[Budget of the United States Government]
[IV. Preparing For the 21st Century]
[3. Strengthening Health Care]
[From the U.S. Government Publishing Office, www.gpo.gov]
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3. STRENGTHENING HEALTH CARE
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We must also keep fighting to extend affordable health care to Americans who lack it. This is a continuing
problem in our Nation, as all of you know. Still there are too many children who lose their hearing because an
ear infection goes untreated, or wind up in the emergency room because they couldn't see a doctor in a more
regular way. Too many patients skimp on their own health to provide coverage for their children; too many missed
chances to prevent illness and prepare young people to lead healthy lives--all these the product of the fact
that tens of millions of Americans still don't have affordable health care.
President Clinton
January 2000
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From the first days of his Administration, President Clinton has
worked to expand access to affordable quality health care for all
Americans. When he took office in 1993, workers feared that taking leave
from work to care for an ill family member could cost them their jobs.
There were no Federal protections to assure the portability of health
benefits for workers who changed or lost their jobs or to protect
workers from discrimination by health plans based on their health
status. Individuals with disabilities were not able to return to the
workforce without losing their Medicare or Medicaid health coverage.
At that time, the ability of the Nation's health care system to
deliver high quality care was in question. The public health delivery
system was in badly need of repair: half of two-year-olds did not
receive immunizations they needed against deadly diseases; cigarette use
among youth was increasing; teenage pregnancy rates were high; the
number of new HIV/AIDS infections and deaths was spiraling; and, Federal
support for mental health was a low priority. Health care costs were
rising at a rapid rate while the number of uninsured--especially
uninsured children--was growing. Fraud, abuse, and inefficiency plagued
the Medicare and Medicaid programs. Moreover, the strains on the
Medicare program meant that it was projected to enter bankruptcy in
1999.
There are still many challenges, but in the past seven years, there
has been significant progress in improving the Nation's health care
system. Largely through reforms enacted in the Balanced Budget Act of
1997, success in curbing fraud, waste, and abuse in the Medicare
program, and a sound fiscal policy, the Federal Government's success in
constraining the growth of Medicare and Medicaid has freed resources to
expand coverage and extend the life of the Medicare trust fund to at
least 2015, while pursing a responsible and balanced fiscal policy that
will eliminate the national debt.
There are other key measures of this progress: today childhood
immunization rates for the most critical vaccines are at over 80
percent; the rate of increase in youth smoking slowed over the past two
years and experts predict that the slowing will continue; teenage
pregnancy is at an all time low; and, Federal funding for mental health
has increased by 90 percent.
The enactment of the Health Insurance Portability and Accountability
Act means that today Americans who change jobs can maintain their health
insurance coverage while insurers are now limited in their ability to
deny coverage due to pre-existing conditions. Last year's enactment of
the Ticket to Work and Work Incentives Improvement Act enables people
with disabilities to enter the workforce without losing their critically
important health coverage. The President continues to vigorously pursue
efforts to pass a Patients' Bill of Rights before leaving office to
extend essential patient protections to all Americans, including
guaranteed access to needed health
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care specialists and emergency room services. By Executive Order last
year, the President extended these and other essential patient
protections to the more than 85 million Americans enrolled in Federal
health plans.
The State Children's Health Insurance Program (SCHIP) was created in
1997 to provide coverage for the uninsured children of hard-working,
low-income parents. SCHIP has doubled its enrollment in the past year to
two million uninsured children. The success of SCHIP illustrates that it
is possible, working in partnership with the States, to formulate and
implement policies to significantly expand coverage to millions of
uninsured Americans. Support for and the expansion of SCHIP to include
parents are among the President's key initiatives in the 2001 Budget.
The budget builds on these accomplishments with initiatives that
include:
Preparing for the aging of America: The budget includes the
President's Medicare reform proposal, which strengthens and
modernizes the program by extending the life of the Medicare
trust fund to at least 2025 and provides for the provision of
a long overdue and optional prescription drug benefit. The
budget also addresses the Nation's growing long-term care
needs by expanding the President's long-term care initiative.
Improving access to affordable health care: The budget
includes a major new initiative to decrease the number of
uninsured that includes: expanding coverage to the uninsured
parents of children eligible for Medicaid and SCHIP;
accelerating enrollment of uninsured children in Medicaid and
SCHIP; offering 55 to 65 year old Americans the option to buy
into the Medicare program; encouraging small businesses to
offer health insurance; providing a tax credit for the
purchase of health insurance for employees in transition;
restoring Medicaid eligibility to legal immigrants; and,
extending transitional Medicaid programs for the working poor.
Assuring and improving quality of care: The budget includes
investments to improve the quality of care for patients
Nation-wide, including new efforts to prevent medical errors
and improve the quality of care through improvements in
information technology. It also includes a new initiative to
protect patients purchasing prescription drugs over the
Internet. These initiatives complement the Administration's
support of a strong, enforceable Patients' Bill of Rights. The
Norwood-Dingell legislation is representative of such a
policy, which has received broad, bipartisan support in the
House of Representatives.
Supporting biomedical research: Building on recent funding
increases for the National Institutes of Health (NIH) and
investing almost $19 billion at NIH in 2001, this budget
includes a $1 billion increase for biomedical research. The
Federal investment in biomedical research continues to yield
dramatic medical advances that improve health and quality of
life. These additional resources will build on existing
research in such areas as genomic medicine and bioengineering,
that combine knowledge of basic biology with technological
advances to produce new, life-saving therapies.
