Bush's 2009 budget to be tight - official

Updated: 2008-02-01 09:27

He said spending on Medicare would increase under Bush's new budget, but not as quickly as had been expected. "Medicare will grow at 5 percent. It just won't grow over 7 percent," he said.

Savings also would come by charging wealthier people higher monthly premiums for Medicare's drug program.

The Centers for Medicare and Medicaid Services said the Bush budget would project the 10-year cost of the program, from 2008 to 2017, at $915 billion. That's $117 billion less than what had been forecast last summer. The agency attributed the lower estimate to smaller increases in the cost of medicines, and better deals negotiated between insurers and drug manufacturers.

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The agency said 25.4 million people were now enrolled in a Medicare drug plan.

Bush last year asked Congress for nearly $65 billion in Medicare savings over five years. Congress refused to go along.

Independent experts have warned that the government needs to address the rising cost of health care for businesses to stay competitive and for the government to be able to pay for other important programs in the decades ahead.

"In fact, if there is one thing that could bankrupt America, it's runaway health care costs. We must not allow that to happen," David M. Walker, the US comptroller general, told lawmakers Tuesday during a congressional hearing.

But Democrats said Bush's budget targets the wrong health care providers for cuts. They said insurers subsidized to provide Medicare coverage are being overpaid.

"The president is proposing to once again slash health care coverage for seniors and low-income working Americans," House Speaker Nancy Pelosi, D-Calif., said. "The president's cuts are exactly the wrong medicine when the cost of health care and the number of uninsured continue to rise and families are feeling economically insecure."

Health care providers said the president's recommendations would make it harder for them to meet expenses, which would continue to rise as a result of inflation, even as their reimbursement rates were frozen.

"That level of reduction is so outrageous that it will be summarily rejected by members of both parties in Congress," said Tom Nickels, senior vice president of federal relations for the American Hospital Association. "I don't think it will be taken seriously."

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