Democrats say latest Trump budget cuts Medicare, but it’s not that simple

Democrats didn't wait long after President Donald Trump unveiled his budget for 2020 to call him out for cutting Medicare, a program he promised to leave untouched.

"The Trump administration wants to cut hundreds of billions of dollars from the #Medicare budget, all while giving billionaires and giant corporations huge tax breaks with the #GOPTaxScam," tweeted Democratic presidential candidate Elizabeth Warren, D-Mass., on March 12.

Democratic Hawaii Sen. Brian Schatz talked of $845 billion in cuts over the next 10 years.

'It's right there in the budget that the president released this week," Schatz said.

Reading the summary table in the budget, Schatz has a point.

The administration projects Medicare spending that is $846 billion less than what the government would have spent if everything stayed on the same path it's on today.

Whether that's a cut is a more difficult question. While Democrats criticize Trump for cutting Medicare, President Barack Obama regularly offered his own version of steps to rein in the growth of Medicare. In his last budget, Obama proposed trimming spending by about $420 billion over 10 years. (Republicans accused Obama and Democrats of cutting Medicare many times, a claim we never rated better than Half True.)

The reality is, spending rises every year in Trump's budget, except for the last one in 2029 (which is mainly a fluke of timing related to when Medicare pays its bills).

To complicate things more, that $846 billion isn't what it appears to be. Two hefty pieces of Medicare — extra payments to hospitals that serve a lot of uninsured patients and funds for teaching hospitals — were moved out of Medicare and into the regular general fund budget. There were cuts, but not nearly as much as the Medicare line items would suggest.

Adding those dollars back reduces the total reduction to $595 billion for Medicare.

But is that actually a cut?

"This issue has been around for decades," said Tricia Neuman, the Kaiser Family Foundation's Medicare policy director. "It is a proposed reduction relative to the baseline. A cut sounds worse than a reduction, but the effect is the same. If these proposals were adopted, there would be less money paid to providers for specific Medicare services than there would have been."

Most of the proposed changes target payments to hospitals and other providers — and that might not affect Medicare patients.

Neuman and many other researchers and analysts believe there is room to spend less without hurting recipients.

"In general, these proposals are in areas where there is evidence we pay providers too much," said Matthew Fiedler, at the Brookings Institution Center for Health Policy. "One big proposal is to make payments site-neutral. Currently, we often pay more for the same service when it's delivered in a hospital rather than in a doctor's office, even when there's no evidence the site of service makes a difference."

Two of the plans along these lines would save a combined $160 billion, according to the Health and Human Services Department.

In 2009, researchers at the Dartmouth Center for Health Policy and Clinical Practice reported that "Higher spending does not result in better quality of care, whether one looks at the technical quality and reliability of hospital or ambulatory care, or survival following such serious conditions as a heart attack or hip fracture."

It's important to note that not all of the proposed cuts land on providers.

Neuman pointed to changes in Medicare's Part D prescription drug insurance program that directly affect recipients. While one change would cap out-of-pocket costs for people with the very highest drug costs, another would expose people below that cost level to higher fees. At the end of the day, the Trump budget reduces payments for people who rely on prescription drugs by $50 billion.

Those $50 billion might be the clearest example of Medicare cuts in the Trump budget. The remaining $545 billion potentially could be absorbed by providers.

With Democrats running the House, Trump's budget has no chance of passage. That's typical for any presidential budget, and it's particularly true for this one.

As an expression of policy priorities, this budget largely resembles past efforts to control the growth of Medicare spending by targeting provider payments. We continue to rate this promise as a Compromise.