Group Urges Congress To Investigate AARP's Ties To Big Insurance
Group Urges Congress To Investigate AARP's Ties To Big Insurance
Instead of advocating for older Americans, group says AARP is a marketing behemoth that caters to corporate partners at the expense of older Americans.
The AARP pocketed an estimated $6.7 billion tax free since 2007 from the nation’s leading health insurer, UnitedHealth Group, for pitching AARP-branded insurance plans.
This is according to a recent report by American Commitment, a right-of-center 501 (c )(3) charitable group that advocates for free markets and lmited government.
The organization claims “royalty fees” earned by the AARP’s lucrative business of licensing its brand name to insurance providers and other companies long ago superceded its commitment to advocating on behalf of older Americans.
American Commitment is asking Congress to investigate what it calls the AARP’s “serious” conflict of interest.
The AARP may have something to worry about for the first time in years.
The AARP, which has about 37 million members, has been closely allied with the Democratic Party since it successfully lobbied Pres. Barack Obama to forego Medigap reforms in 2012. Medigap refers to health care costs that are not covered under Medicare. In exchange for sparing Medigap, the AARP reportedly supported Obamacare, a plan that was widely opposed by the AARP’s membership.
American Commitment states that Obamacare has cut $716 billion from Medicare.
An AARP spokesperson Friday issued a statement that AARP Services, Inc. (ASI) is a wholly-owned taxable subsidiary of AARP and “provides quality control and oversight on behalf of AARP for AARP-branded products and services. Neither ASI nor providers have input into AARP policy-making.”
Inflation Reduction Act
Phil Kerpen, president of American Commitment, said AARP’s conflict of interest was apparent in its recent support of the Inflation Reduction Act of 2022 which “siphons billions of dollars from seniors’ Medicare to subsidize big health insurers and liberal spending priorities.”
American Commitment states the Congressional Budget Office estimates the Inflation Reduction Act will reduce Medicare spending by more than a quarter-trillion dollars over the coming decade.
Furthermore, Kerpen says “drug pricing reform” will result in fewer new drugs and cures for things like cancer and Alzheimers being developed over the next two decades. He said manufacturers will face excise taxes of up to 95% if they refuse to comply the government’s negotiated price.
Financial Analysis
American Commitment recently commissioned a financial analysis of AARP’s business dealings from Juniper Research Group of Washington, D.C. The resulting report, “How AARP Puts Profits over Patients - And Principles,” states AARP earned $1.1 billion in 2021 selling AARP-branded goods and services to its members, an amount that was “more than double the revenues generated by membership dues ($300 million), grant revenue and contributions combined.”
The report states that AARP has received “a stunning amount of revenue—an estimated $8.2 billion— from UnitedHealth Group since 2007.”
The report says UnitedHealth in 2021 enrolled 4,395,000 individuals in AARP-branded Medigap plans. The report estimates each plan has an average premium of $2,126 a year. This means UnitedHealth received $9.4 billion. AARP’s share of each policy was 4.95% for total earnings of roughly $465 million.
Follow the Money
It’s not clear where all of the AARP’s money goes but the AARP is so rich that it has become philanthropy on its own, rewarding CEO Jo An Jenkins pet charities and arts and cultural organizations in Washington, D.C.
American Commitment notes the AARP pays its staff exceptionally well.
In 2021, AARP paid its CEO, Jo Ann Jenkins, a total of $2,708,890 in salary, benefits, and other compensation.
In addition to Jenkins, an AARP filing states 14 out of 15 officers and key employers received more than $500,000 in compensation. This does not include other AARP executives, including those of the AARP Foundation, which is a separate legal entity.
According to its IRS filing, nearly 65% (1,307) of AARP’s total employees (2,023) in 2021 received reportable compensation from the organization in excess of $100,000.
The report concludes that “an exploration of the record shows not just that AARP holds serious conflicts of interest, but that AARP’s financial conflicts have prompted the organization to abandon its principles on numerous occasions, pursuing financial gain for itself and its partners over the organization’s stated mission and policy objectives—and its members.”