Good News for People Who Like Bad Health Care Policy

The AARP makes a definitive move to becoming a major private insurance provider. But, yes, it intends to also be a major Beltway lobbying force. In essence, from here going forward it will be harder than ever to reform health care policy in a sensible direction.

4/17/07 9:55AM del.icio.us this incoming links

Comments

It is not at all clear how you derive your conclusion from the facts presented. In fact it is not at all clear what your conclusion actually means.

Setting aside your remarks it is clear to me that with the AARP holding the anchor position on Medicare for seniors we have lots of room to improve health care policy for the rest of us. One policy solution would be to lower the eligibility age for Medicare to 55 from 65. This would take another huge chunk of the population out of the for profit insurance pool but it is the population the insurance companies do not want anyway. This would drive down the cost of privite insurance making it more affordable to those whithout it now.

Posted by: ken on April 17, 2007 10:39 AM

What are the odds of AARP leveraging its position as the largest private Medicare provider into an activist role in health care reform?

Posted by: Dan on April 17, 2007 11:07 AM

Of course they say they cannot cover everyone since that is not cost effective. And what coverage they do supply will have to make a profit on the part of our population that has the highest costs. And as part of their Medicare coverage created by Medicare Part D they are able to cherry pick the healthiest seniors and leave the rest for Medicare.

It's not a good situation for the system, but it may be the best of a bad deal for some individuals, myself included.

Posted by: Nat on April 17, 2007 11:23 AM

Echoing what ken said...I'm not sure how an advocacy group for senior citizens taking a more active role in healthcare (either in providing insurance or lobbying) is necessarily "bad health care policy."

A big part of the problem right now is that the for-profit side of the healthcare equation is "a major Beltway lobbying force." Having an organiziation that's at least purportedly representing the consumer take on a larger role seems like a good thing.

Posted by: James Gary on April 17, 2007 11:27 AM

The problem is they will stop being an advocacy group for senior citizens and become an advocacy group for the AARP. While senior citizens might want a good health care policy, the AARP may not; good policy might interfere with their money-making.

Posted by: Njorl on April 17, 2007 11:34 AM

"Echoing what ken said...I'm not sure how an advocacy group for senior citizens taking a more active role in healthcare (either in providing insurance or lobbying) is necessarily "bad health care policy."

I suppose that's possible, but really, that's the same blanket argument made against the existence of unions. If purportedly-advocative organizations can't be trusted to act in their members' best interests, where does that leave us? (Two possibilites are: policy made by benevolent wonkish mandarins and policy made by angry mobs. I'm guessing Matthew leans mandarin-ward, which is what I suspect is the point of his orginal post.)

Posted by: James Gary on April 17, 2007 11:53 AM

... The problem is they will stop being an advocacy group for senior citizens and become an advocacy group for the AARP. While senior citizens might want a good health care policy, the AARP may not; good policy might interfere with their money-making."
I suppose that's possible, but really, that's the same blanket argument made against the existence of unions. If purportedly-advocative organizations can't be trusted to act in their members' best interests, where does that leave us? (Two possibilites are: policy made by benevolent wonkish mandarins and policy made by angry mobs. I'm guessing Matthew leans mandarin-ward, which is what I suspect is the point of his orginal post.)

Whuh? If a union has a business on the side that makes money at the expense of its members' interests, yes, it ceases to be a credible advocate for its members. But what is this side business for unions? As far as I am aware, there is none. So what is your point? Unions thrive if their members thrive -- its interests are aligned with those of its members.

The AARP is going into a business detrimental to the interests of a sizable number of seniors. They will actively lobby against the interest of these seniors because acting in the interests of these seniors would harm their profits as an insurer.

Posted by: David Houghton on April 17, 2007 12:13 PM

Maybe once it starts responding to the profit motive, it'll stop advocating disastrous pension policy.

Posted by: Chris on April 17, 2007 12:19 PM

"The AARP is going into a business detrimental to the interests of a sizable number of seniors."

How is the private insurance business inherently "detrimental to the interests of a sizable number of seniors?" (If they can't afford insurance at all, sure. But I see the larger issue here as one of *making healthcare affordable.* Whether it's through an expansion of Medicare or through some free-(or-semi-free)-market mechanism (e.g., AARP as provider) makes no difference to me.)

Posted by: James Gary on April 17, 2007 12:22 PM

How is the private insurance business inherently "detrimental to the interests of a sizable number of seniors?" (If they can't afford insurance at all, sure. But I see the larger issue here as one of *making healthcare affordable.* Whether it's through an expansion of Medicare or through some free-(or-semi-free)-market mechanism (e.g., AARP as provider) makes no difference to me.)

