KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Obama 2013 Budget Would Cut $360 Billion From Medicaid And Medicare

Those cuts, which would be made over 10 years, would come primarily from reduced payments to drug companies and health care providers.

The Washington Post: Obama Budget: National Debt Will Be $1 Trillion Higher In A Decade Than Forecast
The budget released Monday would trim spending on federal health-care programs by about $360 billion over the next decade, primarily by reducing payments to drug companies and other providers. Starting in 2017, Obama also proposes to raise Medicare premiums for new retirees and seniors with higher incomes, start charging co-payments for home health-care services, and penalize patients who buy Medigap policies to take care of Medicare co-payments and deductibles (Montgomery, 2/13).

The Associated Press/Businessweek: Obama Sends FY2013 Budget Proposals To Congress
The projections in Obama's budget show that he is doing little to restrain the surge in (Medicare and Medicaid) expected in coming years with the retirement of baby boomers. Obama's budget projects that Medicare spending will double over the coming decade from $478 billion this year to almost $1 trillion in 2022. Medicaid, the government health care program for the poor and disabled, would more than double from $255 billion this year to $589 billion by 2022. (Crutsinger, 2/13).

CQ HealthBeat: Obama Budget Slices Medicare, Medicaid Through Provider Cuts
President Obama’s $76.4 billion fiscal 2013 Health and Human Services budget proposal would trim $360 billion in Medicare and Medicaid payments over 10 years, in part by cutting payments to certain providers. It also cuts $664 million from the Centers for Disease Control and Prevention, freezes the National Institutes of Health budget at $31 billion and adds about $1 billion to the Centers for Medicare and Medicaid Services. Administration officials explained the NIH’s stagnant funding by saying that “new grant management policies” would increase the number of new research grants (Reichard and Norman, 2/13).

The Hill: Budget Includes Familiar Cuts To Medicare, Medicaid
President Obama's budget proposal would require wealthy seniors to pay for a higher share of certain Medicare benefits. It would charge a co-pay for home healthcare services and put new limits on supplemental policies known as Medigap. ... On Medicaid, the White House again proposed a streamlined funding system that states do not support. The plan would combine various rates of federal funding into a single percentage. States and budget analysts say that approach would simply shift costs to the states, rather than actually controlling the cost of Medicaid. Washington Gov. Christine Gregoire, a Democrat, said last year that the consolidated payment rates could be a "huge problem" for states (Baker, 2/13).

The New York Times: Military Cuts And Tax Plan Are Central To Obama Budget
But the question this year is whether Mr. Obama after the election, win or lose, can use his veto and looming budget deadlines to force some compromises — even a “grand bargain” of spending cuts and revenue increases for deficit reduction could be possible, Mr. Obama has told people privately. “The president’s budget is a reasonable opening move for what will likely be major budget negotiations after the election and before the Bush tax cuts are due to expire at the end of the year,” said Jim Kessler, vice president for policy at Third Way, a centrist policy organization (Calmes, 2/13).

Modern Healthcare: Reform Funding Remains Priority In Obama Budget
The administration's fiscal 2013 budget has requested $76.4 billion for HHS, or about $300 million above fiscal 2012's funding level. "The budget maintains investments in the administration priorities such as the Affordable Care Act implementation and Head Start," according to an HHS summary in the administration's financial blueprint  (Zigmond and Daly, 2/13). 

The New York Times: Pentagon Wants To Raise Some Retirees' Health Fees
Defense Secretary Leon E. Panetta has warned that runaway personnel costs at the Pentagon are "unsustainable," and on Monday he tried to put a big brake on the spending: Over the next five years the Defense Department plans to nearly quadruple the health insurance fees paid by many working-age military retirees (Bumiller, 2/13).

Medscape: New Federal Budget Proposal Mostly Spares Physicians
As they feared, hospitals take it on the chin in the president's new set of numbers. Under the plan, hospitals would receive $36 billion less over the course of the next 10 years in Medicare funds that offset unpaid deductibles and copayments owed by patients. At this time, Medicare covers 70% of patient bad debt. The Obama administration considers a 25% offset more reasonable. Medicare funding of residency training programs also would fall by $10 billion, with the Obama administration reasoning that they are overcompensated for their costs (Lowes, 2/13). 

Bloomberg: Drugmaker Rebates Would Rise $156B In Obama Budget
President Barack Obama’s budget plan would trim spending on federal health programs at the expense of drugmakers, hospitals and nursing homes while seeking nearly $1 billion for carrying out the 2010 health-care law. ... Drug companies led by Pfizer Inc. (PFE) would have to provide $156 billion in discounts over the next decade for medicines sold to low-income senior citizens, on top of $80 billion in discounts and rebates the industry agreed to help fund the cost of the health-care overhaul (Wayne, 2/14).

Reuters: Obama Seeks To Cut Municipal Bond Tax Breaks
As the sweeping healthcare overhaul comes on-line, fewer people will lack health insurance, according to the budget. Obama would cut $18.1 billion through 2020 in "Disportionate Share Hospital" payments intended to support hospitals that treat low-income and uninsured patients. Altogether, the budget "provides $623.7 billion in outlays for state and local governments in 2013, an increase of $20.2 billion from 2012." Nearly half would go to healthcare, according to budget documents, with 17 percent for income security programs, 15 percent for education and social services, and 13 percent for transportation (Lambert, 2/13).

Reuters: What's In That Obama Budget For You?
You'd pay more for Medicare. There's a slew of smaller provisions aimed at making Medicare slightly more means tested than it is now. Starting in 2017, the proposal would increase income-related premiums in section B (which covers doctors visits and similar services) and D (which covers prescription drugs) by 15 percent. Those higher premiums currently are required of taxpayers with income over $85,000 ($170,000 for couples filing joint returns). Obama proposes keeping the income threshold stable (not adjusting for inflation) until one in four beneficiaries are paying extra premiums which currently start at $55.60 a month (for B and D) and go up to $286.20 a month (Stern, 2/13).

The Associated Press: Analysis: A Budget Plan Or A Campaign Document?
Obama's budget blueprint showcases the major priorities of his presidency, ones that contrast sharply with Republicans' near-solid opposition to tax increases and advocacy for deep spending cuts, including in popular benefit programs such as Medicare and Medicare. ... Obama's budget does claim $360 billion in savings over the next decade in Medicare and Medicaid programs, but he proposes to do it with relatively modest changes. White House officials defended the cuts to so-called entitlement programs (Raum, 2/14).

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.