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March 30, 2022

Biden's budget proposal: Why our experts are 'cautiously optimistic'

Daily Briefing

    The White House on Monday released President Joe Biden's $5.8 trillion fiscal year (FY) 2023 budget proposal, which prioritizes mental health initiatives and future pandemic preparedness.

    Our take: 10 health policy topics—including Covid response—to watch in 2022

    Prioritizing future pandemic preparedness

    The budget proposal emphasizes the importance of future pandemic preparedness, requesting $81.7 billion in funding over the next five years to "prevent, detect, and respond to emerging biological catastrophes." This includes:

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    • $40 billion for the research, development, and manufacturing of vaccines, treatments, and tests
    • $28 billion to CDC for pandemic preparedness, including surveillance, lab capacity, and the public health workforce
    • $12.1 billion to NIH for research on vaccines and other mitigation measures
    • $1.6 billion to FDA for labs and information technology

    In addition, Biden is proposing a 26.8% funding increase for HHS in FY 2023, with a proposed $127.3 billion in discretionary funding allocated to the agency—nearly $27 billion more than the department was allotted for FY 2021.

    However, HHS Secretary Xavier Becerra called the administration's preparedness funding request "a drop in the bucket compared to what it's cost so far to deal with Covid."

    "What we need to continue to finish the job on Covid, we need immediately," Becerra said. "What we're asking for in this budget for long term preparedness is very separate."

    "We hope that we're given the chance to make those long-term investments, preparing for the long game," he added.

    Advancing mental health care

    Biden in the budget is also requesting $51.7 billion to improve the mental health system, including:

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    • $7.5 billion for workforce development and service expansion
    • $35.4 billion to improve access to mental health care for Medicaid beneficiaries
    • $3.5 billion to improves access for Medicare beneficiaries by updating fee-for-service benefits, allowing three behavioral health visits each year with no cost sharing, abolishing the 190-day lifetime limit on psychiatric hospital care, and implementing mental health parity rules
    • $275 million over 10 years for the Labor Department to enforce mental health coverage regulations at large-group health plans

    In addition, the budget proposes health insurers be required to cover mental health care with sufficient provider networks and ensure parity in coverage between behavioral health and medical benefits, Modern Healthcare reports.

    Additional health care related funding requests

    Further, the proposed budget aims to improve the public health infrastructure in various additional ways, including:

    • The establishment of a new Vaccines for Adults program that would give uninsured adults free access to vaccines purchased in bulk by the federal government, after CDC's vaccine advisory committee recommends them
    • $400 million in funding for the Title X Family Planning Program, which gives low-income individuals access to family planning and other health care services
    • Multiple investments across the FDA, CDC, National Cancer Institute, and Advanced Research Projects Agency for Health to further President Biden's Cancer Moonshot initiative, which aims to cut the U.S. cancer death rate by 50% over the next 25 years
    • $850 million to decrease new HIV cases through increased access to prevention and support services
    • $119 billion to medical care for veterans—a 32% increase—to fully fund inpatient, outpatient, mental health, and long-term care services
    • $9.1 billion—a 20% increase from 2021—to the Indian Health Service, as well as shifting the funding from discretionary to mandatory funding

    According to the New York Times, the budget recommended very few formal policy proposals for the Medicare, Medicaid, and Affordable Care Act health care programs. However, the White House still aims to implement major changes to those programs through its Build Back Better legislation—which has been held up in Congress since December 2021. Instead of itemizing and scoring those priorities, the budget mentions them and establishes a deficit-neutral reserve fund that can accommodate them, which ultimately makes it difficult to determine the package's overall impact on federal spending, the Times reports. 

