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Contact Us Spring 2001; Volume 2, Number 1
Features: Interviews
Interview with John Rother
Conducted by Andrea Magyera
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HHPR: Could you give us a brief summary of how you see the AARP's role in healthcare policy?
AARP: The AARP is a membership organization for people 50 and above, and we do a lot of polling of our membership. Health care consistently ranks at the top of their concerns and among the top issues on which they want the AARP to be an advocate. Their concern is not limited to one specific area - really it covers the entire health care system. We've been active, of course, in Medicare and prescription drugs, but we're also interested in expanding coverage to more uninsured Americans, long-term care, issues of health care safety and quality, a managed care Bill of Rights, quality in nursing homes and other kinds of managed care, and FDA issues as well. I don't think there's another organization that is engaged in as broad a range of health care issues as we are.
HHPR: How do you provide this service to your members? Is it through mailings?
AARP: We do three things relating to health care that our members seem to value. The first is a piece that I'm in charge of - our advocacy with regards to public policy. We are active not only in Washington, but also in states around the country. Second, we are a principal source of heath care information - not just advocacy information, but information that deals with health care practices, how to find a good doctor, and how to exercise and take care of yourself. We have quite a lot of information going out on a regular basis through our publications or specialized forms of communication to our members. Finally, we also make various kinds of discounts available to our members - primarily insurance related. So, if they want to, they can purchase medical or long-term care insurance through the AARP and have the assurance that we are monitoring that very carefully to make sure that it meets the best consumer standards.
HHPR: How large is the AARP's membership and what percentage of the nation's over-50 population do you represent?
AARP: Right now we're a little under 50% of the total over-50 population. That adds up to somewhere between 34 and 35 million members.
HHPR: And you're just getting to the start of the Baby Boom generation.
AARP: Yes, we think we're going to be over 40 million in just a few more years.
Medicare Reform
HHPR: Moving on to my second question, we have an article in this issue in which Dr. Bruce Vladeck argues that the Medicare program is working well. I am wondering what is the AARP's stance on Medicare and the benefits that it has given to its seniors. How does it feel about reform plans?
AARP: Medicare has certainly done an amazing job of assuring our seniors that they will have health insurance protection and that they have access to mainstream health care services. But it is falling further and further behind in its ability to provide true economic security. On average, about half of total costs for health care are paid by Medicare and half are outside of Medicare. That's because Medicare doesn't cover prescription drugs or long-term care services. We have a growing problem there, one that Congress will address in part this year through a prescription drug benefit. We also have a program that it is, in some cases, pretty old and inflexible. It's locked into an old encounter-based, fee-for-service type system. It doesn't really promote innovations in health care delivery that could be very beneficial.
HHPR: What is your stance on Medicare HMOs?
AARP: We have felt at the AARP that Medicare HMOs are an important option, particularly for low-income seniors, and they have been very helpful in limiting out-of-pocket costs. They also provide some potentially important benefits in terms of coordinating care within a much broader benefit package than Medicare provides. Not all that potential has been realized, and there are problems with how HMOs have been paid. The result is that we haven't gotten the kind of benefit from HMOs that they are capable of delivering, and the program has not received a fiscal benefit because HMOs have generally enrolled healthier than average people. So, there certainly are some issues to be addressed, but I do think that it is important to keep the option there.
Medicare Prescription Drugs
HHPR: Moving on to the Medicare prescription drug issue, when would you think a workable policy could pass? What do you think it would include? How generous do you think it would be under this new administration? And what do you think the timeline is for the next 5 years in health policy for the elderly with regards to this huge issue?
AARP: Well, the important thing is that both parties at the presidential and congressional levels have made clear commitments to act on Medicare drug coverage, and I don't believe they can go back to the voters in 2002 without having acted. I think there is a real sense that they have to do it this time. But, it may take two years for that to happen. It could go faster, but there are lots of reasons why I think it will probably take the full two years to enact a drug benefit.

Most of the drug benefit plans that have already been proposed are not generous at all. They usually involve a 50% co-pay, so they are much less generous than private coverage would typically be for those of us below 65. The key, though, is that the support for this program has to be generous enough to attract most Medicare beneficiaries to enroll. If it's not, and only people with high drug costs enroll, you have adverse selection and then you don't have a sustainable program from a fiscal point of view.

We're walking a tightrope here -- it has to be generous enough to attract most beneficiaries, while at the same time, given the expense that's likely, and given competing demands for the surplus, I'm sure this Administration and Congress are going to have to find ways to address cost containment on an ongoing basis.

HHPR: Do you feel that the Bush Administration proposal would be sufficient or do you think modifications need to be made to it?
AARP: There's really not a proposal from the Bush Administration; there are campaign statements that are not specific enough to really let you know what they have in mind. In talking with the incoming members of the administration, it's clear to me that this set of campaign statements is going to have to be revised in order to have a program that will work, both from a political level and in terms of fiscal stability over time. In other words, they're going to have to commit more resources to it than they've been prepared to commit so far, and they are going to have to reach across the aisle and stay flexible on program design.
Medicare HMO Difficulties
HHPR: Let's turn to the subject of Medicare HMOs. I'm from Wisconsin, and I recently interviewed the Vice President of Blue Cross/Blue Shield of Wisconsin. She stated that their plan is facing difficulties and, consequently, will most likely pull out in the 2002 coverage year. Do you think that the problems that are occurring with Medicare HMOs nationwide, with them not being able to sustain their coverage nationwide even if they want to, could be the critical event that results in passing this prescription drug bill?
AARP: I think most people see them as separate issues. At the end of the last congress, Congress threw quite a bit of money at the HMOs to try to keep them in the program. We don't know whether or not that will be successful.
HHPR: You mean through the floor increases?
AARP: That's right. It seems unlikely that throwing more and more money will do it. I personally think that we're going to have to move to a system of payment based on competitive bidding. The HMOs won't like that, but it's a more stable approach over time, and it would allow plans that want to be in the program to stay in the program. The AAPCC has just about run its course, because of the regional differences in payments and because the plans have just not been able to make it work. I think we're at the end of the day for those formula-based payments.
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Spring 2001, Volume 2, Number 1
Table of Contents
Editor's Note
Features: Medicare Symposium
Features: Interviews
Features: Health Care for the Elderly
Health Highlights
In Focus

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