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Obama Town Hall Meeting Spotlights Medicare Role in Overhaul

By Jane Norman, CQ HealthBeat Associate Editor

August 11, 2009 -- President Obama's town hall meeting on health care in Portsmouth, N.H., on Tuesday failed to draw the heckling, shouting, and even effigy-hanging that have occurred at town hall meetings with members of Congress in other U.S. cities in recent days.

But Obama did purposefully focus attention on Medicare issues that are worrying seniors, who polls have found are the most skeptical about the president and congressional Democrats' plans to overhaul the health care system. For example, a Gallup Poll released July 31 found that seniors are the least likely of all age groups to say that an overhaul will improve their situation.

Obama acknowledged that's what the polls say, added that it's "understandable" because seniors often require more health care, and put special emphasis on speaking directly to Medicare beneficiaries.

"Well, first of all, another myth that we've been hearing about is this notion that somehow we're going to be cutting your Medicare benefits," said Obama. "We are not. AARP would not be endorsing a bill if it was undermining Medicare, OK?"

The seniors' group, however, issued a statement shortly after the presidential event to make it clear no endorsement has been issued.

"While the President was correct that AARP will not endorse a health care reform bill that would reduce Medicare benefits, indications that we have endorsed any of the major health care reform bills currently under consideration in Congress are inaccurate," said Tom Nelson, AARP chief operating officer.

Obama perhaps most importantly confronted fears about "death panels," which some Republicans have charged would make end-of-life decisions for ill seniors. The Web site Politifact rated as "pants on fire" a statement by former Alaska Gov. Sarah Palin on Facebook that the elderly "will have to stand in front of Obama's 'death panel' so his bureaucrats can decide, based on a subjective judgment of their 'level of productivity in society,' whether they are worthy of health care."

Said Obama: "It turns out that I guess this arose out of a provision in one of the House bills that allowed Medicare to reimburse people for consultations about end-of-life care, setting up living wills, the availability of hospice, et cetera. So the intention of the members of Congress was to give people more information so that they could handle issues of end-of-life care when they're ready, on their own terms. It wasn't forcing anybody to do anything. This is I guess where the rumor came from."

A Republican, Sen. Johnny Isakson of Georgia, is a strong proponent of the provision, said Obama. He added: "And somehow it's gotten spun into this idea of 'death panels.' I am not in favor of that. So just I want to—I want to clear the air here."

The actual provision in the House version of the overhaul bill would authorize Medicare payments for an "advanced care planning consultation" between individuals and doctors, if a patient chose to schedule such an appointment. The session is supposed to include an explanation of directives including living wills, durable powers of attorney, and end-of-life services available such as hospice care and palliative care. Orders on how the patient wants life-sustaining treatment to be administered may be written during the consultation.

Obama said the underlying concern is that health care somehow will be rationed. "We do think that systems like Medicare are very inefficient right now, but it has nothing to do at the moment with issues of benefits," he said. "The inefficiencies all come from things like paying $177 billion to insurance companies in subsidies for something called Medicare Advantage that is not competitively bid, so insurance companies basically get $177 billion of taxpayer money to provide services that Medicare already provides."

However, the cutback in Medicare Advantage, which is administered through private health insurance plans and provides a big chunk of money to help finance the overhaul without running up the deficit, also likely would affect millions of seniors.

According to the Kaiser Family Foundation, 22 percent of those enrolled in Medicare in 2009 belong to a Medicare Advantage plan, and since 2003 the number of Medicare Advantage beneficiaries has almost doubled from 5.3 million in 2003 to the current 10.2 million, as of March. Enrollment rates tend to be higher in urban areas than in rural counties.

Kaiser says that Medicare Advantage plans provide basic Medicare benefits and are required to use rebates they receive by bidding below a benchmark to provide extra benefits like vision or hearing, or reduced cost-sharing or premiums. However, groups such as the Commonwealth Fund have argued that Medicare Advantage was supposed to save money for the program and has failed in that mission.

The Congressional Budget Office said in a 2007 report that while reducing the payment differential between Medicare Advantage and the fee-for-service program could result in substantial savings for the government, "it would also diminish the supplemental benefits and cash rebates the Medicare Advantage plans can offer to enrollees and lessen enrollment in those plans."

Obama characterized the reductions as "subsidizing folks who don't need it," referring to insurers, and rejected the notion that changes to Medicare Advantage might affect the more than 10 million seniors who are currently beneficiaries.

"I just want to assure we're not talking about cutting Medicare benefits. We are talking about making Medicare more efficient, eliminating the insurance subsidies, working with hospitals so that they are changing some of the reimbursement practices," he told the audience in Portsmouth.

Prior to the event, former New Hampshire Gov. John H. Sununu correctly predicted the president would receive a "respectful" reception in Portsmouth, though Sununu said he understands the intensity of emotions that have surrounded the health care debate at other town halls around the country. People are upset because they feel there hasn't been a "full debate" in Congress yet, he said. "This idea we have to pass something immediately is not the way to do it," said Sununu, the chairman of the Republican Party of New Hampshire.

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