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State health care groups bemoan Trump's proposed budget cuts

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Medical groups in New Jersey are railing against deep cuts to both Medicare and Medicaid – among other things – in the budget that's been proposed by the Trump administration.

Though most presidential budgets are rarely enacted as is,  they are an indication of the executive branch’s policy direction going forward. This year, President Donald Trump's proposed cuts of nearly $2 trillion to Medicare and Medicaid, as well as cuts to the Supplemental Nutritional Assistance Program are being labeled by many as too Draconian.

As it stands, Trump’s $4.4 trillion proposed budget calls for:

  • $1.4 trillion cut to the Medicaid program, a potential blow to poor and working Americans, seniors and people living with disabilities. Medicaid is also fundamental to combating the opioid epidemic;
  • $555 billion cut to the Medicare program over 10 years;
  • $214 billion cut to the Supplemental Nutrition Assistance Program (SNAP, or food stamps) over 10 years. SNAP currently protects 44 million people from food insecurity and hunger, and a majority of its beneficiaries are children, senior citizens or persons with disabilities;
  • $21 billion cut to Temporary Assistance for Needy Families over 10 years;
  • $72 billion cut to programs that benefit people with disabilities;
  • Eliminates the Low Income Home Energy Assistance Program that allows millions of Americans to stay warm in the winter and cool in the summer; and
  • $2 billion cut (approximately 25%) to the Environmental Protection Agency.

The cuts are meant to offset the loss of tax revenue from the Tax Cuts and Jobs Act of 2017, which is projected to add $1.5 trillion to the nation's debt over the next decade, mostly attributable to large tax cuts for the wealthy and large corporations.

They will also help fund the Trump’s calls for $200 billion in spending to rebuild the nation’s infrastructure, and $23 billion for border security -- most of it for the buildings of a wall on the border with Mexico to stop illegal immigration. Trump is also calling for $716 billion in additional spending on military programs and for maintaining the country's arsenal of nuclear weapons.

Cathy Bennett, president of the New Jersey Hospital Association, said Trump’s cuts, if enacted, could have devastating effects on the state, especially to the elderly and to people who need care in an outpatient setting.

“Unfortunately, the Trump Administration’s budget strips too many resources from health care programs – particularly safety net health care – and undercuts our health care system’s commitment to its patients, residents and communities,” Bennett said in an interview with NJBIZ.

“The budget proposal would hurt a wide swath of health care programs – Medicare for our seniors, graduate medical education to develop future physicians, Medicaid for low-income vulnerable families,” she continued. “The Medicaid cuts would be a major fiscal blow to the states, which could face $800 billion in cuts over the next decade. In New Jersey, access to care for 1.8 million of New Jersey’s most vulnerable citizens would be at risk.”

Bennett said she's also concerned over a provision in the budget that would eliminate the current exemption from site neutral payment cuts for outpatient programs. A site neutral payment refers to Medicare reimbursements to hospital-owned outpatient facilities, where patients often receive post-acute care after being in a hospital. Trump’s budget calls for a $33.9 billion reduction in Medicare payments to hospital-owned outpatient facilities over 10 years.

Bennett added that the reduction in site neutral payments “would reduce payments to hospitals in new Jersey for care delivered in an outpatient setting, along with a new payment system for post-acute care providers such as nursing homes, inpatient rehabilitation facilities and home health agencies.

“These proposals take us two steps backward at a time when our healthcare system is focused on helping individuals stay healthy and independent in their homes and communities. Along with those concerns, we are encouraged to see the focus on the opioid crisis and sky-high prescription drug costs that have become unmanageable for individuals and hospitals alike.”

Dean Paranicas, CEO of the Health Institute of New Jersey, said his organization is still reviewing Trump’s budget, but tried to find the positive in it.

“We are encouraged that Congress and the president recently took actions that will help in this effort, such as repealing the onerous Independent Payment Advisory Board, suspending the innovation-stifling and job-threatening medical device excise tax, and reauthorizing the Children’s Health Insurance Program,” Paranicas said in an email.

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Vince Calio

Vince Calio

Vince Calio covers health care and manufacturing for NJBIZ. You can contact him at vcalio@njbiz.com.

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