Health bill needs seniors' support, but there's little in it for them

Kaiser Health NewsJune 25, 2009 

WASHINGTON — In many ways, seniors have the least to gain from an overhaul of the health care system. Thanks to Medicare, they're the only age group that already has universal coverage. And they have had a drug benefit since 2006.

That's why, in national surveys, seniors are significantly less likely than younger adults to say they expect to benefit from a national health overhaul. A June survey by the Kaiser Family Foundation found just 21 percent of people 65 and over say their families would be better off with a health care revamping, compared to 43 percent under 65. (Kaiser Health News is a program of the foundation.)

That's worrisome for people wanting to pass the legislation. Seniors "are the biggest voting bloc, so it's hard to see how this will all pass without seniors getting behind it," said Jim Furman, the chief executive of the National Council on Aging.

To try to win over skeptical seniors, President Barack Obama and lawmakers are proposing ways to strengthen Medicare and lower seniors' out-of-pocket costs.

On Monday, for example, the pharmaceutical industry announced a deal with the White House and the Senate Finance Committee to cut their brand name prices in half for seniors after they reach a Medicare coverage gap known as the "doughnut hole." The agreement is contingent on enactment of broad health care legislation.

The timing of the announcement was crucial.

Just days before, Obama's hopes for major health changes took a hit when the Congressional Budget Office issued unexpectedly high cost estimates for Democratic Senate plans. Moreover, hospital and doctor groups had just begun to criticize Obama's proposed $600 billion in cuts to Medicare and Medicaid to help fund coverage for the uninsured over the next decade. The provider groups argue that the cuts would hurt their ability to serve elderly and other patients.

The drug agreement gave AARP officials ammunition to say that their over-65 members would gain from an overhaul. "This will help quite a bit, as the doughnut hole has been the biggest complaint from our members," John Rother, AARP's executive vice president for policy and strategy, said in an interview.

Jack Hoadley, a research professor at Georgetown University's Health Policy Institute, said, "If seniors feel like something is in the reform plan for them, such as fixing the doughnut hole, it can have key consequences," for the legislation's chances.

AARP has yet to endorse any health bill, despite pleas from Democrats. Still, it has a big stake in a successful overhaul: Half its 40 million members are under 65. Overhaul advocates say those younger members stand to win big from having a guaranteed, affordable insurance option, especially if they lose their employer-provided coverage in the economic slowdown.

Some seniors back an overhaul, in part because of concern about their children and other family members.

"I am happy as hell with Medicare compared to being under private insurance all those years," said John Martin, 78, of Boynton Beach, Fla. "My only wish is that my children and grandchildren could have a plan like Medicare."

Others are leery of any government changes. Patrice Lynch, 58, who works at a Birmingham, Ala., seniors' center and gets insurance through her husband's employer, said, "I just don't trust the government, and think that with any reforms I'll still have to pay through the nose when I get to retirement age."

The doughnut hole was included in the legislation that created the Medicare drug benefit. Coverage stops when a senior's drug costs reach a certain level — this year, $2,700. When the costs reach $6,154, coverage starts again, with the government picking up 95 percent of the tab.

The AARP, besides working to reduce or eliminate the coverage gap, also is pursuing other goals, including:

  • Creating a pathway for the government to approve generic versions of expensive biologic drugs that are often used for patients with cancer. Obama favors such a change, which is included in legislation being discussed by Senate and House committees.
  • Establishing a Medicare transition benefit to cover the costs of home care when people leave the hospital.
  • Increasing Medicaid funding of home and community-based services that offer an alternative to nursing home care.
  • Making it easier for beneficiaries to qualify for low-income subsidies for Medicare drug plans.

The AARP hasn't taken a position on whether a government-run insurance option should be created as part of a major overhaul. Health insurers, hospitals and doctors oppose a public plan, which the president favors to help the uninsured.

Chances are that an overhaul plan would require individuals to have insurance, and Rother said that ample subsidies should be provided to make the coverage affordable. In addition, AARP wants new rules that would bar insurers from setting premiums for older adults that are more than double those for younger adults. About 13 percent, or 7.1 million, of adults age 50 to 64 were uninsured in 2007 — about 36 percent more than in 2000, the group says.

The backing of the seniors' lobby can make the difference between success and failure on Capitol Hill, something that Democrats — who have sometimes had rocky relations with AARP — are keenly aware of. In the early 1990s, AARP didn't throw its support behind a health care overhaul until it was too late, say Democrats who were involved at the time. In 2003, it supported Republicans' Medicare drug benefit bill over objections by many Democrats.

For its part, the AARP leadership has learned, through painful experience, to make sure it has members' support before going out on a limb. It supported a plan that Congress passed in 1988 that required Medicare enrollees pay a tax to finance coverage for catastrophic illness.

Several months later, former Rep. Dan Rostenkowski, then the chairman of the House Ways and Means Committee, was famously caught on television being chased down a Chicago street by a group of angry senior citizens who wanted him to answer for his vote.

The tax was repealed in 1989.

(Kaiser Health News is an editorially independent news service and is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization that's not affiliated with Kaiser Permanente.)

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