The defeat of a $247 billion provision to stave off steep cuts in doctor reimbursement rates under Medicare sent a strong signal to Democrats that their road to passing a sweeping health care bill this year will be more difficult than they anticipated.
Not only did the 47-53 vote show Majority Leader Harry Reid that lawmakers in his party will not easily get in line behind his yet-to-be unveiled health care plan, the defeat may push its cost well beyond the $900 billion limit set by President Obama.
"This is a budget buster," said Brian Darling, director of Senate relations at the conservative Heritage Foundation. "This is going to add to the problems they are having in trying to find a way to pay for it. If they can't figure out a way to get around the cost issue, it will make it even tougher to pass."
Congress has been keeping major cuts to Medicare payments to doctors at bay with annual extensions. But Senate Democrats wanted to use a 10-year fix to lure doctors into agreeing to back the Democratic health care reform proposal. Doctors face a 21 percent reduction in Medicare reimbursement if no legislation is passed.
"Nobody wants to have a 21 percent reduction in doctor payments," said Sen. Mark Warner, D-Va. "But doing it by adding $247 billion to the deficit? I just couldn't abide."
Republicans called the doctors fix bill a shell game aimed at artificially lowering the cost of their health care reform bill.
A Senate Finance Committee health care reform bill includes a one-year fix, worth about $15 billion. Some Democrats fear that once they bring a health care reform bill to the floor, leaders will amend it with the quarter-trillion-dollar fix. If that happens, Democrats will have to come up with a way to pay for it, either through more taxes or cuts to other programs.
"It should be paid for and it should be done in the context of a health care bill rather than separately," said Sen. Susan Collins, a Republican moderate from Maine who is involved in bipartisan health care reform negotiations. "It has a major implication for the Medicare program."
Senate Democratic leaders are now searching for a way to get a fix passed separately to keep Republicans from tacking it onto health care reform legislation in an effort to defeat it.
"We can still do it outside of health care reform, which is how we do it every year anyway," said Sen Patty Murray, D-Wash., a member of the Democratic Senate leadership team. "We still have not decided yet."