By Phil Kerpen
For years the major health care policy debates in Washington and state capitals have been distorted by the fact that one of America's best known and trusted advocacy organizations, AARP, has functioned largely as a lobbying and PR front for the country’s biggest health insurer, UnitedHealth. Yet elected officials continue to see and hear their advocacy messages as representing millions of seniors – who are famously reliable voters – with a serious corrosive impact on the ability to advance meaningful free-market health reforms.
Even during this pandemic, with the whole world hoping that the biopharmaceutical industry can discover and deliver breakthrough cures and vaccines at record speed, AARP continues to bang the drum for government price controls. In fact, after the pandemic arrived in America AARP sent a letter advocating for Nancy Pelosi's draconian price control plan, which would threaten drugmakers with a tax of 95 percent of their gross revenues if they don't accept government set prices.
When governments set the price of such things as cutting-edge drugs needed innovations and investments dry up. A new cure now costs an average of $2.6 billion to bring to market. If government policy makes it impossible to recover those costs and earn a return on capital, as Pelosi's bill would, seniors would suffer from a shortage of new cutting-edge treatments and potential cures for diseases like Alzheimer’s, cancer, diabetes – and of course from any new emerging pandemic, like the one we face now.
Why would a seniors group favor undermining the discovery of new cures seniors need?
A forthcoming report by Juniper Research (commissioned by American Commitment) explains this seeming paradox. Chris Jacobs explains how AARP – which somehow maintains a tax-exempt charitable status – has raked in an astounding $11 billion from its sales and marketing activities over the past decade, with revenues climbing from just under $200 million in 2001 to over $900 million in 2018.
Most of that revenue comes from UnitedHealth, which from 2010 to 2017 sent AARP a staggering $4.2 billion. That includes a record $627 million in 2017 – after which AARP stopped specifically disclosing how much it takes in from UnitedHealth. This is the same UnitedHealth that brought in record profits this quarter that, ironically, has come during a deadly pandemic.
The lion's share of that windfall is from the sale of Medigap policies, for which AARP collects a nifty 4.95 percent off the top for lending its name and exclusive endorsement. Calling their vig a royalty instead of commission, they claim, sidesteps all of the rules and regulations for brokers and insurance sales. In fact, AARP recently defeated an Ohio lawsuit by arguing, successfully, that their relationship with their members "is not one of 'trust or confidence'" and that membership “does not ‘transcend an ordinary business’ relationship."
With all that money flowing, AARP's policy positions almost always align with UnitedHealth's business interests. Start with Obamacare. Despite overwhelming 14-to-1 opposition from its members, AARP’s executives supported it –...
Our analysis, embedded in the Google sheet below shows that half of reported U.S. COVID deaths are among nursing home residents, and that share has been sharply rising over the last two weeks. Clearly, the lockdowns are not preventing coronavirus from spreading in nursing homes. It's time to open America.
by Phil Kerpen
The United States is in the process of destroying its health care system via lockdown; ordering that all but emergency medical treatments and procedures cease in the name of preserving health system capacity, we have emptied out hospitals to gird for a wave of COVID patients that never came.
Now hospitals are laying off and furloughing by the tens of thousands – and liberal opportunists see this, somehow, as a market failure that would justify government directly seizing control of the medical system through a Medicare-for-all plan. Liberals look at the virus response in Italy, Spain, France, and the United Kingdom and think – somehow – that's what we need here. But we don't have to look to the catastrophic failures of systems abroad as a cautionary tale, because here in America the two biggest failures in our coronavirus response were failures of centralized government control.
The slow start in the American health response was caused by a failed testing rollout, due to incompetent bureaucracy that prohibited private sector testing in favor of a CDC test that didn't work and was contaminated by live virus. When it did finally did work there were severe capacity constraints – a problem caused not by too little centralized government control but by too much.
As government loosened its grip and allowed private labs to conduct testing, capacity scaled up dramatically. This is a lesson we could have learned from South Korea's experience, where their widely praised testing program was developed not by their national health system but by private companies that were promised fast regulatory approval.
The second major policy failure was the decision that crippled our health system capacity and likely significantly increases deaths from all causes. It was a directive from Medicare – the very program liberals now seek to expand to everyone to the exclusion of all choice and competition.
On March 18, the Centers for Medicare & Medicaid Services (CMS) "announced that all elective surgeries, non-essential medical, surgical, and dental procedures be delayed during the 2019 Novel Coronavirus (COVID-19) outbreak."
With few if any exceptions, every health system in America implemented the directive, emptying out hospitals and doctors' offices and crippling health system capacity everywhere the anticipated wave of coronavirus patients failed to materialize. The Mayo Clinic, for instance, is furloughing 30,000 employees.
Emulating the fully government-controlled National Health Service in Great Britain, Medicare made the call that denied cancer patients care they need, ended more transplant surgeries, and sent a panic through the country that caused heart attack and stroke victims to tragically die at home under the mistaken impression that the empty hospitals were too busy to help them.
In the face of this Medicare-caused catastrophe, liberals have floated the new argument that in a fully government-run system, hospitals wouldn't suffer crippling revenue loss from canceling nearly all of their non-COVID medical services – because they would have direct taxpayer funding.
As if disconnecting revenue from the provision of actual medical care is...