Cheating seniors by raising health care costs
By Jon Decker and Phil Kerpen - -
Tuesday, December 3, 2019
ANALYSIS/OPINION:
The AARP recently hosted a forum that included
Health and Human Services Secretary Alex Azar ostensibly to discuss proposals
to lower health care costs. The irony was unmissable. AARP — which until the
1990s was an acronym but now, appropriately, stands for nothing — is crusading
for a Nancy Pelosi bill that allegedly combats “unfair pricing,” while AARP
itself faces serious legal allegations that it is ripping off seniors by
raising the health care costs of its own members.
Sadly, the AARP has become little more than a
marketing scam for its big corporate financial sponsors — UnitedHealth and its
wholly-owned OptumRx pharmacy business. Doing so has become quite lucrative:
Research shows that in 2017, AARP received $627 million from UnitedHealth.
The AARP sells supplemental Medicare plans —
including plans with an “AARP-sponsored” branding. However, instead of helping
seniors select the plan that is most tailored to their needs or financial
resources, the AARP exclusively sells Medigap coverage from UnitedHealth, the
nation’s largest health insurer.
Unbeknownst to many purchasing these plans,
who are under the misimpression that the AARP is a seniors group, these plans
are not always fairly priced — and the AARP receives a 4.95 percent fee for
each plan sold.
Recall that when seniors were contacting the
AARP 14-to-1 urging the group to oppose Obamacare they instead supported it and
received a special carve-out to keep their UnitedHealth gravy train running. In
fact, since the law’s passage and implementation, the AARP has received well
over $4 billion in “royalties” from UnitedHealth.
The ongoing lawsuit Krukas v. AARP is perhaps
the strongest and most direct threat to this cozy arrangement. The plaintiff,
Helen Krukas, alleges:
“AARP received ‘a 4.95% commission from every
policy sold or renewed,’ id., which ‘constitutes an illegal kickback,’ AARP
collects an illegal commission, acts as an unlicensed insurance agent, and
materially misrepresents information about the 4.95% charge, all of which
constitute violations of the CPPA [Consumer Protection Procedures Act] and
common law.”
This is hardly the only area
where the AARP lines its own pockets while betraying seniors.
The AARP has emerged as one
of the most vocal supporters of House Speaker Nancy Pelosi’s prescription drug
plan. This radical bill, which threatens manufacturers with a shocking 95
percent gross-receipts tax if they don’t accept government-set prices, would be
devastating for the discovery and development of new cures and therefore
terrible for seniors.
Numerous
health experts and even the Congressional Budget Office (CBO) have reported the
bill would likely restrict the availability of life-saving drugs and stifle
investments in new ones in disease areas such as Alzheimer’s, cancer, diabetes
and more. According to the leading small biotechnology companies performing cutting
edge research, Mrs. Pelosi’s bill would cause a “nuclear winter” by
obliterating critical R&D funding.
If the federal government
imposes price controls and access restrictions to drugs as Mrs. Pelosi and the
AARP now advocate, in the near-term higher profits will flow through to the
insurance companies. This is why UnitedHealth has its marketing arm AARP out
banging the drum for the extreme Pelosi plan.
Given what its actual core
business model is, the AARP should be the last group to tell others how to
lower health care costs. The AARP has strayed from its mission to support older
Americans. Seniors deserve better than the AARP.
Phil Kerpen is president of
American Commitment. Jon Decker is membership director at American Commitment.
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