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President Bush To Call For Large Cuts In Medicare Spending Growth

Armen Hareyan's picture

Medicare Spending

PresidentBush on Monday will release a fiscal year 2009 budget request that includeslarge reductions in Medicare spending growth and a decrease in Medicaidspending, according to Bush administration officials and budget documents, the New York Times reports. The budget request willpropose legislative changes that would reduce Medicare spending by $6 billionin FY 2009 and by $91 billion over five years. In addition, the request willseek to reduce Medicaid spending by $1.2 billion in FY 2009 and by $14 billionover five years.

Under the budget request, most of the reductions in Medicare spending wouldresult from decreases in annual updates in reimbursement payments to hospitals,nursing homes, hospices, ambulances and home care agencies. The budget requestover five years would reduce by $15 billion annual updates in Medicarereimbursements for inpatient hospital care; reduce by $25 billion specialpayments to hospitals that serve large numbers of low-income residents; reduceby $20 billion capital payments for the construction of hospital facilities andthe purchase of medical equipment; and reduce by $23 billion special paymentsto teaching hospitals.

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The budget request also would freeze Medicare reimbursements to nursing homesin FY 2009 and would freeze payments to home health agencies at current ratesthrough 2013. The budget request would not reduce Medicare reimbursements toMedicare Advantage plans, "even though many Democrats and independent expertssay those plans are overpaid," the Times reports.

According to the Times, health care "savings are a crucialpart of Mr. Bush's plan to put the nation on track to achieve a budget surplusby 2012," but congressional Democrats, who "often pronounce Mr. Bush'sbudget dead on arrival," have "no reason to make unpopular cuts inthis election year" (Pear, New York Times, 1/31).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.