And the Winner is..... AARP

I have of late, been finding in my mailbox copies of folks’ AARP resignation letters. Some of them are quite entertaining. They all bear the common theme (as would be expected) that those resigned to resign feel AARP has in effect become a bunch of toadies for the Democratic machine with little interest in representing their members.  With claims of special treatment, kickbacks, and massive financial incentives being accorded-to or proposed-for The AARP by sitting Democrats, some members have been feeling there just MIGHT be a conflict of interest in The AARP’s representation.

Since July , The AARP was claiming to have lost about 60,000 members specifically to health care reform issues, while gaining or retaining 1.9 million members in the same period.

It’s quite clear that the AARP members who are resigning are confused about the role AARP should be playing in their lives. They paid dues to a group that they expected to represent their best interests. Where they err, is that they think ‘representing their best interests’ has something to do with them.

The AARP clearly feels that the interests of seniors are far better represented when The AARP does better financially. And while it is true that many of the resigning members feel that The AARP should be opposing any Obamacare program that cuts Senior Advantage (a program that allows Medicare recipients to choose to have their coverage administered by a private firm, pay a little more, but receive better coverage with more choice), AARP feels differently. The AARP feels it is working to seniors’ benefit by supporting cuts to Senior Advantage.  In fact, the more and deeper the cuts, the better!

“Why?” You ask. Good question! The answer is simple. While The AARP supports legislation that will cut Senior Advantage, it is perfectly willing to sell its members insurance policies that will make up the difference in supplementing regular Medicare.

So you, as a senior and a member of The AARP, will get the best of both worlds!  You get health care reform AND The AARP is willing to sell you supplemental insurance to make up for what you lost!

In 2008, The AARP generated 562.7 million in revenues, (over 60% of its total revenues) by selling ‘gap’ insurance policies to cover what standard Medicare won’t. Bullets noted at GOP Policy News in a recent article on The AARP:

  • A review of its financial statements finds that in 2008, AARP received more than half a billion dollars in revenue from selling products like Medigap supplemental insurance policies-$652.7 million in direct “royalties and fees,” and an increase of more than 31 percent from the $497.6 million in similar revenue AARP generated in 2007.
  • Royalty revenues now comprise more than half-60.3 percent-of all AARP revenues; a Bloomberg news analysis published in December found that in 1999, royalties comprised only 11 percent of the organization’s total revenues.

Should any Obamacare plan that cuts Senior Advantage go into effect, watch for those number to dramatically increase.

In addition, bills currently being crafted are being crafted in such a way that, according to Philip Klein (reporter for the American Spectator) would create what amounts to a continuous flow of ‘kickbacks’ to AARP.

“If the House Democrats health care bill becomes law, the report argues, it would be a boon to AARP, because while Medicare Advantage plans will be required to pay out 85 percent of the money collected in premiums to claims made by policy holders, the requirement would only be 65 percent for the kind of Medigap policies sold by AARP.

“In other words, under the Democrat bill, seniors could pay as much as 20 cents more out of every premium dollar to fund ‘kickbacks’ to AARP-sponsored Medigap plans than Medicare Advantage plans.”

And, of course, most of us here are familiar with the gag order that Congress has placed on Humana (and any other Senior Advantage provider), prohibiting them from telling their customers that their health plans are in jeopardy. That in itself demands another whole screed decrying the 1st Amendment intrusion by Congress, that I will leave to others for the time being. What most folks are NOT aware of, is that the AARP has apparently been exempted from the gag order.

According to the Spectator:

“Earlier this month insurer Humana Inc. sent customers who enrolled in the company’s Medicare Advantage plan a letter warning them that their benefits would be in danger if the Democratic health care legislation passed. Senate Finance Committee Chairman Max Baucus complained to the Centers for Medicare and Medicaid Services, which not only ordered Humana to stop sending the letters to its customers, but prohibited any other private insurers from doing the same. Except, that is, AARP — which sponsors a Medicare Advantage program in addition to the Medigap policies it offers, but was exempt from the Obama administration’s gag order.

So the AARP is in the unique position of not only being able to offer coverages to its members, but to get them (they are ‘members’ after all) kickbacks from congress if Obamacare is adopted, AND to be able while all this is being decided to keep their members informed on what is best for them.

Why would anybody want to leave?