What 2020 Medicare Cuts Would Mean for Seniors
During the presidential campaign, President Trump presented himself as a guardian for Medicare and Social Security. Yet after repeated promises not to cut Medicare, President Trump’s 2020 budget proposes almost $600 billion in net spending reductions in Medicare over 10 years.
While the budget has been called “dead in the water,” it doesn’t mean it should be ignored. Trump’s 2020 budget shows his campaign priorities for 2020 when several Democrats will be running on a platform of massive Medicare expansion.
Here’s a look at the Medicare cuts Trump proposes and what they would mean for seniors.
Site-Neutral Payments for Long-Term and Post-Acute Care
One of the proposals for Medicare is paying all post-acute and long-term care providers the same rate for a service no matter where the service is provided. Currently, payments for palliative and rehabilitative care are based on whether the services are provided at a hospital or other outpatient facility with hospitals receiving higher payments.
This proposal accounts for much of the cuts to Medicare and it builds on an idea first suggested by President Obama.
Same Payment Rate for Doctors
Another proposal would stop the current practice of giving some doctors higher payments for the same services because their office is owned by a hospital. Instead, doctors would be paid the same rates based on the service provided regardless of whether their office is owned or located in a hospital.
These first two proposals are not benefit cuts to seniors; they are designed to make Medicare more efficient and remove the incentives for hospitals to buy physician practices and receive more money for standard services.
Medicare Part D Out-of-Pocket Costs
About 11% of Trump’s Medicare savings would come from major changes to the Part D prescription drug benefit.
Trump’s 2020 budget proposal would also make changes to the out-of-pocket costs in the Medicare Part D prescription benefit. While some Medicare beneficiaries would enjoy lower costs, others would face higher out-of-pocket costs. A beneficiary’s annual out-of-pocket drug spending would be limited and cost sharing on generic drugs for recipients of the low-income subsidy (LIS) would be eliminated entirely. Premiums for Part D would also go up.
If you have high prescription drug costs, you could expect to pay more under Trump’s plan for Medicare. Essentially, Medicare would be allowed to negotiate lower drug prices with drug companies and cap how much you pay out-of-pocket for coverage. The help you receive with genetic drug costs if you have low income would be removed completely and manufacturer discounts would no longer count toward your out-of-pocket costs.
You would spend more time in the “coverage gap” and spend more out of pocket for prescriptions.
The 2020 budget plan makes several other proposals for Medicare, many of which do not affect seniors directly. This includes reducing payments to hospitals to help cover the cost of patients who can’t pay their bills. While seniors aren’t directly impacted, the downside is some nursing homes and hospitals may stop offering services if they are not profitable. The budget also proposes expanding the requirement that beneficiaries get prior authorization for Medicare fee-for-service treatments which is projected to save $6 billion.
Before you panic about how the proposed Medicare cuts would affect you, remember that there is a slim chance of any of these proposals becoming law.