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Kaiser Family Foundation Ad Audit: Message Sacrifices Truth About Health Bills And Medicare
AD TITLE: “Greatest Generation”
SPONSOR: The 60 Plus Association
SUMMARY: A conservative advocacy group uses testimony from sympathetic older Americans to warn that a health care overhaul would impair Medicare, the government health care program for the elderly. The ad says older Americans should be shielded from spending cuts because of their great sacrifices for the country. But it’s truth that’s sacrificed here: the ad exaggerates the impact of proposed Medicare cuts and ignores some improvements in Medicare benefits included in the main Democratic bills before Congress.
BACKGROUND: The 60 Plus Association, a nonprofit advocacy group that bills itself as a conservative counterweight to AARP, favors lower taxes and less government. The group says it is has purchased $2 million in airtime in eight states that are homes to key senators: Alaska, Arkansas, Connecticut, Louisiana, Maine, Nebraska, North Dakota and South Dakota. The ads come in 30-second and 60-second versions.
POLITICS: The ad is part of a broader effort to increase concerns among older Americans about pending health care legislation. The insurance industry’s main lobbying group, America’s Health Insurance Plans, made a similar argument in ads last month. Both AHIP and 60 Plus are upset about proposals to create government-run insurance that would compete with private companies in selling coverage to people under age 65. Since many surveys show substantial support for the public option, however, the opponents are focusing on something else: The bills’ potential impact on the popular Medicare program.
ACCURACY: The health bills would reduce Medicare spending, but it’s highly unlikely medical care for the elderly would suffer, many health analysts say. “This ad is clearly intended to frighten people with a great deal of misinformation,” says Judith Stein, executive director of the Center for Medicare Advocacy, a Connecticut-based nonprofit that helps people secure Medicare benefits.
Under the Senate Finance Committee bill, Medicare spending, on net, would be $379 billion less over a decade, or about 5 percent of program expenditures, than under current law. In both that bill and the House proposal, a big chunk of the cuts would involve Medicare Advantage plans that are run by private insurers and often provide additional benefits beyond what traditional fee-for-service Medicare offers. The Finance bill targets Medicare Advantage for $117 billion in cutbacks over a decade; the House bill, $170 billion, according to the Congressional Budget Office.
Congress is eyeing Medicare Advantage plans largely because they spend an average of about 14 percent more on their members than traditional Medicare spends on its beneficiaries. If the cuts are enacted, the number of Medicare Advantage plans might decline. In addition, those that survive might pare back some of the extra benefits they offer, such as low or zero monthly premiums, dental care and free gym memberships. But no one would be denied basic Medicare benefits.
On the other hand, not all the proposed reductions would be painless – especially for the providers who would bear the brunt of other Medicare cuts. Overall, though, the cuts would be substantially less than the reductions approved by Congress in 1997 to balance the federal budget deficit, according to Tricia Neuman, a Medicare expert at the Kaiser Family Foundation. (KHN is a part of the foundation.) Congress ended up restoring some of that money a few years later. Lawmakers were worried some of the reductions, including those for skilled nursing facilities, were too severe. “It’s hard to anticipate changes in the health care system,” Neuman says. “Ongoing tweaks may be necessary.”
The ad’s warning about the rationing of “potentially life-saving drugs” lacks support. The 60 Plus Association tries to back up this claim by citing a few news stories about patients in England and Canada denied drugs by government insurers. But far from restricting access to drugs, “ironically, there are enhancements to the Medicare drug benefits” in the health overhaul bills, says Paul Ginsburg, president of the Center for Studying Health System Change, a Washington research group.
The bills being debated would eliminate co-payments for preventive services. In addition, the House bill would provide a 50 percent discount on brand-name drugs purchased when beneficiaries hit the coverage gap known as the “doughnut hole,” and it would gradually eliminate the gap. The Senate Finance bill would not close the doughnut hole, but it would provide the discount, which was negotiated with the Obama administration and the pharmaceutical lobby earlier this year. The House bill also would require Medicare to cover immunosuppressive drugs for as long as kidney transplant recipients need them, rather than for the current 36 months.
Overall the ad’s argument is built on a logical inconsistency: It raises the specter of “government-run health care” to increase concerns among both young and old. But at the same time it extols Medicare – which is government-run health care for people 65 and older.
