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CBO Congressional Budget Office

Sen. Hatch's doc-fix plan would save money, but is unlikely to garner approval

By Paul Demko
Posted: March 25, 2014 - 2:30 pm ET

A Senate Republican plan for a permanent doc fix would cost the treasury $180.3 billion over a decade, according to an analysis by the Congressional Budget Office (PDF). But it would bring in $468.5 billion in additional revenue. That's a net savings for the bill, sponsored by Sen. Orrin Hatch (R-Utah), of $288.1 billion.

Hatch's bill relies on a repeal of the Patient Protection and Affordable Care Act's individual mandate. That makes it a non-starter for Democrats and means the prospect of it coming up for a vote on the Senate floor is highly remote.

Hatch's bill would have significant ramifications for the health insurance marketplace, the CBO found. It would result in 15 million fewer individuals having coverage by 2018 and lead to premium spikes of 10% to 20% for plans sold in the individual marketplace over the next decade.

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Hatch's bill is the third doc fix proposal scored by CBO in recent weeks. In addition to permanently repealing Medicare's unpopular sustainable growth-rate formula for physician payments, it also provides money to extend several other healthcare programs. The current doc fix runs out March 31.

A bill introduced by Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, would cost an identical amount (PDF), but includes no means of paying for the plan. Wyden's staff has indicated that he is “very open” to utilizing Overseas Contingency Operations funds to pay for it.

In the House, a bill sponsored by Rep. Michael Burgess (R-Texas) would cost $138.4 over a decade (PDF). That proposal is paid for by delaying the individual mandate for five years, which would generate $169.5 billion in savings, according to the CBO. The House passed that plan earlier this month on a largely party line vote.

Republicans and Democrats reached a bipartisan accord last month on a plan to permanently fix the Medicare payment system for doctors. But they haven't been able to agree on a means of paying for it. The prospect of coming up with an accord before the March 31 deadline now looks grim. That means another temporary patch—in order to avoid a 24% cut in provider payments in 2014—is likely.

Follow Paul Demko on Twitter: @MHpdemko

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