Outcry Over Trump’s Cuts To Medicare Hospital Payments

Associated Press  March 12, 2019 

WASHINGTON (AP) — As a presidential candidate, Donald Trump promised not to cut Social Security, Medicare, or Medicaid. Once in the White House, Trump reneged on his Medicaid promise, and now he's being criticized for proposing steep Medicare payment cuts in his new budget.

House Speaker Nancy Pelosi told The Associated Press on Tuesday that the budget embodies long-standing Republican ambitions "to make Medicare wither on the vine."

"After exploding the deficit with his GOP tax scam for the rich, President Trump is once again trying to ransack Medicare, Medicaid and the health care of seniors and families across America," Pelosi said in a statement.

The budget calls for $845 billion in total, or gross, spending reductions to Medicare over 10 years, mainly by cutting future payments to hospitals and other service providers.

However, that eye-popping figure appears to involve some budgetary legerdemain. The nonpartisan Committee for a Responsible Federal Budget found actual savings of $515 billion or $575 billion, depending on how those savings are calculated.

Medicare now costs about $650 billion a year, and that's expected to rise sharply as the baby boom generation goes into retirement. The White House says the budget doesn't reflect benefit cuts to seniors but makes better use of taxpayers' dollars and reduces spending by cutting prescription drug costs.

"He's not cutting Medicare in this budget," acting White House budget director Russell Vought told reporters on Monday. "What we are doing is putting forward reforms that lower drug prices, (and) that because Medicare pays a very large share of drug prices in this country, it has the impact of finding savings.

"We're also finding waste, fraud, and abuse," Vought added. "Medicare spending will go up every single year by healthy margins, and there are no structural changes for Medicare beneficiaries."

But the head of a major hospital association was pushing back, saying in a blog that "arbitrary and blunt" Medicare cuts would have a "devastating" impact on care for seniors.

"Hospitals are less and less able to cover the cost of care for Medicare patients; it is no time to gut Medicare," said Chip Kahn of the Federation of American Hospitals.

As a candidate early in the 2016 presidential campaign, Trump held himself out as a different kind of Republican.

"Every Republican wants to do a big number on Social Security, they want to do it on Medicare, they want to do it on Medicaid," he said at a 2015 event in New Hampshire. "And we can't do that. And it's not fair to the people that have been paying in for years and now all of the sudden they want to ... cut."

But his plan to repeal and replace "Obamacare" involved major Medicaid cuts. Indeed, it would have capped federal spending on the entire program. That would have left millions of people uninsured and shifted hard choices about benefit cuts to states. In the end it couldn't pass a Republican-controlled Congress. The latest Trump budget essentially repeats his earlier proposal to do away with the Affordable Care Act and cap Medicaid spending.

The proposed Medicare cuts are another issue. It's common for administrations of both political parties to propose cuts in Medicare payments to hospitals. Because the program is so big, even a small reduction in percent terms can add up to hundreds of billions of dollars over time.

Tricia Neuman of the nonpartisan Kaiser Family Foundation said the Medicare reductions in this year's budget are larger than what Trump proposed last year.

"The proposals generally target hospitals and other health care providers," Neuman said. Examples include reductions in federal payments to reimburse hospitals for uncompensated care, lower payments for services provided in outpatient departments, and cuts to federal financing for graduate medical education.

Advocates for Medicare beneficiaries had a measured reaction to the budget.

A statement from AARP reflected a mix of praise and concern. "We are heartened that President Trump's budget continues to highlight the need to address prescription drug prices," said the group. "But we're also concerned about proposed cuts to programs important to seniors."

The Medicare Rights Center said "it is hard to envision a situation where these changes do not profoundly impact the lives of people who depend on the program."

The group also said it's concerned about that some of Trump's Medicare drug proposals could create winners and losers among beneficiaries. Seniors with very high costs would benefit from a proposed cap on their copays, but others may actually wind up having to pay more.

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