AARP conflict of interest casts doubt over their endorsement of health care reform

AARP, the forty-million member strong lobby for the nation’s senior citizens and those over 50, has been joined by the AMA, the nation’s largest physician lobby, in endorsing the House health care reform bill.

As a supporter of the legislation, I’m pleased that these groups have lent their support at this crucial time. However, it bears noting that there may be more to the endorsements than what meets the eye, and it’s extremely troubling.

The AARP organization’s membership includes one out of every two people over the age of 50, making it far and away the largest representative of the nation’s Medicare recipients and those rapidly approaching the age of participation. However, the non-profit organization earned over $200 million in royalties last year from the sale of AARP branded health insurance programs marketed by United Healthcare, an amount that equals what the organization takes in from other sources such as dues and their monthly magazine which has the highest circulation of any magazine in the country.

To be fair, some of those products involved Medicare Advantage- a program offered by private insurance companies that offers more coverage and receives up to 12% higher payment rates from Medicare. Medicare Advantage is set to disappear under both the house bill and what is expected to emerge from the senate. However, whatever AARP might lose in revenues from the disappearance of Medicare Advantage, they stand to more than make up for in the other programs sold under their name, most of which involve Medicare supplemental policies. More troubling is the fact that should there be any decrease in Medicare benefits as a result of reform legislation, as Republicans allege will occur, millions will seek to regain any lost benefits by purchasing supplemental Medicare programs – many of which are sold under the AARP name and which produce huge income to the organization.

In other words, AARP stands to make a lot of money should their members suffer a reduction in the benefits Medicare offers.

As for the AMA, the overwhelming majority of their membership involves primary care physicians who represent the one area of medical practice that stand to benefit financially under the house reform measures. Lobby groups representing certain other specialties, including general and neurological surgeons, have been outspoken in their opposition to the reform bills.

While I would like to believe that the endorsement of the AARP is based on a policy determination as to what they believe is best for their membership, this conflict highlights the importance of non-profit organizations who stated purpose is to serve the interests of their members, staying out of the business of doing business.

The polls indicate that more of America’s seniors are against health care reform than those who support the effort. The endorsement of AARP could go a long way to help these members get comfortable with the idea. But when an organization like AARP has something to gain at the possible expense of their members, this leaves the card carrying, dues payment membership to wonder who’s side their representatives are really on.

AARP needs to get out of the insurance business or get out of the membership lobbying business. They can engage in either one, but they can’t do both and expect to be credible.