Trump's 2020 Budget Proposes $1 Trillion Cut to Medicare, Medicaid

By Amanda Michelle Gomez, ThinkProgress

12 March 19

"They just want to give up any role, any accountability."

he White House released its 2020 budget proposal on Monday, proposing more than $1 trillion in cuts to the popular programs Medicare and Medicaid and giving insight into what the executive branch would do if Congress didn’t control the federal government’s pocketbook.

The most notable cut comes out of Medicaid, a health program for people who are low-income or have a disability, which Trump proposes cutting by more than $700 billion over 10 years.

The budget calls for Medicaid block grants to states, which would give states far greater flexibility in determining how to run the program and who is eligible. For the second time, the White House endorses a Republican bill that failed in 2017, back when Congress tried to repeal the Affordable Care Act (ACA), and that would set a per-enrollee funding cap. Medicaid expansion under the ACA would also be eliminated under this proposal. The Center on Budget and Policy Priorities estimated that millions of people would become uninsured under such a plan.

This year’s budget also proposes a nationwide Medicaid work requirement, a policy that would lead to loss of coverage for about 4 million people, according to the Kaiser Family Foundation.

While the budget technically proposes a $1.5 trillion dollar cut in Medicaid over a decade, the actual number amounts to $777 billion when accounting for how much the government will spend on state block grants, said Judith Solomon, fellow at the Center on Budget and Policy Priorities. In other words, the administration would replace Medicaid expansion, which has no set dollar amount, with a locked, lump sum — a reduction in what states receive to insure low-income people.

“The size of the cut speaks for itself,” Solomon told ThinkProgress. “You really see what they really want to do and how it would dramatically increase the number of people without insurance.”

“There is this sort of notion that they just want to give up any role, any accountability that somehow you could run a program with a cut of that magnitude in the budget,” she added.

The Graham-Cassidy-Heller-Johnson bill that the budget endorses is nearly impossible to become law since Democrats took back the House of Representatives in the midterm elections. The Trump administration has instead been devising a plan to bypass Congress and permit states to block grant their Medicaid programs, Politico first reported in January. But allowing states to block grant the poverty program through, say, waiver authority likely goes against Medicaid law.

Utah has asked the federal government if it can cap enrollment to meet restraints local lawmakers set in the state budget, or partially expand Medicaid and go against what residents voted for in November. If the administration does approve such a waiver, it’ll likely be met with legal challenges.

The administration also proposes making cuts to Medicare, a popular program serving seniors. The roughly $817 billion dollar Medicare cut comes mostly from reducing spending on prescription drugs and payments to some hospitals. Most of these cuts would require legislative action, the Center for Budget and Policy Priorities’ Paul Van de Water told ThinkProgress. Most of the cuts wouldn’t affect seniors as they affect provider payments, the Kaiser Family Foundation’s Juliette Cubanski told the Hill. Some of these policies were also endorsed by the Obama administration.

The Trump administration’s budget was immediately met with resistance from a prominent hospital lobbying group.

“The new White House budget imposes arbitrary and blunt Medicare cuts to hospitals who care for the nation’s most vulnerable. The impact on care for seniors would be devastating. Not to mention that massive reductions would drastically reduce resources critical to care for low-income Americans and cripple efforts to stave off the looming physician shortage,” said Federation of American Hospitals President and CEO Chip Kahn in a statement.

“Hospitals are less and less able to cover the cost of care for Medicare patients, it is no time to gut Medicare.”

President Donald Trump promised to “save Medicare, Medicaid and Social Security without cuts” on the campaign trail. But his budget suggests the opposite.