    Ultimately, Biden's budget is just a proposal, and any additional funding for pandemic preparedness and other new initiatives must first obtain congressional approval—something that has proven to be a challenge in recent months, despite health experts highlighting the need for additional funding, The Hill reports. (Paavola, Becker's Hospital CFO Report, 3/28; Goldman, Modern Healthcare, 3/28; Sullivan, The Hill, 3/28; Weiland/Sanger-Katz, New York Times, 3/28)

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    Advisory Board's take

    Why we are cautiously optimistic about Biden's behavioral health proposal

    Nearly one month ago, Biden delivered his first State of the Union address. A direct aim at mental health—and the rare opportunity for bipartisan support—struck us as one of the biggest moments from the speech. This budget proposal is a clear follow-up to promises made in the State of the Union.

    We’ve heard from behavioral health leaders that this is the most momentum and alignment they’ve seen in decades—this presents a unique window of time for stakeholders across the industry to come together to improve behavioral health care. We are cautiously optimistic, but let's first into the positive details in the proposal.

    Why we are applauding Biden’s proposal

    There are some truly positive signs in Biden’s plan and budget proposal. Here are a few highlights:

    Medicaid accessibility

    Biden proposed $35.4 billion specifically to enhance mental health access for Medicaid enrollees. We know that people with Medicaid tend to have higher rates of behavioral health needs, so this targeted funding could help some of our most vulnerable patients. That said, it’s important to remember how difficult it can be to find behavioral health providers who accept Medicaid and are accepting new patients.

    Addressing workforce shortages

    We are also excited to see Biden’s focus on addressing workforce shortages in behavioral health, for which he is proposing $7.5B. In particular, Biden has indicated a willingness to invest in non-traditional providers, like community health workers and peer specialists, which is crucial to promoting behavioral health equity. We know that behavioral health is not simply about access to traditional clinical services, and these non-traditional providers can support low-income and marginalized individuals’ behavioral health by providing supportive relationships and addressing non-clinical needs that affect behavioral health.

    Low-barrier access points

    Biden’s strategy also promises to create new low-barrier access points to behavioral health and substance use providers in community-based settings—think schools and homeless shelters. This will be crucial to make sure additional investments aren’t only concentrated in white, wealthy areas.

    Why these efforts may not be enough

    We’re heartened by this increased and necessary focus on behavioral health. But there’s a real risk that the health care industry will make improvements in behavioral health access and treatment for only some folks—in particular, well-insured, wealthy, white consumers with low-acuity behavioral health needs. This may happen while deepening pre-existing disparities for the marginalized groups that already face the worst outcomes, including Black and Indigenous individuals and other people of color, those who are low-income, facing housing insecurity, and/or people with high-acuity mental health needs, among others.

    And that’s because while Biden’s initial fact sheet acknowledged the disproportionate burden of mental illness in Black and Brown communities, the plan and budget are still far from finalized legislation. There are key gaps that deserve attention, such as the need for diverse clinical trials for new treatments. We also need sustainable community partnerships that can enable early interventions to help mitigate the impact of trauma and adverse childhood experiences.

    Health care leaders have a critical role to play

    Instead of hoping for the best, we believe industry leaders need to take concrete steps now to support a vision of equitable behavioral health. At Advisory Board, we have dedicated an entire team of researchers to focus on the intersection of behavioral health and health equity—exploring what stakeholders across the industry can do now to advance equitable access, treatment, and outcomes in behavioral health. This includes a range of stakeholders, including but not limited to hospitals, health plans, pharmaceutical companies, and non-profit organizations. If you’re interested in speaking with our research team about your efforts to advance behavioral health equity, please email us at zuckermr@advisory.com

    Advisory Board’s Darby Sullivan and Andrew Mohama helped contribute to this article

    Health policy topics to watch in 2022

    The legislative, regulatory, and judicial outlook for health policy in 2022

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    The Biden administration's first year in office was unsurprisingly dominated by the Covid-19 pandemic. While Democrats in Congress were able to pass part one of President Biden’s infrastructure package, other health care priorities were largely sidelined. As we look to 2022, there are 10 key health care topics that are ripe for congressional or regulatory action. If and how Congress and the Biden administration move on those actions will have strategic implications for industry executives across the health care ecosystem.

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