WSJ: Obama’s Budget Includes Cuts, Not Changes, to Medicaid & Medicare

President Barack Obama is set to release his budget plan in the coming days which will call for $3 trillion is deficit reductions in the next 10 years and $1.5 trillion in tax increases—a plan that sounds very familiar, reports the Wall Street Journal, since he essentially laid it out last September during the failed bipartisan deficit reduction deal.

Among the components of the budget are proposals to cut spending on two government benefits programs that are heavily tied to the senior housing and care industry:

The president will propose cutting spending on Medicare, the federal health program for the elderly, and Medicaid, the joint federal-state program for the poor and disabled. However, he isn’t proposing the structural changes that experts say are needed to control spending in these programs over the long term. For instance, Mr. Obama won’t suggest raising the Medicare eligibility age, as he was willing to do over the summer during bipartisan budget negotiations that failed to produce a deal. He also doesn’t plan to propose changes to Social Security.


Instead, he again will put forward proposals to reduce spending by roughly $248 billion on Medicare and roughly $72 billion on Medicaid. The proposals include higher premiums and deductibles for many beneficiaries and lower payments to drug companies, hospitals and nursing homes.

None of the president’s “major” proposals are expected to actually become law before the November elections, says WSJ, thanks to both partisan divides and election-year politics.

In response to the imminent release of the president’s budget, the American Health Care Association (AHCA) issued recommendations that include fully funding Medicaid and stabilizing Medicare funding.


“It’s budget season once again, and while our members and frontline staff would prefer to focus on care over dollars, the simple fact is that they need resources to deliver that care,” said Mark Parkinson, president & CEO of AHCA, in a statement. “There are clear linkages between the budget, the size of our workforce, quality within our facilities, and care at the bedside. We hope the President and Congress will consider rational funding levels as they weigh their own proposals in the coming weeks.”

AHCA’s recommendations for the 2013 budget include:

  • No changes in Medicaid provider tax authority
  • $4.88 billion more in Medicaid funding for states based on previous annual shortfalls
  • Explore new models of care in accordance with the Affordable Care Act for potential savings.

Read the full Wall Street Journal article here, and view AHCA’s recommendations here.

Written by Alyssa Gerace