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Democratic Super PAC Uses Familiar Political Play To Hit Trump On Medicare

Priorities USA Action, a Democratic super PAC, announced a new digital and TV ad series criticizing President Donald Trump’s response to the coronavirus pandemic.

Among the ads is a 15-second spot, titled “Pause,” that alleges Trump is trying to cut Medicare during the global health emergency.

“Our lives are on pause. We’re worried about our health. So why is Trump still trying to cut our Medicare? $451 billion in cuts in the middle of a deadly pandemic. Trump is putting us at risk,” the commercial’s narrator says.

The PAC, which was formed in 2011 to support President Barack Obama’s reelection campaign, has been tapped by Joe Biden, the presumptive Democratic presidential nominee, as his preferred choice among Democratic super PACS for big-donor giving.

This ad caught our attention for two reasons. First, the term “Medicare cuts” has long been volleyed between both Republicans and Democrats in Congress and the White House — and often has proven to be a powerful political tool.

Second, the connection between “cuts” to Medicare and the coronavirus pandemic was a new concept we wanted to explore.

We reached out to Priorities USA Action to ask for the basis of these statements.

Josh Schwerin, a PAC spokesperson, sent us links to news articles and confirmed that the “$451 billion in cuts” referred to Trump’s 2021 proposed budget for Medicare.

Asked to pinpoint where the $451 billion came from, Schwerin pointed us to a February ABC News article that said the president’s budget plan would “whack away at federal spending on health care over the next 10 years … including $451 billion less spent on Medicare.” He also sent us links to a February Washington Blade article and February press release from Rep. Jahana Hayes (D-Conn.) — both of which also cited that figure.

Cuts Or A Reduction In Spending? An Argument That’s Been Around

In fall 2010, a few months after the Affordable Care Act was enacted, Republicans aired midterm campaign ads attacking Democrats for “cutting” or “gutting” Medicare. The reason was the law included a $500 billion reduction in projected spending for Medicare over 10 years, which would be used to help fund the ACA.

The Obama administration said the reductions in spending would come from lowering payments to Medicare Advantage plans and providers and would not affect the level of care that Medicare beneficiaries received. They also said it would help make the Medicare system more financially stable.

Now, almost 10 years later, Democrats are using the same language to criticize the White House’s long-term plan for Medicare spending.

“‘Cuts’ is a term that has been thrown around for many years,” said Tricia Neuman, executive director of the Program on Medicare Policy at the Kaiser Family Foundation. “This is a semantic issue that often gets politicized, often in an election year.” (Kaiser Health News is an editorially independent program of the foundation.)

Neuman explained that what is being considered here is a reduction in the projected increase in spending over a certain period. This reduction is based on estimates of how much the government is projected to spend on programs — factoring in proposed policy changes — for the following 10 years, taking into account current levels of spending, assumptions about economic growth and trends in the use of Medicare coverage, said Neuman.

Trump’s 2021 budget blueprint for Medicare estimated that spending would increase each of the 10 years. But the estimate also suggested that the administration’s proposed policy changes would reduce the spending increase compared with estimates of what would be spent if the changes were not implemented.

“Let’s say Medicare spends $100 in 2020 and is projected to spend $200 in 2021,” Neuman said. “If the budget said we’re going to reduce the growth in spending by $25, that’s a reduction in an increase. But other people might call that a cut.”

The Number Itself And What It Means

We reached out to the Department of Health and Human Services, which oversees Medicare, for its take on that $451 billion figure but have not heard back.

Marc Goldwein, senior policy director for the nonpartisan Committee for a Responsible Federal Budget, said the actual figure could be anywhere from $400 billion to $600 billion, depending on how calculations are done. His analysis relied on the executive branch’s Office of Management and Budget calculations and landed on a figure close to $505 billion. Other variables, such as “likely savings from drug price reform” — yet to be enacted — move it closer to $600 billion.

The left-leaning Center on Budget and Policy Priorities came up with a similar estimate: $501 billion. The Congressional Budget Office’s estimate, not including savings generated from proposed drug pricing reforms, was closer to $400 billion.

In all cases, though, the reductions in Medicare spending would be achieved through proposals such as lowering payments to providers and paying the same amount for the same health service offered in different settings.

