President Bush has brought ideas for shoring up Medicare and Social Security from earlier budget proposals back for his proposed fiscal year 2008 budget.
Fiscal year 2008 starts Oct. 1.
Bush today proposed increasing overall spending to $2.9 trillion in fiscal 2008, from $2.8 trillion in fiscal 2007.
“Discretionary, non-security funding” would increase only 1% between 2007 and 2008, to $376 billion, while “mandatory” federal spending on programs such as Medicare, Medicaid and Social Security would increase 4%, to a little more than $1.5 trillion.
Bush has proposed trying to hold down spending on Medicare, which is set to spend $386 billion in 2008, by:
- Cutting Medicare provider payments automatically in 2008 if Medicare gets more than 45% of its funding from general revenue. Congress enacted a law in 2003 that requires the president to take action in 2008 if Medicare gets more than 45% of its funding from general revenue. The Bush administration also included an automatic provider payment reduction mechanism in its fiscal 2007 budget proposal
- Increasing premiums for Medicare Part B, the program that covers the cost of doctors’ services and outpatient hospital care.
- Increasing premiums for the new Medicare Part D prescription drug benefit.
- Eliminating annual inflation indexing of Medicare income thresholds, so that the rating systems that now apply to the highest income beneficiaries will apply to more beneficiaries.
The budget proposal also would:
- Try to replace the current unlimited deduction for employer-sponsored health coverage with a new, limited exclusion for all insured individuals
- Cut subsidies for the “high risk pools” that help insure people with health problems to $0, from $77 million in fiscal 2006.
- Hold funding for partnerships for long term care steady at $3 million.