WASHINGTON — AARP's endorsement helped pass President Barack Obama's health care overhaul. Now the powerful seniors' lobby is telling employees their costs will go up as a result.
In an e-mail to employees obtained by the Associated Press, AARP says employees' health care premiums will increase by 5 percent -- from 8 percent to 13 percent -- next year because of rapidly rising medical costs.
"Most plan co-pays and deductibles have been modified," Jennifer Hodges, AARP's director of compensation and benefits, wrote employees in the Oct. 25 e-mail. "Plan value changes were necessary not only from a cost management standpoint but also to ensure that AARP's plans fall below the threshold for high-cost group plans under health care reform."
AARP says it is also changing co-payments and deductibles to avoid a new goverment-mandated 40 percent tax on high cost "Cadillac" health plans that takes effect in 2018 under the law. Shifting costs to employees lowers the value of a health plan; it's like an escape hatch from the tax.
AARP officials said medical inflation is the main reason employee costs are rising. Its legislative affairs director, David Certner, says the health care law is "a small part."
Sen. Chuck Grassley, R-Iowa, didn't hesitate to draw attention to AARP's increasing premiums and pivotal role in supporting the president's health care overhaul. "AARP supported a partisan health care overhaul that cut Medicare by almost $500 billion," Grassley said in a statement. "That will result in less choice, fewer benefits and decreased access to care for millions of its members. But now we hear that AARP’s members aren’t the only ones who will bear the brunt of the new health care law.
"Like companies across the country," Grassley continued, "AARP is shifting more costs onto employees in reaction to the health care overhaul. Despite their employer’s support, AARP employees are learning that the health care law is not going to address the top priority of making health care coverage less expensive. Supporters of the law tend to have tunnel vision and focus on how it will affect narrow groups of people, rather than recognizing that most people will just end up paying more. But the big picture is clear. Employers and employees nationwide will pay more for health care because of the new law."
AARP legislative affairs director David Certner told the AP the organization's lobbying efforts are not tied to their own employees' welfare. "The impact on AARP employees is not a factor at all in our policy making, which is directed at the impact on our membership and on all older Americans."
This means the AARP employees who refused to listen to their members' concerned last fall are now going to face higher health care costs:
Last year, the AARP reportedly lost 60,000 members who resigned membership in anger over the group’s support of the Democrats' health care overhaul.
The Associated Press contributed to this report.