Budget: Cover Uninsured, Trim Medicare, Tax Cigs

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Newly joining Medicare beneficiaries would face several charges that will not apply to established retirees. These include a $100 copayment for home health services not preceded by an in-patient stay.

But most of the Medicare cuts would fall on service providers such as hospitals and nursing homes. Drug companies would bear the biggest hit, more than $130 billion over 10 years, through rebates and discounts that include a new proposal for speeding the closure of Medicare’s prescription drug coverage gap.

Spending on Medicaid, the program for low-income and severely disabled people, would rise significantly as the coverage expansion in Obama’s health care law goes into full effect next year. Medicaid is expected to account for about half the nearly 30 million uninsured people eventually gaining coverage through the Affordable Care Act.

The costs of the coverage expansion were hard to tease out of the budget, in large part because they’ve been lumped together with other program spending in what’s called the “baseline.” Some of money doesn’t even appear in the HHS budget.

For example, a footnote in another section of the budget noted that tax credits to help uninsured middle-class Americans buy private coverage would total about $32 billion next year. Subsidized coverage for middle-class people who don’t have access to job-based insurance is the other major prong of Obama’s health care law.

The proposed tobacco tax increase isn’t likely to generate as much political heat as Medicare cuts or so-called “Obamacare,” but it could have a huge effect on public health. About one in five adults is a smoker, a rate that seems stuck despite ceaseless anti-tobacco campaigns. Obama would nearly double the federal tax on cigarettes to $1.95 per back. And many think that could deter young people from smoking.

“Young smokers are incredibly price sensitive,” HHS Secretary Kathleen Sebelius said earlier in the week.

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