By Jon Decker and Phil Kerpen
The AARP recently hosted a forum that included Health and Human Services Secretary Alex Azar ostensibly to discuss proposals to lower health care costs. The irony was unmissable. AARP — which until the 1990s was an acronym but now, appropriately, stands for nothing — is crusading for a Nancy Pelosi bill that allegedly combats “unfair pricing,” while AARP itself faces serious legal allegations that it is ripping off seniors by raising the health care costs of its own members.
Sadly, the AARP has become little more than a marketing scam for its big corporate financial sponsors — UnitedHealth and its wholly-owned OptumRx pharmacy business. Doing so has become quite lucrative: Research shows that in 2017, AARP received $627 million from UnitedHealth.
The AARP sells supplemental Medicare plans — including plans with an “AARP-sponsored” branding. However, instead of helping seniors select the plan that is most tailored to their needs or financial resources, the AARP exclusively sells Medigap coverage from UnitedHealth, the nation’s largest health insurer.
Unbeknownst to many purchasing these plans, who are under the misimpression that the AARP is a seniors group, these plans are not always fairly priced — and the AARP receives a 4.95 percent fee for each plan sold.
Recall that when seniors were contacting the AARP 14-to-1 urging the group to oppose Obamacare they instead supported it and received a special carve-out to keep their UnitedHealth gravy train running. In fact, since the law’s passage and implementation, the AARP has received well over $4 billion in “royalties” from UnitedHealth.
The ongoing lawsuit Krukas v. AARP is perhaps the strongest and most direct threat to this cozy arrangement. The plaintiff, Helen Krukas, alleges:
“AARP received ‘a 4.95% commission from every policy sold or renewed,’ id., which ‘constitutes an illegal kickback,’ AARP collects an illegal commission, acts as an unlicensed insurance agent, and materially misrepresents information about the 4.95% charge, all of which constitute violations of the CPPA [Consumer Protection Procedures Act] and common law.”
This is hardly the only area where the AARP lines its own pockets while betraying seniors.
The AARP has emerged as one of the most vocal supporters of House Speaker Nancy Pelosi’s prescription drug plan. This radical bill, which threatens manufacturers with a shocking 95 percent gross-receipts tax if they don’t accept government-set prices, would be devastating for the discovery and development of new cures and therefore terrible for seniors.
Numerous health experts and even the Congressional Budget Office (CBO) have reported the bill would likely restrict the availability of life-saving drugs and stifle investments in new ones in disease areas such as Alzheimer’s, cancer, diabetes and more. According to the leading small biotechnology companies performing cutting edge research, Mrs. Pelosi’s bill would cause a “nuclear winter” by obliterating critical R&D funding.
If the federal government imposes price controls and access restrictions to drugs as Mrs. Pelosi and the AARP now advocate, in the near-term higher profits will flow through to the insurance companies. This is why UnitedHealth has its marketing arm AARP out banging the drum for the extreme Pelosi plan.
Given what its actual core business model is, the AARP should be the last group to tell others how to lower health care costs. The AARP has strayed from its mission to support older Americans. Seniors deserve better than the AARP.
• Phil Kerpen is president of American Commitment. Jon Decker is membership director at American Commitment.
Photo Credit: bisongirl
By Jon Decker and Phil Kerpen