President Biden has decided to enforce an executive order issued by former President Trump that requires hospitals to post their prices publicly — to be “transparent.”
Not only is the administration insisting on compliance, but it’s doubling down by increasing the penalties for the 80% of large hospitals that have dragged their feet so far.
The administration should be congratulated not only for the policy, but for not suggesting to the media that the previous administration had nothing to do with the original order. After all, politicians often say they will promote a good idea, no matter where it comes from. For once, they appear to be doing it.
As we often discover when contemplating Washington’s healthcare policymaking swamp, there’s many a profiteer who stands to make a killing from the final decision. If voters only knew of the countless ways that healthcare law and regulation have been turned to the service of picking their pockets… c’mon man, time to get woke about the skeeziness in which this sector of the American economy is drenched!
Anyway, we shine today’s spotlight on AARP. (What?! You mean those nice people who arrange discounts and put out a magazine that makes oldsters look better than the overwhelming majority of youngsters?!)
Yes, AARP.
In April, the Biden administration proposed exceptions to the order on price transparency. Specifically, the exception means that rates negotiated by hospitals for Medicare Advantage plans could be excluded from Medicare’s reporting of hospital prices.
Hmm. Rules for thee, but not for me.
Let’s follow the money.
Surprise! It leads to AARP.
In reality, only about 10% of Medicare beneficiaries rely solely on Medicare. The other 90% have supplemental plans.
In 2018, 60% of Medicare beneficiaries were enrolled in Medicare Advantage or Medigap plans.
The use of such plans has doubled over the last decade. United Healthcare provides more of these plans than any other private insurer.
Guess who earns a royalty from United Healthcare for help in marketing these plans.
AARP.
According to the organization’s own financial statement for 2019, AARP made more than twice as much from these royalties as it did from membership dues.
Even a director of AARP’s Public Policy Institute acknowledged the problem as far back as 2009. “There’s an inherent conflict of interest,” said Marylin Moon. “They’re… becoming very dependent on [royalty] sources of income.”
Like other big players in the price-concealing thicket of American health care, AARP has a history of lobbying to protect its cash cows. (AARP is number 11 on the list of spenders on lobbying.)
More than once, AARP’s official positions on healthcare policy have even defied the wishes and interests of its members, who could see that those positions would expand the debt to be carried by their children and grandchildren.
For example, AARP lobbied vigorously against the inclusion of Medigap reforms in the Affordable Care Act (aka Obamacare). Those reforms would have been helpful financially to AARP members, but they would have cost AARP $2.8 billion over 10 years.
Despite 75% of its members disagreeing with the position, AARP has also fought the elimination of the legalized kickback system enjoyed by pharmacy benefit managers, notorious middlemen in the American system of health care.
Meanwhile, AARP markets itself as “the world’s largest non-profit, nonpartisan membership organization.”
For a non-profit, AARP’s brass collects a lot of silver.
CEO Jo Ann Jenkins makes $1.2 million annually; 13 other executives each make over $400,000 annually.
AARP employees earn an average of $50,000 annually, 28% less than the national average of $66,000. The lowest-paying job at AARP is a receptionist — $21,000 annually.
For an organization ostensibly dedicated to preventing poverty among seniors, it appears to enrich itself by abetting it. The spectacle has contributed to the emergence of a competitor to AARP, the Association of Mature American Citizens (AMAC).
Washington should note these awkward facts and revisit that proposed exception to the requirement for transparency on prices negotiated by hospitals with insurers.
Yes, to insist on the “full Monty” from all of the players in American health care would be a departure from Washington’s habitual skeeziness.
That would serve AARP’s members, their descendants, and the general public well. The general public would do well to remind the administration of it.
Marion Mass, M.D.; Bucks County pediatrician; co-founder, Practicing Physicians of America; member of this publication’s editorial board; member of Free2Care coalition.