What’s in the Mayor’s Proposed FY 2015 Budget for Health Care?

Overview of the FY 2015 Budget for Health Care

The mayor’s proposed fiscal year (FY) 2015 budget for health care ‘ which includes the Department of Health, the Department of Health Care Finance, and the Department of Behavioral Health ‘ totals $3.5 billion in local and federal funding. This represents a 6 percent increase from FY 2014, after adjusting for inflation. (Unless otherwise noted, all figures are adjusted for inflation to equal FY 2015 dollars.) The proposed increase is largely attributable to growing costs and enrollment in the Medicaid health insurance program, as well as greater funding for mental health services. As was the case in FY 2014, the Department of Health Care Finance ‘ which manages the District’s Medicaid program ‘ continues to account for 85 percent of the growth in gross health care funding. The Department of Behavioral Health accounts for the other 15 percent of the growth with a significant increase in funds for mental health services.

The FY 2015 budget proposal also establishes a government enterprise fund ‘ a fund outside of the District’s general operating fund ‘ for the DC Health Benefit Exchange Authority (Exchange), which is not reflected in the totals above. The Exchange operates DC Health Link, the District’s online portal for health insurance plans and financial assistance for those plans. In FY 2014, the Exchange was funded through federal start-up funds, which was reflected in capital and operating budgets of the Department of Health Care Finance. In FY 2015, the mayor proposes a dedicated local funding stream through an assessment on the gross receipts of health insurance companies.

Proposed local funding for health care would rise by 4 percent, or $48 million, to a total of $1.2 billion. Modest projected enrollment growth and increasing costs associated with Medicaid managed care contribute to the increase. The growth in local expenditures also reflects an expansion in mental health services, including investment in early childhood mental health consultations and independent community residential facilities. Enrollment in the Healthcare Alliance ‘ DC’s public health insurance program for select groups of residents who don’t qualify for Medicaid ‘ continues to decline, but only slightly over the end of FY 2013. Still, Alliance expenditures have risen since then, suggesting higher utilization among enrollees remaining in the program.

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