Ad Audit: “Health Reform Testimonials”

AD TITLE: Health Reform Testimonials

SPONSORS: Families USA & Pharmaceutical Research and Manufacturers of America (PhRMA).

SUMMARY: An unusual collaboration between a prominent liberal group and the prescription drug industry uses heart-rending vignettes of “real people” to press for affordable, comprehensive health insurance. Yet some of the people profiled in the ads might not get much relief under the main proposals pending in Congress.

BACKGROUND: In April, Families USA, a Washington-based consumer advocacy group, and PhRMA, the nation’s main trade group for drug manufacturers, announced a joint campaign to promote three policies to be included in health reform legislation:

• Extend Medicaid eligibility to everyone with incomes up to 133 percent of the federal poverty level, or $28,200 for a family of four in 2008.
• Provide government subsidies to people whose incomes are above that level but aren’t high enough to cover the costs of insurance.
• Limit the amount anyone has to pay out of pocket for major medical expenses.

Families USA says it purchased three weeks of time on the three major national cable networks, MSNBC, CNN and FOX. There are currently two versions of the ads. The total TV time purchase is in the “multi-million dollar” range but the groups decline to say how the cost is being split between them.

DESCRIPTION (ad #1): A sad piano tune plays in the background as a series of people speak directly into the camera. Their names and hometowns are displayed on the screen.

Kenneth Colen, a New Jersey business owner: “After fighting cancer, my health insurance company left me over $90,000 in the hole.”

Summer DeMichael, an uninsured Florida resident hospitalized for a colon infection because she couldn’t afford medication: “I couldn’t work because I was sick, and I couldn’t get better because I didn’t have health insurance.”

Mark Derbyshire, owner of a moving and storage company in Maryland: “I want to provide health care to my employees. They deserve it. But it’s getting harder and harder and harder to do.”

Mary Smalls, a South Carolina resident who lost her employer-provided health insurance when she was laid off: “If I get sick, really sick and got to be hospitalized or something, I stand a chance of losing everything.” She fights back tears.

DeMichael: “I think Americans deserve better. This is one promise the politicians have to keep.”

Text appears: “Every American should have quality, affordable health care.” Then: “Health Care Reform,” followed by “Now.”

POLITICS: For PhRMA, the ads are good public relations and good business for an industry with an image problem. By running these ads-and agreeing recently to help finance health care overhaul through $80 billion worth of concessions, primarily in medicine price discounts for the elderly- the industry is striving to portray itself as an agent of change, rather than an impediment, in the health care debate. And more people with health insurance would translate into more customers who could afford prescription medicine. For Families USA, a relationship with deep-pocketed PhRMA – one of the most muscular trade groups in Washington – gives the reform message extra reach.

POLICY: The difficulty in obtaining affordable health insurance is at the heart of Democratic prescriptions for change, but it’s not clear that the major congressional proposals would resolve the problems of all the individuals in the ads.

Derbyshire, the Maryland employer who complains about the costs of insuring about 30 workers, would qualify for tax credits under the Senate Health, Education, Labor and Pensions (HELP) Committee bill, which provides credits to businesses with fewer than 50 full-time employees. But he might not qualify under the House plan, which would limit subsidies to companies with fewer than 25 workers. The Senate Finance Committee is considering limiting subsidies to employers with 10 or fewer workers. However, all of the proposals envision creating more competitive marketplaces where small businesses could shop for insurance, which proponents argue would help reduce the costs of policies.

Kenneth Colen’s large medical bill occurred because he went out of his insurer’s preferred network for treatment for a rare form of cancer. Colen claims his network did not have a specialized treatment center in its network, but the insurer declined to pay for a portion of the hospital charges it believed were too far above market rates. While Congress is considering placing annual limits on the maximum amount patients must pay in network, neither the HELP nor the House bill explicitly guarantees that the limits will apply to out-of-network providers, analysts say. Even if they did, those safeguards might not apply to the portion of the charges insurers believe are above “reasonable and customary” amounts. The Democratic proposals would require insurers to have adequate networks of doctors and hospitals, which might have helped Colen avoid having to go out of his network in the first place.

The congressional proposal drafts would likely help the two women in the ad who lack insurance by either subsidizing private insurance or permitting them to enroll in Medicaid, the state-federal health program for the poor.