There are certain seniors the AARP can profitably insure. These are the ones who will need relatively little healthcare. These individuals are also better off if no one else is in their risk pool: they don't subsidize the care of the less fortunate. So, these seniors may like the AARP's insurance. Those who the AARP refuses to insure would be better off in a larger risk pool, which is what universal coverage would create. These are the seniors whose interests the AARP would be motivated to lobby against.

All of this ignores inherent cost savings achieved by the rest of the civilized world through various universal health coverage regimes. These savings, plus common human decency, might align the interests of the fortunate seniors with the less fortunate.

Posted by: David Houghton on April 17, 2007 12:35 PM

David, without knowing the details of AARP's plan, it's impossible for me to discuss this further. You're making the assumption above that the proposed AARP coverage would be unavailable (or prohibitively expensive) to a certain segment of AARP members.

Whether or not the realities of the insurance business make it *certain* that this would be so (that is, that it would be *financially impossible* for AARP to offer healthcare to *all* its members, even if it meant operating on a break-even basis) seems an open question, however.

As I said above, I'm in favor of whatever makes healthcare cheaper and more widely available.

Posted by: James Gary on April 17, 2007 01:10 PM

The problem, as I see it, is really one of cowardice on the part of Democratic politicians, and not greed on the part of AARP.

Look, if the Democrats would just lay out a policy of expanding Medicare to everyone then AARP would not see the need to offer coverage to the age bracket just below Medicare eligibility. This is the age braket most in need of a strong Democratic policy that would offer guaranteed health care. If the Democrats are not going to lay out a reasonable position on this, one that AAPR can lobby for, what can AARP do other than trying to fill this need themselves?

As long as we have loser liberals offering Rube Goldburg idiotic ideas on health care nothing will get done. The only, I repeat only, politically feasable policy is to expand Medicare. Everything else is a complete and utter fucking waste of time.

Posted by: ken on April 17, 2007 01:31 PM

Last I checked, proponents of universal health care are interested in health care being available universally, to everyone, not just "seniors". I don't see AARP going out of its way to advocate for, say, indigent children. And now that it will have a substantial financial stake in the system as it is, it's certain to throw its substantial lobbying muscle behind the status quo. Honestly, if you can't see how the institutional incentives are likely to play out here, I'm don't think you understand even the basics of this discussion.

Posted by: sglover on April 17, 2007 01:48 PM

I have never seen a sensible proposal from any politician, policy wonk or pundit for universal health insurance. They are all so full of bullshit complications that none of them make any sense.

Loser liberals are fond of looking to other countries for examples of plans worthy of copying but ignore the most succesfull universal coverage plan in the world right here at home: Medicare. Loser liberals are fond of making up completely unintellegble grandious 'plans' for unversal health insurance that no one in the world understands. They do this because I believe they are basically cowards who do not want to face up to the fact that we have really only one politically feasible policy solution to the proble: expand Medicare.

Everyone understands Medicare and everyone already accepts the fact that, if they live long enough, Medicare will provide them the best Medicare care in the world.

So why don't we have any Democratic politicians offering a homegrown popular program as the solution to the probem? I believe it is because they are cowards who think it is safer to fail with phoney proposals than to stand for something that could actually work.

Posted by: ken on April 17, 2007 02:07 PM

I have never seen a sensible proposal from any politician, policy wonk or pundit for universal health insurance. They are all so full of bullshit complications that none of them make any sense.
...

You seem like an angry concern troll. Either that or you haven't been following this discussion very closely (in which case, your anger at "loser liberals" is hard to fathom).

Your proposed solution has been suggested numerous times in numerous venues. Google around a bit. Are you mad because people have also proposed other solutions or had the temerity to look at what has actually worked in other countries?

Posted by: David Houghton on April 17, 2007 02:45 PM

Ken, sounds like you might be interested in the Yglesias plan:

What does quantitative compromise mean in this context? Many things. But, primarily, it means building on Medicare and Medicaid. First, change the 2003 Medicare reform bill to give the government meaningful price leverage over the pharmaceutical companies and eliminate the role for private insurance companies. Beyond that, see what you can get -- Robert Kuttner laid out a few options yesterday. Propose that Medicaid cover everyone under 25. If you can't get that, take everyone under 21. If you can't get that, take everyone under 18. If you can get that, propose adding full-time students under 25. Then all full-time students. Then everyone under 25. Lower the threshold for Medicare to 50. Or to 55. Or to 60. Lower it to 64 if that's all you can get. Then come back next year and propose lowering it to 50. Or to 55. Or to 63. Keep coming back. Let people under the threshold "buy in" to Medicare on some terms. Enroll all federal employees in Medicare instead of the Federal Employees Health Benefits Program. In short -- keep slicing away.

