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Federal Budget To Slow Growth in Medicare Spending
The proposed 2008 federal budget calls for slowing the rate of growth in expenditures for Medicare, as health care savings are a crucial part of the Administration’s plan to achieve a budget surplus by 2012. The President has repeatedly said that the cost of Medicare is unsustainable. Medicare and Medicaid combined account for nearly a quarter of all federal spending, and their combined cost is expected to double in a decade.
Budget documents show that the President will propose legislative changes in Medicare to save $6 billion in the next year and $91 billion from 2009 to 2013. Additionally, the President proposes to save tens of billions of dollars more through new regulations that are not subject to approval by Congress.
While Congressional Democrats have no reason to make unpopular cuts in this election year, lawmakers say they feel obliged to pass a Medicare bill in the first half of this year, to spare doctors from a 10 percent cut in Medicare fees that would otherwise take effect on July 1. Lawmakers say that bill could easily become a vehicle for other changes in Medicare.
Most of the Medicare savings in the budget would be achieved by reducing the annual update in federal payments to hospitals, nursing homes, hospices, ambulances and home care agencies. The budget would not touch payments to insurance companies for private Medicare Advantage plans.
In the next five years, the largest amount of Medicare savings would come from hospitals, with reductions in the annual updates for inpatient care; reductions in special payments to hospitals serving large numbers of poor people; reductions in capital payments for the construction of hospital buildings and the purchase of equipment, and; reductions in special Medicare payments to teaching hospitals.
Further, under the President’s budget, Medicare payment rates for nursing homes would be frozen in 2009, and payment rates for home health agencies would be frozen at current levels through 2013.
Source: New York Times January 31, 2008
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LINKS FROM PAST ARTICLES
- Retirement Plans May Cut Health Insurance Benefits (January 2008)
- Medicare Cuts Payout on 2 Cancer Drugs (December 2007)
- CareGiver Costs Rise (November 2007)
- Part B Premiums To Rise (October 2007)
- Part D Premiums Lower in 2008 (August 2007)
- Medicare Changes Coverage For Anemia Drugs (August 2007)
- How Can Medicare Help Me Stay Healthy? (July 2007)
- Home Infusion Therapy (June 2007)
- 5 Ways to Lower Your Drug Costs (April 2007)
- New Edition of the Guide to Home Health Care Agencies (May 2007)
- Social Security and Medicare Trustees’ 2007 Report Summary (May 2007)
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