[ AARP, the advocacy organization is welcoming the for-profit
takeover of its members’ national health insurance program —
because it earns hundreds of millions as part of the deal.]
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WHY IS AARP BOOSTING MEDICARE PRIVATIZATION?  
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Matthew Cunningham-Cook
November 21, 2022
The Lever
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_ AARP, the advocacy organization is welcoming the for-profit
takeover of its members’ national health insurance program —
because it earns hundreds of millions as part of the deal. _

AP Photo/Patrick Semansky // The Lever,

 

Despite massive and systemic problems with for-profit Medicare
plans denying care
[[link removed]] to seniors
while costing the government more than $7 billion
[[link removed].] annually
in excess fees, the leading advocacy group tasked with protecting
older Americans is welcoming the privatization of the national health
insurance program — while earning as much as $814 million annually
from insurers advertising the plans.

The state of affairs lays bare a conflict inside AARP, the major
advocacy organization for Americans 50 and older, over how to approach
the regulation of Medicare Advantage, the for-profit version of
Medicare.

On one hand, AARP, formerly known as the American Association of
Retired Persons, collects enormous amounts of revenue from Medicare
Advantage insurers to supplement huge executive salaries (the
nonprofit’s CEO made $1.3 million in 2020). On the other hand, the
organization is expected to advocate for the best interests of their
38 million members — and the 28.4 million Americans now covered
[[link removed].] by
Medicare Advantage plans, or nearly half of all Medicare
beneficiaries.

“The AARP makes money through its own Medicare Advantage plans,”
said Don Berwick, an administrator of Centers for Medicare and
Medicaid Services (CMS) in the Obama administration who has emerged
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a prominent critic of the program. “It would be understandable that
it would try to protect one of its major income sources.”

AARP had a chance to call out problems with Medicare Advantage denying
care to patients — arguably the most important issue facing its
members enrolled in Medicare Advantage — when CMS, the federal
agency that oversees Medicare, released a request for comments about
the program at the beginning
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August. But in its resulting August 30 letter
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AARP hardly touched on care denials, instead recommending modest
increases in transparency on issues like racial equity and telehealth
funding — while championing the expansion of the privatized
insurance program.

“Throughout the current public health emergency, we have supported
the expansion of supplemental benefits in [Medicare Advantage] to help
alleviate the unprecedented health care crisis brought about by the
COVID-19 pandemic,” noted the letter.

Meanwhile, AARP has been reaping the financial benefits of its own
Medicare Advantage plan, which it has been offering in partnership
with the for-profit insurance giant UnitedHealthcare since 2003
[[link removed]].
Starting in 2021, AARP also launched a lucrative partnership with the
major Medicare outsourcing firm Oak Street Health, which is a
participant in the ACO Realizing Equity, Access, and Community Health
(REACH) program that privatizes
[[link removed]] Medicare
benefits for seniors without their consent, as reported by _Kaiser
Health News_
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June.

In 2021, AARP earned $814 million in “royalties” for its health
care work, according to a recently released financial statement
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by _The Lever. _That figure is_ _more than double what the
organization collects in dues, and is 20 percent higher than 2018
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“At the direction of the third party insurance carriers, the plan
pays AARP, Inc. a portion of the total premiums collected for the use
of its intellectual property, which is reported as royalties in the
consolidated statements of activities,” AARP explains in its
latest tax filing
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Representatives of AARP did not respond to repeated requests for
comment.

“There’s A Big Game Being Played”

AARP’s motto [[link removed]] is, “To serve,
not be served.”

But that position hasn’t prompted AARP to sound the alarm on the
privatization of Medicare benefits, even after an April report from
the Inspector General of the Department of Health and Human Services
(HHS) found that 18 percent
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denied by Medicare Advantage plans should have been covered.

AARP has also refused to cut ties with UnitedHealth, its Medicare
Advantage partner, even as evidence has mounted that the insurer
isn’t focused on empowering consumers. In 2017, for example, the
insurance company was sued
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the Justice Department for overbilling Medicare. AARP’s standalone
Medicare prescription drug benefit program has also been racked with
high premium increases, making it one of the most expensive national
plans on the market, a recent investigation
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the _Wall Street Journal _found.

In AARP’s August letter, the advocacy organization also called for
slightly expanding the information Medicare Advantage plans provide on
their practices for denying care. “We are also supportive of
language around enrollee protection standards that will establish a
collaborative process between beneficiaries, providers, and CMS to
ensure that denials of prior authorization requests no longer produce
obstacles to needed care,” read the letter.

But these recommendations were far less expansive than those advocated
by the American Hospital Association (AHA), the leading national
hospital lobbying group. Referring to Medicare Advantage plans’
routine denial of care that would have been covered by traditional
Medicare, AHA pointedly noted in the aforementioned August 30 letter
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“we strongly urge CMS to require [Medicare Advantage plans] to align
medical necessity and coverage criteria with Traditional Medicare
rules so that Medicare patients have equal access to care regardless
of coverage type and to reduce the unnecessary delays and burdens
associated with inappropriate or excessive use of prior
authorization.”

And while AARP calls for more information on Medicare Advantage plans
to allow consumers to shop more effectively, they fail to provide that
information themselves on their website.

Susan Rogers, president of Physicians for a National Health Program
(PNHP), pointed out that AARP’s website
[[link removed]] contained essentially no independent
information on Medicare Advantage. “If you go to their website and
search for Medicare, the first information up there is Medicare
Advantage,” she said. “Nothing about traditional Medicare.
Nothing. If you trace their funding you’re not surprised by their
position at all. That makes them part of the problem.”

AARP has likewise been silent about the massive expansion of Medicare
Advantage augured by the Trump administration launching the “direct
contracting entities” or DCE, program, which under President Joe
Biden has now morphed
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the ACO REACH program. This program involuntarily assigns seniors to
privatized health care plans without their informed consent, and has
been panned by a host of advocates like PNHP and progressive leaders
like Rep. Pramila Jayapal (D-Wash.). Amazon
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major private equity
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have made major investments to try to cash in on this scheme.

In fact, as part of AARP’s new partnership with Oak Street Health,
the ACO REACH plan provider is promoting
[[link removed]] itself as a “trusted primary
care provider by AARP.” Meanwhile, Oak Street has disclosed that it
is the subject of a Justice Department investigation
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its marketing practices.

By neglecting to educate its members on the risks of Medicare
privatization, AARP is doing its members a disservice, said Berwick,
the former CMS administrator.

“There’s a big game being played — the Medicare Advantage money
machine,” he said. “Insurers are making an enormous amount of
money, and it’s a hidden cost to taxpayers. Beneficiaries don’t
actually see what’s being taken from them. If they did understand it
they would be very concerned.”

_[MATTHEW CUNNINGHAM-COOK is a researcher and writer focusing on
capital markets, health care and retirement policy]_

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