories: The budget proposes $144 million in 
          increased funding under CHIP for Puerto Rico and the other 
          four territories, fulfilling the President's promise to 
          provide more equitable funding for children's health care in 
          the insular areas.

Renewing Commitment to Public Health

   This budget affirms the Administration's commitment to improving 
public health, with renewed emphasis on measures to combat smoking, 
especially among young people. The budget also increases access to 
powerful AIDS therapies, enhances food safety, promotes childhood 
immunization, improves reporting of public health threats, and reduces 
infant mortality.

  Stopping Youth Smoking: Every day, 3,000 children become smokers--
1,000 have their lives shortened because of it. Almost 90 percent of 
adult smokers began smoking by age 18 and today, 4.5 million children 
aged 12 to 17--37 percent of all high school students--smoke cigarettes. 
Tobacco is linked to over 400,000 deaths a year from cancer, respiratory 
illness, heart disease and other problems. To end this public health 
crisis, we must have a focused public health effort to reduce youth 
smoking. The 1998 State tobacco settlement was an important step in the 
right direction, but more must be done to protect our children and hold 
the tobacco industry accountable. The Administration believes additional 
steps must be taken at the national level to reduce youth smoking:
   Raise the price of cigarettes, so fewer young people start to 
          smoke: Public health experts agree that the single most 
          effective way to cut youth smoking is to raise the price of 
          cigarettes. Last year, the President called for an increase of 
          $1.10 per pack (in constant dollars) to help cut youth smoking 
          in half within five years. This year, we build on the 
          increases already agreed to between the tobacco companies and 
          the States and those already legislated by the Congress. As a 
          result, we can reach the target with a legislated increase of 
          half this amount.
          The funds that result from this policy will offset tobacco-
          related Federal health care costs. Each year, the Federal 
          Government spends billions of dollars treating tobacco-related 
          diseases for our Armed Forces, veterans, and Federal 
          employees. It is fitting that the tobacco industry reimburse 
          U.S. taxpayers for these costs, just as it has already agreed 
          to do for the States.
   Reaffirm the Food and Drug Administration's (FDA's) full 
          authority to keep cigarettes out of the hands of children: The 
          Administration will again support legisla

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          tion that confirms the FDA's authority to regulate tobacco 
          products in order to halt advertising targeted at children, 
          and to curb minors' access to tobacco products. While the 
          State settlement limits tobacco advertising, it still allows 
          certain marketing practices targeted at children, including 
          newspaper and magazine advertising and retail signs near 
          schools. Moreover, only by reaffirming FDA's authority can 
          Congress ensure that America's children are protected from the 
          next generation of tobacco industry marketing. We should take 
          this matter out of the courts and ensure that the FDA--the 
          Nation's leading health consumer protection agency, providing 
          oversight over food, drugs, and medical devices--has full 
          authority to protect our children from tobacco.
   Support critical public health efforts to prevent youth 
          smoking: To help support tobacco prevention programs in States 
          and local communities, the Administration's budget will double 
          the funding for the FDA's tobacco enforcement budget to $68 
          million and increase funding for the Centers for Disease 
          Control's tobacco control efforts by one-third, from $74 to 
          $101 million. In addition, the Administration will continue to 
          support measures that hold the tobacco industry accountable 
          for reducing youth smoking.
   Protect farmers and farming communities: The Administration 
          remains committed to protecting tobacco farmers and their 
          communities, and is monitoring closely on-going efforts by 
          State, farmer, and industry representatives to provide funding 
          and purchase commitments to tobacco farmers. The 
          Administration will work with all parties, as needed, to 
          ensure the financial well-being of tobacco farmers, their 
          families, and their communities.
   Since U.S. taxpayers paid a substantial portion of the Medicaid costs 
that were the basis for much of the State settlement with the tobacco 
companies, Federal law requires that the Federal Government recoup its 
share. However, the Administration will work with the States and the 
Congress to enact tobacco legislation that, among other things, resolves 
these Federal claims in exchange for a commitment by the States to use 
tobacco money to support shared national and State priorities which 
reduce youth smoking, promote public health and children's programs, and 
assist affected rural communities.
   In addition to these Medicaid costs, tobacco-related health problems 
have cost Medicare and other Federal programs billions of dollars each 
year. To recover these losses, the Department of Justice intends to 
bring suit against the tobacco industry, and the budget contains $20 
million to pay for necessary legal costs. The Administration will 
propose that recoveries will be used to enhance the security of Medicare 
for future generations.

