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Friday, May 31, 2013

Centers for Medicare & Medicaid Services: President’s FY2014 Budget

Alison Mitchell, Coordinator Analyst in Health Care Financing

Federal law requires the President to submit an annual budget to Congress no later than the first Monday in February. The budget informs Congress of the President’s overall federal fiscal policy based on proposed spending levels, revenues, and deficit (or surplus) levels. The budget request lays out the President’s relative priorities for federal programs, such as how much should be spent on defense, education, health, and other federal programs. The President’s budget may also include legislative proposals for spending and tax policy changes. While the President is not required to propose legislative changes for those parts of the budget that are governed by permanent law (i.e., mandatory spending), such changes are generally included in the budget. President Obama submitted his FY2014 budget to Congress on April 10, 2013.

The Centers for Medicare & Medicaid Services (CMS) is the division of the Department of Health and Human Services (HHS) that is responsible for administering Medicare, Medicaid, and the State Children’s Health Insurance Program (CHIP), among other activities. CMS is the largest purchaser of health care in the United States, with expenditures from CMS programs accounting for roughly one-third of the nation’s health expenditures. In FY2014, it is estimated that one-inthree Americans will be provided coverage through Medicare, Medicaid, and CHIP. CMS is also responsible for implementing many of the private health insurance provisions in the Patient Protection and Affordable Care Act (ACA, P.L. 111-148).

The CMS budget includes a mixture of both mandatory and discretionary spending. However, the vast majority of the CMS budget is mandatory spending, such as Medicare benefits and grants to states for Medicaid.

For budgetary purposes, CMS is divided into the following sections: Medicare, Medicaid, CHIP, program integrity, state grants and demonstrations, private health insurance protections and programs, the Center for Medicare and Medicaid Innovation, and program management. The President’s FY2014 budget contains a number of legislative proposals that would affect the CMS budget. Some are program expansions, and others are designed to reduce federal spending.

The President’s proposed budget for CMS would be $854.3 billion in net mandatory and discretionary outlays for FY2014. This would be an increase of $60.2 billion, or 7.6%, over the net outlays for FY2013. This estimate includes the cost of the Medicare physician payment adjustment ($15.4 billion), the estimated savings of the legislative proposals (-$5.8 billion), and the estimated savings from program integrity investments (-$0.1 billion).

This report summarizes the President’s budget estimates for each section of the CMS budget. Then, for each legislative proposal included in the President’s budget, this report provides a description of current law and the President’s proposal. The explanations of the President’s legislative proposals are grouped by the following program areas: Medicare, Medicaid, program integrity, private health insurance, and program management. A table summarizing the estimated costs or savings for each legislative proposal is at the end of each of these sections.

Date of Report: May 15, 2013
Number of Pages: 67
Order Number: R43073
Price: $29.95

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