Friday, February 27, 2009

Q&A: Health Care and the Obama Budget

President Obama has announced his proposed budget for the next fiscal year, and health care is a major priority. Robert Pear details the budget in The New York Times. Here are some answers to questions you may have about health insurance and the budget.

Q: How will he expand medical coverage to the uninsured?
A: Details are vague right now; he says he'll discuss it with Congress over the next year. He has called for a $634 billion reserve fund to be set aside for that purpose.

Q: Is there increased funding for medical research in the budget?
A: Yes; $6 billion will go to the National Institutes of Health for cancer research, and he aims to eventually double that amount. More funding will also go to the Food and Drug Administration to speed up research that will allow cheaper generic drugs to reach the market faster.

Q: Are there any provisions specific to women's health?
A: The budget would expand eligibility for family planning services (e.g. birth control) to women on Medicaid.

Q: How will health care reform be paid for?
A: Obama plans to cut spending over the next decade in certain areas to cover it:
  1. Requiring pharmaceutical companies to give greater discounts to Medicaid (22% instead of the current 15%)
  2. Reducing Medicare payments to health insurance companies that provide comprehensive care, such as Medicare Advantage plans
  3. Cutting payments to home health agencies
  4. Giving hospitals "bundled payments" that cover care provided by home health agencies and nursing homes for the following month after they leave the hospital, in addition to the hospital's care itself. Payments will be cut to hospitals that re-admit too many of their patients during the first 30 days.
  5. Medicare beneficiaries with higher incomes will see their prescription drug coverage premiums increase.
Q: About how much money will that free up in total?
A: Obama's estimates claim that those provisions will save at least $239 billion.

Q: What about doctors and Medicare? Will their payments be cut?
A: It seems like they won't be. Even though current laws call for a reduction in payments, sources say that Congress will make sure that doctors are not affected.

Keep in mind that this budget probably won't pass as is and will likely see significant changes when debated by Congress. Not to mention, various lobbyist groups have already expressed their opposition to some of these proposals.

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