Healthcare Agenda for FY2010 Budget

April 2, 2009

In this session of Congress, legislators face a moral and fiscal responsibility to reform our healthcare system so that it provides quality and accessible care to all people and supports, rather than endangers, our nation’s long-term economic stability. Healthcare costs more than tripled from 1990 to 2007 and are projected to consume 25% of GDP in 2025 unless action is taken to reform our healthcare system. The FY2010 budget process will set the stage for making this long-deferred responsibility a legislative reality.

The FY2010 budget is not the place to debate the detailed “how?” of reform—as the architecture must be constructed in separate legislation. The budget process is the place, however, where Congress must set aside enough money to make comprehensive healthcare reform possible.

Any substantive healthcare reform initiative will require significant federal government investments at the start. The Congress needs to set aside sufficient funds in the FY2010 budget to cover the upfront costs of expanded access for low-income and other uninsured people and higher quality healthcare delivery. Congress must also address the excessively growing healthcare costs to generate savings down the road.

To plan for the necessary investments in healthcare reform, President Obama included a ten-year $634 billion “down payment” in the budget overview he submitted to Congress on February 26. In the president’s proposal, this down payment is funded through a combination of changes in tax policy and changes to payment mechanisms in Medicare. Sources of funding for the down payment include:

• $318 billion in revenue over 10 years by reducing the value of certain itemized tax deductions from 35 cents to 28 cents on the dollar for high-income earners

• $316 billion in savings over 10 years from changes to payment and incentive structures in Medicare, including $175 billion saved by eliminating overpayments to private providers participating in Medicare Advantage.

While President Obama and other advocates acknowledge that the total costs of healthcare reform will likely approach $1 trillion, the $634 billion reserve fund represents a significant and responsible starting point for securing a healthier future for our country.

NETWORK urges Congress to make comprehensive healthcare reform a priority in the FY 2010 budget by fully funding and building upon the $634 billion down payment outlined in President Obama’s proposal. Our families and our economy cannot afford any less.

NETWORK supports efforts to restore balance to our tax codes and limit unfair subsidies to private insurers and pharmaceutical companies as ways of financing healthcare reform. While Congress is likely to consider some alternative and additional sources of revenue and savings to fund the down payment for healthcare reform in the FY 2010 budget, these sources should not—and need not—come at the expense of other domestic human needs priorities. That is why NETWORK urges that Congress’s final budget resolution include an overall domestic discretionary spending cap high enough to restore capacity to human needs programs that have suffered years of budget cuts.