Safeguarding and improving public health through disease
prevention and health promotion: To protect and advance public
health, the budget invests in: a stringent tobacco control
policy; expanded efforts to combat HIV and AIDS both
domestically as well as overseas; food safety programs;
additional efforts to combat emerging infectious diseases; a
new cancer clinical trials demonstration project for Medicare
beneficiaries; family planning efforts Nation-wide; efforts to
promote childhood immunizations; mental health and substance
abuse prevention activities; improving the public health
response to the threat of bioterrorism; a strong Food and Drug
Administration (FDA); and, providing quality care for Native
Americans and veterans.
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The budget provides significant increases to address global public
health challenges, such as HIV/AIDS, polio, and infectious diseases.
Ensuring the fiscal integrity of the Medicare and Medicaid
programs: The budget proposes aggressive efforts to reduce
Medicare fraud, waste, and abuse, and to improve the
management of Medicare and Medicaid.
Preparing for the Aging of America
Since its creation in 1965, Medicare has provided medical care for
tens of millions of older and disabled Americans, extending and saving
lives in the process. Medicare is an essential part of American life--
elderly Americans can be secure in knowing their medical needs will be
treated while their adult children are not forced to make the difficult
choice between their parent's medical costs and the needs of their own
children. However, the demographic changes ahead, associated with the
aging of America, mean that unless we make the right decisions today,
the future of Medicare is at risk. Moreover, an aging society will
strain our current long-term care system--which is already fragmented
and not meeting the needs of many Americans.
At the start of a new century, all Americans can take great pride in
the legacy of the Medicare program. In its 35-year history, Medicare has
helped to lift elderly Americans out of poverty, while offering health
care that has extended and improved the quality of their lives. During
this time, the average life expectancy of Americans at age 65 has
increased by 20 percent. Poverty among the elderly has dropped by nearly
two-thirds, and access to care has increased by one-third.
However, this new century will present Medicare with serious
challenges. With Americans living longer, the number of Medicare
beneficiaries is rising much faster than the number of workers paying
into the system. By about 2015, the Medicare trust fund will be
insolvent just as the baby boom generation begins to retire and become
eligible for Medicare. Since Medicare's creation, the world of medicine
has changed, including increased reliance on prescription drugs to treat
illness and extend lifespan. If we are to keep the promise of Medicare
for future generations, the program designed for the 1960s must be
modernized and strengthened to meet the challenges of the 21st Century.
The budget includes a comprehensive plan to reform and modernize this
vitally important program. This historic plan will: (1) modernize
Medicare's benefits; (2) make the Medicare program more efficient and
competitive; and, (3) extend the solvency of the Medicare Hospital
Insurance Trust Fund.
Modernizing Medicare's Benefit Package:
Creating a prescription drug benefit: The centerpiece of the
President's plan is an outpatient prescription drug plan that
would be available to all Medicare beneficiaries. The drug
plan would have no deductible and pay half of all
beneficiaries' prescription drug costs up to $2,000 in 2003
and $5,000 when fully phased-in by 2009. The benefit would be
administered by private sector pharmaceutical benefit managers
(PBMs) or other qualified entities, who rely on market
competition to ensure access and quality for Medicare
beneficiaries while obtaining lower prices on drugs. Low-
income beneficiaries with incomes below 135 percent of poverty
would not pay premiums or share in the cost of drug coverage
and those with incomes between 135 and 150 percent of poverty
would receive premium assistance. The plan also proposes to
give financial incentives to employers who currently offer
retiree prescription drug benefits to encourage the private
sector to maintain its important coverage.
Expanding access to preventive benefits: This plan creates
incentives to encourage Medicare beneficiaries to monitor
their health and get medical care early, if necessary, which
can save lives and minimize the need for more extensive
medical treatment later. It would eliminate existing
coinsurance and the deductible for Medicare-covered preventive
benefits, including colorectal cancer screenings, bone mass
measurement, pelvic exams, prostate cancer screening, diabetes
self management
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benefits, and mammographies. The plan also proposes a three-
year demonstration to provide smoking cessation services to
Medicare beneficiaries.
Rationalizing cost sharing and Medigap: To help offset the
costs of benefit improvements, the President's plan proposes
to add new cost-sharing requirements for clinical laboratory
services and to adjust the Part B deductible by indexing for
inflation. It has been fixed at $100 since 1991. The plan also
proposes to improve the Medigap market by expanding
opportunities and options for individuals to enroll in Medigap
plans.
Reserving additional funds for protections against
catastrophic drug costs: The budget includes a reserve fund of
$35 billion in on-budget surplus money over 10 years. This
funding is reserved for debt reduction or, in the event that
the President and Congress agree, a policy that provides for
protections against catastrophic drug costs for Medicare
beneficiaries, or policies that otherwise strengthen the
Medicare program.
Making Medicare More Efficient and Competitive:
Fee-for-Service (FFS) modernization: The budget proposes to
give the traditional fee-for-service Medicare program new
purchasing tools to leverage volume discounts from health care
providers and improve quality of care. These proposals build
on prior successful Medicare demonstrations, and management
tools commonly found in the private sector, such as disease
management services, which have been found to improve health
care outcomes while reducing health care costs.
