Recent TV ads that say health care reform will cut Medicare benefits to senior citizens with proposed cuts to something called Medicare Advantage, and it's not clear what the cuts will mean to Minnesotans enrolled in the program.
The trade association for health insurance companies, America's Health Insurance Plans, has been running these ads in Minnesota and other states.
"Most people agree we need to reform health care but is it right to ask 10 million seniors on Medicare Advantage for more than their fair share? Congress is proposing more than $100 billion in cuts to Medicare Advantage," the ad said. "The non-partisan Congressional Budget Office said many seniors will see cuts in benefits."
These ads are by the same group that issued a report earlier this month on the eve of the finance committee's vote saying Senate health care legislation would lead to increases in annual insurance premiums of as much as $4,000 by 2019. Many lawmakers called the report inaccurate and misleading.
FactCheck.org, a nonprofit affiliated with the Annenberg Public Policy Center at the University of Pennsylvania, analyzed the most recent ad and found it also misleading. Fact Check's Deputy Director Viveca Novak said it wrongly implies that Medicare Advantage cuts will help cover the cost of providing health care to other age groups. In reality, she said Medicare Advantage cuts would help pay for traditional Medicare for other seniors.
"So the idea of more than their fair share, a lot of people would say perhaps what's fair is that nobody should be subsidizing other seniors right?" Novak said. "Nobody in Medicare should be forced to pay more in premiums because they are helping to subsidize other seniors who might be getting a little more in benefits."
Medicare Advantage is separate from traditional Medicare. In the Advantage programs, recipients generally get extra benefits such as hearing aids and lower co-payments than the original Medicare plan. But there's a tradeoff, you may be restricted to doctors and hospitals that belong to your plan.
Medicare Advantage was intended to save the government money because recipients would get their health care through managed care systems. University of Minnesota health policy and management professor Jean Abraham said the problem is that Medicare Advantage ended up costing more and that's why the Obama administration targeted it for cuts.
"This is in part motivated by a study that was done by the Medicare payment advisory commission in which they reported that these plans were being overpaid by about 13 to 14 percent over what it would cost to provide Medicare enrollees in the traditional fee for service," Abraham said.
St. Louis Park's Virginia Hanson, who's on Medicare Advantage, has long been frustrated by how confusing the Medicare programs are. She said right now, she isn't even sure if the advantage program is the right plan for her, and the idea of the proposed cuts adds one more unknown.
"Where would those cuts come? Would they be in something I don't need anyway or things that I'm not getting? I don't know what they're talking about," Hanson said. "If I could have a scorecard, that would be great."
The major House and Senate reform bills have outlined different ways of making those cuts. The House bill would lower payments to private health insurers that manage Advantage programs over a period of years. The Senate bill would force insurers to bid more competitively.
One of the major administrators of Medicare Advantage in Minnesota is UCare. Ghita Worcester of UCare said the non-profit has looked at the drafts and UCare prefers the Senate version. She said that bill would include bonus payments for plans that provide high-quality, low-cost care, which could offset the cuts to Medicare Advantage recipients in Minnesota. The House bill doesn't have that.
"The problem is that there has to be a compromise and they have to merge these together and they are so uniquely different we don't know which direction it's going to go" Worcester said.
A vote on the House health care reform bill could come next week.