Department of Health and Human Services: FY2021 Budget Request 
Released: 2020-04-17T00:00:00

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 (listed below), which are responsible for administering a wide variety of health and human services programs, and conducting 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, injury, and environmental health hazards (e.g., CDC, ATSDR); and the regulation of food and drugs (e.g., FDA).

The three remaining HHS operating divisionsâACF, ACL, and CMSâ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. CMSâwhich accounts for the largest share of the HHS budget by farâis responsible for administering Medicare, Medicaid, and the State Children's Health Insurance Program (CHIP), in addition to certain programs related to private health insurance.

(For a summary of each operating division's mission and links to agency resources related to the FY2021 budget request, see the Appendix .)

Context for the FY2021 President's Budget Request

The Budget and Accounting Act of 1921 (P.L. 67-13), as amended, requires the President to submit an annual consolidated federal budget to Congress at the beginning of each regular congressional session, not later than the first Monday in February. Many of the proposals in the President's budget would require changes to laws that govern mandatory spending levels or policies, which are typically established on a multiyear or permanent basis. Discretionary spending , however, which is roughly one-third of the budget, is decided and controlled each fiscal year through the annual appropriations process. While Congress is ultimately not required to adopt the President's proposals or recommendations, the submission of the President's budget typically initiates the congressional budget process and informs Congress of the President's recommended spending levels for agencies and programs.

The FY2021 President's budget request was submitted to Congress on February 10, 2020. Less than two months before this, all 12 of the annual appropriations acts for FY2020 had been enacted into law on December 20, 2019. The FY2020 funding levels shown in FY2021 President's budget materials generally reflect enacted annual levels, with limited exceptions. The exceptions include cases in which full-year mandatory funds had not yet been provided for programs typically funded outside of the annual appropriations process (e.g., mandatory funding for the Temporary Assistance for Needy Families Block Grant or the Community Health Center Fund). In such cases, the FY2021 President's budget generally uses estimated FY2020 funding levels based on annualized amounts provided in the most recent short-term funding extensions. Because some FY2020 amounts have not been finalized, this report generally refers to FY2020 funding levels as estimates , whereas amounts for earlier years are called actual or final . In addition, amounts shown for FY2020 do not include supplemental appropriations or other spending effects resulting from coronavirus disease response measures that have been enacted since the FY2021 President's budget request was submitted.

Overview of the FY2021 HHS Budget Request

Under the President's budget request, HHS would spend an estimated $1.370 trillion in outlays in FY2021 (see Table 1 ). This is $48 billion (+4%) more than estimated HHS outlays in FY2020 and about $156 billion (+13%) more than actual HHS outlays in FY2019.

Historical estimates by the Office of Management and Budget (OMB) indicate that HHS has accounted for at least 20% of all federal outlays in each year since FY1995. Most recently, OMB estimated that HHS accounted for 27% of all federal outlays in FY2019, and projects that it would account for 28% of outlays if all proposals in the President's budget request were enacted.

Figure 2 displays proposed FY2021 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 mandatory spending programsâMedicare and Medicaidâare expected to account for 86% of all estimated HHS spending in FY2021. 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 estimated FY2021 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 funding than most federal departments. According to OMB data, HHS accounted for almost 8% of all discretionary budget authority across the government in FY2019. The Department of Defense was the only federal agency to account for a larger share of all discretionary budget authority in that year (50%).

Budgetary Resources Versus Appropriations

As previously mentioned, the HHS budget reflects funding from a broad set of budgetary resources that includes, but is not limited to, the amounts provided to HHS through the annual appropriations process. As a result, certain amounts shown in FY2021 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, discussed briefly below.

Mandatory and Discretionary Spending

Mandatory spending makes up a large portion of the HHS budget. Whereas all discretionary spending is controlled and provided through the annual appropriations process, all mandatory spending is controlled by the program's authorizing statute. In most cases, that authorizing statute also provides the funding for the program (e.g., State Children's Health Insurance 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 . Certain budget documents may show only discretionary spending, while others may also show some or all types of mandatory spending.

HHS in the Appropriations Process

The HHS budget request accounts for the department as a whole, while the appropriations process divides HHS funding across three different appropriations bills. Most of the department's discretionary appropriations are provided through the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) Appropriations Act. However, funding for certain HHS agencies and activities is provided in two other billsâ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. Each of these three appropriations acts provides discretionary HHS funding. In some cases, these acts also provide the necessary funding for appropriated mandatories at HHS. However, authorizing laws provide funding for other mandatory spending programs.

