A new attack ad by a deep-pocketed, conservative organization ignores a key part of Senate candidate Sara Gideon’s health care platform in describing a Medicare buy-in as a “gamble.”
The ad also neglects growing popular support for a “public option.”
The ad by American Crossroads – a political action committee that has spent nearly $200 million since 2010 – is part of Republicans’ national strategy to cast Democratic proposals as a dangerous “government takeover” of health care.
The ad against Gideon warns of massive tax hikes and shuttered hospitals across rural Maine, but bases those dire predictions on worst-case scenarios from studies produced for the insurance industry.
The ad also fails to actually state what the candidate supports – in this case, a public option allowing some Americans to buy into Medicare coverage as an alternative to private insurance.
Polls suggest a majority of Americans support the general idea of a public option, including a January poll by Kaiser Family Foundation that 68 percent of respondents supported the concept.
The gambling-themed ad also relies heavily on worst-case scenarios from studies produced for an industry trade group whose members from the insurance and hospital industries oppose a public option of “Medicare for all.”
The ad by American Crossroads never actually says what Sara Gideon supports. Still image from video ad
Gideon, a Freeport resident currently serving as Maine’s House speaker, is in a high-profile race against incumbent Republican Sen. Susan Collins as well as two independents, Max Linn and Lisa Savage.
American Crossroads is one of more than 40 PACs and other outside groups that have collectively spent more than $50 million, to date, on Maine’s Senate race, according to the campaign finance watchdog group the Center for Responsive Politics.
Gideon lands in the middle of the Democratic spectrum on health care reforms.
On the far left are progressives like Savage and former presidential candidate Bernie Sanders pushing Medicare for all. Under such a scenario, every American would obtain health coverage through the federal program now offered largely to people age 65 or older, likely eventually leading to the elimination of private insurance.
But Gideon, presidential nominee Joe Biden and other moderates support a public option. Details vary among the proposals but, generally speaking, a public option would expand the Affordable Care Act to enable some people under age 65 – but probably not everyone – to buy into Medicare coverage.
But consumers would have a choice – hence the “option” in public option – and could stay on private insurance plans typically offered through their employers.
The American Crossroads ad claims that Gideon’s public option plan “could put employer-provided health insurance at risk.” To back that up, the ad points to a December 2019 New York Times analysis that says an inexpensive, efficient public option would likely lure some people away from private plans or force commercial insurers to change their offerings.
On the other hand, few people would likely drop their private coverage if the public option provided expensive, less-robust coverage. So it all depends on how the program is structured.
“A public-option plan wouldn’t directly affect private insurers,” the New York Times analysis states. “But by changing the rules of the market, it could influence a company’s business decisions. And that could affect consumers who want to buy private coverage.”
Other claims in the American Crossroads ad deal with how a public option could affect Maine’s ever-fragile rural hospitals and consumers’ wallets.
The ad states that a public option could “raise taxes on Maine workers more than $2,300 a year.” The $2,300 figure appears to come from payroll tax increases that academics at the conservative Hoover Institution said would be necessary to pay the government’s portion of a public option.
The January 2020 study was financed “with support from the Partnership for America’s Health Care Future,” which is an industry trade group comprised of insurance companies, hospitals, chambers of commerce and other business groups. The partnership was created to oppose Medicare for All and a public option.
The ad then asserts that Gideon’s “health care scheme” could lead to the closure of 15 rural hospitals in Maine, or 75 percent of the state’s 21 rural hospitals in the state. That scenario is based on an August 2019 study also paid for by the Partnership for America’s Health Care Future.
Digging deeper, the 15 shuttered hospitals prediction is based on revenue losses if 25 percent to 50 percent of people with private insurance opted to buy into Medicare – which would be a substantial buy-in to the program.
It also assumes no change in current Medicare reimbursement rates, which are typically lower than the rates paid by private insurers.
But Gideon has said that she believes any public option plan should also increase Medicare reimbursement rates.
“In the Senate, Sara supports expanding the number of ‘critical access hospitals’ in Maine and raising Medicare reimbursement rates to ensure rural hospitals are able to continue to meet their communities’ needs,” the Gideon campaign said in response to the American Crossroads ad.
To be clear, Maine’s rural hospitals were struggling years before the COVID-19 pandemic made things even more financially tenuous. Two of Maine’s 21 rural hospitals, Penobscot Valley Hospital in Lincoln and Calais Regional Hospital, are in bankruptcy.
And all hospitals in Maine, rural or urban, would be affected by a public option.
A 2017 financial report from the Maine Hospital Association stated that Medicare and Medicaid accounted for, on average, 62 percent of hospitals’ business but only 55 percent of their revenues “due to significant levels of underpayment” by the federal programs. Privately insured individuals accounted for 35 percent of business but 45 percent of hospital revenues.
“This forces Maine hospitals to shift the costs of caring for Medicare and Medicaid (MaineCare) patients to commercial health insurance carriers,” reads the report.
Those dynamics can also vary significantly. People with private insurance make up as little as 25 percent of clients at some hospitals and as much as 50 percent at others. Regional trends in age, demographics and employment also directly affect that breakdown.
Profit margins are also thin across the board but even more so in rural areas. According to Maine Hospital Association figures, urban hospitals averaged an operating/profit margin of 1.7 percent last year versus 0.4 percent for rural hospitals.
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