AARP is being held up again today as a credible source committed to protecting seniors – this time in a new round of attacks on bipartisan policies that would extend the solvency of the Medicare program. This is the same AARP that hailed the law as benefitting seniors, despite a recent estimate by the Congressional Budget Office that the law cuts Medicare by more than $700 billion to fund a new entitlement program. The Obama Administration’s own actuaries warned the Democrats’ law could jeopardize seniors’ access to health care. However, according to a 2011 Congressional investigation of AAAP, it just so happens that the bulk of these cuts will likely result in AARP growing their revenues by more than $1 billion between 2011 and 2021 alone.
AARP’s Financial Interest in Medicare Cuts in the Democrats’ Health Care Law
- As a result of the Democrats’ health care law, the Obama Administration’s own actuaries estimate more than 7 million seniors will lose their current Medicare Advantage (MA) plans, resulting in a massive migration of seniors into Medigap plans. AARP and UnitedHealth Group’s (United) Medigap plan is the largest in the nation.
- AARP receives a fixed fee for its endorsement of MA plans, regardless of enrollment. Conversely, AARP receives a portion of every Medigap premium. Under its current contracts with United, AARP’s financial gain from the health care law could exceed $1 billion between 2011 and 2021 alone.
- Over and above the millions of dollars they currently receive from United, in 2014, new Medigap enrollees stemming from the law’s cuts to MA could result in AARP gaining between $55 million and $166 million.
So, to AARP, reducing Medicare spending is only acceptable when AARP benefits financially, regardless of how it impacts America’s seniors.