Future of Medicare funding uncertain under Trump presidency

President Donald Trump's vow to save Medicare from budget cuts is facing a snag as the 2018 budget makes its way through Congress.

The promise, along with maintaining current funding levels for other entitlement programs, was one of Trump's earliest campaign pledges. "Save Medicare, Medicaid and Social Security without cuts. Have to do it," he said in his presidential announcement speech.

The 2018 White House budget proposal released in May left Medicare benefits largely untouched compared with Medicaid, which would see a more than $600 billion decrease over 10 years compared to current spending levels. Still, Medicare spending would decrease by more than $50 billion in the next decade compared with current levels.

Though the proposed budget doesn't spell out large direct cuts to Medicare, cuts to other programs would indirectly affect the senior health insurance program. For instance, the budget included eliminating the State Health Insurance Assistance Program, which provides Medicare beneficiaries with counseling and assistance to navigate the health care system.

However, those cuts won't necessarily happen because the White House budget proposal is more of a wish list that the president gives to Congress, where both the House of Representatives and the Senate must create and agree on a final budget to be signed by the president.  

The House's current budget resolution, which was released in July, asked to cut Medicare by $487 billion between 2018 and 2027. Much of this would be done by turning Medicare into a voucher-like program, increasing income-related premiums and limiting medical malpractice litigation by capping attorney fees and awards, according to the plan.

Again, that $487 billion cut won't necessarily make it into the final budget, especially since the House resolution currently doesn't contain legal language that would help ensure the full cut through a special legislative process called reconciliation.

Even though the budget resolution has a line that calls for reduced Medicare spending, it doesn't actually include a way to make that happen, said Marc Goldwein, the senior vice president of the Committee for a Responsible Federal Budget. He said Congress could end up making some moderate cuts to Medicare this year, but "they're clearly not prioritizing it."

Congress and the White House must agree on a budget before Oct. 1 or pass a continuing resolution to avoid a government shutdown during budget negotiations.

But even if Medicare doesn't undergo cuts in the next budget, it's still possible that the program could be affected by an Obamacare repeal or replacement.

"It's unclear given the uncertainty surrounding dealings in Washington right now," said David Lipschutz, an attorney with the Center for Medicare Advocacy. "But we are certainly not out of the woods."

An effort to repeal portions of the health care law died on the Senate floor on July 28 when Republican Sen. John McCain voted against it, but that hasn't stopped the GOP from trying again. Another Obamacare partial repeal proposal by Sens. Bill Cassidy, R-La,, Lindsey Graham, R-S.C., and Dean Heller, R-Nev., has the support of McCain and Trump, according to press reports.

A process that temporarily allowed health care legislation to advance in the Senate with 50 votes rather than the usual 60 votes -- Republicans' best chance at passing a health care bill -- will end on Sept.30.

Lipschutz said the upcoming deadline could pressure Republicans to hastily pass legislation on health care.

If a new partial repeal looks anything like past efforts to change health care, Medicare would likely be affected by cuts to Medicaid spending, one-third of which goes to low-income seniors who are enrolled in both Medicare and Medicaid. (The Congressional Budget Office projected over $800 billion in cuts to Medicaid by 2026 in its analysis of the Obamacare Repeal Reconciliation Act of 2017.) The Commonwealth Fund calculated that, under the previous repeal bill, around 11 million Medicare beneficiaries would lose coverage for long-term services under Medicaid, such as nursing home care.

The overall change to Medicare spending will depend on what makes it into the final 2018 budget and what happens with Obamacare. But current legislative proposals, some of which have garnered Trump's support, plan for funding cuts that affect Medicare in some way, whether directly or indirectly. Trump has not signed either into law yet, so for now we rate this promise Stalled.