Families feel vulnerable to the catastrophic costs of serious illness, and few understand the labyrinth of private and government insurance, allowing partisans to play to their worst fears. Add to that the belief among political pros that health care worries can drive the votes of seniors.

“It is easy to deceive on the issue because the knowledge base of the electorate when it comes to the complexities of health care is relatively low,” said Kathleen Hall Jamieson, an expert on political communication at the University of Pennsylvania’s Annenberg Center.

It would be hard to top Sarah Palin’s now-debunked assertion that “death panels” lurked in the recesses of Obama’s law, but don’t be surprised if that happens this year.

“Many people believe crazy things about health care because they want to believe them,” said Drew Altman, president of the nonpartisan Kaiser Family Foundation. Some of today’s outlandish claims remind him of fears about fluoridated drinking water in the 1950s.

Sound far-fetched? It’s already started.

A few months ago, former Republican presidential candidate Rick Santorum lent credence to an unfounded rumor that the Obama administration would deny advanced medical treatment to stroke patients over the age of 70, allowing only comfort care. It didn’t seem to matter that two doctors’ groups and the Health and Human Services Department were shooting down the rumor.

And as for throwing granny off a cliff, two political ads are already depicting just that — one from the left and one from the right. Both dramatizations are getting steady attention on the Internet.

The ad from the left, by The Agenda Project, features an actress playing an elderly woman in a wheelchair. Pushing her is a younger man acting the part of Ryan, R-Wis. It looks like an outing to a scenic overlook, but then he steers for the edge of the cliff as she tries to fight him off. He thrusts her over the side with “America the Beautiful” playing in the background. The caption urges viewers to let Ryan know America wouldn’t be beautiful without Medicare.

The ad from the right, by AmericanDoctors4Truth, shows an elderly woman in a wheelchair being pushed off a cliff, this time by an actor representing Obama, after she demands a pacemaker recommended by her doctor.

The ad takes things to another level by using a snippet of Obama’s voice. It comes from a rambling response the president gave in 2009 to a woman who wanted to know how his health plan might affect patients like her mother, who got a pacemaker at the age of 100 and enjoyed a good life.

A transcript of the town hall-style meeting shows that Obama didn’t directly answer the question. At one point he suggests if there’s waste involved it would be better to tell doctors and patients “you know what, maybe this isn’t going to help, maybe you’re better off not having the surgery, but taking the painkiller.”

That snippet gets used in the ad. Later in the 2009 appearance, Obama said that maybe patients like the questioner’s mother should get a pacemaker faster, if that helps keep them healthy. “I mean, this can cut both ways,” he said. But those words aren’t in the ad.

Jamieson, who directs a fact-checking project, says both ads are examples of “deceptive dramatization.” Ryan’s plan would not affect people currently on Medicare, she said. And the doctors’ ad makes it sound as if Obama is cutting current Medicare spending, when his law merely slows the program’s future growth. And it’s unrealistic to suggest that either party believes it can afford to antagonize older voters.

Erica Payne, a former Democratic Party fundraiser who founded the New York-based Agenda Project, said she stands by the Ryan ad. “It’s dramatic, but it’s accurate,” she said. Her organization is a public policy and advocacy group.

Ophthalmologist Jane Lindell Hughes, a founder of Texas-based AmericanDoctors4Truth, defended the Obama ad as a parody that responds to Payne’s commercial. “It was absolutely a valid use of the president’s voice,” she said.

People targeted by health care distortions say the attacks can accomplish two things: turning an individual into a pariah and shutting down legitimate consideration of new ideas.

Pediatrician and health care expert Don Berwick, Obama’s first Medicare chief, said he was never able to overcome the label of “rationer in chief” pinned on him by GOP critics of the health law, no matter how often he said he was against rationing.

“When a myth gains traction … it creates a terrain of silence,” said Berwick. “A new kind of calculus is needed here, in which people believe engagement about the truth is wise.”

Economist Douglas Holtz-Eakin was GOP presidential candidate John McCain’s policy chief in 2008 when the campaign unveiled a plan for a health insurance tax credit financed by a limit on the tax-free status of employer health insurance. It got pounded even though the idea had support from some prominent Democrats, and analysis showed it could work.

That experience “reflects a deeper truth,” Holtz-Eakin said. “Health care is a big issue to the American people. If it’s not a big issue, you can’t make hay of it in a political sense.”

The woman who asked Obama the question about a pacemaker for her centenarian mother said she was dissatisfied both with the president’s response and how his opponents are using it in their ad.

“It was just tit for tat,” said Jane Sturm of Long Island, N.Y. “It’s not using intelligent reasoning.”

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Online:

Annenberg Center: http://www.flackcheck.org/patterns-of-deception/

Looking on from the kitchen is mom, who doubles as the narrator. “I always loved watching the kids play basketball,” she says. She still does, even though things have changed.

