Earlier this year, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a proposed rule to reform the rebate system in Medicare Part D. In our current system, insurers and pharmacy benefit managers (PBMs) negotiate significant rebates on medicines, but often don’t share those savings with seniors directly. The proposed rule would change this by ensuring the rebates negotiated with biopharmaceutical companies are entirely passed through to seniors at the pharmacy counter.A new, nationwide Morning Consult survey found:
- 86% of AARP members support the proposed Medicare Part D rebate rule.
- 73% support the proposed rule even after being told it may increase premiums by $3 to $6 per month, since savings at the pharmacy counter would more than offset premium increases.
- 85% of AARP members say they are disappointed in AARP for siding with insurers in opposition to the rebate rule.
- By a margin of 2-to-1, members worry AARP puts profits over seniors.
Despite overwhelming support from their membership for the proposed rule, AARP continues to oppose it while receiving the vast majority of their revenue from insurance companies in recent years (see here and here).
This begs the question: Who is AARP really fighting for?
Key facts about AARP’s relationship with insurance companies:
- Since 2010, AARP has made more than $4.5 billion in royalties and investment income as a result of their relationship with insurance companies. AARP consolidated financial statements available here: 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017.
- Additionally, according to a news report, “A review of AARP’s financial statements shows that since 2010, AARP has made more than $4.5 billion in income from…health insurance plans and generating investment income from plan premiums.”
- Additional news reports note that, “Much of AARP’s revenue comes from its connection to United Healthcare Group (UHG). While AARP collected $301 million in membership dues in 2017, the organization took in about $627 million in royalties from UHG.”
- According to a 2011 Congressional report, “United is AARP’s largest business partner. As part of the United and AARP business agreement all three of the Medicare insurance product lines are marketed under the AARP brand name.” This same report further found that “State insurance rate filings show that, in 2010, AARP retained 4.95% of seniors’ premiums for every Medigap policy sold under its name.”
- A news report quoted a former AARP executive as saying that, “The new arrangement with insurance companies creates a tremendous number of potential conflicts for AARP.”
Get more facts about AARP here.
View topline survey results here.
Robert Zirkelbach Robert Zirkelbach is Executive Vice President of Public Affairs at PhRMA. He joined PhRMA in 2014 after working for seven years representing the health insurance industry. He likes Saturday afternoon BBQs on his deck, traveling, trying new restaurants, and attempting to play golf. He’s an avid, somewhat obsessive, Iowa Hawkeye fan and is lucky to have a wife that loves watching college football on Saturday afternoons.