In his newly-unveiled 2017 budget, President Obama has proposed little or no increase in federal funding for key senior services programs, higher consumer out-of-pocket costs for brand-name drugs and home health services under Medicare, higher Medicare premiums for upper-income seniors, and reductions in federal subsidies to Medicare Advantage managed care plans. The budget also includes many other changes in the health delivery system aimed at increasing the use of managed care though bundled payment arrangements and accountable care organizations.
It is easy to write off Obama’s proposals as little more than a wish-list of a lame-duck president facing heavy partisan headwinds on Capitol Hill. But Congress must still write a budget this year, and many of Obama’s funding requests will serve as a starting point—or perhaps a ceiling—for upcoming negotiations on funding levels for specific programs. And while some of the president’s most far-reaching Medicare reforms are unlikely to get traction in Congress, some of his proposals to hike out of-pocket costs for Medicare recipients could become law.
Most of these programs are funded through the Older Americans Act, a law whose own fate remains uncertain. Their budgets have been essentially flat throughout Obama’s presidency despite increased demand for services from an aging population and rising prices. And the president’s latest stand-pat budget doesn’t change that funding trend by much. For a nice summary of the challenges of the aging network, take a look at this paper by Anne Montgomery and Elizabeth Blair.
For example, Obama would boost funding for home delivered meals, such as Meals on Wheels, by about 3 percent. Spending for congregant meals programs would go up by barely 1 percent. Spending for preventive health services, chronic disease self-management, falls prevention, family caregiver supports, services for families of people with dementia, and the long-term care ombudsman program would be unchanged from this year.
The budget would boost some program budgets substantially—at least in percentage terms. The Lifespan respite program, which has been underfunded since its creation, would see a 50 percent funding increase, but only to $5 million. Aging and Disability Resource Centers, which provide information and other services for older adults, younger people with disabilities, and their families, would get a $2 million increase in their $6.1 million budget.
Obama’s budget also includes some creative proposals to encourage states to shift more of their Medicaid long-term care programs from nursing homes to home and community care. While many Republicans support added state flexibility, the plan is unlikely to go anywhere in Congress because, well, because Obama proposed it.
However, GOP lawmakers may accept some of Obama’s proposals to boost out of pocket costs for Medicare beneficiaries. The question is what would Obama get in trade. We’ll have to wait until next fall or winter to know the answer to that question. But one thing is certain: With the president largely on the sidelines on aging services funding, it is unlikely that programs for older adults are going to get much more money in the coming year’s budget.