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AARP's dual role draws fire from GOP

The nation's preeminent seniors group, AARP, has put the weight of its 40 million members behind health care reform, saying many of the proposals will lower costs and increase the quality of care for older Americans.

But not advertised in this lobbying campaign have been the group's substantial earnings from insurance royalties and the potential benefits that could come its way from many of the reform proposals.

The group and its subsidiaries collected more than $650 million in royalties and other fees last year from the sale of insurance policies, credit cards and other products that carry the AARP name, accounting for the majority of its $1.14 billion in revenue, according to federal tax records. It does not directly sell insurance policies, but lends its name to plans in exchange for a tax-exempt cut of the premiums.

The group's dual role as an insurance reformer and a broker has come under increasing scrutiny in recent weeks from congressional Republicans, who accuse it of having a conflict of interest in taking sides in the fierce debate over health insurance. Three House Republicans sent a letter to AARP on Monday complaining that the group was putting its "political self-interests" ahead of seniors.

GOP lawmakers point to AARP's thriving business in marketing branded Medigap policies, which provide supplemental coverage for standard Medicare plans available to the elderly. Democratic proposals to slash reimbursements for another program, called Medicare Advantage, are widely expected to drive up demand for such Medigap policies, according to health care experts, legislative aides and documents.

"We are witnessing a disturbing trend of handouts to special interests like AARP," said House GOP spokesman Matt Lloyd, referring to Democratic negotiations over health reform. "In return, AARP is lobbying for a government-run health care bill that will pad their own executives' pockets at the expense of its own members and other vulnerable seniors."

AARP officials dispute such allegations, arguing that the group's reliance on brand royalties allows it to offer members a wide range of benefits. The AARP says although it offers a Medicare Advantage plan, it has advocated curbing waste in that federal program.

"We're a consumer advocacy organization; we're not an insurance firm," said David Certner, AARP's director of legislative policy. "That drives everything we do. It's got to be good for our members, or we don't endorse it."

Added AARP spokesman Jim Dau: "We spend far more time at odds with private insurers than not."

AARP's dual role draws fire from GOP 10/26/09 [Last modified: Monday, October 26, 2009 10:58pm]
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