Sacramento Bee ad twists truth for Dan Lungren

As I opened my Sacramento Bee Sunday paper (8/26/12) I was struck with a familiar looking advertisement. It was another “pro” Lungren ad. But instead of being sponsored by the American Action Network, this ad was purportedly placed by the National Taxpayers Union. The ad, which look suspiciously liked a “pro” Lungren ad placed by the American Action Network a couple months back, was thanking Rep. Lungren for his fight against H.R. 2190. The ad erroneously leads the reader to believe that Democrats have proposed a tax on the Part D Prescription Drug benefit. Let’s dissect the advertisement:

Rebate not Tax

H.R. 2190: Medicare Drug Savings Act of 2011 would require drug manufacturers to provide drug rebates for drugs dispensed to low-income individuals under the Medicare prescription drug benefit program. This would be an expansion of the current rebates provided by drug manufacturers that would include recipients on Medicaid as well as Medicare.

It was introduced by Henry Waxman [D-CA30] as a means to lower the deficit by reducing net expenditures of the Part D Prescription drug Medicare Advantage plans. The Medicare Part D program is a completely unfunded entitlement program. The government reimburses private insurance companies for each Medicare enrollee in their plan. There is no payroll deduction or other form of revenue to off-set the costs of the program.

The bill, introduced June of 2011, is given a 2% chance of passage because it was introduced by a Democrat in a Republican controlled congress. H.R. 2190 proposes no new tax on anyone.

National Taxpayers Union

The ad says it was paid for by the National Taxpayers Union (NTU) but looks really close to an ad

placed by the Super PAC American Action Network. A visit to NTU website proclaims they are a non-partisan advocate for overburdened taxpayers. As they provide a link to the conservative leaning American Action Forum in the ad, who is the parent of American Action Network, they can hardly classify themselves as non-partisan.

In addition, why would they sponsor an ad that has nothing to do with taxes? H.R. 2190 is about drug rebates, there are no proposed taxes mentioned in the bill.

Creating credibility

There were three reference links provided in the fine print in the ad. One of the links to Congressman Maurice Hinchey didn’t work. Next was a link to the American Action Forum document titled Cost Shifting Debt Reduction to America’s Seniors by Douglas Holtz-Eakin and Michael Ramlet, July 21, 2011. The authors of the document conclude that rebates can have an inflationary impact on the price of Part D premiums. Part of their introduction notes,

The ongoing debt ceiling negotiations between President Obama and Congress have sought to identify potential budget solutions to address runaway entitlement spending. Among the many proposals is the idea of extending Medicaid drug rebates to dual eligibles [H.R. 2190], or to those who qualify for a low-income subsidy (LIS) in the Medicare Part D program.

The authors construe the potential rise in premiums or other drug prices, as pharmaceutical companies ostensibly look to recapture lost revenue because of the rebates, as a “tax” to consumers. While cost shifting does raise prices somewhere in the particular economic system, it is not a tax. A tax is an assessment usually based on the value of property or income levied by a government.

Runaway entitlements

It is also fairly amusing that the conservative authors of this review give significant weight to the success and importance of the Part D program. In reality, as deficit hawks, the Part D program is just the sort of government entitlement program that raises the debt and would surely have been opposed by the authors when it was first proposed in 2003.

Co-conspirator in deception

The final link was to an opinion piece written by Grace-Marie Turner, president of the Galen Institute that was a guest column for Kaiser Health News. Her piece, Washington’s Rebate Tax Would Be Paid By Seniors, was a review of the Holtz-Eakin/Ramlet document published by the American Action Forum.

Did I mention that Douglas Holtz-Eakin was the President of the American Action Forum and Michael Ramlet was the Director of Operation Healthcare Choice at the American Action Forum. The American Action Forum has been pretty open about repealing the Affordable Care Act. They are the parent to the American Action Network that ran a similar ad on behalf of Dan Lungren. Ms. Turner is a co-author of Why ObamaCare Is Wrong for America (Broadside/HarperColllins, 2011).

It lends an air of credibility to Ms. Turner’s review of the American Action Network study on H.R. 2190 to have been published under the banner of the Henry J. Kaiser Family Foundation website. But in reality, there was no endorsement or legitimacy given to either Ms. Turner’s or the American Action Forum on H.R. 2190. When you read through Ms. Turner’s piece is fairly evident that she is doing the bidding for the American Action Forum and large pharmaceutical companies. Why else would these conservatives want to stop a deficit reduction proposal when they espouse that the growing deficit threatens our entire way of life?

No magnifying glass

And one final complaint, if I, as an insurance agent place an advertisement discussing Medicare, it must be in type no less than 14 point according to the Centers for Medicare and Medicaid. Some of the type was so small in the flyer I had to break out a magnifying glass to read it. The designers of these misleading advertisements know that you can’t read it, you probably won’t investigate it.

Obfuscation supreme

Overall, the ad “thanking” Dan Lungren for fighting against new taxes on Medicare is extremely deceiving. H.R. 2190 proposes no new taxes. There is no “deceptively named rebate” as the ad says. It is an actual rebate from big pharmaceutical companies to the Department of Health and Human Services. I am suspicious if the National Taxpayers Union actually paid for this ad or if they were reimbursed by the American Action Network. The ads greatest value rests in a bird cage.

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[schema type=”review” name=”Tax increases. Higher Premiums. Is that Medicare Reform?” description=””Pro” Rep. Dan Lungren ad paid for by National Taxpayers Union is deceptive and misleading about HR 2190 drug rebate program. There is no tax proposed as the ad leads the reader to believe.” rev_name=”Sacramento Bee ad twists truth for Dan Lungren” author=”Kevin Knauss” pubdate=”2012-08-26″ ]