Competitive defined benefit proposal: Under current law,
Medicare+Choice plans are paid through a complicated
administrative pricing structure that sets Government payments
to private plans based on the costs of the traditional FFS
program. For the first time, beneficiaries will be able to
choose their managed care plan based on price and quality. The
President's plan proposes to require plans to bid on a defined
set of benefits and gives beneficiaries an incentive to choose
lower cost plans in the form of lower premiums.
Medicare management improvements: The President's plan
continues its initiative to improve the Health Care Financing
Administration's (HCFA's) management of the Medicare program
through a continuing reform process that will increase HCFA's
flexibility while also increasing accountability.
Extending the Solvency of the Medicare Program: At a time when
America's prosperity is strong, we need to prepare for the coming
demographic boom, and strengthen Medicare for future generations. The
President's plan dedicates part of the budget surplus to Medicare
solvency--$299 billion over 10 years. This will extend the solvency of
the Medicare Hospital Insurance Trust Fund to at least 2025, and will
eliminate the need to radically cut access to and quality of Medicare
benefits for America's elderly that would be inevitable in the absence
of new resources. At the same time, by paying down the debt, this will
ensure that the Government and the Nation are soundly positioned to meet
the challenge of the retiring baby boomers.
Improving Long-term Care: The budget proposes a $3,000 tax credit to
provide support for Americans who care for a disabled or elderly
relative. The budget also proposes group long-term care insurance for
Federal employees, annuitants, and their families. Employees would pay
the full cost of insurance premiums, which, at group rates, are expected
to be 15 to 20 percent lower than the individual rates otherwise
available. The budget invests $100 million in an innovative housing
initiative to integrate assisted living facilities and Medicaid home and
community-based long-term care and $140 million in a new Medicaid option
to equalize eligibility for people with long-term care needs in
community settings. The budget includes $125 million for a new national
program to provide assistance to families who care for disabled elderly
relatives by supporting local efforts to provide respite care and
counseling, information, and other support services.
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Improving the Quality of Nursing Home Care: The budget invests an
additional $15.9 million for continuing Nursing Home Initiative
activities, a 29-percent increase over the 2000 funding level. The
initiative will help States strengthen nursing home enforcement tools to
ensure facilities meet Federal quality standards, and increase Federal
oversight of nursing home quality and safety standards. The initiative
includes funding to improve and target nursing home inspections and
respond to resident and family complaints in a timely and effective
manner. Funding will be provided for more frequent surveys of repeat
offenders and improving surveyor training, handling increased legal
advice, litigation, and hearings on nursing home enforcement cases and
addressing the backlog of nursing home appeals.
Improving Access to Affordable Health Care
The President remains strongly 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, families who
cannot afford health insurance, and legal immigrants. His 2001 Budget
proposal to expand access to affordable health insurance to working
Americans represents the most significant investment in health coverage
in recent years. This proposal addresses the continued rise in the
number of uninsured, one of the few indicators that has not improved in
this strong economy. These policies to expand access to affordable
insurance would be complemented by an investment of an additional $175
million in community-based efforts to strengthen the health care safety
net.
Increasing Children's Enrollment in SCHIP: The President proposed the
creation of a State Children's Health Insurance Program in 1997. Passed
by Congress the same year, the program provides health insurance to
uninsured, low-income children, increases their access to early
preventive medicine (including immunizations), and enhances their
chances of becoming healthy adults. Administered by the States, either
through Medicaid or a separate SCHIP program, SCHIP has already
successfully reached two million uninsured, low-income children. Despite
the success of initial enrollment efforts, however, more must be done to
provide health insurance coverage to uninsured, low-income children.
This initiative accelerates enrollment of uninsured children in
Medicaid and SCHIP by expanding efforts in schools and simplifying
eligibility. This initiative promotes enrollment in the SCHIP program
and in Medicaid through schools by: enabling school lunch programs to
share eligibility information with Medicaid and SCHIP for outreach
programs; and, allowing additional sites, such as schools, child care
referral centers, and homeless programs to determine presumptive
eligibility. The initiative would also simplify the enrollment process
by requiring states to make Medicaid applications no more complicated
than their SCHIP applications. Finally, it creates an one-time $10
million competitive grant program for State demonstrations to coordinate
programs and increase enrollment of homeless children and families in
Medicaid, SCHIP, and other social service programs.
Covering the Uninsured Parents of Children in Medicaid or SCHIP: At
the center of the President's 2001 health insurance coverage initiative
is a proposal to allow States to cover the parents of children eligible
for Medicaid and SCHIP. Many of the parents of the children eligible for
Medicaid and SCHIP are themselves uninsured. Expanding Medicaid and
SCHIP eligibility to parents will help reduce the growing number of low-
income adults who are without health insurance and increase the
enrollment of their children by enabling entire families to receive
coverage through the same programs.
The budget proposes to expand SCHIP to become the FamilyCare program.
FamilyCare would:
Provide higher Federal matching payments for expanding
coverage to parents.
States that raise their eligibility levels for parents would
receive higher Federal matching payments for coverage provided
to these parents. Funding for these payments will be provided
through increased State allotments.
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Enroll the parents in the same program as their children.
