President Bush’s Fiscal Year 2004 Budget Includes New Fees for Veterans Health, Medicare

President Bush has proposed a number of new or larger fees related to health care for veterans, Medicare claims and other services provided by the federal government to raise more than $2 billion to cover the cost of his proposed tax cuts, the AP/Lexington Herald-Leader reports. In his fiscal year 2004 budget plan, Bush proposed a $250 enrollment fee for higher-income veterans who seek care at Department of Veterans Affairs hospitals and fees for health care providers who submit erroneous Medicare claims. The Bush administration estimates the enrollment fee for veterans would raise $230 million in FY 2004 and the fee for Medicare providers would raise $195 million. Jeff Stein, a senior policy analyst for Taxpayers for Common Sense, said, "The benefit of user fees is that it more efficiently allocates resources. It gives the payers of the fee a choice as to whether they want to pay if there are alternatives to a particular program" (Heilprin, AP/Lexington Herald-Leader, 2/5).

In other budget news, advocates for low-income individuals have raised concerns that a Medicaid reform proposal included in Bush's FY 2004 budget plan could result in a decrease in federal funds for the program, the Los Angeles Times reports (Simon, Los Angeles Times, 2/5). Under the proposal, states would have to maintain comprehensive Medicaid coverage for the two-thirds of beneficiaries whose income levels are low enough that the federal government mandates that they be covered, but for beneficiaries covered at the states' discretion, states could change Medicaid rules and regulations, simplify and alter eligibility requirements and revise or reduce benefits. The proposal would provide states with a fixed amount of money, rather than matching funds, for the beneficiaries that they choose to cover. States that decide to join the new optional Medicaid program would receive a total of $3.25 billion in additional federal subsidies in 2004 to fund new programs and $12.7 billion over seven years, but federal funding would decrease for the three years after that, resulting in a net of no cost to the federal government (California Healthline, 2/3). According to Robert Greenstein, executive director for the Center for Budget and Policy Priorities, the proposal would increase federal contributions to Medicaid more slowly than the current system. In addition, the increased flexibility for states to administer their Medicaid programs "would largely be the flexibility to make deeper cuts," Greenstein said (Los Angeles Times, 2/5).