Bush's Medicare Budget Would Raise Premiums - New York Times
The New York Times

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February 4, 2007
Bush's Medicare Budget Would Raise Premiums
By
ROBERT PEAR

WASHINGTON, Feb. 3 - More and more Medicare beneficiaries would have to pay
higher premiums for coverage of prescription drugs and doctors' services
under
President Bush's 2008 budget, to be unveiled on Monday.

Single people with annual incomes over $80,000 and married couples with
incomes over $160,000 already have to pay higher premiums for the part of
Medicare
that covers doctors' services. The income thresholds rise with inflation.

Budget documents show that Mr. Bush will propose a similar surcharge on
premiums for Medicare's new prescription drug benefit. In addition, the
president
will ask Congress to "eliminate annual indexing of income thresholds," so
that more people would eventually have to pay the higher premiums.

The proposal, expected to raise $10 billion over the next five years, is one
of many advanced by Mr. Bush in a $2.8 trillion budget that aims to
eliminate
the deficit by 2012.

In his budget request, Mr. Bush expresses alarm about what he calls "the
unsustainable growth of federal entitlement programs," and he proposes
savings
in Medicare and Medicaid that far surpass what he or any other president has
sought.

The president contends that he can make the rule changes without any action
by Congress. But Congress could try to block some or all of the changes.

Democrats immediately denounced the proposals. "This is exactly the wrong
approach," said Senator
Hillary Rodham Clinton
of New York, who cited the proposals as evidence of what she called "the
president's misplaced priorities."

Many
Republicans
like the idea of an "income-related premium," saying affluent beneficiaries
can afford to pay a larger share of Medicare's costs. Democrats are divided.
Some see it as a progressive way to finance the program. But others say it
is fundamentally at odds with the idea of social insurance, and they fear
that
it could prompt some wealthy people to leave Medicare.

Administration officials said earlier this week that Mr. Bush would ask
Congress to squeeze more than $70 billion from Medicare and Medicaid over
five years.
But the budget documents show that the actual figure is much larger: $101.5
billion of savings over five years.

The president's budget includes legislative proposals that would save $78.6
billion over the next five years - $65.6 billion in Medicare and $13 billion
in Medicaid.

In addition, the budget documents say that Mr. Bush will propose changes in
federal regulations to save $22.9 billion more over the next five years:
$10.2
billion in Medicare and $12.7 billion in Medicaid.

Lobbyists for hospitals, nursing homes and other health care providers plan
a huge campaign to kill the president's proposals, which they say will
ultimately
harm beneficiaries.

Mr. Bush said his proposals would just slow the programs' growth. "Our
budget reduces Medicare's average annual growth rate over five years to 5.6
percent,
from 6.5 percent," Mr. Bush said, while Medicaid would grow 7.1 percent a
year, instead of 7.3 percent.

In the past, Mr. Bush has proposed trimming Medicare payments to health care
providers for a few years, but now he proposes to make the cutbacks
permanent,
so that hospitals and nursing homes would never receive a full update for
inflation.

For the Children's Health Insurance Program, Mr. Bush requests $5.4 billion
in 2008, a reduction of $223 million, or 4 percent, from this year's level.
Beyond the current levels of spending, the White House is seeking an
"additional allotment" of $5 billion over the next five years, which is less
than
half of what would be needed to maintain coverage for children currently
enrolled.

Mr. Bush said he wanted to return the program to its "original objective" of
covering children with family incomes less than twice the poverty level.
Budget
documents note that 16 states cover children above that level, and "one
state, New Jersey, covers children up to 350 percent of the federal poverty
level."
A family of four is considered poor if its annual income is less than
$20,650.

In a visit to the
National Institutes of Health
last month, Mr. Bush said, "The N.I.H. is one of America's greatest assets,
and it needs to be nourished," adding, "It makes sense to spend taxpayers'
money on
cancer
research."

But the president's budget for biomedical research is basically flat. He is
requesting $28.9 billion for the health institutes in 2008, an increase of
$232
million, or less than 1 percent. For the
National Cancer Institute
, Mr. Bush is requesting $4.8 billion, which is $9 million less than this
year's level.

To fight childhood
obesity
, Mr. Bush asks Congress to set aside $17 million for a new program to
promote "healthy behavior" among adolescents. But at the same time, he asks
Congress
to eliminate the preventive health services block grant, which provides $99
million a year to help states prevent obesity and other chronic conditions.

Mr. Bush proposes an 18 percent cut in the Low-Income Home Energy Assistance
Program, which provides $2.2 billion to help people pay heating bills this
year. At a time of high fuel prices, many lawmakers are likely to resist the
cut.

Copyright 2007
The New York Times Company

Posted by Miriam V.