60 Plus Association's Lawyer Fact Checks FactCheck.org Without Using Any Facts

September 24, 2010 10:22 am ET

Immediately following a series of letters sent to television stations around the country in regards to misleading ads produced by the group 60 Plus, a lawyer representing the group responded with the letter excerpted below.  In its attempt to convince the stations to not pull down the 60 Plus ads, the law firm focused on the claim that Medicare would be cut, leading to disastrous consequences for American seniors.  Appropriately, however, the letter did not contain any more factual information than did the very ads it was meant to defend.

CLAIM: "Every Factual Statement Made Is Accurate And Fully Documented."

Jason Torchinsky, Holtzman Vogel PLLC:

With respect to The 60 Plus Association's advertisement currently airing on your station, every factual statement made is accurate and fully documented. I trust you will not accede to HCAN's attempts to silence speech they would rather the public not hear.

As a preliminary matter, we note that HCAN refers you to FactCheck.org to support their request. As you know, FactCheck.org is but one voice among many.

FACT: FactCheck.org Is One Of Many Sources That Agree The Ads Are Misleading

PolitiFact.com: 60 Plus Ad "Leaves Critical Facts Out" And "Gives A Misleading Impression." According to the non-partisan PolitiFact.com:

It's important to note that the law does not take $500 billion out of the current Medicare budget. Rather, the bill attempts to slow the program's future growth, curtailing just over $500 billion in future spending over the next 10 years. Medicare spending will still increase -- the nonpartisan Congressional Budget Office projects Medicare spending will reach $929 billion in 2020, up from $499 billion in actual spending in 2009...

...Getting back to the Truth-O-Meter, the 60 Plus ad says that the new health care law "will cut $500 billion from Medicare. That will hurt the quality of our care." The ad loses points for accuracy because the $500 billion aren't actual cuts but reductions to future spending for a program that will still grow significantly in the next 10 years. The ad also says those cuts will "hurt the quality" of seniors' care. But we find that to be a highly contentious subject, and the 60 Plus ad doesn't hint at any of the ways that the reductions are ways to make Medicare more efficient. Finally, the ad doesn't mention any of the benefits to seniors, such as improved prescription drug coverage. The ad seems more intent on attacking the health care law than accurately describing this complicated piece of legislation. Because it leaves critical facts out of its description in a way that gives a misleading impression, we rate the statement Barely True. [PolitiFact.com, 9/20/10]

Albany's Times Union: Claims In 60 Plus Ads Are "A Stretch" And "Subjective." In an ad watch of 60 Plus ads run against Democrat Scott Murphy, Albany's Times Union wrote that "it's a stretch to say that the bill 'cuts' $500 billion from Medicare. A report from the Centers for Medicare & Medicaid Services found the bill counts on $575 billion from slowing the projected growth of Medicare costs over the next 10 years, but the overall amount spent continues to rise, not fall. Other claims in the ad, that Murphy 'betrayed' seniors and that the legislation will 'hurt the quality of our care,' are subjective -- unprovable as either true or false." [Times Union, 9/21/10]

PA2010.com: 60 Plus Ads Are "Only Half-True." From an ad watch on the bipartisan Pennsylvania election site PA2010.com:

In four recent TV ads targeting Pennsylvania Democrats, a pair of conservative groups have said the newly-enacted health care law makes massive Medicate cuts, raises taxes and risks seniors losing their doctors.

The health care overhaul's effect on Medicare is a hotly debated subject infused with tension. After examining the facts, we find these four ads from the 60 Plus Association and Americans for Job Security to be only HALF-TRUE.

[...]

