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GOP Report Charges AARP Getting "Kickbacks" In Dem Health Care Bills

By Philip Klein on 9.22.09 @ 4:15PM

One of the subplots to the health care debate I've been following is the cozy relationship between AARP and the Obama administration, as the group has thrown its full-throated support behind the Democrats' health care push even though their membership comes from the age group most opposed to Democratic health care proposals. Today, House Republicans have issued a report providing evidence that AARP is in a position to recieve tens of millions of dollars in "kickbacks" if Democratic health care legislation becomes law.

President Obama and Democrats have proposed saving money to pay for health care legislation, in part, by cutting $162 billion in payments to Medicare Advantage, which allows Medicare recipients to choose privately-administered coverage. If these changes go through, millions of seniors who have chosen Medicare Advantage would lose their current coverage, forcing them into government-administered plans with less generous benefits. As a result, many of them would have to purchase policies to supplement traditional Medicare. Enter AARP.

In 2008, AARP generated $652.7 million in revenue by selling products like Medigap supplemental Medicare insurance, accounting for over 60 percent of the group's revenue, according to an analysis of its financial statements cited in the report released by the House Republican Conference.

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," the GOP report charges.

But this isn't the only way that AARP is getting special favors, according to the report.

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.

I have a call into AARP, and will update the post once I get a response.

UPDATE: AARP emailed this statement from its executive vice president, Nancy LeaMond, as a response, though it doesn't address any of the specific charges raised in the report:

"Any effort to derail AARP’s commitment to reform will not succeed. Similar to “death panels” and other scare tactics, this latest effort is a misguided attempt to talk about anything other than the health care reform this country needs. AARP will continue to work on reform for our members that prohibits insurers from discriminating based on health status or pre-existing conditions, strengthens Medicare by improving quality of care, cutting out fraud and abuse, and closing the so-called ‘doughnut hole’ for prescription drugs.

"AARP was started more than 50 years ago to fight for older Americans and their need for health care – our fight continues today. Over those 50 years our public policies have always dictated every decision we have made.

"The only benefit AARP is looking for in health reform is relief for the millions of Americans who are crushed by soaring prescription drug prices, relief for the millions of Americans who are told they can’t get coverage because they’re too old or too sick, and relief for the millions of Americans who need Medicare strengthened. Period."

View all comments (51) | Leave a comment

Navas de Tolosa| 9.22.09 @ 4:36PM

I'm eligible but, guess what, I ain't going for Obamacide or AARP.

Kate| 9.22.09 @ 7:15PM

Can someone please tell me how the gov't can tell an insurance company it can't send letters to its customers! Why isn't this address in this post?

Richard Schweitzer| 9.22.09 @ 11:43PM

The CMS cited that they could be "misleading" their members, which the law forbids.

As it turns out (if you listened to the hearings on 9/22)
the letters were accurate & informative.

They state that MC Advantage Benefits (so called "extra" benefits for which members pay premiums) will be reduced by the then proposals.

Chuck Chatham| 9.30.09 @ 10:33AM

Why is this not the number one story on all the media outlets today? This is a blatant violation of the first amendment which is the cornerstone of the media's very existence!

Mark| 9.30.09 @ 1:12PM

Simple. The Constitution - including the bill of rights - has been suspended by His Majesty King Obama. If you don't understand that, you are in the same boat as some 7 million German Jews in 1935.

SkipMacLure| 9.22.09 @ 11:28PM

Phil...good work...I've been wondering about this lashup for some time...Looks like they're finally starting to lose their grasp on our seniors...a lot of whom are staring to come out of their self imposed and AARP induced stuper....Now..following the money. I'm wondering where the connection is to ACORN or one of it's multitudinous tentacles is?...On another posting I came up with 290+ either closely or loosely associated groups.....How many in our halls of government are in pocket(read $$) with them? Scratch Maobama and you'll find ACORN and SEIU both tied to all those others...very cozy what?
The liar in chief has mucho to answer to....
Furthermore The Humana issue is a non-starter. The government can no more make a gag order stick than Obama can tell the truth. It's patently unconstitutional. Let's hope the insurance industry has the courage to call them on it.
Let's investigate Baucus..THAT should be juicy.

Semper Vigilans, Semper Fidelis

Claire Solt| 9.23.09 @ 12:47AM

I got that Humana letter and it was innocuous. Baucus is out of it. This is just collusion behind closed doors. Seniors picked up on their discrimination immediately. I perked up when Tom Daschle said EMR would be used to limit care for seniors. Too late for a gag order.

Maria D. Dicino| 9.23.09 @ 12:51AM

I worked closely with CMS and I do not think this falls under the definition of the "marketing material" that needs their approval.

