How Will Trump's Executive Orders Impact Medicaid and Medicare Recipients: An In-Depth Analysis
- Katerina Clark
- Feb 1
- 8 min read
Updated: Feb 2
The landscape of American healthcare is constantly changing, and federal actions play a critical role in influencing the lives of millions. Among these actions are the executive orders issued by President Donald Trump, especially those related to Medicaid and Medicare. In this post, we'll explore how these executive orders may impact recipients of these vital programs and shed light on potential changes, challenges, and benefits.
Understanding Executive Orders and Healthcare
Executive orders are directives issued by the President of the United States to guide the operations of the federal government. These orders can shape policies that significantly affect various sectors, including healthcare.
For Medicaid and Medicare recipients, the effects of these orders can be significant. These programs serve as crucial safety nets for millions, particularly the elderly, low-income families, and individuals with disabilities. Therefore, it is essential for these populations to understand the changes proposed by executive orders.
Possible Changes to Medicaid
Expansion and Eligibility
One notable change during Trump’s administration was promoting state flexibility, potentially allowing states to set new eligibility criteria. For example, some states like Arkansas and Kentucky moved forward with work requirements, which could leave many low-income individuals without coverage. According to the Kaiser Family Foundation, nearly 800,000 individuals lost Medicaid coverage in Arkansas alone after implementation.
These work requirements could create major hurdles for many recipients. For instance, individuals with caregiving obligations or those who find it hard to secure consistent work may struggle to meet these new rules. This could lead to a significant loss of healthcare access for those who rely on Medicaid.
Funding and State Budgets
Funding mechanisms for Medicaid directly affect state-level operations. Trump's executive orders leaned towards controlling federal spending, which could lead to reduced funding for states. As a result, many state governments might have to cut services or decrease funds for healthcare providers. This reduction could detrimentally impact the quality and availability of care for Medicaid recipients.
Moreover, financial pressure on state budgets could lead to higher co-pays or premiums. A report from the Center on Budget and Policy Priorities indicated that states facing budget cuts often increase out-of-pocket costs, hitting low-income individuals especially hard.
Medicaid Work Requirements
The Trump administration has promoted work requirements for Medicaid recipients, encouraging states to mandate that certain beneficiaries demonstrate employment or participation in community service to maintain eligibility. While some states have pursued these policies, they have faced legal challenges, with courts blocking their implementation in several cases. Critics argue that such requirements could lead to coverage losses for vulnerable populations, while supporters claim they promote self-sufficiency and reduce dependency on government assistance
Additionally, under Trump’s executive actions, states may have greater flexibility in imposing restrictions on Medicaid eligibility, including limitations on benefits or increased cost-sharing for certain populations. While these measures are unlikely to be universally implemented, they signal a broader shift in Medicaid policy that could affect low-income individuals relying on the program for healthcare coverage.
Potential Paths for CMS Under the Trump Administration
While a complete repeal of the IRA is unlikely, the Trump administration may attempt to modify the Drug Price Negotiation Program through administrative actions. This could involve revising guidance, adjusting meeting schedules, or modifying other procedural requirements without the need for congressional approval.
A more aggressive approach could see the administration directing legal teams to withdraw from ongoing lawsuits related to the IRA, similar to strategies employed during Trump’s first term regarding challenges to the Affordable Care Act. However, no clear indication has been given that the administration plans to take this route.
Medicare Program Transformations
Prescription Drug Pricing
One of the Trump administration’s key initiatives focused on reducing prescription drug costs for Medicare recipients. Executive orders sought to allow the government to negotiate prices directly or permit the importation of drugs from other nations. In theory, these steps could lower costs significantly for seniors, whose average annual out-of-pocket spending on medications was approximately $2,000.
However, the actual implementation of these orders proved complex. While there was potential for near-term savings, resistance from pharmaceutical companies and logistical challenges could hinder long-term success. Thus, though recipients might see some immediate benefits, the sustainability of these changes remains in question.
