The Trump HHS Budget for Fiscal 2019

Last Monday, the Trump Administration released its FY2019 budget proposal, which the administration says will save an estimated $637 billion over 10 years by, among other strategies, eliminating or reforming several U.S. Health & Human Services agencies.

Scheduled for elimination are the Agency for Healthcare Research and Quality (with some of its elements being absorbed into the National Institutes of Health), the Community Services Block Grant, and certain health workforce programs administered through the Health Resources & Services Administration.

The budget also puts forth several healthcare policy changes, including comprehensive Medicaid reform through legislation modeled after the Graham-Cassidy-Heller-Johnson bill, which aims at restructuring Medicaid financing through block grants.

Additionally, the bill contains provisions to cut Medicare by $554 billion, with reductions to uncompensated care, graduate medical education, post-acute care, home health, and bad debt payments. 

Several changes are proposed for the 340B drug discount program, such as a new user fee on all drugs purchased by covered entities and increased authority for CMS to apply Medicare and Medicaid 340B changes in a budget-neutral manner.

The budget would also cut the Centers for Disease Control and Prevention public health funding by 12%.

Budget proposals from the executive branch at both the federal and state levels are traditionally seen as message documents reflecting the president’s or governor’s priorities. However, in Washington’s uncertain political environment, healthcare interests are reviewing the document closely since individual elements of the Trump budget can gain traction in Congress, and several of the provisions already have been proposed in separate legislation. In addition, some of the above items could appear in regulatory reforms if statute allows.