AP Exclusive: House GOP budget cuts more into law-income health program to benefit Medicare

Lifestyle and Budget Associated Press

House Republicans quietly deepened recommended budget savings from the government's chief health care program for the poor by about $140 billion in recent weeks to offset part of the cost of higher payments to doctors who treat Medicare patients, according to officials familiar with the tradeoff.

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The maneuver comes as Republicans in both houses struggle with competing priorities, in this case a desire to stabilize what is widely viewed as a dysfunctional system of provider payments under Medicare, while pursuing a 10-year goal of balancing the budget.

Neither budget documents nor publicly available material related to the doctor fee legislation contain any reference to the decision to reap greater savings from Medicaid, a federal-state program that provides health care for the low-income. Republican officials who described the decision did so on condition of anonymity, saying they had not been authorized to discuss it.

A spokesman for the House Budget Committee, Ryan Murphy, said the 10-year plan headed for a floor vote accounts for the cost of the Medicare physician legislation, as it does for "all the costs incurred in our budget and gets us to balance within 10 years."

Unlike several other officials, he declined to say if the decision had been made recently to deepen the projected savings from a benefit program for one population in order to pay higher costs for another program serving a difference slice of the country.

At its core, the Medicare legislation would block a 21 percent cut threatened for April 1 in fees paid to doctors who treat seniors. It also would replace a 1997 law that has threatened similar reductions for years with a guaranteed modest increase in fee payments. At the same time, it would tie fees to a new formula aimed at encouraging physicians to charge based on the quality of care, not the quantity.

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The price tag for the as-yet-unreleased Medicare fee legislation, which has support from Democrats and Republicans, has been pegged at about $210 billion over a decade. Of that amount, about $35 billion would be offset by raising the amount that upper-income seniors pay for their care under the program. A similar sum would come from changes in reimbursements to a variety of providers such as hospitals.

That leaves about $140 billion of the bill's cost uncovered, an amount that ordinarily would translate directly into higher deficits.

To guard against that, senior House Republicans decided in private meetings to deepen already-planned savings in Medicaid, according to several officials familiar with the discussions.

So far, the House Budget Committee has not yet disclosed the amount in savings the 10-year balanced budget plan envisions coming from Medicaid.

Materials released by the panel show that "Medicaid and other health programs" would experience a $913 billion cut over a decade from previously assumed levels of spending, but it contains no further breakdown.

Despite Republican maneuvering, it appears that deficits will, in fact, rise if the Medicare doctor fee legislation is signed into law. That bill commands bipartisan support, but Democrats and President Barack Obama almost certainly will block any legislation that cuts as deeply into Medicaid as Republicans want.

The disclosure came as the GOP leadership prepared for floor votes later this week on rival 10-year balanced budget plans that cleared House and Senate committees, and as rival plans sprouted at both ends of the political spectrum.

House Democrats unveiled a proposal that tracks Obama's proposal for $1.8 trillion in higher taxes on wealthy individuals and corporations, a step that is a non-starter for Republicans. It also shows deficits through the end of the coming decade.

The Republican Study Committee, a group of House conservatives, countered with a plan that claims to eliminate deficits in six years, three years sooner than the plan that cleared the House committee. It includes about $1.7 trillion in deeper deficit reductions, and includes proposals to delay the age of Medicare eligibility from 65 to 67 and restrain the cost-of-living increases that go to Social Security recipients.

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Associated Press writers Andrew Taylor and Alan Fram contributed to this report.