DeeDee| 9.23.09 @ 1:37AM

I also wonder about a connection between United Healthcare and Obama. AARP sells their Medicare supplement. Humana has had the Southeast DOD contract for Tricare Prime for several years (similar to Med. Advantage) and now that is in danger of being canceled for retired military. The new contract has been awarded to United Healthcare. Humana is contesting the award causing a delay for at least a few months . Regular Tricare has a lower percentage of payment than Medicare so someone stands to make a bundle selling a supplement for that as well.

Lois| 11.19.09 @ 9:47AM

Is there a connection between Secure Horizons, AARP and United Health Care? Secure Horizons is offering an Advantage plan withUnited Health care and I wondered if AARP was involved??

Timothy L. Pennell| 9.23.09 @ 8:58AM

Great article. Well written. Well thought out. Now what? Does anyone, ANYONE, think that this little PUKE - ERIC HOLDER - is gonna DO ANYTHING? Wake up. This investigation is DEAD. "Yeah, but, we've got evidence." Really? You got MORE evidence than the prosecutors who took the BLACK PANTHERS to trial? Cause they had AUDIO and VIDEO, and WITNESES out the wahoo. They even got a CONVICTION! But, apparently, that's not enough. Not in BARAKS' AMERIKA. Even though they were CONVICTED, they were never punished. The BLACK President, gave the order to his BLACK Attorney General, to let his BLACK buddies go free. And they don't even have any money. What makes you think that the little DESPOT in the White House is gonna have his little PUNK A.G. go after one of his supporters who actually HAS SOME CASH? This is CUBA, now. This is VENEZUALA. You're either WITH El Presidente, or you're AGAINST HIM! This guy is playing with fire. I will be STUNNED, if he finishes out his term. STUNNED.

danz1| 9.23.09 @ 9:52AM

Not one person is denied coverage because they are "too old"-its called medicare. At 65, no matter what, you are covered.
Another AARP lie!!

j4140| 9.23.09 @ 9:55AM

Now the AARP is running PR ads saying how they are just trying to "help" seniors while mentioning all the great things they have done in the past. They are trying to look a-political, like they really haven't endorsed a plan or are involved in it at all, because of the backlash they've experienced. Hope seniors won't fall for their BS.

Tim| 9.23.09 @ 10:42AM

AARPCORN

andromeda| 9.23.09 @ 10:51AM

Ask yourselves this, will we ever be able to get rid of this President? He and his people will change the laws to make it impossible to have an honest election. I am really concerned regarding our future, we are turning into a dictatorship governing body..

GBallSMS| 9.23.09 @ 10:52AM

I work in the senior insurance market and I can tell you that the majority of seniors are NOT falling for AARPs games. Literally every day I get calls from people dropping their coverage with AARP, sometimes to pay more per month, just to get away from them. Whatever numbers they have published regarding people leaving their Medicare insurance plans, I would guess you should double it to get an accurate estimate.

Gayle| 9.23.09 @ 12:05PM

Blue Shield has announced that their Advantage Care has been dropped and will no longer be available to retired Calpers (Califorinia state workers pension plan) members. I wonder if they were pressured by the Obama administration or they just saw the handwriting on the wall.

Jack| 9.23.09 @ 12:58PM

The AARP response is pathetic. A bunch of canned blah blah blah. They do not respond to the charges in the House Republican report. That indicates to me, and should indicate to others, that they have no response, and they know it. Sorry, Ms. LeaMond, but you're not going to skate through this with a bunch of boilerplate.

gilbi| 9.23.09 @ 2:04PM

AARP . . . You lie!

frostwhite| 9.23.09 @ 2:17PM

we droped aarp when they were telling people to vote for john kerry, they have been at it all this time just like the union, drope them america, you are suporting a big lie, is any body honest any more? where do all these people come from that are so easy bought? folks, we have to fight back and some how take our country and freedom back, more people need to wake up, you have been fooled big time,,,

BillC| 9.30.09 @ 9:54AM

I dropped too, for the same reason. I paid union dues years ago and it chapped my @$$ to have dues go to socialist causes I didn't support. I couldn't avoid unioon dues because a closed shop. With a choice to pay membership dues or not, I kept my money and feel so satisfied that AARP gets no benefit from me.

Four years later, I still get promotional literature from these jokers at AARP. I get some satisfaction out of sending postage paid envelopes back with temporary cards torn up inside, or appropriately worded comments on the literature.

