Feb 11, 2020 - Health

Hospitals and Medicaid enrollees lose under Trump's budget

Illustration of a hand pointing at a line of people
Illustration: Aïda Amer/Axios

President Trump's 2021 budget proposes massive reductions in Medicare and Medicaid spending, which would be felt most acutely by hospitals and Medicaid beneficiaries.

Why it matters: Budget proposals are more about messaging than policies that have any chance of becoming law, but it's still a good indication of the direction the administration would like to head in if Trump wins re-election.

Yes, but: The budget isn't entirely theoretical; the administration is moving full steam ahead on some of its Medicaid proposals — like work requirements and block grants — and is still hoping to notch a victory on prescription drug prices before the election.

Details: The budget would reduce Medicare and Medicaid spending by hundreds of billions of dollars each over the next decade.

  • The budget doesn't include new policy ideas to replace the Affordable Care Act or protect pre-existing conditions, but does include $844 billion in spending reductions from the "President's Health Reform Vision," which accounts for a large portion of its Medicaid savings.

Between the lines: These huge Medicare savings come at the expense of hospitals, including through site-neutral payment policies and reduced uncompensated care payments.

  • Although the Medicaid reforms are largely unspecified, if the Trump administration's past actions indicate future behavior, they'd likely include cuts to the ACA's expansion population and capping federal payments to states.
  • "The level of spending reductions called for would inevitably mean fewer people covered and more uninsured," the Kaiser Family Foundation's Larry Levitt said.

My thought bubble: It's extremely hard to see Congress legislating these kind of cuts to hospitals, no matter who's in charge. But if Republicans are in control after the election, it's pretty easy to see them at least trying to pass these large-scale Medicaid reforms again.

Go deeper: Trump vs. Medicaid

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