TAP's Robert Kuttner Smacks AARP: How AARP Shills for UnitedHealthcare

"AARP is basically an insurance marketing scheme masquerading as an advocacy group for the elderly," said Robert Kuttner, a founder and writer for theleft-leaning The American Prospect (TAP). Kuttner also stated: "Over the years, AARP has been sued by members a number of times for its conflict of interest in promoting an inferior insurance product." It's an apparent case of a liberal writer for a liberal publication attacking a left-leaning or liberal nonprofit, namely, the AARP. Some background will set the stage for the fact check of what author Robert Kuttner said via an email to this writer for MHProNews and this Patch on 12.11.2024.

According to Influence Watch at this link here is the following.

"AARP, formerly the American Association of Retired Persons, is a lobbying group that engages in lobbying at the state, local, and federal level on a range of issues affecting older adults. AARP also has extensive business interests, including in health insurance and brand licensing. em###https://capitalresearch.org/article/aarp-advocacy-group-or-crony-capitalists/" title="" aria-describedby="qtip-0">1 AARP claims 38 million members, making it the largest interest group in America. 2

AARP is generally considered to be left-of-center. em###https://www.foxnews.com/story/does-the-aarp-have-a-progressive-agenda" title="" aria-describedby="qtip-2">3em###https://www.washingtonexaminer.com/aarp-draws-political-fire" title="" aria-describedby="qtip-3">4 It is a frequent supporter of left-leaning health care policy and has resisted Republican efforts to reform entitlement programs such as Social Security. em###https://capitalresearch.org/article/aarp-advocacy-group-or-crony-capitalists/" title="" aria-describedby="qtip-4">5 AARP describes itself as “a champion for social change” with an “ambitious social agenda.” em###https://www.aarp.org/about-aarp/" title="" aria-describedby="qtip-5">6 More than 98 percent of the political donations made by AARP staff in 2016 and 2018 went to Democratic candidates and affiliated groups. em###https://www.theepochtimes.com/3013244_3013244.html" title="" aria-describedby="qtip-6">7 "

Left-leaning Wikipedia said: "Robert L. Kuttner is an American journalist, university professor and writer whose works present a liberal and progressive point of view." The American Prospect website says about itself:

"The American Prospect

An independent voice for liberal thought

The American Prospect is devoted to promoting informed discussion on public policy from a progressive perspective."

With that backdrop, here is what Kuttner said as part of a longer email on 12.11.2024 to MHProNews and this writer for this Patch. Additional insights, fact-checks with analysis and more will follow in Part II of this column. Note that the views that follow in Part I represent those of Kuttner and may or may not reflect the views of this writer for The Patch.

Part I

How AARP Shills for UnitedHealthcare

Why does the supposed advocate for the elderly steer them to the industry’s worst insurer?

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, 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. 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, AARP made $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 on 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.

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, 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

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Part II - Additional Information with Related Insights

1) Kuttner raised a number of fascinating and relevant points to millions of Americans, including large numbers living here in sunny Florida. But let's start with his closing paragraph. Kuttner wrote: "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." That claim is apparently mistaken.

45: “As President, I will not cut ONE PENNY from Social Security or Medicare.”

Anyone else sick of the Dems LYING and saying he plans to cut them?👇🏻

pic.twitter.com/S1rApexWiq
— SaltyGoat (@SaltyGoat17) June" class="redactor-linkify-object">https://twitter.com/SaltyGoat1... 29, 2024

2) The X-post links to a video where Trump made that statement. It is true that President-Elect Donald J. Trump (R) plans to seek Congressional approval to make permanent the Tax Cuts and Jobs Act of 2017. But that plan was a proven boost to the working class, middle class, and retirees. Who said? A left-leaning source such as CNN in the chart shown below.

A different chart from right-leaning Fox Business put the benefits of the Trump 2017 tax and economic plan benefits in the following graphic terms.

3) That said, at least looking back at history, while Kuttner is apparently mistaken about his closing claim about Trump with respect to Medicare and Social Security, there are several points that Kuttner raised that are sobering and based on evidence, even if he didn't specifically cite his sources. For example, Kuttner said "AARP has been sued by members a number of times for its conflict of interest in promoting an inferior insurance product." The basic Google search in the screen capture that follows demonstrates his claim.

4) The composite screen grab below of a Google search on 12.11.2024 confirms TAP's founder-writer Robert Kuttner's claim about 'kickbacks' from UnitedHealth to AARP.

5) That pattern could be continued, but the above is sufficient to make the following evidence-supported points.

a) It is useful to check sources across the left-center-right spectrum to get clarity on any significant topic or issue.

b) The long standing Democratic claim that Republicans will cut Social Security and Medicare are ironically disproven in part by Kuttner, who himself pointed out that President George W. Bush (R) added to Medicare the Part D program. Note that this writer is a political independent, and believes in letting the facts, ethics, and history drive good decisions, not blind partisanship.

c) Many may think there are no alternatives to AARP. That's not so. For example, this writer is a member of AMAC.us. About AMAC.us: "As of 2021, the Association of Mature American Citizens (AMAC) has over 2 million members in the United States." While smaller than AARP, it offers similar benefits and gives their members a range of choices on various Medicare suppliment and other plans. This writer is NOT a UnitedHealth policy holder. Interestingly, at this time, AMAC accepts members that are under 55, but keep in mind that certain policies require that a person have Medicare.

d) To briefly inject another personal experience, AMAC also offers deals on auto insurance. This writer responded to an email from Travelers Insurance due to my AMAC.us membership. My insurance premium for the same coverage was essentially cut in half compared to the GEICO policy that I had for over two decades. It was a total no brainer. Within days, I needed to use the roadside assistance part of that insurance plan (my tire picked up a nail and I hate changing flat tires). There was better service from Travelers than GEICO, before, during and after that 'roadside service.' Time will tell, but at this time my wife and I are quite happy with how that new policy has started out: saving money with better service.

e) There is at least one thing that AARP has done that I think merits mention as being largely useful, including, but perhaps not limited to their largely useful research into manufactured housing as a good option for seniors and others. IMHO, AMAC.us could look at that AARP research on manufactured homes, update and refine it, and offer that to their members. But then in fairness, AARP has millions of more members and a ton more revenue. So, perhaps if a large number of people who have AARP switched to AMAC.us, they could afford to produce such research too.

6) So, in summary. While TAP's writer-founder Kuttner arguably glitched on his closing paragraph, much of what he said about AARP is apparently based on solid evidence. Perhaps as people who are AARP members realize that they have good alternatives like AMAC, and there are other options, maybe AARP will rethink some of their political and policy stances and business practices? So TAP's Kuttner's remarks were largely useful for potentially millions of seniors.

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---> L. A. “Tony” Kovach is a publisher who has earned multiple awards in history. He and his family live in a manufactured home on private property in Winter Haven, FL. He is the co-founder of Manufactured Home Living News.com (MHLivingNews.com) and Manufactured Home Pro News.com (MHProNews.com), trade publications serving segments of the manufactured home industry. Having worked in several segments of the manufactured home industry for over 3 decades, Kovach is a widely acknowledged and often praised expert on manufactured housing. ###