U.S. President Barack Obama proposes to cut $320 billion from Medicare and Medicaid in his plan to trim the federal deficit.

The cuts would come government payments to health providers and drug companies.

The plan hopes to save $135 billion in drug costs over 10 years starting in 2013. Some Republicans seem to be in favor of this proposal, but vow that they will oppose any tax increases.

Aside from this proposal, the president also asked in cutting $3.5 billion from the disease prevention fund. Some Medicare beneficiaries can also experience cost changes under the president’s treatment. In 2017, beneficiaries receiving home health services will start paying $100, which will raise $400 million over 10 years.

Here are some possible effects of Obama’s plan on different groups of people.

1. Pharmaceutical companies
The most possible effect of this plan to pharmaceutical companies is a huge adjustment. From job layoffs to the quality of their products, they must adjust if ever this plan will come to life. However, more pharmaceutical companies were predicted to oppose this plan.

"PhRMA opposes implementing Medicaid's failed price controls in Medicare Part D," says Matt Bennett, Senior Vice President of the Pharmaceutical Research and Manufacturers of America, the industry's lobby. "Such policies would fundamentally alter the competitive nature of the program, undermine its success and potentially cost hundreds of thousands of American jobs."

2. Medicare and Medicaid Beneficiaries
Definitely, the receivers of healthcare especially the poor, the disabled, and the old population will hate this idea. In fact, even the consumer advocacy group Families USA that usually supports Obama’s plans, critically disagree with this proposed program.

"The cuts to the Medicaid program in the president's proposal – which shifts the burden to states and ultimately onto the shoulders of seniors, people with disabilities, and low-income families who depend on the program as their lifeline – would be harmful," said the executive director of Families USA, Ron Pollack. "Most of the cuts are not real cost efficiencies; instead they are merely cost shifts to the states. Since the overwhelming majority of states can't or won't bear that extra burden, it will ultimately be a cost shift to low-income families who will experience tragic cutbacks in coverage."

3. Over All Health Care Sectors
Different programs and sectors may have different views about this plan. But one answer will dominate, and that is a big “No.” Health is one of the most important things that every government should take care of. And cutting off millions of dollars to health may lead to more health threats. For instance, lack of budget for research and other experiments may just lead to prolonged health problems.

"We agree that everyone must share in the sacrifice, but advocating for cuts in the most cost effective segment of post-acute care is ill-advised," said President and CEO of the American Health Care Association Mark Parkinson. "The industry is now at the tipping point and further cuts like those proposed today will put the low income frail elderly at considerable risk."