But it's the claim of a $500-billion cut to Medicare that is more complicated, and misleading at best. That figure actually refers to $531 billion worth of reductions in the growth in Medicare spending over the next 10 years. The biggest proportion of these savings comes from slowing the growth in payments to Medicare providers and reduced payments to Medicare Advantage plans, which are administered by private insurers. The Congressional Budget Office projects that this will funnel some people away from Medicare Advantage plans, which are typically more expensive and have better benefits, into the regular Medicare system. But again, it's not a cut as much as it's a future slowdown. And the changes actually add about 12 years of solvency to the Medicare Part A Trust Fund. [PA2010.com, 9/21/10]

CLAIM: Doctors & Hospitals Will Be "Driven Out Of Business"

Jason Torchinsky, Holtzman Vogel PLLC:

When service providers stop providing services to patients, those patients "could lose their doctors." FactCheck.org disagrees with this analysis, arguing the "[CMS] report actually discusses cuts the law makes in payments to other providers, such as hospitals and nursing homes - not doctors."  But this distinction serves no purpose. How will seniors keep their doctors when their doctors' employers - the hospitals and nursing homes experiencing payment cuts under the law - are driven out of business?

FACT: No, They Won't

"Congress Will Intervene To Change The Payment Formula To Avoid Health Care Providers Dropping Out Of Medicare." As reported by PolitiFact.com:

Finally, there's $220 billion in Medicare savings achieved by reducing annual increases in payments health care providers would otherwise receive from Medicare. The reductions are part of programs intended to improve care and make it more efficient, such as reducing payments for preventable hospital re-admissions. These adjustments are aimed at hospitals, skilled nursing facilities, and home health agencies.

The Office of the Actuary for Medicare and Medicaid Services questioned in an April 2010 report whether these levels of savings are realistic, saying that some health care providers would become unprofitable if payments were reduced. (The 60 Plus ad cites this report in its fine print.) The actuary's report suggests that Congress will intervene to change the payment formula to avoid health care providers dropping out of Medicare. [PolitiFact.com, 9/20/10, parentheses original]

Torchinsky's Follow-Up Argument To The Above Claim Is Pure Conjecture About How Congress Will Act In The Future

FactCheck.org's only answer to this clear consequence is revealing. Their analysis, which serves as the crux of their overall argument, follows three steps - all of which are necessary to agree with their conclusions. First, regularly scheduled Medicare payment cuts for physicians have been overridden by Congress since 2003. Second, as a result, the cuts included in the health care bill for service providers are likely to be similarly overridden. Third, we should therefore ignore them altogether and claims that these cuts will actually impact seniors' care are false or misleading.

CLAIM: "Statement 'Millions Could Even Lose Their Current Medicare Plans' Is Absolutely Correct"

Jason Torchinsky, Holtzman Vogel PLLC:

Thus, if seniors lose their doctors or their existing Medicare plans, the quality of their care will be hurt.

As the Associated Press reported on August 25, 2010:

A plan by Medicare to try to make it simpler for consumers to pick drug coverage could force 3 million seniors to switch plans next year whether they like it or not, says an independent analysis.

That risks undercutting President Obama's promise that people can keep their health plans if they like them.5

Based on both federal government reports and media analysis of those reports and the legislation, the advertisement's statement, "millions could even lose their current Medicare plans," is absolutely correct.

FACT: The Article Quoted By Torchinsky In Fact Counters His Argument

Associated Press: "Seniors Would Not Lose Coverage." A longer clip from the Associated Press article, via CBS News, reads:

A plan by Medicare to try to make it simpler for consumers to pick drug coverage could force 3 million seniors to switch plans next year whether they like it or not, says an independent analysis.

That risks undercutting President Obama's promise that people can keep their health plans if they like them.

And it could be an unwelcome surprise for many seniors who hadn't intended to make a change during Medicare's open enrollment season this fall.

The analysis by Avalere Health, a leading private research firm, estimated that more than 3 million beneficiaries will see their prescription plan eliminated as part of a new effort by Medicare to winnow down duplicative coverage and offer consumers more meaningful choices.

Seniors would not lose coverage, but they could see changes in their premiums and copayments.