Proposed Law and Current Law Estimates for Mandatory Programs

HHS budget materials include two different estimates for mandatory spending programs when appropriate: proposed law and current law . The p roposed law estimates take into account changes in mandatory spending proposed in the FY2021 HHS budget request. Such proposals would generally 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.

User Fees and Other Types of Collections

In some cases, agencies within HHS have the authority to expend user fees and other types of collections that effectively supplement their 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 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 HHS estimates are often 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, for instance, FDA (due to user fees) and AHRQ (due to transfers).

Scorekeeping and Display Conventions

The Administration may choose to follow different conventions than those of congressional scorekeepers for its estimates of HHS programs. 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's estimates but not necessarily in the congressional documents.

HHS Budget by Operating Division

Figure 3 provides a breakdown of the FY2021 HHS budget request by operating division. When taking into account mandatory and discretionary budget authority (i.e., total budget authority), CMS accounts for the largest share of the request: nearly $1.3 trillion. The majority of the CMS budget request would go toward mandatory spending programs, such as Medicare and Medicaid. Spending on Medicare and Medicaid is expected to increase from FY2020 levels under the President's request, both in terms of proposed law and current law estimates. The request also includes a number of legislative proposals that would reduce spending on these programs (relative to current law, but not the prior year) if enacted.

When looking exclusively at discretionary budget authority (as illustrated in Figure 3 and detailed in Table 3 ), funding for CMS is comparatively smaller, accounting for $3.7 billion of the HHS discretionary request. Discretionary CMS funds primarily support program operations and federal administrative activities, though some funds also go toward efforts to reduce health care fraud and abuse.

The largest share of the HHS discretionary request would go to the PHS agencies: roughly $64.8 billion in combined public health funding for FDA, HRSA, IHS, CDC, ATSDR, NIH, and SAMHSA (no funds would go to AHRQ under the request ). NIH would receive the largest amount of discretionary budget authority of any single HHS operating division: $37.7 billion. This represents a decrease of roughly $2.6 billion (-6%) from FY2020. All of the existing NIH institutes and centers would receive a decrease under the request. The majority of the proposed NIH budget would support biomedical research performed by hospitals, medical schools, universities, and other research institutions around the country.

ACF would receive the second-largest discretionary funding level among the HHS operating divisions: $20.2 billion. This would represent a decrease of roughly $4.2 billion (-17%) from FY2020. The majority of the discretionary ACF request (more than 80%) would go to early childhood care and education programs, such as Head Start and the Child Care and Development Block Grant. As has been the case since FY2018, the budget proposes to eliminate several ACF programs, including the Low Income Home Energy Assistance Program (LIHEAP) and the Community Services Block Grant (CSBG).

Table 4 puts the FY2021 request for each HHS operating division and the Office of the Secretary into context, displaying it along with estimates of funding provided over the four prior fiscal years (FY2017-FY2019). These totals are inclusive of both mandatory and discretionary funding.

The amounts in this table are shown 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. For example, Table 4 shows $0 in FY2021 BA for AHRQ because the President's budget proposes to eliminate this agency; however, the table shows an estimated $299 million in FY2021 AHRQ outlays, reflecting the expected expenditure of funds previously provided to the agency.

Appendix. HHS Operating Divisions: Missions and FY2021 Budget Resources

This appendix provides for each operating division a brief summary of its mission, the applicable appropriations bill, the FY2021 budget request level, and links to additional resources related to that request.

Food and Drug Administration (FDA)

The FDA mission is focused on regulating the safety, efficacy, and security 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:

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (AG)

FY2021 Request:

BA: $3.293 billion Outlays: $3.552 billion

Additional Resources Related to the FY202 1 Request:

Congressional Justification (all-purpose table on p. 19), https://www.fda.gov/media/135078/download BIB chapter (p. 20), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=24

Health Resources and Services Administration (HRSA)

The HRSA mission is focused on "improving health care to people who are geographically isolated, economically 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

FY2021 Request:

BA: $11.444 billion Outlays: $11.951 billion

Additional Resources Related to the FY2021 Request:

Congressional Justification (all-purpose table on p. 17), https://www.hrsa.gov/sites/default/files/hrsa/about/budget/budget-justification-fy2021.pdf BIB chapter (p. 28), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=32

Indian Health Service (IHS)

