President’s budget proposal includes large cuts to state Medicaid funding, among other health programs

May 24, 2017

President Trump’s FY 2018 budget proposal includes $610 billion in mandatory savings over the next decade by instituting state Medicaid block grants or per capita caps starting in FY 2020. This goes beyond cuts included in the American Health Care Act passed by the House of Representatives three weeks ago. According to the proposal, “The Budget ensures that Medicaid and other programs focus on the most vulnerable Americans that they were intended to serve—the elderly, people with disabilities, children, and pregnant women.” The proposal also includes $250 billion net deficit savings over ten years from repealing and replacing the Affordable Care Act. Other ten-year cuts include a $5.8 billion reduction in CHIP funding and approximately 20% cuts to both the NIH and the CDC. The budget proposes shifting more of the FDA’s budget to industry fees and away from taxpayer funding. The President’s budget estimates $55 billion in federal savings over the decade, including $339 million in Medicaid savings, from nine specific medical liability proposals including caps on damages, safe harbors for providers based on clinical standards, and a three-year statute of limitations. The budget proposes expanding Direct Primary Care in Medicaid, a relatively new capitation model for primary care providers. The proposal includes some expanded funding for emergency preparedness and continues funding to address the opioid epidemic but cuts almost $400 million from the Substance Abuse and Mental Health budget. It’s important to remember that the President’s proposal has to be approved by both houses of Congress and likely will be changed significantly.

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