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Federal Budget Update: What to Expect in FY 2015 and Beyond
NCPHA Spring ConferenceRaleigh, NCMay 13, 2014
Federal Funds Information for States
www.ffis.org
Overview
The federal budget and how it worksWhat to expect this year
– FY 2015 appropriations– Mandatory sequestration (across-the-board cuts)
Issues to watch– Deficit reduction, changes to Budget Control Act (BCA)– ACA program expirations
Where the money goes: pieces of the federal budget pie
Composition of Federal Outlays in FY 2013($ in Billions, % of Total)
Trends in state grant funding
Source: FFIS Grants Database
Federal grants going to North Carolina: per capita, 2013
Major Category Per Capita RankMedicaid $817 28Other State 512 44Local 58 39Individual/Other 346 24Total $1,733 35
What programs areas are supported by state/local grants?
Federal grants going to North Carolina: share of funding by function
What are the major health grants?
Types of grants
Mandatory
Capped Uncapped
Direct Appropriation
Annual Appropriation
Discretionary
Block Grant
Formula Grant
Categorical Grant
Formula Grant
Project Grant
Mandatory vs. discretionary health grants
Health Care Reform
Mandatory Funding Amended uncapped entitlements (Medicaid) Reauthorized capped entitlements (CHIP) Directly appropriated funding for new and existing programsDiscretionary Funding Extended authorization of existing programs Authorized new programs that must receive annual approp.
– Creative funding mechanisms (Prevention and Public Health Fund, initial direct appropriations)
What agencies have benefited from Prevention and Public Health Fund?
Focus on FY 2015: Budget Control Act (BCA) Recap
$984 billion in cuts through FY 2021 (~$109 billion/year, half from defense, half from nondefense)
FY 2013 sequestration occurred on March 1, 2013– “Fix” reduced cuts from $109b to $85b
Many mandatory and a few discretionary programs are exempt (special rules for some programs)
ATB cuts in FY 2013, different process for FY 2014+ Bipartisan Budget Act (BBA) provided some sequester relief
in FY 2014 and FY 2015
House, Senate, President Adhering to BBA in FY 2015
Status of FY 2015 Appropriations
House is moving appropriations bills, Senate plans to begin in mid-May– 302(b) allocations – Easy bills moving first – Aggressive timetable– Many state grants likely to be level-funded– Prediction: Labor/HHS/Education will not be among the
bills passed before October 1
How have major health grants fared?
Program ($ in millions) FY 2010 FY 2013 FY 2014 FY 2014 vs. FY 2010
Health Centers $2,190 $2,950 $3,651 67%Maternal Child Health BG 662 605 634 -4%Ryan White HIV/AIDS 2,312 2,249 2,319 0.3%Rural Health 185 131 142 -23%Substance Abuse BG 1,799 1,710 1,820 1%Mental Health BG 421 437 484 15%Immunization grants 497 469 588 18%Preventive Health BG 102 75 160 57%Public Health Emergency Preparedness 761 623 656 -14%
Budget proposals to watch
Extend Medicaid primary care payment increase Potential cuts to public health programs because
of new coverage under ACA– Refugee Assistance, Access to Recovery, State High-
Risk Pool, Section 317 Immunizations, and National Breast and Cervical Cancer Early Detection
Additional funding for substance abuse/mental health
Reductions to the Prevention and Public Health Fund
BCA still the law of the land
Amended discretionary caps enforced by sequestration Mandatory sequestration still in place
– BBA extended to FY 2023– President proposes repeal, Congress unlikely to agree– ATB percentages applied to current-law levels
Defense Nondefense
FY 2014 -9.8% -7.2%
FY 2015 -9.5% -7.3%
Mandatory programs: FY 2015 OMB sequestration estimates
Program Pre-Sequester
($ in millions)
Sequester Cut($ in millions)
Maternal, Infant, and Early Childhood Home Visiting
??? ???
ACA Health Centers (2%) $3,244 -65
Affordable Insurance Exchange Grants
836 -61
Money follows the person 434 -32
Prevention and Public Health Fund
1,000 -73
Social Services Block Grant 1,700 -124
Aging and Disability Resource Center
??? ???
What happens after FY 2015?
Pressure to tackle deficit diminishing, long-term issues remain
Source: CBO Budget and Economic Outlook, 2/14
House and President take different approaches to deficit reduction
Discretionary caps– President’s budget increases defense and nondefense– House cuts nondefense and shifts savings into defense
Mandatory programs (health care spending)– President’s budget (-$400 billion/10yrs.): Medicare changes – House (-$3 trillion/10 years): repeals ACA, converts Medicaid
into block grant, modifies Medicare Tax Policy
– President’s budget increases revenues, doesn’t include comprehensive tax reform
– House proposes revenue-neutral tax reform
Deadlines on the horizon
October 1, 2014
• Enact FY 2015 budget or pass a Continuing Resolution (CR)
• Aging and Disability Resource Centers (ADRCs)
January 1, 2015
• HHS cannot award additional exchange grants
March 15, 2015
• Raise debt limit
Deadlines on the horizon
April 1, 2015
• Medicaid Qualifying Individual and Transitional Medical Assistance
• MIECHV• ADRCs, Area
Agencies on Aging• SHIPS• Family-to-family
Sept. 30, 2015
• Health Profession Opportunity Grant
• Personal Responsibility Education Program
• Abstinence Ed.• CHIP• Community Health
Centers
Beyond
• Prevention of chronic disease in Medicaid (1/1/16)
• Money Follows the Person (9/30/16)
• DSH Cuts (10/1/16)
• CMS Innovation Center (9/30/19)
• PPHF (indefinite)
More questions than answers
FY 2015: states can expect level funding for most programs; little chance of major legislation
FY 2016: – BCA: discretionary funding increases; many open
questions Will Congress amend the caps? Up or down? Will deficit reduction be a focus? Will ACA programs be extended? The policies will stem from the politics.