As the background music turns somber and urgent, mom morphs from a young woman into middle age, and the kids into young adults. They can’t find jobs, she can’t afford to retire, and they’re all living together again.

Mom supported President Barack Obama in 2008 “because he spoke so beautifully” but “things changed … for the worse.”

The ad goes on to deplore mounting federal debt, blame the new health care law for raising premiums and criticize the economic stimulus for waste. News headlines flash on the screen to underscore each point. “Now Obama wants more spending and taxes,” says the narrator. “That won’t fix things.”

The ad ends by urging viewers to tell Obama he’s got to change and back policies supported by Republicans.

ANALYSIS: The ad is aimed at women voters and independents, two overlapping constituencies whose support Obama desperately needs. No husband or father figure appears in the ad, not even in family pictures, suggesting that mom is her family’s sole support. The ad underscores some of the main criticisms of Obama’s economic record by Republican challenger Mitt Romney.

Crossroads GPS is the sister group of American Crossroads, a super PAC raising millions to elect Republicans. This ad follows a commercial last week from the same group, attacking Obama for what it said are string of broken promises to help average Americans. Crossroads GPS is spending $9.7 million on the new ad, which will run for three weeks.

The claim that government debt has ballooned since Obama took office is technically accurate, but it leaves out a huge part of the story.

The national debt was $10.62 trillion the day Obama took office in January 2009. Today, it is $15.71 trillion, according to the Treasury Department’s Bureau of Public Debt. It has increased by $5.09 trillion under Obama. It went up $4.90 trillion under his Republican predecessor, George W. Bush.

Much of the increase under Obama is due to anti-recessionary stimulus and bailout programs under both Bush and Obama, as well as the Bush-era tax cuts, which have been extended until the end of 2012 by bipartisan votes in Congress. Add to that the cost of the wars in Iraq and Afghanistan.

The worst economic recession since the Great Depression reduced tax revenues, led to increased spending for safety-net programs and prompted massive infusions of government stimulus to keep things from getting worse. While some of the stimulus money was wasted, most economists say the effort created jobs.

Some headlines that flash by in the ad probably need an asterisk or two. One says, “Survey: Health insurance costs surge in 2011,” while the narrator blames the new health care law for making premiums more expensive. Actually, Kaiser Family Foundation analysts who prepared the survey in question said the health care law was only responsible for between 1 and 2 percentage points of a 9 percent increase.

Another headline says “Stimulus program fraught with waste, report says.” What it doesn’t mention is the 2009 report came from Sen. Tom Coburn, R-Okla., a leading stimulus opponent. A White House spokesman acknowledged some of the problems Coburn identified and said they were being addressed.

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Associated Press writer Tom Raum contributed to this report.

“Without it, I would have been dead on March 2,” Watson said of the Pre-Existing Condition Insurance Plan, known as PCIP. That’s when she was hospitalized for a life-threatening respiratory infection.

It’s not clear how the Supreme Court will rule on Obama’s law, but Watson’s case illustrates the potential impact of tying everything in the far-reaching legislation to the fate of one provision, the unprecedented requirement that most Americans carry health insurance.

The law’s opponents say if that insurance mandate is found to be unconstitutional, the rest of the law should also go, since courts should not be picking and choosing policy. The administration defends the insurance requirement but says if the court decides to overturn it, most of the rest of the law should stay.

State officials who administer the federal pre-existing condition plan in 27 states are trying to make fallback arrangements in case the law is invalidated and coverage suddenly terminates.

“Some of these individuals are critically ill and are being treated for very serious illnesses, whether it be cancer or HIV-AIDS, and we feel a responsibility to them to do what we can to see they don’t lose access,” said Amie Goldman, who oversees PCIP in Wisconsin.

Federal officials who administer the plan in the remaining 23 states and Washington, D.C., remain mum on what might happen there if the law is overturned.

The White House line is that Obama is confident the Supreme Court will uphold the Affordable Care Act, and his administration therefore is making no contingency plans for a reversal. None of that sounds reassuring to Watson, who owns a medical transport service in rural north-central Florida.

“It’s scary,” she said. “They need to look at this carefully because it is going to affect a lot of people with a lot of bad conditions who are not going to have any health care coverage.”

Before PCIP, Watson had been uninsured since 2003, originally turned down because of elevated white blood cells. About three years ago, she was diagnosed with a chronic form of non-Hodgkin’s lymphoma, a cancer of the immune system. Unable to afford medications, she relied on the emergency room to treat flare-ups.

She tried applying to a major insurance company for a small business plan for her and her employees, and was quickly rejected. Then she heard about PCIP.

