President Bush's Proposal Would Reduce Medicaid Spending by $8.5B Through 2010, Less Than Administration Estimates, CBO Says

Main Category: Medicare / Medicaid / SCHIP
Article Date: 06 Mar 2005 - 0:00 PDT

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The Bush administration has estimated that the president's Medicaid plan would reduce spending by $13 billion through 2010, but a preliminary projection from the... Congressional Budget Office says the proposal would reduce costs by about $8.5 billion, the AP/Las Vegas Sun reports (Fram, AP/Las Vegas Sun, 3/3). In his budget proposal, Bush recommended a $60 billion reduction in Medicaid spending over 10 years, including $40.5 billion by eliminating "accounting gimmicks" used by states, $15.1 billion by lowering payments to pharmacists and $4.5 billion by implementing more stringent restrictions on nursing home eligibility. Bush also proposed $11.3 billion to expand children's health coverage, $1.8 billion to care for more nursing home residents at home and $1.9 billion to extend coverage (Kaiser Daily Health Policy Report, 3/1). CBO also estimated that Bush's proposed cuts to all programs would save $50.8 billion over the next five years, 18% less than the $62 billion in savings the Bush administration calculated. According to the AP/Sun, the differences in projections might be because of "differing assumptions about the programs' spending rates, the economy and other factors." The CBO's estimates could "complicate" Congress' task of writing its budget beginning next week, the AP/Sun reports. Although Congress' budget is "expected to follow closely" Bush's proposal, House Budget Committee Chair Jim Nussle (R-Iowa) said that House committees will not be required to decide specific Medicaid cuts until September. Nussle said he did not think the CBO estimates would have "a big impact" on Congress' budget proposal. The two chambers of Congress must approve a compromise budget for it to take effect. The president's signature is not needed (AP/Las Vegas Sun, 3/3).

House Democrats Voice Concern to Leavitt
Some House Democrats on Thursday "air[ed] their gripes" about the Bush Medicaid proposal to HHS Secretary Mike Leavitt during a hearing of the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies, CQ HealthBeat reports. Rep. David Obey (D-Wis.) said that proposed cuts to rural, maternal and child health services are "the most phenomenally irresponsible" proposals he has seen during his 36 years in Congress. Rep. Steny Hoyer (D-Md.) said Bush's plan is "an immoral fiscal policy" that would leave the next generation in "deep, deep debt." Rep. Ernest Istook (R-Okla.) said he is concerned that the government will spend too much on Medicaid in the next 10 years. Subcommittee Chair Ralph Regula (R-Ohio) said the committee "might want to rearrange the numbers" of the Bush administration's budget proposal. Leavitt responded that governors have told him Medicaid is unsustainable in its present form, noting that Bush has proposed giving states added flexibility over how to cover "optional" beneficiaries. He added that the U.S. health system should be "organized around consumers," with the federal government taking the lead with changing Medicaid, Medicare and other public health insurance programs (CQ HealthBeat, 3/3).

Broadcast Coverage
NPR's "News & Notes with Ed Gordon" on Friday is scheduled to include a segment on how reduced funding for Medicaid will affect communities of color and low-income U.S. residents (Gordon, "News & Notes with Ed Gordon," NPR, 3/4).

The complete segment will be available online in RealPlayer after the broadcast.

"Reprinted with permission from kaisernetwork.org kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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