Medicare Coverage
Letter from AARP CEO Bill Novelli to Senator Daschle and Representative Pelosi
News Release
November 21, 2003
The Honorable Thomas Daschle
Democratic Leader
United States Senate
509 Hart Senate Office Building
Washington, DC 20510
The Honorable Nancy Pelosi
Democratic Leader
U. S. House of Representatives
2371 Rayburn House Office Building
Washington, DC 20515
Dear Senator Daschle and Representative Pelosi:
Thank you for your letter of November 19th. I appreciate the opportunity to explain more fully our decision to endorse the Medicare prescription drug bill. As you state in your letter, we do agree on the need for a prescription drug benefit in Medicare.
AARP believes that this bill represents an important step towards a long overdue commitment to strengthen and expand health security for our citizens at a time when it is sorely needed.
This legislation will provide prescription drug coverage at little cost to those who need it the most: people with low incomes, including those who depend on Social Security for all or most of their income. It will also provide substantial relief for those with very high drug costs. And, it will provide modest relief for millions more.
The legislation includes substantial subsidies to ensure that people who have good private coverage do not lose it, and maintains fairness by upholding the health benefit protections of the Age Discrimination in Employment Act. And, very importantly, the scaled-down premium support demonstration, which sunsets after 6 years, will not undermine the integrity of Medicare.
It is understandable that a percentage of the public, including, apparently, some AARP members, view this legislation unfavorably. People have high expectations for a Medicare drug benefit. This bill will not meet many of those expectations due to the limited ceiling of $400 billion set in the budget. The money that is available, however, is primarily allocated to those who need it the most.
Having said that, our latest non-partisan poll of our members (conducted on November 19th) finds that our members overwhelmingly support this plan-83 percent strongly or somewhat support. They are especially supportive of the help provided to people with low incomes or high drug costs.
Our poll also shows that a large percentage of people are not familiar with the details of the plan. We all need to work together to inform the public about the features in the bill and how we can build on it. This is what AARP intends to do. We believe it is important that we begin to build the foundation of a good prescription drug benefit, and we need to get it done this year.
Concerning your other question regarding any perception of a potential conflict of interest for AARP, our positions and policies are developed to serve the interests of our members and their families. We never decide policy positions based on business interests. Our policies are set by our all-volunteer member Board of Directors after careful consideration, extensive study and consultation with our members. Our policy decisions are completely separated from our business interests.
In 1999, we established a wholly-owned subsidiary, AARP Services, Inc. (ASI), with a separate board of directors and staff, to offer and manage products and services our members want. Among these are our Medicare supplement plans. The current Medicare prescription drug bill has three Medicare supplemental policies that include prescription drug coverage. We expect that this legislation will significantly decrease or end the need for similar products offered by ASI, which may lead to a drop in AARP revenue.
We have said repeatedly that we would support public policy initiatives even if they eliminated the need for AARP services and products. In fact, AARP has previously supported health-care reform proposals that would have eliminated the need for supplemental Medicare policies, a product which AARP offers to its members. AARP does not develop nor support policy positions to enhance its own revenues.
The overriding standard for AARP products and services is that they reflect our social mission. They often change the market in positive ways and fulfill a demonstrated need for our members. For example, our Medicare supplemental insurance program is credited for bringing down the cost and expanding benefits for seniors.
Senator Daschle and Representative Pelosi, we have great respect for you and for the leadership you provide on behalf of older Americans and the nation. We regret that we do not agree on this current legislation. We will continue, however, to do what is best for our members. And, we expect to be able to move beyond this debate and work together on other important issues in the future.
Sincerely,
William D. Novelli