Editorials

The Feet of Clay award for this week is shared by two recipients, Sen. Diane Feinstein and the American Association of Retired Persons, for supporting the bogus Medicare bill which the Republicans have already shoved through the House with support from some Democrats. Senator Diane’s presence on any list of sellouts comes as no surprise to those who have followed her career, but if you’re too young to have encountered the AARP first-hand, you might wonder what’s gone wrong there. 

Some blame administrator Bill Novelli, a PR man who took the helm at AARP two years ago. But that’s too simple. 

Many outraged commentators (all the usual suspects, from Paul Krugman on down) have pointed out that the organization has been captured by its money-making schemes, notably prescription drug and insurance sales. The Medicare bill which is now being debated in the Senate gives generous payoffs to insurance vendors and privately-owned HMOs. (The Republican majority leader, Sen. Frist of Tennessee, is funded by a family fortune gleaned from ownership of one of the biggest private HMO chains.)  

What is not generally understood is that the AARP has built up a big business selling insurance to members who tend to believe what the organization tells them because of its carefully cultivated do-goody aura. For many who are starting to worry about an unprotected old age, it seems like a known quantity—a safe source for a little added protection which just might come in handy some day. 

That’s what my late mother-in-law thought when she signed up for an AARP hospitalization policy to supplement her well-funded University of California faculty medical benefits. She was a smart woman who successfully managed her own finances throughout her long life, but she got fooled on this one.  

When my husband took over her financial tasks, after she reached 88, he asked what the AARP policy covered that Medicare and UC didn’t. She didn’t know. It didn’t cost much, about five dollars a month, and she thought it must be good for something. Since she could no longer hear well on the phone, he called AARP to ask. They wouldn’t talk to him about it—“confidentiality,” they said. So she sent them a signed letter authorizing them to talk to him. They still wouldn’t say what the policy covered—“only in writing,” they said. So she wrote to them and asked them to write back. After many months had passed, they sent a printed document which purported to outline the conditions under which the policy would pay off. A number of family members, boasting among them many advanced degrees, membership in the California bar, and years of business experience, read it and tried to figure out what it meant. No luck. It seemed to be gibberish. 

Meanwhile, my mother-in-law was undergoing repeated hospitalizations under varying circumstances. Every time she was treated, the hospital sent the bill first to AARP, which always declined to pay, so then either UC’s carrier or Medicare eventually paid it. AARP never could find exactly the right circumstances for her coverage to kick in, and she finally died without having received a penny of benefits from her 20 years or more of payments.  

The AARP has no strong motivation to strengthen government insurance like Medicare. Doing so might mean that worried old people could rely on Medicare to pay all their medical bills, with no incentive to buy this kind of expensive supplemental “protection” from private insurers.  

Five dollars a month doesn’t seem like much, but when you multiply it by many, many AARP members paying in over possibly 20 or 30 years, and taking very little out, it begins to add up to big money for the organization. An insurance company which is hyped as an advocacy group enjoys a privileged position in the marketplace. This translates into supporting a fat AARP bureaucracy with big salaries for executives. An efficient single-payer government health care system would markedly reduce insurance company revenues. There would be no room for lucrative little scams like my mother-in-law’s hospitalization policy. It’s no wonder the AARP likes the current proposal better. 

Becky O’Malley is executive editor of the Daily Planet.