In short "Medicare for more and more!"

Posted by: Matthew Yglesias on April 17, 2007 02:48 PM

I quit AARP. They just went too far for me. And the constant expansion into business bothered me.

It is one thing to advocate that older people be helped and another to advocate that the rest of society has no say about the costs and methods for providing such help. That is how I came to regard the AARP. Opinions, like mileage, will vary.

I see two problems with the 'expand medicare' to universal coverage plan. First, there are huge numbers of people in the US that operate off the books. Some are illegal immigrants, some are tax evaders, some merely suspicous of all government. They have fake documents or no documents. They work for cash and use emergency rooms if needed.

So we will still end up with millions of uninsured and a ridiculous strain on out ERs and public health facilities.

The second problem is votes and lobbies. Today a majority are probably better off without change. Many have private insurance from employers. The elderly have either pure medicare or medicare plus insurance (often paid by someone else). Certainly the huge bloc of government workers and retirees have better deals and want to keep it so.

Posted by: K on April 17, 2007 03:59 PM

Matt, thanks for your clarification regarding your policy position on this. I have read this site often but until now idea you actually made sense on this topic. Why is that? Is it my fault for not discerning this from what you write, or is it your fault for not restating your position often enough for a regular, but not obsessive reader, to know?

And what is our elected Democratic officials position on this? I do pay a lot of attention to that, a lot more than I pay to you, (no offense meant) and I haven't a clue what they would actually do.

I know that if a republican were elected that the top tax rate might go down a percent or two. Their policy positions on core issues are always concrete, simple, and easily understood.

Democrats on the other hand don't offer the same clarity. That is the basis of my complaint - that as a party no one can really understand what they stand for. I am a democrat and I don't understand. Edwards perhaps comes closest to a real healthcare policy but it is just bullshit, totally unrealistic because it is incomprehensible. He sounds like he cares but hides behind a proposal no one can follow. If he had any courage he would propose something that people can actually undersatnd and fight for.

On a national basis Democrats need a policy where people can see the pros and cons in simple terms. The Kuttner propsal is brilliant. Why isn't Hillary Clinton unilateraly declaring that if elected President she, her family and every single appointed official in a Clinton administration, and their families will be covered by Medicare? And that her goal is to extend Medicare to every American? That would be a clear bold position that the majority of Americans could understand and fight for. She isn't doing it, I say, because just like every other liberal democrat, she is a coward and afraid of being out front and leading on the issue in a way people could actually understand.

You see, I believe Democrats feel that a simple coherent understandable policy would draw critics as well as supporters, so they are are unwilling to actually stake out a clear position and defend it. Better to offer befuddlement and bullshit instead cause it is easier to walk away from when it fails.

Posted by: lem on April 17, 2007 04:01 PM

Re: Look, if the Democrats would just lay out a policy of expanding Medicare to everyone then AARP would not see the need to offer coverage to the age bracket just below Medicare eligibility.

If Medicare were expanded in its present form everyone would still need a Medigap policy just as today's seniors do. And those policies can actually be a profitable line since Medicare acts a back stop against high losses even among the sickest population.

Posted by: JonF on April 17, 2007 10:05 PM

Y'all seem to be under the seriously mistaken impression that Medicare somehow displaces private insurance companies. The truth is that ALL of the profitable growth seen by private insurers in the last few years has been in the Medicare market -- both Part D drug plans and Medicare Advantage. Go take a listen to the earnings call of companies like WellPoint & United Health. While the employer-sponsored market continues to see a shrinking base and rapidly escalating costs, it is the Medicare market that has those companies salivating.

Posted by: R.J. Lehmann on April 17, 2007 11:10 PM

"There are certain seniors the AARP can profitably insure. These are the ones who will need relatively little healthcare. These individuals are also better off if no one else is in their risk pool: they don't subsidize the care of the less fortunate."

Operating in the Medicare market is not like operating in the truly private market. You're essentially paid a stipend to process bills. All product designs must be approved by Medicare itself, and must be available to any Medicare-qualified individuals. Differences in rates must be based on the levels of service provided, or on the differences in the income levels of the insureds (the wealthier are charged more) not on the health status of those insured.

Moreover, AARP itself is not actually INSURING anyone. They are "branding" products that are underwritten by UnitedHealth and Aetna. In essence, they're acting as the insurance agent, not the insurer. Which they've been doing for several years -- this is just an expansion of that program.

Posted by: R.J. Lehmann on April 18, 2007 12:30 AM

thanks
best regards

Posted by: mirc on September 22, 2007 08:10 PM

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