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AARP: Healthcare Reform Has Become Most Divisive Issue in Group’s History

October 14, 2009

Healthcare reform is dividing the membership of the AARP more than any other issue ever has.

Despite expending vast resources, the AARP has not been able to unite its own membership, Nancy LeaMond, the executive vice president of the organization’s social impact group, told reporters on Wednesday.

AARP’s membership is roughly divided between Democrats, Republicans and independents, LeaMond told reporters at a breakfast briefing sponsored by the Christian Science Monitor. Polls show seniors in general are the most skeptical part of the electorate when it comes to healthcare reform.

“What’s obviously going on here is not about the policy but about the politics,” said John Rother, the AARP’s executive vice president for policy and strategy. “We face a communications challenge.”

The AARP’s challenge is quite similar to that faced by Democrats in Congress: How to calm and even excite a powerful voting bloc to take up the flag of healthcare reform.

Though an AARP endorsement has eluded Democrats on Capitol Hill, the group has nevertheless been an important ally. With an endorsement, the AARP could help get healthcare reform over the hump.

But the AARP is not satisfied the legislation does enough to help seniors, or that its benefits will be immediately apparent.

The ratcheting up of rhetoric by the insurance industry and other groups will make the AARP’s work even tougher.

“We’re preparing to make the best possible case we can with the facts to this constituency,” said LeaMond. “People are playing for keeps after keeping their powder dry.”

During the tumultuous August recess, the AARP watched as older Americans grew increasingly anxious. News reports proliferated about conservative seniors canceling their AARP memberships in protest of what they viewed as the group’s liberal bias.

Seniors heard critics talk about the rationing of medical services, “death panels” and the fact that Congress is proposing to reduce Medicare spending by hundreds of billions of dollars. The AARP ran televisions ads and held townhall meetings all across the nation but was unable to break through.

“The most effective anti-reform campaigning hasn’t been by traditional special interests,” LeaMond said. Rother also faulted the news media, “particularly FOX News,” for encouraging fear about healthcare reform.

One of the AARP’s priorities in the final stretch is to make health insurance more affordable for people between 50 and 64, who are not well served by the current marketplace. In addition, the AARP wants to see Medicare improved, particularly when it comes to prescription drug costs.

The House bill, for instance, would fill in the so-called donut hole in Medicare’s prescription drug benefit, a period during which some seniors must pay full price for their medicines. The Senate Finance Committee’s bill fills it halfway.

Politically, filling the donut hole would go a long way toward winning over older voters who think it is unfair that they are subject to a gap in coverage. “It’s absolutely central to our ability to rally support among seniors,” Rother said.

In addition to the partisan divide within its ranks, the AARP must balance the different needs of two age groups that make up its membership: People between 50 and 64 who buy insurance on the private market and people 65 and older who receive Medicare benefits.

Younger AARP members are “absolutely, maniacally obsessed with affordability,” LeaMond said. “They are, in our polling and discussions, the most anxious group.”

Older members worry about the stability of their Medicare benefits and their freedom to choose their own physicians. They need reassurance that care will not be rationed and are skeptical that Medicare spending can be reduced without cuts in benefits. They also want to see their drug costs reduced.

Convincing Medicare beneficiaries that the spending reductions actually extend the life of the Medicare trust fund by several years and will not lead to core benefit cuts — even if they will affect Medicare Advantage members — is difficult, Rother said.

Seniors enrolled in private Medicare Advantage plans want their extra benefits preserved even though Congress proposes to slash funding for the program. Rother said that plans should only keep receiving the extra subsidies they get now if they can show they provide better care.

Underlying all of these concerns is the fact that the bill would not go into effect for several years. People fear known costs and doubt future benefits, the executives said.

In many respects, the House bill embodies more of the AARP’s priorities: It would fill the donut hole, give the government the authority to negotiate Medicare drug prices, offer more generous insurance subsidies, create a program to facilitating savings for long-term care, and contain stricter limits on insurers charging higher premiums for older people.

The Senate Health, Education, Labor and Pensions (HELP) Committee’s bill includes similar provisions on the subsidies, long-term care savings and insurance premiums, while the Finance Committee’s bill permits wider disparities in insurance premiums based on age and offers smaller subsidies.

But achieving the AARP’s goals would require significant new spending beyond the Finance bill’s $829 billion price tag, which boosted Democrats’ prospects for getting a bill passed.

Figuring out how to pay for healthcare reform “may be the single most difficult issue when the bill gets to conference,” said Rother. The House proposes to tax the wealthy while the Finance Committee taxes high-cost health insurance plans and assesses fees to healthcare companies. Each proposal has triggered opposition from key interest groups.

“I don’t think we have a clear preference,” Rother said, except that any new revenue sources be broad-based, sustainable and progressive up the income scale. A proposal to cap the tax exclusion on workplace health benefits, which was scrapped after protests from labor unions and employers, would have met those criteria, he added.