One of the Medicare "savings" contained in the health reform bills would reduce or eliminate the subsidies Medicare pays to private insurers who administer Medicare benefits through Medicare Advantage plans. They’re generally paid an extra 12 to 14 percent to do that.

Insurers who receive these subsidies are protesting the proposed cuts and warning their Medicare enrollees that the cuts would lead to reductions in Medicare benefits. Humana, for example, sent an alert to its enrollees, warning them of likely benefit cuts and urging them to contact Congress to let them know their feelings about the reductions in their benefits.

The Center for Medicare and Medicaid Services, CMS, immediately directed Humana and all other Medicare Advantage insurers, to cease sending these scare messages to their enrollees, and the insurers are howling — to their favorite Senators. So the Republican talking point of the week has become that health reform will reduce Medicare benefits, and they repeated that all day long.

In today’s Senate Finance Hearing on the Baucus health reform bill, the CMS warning sparked an amendment from Senator Kyl to guarantee that insurers could tell their enrollees anything they wanted with respect to pending legislation, all in the name of protecting the insurers’ right to free speech.

The Committee debated the amendment for about an hour and finally voted on strict party lines to defeat the Kyl amendment. The debate went something (paraphrased) like this:

Kyl: Insurers are corporations that have 1st Amendment rights of free speech, because the Supreme Court said so in 1980. This amendment would ensure that Medicare’s CMS could not abridge that right so insurers would be free to express their views on legislation and urge their customers to do the same.

Baucus: This is different because these insurers are implementing Medicare, and they have an obligation to their enrollees not to mislead or lie to them.

: Insurers have an obligation not to mislead Medicare seniors.

Kyl: They weren’t misleading them; they told the truth, because cutting Medicare Advantage payments will reduce benefits. But even if they’re wrong, the 1st Amendment protects the right to be wrong, even to lie.

Schumer: Wait a minute. These insurers aren’t just corporations functioning on their own. They’re contractors who are administering Medicare on behalf of the government, so we have a right to keep them from misleading Medicare beneficiaries. If the President of Humana wants to take out an ad on his own, he’s free to do so, but this company used its Medicare mailing lists that it got through being a contractor for implementing a federal program.

Republican: No, any contract is between the insurer and the insurance customer, not with the government.

Committee Staff: Uh, insurers are indeed contractors who agree to administer Medicare through Medicare Advantage. They sign a contract to follow Medicare and CMMS rules.

Republicans: We’ll ignore that.

: Elderly people in my district got these warnings and are scared to death. That’s not fair.

Kyl: But all I’m trying to do is recognize that insurance companies have 1st Amendment rights.

Roberts: Stifling Humana will have a chilling effect on free speech.

Bunning: I’m not following this, so I’ll say something really stupid and then insult the Staff.

: Let’s vote, and although six Democrats are not here, I have their proxies and they all vote "no." Amendment defeated.

We’re not talking about taking out an ad in the newspaper or on television, which insurers and AHIP can do every day. They can even hold their own "town hall." Humana used the mailing list it was required as a government contractor to compile to communicate with Medicare enrollees. But with the current Supreme Court, that probably won’t make any difference.

What we’re watching here is a preview of many such arguments we’ll be having given the fact that the Supreme Court has ruled that corporations have 1st Amendment rights. The current Supreme Court seems likely to expand that pro-corporate view. The fact that these "persons" have enormous advantages, both by their size, by their control over customers, and by the privileged position they gain through a complicit government, will only make their voices stronger and yours less likely to be heard.

ThinkProgress, Aetna pays $80,000 to stage it’s own town hall, with CNN anchor
Christy Hardin Smith/FDL, SCOTUS arguments on corporate free speech case
Greg Sargeant/PlumLine, WH fights back against GOP Medicare scare tactics