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AARP is a Sales Front for Health Insurance, Report States

A new report shows that AARP is a marketing operation designed to sell high-priced Medigap plans to seniors, rather than an advocacy organization representing the interests of retired people.

The August 2020 report, “How AARP Puts Profits over Patients – and Principles,” by Chris Jacobs of analytics firm, Juniper Research Group shows in 2018 alone, AARP’s net income totaled $246,463,998, of which 13.4 percent went into AARP’s pocket as net margin. AARP, formally known as the American Association of Retired Persons, has racked up $1.4 billion in profits since 2009, which is remarkable performance for any organization, claims the report.

“For instance, of seven major health insurers listed in the Fortune 500, none had a 2018 profit margin exceeding 5.42 percent,” the report states.

Royalty Fees from Insurance

Much of AARPs revenue (56.9 percent) comes from “royalty fees,” which are essentially charges to vendors, more or less, for the use of its branding on products and services using the AARP logo. The revenue is more than double what the non-profit brings in from memberships, contributions, and grants.

A large portion of royalty fees comes from the sale and marketing of insurance policies for UnitedHealthGroup. The total has more than doubled in the last decade, to $627.2 million. AARP also makes money by floating premiums it collects as “a grantor trust,” states the report “investing seniors’ premium payments.”

AARPs relationship with UnitedHealthGroup has come under scrutiny by Congress, media organizations, and its own employees, the report states.

“Most of the public does not know that AARP makes a large portion of its budget selling health insurance products,” Jacobs told Health Care News. “Indeed, most of its members do not know that AARP takes a 4.95 percent cut out of every Medigap premium dollar—in several cases, members have sued the organization for fraudulent misrepresentation for not disclosing that fact before they purchased Medigap coverage.”

AARP as a Policy Advocate

AARP has been quite vocal about Obamacare and other health care policy issues in the newspapers and magazines it mails to seniors each month.

“AARP’s financial conflicts-of-interest permeate the organization’s policy positions—the fact that it so vocally supports Obamacare, which provided a windfall to companies like its partner UnitedHealthGroup, being one of the most obvious,” Jacobs said.

Congress needs to scrutinize this activity, Jacobs says.

“Lawmakers would be well-served to engage in oversight efforts regarding AARP’s finances,” Jacobs said. “While congressional committees have compiled reports on its questionable activities over the years, only sustained oversight will lead AARP to change its ways.”

AnneMarie Schieber (amschieber@heartland.org) is managing editor of Health Care News.


Internet info:

Chris Jacobs, “How AARP Puts Profits over Patients – and Principles,” Juniper Research, August 2020: https://secureservercdn.net/

AnneMarie Schieber
AnneMarie Schieber is a research fellow at The Heartland Institute and managing editor of Health Care News, Heartland's monthly newspaper for health care reform.


  1. The collecting of names related to an interest is big business. Witness your requirement that I leave my name and email below (I’m not hostile about Heartland, just use it to illustrate a business practice.)


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