Medicaid & President Trump's Proposed Budget in a Nutshell
President Trump's proposed budget would add millions to the ranks of the uninsured by repealing the Affordable Care Act (ACA) and making deep cuts in Medicaid.
It proposes cutting $777 billion over ten years from Medicaid and ACA subsidies that help people afford marketplace health coverage, primarily by repealing the ACA, including the Medicaid expansion, and replacing that coverage with an inadequate block grant, while also imposing a per-capita cap on the rest of the federal Medicaid program. These proposals would end the ACA’s nationwide protections for people with pre-existing conditions, cause millions more people to become uninsured, and increase costs and otherwise impede access to health care for millions more. The budget also includes other Medicaid cuts, such as making it harder for eligible people to obtain coverage by requiring additional documentation of citizenship or immigration status, re-imposing asset tests, and making it harder for some seniors and people with disabilities to qualify for Medicaid without selling their homes.
For an analysis of the President's budget, see this initial report from the national Center on Budget and Policy Priorities and this Health Policy Hub blog from our partner national organization, Community Catalyst.
The good news - the President's budget is dead on arrival in Congress. Over the next months, Congressional Democrats and Republicans will need to work together to develop their own budget. Stay tuned as Congress moves forward.
President Trump’s Budget:
Proposed Funding Cuts for Major Federal Health Programs
The basics of the federal budget process
President Trump’s proposed federal fiscal year 2020 budget has been released ( here). This budget is a statement of the President’s priorities and policy goals and kicks off the federal budget development process. However, the U.S. Congress has no obligation to consider the President’s budget. Over the next several months, Congress will develop its own proposed federal budget resolution which must be approved by both the House of Representatives and the Senate - but does not need to be approved by the President. With Democrats in the majority in the House and Republicans in the majority in the Senate, both parties will have to work together and develop a budget resolution that represents a compromise between the two parties. The budget resolution only requires a majority vote to pass in both the House and the Senate, and cannot be filibustered in the Senate.
The budget resolution does not change tax or spending directly; it sets targets for other congressional committees that can propose legislation directly providing or changing spending and taxes. The budget resolution guides Congress as they move forward to pass annual appropriations bills, which are needed to fund discretionary programs in the coming fiscal year, and legislation to enact changes to mandatory spending or revenue levels as specified in the budget resolution.
Congress is supposed to pass the budget resolution by April 15, but it often takes longer. In recent years it has been common for Congress not to pass a budget resolution. When that happens, the previous year’s resolution, which is a multi-year plan, stays in effect, although the House, the Senate, or both can use special procedures to set some spending levels. Special procedural rules exist to enforce the terms of the budget resolution, and a special mechanism known as “reconciliation” governs the process of consideration of mandatory spending and tax legislation.
The budget process is described in more detail here.
President Trump’s major health care proposals
Overall, the proposed changes to the Affordable Care Act, Medicaid and Medicare will move the nation toward a health care system that makes it harder and more expensive for many Americans to go to the doctor, catch health problems early, get necessary care in a timely manner, and stay healthy and productive.
Repealing the Affordable Care Act (sometimes called “ObamaCare”) and replacing it with the “the Graham-Cassidy Plan.” The replacement proposal from Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) was one of the plans that were offered during the past couple of years of Congressional debate about the Affordable Care Act’s future. This plan would allow insurers to discriminate against those with preexisting conditions and significantly cut insurance subsidies for low- and middle-income Americans. The Graham-Cassidy plan was only supported by 24 percent of Americans when it was introduced, in stark contrast to the 75 percent of individuals who voiced support for the ACA’s pre-existing condition protections.
President Trump’s budget also would require all Affordable Care Act marketplace enrollees to pay a premium, essentially eliminating the current ability of individuals to access a zero-premium plan, a policy that would likely cause lower-income individuals to lose coverage. In many parts of the country, low-income Americans qualify for "zero premium" insurance plans: health coverage – usually a “bronze” plan - where the entire premium would be covered by their government tax credit. The Trump administration wants to eliminate this option and require premiums for all marketplace plans in order to "increase consumer engagement." The proposed budget does not explain how this would be done.
The President’s budget also makes extreme funding cuts to Medicaid, estimated at a total $777 billion over ten years ($1.5 billion in cuts to Medicaid as we know it today minus spending on the new proposed Medicaid block grant and spending on per capita caps).
The President’s budget eliminates the Medicaid expansion, which currently provides coverage to over 17 million individuals and 153,874 people were enrolled under the Medicaid Expansion in West Virginia as of December 2018.
The President’s budget also proposes to allow block grants and per capita caps in the Medicaid program; two financing proposals intended to dramatically reduce federal Medicaid spending in ways that might result in individuals not being able to enroll in coverage and shift significant health coverage costs to the states. As with Graham-Cassidy, block grants and per capita caps were deeply unpopular when they first surfaced as part of the Affordable Care Act repeal bills.
The President’s budget also proposes to create a nationwide work reporting requirement in Medicaid despite the fact that all of the available evidence confirms these requirements don’t help individuals gain and maintain employment.
In Arkansas, the one state that implemented Medicaid work requirements in 2018, over 18,000 individuals lost their health coverage, while only a small fraction reported that they gained new employment. In addition, many Medicaid enrollees who are working but haven't properly complied with the bureaucratic reporting rules are losing the coverage that helps them stay healthy and keep working. President Trump’s budget states that a nationwide Medicaid work requirement that would save the government an estimated $245 billion over ten years — because fewer Americans would get coverage through the program and be left uninsured.
The President’s budget will require larger copayments in Medicaid. President Trump’s budget proposes "additional flexibility around benefits and cost-sharing, such as increasing copayments for non-emergency use of the emergency department." An extensive body of health policy research has established that when you have higher costs associated with health care, patients cut back on their doctor trips — both the ones that are needed and those that are arguably By deterring timely use of needed medical care, patients will wait to seek treatment until they have more serious and expensive health crisis.
The President’s budget cuts $845 billion from Medicare over ten years. Not all the cuts are to benefits and some of the proposed changes have bipartisan support. However, there are certain changes in the budget that could have a negative impact for patients. For example, the budget proposes requiring prior authorization for certain medical procedures which could make it harder for people who rely on Medicare to get the care they need.