Health and Science

HHS Secretary Azar defends Trump budget cuts to Medicaid, NIH programs

Key Points
  • HHS' budget proposal for fiscal 2020 would slash the department's discretionary funding by 12 percent.
  • The Trump administration has proposed big cuts to the Medicaid safety net program, the National Institutes of Health and other divisions.
  • Though the budget came under fire on Capitol Hill, Azar was praised for pushing to lower drug prices for Medicare patients.
Health and Human Services Secretary Alex Azar
Kevin Lamarque | Reuters

Health and Human Services Secretary Alex Azar took some heat on Capitol Hill over the Trump administration's proposed cuts in health care in its budget, but he also won some bipartisan praise for pushing to lower drug prices for Medicare patients.

HHS' budget proposal for fiscal 2020 would slash the department's discretionary funding by 12 percent from nearly $100 billion to $87.5 billion for the next fiscal year, with big cuts to the Medicaid safety net program, the National Institutes of Health and other divisions.

"It is important to note HHS had the largest discretionary budget of any nondefense department in 2018, which means that staying within the caps set by Congress has required difficult choices that I'm sure many will find quite hard to countenance," Azar said in his opening remarks before the House Energy and Commerce committee hearing Tuesday afternoon.

Medicaid cuts under fire

That administration's proposed budget would slash $395 million from the Centers for Medicare and Medicaid's funding in 2020.

Democrats on the committee criticized proposals to change the funding mechanism to lump sum block grants for states, adding financial caps to coverage for individuals, new co-pays for patients and other provisions that could result in rolling back Medicaid expansion under the Affordable Care Act. Analysts say the measures outlined in the administration's blueprint could result in $1.5 trillion in less funding for Medicaid over 10 years.

"The changes proposed to Medicaid are quite far reaching and would likely lead to fewer people insured, with fewer benefits," said Larry Levitt, senior vice president at the Kaiser Family Foundation.

End run

Democrats including Rep. G.K. Butterfield of North Carolina warned Azar about trying to do an end run around Congress in order to push through Republican proposals.

"You just wait for the firestorm this will create," Butterfield said.

The budget blueprint calls for nearly $5 billion in funding for anti-opioid abuse efforts, including $1.5 billion for substance abuse and mental health services and close to $300 million in funding for efforts to reduce new HIV infections announced during president's State of the Union address last month.

NIH funding cut

Yet at the same time, the administration proposed slashing more than $4.5 billion in funding from the National Institutes of Health, which oversees health research. NIH enjoys bipartisan support on Capitol Hill, and members from both sides of the aisle raised concerns, with Rep. Fred Upton, R-Mich., saying he was alarmed by the size of the proposed cut.

"We tried to prioritize certain funding at NIH," said Azar, noting allocations for studying childhood cancers and the president's opioid initiative. But, he added, "there's just not enough money to go around in HHS."

The administration is also proposing to cut $4.9 billion in funding for the Administration for Children and Families, the division that has come under fire in the debate over the border crisis for its oversight of the detention of undocumented migrant children and families. Most of the questions from Democratic lawmakers centered on the department's role in the administration's family separation policy launched in 2018.

Drug prices

HHS' budget blueprint calls for increasing funding for the Food and Drug Administration by more than 10 percent to $6.1 billion for the FDA, as it pushes forward on the administration's proposals to bring down drug prices outlined earlier this year.

The proposal to eliminate confidential discounts in Medicare Part D drug plans generally won bipartisan praise, while congressional members on both sides of the aisle raised concerns about the administration's proposal to allow Part D plans to exclude certain drugs from coverage in exchange for bigger discounts from drug manufacturers.

"You've got some good things in the budget," said Rep. Peter Welch, D-Vt., adding that he wanted to work with the administration on finding common ground on some proposals.

"Are you open to exploring some ways to address not having (the Part D) formulary restrict appropriate access?" Welch asked.

Difficult calls

Azar replied that if a patient doesn't like the approach of restricted access, "difficult calls" will have to be made in order to find the right policy balance.

The odds of the president's budget being passed by a divided Congress are slim to none, with Democrats now in control of the House.

"Everyone knows that the president's budget is his marker for where he believes the policy should go," said Rebecca Davison, director at ADVI Health, a health policy group. "At the end of the day, … Congress sets the budget."

Tuesday's budget hearing seems to indicate that Congress and the administration are increasingly in agreement on a framework for combating drug prices.

Correction: An earlier version of this story misidentified Rep. Michael Burgess' party affiliation and inaccurately attributed a statement to him. Burgess is a Republican. The statement was made by Rep. G.K. Butterfield, who is a Democrat.