House approves budget spending cut bill, affecting Medicare, Medicaid

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The House last week voted 216-214 to approve the fiscal year 2006 budget reconciliation bill (S 1932), which contains more than $39 billion in cuts, including $6.4 billion from Medicare and $4.8 billion from Medicaid, the New York Times reported. The House already voted to approve the bill back in December, but procedural moves in the Senate required the House to vote on the bill a second time before the legislation could move to President Bush for consideration.

Under the Medicaid provisions of the bill, most beneficiaries would be required to pay higher co-payments for healthcare services and could be denied service for lack of payment. In addition, penalties would increase for seniors who transfer assets before they apply for long-term Medicaid coverage. The bill would make seniors with home equity of more than $500,000 ineligible for nursing home benefits. In addition, the bill would increase Medicaid coverage for disabled children whose families earn up to 300 percent of the federal poverty level, beginning Jan. 1, 2007. Provisions affecting Medicare include higher premiums for beneficiaries, with greater increases for higher-income beneficiaries, and a freeze in payments for home healthcare providers. The bill also cancels a scheduled cut in Medicare reimbursements to physicians and provides medical care to some hurricane survivors.

President Bush said, “The House today passed a significant spending reduction package that will curb the growth of entitlement spending for the first time in years and help us stay on track to cut the deficit in half by 2009,” according to a Feb. 2nd Associated Press article in the Houston Chronicle. House Minority Leader Nancy Pelosi (D-Calif.) said, “This [bill] isn't about small government. This is about small-minded, petty government that does not meet the needs of the American people,” according to a Feb. 2 article in the Los Angeles Times.