Sunday, February 05, 2006

Bush to propose Medicare cuts

Bush to propose Medicare savings measures: NY Times

NEW YORK, Feb 4 (Reuters ) - President Bush will propose substantial savings in Medicare in his budget next week as part of his efforts to rein in the increasing costs of social insurance programs, The New York Times reported on Saturday.

Citing administration officials and health care lobbyists, the Times said Bush's plan aimed to reduce projected Medicare payments to hospitals and other health care providers by billions over the next five years, and that it will seek further increases in Medicare premiums for high-income people beyond those scheduled to take effect next year.

According to the newspaper, administration officials, Congressional aides and lobbyists said the president was contemplating a package of proposals that would cut the projected growth in Medicare spending by $30 billion to $35 billion in the next five years, or less than 1.5 percent of total Medicare spending in that time frame.

Many of the Medicare proposals in the budget, which Bush plans to send to Congress on Monday, follow recommendations from an independent federal panel called the Medicare Payment Advisory Commission, the Times said.

The panel said in January that hospitals need not be fully compensated for the increased costs of the goods and services they use, but instead could manage with a smaller increase if they became more efficient.

The Times quoted Jack Ashby, a research director at the commission, as saying, "We expect the recommendation to have no effect on hospitals' ability to furnish care to Medicare beneficiaries." But Richard J. Pollack, executive vice president of the American Hospital Association, said the cutback could damage the quality of hospital care, it said.

Bush's 2007 budget also calls for a freeze in Medicare payments to nursing homes and home health agencies, in line with the commission's recommendations, the Times said, and also proposes a cut in payments for oxygen equipment provided to Medicare beneficiaries.

The budget does not seek changes in Medicare payments for doctors, which were frozen this year, the Times said. Under current law they will be cut more than 4 percent next year.

Regarding high income beneficiaries, under current law anyone with more than $80,000 of annual income will have to pay higher premiums in 2007 and later years, and people with incomes of $100,000 to $150,000 would see their premiums more than double.

A spokesman for the National Association for Home Care said a freeze in Medicare payments to home care agencies in 2007, coming on top of a freeze this year, would reduce access to services for patients in some parts of the country.