Health Insurance Reform Mythbuster: ‘The Obama Administration Has Issued a Gag Order’

Posted on by Karina

Health insurance reform opponents, including House Republican Leader John Boehner, continue to spread myths about America's Affordable Health Choices Act, including the ridiculous myth that the Obama Administration has issued a “gag order” on insurance companies telling seniors how health insurance reform will affect them. That is not true. What the Centers for Medicare and Medicaid Services (CMS) did do, is instruct health insurance companies to stop spreading misleading information about the possible impact of reform on seniors–conjecture not supported by independent news reporting and, potentially, a violation of both federal regulations and the law.

MYTH: The Obama Administration has issued a gag order on insurance companies telling seniors how health insurance reform affects them.

FACT: Yesterday, the Centers for Medicare and Medicaid Services (CMS) instructed health insurance companies offering Medicare Advantage plans and services to stop spreading misinformation — specifically in mailings and company web sites — about the impact of health insurance reform to Medicare enrollees:


Medicare today called on Medicare-contracted health insurance and prescription drug plans to suspend potentially misleading mailings to beneficiaries about health care and insurance reform. The Centers for Medicare & Medicaid Services (CMS) recently asked Humana, Inc. to end similar mailings. Humana has agreed to do so.

“We are concerned that the materials Humana sent to our beneficiaries may violate Medicare rules by appearing to contain Medicare Advantage and prescription drug benefit information, which must be submitted to CMS for review” said Jonathan Blum, acting director of CMS' Center for Drug and Health Plan Choices. “We also are asking that no other plan sponsors are mailing similar materials while we investigate whether a potential violation has occurred.”

Humana is one of a number of private health plans that contracts with CMS to offer health care services and drug coverage to Medicare beneficiaries as part of the Medicare Advantage and Part D programs. CMS learned that Humana had been contacting enrollees in one or more of its plans and, in mailings that CMS obtained, made claims that current health care reform legislation affecting Medicare could hurt Medicare beneficiaries. The message from Humana urges enrollees to contact their congressional representatives to protest the actions referenced in the letter.

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CMS issued the directive because of the likelihood that seniors and people with disabilities would believe this information to be “official communication about the Medicare Advantage program” rather than the opinion of the health insurance company. Furthermore, CMS indicated this kind of communication may be a violation of both federal regulations and federal law because these companies were misusing official Medicare enrollee data to lobby against legislation.

Beyond the CMS directive, insurance companies earning taxpayer dollars were spending money to lobby against specific legislative initiatives–using claims about Medicare cuts which have been widely discredited by independent news media and fact checkers.

MYTH: The House bill cuts Medicare to fund health insurance reform.

FACT: Nothing in this bill would reduce benefits to seniors. The cost savings measures in Medicare under America's Affordable Health Choices Act are all targeted at protecting and improving services and ensuring choice, by achieving new efficiencies; expanding authority to fight waste, fraud and abuse; and eliminating the wasteful Medicare Advantage subsidies to private insurance companies.

In fact, the $563 billion in savings over 10 years is a gross number–with a net of $340 billion in new spending to improve Medicare benefits and health care for seniors, including the following:

Lowers drug costs by gradually closing the “donut hole” for prescription drug reimbursement

Preserves choice of doctors by eliminating a 20 percent cut in doctor reimbursements

Lowers costs by eliminating copayments for preventive services

Improves low-income subsidy programs, including under the part D program, to help ensure Medicare is affordable for those with low and modest incomes

Computerizes medical records so seniors won't have to take the same test over and over or relay their entire medical history every time they see a new provider

Expands the medical workforce so seniors will have more doctors to choose from and an easier time getting an appointment

Develops new practices to improve quality such as the new Center for Quality Improvement that will identify best practices are distributed widely

Lengthens the solvency of Medicare by five years

Learn more:

Download a Health Insurance Reform Guide for Seniors (.pdf)>>

Health Insurance Reform Mythbuster: Impact on Seniors>>

What's In the Health Insurance Reform Bill For Seniors?>>

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