President Donald Trump’s 2018 budget blueprint calls for huge reductions to social safety net programs. In particular, it targets Medicaid, the program that provides health insurance for millions of poor, disabled, and elderly people, about 1 in 5 Americans.

Republican plans to repeal and replace the Affordable Care Act already has proposed hitting people on Medicaid hard. The American Health Care Act (AHCA) legislation, which the House passed earlier this month, called for $880 billion in cuts to the program. Trump’s budget calls for cutting another $615 billion from Medicaid. Together, the $1.5 trillion in cuts would slash federal Medicaid funds by nearly 50 percent in 10 years.

“This cuts quite a bit more in federal funding than the AHCA alone,” says John Holahan, a fellow in the Health Policy Center at the Urban Institute, a non-partisan research organization. “States are going to have to figure out how to make up the difference."

The budget proposal must be approved by Congress and much could change in the meantime. The Senate is working on a healthcare overhaul of its own. Democrats are opposed to steep Medicaid cuts, as are some moderate Senate Republicans, particularly those in states that expanded Medicaid. 

Still, the prospect of such a massive change to the government's largest health insurance program is troubling to consumer advocates.

“The proposed cuts to Medicaid would decimate the program, dramatically reducing the number of people covered and the quality of coverage for the most vulnerable Americans,” says Betsy Imholz, director of special projects for Consumers Union, the policy and mobilization arm of Consumer Reports.

The budget proposal comes at a time when Americans are increasingly concerned about their ability to afford health insurance.

More than half (57 percent) of those surveyed for Consumer Reports second CR Consumer Voices Survey in March said they lack confidence they and their loved ones will be able to afford health insurance.

And 41 percent now say they're not confident they'll have access to quality care to get the doctors, tests, treatments and medications they need. That’s up from 35 percent in the first CR Consumer Voices Survey in January.

 

Are you worried about healthcare costs? Join Consumer Reports' efforts to #ProtectOurCare.
 

 

How Medicaid Could Change

Here are five things you need to know about how the possible Medicaid cuts proposed by Trump and House Republican leadership would affect you.

1. The proposed cuts in the Trump budget and AHCA wouldn't take place until 2020. 

2. How you are affected will depend on where you live. That's because under the current system, the federal government gives states money based on costs no matter how many are enrolled. The Trump budget blueprint reduces the amount given to states but lets each choose how they receive the money. States could opt to receive a limited and capped amount per person enrolled, or take a “block grant” and decide how to spend it. Trump and other Republicans say block grants give states more flexibility to design their own programs. But experts say it will be difficult for states to make up the shortfall from lost federal funds.

3. If enrolled in Medicaid, you might face stricter work requirements and have to cover more costs, such as higher co-pays, out of pocket. That's because the Department of Health and Human Services is encouraging states to experiment with ways to curtail costs. Under current law, several states, including Maine and Wisconsin, have already applied for waivers to make such changes, says Robin Rudowitz, an associate director for the Program on Medicaid and the Uninsured at the Kaiser Family Foundation.

It's unclear how much money such changes would save, says Rudowitz. For example, only 15 percent of Medicaid dollars are currently spent on able-bodied adults who might be subject to new work requirements, according to an analysis by the Kaiser Family Foundation and the Urban Institute. 

4. The disabled and the elderly will be hit the hardest. The disabled account for 42 percent of Medicaid spending, while the elderly account for 21 percent, to pay for services such as long-term care and nursing homes. Another 21 percent of Medicaid spending provides health insurance for children.

5. It's still unknown how many Medicaid recipients might lose coverage in the end. The Congressional Budget Office's initial analysis of the AHCA passed by the House, estimated that 14 million people would drop out of the program if the bill became law. The CBO plans to issue a new analysis Wednesday meant to reflect amendments to the initial AHCA legislation. But that analysis won't take into account the proposed cuts in the Trump budget.

As a result, it's unknown how many people might lose coverage overall, says Dee Mahan, director of Medicaid Initiatives at Families USA, a non-profit focused on consumer healthcare issues. "But this is a massive cost shift from the federal government to states. States won't be able to make up all this money," says Mahan. "A lot of people will lose their coverage."