The Afterlife of 'Death Panels' Still Haunts Health Reform

by Dan Diamond, California Healthline Contributing Editor

Two years ago this week, the "death panel" myth was born -- and despite bipartisan efforts to kill it, the lie is still alive and plaguing would-be reformers.

A toss-away line in a July 2009 New York Post opinion piece helped crystallize fear that the government's proposed health reforms would ration care. Within weeks, most of the nation was aware of the death panel lie and a sizable minority believed it.

While some Republican lawmakers fought the rumor, the death panels eventually claimed at least one victim: Sec. 1233 of the House health reform proposal. The provision would have reimbursed physicians when providing voluntary end-of-life counseling sessions to Medicare beneficiaries.

Now, the Independent Payment Advisory Board -- hailed by some as a reform with true potential to control costs -- is under attack on similar grounds of care rationing. In terms of direct impact, IPAB may be unrivaled amid ACA's efforts to suppress health spending. But will the mounting rhetoric lead Democrats to sacrifice another provision?

Why Rumors Take Hold in Health Reform

Brendan Nyhan, a Robert Wood Johnson Foundation scholar in health policy and assistant professor at Dartmouth University, told California Healthline that the complexities of health care allow rumors to take root and effectively derail potential reforms.

Rather than debate philosophical principles -- do Americans have a constitutional right to health care? -- opponents of reform have successfully advanced factual-sounding arguments that prove tough to rebut, Nyhan noted.

For example, the 1988 Medicare Catastrophic Coverage Act drew fire from the National Committee to Preserve Social Security and Medicare, which contended that the government underestimated the number of seniors who would need to pay new premiums. The committee launched a direct mail campaign that helped force legislators to repeal MCCA within 16 months.

More recently, President Clinton's mid-1990s effort to reform health care was partly undone by fears of limited doctor choice, backed by a memorable ad campaign.

These arguments tend to rely on "status quo bias," Nyhan said, playing on many Americans' fears that reforms may take away current services and leave them worse off. "It's one of the most successful framing devices [in political rhetoric] and especially scary because the stakes are so high" in health care, he notes.

Need for Real Discussion on End-of-Life Care, Cost Containment

Months after the health reform law passed, the nation seems even less ready to have honest discussion about rising Medicare costs or end-of-life care.

Although lawmakers are constantly warned to rein in Medicare spending, concern that older voters will punish them at the ballot box keeps legislators from significantly overhauling the program, according to a recent New England Journal of Medicine study. And the latest efforts to advance reforms quickly stall in the still-charged political climate, even if some seniors expressly want to see changes.

For example, a report released last week by the Center to Advance Palliative Care found that 95% of seriously ill patients and their families would prefer more education about palliative care. Yet the Obama administration -- seeking to avoid potential attacks on the reform law -- immediately struck down an end-of-life counseling provision after it caught national attention in January.

Playing on these misperceptions is a bipartisan problem. While Republicans were the loudest advocates of the death-panel myth in ACA -- and now critique IPAB on similar grounds -- many Democrats summoned similar fears to lambast recent Republican proposals to reform Medicare, rather than objectively debate the plans' merits.

IPAB Under Attack Again

Richard Frank, who until recently served as HHS' deputy assistant secretary overseeing long-term care, told Politico that the current rhetoric means policymakers "have to be very careful when [they] talk about any of these issues." And Democrats' support for IPAB must walk that fine line.

The board -- created under the federal health reform law and made up of 15 experts -- would recommend how Congress should reduce Medicare spending if the program's spending grows too fast. Although IPAB is designed to include various health care stakeholders and researchers, the panel has been steeped in controversy since it was first floated in the 2009 reform debate. Republicans and other opponents of IPAB are reviving arguments that first emerged when discussing end-of-life counseling: the board takes decision-making authority away from patients and physicians, some warn.

Even some Democrats have raised concern that the panel would remove significant decision-making powers from Congress. Seven House Democrats, including Rep. Pete Stark (D-Calif.), recently co-sponsored Republican legislation (HR 452) that would repeal IPAB. However, these Democrats have refrained from calling IPAB a rationing board, although one warned that the commission is "the least imaginative option and most unlikely to result in the kind of health care we know seniors and Americans deserve."

IPAB received spotlight treatment last week, when HHS Secretary Kathleen Sebelius defended the plan to House Budget Committee members, including Chair Paul Ryan (R-Wis.). The clash illustrated how rhetoric over health reform has evolved to eclipse policy goals, on both sides of the aisle. Sebelius took shots at Ryan's proposal to reform Medicare, which she previously warned could lead to patients "[dying] sooner," while Ryan argued that IPAB gives too much authority to unelected officials.

Yet Ryan faces his own political ghost when critiquing Democrats' proposed commission: the GOP leader proposed his own version of IPAB in May 2009, according to The Incidental Economist’s Don Taylor.

Even if IPAB survives lawmakers' attempts to strike it down, there's no guarantee that the Obama administration will be able to find policy experts willing to join the commission, let alone endure a confirmation process. As California Healthline keeps an eye on the panel's future, here's what else is making news around the nation.

