The good, the bad and the unethical
Voters wondering whether to support the Medicare "prescription drug benefit" and confused over its support from the American Association of Retired Persons should consult this analysis by Consumers Union. The venerable consumer organization has "reluctantly" concluded that the Republican bill now before Congress "not only falls embarrassingly short of giving seniors a real drug benefit, it likely will threaten Medicare's viability."
The C.U. researchers discovered four lethal flaws in the AARP-backed "compromise" bill: Its funding is inadequate; it moves toward privatization of Medicare, without any proof that private plans will be more efficient; it will empower private pharmacy benefit managers far more than drug consumers; and, "most important," it is likely to increase rather than reduce out-of-pocket drug costs for consumers.
C.U.'s analysts estimate that if this bill passes without cost controls, the average Medicare recipient who currently spends $2,318 a year for drugs (without coverage) will pay $2,911 out-of-pocket in 2007.
Why heed Consumers Union rather than AARP? The answer is quite simple. Unlike the ethically challenged leadership of AARP, Consumers Union has always avoided compromising commercial relationships.
Here is USA Today's examination of the conflict of interest that may have influenced AARP's decision to side with Bill Frist and Tom DeLay against its own members: "The organization receives millions of dollars a year in royalties for insurance marketed under its name. It stands to reap a windfall from the plan, which would pump $400 billion into a new drug benefit and open Medicare to private insurance competition. AARP's annual reports show it has received about $608 million in insurance-related income over the four most recent years for which data are available. That's 30 percent of its total income, roughly equal to what it collects in membership dues." (And don't miss Krugman on AARP "gone astray" today.)
AARP chief William Novelli -- now known to dissident members as "Gingrich's poodle," for his adoring preface to the former speaker's new paperback -- has a strangely mixed political pedigree. A former P.R. executive, Novelli specialized in using "social marketing" as a cover for corporate interests. On its own site, the company he founded boasts about its pioneering work on behalf of manufacturing polluters, the auto industry, the insurance industry and other special interests. Porter/Novelli now seems especially proud of the grossly misleading "Harry and Louise" ad that brought down the Clinton healthcare plan in 1993.
[10:30 a.m. PST, Nov. 21, 2003]