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Obama's Budget Targets Healthcare Improvements

Cheryl Clark, for HealthLeaders Media, May 7, 2009

In presenting his $3.4 trillion budget plan Thursday, which includes provisions that will cut the deficit in half by the end of his first term, President Barack Obama proposed cuts to Medicare Advantage payments to private insurers, expansion of health information technology, reduction of healthcare fraud, waste, and abuse, and improved healthcare quality.

Obama said the government will save $22 billion annually starting in 2012 by eliminating Medicare payments to private health insurances "as a broader effort to reduce healthcare costs." The Medicare Advantage program is slated for payment cuts of between 4% and 4.5% in 2010.

Medicare Advantage supporters are obviously not pleased with the announcement.

"If this amount of money is taken out, it will have a significant impact on benefits and premiums that 10 million seniors currently rely on," says Robert Zirkelbach, spokesman for America's Health Insurance Plans, which represents 1,300 companies.

Though AHIP applauds the president for making healthcare reform a top priority, Zirkelbach says, "We do not believe that seniors in Medicare Advantage should be asked to fund a disproportionate share of the cost to reform the healthcare system."

In announcing the plan Thursday, Obama said his proposal would reduce fraud, waste, and abuse, and dedicates funds for increasing oversight and fraud detection under the Medicare Prescription Drug Program, Medicare Advantage, and the Medicaid programs.

The budget has provisions to encourage "high quality and efficient care" and reduce "excessive Medicare payments."

In addition to the Medicare Advantage cuts, Obama said the budget would:

  • Double funding for cancer research.

  • Accelerate adoption of health information technology.

  • Reduce drug costs.

  • Improve food and medical product safety through additional funding of the Food and Drug Administration.

  • Support efforts to allow Americans to buy drugs from other countries and establishes a regulatory pathway to approve generic biologics.

  • Expand health coverage to low-income people.

  • Extend the children's Health Insurance Program and funds an additional $44 billion above the current $25 billion. "This funding provides access to nearly four million newly insured children by 2013," he said.

  • Expand research in autism spectrum disorder by $211 million.

  • Expand access to healthcare for American Indians and Alaska Natives.

  • Expand loan repayment subsidies for health professionals.  "It will allow states to increase access to oral healthcare through dental workforce development grants," he said.

  • Enhance HIV/AIDS prevention and treatment, especially in underserved populations.

Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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