  Safeguarding and Improving Public Health: The budget includes numerous 
policies to improve the health and health systems in the United States. 
These include:
   Reinforcing the Nation's safety-net: A new public health 
          initiative will strengthen the health care safety-net for 
          uninsured and other at-risk individuals. The initiative, which 
          makes use of competitive grants, is designed to encourage 
          local public officials and others to work closely with 
          providers to improve coordination of the delivery of services, 
          to establish accountability in the system for assuring 
          adequate patient care, and to increase the number of services 
          delivered, improving the quality of care and expanding access 
          for the uninsured.
   Increasing biomedical research: Biomedical research is a 
          foundation for combating disease and providing new 
          technologies, from the eradication of smallpox to the 
          disappearance of polio in the Western Hemisphere to prevalence 
          of cardiac pacemakers and organ transplants that help restore 
          normal lives. In last year's budget, the President made a 
          commitment to increasing the National Institutes of Health 
          (NIH) budget by nearly 50 percent over five years. Last year, 
          NIH received an historic $2 billion increase, putting us ahead 
          of schedule in meeting the President's commitment to expanding 
          biomedical research. This year, with an investment of $15.9 
          billion in NIH, the budget renews that commitment to 
          biomedical research.

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   Establishing Medicare cancer clinical trial demonstration: 
          The budget gives more Americans access to these cutting-edge 
          cancer treatments and encourages higher participation in 
          clinical trials by establishing a three-year, $750 million 
          demonstration program. Medicare beneficiaries who participate 
          in certain cancer clinical trials will be covered for the 
          patient care costs for those trials. Funding priority will be 
          given to trials that would most assist the Health Care 
          Financing Administration (HCFA) in making future coverage 
          policy decisions for cancer-related treatments and to 
          substantive trials designed to address specific research 
          questions. Although HCFA would run the demonstration, it would 
          not draw upon Medicare's trust funds.
   Ensuring access to powerful AIDS therapies and improving 
          quality of care through Ryan White HIV/AIDS Treatment Grants: 
          The budget proposes a $100 million increase in Ryan White 
          treatment grants to help States provide AIDS treatment, 
          especially the powerful ``combination therapy'' AIDS drugs 
          through the AIDS Drug Assistance Program. In total, the budget 
          proposes $1.5 billion in Federal spending for activities 
          authorized by the Ryan White CARE Act, a seven-percent 
          increase over 1999 levels and a 291-percent increase over 
          comparable 1993 levels.
   Helping to reduce racial disparities in health status: 
          Despite improvements in the Nation's overall health, 
          continuing disparities remain in the burden of death and 
          illness that certain minority groups experience. For example, 
          the infant mortality rate for African-Americans is more than 
          twice that of Caucasians. American Indian and Alaska Natives 
          are about three times as likely to die from diabetes as other 
          Americans. To address these and other disparities, the budget 
          includes $135 million for health education, prevention, and 
          treatment services for minority populations. The budget also 
          proposes to provide an additional $50 million to address HIV 
          and AIDS issues in minority communities.
   Providing quality health care to Native Americans: The budget 
          proposes a four-pronged funding strategy for the Indian Health 
          Service (IHS), which includes: 1) increased resources; 2) a 
          coordinated effort to ensure that HHS health grants provide 
          assistance to Native Americans; 3) review of reimbursements 
          from Medicaid and Medicare; and 4) increased vigilance to 
          ensure that Federal funds are used properly.
            The budget proposes a $170 million increase for IHS. This 
          eight-percent increase will allow IHS to finance an additional 
          34,000 breast cancer screening mammographies for Native 
          American women between ages 50 and 69, create 44 new dental 
          unit teams to provide an additional 25,000 dental visits, 
          reduce incidence of complications related to chronic diseases 
          such as diabetes and enable approximately 130 new community-
          based public health nurses to provide outreach activities, 
          including home visitations, well-child examinations, 
          immunizations, prenatal care, health fairs, follow-up visits, 
          and missed clinical appointments. The budget also supports the 
          continuation of the construction of two health care facilities 
          (Fort Defiance and Parker Health Clinic). From 1998 to 2000, 
          IHS expects to collect an additional $82 million in 
          reimbursements due to Medicaid and Medicare collection rate 
          increases.
   Increasing Federal support for improving the mental health of 
          all Americans: The budget provides a $5 million, 19-percent, 
          increase for the Projects for Assistance in Transition from 
          Homelessness (PATH) program, which provides much-needed 
          supportive services to persons with a mental illness who are 
          homeless. In addition to increasing funding for this 
          vulnerable population, the budget provides a $70 million, or 
          24-percent, increase for the Mental Health Block Grant, which 
          provides integral support to States for services for people 
          with mental illness.
   Expanding anti-substance abuse activities: The budget 
          includes an $85 million increase for anti-substance abuse 
          activities. These new funds continue the Administration's 
          commitment to expand substance

