Bush Medicare, Medicaid Cuts 'Dead on Arrival,' Key Congress Members Say

WASHINGTON — President Bush's plan to slash Medicare and Medicaid spending by roughly $600 billion over the next decade received a hostile reception Monday from key members of Congress and elderly advocacy groups.

"This administration ought to know that five years' worth of Medicare and Medicaid cuts totaling $200 billion are dead on arrival with me and with most of the Congress," Senate Finance Committee Chairman Max Baucus, D-Mont., said in a statement.

Rep. Pete Stark, D-Calif., chairman of the House Ways and Means' health subcommittee, which oversees Medicare, said, "This budget again reveals the Republican agenda to starve the Medicare program while protecting the profits of insurance companies. Republicans' ultimate goal is to privatize Medicare."

Rep. Frank Pallone, D-N.J., chairman of the House Commerce Committee's health subcommittee, which oversees Medicaid, called the proposals "cruel cuts that would disproportionately affect seniors, the disabled and low-income children, and therefore should be rejected by Congress."

Bush's final budget proposed cutting the growth in Medicare spending by $12.2 billion in the fiscal year that begins Oct. 1, and $178 billion over five years. Bush envisions slashing Medicare by $556 billion over 10 years and more than $10 trillion over 75 years.

Medicaid would be cut by about $18 billion over five years and nearly $47 billion over 10 years.

Most of the Medicare cuts would come from forcing increased competition among health care providers and by trimming money from teaching hospitals and those that disproportionately care for the poor. The budget envisions a cut of about 10 percent in physician payments, but would not trim payments to private Medicare managed care plans.

Bush warned that increasing health care costs plus the looming retirement of 77 million Baby Boomers would result in Medicare, Medicaid and Social Security accounting for as much spending as a percentage of the national economy by 2080 as the entire federal government today.

Bush noted that for the second year in a row, Medicare's trustees last year predicted that more than 45 percent of the program's total budget would come from general tax revenues within the next six years, triggering a requirement that the president propose a plan for bringing the spending level below the threshold.

If that threshold is reached, the budget says, the president would order a 0.4 percent across-the-board reduction in payments to Medicare providers each year the threshold is breached.

Medicare advocates immediately criticized the president's proposal.

David Sloane, AARP's managing director of government relations, said Bush's Medicare and Medicaid budget would do little to slow the growth of health care spending but would "simply be passed along to the American people through higher out-of-pocket costs and potentially fewer services."

Robert M. Hayes, president of the Medicare Rights Center, said the cuts "would hurt older and disabled Americans and take a wrecking ball to many essential hospitals across the country. It is indefensible for the president to propose hurting America's grandparents while maintaining his rabid defense of Medicare overpayments to for-profit health insurance companies."

Barbara Kennelly, president and chief executive officer of the National Committee to Preserve Social Security and Medicare, called Bush's plan to slash the Medicare fee-for-service program, but not the private managed care program, "outrageous and indefensible."