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News of the Day ... In Perspective

5/5/2007

AARP signs contracts with Aetna and UnitedHealth Group

The American Association of Retired Persons (AARP) is to become the largest provider of private insurance to Medicare recipients. It will begin offering a Health Maintenance Organization to Medicare recipients and several other products to people from ages 50 to 64. These products include a high-deductible insurance policy that can be combined with a Health Savings Account (New York Times 4/17/07).

AARP will continue to provide Medicare prescription drug coverage and Medigap insurance.

It plans to “use its leverage to reshape the health insurance market.” AARP now has 38 million members and plans to have 50 million by 2011. As with the AMA, revenues and royalties from the sales of goods and services account for a substantial portion of its revenue. AARP officials insist that its financial interests do not affect the positions it takes on Medicare, Social Security, and other issues on which it lobbies and litigates.

While AARP has opposed efforts to privatize Medicare or Social Security, its role in marketing insurance could give a big boost to privatization, writes Robert Pear—he apparently means in the sense of the “public-private partnership.”

AARP says it plans to use $500 million of its insurance sales revenue over the next decade to help people navigate the health care system, with a new counseling service.

Payments to UnitedHealth and Aetna will be linked to their performance in improving the health of subscribers, including members of minorities, said AARP chief executive William Novelli. It will measure how frequently the companies deliver recommended treatments to people with certain conditions, including diabetes and hip fractures.

“By tying carrier compensation to the health of our members…we are on the leading edge of health care reform,” writes Dawn Sweeney, CEO of AARP Services.

Sweeney told reporters that AARP brings in an average of $185 million a year from royalty and revenue payments from the health insurance products it now offers and plans to double subscribers to its branded products. Part of the money goes into its lobbying efforts (USA Today 4/17/07).

AAPR backs the Democrats’ effort to lift the prohibition on government involvement in price “negotiations” between drugmakers and Medicare Part D plans. Senator John Cornyn (R-TX) denounced the bill as “'a step down the road to a single-payer government-run health care system, and President Bush threatened a veto. The bill failed when the Democrats could not muster the 60 votes needed to bring it to the floor (New York Times 4/19/07).

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