With its literature featuring the smiling faces of happy retirees, every year AARP invites millions of people over age 50 to join its ranks.
The phone message at the main number features Betty White, and its website proclaims, “No one does more for people over 50 than AARP. And you can get all the perks and benefits for as little as $1 a month. So fill out the quick membership form now!”
But its critics contend the organization should talk less about what it claims to do for seniors and more about what it does to seniors, especially the efforts that generate huge profits on the insurance it sells.
American Seniors Association President Phil Kent says the AARP actually is just lobbying for its own interests, which are tied closely to the agenda of a “progressive” bureaucracy in Washington.
“I agree with people who say the AARP, the group once known as the American Association of Retired Persons, has completely become left-wing agenda oriented,” Kent stated.
“It’s no surprise that earlier this year, you had the U. S. House of Representatives Ways and Means Committee, in particular Reps. Wally Herger and Dave Reichert, overseeing and issuing an extensive report on these AARP operations,” he added.
“Essentially, it’s asking the Internal Revenue Service to ascertain whether the AARP abused its tax exempt status. That’s because it’s motivated by politics and not for the benefit of its members,” Kent said.
The report Kent cites is the House Ways and Means Committee March report called “Behind the Veil: The AARP America Doesn’t Know.”
The executive summary is revealing.
“AARP, formerly known as the American Association of Retired Persons, is a tax-exempt non-profit membership organization for those aged 50 years and older. As such, AARP has long been regarded as a protector and advocate of the nation’s senior community,” the report states.
“In conducting the research, one of the central questions became: Why would AARP aggressively advocate for the Democrats’ health care law last year which contained nearly one half-trillion dollars in cuts that independent analysts said would negatively impact seniors’ access to affordable health care services?” it asks.
Kent says he knows the answer to the question. The AARP supported Obamacare so the organization could sell insurance.
Listen to an interview with Kent:
“They lobbied hard simply to sell … insurance and reap profits. Think about this. The AARP fought to gut Medicare Advantage which helps millions of seniors, because if that program goes away the AARP stands to gain millions of dollars in additional royalties from what it’s peddling,” Kent explained.
An AARP spokesman who asked that his name not be used denied the accusation that AARP supported Obamacare to make money.
“Our advocacy drives everything we do, and we would gladly forego any revenue in exchange for lifetime health and financial security for all older Americans. If anyone doubts who we’re advocating for, they need look no further than the numerous instances where we fought against legislative efforts that, using these critics’ logic, could have presented financial windfalls to AARP,” the spokesman said.
“For instance, AARP led the fight against a Social Security privatization plan in 2005 that would have diverted trillions of dollars into the private financial market, despite the fact that AARP brands financial services,” the spokesman added.
“More recently, we strongly opposed a budget plan passed by the House of Representatives that might have presented opportunities for AARP to strengthen its finances, since every older American would be forced into private Medicare plans, like the kinds branded by AARP,” the spokesman said.
The AARP spokesman said the organization supported Obamacare because the law provides services members have wanted for a long time.
“AARP supported the Affordable Care Act because it includes vital benefits and protections that our members have been asking for, for decades,” the AARP officials said. “Our focus now is on working to ensure that the implementation of the health care law best benefits older Americans and helping our members and the public understand how provisions in the health care law will impact them.”
However, those statements don’t seem to match the sentiment expressed on the Association of Mature American Citizens website.
Reacting to an advocacy letter AARP sent to members of Congress, AMAC President Dan Weber said in a website statement, “Why didn’t AARP simply tell the truth and say that they would benefit by what they were lobbying for. Then they could have said the main reason they are against the changes in the copayments is to protect their members.”
“What’s wrong with telling the truth?” Weber asked.
The website comments section following the Weber quote features statements from AMAC members who said they dropped their AARP memberships because of AARP’s advocacy.
“AARP is part of the problem in what is wrong with our system. Money and power (as in misrepresenting members) should not be the only requirements to make or influence change in our system and our country. AARP and unions seem to have similar self-serving intent,” the statement said.
Another writer said AARP is not serving its member’s interests.
“AARP does not have us seniors in their best interest, I cancelled my membership with them years ago,” the writer said.
The group 60 Plus Association President Jim Martin says despite AARP’s claims, the AARP’s “bottom line” for Obamacare and other federal programs is a large profit margin.
“It makes sense to them, dollars and cents if you will. When they’re left standing after the smaller insurance companies have been driven out of business, the Fortune 500 insurance giant will be left while the smaller companies have been gobbled up,” Martin explained.