Cheri| 9.30.09 @ 11:43AM

Keep talking to people around you and wake them up. I know it is tough. Too many people have closed ears and think the government has unlimited funs. Or the rich will pay. I am not rich, but I am becoming self sufficient so I need the government less and need cash less and don't have to give them anymore! I am only 47 have paid my taxes honestly but am changing my mind. We cannot let this them split us up. If all the soon to retire boomers decide they want the gubmint to pay we are hosed!!

lonnie| 9.30.09 @ 8:29AM

Please provide a link through which I, and others, can cancel my membership.

TERRY| 9.30.09 @ 10:24AM

Do you want to cancel your membership in AARP or to American Spectator? I suggest you cancel your membership in AARP as I did three years ago after getting sick of my dues going to a socialist organization. AARP is not an advocate for seniors--wake up--they are a MARKETING COMPANY! They produce more marketing materials to their members than advocacy materials by hundreds to one.

Charles Sillery| 9.30.09 @ 9:29AM

I returned my membership card and a request for full refund. To my surprise about a month later I received a, you are going to love this, a pro-rated refund check. If more unhappy AARP members did this it might get their attention, however where there are politics and money there is corruption and greed. Next write, call, fax, email your elected nitwits in DC and ask them if they are seeing and listening to our voices. I am really looking forward to 2010 and 2012. I am a veteran and a senior citizen and am outraged at the lies comming out of DC.

Jack Belles| 9.30.09 @ 10:04AM

AARP receives kickbacks on all of the products that it "endorses". Finally the word is getting out on this organization. These products (mostly Financial ) are not the best product for the senior, they are the best products for AARP to receive a kickback. AARP never discloses the fee that they receive. This is a disgrace.

Richo| 9.30.09 @ 10:10AM

There is a VAST difference between a Medicare Advantage plan and a supplemental plan. The Advantage plan is like an HMO, it locks you into their doctors, their network, their references, their state, etc. A supplemental is just that, it picks up the difference between what Medicare pays, and what your costs are. No restrictions. Do some research and find out the truth, not the propaganda on this site. I will be Medicare eligible in a year, and I definitely will NOT be enrolling in any Advantage plan.

TERRY| 9.30.09 @ 10:32AM

Richo, Richo, you obviously have not completely researched the issue. Yes, there is a network of doctors and hospitals. That is the norm for most health plans in the country. How about a PPO? Yeh, them too. I am in insurance, but I don't sell med sups or Advantage plans, but I use to. I got out of med sups because they did not cover everthing that Advantage plans cover. Advantage plans are more comprehensive and less out of pocket expenses for the retired. I am retiring in a few years; and yes, I will purchase an Advantage plan (if they still exist). Do the real homework! The government pays Advantage plans 2% to administer the programs. That is partly what they want to cut out. Do you know of any government program that can operate at 2% overhead and still make a profit? I don't!

Richo| 9.30.09 @ 10:58AM

Terry,

You may be right about a slightly lower cost with an Advantage plan, but that is not reason enough for me to go that route. That network of doctors and hospitals you mention is the reason I want to stay away from them. You give up all health care freedom when you go into such a network. I want the freedom to go to any doctor, any specialist, or any hospital in the country if I have a serious illness. Saving a few bucks is not enough reason for me to give up my health care freedom.

cheri| 9.30.09 @ 11:58AM

And the current Government reforms how you how? From that viewpoint alone, you should be screaming at the boys in DC to keep their mits off.
If you want choice keep the government out!

Mark| 9.30.09 @ 1:20PM

You need not worry. If you are eligible for Medicare in a year, in five years, you will be on the list of people that need to be terminated by the allmighty government, because you are a drain and a burden to society. Thus saith King Obama.

The pill. Take the pill. It won't hurt (much), and the world will go black, and it will all be over for you.

Jack Ferguson| 10.1.09 @ 9:01AM

Richo, you are ignorant with to regards to the actual benefits that the Medicare Advantage Plan provides. I was skeptical when I was first informed by an insurance agent that there would be no monthly fees. I then learned that my medicare payments through Social Security, the $96.00 monthly, would be paid to the Medicare Advantage provider in return for my Medical Insurance coverage, both "A" and "B". I also get a good discount on my one perscription drug of a least 70% over what I was paying with my Medicare "D" through Anthem. In addition, The SilverSneakers program for maintain my physical health is a big plus. I am 71 years old and in good physical condition. I enrolled in the Silversneakers program through our newly constructed YMCA. I paid the $75.00 joiner fee and The Medicare Advantage pays my monthly membership. How can you argue that this is not a cost savings for those of us who have been retired and needed assistance with our health insurance cost? Would you please e-mail your reply or rebutal. Jack, Wabash, Indiana

Maddy| 9.30.09 @ 10:24AM

I always knew AARP was dirty and not for the seniors. This dirty relationship with the Democrats prove it. They are not for us-they are for themselves. They are part of the big government lobbyists. What about our choice ?

