By William D. Novelli, Chief Executive Officer
AARP

December 1, 2003

There has been almost as much "analysis" of AARP's support for the just-passed Medicare prescription drug bill as there was of the bill itself. Our support has generated criticism from both the left and right, including some of our traditional allies. But we made the right decision. We will weather this storm and move on.

Many of the criticisms are coming our way because the issue is a political football for the 2004 elections. Some opponents of the legislation are charging that it will destroy Medicare. These scare tactics are designed to alarm seniors and create a furor against AARP. In response, we are telling our members the truth and countering misinformation about what is in the bill.

AARP supported this legislation for one reason and one reason only - it will provide important prescription drug coverage and financial relief for millions of current and future Medicare beneficiaries. Though certainly not perfect, the bill represents an historic breakthrough after years of partisan gridlock in Congress and an important milestone in the nation's commitment to strengthen and expand health security for older Americans and their families.

There have been many accusations against us made by opponents of the bill. One is that we are out of touch with our 35 million members and acted without consulting them. Nothing could be further from the truth. We know that our credibility with both policy makers and our members depends on correctly representing members' views. Of course, no large organization can truly speak for every one of its members, but talking with and listening to our members is a priority at AARP. That's why we conduct frequent surveys, focus groups and individual interviews. We know that a majority of our members, younger and older, want this drug coverage in Medicare. While there was not unanimity of support for all aspects of the bill, one thing did stand out - AARP members told us they were tired of waiting for Congress to fix this problem, keep its promise and craft the perfect bill. They said they needed help now.

The second bit of misinformation making the rounds is that we support the legislation in order to accrue financial benefit. That too, is false. There is no connection between our policy decisions and our marketing of insurance and other products. Our social mission drives our for-profit activities - not the other way around. We are proud of the offerings we provide. Millions of Americans have AARP insurance for expenses Medicare doesn't cover. And through our pharmacy service, AARP members have saved $402 million in 2003 alone on prescription drugs.

The money generated by our for-profit arm goes into serving our members with education, information and services they need to make their lives better. For example, these revenues helped us lead the fight for national "Do Not Call" legislation. It has funded our work to protect the elderly and poor children from being dropped from Medicaid rolls. And we have used these revenues to curtail the activities of predatory lenders.

Rather than offer us financial opportunities, this new legislation could very well decrease the need for our current products. And it wouldn't be the first time. Our support for the 1994 health care reform proposals would have eliminated the need for AARP supplemental Medicare policies. Nonetheless, we felt it was the right thing to do then, and similarly we know our support for the prescription drug bill is the right thing to do now.

We are particularly pleased that the new legislation is focused on helping those who need it most: people with low incomes, including those who depend on Social Security for all or most of their income, and people with very high drug costs. It also provides modest relief for millions more. And it protects retiree benefits through financial incentives to employers and by upholding the health benefit protections of the Age Discrimination and Employment Act. This will help ensure that people who have good employee coverage now do not lose it.

One of the most promising things about the bill is that it adds new preventive services for all Medicare beneficiaries, including a one-time physical examination. And it provides a new benefit to better manage care for those with chronic conditions. There are huge potential savings here. About five percent of Medicare beneficiaries account for some fifty percent of the cost, and many of these individuals have multiple chronic diseases.

Another important step in the legislation is funding for research to compare the effectiveness and safety of therapeutically similar drugs and to make the information available to physicians, pharmacists and consumers so they can choose the most effective drug at the best price.

We are also pleased that our opposition to "premium support," a structure requiring traditional Medicare to compete against private plans, helped to scale this back to a demonstration, limited in scope and beginning in 2010. This pilot will exempt low income beneficiaries and limit any premium increases. These tests will not jeopardize traditional Medicare.

A growing number of advocacy groups are also pointing out the merits of the bill. The National Council on the Aging, which represents the oldest and poorest seniors, has given its endorsement because of the special assistance the bill provides to people with low incomes.

The American Diabetes Association and the Alzheimer's Association have also endorsed this bill because of the help it gives to people who are faced with very high prescription drug costs. The Diabetes Association points out that the new coverage of insulin and syringes is a critical addition for diabetic seniors to manage their disease.

AARP is serving notice that we are stepping up our efforts in the states to strengthen Medicaid coverage and supplemental prescription drug programs and to lower drug costs. We will work with Congress to improve the new legislation, including making legal the importation of prescription drugs from Canada. We will be a watchdog to make sure this new law is properly implemented to improve the lives of people in Medicare and the quality of the Medicare program. And we will keep the heat on to make drugs more affordable and accessible.

As the late civil rights leader Whitney Young once said, "We have no permanent friends or enemies, just permanent interests." Our interests are what is best for our members and all older Americans. That is why we gave our strong endorsement to the bill and why we will now join with others in seeing that older Americans reap its full benefits.