Unable to overcome opposition from the Clinton administration, Medicare and Medicaid reform is all but dead, Republican House leaders said last week.
The GOP leaders had hoped to put some limited Medicare reform measures and the Medicaid reform outline agreed to by the National Governors' Association on a bill that would raise the federal debt limit.
That legislation is needed by mid-March after which the federal government would begin defaulting on its debt.
House Speaker Newt Gingrich (R-Ga.) said that Republicans would only attach measures to the debt-ceiling bill that were agreed to by both parties.
But last week it did not appear that the White House was ready to agree to the GOP plan. After a meeting with Gingrich and Senate Majority Leader Bob Dole (R-Kan.), White House Chief of Staff Leon Panetta said the Clinton administration would not support a limited entitlement reform package.
"If we are going to do Medicare and Medicaid reform we should do it in a balanced-budget agreement," Panetta told reporters after the meeting.
Senate Budget Committee Chairman Pete Domenici (R-N.M.) said he did not think "there would be anything out on the debt-limit legislation."
For some provider groups, which have been concerned that a cobbled-together package of reforms would include only spending reductions with few structural reforms, the decision was considered good news.
Last week, the National Association of Urban Critical Access Hospitals released a study asserting that private, not-for-profit urban hospitals would have lost nearly $26 billion, or one-sixth, of their total Medicare revenues over seven years under the original GOP budget plan.
The study said the 227 urban, critical access hospitals receive 17.65% of all Medicare payments to hospitals but would have suffered 21.23% of the spending reductions if the GOP plan had been enacted.