AARP is supposed to be a public advocate for older Americans, championing policies that improve their quality of life and stopping those that would adversely affect them. But instead, its actions and priorities increasingly seem more aligned with its corporate financial partners. There is no greater example of AARP’s lost purpose than its determined political lobbying to push the Inflation Reduction Act through Congress.
The AARP-endorsed IRA was marketed to lower seniors’ drug costs through Medicare changes. Looking underneath the surface, however, you will find that $280 billion in Medicare drug “savings” is being diverted to pay for unrelated government programs championed by Democrats. If you want to buy an electric vehicle or install solar panels, that’s your choice. But most would agree that Medicare funds shouldn’t be used to subsidize it. So, why would AARP support such a thing? Well, the reasons may be in the billions.
AARP receives $1 billion in corporate financial royalties yearly. That’s three times what it earns in dues from its members and represents more than half of its annual operating revenues. In fact, more than $6 billion in royalties over the last decade have come from a single corporation: UnitedHealthcare. It is one of America’s largest health insurance and pharmacy benefit manager companies, and it happens to sell a significant suite of highly profitable AARP-branded Medicare policies (Medicare Advantage, etc.), which earn AARP billions and UnitedHealthcare many billions more.
AARP and UnitedHealthcare lobby Congress on Medicare. Both make more revenue when older Americans purchase AARP-branded UnitedHealthcare policies. The IRA included drug price controls that, despite prescient warnings, will lead to shortages and fewer investments in cutting-edge treatments, which could save big insurer-PBMs lots of money. Simultaneously, the raided Medicare funds are now being used to subsidize unrelated Obamacare premiums paid to big insurers.
So, how do older Americans feel about all this? McLaughlin & Associates (my business) conducted a recent national study to find out. We polled 1,600 likely voters aged 55-plus, including nearly 700 identifying as AARP members. The results clearly show that AARP and the people it claims to serve are on very different pages regarding Medicare and the IRA and what they want AARP to prioritize on their behalf.
For example, 84 percent of seniors and AARP members believe Congress should not divert any Medicare savings to pay for unrelated programs. Additionally, 88 percent of voters 55-plus believe AARP should have opposed the IRA from diverting any Medicare drug savings to pay for unrelated programs or spending. And only 20 percent believe seniors and patients will benefit through lower drug prices under the IRA’s changes to Medicare.
Other questions revealed that 50 percent believe the big winners are politicians who want to use Medicare funds to pay for unrelated government spending. That was followed by 16 percent who thought big health insurance and middlemen corporations benefited most, and 15 percent who said individuals not enrolled in Medicare yet benefiting from tax breaks came out on top.
Beyond the IRA, our study also found that 76 percent of AARP’s members believe the amount of money paid to AARP from big insurer-PBMs like UnitedHealthcare creates a conflict of interest that could affect AARP’s ability to best represent their interests. An overwhelming 82 percent of AARP members are concerned that AARP’s royalties are primarily tied to UnitedHealthcare.
Most AARP members consider insurer-PBM costs such as premiums, deductibles and copays as the most concerning healthcare affordability issue, far more so than even drug prices and long-term care costs. By near unanimous numbers, 94 percent-plus, AARP members want the advocacy organization to be more vocal on addressing these costs and fighting treatment denials and Medicare overcharges from companies like UnitedHealthcare.
AARP’s support of the IRA is just the latest indicator of its seeming misalignment with the priorities of its members and older Americans. The IRA presented big insurer-PBMs with another possible windfall and gave Democrats a means to fund their pet projects. Who better than AARP to give it a trusted stamp of approval?
Only now, however, are seniors finding out that the “big” drug savings elements promised to them as part of the IRA don’t kick in for a few years, if ever, and long after the raided funds have been spent.
The next time AARP advocates for a major policy change affecting older Americans or stays silent, ask why and who stands to benefit the most from its actions or inactions. The results may surprise you.