Medicaid And Cybersecurity: What Payers Need To Know About Biden's Budget

President Biden has pushed out his budget for 2025, focusing on healthcare and cybersecurity.

As President Biden rolled out his $7.3T budget for 2025, a couple items caught our eye. Politicians usually use their budgets as a tool to direct their messaging towards voters, and President Biden has put healthcare front and center.

Compared with other budgets, this one puts heavy focus on healthcare and cybersecurity. In Biden’s budget he calls for expanding Medicare’s drug negotiation program as well as extending Medicare insulin caps and out-of-pocket costs to consumers with private plans. Both of these measures were seen in his 2022 Inflation Reduction Act passed by Congress.

Medicaid

The budget also renews Biden’s call to implement a federal coverage alternative for low-income individuals in states that have yet to expand Medicaid coverage under the ACA; only ten states have not adopted Medicaid expansion. The budget outlines a decade long $150B increase for Medicaid home and community based services. Biden also tried a major expansion like this in 2020, but it was dismissed by Congress.

This concept of nudging Medicaid expansion even further comes at a time when a handful of states have also extended coverage to immigrants. California and Oregon have already begun funding full Medicaid benefits for all low-income residents who wouldn’t be eligible for the program because of immigration status. Many undocumented individuals live just above the Medicaid income-eligibility threshold, and until recently, no states had looked at the affordability of complete coverage for them.

Biden’s budget also incentives for states to continue their Medicaid expansion and would permanently expand the ACA tax credits that are set to expire at the end of next year.

Biden made a similar call for “Medicaid-like” coverage in his proposed 2024 budget, which didn’t see through in Congress. His 2025 budget is predominantly similar to last year’s.

Notably, the budget also emphasizes healthcare cybersecurity, which everyone currently affected by the Change Healthcare attack should keep an eye on. Here the budget outlines $1.3B in new hospital cybersecurity initiatives and $141M to cushion the federal health department’s systems.

What This Means For Payers

As providers suffer from unprocessed claims payments and payers are being pressured to output advanced payments and relax prior authorizations, payers should pay close attention to cybersecurity budgets and initiatives. Payers have been reluctant to cooperate with these items, particularly the relaxing or removing of prior authorizations, which they claim could lead to increased fraud. While increased cybersecurity would help every organization, it could be especially beneficial to payers to not only protect their providers and health systems, but to avoid fraud and keep their bottom line steady.