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Reichert Opening Statement: Hearing on AARP’s Organizational Structure and Finances

April 01, 2011

I’m glad to see these witnesses here today, and I hope that during the course of this hearing we’ll be able to learn the answers to some questions that I’ve been asking since 2009.  That’s when I made my initial inquiries of AARP representatives to determine why this organization, whose stated mission is to represent the interests of America’s seniors, chose to actively lobby for a health care overhaul that made drastic cuts to Medicare, raised costs, and reduced choice for its members. Something about that just didn’t add up.

Now, as some of you may know, I used to be a cop. And when something doesn’t add up … well, my natural instinct is to dig a little deeper… to gather information and to research the facts in order to discover the truth. I wanted to know:

-Why would an organization that has historically advocated for our seniors aggressively support a proposal that is so harmful to them?

-Why would this organization support something that according to the Congressional Budget Office, would force nearly 3 million seniors out of their Medicare health plan coverage and deny 3 million more seniors the chance to enroll in such a plan in the first place?

My instinct was to dig deeper, and that’s what I did.  More than a year ago, I sent AARP numerous letters and gathered facts in an attempt to make sense of the obvious conflicts that arise when an organization promotes a proposal that would harm its membership.

Though AARP promises to represent seniors’ best interests –and I quote – “in ways that are affordable and beneficial to them,” they have continued to dodge simple, straightforward questions about supporting cuts to member benefits, raising costs, and reducing choice.

While they state that AARP “would gladly forgo every dime of revenue to fix the health care system,” the organization has continued to run ads touting Medigap plans that are now seniors’ only option as the new law Medicare Advantage by $200 billion. And while they stated that “AARP is not an insurance company,” royalty payments from for-profit companies comprised nearly 46 percent of AARP’s revenue in 2009, while membership dues totaled just 17 percent of total revenues.

I’ll say it again: something doesn’t add up.  I am eager for the opportunity to question these witnesses, because the facts I’ve uncovered point to  a direct conflict of interest between AARP’s advocacy for eliminating the Medicare Advantage program – existing supplemental health care in which millions of seniors participate – and the massive profits AARP receives from sponsoring Medigap plans.  Medigap plans that seniors will be forced to buy in the absence of Medicare Advantage.

So I hope today to get a very clear picture about the profit motives at work here, and how AARP stands to financially benefit from the health care overhaul law, because it seems quite apparent that the AARP is putting its bottom line ahead of the best interests of the seniors it claims to represent. Back when I was in law enforcement, I often sat in a room for hours with a suspect, asking questions to figure out the facts. If a question wasn’t answered, I would continue to ask until I was able to reach a conclusion that made sense. That’s what I hope to accomplish here today.

So I again thank Mr. Herger, and I await with great interest the testimony of these witnesses, just as I’m sure the seniors in my district and across America do.