Impact of Federal & State Budgets on Healthcare

Impact of Federal & State Budgets on Healthcare

As more news continues to come out about budgets for the upcoming year, it can be hard to understand how these changes may affect you. Both federal and state level policies and budgets have an effect on the types and prices of insurance plans made available to consumers. Here’s the low-down on what both President Trump and Minnesota Governor Walz have proposed and what it means for Minnesotans’ future.

Federal Budget & Policy Implications

The White House recently released their proposed budget for 2020, which included significant cuts in federal spending for both Medicare and Medicaid programs over the next 10 years. This includes cutting $818 billion from Medicare, the federal health coverage program for seniors, and $1.5 trillion from Medicaid, the federal program for low-income individuals and families. The President also announced that he will continue to work to appeal the Affordable Care Act during his remaining time in office. These changes were created in an effort by the administration to reduce federal spending and tighten the federal budget.

If the proposed budget were to go through, it would likely not only have effects on seniors and low-income adults, but it could also greatly impact hospitals and other care facilities. The Trump administration has noted that they intend to reduce costs by targeting prescription drug prices and reimbursement prices for care facilities. While this may help to reduce costs short-term, the long-term effects of such a cut could prove dire for hospitals and other health facilities, particularly in rural areas, who will feel the greatest impact from the budget changes. However, it is important to note that these proposals are just that. They will need to be passed by both the Senate and the House before they would be put into effect. As of right now, expanded Medicare and Medicaid are still protected under the ACA.

Minnesota State Budget & Policy Implications

On the flip side, Governor Walz of Minnesota is planning to increase healthcare spending in the state of Minnesota in his proposed budget for the next two years. The budget is to be voted on in the legislature before July 1st, and if it was to be passed, work on Walz’s “OneCare” program would begin. The idea is to create a subsidy program that reduces premium costs for individuals and families that buy coverage through MNsure, Minnesota’s healthcare marketplace. Through OneCare, any Minnesotan would be eligible to buy into a public plan through MNsure. If passed, public plans through OneCare would be available starting in 2023, with full implementation beginning in 2024.

In order to come up with the $112 million it would cost for OneCare to get off the ground, Walz has proposed increasing the gas tax by 20 cents a gallon. In addition, the 2% tax on insurance providers would continue. Walz and his administration are hopeful that ongoing costs will be covered by insurance premiums paid by consumers.


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