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President Obama’s Budget Offers Health Care Cuts to Stop Big Medicare Pay Cut for Doctors

Roundup of media reports by Kaiser Health News indicates the plan ‘avoids’ tackling entitlement spending

Feb. 14, 2011 - President Barack Obama's budget plan includes a two-year Medicare "doc-fix" that uses heavy cuts in other health payments to stave-off a scheduled 25 percent reduction in Medicare physician reimbursements. Meanwhile, news outlets also report the plan "avoids" tackling entitlement spending.

Obama To Offer $3.7 Trillion Budget Blueprint The Washington Post

President Obama will roll out a $3.7 trillion budget blueprint Monday that would trim or terminate more than 200 federal programs next year and make key investments in education, transportation and research in a bid to boost the nation's economy and reduce record budget deficits.


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… A senior administration official said Obama's budget request maps "a sustainable path" that would stabilize government finances in preparation for a broader debate about how to tackle the biggest drivers of future deficits: Social Security and health care for the elderly, as well as a tax code that offers more in breaks and deductions than it collects in revenue.

Senior administration officials pointed to two significant changes that would improve the budget outlook by eliminating long-standing gimmicks Congress has used to hide the true depth of the red ink. The first would cover the cost of adjusting Medicare to ensure that payments to physicians are not subject to steep reductions (Montgomery, 2/14).

Obama's Challenge: Implement Health Reform While Cutting Back  The Hill

President Obama faces two major challenges when he unveils his health budget Monday: showing that he's serious about fiscal discipline while making sure implementation of his health care reform law has a clear path. His health budget will receive extra scrutiny this year given that his fiscal commission called health care spending the nation's "single largest fiscal challenge" and Republicans are angling to defund the law. But Obama's budget likely won't provide too many surprises because the reform law has already done a lot of the heavy lifting on spending cuts, lobbyist sources said on Friday.

The Affordable Care Act slows the growth of Medicare spending by about $500 billion over 10 years (Millman and Pecquet, 2/13).

Health Care Cuts Proposed To Pay For Two-Year Medicare Fix The Hill

President Obama's 2012 budget proposal delays a steep cut in Medicare reimbursement rates for doctors by squeezing health care payments for a broad cross-section of medical providers, administration officials said. The budget proposal would postpone for two years a scheduled 25 percent cut in the Medicare physician payment formula, known as the Sustainable Growth Rate (SGR), that's set to go into effect at the end of the year (Pecquet, 2/13).

Obama Avoids Entitlements In Fiscal 2012 Budget Request Roll Call

President Barack Obama will present a fiscal 2012 budget request Monday that his administration contends will return annual deficits to a sustainable level by mid-decade without substantial cuts to Medicare, Medicaid or Social Security. The plan cuts $1.1 trillion in deficits over the coming decade, with about two-thirds coming from spending reductions and the rest from tax increases, according to two senior administration officials (Dennis, 2/14).

Entitlements Won't See Big Cuts The Wall Street Journal

The president and congressional Republicans moved this week toward a clash over spending cuts needed in light of growing deficits, but both sides are largely deferring a major budget challenge: how to overhaul the costly entitlement programs of Social Security, Medicare and Medicaid (Paletta, Hook and Bendavid, 2/11).

Obama Spending Plan Criticized For Avoiding Deficit Commission's Major Proposals The Washington Post

Some who worked on Obama's fiscal panel were also disappointed by his decision not to endorse any of the major elements of their deficit-reduction plan, which calls for raising the Social Security retirement age, charging wealthy seniors more for Medicare and limiting popular tax breaks such as the mortgage interest deduction. The plan has attracted support from key members of both parties and is the focus of an effort in the Senate to develop a bipartisan spending plan (Montgomery, 2/14).

Kaiser Health News tracked weekend news coverage, including reports about the GOP's proposed budget cuts and the inclusion of a two-year "doc fix" in the President's budget plan.

Some of this information is reprinted from with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery. © Henry J. Kaiser Family Foundation. All rights reserved.


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