From 340B to a public option: 4 healthcare items you may have missed in Biden's budget

White House
President Joe Biden is calling for audits of 340B covered entities in his fiscal 2022 federal budget request to Congress. (uschools/iStock/Getty Images Plus/Getty Images)

President Joe Biden released his request for the federal fiscal 2022 budget that includes a major 23% boost to funding for the Department of Health and Human Services (HHS).

But the budget request to Congress also includes several major changes to healthcare policies that could affect the 340B drug discount program, rural healthcare and the Affordable Care Act (ACA).

Congress is not expected to fully take up Biden’s budget request, but it does highlight the administration’s priorities on where to allocate federal funding.

Here are four healthcare items you may have missed in the Friday budget request:

  • More oversight of the 340B drug discount program. The budget includes $17 million to set up a dispute resolution process for the 340B drug discount program. The Trump administration finalized a long-awaited rule that creates the process to settle feuds over the program, and the pharmaceutical industry sued to halt it. But the budget goes further by calling for new regulations that could change how 340B covered entities are audited. The regulation would allow the federal government to audit a covered entity’s records to determine how savings generated from the program are used. It also calls for a regulation to require covered entities to preserve records that could aid this audit. The funding and requests come amid concerns from the pharmaceutical industry over whether discounts they provide under 340B benefit patients. Covered entities such as safety-net hospitals and community health centers have charged the program is vital for providers that operate on thin margins and face escalating drug costs.
  • Making boosted ACA subsidies permanent. The budget aims to make permanent a boost to income-based tax credits the American Rescue Plan Act enshrined into law. The boosted tax credits, however, expire after two years. Biden’s infrastructure plan announced earlier this year also called for making the boosted tax credits permanent. Under the new structure, which went into effect for the 2021 coverage year, people who make 400% above the federal poverty level do not have to pay more than 8.5% of their income on healthcare. Previously, those people would not qualify for income-based subsidies.
  • $400 million for rural telehealth and EHR services. The budget would provide $400 million in grants to expand telehealth services. These grants could include money for pilots and demonstrations on the use of electronic health records to coordinate rural veterans with providers and the Veterans Affairs EHR system, according to HHS’ budget request. The budget also includes funding to expand the Rural Maternity and Obstetrics Management Strategies program to help place “early childhood development experts in pediatrician offices with a high percentage of Medicaid and Children’s Health Insurance Program patients,” the budget request said.
  • A new Medicaid public option. Biden has been in favor of creating a public option for Americans to buy insurance coverage on the ACA’s exchanges, but he also wants one to entice Medicaid expansion holdouts. The president proposed offering “Medicaid-like coverage through a federal public option, paired with financial incentives to ensure states maintain their existing expansions,” the budget request said. The request is the latest bid by Biden to get the 12 states that have not expanded Medicaid under the ACA to expand.