Fact Sheets

Fact Sheet: Impact of the President’s 2021 Budget on Health

Federal Budget
Health
Nutrition

On February 10, 2020, President Trump released his Fiscal Year 2021 (FY21) budget proposal to Congress. The FY21 budget request totals $4.8 trillion for the next fiscal year and includes cuts to programs that benefit low-income children and families, including dramatic cuts to mandatory health programs such as Medicaid and the Affordable Care Act (ACA). The President proposes $94.5 billion in discretionary budget authority and $1.3 trillion in mandatory funding for the Department of Health and Human Services (HHS) and its various sub-agencies.

This factsheet details the administration’s harmful policy proposals for child health as well as funding requests for the following HHS divisions in the President’s FY21 budget proposal:

  • The Center for Medicare and Medicaid Services (CMS)
  • Centers for Disease Control and Prevention (CDC)
  • Food and Drug Administration (FDA)
  • Health Resources and Services Administration (HRSA)
  • Indian Health Service (IHS)
  • Substance Abuse and Mental Health Services Administration (SAMHSA)

Cuts to Medicaid

This proposal severely cuts Medicaid funding. The budget proposal includes gross Medicaid and the Children’s Health Insurance Program (CHIP) funding cuts of $920 billion over the next ten years. To do so, the proposal calls for the implementation of block grants and per capita caps for Medicaid funding that would reduce access, benefits, and services available to recipients. Currently, almost 38 million children, including children with disabilities and complex medical conditions, are covered by Medicaid, and CHIP covers nine million children. Cuts, caps, block grants, and other deviations in the funding system would imperil their coverage and care.

Bureaucratic Threats to Medicaid and CHIP Coverage and Enrollment

Enrollment for children:

Like the 2020 budget, this year’s budget proposal would allow states to continue to give Medicaid to individuals during the “reasonable opportunity period” before proving their citizenship to immigration eligibility upon application to the program but would end federal funding for that coverage while individuals document their status. Even when eligibility is established, states would not be repaid for eligible coverage provided during that time. This would continue to reduce coverage rates for children and their parents as well as reduce state budgets and potentially provider reimbursement. Along with the Administration’s public charge rule, this policy would hurt immigrant children, their parents, and the children of immigrants.

Limits continuous eligibility:

This year’s proposal again would allow states to “conduct more frequent eligibility redeterminations” for Medicaid recipients, including children. States can provide up to twelve months of continuous eligibility for Medicaid and CHIP, allowing children and families to remain covered for one full year after enrollment. When a child is covered for one entire year, it reduces the impact of churn and keeps a child covered without administrative paperwork and red tape. The budget proposal also references an upcoming Proposed Rule, titled “Strengthening the Program Integrity of the Medicaid Eligibility Determination Process” that would permit states to make these more frequent eligibility determinations and add other reforms that will make enrolling and maintain coverage more difficult for eligible kids and families.

Rejects Required Non-Emergency Medical Transportation While Increasing the Medicaid Co-payments for Non-Emergency Use of Emergency Department:

The budget proposal commits to use regulatory authority to make optional the long-standing Medicaid provision that mandates Non-Emergency Medicaid Transportation to all Medicaid beneficiaries. While at the same time, the proposal seeks to charge higher co-pays for non-emergency use of the emergency department. These policy changes are both dangerous to families and will harm low-income people.

Work Requirements:

The budget continues the administration’s attempts to include work requirements within the Medicaid program and promotes its use within states 1115 waivers. This policy reduces access to coverage for many hard-working parents and can also decrease their children’s enrollment in Medicaid or CHIP as their parents face unnecessary paperwork burdens.

A positive:

The proposal makes a positive change in policy for youth in the justice system who receive CHIP. It would align with the SUPPORT Act, which prohibits states from terminating Medicaid eligibility for an individual under age 21 or former foster care youth up to age 26 while incarcerated for the first six months and requires states to redetermine eligibility prior to release without requiring a new application and restore coverage upon release. The budget proposal allows the same suspension rather than termination of coverage for youth who receive CHIP while they are in an institution. This helps young people stay on needed medicine and receive health services immediately upon release and without interruption in care.

FY21 Funding for HHS Agencies:

  • The Centers for Disease Control and Prevention (CDC) would receive $11.1 billion for FY21, a cut of $742 million, or 6.3 percent.
  • The Food and Drug Administration (FDA) would receive $6.2 billion for FY21, an increase of $265 million, or 4 percent.
  • The Health Resources and Services Administration (HRSA) would receive $11.15 billion for FY21, a cut of $705 million, or 5.9 percent.
  • The Indian Health Service (IHS) would receive $6.2 billion in FY21, an increase of $185 million, or 3 percent.
  • The Substance Abuse and Mental Health Services Administration (SAMHSA) would receive $5.7 billion in FY21, a cut of $142 million, or 3 percent.

