Obama budget hits post-acute care, drugmakers

President Obama’s latest budget proposal would hit post-acute care providers, drug companies and wealthier seniors on Medicare as part of $402 billion in estimated healthcare savings over the next decade.

Familiar from previous White House budgets, the proposals appeared in a document notable for its continuity on healthcare spending for 2015.

{mosads}Nearly all of Obama’s previous healthcare savings were repeated in the latest budget, including the increased means testing for seniors in Medicare that’s proven controversial on Capitol Hill.

Another proposal derided by Democrats — chained consumer price index (CPI) — was abandoned in the budget, raising questions about whether the administration would also forgo further Medicare means testing.

Chained CPI refers to a change in calculating Social Security benefits that would amount to a cut for seniors.

To accomplish the savings, in part, the budget would cut certain payments to post-acute care providers, like skilled nursing facilities, and place a cap on the price Medicare Part D plans could pay for drugs.

The American Health Care Association (AHCA), which represents skilled nursing and long-term care facilities, said in response that the industry cannot stand more budget reductions.

“The long term and post-acute care profession has endured billions in cuts over the last several years,” said AHCA President Mark Parkinson in a statement. “Unfortunately, the president’s latest budget contains billions more in Medicare cuts that would jeopardize our ability to continue to provide access to quality care.”

AARP, meanwhile, slammed the budget’s proposal to increase cost-sharing for some Medicare beneficiaries.

“It’s important to emphasize the need for healthcare cost containment, not simply cost shifting,” AARP Executive Vice President Nancy A. LeaMond said in a statement.

“Instead of shifting additional costs onto Medicare beneficiaries, we must look for savings throughout the entire healthcare system, as the rising cost of healthcare threatens people of all ages.”

Obama’s proposal would also increase cost-sharing in Medicare by adding fees for most seniors using home health services or purchasing Medigap supplemental coverage for the first time.

In total, the budget calls for $3.9 trillion in spending in fiscal 2015, including $77.1 billion in discretionary spending for the Department of Health and Human Services.

Among the budget’s winners are doctors, since the plan assumes Congress would be successful in its current effort to overhaul Medicare’s flawed physician payment formula.

That outcome would provide an immediate boost to the medical community, which has suffered under a decade of short-term reimbursement patches.

The White House budget assumes the reform will cost $110 billion over 10 years, somewhat less than the projected $137 billion cost of an overhaul bill currently receiving support in Congress.

The budget also provides new funding for healthcare workforce initiatives.

One proposal would spend $5.23 billion on a new graduate medical education program to train 13,000 residents over 10 years.

Another would provide an additional $3.9 billion to the National Health Service Corps to place medical professionals in regions of great need.

Other investments aim to boost Alzheimer’s research at the National Institutes of Health, help mentally ill youth in Medicaid and improve access to healthcare services for American Indians.

—This post was updated with reaction from the AHCA and AARP at 4:40 p.m.