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Could Trump Executive Order Eliminate AARP’s Sweetheart Deal?

This article was originally published in Issues & Insights.

By: Nathan Williamson

hile President Donald Trump admits his announced executive order on pre-existing conditions amounts to “signaling,” behind the scenes, some conservatives are urging the administration to explore the possibility of going one step further by eliminating a crony Obama-era giveaway to AARP.

For context, look to the unholy alliance between AARP and the insurance giant UnitedHealthGroup. Its mission has apparently been to rake in profits on the backs of the American seniors it claims to “serve.” In fact, AARP has been hit with lawsuits for allegedly receiving an “illegal kickback” in its sales of Medigap plans for America’s seniors – plans exclusively provided by UnitedHealth, but sold with “AARP” branding.

A new report by Juniper Research’s Chris Jacobs examines the extent to which AARP has pulled this scam on seniors and the group’s backroom dealings around ObamaCare:

The sordid history of AARP’s dealings in Washington — the backroom deals its lucrative Medigap coverage received in ObamaCare, the way in which AARP ‘forgot’ to lobby for pre-existing condition changes in Medigap as part of ObamaCare, and the secretive way in which AARP lobbied to kill Medigap reform without informing lawmakers of its financial conflicts — demonstrate how its revenue sources have compromised the integrity of its policy positions.”

The Medigap coverage that AARP sells to seniors (while denying coverage to those with pre-existing conditions) has been a cash cow for the organization. Its marketing revenue has shot up annually since 2001. And in 2018, this revenue amounted to more than twice what it made from flatlining membership dues.

And what is it doing with all of this money? It’s spent millions annually on leftist lobbying campaigns while failing to properly disclose financial ties, says Jacobs:

In 2012, Bill Novelli, AARP’s CEO from 2001 through 2009, said that ‘it’s fair to say that AARP does have a financial interest in Medigap insurance because it’s a significant revenue raiser for them. If Medigap were somehow reduced, then AARP would have a financial reduction.’

That financial conflict played out in 2011, when AARP secretly lobbied against changes to Medigap insurance — without disclosing its financial conflicts to Congress.

Clearly, these carveouts protect its crony regime at the expense of its dwindling member base. So if seniors are canceling AARP over its actions, why should it continue to receive a special carveout from ObamaCare?

To quote from Jacobs’ report:

While AARP claims that ObamaCare ended ‘discrimination’ against individuals with pre-existing conditions, the organization somehow forgot to ensure that the law’s package of insurance changes — including a ban on denying coverage to individuals with pre-existing conditions — applied to its lucrative Medigap policies. As a result, some seniors and AARP members with pre-existing conditions often cannot obtain access to AARP-branded Medigap policies, because the organization has put protecting its prime source of revenue over the principles to which it purportedly adheres.

Trump has proposed an executive order mandating coverage of pre-existing conditions. Is it possible it could be used to put AARP’s sweetheart deal in peril? AARP and its puppet master UnitedHealth should play by the same rules as everyone else.

Nathan Williamson is a conservative activist and writer. His op-eds have been featured in publications including the Washington Examiner and RealClearMarkets.