Parents would be insured in the same program as their children
to improve efficiency and continuity of care. Priority would
be given to parents at the lowest end of the income
eligibility scale just as lower income children are given
priority in SCHIP. States would also be required to show that
they are successfully enrolling children below 200 percent of
the Federal poverty level in SCHIP before accessing additional
funds for adults. Given the experience of SCHIP and the strong
State support to extend SCHIP to parents, it is likely that
many States will take up this option. If, after five years,
however, some States have not expanded coverage of parents to
at least 100 percent of poverty ($16,000 for a family of
four), a failsafe mechanism would be triggered to require
States to go to at least that level of coverage.
Providing Medicare Buy-In for Certain 55 to 65 Year Olds: The fastest
growing group of uninsured are those ages 55 to 65. Between 1997 and
1998, the proportion of people in this age group who were uninsured
increased by seven percent. As the baby boom generation enters this age
group, this problem will only get worse. This initiative expands the
health options available for older Americans by: enabling Americans aged
62 to 65 to buy into Medicare; providing a similar Medicare buy-in for
vulnerable displaced workers ages 55 and older; and providing COBRA to
Americans ages 55 and older whose companies reneged on their commitment
to provide retiree health benefits. To help people afford the Medicare
buy-in, a new tax credit of 25 percent of the cost of the premium would
be created. It would be available to both people ages 62 to 64 and
displaced workers ages 55 to 65. Those in this group accessing COBRA
would qualify for the 25 percent credit for COBRA (described below).
Encouraging Small Businesses to Offer Health Insurance: Workers in
small businesses are more likely to be uninsured. This initiative would
encourage small businesses to offer health insurance through: a new tax
credit for small businesses who join coalitions; tax-exempt status for
foundation contributions to create coalitions; and, technical
assistance. It would be different from last year's proposal because the
credit would be increased to 20 percent of the employer contribution,
and the credits would be available for eight years.
Providing a Tax Credit for COBRA Continuation Coverage: Currently,
employers must offer departing employees the option of buying into their
health plan at a premium of 102 percent. Intended to ensure coverage
during the transition to new jobs, this policy has proven unaffordable
to some people and burdensome to some employers. To address these
concerns, the new proposal would provide a tax credit of 25 percent for
this coverage to departing employees who take this option.
Extending Transitional Medicaid Extension: The budget proposes to
extend and improve the transitional Medicaid program, which provides up
to one year of coverage to those in transition, including welfare
recipients who get jobs. This eases the transition to work and removes a
critical disincentive--the immediate loss of Medicaid coverage. Without
this extension, the program would end in October 2001.
Providing a New Medicaid Option to Cover Certain Low-Income Uninsured
Women with Breast or Cervical Cancer: The budget includes a proposed
State option to provide Medicaid coverage to low-income, uninsured women
who screen positive under the CDC Breast and Cervical Cancer Early
Detection Program.
Expanding State Options to Insure Children Through Age 20: Nearly one
in three people ages 18 to 24 are uninsured, mostly because they are no
longer dependents but often do not have jobs that offer affordable
coverage. The budget would allow States to cover people ages 19 and 20
in Medicaid and SCHIP.
Restoring Medicaid Eligibility 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. In addition, parents of
legal immigrant children who have benefits restored would also be
covered under the
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Medicaid/SCHIP family coverage policy described above. As the President
has pledged, and has achieved for other groups so affected, this would
reverse an inequity enacted in welfare reform.
Reinforcing the Nation's Safety Net: To continue to address the health
care needs of people who remain uninsured, the Administration's budget
strengthens funding for the direct delivery of health care services and
improves access to the health care system. The budget proposes $125
million, a 400-percent increase, to improve health care access for the
uninsured by coordinating systems of care, increasing the number of
services delivered, and establishing accountability in the system to
assure adequate patient care. Additionally, the budget proposes an
increase of $50 million for a total of over $1 billion to support and
enhance the network of community health centers that serve millions of
low-income and uninsured Americans.
Assuring and Improving Quality of Care
President Clinton has forcefully advanced efforts to promote patients'
rights and ensure the delivery of high quality health care. Last year,
the House of Representatives passed the Norwood-Dingell legislation
which provides a strong enforceable Patients' Bill of Rights. The
President encourages Congress to finish this job and pass legislation
that includes critical patients protections such as: guaranteed access
to needed health care specialists; access to emergency room services
when and where the need arises; continuity of care protections so that
patients will not have an abrupt transition in care if their providers
are dropped; access to a fair, unbiased and timely internal and
independent external appeals process to address health plan grievances;
and, an enforcement mechanism that ensures recourse for patients who
have been harmed as a result of a health plan's actions. These
protections are now guaranteed for the 85 million Americans in Federal
health plans. In the budget, the President has included a number of
initiatives to improve health care quality.
Preventing Medical Errors and Improving Quality of Care: As many as
90,000 Americans die each year as the result of medical errors. The
budget includes new funding at HHS, VA, and DOD to develop new avenues
for the prevention of medical errors, including new funding to increase
medical errors prevention, patient safety research, and information
dissemination. In addition, in 2001, the Office of Personnel Management
(OPM) will require Federal Employees Health Benefits Program
participating carriers to institute initiatives to improve health care
quality through the prevention of medical errors and enhancements in
patient safety. The budget will also take steps to improve health care
quality and reduce medical errors by investing in the development of
information technology in the health care system, one of the most
effective ways to improve the quality and efficient delivery of
healthcare. This initiative will also ensure a coordinated Federal focus
on health information confidentiality and security data standards.
