Where I Stand — Mike O’Callaghan: AARP running to catch up

Friday, Jan. 30, 2004 | 9:21 a.m.

LAST MONTH THIS COLUMN gave the AARP full credit for a flawed health bill promoted by President George W. Bush and passed by Congress. It is now a law that insurance companies, health care providers and the drug industry love. The close ties the AARP has with insurance companies raised more than a few eyebrows.

Even the conservative Wall Street Journal noted: "For the drug industry, the legislation is good news, at least in the short run. The benefit would be administered through private insurance plans or pharmacy benefit managers. Drug makers believe individual private buyers are less able to push down prices than a centralized government purchaser with a pool of 40 million patients.

"In another victory for the drug industry, the Medicare package, at least as it stands now, doesn't make it easier to import cheaper drugs from Canada."

It didn't take long for large numbers of AARP members to realize any benefits of the law would soon be eaten up by the increasing cost of the drugs needed to keep them healthy. This resulted in the AARP paying for large and expensive full-page ads across the nation to defend its lobbying for the law.

As this column noted earlier, in the middle of the lobbying battle, author Dale Van Atta, an AARP critic, wrote: "Regardless of where you stand on this proposed act, AARP has no business doing unauthorized lobbying for its membership. Its chimerical lobby wholeheartedly represents only what a few paid staff leaders decide is best for all older Americans.

"If anything, those heartened by the endorsement of the moderate Republican-oriented bill should be aware that in the last two decades AARP has never once had a clear victory on any major controversial health-care legislation. Though it has often been described as the fearsome '800-pound gorilla' of lobbies, it has proved adept at slipping on its own big banana peel."

Today it is evident that Van Atta had a better grasp on the AARP shortcomings than most of us realized. A reported 45,000 AARP members also smelled the problem and gave up their memberships, according to the organization's chief executive, William D. Novelli. Now the AARP is scrambling around the halls of Congress trying to undo the damage. Among its new recommendations is to allow some cheaper drugs from Canada, under strict government guidelines, to be bought by Americans.

According to writer Robert Pear of The New York Times, AARP is recommending the following changes in the law it supported last year: "The government should help fill the gap in drug coverage, sometimes called a 'doughnut hole.' Under the standard benefit, Medicare will pay 75 percent of annual drug costs from $251 to $2,250, but coverage will then stop until the beneficiary has spent $3,600 out of pocket.

"The deductible and other costs to beneficiaries, which increase automatically with Medicare drug spending, should be linked instead to the Consumer Price Index, which typically rises at a much slower pace.

"The government should abolish the new law's limit on assets for low-income people seeking extra assistance with drug costs. This would help 1.5 million Medicare recipients."

Still missing is the need for the purchase of drugs, at reduced prices, by the government. Very simply, this is what any wise buyer of products would be able to demand from a company if they are spending billions of dollars for a product. Evidently the president and legislators believe it is OK to pay whatever the drug companies demand because it's only tax dollars or from the pockets of those who don't make big campaign contributions. A government agency purchasing several hundred cars gets a reduced price, but the same type of shopping isn't appropriate when buying drugs? Why not?

There was some hope that the president would address this and other shortcomings in his most recent State of The Union message. Instead we heard about how "small businesses should be able to band together and negotiate for lower insurance rates." He also rehashed the values of his original bill that will give some seniors some drug cost reduction under Medicare in 2006. Nothing was mentioned about filling the Medicare "doughnut hole" that will be devastating to some seniors, nor did he talk about using large government purchasing as a tool to bring down the outrageous cost of drugs.

The AARP got a message from 45,000 of its members and this fall Congress and the White House need a similar message.6A government agency purchasing several hundred cars gets a reduced price, but the same type of shopping isn't appropriate when buying drugs? Why not?