originally published in The Columbia Journalism Review on February 6th, 2012
A few
days ago USA Today trumpeted some health policy news :
enrollment in Medicare Advantage plans is up and premiums are down. The paper
reported that premiums for the controversial Medicare Advantage plans, which
provide private benefits for Medicare seniors through managed care
arrangements, had dropped an average of seven percent during 2011, while
enrollment had grown on average by 10 percent. That was indeed worthy of
celebration, according to officials at the Department of Health and Human
Services. Secretary Kathleen Sebelius issued a statement apparently intended to
pump up the Affordable Care Act: "Premiums are down on average, enrollment is up,
and thanks to the Affordable Care Act, we have unprecedented new tools to
ensure that seniors and people with disabilities are getting the best value out
of their coverage," the secretary said.
What
tools? The paper didn't say, leaving Sebelius with the last word on that topic.
The story's nut graph did proclaim that the HHS findings counter negative
predictions about the effects of the 2010 law, which said premiums would rise
and enrollment would drop. No doubt that take on the new numbers pleased Madame
Secretary. But buried at the end was a key point made by an insurance industry
spokesperson: most of the cuts in Medicare Advantage plans--some $200
billion--would not take effect until 2015. What's more, the Congressional Budget
Office has advised that enrollment in Medicare Advantage plans would level off
and actually decline by 2018, while premiums would rise.
Hooray
for Kaiser Health News and reporter Marilyn Werber Serafini, who looked more skeptically at the
HHS findings. The headine on its story: "Is HHS Medicare Advantage Celebration
Premature?" Werber Serafini also quoted Robert Zirkelbach, the spokesman for
the insurers trade association America's Health Insurance Plans. Zirkelbach
told her "when you take $200 billion out of the program, it's going to have a
real impact on seniors. These cuts will result in higher out-of-pocket costs
and reduced benefits for seniors in Medicare Advantage."
Werber
Serafini also talked to Medicare expert Tricia Newman, a senior VP at the
Kaiser Family Foundation, who noted that just because premiums are down doesn't
mean the plans offer good value. Premiums only tell one part of the story. Insurers
can finagle the premiums, the copayments, the amount of the coinsurance--a
percentage of the medical bill consumers pay--which could mean that a plan with
a low premium designed to reel in customers could end up giving seniors lousy
value. High coinsurance amounts could mean high out-of-pocket expenses when
seniors get sick, and those expenses could outstrip any premium savings.
A while
back, I chatted with an actuary for a consulting firm that designs Medicare
Advantage plans for insurers. Especially in high-cost areas like New York City,
where there are lots of choices and lots of competition, those choices will be
become more restrictive in the next six years, he said. "Medicare Advantage
plans will be less of a good deal than they are now. The reduction in
reimbursements will translate into higher premiums and fewer dollars available
for enhanced benefits," he told me. Some plans, he added, might not survive.
Seems like seniors might want to know about this, so that they can begin
planning for the health care expenses they will increasingly have to pay out of
pocket. And it might be good to know what's happening in low-cost areas. What
kind of competition exists, and what's it likely to be in the future? Just a
few ideas for reporters to chew on!
It looks
like the administration may be following a timed-release strategy for sharing
health reform news with the public. The day after the Medicare Advantage
numbers came out, HHS announced that 3.6
million people on Medicare (out of nearly fifty million) saved $2.1 billion on
prescription drugs in 2011 because of rebates and discounts on brand name
medicines once their drug expenses reached the notorious donut hole where the
government provides no coverage. And here's another idea to explore. Are
discounts on brand drugs authorized by the health reform law encouraging the
use of expensive prescriptions while employers and insurers that pay for most
care are pushing the use of generics?
We might
be able to excuse the administration's inclination to put the best spin on the
non-controversial aspects of the health reform law as part of its campaign
talking points. But we can't excuse journalists for not looking beyond the
stuff they are being fed.
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