Policy analysts, Democrats and Republicans unhappy with the deal all agree: Federal health programs have dodged a budget bullet in the Washington debate over raising the national debt ceiling.
A compromise bill, passed by the Senate late Thursday, includes several cuts and limits on health spending over the next two years.
But the deal that saves health programs like Medicaid from deep cuts was approved by the Republican-led House of Representatives in April. The bill suspends the debt ceiling – the federal government’s borrowing limit – until January 1, 2025, after the next presidential election.
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Congress’s need to act to avoid an unprecedented default and its unpredictable economic consequences has leveraged House Republicans to win spending concessions from party members. Democratic Party. But in the end, the compromise bill, negotiated primarily by House Speaker Kevin McCarthy and Biden administration officials, only marginally limits health spending.
The most conservative Republicans said they resented what they saw as gifts to Democrats. “It’s a bad deal,” Representative Chip Roy (R-Texas), one of the bill’s most outspoken opponents, said at a press conference on Capitol Hill. “Nobody sent us here to borrow another $4 trillion and get absolutely nothing in return.”
Aside from spending limits, the main health-related concession the Democrats made was the recovery of about $27 billion in funds that had been allocated to covid-related programs but had not yet been spent.
Only a portion of the funds are recovered from special health related covid programs; For example, money is also being returned to the federal government from programs focused on housing and transportation.
Of the unused covid funds, according to the Congressional Budget Office, the largest cut is nearly $10 billion from the Public Health and Social Services Emergency Fund. The CDC will have to pay back $1.5 billion. But exempt from those health-related reimbursements are “priority” efforts like funding next-generation covid vaccine research; long covid study; and efforts to improve the pharmaceutical supply chain.
“The deal appears to have minimal impact on the healthcare sector,” concluded Capital Alpha Partners, a Washington-based policy strategy firm.
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That won’t happen with the House Republicans’ “Limit, Thrift, Growth Act,” their first proposal to raise the debt ceiling and slow it down – in some respects significantly. tell – the growth of federal spending. That bill would reduce the federal deficit by nearly $5 trillion over the next decade, including more than $3 trillion in cuts to domestic discretionary programs, which account for about 15% of federal spending. A portion of that 15% goes to health plans, including the National Institutes of Health, the Centers for Disease Control and Prevention, and the FDA.
The Republican bill would also impose nationwide job requirements on the Medicaid health program, a proposal that has been vehemently opposed by Democrats in Congress and the Biden administration.
Democrats argue that such requirements would not increase jobs but would instead separate those who are eligible from their health insurance for not completing the required paperwork. That happened, according to an analysis by KFF Health News, as states began cutting rolls following the end of the covid public health emergency.
However, the compromise bill doesn’t affect major federal health programs, Medicare and Medicaid – resulting in a political victory for Democrats, who prioritize protecting benefits programs. The agreement does not include new work requirements for Medicaid.
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The bill also freezes other health spending at current levels for the upcoming financial year and allows for a 1% increase next year. The House and Senate Appropriations Committees then decide exactly how to allocate funds between discretionary programs whose spending levels they oversee.
Advocacy groups have argued that even a funding freeze harms programs that provide essential services to millions of Americans. As a result, Sharon Parrott, president of the Center for Budget Freedom and Policy Priorities, said, “Overall, key national priorities will still be undercut when the real impact of inflation is be taken into account.”
Even less amusing, however, are conservatives who had hoped the debt-ceiling battle would give them a chance to make more money from federal spending.
Kevin Roberts, president of the conservative Heritage Foundation, said in a statement: “Overall, this agreement will continue America’s trajectory toward economic ruin and expansion of federal control. .
KFF Health News is a national health policy news service. This is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
