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House barely backs Medicare, Medicaid cuts

By TODD ZWILLICH

WASHINGTON, Feb. 1 (UPI) -- The House gave final approval to a $39.5 billion budget-cutting package Wednesday after late defections from several moderate Republicans nearly scuttled the bill.

The bill puts the Congress's final stamp of approval on approximately $15 billion in cuts to Medicare and Medicaid over the next five years. GOP leaders worked hard for the cuts as a first step to reining in entitlement spending that they said threatens to overwhelm the federal budget.

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A nearly identical bill passed the House on December 19 by a vote of 212-206. But it was returned for another vote after the Senate made technical changes that required re-approval in the House.

Many saw the Senate move--led by Democrats--as a gambit to force GOP leaders to re-air a debate on cuts to popular social programs. The move nearly worked in foiling the bill as several Republicans changed previous 'yes' votes to 'no' votes.

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But the effort in the end fell short and the bill passed by a 216 to 214 margin.

The bill trims an estimated $6.9 billion for the Medicaid health program for the poor by giving states more flexibility to pare back benefits and charge higher co-payments for services. It also cuts some government payments for prescription drugs.

Supporters said the savings were key to controlling the growth of Medicaid, which is expected to expand at more than 7 percent per year over the next decade.

"The program has grown so excessively that it is unsustainable in its current form," said Rep. Joe Barton, R-Tex., who chairs the House Energy and Commerce committee, with jurisdiction over Medicaid.

Rep. Adam Putnam, R-Fla., called the bill "a step toward smarter, more competent government."

The bill also cuts back Medicare by an estimated $6.4 billion over five years, while at the same time stopping a planned cut in the program's payments to physicians.

Democrats sharply criticized the cuts, some of which are made up by increases in beneficiaries' outpatient premiums.

Democrats also attacked Republicans for removing Senate provisions that would have achieved $22 billion in Medicare savings by cutting back on excessive payments to insurance companies and eliminating a monetary fund used to lure the plans toward carrying Medicare benefits.

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Rep. John Dingell, D-Mich., chastised Republicans for moving to raise out-of-pocket health costs for some Medicare and Medicaid patients while declining to cut industry subsidies.

"This is a product of special interest lobbying," said Dingell, the Energy and Commerce committee's Democrat. "They sweated it out of the hides of the poor and the unfortunate."

A report from the Congressional Budget Office concluded that the altered Medicaid policy would achieve savings in part by discouraging beneficiaries from using health services.

At least three moderate Republicans who previously supported the bill switched their votes Wednesday, including Rep. Rob Simmons, R-Conn., Rep. Jim Gerlach, R-Pa., and John Sweeney, R-N.Y.

Physician groups praised the bill for stopping a planned 4.4 percent cut in doctors' payments. Instead, payments were frozen at last year's level.

"Today's congressional action stops this year's Medicare physician payment cut, but reimbursements still fall short of the cost of providing care to seniors," American Medical Association J. Edward Hill said in a statement.

But the bill was strongly opposed by consumer health groups and the powerful seniors' group AARP. Bill Novelli, the group's CEO, criticized the bill for cutting Medicaid just hours after President Bush called for compassion toward the needy in his State of the Union address.

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"Today the U.S. House of Representatives has turned a cold shoulder to that responsibility by further limiting eligibility for Medicaid, a program that serves the neediest," Novelli said.

President Bush has said he will sign the measure.

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