AARP Weighs In - Supports GOP Medicare Bill

November 22, 2003
Democrats and most seniors' groups were blindsided last week as AARP, the 35-million-member gorilla, threw its weight behind the Republican measure to add a modest drug benefit to Medicare and create competition between traditional fee-for-service measure and government-subsidized private plans.

AARP conceded the measure was not perfect but said its membership "doesn't have time to wait," as its chief lobbyist, John Rother, put it in several press interviews. But a group of AARP members held a protest at the organization's national headquarters on Wednesday at which they destroyed their membership cards, as did numerous House Democrats.

Rep. Nancy Pelosi (D-Calif.), the House Democratic leader, charged that AARP was "ini the pocket" of Republicans and the drug companies and suggested that AARP, which sells insurance to its members, had a fincnaicl conflict of interest.

"AARP is pleased with the passage of the Medicare prescription drug bill in the U.S. House of Representatives. This is an important step toward fulfilling a longstanding promise to older and disabled Americans and their families. While this legislation is not perfect, it will help millions of people, especially those with low incomes and high drug costs," the organization said in a statement.

AARP launched a $7 million ad campaign to support the GOP measure.

Other Supporters
Joining AARP was the National Council on the Aging, which said it had decided to support the measure "with reservations," the Alzheimer's Association, American Diabetes Association, and Catholic Health Association.

"Viewed in its entirety, NCOA believes the bill is a good start; a bipartisan compromise with the positives outweighing the negatives," NCOA President James Firman said in a statement. "Admittedly, though, it’s a very close call…We urge Congress to pass the Medicare bill so that millions of seniors with the greatest needs will receive long-awaited and badly-needed prescription drug coverage.

Opponents
"The Medicare conferees’ compromise legislation will hurt the majority of Americans with Medicare. It will subject millions of them to an untried 'premium support' experiment, hiking up the cost of traditional Medicare and pushing many into HMOs. Millions more will lose good drug coverage from their former employers as a result of the legislation," said Robert M. Hayes, president of the Medicare Rights Center. "Rather than representing a collective good for people with Medicare, the legislation pits rich against poor, healthy against sick, those with drug coverage against those without it, and urbanites against rural citizens," Hayes said.

"An analysis by Public Citizen suggests that there were strong financial incentives for AARP to support the Republican-drafted Medicare prescription drug bill, because the organization is likely to realize significant profits from the programs to be established by the legislation," Public Citizen charged.

"The analysis shows that the majority of AARP's annual revenue comes from selling such products as Medigap supplemental drug insurance policies and offering prescription drug discount cards," Public Citizen said. "It also sells its membership list to corporations, such as health insurers, and sells advertising space in its magazine to customers that include pharmaceutical and insurance companies."

Drs. David U. Himelstein and Steffie Woolhandler of the Harvard Medical School and Physicians for a National Health Program, said AARP "derives significant income from the sale of health and life insurance policies, and stands to make hundreds of millions more under the Medicare prescription drug bill.

"We believe AARP's huge insurance business helps explain why it has endorsed a bill that threatens the future of Medicare and the health of America's seniors," they said.

"The bill undermines the entire Medicare program, pushing people into the very HMOs which contribute heavily to Republican lawmakers and barring the government from negotiating for lower drug prices," said MoveOn.org.

"This proposal does too much to destroy Medicare and too little to help the seniors who can least afford their medicines. It still can, and should be, changed," said Ron Pollack, executive director of Families USA.