President Biden’s FY 2022 Proposed Budget Includes No Medicare Provider Cuts

June 1, 2021

President Joe Biden’s Federal fiscal year (FY) 2022 budget proposal, which was released last Friday, makes no significant cuts to hospitals or other health care providers. The proposal, a non-binding blueprint that details the President’s vision and priorities for the coming year, will serve as a tool in budget negotiations and other future legislative discussions.

While Congress is unlikely to adopt the President’s budget in its entirety and large parts of it will be dismissed, many of its proposals have a better-than-normal chance of being enacted into law because the Democrats control Congress. Congressional leaders will likely use budget reconciliation—a process by which certain expansive legislation can advance with a simple majority—to pass many of their priorities in the coming months.

Key budget elements are summarized below.

President Biden’s FY 2022 budget makes permanent expanded premium tax credits for individuals purchasing Exchange insurance coverage. While the budget does not include a public health insurance option, it supports Congressional action for one.

On the graduate medical education (GME) front, the budget includes no cuts to Medicare GME payments and proposes $350 million for the children’s hospital GME program, which funds freestanding children’s hospitals, and $119 million for the teaching health center GME program, which funds community health centers to train about 800 medical residents. The budget also proposes $268 million for nursing workforce development and $225 million for behavioral health workforce development programs—a $75 million increase from the previous year.

The budget also highlights President Biden’s American Jobs Plan proposal to invest $400 billion by raising wages and benefits for home care workers. It also reduces wait periods for individuals accessing the services and extends The Money Follows the Person Program.

In post-acute care, the budget proposes additional funding for several American Rescue Plan programs and increases funding for aging and disability resource centers. The budget also includes dedicated funding for elder justice, caregiver support, and improving care for people with Alzheimer’s disease.

On prescription drug pricing, the budget calls on Congress to pass legislation allowing Medicare to negotiate prices for certain high-cost drugs and require manufacturers to pay rebates when drug prices rise faster than inflation.

President Biden’s proposed budget ignores the dangerous cuts presented in recent White House budget proposals. GNYHA is grateful to the Biden Administration for recognizing that now is not the time for health care provider cuts given how hospitals, nursing homes, and health care workers have sacrificed throughout the COVID-19 pandemic.