Bush Releases Budget Request With Limits on Medicare Growth

President Bush on Monday released a $3.1 trillion fiscal year 2009 budget request that would reduce Medicare spending by $178 billion over five years, the Baltimore Sun reports (Hay Brown, Baltimore Sun, 2/5).

Over 10 years, the budget request would reduce Medicare spending by about $560 billion. The budget request would reduce annual Medicare spending growth from 7% to 5% and save the program $10 trillion over the next 75 years, according to the White House (Godfrey, Wall Street Journal, 2/4).

In an effort to reduce Medicare spending growth, the budget request "asks doctors and hospitals to hold the line on what they charge the elderly for medical care" and maintains that "cuts in Medicare can be painless -- even lowering premiums that seniors pay by capping what doctors and hospitals can charge," the Chicago Tribune reports (Silva, Chicago Tribune, 2/5).

According to the Los Angeles Times, a senior Democratic congressional aide estimated that at least $115 billion of the reduction in Medicare spending would result from decreased reimbursement to hospitals, nursing homes and home health agencies, although "hospitals and other providers in traditional Medicare would face the sharpest cuts" (Gosselin, Los Angeles Times, 2/5). The budget request includes few details about some parts of the reduction in Medicare spending but specifies that Medicare reimbursements to physicians and hospitals would decrease by 0.4% each year that general revenue financed 45% or more of the program (Godfrey, Wall Street Journal, 2/4).

Medicare reimbursements to private health insurers that participate in the program would receive "only a light trim" under the budget request, the Times reports (Los Angeles Times, 2/5).

The budget request would provide $224 billion for Medicaid and the State Children's Health Insurance Program, with $450 million in outreach grants to help enroll uninsured low-income children in the programs (Wetzstein, Washington Times, 2/5).

The budget request would reduce Medicaid spending by $17 billion over five years (Gay Stolberg, New York Times, 2/5). The budget request also would increase SCHIP spending by about $20 billion over five years (Godfrey, Wall Street Journal, 2/1).

The budget request would increase domestic discretionary spending for health care and other programs by less than 1% (Taylor, AP/Detroit Free Press, 2/4).

The budget request would:

• Provide for $737 billion for HHS;
• Provide for $29.3 billion for NIH;
• Provide for $5.6 billion for CDC (Washington Times, 2/5);
• Eliminate spending for some health care programs, such as an initiative that trains physicians at children's hospitals (Abramowitz/Weisman, Washington Post, 2/5);
• Reduce funds for health care programs for veterans (AP/Detroit Free Press, 2/4); and
• Increase FDA spending by 5.7% (Schmit, USA Today, 2/5).

The budget request received "condemnation from House Democratic leaders for continuing 'failed' policies and praise from Republican leaders for starting the annual conversation in a fiscally sound manner," CongressDaily reports (Bourge, CongressDaily, 2/4). Congressional "Democrats vowed to ignore most of the threatened cuts to Medicare and other domestic programs," which likely have "little chance of passage" in an election year, USA Today reports (Wolf, USA Today, 2/5).

However, Congress "will probably take action in pressing areas such as Medicare spending," as both "parties agree that rising Medicare costs will put heavy pressure on the nation in coming decades," according to the Journal. "To avoid a drop in Medicare payments to physicians ... Democrats want to decrease payments to other health care providers, including private health insurers that operate in Medicare Advantage," the Journal reports (Lueck, et al., Wall Street Journal, 2/5).