Green Room

We’ve Been Robbed $2.8 Billion – By The AARP

posted at 7:33 am on September 24, 2012 by

Grey Dawn!

As polling shows, seniors and white Americans over the age of 65 generally don’t support PresidentObama or his health care reform bill.  They are appalled at the $716 billion in Medicare cuts, which will be used to expand coverage (and dependency) for lower income Americans – so why does the AARP support it?

Avik Roy, an advisor to the Romney campaign, penned a column in Forbes over the weekend detailing how AARP will gain almost $3 billion from Obamacare “according to an explosive new report from Sen. Jim DeMint (R., S.C.), [stating the] same Medicare cuts will give the AARP a windfall of $1 billion in insurance profits, and preserve another $1.8 billion that AARP already generates from its business interests.”

Roy explains that AARP “in 2011…generated $458 million in royalty fees from so-called “Medigap” plans, nearly twice the $266 million the lobby receives in membership dues.  Medigap plans are private insurance plans that seniors buy to cover the things that traditional, government-run Medicare doesn’t, like catastrophic coverage. Medigap plans also help seniors eliminate the co-pays and deductibles that are designed to restrain wasteful Medicare spending.”

However,  AARP blocked reforms for their insurance plans during the health care fiasco –which would have saved $415 per senior in premiums.  However, the organization fought incessantly to keep those reforms out of Obamacare because they receive a 4.95% royalty on every dollar a senior spends on Medigap.  The cost of reform would have been $1.8 billion over ten years.

Courtesy of Forbes

In another case of the dependency agenda at work, “not only did AARP succeed in getting Democrats to balk at Medigap reform. Obamacare’s cuts to Medicare Advantage will drive many seniors out of that program, and into traditional government-run Medicare, which will increase the number of people who need Medigap insurance.” Furthermore:

 …AARP Medigap plans are exempted from most of Obamacare’s best-known insurance mandates. AARP Medigap plans are exempted from the ban that requires insurers to take all comers, regardless of pre-existing conditions. The plans are exempted from the $500,000 cap on insurance industry executive compensation; top AARP executives currently make more than $1 million. AARP plans are exempt from the premium tax levied on other private insurers. IPAB, Medicare’s rationing board, is explicitly barred from altering Medicare’s cost-sharing provisions, provisions that govern the existence of Medigap plans.

And AARP Medigap plans are allowed to have twice the administrative costs that other private insurers are allowed under Obamacare’s medical loss ratio regulations. This last point is key, because AARP’s 4.95 percent royalty is a significant administrative cost.

Democrats routinely excoriate private insurers for supposedly putting profits above people. “No American should ever spend their golden years at the mercy of insurance companies,” President Obama told the AARP yesterday. But the typical private insurer gets by on a profit margin of about 5 to 6 percent. AARP’s 4.95 percent royalty, on the other hand, doesn’t do anything to make a health plan operate more smoothly: it’s just pure profit for AARP.

Additionally, AARP – which is suppose to be an independent and non-partisan organization, was actively supporting Obamacare from the beginning.  Roy uses Kim Strassel of The Wall Street Journal and her 71 pages of emails  she uncovered to show that AARP worked on issues relating to seniors before it was “relevant” in the debate.  Strassel said the AARP had “long lambasted cuts in fees to Medicare doctors,” but, like the wind, reversed their position.  This is obviously a compromising position for the lobby – which is why a senior AARP official said they’ll “try to keep a little space between us [referring to the White House]…[our] polling shows we [AARP] are more influential when we are seen as independent, so we want to reinforce that positioning…The larger issue is how best to serve the cause’ of Obamacare.”

Yes, AARP had their little convention in New Orleans last week – whose audience booed Republican Vice Presidential candidate Paul Ryan when he dared to utter the words “repeal” and “Obamacare.”  Roy aptly says this a “small wonder” since the AARP’s phone log reportedly had “seniors registered 50 to 1 against the law.” In all:

Obamacare…saved the AARP from $1.8 billion in Medigap reforms, while potentially earning the group an additional $1 billion in royalties from seniors who are forced out of Medicare Advantage. That’s a swing of $2.8 billion over ten years, all thanks to Obamacare.

[...]

It’s a testament to AARP’s political power—and our broken health-care system—that the lobby is allowed to carry on a half-billion-a-year business that’s based on increasing the premiums that seniors pay, and draining money from the taxpayers who get billed for wasteful Medicare spending. Sen. DeMint has done a public service by bringing these problems out into the open.

