Skip to content
My WebMD Sign In, Sign Up

Health Care Reform:

Health Insurance & Affordable Care Act

Medicaid, Medicare Cuts Pass Senate

Cheney Breaks a 50-50 Tie to Clear Bill

WebMD Health News

Dec. 21, 2005 -- Millions of patients on Medicare and Medicaid are likely to see higher health care costs under a budget-cutting bill narrowly passed by the U.S. Senate Wednesday.

The plan trimmed $40 billion from the federal budget over the next five years and in so doing also cut $4.8 billion from the Medicaid health program for the poor. Much of the cost of the cuts was paid for by new rules allowing states to raise the share that recipients pay out of pocket for their care.

The bill also gives states more leeway in limiting covered benefits or paring back who qualifies for the program and makes it harder for low-income people to spend assets in an effort to qualify for coverage.

The changes were favored by most state governors, who said they were needed to help control a projected 7% annual rise in Medicaid costs over the next decade. States share Medicaid costs with the federal government.

Cheney Breaks Tie

The cuts bitterly divided the Senate, which spent days deadlocked in a fight over the measure. Five moderate Republicans joined all 44 Democrats and one Independent in voting against the GOP-led plan Wednesday, locking the Senate in a 50-50 tie.

That forced Vice President Dick Cheney to use his rarely-exercised Constitutional role as President of the Senate to vote on the bill and push it to a 51-50 victory.

Republican leaders hailed the vote as a step toward controlling federal spending and protecting the long-term viability of taxpayer-funded health programs. Sen. Judd Gregg (R-N.H.), chairman of the Budget Committee, says that the cuts were small compared with a 35% to 40% projected rise in Medicaid's costs over the next five years.

"We haven't cut it," Gregg says. He added that giving states more latitude to shape benefits would "allow them to deliver more services to more people at a slower rate of growth."

"The bottom line is we stood firm and we made tough choices," says Sen. Rick Santorum, (R-Penn.), the third-ranking member of the GOP leadership.

But many bill opponents railed against the cuts as immoral at a time when Republicans continue to favor tax cuts.

Sen. Harry Reid, (D-Nev.), the Minority Leader, called the budget bill "un-American."

"This bill targets Americans with the greatest needs and the fewest resources. These people need more help with their health care, not less," Reid says.

"Within these pages are things that will come to embarrass us," says Sen. Richard Durbin (D-Ill.), referring to the budget bill's text.

Medicare Changes

The measure also cuts more than $6 billion in spending on Medicare over the next five years, including a $1.2 billion reduction in payments to hospitals. At the same time, it avoids a planned 4.4% cut in doctor payments by pouring $7.3 billion into the program.

Calculate
Your Costs

See insurance premium
costs and financial aid.

Start Here

Health Insurance
Advisor

Find a plan that's right
for you.

Start Here

Your State's Insurance Marketplace

Get informed about plans, benefits and costs.

From WebMD
Loading …
URAC: Accredited Health Web Site TRUSTe online privacy certification HONcode Seal AdChoices