Hospitals and other health care providers, lawmakers and consumer groups said Monday that the Bush administration’s fiscal 2008 budget request would severely weaken the nation’s health care safety net by cutting important services that benefit the elderly, children and other low-income Americans.

The $76 billion the administration proposes to cut from Medicare and $26 billion from Medicaid over the next five years will likely create a cost shift to the private sector, said John Sheils, vice president for the Lewin Group. “Private people will be paying more to their providers, private insurers will have to pay more for their care. That will be the way in which we pay for it,” he said.

According to an analysis from the left-leaning Center on Budget and Policy Priorities, states would face new fiscal incentives to take children in families with annual incomes as low as $36,000 for a family of three off of the State Children’s Health Insurance Program (SCHIP), adding to the number of uninsured Americans. “Although nearly six million low-income children remain uninsured today, the budget fails to provide sufficient funds for the program simply to maintain current levels of coverage and represents a step backward from the goal of covering all low-income children,” the group said in a news release. (See related story, CQ HealthBeat, Feb. 5, 2007).

Hospital groups said Bush’s Medicare and Medicaid proposals would be devastating to children, seniors and the disabled. “They are unfairly being singled out to carry the burden of achieving a balanced budget,” said American Hospital Association President Rich Umbdenstock. “The proposed budget includes a tidal wave of cuts that will inflict real damage on hospitals’ ability to care for these patients.”

Chip Kahn, president of the Federation of American Hospitals, was equally distressed. “The budget’s proposed Medicare hospital costs are totally unjustified and fly in the face of” recent recommendations from the Medicare Payment Advisory Commission (MedPAC) that hospitals receive a full market basket in 2008. (See related story, CQ HealthBeat, Jan. 9, 2007).

In addition, Kahn said, the budget plan “cuts Medicare and underfunds SCHIP, further shredding the nation’s safety net.” The cuts also may fall flat on Capitol Hill, said Lawrence A. McAndrews, president and chief executive officer of the National Association of Children’s Hospitals. “They are clearly out of step with bipartisan majorities in the House and Senate who want to do more for kids, not less,” he said.

AMA Board Chair Cecil B. Wilson said his organization was “deeply disappointed” that Bush’s budget plan would do nothing to scheduled Medicare payment cuts to doctors. “Current average Medicare payments to physicians are about the same as in 2001, and next year’s reimbursement will be cut 10 percent unless Congress intervenes,” Wilson said.

Some lawmakers and groups, however, praised Bush’s proposal for elevating the discussion about the uninsured and entitlement spending.

Bush’s proposal to provide tax credits to help consumers purchase health insurance demonstrates “his strong interest in expanding health coverage to the uninsured,” said Laura Clay Trueman, executive director of the Coalition for Affordable Health Coverage, a coalition of insurers, hospitals, business groups, drug makers and others who favor market-based solutions to reduce the uninsured.

Rep. Jim McCrery, R-La., the ranking member of the House Ways and Means Committee, said Bush’s budget would start a discussion about entitlement programs, which McCrery described as “not just an elephant in the room, they are a pachyderm lumbering towards us at full speed.”

But criticism, rather than praise, dominated the day. Sen. Edward M. Kennedy, D-Mass., said that in the area of health care, “ rather than trying to solve the crisis by lowering costs and covering more people, the president’s plan will make the crisis worse by raising costs and failing to cover those who need it most — our nation’s children.”

Rep. Pete Stark, D-Calif., said Bush missed an opportunity to work with Democrats by releasing a document that Stark said was “an exercise in make-believe intended to incite partisanship, not invite policy making” by reintroducing “many of his same old, partisan health care schemes.”

Ron Pollack, executive director of the consumer group Families USA, said the administration’s budget plan would reduce SCHIP eligibility in 18 states, undercutting state governments’ ongoing efforts to cover uninsured children through the SCHIP program. “Not only is the president clearly out of step, but he is heading in the wrong direction,” Pollack said.

Medicaid was another major area of concern for health care groups such as the March of Dimes. Noting that the program is the source of health insurance for over 40 percent of births nationwide and provides health insurance for 28 million children, March of Dimes President Jennifer L. Howse said it would be “shortsighted to undermine the funding and structural integrity of this program that functions as a safety net for millions of low-income pregnant women children and their families.”

Bush’s plan to cap funding for home oxygen at 13 months — the current policy is 36 months — could “have the potential to disrupt the quality and continuity of care for our patients,” said Mark Shreve, chief executive officer of the Coalition for Pulmonary Fibrosis, a group representing patients with progressive and fatal lung disease.

The American Cancer Society called Bush’s funding levels for cancer research “insufficient” and “inadequate at best and could threaten our progress against the disease Americans fear most.”

Community health centers had hoped for more as well, calling the president’s plan to provide $1.988 billion — the same amount that Congress is likely to clear for fiscal 2007 — “a funding freeze, at least on paper.”

Dan Hawkins, vice president for federal, state and public affairs of the National Association of Community Health Centers, also said that cuts to health professions training programs would hurt the staffing of health centers across America. “This is the worst possible time to scale down the federal investment in training the doctors, nurses and health professionals of tomorrow,” Hawkins said.

Bush’s budget will no doubt spur debate on the Hill, with Congress meshing that plan along with their own ideas. While the president’s plan “is an indication of his priorities and is a useful starting point for lawmakers . . . the final document may look very different from the president’s proposal,” said Sen. Michael B. Enzi, R-Wyo. “At the end of the day, the House and Senate control the purse strings.”

Perhaps predicting the months ahead, Sen. Charles E. Grassley, R-Iowa, quipped: “The president proposes and Congress disposes.”