Misunderstandings Are Rampant on Health Care Reform and Medicare

The Affordable Care Act contains a number of important improvements in Medicare coverage, but fact-free media coverage and political spin have stoked fear among seniors.
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When it comes to health care reform, seniors are in the dark.

A recent national poll reveals that many adults over age 65 are misinformed or confused about the impact of the new law on their Medicare benefits, physicians and the federal budget deficit. Harris Interactive conducted the poll of more than 600 adults for the National Council on Aging (NCOA), a non-profit service and advocacy group focused on seniors and aging.

I know from my own reader mail that seniors are worried -- and in some cases, angry -- about the Affordable Care Act. The new law contains a number of important improvements in Medicare coverage, but fact-free media coverage and political spin have stoked fear among seniors.

The NCOA poll confirms that the facts just aren't getting out to Americans on Medicare. Among the remarkable findings:

Benefit cuts: The new law does not cut Medicare benefits, but only 22 percent know this. Meanwhile, 42 percent told NCOA's pollsters they think benefits will be cut in the future. In fact, the law adds new preventive health visit coverage, gradually closes the gap in prescription drug coverage (the "doughnut hole"), boosts reimbursement rates to primary care physicians and improves long-term care coverage for seniors with disabilities who live at home.

On the doughnut hole, 42 percent were aware that the coverage gap will be closed over time--a number that could have been much higher considering the importance of this change in benefits.

The widely-held view that benefits are being cut probably stems from the oft-repeated warning from health care reform opponents that the law slashes Medicare. The only leg these critics have to stand on is the planned cuts in reimbursements to Medicare Advantage programs -- the privatized managed care option offered to Medicare beneficiaries. But cuts in reimbursements are not the same as cuts in benefits.

Medicare Advantage plans currently are reimbursed by the federal government at 114 percent of regular Medicare rates -- a payment scheme that was put in place to stimulate the Advantage market but amounts to no more than a big subsidy to insurance companies. The new law freezes Advantage payments at current levels through 2011, and then reduces them by $116 billion over a period of years, ultimately equalizing reimbursements with traditional Medicare. But 17 percent of respondents think the law will eliminate Advantage plans, with another 62 percent unsure of the law's impact.

There's also confusion among seniors who don't seem to know whether they are enrolled in basic Medicare or Advantage plans.

"Many seniors don't know if they are in Medicare Advantage or something else," said Howard Bedlin, NCOA's vice president for public policy and advocacy. "They may have a Medigap policy or a prescription drug plan from one of the providers that also offers Medicare Advantage. They get all these things in the mail from companies that may have nothing to do with their basic Medicare coverage, and sometimes the difference is just not that clear."

That confusion turns up in NCOA data showing that 47 percent of poll respondents say they are in Advantage plans--a number that's nearly double the actual national enrollment rates, according to research by the Henry J. Kaiser Family Foundation.

Physician rate cuts: Seniors worry -- with justification -- that their doctors will stop accepting Medicare due to insufficient reimbursement rates. Congress has been squabbling for years over a scheduled double-digit cut to doctors' compensation; it's an issue that the health care reform law didn't address -- which is unfortunate.

At the same time, the law doesn't specifically call for any cuts in payments to doctors. But just 14 percent of poll respondents understood that. A full 45 percent stated that the law does cut physician reimbursement rates; and another 41 percent weren't sure.

The federal deficit: The new law isn't projected to increase the federal deficit -- but only 14 percent of respondents knew that. In a similar vein, the law is expected to extend the solvency of the Medicare Trust Fund by almost a decade, but only 24 percent of respondents knew this.

NCOA only surveyed Medicare-eligible individuals over age 65, but the new law also contains important benefits for older Americans below that age who are ineligible for group insurance plans due to joblessness or other factors. Although insurance issues affect Americans of all ages, the problems are acute for people over 50, who tend to have more pre-existing conditions than younger people do, and use more health care.

Starting in 2014, insurance companies won't be able to refuse applicants with pre-existing conditions, and the new law also creates new insurance options for people without group coverage. This summer, new high-risk insurance pools are being launched in many states in partnership with the federal government that cap annual out-of-pocket costs at $5,950 for individuals and $11,900 for families.

The high-risk pool will serve as a bridge to longer-term solutions. These include private insurance exchanges that will operate starting in 2014, as well as expanded Medicaid for low-income households.

NCOA is launching an education campaign, Straight Talk for Seniors on Health Reform, aimed at helping seniors get the facts they need about health reform and changes to Medicare.

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