Protecting Patients Purchasing Prescription Drugs Over the Internet:
This initiative will invest $10 million in new funds in the
investigation, identification, and prosecution of websites selling
unapproved new drugs, counterfeit drugs, prescription drugs without a
valid prescription, expired or illegally diverted pharmaceuticals, and
the marketing of products based on fraudulent health claims. It will
also establish new Federal certification requirements for all Internet
pharmacy sites, increase current civil penalties, and provide FDA with
new administrative subpoena authority.
Improving Health Care Quality: The budget proposes a $51 million
increase for the Agency for Healthcare Research and Quality to enhance
research on the uses and tools of health information technology, conduct
clinical prevention research in the area of medical error reduction,
expand research on worker safety issues, and otherwise enhance research
on health care services, outcomes, effectiveness, cost, and quality.
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Supporting 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. Funding for biomedical
research at NIH has increased by 73 percent since the beginning of the
Clinton Administration. To underscore the Administration's commitment to
this important research, the President made a commitment in 1999 to
increase the NIH budget by nearly 50 percent in five years. Since that
time, the NIH budget has increased by over $4.3 billion. If the Congress
provides full funding for the President's new $1 billion investment, the
Administration will be one year ahead of schedule in reaching the 50
percent goal and will have increased by over 80 percent since 1993. NIH
now supports the highest levels of research ever for cancer, diabetes,
heart disease, and nearly all types of disease and health conditions.
The knowledge gained from investing in biomedical research has already
yielded a powerful information base that is steadily growing and paving
the way for concrete advances. For example, major clinical studies have
demonstrated that if people with diabetes can control their blood sugar
levels very carefully, they can reduce or prevent development of
complications of the disease. A sustained investment in NIH will enable
scientists to seize emerging research opportunities in diabetes and
other diseases that are a tremendous burden on health in the United
States and abroad.
This year, the budget proposes an additional $1 billion for NIH, for a
total funding level of nearly $19 billion. These resources will allow
NIH to continue to support new and expanded research that will lead to
new medical advances such as those referenced in the Diabetes Research
Working Group study. In addition, the budget proposes to repeal the
provision enacted for 2000 which would delay the availability of 2000
funds for NIH and other HHS programs.
Using Genetic Discoveries to Improve Health Care: The Human Genome
Project is scheduled to complete a working draft of the genome sequence
by the spring of 2000, considerably ahead of schedule. New funds
included in the budget will be used to explore the genetic factors
associated with:
Complex chronic diseases: Over the past year, researchers
supported by NIH have discovered a number of genes associated
with hearing loss, Alzheimers disease, and epilepsy. New funds
will be used to continue this research and investigate the
genetic causes of complex chronic diseases, including
diabetes, heart disease, retinal disorders, and Parkinson's
disease.
Individual response to medical therapies: Genetic discoveries
often reveal new strategies for the development of more
effective pharmaceuticals because we are able to determine
exactly how certain chemicals interact with human cells. New
funds will be used to research how an individual's genetic
makeup determines the effectiveness of medications, as well as
what side effects are likely to occur.
Translating Research into Practice: Over the past year, researchers
supported by NIH have discovered a simple, affordable drug to prevent
transmission of HIV in infants, which could potentially prevent the
infection of up to 400,000 newborns, and a tissue engineering method to
grow new arteries, key to the development of new therapies for heart
disease.
Funds will be used to develop new clinical trials evaluating therapies
for cancer, stroke, diabetes, and mental illness and disseminate
information on the clinical application of scientific breakthroughs to
the public.
Eliminating Health Disparities: Racial and ethnic minorities face
disproportionately high infant mortality, low rates of childhood
vaccination, high prevalence of cardiovascular disease and diabetes, and
shorter lifespans than the population as a whole.
In addition, NIH will establish within the Office of the Director a
Coordinating Center that will lead NIH's efforts to develop
multidisciplinary approaches to reducing health disparities. In
addition, NIH will seek legislative authority for the Coordinating
Center to award grants for health disparities research under exceptional
circumstances. The budget includes a $20 million increase for health
disparities research conducted by NIH Insti
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tutes and the Office for Research on Minority Health that will be an
integral part of the new center.
Fostering Interdisciplinary Research: New funds will be used to:
develop and expand competitive grant programs to encourage researchers
in fields such as mathematics, physics, and computer science to
contribute to medical research and develop new ways to effectively
manage data to maximize the scientific discoveries that will spring from
new biological information.
Safeguarding and Improving Public Health Through Disease Prevention and
Health Promotion
The 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 makes additional investments in:
expanded efforts to combat HIV and AIDS both domestically and
internationally; food safety programs; efforts to combat emerging
infectious diseases; efforts to determine the environmental causes of
disease; family planning efforts nationwide; efforts to promote
childhood immunizations; supports pediatric physician training; a
Medicare demonstration project on cancer clinical trials; mental health
and substance abuse prevention activities; asthma treatment for low
income children; improving the public health response to the threat of
bioterrorism; a strong FDA; and, providing quality care for Native
Americans and veterans.
