2016 Budget: Impact on Medicare and Health Care

On December 18, 2015, Congress overwhelmingly passed a combined budget and tax package, which President Obama signed into law the same day.  Among other things, this $1.8 trillion agreement prevents a government shutdown and funds the government through September 2016.  While Medicare beneficiary advocates had feared the Bill would include a number of provisions that would negatively affect Medicare beneficiaries, such provisions were not included. Some health-related provisions that are in the final package include:

• State Health Insurance Programs (SHIPs) are funded at $52 million for fiscal year 2016—this is the same level of funding as the previous fiscal year, not the drastic cut that was proposed earlier in 2015.
• The Administration for Community Living, an agency within HHS that helps older persons and people with disabilities live independently, is funded at $1.95 billion for fiscal year 2016—$36 million more than in fiscal year 2015. This amount includes $158 million for a program ($6.5 million more than the previous year) that provides support services to family caregivers.[1]
• Important Affordable Care Act (ACA) funding mechanisms, the “Cadillac Tax” and the Medical Device Tax, have been delayed for two years. The budget law reduces revenue for the ACA by $35 billion.[2] The delay of the Cadillac Tax on insurance plans with high-end benefits will cost the government at least $18 billion over the next two years.[3]
• The law limits Medicaid payments of Durable Medical Equipment (DME) to Medicare rates and instructs CMS to evaluate the efficacy of this change in payment amounts.[4] The Department of Health and Human Services estimates in the budget it submitted to Congress that this effort will save it $4.3 billion over 10 years.[5]
• The September 11th Victim Compensation Fund is funded through 2021 at $4.6 billion. The health care portion of the Zagroda Act (of which the compensation fund is one part) was extended until 2090.[6]
• The law raises National Institutes of Health (NIH) funding by $2 billion in 2016 to a total of $32.1 billion—the 6.6 percent increase in funding is the largest the agency has seen in 12 years.
• The legislation includes $350 million more in spending for Alzheimer’s research—a 60% increase over the 2015 amount.[7] By the end of 2015, an estimated 20 percent of Medicare costs will have gone towards caring for patients with Alzheimer’s.[8]