In budget, Medicare recipients pay more
WASHINGTON — In his new budget, President Barack Obama proposed Monday to squeeze $399 billion over the next 10 years out of Medicare, Medicaid and other programs run by the Department of Health and Human Services.
Under the proposals, many Medicare beneficiaries would have to pay more for their care and coverage. The president would, for example, introduce a co-payment for new Medicare beneficiaries who receive home health care services, and he would collect $4 billion over 10 years by imposing a surcharge on premiums for new beneficiaries who buy generous private insurance to supplement Medicare.
In addition, Obama’s budget would reduce scheduled Medicare payments to teaching hospitals, nursing homes and health maintenance organizations that care for older Americans and people with disabilities.
Nancy LeaMond, an executive vice president of AARP, welcomed a proposal by Obama to hold down the cost of prescription drugs. But she said, “We have concerns about certain proposals that could shift costs onto older Americans, such as higher premiums, deductibles and copayments for Medicare beneficiaries.”
Richard Umbdenstock, president of the American Hospital Association, said the proposals were “bad medicine for our nation’s seniors.” Currently, he said, “1 in 3 hospitals operates in the red,” and many lose money on their Medicare patients.
The budget would reduce the projected growth of Medicare payments for graduate medical education by $16 billion over 10 years while saving $116 billion in Medicare payments to drug companies for medicines prescribed for low-income patients.
Obama would save more than $100 billion over 10 years by reducing inflation updates for health care providers that care for Medicare beneficiaries after they are discharged from hospitals.
And he would cut $43 billion over 10 years from the projected growth of federal payments to Medicare managed-care plans, known as Medicare Advantage plans. The goal of this proposal, the White House said, is to “improve payment accuracy for Medicare Advantage.”
The president’s budget would collect $66 billion over 10 years by charging higher premiums to higher-income Medicare beneficiaries, for coverage of doctors’ services and prescription drugs.
Obama again proposes to ban deals between brand-name and prescription drug manufacturers that he says delay the marketing of lower-cost generic medicines. This change, he said, would save Medicare and Medicaid more than $11 billion over 10 years.
White House officials highlighted a proposed expansion of Medicare benefits that would eliminate the existing 190-day lifetime limit on coverage of inpatient care in psychiatric hospitals. The administration described this as a step toward “parity” in coverage of care for mental and physical illnesses, and said it would cost $5 billion over 10 years.
The budget proposes to continue the Children’s Health Insurance Program through 2019. Under current law, the White House said, financing for the program will end in 2015.
The president said his budget would encourage nursing homes and home health agencies to deliver care more efficiently by making a single bundled payment for many of their services.
Obama also proposed steps to address severe financial problems in Social Security’s disability insurance program. He said he wanted to reallocate payroll tax revenue from Social Security’s old-age and survivors trust fund to its disability trust fund, while he works with Congress to devise “a longer-term solution” to the solvency of the overall program.