AARP is being held up again today as a credible source committed to protecting seniors – this time in a new round of attacks on bipartisan policies that would extend the solvency of the Medicare program. This is the same AARP that hailed the law as benefitting seniors, despite a recent estimate by the Congressional Budget Office that the law cuts Medicare by more than $700 billion to fund a new entitlement program. The Obama Administration’s own actuaries warned the Democrats’ law could jeopardize seniors’ access to health care. However, according to a 2011 Congressional investigation of AAAP, it just so happens that the bulk of these cuts will likely result in AARP growing their revenues by more than $1 billion between 2011 and 2021 alone.
AARP’s Financial Interest in Medicare Cuts in the Democrats’ Health Care Law
As a result of the Democrats’ health care law, the Obama Administration’s own actuaries estimate more than 7 million seniors will lose their current Medicare Advantage (MA) plans, resulting in a massive migration of seniors into Medigap plans. AARP and UnitedHealth Group's (United) Medigap plan is the largest in the nation.
AARP receives a fixed fee for its endorsement of MA plans, regardless of enrollment. Conversely, AARP receives a portion of every Medigap premium. Under its current contracts with United, AARP’s financial gain from the health care law could exceed $1 billion between 2011 and 2021 alone.
Over and above the millions of dollars they currently receive from United, in 2014, new Medigap enrollees stemming from the law’s cuts to MA could result in AARP gaining between $55 million and $166 million.
So, to AARP, reducing Medicare spending is only acceptable when AARP benefits financially, regardless of how it impacts America’s seniors.