President Obama recently released his budget request for fiscal year 2013, which includes investments in some programs for seniors but cuts in others.
The Older Americans Act funding would generally be frozen, and Medicare spending would be reduced by $302.8 billion during the next 10 years. Given that the debt ceiling deal reached last year imposed discretionary spending caps for the next 10 years, the fact that OAA is essentially level funded is really good news.
Other areas of the budget also include some important increases for older adults:
• $100 million for new units of Section 202 affordable housing for the elderly
• $10 million for reverse mortgages and other housing counseling services
• $10 million more for the commodity supplemental food program
In addition to the $302.8 billion cut from Medicare over 10 years, there is a reduction of $55.7 billion in Medicaid over 10 years. The reductions are very similar to those proposed in September for consideration by the Congressional supercommittee, which was never able to reach an agreement.
My particular concerns are about the three proposals in the president's budget that would shift additional costs onto Medicare beneficiaries. However, the cuts would only affect new, not current beneficiaries and would not take place until 2017. The Medicare Part B deductible would increase from by $25 for new enrollees in 2017. Another $25 increase would take place in 2019 and 2021. Home health co-payments would be a $100 co-payment for new beneficiaries not paid before. The Medigap surcharge for new beneficiaries would pay an additional 15 percent surcharge on insurance.
My concern is that these charges could be difficult for millions of seniors who are already struggling to pay for health care costs as it is. Out-of-pocket costs for Medicare beneficiaries as a share of income increased from about 12 percent to an estimated 19 percent in 2011, and they are projected to increase to 26 percent in 2020 unless there is a change in current law. Overall, Medicare households spend three times more as a percent of income on out-of-pocket costs for health care, compared to non-Medicare households. Moreover, current assistance for low-income Medicare beneficiaries with expensive cost-sharing is grossly inadequate.
And of course there is a huge reaction from the Republicans as to the budget, so we will see many changes, I am sure. As stated before, not much will be getting done in D.C. until after the election. It's actually the race and election of the Super PACs rather than candidates. Stay tuned.
• Janice Ayres is president of Nevada Senior Corps Association.