Politics is filled with hot-button issues. Polarizing topics are routinely brought up on twitter, in congressional meetings, and during rose garden speeches. Abortion, guns, and policing are all on the table and docket. This is in large part due to activists who make a living on keeping issues in the spotlight to enact change. It has become a highly lucrative field. Recent news reports of BLM activists making millions of dollars through fraud, and buying McMansions, highlight the importance of viewing activism as a business that needs to be monitored.
Despite the lack of news coverage, the group that politicians fear the most–and who are most adept at turning a profit–is the American Association of Retired Person. It battles for social security and expansions of Medicaid. Largely because of their work social security became known as the ‘third rail of politics’–deadly to anyone who touches it. Social Security and Medicaid are both in desperate need of reform as both are set to go bankrupt in the next 50 years and send the government down along with it.
The AARP gets rich from preventing the issues from being even discussed. The Daily Caller News Foundation reported AARP “reported $1.6 billion in revenue, with roughly $1 billion, or over 60%, from royalty revenue.” Royalty revenue is money coming to the group from “royalties on branded health insurance policies, not memberships, according to company financial documents.” Membership has its privileges, but licensing your name has its profit.
AARP is a reliably liberal organization, they’re also extremely good at what they do. If you or someone you know is approaching age 50, they will find AARP material in their mailbox. They know who you are and are waiting for your, with discounts on everything from restaurants to hotels and travel.
With so many seniors in this country, the pool from which they can pull is large and deep. That means a steady revenue stream. With so many members, in the tens of millions, that creates a brand people trust. That brings about trust and brand recognition. That’s what AARP sells in these health insurance policies.
AARP is not a healthcare provider, nor is it an insurance company. They’re a brand. As far back as 1996, when the New York Times ran an editorial with the title, “Can You Trust the AARP?” they’ve been offering up that brand to the highest bidder. As with what the Daily Caller found, the Times reported, “The credibility of the American Association of Retired Persons will be at stake if the organization proceeds with efforts to license its name to managed care plans for a fee.”
With every major piece of healthcare legislation, AARP has been a player. In 96, the issue was the hangover from Hillarycare. The Times warned, “The taint of financial self-interest is more than hypothetical. Some critics charge that the organization’s tongue-tied role in the raging health reform debate two years ago and refusal to provide its members with information about Medigap policies cheaper than its own followed from its vested interest in private insurance companies. As long as A.A.R.P.’s bank account is linked to its policies, charges of financial self-dealing will never go away.”
They are still linked, and the charges have not gone away.
In the 1990s, Republican Alan Simpson held hearings into their actions that resulted in over one hundred million being paid back in taxes. They consistently use their influence not only to win on issues, but to make an inordinately large profit. He questioned their non-profit status and discovered how they had been exploiting the market to create unfair competition.
Every few years something happens to remind us that AARP is lurking in a gray area of ethics. In 2019, Forbes reported, “AARP is a leading purveyor of so-called “Medigap” supplement health insurance programs to its membership of 38 million older Americans. A Medigap policy is insurance offered by a private insurer to help pay for certain “gaps” in Medicare coverage. AARP offers group Medigap policies that are underwritten by UnitedHealth Group and UnitedHealthcare Insurance Company. The insurer compensates AARP for marketing, selling, and administering the insurance to AARP members. Clearly, the loss of rebates would affect policy profitability.”
It’s enough to make you wonder what the priority of AARP actually is, its membership or its ever-growing profits? As a “charity,” the answer matters.
As the House Ways and Means Committee reported after a 2011 investigation, “In particular, one might question whether AARP is primarily operating to promote the common good and general welfare given the fact the AARP has become increasingly dependent on hundreds of millions of dollars in royalty revenue from insurance companies.”
The AARP can either be a cash cow and player in Washington politics or an organization that helps senior citizens save money, but it can’t be both. It seems it’s more the former and just incidentally the latter.
Jack Rowing is a politics major at the Catholic University of America and an assistant editor at RealClearHealth.