[Associated Press via CBS News, 8/25/10, emphasis added]

CLAIM: Health Care Law "Cuts $500 Billion From Medicare"

Jason Torchinsky, Holtzman Vogel PLLC:

HCAN also takes issue with the advertisement's statement that the health care plan "cuts $500 billion from Medicare." Regardless of what HCAN and FactCheck.org may say, it is very well established that the health care bill "cuts $500 billion from Medicare." For example, in a piece titled "Health Care Reform Bill Summary: A Look At What's in the Bill," published March 23, 2010, CBS News stated very clearly: "The bill also includes $500 billion in Medicare cuts over the next decade."6 The Associated Press reported the same on March 21, 2010: "To pay for the changes, the legislation includes more than $400 billion in higher taxes over a decade and cuts more than $500 billion from planned payments to hospitals, nursing homes, hospices and other providers that treat Medicare patients."7 See also Lori Montgomery, The Washington Post, "Report: Bill would reduce senior care," November 15, 2009 ("A plan to slash more than $500 billion from future Medicare spending -- one of the biggest sources of funding for President Obama's proposed overhaul of the nation's health-care system -- would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday.").

FACT: Cuts Or Cost Changes Will Not Cut Traditional Medicare Benefits

Reuters: "There Are No Cuts To The Traditional Medicare Benefit." As reported by Reuters:

There are no cuts to the traditional Medicare benefit. The lion's share of spending cuts are in Medicare Advantage -- a program that uses private firms such as Humana and UnitedHealth Group to deliver Medicare benefits. Many of these providers offer extra coverage and some of those extras could be dropped as Medicare Advantage subsidies are bought more in line with the cost of traditional Medicare benefits. Medicare Advantage payment rates will be frozen in 2011 and then gradually reduced giving companies time to adjust to the changes. [Reuters, 3/22/10]

No Traditional Medicare Beneficiaries Would Be Affected. From Kaiser Health News:

The three-quarters of beneficiaries who receive traditional Medicare benefits would not be affected by the change. However, for those in Advantage plans, they may have fewer to choose from. "You are going to start seeing companies dropping out," said Robert Moffit, a policy analyst at the Heritage Foundation. [Kaiser Health News, 4/6/10]

CBO: Cost Changes To Medicare Made From Savings. According to the CBO: "Changes to the Medicare program and changes to Medicaid and CHIP other than those associated directly with expanded insurance coverage:  Savings from those provisions are estimated to total $93 billion in 2019, and CBO projects that, in combination, they will increase by 10 percent to 15 percent per year in the next decade." [CBO.gov, 10/7/09]

FACT: Seniors' Medical Expenses Will Still Be Covered

Health Care Reform "Will Keep Paying Medical Bills For Seniors."  According to PolitiFact.com: "The government-run Medicare program will keep paying medical bills for seniors, but it will begin implementing cost controls on health care providers, mostly through penalties and incentives. The legislation would reduce payments for hospital-acquired infections or preventable hospital admissions. For Medicare Advantage, the federal government intends to reduce extra payments, taking away subsidies to private insurance companies. Insurers will likely cut benefits in order to not lose profits. The bill does not address the 'doctor's fix,' an expected proposal that Congress usually passes to prevent doctors' Medicare payments from severe cuts." [PolitiFact.com, 3/18/10; emphasis in original]

FACT: Changes To Medicare Include Additional Benefits

Health Care Reform Fills The "Doughnut Hole."  According to the Kaiser Family Foundation: "In 2010, Part D enrollees with any spending in the coverage gap will receive a $250 rebate. Beginning in 2011, enrollees with spending in the coverage gap will receive a 50 percent discount on brand-name drugs, provided by the pharmaceutical industry. The law phases in Medicare coverage in the gap for generic drugs beginning in 2011, and for brand-name drugs beginning in 2013. By 2020, Part D enrollees will be responsible for 25 percent of the cost of both brands and generics in the gap, down from 100 percent in 2010." [Kaiser Family Foundation, accessed 8/25/10]

