The Huge Boehner-Pelosi Deal That Could Change Medicare Forever

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WASHINGTON — The House’s top two leaders are on the verge of securing a sweeping deal to permanently fix a gaping hole in Medicare that has haunted Congress for more than a decade while also securing significant long-term savings in the program.

And shockingly, it has broad support among Democrats and Republicans, including even some hardline conservatives who have spent years thwarting bipartisan agreements.

House Speaker John Boehner (R-OH) and Minority Leader Nancy Pelosi (D-CA) are aiming to finalize the deal this week and put it to a vote next week, leadership sources said. There’s always a possibility of it imploding, but if the plan passes and is signed into law, it would be the most important piece of health care legislation since Obamacare, and a huge achievement for a Congress that has so far been marked by unusual dysfunction.

The deal would end the perennial Medicare “doc fix” problem by replacing the widely-maligned formula for reimbursing physicians, which currently imposes steep annual cuts that Congress has regularly overridden since 2002. It’s a big headache for lawmakers as powerful health industry groups have been clamoring for a permanent fix for years. The cost of repealing the existing “Sustainable Growth Rate” payment formula is $170 billion over a decade.

The plan would also extend for two years the Children’s Health Care Program, which helps insure families with children, and runs out of funding on October 1, lawmakers and aides said.

“So far as it goes, I think it’s good. We need some of the structural entitlement reform. That’s a good thing. I support extending S-CHIP. That’s a good thing. What’s not good is right now it’s not paid for,” said Rep. Joe Barton (R-TX), a long-serving conservative who went on to say, “I know how hard this is. Our seniors are having more and more difficulty getting doctors because Medicare doesn’t reimburse, and doctors are dropping Medicare.”

The big carrot for conservatives: two major reforms that cut billions of dollars from Medicare spending in the long-term. One change would require upper-income seniors to pay more for the program; another would reduce spending on supplemental “Medigap” plans that some elderly beneficiaries enjoy. The reforms would be phased in to avoid immediate disruptions.

“These are two huge improvements that would drive costs down and actually, in the long-run, improve care and access to care,” said Rep. John Fleming (R-LA), a staunch conservative who supports the emerging Boehner-Pelosi deal. “This is a long-term solution for doctors who are having their patients really destroyed. … This is a huge advance.”


Rep. John Fleming (R-LA) speaks to reporters on Capitol Hill in Washington. (AP Photo)

For Democrats, the draw is that CHIP would be extended and Medicare benefits would be preserved and protected for middle class Americans who need it. The downside for them is that it drops their longstanding demand that any deal to cut entitlement benefits include provisions to raise tax revenues.

“Essentially this would increase the amount [paid by] individuals with income of $133,000 and families of around $260,000,” said Rep. Sander Levin (MI), the top Democrat on the powerful Ways & Means Committee. “These changes are much better than others that we could have done. … So there are some major, major pluses in this.”

And every member of Congress would be relieved to get the “doc fix” off their plate for good.

“We must find a way to get it done, and will,” said Rep. Pete Sessions (R-TX), the chair of the Rules Committee. “The Speaker is really committed to doing this. And this body as a whole is gonna have to thoughtfully, carefully find a way to be for this. … The art of getting it done is in everyone’s interest. … I view it as a must-pass piece of legislation.”

Boehner told his House GOP members that he’s working with House Democrats on “a permanent solution in exchange for structural reforms to Medicare,” according to a source in the room Tuesday during a private meeting.

Just one-third of the deal would be paid for in the 10-year window. That’s a deal-breaker for some hardline conservatives, and it’s why the activist group Heritage Action is pushing to scuttle the agreement. But it doesn’t bother all conservatives in the House — some stress that the existing Medicare payment formula is a budget gimmick.

“What we’re doing now with the patches are not really fully paid for either,” said Fleming, a physician. “So this is an honest approach where we’re actually being transparent. … I think many [conservatives] will” support the proposal,” he said, adding that Pelosi has “made some huge concessions here.”

“The Speaker’s got an obligation to govern,” Barton said, predicting that the deal is “probably going to be a bipartisan agreement, and if they get large numbers of Democrats then there’s not quite the pressure to find the pay-fors.”


House Ways and Means Committee Chairman Paul Ryan (R-WI), with Rep. Sander Levin (D-MI) on Capitol Hill. (AP Photo/J. Scott Applewhite)

Senate Democrats have been pushing for a four-year extension of CHIP, but that’s unlikely to happen, multiple sources said. “At this point I think the discussion in the House is focused on two years,” Levin said. “The only way SGR was going to be addressed was on a bipartisan basis.”

“It looks like it has pretty good momentum,” said Rep. John Yarmuth (D-KY). The doc fix is “a thorn in everybody’s side. I think everybody would like to get rid of it once and for all. … We want to make sure that doctors stay in the profession.”

In the Senate, there’s an equally large appetite to eliminate the “doc fix” problem.

House Minority Leader Nancy Pelosi (D-CA) said the negotiations are “proceeding in a positive way” when asked by reporters on Wednesday. “It is an engine that is going to leave the station and … I think we will have bipartisan agreement and it will be a good agreement,” she said.

Boehner’s negotiators are also optimistic about sealing the deal.

“From our perspective this is a good start on addressing big entitlement issues in a fair and responsible way,” said a senior House Republican aide, who requested anonymity to discuss the negotiations. “And that’s what we came here to do. That argument appeals to a lot of our guys.”

ABOUT THE AUTHOR

Sahil Kapur is TPM's senior congressional reporter and Supreme Court correspondent. His articles have been published in the Huffington Post, The Guardian and The New Republic. Email him at sahil@talkingpointsmemo.com and follow him on Twitter at @sahilkapur.
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