Health Care Facts President Obama Doesn’t Want You to Know

Propaganda Campaign Targeting Seniors Omits Findings of Medicare’s Own Actuaries

The Administration recently announced it would be mailing flyers to more than 40 million seniors at taxpayer expense to “educate” them about the provisions of the newly enacted health care law.[i] However, an examination of the leaflet[ii] reveals that the Administration’s newest political campaign to sell the health care law resulted in the omission of facts that Democrats may consider to be inconvenient truths:

CLAIM:         “More affordable prescription drugs.”

FACT:            All seniors paying Part D premiums will see their costs rise so that only a few million seniors will benefit. Specifically, the Congressional Budget Office (CBO) found that “the law would lead to an average increase in premiums for Part D beneficiaries of about 4 percent in 2011, rising to about 9 percent in 2019.”[iii] While 2.9 million seniors were fully exposed to the Part D “doughnut hole,” and thus will receive all the new law’s benefits, more than 17 million seniors will pay higher prescription drug premiums so this much smaller subset can benefit.[iv]

CLAIM:         “This [legislation] will extend the life of the Medicare trust fund by 12 years.”

FACT:            The Medicare actuaries found that the law’s Medicare provisions “cannot be simultaneously used to finance other federal outlays and to extend the [Medicare] trust fund, despite the appearance of this result” because of Democrats’ budgetary double-counting.[v] The CBO agrees: hundreds of billions of dollars in “Medicare savings” will be re-directed toward creating a new entitlement program, such that the legislation “would not enhance the ability of the government to pay for future Medicare benefits.”[vi]

CLAIM:         “Improvements to Medicare Advantage.”

FACT:            Projected enrollment in the popular Medicare Advantage (MA) program will be cut in half.  According to Medicare’s actuaries, “enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law).”[vii] The actuaries also found that the bill’s cuts will “result in less generous benefit packages,” leading those seniors who still have access to MA plans to lose their extra benefits.[viii]

CLAIM:         “The guaranteed Medicare benefits you currently receive will remain the same.”

FACT:            According to Medicare’s actuaries, about “15 percent of Part A providers would become unprofitable within the 10-year projection period” because of the health care law.[ix] The actuary report also found that the Medicare provisions may lead some providers to terminate their participation in Medicare entirely, “possibly jeopardizing access to care for Medicare beneficiaries.”[x]

CLAIM:         “Insurance companies will be prohibited from denying coverage due to a pre-existing condition for children starting in September, and for adults in 2014.”

FACT:            The health law gives an exemption from the pre-existing condition restrictions to insurance companies selling Medigap plans. So AARP and other plans selling insurance to vulnerable seniors can continue to impose waiting periods on beneficiaries needing care for chronic conditions, as AARP currently does.[xi]

CLAIM:         “The new law creates a program to preserve [retiree health] plans and help people who retire before age 65 get the affordable care they need.”

FACT:            One recent study found that a single provision in the health care law—eliminating a tax subsidy for employers who cover their retirees’ pharmaceutical expenses—could result in as many as two million retirees losing their drug coverage.[xii] Moreover, the Medicare actuaries found that the new retiree health program was under-funded, and would run out of funds “within the first one to three years of operation.”[xiii]

CLAIM:         “The new law creates a new voluntary insurance program called CLASS to help pay for long-term care and support at home.”

FACT:            The plain text of the health care law notes that individuals must pay premiums into the CLASS program for five years before becoming eligible for benefits. In addition, an individual must be “actively employed” and “not a patient in a hospital or nursing facility” in order to enroll in the program.[xiv] These restrictions mean most Medicare beneficiaries would be ineligible to enroll in the program. For those few beneficiaries who might be able to enroll, many may not see benefits from it—the Medicare actuaries found that the entire CLASS program faces “a significant risk of failure” and “there is a very serious risk” the program will become “unsustainable.”[xv]

With the federal government facing trillion-dollar deficits, many may question the wisdom of spending millions of taxpayer dollars to mail seniors an incomplete, biased leaflet designed largely to promote the President’s agenda. Moreover, what does it say about the law itself that the Administration ignores the conclusions of its own non-partisan experts?

 

[i] E-mail from Centers for Medicare and Medicaid Services, May 27, 2010

[ii] Claims come from Medicare flyer, available at http://www.medicare.gov/Publications/Pubs/pdf/11467.pdf

[iii] Congressional Budget Office, impact of H.R. 3590 and reconciliation legislation on Part D premiums, March 19, 2010, http://www.cbo.gov/ftpdocs/113xx/doc11355/Comparison.pdf

[iv] Medicare Payment Advisory Commission, “Report to the Congress: Medicare Payment Policy,” March 2010, http://medpac.gov/documents/Mar10_EntireReport.pdf, pp. 286-88

[v] Solomon Mussey, Department of Health and Human Services, Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” on the Medicare Trust Fund, April 22, 2010, http://www.cms.gov/ActuarialStudies/Downloads/PPACA_Medicare_2010-04-22.pdf, pp. 1-2

[vi] Congressional Budget Office, Letter to Honorable Jeff Sessions, January 22, 2010, http://www.cbo.gov/ftpdocs/110xx/doc11005/01-22-HI_Fund.pdf.

[vii] Richard Foster, Department of Health and Human Services, Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as amended, April 22, 2010, http://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf , p. 11

[viii] Ibid.

[ix] Ibid., p. 10

[x] Ibid.

[xi] See for instance the New York State Insurance Commissioner’s website comparing Medigap plans, http://www.ins.state.ny.us/caremain.htm#tables

[xii] “Assessing the Coverage and Budgetary Implications of Legislation Modifying the Deductibility of Retiree Drug Spending Eligible for Subsidies,” American Benefits Council report by The Moran Company, March 16, 2010, http://www.americanbenefitscouncil.org/documents/hcr_rds-report_031610.pdf, p. 5

[xiii] Richard Foster, Medicare actuaries report on financial effects of PPACA, p. 15

[xiv] Title VIII of H.R. 3590 as enacted, new Section 3204(c) of CLASS Act, p. 1906

[xv]Richard Foster, Medicare actuaries report on financial effects of PPACA, p. 15