Department of Health and Human Services: FY2019 Budget Request
Released: 2018-03-22T00:00:00

About the U.S. Department of Health and Human Services (HHS)

The mission of HHS is to "enhance the health and well-being of Americans by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services." HHS is currently organized into 11 main agencies, called "operating divisions" (see below), which are responsible for a wide variety of health and human services and related research. In addition, HHS has a number of "staff divisions" within the Office of the Secretary (OS). These staff divisions fulfill a broad array of management, research, oversight, and emergency preparedness functions in support of the entire department.

HHS Operating Divisions

Eight of the HHS operating divisions are part of the U.S. Public Health Service (PHS). PHS agencies have diverse missions in support of public health, including the provision of health care services and supports (e.g., IHS, HRSA, SAMHSA), the advancement of health care quality and medical research (e.g., AHRQ, NIH), the prevention and control of disease and injury and environmental health hazards (e.g., CDC, ATSDR), and the regulation of food and drugs (e.g., FDA).

The three remaining HHS operating divisions—ACF, ACL, and CMS—are not PHS agencies. ACF and ACL largely administer human services programs focused on the well-being of vulnerable children, families, older Americans, and individuals with disabilities. CMS—which accounts for the largest share of the HHS budget by far—is responsible for administering the Medicare and Medicaid programs, in addition to some aspects of the private health insurance market.

Methodology and Assumptions Underlying FY2019 Budget Documents

The President's budget request for FY2019, which was released on February 12, 2018, occurred in the context of at least two significant circumstances. First, annual appropriations for FY2018 had not been enacted at the time of the budget's release. Second, on February 9, 2018—just days before the President's budget was released—the Bipartisan Budget Act of 2018 ( P.L. 115-123 ; BBA 2018) was enacted. This law increased the amount of discretionary spending that would be allowed for FY2018 and FY2019, extended temporary funding provided under earlier FY2018 continuing appropriations, provided new FY2018 supplemental appropriations, and extended funding for a number of HHS mandatory spending programs through FY2019 (or beyond). This section discusses the extent to which these circumstances affected the FY2018 and FY2019 funding levels published in the Office of Management and Budget (OMB) budget request materials and the HHS Budget in Brief (BIB), which are the primary data sources for this report.

Interpreting FY2018 Funding Levels

At the time that the budget request was released, discretionary funding for FY2018 was being provided by a series of temporary continuing resolutions (CRs), instead of full-year appropriations acts. Consequently, both the OMB and HHS budget materials use estimates for FY2018 that are derived from two sources:

For discretionary spending programs, the materials display annualized estimates of funding provided under the fourth FY2018 CR ( P.L. 115-120 ), which was in effect at the time the budget request was being finalized. Generally, this CR included a formulaic extension of FY2017 funding levels with an across-the-board adjustment and exceptions for particular accounts and activities. For mandatory spending programs, the materials display estimates of the amounts expected to be needed for FY2018 based on criteria outlined in authorizing law. (For a related discussion, see " Budgetary Resources versus Appropriations .")

While the estimates of annualized spending under FY2018 CRs might have informed FY2019 budget negotiations within the Administration, these estimates should not be treated as FY2018 "final" or enacted levels for the purposes of comparison to prior years or the FY2019 proposal.

In addition, readers should note that BBA 2018 (discussed further in the next section) contains provisions that directly affect actual discretionary and mandatory spending levels for FY2018. The act contains full-year FY2018 supplemental appropriations for disaster relief, including for certain HHS programs or activities. It also extends a number of mandatory spending programs or activities through FY2019 (or beyond), and, in so doing, also provides FY2018 funding for a number of those purposes. Neither the FY2018 supplemental appropriations nor the FY2018 mandatory spending contained in BBA 2018 were incorporated into the FY2018 estimates presented in HHS or OMB budget materials (and thus, these amounts are also excluded from this report).

Interpreting FY2019 Funding Levels

During the time that the President's budget request for FY2019 was being formulated, policymakers had not yet agreed to changes to the statutory limits on discretionary spending for FY2018 and FY2019. (These limits on "defense" and "nondefense" spending are intended to restrict the total amount of discretionary funding that can result from appropriations decisionmaking each fiscal year.) On February 9, 2018, three days before the FY2019 budget was submitted, these limits were increased by the enactment of BBA 2018; the total nondefense limit was increased by $63 billion in FY2018, and by $68 billion in FY2019. Almost all HHS discretionary spending is subject to the nondefense limit.

