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Trump’s Cuts to Medicare Hospital Payments Trigger Outcry

WASHINGTON (AP) — Democrats are accusing President Donald Trump of going back on his campaign promise to protect Medicare after he introduced a 2020 budget that calls for steep cuts in Medicare payments to hospitals.

The budget embodies long-standing Republican ambitions “to make Medicare wither on the vine,” House Speaker Nancy Pelosi said Tuesday.

“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, D-Calif., said in a statement.

“This budget says ‘promises kept,’” said Senate Democratic Leader Chuck Schumer of New York. “Balderdash.”

The administration argues that the budget doesn’t cut Medicare benefits to seniors but makes better use of taxpayers’ dollars and helps reduce Medicare spending by lowering prescription drug costs.

“On Medicare, we are actually putting it on a sounder footing,” Health and Human Services Secretary Alex Azar told House lawmakers Tuesday at a budget hearing.

As outlined in White House documents, 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. Administration officials say their proposals would keep spending increases more manageable.

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

“Medicare spending will go up every single year by healthy margins, and there are no structural changes for Medicare beneficiaries,” Vaught added.

Medicare cuts have little public support and Trump’s package appears to have slim chances in a divided Congress. Senate Republicans didn’t even bring up the subject at their weekly news conference.

The head of a major hospital association pushed back hard, 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. It would have capped federal spending on the entire program and left millions of people uninsured. 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.

Questioned at the budget hearing by Rep. G.K. Butterfield, D-N.C., Azar acknowledged that the administration cannot force Medicaid spending limits onto states, and Congress would have to approve such sweeping changes.

The proposed Medicare package also would require lawmakers to sign off. It’s common for administrations of both political parties to call for cuts in Medicare payments to hospitals. Because the program is so big, even a single-digit 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 cuts in this year’s budget are larger than what Trump proposed last year.

“Providers are likely to say that the proposed cuts are likely to harm patient care, especially if they think there is some possibility that Congress will adopt them,” said Neuman. “The truth is, it is difficult to predict what the impact would really be.”

Among the budget’s targets are federal payments to reimburse hospitals for uncompensated care, fees for services provided in outpatient departments, and federal financing for graduate medical education. Exempt from cuts: private Medicare Advantage plans favored by Republicans.

Republican strategist David Kochel, a 2016 adviser to Jeb Bush, said there was little evidence that Trump’s voters would abandon him over the Medicare proposal.

“It’s not like he’s been held accountable for things he said on the campaign with his own base,” said Kochel, noting that Mexico is not paying for Trump’s border wall.

Advocates for Medicare beneficiaries had a measured reaction.

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.”