ABLEnews Extra [The following file may be freq'd as AARP9408.* from 1:109/909 and other BBS's that carry the ABLEFiles Distribution Network (AFDN). Please allow a few days for processing.] In the wake of an overwhelmingly negative reaction on the part of its members to the Clinton health plan as reported in the February 15, 1994 Of Note (ON9402B.*), the lobby's subsequent endorsement of Clintonite clones provoked sharp criticism from members of the AARP and Congress (ON9409B.*). Jack Anderson's eye-opening expose provides further insight into the actions of the AARP's self-serving misleaders. Selling Out Seniors The nation's largest seniors group threw its endorsement to the leading Democratic health care bills because it "wanted to make a statement to our members that these are two good bills." But the fine print of the health plan proposed by Senate Majority Leader George J. Mitchell (D-ME) suggests that the high-minded rhetoric of the American Association of Retired Persons papers over the bottom line. Tucked away in the 1,443-page Mitchell bill is a sweetener that the seniors lobby may have found irresistible: a clause that largely exempts mail-order pharmaceutical firms from the stringent cost controls contained in a prescription drug benefit for the elderly. Not coincidentally, the AARP owns a stake in one of the country's oldest and largest mail-order prescription drug companies. If the Mitchell bill becomes law, this clause could mean extra wealth for what's already become a cash cow for the nation's largest advocacy group. "It certainly appears to line the pockets of the AARP leadership," says one Republican health care staffer. "It's flabbergasting how blatant this is, how a special interest benefits from the Clinton-Mitchell bill." Officials at AARP strongly deny that their endorsement of the Mitchell plan--the group also endorsed a similar plan in the House proposed by Majority Leader Richard A. Gephardt (D-MO)--was based on financial factors. "At no time in this debate, or any previous debate, have we ever gone up [to Congress] and said this would be good" for business, a senior AARP lobbyist told our associate Jan Moller. "The board [of directors] looks at what's good for the members, not what's going to be good for the organization from a proprietary standpoint." The Mitchell health care bill, introduced this month as a Democratic alternative to the defunct Clinton health plan, falls short of what President Clinton and the AARP once claimed was nonnegotiable--health insurance for every American. But that didn't stop the AARP from ending months of speculation on Congress and at the White House by endorsing the plan on August 11. Before the endorsement, AARP officials had stayed staunchly nonpartisan, supporting various principles of health care reform yet refusing to embrace any specific legislation. An AARP spokeswoman says the eleventh-hour endorsement came because legislation was moving towards the floor of the House and Senate, and that the organization did not want to miss a "historic opportunity" to provide affordable and comprehensive health care. Unlike the original Clinton plan, which relied on private employers to foot much of the bill for expanding coverage, the Mitchell plan relies heavily on a system of federal subsidies to help individuals to buy private insurance. As further inducement, the Mitchell plan would expand Medicare by adding the new prescription drug benefit for the elderly. To contain costs in this program, the Mitchell bill proposes to limit the price that the government will pay for prescription drugs. Yet mail-order drugs are specifically exempt from these price controls. According to the Mitchell bill, the government would rebate seniors 25% of any extra costs seniors might incur by using mail- order drug services like AARP's. In effect, this would help preserve the significant market share in the prescription drug business. A Mitchell spokeswoman says the retail-order clause will provide greater choice and promote competition while still saving the government money. "So we are going to have price controls on everything else except mail-order pharmacies," says Sen. Don Nickles (R-OK). "Mail-order pharmaceutical would be given special treatment under this bill." The prescription drug rift illustrates a fundamental paradox within AARP: While its political clout is drawn from its 33 million members, much of its funding comes from affiliated businesses such as the mail-order drug operation. Membership dues accounted for less than one-third of AARP's $455 million operating revenue in 1993, with the rest of its income deriving from its variety of investments and business interests. Although AARP does not own the prescription drug business, called Retired Persons Services Inc., it receives a royalty of 1% on all revenue in exchange for endorsing its products. AARP's leadership also appoints four of the eight members of RPS's board of directors. According to the AARP's annual report, the association took in more than $30 million in royalties last year from all sources. If the Mitchell bill is good medicine for the health care system, it will also be a shot in the arm for the AARP. [AARP's Health Care Booster Shot, Jack Anderson and Michael Binstein, op-ed, Washington Post, 8/25/94] A Fidonet-backbone echo featuring disability/medical news and information, ABLEnews is carried by more than 360 BBSs in the US, Canada, Australia, Great Britain, Greece, New Zealand, and Sweden. 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