For the FY2019 budget submission, OMB and HHS materials dealt with this increase to the spending limits differently. The OMB budget materials generally were not revised to account for the additional spending allowed by BBA 2018. Instead, OMB released an "addendum" concurrent with the budget submission to outline proposed changes to the budget request in response to the increased spending limits. (The addendum explained that these increases did not equal the entire additional amount allowed by the new FY2019 spending limits because "the Administration strongly believes that we need to continue to restrain non-defense spending in light of the Nation's long-term fiscal challenges.") However, the HHS budgetary amounts displayed in the FY2019 BIB were revised ahead of their release to account for the increases that were outlined in the OMB addendum. This means that the agency-, account-, and program-level amounts for FY2019 listed in OMB budget materials in many cases differ from what is displayed in the HHS BIB—for both mandatory and discretionary accounts.

The changes proposed in the OMB budget addendum (and reflected in the HHS BIB) represent a fairly significant shift in the Administration's discretionary request for HHS compared to the request as it existed before the BBA 2018 was enacted. Based on OMB materials prepared before the BBA 2018 was enacted, the Administration had planned to propose decreasing discretionary HHS budget authority in FY2019 by about 24% compared to FY2017 (the most recent year for which final funding levels are available). By contrast, the revised FY2019 request reflected in the HHS BIB calls for a 10% increase in discretionary HHS budget authority compared to FY2017.

Finally, readers should be aware that, as was the case for the FY2018 mandatory spending in BBA 2018, the FY2019 mandatory spending in BBA 2018 was not incorporated into the HHS BIB or OMB budget materials for FY2019.

Overview of the FY2019 HHS Budget Request

Under the budget request, HHS would spend an estimated $1.216 trillion in outlays in FY2019 (see Table 1 ). This is $48 billion more than the FY2018 estimate (based on the annualized CR and current services mandatory spending) and about $113 billion (+10%) more than FY2017 actual.

Historical estimates by OMB indicate that HHS has accounted for at least 20% of all federal outlays in each year since FY1995. Most recently, HHS is estimated to have accounted for 28% of all federal outlays in FY2017.

Figure 1 displays proposed FY2019 HHS outlays by major program or spending category in the President's request. As this figure shows, mandatory spending typically accounts for the vast majority of the HHS budget. In fact, two programs—Medicare and Medicaid—are expected to account for 86% of all estimated HHS spending in FY2019. Medicare and Medicaid are "entitlement" programs, meaning the federal government is required to make mandatory payments to individuals, states, or other entities based on criteria established in authorizing law.

This figure also shows that discretionary spending accounts for about 8% of FY2019 HHS outlays in the President's request. Although discretionary spending represents a relatively small share of total HHS spending, the department nevertheless receives more discretionary money than most federal departments. According to OMB data, HHS accounted for 7.2% of all discretionary budget authority in FY2017. The Department of Defense is the only federal agency to account for a larger share of all discretionary budget authority in that year.

Budgetary Resources versus Appropriations

Readers should be aware that the HHS budget includes a broader set of budgetary resources than the amounts provided to HHS through the annual appropriations process. As a result, certain amounts shown in FY2019 HHS budget materials (including amounts for prior years) will not match amounts provided to HHS by annual appropriations acts and displayed in accompanying congressional documents. There are several reasons for this, which are described throughout this section.

First, mandatory spending makes up a large portion of the HHS budget, and much of that spending is provided directly by authorizing laws, not through appropriations acts. All discretionary spending is controlled and provided through the annual appropriations process. By contrast, all mandatory spending is controlled by the program's authorizing statute. In most cases, that authorizing statute also provides the funds for the program. However, the budget authority for some mandatory programs (including Medicaid), while controlled by criteria in the authorizing statute, must still be provided through the annual appropriations process; such programs are commonly referred to as "appropriated entitlements" or "appropriated mandatories."

