3 things to know about Trump's budget plan for Medicare, Medicaid

Trump's budget would reduce $451B in Medicare spending over 10 years.

February 11, 2020, 5:47 PM

President Donald Trump said he wouldn’t touch Medicare before pitching a budget plan that would do exactly that, along with steep cuts to Medicaid. Democrats are calling it “savage” and “heartless,” while administration officials are insisting they are only slowing explosive growth in future years and that current Medicare benefits would remain untouched.

Here are three things to know about the election-year fight on health care spending:

Trump proposed spending $1.6 trillion less on future health care spending, including $451 billion less for Medicare.

On Twitter, two days before releasing his budget, the president said, “we will not be touching your Social Security or Medicare.” It was a promise he also made in his State of the Union address.

Whether he broke that promise depends upon how you look at it.

President Donald Trump delivers his State of the Union address to a joint session of Congress in the House Chamber on Capitol Hill in Washington, Tuesday, Feb. 4, 2020, as Vice President Mike Pence and Speaker Nancy Pelosi look on.
Leah Millis/Pool via AP

There’s no doubt the president’s budget plan would whack away at federal spending on health care over the next 10 years, with an estimated $1.6 trillion reduction, including $451 billion less spent on Medicare and $920 billion less for Medicaid.

The Trump administration is loath to call it a “cut” though because it applies to future spending plans only and budgets wouldn't decline compared to current spending. When asked for details, the Health and Human Services Department declined to talk in terms of dollar figures for Medicare and Medicaid, offering only that the plan “slows the average growth rate” on Medicare by a small percentage over the 10-year period.

Overall, HHS stated, “funding levels will be no lower each year than they are today.”

Health and Human Services Secretary Alex Azar speaks during a press conference at the Department of Health and Human Services on the coordinated public health response to the 2019 coronavirus, Feb. 7, 2020, in Washington, D.C.
Olivier Douliery/AFP/Getty Images

(The dollar figures were provided by a senior administration official who spoke to ABC News on condition of anonymity; the estimates were also confirmed by independent budget analysts.)

Democrats were unmoved.

House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer speak during a news conference, on Capitol Hill, Feb.11, 2020 in Washington, D.C.
Alex Brandon/AP

"Don’t get in front of an audience and say I’m here to protect Medicare and Social Security … and put a budget like this forward," Pelosi told reporters on Tuesday.

The plan won’t impact Medicare benefits though

Trump’s health policy experts also argue that the plan for slowing “growth” in Medicare won’t impact benefits, but rather how providers like hospitals are paid.

Tricia Neuman, a policy expert at the nonpartisan Kaiser Family Foundation, said the administration is right that the plan cuts the growth in Medicare spending without actually cutting benefits for current enrollees. But she also notes that it includes a proposal that would make it harder for some seniors to qualify for long-term care services, for an estimated $34 billion in Medicaid savings.

Separately, the plan also proposes $135 billion in savings from drug pricing reforms “with few details,” she notes.

But those specifics aside, there’s another reason that Trump’s budget plan is unlikely to have an impact on Medicare recipients – it has almost no chance of becoming reality. Democrats control the House, and an election is on the horizon.

What the budget provides is a blueprint for what Trump would try to accomplish if given the opportunity. It’s essentially a starting off point for budget discussions – and the campaign debate. But it’s unlikely that lawmakers on either side of the aisle would have the appetite – especially in an election year – to chip away at health care spending.

If reelected, Trump clearly has Medicaid cuts in his sights

Medicaid is the government-run health care insurance for people with low incomes and disabilities and covers one in five Americans. And according to Kaiser Family Foundation, it finances nearly half of all births in the U.S.

Under Trump’s 10-year plan, $920 billion in future spending would be cut, according to the senior administration official and analysts.

Like Medicare figures, HHS declined to confirm that figure, saying only that the plan “slows average annual growth” from 5.4 percent to 3.1 percent “to ensure a more sustainable program for the truly needy and gives state flexibility to reform and innovate.”

The plan factors in savings by imposing work requirements as a condition of accepting Medicaid coverage for people who aren’t exempt.

Democrats clearly planned to use the proposal as a talking point ahead of the election, with Senate Minority Leader Chuck Schumer, D-N.Y., on Tuesday calling it a "blueprint for destroying America."

"Now the American people can clearly see that he is a fraud who is not fighting for them," he said.

ABC News' Benjamin Siegel contributed to this report.

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