President’s FY 2013 Budget Request: Implications for Healthy Aging
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President’s FY 2013 Budget Request: Implications for Healthy Aging

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February 16, 2012

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Download our table of funding levels for aging programs.

President Obama has released his budget request for FY2013. The proposal includes investments in some programs for seniors, but cuts in others.

Overall, the proposal is projected to reduce the deficit by about $3 trillion over 10 years through a balanced package of spending cuts and revenue increases. According to the Administration's estimates, deficits would fall from 8.5% of Gross Domestic Product in 2012 to 3.0% in 2022.

Older Americans Act (OAA) funding would generally be frozen, and Medicare spending would be reduced by $302.8 billion over 10 years.

The news for programs that specifically promote healthy aging is mixed.

Status Quo for CDSMP and Falls Prevention

The Administration is proposing that another $10 million from the mandatory Prevention and Public Health Fund (PPHF) be allocated to the Chronic Disease Self-Management Program (CDSMP).

Level funding of $21 million is requested for OAA Preventive Health (Title III-D), supporting evidence-based prevention programs, healthy aging information, and outreach. The Administration also proposes to continue requiring that states use this funding only for evidence-based disease prevention and health promotion programs and activities that have been demonstrated through rigorous evaluation to be effective.

The CDC Center for Injury Prevention and Control and the Unintentional Injury activities are essentially level funded for FY13, and unlike the FY12 request, no allocations from the PPHF are proposed. Therefore, it is unlikely the request includes any new funding above the current $2 million for Falls Prevention.

No R&D Investment and Prevention Fund Cut

The Administration is not requesting the restoration of the $19 million that was eliminated for OAA Program Innovations this year.

Funding for the Prevention and Public Health Fund (PPHF), created by the Affordable Care Act, would be reduced by $4.5 billion over 10 years, although it would be fully funded at $1.25 billion in FY13. NCOA has been advocating for the Fund as a means to expand evidence-based self-management such as CDSMP and Falls Prevention programs.

Reports indicate that the Congressional deal to extend the payroll tax cut, unemployment insurance, and Medicare physician payment fix includes a $5 billion cut to the PPHF (out of $15 billion over 10 years) to pay for this package. 

Reductions for Medicare and Medicaid

The President’s proposal also includes $358.5 billion in cuts to Medicare ($302.8 billion) and Medicaid ($55.7 billion) over 10 years. The reductions are similar to those the Administration proposed in September 2011 for consideration by the congressional “Supercommittee,” which was not able to reach a bipartisan deficit reduction agreement.

NCOA is particularly concerned about three proposals in the President’s budget that would shift additional costs onto Medicare beneficiaries. However, the cuts would only affect new, not current, beneficiaries, and would not occur until 2017:

  • Part B Deductible: New beneficiaries would pay a higher annual Medicare Part B up-front deductible for physician and other outpatient services. Currently $162, this fee is indexed for inflation. It would go up by $25 for new enrollees in 2017, 2019, and 2021 (a $75 total increase).

  • Home Health Copay: For the first time, new beneficiaries would pay a $100 copayment per treatment episode for home health services, unless they have been discharged from a hospital or skilled nursing facility.

  • Medigap Surcharge: New beneficiaries who buy certain first dollar Medigap supplemental insurance policies would pay a 15% additional surcharge on those policies, about $30 per month.

Out-of-pocket costs for Medicare beneficiaries as a share of income has increased from about 12% in 1997 to an estimated 19% in 2011, and they're projected to increase to 26% in 2020, assuming no changes in current law. 

Overall, Medicare households spend three times more as a percent of income on out-of-pocket for health care compared to non-Medicare households.

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