AARP has shifted from relying on dues from members and towards revenue from its tight relationship with UnitedHealth Group, the nation’s largest health insurer, according to a report from American Commitment.
The American Commitment report, titled “How AARP’s Profits Harm Patients — And Violate Its Principles,” found that AARP has increased its revenue through its tight relationship with UnitedHealth by embedding “royalty fees” within the premiums of those who purchase Medicare supplemental policies, or “Medigap” insurance. UnitedHealth licenses these Medigap and Medicare Advantage plans, which have grown every year for “more than two decades straight.”
Since 2007, the American Association of Retired Persons (AARP), a nonprofit, has received roughly $9 billion in tax-free revenue from UnitedHealth.
American Commitment’s research, which was conducted by the Juniper Research Group, found that AARP’s revenue has increasingly come from its business interest over dues from members. This includes:
AARP has received an estimated $9 billion in tax-free revenue from UnitedHealth since 2007.
AARP revenue in 2022 derived from UnitedHealth alone is estimated to be around $862 million.
AARP was paid more than $1.1 billion in total corporate royalties in 2022 – three times more than AARP’s members pay in membership dues – and account for nearly 60 percent of all annual revenues.
AARP member dues revenue fell by over $5 million in 2022, yet royalty revenues grew over $47 million.”
Although American seniors seem to have a favorable view of AARP, many have misgivings about the nonprofit’s conduct.
American Commitment sampled a subset of AARP members and found that 75 percent of those surveyed believe the AARP “royalty fee” “creates a conflict of interest” that could impact AARP’s ability to represent seniors’ interest. More than 62 percent of the association’s seniors think that AARP’s 4.95 percent surcharge amounts to an unnecessary “junk fee.” Over 87 percent of AARP members believe that the group should have opposed diverting Medicare revenues to fund “unrelated spending and tax breaks.”
While AARP has pushed Democrat policies to this claimed conflict of interest, AARP CEO Jo Ann Jenkins received nearly $1.6 million in salary, benefits, and other compensation. This is not limited to its CEO; of the 14 other AARP officers on the non-profit 2022 Form 990, all received more than $500,000 in compensation.
A near majority, or 48 percent, said that learning about AARP’s position on the Inflation Reduction Act and its relationship with UnitedHealth makes them “less likely to trust AARP [is] acting in the best interest of older Americans.”
The report finds that this tight business relationship between AARP and UnitedHealth creates a perverse incentive when the nonprofit for retired Americans advocates for policies on Capitol Hill.
AARP also actively supported the $700 billion Inflation Reduction Act’s healthcare reforms, which took $250 billion Medicare “savings” and shifted to unrelated spending, which the report noted is a common Democrat spending tactic. The report also found that polls show roughly 90 percent of American seniors oppose this move.
The AARP also endorsed the Inflation Reduction Act’s policy to “negotiate” the price of prescription drugs, which American Commitment says will reduce innovation and prevent new drug discoveries. For example, biotech company Seagen canceled research into another application of its successful bladder cancer therapy, citing that there would be “no economic return from doing it.”
American Commitment contended that the billions of dollars AARP receives from UnitedHealth — which includes royalty fees within the premiums of those who purchase Medicare supplemental policies, or Medigap insurance, and licensing Medigap and Medicare Advantage coverage — compromises AARP’s policy stances.
The American Commitment report found:
AARP’s financial conflicts have prompted the organization to abandon its principles on numerous occasions, pursuing financial gain for itself and its partners over the organization’s stated mission and policy objectives—and its members. As an analyst at the Committee for a Responsible Federal Budget noted, “It’s hard to know whether they’re advocating for their business interests or for the seniors that they are supposed to represent.” [Emphasis added]
The report stated, “The fact that many of AARP’s own members are troubled by the organization’s conduct should give Congress justification to follow up on its own prior investigations by further exploring the unsavory alliance between AARP and UnitedHealth.”
“This report is a devastating indictment of AARP’s public policy engagements and financial priorities, exposing the way AARP actually functions in stark contrast to its ongoing attempts to portray itself as an advocacy group for older Americans,” said Phil Kerpen, president of American Commitment, said in a statement.
“Where legislation like the IRA is beneficial for big insurers like UnitedHealth, AARP is often aggressively and visibly active. But on PBM reform or addressing premium increases and high out-of-pocket expenses, billions in Medicare overcharges or patient care denials, AARP is largely silent.”
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter @SeanMoran3.
