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Medicare News: House Proposes Deep Cuts in New Budget

Posted by Nathan Hope on Mar 18, 2015

Medicare News: On Tuesday, Republicans in the House of Representatives announced their proposed budget plan that would cut spending by $5.5 billion dollars. Among the deep cuts called for within the budget are healthcare-related, while increases in spending such as defense are recommended.


The House has promised that it can repeal Obamacare and, in turn, get rid of the Medicaid expansions associated with it. Additionally, removing subsidies to those with low income and those for middle-income earners seeking insurance would save approximately $2 trillion over 10 years. These numbers provided are prominent elements of the proposed budget.

Several healthcare-points provided in the budget document are below:

  • The budget repeals Obamacare’s Medicaid expansion so the program is able to focus on its core mission of serving those in our communities most in need of assistance.
  • For many, though, Medicaid’s promises are empty, its goals are unmet, and its dollars are wasted. Sick individuals cannot get appointments, new beneficiaries cannot find doctors, and Medicaid cards are little more than pieces of plastic. Doctors who provide services to Medicaid patients are severely under-reimbursed, a problem that does not get easier to solve by adding more individuals to the system. Without reform, Medicaid will not be able to deliver on its promise to provide a sturdy health care safety net for the country’s most vulnerable.
  • Medicaid’s current structure provides states with a perverse incentive to expand the program and little incentive to save. For every dollar that a State government spends on Medicaid, the federal government pays an average of 57 cents (and between 90 and 100 cents of every dollar for those who are newly eligible under Obamacare). Expanding Medicaid coverage during boom years is tempting for States because State governments pay less than half the cost. Conversely, there is little incentive to restrain Medicaid’s growth because state governments only get back 43 cents for every dollar worth of coverage they save.
  • Our budget begins to fix the problem by repealing the Medicaid expansion under Obamacare and instead grants flexibility to States so the program can better serve those who it is intended to benefit.
  • Payments would be adjusted so that those with illnesses would receive higher payments if their condition worsened; lower-income seniors would receive additional assistance to help cover out-of-pocket costs; and wealthier seniors would assume responsibility for a greater share of their premiums. (budget.house.gov)


Among the proposed changes to Medicare/Medicaid, additional tax cuts for coporations and individuals are highlighted, however, no accounting for lost revenue after repealing Obamacare taxes.

“I find it hard to believe that, first, Congress would choose to repeal all of Obamacare, and then Congress would follow that up by passing a $1 trillion revenue-positive tax reform,” said Marc Goldwein, a senior vice president at the Committee for a Responsible Federal Budget, a group devoted to deficit reduction.

 The full budget report can be found here: http://budget.house.gov/uploadedfiles/fy16budget.pdf

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