By Susan Cornwell
WASHINGTON (Reuters) - The Republican-run U.S. House of Representatives on Friday approved a bipartisan deal to spare doctors from a looming Medicare pay cut but included a provision to undermine Obamacare, which critics said was a non-starter in the Democratic-controlled Senate.
The vote was 238-181, with most House Democrats refusing to swallow what they called an Obamacare "poison pill," a provision to delay for five years the tax penalty that most Americans must pay under President Barack Obama's healthcare law if they decline to sign up for insurance.
Just a dozen Democrats, some of whom face tough re-election races in November, voted with Republicans to pass the bill, which the White House has threatened to veto.
Hundreds of thousands of doctors who participate in traditional Medicare face a 24 percent pay cut on April 1, a situation dating to a 1990s initiative to restrain federal spending on the government healthcare program, which today serves nearly 50 million elderly and disabled people.
Doctors hoped to see a permanent fix to the recurring Medicare payments problem this year after Republicans and Democrats in both chambers of Congress agreed in February on a policy to replace the payment formula, known as the sustainable growth rate, or SGR.
But there was no agreement on how to fund the $138 billion cost of the "doc fix" over the next decade. So House Republicans proposed to pay it by delaying the penalty for the individual mandate to buy insurance under the Affordable Care Act, also known as Obamacare.
Democrats charged this was part of a Republican election-year attack strategy on the 2010 law, noting it was the 51st vote in the House to repeal or undermine Obamacare.
Some analysts also noted that the vote will let Republicans accuse Democrats of refusing to help Medicare doctors in order to keep one of Obamacare's most unpopular provisions intact. This could menace vulnerable Democrats in states where public attention on healthcare reform has been directed toward last year's wave of insurance cancellations.
Republicans "have created a very strong issue here. Politically, you're talking about getting rid of something unpopular to pay for something that's very popular," said Robert Blendon, a Harvard University professor who studies political trends in healthcare.
The individual mandate penalty, which underpins the terms of subsidized private health coverage available through new Obamacare insurance marketplaces, is being phased in over three years. For 2014, it amounts to $95 per adult or 1 percent of household income, whichever is greater. For 2016, it rises to $695 per adult or 2.5 percent of household income.
Delaying the penalty until 2019 would slow down Obamacare signups and save the government billions of dollars that would otherwise be paid out in taxpayer subsidies to enrollees, the Republicans say, citing Congressional Budget Office estimates.
Democrats expressed consternation that Republicans would attach their latest Obamacare attack to a bipartisan compromise to fix Medicare payments that had eluded lawmakers for years.
"For what reason have you poisoned his process?" demanded Democratic Representative Frank Pallone. "You have singled-handedly, in my belief, stomped on months and months of hard work and effort by my colleagues on both sides of the aisle and our staffs."
Republicans acknowledged the combined measure may not have a bright Senate future but said they had to fund the doc fix to get it through the House. They said Senate Democrats should propose their own way to pay for the Medicare changes and then negotiate with the House.
However, while reforming the Medicare payments system is a priority for many in the Senate, key Democrats like the new chairman of the Finance Committee, Ron Wyden, have not proposed a way to pay for it. "I think he has been open to the idea of the doc fix not paid for," Wyden spokesman Ken Willis said.
The House Republican approach brought an unusual public rebuke from the American Medical Association, one of the most powerful lobby groups, representing 225,000 physicians who hope for a permanent doc fix this year. On Friday, the president of the AMA, Dr. Ardis Dee Hoven, said it was "a shame" to see lawmakers' bipartisan efforts overcome by "partisan politics."
Earlier this week the House passed exceptions to the Obamacare individual mandate for veterans and firefighters, and broadened a religious exemption. Last week 27 House Democrats voted to delay the mandate penalty for one year.
But on Friday, one of those Democrats, Representative Carol Shea-Porter, said she couldn't support a five-year delay because it would seriously undermine Obama's healthcare law.
(Additional reporting by David Morgan; Editing by Stephen Powell and Leslie Adler)