KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Senate Approves ‘Fiscal Cliff’ Deal With ‘Doc Fix’; GOP House Members Skeptical

The Hill: Senate Approves Biden-McConnell 'Fiscal Cliff' Deal In Easy 89-8 Vote
The Senate early on New Year's Day voted overwhelmingly in favor of a fiscal cliff deal that would extend tax rates on annual household income under $450,000 and postpones automatic spending cuts for two months. ... The legislation will freeze scheduled cuts to doctors' Medicare payments for one year, paying for them with spending cuts in other healthcare spending. This avoids a 27-percent cut in reimbursements to doctors treating Medicare patients (Bolton, 1/1).

The Washington Post: Obama, Senate Republicans Reach Agreement On 'Fiscal Cliff'
And doctors would be spared a 27 percent cut in Medicare reimbursements set to take effect in January — although the $30 billion cost of that extension would be covered by cutting other health-care programs. The last last piece of the puzzle to fall into place was the sequester, which would be delayed until early March under an agreement to raise $12 billion in new tax revenue and $12 billion in fresh savings from the Pentagon and domestic programs (Montgomery and Kane, 1/1).

The New York Times: G.O.P. Anger Over Tax Deal Endangers Final Passage
House Republicans reacted with anger Tuesday afternoon to a Senate-passed plan to head off automatic tax increases and spending cuts, putting the fate of the legislation in doubt just hours after it appeared Congress was nearing a resolution of the fiscal crisis. Lawmakers said that Representative Eric Cantor of Virginia, the No. 2 Republican, indicated to his colleagues in a closed-door meeting in the basement of the Capitol that he could not support the legislation in its current form. Many other Republicans were voicing stiff objections to a plan that they saw as raising taxes while doing little to rein in spending (Steinhauer and Weisman, 1/1).

The Wall Street Journal: Fiscal-Cliff Focus Moves To House
While the large Senate margin could give momentum to the bill, initial GOP reaction in the Republican-controlled House doesn't bode well for quick and simple action on the compromise. Conservative Republicans are dismayed the compromise raises tax rates and doesn't include more cuts in federal spending. House Speaker John Boehner (R., Ohio) has raised the possibility the House could amend the bill and send it back to the Senate (Hook and Hughes, 1/1).

Politico Pro: Cliff Deal Pays For Doc Fix With Provider Cuts
The one-year Sustainable Growth Rate patch is paid for by striking numerous programs within the health sector — with hospitals taking some of the biggest hits. The plan — part of the legislation passed by the Senate early Tuesday morning to avert the fiscal cliff — pulls approximately $30 billion in health savings, according to legislative text and summaries circulating shortly before the vote. It also repeals the Community Living Assistance Services and Support, or CLASS, program — a now-defunct part of the health law. It’s a notable win for Republicans, who can say they repealed a piece of Obamacare, even if the Obama administration has already said it wouldn’t implement the program. The bill also establishes a commission to address long-term health care issues (Haberkorn, 1/1).

The Wall Street Journal: Deal Leaves Lawmakers With Plenty More To Do
Monday's tax and spending deal could avert the fiscal cliff, assuming the package meets with lawmakers' approval. But it keeps Washington on a rocky and potentially risky fiscal-policy path for the coming year. ... Republicans are likely to push again for overhauling big spending programs such as Medicare and Medicaid. ... Mr. Obama on Monday said future deficit-reduction efforts would have to be "balanced," meaning they would have to include both spending cuts and tax revenue increases. "[Entitlement] reform has to go hand in hand with doing some more work to reform our tax code so that wealthy individuals, the biggest corporations can't take advantage of loopholes and deductions that aren't available to…most Americans," Mr. Obama said (McKinnon, 12/31).

Politico: America Awaits House Action On Cliff
(The plan passed by the Senate is) not the grand bargain that Wall Street and corporate CEOs wanted to see — and spent millions advocating . But it is still fairly broad in scope. And it reflects significant concessions by both sides, but particularly for McConnell. McConnell’s first offer on Friday night was far from where the deal ended up, according to sources familiar with the talks. That proposal included raising the income threshold to $750,000, instituting means testing for Medicare, reverting to a less generous inflation calculator for government programs, no extension of middle class tax credits and continuing the current estate tax rates, which many Democrats opposed. None of those elements made it into the bill (Sherman, Budoff Brown and Nocera, 1/1).

The Hill: Deal Guarantees Spending Showdown
The United States will avoid the "fiscal cliff" if the House quickly passes the Senate's budget deal, but the deal sets up a massive spending showdown in just a matter of weeks. ... Most importantly, the deal does not raise the nation's $16.4 trillion debt limit. On Monday, the U.S. hit that limit and began taking extraordinary measures to prevent a default on government payment obligations. In the 2011 fight over the debt ceiling, Republicans got $2.1 trillion in spending cuts and they will be demanding cuts to entitlements next time around (Wasson, 1/1).

The Washington Post: After A 'Fiscal Cliff' Deal, What Next?
Assuming the deal is approved by the House, it will nevertheless give way to a nearly continuous series of fights that will consume the first part of the year, even as President Obama might hope to shift Congress’s attention to immigration reform and gun control. ... Republicans figure that will tilt the debate toward spending cuts. (South Carolina Sen. Lindsey) Graham said he anticipates forcing Democrats to give in on a long list of the GOP’s top spending priorities in the new year: raising the eligibility age for Medicare, increasing premiums for its wealthier beneficiaries, and trimming Social Security benefits by using a new method to calculate inflation (Helderman, 1/1).

Los Angeles Times: Obama Wins 'Fiscal Cliff' Victory, But At High Cost
Obama had to accept far less new revenue than he had wanted. In his reelection campaign, Obama had called for raising taxes on income over $250,000. The compromise starts the increases at $400,000 for individuals and $450,000 for couples. Overall, the deal is projected to raise about $620 billion in new revenues over the next 10 years, almost $1 trillion less than Obama had asked for. Without that extra revenue, White House officials have said, the nation eventually will face punishing cuts in Social Security, Medicare and other domestic programs. Concern that the deal included too little revenue led liberals in the Senate to threaten repeatedly Monday to pull the plug. Obama, they said, was giving in too much to Republican demands at the point where he had maximum leverage (Hennessey and Lauter, 12/31).

Politico: Fiscal Cliff Deal -- If It Happens -- Doesn't Settle Much Of Health Care Future
For the health care world, the on-again, off-again, on-again resolution of the fiscal cliff is only the beginning of the story. If the deal to fix the cliff goes through in the next few days, the big questions about health and entitlement spending — particularly Medicare and Medicaid — will remain bitterly unresolved (Kenen, 12/31).

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