CMS Announces Selected Drugs for 2027 Price Negotiations Ahead of IRA Deadline
On January 17, 2025, in anticipation of the Inflation Reduction Act (IRA) deadline on February 1, the Centers for Medicare & Medicaid Services (CMS) revealed its list of 15 Medicare Part D drugs selected for the second round of price negotiations. These newly selected medications, which will have revised pricing effective January 1, 2027, include:
Ozempic,
Rybelsus,
Wegovy
Trelegy Ellipta
Xtandi
Pomalyst
Ibrance
Ofev
Linzess
Calquence
Austedo, Austedo XR
Breo Ellipta
Tradjenta
Xifaxan
Vraylar
Janumet, Janumet XR
Otezla
This announcement marks the beginning of the statutory timeline for drug manufacturers to determine their participation in negotiations and to compile necessary manufacturer-specific data as part of the process.
Trump Administration Rescinds Biden-Era Executive Order
Upon taking office on January 20, 2025, President Trump repealed multiple executive orders from the Biden administration, including Executive Order No. 14087. However, due to the IRA’s statutory mandates, this action is unlikely to affect the 2027 drug selection process.
Many of the Biden administration’s drug pricing reforms, such as the $2,000 annual cap on out-of-pocket prescription drug costs and inflation rebates, are embedded within the IRA. Reversing these changes would require congressional action, making an immediate policy shift unlikely. Still, the rescission of this executive order suggests that drug price negotiations will remain a key issue for the Trump administration moving forward.
Potential Paths for CMS Under the Trump Administration
While a complete repeal of the IRA is unlikely, the Trump administration may attempt to modify the Drug Price Negotiation Program through administrative actions. This could involve revising guidance, adjusting meeting schedules, or modifying other procedural requirements without the need for congressional approval.
A more aggressive approach could see the administration directing legal teams to withdraw from ongoing lawsuits related to the IRA, similar to strategies employed during Trump’s first term regarding challenges to the Affordable Care Act. However, no clear indication has been given that the administration plans to take this route.
Telehealth Services Expansion
The COVID-19 pandemic drove a significant rise in telehealth services. The executive orders during this time helped increase access for Medicare recipients. For example, a study by the Centers for Disease Control and Prevention showed that telehealth visits increased over 2000% during the early months of the pandemic, benefiting many seniors with mobility limitations or those living in rural areas.
However, uncertainty looms regarding the future of these expanded telehealth services beyond the pandemic. Many Medicare recipients who rely on this convenience could face setbacks if these services are not permanently integrated into the healthcare system.
The executive orders also emphasize expanding telehealth services for Medicare and Medicaid recipients.
The policies include:
Increased Telemedicine Access: Enhancing reimbursement structures to encourage providers to offer virtual care, ensuring more Medicare and Medicaid beneficiaries can access healthcare remotely.
Permanent Expansion of Pandemic-Era Waivers: Extending flexibilities that allowed telehealth services across state lines and in non-rural areas, making them permanent features of the healthcare system.
Technology Investments: Encouraging states to invest in broadband expansion and digital health infrastructure, particularly in rural and underserved areas.
Medicaid Telehealth Coverage Expansion: Providing states with greater flexibility to integrate telehealth into Medicaid programs, broadening eligibility for virtual services.
By expanding telehealth access, the administration aims to improve healthcare delivery efficiency while reducing costs and increasing convenience for beneficiaries.
Promoting Value-Based Care
The Trump administration is continuing its push toward value-based care models, shifting away from traditional fee-for-service models where healthcare providers are paid per procedure. Instead, value-based care ties provider reimbursement to patient outcomes and cost efficiency. Recent executive orders include:
Expanding Alternative Payment Models: Encouraging Medicare and Medicaid to adopt payment models that incentivize quality over quantity, such as bundled payments and accountable care organizations (ACOs).
Enhancing Provider Incentives: Increasing financial incentives for hospitals and physicians who demonstrate improved patient health outcomes while reducing costs.
Reducing Regulatory Barriers: Streamlining regulations that have previously hindered providers from adopting value-based care models, making it easier to participate in risk-sharing agreements.
Encouraging Private Sector Partnerships: Promoting collaboration between public healthcare programs and private insurers to drive innovations in value-based care.
