Passing the Buck on Health Care

February 12, 2007
New York Times Editorial

President Bush¹s new budget would extend the administration¹s warped
priorities deep into the realm of federally supported health care programs.
The administration long ago sacrificed any meaningful domestic agenda to
finance tax cuts for the wealthy and its reckless war in Iraq. The White
House¹s reckless determination to make the tax cuts permanent is now driving
it to slash domestic spending in health and other vital programs.

Instead of trying to address the underlying problems of escalating health
care costs, Mr. Bush¹s strategy is to cut services or shift more of the bill
to states, health care providers and individuals.

In the Medicare program, which covers health care for Americans aged 65 and
over, the administration would find most of its savings by slowing the
annual increase in reimbursements for services, forcing hospitals and other
providers to absorb the burden. Given Medicare¹s precarious financial
straits, the package appears broadly acceptable.

The real outrage is that the administration has not proposed comparable
reductions in the large overpayments < roughly 12 percent more per patient <
made to private managed care plans that enroll Medicare beneficiaries. The
budget would also phase out Medicare bad-debt payments, forcing hospitals to
swallow beneficiaries¹ unpaid bills.

The budget also looks to save money by eliminating inflation indexing so
that as incomes rise, so would the number of people required to pay higher
premiums. Although this is a sneaky way to raise premiums, it is hard to
argue with the notion that better-off beneficiaries should pay more to help
rescue a financially strained program.

What seems counterproductive is Mr. Bush¹s plan to lower federal matching
funds for Medicaid administration < forcing the states to find more of their
own funds or sacrifice good management and oversight. More worrisome is his
plan to cut back on state programs that insure the young.

The most shortsighted restrictions would come in the highly acclaimed State
Children¹s Health Insurance Program, which uses federal matching funds to
provide coverage for low- and moderate-income children who are not quite
poor enough to qualify for Medicaid. The program has been enormously
successful in reducing the number of uninsured children. Yet now the
administration wants to reduce its matching rate and limit enrollment to
children in households earning no more than twice the federal poverty level.
That would undercut programs in 16 states that have expanded coverage to
children above that level.

Although the administration¹s budget would grant the children¹s program a
small $5 billion increase spread over five years, that¹s less than half, and
possibly only a third, of the amount needed just to maintain current
enrollments and participation rates. This is too high a price to pay for
more tax cuts and Mr. Bush¹s ill-managed presidency.

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