A permanent "doc fix" plan—negotiated by House Speaker John Boehner and Minority Leader Nancy Pelosi—will need to gain traction in the coming days if it's going to have a realistic shot at enactment.
That's because both the House and Senate need time to consider a permanent fix before Congress adjourns for spring break at the end of the month.
Congress has until March 31 to take action on the issue. Otherwise doctors would face a 21.2% decrease in payments for treating Medicare patients.
While talks continue in the House and some objections have surfaced, the contours of the deal that emerged on Friday continue to tenuously hold, according to lobbyists and staffers tracking the issue. The $215 billion package would include permanent repeal of Medicare's sustainable growth-rate formula, a two-year extension of the Children's Health Insurance Program and a two-year extension of a package of healthcare-related tax and spending provisions.
“Cautiously optimistic is the way that I would describe my feeling about the situation," said Rep. Renee Ellmers (R-N.C.), who sits on the Energy & Commerce Committee. "I am confident that it can be done."
“I believe the leadership is committed to it on both sides of the aisle,” said John Rother, president of the National Coalition on Health Care, a nonpartisan advocacy group. “I give Boehner a lot of credit for making this happen and for being flexible enough in the negotiations to get this far.”
Only about a third of the projected spending is offset by corresponding cuts. That will make the plan toxic for some fiscal conservatives. But at least one conservative voice—the Wall Street Journal editorial board—has given its blessing to the emerging deal.
“Conservatives are supposed to understand that price controls distort markets and don't work,” the paper opined over the weekend. “So much the better if reasonable Republicans and Democrats can agree to commit the SGR to the glue factory.”
The $70 billion in offsets are expected to be roughly split between cuts to providers and changes to Medicare benefits. The latter include eliminating Medigap plans with no deductible and requiring those customers to spend at least $250 out of pocket before coverage kicks in. But current holders of first-dollar-coverage supplemental plans would be grandfathered in and those plans wouldn't be eliminated until 2020.
The proposal also includes increased out-of-pocket costs for wealthier Medicare beneficiaries. But the increased expenses would only apply to individuals who are already subject to means testing, currently individuals with incomes above $85,000 and couples with incomes above $170,000. According to a Democratic staffer familiar with the discussions, the increased costs in the SGR proposal would only apply to beneficiaries with incomes well above $100,000.
“I think it's fair to say that beneficiary groups, including AARP, are not thrilled with this idea,” said Rother, a former longtime lobbyist for the senior advocacy group.
Democrats have typically balked at any Medicare benefit reductions. A significant slice of their caucuses could balk at supporting the package if those cuts run too deep.
The Senate has played a passive role in the negotiations, although the top Republican and Democrat on the Finance Committee have both praised the House's work on the issue. However, Senate Democrats have warned that they might not be willing to support a package that doesn't re-authorize CHIP for four years, as reported by the Associated Press.
“While a two-year extension of CHIP is encouraging, a four-year, clean extension of the program is necessary to ensure stability and certainty for states and families,” said a spokesman for Sen. Sherrod Brown (D-Ohio), the chief sponsor of a four-year CHIP reauthorization bill, in a statement. “Until the details of this deal—including how this is paid for—are shared with the Senate, it is unclear whether or not this is a package Senate Democrats could support.”
There could also be an effort to sweeten the deal with policy provisions that are important to individual members. But any additional proposals could also cause complications.
“I think there will be policy riders in order to get some folks to sign on,” said Julie Scott Allen, senior vice president with the District Policy Group at Drinker Biddle & Reath. “This is the one big thing to move so folks are gunning for it."
The window is very narrow to get a deal done. Most healthcare policy watchers believe that the Senate will have to agree to take up any legislation as passed by the House. As one GOP Senate staffer pointed out, Boehner wouldn't have stuck his neck out this far if he didn't have some kind of tacit agreement with Senate Majority Leader Mitch McConnell that he could get it through the Senate.
“They'll have to really cook this with the Senate for that to occur. There's just no time,” Allen said. “I'm still putting my bet on at a bare minimum we're looking at a couple month delay.”
The GOP Senate staffer assessed the odds of passage as "plausible, but unlikely." "Are there a sufficient number of members of both parties who are willing to come together to get this done in whatever configuration it takes?" this person asked. "Can you get enough votes to make this damn thing go away?"
Follow Paul Demko on Twitter: @MHPDemko
