Emerging 'doc fix' deal includes only a partial cost offset

A proposed congressional "doc fix" deal will include a permanent repeal ofMedicare's sustainable growth-rate formula and a two-year extension of theChildren's Health Insurance Program with a total cost exceeding $200 billion. 

Only a portion of the cost will be offset by spending cuts, said four lobbyists familiar with the negotiations. Funding a permanent fix has stymied Congress during past attempts to move beyond a temporary patch for the issue, as was done last year.

Details are still subject to negotiations between House Speaker John Boehner and Minority Leader Nancy Pelosi and therefore could change, sources warned.

Only about $70 billion is expected to be offset by spending cuts. Those spending reductions are anticipated to be split roughly evenly between cuts to providers and changes to benefits. The latter is expected to include increased cost-sharing for wealthier Medicare beneficiaries. 

That lack of corresponding spending reductions is certain to be controversial within the Republican caucus. The conservative advocacy group Heritage Action for America already has issued a statement blasting a doc fix that's not entirely paid for with spending reductions. 

“Any permanent solution must be financed with permanent Medicare savings, period,” said spokesman Dan Holler. “Americans didn't hand Republicans a historic House majority to engage in more deficit spending and budget gimmickry.”