- The Washington Times - Wednesday, April 10, 2013

President Obama’s new budget plan aims for about $400 billion in health care savings over the next decade through tweaks to Medicare and other reforms that will affect drug companies more than Americans who benefit from federal health entitlements.

His proposal, formally unveiled Wednesday, calls for better rebates on brand-name and generic drugs purchased through Medicare, so prices under the program are in line with the generous rebates associated with the Medicaid. If implemented, administration expects to save $123 billion over 10 years.

House Minority Leader Nancy Pelosi, California Democrat, endorsed the move during a weekly press conference in March as a lingering priority for health reform.


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The Obama administration also hopes to save $50 million in the 10-year period by requiring high-income Medicare beneficiaries to pay higher premiums.

“This will help improve the financial stability of the Medicare program by reducing the federal subsidy of Medicare costs for those beneficiaries who can most afford them,” White House budget documents said.

Mr. Obama wants to implement a gradually increasing discount on drugs in the Medicare program — a provision in his signature health care law — more quickly, saving $11 million.

But the ranking member of the Senate Finance Committee was quick to criticize the president’s plans.

“Trying to reduce costs by cutting what doctors and hospitals get paid or introducing price controls for prescription drugs doesn’t change the fundamental problems with Medicare and only threatens seniors’ health care,” Sen. Orrin Hatch, Utah Republican, said.

The White House pitched many of the reforms as continuing efforts that began with the Affordable Care Act of 2010. The health care overhaul greatly expands Medicaid enrollment in states that opt in, and qualified consumers without employer-based insurance will be able to shop for health plans on state-based marketplaces. Both reforms will take effect in 2014.

“The president is committed to ensuring ACA implementation is effective, efficient and swift,” the administration budget documents said. “Repealing or failing to implement the health care law would return the nation to a path of rapidly increasing health care costs and add trillions of dollars to deficits over the long-run.”