Rolling out Reform

  • In June, HHS granted 39 waivers exempting certain health plans from coverage-level mandates in the federal health reform law, according to data released last week by HHS' Center for Consumer Information and Insurance Oversight. The waivers are granted to employers that offer low-cost health plans -- or "mini-med" plans -- allowing them to receive a one-year exemption from a provision in the reform law that prohibits caps on health benefits. The total number of plans with exemptions now stands at 1,471 and the total number of individuals covered by such plans has reached 3.2 million. Employers that have requested waivers may keep them until 2014 if they apply for an extension and meet transparency requirements by Sept. 22 (Norman, CQ HealthBeat, 7/15).
  • State health insurance exchanges created by the federal health reform law could sell up to $60 billion in policies by 2014 and nearly $200 billion by 2019, according to a recent report from PricewaterhouseCoopers. In addition, the report stated that consumers will have improved "purchasing power that will make health insurers want to work harder to win their business and loyalty." The report is based on a national survey of 1,000 consumers and 153 health insurance executives, and in-depth interviews with 35 health care industry executives. The report also found that 52% of insurance executives expect their organizations to participate in the exchanges, nearly one-third are undecided and 17% do not intend to participate (Miliard, Healthcare Finance News, 7/12).
  • Enrollment in high-risk insurance pools created by the federal health reform law increased by more than 3,000 in March, April and May, but is still well behind initial projections, according to figures released on July 15. As of May 31, a total of 24,712 U.S. residents had enrolled in the Pre-Existing Condition Insurance Plans, nearly double the number of people who had enrolled as of the end of January. However, enrollment has been slower than initial projections, which estimated that 375,000 people would enroll during the first year. The new figures do not take into account efforts by HHS to boost enrollment that took effect on July 1 (Adams, CQ HealthBeat, 7/15).

Effects on Employers

  • A number of large U.S. employers -- including Wal-Mart, Gap, UPS and Hilton -- are lobbying the White House and the Internal Revenue Service for a grace period from penalties imposed by the federal health reform law. The overhaul's requirement that employers with 50 or more full-time employees offer affordable insurance or pay a $2,000 penalty per individual is unclear and poorly defined, the employers said. Although the health reform law defines a full-time employee as one who averages at least 30 hours weekly in a given month, many employers argue that a one-month average is not sufficient to determine whether a worker is full-time (Adamy, Wall Street Journal, 7/13).

In the States

  • On July 1, the Utah Department of Health submitted a request to CMS to alter its Medicaid program to reimburse physicians and hospitals based on outcomes and quality. Gov. Gary Herbert (R) signed legislation to change the state's payment program in March. The plan is to implement accountable care organizations and pay them risk-adjusted, capitated per-member and monthly rates to provide care and medical homes to Medicaid beneficiaries. The federal health reform law calls for the creation of ACOs. If CMS approves the waiver, the overhaul would take effect on July 1, 2012, in Utah's four most populated counties (Trapp, American Medical News, 7/8).

On the Hill

  • Sen. Ben Nelson (D-Neb.) has introduced legislation (S 1378) that would repeal a "glitch" in the federal health reform law that would allow middle-income elderly couples to qualify for Medicaid when the program is expanded in 2014. Under the health reform law, the value of Social Security benefits is not taken into account when determining Medicaid income eligibility. In a statement announcing the bill, Nelson said the measure would "keep Medicaid focused on lower-income Americans," adding that his bill would save $13 billion (Daly, Modern Healthcare, 7/16).
  • Last week, Democrats and Republicans released a bill that would repeal a portion of the federal health reform law that requires consumers to have a prescription before they can purchase over-the-counter medications with health savings accounts. The original prohibition on using HSAs for OTC purchases was added to the reform bill to reduce its cost (Pecquet, "Healthwatch," The Hill, 7/14). The Congressional Budget Office estimated that the restriction would save $5 billion over 10 years by compelling individuals to stop using their tax-free HSAs to buy OTC drugs (McCarthy, National Journal, 7/14). The White House has not yet taken a stance on the repeal bill ("Healthwatch," The Hill, 7/14).
  • Last week, four lawmakers -- including two Democrats -- at a House Energy and Commerce Subcommittee on Health hearing testified against the Independent Payment Advisory Board (Zigmond, Modern Healthcare, 7/13). Rep. Allyson Schwartz (D-Pa.), one of eight Democratic co-sponsors of a House bill (HR 452) to repeal IPAB, said she and some other Democrats are concerned that the panel will cut payments to doctors and hospitals. HHS Secretary Kathleen Sebelius also defended the panel in written testimony she submitted for the hearing (Pecquet, "Healthwatch," The Hill, 7/13).
  • Last week, Sens. Mike Enzi (R-Wyo.) and Orrin Hatch (R-Utah) sent a letter to the Institute of Medicine with a request for information to determine whether the federal health reform law will cause private health insurance premiums to increase. Enzi and Hatch asked IOM to include cost estimates on potential premium increases within its analysis of the essential benefits packages under the overhaul. The two lawmakers contend that coverage mandates included in the reform law will cause health care costs to increase. They also asked IOM to emphasize affordability and "consumer choice" in its analysis and encourage federal officials to avoid a "one-size-fits-all approach" in its recommendations (Daly, Modern Healthcare, 7/12).

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