Seniors skeptical of health overhaul

The landmark health-overhaul bill the House passed earlier this month would bring about some unmistakable benefits for seniors, including:

• No more Medicare copays for cancer screenings, vaccines and other preventive services.

• An end to Medicare's infamous "doughnut hole" insurance gap that leaves many seniors having to pick up the full cost for their prescriptions in the middle of their coverage.

• And more money to pay doctors for treating Medicare patients, helping to keep a shortage of such providers from getting worse.

Why, then, are seniors like Gary Spiller so skeptical?

Spiller, a retired foreign-language teacher from Mill Creek, worries that the daunting costs of the 10-year, $1.1 trillion plan to extend coverage to virtually all Americans would be borne by those least able to afford it — seniors — in the form of reduced Medicare benefits or higher premiums.

"I'm not going to win at all and I'm pretty sure I'm gonna lose big time," said Spiller, 67. "The money's going to have to come from somewhere."

Polls show that Spiller and other Americans 65 and older are less likely than younger people to support President Obama's health-care efforts and more skeptical that changes would benefit them personally.

According to the September 2009 Kaiser Health Tracking Poll, people 65 and older were evenly split over whether they would be better off with an overhaul, while among those under 65, twice as many believe they would be better off than worse off.

For seniors opposed to an overhaul, much of the fear stems from well-publicized news reports of massive Medicare cuts over a decade.

The House bill calls for nearly $500 billion in spending cuts that are designed to keep Medicare solvent longer by reducing fraud, waste and excessive spending.

Excessive costs

Half the cuts would be to what experts call excessive payments to home-health, skilled-nursing and other institutional health providers.

The House bill would save an additional $155 billion by eliminating subsidies for Medicare Advantage plans sold by private insurers such as Group Health Cooperative, Regence BlueShield and UnitedHealthcare.

The anxiety among seniors persists despite insistence by many consumer advocates that health changes, on the whole, would strengthen Medicare without explicitly reducing benefits.

"One of the big myths out there is that health-care reform is bad for seniors," said Ingrid McDonald, Washington advocacy director for AARP, the largest organization for older Americans.

Both the AARP and the American Medical Association have endorsed the House bill.

AARP estimates the spending cuts would mean an extra five years of solvency for the portion of Medicare that funds hospital care, which is forecast to run out of money in the next eight years.

Joe Baker, president of Medicare Rights Center, a New York-based nonprofit consumer-advocacy group, blames fearmongering by overhaul opponents for leaving some seniors bewildered and scared.

"All they've heard is all the bad stuff that's going to happen in Medicare," Baker said. "They haven't heard about the good stuff."

Older supporters

To be sure, millions of older Americans are vociferous supporters for change.

After all, seniors are the only group in the nation that enjoys near-universal coverage — and many are impatient to extend that safety net to their kids and grandkids.

Edyth Koch, a senior who lives in a low-income apartment on Queen Anne, believes a government-run public-insurance plan is the most politically feasible solution to a largely private-insurance system rife with inequities, waste and high cost.

Koch has little sympathy for peers who remain fearful.

The elderly "tend not to want change from what they've got, even though what they've got costs too much," Koch said. "They don't have confidence that change is better."

Still, even supporters can't rule out the possibility some seniors could be hurt by the cuts in Medicare spending.

Perhaps the biggest uncertainty surrounds elimination of the subsidies to private insurers that sell Medicare Advantage plans.

In the late 1990s, Congress began aggressively encouraging seniors to switch from traditional Medicare to these private plans as a cheaper, managed-care alternative to traditional fee-for-service Medicare. Some 10 million seniors — nearly a quarter of the 45 million covered by Medicare — now get their benefits from commercial insurers, most of which receive fixed payments from the government for each enrollee.

But over time, Medicare Advantage plans actually became the more expensive option, at least for taxpayers.

Partly because of payment formulas devised by Congress to reward insurers for operating in rural and other underserved areas, some Medicare Advantage plans receive so much money per member that they are required to "rebate" the money by offering extra benefits, such as enhanced vision and dental coverage or gym memberships.

No advantage to feds

In 2009, the federal government found itself spending an average 14 percent more for each senior covered by Medicare Advantage than by regular Medicare.

The Senate, which could take up floor debate on its bill before Thanksgiving, also proposes reducing Medicare Advantage subsidies.

Now the question is whether the Medicare Advantage plans will respond by raising rates or reducing extra benefits. Even seniors who understand their sweet deal comes courtesy of taxpayers don't want the perks jeopardized.

"Why pay extra?" when a cheaper option is available, said Carl Christensen, a 73-year-old Bellevue resident who two years ago switched from traditional Medicare to a zero-premium plan through SecureHorizons. "We paid Social Security (taxes) all those years. I think the government has an obligation to take care of its senior citizens."

Baker, of the Medicare Rights Center, argues that losing the subsidies shouldn't automatically prompt insurers to pass along the cost to customers. Instead, companies could reduce expenses, accept lower profits or both, he said.

"It's not a given that it has to happen," Baker said.

U.S. Rep. Dave Reichert, R-Auburn, a vocal critic of the health-care overhaul bills and the AARP's support of them, contends seniors can't help but be shortchanged.

"How can the government cut half-trillion dollars from Medicare and claim that it's not going to increase premiums and decrease benefits?" he asked. "Half-trillion dollars is not streamlining."

Too much bloat

Chris Rayl disagrees.

A retired Boeing engineer from South King County, Rayl said the U.S. health-care system is riddled by too much bloat and profit taking.

Rayl suffered a minor heart attack in January but didn't realize it until later, when his cardiologist ran an electrocardiogram. Rayl subsequently had a balloon angioplasty to clear his blocked artery, then surgery to implant a stent.

All of that medical care makes Rayl wonder how much was done based on "what's good for me, and how much of it pays for good income for the doctor?"

Turns out Rayl, too, will have to pay.

He and his wife now each pay $149 a month for a generous Medicare Advantage plan from Regence BlueShield. Starting in January, the premiums will rise to $262 for each.

The news has sent the 75-year-old, with much reluctance, to shop for a different Medicare Advantage plan.

"We, the poor customers, need the public option more than ever," Rayl said.

Kyung Song: 206-464-2423 or ksong@seattletimes.com. Seattle Times news researcher David Turim contributed to this report.