Source: Kaiser Health News, Jordan Rau, KHN Staff Writer
Medicare Private Insurance Companies Are At It Again
Late last week Humana, one of the largest private insurance companies offering Medicare Advantage and prescription drug plans under Medicare, sent a letter to the Medicare beneficiaries enrolled in their HMOs and other Medicare Advantage plans. The outside envelope warned that the letter contained important information about their Medicare benefits. The letter itself said that Congress was considering cuts to Medicare in its health care reform legislation, these cuts would result in reduced benefits for Humana plan enrollees, and enrollees should contact their members of Congress to protest the cuts.
This is not the first time that private Medicare plans have written their enrollees with misinformation about alleged Medicare cuts. The Center for Medicare Advocacy and a number of other beneficiary organizations have been concerned for years about these kinds of mailings by private Medicare plans. We recently asked CMS to modify its guidance to private Medicare plans in order to specifically identify these communications as marketing materials, which are subject to CMS oversight and review. We said in our comments:
We are very concerned about plan sponsors soliciting their enrollees to join “grassroots” efforts to influence Medicare policy via member newsletters and other means. …We believe there should be a prohibition on plan sponsors soliciting members’ participation in political activities, particularly those that benefit the plan sponsor, and urge CMS to analyze whether such activity already violates current law.
CMS did not amend its guidance to plans per our suggestion, but it did take swift action against Humana. CMS sent a letter to Humana yesterday telling the organization to stop sending misleading and confusing communications, and that it believed such communications are potentially contrary to federal regulations and guidance. CMS further advised that the agency takes this matter very seriously and could pursue compliance and enforcement actions. CMS also sent a comparable memo to all private insurance companies telling them not to send similar communications.
We thank CMS for acting so swiftly to curb misleading and confusing communications to people in their Medicare plans. While we are pleased that the government is exercising its oversight and enforcement authority, we see this incident as another example of how reliance on private insurance companies can generate confusion and fear for Medicare beneficiaries. This happens because the interests of private Medicare plans are not always in accord with the interests of Medicare beneficiaries.
Watch and See Why We Need A Public Health Plan
An animated cartoon is worth a thousand words:
Why the Public Option is Critical
Stephen M. Davidson
Professor of health policy and management at the Boston University School of Management
Originally posted on the Huffington Post, August 19, 2009 02:03 PM
The health reform proposals being considered by Congress depend on private insurance companies competing. Proponents of this strategy believe that to win subscribers from competitors, insurers will need to find innovative ways to keep costs down at the same time they provide good coverage. To keep them focused on providing good value to the public, some of the proposals, including the President’s original one, include a public plan to compete with the private firms. If retained in the bills, this contentious provision may sink the reform effort. So, how important is it to achieving reform’s goals?
The answer is no mystery: The competition strategy is so weak that the public option is essential. The fact is that competition is a good thing only when it produces innovation that leads to better, less expensive things for sale. The new computer we bought a year ago was faster, more powerful, and less expensive than the one it replaced — in part, at least, because of competition.
The U.S. already has the most competitive health insurance system in the world. Many insurers make lots of money. How do they do it? My colleague, Jim Post, who has studied the industry, reports insurers have only 3 factors to work with: who is covered (availability), what they are covered for (quality), and price. So, among other things, in the present, badly broken system, they refuse to cover people with pre-existing conditions or make coverage so expensive for such people that they cannot afford it. They provide coverage that excludes some of the services their subscribers need. They charge cost-sharing amounts that make doctor-recommended services unaffordable for many covered patients. They introduce administrative procedures that make it difficult for patients to receive and doctors to provide covered services. And with it all, instead of falling, premiums keep rising and lead increasing numbers of employers and employees to drop coverage.
So, given this history, how do policy makers arrange for a competition-based strategy that will cover everyone and keep costs under control? The president and his allies in Congress have proposed 2 main strategies. One is to impose regulations that prohibit the firms from using the tactics just described. Guaranteed issue and renewal, community-rated premiums, and limits to cost-sharing would be required.
But if private insurers can no longer engage in the tactics that got them to profitability, what methods are left to them? How will they keep spending under control at the same time they provide value to the public? That is a question they should be forced to answer.
To protect the public against the possibility that they will find ways to vary the 3 factors in their control in ways that undermine the reform goals, the second proposed strategy is to introduce a publicly operated plan to compete with the private firms. The primary mission of this government-run insurer would be to offer affordable coverage for people who could not find it from private firms. It would not need to earn a profit for shareholders, nor to engage in expensive marketing campaigns to win subscribers. In order to avoid losing too many subscribers to it, the idea is that private insurers would need to respond to its offerings. The coops that are suggested as a substitute pale in comparison.
