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Last Updated: Apr 20, 2011 - 9:38:09 AM |
1601 N. Tucson Blvd. Suite 9
Tucson, AZ 85716-3450
Phone: (800) 635-1196
Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto
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AARP rakes in cash from seniors’ insurance
January 16th, 2009
Seniors may think they save money when they buy AARP insurance, but if they take the trouble to compare competing products, they may be paying twice as much.
AARP brought in nearly half a billion dollars in 2007 from fees insurers pay for AARP endorsement. It also gained about $40 million from holding the clients’ premiums for a month and investing them.
The revenue helps pay down the $200 million bond debt that funded the organization’s brass and marble headquarters in Washington, D.C.—which is closed to visitors, purportedly so staff can work.
Royalties and fees now constitute about 43% of AARP’s revenue, up from 11% in 1999.
According to a 2007 Harris poll, AARP ranks third behind Consumer Reports and the American Red Cross as a trusted large advocacy group influencing U.S. politics. AARP is considered the most powerful interest group in the United States.
“They don’t even have to give any campaign contributions,” observes James Thurber, director of the Center for Congressional and Presidential Studies at American University in Washington. “AARP’s enormous clout comes from the threat that they could defeat people in Congress who don’t do what they want.”
AARP lobbied against Bush’s proposed overhaul of Social Security, and for the Medicare prescription drug benefit. When Part D passed, AARP was able to expand its contract with UnitedHealth Group, which underwrites its Medicare supplemental insurance plan.
“I was kind of shocked,” said one member, who found out he was paying $1,079 more for his AARP auto insurance than he would have paid for a Mutual of Omaha policy. “They’re making money on the backs of old people” (Gary Cohn and Darrell Preston, Bloomberg.com 12/4/08).
Additional information:
“AARP Signs Contracts with Aetna and UnitedHealth Group,” AAPS News of the Day 5/5/07.
“Crumbling Medicare Foundation will Topple with Addition of Drug Benefit: New Benefits Should be Delayed,” AAPS Press Release 3/23/04.
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