House, Senate Budget Bills: The Final Version

The final versions of the US Senate and House budget bills include changes made to assure their passage (Marketletters passim). On Medicare, the Senate has raised the annual deductible to $150 in 1996 and added $10 per year, while the House version keeps the deductible at $100 but has reduced hospital increases by $76 billion. Both raise costs to beneficiaries, trim payments to providers, pay for more benefits, encourage the elderly to switch to private managed-care units, and allow seniors to choose catastrophic-only health coverage coupled with a medical savings account.

On Medicaid, the Senate would save $187 billion over seven years, and provide Medicaid for children under 13 and pregnant women in poor families. The House would save $182 billion over seven years, and both would convert Medicaid into block grants to the states and cut spending growth from 10% annually to under 5%.

Differences In Distribution Pressed by Democrats and GOP moderates, the Senate moved away from the more conservative House version, restoring federal nursing home standards set for repeal but also rewriting the rules for distribution of Medicaid funds in a way Democrats say unduly benefits states represented by Republicans. Still, central to both bills are changes to Medicare and Medicaid. The Senate would keep tough federal regulation and allow states to set their own rules. Both would take about $170 billion from Medicaid over seven years and try to control costs by giving the states block grants, but they would distribute the money differently; states with small populations generally prefer the Senate version. Before its final version passed, the Senate: