How Much will Medicaid and Medicare Budget Cuts Save?

Trump’s 2021 fiscal year include major Medicaid and Medicare budget cuts which will have a big impact on those programs if successfully implemented.

President Trump’s proposed fiscal year 2021 budget will include substantial Medicaid and Medicare budget cuts.  The HHS budget notes that taxpayers could save $756 billion in Medicare through 2030 by reducing fraud and waste and relying on lower payments to hospitals through “site-neutral” payment policies. For Medicaid, the Health and Human Services Department’s annual budget proposal presumes that expanded work requirements, tighter beneficiary eligibility screening and capped or “block grant” state funding will all be in effect.  These types of Medicaid and Medicare budget cuts will have a big impact, if successfully implemented.

Also for references, Medicaid and Medicare accomplish different goals, so see here for the differences.  https://www.galliganmanning.com/practice-areas/elder-law/

These approaches show how the White House will change entitlement programs in an election year, if Trump’s budget is approved. His administration would like to see able-bodied adults who enroll in Medicaid to have a work requirement imposed. If this requirement was implemented, it would probably decrease the population of recipients and more of those receiving benefits would be physically unable to work.

“As part of the President’s Health Reform Vision, Medicaid spending will grow at a more sustainable rate by ending the financial bias that currently favors able-bodied working adults over the truly vulnerable,” the HHS budget document said.

The Centers for Medicare & Medicaid Services (CMS) has okayed 11 state work requirement programs and is in the process of looking at nine others. These state work mandates are being challenged in court, but the administration still contends they’ll save Medicaid $8 billion in 2021 alone.

CMS would like to implement Medicare’s “site-neutral” payment policy. This would pay the same lower rate for services whether provided at a doctor’s office or in a hospital outpatient setting. It’s a priority to see it go into effect. However, a federal court scrapped the policy last year, saying it was a programmatic overreach. Nonetheless, the Trump administration again implemented it this year and is facing more lawsuits from the hospital industry. The Trump White House says the site-neutral Medicare payments would save more than $164 billion over 10 years.

The administration also wants to cut Medicare payments for doctors’ residency training programs and hospitals’ uncompensated care. Those moves would save about $52 billion and $88 billion, respectively, over 10 years, the budget document explains.

The administration also estimates that overhauling Medicare payments for care after a patient leaves the hospital would save more than $101 billion over the next 10 years.

We’ll continue to watch these developments as they will have a big impact on Medicare and Medicaid programs.

Reference: Bloomberg Law (Feb. 11, 2020) “Trump Projects Saving Billions From Medicare, Medicaid Policies”