House panel approves Medicaid cuts

WASHINGTON — A key House committee late Thursday approved a proposal to curb Medicaid spending by about $9.5 billion by the end of the decade, advancing a plan to slow spending on the federal government's health-care program for the poor and disabled.

The Energy and Commerce Committee voted a party-line 28-22 for the measure, over protests from panel Democrats who said Republicans were trying to cut the deficit on the backs of poor. Republicans countered that they were making only modest trims — about 1 percent — in a program predicted to cost $1.1 trillion over the same period.

The Medicaid measure is to be folded into a sprawling budget bill to implement Republican plans that would, for the first time in eight years, take on the growth of federal programs such as food stamps, farm subsidies and student loan subsidies. The plan also would also raise revenue by auctioning television airwaves to wireless companies and leasing parts of the Arctic National Wildlife Refuge for oil drilling.

The belt-tightening comes even as the Senate on Thursday approved by voice vote $8 billion in emergency spending to prepare vaccines and antiviral drugs and make sure health facilities are ready for an outbreak of much-feared bird flu.

And the White House is expected to ask Congress on Friday to redirect $17 billion in already approved hurricane relief funds to projects like repairing highways and federal facilities damaged by the storms.

Such moves illustrate the pressure to boost spending, even as the Republican-dominated House implements its budget plans. The Senate is scheduled to debate a companion $39 billion deficit-cutting plan starting Monday.

The House Medicaid plan would impose new co-payments on Medicaid beneficiaries and would allow states to scale back coverage. It also would tighten rules designed to limit the ability of elderly people to shed assets in order to qualify for nursing home care, lower pharmacy profit margins and encourage pharmacies to issue generic drugs.

The House bill would extract significantly less savings from drug manufacturers and pharmacies than would a companion Senate measure. Beneficiaries would bear a greater share of the cuts, with advocates for the poor noting that working families would shoulder the greatest burden.

And, for the first time, people with significant home equity of $500,000 would be ineligible for nursing home care under Medicaid.