Extra, Extra! Obama Budget Plan Details Federal Health Spending Savings

In the message accompanying the release of its’ fiscal year 2013 budget on February 13, the Obama administration noted that health care makes up 25 percent on non-interest federal spending. With that in mind, the budget includes $364 billion in health savings proposals, spread over 10 years. 

The budget, which is seen more as a blueprint for later negotiations with Congress, as opposed to a document that could actually be turned into legislation that would pass Congress, calls for $3.8 trillion in spending in FY 2013, with revenues of $2.9 trillion, for a deficit of just under $1 trillion. Medicare spending would total $528 billion in 2013; Medicaid spending would total $283 billion. 

Special proposals to reduce federal health spending over the next 10 years include the following –  

  • reducing Medicare coverage of bad debts;
  • aligning graduate medical payments to teaching hospitals with actual patient care costs in teaching hospitals;
  • aligning payments for rural providers and adding restrictions relating to the designation of critical access hospitals
  • adjusting payments for post-acute care in inpatient rehabilitation hospitals and skilled nursing facilities;
  • aligning Medicare drug payment policies with Medicaid policies for low-income beneficiaries;
  • increasing income-related premiums under Medicare Parts B and D;
  • modifying the Part B deductible for new beneficiaries;
  • introducing home health copayments for new beneficiaries;
  • strengthening the powers of the Independent Payment Advisory Board to reduce long term Medicare cost growth;
  • cutting Medicare and Medicaid waste fraud and abuse;
  • limiting Medicaid reimbursement of durable medical equipment based on Medicare rates;
  • re-basing Medicaid disproportionate share hospital allotments starting in 2021; and
  • expanding state flexibility in creating Medicaid benefit packages.