The AARP endorsed Medicare D(isaster) to supposedly “benefit” senior citizens who did not have rx coverage. However, a closer look at the endorsement of Medicare D(isaster) by the AARP has revealed the the AARP
was instrumental in passing the Medicare bill, continues to defend it and vigorously sells the United plan, from which it earns commissions.
Taking that into consideration, the passage and preservation
of Medicare D(isaster) is much more than a PR legislative win [than one] for the health and welfare of senior citizens.
In short, by its sales of the United plan, the AARP can generate tens of millions of dollars. Membership of the AARP totals 35 million, with dues costing $12.50 per year.
However, AARP has non-profit status. It represents seniors and is one of the most influential lobbying groups in the country. Other services provided to members include tax preparation assistance and safe driver education.
Rep. Pete Stark recognized the conflict of interest and claimed,
“They can’t have it both ways…It would be like Consumer Reports investing trust fund money in Chrysler and then promoting Chrysler cars. You can’t claim to be a disinterested advocate if you’re peddling insurance to make a profit and pay your overhead.”
Steve Hahn, spokesman for the AARP stated
“There are no limos in the garage…Any money AARP makes will get plowed back into the services our members want.”
Due to its marketing agreement with AARP, UnitedHealth has a lead in enrollment,
according to preliminary figures from major insurers and an analysis by Lehman Brothers’ Equity Research.
The AARP MedicareRx plan has at least 1.8 million members, according to UnitedHealth and AARP, making up more than half of the total enrollment of 3.2 million in all the Medicare-related plans offered by UnitedHealth.
After the AARP beneficiaries, the largest UnitedHealth contingent comes from the 840,000 members enrolled under PacifiCare. UnitedHealth, based in Minnesota, recently acquired the California insurer.
10 companies that won federal contracts to offer coverage under Medicare D, including California-based Pacificare Health Systems, gave a collective $6.5 million to members of Congress over the past six years.
Interestingly, following AARP beneficiaries, the largest UnitedHealth membership is from the 840,000 members enrolled under PacifiCare. UnitedHealth, based in Minnesota, recently acquired the PacifiCare. And according to Business Week,
by automatically assigning poor seniors to low-cost plans such as Humana’s, the feds are eliminating insurers’ marketing costs.
Terms of the deal were not disclosed. But, according to Robert Laszewski, a former insurance executive who is now a consultant on health policy,
“It ain’t nickels and dimes.”
The deal could involve advertising fees and other payments in addition to royalties. If that is the case, it appears to possibly be similar to the marketing deal between Wal-mart and Humana. This deal consists of
Humana also [having] Medicare Part D sales representatives inside some Wal-Mart stores and markets a card that carries only the Wal-Mart logo.
a drugstore’s logo on the card is one way an insurer can reward its retail partners for their help enrolling members.
In this instance, it is possible that the reward could be similar, due to the customer volume of Walmart.
Larry Noble, executive director of the Center for Responsive Politics, a nonpartisan group that tracks the influence of money in the political system said that
AARP should make a full disclosure.
Due to the intricacies of Medicare D(isaster), it is doubtful that the privately held companies will have to do so.