AARP Lines Up Behind Pharma–Again

AARP was among the very first to register support of the drug industry’s announcement of $30 billion in price cuts to Medicare beneficiaries, which are supposed to help us out when we fall into the donut hole in Medicare Part D’s prescription drug coverage. AARP head man Barry Rand, standing behind the President in announcing the deal, said just what Big Pharma must have wanted to hear: “This is an early win for reform and a major step forward. It is a signal the process is working and will work.”

AARP is positioned as a nonprofit advocacy group for the interests of older people–and sometimes it actually acts like one. But when it comes to anything involving the health insurance business, it has private interests of its own. AARP offers Medicare supplemental policies as well as Part D policies–in fact, these insurance plans, offered in conjunction with the private insurance company UnitedHealthcare, are a major source of the group’s income.

AARP already gave one big boost to Big Pharma’s profits when it decided to support George W. Bush’s privatized Medicare Part D program, which was a boon to both the insurance and drug companies. Now its cheerleading for the pharma proposal. While it might look benevolent on the surface, the discount program will likely channel more oldsters onto brand name drugs (see yesterday’s post), or keep them there when they might otherwise switch to generics. It will also enhance the position of the Part D insurance plans, which under the law get to run the federal funded prescription program. The largest provider of this insurance is, of course, AARP/UnitedHealthcare.

Reformers have argued that drug prices can be cut if the government steps in and runs the Part D program itself, just as it runs traditional Medicare, thereby eliminating the insurance industry as a go-between. This totally freaks out the pharma guys, who not only see themselves losing business, but fear any federal extension into their protected “freemarket” will be the beginning of a domino cascade that will end up with socialists making them walk the plank. (If only!)  So Big Pharma’s discouint deal is a twofer—a sales ploy for the drug industry, and protection for the insurance companies running the Medicare program.

All of this underscores the basic politics of health care “reform.” Journalists who are wrestling to make sense out of different polls, and running back and forth from one politician to another—from Baucus to Grassley to Dodd to whoever, while listening to Obama’s earnest pleas—don’t seem to get it. Health care politics is run by a troika of the insurance industry, Big Pharma, and the doctors. And when Obama says he doesn’t care what’s in the plan, he means it. The industry guys cut the deal—not him, not the politicians on Capitol Hill.  And for God sake, least of all the public.

2 responses to “AARP Lines Up Behind Pharma–Again

  1. AARP also wants to drop the minimal age for Medicare from 65 to 55, another position that is hardly benevolent, since it sells HMO, supplemental and Part D Mediare products. AARP doesn’t have one of the largest, most impressive buildings in downtown Washington, D.C., near the capitol primarily by being a supporter for the elderly. From the start, AARP has been in the insurance business and has been profitable. Read “Trust Betrayed,” by Van Atta for a good history of early AARP. Its business plan and financial foundation has not really changed over the years. Its mailing list of those over 50 is its money pot.

  2. Jim,

    You will get a shock if you call the AARP to ask about supplemental insurance if you are being denied a kidney transplant because you only have Medicare and no other insurance to cover the 20% co-pay for a transplant. Most kidney transplant centers offer transplant for people up to 70 years old, but will not even make an appointment to see you if you can’t prove that you have supplementary insurance to pay for the 20% of the transplant that Medicare refuses to pay. For no reason that makes financial sense, except perhaps to the people profiting from dialysis, Medicare pays 100% of kidney dialysis for any American in kidney failure but only 80% of a kidney transplant! Since dialysis costs Medicare $72,000 per year per patient, and maintaining a person after a kidney transplant, only costs Medicare $15,000 a year, and we currently have over half a million people in the US attached to dialysis machines, the savings to Medicare would be in the billions of dollars if these patients could get a transplant. Since virtually all people in kidney failure are totally disabled and eligible for Social Security, the actual savings to the taxpayer if these people could regain their health and careers is billions more. Also, this is Medicare money that could be used for other diseases.

    The AARP could save tens of thousands of lives and save Medicare billions of dollars if they would sell supplementary insurance to people who are in kidney failure and over 55.

    If you are one of the over 200,000 people over 55, (AARP’s age range), in kidney failure and need a kidney transplant to get off the dialysis machine which can only partially take the place of a functioning kidney, try calling AARP as my aunt did. Here’s how she describes the phone call, “I called AARP about supplemental medical insurance. The first thing I was told, ‘Before we discuss the plan I would like to inform you that you must be able to answer ‘No’ on the application to the End Stage Renal Disease question in order to be eligible. Are you on kidney dialysis or have kidney disease?’ Yes? Abandon hope.

    If the AARP was serious about advocating for and saving the lives of seniors it would step up and offer the supplementary insurance needed for transplant to anyone over 55. Half the people in kidney failure in the US are over 55. Not only would this result in tens of thousands of transplants and lives saved, it would save all of us who are taxpayers, billions of dollars a year now wasted on the inferior and vastly more costly dialysis for people who are candidates for transplant, and are dying to get a transplant, but have no supplementary insurance.

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