Obama Budget Cuts Medicare, Boosts Medicaid

Wealth redistribution from senior citizens to welfare voters.

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Obama continues his campaign of wealth redistribution from senior citizens to welfare voters. His new budget makes further cuts to Medicare payments.

Reduction of Medicare bad debt payments to providers. Medicare reimburses hospitals, physicians and other providers 65 percent of bad debts that result from Medicare patients not paying their deductibles and coinsurance. This occurs after providers have made "reasonable" efforts to recoup the unpaid bills. The budget proposes slashing that rate to 25 percent. In FY 2015, this provision would cost hospitals and other providers $340 million. From 2015 through 2024, it would save more than $30.8 billion. This was proposed in last year's budget but was not enforced.

The reimbursements create an incentive for providers to see Medicare payments. The cuts will encourage more providers to stop seeing Medicare patients. The process is already underway due to earlier Medicare cuts.

Payment reductions to post-acute providers. Inpatient rehabilitation facilities, long-term care hospitals and home health agencies would have their Medicare reimbursements slashed by 1.1 percent each year from 2015 through 2024, resulting in $97.9 billion in savings.

More contributions from high-income Medicare beneficiaries. Starting in 2018, high-income Medicare beneficiaries would pay more in premiums, which the government projects would increase revenue by almost $53 billion through 2024.

Meanwhile Medicaid will be getting a boost.

Continuation of enhanced Medicaid payments for primary care physicians. Beginning  Jan. 1, 2013, and running through Dec. 31, 2014, states started increasing Medicaid payments for certain primary care physicians (like those in family medicine or internal medicine) to Medicare rates, with the federal government covering 100 percent of the difference. The president's budget proposal would extend that enhanced rate through Dec. 31, 2015, costing $5.4 billion during the next two years.

Medicare is turning into Medicaid. Meanwhile Medicaid is turning into Medicare. Doctors are being given incentives to drop Medicare and accept Medicaid patients.