AP NEWS

Trump’s 2020 budget to reduce Medicare costs by targeting waste, fraud

March 12, 2019

President Trump’s budget would largely skip the hard work of cutting entitlement spending, the biggest driver of federal debt, instead proposing to slow the growth of payments to Medicare providers and leaving Social Security untouched.

Total spending on Medicare in Mr. Trump’s proposed fiscal 2020 budget would rise from $645 billion currently to $1.2 trillion in 2029. But administration officials said it would reduce projected Medicare increases by $845 billion over 10 years, about half by eliminating waste and fraud, and by lowering the prices the government pays for prescription drugs.

Russ Vought, acting director of the Office of Management and Budget, said Mr. Trump is “keeping his commitment to America’s seniors, by not making changes to Medicare and Social Security.”

But Democrats seized Monday on the president’s relatively modest entitlement proposals as a 2020 campaign issue, accusing him of breaking his campaign promise by “cutting” Medicare and Medicaid and abandoning seniors.

“This budget does the exact opposite of what Trump promised the American people,” said Sen. Bernard Sanders of Vermont, a contender for the 2020 Democratic presidential nomination.

Another Democratic presidential hopeful, Sen. Kamala D. Harris of California, criticized Mr. Trump’s proposal on Twitter: “This would hurt our seniors and is yet another piece of evidence for why we need a new president.”

Mr. Vought said the president is “not cutting Medicare in this budget.”

“What we are doing is putting forward reforms that lower drug prices,” he said. “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.”

The Federation of American Hospitals quickly came out against the proposal, criticizing “arbitrary and blunt Medicare cuts to hospitals who care for the nation’s most vulnerable.”

“The impact on care for seniors would be devastating,” said FAH President and CEO Chip Kahn. “Not to mention that massive reductions would drastically reduce resources critical to care for low-income Americans and cripple efforts to stave off the looming physician shortage. Hospitals are less and less able to cover the cost of care for Medicare patients, it is no time to gut Medicare.”

The president’s 2020 budget also would reduce projected increases in Medicaid, although total spending would rise from $419 billion this year to $602 billion in 2029. The proposal would shift $1.2 trillion in Medicaid spending over 10 years to block grants starting in 2021, and eliminate funding for Medicaid expansion to states under Obamacare.

Democrats said the result would be a reduction of $777 billion for Medicaid recipients over the next 10 years.

Regardless, budget analysts say there likely won’t be meaningful reform to expensive entitlement programs again this year, and deficits will continue to climb.

Michael Peterson, CEO of the Peter G. Peterson Foundation, said the budget “achieves some deficit reduction on paper, but it does not address the key drivers of our debt.”