Obama’s FY 2016 Proposed Budget Gives to HHS, Takes From Hospitals

The Obama Administration released its budget proposal for fiscal year (FY) 2016, calling it “the nation’s first open sourced budget.” According to an overview provided by the Office of Management and Budget (OMB), the budget will provide a deficit reduction of $1.8 trillion, which the OMB attributes “primarily from reforms to health programs, our tax code, and immigration.”

The FY 2016 proposed budget builds on President Obama’s 2015 State of the Union address, which discussed health care-related successes in 2014 and health issues that still need to be addressed. The President’s speech, which included praise for Ebola workers, a push for precision medicine, and acknowledgement of the success of the ACA, shares much of the same framework as the budget.

Affordable Care Act

The budget prioritizes the support of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), including support for the Health Insurance Marketplace, premium tax subsidies, and the ACA’s Medicaid expansion. President Obama’s budget message praised the ACA, calling it progress toward “ensuring that every American has the peace of mind that comes with quality, affordable health insurance.” He explained that the ACA has put the United States “on a more sustainable fiscal path by slowing the growth of health care costs,” and touted the budget’s “additional reforms and cost saving proposals to continue encouraging high-quality and efficient health care.”

Health Innovation

The FY 2016 budget provides a 6 percent increase for research and development. The budget provides for investments in biomedical research—like the BRAIN initiative, which is developing tools and technologies to offer new insight into diseases like Alzheimer’s, and Precision Medicine, which can improve health outcomes and better treat diseases.

Infectious Diseases

The budget includes funding increases for global health challenges, including the eradication of polio, and creates a new Impact Fund for targeted global HIV/AIDS efforts. It also provides resources to support the Global Health Security Agenda. Domestically, the budget increases preparedness funding to ensure effective and efficient responses to potential future disease outbreaks in the U.S. and invests in state implementation plans to address the domestic HIV epidemic.

HHS Funding

HHS Secretary Sylvia Burwell announced that the President is requesting a $4.8 billion increase in HHS’ discretionary budget authority, for a total of $83.8 billion. HHS highlighted health-related budget inclusions, such as:

  • serving approximately 28.6 million patients in FY 2016 at more than 9,000 health center sites in medically underserved communities throughout the country;
  • making strategic investments in our nation’s health care workforce to ensure rural communities and other underserved populations have access to doctors and other providers;
  • reforming health care delivery by finding better ways to deliver care, pay providers, and distribute information;
  • reducing the prevalence and impact of opioid use disorders, including heroin abuse, by investing in a new, aggressive, multi-pronged initiative;
  • accelerating progress in scientific and public health efforts to detect, prevent, and control illness and death related to antibiotic-resistant infections; and
  • improving the Medicare Appeals process to increase adjudication capacity and implement new strategies to alleviate the current backlog.

HHS provided a “Budget in Brief” document to explain the provisions in the FY 2016 budget proposal that affect the department.

Deficit Reduction

According to the Administration, new investments in the FY 2016 budget “are paid for with smart reforms across a range of programs,” which is “achieved primarily by focusing on the key drivers of our Budget challenges: health care cost growth and inadequate revenue levels in the face of an aging population.” The proposed budget “includes $400 billion in health savings that build on the Affordable Care Act to help maintain slower cost growth while improving health care quality,” and the Administration claims that the health savings included in the budget “grow over time—raising about $1 trillion in the second decade, and extending the Medicare Hospital Insurance trust fund solvency.”


Republicans denounced the Administration’s budget proposal. Senate Majority Leader Mitch McConnell (R-Ky) said that the proposal is “another top-down, backward-looking document that caters to powerful political bosses on the Left and never balances—ever.” House Speaker John Boehner (R-Ohio) echoed McConnell, saying, “Like the president’s previous budgets, this plan never balances—ever.” He promised that the GOP’s FY 2016 budget proposal “will be about the future.” Similarly, House Majority Leader Kevin McCarthy (R-Cal) accused the Administration budget of not being a serious proposal.

Criticism also came from less partisan sources. The American Hospital Association (AHA) criticized the budget for proposing “cuts that diminish our nation’s health care infrastructure.” AHA President and CEO Rich Umbdenstock released a statement claiming that “many items in today’s proposal would seriously challenge hospitals’ ability to keep the promise of maintaining access to quality health care services.” Umbdenstock did, however, praise the Administration for its “willingness to explore structural reforms to the Medicare program” and its “proposal to replace the remaining Medicare sequestration cuts.”

“Open Source”

In a blog post, the White House explained that its goal with the budget proposal is to allow “as many members of the American public as possible to review the President’s proposals, and have clear opportunities to provide feedback.” To that end, the budget proposal was made available in its entirety on blogging platform Medium, and released all of the data in the FY 2016 budget in an easy, machine-readable format on GitHub, a website for hosting open-source projects.