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Politics of health care: Republicans vs. AARP

House Republicans trying to thwart Democrats’ plans for a health care are questioning the motives of AARP, the seniors’ organization that the GOP accuses of putting its own interests ahead of its members’.
/ Source: CQ Politics

House Republicans trying to thwart Democrats’ plans for a health care overhaul are questioning the motives of AARP, the 40-million-member seniors’ organization that the GOP accuses of putting its own interests ahead of its members’.

By attacking AARP, the Republicans are wagering that seniors who fear that proposed changes to Medicare will hurt them can be turned into a potent force against an overhaul — even if their biggest advocacy group is friendly to many of the Democrats’ ideas.

On Monday, House Republican Conference Chairman Mike Pence of Indiana and Dave Reichert, R-Wash., fired new salvos at AARP. Reichert said that the group, which collects royalties when its members buy AARP-endorsed coverage from private insurers, is helping Democrats kill off a private-sector version of Medicare called Medicare Advantage so it can collect more commissions from seniors who would be forced to find new arrangements.

Reichert said he asked Washington state insurance regulators for an opinion on whether AARP should be regulated as an insurance company. “It’s an open investigation,” he said.

And Pence said that AARP has won preferential treatment in the Senate health care overhaul legislation that he said would limit executive compensation for health insurers. Pence noted a “carve out,” or exemption, for AARP and other groups that have cooperated with Democrats on the bill.

“It’s a backroom deal where Washington Democrats are protecting executives at places like AARP,” Pence charged.

“This health care legislation doesn’t sound like a good deal for seniors, but it sounds like a pretty good deal for AARP,” he added.

Fraying for Years
Congressional Republicans and AARP leaders have been increasingly at odds for several years. The group supported President George W. Bush and congressional Republicans’ 2003 Medicare drug prescription plan, but then fell out over Bush’s plan to create private retirement accounts within Social Security.

When Democrats pushed an expansion of the State Children’s Health Insurance Program in 2007, AARP proposed helping pay for it by cutting Medicare Advantage, in which private insurers provide seniors their Medicare benefits in place of the government. Democrats have long criticized the program, because the plans are paid more per patient than traditional Medicare costs. Nevertheless, the AARP proposal died.

Last week, AARP said it was “deeply disappointed” that the Senate blocked an attempt by Majority Leader Harry Reid , D-Nev., that would have averted a scheduled Medicare payment cut to doctors. Republicans uniformly opposed that measure.

And now AARP, while not endorsing any specific bill in the current health care debate, is collaborating with Democratic leaders. AARP’s executive vice president, Nancy LeaMond, appeared with Speaker Nancy Pelosi, D-Calif., at an Oct. 23 news conference where Pelosi proposed closing gaps in Medicare drug coverage — the so-called “doughnut hole” — as part of the House’s health care overhaul bill.

Democrats are proposing to eliminate some $500 billion in Medicare cuts over 10 years, but say the money will come from eliminating fraud and other inefficiencies.

In the current fight, AARP supports cuts to Medicare Advantage. It wants the money to pay for closing the gap in Medicare prescription coverage that hits millions of seniors annually. But Republicans say getting rid of the private alternative to Medicare would unfairly affect seniors in rural areas who have signed up for the program in larger numbers.

AARP Response
AARP and Reichert have already had an exchange of letters about the congressman’s allegations. AARP says it is not an insurance company, does not employ sales agents and has not endorsed any bill this year. The group says it is working to get the best deal for seniors.

“While AARP is actively engaged in the ongoing legislative debate, we have not endorsed any of the bills now pending in the House and Senate,” AARP Chief Operating Officer Thomas C. Nelson wrote Reichert early this month. “We are fighting to protect and improve Medicare benefits for seniors and ensure future generations have the health care they need.”

AARP officials say the group would not be affected by the provision regarding executive pay that Pence alluded to — which would impose limits on the tax deductibility for top insurance company officials’ pay — because the organization is not an insurance company.

“We’re no more ‘carved out’ than any other non-insurance company is carved out,” said David Certner, AARP’s legislative policy director.