President Trump's Campaign Promises on Medicaid and Medicare

A Look at Plans to Changes to Entitlement Programs

President Donald Trump made promises to Americans on the campaign trail. Repealing the Affordable Care Act (ACA), more commonly known as Obamacare, and preserving Medicare were on the top of that list. Is the President living up to those campaign promises?

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A Look at Trump's Campaign Promises

As a reminder, President Trump campaigned on a seven-part health plan. With the following changes taken from his campaign site (no longer accessible online), he vowed to make health care great again.

  1. Repeal the Affordable Care Act, aka Obamacare
  2. Allow selling of health plans across state lines as long as health plans follow state guidelines
  3. Allow individuals to deduct health insurance premiums on their tax returns
  4. Allow individuals to use Health Savings Accounts (HSA)
  5. Require price transparency across the healthcare system
  6. Discontinue federal grants to states for Medicaid
  7. Allow expansion into free markets, including purchasing cheaper drugs overseas, to decrease the cost of prescription medications

Is President Trump delivering on his campaign promises?

Trump Takes on Medicaid

No matter how you look at it, Medicaid funding has been on the chopping block. This could affect how many people are able to access health care through the program.

Repealing Obamacare

When the Affordable Care Act was introduced in 2010, there were as many as 49 million uninsured Americans, approximately 16.3% of the population. According to the U.S. Census Bureau, the passage of the law decreased that number to 8.8% by 2016.

Obamacare allowed young people to stay on their parents' plans longer, prevented insurance companies from increasing premiums based on pre-existing conditions, allowed for expansion to existing Medicaid programs and developed the Health Insurance Marketplace as a more affordable option to those who did not meet criteria for Medicaid. Although more people were eligible for coverage, many argue that Obamacare continued to leave health plans out of financial reach. Not everyone qualified for tax subsidies and deductibles for many plans remain unaffordable for many Americans.

President Trump signed an executive order on January 20, 2017, the day of his inauguration. The order directed federal agencies to scale back on Obamacare "to the maximum extent permitted by law". The order did not, however, repeal the ACA nor did it outline how agencies were to proceed on the issue. Later that year, he attempted to repeal Obamacare and replace it with the American Health Care Act (AHCA) of 2017, aka Trumpcare. Although the act was approved by the House, it failed to pass in the Senate. If he had succeeded, the Congressional Budget Office estimated that 14 million people would have lost access to health insurance in 2018 and 24 million people over the next 10 years.

Attempts to undermine the ACA continue. The individual mandate, a tax people had to pay when they did not sign up for Obamacare, was eliminated after passage of the Tax Cuts and Jobs Act of 2017. Without the mandate in place, a Texas federal court judge declared the ACA to be unconstitutional in 2018. The decision now awaits review by the Supreme Court. In the interim, Obamacare remains the law of the land.

Cutting Federal Funding to Medicaid

Obamacare offered incentives to states that chose to proceed with Medicaid expansion. Those states received federal dollars to assist them, up to 100% of expansion costs for three years and then 90% of costs through 2020.

The AHCA aimed to put an end to Medicaid expansion but would also cut federal funding to Medicaid in other ways. It had proposed limiting funding to block grants. Since 1965, states have received federal dollars for Medicaid based on the number of people that were eligible for the program. Block grants would change all that, offering a fixed amount of money for Medicaid regardless of a state's need. Funding changes would affect all states, not only those that participated in Medicaid expansion.

The Congressional Budget Office estimated that the AHCA would have cut Medicaid funding by $800 billion over the next decade. By putting more burden on the states to provide funding, who and what Medicaid covers would likely change. States would need to set up enrollment caps, establish waiting lists for people who meet Medicaid eligibility requirements, or cut benefits to keep costs in check.

Although the AHCA failed to pass, the GOP continues to target Medicaid funding. The initial GOP 2019 Fiscal Year Budget proposed $1.5 trillion in cuts to Medicaid over 10 years. The initial GOP 2020 Fiscal Year Budgetagain proposed block grants and per capita rates, encouraged states to pursue Medicaid work requirements, and recommended a $1.5 trillion cut over through 2029. Neither budget passed.

In 2020, the Centers for Medicare and Medicaid Services announced the Healthy Adult Opportunity, an initiative that would allow states to use blocks and per capita rates for certain people. It would apply to adults under 65 years old who are not pregnant, who do not qualify for Medicaid based on a disability or their need for long-term care placement. In exchange for using this type of funding, states could change their Medicaid eligibility requirements and pocket some of the federal savings.

Decreasing Medicaid Spending

President Trump may not have repealed Obamacare or put an end to Medicaid expansion, but his policies may well decrease how much money is spent on Medicaid.

In January 2018, CMS issued a State Medicaid Director Letter that addressed the use of Section 1115 waiver proposals to add work requirements as a condition for Medicaid eligibility. In April 2018, President Trump signed an executive order that encouraged states to pursue those work requirements. The intention is to promote employer-sponsored health insurance and to decrease the financial burden on the Medicaid system.

