Reports: Trump Budget to Cut Medicaid; Healthcare Subsidies to Stay for 90 Days

Several published reports said the proposed budget due Tuesday would feature the Medicaid cuts contained in the American Health Care Act (AHCA), along with cuts to food stamps and other anti-poverty programs.

The Washington Post, the Associated Press, and other outlets were reporting early today that documents obtained by a group called the Third Way show the Trump budget will follow through on plans to cut Medicaid by $880 billion over 10 years. The AHCA calls for converting Medicaid to a block grant program that would give more control to states and creating a per-capita cap that would fluctuate with the number of people in the program.

The Post reported that numerous social safety net programs, including Medicaid, grew too rapidly during the financial crisis and needed to be scaled back as people returned to work. Medicaid has also grown due to the Affordable Care Act (ACA), which allowed states to expand benefits to people earning up to 138% of the federal poverty line. Today, 31 states have chosen expansion.

Many seniors receiving nursing home care are “dual eligibles,” meaning they receiving benefits under both Medicaid and Medicare. However, most of the complaints from Republicans about safety net programs are about “able-bodied” adults, those they feel should be working but are not. According to the Post, leaked documents show there will be changes to the Social Security Supplemental Security Income program, known as SSI, which provides cash benefits for the poor and disabled, including some with severe mental illness or developmental disabilities.

The budget offers only one part of today’s healthcare news. The administration will ask a federal court later today whether it plans for a 90-day delay in a lawsuit that could ultimately end subsidies paid to insurers under the Affordable Care Act (ACA). The motion is expected to be filed later Monday.

In a statement, Senate Minority Leader Chuck Schumer, D-New York, said the administration was “kicking the can down the road,” and should fund the subsidies permanently.

The subsidies, which help low- and moderate-income Americans buy coverage on the exchanges under the ACA, remains in effect while Congress debates the AHCA. Insurers have been waiting to hear the fate of the subsidies before announcing their plans for 2018, and the uncertainty is one reason Aetna has already decided to quit the exchanges for next year.

House Republicans challenged the subsidies in court, and in 2016 a federal judge agreed they required an appropriation. The Obama administration appealed. Trump could drop the appeal, and he has hinted that he wants to end the subsidies. But HHS Secretary Tom Price, MD, has reportedly warned about the fallout of an abrupt exodus of insurers from the exchanges.