Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — GOP gubernatorial candidate Sam Brownback has vowed to fight federal health reform, if elected.

According to the candidate, if the Affordable Care Act is implemented as planned, "44,000 Kansans enrolled in Medicare Advantage plans will have their benefits reduced by half."

But leading advocates for seniors say the candidate's claim is questionable or off the mark:

“That is a wild number,” said Suzi Lenker, education and outreach coordinator for Senior Health Insurance Counseling for Kansas (SHICK), which advises seniors on how to choose among Medicare plans. “I don't know where they got that number or that information. From what I see, they're not taking any benefits from these folks. But there are some (Medicare Advantage) plans that are leaving the market completely.”

The Brownback campaign said its numbers came from a Congressional Budget Office report. But that report offers no specifics for Kansas, nor does it project loss of benefits. Instead, the report forecast there would be fewer people nationally enrolled in Advantage plans by 2019 as a result of health reform; 9.1 million instead of 13.9 million.

The campaign also cited some recent news clippings, including this one noting that Harvard Pilgrim in Massachussetts was shutting down its Medicare Advantage Plan in that state.

Insufficient margins

The Heritage Foundation, a conservative think tank, has predicted that without health reform there would be 60,507 Medicare Advantage enrollees in Kansas by 2017. But with health reform, that number would drop to 30,103. The Heritage Foundation also predicted there will be fewer plans to choose from.

"Some (Medicare Advantage) insurers will have difficulty generating sufficient margins, or just breaking even, in some regions of the country, thus leading them to shut down some or all of their plan offerings," according to the analysis. "This will force current or potential enrollees to enroll in less-preferred options."

But neither report asserts that 44,000 Kansans would lose half their benefits.

Since 1997, Medicare beneficiaries have had the option of receiving their services through private insurance plans. In 2003, Congress added prescription drug benefits to the option and also created what became known as Medicare Advantage. Republicans, then in control of Congress, supported that move, saying private insurance companies would make Medicare more effective and cheaper. Brownback was among those who voted for those changes.

Shifting costs

But instead of cutting costs, those for Medicare Advantage have exceeded those for traditional Medicare by billions of dollars, presenting another challenge to the solvency of the entire program and shifting premium costs to those on traditional Medicare, according to the Government Accounting Office.

The health reform law would reduce the amount of money the federal government spends on Medicare Advantage by $132 billion over 10 years, according to CBO.

Among the likely consequences of the reduced spending, various experts say, is that Advantage plans will reduce some of their extra benefits. For example, some plans now offer dental and vision coverage and/or health club memberships. With fewer benefits, seniors are more likely to choose traditional Medicare, meaning a drop-off in Medicare Advantage enrollment and fewer Advantage plans to choose among.

Uwe Reinhardt, a Princeton professor and one of the nation’s leading health economists, said if Advantage plans operate more efficiently than government programs, they should be able to survive without the 14 percent federal subsidy they’ve been getting. But he also said that health reform critics are right when they say that the loss of the subsidy – estimated at $6 billion a year – will cause Advantage plans to discontinue some of the “extra benefits” that differentiate them from regular Medicare.

“If you take that subsidy away, these benefits can’t be offered anymore and those Medicare recipients will be losers," Reinhardt said in an interview with Kansas Public Radio, a KHI News Service partner.

Even so, Reinhardt said, Brownback’s claim that 44,000 Kansas beneficiaries will lose half their benefits isn’t supportable.

“No, no. It’s only the extra benefits,” he said.

Though some Advantage benefits and plans are expected to disappear, the law would increase spending to close the Medicare prescription drug “donut hole,” and boost preventive services for all seniors enrolled in Medicare. About 380,000 Kansans are Medicare beneficiaries.

Support from AARP-Kansas

The changes have drawn support from American Association of Retired Persons (AARP), the Medicare Rights Center and other leading lobbying groups for America's seniors.

“They were handing out billions of dollars to private insurance companies,” said Mary Tritsch, a spokeperson for AARP-Kansas, which has about 360,000 members statewide. “Medicare Advantage cost 13 percent more per person than traditional Medicare. Now those tax dollars can go for senior care and things like reducing the donut hole instead of to the insurance companies for subsidies.

“A lot of people had concern that the new health care law was going to negatively effect Medicare beneficiaries,” Tritsch said, “but we believe it will positively affect them.”

"Doom and gloom"

Joe Baker, president of the Medicare Rights Center, said there was good and bad in the health reform law but that “doom-and-gloom” predictions about Medicare Advantage have been overstated.

“Certainly there are projections out there about the number of people enrolled in Mediare Advantage plans dropping,” Baker said. “But there are a couple of reality checks on that. Everyone expected a big exodus and spikes in premium this year and we know based on the information put out recently by CMS (Centers for Medicare and Medicaid Services) this just isn't happening. The doom-and gloom forecast that was supposed to start this year hasn't materialized.”

Baker said the big Medicare Advantage plans such as Humana and United Health Care, “think there's still a good market there.

“The reality on the ground is that everyone who wants access to a Medicare Advantage plan can get access to it for this year,” Baker said. “And the longer-term prospect looks like Medicare Advantage plans are here to stay.”

In fact, the reform law authorizes federal bonus payments to Medicare Advantage plans that score high in quality ratings.

The spokepersons for AARP, SHICK and the Medicare Rights Center each said their organizations were working hard to counter the “misinformation,” about health reform being foisted on the public by the law's political opponents.

“We're just trying to get the correct information out and I think if the people see the information that's available and what's really going to happen, they're going to look at it in a different light,” Tritsch said.

The Brownback campaign was given opportunities to expand or elaborate on its claims about Medicare Advantage and other provisions of the federal health reform law, but declined.

"Obamacare needs to be repealed," said Sherriene Jones-Sontag, a campaign spokesperson. "Then we can focus on bi-partisan solutions to solve the issue."