Bush Administration Launches Ad Campaign To Boost Support for New Medicare Law
The Bush administration on Tuesday launched a $9.5 million television advertising campaign designed to "build public support" for the new Medicare law (HR 1), the Washington Post reports (Goldstein, Washington Post, 2/4). The 30-second ad, which will appear on network and cable television stations nationwide through March, "addresses some of the major criticisms of the law," including assertions that the changes will force beneficiaries out of traditional Medicare and into managed care plans and that the savings from the prescription drug discount cards and benefits will be "paltry," according to AP/USA Today. The ads feature four older actors who are reassured by an announcer that they will be allowed to retain their current, fee-for-service coverage and that the changes called for in the law will enhance the existing program (Sherman, AP/USA Today, 2/4). The ad also encourages seniors to learn more about the new law by calling 1-800-Medicare. HHS Secretary Tommy Thompson said, "We're going to provide seniors with straight answers about the new benefits being offered to them." Dennis Smith, acting CMS administrator, added, "We know there are some who are uncertain about what this new legislation means for them. This campaign will help answer their questions and show them where to go for more information" (HHS release, 2/3). The ads, which will be supplemented by $3.1 million in print, radio and Spanish-language spots, will be paid for out of $1 billion set aside to implement changes to the program (Washington Post, 2/4). Senate Minority Leader Tom Daschle (D-S.D.) said the advertisements should be financed with campaign money, instead of funds from the government, adding, "Their ad campaign is fluff" (AP/USA Today, 2/4).
Reps. Henry Waxman (D-Calif.), John Dingell (D-Mich.) and Charles Rangel (D-N.Y.) on Monday sent a letter to Thompson "demanding" that the Bush administration detail when it knew that the 10-year cost of the Medicare law would exceed $400 billion, CongressDaily reports (Rovner/Heil, CongressDaily, 2/3). Last week, administration officials announced that according to the Office of Management and Budget, the legislation will cost $534 billion over the next 10 years, $134 billion more than estimated by the Congressional Budget Office. Last week, CBO reiterated its estimate of $395 billion over 10 years. The budget Bush released on Monday acknowledged the new estimate (California Healthline, 2/3). The lawmakers asked that Thompson release by Feb. 17 all administration estimates of the cost of the Medicare bill, including those completed during the bill's development. In the letter, they disputed the administration's assertions that White House officials kept members of the Medicare conference committee apprised of their estimates and said, "Congress and the public should know what the administration knew about the costs of the prescription drug benefit and when the administration knew it" (CongressDaily, 2/3). In addition, some Democrats on Tuesday said that the Bush administration did not include in its cost estimate of the Medicare law an accurate assessment of the implementation of health savings accounts. HSAs, which allow individuals to accrue funds for medical purposes tax-free, are available to anyone with a health plan that has a deductible higher than $1,000 for an individual and $3,000 for a family. According to Treasury Secretary John Snow, who on Tuesday spoke to the House Ways and Means Committee, department officials estimated that the cost of the accounts is roughly $16 billion over 10 years, compared with an estimate of $7 billion over five years from the Bush administration. Rep. Pete Stark (D-Calif.) said that including the lower estimate in the budget is "yet one more example of the Bush administration's habit of suppressing or manipulating information to suit its political purposes" (Rovner, CongressDaily, 2/4).
Health insurers on Tuesday said they will use a "large increase" in federal Medicare payments to increase benefits and reduce premiums and copayments for beneficiaries, the New York Times reports (Pear, New York Times, 2/4). Medicare HMOs will receive $500 million in federal subsidies as called for in the new Medicare law, amounting to a 10.6% payment increase. The law established a new reimbursement formula that will increase Medicare reimbursements to HMOs by an estimated $500 million this year and a total of $14 billion between 2004 and 2013. Federal officials and lawmakers hope that the new reimbursement levels will encourage private health plans to continue to participate in Medicare. Health plans are required by the law to use the payments to enhance benefits, decrease premiums or increase payments to providers. Such changes are expected to affect at least 1.25 million seniors in 15 states (California Healthline, 2/3). Health plans had to file with CMS by Friday any changes they planned to make. If the changes are approved, they would take effect March 1 (New York Times, 2/4). Insurers in the Philadelphia region, such as Aetna and Independence Blue Cross, said they plan to reduce premiums for some 180,000 local beneficiaries (Stark, Philadelphia Inquirer, 2/4). A survey by American Association of Health Plans-Health Insurance Association of America found that insurers representing more than 93% of private plans participating in Medicare will lower monthly premiums for patients, and insurers representing more than 60% of such beneficiaries will enhance or increase benefits (CongressDaily, 2/4). Sen. Charles Schumer (D-N.Y.) said, "This isn't just nickels and dimes, this is a quantum leap in the amount of money HMOs will get for serving seniors." Karen Ignagni, president of AAHP-HIAA, said, "Congressional action is getting results. Millions of beneficiaries will receive better benefits, lower premiums and expanded choices in 2004 as a result of the Medicare legislation" (New York Times, 2/4). Tricia Newman, a Kaiser Family Foundation vice president, said, "The question is whether the country can afford to spend more money in order to promote private plan options for seniors" (Philadelphia Inquirer, 2/4).
The debate over whether the House Committee on Standards of Official Conduct should investigate bribery accusations related to the November House vote on the Medicare law "continued to simmer" on Tuesday, with House Minority Whip Rep. Steny Hoyer (D-Md.) saying that a lawmaker probably would file a formal complaint in the next two to four weeks if the committee does not pursue the matter on its own, CongressDaily reports (CongressDaily, 2/3). In December, retiring Rep. Nick Smith (R-Mich.) said that unnamed Republican leaders promised to donate $100,000 to his son's congressional race in exchange for his support on the Medicare bill. However, Smith later backed away from that comment, saying that suggestions that he was bribed are "technically incorrect." He added that some Republican lawmakers had said they would oppose his son's campaign but did not offer to donate any money to the campaign as had been previously reported. Smith voted against the Medicare legislation. In a Jan. 20 letter to House Speaker Dennis Hastert (R-Ill.), Hoyer called for an ethics investigation into the allegations (California Healthline, 2/3). Gannett/Detroit News reports that a formal complaint would compel the ethics committee to investigate Smith's allegations (Hutt Scott, Gannett/Detroit News, 2/4). The Hill reports that House Republican leaders have not yet developed a public response to the allegations, but they met Tuesday afternoon to "discuss the issue." House Majority Leader Tom DeLay (R-Texas) said, "I think the Democrats in the House ought to leave their campaign plan outside the chamber. They are trying to politicize the ethics committee, and I think that is wrong" (Kaplan/Nichols, The Hill, 2/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.