Medicare Ads Incomplete but Legal, GAO Decides

The Bush administration’s Medicare ads do not violate federal laws prohibiting the use of taxpayer funds for political purposes, but they contain “notable omissions and other weaknesses,” congressional investigators said Wednesday.

The General Accounting Office’s formal opinion on the legality of the ads came a few days after the Health and Human Services Department began mailing a two-page flier about the Medicare prescription drug law to 36 million households and more than a month after the administration launched a $12.6-million advertising campaign.

Calling the opinion “a complete victory for our effort to educate seniors,” Kevin Keane, a department spokesman, vowed that the administration’s campaign to promote the controversial reform law would “remain aggressive.” The cost of printing and mailing the flier is $10 million.

But the Democratic lawmakers who requested the investigation said the agency’s opinion was based on an “extremely narrow reading” of the relevant laws. They called on Health and Human Services Secretary Tommy G. Thompson “to pull these misleading ads now.”

“The GAO agreed with us that the administration sugarcoats the drug discount cards that will soon be offered, and that they overstate the benefits of the Medicare prescription drug plan that will go into effect in 2006,” said Sen. Frank R. Lautenberg (D-N.J.).

The GAO said it had granted the administration “considerable deference” because the new law requires the department to inform Medicare’s 40 million senior and disabled beneficiaries about changes to the program. And although the ads are incomplete -- failing to note, for example that most seniors who sign up this spring for a temporary discount drug card will be charged an annual fee -- “the materials are not so partisan as to be unlawful in light of our prior decisions and opinions,” the agency said.

“This is not to say that the content [of the ads and fliers] is totally free of political content.”

With continuing disagreement over the law’s long-term effect on both the nature and the financial health of Medicare, the theme of the administration’s materials -- “Same Medicare. More benefits” -- “may appear to some as an attempt to persuade the public to the administration’s point of view,” the agency said. Public opinion about the Medicare reform law is of great concern to Republican and Democratic candidates in this election year.

The Bush administration and Republican lawmakers had hoped that their role in creating a Medicare prescription drug benefit would help them at the ballot box in November. So far, however, partisan attacks on the law, as well as its own complexity, appear to be blunting any such political advantage.

Democratic lawmakers, including presidential candidate John F. Kerry, a Massachusetts senator, regularly criticize the law as a boon to drug companies and health maintenance organizations. Conservative Republicans, angered over new administration estimates that peg the 10-year cost of the law at $534 billion rather than the original $400 billion, have also turned against it.

A recent survey by the Kaiser Family Foundation indicates that a fraction of the nation’s seniors understand the law, and that the more they learn about it, the less they like it. In addition to offering seniors and the disabled a limited drug benefit beginning in 2006, the law gives private insurance companies billions of dollars to lure beneficiaries away from traditional Medicare and into managed care.

Sen. Edward M. Kennedy (D-Mass.) predicted that the more Medicare beneficiaries “learn about the Bush administration’s attempt to disguise these blatant campaign ads as an official government expense, the angrier they will be.”

But Thompson, citing a 70% increase in telephone calls to Medicare information lines, said the ads were successfully guiding seniors to call 1-800-MEDICARE.