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Life Health > Health Insurance > Life Insurance Strategies

AARP subject of Republican 'witch hunt'?

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The AARP may be facing some political blowback from Republicans after coming out in support of Obama’s health reform plan during the recent contentious debate. The nonprofit, which claims 37 million members, has been called upon by Republicans on the House Ways and Means Committee to justify its tax-exempt status

Republicans charge the group with behaving less like an advocacy organization and more like an insurance company because of the royalties it receives from endorsing insurance products. For example, according to a Republican-led report on the group’s finances, AARP received less than 20 percent of its revenue from member dues but more than 45 percent from AARP-branded insurance coverage.

Democrats decried the hearing as a witch hunt, in part because what was supposed to be an oversight hearing for tax-exempt groups focused only on AARP. Democrats, however, have had their own complaints about the group. During George W. Bush’s presidency, it was Democrats leading the charge against AARP for supporting that administration’s Medicare drug plan.

Barry Rand, CEO of AARP, defended the group against the Republican accusation that it acts like an insurance company, calling the report “one-sided.” He maintained that the branded insurance products do not help set the agenda for the group. “All these insurance products come from our members and the 50-plus population who say, ‘We have these needs,’” he said.

At the hearing, much was made of AARP’s support of the Affordable Care Act. Republican Wally Herger, who helped write the critical report, said at the hearing, “AARP stands to gain an additional $1 billion over the next 10 years as a result of the Democrats’ health care law.”

However, AARP actually lobbied against one of the programs it makes money on: Medicare Advantage. Only one-quarter of Medicare recipients take part in the program, while all Medicare recipients help pay for it. To do away with it, AARP claims, would strengthen Medicare overall.


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