The President’s FY 2018 Budget and Its Impact on PA Education

On May 23, the president released his fiscal year (FY) 2018 budget for the federal government. This budget outlines the president’s federal spending priorities for the upcoming year and provides insight into and a roadmap for the Administration’s goals and fiscal agenda. There are several proposed changes to Health Resources and Services Administration and Department of Education funding that will adversely impact PA education, students, and faculty. In fact, some essential programs that fund diversity and curricular innovation are being eliminated altogether.

Under both the president’s “skinny budget,” released earlier this year, and this full FY 2018 budget, health workforce funding suffers devastating cuts. Many of the budget proposals are tied to the repeal and replacement of Obamacare and plans to reauthorize the Higher Education Act.

However, keep in mind that the president’s budget, while a blueprint for the Administration’s priorities, is not rubber-stamped by Congress. In fact, many members of Congress have voiced their opposition to the president’s proposal and are developing the final funding levels for FY 2018 that reflect congressional priorities.

Health Care

The president’s budgetary priorities focus on direct health care services and programs that place providers in medically underserved areas with a shortage of health care providers. As such, he provided $748 million in mandatory and discretionary funding to maintain programs for community health centers, the National Health Service Corps, Children’s Hospital and Teaching Health Center Graduate Medical Education, and the Nurse Corps Scholarship and Loan Repayment Program.

Primary Health Care: Health centers, which receive discretionary and mandatory funding, would get nearly $5.1 billion. This is $89 million more than FY 2017 funding levels. The increase helps replace funding that was cut through sequestration — the automatic spending cuts that were part of the Budget Control Act of 2011.

Health Workforce: The National Health Service Corps will receive $310 million in mandatory funding, up $21 million from FY 2017. The following programs, important for developing a strong health care workforce, were zeroed out, meaning no funding, in the president’s budget:

• Training for Diversity
• Training for Primary Care Medicine
• Oral Health Training
• Area Health Education Centers
• Public Health and Preventive Medicine Programs

These programs included the PA Training Grant, which is part of the Primary Care Training and Enhancement grant program, Health Careers Opportunities Program, and Area Health Education Centers. These programs directly fund faculty development and curricular innovations, support student clinical placement, and contribute to the diversity pipeline for the profession. Under the president’s budget, these programs would be eliminated. The reasoning for these cuts was the president’s priority on funding programs that produce health care providers, as well as what the Administration deems as a lack of evidence in valuable outcomes from investment in these other programs.

Medicaid: The president’s budget proposes sweeping changes to Medicaid, which will result in a net savings of $627 billion over 10 years and does not include the additional savings the Administration expects from their plan to repeal and replace Obamacare. The Administration’s aim is to ensure that the program provides coverage for some of the most vulnerable groups in America, including children, the elderly, and people with disabilities. With a strategy to reform Medicaid funding to the states into either a per capita cap or block grant in 2020, the Administration wants to allow states to “advance solutions that best serve their unique population.” The Administration thinks that states are in “the best position to assess the unique needs of their populations.”

The Children’s Health Insurance Program (CHIP): CHIP is a federal-state partnership that was created to provide health insurance coverage for low-income children under 19 whose family incomes are not high enough to pay for private insurance, but are too high for Medicaid. The Medicare Access and CHIP Reauthorization Act of 2015 extended CHIP funding through FY 2017; the president’s budget proposes extending it through FY 2019. While the president’s budget extends CHIP for two more years, additional policies in the budget would lead to funding cuts. These policies include repealing the 23 percent pay increase under current law, capping coverage in CHIP to 250 percent of Federal Poverty Levels. Current law requires states to transition children ages 6–18 in families with incomes between 100 and 133 percent of the Federal Poverty Level off of CHIP to Medicaid, but under the budget proposal, states could move these children back to CHIP.

Education

There are sweeping changes to student financial assistance that will primarily impact low- income students and graduates. The various proposals are intended to support efforts in Congress to reauthorize the Higher Education Act. They include:

Simplifying student loan repayment programs: The budget would replace the five different income-driven plans with one repayment plan, with monthly payments set at 12.5 percent of discretionary income. Borrowers would have to make payments for 15 years, instead of the current 10 years, in addition to paying an increased amount for the monthly payment. Graduate students would be required to make payments for 30 years.

Public service loan forgiveness: This program, which forgives debt after 10 years of work for federal, state, or local government or a nonprofit, is eliminated under the president’s FY 2018 budget. As a result of this, all undergraduate student loans would be unsubsidized. The proposed budget cuts for student loan repayment and elimination of the Public Service Loan Forgiveness Program create $143 billion in savings over 10 years.

Support to institutions serving large populations of minority students: Funding is available for programs at Historically Black Colleges and Universities and Predominately Black Institutions, as well as for the Promoting Postbaccalaureate Opportunities for Hispanic Americans program, although the funding largely supports continuation awards and not new award competitions.

As the budget cycle moves forward, hopefully Congressional priorities for health care and higher education will keep funding at levels close to the recently passed appropriations omnibus bill.