“Why did AARP ignore the overwhelming opposition among seniors, calls from their own members running 14-1 against, and emotional town hall confrontations all over the country?
AARP is in the business of selling insurance, and their offerings were uniquely well-positioned to benefit from the bill, because the steep cuts to Medicare Advantage would force beneficiaries into traditional fee-for-service Medicare, making them potential customers for AARP’s Medigap policies.
An investigative report from the House Ways and Means Committee found: “The Democrats’ health care law, which AARP strongly endorsed, could result in a windfall for AARP that exceeds over $1 billion during the next 10 years.”
That’s a billion reasons for AARP to betray seniors and support Obama’s bill.
The report found that while AARP offers a Medicare Advantage plan through United Healthcare, it does so under a flat-fee licensing agreement that would give the company the same revenue even following savage cuts to Medicare Advantage.
Its Medigap policies, on the other hand, are its biggest cash cow and AARP makes money with every policy sold. It was a win-win for AARP’s bottom line, but at a devastating cost to the seniors it pretends to represent.
Sweetening the deal for AARP, the bill created a special, AARP-specific carve-out exempting its Medigap policies from the rate regulations applied to its competitors.”