Obama’s Health Care Plan to Hit Medicare

Medicare cuts and tax hikes on the rich is President Barack Obama's plan for the nation's ailing health care system. Obama’s budget proposals are designed to force Congress into some very tough negotiations.

The Obama administration believes that Medicare spending cuts and tax increases on the wealthy will trim waste from the system. Medical providers and Medicare recipients are likely to put up a big fight on this issue. According to the Associated Press, Obama is forcing Congress to address this question:

If you're going to cover an estimated 48 million uninsured Americans in the world's costliest medical system, how do you pay for it?

Obama’s plan sets aside $643 billion over 10 years to cover all Americans and the cost would be more than $1 trillion dollars.

Half the money would come from tax increases on upper-income earners; the other half from cuts to Medicare and Medicaid. Private insurance plans serving Medicare seniors would take the biggest hit, but hospitals, drug companies and home health agencies also face cuts.

Insurancenewsnet.com reports that National and California-based eldercare advocates are holding a media teleconference today to detail how the Obama budget will jeopardize quality senior care and “weaken major drivers of economic activity.”

Data will be released that illustrates how the long term care sector is a major driver of economic activity as it directly employs nearly 3 million individuals, generates $56.1 billion in tax revenue annually, and indirectly contributes $371.9 billion to the U.S. economy every year.

[Medicare Advantage Plans are likely to suffer under Obama’s competitive bidding plan. Investors.com reports that Obama’s plan will bring hefty cuts to HMO-run Medicare programs.

Obama also wants to use competitive bidding for the privately run Medicare Advantage. . . Medicare Advantage, which offers more benefits and options than traditional Medicare, often is popular in districts held by conservative "Blue Dog" Democrats.

The Washington Times reports today that “Wall Street turned sour Thursday, with health care stocks leading the markets down because of President Obama's proposed cuts to Medicare insurance companies in his $3.55 trillion budget. Most bank stocks rose.”