President Joe Biden’s fiscal 2024 budget proposal asserts that, if approved, it will significantly reduce the $1.8 trillion federal budget deficit.
The $6.8 trillion budget proposal will likely enhance social expenditure and raise taxes on high-income households and corporations, increasing the deficit. Not that the Biden administration’s March 9 document will be adopted. Republicans hold a narrow majority in the House of Representatives despite Democratic control of the White House and Senate. The Biden budget proposal has many positive aspects.
Medicaid-Related Initiatives
It provides a useful framework for understanding where congressional Democrats and the Biden administration stand on spending for one of the nation’s most costly endeavors, healthcare, particularly as congressional Republicans emphasize the need for fiscal discipline as the national debt approaches $32 trillion.
Medicaid is a combined federal-state health insurance program that provides coverage for low-income and disabled adults and is a major contributor to the increase of the national debt.
A provision in the budget would maintain permanent subsidies from the 2010 Affordable Care Act, the major domestic achievement of former President Barack Obama. So far, these subsidies were meant to be transitory during the COVID-19 pandemic.
Since Congress expanded the program during the COVID-19 national health emergency, more than 20 million people acquired coverage over the past three years. The action increased the population by more than 25 percent. With the federal emergency due to expire in April, states will begin removing ineligible individuals.
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Fiscal Incentives Sustain Existing State Growth
Initially, the Affordable Care Act required states to expand Medicaid or risk losing federal funding. In contrast, the Supreme Court determined in 2012 that the requirement was unlawful.
States that have not yet expanded Medicaid are afraid that doing so could hurt enrollees seeking care and lead state budgets to swell. The most recent state to expand is North Carolina, whose legislature is led by Republicans.
According to the proposed budget, particular programs would get an additional $150 billion over a decade. This comprises Medicaid home and community-based services. Home and community-based services (HCBS) allow patients to receive assistance in their own homes or communities, rather than in institutions or other confined settings.
In addition, the Biden budget prioritizes the use of Medicaid-managed care plans, the major method of care delivery for recipients. Seventy-two percent of beneficiaries enroll in managed care companies.
Instead of withholding all Medicaid matching funds from the federal government, the Biden budget would boost enforcement of regulations that allow the Centers for Medicare and Medicaid Services to demand reimbursement from non-compliant plans. This will result in savings of $1.5 billion over the next decade, according to the Biden budget.
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