AARP caught in partisan crossfire on overhaul of healthcare

Republicans are accusing the AARP of a conflict of interest on Democratic efforts to reform healthcare, six years after Democrats accused the consumer advocacy group of ulterior motives when it endorsed a GOP-crafted Medicare prescription drug bill.

Republicans on the House Ways and Means Committee are demanding answers from AARP for its supportive statements regarding healthcare proposals that seek about $500 billion worth of cuts to Medicare.

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GOP Reps. Dave Reichert (Wash.), Ginny Brown-Waite (Fla.) and Wally Herger (Calif.) are pressing the AARP to reveal how much money the group makes from selling its endorsement for various insurance products, including Medicare supplemental policies.

“[The AARP’s support for the Medicare cuts] just doesn’t make any sense” until “you dig a little deeper and see that 38 percent of their revenues come from these royalties and if Medicare Advantage does go away, they may gain millions of dollars in additional royalties,” Reichert told The Hill.

But AARP officials adamantly deny accusations that the organization is motivated by money.

“AARP’s process of developing policy positions, including our position on healthcare reform, is conducted independently of any AARP royalty-generating activities,” Thomas Nelson, AARP’s chief operating officer, wrote in a response letter sent to Reichert earlier this month.

That answer has not satisfied Reichert, whose seat is being targeted by Democrats in the 2010 cycle.

Reichert on Thursday fired off a follow-up letter to Nelson pointing out that the advocacy group makes “nearly twice as much from insurance premiums as it does from membership dues,” showing that the organization is “dependent on insurance funds.”

AARP has not formally endorsed Democratic efforts to overhaul the nation’s healthcare system, but it has praised various provisions in it, including plugging the so-called “doughnut hole” in the Medicare prescription drug benefit.

Republicans are concerned that AARP will back the final bill because it has not been outspoken against the Medicare cuts. AARP has said that those proposed cuts, many of which are targeted at health plans, will not significantly hamper quality of care.

Brown-Waite’s questioning of AARP triggered a public battle with the group’s state director in Florida.

After several letters exchanged through the media, Brown-Waite wrote in September to AARP’s Lori Parham, “let me spell it out: I would like to know the margin for each policy sold: auto, health, dental, mobile home, vision, etc.?”

Brown-Waite represents the district with the highest population of Medicare-age constituents.

The AARP argues that cutting billions from Medicare Advantage — the federally funded, privately run healthcare option for seniors — would drive down costs for premiums of all Medicare recipients because the government pays nearly 14 percent more per person participating in that program.

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The AARP’s stamp of approval was key to passing the 2003 Medicare drug bill, and its endorsement would be a huge boost for Democrats.

Democrats in Congress, ranging from then-Minority Leader Nancy Pelosi (D-Calif.) and -Rep. Rahm Emanuel (D-Ill.), expressed outrage when AARP endorsed the prescription drug bill.

Soon after the announcement, congressional Democrats argued that AARP backed the bill because of its partnership with UnitedHealth Group, which offers drug coverage.

AARP denied the charges, but the accusations led thousands of members to quit the consumer advocacy group.

The Democrats’ relationship with AARP began to thaw two years later when AARP rallied against President George W. Bush’s effort to reform Social Security.

Republicans have seized on Democrats’ proposed cuts to Medicare, which Democrats have called a scare tactic. Privately, however, some Democrats were concerned the GOP was winning political points by lambasting the cuts to the popular entitlement program.

President Barack Obama this month was praised by senior advocacy groups for calling on Congress to pass legislation that would send out $250 checks to Social Security recipients. Obama’s announcement, embraced by many Democrats, came after the government announced there would not be a cost-of-living adjustment in 2010 Social Security checks.