The temporary program is meant to serve as a patch until 2014, when the federal health care law will require insurers to accept all applicants, including cancer patients like Watson, regardless of medical history. The law’s controversial mandate for individuals to carry health insurance is related to that guaranteed acceptance provision. By forcing healthy people to buy insurance, it would help keep premiums in check.

Initially, Watson could not afford the $800 monthly premium the government was asking for PCIP. High premiums are part of the reason the program has not attracted more people.

But officials retooled to make coverage more affordable. Watson applied again and was accepted. She met the basic requirements: uninsured at least six months, turned away because of pre-existing conditions, having U.S. citizenship or legal residence. Her premium is $363.

In March, Watson went to the emergency room with what she thought was pneumonia. She was admitted, and quarantined the next morning when tests showed she had an antibiotic-resistant bacterial infection, highly dangerous. She spent five days in intensive care.

Without her PCIP coverage, Watson is convinced she would have been sent home from the emergency room after initial treatment to ease her shortness of breath.

“I’m not a candidate for any for type of indigent program, and without insurance they would not have put me in ICU,” she said.

“I would have gone into cardiac arrest and probably died,” she added. Emergency rooms must treat the uninsured, “but they are only required to get you stable. And then they release you and tell you to go to the health department.”

A government report this year found that people in the pre-existing condition plan tended to be middle-aged patients with no access to employer coverage and with medical conditions that require continuous care. The top five diagnoses: cancer, heart disease, degenerative bone diseases, organ failure requiring a transplant and hemophilia.

If the federal law is struck down, some state officials are considering taking the patients into their own, separate, state high-risk insurance pools. Wisconsin, for example, has decided that PCIP enrollees would be automatically accepted into its pool. But not all states have them. In the 35 that do, premiums would generally be higher, and there might be waiting periods.

Republicans, including presidential candidate Mitt Romney, have long favored insurance pools for high-risk patients. And Congress could take emergency action to keep PCIP going. But no assurances have been offered. Michael Steel, a spokesman for House Speaker John Boehner, says Republicans are ready to work on “step-by-step, commonsense” approaches.

Watson says she still disagrees with Obama’s requirement that individuals have health insurance, either through an employer, a government program or by purchasing their own plan. “I approve of some of it,” she said of the law, “I don’t approve of the mandatory … insurance.”

But she doesn’t want to go back to depending on the emergency room.

“I have no problem paying my insurance and paying my copays,” she said. “I just think I should have the right to purchase insurance.”

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Online:

Pre-Existing Condition Insurance Plan: https://www.pcip.gov/

“While some pharmacies may be billing extremely high amounts for legitimate reasons, all warrant further scrutiny,” said the report being issued Thursday.

The analysis broke new ground by scrutinizing every claim submitted by the nation’s 59,000 retail pharmacies during 2009 — more than 1 billion prescriptions. Using statistical analysis, investigators were able to reveal contrasts between normal business practices and potential criminal behavior.

“The findings call for a strong response to improve (program) oversight,” the report said.

In written comments, Medicare administrator Marilyn Tavenner said the agency mostly agrees with the inspector general’s call to action. But she suggested that requiring private insurers to monitor and report suspicious activity could place a burden on the companies and may flood government officials with leads that turn out to be useless.

Medicare also said it has anti-fraud contractors that are already keeping close tabs on the program.

“We believe it is important to note that (the inspector general’s) report identified what appeared to be questionable billing based on its own data analysis but did not determine any actual fraud committed by the pharmacies,” Tavenner wrote.

The inspector general’s office says its findings aren’t just smoke.

“What we are seeing in the data is extremely concerning,” said Jodi Nudelman, a regional inspector general in New York who directed the research.

Her team will turn over the names of the 2,637 pharmacies it identified for follow-up. They are “extreme billers, when you look at their peers and compare them,” added Nudelman.

Overall, only a small fraction of retail pharmacies — 4.4 percent — were found to have telltale patterns of questionable billings. But in some parts of the country, the share was much higher, reaching nearly 20 percent of pharmacies in Miami, an area known as an incubator for Medicare fraud.

In Los Angeles, where 12 percent of pharmacies had questionable billings, one drugstore in a suburban strip mall billed Medicare more than $8.4 million, nine times the national average. That worked out to an average of 116 prescriptions per beneficiary.

At pharmacies in Baltimore, Detroit and Tampa, the problem was different: powerful painkillers classified as controlled substances accounted for an abnormally high share of total prescriptions billed. No pharmacies were named in the report.

New York also stuck out, with 9 percent of pharmacies filing high numbers of questionable claims. Nationally, independent pharmacies were more likely to have problems than chain drugstores.

Investigators identified eight major indicators of potential fraud. Some, like billing hundreds of prescriptions for a single Medicare beneficiary, are fairly obvious. Others are not.

For example, a drugstore whose claims reflect an extremely high share of brand-name drugs may be dispensing generic medications and billing them at the higher rate for pricey brands.

