The American Association of Retired Persons (AARP) has not openly endorsed President Obama’s re-election, to my knowledge, but they have praised him and the Affordable Care Act (aka Obamacare) and some groups campaigning for Mr. Obama have quoted AARP in their advertising.
But don’t be deceived – AARP has a financial reason for favoring Obamacare and not wanting a Republican administration that might repeal it, because AARP sells Medicare Supplement insurance plans. Here are the details.
Medicare only pays about 80% of medical expenses (much like traditional health insurance). Most seniors purchase a health plan that covers the difference. The Medicare Supplement plan is paid for in additional to Medicare premiums deducted from Social Security checks. At some point insurers began to offer Medicare Advantage plans. With this option, seniors pay their Medicare premium, and it is turned over to the insurer, which then takes care of all financial aspects of medical care. They provide all the medical benefits of Medicare and most or all the benefits of a Medicare Supplement plan, sometimes even better benefits.
So what does this have to do with Obamacare and the election? The Affordable Care Act will outlaw Medicare Advantage plans. As the primary provider of Medicare Supplement plans, AARP has an advantage even if other insurers chose to begin offering these plans. If Mitt Romney wins the election and is successful in repealing Obamacare, AARP will continue to have competition from less expensive, sometimes better plans.
The following is not related to the election,, but to the problems with the direction healthcare insurance takes under Obamacare. Much of Obamacare seeks to institute the President’s vision of “fairness”. But as the above discussion shows, those with a financial stake have had influence over the legislative process.
There are a number of things in the Affordable Care Act that seem rather counterproductive to improving the healthcare model we currently use. But they fit how President Obama wants to fundamentally transform healthcare in the US.
* If you can afford to cover a high deductible, you will pay a lower premium. Not fair, so high deductible plans will be outlawed.
* If you can afford health insurance that covers almost every possible medical problem with a low deductible (so called Cadillac plans), you will in theory get better medical care. Not fair, so Cadillac plans will be taxed.
* Medicare Advantage plans generally offer less expensive care than Medicare Supplement plans. Not fair, so they need to be eliminated. (Obamacare could have eliminated Medicare Supplement plans instead, leaving the cheaper options, but AARP probably lobbied strongly against this. And it would still have allowed too much choice for seniors. More about choice in a minute.)
* Under Obamacare employers of more than 50 workers will be required to provide an insurance benefit. If they cannot afford that, they can pay a fine instead and the employees can purchase insurance (mandatory under Obamacare) from a government insurance exchange.
Eliminating the cheapest health insurance options, taxing the most expensive, and making it so expensive for businesses that they must force their employees into the government exchanges all accomplish the same objective. With fewer choices, fewer people will purchase traditional private insurance, creating a de facto government run healthcare system.
It may sound good to provide the same medical benefits to all. But Americans cannot afford the taxes eventually necessary to sustain a system with the level of care most enjoy now. What we would get is poorer care for all.