Cut to: Medicare ‘cuts’

At the moment, it looks like Medicare may be the gift that keeps on giving for the GOP. For the 2010 midterm elections, Republicans packaged a powerful, if factually-incomplete, talking point on Medicare–the $500 billion in “cuts” to Medicare engineered by Obamacare architects to help pay for subsidies for the uninsured. The “cuts” largely represented reduced reimbursements to hospitals and other providers, not basic benefits for seniors–crucial context that too often went missing in press coverage. Talking point in hand, Republicans targeted members of Congress who voted for health reform, and frightened seniors gave Republicans big wins that year.

In 2012, the Congressional Budget Office did some recalculating and found that the “cuts” were really $716 billion. On the campaign trail, Mitt Romney called it a raid on the Medicare trust fund that Obama “used to pay for Obamacare, a risky unproven federal government takeover of healthcare.” Seniors, still wary of “cuts,” helped the GOP keep its edge in the House that year. Again, the press did little to set the record straight or note what the supposed cuts were about (largely reductions to hospitals and providers), the part they played in financing Obamacare (subsidies for the uninsired), and the benefits the law gave seniors (free preventive care, for example). “Nobody seemed to step back and say what Medicare is, who gets it and how it works,” I wrote in a post-mortem on Medicare coverage at the end of 2012.

But wait! The media might still have a chance for redemption. Saturday, Florida Republican Rep. Tom Rooney sent some pretty clear signals in the Republicans’ weekly address: Medicare, the campaign warhorse, was back and ready for political action. Rooney said, “To help pay for his healthcare law, the president made deep cuts to the successful Medicare Advantage program, which serves nearly 30 percent of all Medicare beneficiaries.” Rooney accused the administration of a “breach of faith” with seniors, saying, as CBS News paraphrased, “stories of seniors losing access to their longtime doctors belie the president’s pledge that Obamacare would let people keep their doctors.” Rooney was using “cuts” as a scary talking point just as Republicans had done in two previous election cycles–but he also injected a new point that plays into Obama’s discredited campaign promise that if people liked their doctors, they could keep them.

Last Thursday, Republican leaders wrote to the president urging him not to cut government payments to Medicare Advantage plans (cuts included in Obamacare because of concerns that government had been overpaying insurance companies). According to Politico, the insurance industry is expecting an announcement at the end of this week of a significant cut and, like last year, it is ready to fight.

About a year ago, insurance companies mobilized their sham grassroots group, the Coalition for Medicare Choices, to send letters to Congress and the Administration and pump big bucks in to studies, national advertising, and press releases noting that payment cuts would cause typical seniors with Medicare Advantage plans to see monthly premiums rise as much as $90–a claim the press did not investigate. In fact, press coverage was virtually nonexistent, and in the end the industry did not get a payment cut but a 3.3 percent raise from the government, which Politico called “one of the greatest political victories in recent memories.”

This year, the Coalition for Medicare Choices again is hard at work using the same strategy and a national grassroots and advocacy campaign called “Seniors are Watching.” The industry’s trade group, America’s Health Insurance Plans (AHIP), cites a new analysis by the firm Oliver Wyman (which prepared last year’s analysis) saying that those enrolled in Medicare Advantage plans could face premium increases and benefit reductions of $35 to $75 a month–a claim that also needs to be examined. To help reach their goal of maintaining current payment levels for next year, AHIP has enlisted support from other groups such as the National Hispanic Medical Association and the Healthcare Leadership Council, an organization of chief executives of all the big players in healthcare (hospitals, academic medical centers, drug companies, bio tech firms) that have an interest in making sure Medicare beneficiaries have large benefits to pay for the products and services they sell.

There’s a new twist to this year’s campaign. Angst over narrow networks has understandably hit the senior set, and they are complaining, as Rep. Rooney noted in his Saturday chat. In December, Susan Jaffe reported for Kaiser Health News that UnitedHealthcare, the biggest seller of Medicare Advantage plans, was dropping hundreds of doctors from its plans to slow down increases in medical costs and “sustain our plans in an era of Medicare Advantage funding cuts.” A few days later, Jaffe reported a federal judge in Connecticut had temporarily blocked United from dropping more than 2000 docs in the state. The Washington Post hopped on the story in late January, reporting that while some beneficiaries might be unhappy, smaller networks will lead to better patient care because health plans will work more closely with doctors. Who knows if that will happen, or if it’s just a quote that sounds good to reporters.

What’s more certain is that the cuts and narrow networks are tied up with Obamacare, and in an election year they will build a “pretty powerful frame,” as Harvard pollster Robert Blendon told Politico (behind Politico Pro paywall). “It’s [Medicare cuts] not going to be a politically popular thing, and it’s going to be wrapped around a Republican criticism of the Affordable Care Act,” he said. That itself is a good story–a political one that offers a chance again to explain the difference between cuts and savings, and examine the cross-subsidies in the Affordable Care Act. But there’s more. It’s also a story about the bottom lines of insurance companies who want to make sure Medicare Advantage plans are super attractive to seniors–meaning, low premiums and lots of benefits which extra government payments have historically paid for. Last year, John Wasik, writing for the now-defunct Medicare News group, noted that while the insurance industry prefers to focus on what “cuts” might cost seniors, the industry’s own financial interests would run something like $11 billion in 2014. This year the numbers may be different, but the back story is the same. Reporters need to put the talking points in context and honestly explain to seniors what’s at stake for them.

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