Following Social Security push, liberal coalition tackles Medicare Advantage

A liberal activist group founded to resist President Bush’s proposed overhaul of Social Security is rallying support for Democratic efforts to scale back the role of health insurance companies in Medicare.

Americans United for Change, formerly known as Americans United to Protect Social Security, last week began rolling out a grassroots organizing campaign with other left-leaning groups to advocate reducing government premiums to private health plans that provide benefits under the Medicare Advantage program.

One goal of these organizations is to engage more young voters and broaden the base of support for cutting Medicare Advantage payments. For now, the older population that receives Medicare benefits is more likely to be engaged in the issue.

“There is a band of activist Americans out there … who will suit up for the fight if they feel an egregious wrong is being conducted,” Americans United President Brad Woodhouse said. “A component of this [will be] creating the message that this is a fight.”

In addition to Americans United, the Campaign for America’s Future, the American Federation of State, County and Municipal Employees, USAction, the Medicare Rights Center, the Alliance for Retired Americans and the National Committee to Preserve Social Security and Medicare are participating in the coalition.

Americans United and its partners want to deliver the message that the Bush administration’s support for Medicare Advantage proves that the president and his Republican allies in Congress are engaged in a piecemeal effort to privatize Medicare.

In 2005, Americans United, the AARP and other groups charged that Bush’s plan to add private investment accounts to Social Security amounted to an effort to privatize the program. Those arguments were central to the successful campaigns to stifle interest on Capitol Hill and among voters for the president’s proposal.

At issue this time are the changes made to Medicare Advantage by the same 2003 law that created the Part D prescription drug benefit.

The statute included financial incentives for more insurance companies to offer Medicare benefits to more individuals in a greater number of geographic areas. Health plans participating in the predecessor program to Medicare Advantage, called Medicare+Choice, claimed that they often struggled to earn profits because the federal subsidy was too small. Many plans that were losing money exited the program entirely, leaving their beneficiaries no choice but to rejoin traditional Medicare.

In addition, the health insurers argue that the additional subsidies enacted in 2003 allow them to offer benefits not available to people signed up for traditional Medicare, such as disease management services.

But senior congressional Democrats have vowed to scale back the subsidies, describing them as “overpayments” to the plans. According to an analysis by the Medicare Payment Advisory Committee, which reports to Congress, Medicare Advantage plans receive an average of 11 percent more money than it would cost to cover a beneficiary under the government-run “fee-for-service” program.

Moreover, Democrats operating under pay-as-you-go budget rules need to identify offsets for spending on other healthcare priorities, such as the cost of preventing a pending cut in Medicare’s payments to physicians and the expense of expanding the State Children’s Health Insurance Program.

If Democrats such as Rep. Pete Stark (Calif.), the chairman of the Ways and Means health subcommittee, are successful, they could garner as much as $50 billion from cutting payments to the health plans.

The Americans United-led Medicare Advantage campaign is not the group’s first foray into the politics of Medicare. When Part D debuted, Americans United worked closely with congressional and national Democrats to build support among liberals for changing the benefit, or at least for extending the enrollment deadline for beneficiaries to choose a private Part D drug plan.

In a written statement, Americans United described the effort as an “aggressive, national, seven-figure campaign.”
Woodhouse said that the Medicare Advantage campaign would be bigger than its Part D efforts but probably not reach the scale of its Social Security outreach. The groups do not currently plan to stage a paid advertising campaign, he said.

“We’re just getting started,” Woodhouse said. Social Security “went to a boil overnight. This is on a slow burn right now.”

Woodhouse emphasized that while his group will reach out to younger voters, he expects that older Americans will be more engaged and remain the primary target of the grassroots organization campaign on Medicare Advantage. “These are the people that most understand, are most articulate and most active,” Woodhouse said.

The National Committee to Preserve Social Security and Medicare also will focus its efforts on those who are on Medicare or soon will be, said the group’s president and chief executive, former Rep. Barbara Kennelly (D-Conn.).

Kennelly’s organization already has been pleading the case for reducing the health plan’s subsidies, both through grassroots efforts of its own and through lobbying members of Congress. “We’ve been talking about this, really, since the [Medicare Part D bill] passed and got very little attention” until this year, she said.