Trump’s “Health Reform Vision” Includes $1 Trillion in Cuts to Medicaid and ACA

For months, the Administration has promised that it has a plan for Americans’ health care if it wins its lawsuit seeking to eliminate the Affordable Care Act (ACA). The President has also pledged to pursue ACA repeal legislation in 2021 if Republicans control Congress.

The President’s new budget doesn’t outline a health care plan. Instead, it includes an “allowance for the President’s health reform vision”: a line of numbers backed up with minimal policy specifics. But despite the lack of detail, the budget sheds light on what the President’s vision for health care entails, including significant cuts and an empty promise to protect people with pre-existing conditions.

Here are five takeaways.

1. 1. The centerpiece of the President’s vision is deep cuts: $1 trillion less funding for Medicaid and the ACA over ten years. (See chart.) The “allowance for the President’s health reform vision” calls for $844 billion in cuts (from 2021 through 2030); the budget indicates that the large majority would come from Medicaid, including the ACA’s Medicaid expansion to low-income adults, while the rest appears to come from other ACA coverage programs. The budget’s other Medicaid proposals account for another roughly $150 billion in cuts. The total Medicaid and ACA cuts would grow rapidly over time, to about $165 billion annually by 2030.

      

   2. The proposed cuts would cause millions of people to lose coverage. By 2030, the annual cuts to Medicaid and the ACA would be almost as large as the cuts that would result from simply eliminating the ACA’s Medicaid expansion and its premium tax credits that help low- and moderate-income people afford health insurance, as the lawsuit would do. Eliminating those programs would cause 20 million people to lose coverage.

      And while the budget doesn’t explain most of its cuts, the few policies it does specify would cause very large coverage losses. The budget would:

      • End enhanced federal funding for the Medicaid expansion. In a two-paragraph description of the President’s health care vision mostly lacking in other policy detail, the budget goes out of its way to specify an end to the ACA’s enhanced federal funding to cover low-income adults. That would almost certainly lead states to end coverage for most of the more than 12 million people who have gained coverage through the expansion, reversing dramatic improvements in access to care and financial security and costing lives.
      • Take coverage away from people not meeting work requirements. The budget would require all states to take coverage away from adult Medicaid enrollees who don’t meet work requirements, a policy that would apply to millions of people on top of those covered through the expansion. In Arkansas, the one state that fully implemented such a policy before a court blocked it, nearly 1 in 4 people subject to it lost coverage.
      • Make it harder for people to get and keep Medicaid coverage. The budget would let states require more paperwork from children and adults seeking Medicaid coverage, keeping some eligible people from enrolling; make it harder for seniors and people with disabilities to qualify for Medicaid without selling their homes; and make it harder for eligible people in immigrant families, including children, to get coverage.
   3. The large savings from these cuts would all go to pay for continuing the President’s tax cuts. The $1 trillion in cuts to health programs over ten years are less than the $1.4 trillion the budget would spend on making the 2017 individual and estate tax cuts perman ent. (See second chart.) So rather than financing health care investments or reducing budget deficits, all of the savings from Medicaid and ACA cuts would go toward regressive tax cuts that would boost the income of the top 1 percent of households by an average of $40,000 each year.

      

   4. The budget’s large cuts to coverage programs would more than offset any gains from its small investments in substance use treatment and mental health care. While the budget proposes some additional investments in treatment for people with mental health conditions and substance use disorders, its proposed cuts would deeply harm many of the people it purports to help. At best, the budget’s touted $12 billion investment in behavioral health is less than 1.5 percent of its cuts to Medicaid and the ACA. And that counts proposed increases in discretionary spending on behavioral health that probably wouldn’t materialize if Congress adopted the budget’s deep cuts to total domestic discretionary funding levels. Medicaid is the nation’s largest payer of behavioral health services, and the ACA’s Medicaid expansion, which the budget singles out for cuts, has been crucial to expanding access to mental health care and substance use treatment.
   5. The budget proposes no policies to protect people with pre-existing conditions, leaving the Administration’s stance in the lawsuit as its only clear policy position on this issue. What the budget omits is as significant to the President’s vision as what it includes. While it states that “the President’s healthcare reforms will protect… those with pre-existing conditions,” it includes no policies to support that pledge. Meanwhile, the Administration is urging the courts to throw out the ACA’s protections for people with pre-existing conditions (along with the rest of the law); when a federal judge endorsed that position, the President tweeted, “Great news for America!

If the Administration’s stance in the lawsuit ultimately prevails, insurers could once again deny coverage or charge higher premiums based on a pre-existing condition; would no longer have to cover essential health benefits such as maternity coverage, substance use treatment, or prescription drugs; and could impose annual and lifetime limits on coverage, including for people with employer plans.