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The $844 Billion Mystery in Trump’s Budget

Yuval Rosenberg

Unlike in previous years, the White House budget proposal released Monday didn’t include a detailed plan to replace major portions of Obamacare. It did include what Ricardo Alonso-Zaldivar of the Associated Press calls “an $844 billion mystery pot.”

The dollar figure represents a target for savings over 10 years resulting from what the budget calls Trump’s “health reform vision.” And that vision remains as grand as it’s been since Trump was a candidate: “The President’s great healthcare vision will ensure better care at lower costs,” the budget says. “Americans deserve affordable, personalized care that puts them in control and provides peace of mind. The President’s healthcare reforms will protect the most vulnerable, especially those with pre-existing conditions, and provide the affordability, choice, and control Americans want, and the high-quality care that all Americans deserve.”

A vital campaign issue: Voters say that health care is a top issue in the 2020 elections, and it’s a vulnerability for Trump. “Despite the strong economy, the number of uninsured people has edged up under Trump, and his eventual Democratic opponent is likely to have a plan to put the nation on a path to coverage for all,” Alonso-Zaldivar writes. “Meanwhile, the White House is supporting a lawsuit to overturn the Obama-era Affordable Care Act, jeopardizing coverage for some 20 million people, as well as protections for those with pre-existing medical conditions.”

The $844 billion question: It’s not clear just how or whether the Trump administration proposes to achieve its promises. But the size of the projected $844 billion in savings imply it would pursue large-scale changes. “Health reform always involves trade-offs, and those trade-offs become more apparent with details. So, it's not surprising that President Trump has avoided such details,” Larry Levitt, executive vice president for health policy at the nonpartisan Kaiser Family Foundation, tweeted. “But, the level of health care spending cuts he is proposing would have severe consequences.”

As Margot Sanger-Katz of The New York Times explains:

“The deep cuts enshrined in the budget’s numbers are not consistent with modest tweaks. Taken together with Medicaid changes recommended elsewhere in the budget, the proposal would strip about $1 trillion out of Medicaid and the Affordable Care Act’s premium subsidies, the two pillars of the law’s expansion of insurance coverage. By 2029, the cuts to those programs in Mr. Trump’s budget would represent around 85 percent of the total that the Congressional Budget Office estimates would otherwise be spent on Obamacare coverage that year.”

And Aviva Aron-Dine, the vice president of health policy at the progressive Center on Budget and Policy Priorities and a former Obama administration official, told the Times that the size of the projected cost savings don’t square with Trump’s promises to preserve existing patient protections. “You can’t cut $1 trillion from these programs and protect the most vulnerable,” she said.

What Trump’s budget signals for health care: Trump’s budget proposes to reduce the growth in Medicare spending, but it does not propose cuts in Medicare benefits. “Though the budget does propose reducing program spending by around half a trillion dollars through a series of cuts to payment policies, it does not make any major changes to the benefit structure of the program or for the populations that will be eligible for coverage,” Sanger-Katz notes.

On the other hand, the budget does signal that the administration would aim to cut Medicaid in ways that reduce coverage and benefits. “In Trump's budget, Medicaid would grow somewhat, but at a rate much slower than underlying health care costs,” Levitt said. “That would require cuts in the program or leave states holding the bag.”

The budget calls for Medicaid work requirements for “able-bodied” adults and for “ending the financial bias that currently favors able-bodied working-age adults over the truly vulnerable” in the program. Alonso-Zaldivar says that jargon means that the administration would seek to repeal the generous federal matching funds for states expanding Medicaid to cover low-income adults under the Affordable Care Act.

The administration defended the Medicaid cuts to reporters. “The Budget protects and preserves Medicaid by putting it on a sustainable path, so it can continue to provide vital services to those who need it the most, including children, the disabled, elderly and pregnant women,” one official told The Hill

The bottom line: Trump’s budget does nothing to reduce his vulnerability on health care or counter attacks that his policies — particularly on Medicaid and the Affordable Care Act — would likely lead millions of people to lose coverage. The cuts and savings it proposes play right into Democratic attacks, even as they might also hearten some in his base. “President Trump has made clear his aim is to dramatically scale back federal health spending,” Levitt said. “No matter who the Democratic nominee is, the choice will be quite stark.”

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