The IHS mission is to provide "a comprehensive health service delivery system for American Indians and Alaska Natives" and "raise the physical, mental, social, and spiritual health of American Indians and Alaska Natives to the highest level." IHS provides health care for approximately 2.2 million eligible American Indians and 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:

Departments of the Interior, Environment, and Related Agencies (INT)

FY2021 Request:

BA: $6.391 billion Outlays: $6.479 billion

Additional Resources Related to the FY202 1 Request:

Congressional Justification (all-purpose table on p. 8), https://www.ihs.gov/sites/budgetformulation/themes/responsive2017/display_objects/documents/FY_2021_Final_CJ-IHS.pdf BIB chapter (p. 37), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=41

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

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 ATSDR is headed by the CDC director. For that reason, the ATSDR budget is often shown within CDC. Following the conventions of the FY2021 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 adverse effects resulting from exposure to hazardous substances in the environment.

Relevant Appropriations Bills:

LHHS (CDC) INT (ATSDR)

FY202 1 Request (CDC and ATSDR combined):

BA: $7.134 billion Outlays: $8.174 billion

Additional Resources Related to the FY202 1 Request:

CDC Congressional Justification (all-purpose table on p. 25), https://www.cdc.gov/budget/documents/fy2021/FY-2021-CDC-congressional-justification.pdf ATSDR Congressional Justification, https://www.cdc.gov/budget/documents/fy2021/FY-2021-ATSDR-congressional-justification.pdf BIB chapter (p. 43), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=47

National Institutes of Health (NIH)

The NIH mission is focused on conducting and supporting research "in causes, diagnosis, prevention, and cure of human diseases" and "in directing programs for the collection, dissemination, and exchange of information in medicine and health." NIH is organized into 27 research institutes and centers, headed by the NIH Director. (The FY2021 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

FY2021 Request:

BA: $37.905 billion Outlays: $39.807 billion

Additional Resources Related to the FY2021 Request:

Congressional Justification (all-purpose table on p. 15), available at https://officeofbudget.od.nih.gov/pdfs/FY21/br/1-OverviewVolumeSingleFile-toPrint.pdf BIB chapter (p. 54), available at https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=58

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

FY2021 Request:

BA: $5.598 billion Outlays: $5.984 billion

Additional Resources Related to the FY202 1 Request:

Congressional Justification (all-purpose table on p. 6), https://www.samhsa.gov/sites/default/files/about_us/budget/fy-2021-samhsa-cj.pdf BIB chapter (p. 63), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=67

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 FY2021 President's budget proposes eliminating AHRQ and consolidating certain key AHRQ functions within NIH, in the new National Institute for Research on Safety and Quality (NIRSQ).

Relevant Appropriations Bill:

LHHS

FY202 1 Request:

BA: $0 Outlays: $0.303 billion

Additional Resources Related to the FY202 1 Request:

Congressional Justification for the proposed National Institute for Research on Safety and Quality, https://www.ahrq.gov/sites/default/files/wysiwyg/cpi/about/mission/budget/2021/FY_2021_CJ_NIRSQ.pdf There is no FY2021 BIB chapter for AHRQ.

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 on supporting private insurance market reform programs. The President's budget estimates that in FY2021, "over 145 million Americans will rely on the programs CMS administers including Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the [Health Insurance] Exchanges."

Relevant Appropriations Bill:

LHHS

FY2021 Request:

BA: $1,297.294 billion Outlays: $1,232.275 billion

Additional Resources R elated to the FY2021 Request:

Congressional Justification (all-purpose table on p. 9), https://www.cms.gov/About-CMS/Agency-Information/PerformanceBudget/FY2021-CJ-Final.pdf BIB chapter (p. 69), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=73

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

FY202 1 Request:

BA: $54.976 billion Outlays: $57.489 billion

Additional Resources Related to the FY2021 Request:

Congressional Justification (all-purpose table on p. 6), https://www.acf.hhs.gov/sites/default/files/olab/fy_2021_congressional_justification.pdf BIB chapter (p. 141), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=145

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

FY202 1 Request:

BA: $2.097 billion Outlays: $2.153 billion

Additional Resources Related to th e FY2021 Request:

Congressional Justification (not yet available online); see excerpts, including a downloadable version of the all-purpose table, at https://acl.gov/about-acl/budget BIB chapter (p. 159), https://www.hhs.gov/sites/default/files/fy-2021-budget-in-brief.pdf#page=163