AARP shows more interest in its bottom line than help for seniors

When the AARP endorsed the House Democrats’ version of health reform on Nov. 5, AARP vice president Nancy LeaMond said that “we can say with confidence that it meets our priorities for protecting Medicare, providing more affordable health insurance for 50- to 64-year-olds and reforming our healthcare system.”

I have no doubt that the House bill met the priorities of AARP. My only question is: Which priorities?

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The House bill that AARP endorsed cuts nearly $500 billion from the Medicare program — reducing payments earned by providers when a senior needs medical care.  According to Robert Foster, the chief actuary of the Centers for Medicare and Medicaid Services, these “sustained reduction payment updates” would damage doctors and hospitals, making it harder for a senior to find a physician who accepts Medicare insurance because the fees Medicare pays doctors won’t cover the cost of care.

The legislation would also cut nearly $160 billion from the Medicare Advantage (MA) program. Robert Foster, in his November report, points out that these proposed reductions to the Medicare Advantage program “ … would result in less generous benefit packages” and ultimately cause 8.5 million seniors to lose their MA coverage by 2014.

Today, 11 million seniors are enrolled in an MA plan because it offers them additional benefits like drug coverage, dental, vision, wellness checkups, and help with out-of-pocket costs including Medicare premiums, co-pays, and deductibles. Seniors enjoy MA plans because they make care more affordable, and a majority of these plans do not require additional premiums for the extra services and cost sharing provided.

The impact of the cuts would not help seniors get more affordable care. Rather, seniors could see an increase in Part B premiums, co-pays, and deductibles that their MA plan helped to offset, along with a new monthly premium for prescription drugs under Part D. Seniors would also need to purchase a separate Medicare wraparound plan — called Medigap — to make up for the lost benefits and cost-sharing they may have previously enjoyed.

In total, seniors could expect hundreds of dollars in extra payments each month should they lose their MA plan. That is, if they can afford it.

The potential harm that this bill will cause seniors seems to directly contradict the endorsement of AARP. Which brings me back to my original question: Which priorities is AARP safeguarding?

I would suggest that AARP is fighting not for its seniors but instead for its bottom line.  In 2008, AARP made $650 million from the sale of AARP insurance plans — three times what it made in membership dues. Should the Democrats’ bill become law, AARP — with its 30 percent market share on Medigap products — could stand to make millions more in annual royalties because Medigap plans become the plan seniors would need to purchase to make up for their reduced benefits.

Worse, Medigap plans are treated differently under the House bill than any other plan — coverage can be denied for preexisting conditions and the ratio of benefits provided to profits made is less strict than other plans.  These sweetheart exclusions mean more profit for companies that sell Medigap plans — namely, AARP.

Why would AARP endorse a bill that forces seniors to shoulder more of their own healthcare costs while allowing insurance companies, including AARP, to earn more profits? Why wouldn’t AARP be the ones walking the halls of Congress demanding that coverage for preexisting conditions be included in all Medigap plans so seniors are protected? Why wouldn’t they want the 8.5 million seniors who would be covered under a current MA plan to keep their coverage?

The answers, for me, are clear. It is AARP’s bottom line that is its priority, not seniors.

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Healthcare has been a central part of my life for the last 40 years as a provider, a legislator, a son, a husband, a father and a patient. It is from all of these perspectives that I ask these questions. I know what good care for seniors requires. This is not it.

Healthcare should not be a partisan issue and reforming our system should not involve secret meetings and sweetheart deals.  Organizations that purport to advocate for seniors should fight for the very best for those they represent, the same as elected officials should do here in Congress. The 150,000 seniors who have dropped AARP membership this year are a testament to its failure in this regard. AARP can do better.  This Congress can do better.

Gingrey, M.D., is a member of the Health Subcommittee of the Energy and Commerce Committee and co-chairs the GOP Doctors Caucus.

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