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Seniors caught up in Medicare debate Trying to separate facts from health care rumors

Diane Janicke says she's sick of all the lies. She's heard about the fictitious "death panels," she's heard the rumor that President Obama's health plan would cut off Medicare to people over age 80, and she's telling her friends not to listen to all the tall tales.

"I don't think reform is going to bring down Medicare benefits at all," said Janicke, a Medicare recipient from Angola and strong supporter of health care reform. "But people are very angry and afraid. It's scary that the opponents of this bill are just trying to terrorize people."

Yet what scares seniors like Richard F. Teetsel isn't any rumor about how health care reform would affect Medicare. It's the reality that Democrats are proposing cuts in funding to the health care program for seniors while also promising that benefits will remain the same.

Democrats want to cut what the government pays to "Medicare Advantage" HMOs like the one he's on.

"I'm afraid that if we take away all the subsidies, it will inevitably result in an inferior program," said Teetsel, of the Town of Tonawanda.

The debate between Janicke and Teetsel mirrors one in Washington about how health reform will affect the 45.3 million Americans and 214,000 Buffalo-area residents on Medicare.

Like the debate writ large, it's one shrouded in nonsense rhetoric that hides a confusing and ill-defined reality: Cuts in the growth of Medicare spending would be used to finance about half of the $900 billion or so that Democrats propose to spend to expand health coverage and reform the system.

One thing is clear, though. The vast majority of experts think the reform proposals circulating in Washington would not harm traditional Medicare and might even improve it.

But it's possible that reform could make Medicare Advantage programs -- which serve more than half the Erie County seniors on Medicare -- more expensive and less laden with benefits. And if you believe the insurance industry, some such plans could even be eliminated.

>Fear tied to rumors

Medicare has long been one of the great untouchables of American politics, and President Obama has gone to great lengths to try to convince the huge senior population that he can cut waste from Medicare without hurting the elderly.

"Without taking any money from the Medicare trust fund that gives benefits to your grandparents -- they depend on it for their health care -- we're going to eliminate hundreds of billions of dollars of waste and fraud and subsidies to insurance companies that pad their profits but don't do anything to make seniors healthier," Obama said in a speech in College Park, Md., last week.

That argument doesn't seem to hold much sway among seniors.

A Washington Post poll, taken the day of Obama's health care speech to Congress earlier this month and on the three days after, found that 56 percent of seniors think health care reform would hurt Medicare.

Much of the fear appears to be tied to the rumors that have beset the health reform effort, many of them versions of the notion that "ObamaCare's" voluntary end-of-life counseling for seniors would encourage them to commit suicide.

"This claim is nonsense," the nonpartisan group says.

Yet people are believing that rumor and others, said Janicke, of Angola.

"One friend of mine told me that there would be no coverage for people over 80, which is basically a death sentence," she said. "I also heard you had to sign a do-not-resuscitate order. . . . It's all ridiculous. But people are actually afraid."

Others merely fear that their benefits will be cut.

"My concern is I lose all the benefits I have now to something even less," Gloria Nettina, 82, of Amherst, said at an AARP forum on health care last month. "It's hard to understand what it's all about because you have all these different views, and you don't know what's the truth."

>Seniors need not fear

In reality, though, many experts say seniors on traditional Medicare have little to fear.

The reform proposals actually aim to improve Medicare services. The "doughnut hole," or coverage gap, in the Medicare prescription drug program would be narrowed or eliminated, and coverage for preventive care would be expanded.

"This is not a Medicare reform," said Robert Bixby, executive director of the Concord Coalition, Washington's premier budget watchdog. "This does not threaten the medical care seniors receive. . . . Nothing is being raided here. In fact this will actually improve Medicare's fiscal outlook."

While Bixby said the reform effort will not entirely fix Medicare's long-term fiscal problems, both the House and Senate health proposals aim to modestly reduce the increases in reimbursements that hospitals receive under Medicare.

For example, bills passed by three House committees aim to save $200 billion over 10 years by cutting the annual increase in Medicare payments to hospitals from 6.5 percent a year to 5.5 percent, said Karen Davis, president of the Commonwealth Fund, a nonprofit that is pushing for health reform.

"The hospital industry has said it can live with slower rates of increase. . . without damaging access or quality of care," Davis noted.

What's more, both the House and Senate bills aim to wring billions of dollars of waste out of the system.

On both sides of Capitol Hill and in both political parties, there's consensus that there is plenty of waste to be had.

"In my district, there are many people who simply believe that is the way most doctors supplement their income is by [ordering] extra tests," Rep. Louise M. Slaughter, D-Fairport.

Nevertheless, Sen. Charles Grassley of Iowa, the top Republican on the Finance Committee, questioned cutting waste in one program to start another.

Speaking on a home-state radio show last week, Grassley said: "Doesn't it sound a little ironic that you complain about waste, fraud and abuse, and you can save $400 billion, and then in turn want [to use that money] to set up another government agency to do health care?"

>Cutting waste

While about half of the $400 billion in cuts would come from traditional Medicare, most of the rest would result from slashing subsidies to Medicare Advantage plans such as those offered by BlueCross Blue-Shield, Independent Health and Univera in Western New York.

And that's just what Teetsel, a former BlueCross BlueShield manager, worries about.

Such plans "have been a real blessing to millions of people on Medicare," Teetsel said. "Frankly, the coverage with Senior Blue is much better than I would have with traditional Medicare."

These Medicare HMOs frequently offer generous services at the drop of a $10 copay along with extensive prescription drug benefits.

The trouble is, the government pays 14 percent more to Medicare Advantage plans than it pays for traditional Medicare. Many Democrats have long seen that subsidy as a giveaway to the insurance industry, and they're not alone.

"It is inefficient and wasteful to use taxpayer dollars to subsidize private insurance companies," Bonnie Cramer, AARP's board chairwoman, said at that congressional forum last week. "These subsidies boost insurer profits but do little to help the majority of beneficiaries."

Supporters of the Medicare HMO programs, meanwhile, see things differently.

"The government gets more for its dollar" under the Medicare Advantage plans, said Alphonso O'Neill-White, CEO of BlueCross BlueShield of Western New York. "It's comprehensive care. That's why it's more expensive."

The Medicare Advantage plans also offer wellness programs that probably produce a huge cost savings over time, said Rep. Chris Lee, R-Clarence.

"In my district, a very large percentage of people use these plans and have a very positive view of them," he added. "It's a program that has worked extremely well."

Without the government subsidies, however, it might not work for much longer, said Robert Zirkelbach, a spokesman for America's Health Insurance Plans. If government subsidies are cut, he said, Medicare Advantage plans might have to cut the vision or dental services they now offer, or perhaps boost co-pays -- or even be eliminated.

O'Neill-White also complained that Congress was considering "gutting" the Medicare Advantage plans, but even some Medicare Advantage customers said the program had to be viewed in the larger context of health care reform.

"I think health care reform is a good thing," said Nat Simon, an Amherst senior who said he's only "slightly concerned" that reform could affect his Independent Health Medicare Advantage plan.

"For a country as wealthy as ours, our medical system could do much more," Simon said. "There is some modification needed."

And that modification should include cutting the waste out of Medicare, C. Eugene Steuerle, vice president of the budget-watching Peter G. Peterson Foundation, said at a recent panel discussion sponsored by Health Affairs.

"I think fortunately -- maybe I should say unfortunately -- there is enough waste in the system and bad practice that there are probably a lot of things we can do that will not impact on people," Steuerle said.


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