Why Is AARP Boosting Medicare Privatization?

Despite massive and systemic problems with for-profit Medicare plans denying care to seniors while costing the government more than $7 billionannually 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 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 as 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 of August. But in its resulting August 30 letter, 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.

This is a worthwhile piece of criticism. It points out the contradictions that lead inevitably to AARP choosing profit over service at every opportunity. Here’s the link to the complete article.

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