Fighting Infectious Diseases Overseas: The budget dedicates $50
million to purchase vaccines for diseases that ravage poor nations,
including hepatitis B, certain forms of meningitis, and yellow fever,
helping to save millions of children. Purchasing existing vaccines is
the first step toward accelerating the development and delivery of
vaccines for AIDS, malaria, TB, and other diseases disproportionately
affecting the developing world. Funds will be invested in the Global
Alliance for Vaccines and Immunizations, a new, collaborative effort of
UNICEF, the World Bank, the World Health Organization, and other
governments and private organizations around the world. In addition, a
new tax credit will encourage the development of vaccines for diseases
that occur primarily in the developing world (e.g., HIV/AIDS, malaria,
TB, and other infectious diseases).
Stopping Youth Smoking: Almost 90 percent of adult smokers began
smoking by age 18 and today, 4.1 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, the
budget supports a focused public health effort to reduce youth smoking.
The 1998 State tobacco settlement was an important step in the right
direction. The Administration believes additional steps must be taken at
the national level to reduce youth smoking.
Cut youth smoking in half by holding the tobacco industry
accountable: Public health experts agree that the single most
effective way to cut youth smoking is to raise the price of
cigarettes. To build on the momentum of the increases already
agreed to between the tobacco companies and the States and
those already legislated by Congress, the budget includes a
combination of excise tax increases and youth smoking
assessments. The cigarette excise tax would be increased 25
cents per pack beginning October 1, 2000, and the already
legislated increases would be moved to that date. In addition,
beginning in 2004, tobacco companies would pay a youth smoking
assessment, at twice the estimated lifetime profit per
underage smoker each year that underaged smoking has not been
reduced by 50 percent.
Reaffirm FDA's full authority to keep cigarettes out of the
hands of children: The Administration will continue to support
full FDA authority to regulate tobacco products in order to
halt advertising targeted at children, and to curb minors'
access to tobacco products.
Support efforts to prevent youth smoking: To support tobacco
prevention in States and local communities, the budget
includes $39 million for FDA tobacco enforcement activities.
The budget also provides $106 million for the Centers for
Disease Control and Prevention's (CDC) to
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bacco control efforts--a tenfold increase from $10.3 million
in 1993 to $106 million in 2001.
Require States to cover smoking cessation drugs under
Medicaid: The budget includes a proposal to require States to
cover prescription and non-prescription smoking cessation
drugs for Medicaid beneficiaries at the standard Federal
match. This proposal furthers the Administration's goal of
reducing the incidence of smoking-related diseases and ensures
that Medicaid beneficiaries have access to important smoking
cessation drugs.
Protect farmers and farming communities: The Administration
fully supports the $5 billion settlement to compensate tobacco
farmers, which was agreed to by the States and the industry in
1998, and is committed, as Federal litigation proceeds to
judgement or settlement, to ensuring funds are set aside for
tobacco farmers and their communities.
Dedicate tobacco recoveries to strengthening Medicare and
Social Security, farmers, veterans, and other Federal health
programs: Tobacco-related health problems have cost Medicare
and other Federal programs billions of dollars each year. To
recover these losses, the Department of Justice has brought
suit against the tobacco industry, and the budget contains
ample resources to pay the necessary legal costs. The
Administration will propose that, in addition to any remedies
imposed by the court to advance public health, $5 billion of
any judgement or settlement be used to assist tobacco farmers
and their communities, and to support the Department of
Veterans Affairs health programs and other Federal health
programs. One hundred percent of the remaining recoveries
would be dedicated to the Medicare and Social Security trust
funds, two-thirds to Medicare and one-third to Social
Security, to enhance the security of these programs for future
generations.
Preventing HIV Transmission: The budget includes an additional $50
million in community-based prevention interventions and education in the
United States to reduce the rate of new HIV infections through expanded
community prevention planning, with a special emphasis on racial and
ethnic minorities, women, injection drug users and their partners, and
young gay men. The budget also proposes a $125 million increase in Ryan
White treatment grants to increase access to quality medical care for
individuals living with HIV/AIDS including expanded access to life
saving pharmaceuticals. The budget continues the initiative to reduce
the spread of HIV/AIDS in racial and ethnic minority communities.
The Administration secured, in 2000, $100 million to begin a Global
HIV/AIDS initiative to help prevent the spread of HIV and AIDS in the
developing world. This year, the budget will invest a total of $342
million in HIV prevention around the world to build on that commitment,
adding $100 million to last year's allocation. Funds will be targeted to
the countries where the disease is most widespread and where our efforts
will have the greatest impact. Activities include: increasing primary
prevention efforts; providing care and treatment for individuals
infected with HIV; caring for children orphaned by AIDS; strengthening
the public health infrastructure; assisting armed forces in preventing
the spread of HIV within military organizations; and, initiating HIV
prevention programs in the workplace.