So, we’ve been robbed.  It’s wrong. It’s unjust. Although, that’s usually the case for any organization that has a conflict of interest operating in the public sphere.

Courtesy of Forbes

 

 

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Comments

This is so friggin’ outrageous that it almost defies belief. AARP is nothing but a legalized fraud operation — deceiving senior citizens that it is working to advance their interests, while it actively works against their interests, and profits hugely in the bargain.

AARP must be exposed.

AZCoyote on September 24, 2012 at 8:46 AM

Seniors falling for a financial scam? NO. FRIGGIN. WAY.

Laura in Maryland on September 24, 2012 at 8:53 AM

LOL..serves you a$$holes right for believing in the AARP. I’ve gotten mail from them since I was 45 and threw each one away. Why would any THINKING person EVER pay someone to represent their freedoms like “AARP?”

Fools !

DevilsPrinciple on September 24, 2012 at 11:30 AM

“For those of you who live in Rio Linda,” this is yet another way the D’s launder taxpayers’ cash by passing it through a 3rd-party on its way to their own campaign coffers…

It’s almost the same deal they work with the various Big Labor unions (NEA, UAW, SEIU and on & on…), except in this case, there’s no “Closed Shop” mandatory membership requirements driving the union dues being deducted from paychecks before the workers even see their own hard-earned money.

Nope. In this case, AARP holds members hostage to their own age and declining health, a condition they cannot escape by simply moving to a different (read:”Right-to-Work”) state… which, IMAO, makes the AARP even more calculatingly cynical than the unions.

Who’da thunk?

“Ask not what your TEA Party can do for you…” ~ DeepWheat

DeepWheat on September 24, 2012 at 11:45 AM

Hubby and I cancelled our aarp membership many years ago when we became aware of where our dues was going with their political views. Their political views are NOT ours! It is sad that so many people don’t know or care where their dues are going if it isn’t theirs!
L

letget on September 24, 2012 at 12:19 PM

I luckily had an older sibling who warned me about AARP so I’ve been tossing their mailings in the trash unopened for as long as I can remember. They should change their name: AARiP-off.

stukinIL4now on September 24, 2012 at 1:08 PM

I will NEVER join AARP.

J.E. Dyer on September 24, 2012 at 1:57 PM

They’ve unionized old age.

What did you expect would happen?

FlatFoot on September 24, 2012 at 1:57 PM

J.E. Dyer on September 24, 2012 at 1:57 PM

I don’t know if you are getting ready to start getting krap from aarp, but there are several others that does the same and are conservative. Sorry, I can’t think of the names at this point.

When we get mail from aarp, with an envelope that is pre-paid, we fill it with other junk mail(without our names on it) and send it back to them on their dime!
L

letget on September 24, 2012 at 2:35 PM

AARP will gain almost $3 billion from Obamacare

No wonder they old fogies were booing Paul Ryan.

Fleuries on September 24, 2012 at 4:12 PM

They should change their name: AARiP-off.

stukinIL4now on September 24, 2012 at 1:08 PM

Did you know that AARP legally dropped the words “American Association of Retired Persons” from their corporate name? It’s true. AARP is now the full name, and it stands for nothing.

AARP is technically a non-profit. However, what most people are not aware of is that AARP has a wholly-owned subsidiary called AARP Services, Inc., that is a for-profit, money-making machine. It makes billions of dollars a year selling the AARP endorsement to insurance companies, which then sell various AARP-endorsed insurance products to seniors, and AARP Services gets a nearly 5% royalty on each product sold.

AARP executives make million-dollar-plus salaries, and get lavish benefits packages, because of this scam on seniors.

Taxpayers need to contact their representatives in Congress and the Senate and demand that AARP’s non-profit status be revoked, and/or that its relationship with for-profit AARP Services, Inc., be fully and prominently disclosed in all advertisements for insurance products, and in every publication or solicitation that AARP sends to seniors.

Senior citizens are being ripped off billions of dollars every year by this corrupt organization, and it’s time they were made aware of that fact.

AZCoyote on September 24, 2012 at 4:13 PM

Senior citizens are being ripped off billions of dollars every year by this corrupt organization, and it’s time they were made aware of that fact.

AZCoyote on September 24, 2012 at 4:13 PM

Nice write up.

astonerii on September 24, 2012 at 5:23 PM

AZCoyote on September 24, 2012 at 4:13 PM

Dittos.

landlines on September 27, 2012 at 5:36 PM