Bush's Proposed Health-Care Cuts Get Mixed Reviews

David L. Elliott, 74, a retired professor who relies on Medicare, said he worries that Bush's cuts eventually will drive more health-care providers out of the program.

"Medicare currently is underpaying doctors and hospitals, and it's not clear how long they can stand it," the College Park resident said. "Some doctors already are refusing Medicare patients. And this is going to continue."

Since Medicare's inception, beneficiaries have generally paid the same amount for coverage regardless of income, but some experts say that is now unsustainable. The problem was made worse when the GOP-controlled Congress added a prescription drug benefit in 2003, which is expected to cost $38 billion this year.

A little-noticed section of that law, however, for the first time required the more affluent to pay higher premiums. Starting this year, about 1.5 million beneficiaries with incomes of more than $80,000 annually ($160,000 for couples) pay monthly premiums of $106 to $162.10 for Medicare Part B coverage for physician services, up from the standard premium of $93.50.

The Bush budget would no longer adjust the income thresholds annually by inflation. And it would tie drug benefit premiums to income starting next year, a move that would affect 1.1 million beneficiaries, the Centers for Medicare and Medicaid Services calculates. The changes would save more than $10 billion over five years.

Budget hawks say Democrats should swallow hard and sign on.

"I know Democrats are reluctant and resistant and don't like the concept, but they have to scale back the federal commitment in some way," said Robert L. Bixby, executive director of the nonprofit Concord Coalition, which advocates reducing the federal deficit. "This does so in a progressive way, which is a principle the Democrats should be able to support."

But many seniors and their advocates, including the AARP, say an income test is unfair and threatens to make Medicare a welfare program instead of a broadly supported social insurance effort. Some point out that higher-income seniors already paid more in the form of higher Medicare payroll taxes during their working lives.

"I look at it as a tax increase," said Melville, N.Y., resident Sam Gross, 79, a retired accounting firm partner who pays the higher premiums.

Democrats have said they are not willing to accept cuts to Medicare and other entitlement programs unless the administration shows a willingness to raise revenues as well. Ultimately, however, treating beneficiaries differently based on income "does have to be part of the solution," Senate Budget Committee Chairman Kent Conrad (D-N.D.) said in an interview taped for C-SPAN and scheduled to air this weekend.

In Medicaid, which serves the poor and disabled, Bush proposes to trim spending growth by nearly $26 billion over five years through measures such as altering how the program pays for drugs and eliminating funding for graduate medical education in teaching hospitals. That would be a big blow for the nation's 800 teaching hospitals, said Richard M. Knapp, executive vice president of the Association of American Medical Colleges.

"We already struggle with our payments from Medicaid," Knapp said. "Major teaching hospitals have the lowest operating margins of all the hospitals in the country, and this would just add to that problem."

The White House argues that the proposals are not draconian. Medicare and Medicaid would account for about $596 billion in federal spending next year, up 5.7 percent. Medicare's average annual spending growth rate over the next five years would slow from 6.5 to 5.6 percent, while Medicaid's would be above 7 percent.