President Donald Trump’s federal budget plan for fiscal year 2021, which begins in October, includes close to $1 trillion in cuts to Medicaid that analysts say could hurt access to health insurance and care for the millions of people covered by the safety-net program.
Politicians have tried for years to tamp down Medicaid costs, though soon after he took office, Trump said he would not cut the program.
Medicare — which covers seniors and the disabled — is a kind of third rail to politicians wary of alienating a huge number of faithful voters. Trump has pledged to protect it, too.
“I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid,” he told the Daily Signal, a political news website published by the conservative Heritage Foundation, in 2015.
His budget plan also includes changes to the way Medicare pays for services. The changes are intended to reduce unnecessary spending — not cut services for seniors — but analysts say they could also affect the care people receive.
Trump’s proposal has gone to Congress, which ultimately develops and approves a budget it then sends back to the president for his signature. Yet the Trump plan provides important insights, analysts said.
“The president’s budget isn’t an action item — it’s a statement of priorities,” said Robin Rudowitz, a vice president at the Kaiser Family Foundation, a health-care policy think tank.
But health advocacy organizations are concerned about the possibilities, said Lindsey Copeland, the federal policy director for the nonprofit Medicare Rights Center.
“We think this is a damaging vision for older adults and people with disabilities," Copeland said.
‘President’s health reform vision’
The budget anticipates $844 billion in health-care savings over the next 10 years from the “president’s health reform vision,” a vague plan for replacing the Affordable Care Act. About $744 billion of that would come from changes to Medicaid that would end what the administration describes as the “financial bias that currently favors able-bodied working-age adults over the truly vulnerable.”
Under the ACA, millions of uninsured low-income people gained coverage for the first time as part of the law’s Medicaid expansion. Trump’s plan would end federal dollars — which dwarf the states’ contributions — possibly making some 13 million people again uninsured, if states are unable to maintain expanded eligibility, according to the Center on Budget and Policy Priorities, a Washington think tank.
The administration also suggested its health reform vision could save money through instituting greater price transparency, lowering prescription-drug prices, and ending surprise bills — but the budget does not offer a plan for accomplishing those initiatives or indicate exactly how much money each could save.
According to the budget, the plan would “protect the most vulnerable, especially those with preexisting conditions." Yet at the same time, the Trump administration is supporting a Texas lawsuit seeking to do away with the ACA entirely — including its popular coverage guarantee for people with preexisting conditions.
Medicaid work requirements
The budget also requires all states to establish work requirements for Medicaid recipients, which it says would save an estimated $152 billion. But in practice, policy experts say, Medicaid work requirements won’t achieve anything like such savings by insisting that people earn more money.
About two-thirds of adult Medicaid recipients work full time or part time, already; those who don’t typically cannot work because of multiple chronic illnesses, physical limitations, or other barriers to employment, according to a study by the Kaiser Family Foundation.
Yet the work requirements could save money in a more roundabout way, by making it a lot harder to meet the demands of bureaucracy. People who are qualified may lose coverage if they fail to properly document whether they qualify for a work exemption every time it’s required, said Rudowitz. Many low-income people might not have access to a computer with internet, may work irregular work, or might even be homeless.
“To the effect that individuals don’t comply with the reporting and end up facing consequences from being dis-enrolled from the program, they could lose access to health coverage and access to services,” said Rudowitz, who is codirector of the Kaiser Family Foundation’s program on Medicaid and the uninsured.
On Friday, days after the budget was released, a federal appeals court ruled against Arkansas’ Medicaid work requirement, arguing that the Department of Health and Human Services didn’t have authority to force people to work to qualify for Medicaid. About 18,000 Arkansas residents lost coverage when the state imposed a work requirement in 2018.
What about Medicare?
The budget proposes several changes to the way health-care providers are paid in order to save money, not cut services. An estimated $117 billion could be saved over 10 years by stopping the practice of paying hospitals more than doctor’s offices for the same services.
Patients have complained for years about this price disparity. But Copeland said this change could affect patients by giving hospitals incentive to transfer patients to other facilities. As it is, Medicare pays doctors significantly less than private insurance does for the same services. Doctors dissatisfied with still lower rates could cut down on the number of Medicare patients they accept — or stop accepting Medicare entirely, she said. That’s what has happened with Medicaid, which pays even less than Medicare.
“Though intended to control costs by reducing spending growth rather than by cutting services directly, we are skeptical that reductions of the magnitude proposed could be implemented without negatively affecting beneficiaries,” the Medicare Rights Center wrote in a policy brief.