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          abuse treatment for hundreds of thousands of high-risk youth, 
          families moving from welfare-to-work, and other under-served 
          Americans. To help communities address gaps in substance abuse 
          treatment for emerging areas of need, the budget proposes $110 
          million for Treatment Targeted Capacity Expansion grants. This 
          proposed funding level is double the 1999 funding level and, 
          with additional funding for the Substance Abuse Block Grant, 
          will provide treatment for another 21,000 individuals.
   Improving asthma treatment for low-income children: The 
          budget proposes $50 million in demonstration grants to States 
          test innovative asthma disease management techniques for 
          children enrolled in Medicaid to help these children receive 
          the most appropriate care, and keep their asthma in check. To 
          judge the success of the project in improving asthmatic 
          children's quality of life, participating States will measure 
          the program's success in averting asthma-related crises--such 
          as decreased emergency room visits and hospital stays. To 
          complement these efforts, the budget provides $23 million for 
          the Environmental Protection Agency's (EPA) childhood asthma 
          initiative for education and outreach, research, and expansion 
          of EPA's outdoor pollution air monitoring network.
   Creating superior public health surveillance: The budget 
          proposes $64 million to begin development and implementation 
          of a new National Electronic Disease Surveillance Initiative 
          at the Centers for Disease Control (CDC). A standardized 
          national system to collect and analyze epidemiological 
          information on the occurrence of communicable diseases is a 
          critical missing link in the Nation's public health 
          infrastructure, and will help address problems such as the 
          emergence of the drug-resistant bacteria--so called 
          superbugs--as well as food safety and bioterrorism.
  Supporting a strong FDA: The budget proposes an increase of 17 
          percent, or $190 million, over the 1999 level for FDA to: 1) 
          ensure the timely review of important drugs, medical devices, 
          and food additives; 2) expand inspection coverage of 
          facilities under their jurisdiction (e.g., registered blood 
          banks); and 3) improve the quality of information on injuries 
          and product defects associated with FDA-regulated products.
   Improving public health's response to bioterrorism threats: 
          The budget proposes a $71 million, or 45-percent, increase for 
          medical and public health response and preparedness related to 
          potential terrorist use of biological and chemical weapons. At 
          this level, HHS will expand research and development 
          activities on potential biological and chemical terrorist 
          agents, including research on smallpox and anthrax vaccines 
          and therapeutics and expedited regulatory review to facilitate 
          these activities. This increase will improve public health 
          surveillance of these threats and expand epidemiological and 
          laboratory capacities to address such incidents, at the 
          national, State and local levels. The proposed increase would 
          also support 25 new local health care response systems 
          (Metropolitan Medical Response Systems). These funds will be 
          in addition to investments in the Departments of Defense and 
          Justice.
   Enhancing food safety: The budget increases funding by $72 
          million, or 24 percent, over the 1999 level for the 
          Administration's inter-agency food safety initiative. The 
          additional funds would increase the frequency of inspections 
          of high-risk domestic establishments, double inspections and 
          evaluations of foreign food establishments, improve science-
          based inspections of meat and poultry plants, and expand food 
          safety research, risk assessment, education and surveillance 
          activities. In 1998, the President established the Council on 
          Food Safety to develop a comprehensive strategy for Federal 
          food safety activities, including coordinating research 
          efforts and budget submissions among the various food safety 
          agencies.
   Promoting childhood immunizations: The budget proposes $1.1 
          billion for the Childhood Immunizations Initiative, including 
          the Vaccines for Children program and CDC's discretionary 
          immunization pro

