Freedom Line Blog

Joel Gehrke of the Washington Examiner flagged a disingenuous statement from the AARP after President Barack Obama’s disastrous debate performance last night:

President Obama invoked AARP to defend his health care law last night, prompting the influential group to release a statement telling him not to do that again.

“While we respect the rights of each campaign to make its case to voters, AARP has never consented to the use of its name by any candidate or political campaign,” the group posted in a statement. “AARP is a nonpartisan organization and we do not endorse political candidates nor coordinate with any candidate or political party.”

The statement is disingenuous because, as I argued in a recent column, AARP stands to gain $2.8 billion if ObamaCare is implemented; an event foreshadowed in an email from a top AARP executive to the White House in 2009 that said, “we will try to keep a little space between us” on health care because AARP’s “polling shows we are more influential when we are seen as independent, so we want to reinforce that positioning…The larger issue is how best to serve the cause.”

AARP already made its choice.  If it wants its money, the group must support its patron, no matter how unpopular he is becoming.

My column this week explains how AARP, formerly known as the American Association of Retired People, exploited its relationship with liberal politicians to reap a $2.8 billion windfall from ObamaCare.  The massive payout comes from regulatory exemptions that help AARP increase its lucrative Medigap endorsement scheme.

But it’s not like President Barack Obama’s landmark health law ushered in a new era of revenues for the premier non-profit advocate for seniors.  With $458 million in revenues for 2011, AARP would rank as the sixth most profitable for-profit health care company, according to a report by staff members to Senator Jim DeMint (R-SC).

This puts AARP just behind Humana and ahead of industry giants like Coventry, Amerigroup and Health Net.

Best of all for AARP, because it designates much of its revenue as “royalty fees” instead of “commissions” for endorsing certain private Medicare plans it gets to avoid paying taxes on millions of dollars in income to the Internal Revenue Service.

An investigation (pdf) by House Ways and Means Committee members has asked the IRS to investigate whether AARP’s reporting practices violate federal law, and for good reason.

The investigators note that “In 1994 AARP paid the Internal Revenue Service (IRS) a one-time settlement payment of $135 million in lieu of taxes, resolving an audit over tax returns for years 1985 through 1993 for failure to fully pay unrelated business income tax (UBIT) on its commercial activities.”  And, “In 1999, the IRS and AARP once again reached a settlement to conclude tax years 1994 through 1998 with respect to the treatment of revenues AARP received from licensing and selling its name and logo to insurance companies.”

Sounds like AARP merits more scrutiny from the IRS.

Well, it only took the Obama administration a half-day to find folks to trash an insurance industry study that calculates much higher health care insurance premiums under the Baucus version of ObamaCare.

“I really don’t think it’s worth the paper it’s written on,” AARP Executive Vice President John Rother  said, according to the Associated Press. 

That couldn’t be the same AARP that sees nothing distressing in Medicare cuts of $500 billion or of significant cuts to Medicare Advantage under the Baucus plan, could it?  The AARP that sells insurance  that will competitively benefit from cuts in Medicare Advantage?  The AARP that sells tons of stuff to seniors by making those seniors believe that AARP is their lobbyist while laughing all the way to the bank?

At his town hall meeting in Portsmouth, NH yesterday, President Obama again bragged about the AARP’s support of his plan for government-run health care.  The President proudly proclaimed to his hand-picked crowd of supporters:

We have the AARP on board because they know this is a good deal for our seniors.

Obama added,

AARP would not be endorsing a bill if it was undermining Medicare.

But hold the phone, folks.  According to the Associated Press and Fox News, AARP’s chief operating officer Tom Nelson moved quickly to correct the record, saying, “indications that we have endorsed any of the major health care reform bills currently under consideration in Congress are inaccurate.”  That forced White House Press Secretary Robert Gibbs to backtrack, claiming that the President didn’t mean to mislead the American people.

AARP has been under heavy fire for appearing with Obama on numerous occasions in the last several months seemingly in support of the President’s health care plan — and by extension, the various plans being pushed by Congressional Democrats.  But with support among seniors  dwindling, it is no surprise the AARP is now seemingly looking for an out.

A new Rasmussen Reports national telephone survey released yesterday shows that a whopping 56% of those over age 65 are opposed, and 46% of senior citizens are strongly opposed.

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