Bush's health care plan might squeeze Medicare


WASHINGTON -- President Bush's proposal to help 90 million Americans buy health insurance with new tax credits and tax deductions would be financed mainly by curbing the growth of government health programs like Medicare and Medicaid, administration officials and members of Congress say.

In a speech Thursday in Cleveland, Mr. Bush intends to unveil the proposal, which is designed to help people who have no insurance and those who have difficulty paying for it.

The president also plans to travel to San Diego on Friday to visit an immunization clinic and speak to a Rotary Club about his proposals. The trip is meant to help Mr. Bush answer Democratic charges that he has ignored health and other domestic issues.

A confidential set of questions and answers, prepared in advance of Mr. Bush's announcement by officials at the White House Office of Management and Budget, says, "The president's plan will not hurt beneficiaries in any way."

The document notes that Medicaid and Medicare would continue growing, but at a slower rate.

Administration officials said in interviews that the president's plan would cut back payments to many hospitals and doctors that treat elderly people under Medicare and poor people under Medicaid. It would, for example, reduce special allowances now paid to teaching hospitals and hospitals that serve large numbers of low-income patients.

A federal budget official working on the president's plan said it would reduce "selected sources of excessive reimbursement to both doctors and hospitals."

Democrats have their own proposals for overhauling the nation's health care system. With Democratic majorities in the House and the Senate, Congress is unlikely to approve Mr. Bush's proposal.

But, the White House officials said, the president would be able to say that he had seriously addressed the nation's health care problems as he campaigned for re-election.

A White House document describing Mr. Bush's proposal suggested that it might eventually lead to a reduction in premiums under Medicare, the federal health insurance program for 34 million elderly and disabled people.

In the document, the White House asks, "Is the president's plan going to accomplish its cost savings by severely reducing Medicare payments to physicians and hospitals -- to the point that providers won't want to treat Medicare patients?"

After saying that would not happen, the document adds, "Bringing the costs of Medicare under control may reduce the premium contributions for seniors." The monthly Medicare premium has not been reduced since the program was created. It started at $3 in 1966 and is now $31.80.

Administration officials contended that hospitals could absorb cutbacks in their Medicare payments because, under the president's plan, more people would have private health insurance and would be able to pay their bills, thus reducing the hospitals' burdens of bad debt and charity care.

"Over 90 million Americans would receive new assistance for health care" under the plan, the White House document says.

But hospital executives expressed alarm at the prospect of slower growth in Medicare payments at a time when their revenues are often inadequate to cover the costs of treating patients.

In Baltimore, University of Maryland Hospital spokeswoman Joan Schnipper said she expected the proposal would meet with strong opposition from hospital organizations throughout the country. "Any cuts in Medicare and Medicaid would definitely hurt us. We have a large population of people who depend on those programs," she said.

Officials at Johns Hopkins -- Baltimore's other major teaching hospital -- deferred comment until administrators have had time to review the Bush proposal.

Dr. Spencer Foreman, president of Montefiore Medical Center in New York, said:

"There is no assurance there would be a match between the institutions that are cut and the institutions that benefit under the proposals being discussed by officials in Washington. For teaching hospitals in New York City, which operate at nearly full capacity but barely break even, I fear there would be a reduction in Medicare payments without an equivalent offsetting gain."

Medicare and Medicaid account for two-thirds of the revenue that Montefiore gets for treating patients admitted to the hospital.

More than 35 million people have no health insurance. Another 34 million people are covered by Medicare, and nearly 30 million are covered by Medicaid. About 177 million people, including many enrolled in Medicare, have some type of private health insurance.

Michael D. Bromberg, executive director of the Federation of American Health Systems, said of the president's proposal. "It hasn't got a chance in a million. Nobody expects Bush's plan to pass, not even Bush."

Asked about the financing of the president's proposal, a Republican member of Congress said, "I can't make the numbers add up, and I know how the administration plans to pay for it."

Sara Rosenbaum, a senior fellow at the George Washington University Center for Health Policy Research, said, "The administration would finance health care for poor people who have no health insurance by cutting health care for poor people who have insurance through Medicaid."

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