Last week there was a rash of articles critical of AARP and accusing it of taking nearly $650 million in revenues from its endorsements of insurance products, $450 million of it from health insurance products.

The media took its lead from the Republicans, but criticism of AARP is not limited to Republicans and their media outlets.  Even respectable writers on the left, like James Ridgeway, find a conflict of interest with AARP’s collection of royalty fees and AARP’s advocacy position.

My interest in this is two-fold.  First, there is a certain hypocrisy in the Republican attack.  Second, the issue of fees to AARP can shed some light on the hidden costs of our fragmented patient delivery system.

In the interest of full disclosure and like Mr. Ridgeway, I too carry an AARP membership card.  I am not, however, enrolled in any of AARP’s insurance products.  That was not an easy decision after AARP’s disappointing advocacy of George W. Bush’s Medicare Part D prescription drug plan.

AARP’s conflict of interest?

Why are Republicans upset with this so called “conflict of interest”?  This summer, right wing nut cases furiously attempted to disrupt discussion of health care reform with obvious distortions about death panels, Medicare cuts and cries from distressed seniors urging politicians to keep their government hands off their Medicare.

What did AARP do?  They attempted to set the record straight.

So where is the conflict of interest?  Could it be because AARP is unwilling to back HR 676, the Medicare for All legislation?   That they cannot conclude that what is good for seniors could be good for all Americans?  Does anyone really think that would attract the ire of Republican politicians?

No, AARP supports the current House legislation HR 3962.

What about the NFIB?

But the NFIB, the National Federation of Independent Business does not support the current form of health insurance reform.

The NFIB also markets health insurance products to its members.  Who is asking the NFIB how much money they receive from their vendors?

There is no group in the economy that stands to benefit more from meaningful health reform than small business.  Most of the uninsured work for small businesses.  Small businesses pay 18% more than their larger competitors.  Yet the NFIB health reform proposals are lifted directly from the Republican policy book.  They oppose HR 3962.

Out of touch

Evidence that the NFIB has lost touch with its constituents can be seen in the emergence of the Mainstreet Alliance and the Small Business Majority,  groups that have emerged specifically to urge for health care reform on behalf of small businesses.  Could this disconnect between NFIB policy positions and the interests of its members have anything to do with the money it receives from health insurance companies?

They need the money

But there is another aspect of this issue that is illuminating.  It cost money to offer a health insurance plan.  There are marketing and communication costs, enrollment and disenrollment costs, information system costs, customer service costs.  The only opportunity to pay for those costs is from the premiums paid by plan participants.

Plan participants aren’t going to write two checks each month, so they write one and the health insurance company sends some of it back to the plan sponsor to cover its costs.  I don’t know a single group purchasing arrangement that doesn’t work this way.  It could be AARP, the NFIB, a local chamber of commerce or business or union coalition.  Each of these organizations offers a portal through which people gain access to health care.  Monitoring that portal costs money.

Employer sponsors of health insurance plan pay those costs now.  They likely are not counted as part of our national health expenditures.

It’s the sytem

A system that permits multiple and sometimes simultaneous portals into health care is an inefficient system.  Recently I spent time with one of our members whose eligibility to stay on our plan as a widow had ended.  But she could not enroll in AARP’s plan because United Health Care’s computers indicated that she still had coverage with our plan.  It took almost an hour and half on the phone with the member, AARP, and United Health Care.

I tell this story not to point the finger at one actor but at a system that is inefficient by design.  It is that inefficient design that that opens opportunity for profit and for distorting one’s political policy inclinations.