Goldwein said these proposals for Medicare reform are largely bipartisan and “either mimic or build upon” those advanced during the Obama era. He also said that, in his organization’s view, the “cuts” are savings to the Medicare program and beneficiaries, who would see lower premiums and out-of-pocket medical costs.

The policy experts said it’s likely the reductions in spending wouldn’t directly affect the care that Medicare beneficiaries receive. But provider groups have complained that lower reimbursements might drive some doctors to leave Medicare. Hospitals have argued against the proposal for equalizing payments for similar services because they say their overhead expenses are higher than those of a doctor’s office or off-site clinic and their higher rates help finance other necessary services.

Timing Matters

The Priorities USA Action ad also alleges that Trump is trying to cut Medicare “in the middle of a deadly pandemic.” But the timeline of events doesn’t support this statement.

The White House released the 2021 budget proposal on Feb. 10 — well before the COVID-19 outbreak had become a part of our national consciousness.

The first domestic case of COVID-19 was announced by the Centers for Disease Control and Prevention on Jan. 21. The World Health Organization declared the outbreak of the novel coronavirus a “public health emergency of international concern” on Jan. 30.

On Feb. 10, the day the budget was released, the CDC put out a press release stating there were 13 cases of the disease in the U.S. CNN also published an article that day stating the vast majority of COVID-19 cases and deaths had occurred in China. Authorities didn’t announce the first U.S. death from COVID-19 until Feb. 29. The WHO declared a pandemic on March 11.

“These budget proposals were probably developed well before the pandemic hit the U.S. and hit it hard,” said Neuman. However, she added, “the administration hasn’t disavowed these proposals, but they also haven’t pushed them forward.”

Joseph Antos, a scholar in health care and retirement policy at the right-leaning American Enterprise Institute, said it was a “ridiculous statement to connect cutting Medicare spending to the COVID crisis.”

“The implication of the video that this is going on actively while we’re in the middle of this crisis, that’s dead wrong,” said Antos.

Our Ruling

The Priorities ad said Trump is trying to make $451 billion in Medicare cuts “in the middle of a deadly pandemic.”

This is an exaggerated attack, even before the pandemic is layered on top of it. The dollar figure itself is “in the ballpark” of what the policy proposals would generate in spending reductions, giving this ad a sliver of truth. However, in the Trump budget, the amount is spread over 10 years — important context that was omitted.

What’s in Trump’s budget proposal is not a direct cut to Medicare. Instead, Priorities uses the age-old political tactic — employed on both sides of the aisle — of holding up a reduction in projected spending growth as a “cut.”

Moreover, the ad leaves the impression that Trump is trying to whack Medicare for seniors at a time when panic is particularly high because of the coronavirus. But that connection to the pandemic is also misleading. The presidential budget was released weeks before most of the nation began to comprehend the threat of COVID-19.

The claim contains an element of truth but ignores critical facts and context that would give a different impression. We rate it Mostly False.

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A Senator From Arizona Emerges As A Pharma Favorite

Sen. Kyrsten Sinema formed a congressional caucus to raise “awareness of the benefits of personalized medicine” in February. Soon after that, employees of pharmaceutical companies donated $35,000 to her campaign committee.

Amgen gave $5,000. So did Genentech and Merck. Sanofi, Pfizer and Eli Lilly all gave $2,500. Each of those companies has invested heavily in personalized medicine, which promises individually tailored drugs that can cost a patient hundreds of thousands of dollars.

Sinema is a first-term Democrat from Arizona but has nonetheless emerged as a pharma favorite in Congress as the industry steers through a new political and economic landscape formed by the coronavirus.

She is a leading recipient of pharma campaign cash even though she’s not up for reelection until 2024 and lacks major committee or subcommittee leadership posts. For the 2019-20 election cycle through March, political action committees run by employees of drug companies and their trade groups gave her $98,500 in campaign funds, Kaiser Health News’ Pharma Cash to Congress database shows.

That stands out in a Congress in which a third of the members got no pharma cash for the period and half of those who did got $10,000 or less. The contributions give companies a chance to cultivate Sinema as she restocks from a brutal 2018 election victory that cost nearly $25 million. Altogether, pharma PACs have so far given $9.2 million to congressional campaign chests in this cycle, compared with $9.4 million at this point in the 2017-18 period, a sustained surge as the industry has responded to complaints about soaring prices.

