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Trump proposes big cuts to health programs for poor, elderly and disabled

The Washington Post logo The Washington Post 3/11/2019 Jeff Stein and Amy Goldstein

a close up of electronics: President Trump’s fiscal year 2020 budget request would make big cuts to the government’s health programs for the poor, elderly and disabled. © Anna Moneymaker/Bloomberg President Trump’s fiscal year 2020 budget request would make big cuts to the government’s health programs for the poor, elderly and disabled. The Trump administration is proposing a sharp slowdown in Medicaid spending that would shift more than $1 trillion over 10 years by steering the entitlement program into a system of block grants that would give states far more freedom to set their own rules about how to cover the poor.

The budget released by the White House on Monday also calls for a sizeable reduction for Medicare, the federal insurance for older Americans that President Trump has consistently vowed to protect. Most of the trims relate to changing payments to doctors and hospitals, and renewed efforts to ferret out fraudulent and wasteful billing — oft-cited targets by presidents of both parties.

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In keeping with Trump’s promise in last month’s State of the Union address to end the spread of HIV over the next decade, the budget includes an initial installment of $291 million next year targeted to communities where the virus is continuing to infect people not getting proper treatment. It also includes $4.8 billion to slow the opioid epidemic -- the same amount as in last year’s budget.

Efforts the president and HHS Secretary Alex Azar advocate to curb the rising price of prescription drugs are part of the budget, as well. But spending on the National Institutes of Health, a longtime favorite of lawmakers of both parties, would be reduced by $4.5 billion, with the National Cancer Institute proposed to absorb the largest chunk of that cut.

The idea of opening Medicaid to block grants to states — or a related idea that would create per-person funding caps — would both be fundamental alterations of a federal entitlement program that began in the 1960s as part of the War on Poverty and have always provided each state a share of funding for anyone who is eligible. The budget calls for limiting the program’s growth to the pace of inflation.

Since health care spending typically rises more swiftly than the consumer price index, tying it to the nation’s overall inflation rate would put a strong squeeze on the public insurance system that covers tens of thousands of poor, vulnerable people, some of them elderly.

The spending plan calls for a cut of nearly $1.5 trillion in Medicaid over 10 years and for $1.2 trillion to be added for a new “Market Based Health Care Grant” — that is, the block grants that would start in 2021. It also would eliminate funding for Medicaid expansion under the Affordable Care Act has gone to about three dozen states over the past five years.

The budget does not make explicit whether the administration is asking Congress to consider converting Medicaid to a system of block grants once again — or whether it seeks to make such a switch on its own. Congressional Republicans included the idea in their failed 2017 efforts to repeal large aspects of the ACA. Opposition to block grants, including from some GOP governors who feared they would be saddled with escalating health-care costs, was a major reason behind the Senate’s inability to pass such bills.

Last year’s White House budget — an annual exercise that usually is more wish list than actual harbinger — also endorsed the Medicaid block grant idea, assuming it would be part of an ACA repeal. The new proposal comes as the House is in Democratic hands and even congressional Republicans have largely turned their attention away from dismantling the ACA.

Federal health officials have quietly been exploring the controversial idea of giving individual states permission to convert their Medicaid programs to block grants or a system of caps. Senior officials of at least one state, Utah, have said publicly they have been discussing the idea with leaders of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, and leaders of other conservative states also appear to be interested.

The Trump budget also proposes cutting spending on Medicare, the federal program that gives health insurance to older Americans, by $845 billion over the next 10 years, in part by limiting fraud and abuse and payments to hospitals. During the 2016 presidential campaign, Trump said he would not cut Medicare or Social Security, the retirement program for the elderly, but his budget last year also included a proposed cut of more than $550 billion to the program.

The White House budget calls for a number of new programs to reduce Medicare spending, including by increasing audits of payments through Medicare Advantage, instituting new changes to reduce other forms of “fraud and abuse,” and changing hospital reimbursement rates.

The increasingly ambitious cuts to Medicare in the White House budget reflect the administration’s narrowing budget math, as the federal deficit has continued to balloon under its watch. They also come at a time when many Democrats have embraced plans for expansions of Medicare, including a “Medicare-for-all” system that would increase federal spending on the program by as much as $30 trillion.

The changes are expected to encounter fierce resistance from industry lobbying groups, as well as from member of Congress who are traditionally nervous about backing cuts to health care programs. Charles N. “Chip” Kahn, president of the Federation of American Hospitals, which represents more than 1,000 for-profit hospitals and health systems, said the budget “imposes arbitrary and blunt Medicare cuts. . .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.”

“Administrations have been proposing to do these sort of things forever and they never happen,” cautioned Howard Gleckman, a budget expert at the Tax Policy Center, a nonpartisan think tank. “I suspect that’s what’s going to happen this time.”

jeffrey.stein@washpost.com

amy.goldstein@washpost.com

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