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April 2011 St@teside

Fiscal Year 2011 Budget Deal Impacts Health Programs

The federal budget for fiscal year (FY) 2011 was passed by the U.S. House of Representatives and the Senate on April 14, 2011 and was signed into law by the president the following day. According to House appropriators, the FY 2011 budget reduces federal spending by $40 billion in discretionary funds compared to FY 2010.1 In terms of impacts on health-related programs, the FY 2011 budget:

  • Reduced funding for the Health Resources and Services Administration (HRSA) by $1.2 billion;
  • Reduced funding for community health centers by $600 million. (Mandatory funding in the ACA ensures health centers will continue operating);
  • Reduced funding to the National Institute of Health (NIH) by $260 million;
  • Eliminated all funds for the State Health Access Grant program, which gave $75 million to states in 2010;
  • Reduced funding for rural health programs by $35 million;
  • Reduced funding for Title X Family Planning by $17 million;
  • Cut $2.2 billion in funds to the Consumer Oriented and Operated Plans (CO-OP), a program which would have helped set up non-profit health plans in the individual and small group market; and
  • Eliminated the Free Choice Voucher Program. The program would have allowed certain employees to convert their tax-free employer contribution into a “free choice voucher” that they could use to purchase health insurance through a state exchange in 2014.2

Proposed cuts in the Prevention and Public Health Fund of $750 million were averted. In addition, the budget increases the Food and Drug Administration budget by 4 percent.

The budget also includes:

  • Policy riders that allow studies of the impact of health insurance premium increases on individuals and families due to mandates in the ACA;
  • An audit of waivers granted by the U.S. Department of Health and Human Services (HHS) to organizations that need more time to meet requirements for benefit packages under the ACA;
  • A review of comparative effectiveness research funding; and
  • A report on contractors hired to carry out the health care law.3

Lawmakers now turn to the FY 2012 budget.

1CQ HealthBeat. (Subscription only). (2011, April 12). Health Takes a Hit in Spending Deal but Priorities Survive. Retrieved April 13, 2011 from

2BNA’s Health Care Policy Report. (Subscription only). (2011, April 25). Obama Signs FY 2011 Spending Bill Into Law, Putting One Battle Behind Him. Retrieved April 25, 2011 from

3CQ HealthBeat. (Subscription only). (2011, April 12). Health Takes a Hit in Spending Deal but Priorities Survive. Retrieved April 13, 2011 from