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Ways and Means Committee Members Seek Additional Information from AARP

April 21, 2011

Washington, DC – Today, Ways and Means Health Subcommittee Chairman Wally Herger (R-CA), Ways and Means Oversight Subcommittee Chairman Charles Boustany (R-LA) and Congressman Dave Reichert (R-WA) sent a letter to AARP CEO Barry Rand seeking further clarification and information pertaining to concerns raised in a Ways and Means Committee hearing. The hearing focused on findings uncovered in the recently released “Behind the Veil: The AARP America Doesn’t Know,” a report exposing the conflict between AARP’s drive for profits and the best interests of its members.  The report was turned over to the IRS earlier this month with a request by the three members asking the Internal Revenue Service (IRS) to examine whether or not AARP ought to be permitted to retain its tax-exempt status.
In the letter to Mr. Rand the three members wrote, “Based upon comments you or Lee Hammond, President of AARP, Inc., made at the hearing, there are a number of documents and answers that AARP agreed to provide the Subcommittees.  Likewise, there are unresolved matters or areas that require further clarification.  To that end, this letter is intended to follow up on those matters.”

The letter calls on AARP to answer questions, share information and provide documentation by May 5, 2011 that was promised by AARP during a Committee hearing held on April 1, 2011.  The members outlined fifteen requests in the six-page letter, which fall into three different categories.  Examples of the questions and information request from each of the three categories are included below:
Information AARP agreed to provide during the hearing
“[Please provide the Committee with] the amount of money AARP earned on the interest from holding insurance premiums for AARP-branded insurance products and the amount of taxes paid, if any, on the interest earned, in each of the last ten years.  Also provide the length of time the premium money is held by AARP, in accordance with the contracts, for each AARP-branded insurance product.”
Questions and clarifications related to inaccuracies or misstatements
“When asked, ‘What percentage of AARP’s Medigap premiums will AARP keep in each year from 2011 until the current contract expires in 2017?’ you responded that, ‘I can’t answer the future.  We have not talked about that.’  

“Given that AARP’s Medigap contract with UnitedHealth Group runs through 2017, the royalty payment (defined as percentage of Medigap premiums retained by AARP) that AARP receives in future years covered under the contract should be readily available.  Please provide us with information detailing the percentage of the Medigap premium that AARP will receive in 2011 through 2017.”
Questions that were unanswered or that AARP refused to address
“You were asked twice, by two different members, whether AARP would commit to forgoing any Exchange insurance product-related revenue, whether by royalty commission, or otherwise, beginning in 2014.  You failed to answer the question both times it was asked.  We would like you to answer this very simple question:  

“Will AARP commit to not endorsing or selling insurance in the government-run Exchanges? Will AARP decline any royalty, commission payments, licensing fees, or revenue from any insurance company that is related to an insurance product offered in the Exchange?”

To read the full letter click here.