Enhancing Food Safety: The budget proposes a $68 million, or 19-
percent, increase over the 2000 level for the Administration's
interagency food safety initiative (FSI), for a total of $422 million in
FSI funding in 2001. This includes an additional $30 million to: allow
the FDA to conduct annual inspections of 100 percent of high-risk food
establishments; expand the number of imported food exams; complete the
National Antimicrobial Resistance Monitoring System; increase laboratory
testing capacity; improve research and risk assessment (particularly in
the areas of antimicrobial resistance in animals and animal feeds and in
the development of methods for predicting risk associated with foodborne
pathogens); and, expand surveillance and education activities. A $10
million increase would allow CDC to enhance the national network of
public health laboratories capable of subtyping foodborne pathogen DNA
for rapid response to disease outbreaks (PulseNet), as well as enhance
public education efforts. USDA's
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$28 million increase would extend risk assessment modeling and data
collection to include the pre-harvest phase for all foods, expand
education activities, and support bioscience research to develop
effective methods of handling and treating agricultural products to
minimize microbial contamination. Funding is also included for HHS and
USDA to begin implementation of the Egg Safety Action Plan, adopted by
the President's Council on Food Safety in December 1999.
Preventing Infectious Diseases: This initiative will dedicate an
additional $20 million, a 45-percent increase over the 2000 funding
level, to create a consistent national architecture for infectious
disease surveillance to link public health clinics, hospitals, and
health care providers. A standardized national system for collecting and
analyzing epidemiological data on infectious diseases will also help
address problems, such as West Nile-like encephalitis and influenza.
Determining the Environmental Causes of Disease, Including Breast and
Prostate Cancer: This initiative will invest an additional $10 million,
a 56-percent increase over the 2000 funding level, for CDC's
environmental health laboratory to: evaluate the exposure of men, women,
and children to toxic substances that may cause breast and cervical
cancer, birth defects, or other diseases; develop new and improved
methods of measuring human exposure to toxic substances; and, assist
State and local public health officials to rapidly evaluate the impact
of public health emergencies, such as chemical spills and groundwater
contamination, on local residents.
Increasing Family Planning Efforts Nationwide: The budget will invest
an additional $35 million, a 15-percent increase over the 2000 funding
level, for grants to family planning clinics providing reproductive
health services and clinical care to roughly five million low income
clients. Family planning funding has contributed to the lowest teenage
pregnancy in 20 years, the decline in teenage sexual activity, and the
prevention of over a million unintended pregnancies each year by
improving the delivery of comprehensive reproductive health services. In
addition, these clinics provide STD and cancer screening and prevention;
HIV prevention, education and counseling; educational programs that
encourage adolescents to postpone sexual activity; access to
contraceptive counseling and services as well as access to effective
contraceptives for those in need; and, partnerships with other community
based providers to conduct outreach to adolescents at risk. The budget
also continues the requirement that health plans in FEHBP offer the full
range of contraceptive options.
Promoting Childhood Immunizations: The budget proposes almost $1
billion for the childhood immunizations initiative, including the
Vaccines for Children program and CDC's discretionary immunization
program. The incidence of vaccine-preventable diseases among children,
such as diphtheria, tetanus, measles, and polio, is at an all-time low.
Eradicating Global Polio: The budget includes funds in CDC and the
U.S. Agency for International Development to continue efforts to
eradicate polio globally, and provides an additional $15 million through
CDC in 2000 to expedite and intensify global polio eradication
activities in those countries where polio still exists.
Increasing Access to Cancer Clinical Trials Through a Demonstration
for Medicare Beneficiaries: The budget increases access to cutting-edge
cancer treatments by establishing a $750 million demonstration program.
Medicare beneficiaries who participate in certain cancer clinical trials
will have their routine patient care costs reimbursed by the Federal
Government.
Expanding Substance Abuse Activities: The budget includes an $82
million increase for the prevention and treatment of substance abuse, a
50-percent increase from the 1993 enacted level. These new funds
continue the Administration's commitment to expand substance abuse
treatment for thousands of under-served Americans. To help communities
address gaps in substance abuse services for emerging areas of need, the
budget proposes an additional $54 million for Targeted Capacity
Expansion grants, approximately $10 million of which will be used for
services to ex-offenders, complementing similar proposals in the
Departments of Justice and Labor budgets. With this increase and an
additional $31 million in funding for the Substance Abuse Block
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Grant, the budget will provide treatment for over 15,000 additional
individuals. This additional $97 million is funded through a combination
of new resources and redirecting existing resources. In addition, in
January 2001, the FEHBP's benefit structure will, for the first time,
provide for parity in the provision of benefits for mental health and
substance abuse, which have long been given less favorable treatment by
the health care industry.
Increasing Federal Support for Improving the Mental Health of All
Americans: According to the December 1999 Surgeon General's Report on
Mental Health, one in five Americans is living with a mental health
disorder. This report states that the fundamental components of
effective service delivery are broadly agreed upon, but in short supply.
The budget provides $731 million, an increase of $100 million for mental
health services, a $349 million, 90-percent increase from 1993. This
includes a $60 million increase for the Mental Health Block Grant, which
provides integral support to States for services for people with severe
mental illnesses. The budget also proposes $30 million for new Targeted
Capacity Expansion grants to assist those with mental illnesses that the
Mental Health Block Grant is not authorized to serve.
Improving Asthma Treatment for Low-Income Children: The budget
proposes $100 million in demonstration grants to States to 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. This program serves as an example of how
core entitlement programs can help to accomplish critical public health
goals--keeping children with asthma out of emergency rooms through
appropriate environmental and pharmaceutical disease management.
Supporting a Strong FDA: The budget proposes an increase of 13
percent, or $163 million, over the 2000 program level to ensure the
timely review of important drugs, medical devices, and food additives;
expand inspection coverage of facilities under their jurisdiction; and,
improve the quality of information on injuries and medical errors
associated with FDA-regulated products.
