Medicare and Medicaid, already cut substantially since President Reagan took office, would lose another $6 billion to $8 billion a year under proposals that the Office of Management and Budget wants included in the fiscal 1987 budget, officials said last night.
The cuts are included in a "passback" document that the OMB sent to the Health and Human Services Department after reviewing HHS's initial budget plans. HHS can appeal the OMB decisions to the president, and Congress would have to pass legislation putting his major decisions in effect, though some are listed for administrative action.
In fiscal 1986, federal outlays for Medicare and Medicaid will total about $100 billion. The outlays normally grow at least 10 percent a year, and the new cuts would be applied to projected 1987 levels after allowing for normal growth.
The OMB plan proposes further heavy squeezes on what is paid to hospitals and other Medicare providers, a new system of reimbursing hospitals for capital outlays, and a cut of $1 billion in Medicaid.
Medicare patients would also have to pay larger premiums and deductibles for the doctor-insurance portion of the Medicare program. Among the major proposals:
*Medicare's payment rates for hospitals would be held to an increase of at most 2 percent, about half the increase payable if the normal practice of raising rates to keep up with inflation were followed. This would cut projected outlays by $1.5 billion to $2.5 billion. In fiscal 1985, hospitals got no raise.
*Instead of reimbursing hospitals for Medicare's share of whatever they spend on construction and major equipment, the government would, in effect, add 5 to 7 percent to the fixed rate it pays hospitals for patient care, thus imposing a limit on how much capital expenditure it would reimburse.
*Federal payments to the states for Medicaid would be limited to about $1 billion below projected levels, and obtaining a second doctor's opinion would be required to curb unnecessary elective surgery.
*Medicare doctor-insurance premiums, now $15.50 a month and constituting 25 percent of the cost of the doctor insurance (the Treasury pays the rest), would be increased to 35 percent over five years. It would rise to 50 percent in cases where third parties such as state agencies pay the premium for the beneficiary.
*Medicare patients would be required to pay $100 a year out of pocket for doctor bills (instead of $75) before Medicare payments start. The $100 would be raised annually to match inflation.
*The Medicare Economic Index, the basis for payments to doctors, would be recalculated back to 1974 to yield a new rate base, eliminating certain allegedly overstated cost increases. Payments for certain "overpriced" doctor procedures and for lens replacements in cataract surgery would be lowered. All this would lower payments to doctors.
*In proposals repeated from previous years, Medicare payments to hospitals to cover the costs of medical trainees would be sharply cut. Fees would be imposed for various Medicare home health benefits. Eligibility for Medicare benefits would be postponed until the first full month after the individual reaches 65. Medicare would become the "secondary payer" -- paying only after employer-provided insurance was used up -- for certain disabled spouses and aged persons who work. Medicare beneficiaries would be allowed to obtain government "vouchers" and, in effect, use them to buy private health coverage instead of Medicare.