During his weekly address to the nation on Saturday, President Obama announced that he will seek more than $300 billion in additional cuts from Medicare and Medicaid payments to help finance health care reform.

Two-thirds of the new proposed spending cuts come from hospital payments.  The President proposed $106 billion in ‘savings’ by cutting the Medicare and Medicaid DSH programs by 75 percent.  In addition, the President proposed $110 billion in ‘savings’ by reducing inflationary updates with an annual ‘productivity adjustment,’ the greatest impact on hospitals.

These ‘savings’ are in addition to the President’s FY2010 budget proposal to cut Medicare and Medicaid spending by $309 billion. They are also in addition to the $38 billion in previously announced reform-related cuts, and $41 billion in cuts in the proposed FY 2010 inpatient PPS rule.

IHA will be analyzing the proposal’s specifics and determining as best possible the Iowa impact. IHA will also be coordinating our messages and advocacy strategy with AHA.  Please stay tuned for next action steps on this important issue.