How The AARP Profits From Seniors’ Economic Misery
THE FEDERALIST
As health care costs continue to rise, families of all ages and sizes continue to feel the pinch. But when seniors get squeezed, one organization in particular benefits, and it’s not one you might think.
While it claims to run a seniors’ advocacy organization, AARP, formerly the American Association of Retired Persons, actually profits from its own members’ economic misery. As premiums rise for its members, so too does AARP’s financial windfall — a perverse set of circumstances for a purported consumer group.
Medigap Premiums Spike
A recent Kaiser Health News story highlighted an underreported trend within insurance markets. In recent years, rates for Medicare supplemental insurance plans, which offset the cost of copayments and coinsurance that traditional Medicare does not cover, have risen rapidly. One analysis of first-quarter filings for these Medigap plans shows most insurers increasing rates by upwards of 10 percent and in several cases by more than 20 percent.
These premium increases leave seniors in a pinch for several reasons. First, traditional Medicare does not include a cap on out-of-pocket spending by beneficiaries. That absence makes a Medigap policy a virtual necessity, unless enrollees in traditional Medicare want to risk exposing themselves to tens or even hundreds of thousands of dollars in expenses should they develop a catastrophic medical condition.
While all Medicare Advantage plans offer catastrophic coverage, they also impose restrictions on seniors’ choice of doctors and hospitals. And if senior citizens dislikes their Medicare Advantage plan, they may not have a chance to return to Medigap coverage.
Contrary to Democrat claims that Obamacare “ended discrimination against people with preexisting conditions,” Medigap plans can — and do — impose waiting periods and other restrictions related to health status. While all seniors can buy a Medigap plan when they turn 65, beyond then, “[s]trict rules then kick in around when beneficiaries can enroll in or switch Medigap coverage and options become much more limited.”
Read more here.