General Information

President’s FY 2013 Budget Proposal Includes Cuts to Medicare and Medicaid

President Obama released his federal fiscal year (FY) 2013 budget proposal, setting forth a plan for spending $3.8 trillion next year. The proposal would reduce Medicare spending by $267 billion and Medicaid spending by $50 billion over the next 10 years. The President’s FY 2013 budget includes many proposals from his February, April and September 2011 budget plans that would reduce federal payments for hospital and post-acute-care services to Medicare beneficiaries, including cuts to payments for bad debt, rural hospitals and graduate medical education (GME).

In addition, the President’s budget calls for reductions in Medicaid, including reducing state reliance on provider taxes, reducing funding for the children’s hospital GME program and rebasing disproportionate-share hospital payments.

The President’s budget is typically viewed as a political document laying out his priorities as he heads toward the election. While the budget is not likely to receive a vote in Congress, the cuts contained in the budget may give cover to Democrats to support cuts they otherwise would have opposed. As Congress works to reduce the federal deficit, policies contained in the President’s proposal are likely to come up in future legislation.

Members can find more detailed information on key hospital-related provisions at