New House Bill Links “Doc Fix” to Obamacare Delay

New legislation passed by the House tying the “doc fix” to Obamacare is expected to meet its demise on the Senate floor. Thus, a once-promising solution to a long-term problem is likely to turn into another victim of bipartisan politics.

[This is part of a series of articles by Ken Berry on new developments relating to the Patient Protection and Affordable Care Act of 2010 (aka “Obamacare”).]

Previously, House and Senate committees had devised a way to avoid the annual scramble preventing large cuts in the payments physicians receive for treating Medicare patients. Under the compromise worked out by opposing factions in Congress, the legislation would increase the amount that Medicare would pay physicians by 0.5 percent each year for the next five years.

This would replace the complex and flawed system for determining Medicare payments that doctors have been railing about for more than a decade. Stop-gap measures have managed to postpone the financial pain indefinitely.

But here’s the rub: To pay for the resolution, to the tune of $138 billion, the bill agreed to by the Republican-led House would postpone the individual health insurance mandate under Obamacare for five years. The vote, which mainly followed party lines, was 238-181 in favor of the measure. No Republicans voted against the bill and only twelve Democrats in the House supported it.

Under Obamacare, individuals are required to obtain at least minimal health insurance coverage in 2014 or be forced to pay a penalty after the grace period expires in March 31. The penalty for 2014 is the greater of $95 per individual ($47.50 per child under 18), up to a family maximum of $285, or 1 percent of household income. Another provision requiring employers to provide affordable health insurance to employees was postponed for one year – from January 1, 2014 to January 1, 2015 – and yet again for another year to January 1, 2016 for certain mid-sized firms. The penalty for failing to comply with the employer mandate is $10 per affected individual.

Democratic leaders in the Senate have called the latest arrangement a “poison pill” that won’t be swallowed by the chamber. Republicans acknowledged that the bill has scant hopes of passing the Senate, but said the provision was essential for financing the doc fix.

If the bill somehow manages to scrape by in the Senate, the Obama administration has said, in no uncertain terms, that the president would veto it.

Assuming the measure dies a quick death as expected, payments to physicians will be reduced by 24 percent after March 31, unless other legislation is enacted. House Republicans say they will gladly entertain other reasonable proposals from the Senate for fixing the Medicare mess. Amidst all the tumult, Congress is scheduled to recess for a week, allowing precious little time to work out another deal.