For the most part, the budget does not reflect the President's efforts to end the Affordable Care Act (ACA) or his executive order calling for various Medicare changes. These policies, which a budget would typically include, would weaken Medicare in several ways.
The budget would establish a new payment system for post-acute care, reduce Medicare coverage of bad debts (deductible and coinsurance amounts that are uncollectible from Medicare beneficiaries and that Medicare now pays to reimburse hospitals and other institutional providers), limit medical malpractice awards, extend through 2030 the 2 percent Medicare sequestration cut under the 2011 Budget Control Act, and pay for all doctor and other outpatient services at the same rate regardless of where they're provided. Most of these proposals also appeared in last year's budget.
In two cases -- payments to hospitals for graduate medical education (GME) and for uncompensated care -- the budget proposes to move spending from Medicare's trust funds to new, smaller grant programs funded by general revenues. While the budget would cut Medicare spending by
In addition to its specific Medicare proposals, the budget assumes
Several of the major budget proposals, such as site-neutral payments to equalize Medicare's payments to different kinds of facilities (as explained in the table below), are similar to recommendations from the
Unfortunately, other Administration proposals would weaken Medicare's finances and harm beneficiaries.
Most significant, the Administration has joined 18 Republican attorneys general in asking the courts to strike down the entire ACA. The President has also pledged to pursue ACA repeal legislation in 2021 if
Striking down the ACA would reopen the Medicare drug "donut hole" (under which beneficiaries paid all of their drug costs until they reached the yearly catastrophic spending threshold), reintroduce cost sharing for preventive services, and create confusion and uncertainty around payments to plans and providers. It would also greatly weaken Medicare financing by repealing the ACA's Medicare payroll tax increase on high earners and undoing significant payment reforms.
See table here (https://www.cbpp.org/blog/medicare-in-the-2021-trump-budget).