Obama said high health care costs hurt the entire economy and contribute to the nearly 50 million people who lack coverage. His address focused on payments to Medicare and Medicaid, which cover millions of elderly and low-income people and involve thousands of doctors, hospitals, nursing homes and other institutions.
He proposed cutting $313 billion from the programs over 10 years. That’s in addition to the $635 billion “down payment” in tax increases and spending cuts in the health care system that he announced earlier.
Together, Obama’s plans would provide $948 billion over a decade in savings and/or tax increases to help insure practically everyone and to slow the rate of soaring health care costs.
The president wants to cut $106 billion over 10 years from payments that help hospitals treat uninsured people. Spending on Medicare prescription drugs would fall by $75 billion over a decade.
And slowing projected increases in Medicare payments to hospitals and other providers — but not doctors — would save $110 billion over 10 years, the president said.
Obama called them “commonsense changes,” although he acknowledged that many details must be resolved. Some powerful industry groups called the proposals unwise and unfair.
“Payment cuts are not reform,” Rich Umbdenstock, president of the American Hospital Association, said even before Obama’s plan was announced. His group is urging hospitals with large proportions of low-income patients “to push back on proposed cuts.”
The pharmaceutical industry is wary of Obama’s plan to extract $75 billion over 10 years from Medicare prescription drug spending. The White House said “there are a variety of ways to achieve this goal.” For instance, it said, drug reimbursements might be reduced for people who receive both Medicare and Medicaid.
Pharmaceutical Process Equipment
