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HOW AARP SHILLS FOR UNITEDHEALTHCARE  
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Robert Kuttner
December 11, 2024
The American Prospect
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_ Today on TAP: Why does the supposed advocate for the elderly steer
them to the industry’s worst insurer? _

, Charles Krupa/AP Photo

 

We still don’t know quite why the assassin of Brian Thompson
targeted the CEO of UnitedHealthcare. But it’s hardly a secret that
UnitedHealthcare has the worst record among all large insurers in
denying necessary medical care to its subscribers.

The data confirm what far too many patients experience. In 2023,
UnitedHealth’s denial rate of claims was 32 percent
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compared to an industry average of 16 percent. Nonprofits had a far
better record than for-profits.

I had assumed that UnitedHealth’s business model was to lowball
premiums and then more than make up the profit by denying claims. But
it’s even worse than that.

In Massachusetts, where I live, a supplemental Medicare policy from
UnitedHealth costs $251 a month. An identical policy from Blue Cross,
which has the state’s best record in not denying care, costs $212.

Why on earth would consumers buy such a flawed insurance product? It
helps if they are captive customers, steered to UnitedHealth by a
trusted source.

That would be AARP.

AARP has just under 38 million members. But AARP is basically an
insurance marketing scheme masquerading as an advocacy group for the
elderly.

For 27 years, UnitedHealth has been the co-branded choice of AARP
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If you are looking for a supplemental policy to conventional Medicare,
or a Medicare Advantage product, or a Medicare drug insurance policy,
AARP will steer you to UnitedHealth. And only to UnitedHealth.

The reason is shameful. UnitedHealth kicks back 4.95 percent of
premium income from AARP subscribers to AARP. And the numbers are
staggering. According to AARP’s audited financial report
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$289.3 million from member dues, but $1.134 billion from kickbacks
from insurers, of which the lion’s share, $905 million, was from
health insurers. AARP delicately refers to these as royalties.

And somehow, because it is a nonprofit, AARP manages to avoid income
taxes on this kickback income. Despite Congress’s efforts over the
years to make nonprofits pay taxes on commercial income, AARP paid
only about $3 million in federal income taxes on “royalties” of
well over a billion.

In its role as supposed advocate for the elderly, in 2003 AARP lobbied
heavily in favor of George W. Bush’s misbranded and badly flawed
“Medicare Part D”—the private insurance company drug insurance
policies blessed by the federal government. Part D was mainly a way
for UnitedHealth and others to make even more money and AARP to reap
more kickbacks.

Over the years, AARP has been sued by members a number of times for
its conflict of interest in promoting an inferior insurance product.
The suits typically argue that were it not for the kickback, the
premium would be lower. Credulous judges have thrown out the suits
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the grounds that the premium rates had been duly approved by
regulators, that premiums would not necessarily have been lower, and
that the purchasers were consenting adults.

It’s not as if AARP is unaware of how unhappy its members are with
the treatment they get from UnitedHealth. AARP sponsors a discussion
forum for members, called its Online Community, and the comments are
thick with scathing accounts of UnitedHealth claims denials and
bewilderment that AARP would sponsor such a product
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AARP has issued no statement since the murder of UnitedHealth’s CEO.
I placed several phone calls and emails to AARP’s media relations
department, but they don’t want to talk to me. They also seem to be
ghosting appalled members.

Among the other insidious things about AARP’s conflicted role is
that it crowds out much-needed genuine organizations to advocate for
seniors. One such worthwhile group, the National Committee to
Preserve Social Security and Medicare
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has an annual budget of about $8 million, compared to AARP’s more
than $1.3 billion.

Two good things might come out of the current spotlight on
UnitedHealth (and no, I don’t condone the murder). Bad publicity,
and pressure from the membership, might cause AARP to dump
UnitedHealth in favor of a less rapacious insurance carrier, or at
least to offer members an evaluated choice. But don’t hold your
breath. There is just too much money on the table.

More importantly, this disgrace should remind Democrats of the
importance of defending traditional Medicare and making it harder for
Trump and Elon Musk to trash Medicare in favor of private insurance
products and billionaire tax cuts.

_Robert Kuttner is co-founder and co-editor of The American Prospect,
and professor at Brandeis University’s Heller School._

_Used with the permission © The American Prospect, Prospect.org
[[link removed]], 2024. All rights reserved. _

_Read the original article at Prospect.org:
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