The best hope insurers — and the public — have to achieve the goals of reform is to change the incentives on providers by ending fee-for-service payment and to promote the development of integrated group practices which would have the means to furnish better, more efficient care. This being the case, should we expect insurers to contract selectively with physicians and pay capitation rates? Will they encourage creation of integrated delivery systems which, being fewer in number and larger than most of today’s practices, would have more bargaining clout over rates and terms?
If we are stuck with a competition-based strategy, the public option is the last, best chance for private insurers to show us they can provide better value at lower cost. The public option is needed because the insurers have already demonstrated that they do not do that on their own.
Supporters of reform should demand that Senator Conrad and his like-minded colleagues who oppose the public option answer these questions: In the absence of the public option, what actions will insurers take to accomplish the goals of reform? And why they have not used them until now?
Advocates of the public option should not allow themselves to be put on the defensive. Instead, they should insist that opponents explain what innovations insurers will introduce to provide good value at affordable prices.
Stephen M. Davidson, a Boston University School of Management professor, is author of the forthcoming book, In Urgent Need of Reform: The U. S. Health Care System.
Can We Afford a Private Health Plan Option?
Last week, Congressman Anthony Weiner (D. NY) asked TV commentator (and former Congressman) Joe Scarborough a series of questions about private insurance companies that form the lynchpin of our current health care system and around which health care reform may be based. Congressman Weiner asked: “Why are we paying profits for insurance companies? Why are we paying overhead for insurance companies? Why are we paying for their TV commercials? What is their value? What are they bringing to the deal?”
Here’s what we know about the role private health insurance companies play in our health care system – and might well play in healthcare “reform”:
1. Private insurance companies decide which doctors we see. Most Americans are in network plans that require them to use the doctors who allowed into their network. Some plans allow members to go to non-network providers, but only if the individual pays more out-of-pocket. Private insurance supporters argue that people are always free to go to a doctor who isn’t in their insurance plan’s network, but if they do so they have to pay the full cost themselves, something most Americans cannot afford.
2. Private insurance plans decide who gets insurance. They reject people who use too much health care, rescind contracts from high health-care users, and deny health insurance and/or coverage to people with pre-existing conditions. Plans also charge higher premiums for people based on what they determine to be a pre-existing condition or based on the individual’s gender, making health insurance unaffordable for many people.
3. Private insurance companies decide what health care will be provided and paid for. They decide what services will be covered in the insurance package they offer. They establish drug formularies and prior approval requirements for drugs and procedures. They set the standards for the documentation and proof they require to determine whether a prescribed treatment is medically necessary, and each plan has its own requirements. Private insurance plans are not bound by what your doctor thinks is best for you, and they may override your doctor’s recommendation, and refuse coverage.
4. Private insurance companies increase the administrative work load for doctors’ offices. Staff must submit different health claim forms for different insurance companies and comply with each plan’s own formularies and requirements for submitting medical records to justify claims. They must spend hours on the phone with insurance companies to verify coverage, cost sharing, and formulary rules.
5. Private insurance companies encourage people to ration health care. By developing products with high deductibles and cost-sharing, private health insurance companies encourage enrollees to think twice about getting the care their doctors prescribe. Unfortunately, such decisions are often based on cost rather than on medical necessity and/or quality of care. Someone who delays needed care because of a high deductible or high cost-sharing amount may leave a condition untreated, and may end up requiring more costly health care in the future.
6. Private insurance companies are highly profitable industries, for their investors. According to insurance industry filings with the federal Securities and Exchange Commission, profits for the 10 largest publically traded health insurance companies rose 428% from 2000 to 2007, from $2.4 billion to $12.9 billion. During the same time period, the number of uninsured continued to rise, although the economic downturn enabled some individuals to get insurance through state Medicaid programs, many lost their health insurance due to lay-offs.
What do we get from private insurance companies? A system that decides who gets insurance and who does not; that comes between patients and their doctors – and that makes profits for investors. Is this the right direction for our country to take in “reforming” the health care system? Can we afford this? And who stands to gain?
Can Blue Dogs Learn New Tricks?
The Coalition of 52 conservative “Blue Dog” Democrats in the House of Representatives has emerged as a potential roadblock to passage of a health care reform bill in the House of Representatives. There are eight Blue Dogs on the Energy and Commerce Committee, the remaining House Committee with jurisdiction over health care to vote on the bill before it goes to the floor of the House for a vote. Concerns raised by seven of the eight Blue Dogs about the health care bill have caused the Committee to delay its consideration of the pending legislation. What makes the Blue Dogs’ resistance so fascinating is not their politics, but rather their constituents.
