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September 12, 2014 01:00 AM

Reform Update: Familiar talking points on Medicare emerge in tight congressional contests

Paul Demko
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    A GOP attack ad takes aim at Braley.

    Healthcare has not been at the forefront of Iowa's tightly contested Senate race between Democratic Rep. Bruce Braley and Republican state Sen. Joni Ernst. But last week, the National Republican Senatorial Committee started running an ad attacking Braley's stance on Medicare as part of a $3.3 million advertising buy in the state.

    “Bruce Braley voted to cut $700 billion from Medicare to support Obamacare,” says Darlene Blake, a senior citizen living in Des Moines, in the spot. “That's just not fair. We paid in. We paid for it. That should be there for us. It's hurting a lot of people.”

    The charge of slashing $700 billion from Medicare has become a staple of Republican attack ads since passage of the Patient Protection and Affordable Care Act. The NRSC is running similar ads in Georgia charging that Medicare cuts are part of Democratic challenger Michelle Nunn's “liberal agenda.” Crossroads GPS, a conservative independent expenditure group, recently released an ad pillorying Sen. Mark Pryor (D-Ark.), who is among the most endangered incumbents in the country, for Medicare cuts. And former Republican National Committee chair Ed Gillespie, who's waging a longshot bid to take out Sen. Mark Warner (D-Va.), also lobbed the Medicare cuts charge in a recent campaign e-mail explaining his reasons for opposing the ACA.

    “Medicare demagoguery worked effectively mostly in 2010 to benefit Republicans,” said Chris Jennings, a Democratic healthcare expert who served in both the Clinton and Obama administrations. “It is not surprising therefore that in a non-presidential election year, Republicans want to do some fear-mongering around Medicare to motivate the base, which is older white males in particular, to vote for their candidates.”

    The charge of $700 billion in cuts isn't entirely baseless, but it lacks context. The reference is to reduced growth in Medicare spending that was projected to take place under the ACA. Given that pundits on both sides of the aisle agree that the healthcare program for seniors is on a financially unsustainable course, reducing the growth in spending is typically seen as a positive development. A big chunk of those cuts come from reducing payments to Medicare Advantage plans by roughly $150 billion, which before the ACA had cost as much as 114% more per beneficiary than the traditional fee-for-service program.

    “Not all cuts are created equal,” said Ed Howard, executive vice president of the Alliance for Health Reform, a not-for-profit group that monitors implementation of the federal healthcare law. “Almost every healthcare economist agrees that Medicare Advantage plans had been overpaid. Moving that number down to something comparable to what fee-for-service Medicare would have paid is something that over the years has gotten bipartisan support in congress.”

    Braley's response to the attack is also typical of how the debate over Medicare is playing out in contests. The Democrat's campaign immediately issued a news release tying Ernst to GOP House Budget Chair Paul Ryan's proposal to overhaul the program. Ryan's budget plan would cut $129 billion from Medicare over the next decade. It calls for a policy of “premium support” for Americans who currently are 55 and younger when they qualify for Medicare. That would give seniors the choice between traditional Medicare and buying a private plan on a new Medicare exchange.

    “The truth is that while Bruce has fought for years against efforts to turn Medicare into a voucher program, Ernst has embraced the very proposals that would end Medicare's guaranteed benefits and increase costs for seniors,” said Braley campaign spokesman Sam Lau, in a statement. “Iowans weren't fooled by these false attacks in 2012, and they won't be fooled today either.”

    Polling data shows the Iowa Senate contest is deadlocked. It's among nine Senate contests that the Cook Political Report currently rates a tossup and that will determine which party runs the Senate in 2015. Republicans need to pick up six seats to take over control of the chamber. In such a close contest, where the ground game will be paramount and turnout is expected to skew toward older voters, Medicare attacks could prove a crucial factor.

    “(Healthcare) is a topic that neither party or candidate wants to talk about very much except to attack the other side on it,” said Arthur Sanders, a political science professor at Drake University in Des Moines. “Medicare works in sort of the same way. Everybody knows we have to do something about it. But as soon as you specify what you want to do, you get somebody upset.”

    Bipartisan, bicameral proposal to allow 'value based' MA plans introduced

    Legislation that would create a pilot project to test “value-based insurance design” in the Medicare Advantage program has been introduced in both the House and Senate with bipartisan support. This week, Sens. John Thune (R-S.D.) and Debbie Stabenow (D-Mich.) introduced a bill that would seek to test whether such plans could reduce costs and improve health outcomes for seniors with chronic conditions. Value-based plans seek to induce beneficiaries to utilize effective, but less costly treatments by providing financial incentives. Previously Reps. Diane Black (R-Tenn.) and Earl Blumenauer (D-Ore.) introduced similar legislation in the House.

    Individual market enrollment spikes, but so do premiums

    In the second quarter of 2014, 13.2 million people were enrolled in plans through the individual insurance market, according to a new analysis by Amanda Kowalski, a non-resident fellow at the Brookings Institution. That includes enrollments both and off the exchanges. That's at least 4.2 million more than would have been covered if pre-ACA trends had continued. But average premiums for coverage in the individual market increased by 24.4%, Kowalski found, over where they would have been without the changes mandated by the federal healthcare law.

    Follow Paul Demko on Twitter: @MHpdemko

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