Does Donald Trump Plan to Change Medicare and Medicaid?

Will Americans lose access to health care?

Donald Trump Medicare Medicaid
Mr. Donald Trump has proposed a healthcare plan that will affect both Medicare and Medicaid. Getty Images Sport/Getty Images Europe

American healthcare is ready for change but how far is the U.S. willing to go? Politicians are forced to address health care reform at every turn. With the 2016 presidential election approaching, Republican candidate Donald J. Trump has proposed a plan to address the issue.

Trump's Health Plan in Seven Simple Steps

Mr. Trump outlined his healthcare plan in seven steps. These are reviewed below.

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

While not a definitive step in his health plan, Trump does mention illegal immigration as impacting on the cost of American health care. He does not explicitly state how he would address health care access in this population, i.e. whether or not he would cut it altogether.

What Does Trump Healthcare Mean for Medicaid?

Funding for Medicaid would be cut significantly. This could affect how many people are able to access healthcare through the program.

Repealing Obamacare

Repealing Obamacare will affect coverage to millions of Americans. When the Affordable Care Act, aka Obamacare, was introduced in 2010, there were as many as 48 million uninsured Americans, approximately 15.7 percent of the population. According to the Centers for Medicare and Medicaid Services, the passage of the law decreased that number to 9.2 percent by 2015.

Obamacare allowed young people to stay on their parents' plans longer, allowed for expansion to existing Medicaid programs and developed the Health Insurance Marketplace as an affordable option to those who did not meet criteria for Medicaid. It also prevented insurance companies from increasing premiums based on pre-existing conditions.

The Trump healthcare plan states it will repeal Obamacare but offers no plan to replace it. This would increase the number of uninsured people in the United States by tens of millions. Is this a healthy option for America?

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 percent of expansion costs for three years and then 90 percent of costs through 2022. This funding would be discontinued under the Trump plan.

Beyond repealing Obamacare, the Trump health plan aims to cut other federal funding to Medicaid programs. This leaves Medicaid management and budgeting of the program entirely up to the states.

 States that did not expand Medicaid are likely to be less affected than states that did since they did not rely heavily on those funds. Those that did expand will have to find alternative ways to pay for the program or otherwise significantly cut coverage.

What Does Trump Healthcare Mean for Medicare?

Trump's healthcare reform would affect Medicare on many levels, especially in regards to savings for seniors. These are the key points.

Negotiating Drug Costs

The same medications used in the United States often cost less in foreign countries. For example, Advair, a common medication used to treat asthma, costs $309.60 per month in the United States before discounts whereas it only costs $74.12 in Canada and $46.99 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.

The Trump plan would not only allow for medications to be purchased from other countries but would also allow Medicare to negotiate with pharmaceutical companies in the U.S. 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. There is significant lobbying by pharmaceutical companies to continue this legislation.

With only ten percent of health spending reported on medications, the Congressional Budget Office (CBO) states they would not expect significant cost reductions with federal intervention. Other policy briefings suggest that Medicare could save as much as $16 billion every year by negotiating and decreasing the cost of brand name drugs to levels the federal government has already negotiated for Medicaid and the Veterans Administration.

Tax Savings

The Trump plan offers multiple opportunities for Americans to save on their taxes. At the present time, Medicare beneficiaries are not allowed to make use of an HSA. This would allow money to be set aside tax-free for the purposes of health care. By also making the cost of premiums tax deductible (an amount ranging from $1,461 to $4,677 for Medicare Part B in 2016)seniors could save more of their retirement earnings.

Is Trump Healthcare Right for America?

People who rely on Medicaid may face challenges with Trump's plan. Fewer people may be eligible for the benefit and without federal funding, resources could be limited to bolster the program. Millions of people will lose health care coverage. Those on Medicare, however, may find increased savings with a Trump presidency. Decreased spending on prescription drugs in addition to tax breaks could help many seniors stay afloat. Only you can decide if this is a plan worth supporting. Be sure to vote on election day.


Cubanski J, Neuman T. Searching for Savings in Medicare Drug Price Negotiations. The Henry J. Kaiser Family Foundation. Published February 9, 2016. Accessed April 18, 2016.

Gagnon MA, Wolfe S. Policy Brief. Mirror, Mirror on the Wall: Medicare Part D pays needlessly high brand-name drug prices compared with other OECD countries and with U.S. government programs. Public Citizen. Published July 23, 2015. Accessed April 18, 2016.

National Committee to Preserve Social Security and Medicare. Negotiating for Lower Drug Costs in Medicare Part D. Accessed April 18, 2016.

Obamacare Facts. Obamacare Enrollment Numbers. Accessed April 18, 2016.

Trump: Make America Great Again. Healthcare Reform to Make America Great Again. Accessed April 18, 2016.

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