And a drugstore whose billings show an unusually high share of refilled prescriptions might be billing for refills that patients didn’t ask for and won’t pick up. Usually the drugs are just restocked on the shelves, and the scheme continues.

Medicare’s prescription benefit has proven popular with seniors since its inception in 2006 under President George W. Bush, and academic researchers have found indications that it is saving taxpayers money by keeping beneficiaries healthier.

Recently, President Barack Obama’s health care overhaul law addressed one of the program’s major remaining shortcomings, gradually closing a coverage gap called the “doughnut hole,” dreaded by millions of seniors with high prescription costs.

The inspector general’s report concluded that the program left the door open to fraud from the beginning.

Medicare says it has been using computer analysis to look for evidence of suspicious activity by providers, but the new analysis was apparently the first such template for the $53 billion program as a whole. Previously, there were no comprehensive data about pharmacies’ typical billing patterns, or types of questionable billings.

“The program has limited safeguards in place and is vulnerable to fraud, waste and abuse,” the report said.

For example, the private insurers who serve as program middlemen are encouraged to report fraud, but they are not required to do so.

“Because (insurers) are on the front lines of detecting fraud, waste and abuse … a significant vulnerability exists when (they) are not required to report this information,” the report found.

It urged Medicare to develop a fraud risk rating for each individual pharmacy.

Compared with traditional insurance, consumer-directed plans charge significantly lower premiums. But deductibles, the annual amount you pay before insurance starts covering, can be twice as high or more. To overcome consumers’ unease about greater financial exposure, the plans are packaged with tax-advantaged medical accounts to which employers can contribute.

“There is reason to be concerned that this potential solution to our rising health care cost problem comes with risks,” said Amelia Haviland, a statistician at Carnegie Mellon University in Pittsburgh, who led the study. “The immediate risks are carried by employees and their families. If they get less healthy, the cost implications could affect the whole system.”

Consumer-directed plans are not new. Former President George W. Bush called them health savings accounts and promoted them as a way to get Americans personally invested in cutting costs, as proponents say, by having more “skin in the game.” What’s new is that the plans are gaining traction in the workplace — enrolling nearly 1 in 6 workers.

Although President Barack Obama took a very different approach from Bush to the nation’s health care problems, the study concludes that Obama’s overhaul will encourage more employers to adopt consumer-directed plans, accelerating a trend Bush helped to start.

Obama’s law, if it survives Supreme Court scrutiny, would create economic incentives that boost low-cost plans in two ways. First, the plans provide an option for medium and large employers who don’t currently provide coverage to avoid federal penalties that loom in a couple of years. And they could also help some employers escape a new tax on high-cost “Cadillac” health insurance.

For consumers, there are other considerations: Premiums for traditional insurance could rise if the new plans lure away people in good health. Also, workers with chronic conditions may find that high-deductible plans put more strain on family budgets.

Published in the journal Health Affairs, the study analyzed medical claims data from 59 large U.S. employers, most of which offered the choice of a consumer-directed plan. Crunching that information, researchers estimated that employers overall could reduce their health care costs by 7 percent if half of American workers were to enroll in the plans.

National savings would total $57 billion annually, potentially allowing employers to pay higher wages or hire more workers.

Two-thirds of the savings in the study came from people using less medical care. The remaining one-third came from frugal behavior such as opting for generic drugs or seeing specialists less often.

The study raised concerns about prevention. It looked at six types of recommended preventive services, from cervical cancer screening to hemoglobin A1c tests for diabetics, and found less use of all of them among employees in consumer-directed plans.

Many of those services had been covered at no cost to the patients in the study, and the health care law makes free preventive care a requirement for most insurance plans. But some consumers apparently may not understand that they are covered for prevention.

“The big risk is that people understand ‘I have a big deductible,’ and they are going to cut everything they can think of to cut,” said Haviland.

Meanwhile, consumer-directed plans have clearly moved from a niche to the mainstream. The study found that workplace enrollment jumped from 4 percent of workers in 2006 to 13 percent in 2010. The trend continued last year, reaching 17 percent, says the Kaiser Family Foundation.

Next year, 70 percent of large employers plan to offer a consumer-directed plan, in most cases as one of several options, says the benefits consulting firm Towers Watson. But it’s unclear if or when such plans will dominate the market.

Many employers are experimenting, and large firms seem to want keep offering employees a choice, said Tom Billet, a senior benefits consultant with Towers Watson. Yet a transition could be under way.

“The likelihood of getting to a 50-percent share of the market in the next two to three years is very small,” said Billet, referring to consumer-directed plans. “Five to seven years out, is it possible? Yes.”

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Online:

Health Affairs – http://content.healthaffairs.org/content/31/5/1009.abstract