June 13, 2009

Federal Cuts Could Finance Health Care Reform

President Barack Obama said Saturday that by sharply reducing the government's medical spending it will open up more than $300 billion that could help make health care available to all Americans, The Associated Press reported.

Such government cuts would come mainly by trimming payments to prescription drugmakers, hospitals and other care providers.

The president's health care reform project, estimated to cost around one trillion dollars, would be almost fully financed if this money comes through.

Obama said in his weekly radio address: "...I have made a firm commitment that health care reform will not add to the federal deficit over the next decade."

The Obama administration has already identified how to pay for the 635 billion dollar down payment on reform detailed in the budget proposal submitted to Congress earlier this year.

The president continued: "So today, I am announcing an additional 313 billion dollars in savings that will rein in unnecessary spending, and increase efficiency and the quality of care - savings that will ensure that we have nearly 950 billion dollars set aside to offset the cost of health care reform over the next ten years."

Changes like reducing Medicare overpayments to private insurers, and rooting out waste in the Medicare and Medicaid health programs that serve the elderly and the poor would likely amount to more than $300 billion in savings.

Various medical providers have agreed with Obama that there's enough waste in the system to cut $2 trillion over 10 years, but behind-the-scenes they are preparing to resist specific cuts.

In the effort to fulfill one of his key campaign promises"”providing health care to the 46 million Americans, some 15 percent of the population, who currently don't have any medical coverage"”the president wants Congress to approve his health care reform proposals by the end of the year.

However, he also wants to reduce the budget deficit by half by 2013.

The newly proposed health care reform will require additional costs in the short term in order to reduce spending in the long-term, Obama acknowledged.

Medicare and Medicaid pose one of the greatest threats to the U.S. federal deficit, and could leave the country "with a mountain of debt" that future generations would not be able to pay, Obama said.

"We cannot continue down this path. I do not accept a future where Americans forego health care because they can't pay for it, and more and more families go without coverage at all," he noted.