Jobs Bill Passes House: Dems Keep ‘Doc Fix’ But Jettison COBRA Benefits, Extra State Medicaid Funding

The House this afternoon passed a bill that would keep doctors from facing a cut in Medicare payments while extending tax and unemployment benefits. But, under pressure from fiscal conservatives, Democrats dropped a COBRA subsidy extension to help newly laid-off pay for health coverage as well as a provision to boost federal aid to state Medicaid programs.

Politico: "Democrats narrowly won House approval Friday of a nearly $90 billion jobs and tax package, capping days of turmoil that split the party. ... Adopted 215-204, the package is half of what had been envisioned just a week ago, and with the Senate gone home for Memorial Day, the repeated delays have left the leadership with no chance of completing action before tens of thousands of long-term unemployed begin to lose their jobless benefits June 2."

"A June 1 deadline threatening Medicare payments to physicians will also go unmet. By a 245-171 margin, Democrats also won approval of a 19 month patch to forestall the 21% reduction that will hit home at mid-month, but there too, nothing can be enacted until the Senate returns June 7" (Rogers, 5/28).

CongressDaily: "The Blue Dogs won a significant victory by forcing House Democratic leaders to cut $79 billion in spending, including subsidies to help laid-off workers buy health insurance and ease state budget cutbacks. But unions are pledging to make them pay for it with targeted ads over the Memorial Day recess. And advocates for the poor said the removal of health insurance subsidies would reverse gains made in recent health reform legislation."  

"The bill would have provided $6.8 billion to extend a 65 percent subsidy through November, but that was removed to appease the Blue Dogs" (Cohn, 5/28).

CQ Politics: "With a 21 percent payment cut slated to take place June 1 for doctors who see Medicare patients, the Centers for Medicare and Medicaid Services has notified physicians it will delay processing claims for two weeks. Efforts to prevent the cuts before the deadline have run out of time. The House on Friday approved a $22.9 billion provision in a package of tax and benefit extensions that would block the cuts through the end of 2011 and provide physicians a small increase each year.  the Senate is not expected to address the extenders package until June 7 at the earliest. CMS told its contractors to hold claims for Medicare reimbursement for 10 business days 'to avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians,' the agency said in a letter to providers" (5/28). 

The Associated Press: "The move to drop the aid to states was a big blow to the nation's governors, who are desperate for fiscal relief as weak tax revenues are forcing painful cutbacks, including layoffs and furloughs of state workers. Many states had already incorporated the money into their budgets for next year. ... About 200,000 people per week are set to begin losing jobless benefits when an extension of unemployment insurance expires next week, though lawmakers are likely to seek to restore them after the fact. ... The cutoff of health insurance subsidies means that, starting next month the newly unemployed won't be eligible for a 65 percent subsidy under the COBRA program. People currently receiving the subsidy would remain eligible for a total of six months" (Taylor, 5/28).

CNN Money: "At least 19 states have already assumed those [Medicaid] funds in their fiscal 2011 budgets. If it doesn't come through, they'd have to make even more massive cuts to balance their budgets" (Luhby, 5/27).

The Washington Post: The COBRA subsidy and increased Medicaid payment extensions "could be reconsidered when the House returns from a 10-day Memorial Day break. But with voters complaining about out-of-control spending, many rank-and-file Democrats warned that they are unlikely to support additional aid for the jobless or other measures aimed at shoring up the economic recovery" (Montgomery, 5/28). 

Modern Healthcare: "Under the bill, physicians will get a 2.2 percent boost in Medicare reimbursement for the balance of 2010, followed by a 1 percent update through 2011. But the troublesome formula used to calculate payment would continue in the years after, setting doctors up for a 33% cut in 2012" (DoBias, 5/27).

Los Angeles Times: "In particular, the Democrats' majority is increasingly divided between those who will stomach more spending and more conservative members who are concerned about record deficits. ... 'The phenomenon or the situation that I see is that members who are from low-unemployment areas are very concerned about the deficit,' said House Speaker Nancy Pelosi (D- Calif.). 'Members who are from high-unemployment areas are very concerned about the jobs'" (Mascaro, 5/27).