As of February 2020, 20 states have applied for waivers, three states have been approved and have implemented work requirements (Indiana, Michigan, and Utah), and four states have been approved but have not yet implemented work requirements (Arizona, Ohio, South Carolina, and Wisconsin). Waivers are pending in Alabama, Georgia, Idaho, Mississippi, Montana, Nebraska, Oklahoma, South Dakota, Tennessee, and Virginia. Kentucky was the first to enact the requirements but a U.S. Federal District Court struck down the legality of those requirements. Other states that have had their work requirements struck down in court include Arkansas and New Hampshire.

Trump Takes on Medicare

On the campaign trail, President Trump promised not to cut Medicare benefits, but the AHCA would have certainly had an impact on Medicare beneficiaries. He also made several promises for American seniors that he has yet to take action on.

Negotiating Drug Costs

The same medications used in the United States often cost less in foreign countries. For example, in 2017, the asthma medication Advair, cost $1,277 retail per month in the United States whereas it only cost $377.62 in Canada and $217.41 in the United Kingdom. At the current time, Medicare does not allow enrollees to purchase their medications out of the country to take advantage of cheaper drugs. President Trump stated he would change that but no action has yet been taken. Not surprisingly, the pharmaceutical industry has lobbied against it.

President Trump campaigned that he wanted to negotiate with American pharmaceutical companies for better rates. Medicare Part D prescription drug plans are currently run by private insurance companies, and laws are in place that prevent the federal government from intervening in pricing. This is unfortunate since the federal government currently negotiates to decrease the cost of drugs for Medicaid and the Veterans Administration.

The Trump administration put forth a proposal in May 2018, American Patients First, which discusses plans to decrease the cost of prescription drugs. It does not address purchasing foreign medications or allowing Medicare to negotiate with pharmaceutical companies. It did, however, encourage a lift of the pharmacy gag rule. At the time, a pharmacist was prohibited from notifying patients about cheaper drug alternatives. For example, a pharmacist could not tell someone if a medication was cheaper to buy out of pocket than with an insurance copay. Thankfully, President Trump signed The Patient Right to Know Drug Prices Act in 2018 that lifted the pharmacy gag rule.

Tax Savings

President Trump may offer Americans opportunities to save on taxes and not just through the infamous GOP tax bill. At the present time, Medicare beneficiaries are not allowed to take advantage of health savings accounts.

That would have changed if the GOP 2019 Fiscal Year Budget came to pass. It proposes that Medicare beneficiaries be allowed to set aside money tax-free for the purposes of paying for healthcare expenses. By also making the cost of premiums tax-deductible (an amount ranging from $1,608 to $5,143 for Medicare Part B at the time the budget was proposed)seniors could have saved more of their retirement earnings. The idea is again being introduced in the 2021 Fiscal Year Budget.

Repealing Obamacare Affects Medicare

Though attention has been focused on Medicaid and the uninsured, a full-out repeal of the ACA could have significant repercussions for people on Medicare as well. Obamacare helped to establish programs to improve hospital care, to decrease Medicare fraud, and to innovate new payment models that could save money for the program. It also expanded on Medicare coverage, making preventive services like colonoscopies and mammograms free when you receive care from a participating provider. Most importantly, it helped to decrease the cost of prescription drugs for people on Part D plans.

At first, it was unclear how the AHCA would address these issues, but it seems that not all Obamacare efforts were on the chopping block. The AHCA would not have changed Medicare benefits, and the donut hole to close by 2020 as planned.

It did aim to decrease taxes, however. The AHCA would have repealed the Medicare payroll surtax on high-income earners, meaning that less money would be available for the Medicare Trust Fund over time. In fact, it was estimated that the Medicare Trust Fund would lose solvency by 2025, three years earlier than predicted in 2016, if the AHCA comes to pass.

A Word From Verywell

At this time, the Affordable Care Act remains the law of the land. President Trump promised to repeal Obamacare but Congress failed to pass the AHCA. He promised to keep Medicare untouched but has proposed significant cuts to the program. Only time will tell if the President will live up to the promises he made to the people who voted for him on the campaign trail.

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Article Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Number Uninsured and Uninsured Rate: 1987 to 2010. United States Census Bureau. 2011.

  2. Health Insurance Coverage in the United States: 2016. United States Census Bureau. September 12, 2017.

  3. H.R.1628 - American Health Care Act of 2017. United States Congress.

  4. American Health Care Act: Cost Estimate. Congressional Budget Office. March 24, 2017.

  5. Healthy Adult Opportunity Fact Sheet. Centers for Medicare and Medicaid Services. January 30, 2020.

  6. Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State. Kaiser Family Foundation. February 28, 2020.

  7. 70% of popular brand name drugs sold in U.S. pharmacies are imported; cost up to 87% less in Canada. Updated August 3, 2017.

  8. American Patients First The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs. U.S. Department of Health & Human Services. May 2018.

  9. S.2554 - Patient Right to Know Drug Prices Act. United States Congress. Updated August 10, 2018.

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