As I have written in the past, I remain skeptical of AARP’s  (American Association of Retired Persons) role as an unbiased advocate and lobbyist for senior citizens.

In particular, their slavish promotion of progressive communist democrat price control legislation and the inherent conflict of interest that arises from their for-profit ventures, which sell access to the senior citizen marketplace and promote the sales of insurance, travel, and financial planning products.

More specifically, their relationship with UnitedHealth Group, one of a triumvirate of corporations controlling 80% of the pharmacy benefit management industry. Rather than streamlining access to medications, these PBM intermediaries often drive up costs and limit patient choices by negotiating rebates and dictating formulary lists that frequently prioritize profits over patient care. As we have seen in the past, when prices are artificially controlled and lowered in one area, prices in other areas surge to make up the difference and more.

Consider AARP’s positioning on Medicare Negotiated Drug Prices.

AARP Statement Following Announcement of First Medicare Negotiated Drug Prices

Today, AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond issued the following statement in response to the Centers for Medicare & Medicaid Services (CMS) announcement of the first Medicare negotiated drug prices as part of the 2022 prescription drug law:

“Today’s announcement marks a significant step forward in our long-standing efforts to lower prescription drug prices. AARP members from across the political spectrum overwhelmingly called lowering prescription drug costs a top concern – and this first round of Medicare-negotiated prices will bring financial relief to millions of older Americans. As the voice for the 100 million Americans ages 50-plus, we will continue working to ensure this law is fully implemented and benefits older Americans for decades to come.”  <Source>

Medicare Unveils First Negotiated Prices for 10 of the Costliest Medications
Millions of older Americans are expected to save on their prescriptions

Under the new prescription drug law and for the first time in history, Medicare has negotiated lower prices for 10 medications that are among the costliest and most used in its prescription drug program (Part D). Every year going forward, the federal program will select additional drugs to negotiate.

The new prices negotiated by the federal government and drug manufacturers take effect in 2026 and apply to prescription pills and injections taken by older adults for diabetes, blood clots, heart failure, arthritis, kidney disease, cancer and more. About 9 million Medicare enrollees in 2023 used one or more of the 10 drugs selected.

[OCS: As of early 2024, there are approximately 65.7 million Medicare enrollees in the U.S., with about 33.9 million enrolled in Original Medicare and 31.8 million in Medicare Advantage or other plans. Leaving approximately 86.3% at risk for higher prices on non-controlled drugs.]

Lower prices are result of AARP-backed law

The first 10 prescription medications selected for negotiations were identified last August as part of an AARP-backed prescription drug law that expands health care benefits and lowers out-of-pocket expenses for millions of older Americans with Medicare.

“Today’s announcement marks a significant step forward in our long-standing efforts to lower prescription drug prices,” says Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. “AARP members from across the political spectrum overwhelmingly called lowering prescription drug costs a top concern — and this first round of Medicare-negotiated prices will bring financial relief to millions of older Americans.” <Source>

How will that work out in practice?

• Surging Premiums: Since the Inflation Reduction Act (IRA) was enacted, premiums for prescription drug plans have skyrocketed—42% for higher-end plans and 57% for lower-end plans across major states.

• Impact on Physicians: Fewer prescribing choices and encouragement to replace effective drugs with their bio-equivalent, but not identical, generic counterparts.

• Fewer Plan Options: The Kaiser Family Foundation reports a 25% drop in available plans for Medicare beneficiaries, leaving seniors with limited choices.

• Rising Out-of-Pocket Costs: A study by Milliman, a global consulting and actuarial firm that specializes in healthcare, insurance, and financial services, indicates that by 2026, 3.5 million seniors will face significant increases in out-of-pocket costs, averaging a 12% hike due to price-controlled drugs.

• Impact on Communities of Color: African American and Asian American seniors will likely be disproportionately affected, as they often have lower incomes and fewer plan choices.

• Role of Insurance Companies and PBMs: Insurance companies pass on costs to consumers, utilizing tactics like “utilization management” that deny or delay necessary care. Pharmacy Benefit Managers (PBMs) dominate the market, prioritizing profits over patient needs. PBMs profit by capitalizing on the spread between the prices they negotiate with drug manufacturers and what they charge health plans, incentivizing them to favor higher-priced drugs. They tend to push expensive brand-name drugs over cheaper alternatives to secure larger manufacturer rebates, and they extract fees from every party in the supply chain, driving up costs further.

• Need for Reform: To address these issues, the PBM system must be reformed, transparency enhanced, and genuine competition in the pharmaceutical market facilitated rather than reliant on ineffective price controls.

No! I am not kidding...

Biden-Harris Price Controls Causing Senior Drug Prices to Skyrocket

A recent analysis warns that these pricing provisions will likely lead to higher costs for millions of seniors and disabled Americans who rely on Medicare Part D. This shouldn’t come as a surprise—price controls simply don’t work, and when they’re implemented, someone will eventually have to pick up the tab. Nor should it be surprising that government spending doesn’t reduce inflation. History shows quite the opposite.

For low-income beneficiaries, the out-of-pocket cost increases are significant—averaging 27% more. Asian and black beneficiaries who rely on the medicines subject to an MFP could experience an average increase of 13% and 15%, respectively. As is too often the case, the most vulnerable among us will bear the brunt of bad policy.

As bad as this all is, it gets worse. The predictable impact of price controls on goods and services is a well-researched topic in economics. This makes the typical combination of good intentions and unintended consequences a tough excuse to swallow.

Progressive special interests whose long-term goal is abolishing private insurance in favor of a single-payer health care system (e.g., Medicare for All)— as Kamala Harris proposed during her 2020 presidential run—have also vocally supported price controls as a means of moving America toward government-run health care. <Source>

Bottom line…

In a rapidly aging world, seniors deserve an advocate that truly represents their interests.

However, where big money is involved, and lobbyists can influence legislators and legislation, look to the ultimate source of funds, the consumer, to be screwed.

Steve