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          gram. As a result of the Administration's Childhood 
          Immunization Initiative, the Nation exceeded its childhood 
          vaccination goals for 1997, with 90 percent or more of 
          America's toddlers receiving each basic childhood vaccine. The 
          incidence of vaccine-preventable diseases among children, such 
          as diphtheria, tetanus, measles, and polio, are at all-time 
          lows. The budget also includes $83 million to eradicate 
          polio--preventable through immunization throughout the world.
   Promoting full participation in the Women, Infants, and 
          Children (WIC) program: Last year, WIC reached over 7.4 
          million low-income women, infants, and children, providing 
          nutrition assistance, nutrition education and counseling, and 
          health and immunization referrals. WIC also provides prenatal 
          care, which reduces premature birth and infant death. Due in 
          large part to expansion during this Administration, 
          participation has grown by 30 percent, and the program now 
          helps half of America's infants. The budget proposes $4.1 
          billion to serve 7.5 million people through 2000 and fulfills 
          the President's goal of full participation, making sure that 
          all who are eligible take part in WIC.
   Ensuring continued educational excellence in the Nation's 
          children's hospitals: The budget proposes $40 million to 
          support graduate medical education at free-standing children's 
          hospitals. Children's hospitals play an essential role in the 
          education of the Nation's physicians, training 25 percent of 
          all pediatricians and over half of many pediatric 
          subspecialties.
   Enhancing family planning: Publicly subsidized family 
          planning services help women prevent over a million unintended 
          pregnancies each year. The budget provides a $25 million 
          increase, to $240 million, to support over 4,400 family 
          planning clinics, which make up a national network providing 
          these services to low-income women. The budget also includes 
          $50 million in mandatory funding for States to conduct 
          abstinence education projects to help reduce unintended 
          pregnancies.
   Providing contraceptive coverage in the Federal Employees 
          Health Benefits Program (FEHBP): The budget continues the 
          policy of providing the health care coverage necessary for 
          Federal employees, annuitants, and their families to reduce 
          unwanted pregnancies and the need for abortions. The budget 
          proposes to continue the requirement, enacted in the 1999 
          Omnibus Consolidated and Emergency Supplemental Appropriations 
          Act, that health plans in FEHBP offer the full range of 
          contraceptive options.
   Improving health care quality: The budget proposes a $35 
          million, or 21-percent, increase for the health care quality 
          activities of the Agency for Health Care Policy and Research 
          to enhance knowledge about how best to measure and improve the 
          outcomes and quality of medical services and expand 
          information on new priority health issues (e.g., vulnerable 
          populations, the impact of managed care, pharmaceuticals 
          research and other activities).
   Caring for veterans: Continuing its commitment to veterans 
          programs, the Administration proposes $18.1 billion, including 
          an expected $749 million in medical care collections, for the 
          Department of Veterans Affairs health system. This funding 
          will support such initiatives as testing and treating 
          Hepatitis C, smoking cessation, and emergency care for high-
          priority veterans.

Improving the Fiscal Integrity of Medicare and Medicaid

  The budget proposes improvements to Medicare and Medicaid to improve 
the efficacy and strength of these programs.

  Strengthening Medicare Program Integrity: The budget includes several 
policies that would reduce Medicare fraud, abuse, and overpayment. Since 
1993, the Administration's efforts to combat fraud and abuse in Medicare 
have increased prosecutions for health care fraud by over 60 percent, 
increased convictions by 40 percent, and saved billions of dollars in 
health care claims. The budget proposes efforts to strengthen our 
commitment to eliminate fraud and abuse, ensure that Medicare payments 
to hospitals and other providers are reasonable, and promote competitive 
pricing. In addition, the budget will expand the Cen

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ters of Excellence program, eliminate overpayments that facilities 
receive for drugs used to treat anemia, reform outpatient mental health 
benefits, and require insurance companies to provide information that 
will ensure that private insurers pay claims for which they are legally 
responsible.
  Maintaining Fiscal Responsibility in Medicaid Administrative Cost 
Allocation: The budget treats shared Medicaid and Temporary Assistance 
for Needy Families (TANF) administrative costs similar to the way the 
Agricultural Research Act of 1998 addressed common Food Stamp and TANF 
costs. The budget proposes a State-by-State approach that gives States 
flexibility in the use of TANF block grant funds.
  Improving Medicare Managed Care: In 1998, 99 managed care plans chose 
not to renew their Medicare contracts, leaving about 50,000 
beneficiaries without a managed care option. While these decisions 
affected less than one percent of Medicare managed care enrollees, they 
caused severe difficulty for many of these beneficiaries. The budget 
includes a set of proposals designed to ensure that sufficient options 
remain available to Medicare beneficiaries. First, the budget would help 
both elderly and disabled beneficiaries whose plans leave the program by 
providing earlier notification and broadening their access to Medigap 
coverage. The budget also proposes to reduce administrative burden on 
health plans by easing various reporting requirements; to extend plan 
coverage proposal deadlines and streamline other rules; and to stabilize 
plan revenue by phasing-in payment adjustments for enrollees' health 
status.
  Strengthening HCFA Management Capacity: HCFA faces the formidable 
challenge of modernizing a massive administrative infrastructure, 
meeting pressing statutory deadlines for program change, and, perhaps 
most importantly, by being highly responsive to its customers. The 
budget outlines a continuing management reform process that will 
increase HCFA's flexibility to adapt to the changing health care market 
while also increasing accountability. This process includes: 1) 
management flexibilities; 2) increased accountability; 3) program 
flexibilities; 4) structural reforms; and 5) contractor reform. In 
addition, the Administration will explore ways to stabilize HCFA's 
funding sources. (See Section IV, ``Improving Performance through Better 
Management,'' for details on these management reforms.)