Gray Matters: AARP

Pulitzer Prize-winning journalist Saul Friedman (bio) writes the weekly Gray Matters column which appears here each Saturday. His Reflections column, in which he comments on news, politics and social issues from his perspective as one of the younger members of the greatest generation, appears here at Time Goes By twice each month.

I think it’s time to call a truce in the long feud that many of us and I have been waging against AARP.

Why now? Well, AARP must be doing something right when Senator John McCain (R. Arizona), who would deny Americans the tax-payer supported health insurance coverage that he has enjoyed all his life, vowed to “fight with every fiber of my being” the proposed health reforms now before the Senate and he asked members to tear up their AARP membership cards.

Also, a group of House Republicans who have been hostile to Medicare and had no intention of supporting any real reform, sent letters to AARP accusing it of “putting political self-interests ahead of seniors” in supporting the reform bill passed by the House.

AARP rejected the complaint and, I would add, better “political self-interests” than financial. For these Republicans had no problem with AARP in 2003 when to the dismay of many members, it helped the Bush administration pass in a midnight session, over the objection of nearly every Democrat, the misnamed Medicare Part D drug bill, which among other things, hobbled Medicare, gave billions in subsidies to insurers and enriched the drug and insurance companies – and AARP.

About 40,000 of AARP’s 40 million members quit in an unprecedented protest. But AARP has made as much as $5 billion in insurance company royalties since then. Now, after some temporizing, AARP has joined President Obama, the American Medical Association, leading trade unions and most respected advocacy groups in backing health reform bills that would roll back some of the troubling aspects of the drug legislation.

And AARP lobbyists, who usually make no commitments, have uncharacteristically supported a public option and cuts in subsidies to insurance companies that now pay the organization millions a year in royalties. The question now is whether they will fight for their positions.

There were reasons to distrust AARP before 2003. When the Republicans captured the Congress in 1995, their leaders and a well-financed right-wing network launched an assault on AARP for its lobbying on behalf of Medicare, Social Security and long-term care. Congressional conservatives threatened to withhold the few dollars AARP got from Washington for running some employment programs. About the same time, the IRS forced AARP to split its money-making enterprises from its advocacy.

Partly in reaction to this conservative onslaught, the organization in 2000 turned to a bona fide Republican, advertising executive William Novelli, as the new CEO to replace the mild-mannered Horace Deets, an AARP professional.

Almost immediately it became clear that the huckster Novelli, who had worked for Richard Nixon, would seek to expand AARP by going after boomers as members. The name of the organization was changed from the American Association of Retired Persons to AARP to eliminate the word “retired.” Age eligibility was reduced to 50. The slick magazine became slicker, and was targeted to age groups. They were all needed changes. But in 2001, I discovered and so wrote that Novelli had more ominous plans.

At a convention breakfast I attended, Novelli’s guest was former House Speaker Newt Gingrich, who had predicted that Medicare’s agency would “wither on the vine.” They meant to privatize Medicare. So Gingrich and his allies threatened drastic cuts in Medicare to force President Clinton to allow private HMOs to insure Medicare beneficiaries for the first time.

It was a move that Novelli welcomed for his top officials told me then that he believed Medicare ought to provide beneficiaries with more (private) choices. Although Novelli was no longer with the firm he founded, Porter, Novelli, it created the infamous “Harry and Louise” ads that helped kill the Clinton attempt at health care reform and made way for private insurers and today’s Medicare Advantage plans.

Novelli later wrote a glowing preface to Gingrich’s book, Saving Lives, Saving Money, which called for technology and private enterprise to transform the nation’s health care system.

Gingrich’s thesis has sunk from sight and he now opposes health reform efforts. The Novelli denouement came in November 2003 when AARP suddenly deserted the Democrats and its long held position that the drug benefit should be administered by Medicare. Novelli pleaded that it was important to get a deal, even if it was imperfect. Indeed, Novelli’s personal prestige was at stake for he had promised to get a drug benefit passed, no matter the terms.

Thus, AARP supplied critical support for the Republicans’ a more expensive (its cost was kept from lawmakers), complex, fully private benefit that prohibited Medicare from even negotiating cheaper prices from drug companies.

The bill also created the infamous coverage gap, or donut hole, designed to discourage seniors from using too much of their basic benefit. Dozens of drug and insurance companies rushed for the bonanza giving beneficiaries a confusing array of choices. But the bill also limited Medicare’s growth, established a means test to raise premiums for higher income beneficiaries and awarded billions in subsidies for private insurers like United Health, which has paid AARP close to $700 million a year in royalties.

[A personal note. My criticisms of Novelli’s actions in earlier Gray Matters columns and my reporting that AARP’s Bulletins on Part D were misleading, provoked Novelli’s wrath. He canceled a feature piece that AARP was to run on my column and me.]

But the furor among members and within the AARP staff had a positive effect. After some hesitation, AARP used its power, prestige, and research and lobbying resources when it played a major role in 2005 in stopping George Bush from following up his Part D victory with his scheme to turn Social Security into millions of 401(k)s.

Novelli deserves some credit, but he had little choice for it’s uncertain that AARP could have survived in its present form if America lost the twin pillars of social insurance. Nevertheless, in Novelli’s zeal to provide private insurance for the boomers – persons under 65 – to wean them from traditional Medicare, a Senate committee concluded the insurance was worthless and the policies were canceled.

True, AARP is still too much of a seller of insurance, auto and health, which in my view undermines the goal of universal public coverage. But Novelli left in April and was replaced by a corporate , A. Barry Rand.

