The point man on AARP's controversial Medicare move

The senior group has lost thousands of members, but maintains the drug plan was a step forward.

As CEO of the 35 million member AARP, William Novelli leads an army of older Americans, not all of whom are happy with his battle plan.

Under Mr. Novelli's direction, the politically potent AARP backed Republican legislation that added a prescription drug benefit to Medicare. Critics, many of them Democrats, charge the bill will weaken Medicare's long-term health.

The group's stance has come at a cost. Novelli says AARP may have lost as many as 8,000 to 10,000 members - not the 15,000 some have suggested, but a significant number nonetheless.

"We have some repair work to do with the Medicare legislation and members' views of it," Novelli says. But, he argues, "We did the right thing. The boomers are coming, and the country is not ready." He thinks the new Medicare law will help the country prepare for a coming wave of boomer retirees.

The decision to support the Republican measure "realigned AARP" politically, Novelli admits. "I think AARP was taken for granted" by Democratic leaders in the past. "The best thing we can do is not be aligned with either party," he told reporters at a Monitor breakfast Wednesday.

While calling for a "nonpartisan" AARP, Novelli has links to Republicans that caused some comment during the Medicare debate. He worked on the November Group, the in-house advertising agency for the Nixon reelection effort in 1972. And he wrote a foreword to a book by former House Speaker Newt Gingrich. Novelli says Mr. Gingrich "is an idea guy and I like ideas regardless of their source."

Novelli, a smart and genial Washington insider, has three grown children and three grandchildren. The AARP draws on his career experience spread over public relations, social action, and health issues. Before coming to AARP in January 2000, Novelli was president of the Campaign for Tobacco Free Kids. Previously, he was executive vice president of CARE, the world's largest private relief and development organization.

He cofounded a major public-relations agency and was once an advertising director for the Peace Corps. It's an impressive background - but then you would need one if you were trying to convince aging baby boomers that "sixty is the new thirty," as a recent edition of the AARP magazine argued.

Getting the new Medicare bill through Congress involved more partisan heat than he anticipated. "I thought it would be more bipartisan than it turned out," he says. A major member backlash is "possible, but I don't think it is likely" given AARP's long-term credibility with members and the "positive provisions" in the legislation, Novelli says.

Next year AARP will be in the middle of the effort to fix the Medicare legislation. "Now the great question is: Is competition going to work in Medicare?" he says. He calls controversial provisions in the law that would allow private insurers to complete with Medicare in the future nothing more than a "fig leaf."

Democrats are angry with the AARP for helping push the Medicare legislation through Congress. Novelli hopes "the anger will cool," adding there are "plenty of issues where we are aligned." One is the push President Bush is expected to make for private savings account as a part of a Social Security reform package. "We don't support private accounts carved out of Social Security money," he says.

While the Medicare legislation doesn't allow consumers to import drugs from countries like Canada in a bid to save money, AARP will "try to push" importation in the next session, says Novelli. The issue "is not going away."

He says that the AARP is not an enemy of the drug industry, but notes that "drug prices are too high - there has to be a middle ground." Given its clout in the insurance marketplace, AARP is able to pressure the pharmaceutical industry. That industry recognizes the latest Medicare legislation "is not the end of the game," Novelli says.

In 2004 AARP plans to focus on older workers. "We are going to promote physical activity, the most important thing" workers can do to "stay healthy longer."

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