Despite his repeated promises on the campaign trail that he would not cut Medicaid, President Trump’s FY 2018 budget would slash the program’s budget nearly in half over the next decade. The budget assumes the $839 billion in Medicaid cuts in the American Health Care Act (AHCA) become law, and then calls for an additional $627 billion in cuts to the program, all while slashing other safety net programs too.
An attack on health and economic security for low-income communities
Cuts of this magnitude would put at risk the health of the millions of older adults, people with disabilities, children and low-income families who depend on Medicaid for their care. They would undermine a program that is essential to the fight against the opioid epidemic. And they would rock the economic security of low-income communities, who depend on Medicaid coverage to protect them against crippling medical debt.
What’s more, the Trump budget pairs these Medicaid cuts with deep cuts to other essential health and social welfare programs – like food stamps and disability insurance. Together, these programs not only boost economic security for low-income families, they also contribute to health security by putting healthy foods and safe housing within reach of families who could not otherwise afford them. By slashing these programs alongside Medicaid, the Trump budget is an all-out attack on the health and economic security of vulnerable communities.
A wakeup call for America’s governors
While many governors have expressed concern about how the AHCA ends the enhanced funding for the ACA’s Medicaid expansion, they have said relatively little about how it also turns Medicaid into a per capita cap. This budget should be a wake-up call for those governors: per capita caps are a Trojan horse that will allow the federal government to balance its budget at the expense of state budgets.
While budget documents don’t make it entirely clear how the administration would achieve over $600 billion additional savings in Medicaid, Trump’s budget director Mick Mulvaney explained that the additional funding cuts result from a reduction to the growth rate for the per-capita cap, compared to the AHCA. That’s just a backdoor way of shifting Medicaid costs from the federal government on to states.
The Trump budget exposes as wishful thinking any assumptions that governors may have made that they could weather the AHCA’s cuts to Medicaid by utilizing additional “flexibility”. The AHCA doesn’t merely make $839 billion in Medicaid cuts; it creates a dial that Congress and the administration can and will ratchet down any time they want additional savings. The $1.47 trillion in Medicaid cuts inherent in Trump’s budget this year is likely just the beginning.
Additional cuts targeted at children
Trump’s budget also targets the Children’s Health Insurance Program (CHIP), which provides health insurance to children of low- and moderate-income families who are not eligible for Medicaid. In 2016, CHIP covered nearly 8.9 million kids, while Medicaid covered about 37 million. Together with Medicaid, CHIP coverage has helped lower the uninsurance rate for children to a historic low of 4.8 percent.
CHIP is currently funded through September 30, 2017 but will need another funding extension in order to continue past that date. The Trump administration’s proposed budget would extend CHIP funding for only two years despite the recommendation from the Medicaid and CHIP Payment and Access Commission to extend funding for five years.
The proposed budget would end the higher federal CHIP matching rate known as the 23 percent bump and eliminate the Affordable Care Act’s Maintenance of Effort requirement at the end of September—two years earlier than the ACA intended. It also assumes the AHCA provision that rolls back eligibility for school-aged children from 138 percent FPL to 100 percent FPL—potentially affecting millions of children. We know that Medicaid and CHIP disproportionately cover children of color, so not only is this a loss in coverage but a step backward in our efforts to address health equity.
Trump’s budget would further undermine CHIP’s efficacy by eliminating federal enhanced matching funds to children above 250 percent of the Federal Poverty Level. This is particularly problematic because in many states CHIP eligibility extends beyond this marker. For example, Alabama provides CHIP coverage up to 317% FPL and New York goes up to 405% FPL. By capping these CHIP eligibility levels, the Trump budget reduces state flexibility in meeting the needs of children. Overall, the Trump administration’s budget does not help advance children’s health, instead it puts us in danger of reversing our hard won coverage gains.