Yesterday, President Bush signed the Deficit Reduction Act of 2005, which will reduce Medicaid spending by almost $5 billion and Medicare spending by $6 billion over the next five years. The signing comes on the heels of the President’s FY2007 budget proposal, which includes a $36 billion cut in Medicare spending and a $1 billion cut in Medicaid spending over five years.
The President said, “By 2030, spending for Medicare, Medicaid, and Social Security alone will be almost 60 percent of the entire federal budget. And that will leave future generations with impossible choices--staggering tax increases, immense deficits, or deep cuts in every category of spending. The Deficit Reduction Act is estimated to slow the pace of spending growth in both Medicare and Medicaid.”
According to the White House, the Deficit Reduction Act will reduce Medicaid spending by reducing Federal overpayment for prescription drugs. The Act also will give governors more flexibility to design Medicaid benefits and reduce the ability of Medicaid recipients to transfer their assets.
Read the HFMA Views post "The DRA--The Devil For Hospitals May Be in the Medicaid Details."
