Thursday, May 20, 2010

Democrats FINALLY Discover AARP Has a Conflict of Interest

In case you missed it, Sen. Harkin was just on the floor criticizing AARP for opposing his annuities amendment.  He accused the organization of having a conflict of interest because they offer AARP-branded annuities in a marketing arrangement with New York Life, and their annuities would be disadvantaged by his amendment.  It’s curious that Sen. Harkin now thinks that AARP has a conflict of interest, because just a couple of weeks ago the Wall Street Journal reported on a Democrat presentation that showed AARP as a “third-party validator” of the majority’s claims.  How can you be an independent third-party validator of Democrat policies when even Democrats admit you have conflicts of interest?

Of course, when it comes to health care, it should be no surprise that Democrats finally discovered that AARP has conflicts of interest, because AARP’s own former executives have been saying that for years: “There’s an inherent conflict of interest…They’re ending up becoming very dependent on sources of income.”  But it’s worth noting how many backroom deals and exemptions AARP received from Sen. Harkin and his Democrat colleagues when it came to their most lucrative product – Medigap supplemental insurance:

  • EXEMPT from the prohibition on pre-existing condition exclusions, such that AARP can continue to impose waiting periods on vulnerable seniors with pre-existing conditions – as it does currently (Section 1201(2)(A), Page 81 of H.R. 3590);
  • EXEMPT from a $500,000 cap on executive compensation for insurance industry executives, so that AARP can continue to give its CEO more than $1 million in annual compensation – over 78 times the average annual Social Security benefit of $12,738 (Section 9014, Page 1995 of H.R. 3590);
  • EXEMPT from the tax on insurance companies that will total more than $14 billion per year – even though according to its own financial statements AARP generated more money from insurance industry “royalty fees” than it received from membership dues, grant revenues, and private contributions combined (Section 10905(d), Page 2395 of H.R. 3590); and

  • EXEMPT from a requirement imposed on Medicare Advantage plans to spend at least 85 percent of their premium dollars on medical claims – AARP Medigap policies are currently held to a far less restrictive 65 percent standard, and the difference can be used to fund “kickbacks” to AARP paid out of the pockets of its senior citizen members (Section 1103, Page 49 of H.R. 4872).

So if Sen. Harkin now wants to criticize AARP for having a conflict of interest, perhaps he should start by explaining exactly why he supported legislation that will enable AARP to rake in hundreds of millions of dollars in additional “kickbacks” – all the while denying care to vulnerable seniors with pre-existing conditions.