Highlights of a $39 billion, five-year deficit reduction bill that the House passed by a vote of 216-214 on Wednesday.
Medicare: Saves a net $6.4 billion from the health care program for the elderly. Saves $6.5 billion by increasing Medicare payments to insurers that cover sicker patients and lowering payments to those covering healthier patients. Accelerates premium increases for better-off Medicare patients for doctor visits, and increases such premiums for all Medicare beneficiaries by about $2.30 a month in 2007. Saves $2.8 billion by reducing payments for imaging services, and saves $2 billion by freezing payments to home health care providers. Provides $7 billion for doctor’s fees to avoid a 4.4 percent cut otherwise taking effect Jan. 1.
Medicaid: Saves $4.8 billion from the health care program for the poor and disabled by reducing payments for prescription drugs, tightening asset-transfer rules for nursing home eligibility, permitting states to reduce benefits and increasing co-payments paid by beneficiaries.
Student loans: $11.9 billion in net savings, achieved chiefly by reducing lender subsidies and retaining a scheduled shift from variable interest rates to a 6.8 percent fixed rate on most loans. Increases loan limits to $3,500 for first-year students and from $3,500 to $4,500 for second-year students. Establishes a $3.7 billion grant program for low-income college students studying math, science or specialty languages.
Welfare reform: Extends the 1996 welfare reform law, freezing core funding at $74.3 billion over five years, while tightening work requirements under the program. Provides $11.7 billion for child care subsidies for welfare recipients required to work for Temporary Assistance for Needy Families benefits, a $1 billion increase compared with current law.
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