FACT SHEET | February 8, 2007

Bush Budget Proposal Shortchanges Health Programs

The Bush Administration’s budget proposal for Fiscal Year 2008, released this week, demonstrates the President’s misplaced priorities. Health care costs are rising and health coverage is increasingly difficult to obtain. Yet the President has failed to invest enough in the successful State Children’s Health Insurance Program (SCHIP) to maintain current coverage, putting many children at risk of losing care and leaving millions of other low-income children uninsured. At the same time, his budget proposes another round of deep cuts to Medicare and Medicaid totaling close to $300 billion over ten years. His budget also cuts discretionary health programs at the Department of Health and Human Services, including the National Institutes of Health, the Centers for Disease Control and Prevention, and rural programs. Unfortunately, the President’s budget proposal will cause even more distress for millions of Americans who are already anxious about the quality and affordability of health care. 

State Children’s Health Insurance Program.The President’s budget puts existing SCHIP coverage in jeopardy. His budget proposes adding only one-third of the funding necessary to maintain current coverage levels in the program, putting millions of low-income children and others at risk of losing their health insurance. Moreover, his plan would leave millions of low-income children who are eligible for the program without coverage. 

Medicare cuts.Approximately 43 million senior citizens and people with disabilities depend upon Medicare for their health care. The President proposes $76 billion in legislative and regulatory Medicare cuts over five years, and $252 billion in legislative cuts over 10 years. He also proposes to increase the number of Medicare beneficiaries subject to higher premiums in Parts B and D. By preventing the income threshold for the higher premiums from increasing to reflect inflation, more middle class beneficiaries will be affected by the higher premium, and one of the greatest strengths of the Medicare program – its universality – will erode. Moreover, the President’s budget proposal favors private managed care plans over traditional Medicare providers. His budget proposes to reduce payment updates to hospitals and other health care providers participating in the traditional fee-for-service Medicare program but maintains overpayments to HMOs and other managed care plans even though MedPAC, an independent advisory panel, has recommended their elimination. 

Medicaid cuts.More than 50 million low-income people –approximately one out of six Americans – depend on Medicaid for their health care. Just last year, the Republican-controlled Congress enacted $6.9 billion in Medicaid cuts over five years. Now the President is looking for more. The President’s budget, through legislative proposals and regulatory changes, proposes $25 billion in Medicaid cuts over five years. 

Health coverage proposals that increase costs and premiums.Almost 46 million Americans are uninsured and an additional 16 million have health coverage that does not adequately protect them from catastrophic health care expenses. But instead of offering a real solution, the President’s budget proposal would jeopardize existing employer-based coverage and push people into the individual insurance market where insurers can discriminate based on pre-existing conditions and drop coverage when people get sick. By capping the tax deduction for health insurance, and driving healthier individuals out of comprehensive health insurance plans into health savings accounts (HSAs), the President’s plan will raise costs for millions of Americans while failing to address the problems of the uninsured. 

Reduces funding for the National Institutes of Health.The National Institutes of Health (NIH) are the leading source of basic biomedical research funding and have played an essential role in improving health and extending lives. President Bush has proposed cutting funding by $743 million. 

Cuts to health professional training.The Title VII health professions training programs train health professionals to respond to the needs of special and underserved populations as well as to increase the racial and ethnic diversity of the health care workforce. But the President’s budget proposes to cut funding for health professions training and to eliminate programs related to emergency medical services for children, newborn hearing screening, and trauma care. The President would also cut the National Cord Blood Stem Cell Bank’s funding in half. 

Cuts to rural health programs.The President’s budget proposal also targets programs designed to help rural communities address their unique health care challenges. He proposes cutting rural health programs by $146 million (or 89.6 percent) from last year’s level. The President proposes terminating outreach grants, the rural and community access to emergency devices program, and rural hospital flexibility grants. 

Cuts to health promotion programs.The President proposes to cut overall funding for the Centers for Disease Control and Prevention (CDC) and again proposes eliminating the Preventive Health Bock Grants. His budget would cut funding for West Nile Virus activities by $18.6 million. 

Cuts to substance abuse and mental health programs.The President proposes cutting the Substance Abuse and Mental Health Services Administration (SAMHSA), which supports mental health programs and alcohol and other drug abuse prevention and treatment services throughout the country, by $221 million. 

Program terminations.The President also proposes to eliminate several important health programs, including the Preventive Health and Health Services Block Grant, Emergency Medical Services for Children, Universal Newborn Hearing Screening, Trauma Care, Traumatic Brain Injury, and Alzheimer’s Disease Demonstrations. 

DPC