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AARP Controversy with Newspaper Emphasizes Its Conflicts

The Hill says AARP is softening on imported drugs, favoring Medicare drug plans like they help sell

By Tucker Sutherland, editor

Jan. 5, 2006 – Has AARP softened its support for imported drugs, because they find drugs are cheaper from the Medicare drug program than from Canada? The Hill, a newspaper "for and about the U.S. Congress," says they have, but AARP has fired back saying The Hill story is a "blatant mischaracterization of AARP's position." It's hard, however, not to question AARP's position when they are one of the major brokers of Medicare insurance programs.

It all started with an article published in an AARP magazine and online entitled, "The New Math: Cheaper than Canada? The drug benefit may be the better deal.”

The AARP analysis written by Patricia Barry opened with this paragraph -
"People who have been buying low-cost prescription drugs from Canada could be in for a big surprise. Many who choose the least expensive Medicare drug plan in their area that covers all their drugs could pay less this year than getting those same drugs from Canada, according to an AARP Bulletin investigation."

That certainly seems to imply that the Medicare drug program, which was strongly backed by AARP, is making drug importation less important.

And, that's how The Hill reporters Kelly McCormack and Bob Cusack interpreted it. The following is the lead paragraph on their story -
"In a move that is already attracting criticism from some lawmakers, AARP last week softened its support of drug reimportation legislation by saying that the new Medicare drug benefit saves senior citizens more than buying pharmaceuticals from Canada."

The Hill reporters said, "The powerful consumer group has previously endorsed reimportating drugs, but its revised position could severely damage momentum for legislation pending in Congress.

"It could also alleviate political pressure on the White House and the pharmaceutical industry, which have opposed reimportation even though it is supported by a majority of members of Congress.

They did, however, state flatly in their article, "AARP stressed that it continues to support reimportation legislation."

Barry, in her AARP report, said their calculations takes into account all out-of-pocket costs under a Medicare plan through 2006, including premiums, deductibles and payments for drugs. She also noted that people with lower incomes who are eligible for the "Extra Help" part of Medicare drug coverage were excluded from the analysis. So were Medicare Advantage plans that combine drug coverage and medical services in managed-care packages.

She wrote, "Everybody knows that Canadian drug prices are usually far lower than American ones. That remains true. But Medicare drug coverage is insurance, so enrollees are charged copayments instead of full price, except in the coverage gap, also known as the 'doughnut hole.'

"And the private plans that provide it have been scrambling to win over customers with good deals for 2006. Many have eliminated deductibles and some offer full coverage in the gap."

Barry said the AARP results were surprising but do not apply to everyone. But, she said, they but are widespread enough to "underscore the importance of carefully doing the math—especially looking at the copays—when choosing among Medicare plans or comparing them with the cost of drugs from Canada."

Barry also challenged claims by the Canadian industry that buying drugs from Canada is still less expensive than getting them through the Medicare plan. She says those comparisons are with the basic Medicare drug benefit that Congress designed in 2003 and not "the much better deals that many Medicare drug plans are actually offering for 2006."

Mark Kitchens, AARP Director of Media Relations, wrote the letter of protest to The Hill publisher James Finkelstein.

He said, "AARP has and continues to support legislation to allow for the legal importation of drugs from Canada and stated as much in yesterday's interview with your publication.

"The Hill conversely reported that AARP was edging away from that commitment. This is not the first time The Hill has completely mischaracterized AARP's positions or misstated the facts.

"The Hill claims that AARP, 'concluded that seniors who enroll in a low-cost Medicare prescription drug plan would save more in drug costs this year than if they were to buy the same drugs in Canada.'

"The message of our AARP Bulletin article is that it is valuable for all Medicare beneficiaries to do the math and see what option is best for them.

"It's also important to remember that prescription drug importation will benefit all consumers, not solely Medicare beneficiaries. Though there are millions of Americans who are eligible to enroll in the new Medicare Part D benefit, there are millions more -- including more than 45 million uninsured Americans who lack access to affordable prescription drugs."

This sounds like one of the conflicts the giant insurance broker encounters when it tries to be a spokesperson for everyone from age 50 to infinity. AARP is no longer, if it ever was, an organization representing "senior citizens."

But, many in political positions still listen to AARP as if they did speak for the massive senior citizen vote.

As The Hill article pointed out, "The group has enormous clout on Capitol Hill, playing a crucial role in passing the Medicare drug bill in 2003 and thwarting the GOP effort to reform Social Security last year."

AARP's Kitchen said, "One does not have to choose between support for legal importation from Canada and a new Medicare drug plan. They are not mutually exclusive."

It is pretty hard to argue, however, that they are not closely related. If the U.S. government, in this cooperative effort with the pharmaceutical industry, can provide Medicare beneficiaries with drugs at a lower cost than buying them in Canada, then why support the reimport legislation?

"This is a classic example of searching for controversy where none exists and selectively quoting individuals to make their case," concluded Kitchen. "AARP's purpose is to inform the public and to find multiple ways for Americans to afford the prescription medications they require. These issues are too important to Americans to get this wrong."

But The Hill may have a different slant on the "issues."

The article points out that AARP is working with UnitedHealth Group, an insurance company, selling prescription drug coverage, and over two million seniors have bought it. This is a fact not mentioned by Barry in her AARP article.

“AARP is selling Medicare drug coverage, so it’s not surprising that they’re pushing their own product,” Rep. Sherrod Brown (D-Ohio) told The Hill reporters. “Now they are making an apples-to-oranges comparison between Medicare drug coverage and Canadian drug prices. Seniors deserve decent drug coverage, and every American deserves lower-priced drugs. That’s the bottom line.”

So, this highlights AARP's major problem that the media seldom mentions. Is it a major conflict of interest for AARP to claim to be a benevolent spokesperson for older consumers, when the "issues" are extremely important to their financial well-being?

AARP vigorously supported the Medicare drug program, as did most of the insurance industry, which saw flashes of gold in the government plan.

But, then AARP strongly opposed the Bush Social Security program that included private accounts. There was not insurance program involved in that one.

This is not to say that I think there is something evil about AARP. I am a member, although, I have never used the membership for anything. But, I do think AARP does not level with the public or its members when it becomes involved in these public issues. AARP and their spokespersons should clearly state that the organization has a vested interest in the outcomes.

For complete story in The Hill – click here

For the AARP story – click here

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