The Department of Health and Human Services has released a new, expanded version of its proposed FY 2026 budget.  In some areas this version provides more detail than the administration shared in early May when it released a so-called “skinny budget” and some aspects of the budget proposal differ from the May release.  Highlights of the most recent proposal include:

  • A reduction of 25 percent, from $126 billion to $94.7 billion, in HHS’s overall discretionary (non-mandatory) spending.
  • The consolidation of HHS’s 28 current operating divisions into 15 divisions.
  • A reduction of $661 million, or 11 percent, in discretionary spending for CMS.
  • The shifting of the 340B prescription drug pricing program into CMS.
  • The elimination of the Health Resources and Services Administration (HRSA, which currently administers 340B), the Substance Abuse and Mental Health Services Administration (SAMHSA), the National Institute for Occupational Safety and Health, some CDC programs, and others and the absorption of their responsibilities under a new “Administration for a Healthy America.” This reorganization would include a reduction of funding for some current SAMHSA programs.
  • The consolidation of the Community Mental Health Services Block Grant, the Substance Use Prevention, Treatment and Recovery Support Services Block Grant, and State Opioid Response grants into a single new $4 billion Behavioral Health Innovation Block Grant.
  • A reduction of $3.9 billion in the CDC’s budget.
  • A reduction of $18 billion in the NIH’s budget – about one-half of its current budget – and the consolidation of its current 27 institutes and centers into eight such entities.
  • A reduction of $409 million in the FDA’s budget.
  • The creation of a new “Administration for Children, Families, and Communities” that would include the current Administration for Children and Families and the Administration for Community Living.
  • The absorption of the Agency for Healthcare Quality Research into the Office of the Secretary.

Administration budget proposals have historically received little serious consideration before being dismissed by Congress – a circumstance that has not varied based on the party of the president submitting the budget or the party in the majority in Congress.  Their significance is generally that they present a statement of an administration’s priorities and plans.  Learn more from HHS’s proposed FY 2026 budget.

This is not expected to be the final word from the administration on its FY 2026 spending plans for HHS; it has indicated that when an FY 2025 budget reconciliation bill is adopted it will provide further information on its FY 2026 plans.