In the 111th Congress there are 48 Congressional districts that were won by John McCain in the election but that are represented by a Democrat in the House. Most of these districts are rural, blue collar areas. Blue Dog Democrats represent most of them. On July 10th 2009 Gallup released their study of every Congressional district on “Health and Well Being”. One of the questions asked in this survey was whether citizens had health insurance. The median uninsured population of all Congressional districts is 14.6%. Of the 48 Districts won by McCain, 31 (roughly two-thirds) have numbers of uninsured well above the national median.
Take for example the districts of four Blue Dogs who are on the Energy and Commerce Committee: Charlie Melancon D-LA (21.9% Uninsured), Mike Ross D-AR (21.8% Uninsured), Bart Gordon D-TN (17.3% Uninsured) and Zachary Space D-OH (16.8% Uninsured). The House and Senate proposals are meant to assist these rural poor districts by directing the Institute of Medicine to study geographic inequities in Medicare reimbursement rates, and instructing the Health and Human Services Secretary to revise payment rates based on the findings. The bill even ensures that rural doctors are paid the same rate for their work as urban doctors. Yet, Health reform’s biggest obstacle might just be the representatives of those who need, and will benefit from, reform the most.
Can’t anyone teach these Blue Dogs new tricks?
Yes, Virginia, A Public Health Insurance Option Will Save Money and Provide Access To Good Care
Once again, probing, independent minds have concluded that a public health option will save money and provide stable access to health care. A new Commonwealth Fund report finds “A public insurance plan can help drive new efficiencies in the system that will produce large cost reductions. Without a public plan, much of those potential savings will be lost,”
With a public option and a standard set of benefits across all private and public plans, everyone will be better able to access coverage they can understand, at a price taxpayers can afford.
We get it. We need health care reform. We need a public option. We don’t believe in fairy tales. Tell Congress!
A Fourth of July Reflection on the Health Reform Debate
“Millions of our citizens do not now have a full measure of opportunity to achieve and enjoy good health. Millions do not now have protection or security against the economic effects of sickness. The time has arrived for action to help them attain that opportunity and that protection.”
President Obama might have spoken those words in recent weeks. Instead, President Truman spoke them over 65 years ago. With nearly 47 million Americans uninsured and millions more underinsured, most Americans are just one pink slip or accident away from financial disaster. The writing is on the wall, and the environment could not be more ready for health care reform. Already this summer, the Congress has produced three different reform proposals:
- The Senate Health, Education, Labor and Pensions (HELP) Committee released Sen. Kennedy’s (D-MA) draft proposal the “Affordable Health Choices Act” on June 9th. The “Affordable Health Choices Act” attempts to improve access to coverage by regulating insurers. The proposal expands Medicaid (to include families who earn up to 150% of the Federal Poverty Level) and SCHIP. The proposal is built upon establishing state-sponsored insurance Gateways (or exchanges) to help Americans find affordable coverage. The current proposal would provide subsidies for buying health insurance through plans inside the Gateways to families with annual incomes as high as five times the poverty level. Senator Dodd (D-CT) announced on July 2nd that the HELP Committee bill will include a strong, national, public health plan option.
- The House has also released a draft version of a Health Reform bill with their Tri-Committee Proposal. The current proposal would set up a new Health Insurance Exchange which would allow individuals and small employers to shop among private and public plans. The proposal also provides sliding scale affordability credits, expands Medicaid (to those earning 133% of the Federal Poverty Level) and caps out-of-pocket expenses. Individuals will be responsible for having health insurance coverage, and employers will have the option of providing health insurance coverage for their workers or contributing funds on their behalf. Small businesses, with payrolls less than $250,000 per year, will be exempt from the employer responsibility requirement.
- The Senate finance committee, chaired by Sen. Max Baucus (D-MT), will release its proposal imminently.
Just as we come together to barbecue or watch the fireworks on July 4th, those of us who believe in the promise of health care for all must also come together. This holiday is a time for us to reaffirm our will to fight the cynics who don’t believe in the essential promises of our land of opportunity and to renew the goal of health care for every American. Our representatives need to hear our voices! Please call your representative and message your members to act for this is our time to fight for our ideals. This week Families USA has published a toll free number that can be used to reach members of Congress. On July 7th and 8th you can call 1-866-210-3678 to connect to the Congressional Switchboard to speak to your representative. Help flood the switchboard. Together we can achieve the reform that we are fighting for.
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