The House agreed to cut federal spending on Medicare by $8.3 billion and Medicaid by $6.9 billion over five years partly through higher co-payments and deductibles for beneficiaries. The cuts exceed those approved by the House and Senate in earlier versions of the 2006 budget, said Lori Houseman, an AARP consultant. The Senate began considering the budget package today. If it does not approve the agreement, Congress will have to resume work on the budget in January. Despite the Medicare and Medicaid cuts, the bill includes several provisions favorable to providers, including a one-year freeze on Medicare physician reimbursement, which otherwise is slated for a 4.4% cut, said Richard Pollack, executive vice president at the American Hospital Association. The bill also would slow down implementation of the so-called "75% rule" for rehabilitation hospitals and extend a moratorium until August 2006 on physician referrals to new specialty hospitals in which they have an ownership stake.
The AARP said it "strongly opposed" the bill, which the organization said would make it harder for retirees to qualify for Medicaid home-health and long-term-care coverage while raising Medicare beneficiaries' Part B costs. Robert Greenstein, executive director at the Center on Budget and Policy Priorities, said the Medicaid changes would represent "significant hardships" for low-income families, with the copay increasing from $3 to upwards of $80 for certain procedures. -- by Matthew DoBias