Projected Medicare spending would be cut by $270 billion over seven years and Medicaid by $180 billion under a compromise budget agreed to last week by House and Senate negotiators.
The budget would become Congress' final proposal if both houses approve the compromise later this week, as expected.
But later this year, Congress will have to wrestle with the details of how those budget targets will be met.
"There's a long way to go," said Mary Grealy, executive vice president of the Federation of American Health Systems. "If you look at the difficulty (Congress) is having with welfare reform, figuring out who gets the money, it's going to be worse when they get to Medicaid reform. There is still a lot of chances for all this to change."
In May the House passed a budget that included $283 billion and $184 billion in Medicare and Medicaid spending reductions over seven years, respectively. The Senate plan would have cut Medicare spending by $256 billion and Medicaid by $175 billion.
President Clinton released his own plan that would balance the budget by 2005, three years later than the GOP proposal. The Clinton plan includes $124 billion and $55 million in Medicare and Medicaid savings, respectively, in the first seven years of his 10-year budget scheme.
"These are interesting numbers, but there isn't any way in the world they can get the level of savings out of these two programs without doing serious damage to the programs and the political futures of those involved," said Jim Scott, president of the American Healthcare Systems Institute.
The Congressional Budget Office projects that Medicare spending will increase at an average rate of more than 10%, from about $175 billion this year to more than $325 billion by 2002.
Under the GOP budget, annual Medicare spending increases would be held to about 6%.