TRUTH TEST: The future of Medicare Advantage

KUSA - 9NEWS remains committed to holding those who run political commercials on our stations accountable for what they say, including a recent ad about health care reform.

The following Truth Test looks at a 30-second ad paid for by a group called America's Health Insurance Plans (AHIP), which describes itself on its Web site as "the national association representing nearly 1,300 member companies providing health insurance coverage to more than 200 million Americans. Our member companies offer medical insurance, long-term care insurance, disability income insurance, dental insurance, supplemental insurance, stop-loss insurance and reinsurance to consumers, employers and public purchasers." (Source: AHIP Web site: http://www.ahip.org/)

The group has also created a Web site to discuss the impact of current health care reform legislation on Medicare Advantage: www.Medicarechoices.org.  

AHIP spent a gross total of $105,700 to run 84 commercials on the networks of 9NEWS through Nov. 8

QUOTE: There's news from the government on how health care reform might affect nearly 200,000 Colorado seniors on Medicare Advantage.

TRUTH: Medicare Advantage (MA) is a program where seniors get their benefits from a private insurer instead of through the government-sponsored fee-for-service program. The government estimates it's roughly a 78-22 split, with 78 percent of seniors getting their care through traditional Medicare while the other 22 percent goes through MA. Those who are in the Advantage programs get all the Medicare-covered benefits plus extra benefits such as coverage for eyeglasses or gym memberships. They also could pay a little less in premiums and co-pays. It's not available everywhere in the country and Advantage plans act much like an HMO and have limits on who you can see for services. (Source: Medicare: http://www.medicare.gov/Choices/Advantage.asp)

The government has estimated it pays an average of 14 percent more per Medicare patient in the Advantage program than for traditional Medicare patients. Advantage combines hospitalization, outpatient and pharmaceutical services under a single plan rather than the per service concept of Medicare. (Source: Government Accountability Office Report: http://www.gao.gov/new.items/d08522t.pdf)  

Roughly one in three Colorado seniors is enrolled in a Medicare Advantage program.

There are 185,673 seniors living in Colorado who are enrolled in a Medicare Advantage program, according to the Web site Statehealthfacts.org, which is a project of the national non profit Henry J. Kaiser Family Foundation. It is not associated with Kaiser Permanente or Kaiser Industries. The same Web site estimates there are 10,259,669 seniors enrolled in Medicare Advantage nationwide. (Source: http://www.statehealthfacts.org/profileind.jsp?cat=6&sub=79&rgn=7)

The U.S. Census estimates that in 2008, 10.3 percent of Colorado's population or 508,763 residents, are above 65 years of age, the eligibility level for Medicare. (Source: U.S. Census Colorado QuickFacts: http://quickfacts.census.gov/qfd/states/08000.html)  

QUOTE: The news isn't good. A new independent government analysis says Congress is cutting over $100 billion from Medicare Advantage.

TRUTH: This definitely needs context.

First of all, both chambers of Congress are looking at cuts in the Medicare Advantage program as a way to pay for health care reform, but nothing is a done deal. That's why the commercial is being run, to influence members on the issue.

Secondly, the numbers here are a bit off. The government analysis is from the Centers for Medicare and Medicaid Services' (CMS) Office of the Actuary. (Source: http://republicans.waysandmeans.house.gov/UploadedFiles/OACT_Memorandum_on_Financial_Impact_of_H_R__3200_.pdf)

It analyzed the House version of health care reform, H.R. 3200. (Source: H.R. 3200: http://www.govtrack.us/congress/billreport.xpd?bill=h111-3200&type=cbo) In the House version, there are $170 billion in proposed cuts to Medicare Advantage. In the Senate version passed by the Senate Finance Committee, that number is closer to $113 billion. (E-mail from AHIP's Robert Zirkelbach to 9NEWS on Nov. 2) Both estimate the cuts would be phased in over the course of the next ten years.

The $100-plus billion in savings would arise because the private insurers currently giving care through the Advantage program would be required to bid competitively for the right to sign up seniors. The Actuary report states that provision in the legislation would "reduce MA rebates to plans and thereby result in less generous benefit packages." (Source: http://republicans.waysandmeans.house.gov/UploadedFiles/OACT_Memorandum_on_Financial_Impact_of_H_R__3200_.pdf)  

The debate may be moot as Sen. Bill Nelson (D-Florida) has introduced an amendment to the Senate Finance Committee version to grandfather most of the current benefits enjoyed by current Medicare Advantage patients. (Source: http://billnelson.senate.gov/news/details.cfm?id=318577&). It has yet to be decided

QUOTE: The same government report warns over 5 million American seniors could lose their Medicare Advantage coverage.

TRUTH: This needs some context as well.

First, supporters of the cuts to Medicare Advantage, including President Obama, have argued that no one who is eligible for Medicare will lose any of the benefits currently offered under Medicare.

The president told ABC's George Stephanopolous that current Advantage consumers "are going to be able to get Medicare that is just as good, provides the same benefits, but we're not subsidizing [the insurance industry] for $18 billion a year... We're not going to take a dollar out of the Medicare trust fund. We're going to make sure that benefits are just as strong if not stronger. We're not going to subsidize insurance companies in ways that end up creating a situation that Medicare is actually weaker and has a less financial foundation." (Source: ABC News: http://blogs.abcnews.com/george/2009/09/obama-defends-medicare-advantage-cuts.html)

The Actuary report cited here says five to six million seniors currently enrolled in the plan would not be enrolled in Medicare Advantage plans by 2014 because as we reported above, the legislation would result in "less generous benefit packages." (Source: http://republicans.waysandmeans.house.gov/UploadedFiles/OACT_Memorandum_on_Financial_Impact_of_H_R__3200_.pdf)  

QUOTE: Read the report. Call your representative. Stop the cuts to Medicare Advantage.

TRUTH: This is an opinion.