CBO Testimony Echoes Insurers’ Claims About Cuts to Medicare Advantage Program
Thursday, September 24, 2009
By Matt Cover


Health and Human Services Secretary Kathleen Sebelius (AP Photo)

(CNSNews.com) – Insurance giant Humana, in a letter to members of its Medicare Advantage plans, says the Obama administration’s health care overhaul would cause sweeping cuts in benefits and services for those in the Medicare Advantage program. The director of the non-partisan Congressional Budget Office (CBO) said something similar when he testified before Congress earlier this week.

The health care bill currently under review in the Senate Finance Committee reportedly would cut payments to Medicare Advantage by more than $100 billion over 10 years. According to CBO Director Douglas Elmendorf, in testimony on Tuesday, those cuts and other changes "would reduce the extra benefits that would be made available to beneficiaries through Medicare Advantage plans."

In its letter to members of Medicare Advantage, Humana said that the proposed health care overhaul included "billions in Medicare Advantage funding cuts," and that "if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable.”

On Monday, the Center for Medicare and Medicaid Services (CMS), the federal agency that runs Medicare and Medicaid, issued a press release demanding that insurance companies “suspend” any mailings about the Obama administration’s health overhaul that might be “potentially misleading.”

“Medicare today called on Medicare-contracted health insurance and prescription drug plans to suspend potentially misleading mailings to beneficiaries about health care and insurance reform,” the CMS press release stated.

“The Centers for Medicare and Medicaid Services (CMS) recently asked Humana, Inc. to end similar mailings,” it continued. “Humana has agreed to do so.”

CMS claimed that Humana’s mailing might have led seniors to believe that the letters were official communications from Medicare or official information regarding their plans. Under the law, Humana must submit such mailings to CMS for review before mailing them.

“We are concerned that the materials Humana sent to our beneficiaries may violate Medicare rules by appearing to contain Medicare Advantage and prescription drug benefit information, which must be submitted to CMS for review,” CMS acting Director Jonathan Blum said in the release.

The letter, which bears Humana’s corporate logo and was signed by Humana’s chief medical officer, warns seniors that if Congress passes President Obama’s proposed cuts to Medicare Advantage, they could see their benefits and services disappear.

“Leading health reform proposals being considered in Washington, D.C., this summer include billions in Medicare Advantage funding cuts,” the letter states. “While these programs need to be made more efficient, if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable.”

The letter urges seniors to contact their congressional representatives, via a toll-free number, and to join the Humana Partners program, which sends out a newsletter keeping seniors up to date on the proposed cuts.

“Let your Members of Congress know why Medicare Advantage is important to you,” the Humana letter urges.

“We’ve made it easy for you to have your voice heard,” the letter continues, before offering a toll-free number and a Web site – http://www.humanapartners.com – both of which were out of service as of Wednesday.

The CMS contended that the information Humana provided might be misleading, making seniors think that Medicare, not Humana, was urging them to protest the changes.

However, at the bottom of the letter is a disclaimer that plainly states that the information in the letter had not been approved by the CMS. The envelope for seniors to send reply mail bears Humana’s corporate address in Kentucky, not CMS’s address in Washington, D.C.

“Neither the Centers for Medicare and Medicaid Services nor the Medicare program has reviewed these materials for accuracy or misrepresentation,” the Humana letter reads.

Senator Max Baucus (D-Mont.) claimed that Humana had “misled” seniors by sending out the letter. He called the claims “false,” and said that Medicare Advantage benefits would not be cut.

“It is wholly unacceptable for insurance companies to mislead seniors regarding any subject,” Baucus said in a statement Monday. “False claims in the Humana letter to beneficiaries include the threat of seniors losing benefits in the Medicare Advantage program. In fact, the America’s Health Future Act does not include cuts to Medicare benefits.”

However, the director of the Congressional Budget Office, Douglas Elmendorf, in testimony before Baucus’s own Senate Finance Committee, said, in fact, the cuts in Medicare Advantage would result in a loss of benefits and lower enrollment.

“The effect of the original chairman’s mark on Medicare Advantage enrollment in 2019, would be a reduction of roughly 2.7 million people or 20 percent of the enrollment,” Elmendorf said Tuesday. “[T]he competitive bidding process would reduce the extra benefits that would be made available to beneficiaries through Medicare Advantage plans.”

Elmendorf said that, by 2019, the value of extra benefits provided by private insurers but not by the government, would be cut in half if health reform is passed.

“The additional benefits would be smaller: $42 in additional benefits per month in 2019, and it’s a little less than half of what we would project under current law,” he said.

Humana representative Jim Turner told CNSNews.com that his company believed the mailers were appropriate, adding that Medicare Advantage customers had a right to know what their government was planning to do to their health insurance.

“We reviewed CMS guidance and believe the informational and educational materials we mailed out did not require a filing with the agency,” Turner said.

“We also believe Medicare Advantage members deserve to know the impact that funding cuts of the magnitude being discussed would have on benefits and premiums,” said Turner.

http://www.cnsnews.com/public/content/ar...rcID=54515

How DARE anyone point out that the Ostalin administration is loaded with liars? We better get that 1st amendment over-turned before this gets out of hand!