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Lawmaker Criticizes AARP Over Drug Plan

June 08, 2005|Ricardo Alonso-Zaldivar | Times Staff Writer

WASHINGTON — A decision this week by AARP, the nation's largest seniors' lobby, to join in offering a prescription plan under the new Medicare drug benefit drew withering criticism Tuesday from a senior Democratic lawmaker.

AARP's support was pivotal in securing congressional passage of the controversial Medicare overhaul, which included the drug benefit, in 2003. Although AARP may be known best as a consumer group, it also has been long engaged in marketing insurance -- including coverage for gaps in Medicare -- to its 35 million members.

AARP's announcement Monday that it was endorsing a Medicare drug plan to be offered by UnitedHealth Group confirms "what we predicted when they first threw their weight behind the Medicare drug bill in 2003," Rep. Pete Stark (D-Hayward) said in a statement. "They did so to improve their bottom line, not to help the 35 million seniors they claim to represent.

"It's one thing to act in selfinterest as a profit-making insurer," Stark said. "It's another entirely to leverage a trusting membership of America's seniors to pass legislation that you know will do little more than line your own pocket."

For The Record
Los Angeles Times Thursday June 09, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 63 words Type of Material: Correction
Medicare drug benefit -- An article in Wednesday's Section A about AARP's decision to offer a prescription plan under the Medicare drug benefit said that Medicare had imposed a marketing ban until Sept. 15. In fact, companies must wait until Oct. 1 to begin official marketing of their plans; Medicare's list of approved drug plans will be announced on or about Sept. 15.

"We have the utmost respect for Congressman Stark," AARP spokeswoman Lisa Davis said. "We are going to continue doing what is right for our members and their families. Our policy decisions drive what we do on the product side, and not the other way around."

Stark is the ranking Democrat on the House panel that oversees Medicare. His criticism is a sign that the bitterness of the 2003 debate lingers as the Bush administration strives to meet tight deadlines for putting the complex new drug benefit in place by Jan. 1.

Medicare beneficiaries will pick prescription coverage from among private plans subsidized by the government, including the offering from AARP and UnitedHealth Group.

Economists project that the new Medicare benefit will significantly reduce drug costs for many retirees. But cost-sharing requirements and a gap in coverage of annual drug expenses between $2,250 and $5,100, known as the "doughnut hole," may prompt a backlash from some. Democrats who opposed the program said it would fatten the bottom line for insurers and drug manufacturers at taxpayers' expense, while giving retirees a substandard benefit.

"The AARP leadership supported a bill that advanced a privatization agenda at the expense of beneficiaries and taxpayers," Stark said.

AARP's joint venture was announced Monday in a news release issued by its partner, UnitedHealth Group, a large national insurer in Minnetonka, Minn. UnitedHealth Group already administers mail-order pharmacy services for AARP, as well as a drug discount card.

The new AARP-UnitedHealth plan "is the natural extension of a relationship that meets AARP members' need for high-quality products and services," AARP said Tuesday.

Spokeswoman Davis said AARP would receive a "royalty-based fee" in exchange for the use of its name. She said she did not know how much it would amount to.

"Any money we receive is just plowed back into AARP's social programs," she said.

The AARP-UnitedHealth plan will be offered in all 50 states and the District of Columbia, and in U.S. territories such as Puerto Rico. Details of the plan were not available because Medicare had imposed a marketing ban on all drug plans until Sept. 15.

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