February 4, 2006

Bush to propose Medicare savings measures: NY Times

NEW YORK, Feb 4 (Reuters ) - President Bush will propose
substantial savings in Medicare in his budget next week as part
of his efforts to rein in the increasing costs of social
insurance programs, The New York Times reported on Saturday.

Citing administration officials and health care lobbyists,
the Times said Bush's plan aimed to reduce projected Medicare
payments to hospitals and other health care providers by
billions over the next five years, and that it will seek
further increases in Medicare premiums for high-income people
beyond those scheduled to take effect next year.

According to the newspaper, administration officials,
Congressional aides and lobbyists said the president was
contemplating a package of proposals that would cut the
projected growth in Medicare spending by $30 billion to $35
billion in the next five years, or less than 1.5 percent of
total Medicare spending in that time frame.

Many of the Medicare proposals in the budget, which Bush
plans to send to Congress on Monday, follow recommendations
from an independent federal panel called the Medicare Payment
Advisory Commission, the Times said.

The panel said in January that hospitals need not be fully
compensated for the increased costs of the goods and services
they use, but instead could manage with a smaller increase if
they became more efficient.

The Times quoted Jack Ashby, a research director at the
commission, as saying, "We expect the recommendation to have no
effect on hospitals' ability to furnish care to Medicare
beneficiaries." But Richard J. Pollack, executive vice
president of the American Hospital Association, said the
cutback could damage the quality of hospital care, it said.

Bush's 2007 budget also calls for a freeze in Medicare
payments to nursing homes and home health agencies, in line
with the commission's recommendations, the Times said, and also
proposes a cut in payments for oxygen equipment provided to
Medicare beneficiaries.

The budget does not seek changes in Medicare payments for
doctors, which were frozen this year, the Times said. Under
current law they will be cut more than 4 percent next year.

Regarding high income beneficiaries, under current law
anyone with more than $80,000 of annual income will have to pay
higher premiums in 2007 and later years, and people with
incomes of $100,000 to $150,000 would see their premiums more
than double.

A spokesman for the National Association for Home Care said
a freeze in Medicare payments to home care agencies in 2007,
coming on top of a freeze this year, would reduce access to
services for patients in some parts of the country.