Jobs bill: Dems keep 'doc fix' but jettison COBRA benefits, extra state Medicaid funding

House Democrats, under pressure from fiscal conservatives to cut spending, have dropped from a jobs bill both a COBRA subsidy extension to help newly laid-off pay for health coverage as well as more federal aid to boost state Medicaid budgets, The Associated Press reports.  Although several programs covered by the bill will expire during the congressional recess that begins this weekend, final action isn't expected because even if House members reach agreement on the measure, it must still go to the Senate, which has not scheduled any votes today.

"The steps taken by House leaders could reduce the deficit impact of the bill to as little as $30 billion or so in hopes of winning over fiscally conservative 'Blue Dog' Democrats unhappy about adding to the deficit as the national debt closes in on $13 trillion. A version circulated last week would have added $134 billion to the deficit" (Ohlemacher and Taylor, 5/28).

The Wall Street Journal: The measure still "would suspend long-planned cuts in Medicare payments to doctors, set to take effect next month, deferring them through December 2011. And the measure would revive several business tax breaks that expired at the end of last year, including one promoting research and development." Increased financial aid to states to help them pay for Medicaid programs strained by the recession runs through the end of the year, but the six-month extension of that aid was dropped (Hitt and Vaughn, 5/27).

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: "Both [the COBRA subsidy and increased Medicaid payment extensions] provisions are likely to be considered after the Memorial Day break, aides said" (Murray and Montgomery, 5/28).

The Hill: "A senior Democratic Senate aide said that Democrats would offer a 14-day extension of unemployment insurance, COBRA, the so-called 'doc fix' and the national flood insurance program. Senate Republicans, however, are expected to object to the proposal because it would add $4 billion to the federal deficit" (Bolton, 5/27).

Politico reports that a planned $22 billion 19-month payment fix to doctors who serve Medicare patients will be subject to a separate House vote Friday. Without a fix in the payments to doctors, they face a 21 percent reduction in payments beginning June 1. "The Medicare 'doc fix' could yet survive, given the power of the American Medical Association across party lines. But governors, some of whom have been in Washington this week lobbying for Pelosi on the same jobs package, will be infuriated by the loss of the Medicaid funds, a carryover from the giant economic-recovery bill approved in the first months of President Barack Obama's administration" (Rogers, 5/27).

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).

Medscape: "Anticipating that Congress might not act in time to avert the June 1 pay cut, the Centers for Medicare and Medicaid Services has instructed its carriers this week to hold payment on claims with June service dates for the first 10 business days of the month. That way, if Congress retroactively postpones the pay cut early next month, carriers would process the suspended claims at either the current reimbursement rate or any higher — and temporary — rate that lawmakers might approve" (Lowes, 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).

CongressDaily: "On Wednesday, Democratic leaders had already caved in to [fiscally conservative] Blue Dog [Democrats'] demands by cutting nearly $50 billion out of the bill, by shortening the physician fix to 19 months from three-and-a-half years and shaving a month off of unemployment benefits and COBRA health subsidies. Blue Dogs said they thought the COBRA provisions, which pay 65 percent of laid-off workers' health benefits, should be scrutinized further. The federal Medicaid matching payments are backed by nearly every governor as critical relief to states, however, and 32 Blue Dogs have signed a letter in support" (Cohn, 5/27).

The Hill in a separate story: The House will consider the package Friday in two pieces House Ways and Means Chairman Sander Levin [D-Mich.] said Thursday. The two pieces: the jobless benefits — minus the COBRA and Medicaid money extensions — and the "doc fix."

"Senate Majority Leader Harry Reid (D-Nev.) said Thursday the Senate would take up the tax extender measures when the Senate returns June 7 from the Memorial Day recess" (Needham, 5/27).