The following Bill was passed in the U.S. Senate by a vote of 51 to 50 with Vice President Chaney casting the deciding vote.

Budget Accord Could Mean Payments by Medicaid Recipients        

By ROBERT PEAR, NY Tines

Published: December 20, 2005

WASHINGTON, Dec. 19 - The final Congressional agreement on a budget bill gives states sweeping new authority to impose premiums and co-payments on Medicaid recipients, freezes doctors' pay under Medicare and toughens work requirements for welfare recipients.

In negotiations over Medicaid, the health program for more than 50 million low-income people, House Republicans generally prevailed over the Senate.

The agreement between the two chambers, approved on Monday by the House, incorporates many recommendations from governors of both parties, who had sought new power to rein in the soaring cost of Medicaid.

Under the agreement, states can charge premiums and higher co-payments for a wide range of Medicaid benefits, including prescription drugs, doctors' services and hospital care.

States can scale back benefits, capping or eliminating coverage for services that federal law now guarantees. In addition, states can end Medicaid coverage for people who fail to pay premiums for 60 days or more. Pharmacists can refuse to fill prescriptions, and doctors and hospitals can deny services, for recipients who do not make the required co-payments.

The agreement also makes it more difficult for older Americans to qualify for Medicaid coverage of nursing home care after transferring assets to their children or other relatives for less than fair market value. 

In general, Medicaid would not cover long-term care for any person with home equity of more than $500,000, although a state could choose to set the ceiling at a higher level, up to $750,000.

The Congressional Budget Office said the budget bill would save the federal government $26.5 billion in Medicaid and $22.3 billion in Medicare over the next 10 years. Drug makers and health insurance companies escaped largely unscathed. Negotiators rejected several provisions of the Senate bill that would have cut their payments.

Under the final agreement, all states have to ensure that half their welfare recipients are engaged in work or related activities like searching for employment.

Under the current law, a reduction in a state's caseload leads to a reduction in its work requirements, and administration officials said the number of welfare recipients had fallen so far in some states that the federal law imposed no meaningful work requirements.

Republicans hailed the final budget bill as evidence of their determination to rein in the automatic growth of benefit programs. Representative Joe L. Barton, Republican of Texas, the architect of the Medicaid provisions, said the higher co-payments were needed to "encourage personal responsibility" among low-income people.

Medicaid recipients can be charged 10 percent of the cost of any item or service if their family incomes were 100 percent to 150 percent of the federal poverty level, $12,830 to $19,245 for a family of two. Recipients with incomes above that can be required to pay 20 percent of the cost of any item or service. Total co-payments for all people in a family cannot exceed 5 percent of family income.

Senator Jeff Bingaman, Democrat of New Mexico, said, "It's very disappointing that Congressional leaders would decide to cut health care benefits and coverage to children, while imposing a greater cost-sharing burden on the poor, disabled and elderly."

AARP, the lobby for older Americans, denounced the final agreement. "It protects the pharmaceutical industry, the managed care industry and other providers at the expense of low-income Medicaid beneficiaries and Medicare beneficiaries who will foot the bill," said William D. Novelli, chief executive of AARP.

Lawrence E. Davidow of Suffolk County, N.Y., president of the National Academy of Elder Law Attorneys, whose members advise older people and their families, said, "I'm horrified and surprised that Congress would turn its back on middle-class senior citizens who look to Medicaid as a safety net to pay for long-term care." Under the agreement, Mr. Davidow said, "it's more likely that people who need long-term care will lose their homes and everything they have worked a lifetime to acquire, because they'll have to use their assets to pay for nursing home care."

The Bush administration announced last month that it would cut fees paid to doctors treating Medicare patients by 4.4 percent in 2006. It said the cut was required by a statutory formula. Congress decided instead to freeze doctors'fees next year. That would increase Medicare spending over the next five years by $7.3 billion above the amounts expected under the current law, the budget office said. Beneficiaries would pay some of the cost through higher premiums.

Under the agreement, states will not have to provide Medicaid recipients with all the services now required by federal law, but can offer a more modest package of benefits resembling commercial insurance. The agreement also gives states new authority to charge co-payments as a way to discourage the use of high-cost drugs and the use of hospital emergency rooms for nonemergency care.

House Republican aides said they meant to preserve one of the most important Medicaid benefits, known as "early and periodic screening, diagnostic and treatment services," for children younger than 19. The bill appears to be ambiguous on whether that is an option or a requirement for states, but Senate Republicans said it was intended to be a requirement.