Trump Raids Medicare To Swing an Election He Already Lost

The idea is probably illegal, because the Constitution gives Congress alone the power to spend money.


by Brendan McDermott, Fiscal Policy Analyst

Refusing to accept that the election is over, President Trump is moving forward with one of the most desperate gambits from his campaign: raiding Medicare to give 39 million seniors a $200 prescription drug card. Fortunately, Trump’s plan to bypass Congress and act by executive order did not come to fruition before the election. But this week, it cleared a regulatory roadblock and the administration says it will start sending the cards before the end of the month.

The idea is probably illegal, because the Constitution gives Congress alone the power to spend money. It is certainly bad policy, because it cuts into Medicare’s finances to pay for a blatant vote-buying scheme. That makes no sense now that the election is behind us, but then, little that Donald Trump has done or said since he lost decisively on Nov. 3 makes sense.

Before it finishes its work, the lame-duck Congress should act to protect Medicare by killing Trump’s effort to usurp its power of the purse. For Republicans in the Senate, the opportunity to reject this political maneuver will test whether they recognize the election is over, and with it the reckless rule-breaking of the Trump administration.

Trump’s proposal would send 39 million seniors $200 cards, similar in appearance to credit cards, that they could use to buy prescription drugs. Like many things Trump does, this plan may be illegal. The Constitution gives Congress alone the power to spend money, but Congress has not authorized this program or appropriated any money towards it. Congressional Democrats have rightfully asked the Government Accountability Office to investigate whether the program is legal.

Administration officials claim the President can authorize the cards without Congress through an existing “testing” program meant to find more efficient ways to administer Medicare. The program will supposedly “test” whether the cards make seniors more likely to take their medicine on time, but it will not establish a control group or any other practices typical of an experiment. While tests of this kind are normally small in scale and cost-neutral, Trump’s plan would involve tens of millions of seniors and cost billions of dollars.

The much more likely explanation for Trump’s card plan is that it was a political effort to ingratiate himself with seniors. Trump’s own officials say he only added mention of the cards to his speech a few hours before he gave it because he felt the need to cram health care successes in before the election. The general counsel of the Department of Health and Human Services sent an internal memo warning that the plan could draw legal challenges related to election law and advised the administration to get guidance from the Department of Justice’s Public Integrity Section, which handles elections-related offenses.

The plan’s political motivations are so glaring that they gummed up Trump’s initial attempts to accomplish it. A week before Trump’s announcement, pharmaceutical executives abandoned a deal between the Trump Administration and the industry that would have included similar cards because the executives believed the cards would make the deal look political.

President Trump has said he intends to get the $7.9 billion he will need for the cards from the Supplemental Medical Insurance Trust Fund, one of the two Medicare trust funds that pay for senior citizens’ health care. But Medicare does not have money to spare. The Congressional Budget Office estimates that the net cost of Medicare will grow from 3.5 percent of gross domestic product this year year to 6 percent in just 30 years because the population is growing older and health care is becoming more expensive, drawing money away from other vital spending priorities. Medicare’s other trust fund is projected to run out of money by 2024 thanks to this budget crunch, which would automatically prompt payment cuts. Elected officials need to control Medicare spending growth, not add to it without addressing its driving forces.

Until this week, the program appeared unlikely to materialize before Trump left office. Administrators had to pull the plan together in very little time, and the effort to get guidance from the Department of Justice slowed the process down. More recently, the Special Interest Group for Inventory Information Approval System Standards (SIGIS), an industry organization that helps the Internal Revenue Service set standards for federal benefit cards, has said for weeks that limiting the cards’ use to prescription drugs was inconsistent with the standards it sets for other benefit cards. Health officials told Politico that without the group’s approval, the administration cannot mass produce working cards.

Yet after appeals from the Trump administration, SIGIS dropped its objections on Monday, for unclear reasons. Thanks to this surprising reversal, the administration plans start sending the cards to seniors by the end of this month.

Voters care about drug prices for good reason. Prices are higher in the United States than in other developed countries, and the costs of the most popular prescription drugs are growing by nearly 10 percent per year. But one-time payments from the government cannot solve a systemic problem such as the rising cost of lifesaving and life-improving drugs — they can only paper over it. Congress should keep fighting Trump on this plan so neither he nor any other President thinks they can finance political gifts by raiding Medicare’s coffers.