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House Joins Senate in Passing Budget Cuts Including
Medicaid
Nov. 18, 2005 After embarrassing failures by the
Republican leadership in the House of Representatives to pass a bill to
cut the federal budget, they finally passed the finish line early this
morning with a 217 to 215 vote victory. The House bill has major
differences from the bill passed by the Senate yesterday 64-33,
including cuts in Medicaid, which will impact millions of senior
citizens. President Bush has said he will veto the Senate bill, should
its provision for additional taxes on oil companies be part of the
compromise.
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To win final approval of the bill in the House,
concessions were made on Medicaid, according to a report by the
Associated Press, to win over moderate Republicans.
To win final approval the leadership reduced the
co-payment for the lowest income Medicaid beneficiaries to $3 from the
proposed $5.
They also increased the provision that was to deny
Medicaid nursing home benefits to people with home. The first proposal
was a limit of home equity up to $500,00 and this was raised to
$750,000.
Still, there are $12 billion in cuts to Medicaid in
the House bill. Other changes are provisions allowing states to reduce
coverage and a tightening of the rules concerning the ability of senior
citizens to rid themselves of assets to meet the qualifications for
nursing home care.
The AP reports the House bill also will reduce
pharmacy profit margins and encourage pharmacies to issue generic
drugs.
This is the first Congressional action to try and
reign in the growing costs of mandatory entitlement programs like
Medicaid. These programs make up about 55 percent of the federal budget.
Fourteen Republicans and all Democrats voted
against the bill. Rep. Mark Kennedy, R-Minn., cast the decisive vote.
House Democratic Leader Nancy Pelosi issued a
statement saying, This budget is a sham and it's a shame. Democrats
believe that together, America can do better.
"As the number of people without health insurance
has increased for four years in a row, Republicans are charging ahead
with $45 billion in cuts to Medicaid -- the health insurance program
that provides medical care to America's poorest children and many of the
survivors of Hurricane Katrina.
Speaker Dennis Hastert said about the
Medicaid provisions, For Medicaid, the Energy and Commerce Committee
made market based reforms that both Republican and Democrat governors -
who pay 43 percent of the program's cost - have been begging for. One of
those reforms includes starting a demonstration project to give states
the flexibility to offer HSAs to supply Medicaid benefits. This injects
both market principles and personal responsibility into Medicaid.
President Bush praised the House bill.
The House also cut $8 billion from the cost
of preparing to avoid the potential bird flu pandemic.
Despite concessions to the moderates, some were
calling the House bill a victory for Rep. Mike Pence (R-Ind.), chairman
of the Republican Study Committee, a group of about 100 conservatives,
that launched "Operation Offset" in September with a proposal that they
say will strip the national budget of more than $929 billion, over ten
years, of unnecessary spending. About $491 billion will be from
programs impacting senior citizens. One of their proposals was to delay
the Medicare prescription drug bill by one year. (See link to story in
box for "Related Stories.")
The House bill will reduce spending by $50 billion
over five years, while the Senate bill will cut $60 billion.
The Senate cuts $10 billion over five years from
Medicare and Medicaid, but the cuts are primarily aimed at reducing
subsidies for the pharmaceutical industry. The downside for some seniors
was some tightening of rules for transferring personal assets to others
when trying to qualify for Medicaid.
The Congress will now go home for Thanksgiving and
return to battle out a compromise.
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