In addition, the HHS budget request takes into account the department as a whole, while the appropriations process divides HHS funding across three different appropriations bills. While most of the discretionary funding for the department is provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) Appropriations Act, funding for certain HHS agencies and activities is appropriated in two other bills—the Departments of the Interior, Environment, and Related Agencies Appropriations Act (INT) and the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act (AG). Table 2 lists HHS agencies by appropriations bill.

Moreover, the Administration's estimates for HHS programs may follow different conventions than those of congressional scorekeepers. For example, certain transfers of funding between HHS agencies (or from HHS to other federal agencies) that occurred in prior fiscal years, or are expected to occur in the current fiscal year, may be accounted for in the Administration estimates but not necessarily in the congressional documents.

In addition, HHS budget materials may include two different estimates for mandatory spending programs in FY2019: proposed law and current law . Proposed law estimates take into account changes in mandatory spending proposed in the FY2018 HHS budget request. Such proposals would need to be enacted into law to affect the budgetary resources ultimately available to the mandatory spending program. HHS materials may also show a current law or current services estimate for mandatory spending programs. These estimates assume that no changes will be made to existing policies, and instead estimate mandatory spending for programs based on criteria established in current authorizing law. The HHS budget estimates in this report reflect the proposed law estimates for mandatory spending programs, but readers should be aware that other HHS, OMB, or congressional estimates might reflect current law instead.

Finally, the amounts of discretionary funding provided in the appropriations bills do not necessarily account for all of the budgetary resources that are available to those agencies. This is because agencies within HHS may have the authority to expend user fees and other types of collections that effectively supplement those appropriations. In addition, agencies may receive transfers of budgetary resources from other sources, such as from the Public Health Service Evaluation Set-Aside (also referred to as the PHS Tap) or one of the mandatory trust funds established by the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 , as amended). Budgetary totals that account for these sorts of resources in the Administration estimates are referred to as being at the "program level." HHS agencies that have historically had notable differences between the amounts in the appropriations bills and their program level include the Food and Drug Administration (due to user fees) and the Agency for Healthcare Research and Quality (due to transfers). The program level for each agency is listed in the table entitled "Composition of the HHS Budget Discretionary Programs" in the HHS FY2019 BIB.

HHS Budget by Operating Division

Table 3 displays budgetary totals for each HHS operating division, as well as the Office of the Secretary. These totals are inclusive of both mandatory and discretionary funding. The FY2017 actual, FY2018 estimate (based on the annualized CR and current services mandatory spending), and FY2019 request figures are taken from the HHS BIB for FY2019; the FY2016 actual figures are taken from the FY2018 BIB.

The remainder of this section provides a brief summary of the mission of each operating division, the FY2019 budget request, and links to additional resources related to that request. A table of relevant CRS key policy staff is included at the end of the report.

The figures in this section are provided in terms of budget authority (BA) and outlays. BA is the authority provided by federal law to enter into contracts or other financial obligations that will result in immediate or future expenditures involving federal government funds. Outlays occur when funds are actually expended from the Treasury; they could be the result of either new budget authority enacted in the current fiscal year or unexpended budget authority that was enacted in previous fiscal years. As a consequence, the BA and outlays in this table represent two different ways of accounting for the funding that is provided to each HHS agency through the federal budget process.

Food and Drug Administration (FDA)

The FDA mission is focused on regulating the safety of human foods, dietary supplements, cosmetics, and animal foods; and the safety and effectiveness of human drugs, biological products (e.g., vaccines), medical devices, radiation-emitting products, and animal drugs. It also regulates the manufacture, marketing, and sale of tobacco products.

Relevant Appropriations Bill:

AG

FY2019 Request:

BA: $3.257 billion Outlays: $3.092 billion

Health Resources and Services Administration (HRSA)

The HRSA mission is focused on "improving access to health care for those who are uninsured, isolated, or medically vulnerable." Among its many programs and activities, HRSA supports health care workforce training, the National Health Service Corps, and the federal health centers program, which provides grants to nonprofit entities that provide primary care services to people who experience financial, geographic, cultural, or other barriers to health care.

Relevant Appropriations Bill:

LHHS

FY2019 Request:

BA: $9.891 billion Outlays: $10.634 billion

Indian Health Service (IHS)

The IHS mission is focused on providing "comprehensive health services for American Indians and Alaska Natives ... to improve their health status and overall quality of life." IHS provides health care for approximately 2.2 million eligible American Indians/Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas.

