Grassley had staff members pose as consumers (AP file photo)

By Gilbert Cranberg
gilcranberg@yahoo.com

AARP, which purports to be the seniors' friend, has a lot of explaining to do to Iowa's Senator Charles Grassley, ranking Republican on the Senate Finance Committee. In a scorching letter to AARP, Grassley implies that the organization is more interested in profiting from seniors than in serving them.

In saying AARP “purports” to be seniors’ sidekicks, I have in mind the way it exploits the belief of its members, many of them elderly, that it gives reliable, disinterested advice when it puts its name to insurance products and promotes them. Actually, it profits from what it peddles. How much does it make from the tie-ins? In a piece I wrote for this site in November 2007, I described how I questioned AARP about its financial interest in a Medicare Advantage plan it touted in behalf of United Health Care, the large and prosperous private health-care insurer. The response from an AARP spokesman: as a "private business contract" it won't be disclosed.

AARP could stonewall me without consequence, but now it has to contend with Grassley, whose letter to AARP has "United States Senate" in big, bold letters atop the stationery. Grassley wants AARP to divulge "a detailed description of any sales commissions, inducements, incentives or other compensation offered to agents for the sale of each of the AARP insurance products." Further, he wants to know how AARP, as an organization, "benefits financially from the sale of these policies and, if so, please provide the annual gross and net revenues to AARP from the point in time when the policies were first marketed up to the present." Grassley set a Nov. 24 deadline for answers.

The financial data could shed important light on what really interests Grassley: why AARP sells to its members insurance policies that prove to be essentially worthless when coverage is needed.

In a press release accompanying the letter to AARP, Grassley lit into the organization:

"The pitch for these products should be straight-up and informative, instead of designed to leave the impression of being comprehensive when the product is, in fact, very limited and leaves consumers seriously in debt if they need intensive medical care. Individuals shopping in the health insurance marketplace shouldn't be taken advantage of. A big-time advocate for health security should not target under- and un-insured Americans with misleading marketing."

Grassley based his attack, in part, on what he learned from staffers posing as consumers shopping for coverage who were told by AARP marketers that a product, a "supplemental indemnity plan," with flimsy coverage was "good health insurance." The coverage was so poor that a Texas woman, Lisa Kelly, who bought it, was told by a major hospital treating her for leukemia, that it was unacceptable; the hospital even balked at changing a chemotherapy IV until her husband could show proof of payment.

AARP can take a hint; a few days after Grassley sent his letter, the organization said it would suspend marketing the inadequate supplemental benefit plan that so irked the senator.

Grassley learned about Kelly and her experience with AARP's recommended policy from a story in the Wall Street Journal. The press as a whole, however, has been derelict in shining light on the organization's practices and ties to the commercial insurance business. An exception has been the Des Moines Register, which ran two strong editorials Dec. 9 and 10 connending Grassley and criticizing AARP.

Senator Grassley shouldn't have to do the press's work for it. AARP has some 40 million members. It is a powerhouse. The press should have been all over this issue long ago. The least it can do now is pay close attention to the answers Grassley gets from AARP and from the 24 state insurance commissioners he also queried in states where the flawed AARP-backed policy is sold.

[Editor’s note: A related issue—the privatization and weakening of Medicare through Medicare Advantage plans—also cries out for press attention. See pieces on this site by Judith Stein, executive director of the Center for Medicare Advocacy.]

Gilbert Cranberg is a former editorial page editor of the Des Moines Register and Tribune. E-mail: gilcranberg@yahoo.com

Comments

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Posted by Suzie Kidder 11/11/2008, 03:09 PM It would be interesting to know if the composition of AARP's membership has changed in recent years, i.e. is it aging and are there fewer "younger" seniors that are choosing to join. I ignored every solicitation they sent me when I hit "AARP Age," having essentially zerio interest in any products or services they appeared to offer. I've seen no reason to change my mind on this as I've watched their public performance over the years. But 40 million members does give them a certain volume to their "voice." They deserve to be investigated vigorously for any fraudulent or deceptive marketing they do, especially given that they wear (what sometimes appears to be false) mantle of "Honest Advocate for Seniors" as they go about promoting themselves.

Mrs. Posted by Nancy Graham 11/14/2008, 10:59 AM When AARP didn't fight the Drug Benefit Plan's clause that the government could not negotiate for lower drug prices it was very clear they did NOT have the welfare of seniors as their mission. They then jumped into the health insurance industry. My 93 year old uncle cancelled his member ship and went one step further. (I love this and folowed his lead). Every time he got a letter from AARP touting membership or insurance,He sent back a letter in their POSTAGE PAID ENVELOPE telling them what he thought of their association and why.

AARP sold out seniors Posted by Lynn Barnett 11/19/2008, 12:46 PM By supporting the Medicare Part D program, AARP essentially sold out seniors. It is not surprising that they are profiting from it, like the insurance and pharmaceutical industries, at the expense of those paying the premiums. We need single payor, universal, government run health care. Get the insurance industry out of health care.

Mr Posted by Cecil Graham 11/19/2008, 01:52 PM AARP has proven over the years that they no longer care about retirees. They have be after me for years with all manner of solicitations which I normally put in the trash. I beleive they are in cohoots with the Insurance and Pharmaceutical Companies to fleece our Seniors.

Old News Posted by Jason Whisnant 11/19/2008, 02:04 PM I encourage everyone to go to the Wikipedia page for the AARP. http://en.wikipedia.org/wiki/AARP ... This group pushed thru Medicare Part D which for the most part was directly in opposition to the health care interests of older, low to moderate income Americans. They should have had thier non-profit status removed long ago.

Posted by thebewilderness 11/19/2008, 05:07 PM What happens is that when you start shopping around for auto insurance you discover that joining aarp saves you a bundle, so you sign up with them. Next thing you know your mailbox is stuffed with aarp offers for every sort of insurance. I think that most seniors who have been members for 10 to 20 years are fully aware that aarp has shifted from an advocacy organization to an advertising agency. I don't think their reputation brings in any new members, but I suspect the cheaper auto insurance still does.

American Posted by Tom Bales 11/19/2008, 07:44 PM I've been in an out of AARP for the last ten years or so, finally opting out for good some time back when it became apparent that it was nothing but an overblown insurance and travel agency interested only in how many insurance policies and luxury cruises it could sell to wealthy seniors. It has nothing to offer ordinary working class senior citizens. If you didn't manage to become rich, or at least well to do during your younger years, AARP wants nothing to do with you unless it's time to collect your dues.

ARRP Posted by Billroy 06/06/2009, 07:24 PM I joined for ONE year, and never renewed. Since then, it has been amazing just how much ARRP related garbage/junk mail they send me, attempting to separate me from what little money I get in my SS disability each month. AARP may have originally begun as a senior advocacy group, but it is plain it has matured into just another rip-off, money grubbing commercial entity, and seniors be damned. If something has ANY tie to AARP in any kind of way, I garbage can it. Screw AARP..........

Mr. Posted by Charles Arena 09/22/2009, 05:27 PM I had one of those useless policies from AARP. They refused to pay and as a result the money I was saving for a newer work truck went to the hospital. Thanks AARP. Submit a comment - Jump to top of list