Sinema’s pharma haul was twice that of Sen. Susan Collins of Maine, considered one of the most vulnerable Republicans in November, and approached that of fellow Democrat Steny Hoyer, the powerful House majority leader from Maryland.

It all adds up to a bet by drug companies that the 43-year-old Sinema, first elected to the Senate in 2018, will gain influence in coming years and serve as an industry ally in a party that also includes many lawmakers harshly critical of high drug prices and the companies that sell them.

“This is a long-term play,” said Steven Billet, a former AT&T lobbyist who teaches PAC management at George Washington University. “She’s more of a moderate than people are giving her credit for. If I’m a pharmaceutical guy, I’m saying, ‘You know what? Maybe this is somebody we can work with down the road.’”

The industry’s pivot to Sinema comes as powerful favorites such as former Sen. Orrin Hatch of Utah and retiring Rep. Greg Walden of Oregon, both Republicans, fade from the scene.

Bisexual, an LGBTQ rights advocate and a former member of the Arizona Green Party, Sinema said in 2006 that she was the most liberal member of the Arizona State Legislature, according to HuffPost. These days, representing traditionally conservative Arizona statewide, she portrays herself as a moderate. She favors better medical coverage by improving the insurance company-friendly Affordable Care Act, for example, not by scrapping it in exchange for “Medicare for All.”

“Sinema is a talented politician who knows where she needs to be politically and will get there,” said Nathan Gonzales, editor of Inside Elections, a nonpartisan newsletter.

Sinema’s spokesperson did not respond to queries from KHN.

First elected to the U.S. House in 2012, she has a history of supporting pharmaceutical and biotech firms, dozens of which have operations in Arizona. Her acceptance of drug industry campaign contributions sets her apart from Democrats such as Sen. Cory Booker of New Jersey who have pledged to reject pharma money, not to mention those who spurn all corporate cash.

“The Republican Party tends to be more receptive to pharma cash,” said Paul Jorgensen, a political science professor at the University of Texas Rio Grande Valley, who analyzes campaign finance. “You’re going to see divisions within the party on pharma on the Democratic side.”

In 2017 Sinema introduced a House bill, strongly supported by the Biotechnology Innovation Organization trade group, that would have eased financial regulation on publicly traded biotech firms with little revenue. The measure has not become law, but two weeks later BIO named Sinema “Legislator of the Year,” calling her a “stalwart advocate” for life sciences jobs.

“We welcome the opportunity to work with any policymaker who understands the value of science, the risks, costs and challenges of developing new medicines, and the need to ensure patients have access to medicines with out-of-pocket costs they can afford,” BIO spokesperson Brian Newell said.

Sinema portrayed her backing of a 2016 measure to accelerate the introduction of scarce generic drugs as a blow against high drug costs. A version became law the next year. But support for the bill by the Pharmaceutical Research and Manufacturers of America, the main brand-drug lobby, prompted some to question its potential to bring down overall drug prices.

Sinema was a strong advocate of the biggest overhaul of over-the-counter drug regulation in almost half a century. The measure became law in March with little public notice as part of the CARES Act to rescue the economy and fight the coronavirus. It gives the Food and Drug Administration new leeway to move against possibly dangerous drugs, sets up industry fees to pay for accelerated reviews and creates incentives to bring new medicines to market.

The changes drew widespread, bipartisan support. The old OTC regulation “wasn’t good for anyone,” said Joshua Sharfstein, who was deputy FDA commissioner in the Obama administration. “It wasn’t good for consumers. It wasn’t good for industry.”

The new system resembles the user-fee financing of regulation for prescription drugs. But making the FDA dependent on drug company money for OTC oversight — subject to periodic negotiation with industry — makes the agency beholden to the companies it oversees, said David Hilzenrath, chief investigative reporter for the Project on Government Oversight, a watchdog nonprofit.

Accelerating review of OTC medicines “may be a double-edged sword,” he said. “It could speed decisions that benefit the public and it could speed decisions that put the public at risk.”

Personalized medicine — also known as precision medicine — promises to use genetic characteristics and other traits to identify which treatments are best for a particular patient.

Sinema co-chairs the Personalized Medicine Caucus along with Republican Sen. Tim Scott of South Carolina and two House members. The lawmakers introduced the group in coordination with a pharma industry group, the Personalized Medicine Coalition.

