Thanks a lot, AARP
The AARP spent a lot of time defending itself after it supported the bad Medicare reform bill last year. They insisted that the changes would be good for seniors. Does this sound good to you?
Some companies with many retired workers are expected to post big earnings gains for 2003 or 2004, thanks to accounting guidelines for subsidies under the federal prescription-drug program.
When Congress approved prescription-drug benefits for Medicare recipients last year, it granted benefits for the 65% of large employers with retiree health-care plans, providing funds for companies that maintained their prescription-drug coverage for retirees.
The program is supposed to encourage employers to retain prescription-drug coverage.
But companies are entitled to the subsidy regardless of how much of the cost they pick up themselves. As a result, it does nothing to halt the current rush by some employers to shift more costs to retirees.
In fact, benefits consultants are designing employer-sponsored prescription plans to save companies more money by unloading costs on their former workers without losing out on the new subsidy.
So, either the AARP leadership were bought off, or they were just too stupid to actually understand the language of a bill that probably wouldn’t have passed without their support. Either way, they definitely did a disservice to their members, and this is just the first of what promises to be a long list of problems with the new Medicare laws.
