Special Bulletin: White House Releases FY 2021 Budget Request with Proposed Medicare, Medicaid Reductions

President Trump today submitted to Congress his budget request for fiscal year (FY) 2021. The budget request, which is not binding, proposes hundreds of billions of dollars in reductions to Medicare and Medicaid over 10 years. The budget request also contains a number of provisions related to drug pricing, opioids and other health-related issues.

AHA Take: In a statement, AHA President and CEO Rick Pollack said, “Hospitals and health systems remain steadfast in our commitment to stand up for patients and families. Every year, we adapt to a constantly changing environment, but every year, the Administration aims to gut our nation’s health care infrastructure. The proposals in this budget would result in hundreds of billions of dollars in cuts that sacrifice the health of seniors, the uninsured and low-income individuals. This includes the one in five Americans who depend on Medicaid, of which 43% of enrollees are children.

The budget's proposal on Medicaid financing and service delivery would cut hundreds of billions of dollars from the Medicaid program. This would further cripple Medicaid financing in many states and jeopardize access to care for the 75 million Americans who rely on the program as their primary source of health coverage.

In addition to the hundreds of billions in proposed reductions to Medicare, the blueprint includes cuts we strongly oppose for care in hospital outpatient departments, teaching hospitals and post-acute care providers. These cuts fail to recognize the crucial role hospitals serve for their communities, such as providing 24/7 emergency services. Post-acute cuts threaten care for patients with the most medically complex conditions. The cuts also undermine medical advances and the availability of around-the-clock services exclusive to teaching hospitals, and the training they provide to those who will become our nation’s future physicians.

Medicaid and Medicare – and the other essential health care programs at risk of reductions – have made a real difference in millions of Americans’ lives and we will continue to defend them.”

Key Takeaways

• President Trump’s FY 2021 budget proposal is non-binding and predominantly serves as a messaging document laying out the administration’s funding priorities.
• Health Reform Allowance – The budget request proposes an allowance for health care reform that would result in $844 billion in savings.
• Medicare – The budget proposes reductions to Medicare of $478.5 billion over 10 years, including hundreds of billions in cuts to payments for hospital services.
• Medicaid – The budget proposal includes a number of legislative and regulatory changes that would provide states with increased flexibility, as well as restrict eligibility, program funding and hospital payment.
• Other Proposals – Among other proposals, the budget includes funding to address the opioid crisis and support veterans’ health services.

Highlights of the budget request follow under key resources..