Obama Offers Medicare Spending Cuts

By David Pittman, Washington Correspondent, MedPage Today

Published: April 13, 2013

WASHINGTON -- President Obama proposed cutting nearly $400 billion in Medicare spending over 10 years as part of his fiscal 2014 budget, while one woman moved closer to heading the agency that oversees the Medicare program.

HHS Budget Plan Cuts Billions from Medicare

The $967 billion proposed on Wednesday for the overall Health and Human Services (HHS) budget for fiscal year (FY) 2014, however, is larger than the $848.2 billion actually spent in FY 2012 and the $907.8 billion estimated for FY 2013.

The budget proposal includes another $1.5 billion -- in addition to the $1 billion already spent -- to get ready for the implementation of the health insurance exchanges mandated by the Affordable Care Act (ACA). Some ACA opponents have criticized the request for additional funds, but Sebelius put a different spin on it at the press conference, saying the total amount was still far less than the $10 billion that the Office of Management and Budget had originally estimated would be needed.

The 10-year, $371 billion Medicare cut is achieved by saving money in two ways: increasing the Medicare premiums that wealthier seniors pay, and negotiating lower prices for prescription drugs bought by "dual eligibles" -- Medicare beneficiaries who are also eligible for Medicaid. Currently, dual eligibles pay Medicare rates for their prescriptions, but Medicaid rates are less expensive.

Tavenner Moves Closer to CMS Confirmation

Marilyn Tavenner, acting head of the Centers for Medicare and Medicaid Services (CMS), received bipartisan support at a Senate confirmation hearing Tuesday, taking her one step closer to becoming the agency's first confirmed administrator in 7 years.

CMS hasn't had a confirmed head since Mark McClellan, MD, PhD, left the post in October 2006. McClellan was confirmed in March 2003. Since McClellan left, four acting administrators -- most recently Don Berwick, MD -- have come and gone without the needed confirmation of the Senate.

Multiple Republican senators voiced their support for Obama's nominee to head the agency, surprising those who expected opposition from them.