Centers for Disease Control and Prevention (CDC)

The Centers for Disease Control and Prevention (CDC) would receive $11.1 billion in total discretionary budget authority and mandatory spending in FY21 under the President’s budget proposal. This funding level represents a cut of $742 million, or 6.3 percent, across mandatory and discretionary spending from FY20 levels. Cuts within the CDC span essentially every area under the agency’s jurisdiction, including programs that address public health concerns for children and families. The budget would also eliminate hundreds of millions of dollars in funding to various public health programs and consolidate them into a block grant with severely limited funding. The budget proposal does make some needed investments in public health priorities for children, but these modest increases would not offset the major cuts in other areas. Some areas serving children and families that receive increased funding under the proposal include vaccines for children, childhood lead poisoning, and maternal and infant health. As a whole, the President’s FY21 budget proposal poses a risk to the health of America’s children by shortchanging vital CDC programs.

America’s Health Block Grant

As in past years, the President’s FY21 budget once again proposes eliminating and consolidating numerous CDC chronic disease prevention and health promotion programs into a single, $350 million block grant called the “America’s Health Block Grant.” Some programs slated for elimination under the block grant include important initiatives for child health, including diabetes prevention and treatment, racial and ethnic approaches to community health, nutrition and physical activity promotion, breastfeeding, early childcare, and tobacco prevention. While the budget allows for America’s Health Block Grant money to be used for these purposes, the open-ended nature of the block grant provides little guidance or oversight on how the money would actually be spent. Furthermore, the $350 million provided for the block grant represents a significant cut across all programs included from their FY20 levels.

Some top takeaways regarding children and families from the President’s FY21 budget request for the CDC include:

Programs Eliminated: (The budget proposes that money from the America’s Health Block Grant be used for these activities.)

  • Hospitals Promoting Breastfeeding: Eliminated– The program received $9 million in FY20.
  • National Early Child Care Collaboratives: Eliminated– The program received $4 million in FY20.
  • National Tobacco Control Program: Eliminated– The program received $230 million in FY20.
  • Nutrition, Physical Activity, and Obesity: Eliminated– The program received $56.9 million in FY20.

Programs Cut:

  • Agency for Toxic Substances and Disease Registry: $62 million – A $14.7 million, or 19.2 percent, cut from FY20 levels
  • Birth Defects, Developmental Disabilities, Disability and Health Programs: $112.3 million – A $48.6 million, or 30.2 percent cut from FY20 levels
  • CDC School Health Programs: $15.37 million – A $290,000, or .02 percent, cut from FY20 levels
  • National Asthma Control Program: $25 million – A $5 million, or 16.7 percent, cut from FY20 levels

Programs with Increased Funding or flat funding:

  • Childhood Lead Poisoning Prevention:$37 million – flat funding from FY20
  • Safe Motherhood and Infant Health Program: $70 million – A $12 million, or 20.7 percent, increase from FY20 levels
    • The $12 million increase is a result of a doubling of funding for the Maternal Mortality Review Committee from $12 million in FY20 to $24 million in FY21
  • Vaccines for Children: $4.95 billion – A $533.7 million, or 12.1 percent, increase from FY20

Food and Drug Administration (FDA)

The FDA would receive $6.2 billion for FY21, an increase of $265 million, or 4 percent.

E-cigarettes and vaping are among the most dangerous threats facing children today. Use of e-cigarettes by youth has escalated rapidly in recent years fueled by youth attraction to flavored products, placing a new generation at risk of nicotine addiction and tobacco use.  Between 2017 and 2019, e-cigarette use more than doubled among high school students (from 11.7 percent to 27.5 percent) and tripled among middle school students (from 3.3 percent to 10.5 percent). More than 5.3 million middle and high school students used e-cigarettes in 2019, an alarming increase of more than 3 million in two years. Tobacco use remains the leading preventable cause of death in the United States and is responsible for approximately $170 billion in health care costs each year. 

Despite this threat, early in 2020 the administration refused to ban all flavored e-cigarette products from the market, as it had earlier promised to do, and now its budget breaks no new ground on preventing youth e-cigarette use. The only major change it proposes, with no details or reference to the change in its congressional justification, is to move the tobacco regulation duties from FDA into a new agency. This untested change to move the tobacco regulation expertise that currently resides at FDA will not change outcomes for youth use of tobacco products and comes at a critical time for tobacco product regulation. Instead, the administration should do what we know will help reduce youth use – prohibit all flavored tobacco products.

Health Resources and Services Administration (HRSA)

HRSA would receive a $705 million cut under the president’s budget. A number of important programs are eliminated in the budget request, including providing emergency medical services to children and services for children with autism and other developmental disabilities.

