In a recent exposé, the Daily Caller News Foundation details how “AARP Rakes in Record Profits Selling Brand Royalties While Overcharging Members.” While the organization bills itself as a scrappy senior advocacy group, its recent financial disclosures—as well as its own admission in court—cast serious doubt on whether it acts “with the interest of its members in mind.” The Daily Caller took a deep dive into AARP’s money tree and the resulting conflict of interest.
Despite the economic devastation COVID-19 wrought on Americans last year, AARP raked in $1.6 billion in revenue, only modestly less than the $1.72 billion it generated in 2019. What may surprise you to know is that this revenue doesn’t primarily come from its membership fees, which account for only about 20 percent of the organization’s revenue. Instead, almost 40 percent is derived largely from corporate royalty fees, mostly by selling ‘senior-approved’ supplemental health insurance plans at an upcharge.
UnitedHealth, the nation’s largest health insurance provider, partners with AARP to exclusively sell seniors these insurance policies. Lawsuits have alleged this arrangement constitutes an “illegal kickback.” This is how AARP is able to charge so little in membership fees yet still maintains astronomical revenue numbers. (It’s not just health insurance, AARP has commoditized its senior members and sells its “trusted brand and access” to companies looking to target senior citizens.)
Juniper Research Group Founder Chris Jacobs explains how this scheme works:
“AARP functions less as a membership organization than as a marketing conglomerate with a liberal advocacy group on the side,” Jacobs told the Daily Caller News Foundation. “It charges so little for membership because it makes most of its money selling products to its members and taking a percentage of the cut — starting with insurance products sold by UnitedHealth…
For every additional dollar seniors pay in premiums, AARP adds more to its bottom line. This commission-type arrangement gives AARP every incentive to sell its members products they don’t want or need, just to make more money itself—the opposite of the way a supposedly consumer-based organization should be acting.”
The AARP/UnitedHealth “partnership” is nothing new, and regulators have already tried to expose the damage they do to unsuspecting seniors. The House Ways and Means Committee investigated AARP in 2011 and specifically called out their royalty structure in a report submitted to the IRS. The company has also recently faced class-action lawsuits about its insurance practices.
Click here for more information on how AARP puts profits over patients with their suspicious business practices and dodgy partnerships.