$185 million!
That’s how much AARP estimates it makes on average in royalties and revenues from the sale of health insurance products, according to an article in USA today.
And the organization says that future sales will probably garner about $1.5 billion over the next seven years.
Now, a number of interesting questions arise from this revelation—questions the media never seem to raise.
For example, you will frequently hear the media and liberal politicians complain about the cost of health insurance, asserting that if we removed the profit from health insurance coverage would be more affordable. And remember, AARP isn’t bearing any risk; it just serves as a middleman between insurers and seniors.
And yet we can’t recall seeing any criticism of AARP for siphoning off $185 million from the system.
Second question: Is AARP committed to the privatization of Medicare?
One of the reasons AARP is making so much money is that seniors are moving into its Medicare Advantage programs—private sector HMOs that provide seniors with comprehensive coverage for a defined contribution from the federal government.
That success has liberals worried, especially Rep. Pete Stark (D-CA), who heads the House’s health insurance subcommittee. The fear is that a successful Medicare Advantage program would eventually transform Medicare into a “privatized,” defined-contribution program. (We can only hope!)
But wait! Didn’t AARP do everything it could to fight privatization of Social Security, which would have allowed workers to put at least a portion of their payroll tax into a personal account?
So AARP makes millions of dollars off selling health insurance, including Medicare Advantage, which could eventually lead to at least a partially privatized Medicare program. But the organization opposes reforming Social Security, which faces similar long-term financial challenges.
Now if we could just figure out a way for AARP to make millions of dollars off personal retirement accounts, maybe we could make some progress on Social Security reform.