Improving the Public Health's Response to the Threat of Bioterrorism:
The budget proposes an increase of $18.5 million, seven percent after
reductions are taken for one-time activities, for medical and public
health response and preparedness related to potential terrorist use of
biological and chemical weapons. The proposed increase would support 25
new local health care response systems for a total of 97 systems by the
end of 2001. These activities are part of a broader multi-agency effort
to address counter-terrorism.
Promoting Full Participation in the Women, Infants, and Children (WIC)
Program: Last year, WIC reached over 7.3 million low-income women,
infants, and children, providing vouchers for nutritional food packages,
nutrition education and counseling, and health and immunization
referrals. Due in large part to expansion during this Administration,
funding has grown by over 40 percent, and the program now helps nearly
half of America's infants. Funding for 2000 is sufficient to serve 7.4
million women, infants, and children. This budget proposes $4.1 billion
to serve 7.5 million people by the end of 2001 in order to fulfill the
President's goal of full participation, making sure that all who are
eligible may take part in WIC.
Providing Quality Health Care to Native Americans: The budget proposes
an investment of $2.6 billion, an increase of $230 million, or 10
percent, over the 2000 funding level, that reflects a five-pronged
funding strategy for the Indian Health Service (IHS) (see Chapter 7,
``Strengthening the American Community''). This initiative includes new
efforts to: expand preventive services designed to reduce the need for
acute medical care; expand patient access to clinical services and
treatment to help decrease health disparities; improve emergency medical
services in remote locations common on American Indian and Alaska Native
reservations; address the environmental conditions in American Indian
and Alaska Native homes and communities by constructing safer water and
waste disposal facilities; expand programs that provide substance abuse
treatment and mental health services; enhance surveillance capabilities;
provide preventive and corrective dental care and water fluoridation to
reduce tooth loss; maintain, improve, and construct IHS' health delivery
infrastruc
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ture; and, help meet the IHS' Government Performance and Results Act
goals of providing an additional 20,000 screening breast cancer
mammographies, increasing access to dental care to an additional 25,000
patients, and enabling 25 new community-based public health nurses to
provide an additional 25,000 home-based counseling, monitoring, and case
management services.
Caring for Veterans: Building on its commitment to veterans, the
Administration proposes $20.9 billion for the Department of Veterans
Affairs medical care system, an increase of $1.4 billion. This funding,
which includes $0.6 billion in collections, will ensure that the
Department can aggressively reduce waiting times, provide high quality
care, and test and treat Hepatitis C.
The budget provides for the full implementation of expanded benefits
authorized by the recently passed Millennium Bill including: expanded
nursing home care for the most disabled veterans and coverage of
emergency care at non-VA facilities for certain enrolled veterans.
Ensuring the Fiscal Integrity of the Medicare and Medicaid Programs
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 to further reduce Medicare fraud, abuse, and overpayment. 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 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.
The budget also proposes a new Medicare contractor oversight
initiative. This initiative will invest $48 million in a comprehensive
program to improve Medicare contractor internal controls and financial
accounting, enhance Federal performance measuring and monitoring, and
establish a structure for overall Federal oversight. The initiative will
fund additional contractor staff to establish and implement financial
controls. The initiative will also develop new evaluation protocols and
management information systems to assess contractor performance. The
budget also funds new staff to monitor and oversee contractor operations
and financial management and allows HCFA to contract out to test and
evaluate contractors internal controls. This initiative was developed in
response to a GAO report critical of a number of inappropriate practices
by some Medicare contractors. In a closely related effort, the budget
invests $7 million to implement a new integrated financial ledger system
at the contractors to improve financial accountability.
Maintaining Fiscal Responsibility in Medicaid: The budget includes
four provisions that will strengthen fiscal integrity and accountability
in the Medicaid program:
Ensure appropriate allocation of Medicaid costs: 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
and retains State flexibility in the use of TANF block grant
funds.
Strengthen HHS' authority to enforce compliance with Medicaid
requirements: Separately, the budget also gives the Secretary
of Health and Human Services modest new enforcement authority
when States fail to comply in a non-substantial manner with
Federal requirements.
Improve Medicaid payment for prescription drugs: The Medicaid
rebate statute currently requires brand-name drug
manufacturers to pay an additional dollar-for-dollar rebate to
the Medicaid program if they increase the prices of their
brand-name drugs in excess of the Consumer Price Index (CPI-
U). This same requirement does not apply to generic drugs.
However, the Administration has found that some generic drug
prices have increased rapidly in the past few years. The
budget proposes
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to extend to generic drugs the same CPI-U adjustment to the
Medicaid rebate that currently applies to brand-name drugs.
Share the Medicaid prescription drug average manufacturer
price (AMP) with States: HCFA has found that prescription drug
companies often inflate the prices charged to States on
prescription drugs covered by the Medicaid prescription drug
program. The prices are inflated relative to the AMP, a
measure that must be reported by drug companies to HCFA but
may not be shared with States. Since many States use other
less accurate information made to set Medicaid reimbursement
rates, they often overpay for prescription drugs. The budget
proposes to allow HCFA to share the AMP with States so that
States can use this data to more accurately set Medicaid drug
reimbursement rates.