Medicaid Funding – Trump’s Budget for Fiscal Year 2019

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20 Feb Medicaid Funding – Trump’s Budget for Fiscal Year 2019

The Trump administration has made considerable efforts to reform the Affordable Care Act. Despite all of the failed attempts in 2017, the Whitehouse is once again targeting the nation’s healthcare safety net. The recently released budget for FY 2019 clearly outlines the administration’s intent to restructure Medicaid over the next twelve months. 

Revise the Affordable Care Act and Reform Medicaid

The Trump administration will continue its efforts to replace the ACA with a bill reminiscent to what Senators Graham and Cassidy presented last fall. Had the Graham/Cassidy bill passed, the landscape of Medicaid would have drastically changed. The estimated number of uninsured Americans would have risen to 20 million by 2026 and federal health care spending would be cut in 10 years by $215 billion.

In Trump’s budget proposal, the funding from the ACA for Medicaid expansion and premium subsidies would be distributed as block grants to each state.  In addition, the bill would put into place a per-person spending cap for Medicaid. Trump’s proposed budget places severe cuts for Medicaid above and beyond the Graham/Cassidy block grants. For instance, $675 billion would be cut from federal spending and Medicaid would experience a $1.4 trillion cut due to offset spending on block grants.

While Trump’s health care reform efforts have not yet materialized, the multiple attempts are clear indications of intent for the nation’s healthcare system. In the event that the GOP can secure a larger Senate majority in the upcoming midterm elections, the administration’s vision could very well become a reality.

Big Pharma and Medicaid Drug Pricing

While the administration has not made any progress to lower the cost of pharmaceuticals, the budget does include a handful of drug cost proposals. For instance, Medicaid could create drug formularies of preferred drugs so private insurers could negotiate drug prices with pharmaceutical companies. However, it is unclear if Trump and Congress would approve the formulary system. 

Medicaid may experience additional cuts

Aside from the $1.4 trillion in reform cuts and spending caps, President Trump may also:

  • Cut $2.2 billion by denying benefits to individuals that cannot prove their immigration status
  • Cut $1.3 billion over ten years by increasing the copayments of beneficiaries for improper use of the ER
  • Cut $2 billion by 2028 by permitting asset and income testing for Medicaid eligibility

President Trump has demonstrated through his proposed legislation that he intends to restructure healthcare and Medicaid. While the president and the GOP’s efforts did not happen last year, it is certain that they will continue their efforts in 2018.