Why the AARP health 'reform' endorsement?

AARP collects royalties on "Medigap insurance," a privately purchased insurance coverage that helps pay some of the health-care costs that Medicare doesn't cover.

However, seniors have the option of joining Medicare Advantage plans, allowing them to use Medicare funds to purchase private insurance plans that offer extra benefits and lower copayments than the Original Medicare Plan. An estimated 10.2 million seniors have enrolled in Medicare Advantage.

When seniors enroll in Medicare Advantage plans, they often drop Medigap policies because Medigap plans won't pay deductibles, copayments or other cost-sharing under the Medicare health plan. The switch slashes Medigap revenues – and simultaneously impacts AARP royalties from Medigap insurance.

However, Sec. 1161 of the House bill would slash payments to Medicare Advantage health plans used by 20 percent of seniors and cause them to lose some benefits, including vision and dental coverage.

Grace-Marie Turner, president of the Galen Institute, one of the leading health-care policy organizations in the country, told WND's Radio America AARP saw that it would lose revenue if it didn't stop the Medicare Advantage programs.

"The House bill would dramatically cut money out of Medicare Advantage programs, forcing people to need the Medigap policies that are such a big cash cow for the AARP," she said.

"Seniors are going to have higher costs in Medicare. Because of the cuts in Medicare, they are going to have ever more need for these Medigap policies. So the AARP, therefore, will be able to make even more money off of us," Turner explained. "The legislation both kills competition that the AARP has with these Medicare Advantage programs, and it boosts the number of people who need the Medigap insurance because Medicare is going to become an even more deficient program than it is now if you take half a trillion dollars out of it."

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