AARP: Out For-Profit or For its Members?

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April 1, 2011; Source: U.S. News & World Report | Planned Parenthood, NPR and the Environmental Protection Agency have all been under attack since the GOP assumed leadership in the House of Representatives. Now, AARP, the 37 million-member voice of older Americans, is being accused building a billion dollar for-profit business instead of being an advocate for its members.

In a report called, Behind the Veil: The AARP America Doesn’t Know, GOP members of the House Ways and Means Committee claim that AARP has focused more on insurance lobbying efforts than serving its senior citizen members. The report calls for the IRS to investigate whether AARP’s tax-exempt “privileged status” should be revoked.

The report outlines AARP’s increased growth through branded insurance policies sold through selected insurance companies, including United Health Group. Since 2002, income generated from membership fees increased 32 percent to 60 million. During the same time period, income from these business relationships nearly tripled to $417 million.

The congressional report also claims that AARP advocated for health care cuts to Medicare services that would hurt their members, but would support AARP insurance interests. The GOP report says the group encourages seniors to purchase Medicare supplements sold by United Health under the AARP brand. AARP representatives contend it is too early to tell if these branded health policies will benefit from health reform.

AARP claims the report is old news that is being recycled to attack its stance on the national health reform law. Democratic Ways and Means members call the report a “witch hunt” to punish health reform supporters in an effort to weaken opposition to privatize Medicare and Social Security. AARP contends that added revenue from these business relationships supports social welfare programs and keeps membership dues low.

AARP has posted its annual reports, Form 990s, and other public filings, as well as revenue and expenditures charts on its website. In 2009, the organization paid $14 million in income taxes, comparable to other nonprofits based on percentage.

The report is now being handed over to the IRS for their review to determine if the AARP should lose its tax-exempt status. Democrats predict that more liberal causes will be attacked as the GOP attempts to motivate their base by silencing organizations believed to be the “sacred cows of the left.”—Nancy Knoche

  • David Cearley

    According to a report yesterday, the Obamacare provisions advocated for by the AARP will add one trillion dollars to their bottom line over the next ten years, with much of that money coming out of the pockets of their members through increases in medigap coverage required by Obamacare.

  • Tipster

    When Novelli’s salary jumped 180% to $1.8 million from 2007 to 2009, AARP made deep staff cuts among older, long-term workers approaching retirement. It protected itself from charges of age descrimation by hiring very young workers at relatively high pay and promptly firing them among the targeted older workers in order to bring down the average age of the impacted group. Moreover, to collect severance pay, the wokers were required to sign an agreement to say nothing bad about the organization. Only a relatively small percentage of rank and file AARP workers of long service have reached normal retirement in recent years.