How The Current Healthcare Proposals Will Increase AARP Profits If Passed

One of the most reliable ways to understand any legislation and its supporters is to ‘follow the money.’  Power LIne did just that yesterday in an article about the proposed healthcare legislation.  Paul Mirengoff points out that the plan is to save money to pay for expanded healthcare by cutting the Medicare Advantage program in Medicare.  This program allows senior citizens to choose privately-administered coverage.  If this program is eliminated, these seniors will be forced into government-administered programs with less benefits.  At that point they will be forced to purchase private health insurance policies to supplement Medicare. 

According to a report issued by the House Republicans and cited in the Power Line article:

“In 2008, AARP generated $652.7 million in revenue by selling products like Medigap supplemental Medicare insurance, accounting for over 60 percent of the group’s revenue, according to an analysis of its financial statements cited in the report released by the House Republican Conference.”

The report further explains:

“If the House Democrats health care bill becomes law, the report argues, it would be a boon to AARP, because while Medicare Advantage plans will be required to pay out 85 percent of the money collected in premiums to claims made by policy holders, the requirement would only be 65 percent for the kind of Medigap policies sold by AARP.

“In other words, under the Democrat bill, seniors could pay as much as 20 cents more out of every premium dollar to fund ‘kickbacks’ to AARP-sponsored Medigap plans than Medicare Advantage plans,” the GOP report charges.”

This at least partially explains why the AARP is willing to ingore the interests of the senior citizens it is supposed to represent by supporting a healthcare reform bill that limits care to those senior citizens in order to save money.