Debra| 9.30.09 @ 10:44AM

I am appalled at AARP and I am going to tell my friends and relatives about them. Their true colors are coming out...finally. Most Americans didn't know their corrupt ways. God Bless America!

Tommy Waldrop| 9.30.09 @ 11:10AM

I realized that AARP was a hypocritical organization a few years ago when they helped get the Part D passed. I realized that they sold out everyone they were 'supposedly' there to help. At that time I cancelled my membership and would request everyone else to do the same. They are only interested in the money they are getting and do not care about anything else. AARP SOLD OUT SENIORS!

odmartin| 9.30.09 @ 11:25AM

Richo: You obviously have not investigated the details of an Advantage plean. I used to have Medigap for $120/month, plus Part D prescription coverage for $90/month, Medicare Advantage costs $28/month, and every doctor I have gone to over the years is on their approved list, and drugs are covered as well, for free if you get generic fo 90 days!

FPN| 9.30.09 @ 11:46AM

Here I sit all broken hearted,
Just retired my checks have started.
Just found out that my friend AARP,
Has all this time been lying to me.
Sell out your friends its happened before,
Soon they will be knocking on your door.
We have no use for you since you payed your dues,
All those years paying and now you lose.
My Grand Father said it would happen this way,
What the Government gives it can quickly take away.
fp

Cheri| 9.30.09 @ 12:01PM

Right On!

Mark| 9.30.09 @ 1:17PM

This nation was founded on the principle that government must be LIMITED by the people, not that government PROVIDES for the people. We have lost sight of that, and been deluded into thinking that government can improve our health care provisions over what we can do for ourselves. That being the case, we have surrendered our freedom, and lost our nation. It may not be too late to recover it, but two generations have been taught by the schools that government exists to protect the people and to provide their needs, so in my mind, the Great Experiment - a democratically elected Republic - is over.

Now take that pill. It won't hurt much, then it will all be over for you.

mary anne havens| 9.30.09 @ 12:09PM

Isn't this what is happening to all of out institutions? We have paid money in to support an organization. Now the computer guhrus are taking over, spending the funds that have been created, telling us we have to change everything. Telling us there's not enough money.Where's the money going? We are churning (making un needed changes to justify some parasite's need for money)all of our businesses. We simply don't have enough money in our economy to keep people honest. We need to stop shipping our jobs overseas.

K Frederick| 9.30.09 @ 3:54PM

If AARP is for seniors, why are they in bed with the government? My grandfather told me too. He was right!!

Trish E.| 9.30.09 @ 5:49PM

I will have nothing to do with AARP. Nothing. They deceive the seniors. AARP is all about money and the plight of the senior and their needs are secondary to associations that will put more money in their pockets. Most seniors don't know how "dirty" AARP is. I want the word to get out about all their "back-room" deals. I enjoy sending back their self stamped envelopes that are included in promotional mailings with my words of disgust for them. Wasting their postage money is a pretty small way to fight back, but I get some satisfaction.

mike r snyder| 9.30.09 @ 5:52PM

AARP- You smart asses ready to get disowned !

jabo| 10.1.09 @ 12:51AM

I left the AARP because of their Liberal policies and now I"m getting back at them. Here's what everyone needs to do:

When you get a letter from them with a Pre-Paid envelope in it, take the application or letter within and write, "No Obama health-care Reform." It will cost them about 50 cents for you to use their envelope. Let them pay for your objections.

Charles F. Spencer| 10.2.09 @ 7:49PM

Seems like aarp is headed for a big supprise.

bubba| 10.3.09 @ 9:43PM

@Richo:
'The Advantage plan is like an HMO, it locks you into their doctors..."

Some are HMO, but others are PPO, or even PFFS (Private Fee for Service), which were available at any provider who accepted Medicare's provisions..

@Jack Ferguson:
"I then learned that my medicare payments through Social Security, the $96.00 monthly, would be paid to the Medicare Advantage provider in return for my Medical Insurance coverage."

Jack, the Pt. B premium goes to Medicare, not your Medicare Advantage carrier.

Medicare Advantage is Private Market medicare, and as such, is a threat to universal hewalth care, and is therefore HATED by the Dems. they'll do what they need to do to kill it off.

I think that all of the MA carriers will ahve had enough by the 2012 coverage year, and will bail out.

MA and MAPD (with the prescrrition drugs included) are ecellent for many people and generally provide better medical outcomes for those enrolled, but you won't read or see that in the media for the most part, and you CERTAINLY won't hear that from the Dem Demagogue politicians.