Early in 2009 during the opening stages of the national debate on Obamacare, the blogosphere came alive with videos of stormy AARP chapter meetings in which angry members blasted their leaders for supporting President Barack Obama’s signature health care reform. Reports soon followed that AARP was losing members by the thousands. Indeed, so many left the famous seniors’ group in protest that James Martin, head of the Seniors Plus Association, which bills itself as an alternative to AARP, said his organization had to hire 150 temporary telephone operators to handle the flood of applicants and information seekers.
Something else about AARP came out in 2009 when a Washington Examiner investigation found that the group’s well-paid national leaders were overwhelmingly Democratic campaign contributors. In fact, as The Examiner wrote, AARP “is an integral part of the tireless liberal lobbying machine that runs 24/7 in the nation’s capital pushing to protect and expand current government entitlements and to create costly new ones.”
Taxpayers learned much more about the inner financial workings of AARP when Reps. Wally Herger, R-Redding, and Charles Boustany, R-La., convened a joint meeting of two House Ways and Means Committee subcommittees to consider a report they authored along with Rep. Dave Reichert, R-Wash.Titled “Behind the Veil — The AARP America Doesn’t Know.” The report reveals the massive financial windfall AARP stands to gain from full enactment of Obamacare.
Thanks to the new law’s gutting of the Medicare Advantage program, millions of seniors will have to buy MediGap policies. The AARP already controls 34 percent of the MediGap market and, according to the report, the additional MediGap enrollees could fatten AARPs treasury by more than $1 billion. In other words, the policies pushed by the nonprofit segment of AARP drive the revenues produced by the organization’s for-profit operation. AARP’s aggressive advocacy of Obamacare represented what Public Citizen described as “a significant conflict of interest.”
As AARP “Behind the Veil” notes, this conflict of interest also raises fundamental questions about the group’s tax exempt status: “AARP is not simply a nonprofit entity claiming to advocate on behalf of America’s seniors. AARP is in fact a large, complex and sophisticated organization with over $2.2 billion in total assets and had revenues in excess of $1.4 billion in 2009 alone.
“When measured by the products it endorses and profits it derives from those deals, AARP is one of the nation’s largest insurance companies and by far the largest provider of Medicare plans to seniors. AARP is also one of the most powerful and active lobbying groups (in terms of dollars spent) in the country. Further clouding AARP’s image is a tangled relationship between the board members of its ‘for-profit’ subsidiaries and the parent ‘nonprofit’ AARP which establishes AARP’s policy positions — often making it impossible to tell the two sides, and their competing agendas, apart.” It’s time AARP is called to account.