The administration's approach aims to enhance care quality while controlling long-term costs for Medicare and Medicaid beneficiaries, ensuring that healthcare dollars are spent efficiently and effectively.
Key Takeaways
The repeal of Executive Order No. 14087 does not impact insulin price caps or limits on out-of-pocket expenses for Medicare beneficiaries.
Medicare’s Drug Price Negotiation Program will proceed as planned, with the 15 drugs announced by CMS on January 17, 2025, still subject to negotiations.
The Center for Medicare and Medicaid Innovation (CMMI) retains the authority to develop and implement experimental pricing models. However, given the change in administration, Biden-era initiatives may face delays or revisions.
Drug pricing remains a bipartisan concern. While the IRA’s core provisions remain intact, the overall direction of federal healthcare policy and Medicare’s negotiation program under the Trump administration remains uncertain. Trump previously pursued drug pricing reforms, such as the “most favored nation” model and price disclosures in advertisements, signaling that additional changes may be forthcoming.
Overall Impact on Recipients
The possible effects of Trump's executive orders on Medicaid and Medicare recipients are wide-ranging and complex.
Positive Outcomes
Flexibility in Services: Some states may utilize their newfound flexibility to enhance patient care and innovate within their Medicaid programs.
Enhanced Access to Telehealth: Ongoing access to telehealth services can greatly improve convenience and broaden treatment options for many users.
Challenges Ahead
Addressing Complex Needs: Recipients facing complex health conditions may encounter increased barriers as states reassess eligibility criteria.
Cost Implications: Alterations in funding could lead to higher out-of-pocket expenses, presenting further challenges for the most vulnerable populations.
What Lies Ahead for Recipients
As Medicaid and Medicare beneficiaries navigate the impacts of Trump's executive orders, understanding these changes is vital. Ensuring fair access to healthcare should remain a priority in ongoing discussions and policy actions.
While there are opportunities for innovation and improvement, significant risks could also impact service quality and accessibility for millions.
With the right policies and continuous advocacy focused on recipients' needs, creating a sustainable and equitable healthcare landscape could be within reach. Ongoing dialogues among stakeholders, including recipients, healthcare providers, and policymakers, will be essential in shaping the future of these critical programs.
Individuals relying on Medicaid and Medicare should remain engaged and informed about potential changes to their healthcare access and services. The well-being of vulnerable populations depends on proactive advocacy and a clear understanding of evolving policies.
Since January 20, 2025, concerns have continued to grow regarding the new executive orders implemented by the Trump administration. I want to emphasize that any article I share is strictly for informational purposes—I do not engage in political discussions. My goal is to keep my clients and individuals like yourself informed about potential changes that may impact their lives, especially in times of uncertainty.
Among these executive orders are increased enforcement actions affecting families who are in the country illegally. As someone with family members who have legally immigrated to America and built their lives here over decades, I deeply understand the fear and uncertainty these policies can create. Many of my relatives have been in the U.S. for over 50 years, and the idea that they may have to prove the validity of documentation from the 1960s is unsettling.
As someone proud of my heritage—being German, Cuban, and American—I have witnessed firsthand the resilience and determination of my family, who fought tirelessly for everything they have achieved. Knowing that hardworking families, like my own, now face potential upheaval is heartbreaking.
While I won’t delve further into the broader immigration debate, it is crucial to recognize the profound impact these policies can have. Beyond legal status, these are real people, real families, and real lives being affected. Acknowledging their struggles with compassion and understanding is more important now than ever.
The future direction of drug pricing policy remains uncertain, as it was not a focal point of Trump’s campaign. Clarity may emerge in the spring when guidance for the 2028 pricing cycle is expected to be released, offering insights into the administration’s broader strategy on drug pricing reforms.
As healthcare policy continues to evolve under the Trump administration, staying informed is more important than ever. With ongoing changes to Medicare, Medicaid, and drug pricing regulations, I will continue to provide updates and insights to help you navigate these developments with clarity and confidence. Be sure to follow along for the latest news and expert analysis on how these policies may impact you and your loved ones. Stay tuned for more updates, and as always, feel free to reach out with any questions.
By Katerina Clark
Very informative, thanks!