Proposed Trump Budget Punts On Healthcare Reform, Drug Pricing Policy

February 11, 2020

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Source: Modern Healthcare, by Rachel Cohrs

President Donald Trump on Monday unveiled his fiscal 2021 budget plan to Congress, which is devoid of details on two of the most prominent healthcare policy issues on the 2020 campaign trail: large-scale healthcare reform and prescription drug pricing.

The president’s budget is largely a messaging document, and Congress is not obligated to follow his recommendations. However, it provides insight into Trump’s healthcare priorities ahead of the 2020 presidential election.

Unlike prior years, Trump’s budget does not recommend a detailed plan to repeal and replace the Affordable Care Act, despite the fact that his administration is pursuing a lawsuit that could strike down the landmark healthcare law in its entirety. Instead, Trump’s budget lays out general principles for health reform including protecting individuals with pre-existing conditions, transparency of healthcare costs, lowering drug costs, ending surprise medical billing, increasing competition, and reducing regulations. The budget gives a savings “allowance” to the policies of $844 billion over 10 years.

Trump in previous budgets advocated for failed legislation to repeal the ACA led by Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.). The legislation would convert all of the ACA’s funding into block grants. It would also convert Medicaid into a per capita cap system that would dole out funding based on the state’s population.

Trump also diverged from previous budgets by leaving drug-pricing reform up to Congress with an “allowance” of $135 billion for bipartisan policy to lower drug costs. The HHS budget generally says the administration supports an out-of-pocket cap for beneficiaries’ pharmacy drug costs, policies to promote generic and biosimilar competition, increasing drugmakers’ share of Medicaid rebates and authorizing innovative Medicaid drug payment models.

In contrast, Trump last year proposed a laundry list of 25 policies to reduce prescription drug costs.

Overall, Trump proposed significant domestic spending cuts, including a 9% cut to HHS. The Veterans Affairs Department, however, would get a 13% funding increase.

Trump’s healthcare budget would impose work requirements for food stamps and Medicaid nationwide. The administration also proposed allowing the CMS to conduct more frequent eligibility checks for Medicaid enrollees.

Other Trump budget requests include a funding increase of $24 million to improve oversight of the 340B drug discount program, a continuation of cuts to Medicaid disproportionate-share hospital payments from 2025 through 2030, provider-level transparency on Medicaid supplemental payments, limiting total payments for uncompensated care, site-neutral payment policies for some physician services administered in hospital outpatient departments, eliminating bad debt for payments to DSH-eligible hospitals, and reducing payment for some hospice services provided in skilled-nursing facilities. Several of these policies were also included in HHS’ fiscal 2020 budget request.

The left-leaning Center on Budget and Policy Priorities and the Federation of American Hospitals, which represents for-profit hospitals, both denounced the budget proposal.

“The arbitrary cuts to health care programs envisioned in the budget will make the job of America’s caregivers much more difficult. This proposal combined with already issued regulations will result in a reduction in coverage, putting the health care of millions of patients at risk,” Federation CEO Chip Kahn said.

 

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