Understanding the Status of Medicaid, Medicare, and the PPACA under Trump

We’re now into the second month of the second Trump Administration and nearing the third month of the new Congress. There’s a lot happening, but let’s focus on the status of Medicaid, Medicare, and the Patient Protection and Affordable Care Act (PPACA).

We’ll start with Medicaid, the future funding of which has garnered a lot of headlines. Despite those many headlines, it’s difficult to track exactly what is going on. Many news stories are saying that Medicaid budget cuts are on the way, but President Trump says that Medicaid will remain, quote, “untouched.”

Let’s clarify: neither the Senate nor the House budget proposals specifically indicate that the Medicaid program may be cut. So, in one sense, it is true that for the time being, the Medicaid program appears untouched by current budget and policy proposals.

However, in its current version, the House budget proposal is looking for nearly a trillion dollars in spending cuts from the Energy and Commerce Committee, the House Committee that controls Medicaid funding  – that’s TRILLION, with a “T.”

According to one GOP lawmaker, it is mathematically difficult to achieve that magnitude of savings without making substantial cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP).  

It’s as if you were trying to make significant cuts to your household budget, and you found that a significant majority of your monthly salary was going to car payments. You may not be ready to talk about it at the dinner table yet, but you’re probably going to have to sell that third vehicle.

In the same way, Medicaid cuts may not specifically be referenced in the budget yet, but there’s no other way to make the cuts the House wants to make.

Budget talks between the GOP House, Senate, and President are in a hurry-up-and-wait kind of phase. All three state that there is urgency to get something passed, but there’s quite a bit of disagreement on what that something should look like (here and here too) – and Medicaid is in the middle of that disagreement.

Now, to Medicare: Medicare is not on the menu for cuts, but is being looked at for maybe an increase. As readers are well aware, providers have been experiencing a nearly 3-percent cut in Medicare reimbursement rates since January. A bipartisan House bill was introduced at the end of January to fix that, but whether it makes it into any of the current budget considerations is still up in the air.  

Let’s turn to the PPACA, which has had some interesting one-step-back, one-step-forward momentum in the first month of the Trump Administration.

First, the Administration reduced funding for the PPACA Navigator program by 90 percent, stating that the program, which helps people enroll in the PPACA exchanges, as well as in Medicaid and the Children’s Health Insurance Program (CHIP), enrolled less than 1 percent of the total PPACA enrollees in the 2024 plan year. The budget reduction is a repeat of the cuts to the Navigator program the first Trump Administration made, which were then subsequently re-upped by the Biden Administration.

On the other hand, the Trump Administration told the U.S. Supreme Court that it will maintain the Biden Administration’s arguments about the PPACA preventive services mandate. In current litigation, the Supreme Court is to decide whether the government, through the PPACA, can require commercial insurance companies to cover specific preventive services without cost sharing.

For the time being, the Trump Administration is arguing that the government has a right to mandate preventive coverage.

Under the new Congress and Administration, it’s undeniable that changes are likely coming for Medicaid, Medicare, and the PPACA.

Like so many other government policies, we’re just not sure what those changes will look like.

Programming note:

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