Bush Plans to Propose Medicare Savings in 2007 Budget

President Bush plans to propose tens of billions of dollars in savings from the Medicare program when he submits his 2007 budget Monday.

The budget is expected to propose wringing as much as $40 billion over the next five years from Medicare providers like hospitals and home healthcare businesses, as called for by the Medicare Payment Advisory Commission, a bipartisan panel of experts that makes Medicare policy recommendations to Congress.

Bush also plans to seek further increases in the premiums that beneficiaries with higher incomes pay for coverage, according to the New York Times. Under the Medicare law passed in 2003, beneficiaries with more than $80,000 in income will have to pay higher premiums beginning in 2007.

The income thresholds are adjusted under the law to reflect inflation, but Bush would eliminate that adjustment so more people would pay higher premiums for coverage, the newspaper said.

Last year, Bush urged Congress to leave Medicare alone as the administration began implementing the controversial Medicare drug benefit. He instead focused on finding savings from the Medicaid healthcare program for the poor and disabled.

After Congress this week cut $28 billion from Medicaid over the next decade, Bush now is looking for big savings from the rapidly growing Medicare program, said lawmakers, staff aides and health industry lobbyists.

Bush is expected to steer clear of proposals asking direct election-year sacrifices from Medicare beneficiaries, who are agitated over foul-ups in the start of the new prescription drug program.

But hospitals and other medical interest groups are girding for battle over cuts they will be asked to take.

Adopting the Medicare Payment Advisory Commission’s recommendations would give the White House political cover for Bush’s new proposals, officials said.

The commission recommended reducing payments to hospitals for inpatient and outpatient care by about half of 1% below scheduled inflation adjustments.

Home healthcare providers under Medicare fear seeing their payments frozen as recommended by the commission, which also has recommended freezing payments to nursing homes and long-term care facilities.

“It’s doable and it’s good healthcare policy,” Senate Budget Committee Chairman Judd Gregg (R-N.H.) said of the MedPAC recommendations. Gregg said he expected significant Medicare cost curbs to be included in Bush’s budget.

Elsewhere, the $2.7-trillion budget will ask virtually every domestic Cabinet department except Homeland Security to operate at or below current budget levels.

The budget will also project about $18 billion more for hurricane relief along the Gulf Coast.

The White House says the burgeoning costs of the war and hurricane aid will cause the budget deficit to exceed $400 billion for the current year, up from $319 billion in 2005. The record deficit in dollar terms is $413 billion, set in 2004.

Bush said in his State of the Union address Tuesday that the budget would keep his promise, made in 2004, to bring the deficit below $260 billion by the time he left office.

The White House will not divulge details of the budget before its Monday release, but congressional aides briefed on parts of it shared some details. The aides spoke on condition of anonymity because the budget hadn’t been released.