New Trump Budget Proposal Could Slash Medicare by $854 Billion

trump budget proposal slashes medicare, medicaid, social security

This week, President Trump broke one of the biggest promises he made during his 2016 presidential campaign: no cuts to Medicare, Medicaid, and Social Security. Released Monday, March 11, the Trump budget proposal for 2020 would make deep cuts to these popular social programs. If passed, it could affect the health of millions of Americans across the country and make his position going into the 2020 presidential election a vulnerable one.


Under the Trump budget proposal, Medicare spending would be gutted by $845 billion over 10 years. However, $269 billion would be reclassified under the Department of Health and Human Services, which would bring the actual Medicare cut to $575 billion.

The administration says this will be achieved by targeting wasteful spending, investigating instances of fraud and abuse, and lowering prescription drug costs. An advocate group for fiscal responsibility, the Committee for a Responsible Federal Budget, estimates 85 percent of these cuts will come from payments to providers, 5 percent will come from policies and medical malpractice, and 11 percent will come from reduced Medicare Part D costs.

Part D is the only branch of Medicare that can legally adjust their spending by raising costs for some beneficiaries while lowering costs for others, but this would leave premiums, deductibles, and copays largely unaffected.

The Federation of American Hospitals opposes the Trump budget proposal, calling the cuts to Medicare devastating for seniors. “Hospitals are less and less able to cover the costs of care for Medicare patients,” president and CEO Chip Kahn said in a statement following the release of the budget proposal. “It is no time to gut Medicare.”

Of the budget proposal, the White House said, “He’s not cutting Medicare in this budget. What we are doing is putting forward reforms that lower drug prices. Because Medicare pays a very large [share] of drug prices in this country, [that] has the impact of finding savings. We are also finding waste, fraud, and abuse.”


The cuts to Medicare are deep, but those proposed for Medicaid are even deeper. If passed, the Trump budget proposal would cut an estimated $1.5 trillion from Medicaid over 10 years.

This would be accomplished, first, by adding work requirements for anyone attempting to collect Medicaid benefits. Second, it would repeal the expansion of Medicaid–one of the most successful moves of the Affordable Care Act. In states where Medicaid was expanded under the ACA, insurance rates were reduced by 6 percent, and health outcomes improved.

The third way this massive cut would be achieved is to switch from Medicaid’s current pay-as-you-go model into a block grant system. This means states would receive a lump sum of money allocated for Medicaid spending, and these states would not receive more money due to increased need or rising costs.

Social Security

The Trump budget proposal also suggests an estimated $25 billion cut to Social Security over 10 years. An estimated $10 billion of this figure would come from Social Security Disability Insurance (SSDI), a subsector Trump’s budget advisor Mick Mulvaney has been attempting to whittle down throughout his career.

Mulvaney once bragged to a reporter that he tricked Trump into accepting a proposal to cut SSDI benefits by categorizing them as disability insurance. The attempt to slash Social Security, specifically SSDI benefits, has been in every single one of Trump’s budget proposals to Congress since he took office in January 2017.

Although the Trump budget proposal is making waves in the political and healthcare worlds, it is unlikely to pass in both the House and the Senate.

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