President Trump’s proposed budget for fiscal 2018 could mean crushing blows for some of the nation’s largest health care programs, if it makes it through Congress.

The proposed budget “clearly reflects the priorities of the Trump administration, which is to cut taxes, to increase defense spending and spending on boarder security, and also to cut domestic spending,” Timothy S. Jost, a health law professor at Washington and Lee University in Lexington, Va., said in an interview*.

The proposal would cut Medicaid spending by $610 billion and slice CHIP by $6 billion over the next decade, while extending CHIP through 2019. It assumes full passage of the American Health Care Act (AHCA), which would enable states to move the Medicaid program to either a block grant or per capita cap system.

The proposed CHIP reduction would eliminate the increased federal match provided by the Affordable Care Act and cap eligibility for federal CHIP funding at 250% of the federal poverty level, according to a summary of the proposal by the Kaiser Family Foundation. States would be able to transfer children in families with incomes below 133% of the poverty line who were moved from CHIP to Medicaid under the ACA back to CHIP.

If the cuts are approved, physicians face the challenge of caring for more uninsured and underinsured patients, said John D. Abramson, MD, a family physician and health policy lecturer at Harvard Medical School in Boston. He notes that the budget’s proposed Medicaid cuts come on top of Medicaid reductions included in the AHCA.

“If anything close to the House version of the American Health Care Act becomes law, 23 million people will lose health care coverage over the next 10 years, including 14 million now covered by Medicaid,” Dr. Abramson said. “The President’s budget proposes an additional $610 billion cut to Medicaid over the next 10 years. ... Family physicians will be on the front lines of providing safety-net primary care that may no longer be reimbursed or only partially reimbursed. This is unfair to both patients and doctors.”

Meanwhile, the Food and Drug Administration stands to lose $850 million for 2018 through the budget, although medical product user fees would increase, resulting in a program increase of about $450 million. The President proposes to cut CDC funds by $1.3 billion and withdraw $252 million in funding from the Substance Abuse and Mental Health Services Administration. The cuts and savings are further outlined in a U.S. Department of Health & Human Services budget summary.

The cuts to mental health care funding would no doubt affect mental health care providers and the patients they seek to treat, Mr. Jost said. “Given the seriousness of the opioid crisis, it doesn’t seem like a great time to be cutting funding for substance abuse treatment.”

Medical research may also suffer under the proposed budget. The President intends to cut funding for the National Institutes of Health by $5.8 billion, while eliminating the Agency for Health Care Research and Quality as a stand alone agency and folding it into the NIH with less funding.

The American Association for the Advancement of Science expressed concern that the research cuts could devastate the country’s science and technology enterprise and weaken the nation’s economic growth.

“Slashing funding of critically important federal agencies threatens our nation’s ability to advance cures for disease, develop new energy technologies, improve public health, train the next generation of scientists and engineers and grow the American economy,” Rush Holt, association CEO said in a statement.

Other proposals in the budget could be positive for health care, experts say.

The budget would eliminate the Independent Payment Advisory Board (IPAB), authorized under the ACA to give Congress recommendations about slowing Medicare cost growth. While IPAB never officially took effect, health providers have long criticized the concept as taking health care decision making away from physicians and patients, said John Z. Ayanian, MD, a professor of medicine and director for the Institute for Healthcare Policy and Innovation at the University of Michigan in Ann Arbor.

IPAB “really hasn’t had any impact on health care over the past 7 years,” Dr. Ayanian said. ““That’s potentially one area of compromise as senators and representatives discuss ways in which the Affordable Care Act can be reformed.”

The Medicare program remained relatively unscathed among the proposals, noted Elizabeth Carpenter, senior vice president at Avalere Health. The budget made no payment cuts to providers in the Medicare program, nor did it address Medicare delivery reform, she said.

Medical malpractice reforms are also included in the proposed budget. The proposal includes a $250,000 cap on noneconomic damages, a 3-year statute of limitations, and an established safe harbor for clinicians following evidence-based clinical practice guidelines. The changes are estimated to save the federal government $55 billion over 10 years.

“That’s an area of frequent concern for practicing physicians,” Dr. Ayanian said. “To the extent that reforms can be developed that are acceptable to patients and physicians that create the right incentives for improving health care quality and avoiding medical errors, that could be a positive. It’ll depend very much on the reform proposals that are developed. I think there is potential for bipartisan agreement in this area.”

Ms. Carpenter stressed that the President’s budget is only the first step in a lengthy budget process that will include congressional hearings and debate before legislators draft budget resolutions. “I expect Congress to debate some of the cuts to domestic spending, including things like NIH. There seems to be a good bit of alignment in terms of repeal and replace of the [ACA] and potentially some of the Medicaid reforms.”

Sen. Ron Wyden (D-Ore.), ranking member of the Senate finance committee immediately criticized the President’s budget, posting a photo on Twitter of the proposal stashed in a recycling bin.

“Trump’s budget breaks his promise not to touch Social Security, which at its core is lifeline insurance for Americans who can no longer work, not just in retirement, but also due to a disability,” Sen. Wyden said in a statement. “It also slashes Medicaid by over $600 billion beyond the damage done by Trumpcare, further threatening pediatric care, the nursing home benefit, special education programs in schools, and other health care like substance misuse treatment.”

House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) commended the budget proposal as one that demonstrates President Trump’s commitment to balancing the budget and responsibly prioritizing taxpayer dollars.

“The initiatives modernizing our energy infrastructure and promoting our nation’s energy abundance would undoubtedly make positive impacts on our constituents’ lives,” he said in a statement. “The president’s proposals show the difficult choices facing the country as we work to reduce the deficit, protect our security, and grow jobs.”

Additional proposals in the President’s budget include:

• Nearly $70 billion in cuts for Social Security disability benefits over the next 10 years.

• A funding increase for the Veterans Administration, including $29 billion over the next decade for a program that enables veterans to seek outside health services from private doctors.

• A ban on funds for clinics and medical centers that provide abortions, such as Planned Parenthood.

• A $70 million increase for Medicare and Medicaid fraud prevention efforts in 2018.

• A $114 million funding increase for the Center for Medicare and Medicaid Innovation.

agallegos@frontlinemedcom.com

On Twitter @legal_med

*This story was updated May 26, 2017

President’s budget: Malpractice reform but deep health care cuts