Seniors' old friend turns foe, for some

Senior citizens in the cavernous Senate Caucus Room - once the scene of hearings on the sinking of the Titanic - this week heartily booed the organization that is arguably the flagship in Washington's fleet of powerful lobbying groups.

The meeting, while focused on a controversial Medicare deal making its way through Congress, also revealed a growing rift among seniors over the AARP - once known as the American Association of Retired Persons - as well as the strategy for improving healthcare for seniors.

More than 500 seniors hissed at the mention of pharmaceutical companies and at another backer of the proposed prescription drug plan: former GOP Speaker Newt Gingrich, who once called for an end to the Medicare system altogether.

But when the AARP came up, they roared disapproval. "Down with the AARP!" the crowd shouted. "I'm shocked and outraged and I want to give up my membership," says Bill Toto, a retired teacher from Huntington, Long Island. He added, repeating a claim by Democratic lawmakers who organized the rally: "They're in the drug and insurance business and they stand to gain."

On one level, the scene was skewed. These seniors were a select group, bused in by labor unions to protest the Medicare drug plan and cheer its Democratic critics. But it also signals deeper rifts within the senior community going into this fight, expected to come to a House vote Friday.

For decades, the 35-million strong AARP has been the most reliable ally of Democrats on Medicare issues. They were present at the creation of the Medicare system in 1965 and lobbied hard to expand the system to include prescription drugs - a move they said should cost at least $750 billion over the next 10 years.

The $400 billion plan announced this week falls far short of that goal. But national AARP leaders say it's the best seniors can do for now, and are backing that claim with a $7 million media campaign: "The proposed prescription drug Medicare bill isn't perfect. But millions of Americans can't afford to wait for perfect."

Senior Democrats cried foul. "The AARP has forgotten where they come from, because once you get into the business of making money with the devil you forget your mission," says Rep. Charles Rangel (D) of New York, referring to royalties the AARP receives from insurance marketed to its members. Opponents of the largely GOP-crafted Medicare bill worry that the clout of an AARP endorsement will be enough to win passage of what they say is a deeply flawed bill.

American seniors are living longer and gaining political clout. During this decade, the 65-and-over demographic will grow at a higher rate than the total US population, and three to four times as high after 2011, when the baby boomers begin to retire, according to US census data.

But as this group matures, significant differences are surfacing on once monolithic, so-called senior issues, such as healthcare. Many Americans work into their 70s, and live active, independent lives well beyond that. That's one reason the AARP in 2001 dropped the words "retired persons" from its full name, retaining just the initials.

Such splits are also surfacing in voting patterns. "The senior vote was always viewed as people over 65 and always viewed as a slam-dunk Democratic vote ,and during the '90s it wasn't," says pollster John Zogby.

For senior organizations such as the AARP, representing such a big tent group is a challenge, never more so than in the complex and wide-ranging Medicare bill.

The bill aims to add a prescription drug benefit to a system still focused on acute care for seniors in hospitals. It offers seniors a choice between a stand-alone drug plan for a private health plan that offers drug coverage.

To get the bill under the $400 billion limit, lawmakers are also proposing gaps in coverage for prescription drug costs between $2,200 and $3,600. Premiums and deductibles would be waived for the lowest-income seniors.

What especially alarms Democrats and some senior groups is the prospect of a competition between traditional fee-for-service Medicare and private coverage by 2010.

In final negotiations over the bill, that competition was reduced to demonstration projects in six metropolitan areas. But it's still a lightning rod for critics who say it could undermine traditional Medicare.

"It's hard to explain the AARP's decision on this. If you look at this plan narrowly from the point of view of middle- and upper-income elderly who form the bulk of AARP membership, they will get more in benefits than they pay in taxes," says Henry Aaron, a senior fellow at the Brookings Institution.

"From a self-interested standpoint, it's a good deal, but it is a bad deal for many elderly and disabled people," he adds.

In response to the AARP decision, Democrats release a new poll by Peter D. Hart Research that found that 61 percent of AARP members view the pending Medicare bill unfavorably. AARP spokesman call the poll "slanted."

Senior Democrats also called on AARP CEO William Novelli to avoid appearance of a "conflict of interest" by make a commitment not to market "discount cards, pharmacy drug benefit plans, or any other managed care health plan offerings to Medicare beneficiaries called for in this bill."

Republican leaders hailed the AARP decision, which they say will help secure a favorable vote in the House, where the plan is under fire both from Democrats and from GOP conservatives, who say the plan does not ensure enough competition with private plans to drive down Medicare costs.

Medicare reform passed the House by a single vote last June. GOP vote counters say the AARP endorsement may give them a slightly higher margin, when the renegotiated bill comes up for a final vote this week.