This is part one of a series on health care budget cuts.
The Trump administration sent its budget – essentially its appropriation request to the Hill. While such a budget represents the administration’s wish list, in this year’s political context it may carry more weight with members of Congress who must decide by how much funding government programs receive. The portion of the budget that encompasses the U.S. Department of Health and Human Services (HHS) contains steep cuts in a variety of areas but also reflects the administration’s plans for reorganizing HHS. Because of the reorganization and lack of details in some cases, many questions remain.
Within HHS, the focus is on reducing the number of HHS agencies and operating divisions, establishing a new Administration for a Healthy American and shifting management of some functions to other agencies. The proposal addresses only discretionary spending that requires congressional appropriations and does not propose changes to mandatory spending like Medicare and Medicaid. While the president has made this proposal, Congress would still have to act.
In brief, the budget proposal would reduce funding for:
- HHS’ discretionary budget to nearly $95 billion, a $32 billion decrease amounting to a 25% reduction. In comparison, President Biden requested $130.7 billion for HHS a year ago.
- Centers for Disease Control and Prevention (CDC) by $3.58 billion and would consolidate the agency’s infections disease, opioids, viral hepatitis, sexually transmitted infections program and TB program into a single $300 million grant program. Programs that are “duplicative,” “DEI” or “simply unnecessary” would be eliminated, including the National Center for Chronic Diseases Prevention and Health Promotion, the National Center for Environmental Health and the National Center for Injury Prevention and Control. The CDC’s public health preparedness programs would also be shut down, as they “can be conducted more effectively by states,” according to the budget document.
- Health Resources and Services Administration (HRSA) by $1.73 billion and proposes eliminating multiple health workforce programs
- National Institutes of Health (NIH) by $17.96 billion and proposes consolidating NIH research into five newly defined areas.
- Agency for Healthcare Research and Quality (AHRQ) by $129 million and proposes eliminating new grants and merging the agency’s functions into the proposed HHS Office of Strategy.
- Centers for Medicare and Medicaid Services (CMS) reduced by $674 million and proposes to eliminate CMS activities related to health equity, outreach and education.
- Administration for Strategic Preparedness and Response (ASPR) by $240 million and proposes to eliminate funding for the Hospital Preparedness Program.
- Food and Drug Administration (FDA) reduced by $6.8 billion.
- Administration for Community Living would be eliminated with some of its programs shifted to other agencies including CMS and the Administration for Children and Families.
Details
National Institutes of Health (NIH)
The proposal reflects the plan to reorganize NIH’s current 27 institutes and centers into just eight is reflected in the document. This reorganization would preserve the National Institute of Allergy and Infection Diseases, National Institute of Aging, National Institute of General Medical Sciences and the National Cancer Institute. However, the proposal eliminates studying minority health, alternative medicine, nursing and global health. The remaining institutes would be folded into four new ones:
- National Institute on Body Systems
- National Institute on Neuroscience and Brain Research
- National Institute of Behavioral Health
- National Institute for Child and Women’s Health, Sensory Disorders and Communication.
Please note that on May 30, an appeals judge upheld a lower court’s ruling blocking the NIH reorganization proposal, although this ruling could be reversed.
The proposal assumes the administration will be able to implement a proposed 15% cap on indirect costs paid to support operations at institutions receiving NIH funding. A federal judge blocked this policy in April, but it continues in the court process.
The budget also reflects the administration’s priorities including a focus on food additives and chronic health rather than infectious diseases studies and proposes using artificial intelligence and big data analysis to research the “exposome” – the collection of environmental factors that can influence human health.
In addition, the proposal mentions broadening efforts to replicate scientific findings, suspending “gain-of-function” research that could make pathogens more dangerous, enhancing security measures that prevent intellectual property theft and fostering a culture of respect for dissenting ideas.
Food and Drug Administration (FDA)
The proposal reflects an overall decrease of 3.9% or $6.8 billion. In its budget documents, the FDA stresses
- Investment of $234.5 million to address food safety and issues related to chronic disease. These funds would be used to prevent food safety failures, prevent infant formula contamination and shortages and restore laboratory operations to conduct “gold standard science”.
- $118.2 million to sustain medical device review and research. Within this enhancement, $5.4 million is provided to advance MAHA initiatives as they pertain to improving health outcomes, supporting innovation and reducing the burden of chronic diseases.
- Streamlining of functions would save $626 million.
- $87.1 million would be saved as the FDA assesses its infrastructure requirements to align with the administration’s goals.
Centers for Medicare and Medicaid Services (CMS)
Programs added to CMS and level funded are:
- Supportive services
- Senior Centers
- National Family Caregiver Support program
- Native American Nutrition
- Native American Caregivers support
Programs added to CMS, but funding is eliminated
- Health Promotion and Disease Prevention (Preventive Health)
- Fall prevention
- Chronic Disease Self-Management Education (CDSME)
Other CMS functions
The 340B Drug Pricing Program: This program is to be moved from HRSA to CMS. The 340B Drug Pricing Program FY 2026 budget request is $12.2 million, a level comparable to FY 2024.
Survey and Certification: CMS requested an increase of $45 million above the FY 2025 to achieve 65% completion of mandatory surveys and 10% of nonstatutory surveys of facilities that provide care to beneficiaries.
Research: CMS’ requested $18.1 million request for research will allow CMS to operate the Medicare Current Beneficiary Survey while using “data-driven solutions” through the Virtual Research Data Center and Chronic Condition Warehouse to “deliver evidence-based improvements that enhance health care outcomes for all Americans.”
Health Care Fraud and Abuse Control: CMS requested $941 million in discretionary funding to strengthen CMS efforts in identifying and eliminating waste, fraud and abuse.
Grants to States for Medicaid: The FY 2026 Medicaid appropriations request is $769.2 billion, an increase of $57.5 billion above the FY 2025 level, consisting of $508.1 billion for FY 2026 and $261.1 billion in advance appropriation from FY 2025.
Appropriations coupled with offsetting collections from the Supplementary Medical Insurance (SMI) Trust Fund and Medicare Part D account will support $770.9 billion in estimated gross obligations in FY 2026. These obligations primarily consist of Medicaid medical assistance benefits but also includes Medicaid administrative functions including Medicaid survey and certification and state fraud control units, and Centers for Disease Control and Prevention’s Vaccines for Children program.
The low income Medicare beneficiary assistance program is moved to CMS and retained because the Medicare Improvements for Patients and Producers Act is a mandatory program.
Highlights of Programs Eliminated
- The Prevention and Public Health Fund (PPHF) – a significant source of investment in public health initiatives will be erased. The fund not only supports ACL healthy aging grants but also key programs at CDC and Substance Abuse and Mental Health Services Administration (SAMHSA).
- Aging and Disability Resource Centers (ADCRCs)
- Medicare State Health Insurance Assistance Program
- The Lifespan Respite Care Program