AARP’s business partner, United Health Group, which writes insurance policies for AARP, is ranked 22nd on the Fortune 500 list of companies, bringing in over $90 billion in revenues annually.
The United Health connection was covered in the Ways and Means Committee’s report.
“UnitedHealth Group (“United”) is AARP’s largest business partner. In 2008 and 2009, United accounted for 63 percent and 65 percent, respectively, of total royalty payments according to AARP’s financial statements. As a result, AARP is becoming increasingly dependent on payments from United. In the span of three years, United’s royalty payments to AARP have grown from $284 million to $427 million, a 50 percent increase,” the report states.
The report adds that AARP’s insurance business makes the organization the sixth -largest insurance company in the United States.
Martin goes on to say that even though the AARP brings in millions every year in insurance premiums, it has failed to answer questions from Congress.
“They have not responded to the Congress on how their partnership with United Health Care operates. They make millions, in fact it might be billions,” Martin said.
Martin points out that some of AARP’s business ventures are financed by federal grants.
“I find it absolutely appalling that the AARP gets millions in grants every year from the federal government,” Martin stated. “I don’t mind if they go out into the marketplace and compete for seniors’ business, but they do it with millions and millions of our tax dollars.”
He says his alternative group receives no federal grants.
Kent offered specifics on how Obamacare helps the AARP’s insurance business.
“The report (Ways and Means report) also details the Democrats’ health care law’s significant cuts to Medicare Advantage (MA) and how the interplay in the marketplace between MA and Medigap (AARP’s plan) will increase Medigap sales,” Kent said.
“This will have a direct, significant, and positive impact on future profits at AARP. Also troubling is the report’s central finding: The Democrats’ health care law, which AARP strongly endorsed, could result in a windfall for AARP that exceeds over $1 billion during the next 10 years,” he said.
The report amplified Kent concerns.
“AARP endorses just about every type of insurance product under the sun, including three types of Medicare-related insurance products: Part D prescription drug insurance, Medicare Advantage (MA) insurance, and Medicare supplemental insurance, often referred to as ‘Medigap,’” the report states.
Later in the report, the authors refer to AARP profits and how Obamacare’s cuts to the Medicare Advantage plan will increase AARP’s profits.
“AARP stands to financially gain between $55 million and $166 million in 2014 alone, and this does not include the additional interest AARP earns on the Medigap premiums they receive from seniors,” the report states.
“AARP’s financial gain from the health care law, under their existing contract, could exceed $1 billion during the next 10 years, under the mid-range estimate,” it says.
The report’s findings prompted the authors to fire off a letter to IRS Commissioner Douglas Shulman asking the agency to review AARP’s tax exempt status.
“Our report raises numerous questions related to how the various entities are controlled and whether the activities of the for-profit entities should be attributed to AARP, Inc., the IRC section 501(c)(4) tax-exempt parent,” the letter said.
Herger, Reichert and letter co-author Rep. Charles Boustany suggest complete revocation of the tax exempt status.
Kent described the close relationship between Obama and the AARP.
“It is almost as if the AARP is joined at the hip with the Obama administration. If you go back to 2009 and 2010, you saw the AARP just stabbing its membership in the back by constantly cheerleading for Obamacare,” Kent observed.
“They didn’t care, for example, that Medicare was going to be cut by $500 billion. They didn’t care that a huge tax would be put on the makers of medical devices which would create higher costs for seniors and less choice,” Kent said.
Kent zeroed in on another aspect of the Obamacare plan that has been the subject of frequent debate – the possibility that critical decisions for medical care would no longer be made between the doctor and patient.
“They didn’t care that decisions over Medicare wouldn’t be made by doctors and patients, but by an unelected Medicare Board. Those are just a few of the things where the AARP was in a constant drumbeat with the Obama administration when it came to passing the Obamacare law,” Kent said.
WND reported in April that Obama has recommended giving an unelected board more authority over health care and insurance decisions.
The Independent Payment Advisory Board is the most notorious of the some 150 boards and commissions that Obamacare needs to operate. It would be made up of 15 Obama-appointed individuals and would dictate Medicare policy affecting millions of seniors and disabled Americans with essentially no congressional or judicial oversight.
WND also previously reported that AARP collected nearly $653 million in royalties from private insurance companies that sold products referred by AARP during 2008. Another $120 million came from ads placed in its publications.
Because of AARP’s position on Obamacare, an estimated 60,000 members canceled their memberships.