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.