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Four Pinocchios for yet another Democrat ‘Mediscare’ ad

A new ad endorsed by Rep. Nick Rahall (D-W.Va.) attacks his Republican opponent Evan Jenkins for his stance on Medicare. (Video: Nick Rahall)
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“His billionaire financial backers want to turn Medicare into a voucher plan. That could raise seniors’ out of pocket costs—something Evan Jenkins is comfortable with. He said seniors should have some ‘financial skin in the game.’”

–voiceover of new attack ad by Rep. Nick Rahall (D-W.V.) against his GOP rival, Evan Jenkins.

This ad, in the hard-fought congressional race between Rep. Nick Rahall and GOP state Sen. Evan Jenkins, is textbook example of why voters gets turned off by politics. It takes some misleading facts and then combines it with a statement taken grossly out of context.

Let’s take a look.

The Facts

First, the ad starts with a bit of misdirection. It refers to Jenkins’ “billionaire backers,” presumably Charles and David Koch, and the support by the Koch-backed Americans for Prosperity for a plan originally advanced in 2011 by Rep. Paul Ryan (R-Wis.), the chairman of the House Budget Committee.

Under the 2011 version of the plan, the traditional fee-for service Medicare plan would have been changed to a “premium support” model, under which Medicare beneficiaries would instead receive help in buying private insurance. (For a neutral description of the concept, read this Health Affairs article.)

But as we have repeatedly noted, Ryan substantially changed the plan in 2012 and now offers traditional Medicare as an option. Indeed, while the ad flashes a headline suggesting seniors would pay as much as $6,000 extra a year, the source cited is from 2011—meaning the the old plan.

That $6,000 claim is based on a 2011 analysis by the left-leaning Center on Budget and Policy Priorities (CBPP), using data from the Congressional Budget Office, regarding Ryan’s original plan. The report said that in 2022, when the premium support system then was expected to go into effect, a beneficiary’s out-of-pocket expenses would double, from $6,000 to $12,000.

But when Ryan’s plan changed, so did the numbers, in part because Ryan allowed Medicare spending to grow slightly faster than the nation’s economy (+0.5 percent), the same growth rate as President Obama’s budget. (The first version had capped growth at the rate of inflation.)

Under Ryan’s 2012 revision, the premium support payment would be based on the cost of the second least-expensive private plan or traditional Medicare, whichever is lower. Any difference in costs would need to be made up by the beneficiary. But Medicare benefits of at least one plan supposedly would be covered by the premium-support payment. But in 2014, Ryan moved to an “average-bid” plan — meaning the average of all bids submitted by private insurers and traditional Medicare.

In a September 2013 report, CBO found that the “average-bid” option would actually provide savings for beneficiaries; the same report essentially retracted the 2011 analysis that formed the basis of CBPP’s $6,000 projection. (CBO says its modeling has improved.)  CBPP in its most recent examination of the Ryan plan reiterates that, in its view, over time costs would rise and traditional Medicare would be eroded. But there are no numbers as definitive as the original estimate of a $6,000 gap.

Indeed, the Journal of the American Medical Association in 2012 calculated that the gap would be much less than $6,000. The report suggested that if the revised Ryan plan had been in effect in 2009, the additional payment would have added up to less than $800 a year.

In any case, the ad really becomes untethered from reality when it purports to quote Jenkins as confirming that seniors should have some “financial skin in the game.”

The ad suggests that the candidate is talking about raising Medicare premiums. But in fact the quote has to do with completely different subject — Medicaid, the government-run health care program for the poor. Jenkins was interviewed by Charleston Daily Mail for an article on how the Affordable Care Act’s expansion of Medicaid would begin to require co-payments for some recipients — because he was executive director of the West Virginia State Medical Association.

Here’s Jenkins’ quote in context:

Under current Centers for Medicare and Medicaid rules, states cannot charge Medicaid recipients more than $8 for non-emergency trips to a hospital emergency room.
For inpatient care, states can charge patients as much as half the cost for their first day of treatment, or set a nominal fee. For outpatient care, states only can charge a $4 co-pay if patients’ income is below the federal poverty line.
That doesn’t seem like much, but state Sen. Evan Jenkins, D-Cabell, said studies have proven even small co-payments encourage health care consumers to reconsider unnecessary medical services….
“With a little financial skin in the game, they will think about that co-pay when deciding whether or not ‘I really need to go to the doctor,’ ” he said. “When something is free, we don’t place a very high value on it. We may take it for granted and we may over-utilize.”
And that is exactly what is happening at hospitals around the state.
Dale Wood, chief quality officer for Charleston Area Medical Center, said most people who arrive at emergency rooms are soon sent back home.
“Depending on the type of hospital, it may be as high as 80 percent go home,” he said.

In other words, Jenkins was quoted as an expert, not in a political context. The ad leaves the impression that Jenkins is perfectly happy as a policy-maker to force seniors to pay $6,000 more in premiums a year, when in fact he wasn’t talking about seniors—and the actual co-pays generally turned out to be a few dollars a visit. (Technical note: there are some poor, elderly Americans on Medicare who also use Medicaid to fill in gaps in Medicare’s benefit package but they generally are exempted from the new rules.)

The Rahall campaign stood by its ad.  Officials claimed it was not about the Ryan budget but something deeper. “The point of the ad is that Evan Jenkins believes in raising seniors’ out-of-pocket costs, just like his wealthy backers,” a campaign statement said. “They share that belief whether it’s Medicare or seniors’ copays – the consequences are the same: seniors pay more.”

The Pinocchio Test

It’s really time for Democrats to drop these repeated “Mediscare” references to a supposed $6,000 increase in premiums. It is so out of date as to be laughable.

But even without that claim, the use of Jenkins’ quote about Medicaid to make broad charges about Medicare is a ridiculous and misleading mix-up of policies. The Rahall campaign should be ashamed of this ad.

Four Pinocchios

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