Congress Votes to Cut Medicaid

A $2.6 trillion budget outline approved by Congress on April 29, will cut projected spending on Medicaid for the poor, lock in tax cuts and, Republicans claim, put the country on a path toward lower federal deficits. The budget resolution is nonbinding, but it sets broad goals for lawmakers as they hammer out the specifics of spending for the 2006 fiscal year, which begins October 1. Moreover, tax and spending legislation passed under direction of the budget resolution is immune from Senate filibusters.

Under this resolution, the Medicaid program is to be cut by $10 billion in the four-year period beginning in 2007. It contains no specifics on where the $10 billion in cuts will come from, but it calls for the creation of a study commission that will recommend changes to the Medicaid program. The changes to Medicaid would not begin until after the Medicaid commission has delivered its final report, giving the commission and the nation's governors time to recommend cost-saving proposals.

House Budget Committee Chair Jim Nussle (R-Iowa) distributed a memo he received from Virginia Gov. Mark Warner (D), chair of the National Governors Association, that includes proposals for $1.4 billion in savings by making it more difficult for the elderly to transfer assets to qualify for Medicaid coverage of nursing home care.

Details of the study commission are still being worked out. Some reports have commission members delivering their recommendations by September, while others say the commission will deliberate until December 2006. Although senators had wanted a bipartisan commission that would be appointed by Congress and include advocates for Medicaid recipients, panel members will reportedly be appointed by President Bush.

The budget resolution would also cut taxes by $106 billion over five years. The agreement drops several billion dollars that the Senate voted to add to education spending and assumes $50 billion in extra spending next year for military operations in Iraq and Afghanistan.

The vote was 214-211 in the House and 52-47 in the Senate, with Democrats unanimously opposing the resolution.

-Adapted from : “Congress Votes to Cut Medicaid by $10 Billion Starting in 2007” By ElderLawAnswers.com, Apr 29, 2005 and “ Congress Passes Budget That Cuts Medicaid”, By Jim Abrams,April 29, 2005, www.washingtonpost.com

05/2005