Under recently enacted legislation States will have clear Federal guidelines and a stronger obligation to plan and account for their social service programs. In order to bring the Federal share of financing social services more into line with the Federal/State shares for medical services, legislation will be proposed to increase the State share of financial responsibility from 25% to 35% in 1976 and to 50% in 1977. Under this plan, Federal grants to States for social services and related activities will decline by approximately $400 million in 1976 to a level of $1.6 billion. Should the States assume the increased share of the costs, the overall level of available service would remain the same. Rehabilitation services, with outlays of $806 million, incorporate both vocational rehabilitation and services for the developmentally disabled (individuals such as the severely mentally retarded, epileptics, or those suffering from cerebral palsy). Under the Rehabilitation Act of 1973, the vocational rehabilitation program will increasingly focus on the severely handicapped. Approximately 1.7 million persons will receive vocational rehabilitation services in 1976. Beyond the regular program for funding vocational rehabilitation services, additional resources for these services are available under the Federal supplemental security income program and the old age, survivors, and disability insurance programs. Together, these programs will provide an added $132 million for 1975 and $158 million in 1976. Services for the aging and other special groups will receive continued Federal support in 1976, with outlays estimated at $279 million. This includes funds for programs which apply innovative approaches and necessary services to deal with the special needs of Indians and other Native Americans. Outlays for special programs for the aging will provide more than 200,000 meals daily and other services which will assist those older persons capable of self-care to secure and maintain independence in a home environment. The aging program places emphasis on assisting State and local area agencies to develop coordinated service systems that can effectively bring together available Federal, State, local, and private resources. Juvenile delinquency prevention programs, which were included in this section in prior years, are now included in the General Government function. Primary responsibility for this activity was transferred to the Department of Justice with enactment of the Juvenile Justice and Delinquency Prevention Act of 1974. However, funds will still be provided under this function for continued demonstration of coordinated services for runaway youths. Legislation will be proposed to authorize a program to encourage coordination of human service delivery programs at the State and local level. HEALTH Program Highlights Increase medicare and medicaid expenditures from $17 billion in 1974 to over $22 billion in 1976, expanding coverage from 43 million to 45 million aged, disabled, and low-income Americans. • Increase support of health research from $1.6 billion. in 1974 to $1. 8 billion in 1976. • Provide $155 million for innovations in health professions training. • Increase funds for consumer safety and disease prevention activities from $750 million in 1974 to $920 million in 1976. Outlays for Federal health programs are estimated at over $28 billion in 1976, an increase of almost $1.6 billion or 6% over 1975. The 1976 budget for health programs is based on a policy of providing access to basic health services through financial assistance to individuals under the medicare and medicaid programs rather than continuing to increase funding for inequitable project grants to selected communities and groups under narrow categorical program authorities. The budget also provides funding to improve the quality of health care and health care delivery through research, training, planning, and regulatory activities. Health care services.-The largest Federal effort in the health sector is the financing and provision of health care services. Financing medical services.-Medicare outlays of $15 billion in 1976 will help meet the medical costs of an estimated 13.3 million aged and disabled Americans, 29% more people than were aided in 1971. Medicare legislation is proposed to provide financial incentives against overutilization, to improve protection against catastrophic health care expenses, to allow future adjustments in the supplementary medical insurance premiums, and to prevent payments for excessive hospital costs. Administrative actions will be taken to limit reimbursement for medically necessary services to reasonable costs. Medicaid outlays of over $7 billion will help to pay for medical care. for almost 26 million low-income Americans. This represents a 40% increase in beneficiaries and a 113% increase in funding since 1971. The medicaid program will emphasize early and periodic screening of children in 1976 in order to assure that all eligible children receive 1 Compares with budget authority for 1974 and 1975 as follows: 1974, $26,365 million; 1975. $28,448 million. necessary care, particularly immunizations and other vital preventive services. The management of medicaid will be improved through expanded eligibility screening and more effective program review. Legislation is proposed to provide greater sharing of medicaid program costs by the 13 highest income States. This change will mean that proportionately more Federal assistance will go to lower income States. Legislation is also being proposed to eliminate Federal matching for routine dental services for adults and to provide medicaid reimbursement for care received in neighborhood health clinics. Federal tax laws currently exclude from taxable income employer contributions to health insurance premiums for the employee. They also permit itemized deductions for certain health care and health insurance premium costs. In 1976, the revenue loss from these tax expenditures is estimated at $3.7 billion for employer contributions, and $2.6 billion for itemized medical deductions. For an explanation of tax expenditures, see pages 67 to 69 above or Special Analysis F in the Special Analyses volume of the Budget. Providing medical services. In addition to financing medical services, the Federal Government provides some medical care directly. An estimated $437 million will be spent in 1976 on the provision of medical services to Alaska Natives, merchant seamen, and American Indians who live on or near reservations. Of this amount, $322 million in outlays will be requested for the care of approximately 500,000 eligible American Indians and Alaska Natives. Annual Federal expenditures of over $640 per Indian or over $2,500 for a family of four compare to estimated per capita national expenditures of about $600 in 1976 for the U.S. civilian population. Funding for Indian health services has increased 125% in 6 years, from $143 million in 1971 to $322 million in 1976. Legislation is being proposed to transfer Saint Elizabeths Hospital from the Federal Government to the District of Columbia. Under the legislation, the Federal Government will continue to subsidize the operating costs of the hospital and to reimburse the District for the treatment of Federal beneficiaries. Approximately 87% of the inpatient population of the hospital are District residents and virtually all of its outpatient activity is devoted to District residents. Funds will be requested for renovation and construction at Saint Elizabeths as soon as the transfer takes place and the District has developed a facilities plan. In addition, legislation will be developed to transfer to local community use one or two PHS hospitals in 1976. Necessary medical care for eligible merchant seamen and other beneficiaries will be financed through other means. Efforts to improve the ways in which health services are made available will be continued in 1976. Federal policy on providing for the direct delivery of health care through project grants will emphasize cost-sharing by States, local governments, and other grantees. Support will continue to be provided for the demonstration of health maintenance organizations. These organizations provide health care on a prepaid basis and stress preventive services. The National Health Service Corps program will continue to place physicians and other health professionals in areas of the country with critical shortages of health manpower. The national effort against drug abuse-including Federal, State, local and private efforts has resulted in the development of treatment capacity for all heroin addicts seeking treatment. Treatment of heroin addiction will continue to be a national priority in 1976 and other drug abuse prevention efforts will also be continued. As required by law, the Special Action Office for Drug Abuse Prevention will terminate in June 1975. A separate agency for drug abuse prevention in the Executive Office of the President is no longer necessary since the major policy and coordination issues in drug abuse prevention have been resolved. In 1976, funding will continue for a wide range of alcoholism prevention projects designed to demonstrate more effective delivery of medical, social, and education services. Federal support for existing Community Mental Health Centers (CMHCs) will continue through the 8-year demonstration cycle. Subsidies to CMHCs have demonstrated the viability of communitybased mental health services. Therefore, no new demonstration awards will be made in 1976. Mental health and social services provided in CMHCs are included among services already available on a more equitable basis through the medicaid and social services programs for which the Federal Government will spend $8.7 billion in 1976. In addition, State and local governments will spend an estimated $7.7 billion in 1976 for these programs. In 1976, $50 million is being requested for the Professional Standards Review Organizations (PSRO) program, which aims at improving |