More important, without Novelli, the board seems to be running things and AARP, in the current drive for health reform, is not playing all sides against the middle. Officials like John Rother, the chief strategist, and David Certner, the chief lobbyist, committed early in the health care debate to support cutting billions from private insurance subsidies and a strong public option.

Let’s watch closely to see if AARP keeps its word this time and helps strengthen the reforms as the legislation moves through the Senate and the conference. Keep an eye on www.aarp.org.

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Comments

[joared]

Thanks for this recap on AARP and I am watching them closely. I'm one of those who canceled my membership years ago even though I don't have to use Part D -- but it was such an obvious rape of Medicare I've been inflamed about it ever since. I still haven't rejoined AARP.

You are so correct:
"...the misnamed Medicare Part D drug bill, which among other things, hobbled Medicare, gave billions in subsidies to insurers and enriched the drug and insurance companies – and AARP."

I'm aware of the truth of this every day as I work in health care and wonder why so many people seem oblivious to the facts. Perhaps it's because they listen only to one side of issues and opinions of those with self-interests who deliberately mislead or are ill-informed themselves.

[kenju]

Thank you for helping me to make sense of this. I'm sending a link to my husband.

[janinsanfran]

I've watched all this with interest. I'd always been told that AARP was uncannily good at finding folks and soliciting them to join up as soon as we turned 50 -- but they didn't find me until 12 years after that. Have I lived enough off the grid to avoid notice? Seems unlikely.

Having been aware of the 2003 AARP episode, I scan them warily.

[Cop Car]

Good article, Mr Friedman. Personally, I believe that Dr Ethel Percy Andrus must be spinning in her grave over what "the guys" have done to her organization. Call me sexist; but, the women ran a totally different (and better) organization. (No reflection on good men like Mr Friedman is intended.)

[Nan]

I was one of those who refused to renew AARP membership because of Medicare Part D. It's a terrible program - yes it does help some folks who did not have prescription drug coverage before, but at the expense of others and the taxpayers. There are other, simpler and less costly models that could have been used.

The gradual improvements are coming, but much too slowly and not in a significant way.

The coverage gap is life threatening for those whose lives truly do depend immediately on their drugs, such as diabetics.

[Alan G]

The following excerpt came from a statement issued by AARP defining the goal of their alliance with the AMA. If this is the particulars of what you are referring to in your post, then the fact is that AARP is doing little of consequence for its constituency.

“Today, AARP and AMA are launching a national television ad that separates fact from fiction and highlights how health reform will improve Medicare by lowering prescription drug costs and making certain that neither government nor insurance bureaucrats come between Medicare patients and their doctors when making important health decisions.”

AARP’s statement may give some comfort that there is an organization fighting to insure neither the government or insurance companies will come between patients and their doctors but the much, much bigger question is, “What doctors?” Physicians are opting out of Medicare at alarming rates. Right now their reimbursement rates are scheduled to be cut another 21% beginning the first of the year. There is evidence that soon hospitals will be opting out of Medicare and if the new legislation in its current form is passed with a $500 billion cost repercussion to Medicare, the consequences could be catastrophic.

With regard to the aforementioned cut in doctor reimbursement, there is a bill which just passed the House, H.R. 3961, on November 20th which will block that 21% cut. And I find it quite curious that AARP is strongly claiming to be behind this bill which will block the decrease yet somehow can support healthcare legislation which boldly touts that half the costs of the reform will be paid for with $500 billion in savings (now there's a double-edged word) from Medicare.

If AARP is so concerned with my wellbeing as a senior, why aren’t they funding commercials informing the public and their constituency to the immediate threat to Medicare and the need for their individual Senators to support for this bill, H.R. 3961, which requires immediate passage? Show me that commercial….and then I may begin to believe they have my best interest at heart.

In closing, the fact that Republicans or Democrats saddle up with AARP at any given moment in time is of little consequence to me personally. That’s just politics as normal. Tomorrow it will be in their party’s best interests to be on the other side of the proverbial fence.

I certainly appreciate your commentary and thoughts on the subject of AARP, but I shall remain a “card-burning” member until such time as they meet my expectations as an advocate for seniors and not their own self-interests.

[Kay Dennison]

I've all but given up hope that a fair and decent plan will be enacted and that, like many elders, I will die from lack of proper health care.

[Alan G]

I must correct an error in my post's 4th paragraph stating...

"And I find it quite curious that AARP is strongly claiming to be behind this bill which will block the decrease yet somehow...."

The word "decrease" should have read "increase".

[donna]

Isn't it time we had an association of Elders instead of Retired Persons? It's not like everyone can retire anymore, after all.... and why shouldn't we have an organization that fights for us to keep working if we want to?

[Cop Car]

Donna--I don't know where the guys go, but we gals can go to the OWLs - Older Women's League.

About Older Women's League

[joared]

I like Donna's suggestion for an association of Elders rather than "retired" persons -- "...why shouldn't we have an organization that fights for us to keep working if we want to?"

There's certainly a need for that sort of organization, since far too many that want or need to keep working are prevented from doing so.

Expect a whole lot of education has to keep happening to eliminate ageism. I just wish more leaders in government, business, and the media would make a much more concerted effort to combat that "ism."

The writings here at TGB make an ongoing effort to end ageism, but much more is needed than just here in the blogosphere.

[saul friedman]

Alan G, The only Medicare cut that will affect benefits will be the gradual end of subsidies for Medicare Advantage, which has been the wedge for the privatization of Medicare. That will affect the 10 million MA subscribers, whose insurance is being paid for in part by the 40 plus million Medicare beneficiaries. As for the other cuts..have you seen the prices hospitals have charged Medicare? This is one that AARP is doing the right thing. I am disappointed that AARP and Obama did not come out early for Medicare for All.