GOP sets sights on AARP over its support for healthcare reform

Newly empowered House Republicans are getting ready to renew their attacks against AARP over its support for the healthcare reform law, The Hill has learned.

The Ways and Means health and oversight subcommittees are hauling in the seniors lobby’s executives before the panel for an April 1 hearing on how the group stands to benefit from the law, among other topics. Republicans say AARP supported the law’s $200 billion in cuts to the Medicare Advantage program because it stands to gain financially as seniors replace their MA plans with Medicare supplemental insurance — or Medigap — policies endorsed by the association.

The hearing will cover not only Medigap but “AARP’s organizational structure, management, and financial growth over the last decade.”

 An embarrassing hearing would not only hit AARP back for its support of the law, but fits in with the GOP’s mantra that the law was written behind closed doors to favor Democratic allies. And policy-wise, it could empower Republicans to tackle Medigap policies, which many conservatives want to reform because they believe they contribute to over-utilization of the medical system by reducing out-of-pocket contributions.

Two Ways and Means Republicans — Reps. Wally Herger (Calif.), the No. 2 Republican on the panel, and Dave Reichert (Wash.) — led the charge against the seniors group during the healthcare reform debate, along with then-Rep. Ginny Brown-Waite (Fla.).

“AARP unfortunately has become a mouthpiece for this president at the expense of what is best for America’s seniors,” Brown-Waite wrote in a letter to the association at the time.

The AARP’s support for healthcare reform “just doesn’t make sense” until “you dig a little deeper and see that [a lot] of their revenues come from these royalties,” Reichert told The Hill during the healthcare reform debate. “And if Medicare Advantage does go away, they may gain millions of dollars in additional royalties.”

AARP said it had nothing to hide.

“AARP has a long-standing and good working relationship with Congress and we look forward to appearing before the Committee on behalf of our millions of members, and the entire 50+ population, on April 1st,” spokesperson Drew Nannis said in a statement. “AARP is committed to transparency, and the hearing will provide us yet another opportunity to answer any questions as we continue to be a champion for the wants and needs of Americans 50-plus.”

In 2009, the group’s chief operating officer wrote to Reichert and told him the group’s “process for developing policy positions, including our position on healthcare reform, is conducted independently of any AARP royalty-generating activities.”

Still, the association’s balance sheet raises questions.

According to its 2009 tax filing, AARP made $246 million from membership dues but $657 million in payments for lending its name to policies sold to its members by private insurers. Those royalties made up more than 53 percent of its total $1.23 billion in operating revenues that year.

The royalties aren’t only for Medigap policies, but include endorsements of Medicare Advantage policies as well as auto, life and other insurance.

This isn’t the first time the AARP’s dual role as a consumer advocate and an insurance sponsor has come under scrutiny.

Democrats were furious when the association supported Republicans’ Medicare prescription drug bill in 2003, and several — including then-Rep. Rahm Emanuel (Ill.) — suggested the decision was influenced by its partnership with the insurer United Health Group.

Thousands of members left the group in protest at the time, just as tens of thousands did this time around. Many of those disgruntled former members joined the American Seniors Association, which billed itself as the conservative alternative to AARP.

This story was updated at 1:40 p.m. with comment from the AARP

Tags Dave Reichert

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