WASHINGTON (AP) – The poor will have to pay a greater portion of their health care under spending cuts moving through Congress.

The House has signed off on a compromise bill that would trim federal spending overall by $40 billion over the next five years. The Senate vote is expected to be so close that Vice President Dick Cheney was called back to Washington in case he is needed to break a tie.

Under the compromise measure, states would have the option of charging premiums and increasing copays for Medicaid recipients. Typically, copays now range from 50 cents to $3 per service. Copays could increased dramatically for those with incomes above the poverty line. For those living in poverty, increases would be held to the rate of health care inflation.

The Congressional Budget Office has concluded that such increases would lead many poor people to forego health care or not to enroll in Medicaid at all – contributing to some of the $4.8 billion in Medicaid savings envisioned over the next five years. Medicaid is the state-federal program that provides health care for the poor.

The budget bill also includes $6.4 billion in savings to Medicare, the health insurance program for the elderly. The savings occur largely by increasing payments to insurers that cover sicker patients and decreasing payments for the healthier patients. Lobbyists said the change was largely a technical adjustment widely viewed as appropriate and not hard fought. The Bush administration recommended the overall policy.

The higher fees paid by Medicaid recipients would represent a change of heart by the Senate, which had opted to save money by increasing the rebates drug companies pay Medicaid and by eliminating a $5.4 billion subsidy for health insurance companies. The Senate had even instructed its conferees not to increase payments on Medicaid beneficiaries.

The House bill voted for the higher fees, and they were part of the compromise bill approved over the weekend by House and Senate negotiators. Provisions related to drug manufacturers and insurance companies were largely scaled back.

The bill “does not ask for shared sacrifice, the AARP said in a letter to Senate Majority Leader Bill Frist, R-Tenn. “Rather it protects the pharmaceutical industry, the managed care industry, and other providers at the expense of low-income Medicaid beneficiaries and Medicare beneficiaries who foot the bill.”

The Congressional Budget Office estimates that many states will take the federal government up on its offer. It estimates that higher co-pays, premiums, and a reduction in benefits for some participants will save the federal government $16 billion over 10 years. Most of the savings come from a reduction in services rather than an increase in revenue as a result of the higher payments.

The higher payments from the poor do have supporters. The nation’s governors believe that one way to slow Medicaid spending is to require beneficiaries to take on more personal responsibility in the purchase of their health care.

The governors’ recommendations were embraced by the House.

Rep. Joe Barton, R-Texas, and chairman of the House Energy and Commerce Committee, said that passing on more costs to beneficiaries beats the alternative of dropping them from the rolls entirely, which is what some states have done.

“It was perplexing that so many who said they care the most, wanted to do the least,” Barton said. “If you wanted Medicaid patients to lose health care, the best thing to do was nothing.”

Barton said that between 2002 and 2005, 38 states reduced eligibility; and 34 states reduced benefits.

The effort to reduce spending also would make it harder for people to transfer assets and then to qualify for Medicaid coverage of their nursing home care. While some claim that middle class Americans give assets away so that the government picks up their nursing home tab, others, such as the AARP, believe the problem is exaggerated and that Congress is on the verge of overreacting.

A spokesman for the trade group representing drug manufacturers said it would have no comment concerning the proposed legislation until the Senate votes on it.

Supporters of the bill note that the proposed changes would reduce Medicaid’s annual growth rate from about 7.3 percent to 7 percent.

Copy the Story Link