May 24, 2017
Trump Health Care Budget Cuts Program Funding But Leaves Big Pharma Alone
Ricardo Alonso Zalidivar READ TIME: 3 MIN.
WASHINGTON -- Candidate Donald Trump promised to improve health care, but as president his first full budget calls for deep cuts to popular insurance programs. And it omits any proposal for negotiating prescription drug prices, a Trump talking point.
While not addressing Medicare's long term financial problems, the budget targets the much smaller Children's Health Insurance Program, or CHIP. And Trump's Medicaid cuts appear even bigger than those in the health care bill recently passed by House Republicans, above what would be needed to fulfill the GOP vow to repeal "Obamacare."
Both safety net programs are federal-state collaborations, and such cuts would leave states with hard choices: spend more of their own money; restrict enrollment; cut benefits, or reduce payments to hospitals and doctors.
"If states get fewer dollars from the federal government, there are only so many options, because states have to balance the budget every year," said Elizabeth Carpenter, a health policy expert with the consulting firm Avalare Health.
Trump's budget was silent on bargaining with the pharmaceutical industry to reduce the cost of prescription drugs, a topic the president has often touched on. But the budget repeated Trump's previous proposals for double-digit percentage cuts to the National Institutes of Health and the Centers for Disease Control and Prevention, considered nonstarters even by Republican lawmakers.
The trillion-dollar-plus Department of Health and Human Services, whose programs cover more than 130 million people, did not hold its customary budget briefing on Tuesday. From Europe where he is attending a world health conference, HHS Secretary Tom Price released a statement that said the budget "outlines a clear path toward fiscal responsibility by creating efficiencies that both improve services and save money."
As a candidate and as president Trump has frequently talked about making health care more affordable for regular folks, including by lowering premiums and deductibles. He promised not to cut Medicare, and initially, Medicaid as well. But to some experts, Trump's budget looks more like a cost shift from the federal government to the states and to people now benefiting from coverage expansions in the Obama years.
"I think it will be challenging for states to try to figure out what to do," said Trish Riley, executive director of the nonpartisan National Academy for State Health Policy, which advises states.
Children's health insurance previously had not figured as a major issue for the administration. The CHIP program covers about 7 million children, and traditionally enjoyed bipartisan support. Trump's budget would extend CHIP for another two years, but it would also cut $5.8 billion.
"It's a big impact," said Riley. States would receive significantly lower overall payments from the federal government, and Washington would no longer match state spending on coverage for kids whose families make more than two-and-a-half times the federal poverty level, about $51,000 for a family of three.
More than half the states now cover children above the administration's proposed cutoff, Riley said. Administration officials say that the limitation proposed in the budget would focus taxpayer money on families who need it the most.
Medicaid is facing even bigger cuts. Already, the House GOP bill would roll back former President Barack Obama's Medicaid expansion while also capping future federal financing for the program. The Congressional Budget Office estimates that would reduce federal Medicaid spending by $839 billion over 10 years.
Trump's budget would squeeze additional savings beyond that, but congressional aides say how much is not exactly clear. White House Budget Director Mick Mulvaney has indicated that the budget uses a lower growth rate for the federal government's share of future Medicaid spending.
"The Trump budget assumes hundreds of billions more in Medicaid cuts than the House bill," said Edwin Park, a health policy expert with the Center on Budget and Policy Priorities, which advocates for low-income people.
