AARP health insurance profits set to soar under Obamacare

Robert Bluey:

An 18-month congressional investigation into AARP reveals that the organization stands to make more than $1 billion over the next 10 years from Obamacare, a law the seniors lobby supported despite opposition among its core constituency.

AARP, which operates as a tax-exempt organization in Washington, would profit from an increase in its insurance business, specifically from the sale of Medicare products to older Americans. The lucrative business has already transformed AARP into an insurance powerhouse. If it were a for-profit business, AARP would rank as the sixth-largest insurance company in America with profits of $427 million in 2009.

AARP’s revenues exploded following passage of the Medicare Part D law during the Bush administration and will continue to grow as a result of Obamacare, according the House Ways and Means Committee report. That’s because an estimated 7 million seniors will lose Medicare Advantage plans — a consequence of Obamacare — and shift to Medigap plans instead. Every new Medigap plan sold by AARP, already the largest provider of those plans, results in more royalty revenue.

As seniors begin to make the shift in 2014, AARP stands to make between $55 million and $166 million that year alone. Over 10 years, royalties would total more than $1 billion just in new customers.

...

“AARP is most disturbed by the accusation that our support of any legislation would be done with revenue in mind,” AARP President Lee Hammond said. “AARP has long-maintained that we would gladly forgo revenue in exchange for lifetime health and financial security for all older Americans.”

...
I do not find the AARP denial credible. There maybe other reasons for supporting the legislation, but I am sure the potential profit helped push them in that direction. AARP is basically a very profitable Democrat front group. You can bet they will be back this year opposing entitlement reform.

I quit sending them money long ago and it seems I am throwing solicitations from them in the trash on a weekly basis.
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