EMAIL PAGE FIVE
COLUMN 101, JANUARY 1, 2004
(Copyright © 2004 The Blacklisted Journalist)
BY PAUL KRUGMAN
AARP IS AN INSURANCE COMPANY
Subject: NYTimes.com Article: Op-Ed Columnist: AARP
Date: Fri, 21 Nov 2003 20:10:21 -0500 (EST)
November 21, 2003
AARP Gone Astray
By PAUL KRUGMAN
This is a good bill that will help every Medicare
beneficiary," wrote Tom Scully, the Medicare administrator, in a letter to
The New York Times defending the prescription drug bill. That's flatly untrue.
(Are you surprised?) As the Center on Budget and Policy Priorities points out,
the bill will force millions of beneficiaries to pay more for drugs, thanks to a
provision that cuts off supplemental aid from Medicaid. Poorer recipients may
find previously affordable drugs moving out of reach.
That's only one of a number of anti-retiree measures tucked
away in the bill. It contains several Trojan horse provisions that are clearly
intended to undermine Medicare over time " it will allow private insurers to
cherry-pick healthy clients in selected cities, and it will heavily subsidize
private plans competing with traditional Medicare. Meanwhile, the bill prohibits
Medicare from using its bargaining power to cut drug prices; drug company stocks
have soared since the bill's details became public.
Yet the bill has a good chance of passing, thanks to an
endorsement from AARP, the retiree advocacy organization, which has already
begun an expensive advertising campaign on the bill's behalf. What's going on?
Let's step back a minute. This is a bill with huge
implications for the future of Medicare. It's also, at best, highly
controversial. One might therefore have expected an advocacy group for retired
Americans to take its time in responding " to make sure that major groups of
retirees won't actually be hurt, and to poll its members to be sure that they
are well informed about what the bill contains and don't object to it.
Instead, AARP has thrown its weight behind an effort to ram
the bill through before Thanksgiving. And no, it's not urgent to get the bill
passed so retirees can get immediate relief. The plan won't kick in until 2006
in any case, so no harm will be done if the nation takes some time to consider.
Many of AARP's members feel betrayed. The message boards at
the organization's Web site have filled up with outraged posts. A number of
those posts say something like this: "Now you're just an insurance
company." Indeed, that may get to the heart of the matter.
Over the years AARP has become much more than an advocacy
and service organization for older Americans. It receives more than $150 million
each year in commissions on insurance, mutual funds and prescription drugs sold
to its members.
And this Medicare bill is very friendly to insurance and
drug companies. Senator John Breaux, one of only two Democrats who participated
in negotiations over the bill, takes the controversy as a good sign: "No
one got everything they wanted." But as Jonathan Cohn points out in The New
Republic, drug and insurance companies got exactly what they wanted: no efforts
to limit prices, generous subsidies and lots of additional business. For
example, insurance companies that offer an alternative to Medicare will not only
be able to pick and choose their customers, but will also get 30 percent more
per client than the government spends on the average Medicare recipient.
So do AARP executives support this bill because they hope
to share in the bounty? Maybe, but it probably runs deeper than that. Once an
advocacy group becomes as much a business as a service organization, its
executives are likely to start identifying more with industry interests than
with the groups they are supposed to serve.
Thus it may seem odd on the surface that William Novelli,
AARP's chief executive, wrote a glowing preface to Newt Gingrich's book on
health care reform. After all, Mr. Gingrich has long advocated turning the
administration of Medicare over to private companies " an unpopular idea, and
also an expensive one (forget the clich's about inefficient government: private
companies have much higher overhead than Medicare). But what looks like wasted
money to taxpayers and retirees looks like opportunity to private providers.
Am I being too cynical? How could I be? In case you haven't
noticed, we live in a golden age of pork: the other big piece of legislation
marching through Congress, the energy bill, makes the Smoot-Hawley tariff look
like a classic of good government.
So it should come as no surprise that Medicare "reform" appears likely to be another triumph for the coalition of the bought-off " a coalition that, sadly, includes AARP.
Copyright 2003 The New York Times Company ##
* * *
CLICK HERE TO GET TO 'WOLF TAKES OFF SHEEPSKIN: AARP WAS JUST A BIG CON'
CLICK HERE TO GET TO INDEX OF COLUMN 101
CLICK HERE TO GET TO INDEX OF COLUMNS
Blacklisted Journalist can be contacted at P.O.Box 964, Elizabeth, NJ 07208-0964
The Blacklisted Journalist's E-Mail Address:
THE BLACKLISTED JOURNALIST IS A SERVICE MARK OF AL ARONOWITZ