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President’s Budget Targets Medicare, Medicaid and Food Stamps

Spending proposal slashes many health and safety net programs

Money balancing on an apple.

Gregory Reid/Gallery Stock

The new budget proposal would reduce funding for several programs that are important to older Americans.

En español | President Trump unveiled his federal budget proposal Monday, which takes aim at many of the health and safety net programs that older Americans rely on. The plan sharply reduces funding for Medicare, Medicaid, Social Security Disability Insurance and food stamps.

Rarely do most of the elements of a president’s budget become law, as Congress would have to enact them. Historically that almost never happens.

Medicare

The budget cuts $237 billion over 10 years. The spending plan includes:

  • Requiring Part D prescription drug health plans to participate in a program to prevent drug abuse.
  • Mandating Part D plans to pass on to enrollees some of the rebates they receive from pharmaceutical manufacturers at the pharmacy counter.
  • Changing the way out-of-pocket drug costs are accounted for within the doughnut hole. Fewer enrollees would reach the catastrophic threshold, but those who do would have their out-of-pocket costs capped. Currently, enrollees pay 5 percent of their drug costs once they reach catastrophic coverage.
  • Allowing Medicare beneficiaries to continue contributing to their Health Savings Accounts or Medicare Savings Accounts if they have high-deductible plans.

Medicaid

The spending proposal give states more flexibility. The plan includes:

  • Repealing the Affordable Care Act’s Medicaid expansion.
  • Testing new ways of providing drug coverage to Medicaid recipients. Five states would be able to determine which drugs they would cover to help them better negotiate drug prices with manufacturers.
  • Allowing states more flexibility to consider savings and other assets when determining if someone is eligible for Medicaid.

Food Stamps

The budget would fundamentally change the way the program works. The proposal includes:

  • Slashing the Supplemental Nutrition Assistance Program (SNAP) by $213.5 billion over a decade. The value of each voucher would be reduced, and recipients would receive what the Agriculture Department is calling “America’s Harvest Box.” These boxes would include shelf-stable milk, cereals, pasta, peanut butter, beans, canned fruit, vegetables, and meat, poultry, or fish. The Administration says such a system would lead to better nutrition for SNAP beneficiaries and reduce the potential for fraud.

Social Security

The budget plan would cut $72 billion over 10 years in the Social Security Disability Insurance and Supplemental Security Income programs. The plan includes:

  • Getting more disability recipients to return to the workforce and tightening eligibility for these benefits.

Low Income Home Energy Assistance Program (LIHEAP)

The budget would end this program. The proposal includes:

  • Eliminating the $3.4 billion annual funding. As of 2014, LIHEAP served about 6.3 million households and nearly one-third of those benefiting had at least one member aged 60 years or older, about 38 percent had someone living in the home with a disability and 19 percent had at least one child age five or under.

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