AARP Medicare Plans Cost Taxpayers $458 Million a Year

Wednesday, 27 Mar 2013 07:44 AM

By Michael Carr

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In the debate about healthcare, AARP has battled against changes to Medicare. AARP brings a biased perspective to the debate — a bias that could cost taxpayers $4.5 billion over the next 10 years. This money will come from government healthcare spending and could instead be dedicated to improving care.

Bias is not a problem if conflicts of interest are disclosed. But AARP creates the impression that it is an honest broker in the debate. The group’s website clearly proclaims that “AARP is a nonprofit, nonpartisan organization, with a membership of more than 37 million.”

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Nonprofit does not mean operating on a shoestring budget, at least in this case. According to Bloomberg, “AARP, the largest advocacy group in the country for people ages 50 and older, earned about $458 million in 2011 from UnitedHealth in exchange for using its brand on Medicare plans.”

This $458 million is paid to a for-profit division of AARP, although the for-profit nature of AARP divisions is not mentioned on the group’s “About Us” page.

When looking at how to cut healthcare spending, this could be among the first expenses that are eliminated and no one would suffer a decline in the level of care. AARP is taking $458 million a year from Medicare to provide its mailing list to an insurance company.

About $2.6 trillion is spent on healthcare and AARP’s profit only represents 0.02 percent of total spending. But there is no reason to spend that money and this expense is likely just one example of many multimillion-dollar expenses that could be cut without impacting healthcare for anyone.

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