[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.)