For those of us who toil in the vineyards of health care finance it has long been obvious that the American Association of Retired Persons (AARP) is, for all intents and purposes, an insurance company disguised as an advocacy group. Thus, it was something of surprise when AARP announced its support for ObamaCare in the fall of 2009. Why would a financial conglomerate so dependent on insurance-related revenue endorse a bill that promised to wreck the health insurance industry? Then, the penny dropped. One of the ways the Democrats proposed to "pay" for their health care law was by cutting the Medicare Advantage (MA) program by $200 billion. This would inevitably drive many carriers out of the MA market and herd millions of seniors back to the more expensive coverage of traditional Medicare. ...
But what Americans don't know is… that the AARP brand dominates the private Medicare insurance market." As Rep. Boustany phrased it, "In light of AARP's dependence on its income from insurance products, there is good reason to question whether AARP is primarily looking out for seniors or just its own bottom line."
Indeed there is. Only about 20% of its $1.3 billion in annual revenue comes from membership dues. In other words, AARP earns nearly $1 billion per year by endorsing various products and services sold to its members. More than 65% of that tsunami of cash arrives in the coffers of this "seniors' lobby" in the form ofroyalty payments "for lending its name to policies sold to its members by private insurers." Thus, it seems reasonable for the members of the Ways and Means Committee to ascertain how AARP's financial interests affect its ostensible mission of "enhancing seniors' quality of life." Curiously, when Charlie Rangel (D-NY) was the Chairman of the committee, neither he nor his fellow Democrats showed any interest in such apparent conflicts of interest.
In fact, when they held the majority in the House, the Democrats were so sanguine about AARP's motives that they awarded the organization a huge grant in their infamous "porkulus" legislation. AARPreceived"an $18 million grant in the economic stimulus package for a job training program that has not created any jobs." More to the point, the Democrats granted AARP a long list of special dispensations from the most onerous features of ObamaCare. As Chris Jacobs of the Republican Policy Committee has noted, AARP received exemptions from the prohibition on pre-existing condition exclusions and the $500,000 cap on executive compensation for insurance industry executives. ...
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