Recently I attended a sales pitch for health insurance sold by United Health Care, the country’s largest private health insurer. I went to the session in response to an ad by AARP touting the meeting. The ad mentioned, in small type, that “UnitedHealthCare pays a royalty fee to AARP for use of the AARP intellectual property.”
No one at the meeting could describe or explain the fee. Nor could a call to AARP’s national office shed light. I am no longer in the dark: A recent 35-page report, “Behind the Veil: The AARP America Doesn’t Know,” by a couple of Republican members of the House Ways and Means Committee, reveals that in 2009 AARP pocketed $427 million in payments from United Health. That’s in addition to millions more from other insurers. AARP‘s 40 million members pay annual dues. Income from dues accounts for less than 20 per cent of the organization‘s revenues and it is dwarfed by what AARP collects from insurers.
The authors of the report, Representatives Wally Herger of California and Dave Reichert, Washington, seem to be worried that AARP is using its vast resources and lobbying clout to advance Democratic causes, mainly the Affordable Care Act. That view is a little selective, disregarding, for example, AARP’s key role in getting George W. Bush’s unfunded Medicare Part D enacted. AARP’s CEO at the time, William Novelli, even joined Bush at the White House in promoting and celebrating the bill.
As an AARP member who bought a Medigap policy largely on AARP’s say-so I am more concerned about whether AARP endorsed my policy because it was the best deal for me and other members or because it profited AARP. The secrecy surrounding AARP’s business deals heightens my suspicion and is also why Representatives Herger and Reichert call for an IRS investigation of AARP’s tax-exempt status.
The Herger-Reichert report shows that AARP withholds information about itself not only from its members but also from Congressional investigators. The report says the organization “refused to comply with repeated requests to share with members of Congress its tax filings and other financial documents.”
The pair forwarded the report to the IRS for further examination “which would include a review of the many documents withheld from members of Congress” but also to determine “whether the operational activities of AARP are primarily motivated by political or profit interests, instead of to benefit its members.”
AARP is a big and influential player in health care. The Ways and Means subcommittee report says AARP “would have been the sixth largest insurance company” in the U.S. last year based on its Medicare insurance business alone. That is reason enough for the press to be scrutinizing its activities and following up on questions posed by Representatives Herger and Reichert.
Why, among other questions, did the non-profit’s foundation recently agree to pay NASCAR driver Jeff Gordon $14 million in each of the next three years to be his primary sponsor? And is it true, as the report alleges, that AARP stands to make a windfall of more than a billion dollars over the next ten years from the new heath care law it endorsed?
It’s unfortunate that the representatives allowed their investigation of AARP to be tainted by the whiff of politics. The factual findings of their report, minus the partisan innuendo, deserve attention and follow-up.