Deep cuts in health spending likely under second Trump administration, experts say

During a second Trump administration, president-elect Donald Trump and a Republican-backed Congress are expected to limit abortion access and cut spending for Medicaid and the Affordable Care Act (ACA), health policy experts from the nonpartisan KFF said Friday.

On a Zoom call, the topic was "What a Second Trump Administration May Mean for Health Care." Here's a recording and transcript. On the call, KFF's policy experts warned that the incoming administration may do the following:

• Limit access to contraception via medication
• Begin strict enforcement of the Emergency Medical Treatment and Labor Act (EMTALA), thus restraining care for pregnant people in distress.
• Scrap or curtail Medicare's new drug-price negotiations program,
• Let the enhanced subsidies expire at the end of 2025 for millions enrolled in ACA plans under Obamacare,
• End U.S. cooperation with other nations on global health initiatives and on any response to another pandemic.

Many of these issues will depend on who is appointed to lead the federal Department of Health and Human Services, the Food and Drug Administration and other agencies, and what role Robert F. Kennedy Jr., will have in setting policy, the experts said.

Keep in mind that Larry Levitt, KFF's executive vice president for health policy, warned, "There's a lot of tea-leaf reading in trying to anticipate what might happen."

"We know there will be a big debate coming on taxes, and I fully expect health care to be a big part of that debate," he added. "Trump has said Medicare, Social Security and Defense (Department) cuts are off the table with Republicans looking for spending reductions to help pay for tax cuts."

For health policy, a fork in the road

The election represented a "fork in the road for health policy," Levitt added. That means more emphasis on deregulation than under the Biden administration, and for health care, less federal spending and less transparency, he said.

"That means the math is inescapable," Levitt noted, explaining that cuts are coming in spending for Medicaid and the ACA. "Medicaid is the next biggest chunk of money after those other programs, and if there is pressure to cut spending to finance tax cuts, then Medicaid will have a big target."

In the past, Trump, conservative groups and Republicans in Congress have endorsed plans to cut Medicaid spending by making block grants to states or per-capita caps or by slashing federal matching payments for the ACA and Medicaid expansion, Levitt commented.

One big question is what a Trump administration may do about the prescription drug-price negotiations, which began last year, as we reported here. "Trump has been a long-time critic of the drug industry, but offered no specific policies in the campaign," Levitt said. "It's a big question of whether he will continue drug-price negotiations in Medicare or seek to repeal or weaken it."

Questions on ACA subsidies

Trump and Congressional Republicans also could let the ACA's premium tax-credit subsidies expire after next year. If they do, the result will be big increases in out-of-pocket and premium costs, lower enrollment in ACA plans and more uninsured Americans, he predicted.

It's also possible, however, that health insurers, hospitals and physicians will want the subsidies to continue because they boost health insurance enrollment, Levitt said. "The ACA is working quite well right now, and insurers do not want to see the enhanced financial aid expire and reduce enrollment," he commented. "I think the Trump administration is perceived as business-friendly. Cuts in health care would certainly not be perceived as friendly to the health care industry."

Cynthia Cox, KFF's vice president and director of the program on the ACA, added that Obamacare marketplaces have doubled the number of people enrolled from about 11 million four years ago to 21 million today. "That's driven by these enhanced subsidies, primarily, but also because the Biden administration has taken other steps to boost outreach and marketing and enrollment assistance programs," she said.

Restrictions on abortion

On the issue of limiting abortion access, Alina Salganicoff, KFF's senior vice president and director for women's health policy, said mifepristone, one of two drugs used for medication abortions, is a target for those who oppose abortion.

In June, the U.S. Supreme Court ruled unanimously to preserve access to the drug, as Mark Sherman reported for the Associated Press. The medication was used in almost two-thirds of all abortions in the United States last year, and the case could restrict access to mifepristone across the country, including in states where abortion remains legal, he added.

"That case is still live," Salganicoff explained. Even though the Supreme Court said the groups challenging the use of the drug did not have standing, there are changes the FDA could make in the second Trump administration, she added. "We don't know whether they're going to actually review the approval, but I will tell you that it is likely that they will revisit the conditions in which medication abortions, which now account for nearly two-thirds of all abortions in this country, can be provided," she said.

In addition, health care providers using telehealth approve about one in five abortions in the United States today, Salganicoff said. After a telehealth visit with a provider, the pills are mailed under provisions the Biden administration approved, she explained. The result is no in-person visit is needed. "We do anticipate that's going to be a target," she added.

What's more, about one in 10 abortions are done using pills mailed to people in states where abortion is banned from states that have shield laws protecting their use, she said. Under this FDA protocol, it's legal to do so. "But, clearly this is going to be a target at the FDA," she warned.

Looming cuts for Medicaid

On the issue of Medicaid spending, Levitt said, there are questions about whether cuts will come in the form of reductions in federal matching payments to the 40 states that have expanded enrollment in Medicaid or for the 10 states that have not expanded Medicaid, including Georgia. If Trump or Congresses used block grants or per-capita caps to fund Medicaid, every state would be affected, he explained. In turn, every state could cut Medicaid spending, leading to reductions in coverage and benefits, he added. Both block grants (meaning a set amount for each state) and per-capita caps (meaning a set amount for each enrollee), Trump and Congress could limit federal Medicaid spending.

Robin Rudowitz, KFF's vice president and director of the Program on Medicaid and the Uninsured, commented that changes in spending for the ACA also could affect whether the remaining 10 states expand Medicaid and would affect the waivers that some states, such as Georgia, use to enroll residents in Medicaid without expanding enrollment more broadly.

What's ahead for the CDC and WHO

One of the questions the KFF experts addressed was related to public health. Levitt noted that if Kennedy has a prominent role in the administration, there is a potential for misinformation. "We turn to the government for reliable data, public health and scientific information, and there's the potential now for the government to be not only not an effective source for health information, but in fact, an accelerant for misinformation," he warned. He asked Jennifer Kates, KFF's senior vice president and director of global health and HIV policy to address that issue and the changes that Trump could make at the federal Centers for Disease Control and Prevention.

"First of all, the new administration is going to appoint a CDC director, and that appointment itself is very important, because that person will likely share the views of the incoming administration," she said. Under a new law, the Senate will confirm the CDC director in 2025, as Joyce Frieden reported for MedPage Today.

"We could expect a de-emphasis, or change in the view of what is considered evidence and in how the CDC provides recommendations on public health measures," she added. "There's a lot of discretion that the new administration is going to have to decide what role it wants [the] CDC to play."

Another possibility is that during a second Trump administration, federal officials could begin the process of taking the United States out of the World Health Organization, as the first Trump administration attempted to do but ran out of time, Cates said. "I would fully expect the second Trump administration to try to do that again," she added. Also, the incoming administration is likely not to agree to an international agreement to strengthen efforts to prevent, prepare for and respond to a pandemic, as the WHO has proposed, she noted.