AARP Vows Medicare, Medicaid Budget Fight

Washington’s most powerful senior citizens’ lobbying group is gearing up for several health care fights in 2005, warning lawmakers that it is prepared to throw its weight against possible efforts to cut federal programs.

Leaders from AARP (search) said Wednesday that the group is watching for spending cuts in big programs such as Medicare (search) and Medicaid (search) upon which millions of seniors rely for medical care.

AARP has considerable influence on Capitol Hill, where it has a history of helping sway key votes on issues affecting seniors. Though the group says that its top 2005 priority will be the coming fight on privatizing Social Security, it is also planning to fight for legalized prescription drug importation and against possible cuts to Medicaid.

“We expect to make the telephones ring” in lawmakers’ offices, William Novelli, AARP’s CEO says.

The extent of possible cuts to Medicare or Medicaid remains to be seen. Lawmakers and interest groups are waiting for President Bush to release his fiscal 2005 budget in early February.

But some reductions seem likely as Congress and the White House strive to make good on pledges to cut the huge federal deficit by half during the next four years.

One proposal widely expected from the White House is a reprise of a 2003 plan to offer states increased federal Medicaid payments in exchange for program changes and payment reductions in future years. The plan would have reduced federal oversight of Medicaid payments, instead sending block grants to governors to run the program.

The plan was met with a tepid response from many governors and was never acted upon by Congress. But some form of the block grant (search) proposal could save the government billions.

AARP leaders vowed to fight block grants, saying that they threaten to undermine the program’s long-term role as a health care safety net for poor seniors and others. “We don’t think block grants are a viable option,” says Kirsten Sloan, the group’s chief health care lobbyist.

Bush could also ask Congress to consider cutting Medicare payments to doctors, hospitals, and other health providers as a way to help offset the cost of the new prescription drug benefit, which next year is set to begin at an estimated cost of some $500 billion over 10 years.

AARP says that they also plan to push for passage of legislation legalizing the importation of lower-cost prescription drugs from Canada and Europe. The Bush administration two weeks ago expressed deep skepticism about allowing imports, saying that they could damage the safety of the U.S. drug supply and may hurt the ability of drug companies to invent new medications.

A bill authorizing prescription imports passed in the House of Representatives last year but never reached a vote in the Senate. Sen. Byron Dorgan, D-N.D., vowed in December to reintroduce the importation bill he co-authored with Sen. Olympia Snowe, R-Maine.

Novelli says that his group plans to launch a major education effort this year to inform seniors about their options in the Medicare prescription drug benefit, due to start in January 2006. AARP has been among several groups critical of Medicare for putting in for a prescription drug discount card plan that had complicated benefits and confused many seniors. Less than 6 million of Medicare’s 40 million beneficiaries have signed up for the program so far.

“We have a lot of work to do still,” he says.

Several health care organizations, including the American Hospital Association and the American College of Physicians, wrote to President Bush in December expressing opposition to 2006 budget cuts to Medicare and Medicaid. "With many states in fiscal crisis, Medicaid reductions at the federal level would drastically unravel an already frail health care safety net," the groups write.

By Todd Zwillich, reviewed by Brunilda Nazario, MD

SOURCES: William Novelli, CEO, AARP. Kirstin Sloan, chief lobbyist for health care, AARP.