The President’s Proposed 2019 Federal Budget: The 6 Things Labs Must Know

While President Trump’s proposed $4.75 trillion budget may be the largest in U.S. history, it calls for important cuts affecting health care in general and labs in particular. Here are the six things lab managers need to know about it:

1. Medicare & Medicaid Cuts

The part of the Trump budget with the most direct impact on labs are probably the deep cuts to Medicare and Medicaid, including $181 billion from Medicare and nearly $1.5 trillion from Medicaid over projected 10-year spending levels.

2. Payment Cuts to Health Providers

Medicare cuts would reduce payments to providers. The New York Times projects that cuts to hospitals over 10 years would amount to:

• $136 billion for unpaid bills and uncompensated care; and
• $131 billion in payments to hospital outpatient departments (including labs).

3. More Funding to Combat Opioids

The budget requests more than $30 billion for “drug control funding,” including money for:

• Prevention and treatment;
• New resources for the Dept. of Health and Human Services (HHS); and
• States to help them respond to the crisis.

Significantly, the budget also calls for Medicaid and Medicare program changes to prevent drug abuse, e.g., via monitoring of providers and changes to current payment methods.

4. Increased Health Care Spending for Veterans

The budget requests an increase of nearly 10% in health care spending to enhance and expand veterans’ access to health care and provide them with more treatment options, including allowing them to use walk-in clinics for minor illnesses and injuries.

5. Repeal & Replace Obamacare

The budget includes a section called “Repeals & Replaces Obamacare and Reforms Medicaid Financing” that highlights the negative aspects of the Affordable Care Act (ACA). After proposing the budget, the Administration reversed its previous position that at least part of the ACA should be retained and is now seeking full repeal. In so doing, the Administration indicated that it would ensure that some form of replacement coverage is offered to the approximately 20 million Americans who’d lose their coverage if the ACA were repealed. But the budget itself includes no such replacement coverage plans, calling instead for turning over management of health care to the states.

6. Greater State Control Over Medicaid

The budget proposes empowering states to “modernize Medicaid benefits and eligibility,” basically a code word for cracking down on what’s perceived as Medicaid abuse. The budget notes that it “would give states additional flexibility around benefits and cost sharing, allow states to consider savings and other assets when determining Medicaid eligibility, and reduce waste by counting lottery winnings as income for Medicaid eligibility.”

Takeaway: Keep in mind that the proposed budget is just that—a proposal. Under the U.S. Constitution, budgets are created by Congress, not the President. Still, budget proposals are significant for staking out the Administration’s position on health care and other federal spending issues even if they exert only minimal influence on what eventually emerges from Congress, especially in times where each party controls one chamber.