Health Care Reform Improves Medicare's Coverage Of Preventative Benefits.  According to the Kaiser Family Foundation: "Beginning in 2011, no coinsurance or deductibles will be charged in traditional Medicare for preventive services that are rated A or B by the U.S. Preventive Services Task Force (USPSTF). Medicare will cover a free annual comprehensive wellness visit and personalized prevention plan." [Kaiser Family Foundation, accessed 8/25/10]

FACT: Changes To Medicare Are Changes To The Medicare Advantage System

NEJM: HCR Phases Out "Substantial Overpayments" To Medicare Advantage Plans. From the New England Journal of Medicine:

A phased elimination of the substantial overpayments to Medicare Advantage plans, which now enroll nearly 25% of Medicare beneficiaries, will produce an estimated $132 billion in savings over 10 years.

[...]

The ACA also produces nearly $200 billion in savings by assuming that providers can improve their productivity as firms in other industries have done. On the basis of this presumed improvement, the law reduces Medicare's annual "market basket" updates for most types of providers - a provision that has generated controversy. [New England Journal of Medicine, 7/8/10]

Morgan Lewis: HCR May Result In Payment INCREASE To Some Medicare Advantage Plans. From Morgan Lewis:

According to a recent Medicare Payment Advisory Commission (MedPAC) report, in 2009 the Medicare program spent roughly $14 billion more for beneficiaries enrolled in MA plans than for beneficiaries in the Medicare fee-for-service (FFS) program (Parts A and B).1 This difference in spending was often cited in the policy discussions leading up to the passage of the Healthcare Reform Law as the reason for the MA payment reductions. To bring MA spending in line with FFS costs, the Healthcare Reform Law will phase in a new payment methodology tied to a percentage of Medicare FFS costs. However, the new methodology also builds in a number of incentive payments that, in effect, will likely act to reduce the rate of reduction in payment to MA plans that achieve the quality goals. In some instances, these incentive payments may actually result in an increase in payments to an MA plan. [Morgan Lewis, 4/9/10]

Cuts Would Only Affect Medicare Advantage Plans. As reported by Kaiser Health News:

The new health law will cut $136 billion in spending on the Advantage program by 2019, which currently pays private plans to administer Medicare benefits and pays them about 14 percent more than the per-patient cost of the traditional Medicare program. Plans use that subsidy to lure members with lower premium costs or extra benefits not normally paid for by Medicare, such as vision care or better prescription drug coverage. Some Democrats and analysts have argued the higher rates are wasteful. 

Even experts who support the change concede that the impact of the cuts could be evident. Robert Berenson, a scholar at the Urban Institute and former Medicare official, said some Advantage plan members will notice skimpier benefits, "but the Republicans have really exaggerated that this will wipe out the Advantage plans." 

Marsha Gold, a health policy analyst for the private research group Mathematica, said, "Over time, there will be less rich benefits or higher premiums, but it's going to be gradual," noting that the largest cuts do not begin until 2015. 

[Kaiser Health News, 4/6/10]

A Quick Review Of Medicare Advantage

Medicare Advantage Costs Taxpayers 14% More Than Traditional Medicare.  As reported by PolitiFact.com:

Let's back-up for a minute and explain Medicare Advantage: There are two basic ways most people get Medicare coverage. They enroll in traditional Medicare and a prescription drug plan through the government and maybe buy a supplemental policy to cover most out-of-pocket costs. Or they enroll in Medicare Advantage programs (they include drug plans), which are run by private insurers. Medicare Advantage programs typically have more generous benefits such as dental and vision coverage. Some plans even pay the patient's monthly Medicare premium, which can amount to about $100.

The Medicare Advantage program was intended to bring more efficiency from the private sector to the Medicare program, but it hasn't worked as planned. A June 2009 analysis from the Medicare Payment Advisory Commission said that the Advantage programs costs taxpayers on average of 14 percent more than the traditional Medicare plan. President Barack Obama has said repeatedly that the Medicare Advantage plan wastes public money that could be put to better use. [PolitiFact.com, 9/20/10]

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