Published August 24, 2012
In 1999, the American Association of Retired Persons officially changed its name to "AARP," which has since officially stood for nothing. So it’s fitting that in the orgy of corrupt backroom deals that resulted in the president’s deeply unpopular health care law, the worst of all was cut by AARP, an insurance purveyor that used to be a seniors group. With Obama taking to the airwaves touting AARP support, it’s important to remember how the dirty deal was done.
Seniors hated Obama’s bill, because they rightly feared its steep cuts to Medicare with no meaningful cost containment mechanism other than denial-of-care. Those cuts have already ballooned from an initial estimate of $500 billion to $700 billion, and additional cuts from the so-called Independent Payment Advisory Board are authorized without a vote of Congress.
The last Rasmussen poll before the final House passage vote showed opposition to the law among seniors running at 59 percent, versus just 37 percent support, with strong opponents outnumbering strong supporters more than two to one.
We now know, thanks to an investigative report by the House Energy and Commerce Committee, that opposition among AARP’s own membership was even more overwhelming. An e-mail from AARP lobbyists Nora Super to White House staffer Lauren Aronson on July 23, 2009 said: “We really need to talk. Our calls against reform are coming in 14 to one.”
Yet a few months later, AARP was fully on board and officially supporting the very bill that was overwhelmingly opposed by its members. Indeed, so fully on board that Jim Messina (then a top White House staffer and now Obama’s campaign manager) sent AARP executive Nancy LeaMond a December 16, 2009 e-mail with the subject: “Now that byou [sic] support the bill (tomorrow am)” and the body: “Can we get immediate robo calls into Nebraska urging Nelson to vote for cloture?”
AARP dutifully complied, and their pressure – along with the corrupt Cornhusker Kickback, convinced Ben Nelson to put the bill over the top.
Why did AARP ignore the overwhelming opposition among seniors, calls from their own members running 14-1 against, and emotional town hall confrontations all over the country?
AARP is in the business of selling insurance, and their offerings were uniquely well-positioned to benefit from the bill, because the steep cuts to Medicare Advantage would force beneficiaries into traditional fee-for-service Medicare, making them potential customers for AARP’s Medigap policies.
An investigative report from the House Ways and Means Committee found: “The Democrats’ health care law, which AARP strongly endorsed, could result in a windfall for AARP that exceeds over $1 billion during the next 10 years.”
That’s a billion reasons for AARP to betray seniors and support Obama’s bill.
The report found that while AARP offers a Medicare Advantage plan through United Healthcare, it does so under a flat-fee licensing agreement that would give the company the same revenue even following savage cuts to Medicare Advantage.
Its Medigap policies, on the other hand, are its biggest cash cow and AARP makes money with every policy sold. It was a win-win for AARP’s bottom line, but at a devastating cost to the seniors it pretends to represent.
Sweetening the deal for AARP, the bill created a special, AARP-specific carve-out exempting its Medigap policies from the rate regulations applied to its competitors.
In light of this betrayal, my friend Jim Martin of the 60 Plus Association, a fiscally conservative seniors group, has suggested that AARP ought to once again be an abbreviation: the Association Against Retired Persons.
Sounds right to me.