“Raising awareness of the benefits of personalized medicine helps detect and prevent diseases, while making health care more affordable and accessible for Arizona families” was Sinema’s quote in the press release.

But affordability has not been a hallmark of personalized medicine so far. Like other recent pharma products, genetically targeted medicines and tests can come with extremely high prices while sometimes delivering mediocre benefits, health policy analysts say.

One of the best-known precision medicines is Merck’s Keytruda, used against a variety of cancer tumors with certain genetic profiles. It costs more than $100,000 a year.

“It’s a good drug,” said Vinay Prasad, an associate professor at the University of California-San Francisco who studies health policy and cancer drugs. “But behind it is a marketing machine that is trying to maximize its use.”

In any case, personalized medicine generally “has been a mixed bag,” with prices for cancer drugs that are “universally horrendous,” he said. Industry enthusiasm may be “motivated by the fact that when something is called precision or personalized, the regulatory bar needed to approve it is lower,” he added. “And that is often good for profits.”

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KHN’s ‘What The Health?’: Still Seeking A Federal Coronavirus Strategy

Can’t see the audio player? Click here to listen on SoundCloud.

The Trump administration sent its COVID-19 testing strategy plan to Congress, formalizing its policy that most testing responsibilities should remain with individual states. Democrats in Congress complained that the U.S. needs a national strategy, but so far none has emerged.

Meanwhile, President Donald Trump, noticing that his popularity among seniors has been falling since the pandemic began, unveiled a plan to lower the cost of insulin for Medicare beneficiaries. However, while diabetes is a major problem for seniors in general and for Medicare’s budget, only a small minority takes insulin.

This week’s panelists are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Anna Edney of Bloomberg News and Erin Mershon of STAT News.

Among the takeaways from this week’s podcast:

  • The difficulties caused by the lack of a unified federal response to the pandemic can be seen by looking at other countries. Communities around the world face some of the same problems U.S. cities and states do, such as high numbers of cases in nursing homes and other congregate living facilities, and test shortages. But in other countries, the governments have taken the lead in working through the issues.
  • Recent episodes of crowds gathering as states reopen point to a breakdown in public health messaging. That may be partly attributable to the president’s ambivalence or a result of the recent cutback in press briefings and other direct communication from federal public health officials. But much of it could also be directly related to political divisiveness, which runs rampant.
  • With a Rose Garden ceremony, Trump announced the deal with drugmakers to limit Medicare beneficiaries’ out-of-pocket costs for insulin to $35. That is expected to save those patients on average more than $400 a year. But the announcement is a long way from the promises made by the administration to bring down drug prices for all Americans.
  • Republicans have touted short-term insurance plans as a cheaper alternative to health coverage offered under the Affordable Care Act’s marketplaces. But the COVID-19 pandemic has highlighted shortcomings of those plans, including that many don’t cover prescription medications or experimental treatments.
  • The pandemic has also spotlighted the administration’s intent to get more drug manufacturing — which has become concentrated in India and China — to return to the United States. The government recently announced it is starting a project with a Virginia company to add manufacturing capacity stateside.

Also this week, Rovner interviews KHN’s Phil Galewitz, who reported the latest KHN-NPR “Bill of the Month” installment about a patient with a suspected case of COVID-19 who did what he was told by his health plan and got billed, anyway. If you have an outrageous medical bill you would like to share with us, you can do that here.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read, too:

Julie Rovner: ProPublica’s “The Feds Gave a Former White House Official $3 Million to Supply Masks to Navajo Hospitals. Some May Not Work,” by Yeganeh Torbati and Derek Willis

Also, The New York Times’ “My Mother Died of the Coronavirus. It’s Time She Be Counted,” by Elisabeth Rosenthal

Joanne Kenen: The New Yorker’s “The Town That Tested Itself,” by Nathan Heller

Anna Edney: The New York Times’ “Wealthiest Hospitals Got Billions in Bailout for Struggling Health Providers,” by Jesse Drucker, Jessica Silver-Greenberg and Sarah Kliff

Erin Mershon: The Washington Post’s “Coronavirus May Never Go Away, Even With a Vaccine,” by William Wan and Carolyn Y. Johnson

To hear all our podcasts, click here.

And subscribe to What the Health? on iTunesStitcherGoogle PlaySpotify, or Pocket Casts.

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