Behind the Curtain: Why AARP Supports ObamaCare

by Larry O'Connor

When the AARP began its full-throated support for the President’s Health Care Scheme many wondered why this venerable organization would support a plan which would  cut hundreds of billions of dollars from Medicare, mostly by putting strict price controls on the very popular Medicare Advantage program.

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By putting enormous price controls (cuts) in the Medicare Advantage program, many seniors will be forced to look to the other Medicare supplemental offer, MediGap.   It just so happens that AARP sells MediGap coverage to its members.  The income generated from those sales accounts for 60.3% of AARP’s revenues, ten years ago, this income only accounted for 10% of their budget.

So, in short, the Obama Health Care Scheme puts hundreds of millions of dollars in AARP’s coffers by forcing seniors off of Medicare Advantage and into MediGap programs.  You would think that this was enough of a payback to the AARP for their support.  But Big Government now reveals another little prize that has been awarded to AARP in time for their recent official endorsement of the Senate Bill.

The AARP Foundation will have received over $100, 000, 000 dollars in Federal grants by the end of this fiscal year.  Last fiscal year they received less than $80,000,000.  That is a hell of an increase in this economy.  But would AARP sell out their membership for a mere $20,000,000 increase in Federal Grants?  It’s not quite as simple as that.  The bigger question is:  “Why does AARP continue to back a Health Care Scheme which seems to work directly against the interests of their members?”

The answer is:  At this point, the AARP doesn’t NEED to care about their members.  Frankly, they don’t NEED their members at all.

Let’s look at the numbers:

  • The AARP annual membership fee is $16.00.
  • In 2007 AARP earned about $500 million in MediGap royalties
  • In 2008 it earned $652 million in MediGap royalties
  • The 2009 numbers have not yet been released, but given the trends, it’s looking pretty good for AARP.
  • Add to that the $100 million in federal grants (that’s your money they are getting for free)

When you look at those numbers and you realize that those MediGap royalties will go through the roof when MediCare Advantage is clamped down by the new system and you can see that all of that income just can’t compare with AARP’s membership’s measly sixteen bucks per geezer.

With this in mind, so much about the AARP’s recent activities makes sense.  This is why they jumped so hard on board with Obama’s scheme.  This is why they worked so hard against President Bush’s Social Security reforms (there’s no money in a Republican plan that REDUCES the role of government).

This is why they ask “How High?” whenever the administration tells them to jump.  Look at their uncharacteristic and peculiar support for the Entertainment Industry Foundation’s participation in President Obama’s “Call to service” on network television programming this Fall as exposed on the pages of Big Hollywood.  AARP went so far as to set up its own search engine chock full of volunteer opportunities including phone banks at Planned Parenthood (just what grandma wants their $16.00 to pay for, right?)

It seems that with MediGap income rapidly reaching a billion dollars and with hundreds of millions of dollars in grants, the real constituency for AARP is not the vulnerable seniors they claim to service, but the Big Government fat cats who push cash their way and force through regulations that put their competitors out of business.  Kind of makes that 20% discount at Hometown Buffet really worth while, doesn’t it?


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Posted Dec 18th 2009 at 9:29 am in Healthcare, Politics, Uncategorized | 67 Comments