Saturday, September 26, 2009

AARP Getting "Kickbacks" In Obama's Health Care Takeover

Why is AARP, formerly known as American Association of Retired People or something such, acting against its retirement-age "members"? Obama is going to cut $162 million from Medicare Advantage and AARP is in favor? Why does AARP favor cutting benefits for the seniors it claims to represent. Read below about the special favors AARP has been promised; some are already in effect. This is money for the AARP bureaucrats, but reduced benefits for the retired. How cynical! Philip Klein at The American Spectator
One of the subplots to the health care debate I've been following is the cozy relationship between AARP and the Obama administration, as the group has thrown its full-throated support behind the Democrats' health care push even though their membership comes from the age group most opposed to Democratic health care proposals. Today, House Republicans have issued a report providing evidence that AARP is in a position to recieve tens of millions of dollars in "kickbacks" if Democratic health care legislation becomes law. President Obama and Democrats have proposed saving money to pay for health care legislation, in part, by cutting $162 billion in payments to Medicare Advantage, which allows Medicare recipients to choose privately-administered coverage. If these changes go through, millions of seniors who have chosen Medicare Advantage would lose their current coverage, forcing them into government-administered plans with less generous benefits. As a result, many of them would have to purchase policies to supplement traditional Medicare. Enter AARP.
Here it comes...
In 2008, AARP generated $652.7 million in revenue by selling products like Medigap supplemental Medicare insurance, accounting for over 60 percent of the group's revenue, according to an analysis of its financial statements cited in the report released by the House Republican Conference. If the House Democrats health care bill becomes law, the report argues, it would be a boon to AARP, because while Medicare Advantage plans will be required to pay out 85 percent of the money collected in premiums to claims made by policy holders, the requirement would only be 65 percent for the kind of Medigap policies sold by AARP. "In other words, under the Democrat bill, seniors could pay as much as 20 cents more out of every premium dollar to fund 'kickbacks' to AARP-sponsored Medigap plans than Medicare Advantage plans," the GOP report charges. But this isn't the only way that AARP is getting special favors, according to the report. Earlier this month insurer Humana Inc. sent customers who enrolled in the company's Medicare Advantage plan a letter warning them that their benefits would be in danger if the Democratic health care legislation passed. Senate Finance Committee Chairman Max Baucus complained to the Centers for Medicare and Medicaid Services, which not only ordered Humana to stop sending the letters to its customers, but prohibited any other private insurers from doing the same. Except, that is, AARP -- which sponsors a Medicare Advantage program in addition to the Medigap policies it offers, but was exempt from the Obama administration's gag order.
Update: The AmSpec author got a response from AARP. It only has empty phrases and name calling. Executive vice president, Nancy LeaMond does not address the substance of Klein's argument.

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