Bush proposes cutting Medicare budget by $36bn

President Bush has proposed reducing the Medicare budget by $36bn (£21bn; €30bn) over five years. He plans to achieve his target by reducing the rate of increase in payments to healthcare providers and by increasing the premiums for people on higher incomes.

Until now all beneficiaries of Medicare—the federal health insurance programme for elderly and disabled people—have made the same level of monthly payments to cover doctors' and outpatient services. In 2006 this amount was $88.50. However, recent Medicare reforms introduced differentiated premiums that are based on income, starting in …