President Bush To Call for Large Cuts in Medicare Spending Growth, Major Medicaid Savings

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

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

The budget request also would freeze Medicare reimbursements to nursing homes in FY 2009 and would freeze payments to home health agencies at current rates through 2013. The budget request would not reduce Medicare reimbursements to Medicare Advantage plans, "even though many Democrats and independent experts say those plans are overpaid," the Times reports.

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