Programs eliminated:

  • Autism and Other Developmental Disorders: Eliminated – The program received $52 million in FY20
  • Children’s Hospitals Graduate Medical Education (CHGME): Eliminated – The program received $340 million in FY20
    • The budget request proposes to consolidate the federal graduate medical education spending from Medicare, Medicaid, and the Children’s Hospital Graduate Medical education program into a single grant program for teaching hospitals equal to the sum of Medicare and Medicaid’s 2017 payments for graduate medical education, plus 2018 spending on children’s hospitals graduate medical education, and adjusted for inflation. The Secretary would have authority to modify the amounts distributed based on the proportion of residents training in priority specialties or programs and based on other criteria identified by the Secretary, including health care professional shortages and educational priorities.
  • Emergency Medical Services for Children: Eliminated – The program received $22 million in FY20
  • Heritable Disorders in Newborns and Children: Eliminated – The program received $18 million in FY20

Programs cut or level-funded:

  • Cord Blood Stem Cell Bank: $8 million – A $9 million, or 52.9 percent cut from FY20 levels
  • Early Hearing Detection and Intervention: $18 million – flat funded from FY20 levels
  • Early Intervention – IDEA Part C: $201 million – flat funded from FY20 levels
  • Healthy Start: – $126 million – flat funded from FY20 levels
  • Pediatric Mental Healthcare Access Grants: $10 million – flat funded from FY20 levels
  • Poison Control Centers: $23 million – flat funded from FY20 levels
  • Screening and Treatment for Maternal Depression: $5 million – flat funded from FY20 levels

Programs with Increased Funding:

  • Community Health Centers: $5.7 billion – A $102 million, or 1.8 percent, increase over FY20 levels
    • Approximately one-third of patients are children (age 17 and younger). Health centers provided primary care for one in nine children nationwide. (HRSA Justification – page 64)
  • Maternal and Child Health Block Grant: $761 million – A $73 million, or 10.6 percent increase from FY20 levels
    • This increase comes at the expense of $92 million in cuts to Autism and Other Developmental Disorders, Emergency Services for Children, and Heritable Disorders which the Maternal and Child Health programs will have to support.

Indian Health Service (IHS)

The president’s FY2021 budget proposal requests $6.2 billion to fund the Indian Health Service (IHS), which represents a $185 million, or three percent, increase over FY2020 spending levels. Several programs important to the well-being of children are cut in this budget. There are several increases, but these are tempered by cuts elsewhere in the president’s budget request that would negatively impact children.

According to the administration’s own language in its budget request, alcohol and substance use are some of the largest public health and safety threats facing American Indian and Alaska Native (AI/AN) individuals, families, and communities, yet the budget requests a $9.9 million cut to alcohol and substance abuse funding in FY21. The budget cuts preventive services by $36 million, including cuts to public health nursing and the consolidation of Health Education, Community Health Representatives, and the Community Health Aide Program into a new Community Health program.

Programs cut:

  • Alcohol and Substance Abuse: $235.7 million – A $9.9 million, or 4 percent, cut from FY20 levels
  • Preventive Services: $141.6 million – A $36 million, or 20.2 percent, cut from FY20 levels

Programs with increased funding:

  • Maternal health: $5 million – The FY21 budget proposal creates this program
  • Mental health programs: $128.2 million – A $19.3 million, or 17.7 percent, increase over FY20 levels

Substance Abuse and Mental Health Services Administration (SAMHSA):

SAMHSA would be cut by $142 million under the president’s FY2021 budget proposal, to a funding level of $5.7 billion. SAMHSA funds a number of programs vital to children and their families, including in mental health, substance use, suicide prevention, and maternal health. Many programs relevant to children would be flat funded in the president’s budget.

Programs flat-funded:

  • Children and Families (Substance Use): $29.6 million
  • Children and Family Programs (Mental Health): $7.2 million
  • Children’s Mental Health Initiative: $125 million
  • Community Mental Health Services for Children with Serious Emotional Disturbance: $125 million
  • Garrett Lee Smith State and Campus Suicide Programs: $41.9 million
  • Infant and Early Childhood Mental Health: $7 million
  • National Child Traumatic Stress Initiative: $68.9 million
  • Project AWARE and Mental Health Awareness Training: $125 million
  • Project LAUNCH: $23.6 million
  • Residential Treatment Programs for Pregnant and Postpartum Women: $31.9 million
  • Sober Truth on Preventing Underage Drinking: $9 million
  • Substance Abuse Prevention and Treatment Block Grant: $1.9 billion
  • Substance Abuse Treatment Services for Children and Adolescents: $29.6 million
  • Tribal Behavioral Health Grants: $40 million