Relevant Appropriations Bill:

INT

FY2019 R equest:

BA: $5.433 billion Outlays: $5.410 billion

Centers for Disease Control and Prevention (CDC) and Agency for Toxic Substances and Disease Registry (ATSDR)30

The CDC mission is focused on "disease prevention and control, environmental health, and health promotion and health education." CDC is organized into a number of centers, institutes, and offices, some focused on specific public health challenges (e.g., injury prevention) and others focused on general public health capabilities (e.g., surveillance and laboratory services).

In addition, the Agency for Toxic Substances and Disease Registry (ATSDR) is headed by the CDC director. For that reason, the ATSDR budget is often shown within CDC. Following the conventions of the FY2019 HHS BIB, ATSDR's budget request is included in the CDC totals shown in this report. ATSDR's work is focused on preventing or mitigating the adverse effects resulting from exposure to hazardous substances in the environment.

Relevant Appropriations Bills:

LHHS (CDC) INT (ATSDR)

FY2019 Request (CDC and ATSDR combined):

BA: $6.078 billion Outlays: $7.530 billion

National Institutes of Health (NIH)

The NIH mission is focused on supporting and conducting research "into the causes, diagnosis, treatment, control, and prevention of diseases" and promoting the "acquisition and dissemination of medical knowledge to health professionals and the public." NIH is organized into 27 research institutes and centers, headed by the NIH Director. (The FY2019 President's budget assumes that AHRQ's functions will be consolidated within NIH, in the new National Institute for Research on Safety and Quality [NIRSQ] . This assumption is reflected in the figures below.)

Relevant Appropriations Bill:

LHHS

FY2019 Request:

BA: $33.888 billion Outlays: $35.082 billion

Substance Abuse and Mental Health Services Administration (SAMHSA)

The SAMHSA mission is focused on reducing the "impact of substance abuse and mental illness on America's communities." SAMHSA coordinates behavioral health surveillance to improve understanding of the impact of substance abuse and mental illness on children, individuals, and families, and the costs associated with treatment.

Relevant Appropriations Bill:

LHHS

FY2019 Request:

BA: $3.426 billion Outlays: $3.616 billion

Agency for Healthcare Research and Quality (AHRQ)

The AHRQ mission is focused on research to make health care "safer, higher quality, more accessible, equitable, and affordable." Specific AHRQ research efforts are aimed at reducing the costs of care, promoting patient safety, measuring the quality of health care, and improving health care services, organization, and financing. The FY2019 President's budget proposes consolidating AHRQ's functions within NIH, in the new National Institute for Research on Safety and Quality (NIRSQ).

Relevant Appropriations Bill:

LHHS

FY201 9 Request:

BA: $0 Outlays: $240 million

Centers for Medicare & Medicaid Services (CMS)

The CMS mission is focused on supporting "innovative approaches to improve quality, accessibility, and affordability" of Medicare, Medicaid, the State Children's Health Insurance Program (CHIP), and private insurance and private insurance market reform programs. The President's budget estimates that in FY2018, "over 143 million Americans will rely on programs CMS administers including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the Health Insurance Exchanges."

Relevant Appropriations Bill:

LHHS

FY2019 Request:

BA: $1,122.804 billion Outlays: $1,092.541 billion

Administration for Children and Families (ACF)

The ACF mission is focused on promoting the "economic and social well-being of children, youth, families, and communities." ACF administers a wide array of human services programs, including Temporary Assistance for Needy Families (TANF), Head Start, child care, the Social Services Block Grant (SSBG), and various child welfare programs.

Relevant Appropriations Bill:

LHHS

FY201 9 Request:

BA: $47.247 billion Outlays: $48.971 billion

Administration for Community Living (ACL)

The ACL mission is focused on maximizing the "independence, well-being, and health of older adults, people with disabilities across the lifespan, and their families and caregivers." ACL administers a number of programs targeted at older Americans and the disabled, including Home and Community-Based Supportive Services and State Councils on Developmental Disabilities.

Relevant Appropriations Bill:

LHHS

FY201 9 Request:

BA: $1.819 billion Outlays: $1.966 billion