One of the subplots to the health care debate I've been following
is the cozy
relationship between AARP and the Obama administration, as
the group has thrown its full-throated support behind the
Democrats' health care push even though their membership comes
from the age group
most opposed to Democratic health care proposals. Today,
House Republicans have issued a
report providing evidence that AARP is in a position to
recieve tens of millions of dollars in "kickbacks" if Democratic
health care legislation becomes law.
President Obama and Democrats have proposed saving money to pay
for health care legislation, in part, by
cutting $162 billion in payments to Medicare Advantage, which
allows Medicare recipients to choose privately-administered
coverage. If these changes go through, millions of seniors who
have chosen Medicare Advantage would lose their current coverage,
forcing them into government-administered plans with less
generous benefits. As a result, many of them would have to
purchase policies to supplement traditional Medicare. Enter AARP.
In 2008, AARP generated $652.7 million in revenue by selling
products like Medigap supplemental Medicare insurance, accounting
for over 60 percent of the group's revenue, according to an
analysis of its financial statements cited in the report released
by the House Republican Conference.
If the House Democrats health care bill becomes law, the report
argues, it would be a boon to AARP, because while Medicare
Advantage plans will be required to pay out 85 percent of the
money collected in premiums to claims made by policy holders, the
requirement would only be 65 percent for the kind of Medigap
policies sold by AARP.
"In other words, under the Democrat bill, seniors could pay as
much as 20 cents more out of every premium dollar to fund
'kickbacks' to AARP-sponsored Medigap plans than Medicare
Advantage plans," the GOP report charges.
But this isn't the only way that AARP is getting special favors,
according to the report.
Earlier this month insurer Humana Inc. sent customers who
enrolled in the company's Medicare Advantage plan a letter
warning them that their benefits would be in danger if the
Democratic health care legislation passed. Senate Finance
Committee Chairman Max Baucus
complained to the Centers for Medicare and Medicaid Services,
which not only ordered Humana to stop sending the letters to its
customers, but prohibited any other private insurers from doing
the same. Except, that is, AARP -- which sponsors a Medicare
Advantage program in addition to the Medigap policies it offers,
but was exempt from the Obama administration's gag order.
I have a call into AARP, and will update the post once I get a
response.
UPDATE: AARP emailed this statement from its
executive vice president,
Nancy LeaMond, as a response, though it
doesn't address any of the specific charges raised in the report:
"Any effort to derail AARP’s commitment to reform will not
succeed. Similar to “death panels” and other scare
tactics, this latest effort is a misguided attempt to talk
about anything other than the health care reform this country
needs. AARP will continue to work on reform for our
members that prohibits insurers from discriminating based on
health status or pre-existing conditions, strengthens Medicare
by improving quality of care, cutting out fraud and abuse, and
closing the so-called ‘doughnut hole’ for prescription drugs.
"AARP was started more than 50 years ago to fight for older
Americans and their need for health care – our fight continues
today. Over those 50 years our public policies have
always dictated every decision we have made.
"The only benefit AARP is looking for in health reform is
relief for the millions of Americans who are crushed by soaring
prescription drug prices, relief for the millions of Americans
who are told they can’t get coverage because they’re too old or
too sick, and relief for the millions of Americans who need
Medicare strengthened. Period."
