Hopes Dim For Deal To Avert Medicare Premium Spikes

The window is closing for congressional leaders to avert the double-digit premium hikes that are set to hit 8 million Medicare enrollees next year.

Congress has only a handful of weeks to prevent the 52 percent premium hikes — the largest in the program’s history — that will harm seniors and drain state budgets. And with a key deadline missed on Thursday, aides of both parties say a deal between House leaders by year’s end is becoming less likely.

After some initial optimism for an agreement between House Speaker John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.), things have since grinded to a near halt, according to several people familiar with the talks. Any hopes of a deal have dropped out of sight until likely December, when the same leaders must approve a government spending bill.

“I think it will be a part of the government spending discussion, especially since Pelosi seems to have this as a priority. I think she’ll be pretty insistent,” a Democratic aide said.

That outcome — if it can be reached — would mean months of uncertainty for millions of Part B enrollees caught in the crosshairs of a federal benefits policy glitch.

Because of a quirk in federal law, in years that the government doesn’t approve an annual cost-of-living increase, Medicare enrollees face a spike in premium costs if they aren’t protected by Social Security’s “hold harmless” provision.

Among those affected, monthly premiums will rise to $159.30 per month, from about $104.

Pelosi had initially hoped to achieve a deal by Oct. 15 — the date that the administration announced there would be no cost-of-living increase — because it would result in a slightly cheaper price tag from the Congressional Budget Office. (The budget office would have calculated the cost of the bill using a nearly 1 percent cost-of-living increase, which some have dismissed as a budgetary gimmick.)

The Democratic leader first raised the issue in a one-on-one meeting with Boehner on Sept. 17, according to her spokesman, who declined to share any other details.

“There was a real hope they could do it before today,” David Certner, legislative policy director for AARP, said the day the deadline passed.

It’s only been a few months since Pelosi and Boehner last struck a major deal on a healthcare bill, to eliminate the decades old “doc fix.” But with the House GOP leadership scramble and the threat of a government shutdown over the same period, those talks went nowhere.

“Obviously Congress is not functional right now,” Certner added.

The Obama administration confirmed Thursday that this year’s cost-of-living index would not increase — the first time without an increase since 2011. That news all but assures a spike in premiums, driving up the pressure for Congress to act.

Pelosi, who held a press conference with a half-dozen House Democrats last week to accuse Boehner of refusing a deal, has stepped up her criticism of Republican leaders.

“Unless the Republican Congress brings a bill to the floor soon, almost 8 million American seniors will be hit with the largest premium and deductible increases in the history of Medicare Part B,” she wrote in a statement released late Thursday. “We know what needs to be done, but Republicans have failed to act.”

Her position makes clear that if a deal is not met, she intends to put the blame squarely on Boehner’s shoulders — a move that could put the GOP up against a strong political lobby in an election year.

Pelosi has not put forward a specific bill, but lawmakers say House Democrats have drafted one they hope will win support from Republicans, though there are still other options on the table.

Rep. Jan Schakowsky (D-Ill.), who co-chairs the Seniors Task Force, said last week that the most likely option was a stand-alone bill that she hoped could get a vote before Oct. 15. She said then that there was not a pay-for in the bill: “If we can give trillion-dollar tax cuts with no pay-for, it seems to me we can protect our seniors.”

One Democrat, Sen. Ron Wyden (D-Ore.), has put forward a bill in the upper chamber to avert the premium hikes, though it does not yet have a pay-for. It has gained 22 co-sponsors, none of whom are Republicans.

Democrats in Congress are also getting help from Democratic presidential front-runner Hillary Clinton, who put out a sharply worded statement Friday accusing the GOP for ignoring the problem.

Both parties agree the biggest sticking point is paying for the bill, which could cost as much as $7.5 billion by some estimates.

A House GOP leadership aide said Boehner will not consider a package that is not fully paid for. While Pelosi’s office has also said they are looking for offsets, Democrats have kept quiet about what options are on the table.

One reason is that during a Congress-wide spending debate, no lawmaker wants to disclose a proposed pay-for that could be used as an offset for another provision.

“Putting out a health or Medicare offset right now is sort of dangerous, in terms of getting picked off and used,” a Democratic Senate aide said. “We’d like to see more interest from them before we really get serious about payoffs.”

Even if the provision is passed as part of the government spending bill, that timeline leaves little space for error. The administration has said it could take up to a month for health officials to process the change.

“The longer you delay, this is problematic because the administration is mailing out checks. It can’t just do this on the dime right before Christmas,” Certner, the AARP legislative director, said. “They’re going to need some lede-in time.”

White House spokesman Josh Earnest offered few details about how the administration planned to address the problem, other than to say the administration is aware of and concerned about the “unintended policy consequence.”

“There have been discussions that the administration has had with members of Congress about this issue and about our interest in trying to resolve it. However, we have worked diligently to protect the ability of those who are discussing a budget agreement to work in private,” he told reporters Thursday.

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