Setting the Record Straight on Campaign Ads

Who’s telling the truth about Medicare?

Pity the senior citizens in the voting booth Tuesday. Who should they believe about Medicare—the Dems and their surrogates, who say health reform has strengthened the program, or the GOP and its allies, who charge that reform has gutted it? Both sides have cynically exploited Medicare, and anecdotal evidence shows that the fierce onslaught of campaign advertising is having an effect.

The Wall Street Journal went to Wisconsin and looked at the hot race between Democratic Rep. Steve Kagen and his challenger, Reid Ribble. The Journal’s reporters told of one woman who was going to support Kagen because she was “really upset” with the ads attacking him. But they found a retired industrial consultant who complained that a video of Ribble that Kagan used in his ad was incomplete and misleading. “One thing that sticks in my craw is false advertising,” he said. “How are we supposed to know what is true and what is false?”

That is the question, and Campaign Desk is pleased that so many media outlets have tried to answer it by analyzing the ads and reporting their findings. But the quality of their analyses has varied widely. Where the claims were clearly right or wrong, the task was easy. In Indiana, when Republican senatorial candidate Dan Coats announced that his opponent, congressman Brad Ellsworth, “voted with Nancy Pelosi to force seniors into Barack Obama’s government-run health care program,” it was simple for PolitiFact’s truth-o-meter to debunk the claim. Medicare already is a government-run program, and has been since it began in 1965.

In other cases, the analyses have been harder, especially when it came to figuring out who is bankrolling some of the ads in this year’s campaigns. Slate took a good in-depth look at the 60 Plus Association, which calls itself a “nationally recognized conservative alternative to the liberal AARP.” Political reporter David Weigel pointed out that 60 Plus does not have to disclose its donors, but is “dumping $6 million on ads,” raising the question of who’s paying for them.

His piece described an ad the group ran in northeast Pennsylvania attacking Democrat Paul Kanjorski:

‘Washington liberals like Paul Kanjorski have betrayed Pennsylvania seniors,’ said the first man. ‘He voted for Nancy Pelosi’s big government health care plan that costs a trillion dollars,’ said the second, interrupted by the third, who informed viewers that this plan ‘raises taxes and cuts $500 billion from Medicare.’ ‘Seniors could lose their doctors,’ said the first man, bringing it home.

Other ads from 60 Plus also emphasize the $500 billion Medicare cut. Their message is unmistakable: that $500 billion will hurt seniors. The 60 Plus Association pushed its New York ads on its website, where the group’s chairman asserts “The new health legislation cuts $500 billion from Medicare” and notes the cancellation of one Medicare Advantage (MA) plan, which has affected 22,000 seniors as a result.

Sometimes, refuting the ads’ claims often requires answers that are not as short, snappy, or as memorable as the claims themselves, making them hard for readers to grasp. In Pennsylvania, Crossroads GPS, a group connected to Republican strategists Karl Rove and Ed Gillespie, attacked Democrat Joe Sestak, claiming that “Sestak voted to gut Medicare—a $500 billion cut. Reduced benefits for 850,000 Pennsylvania seniors.” The Associated Press examined that one, concluding that the cuts are spread over ten years and slash projected payment increases to hospitals, insurance companies, and other government health programs. “The Congressional Budget Office places the overall costs of Medicare over 10 years at $7.1 trillion, making the reductions required by the new law amount to 7 percent of Medicare costs. Not exactly a ‘gutting,’” said the AP. Not exactly an easily understood refutation for the public, which tends to stumble over numbers. It might have been easier for readers simply to say that the $500 billion is a small percentage—7 percent—of Medicare’s total budget. The AP also missed the fact that there are spending increases that the law provided for, as well.

As for benefit reductions for the 850,000 Pennsylvania seniors—that, too, is tricky. That’s the number of Pennsylvanians who have MA plans, and the truth is that some may well see a benefit cut in the optional benefits those plans offer. (Medicare Advantage plans are a type of coverage that provide all the government required benefits, and lots of extras like gym memberships and vision care for about one-quarter of all beneficiaries.) The AP reported that the law “did not cut benefits guaranteed under traditional Medicare.” But Medicare Advantage is a slippery slope, and beneficiaries don’t distinguish between benefits provided under traditional Medicare and the popular extras.

The Denver Post’s political polygraph took on MA plans, but muddied the point. First it said that the Centers for Medicare and Medicaid Services “has assured seniors who paid extra to participate in the privately-managed Medicare Advantage plans that they will not see their benefits reduced.” That left me confused. In general, seniors pay lower premiums to participate in these plans. That’s why they are so popular. In the next graph, if readers got that far, the paper reports that the health reform law does reduce overpayments, but MA plan members will still get guaranteed Medicare benefits, which are not defined. They should be.

To beneficiaries, a cut is a cut, and administration spokespeople along with health reform advocates have downplayed the looming cuts to Medicare Advantage plans, which seniors will start to feel in the next few years, a point The Washington Post made in its examination of the misleading claims. A letter sent in early October from Medicare’s chief actuary, Richard Foster, to Iowa Republican senator Charles Grassley explains that the reduction in government payments to sellers of Medicare Advantage plans will indeed result in “significant increases” in out-of-pocket costs beginning in 2011, and those increases could be as much as $873 in 2019.

For reporters taking a look at your local ads in the next two days—and we hope you do—here are the facts:

The health reform law cuts the growth in Medicare spending by $533 billlion. (Some like to call that a savings because Medicare might not be spending as much as it otherwise would, but the term can be confusing.) But it also adds $105 billion in new spending for more coverage for seniors who have very high drug expenses, and the elimination of copayments for preventive services. The net reduction in Medicare spending is $428 billion over ten years.

About 40 percent of those cuts come from payment reductions to hospitals, nursing homes, home health agencies, and other providers, except doctors. Congress will deal with payments to doctors separately. That money will be used to subsidize insurance policies for the uninsured. Another twenty five percent comes from reductions in the overpayments to Medicare Advantage plans. In 2010, the government has been paying insurers nine percent more on average to provide the same benefits it pays to care for beneficiaries in the traditional Medicare program. “Eliminating the overpayments helps prolong the life of the Medicare trust fund,” says Tricia Newman, vice president of the Kaiser Family Foundation.

Phasing out the overpayments will also hold down the increases in Part B premiums, which all beneficiaries pay to help cover the costs of doctor, lab, and hospital outpatient services. While cuts to MA plans may be unpopular with those who have them, cutting the overpayments sense does strengthen Medicare for everyone at a time when the program faces significant financial challenges.

Most people, especially those on Medicare, have never really understood how the program works. That’s made it easier for each side to get away with advertising flim-flam. Right after the election as Medicare’s open enrollment begins, it would be great if all those media outlets that have dissected campaign ads start telling their readers what the advertising missed, which I discuss in the accompanying post.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman.