President Obama bragged yesterday about AARP’s endorsement of the latest health care reform proposal, claiming the endorsement should silent criticism regarding how seniors will be treated under the new plan. In his speech, Obama said:
The AARP knows this bill will make health care more affordable. They know it will make coverage more secure. They know it’s a good deal for our seniors.
“Good deal for our seniors?” Try a good deal for AARP.
As observers should always do when special interest groups endorse the growth of government power, follow the money trail. As this article points out, certain provisions in the current bill would serve to line AARP’s pockets, but work against the interests of many of their now dwindling members.
Clearly something must be up with AARP.
Why else would the nation’s largest lobbying organization, sworn to protect the interests of senior citizens, watch silently as Congress plans to cut Medicare spending by $400 billion to pay for its health reform legislation? Could it be that the interests of seniors and AARP are not exactly aligned?
Let’s follow the money. AARP takes in more than half of its $1.1 billion budget in royalty fees from health insurers and other vendors that market services with the organization’s name. Medicare supplementary policies, called “Medigap” plans, make up the biggest share of this royalty revenue.
AARP has an interest in selling more, not fewer, Medigap plans, of course. But there is a competitor on the block.
A growing number of seniors are enrolling in a new form of Medicare coverage Medicare Advantage where they don’t need Medigap.
A Washington Post front-page story on Oct. 27 questioned whether AARP has a conflict of interest in appearing to represent seniors while watching Congress cut Medicare.
“Democratic proposals to slash reimbursements for … Medicare Advantage are widely expected to drive up demand for private Medigap policies like the ones offered by AARP, according to health-care experts, legislative aides and documents,” the Post reported.
Medigap plans are a cash cow for AARP. And if people don’t need them because they can enroll in Medicare Advantage plans, that’s a revenue loss for AARP
Its not exactly a leap to say that AARP’s endorsement has nothing to do with concern for their senior-citizen members, but rather view the bill as a means to use government power to protect and enlarge a primary revenue stream. This is a classic case of rent seeking at its worst.
Hopefully, people aren’t fooled by Obama’s claims that AARP’s endoresement is some proof-positive that the proposal is a “good deal for seniors.” More like a good deal for special interests.