When evaluating an advocacy group’s views on public policy, it helps to consider the source. In the case of AARP, that means scrutinizing the sizable conflicts of interest that compromise the organization’s policy positions. Even as it lobbies for a permanent extension of enhanced Obamacare subsidies to make insurance “affordable,” AARP funds that lobbying by making health coverage less affordable for its own members.
A glance at AARP’s most recent financial statements shows a glaring conflict. Last year, the organization received $9.1 billion—that’s billion with a “B”—from its restructured contract with UnitedHealth. The one-time, tax-free payment constituted an advance on future royalties from selling UnitedHealth insurance policies.
As I have outlined in a series of reports for American Commitment, AARP has become increasingly dependent upon royalty revenue, and specifically revenue from UnitedHealth, to sustain its operations. From 2007 through 2024, AARP received $15.5 billion in royalty fees, of which an estimated $10.8 billion came from UnitedHealth. In 2024, I estimate that revenue from UnitedHealth comprised nearly half (47.9%) of AARP’s income.
Yet AARP says precious little about how its revenue sources compromise its policy positions. In lobbying Congress and issuing fact sheets about the Exchange subsidies, it included not a word about how a large and growing portion of its revenue base comes directly from the nation’s largest health insurer. UnitedHealth has an obvious financial stake in keeping the enhanced Obamacare subsidies flowing—and its reliance on revenue from UnitedHealth means that AARP does too.
For an entity that advocates for transparency regarding drug pricing, AARP seems intent on ignoring the conflicts posed by its relationship with UnitedHealth. Its website mentions not a word about the federal investigation surrounding UnitedHealth’s Medicare billing practices. An AARP article about last year’s ransomware attack on a UnitedHealth affiliate, which crippled the health care system for months, failed to reference AARP’s ongoing contractual arrangement with UnitedHealth. AARP even went so far as to reword its financial statements to prevent readers from determining the precise amount of revenue it receives from UnitedHealth each year, months after I published an expose pointing out that AARP had made billions from that relationship.
But the larger irony comes from AARP’s position on Obamacare subsidies. For all its talk about “affordability,” AARP receives “royalties” generated by overcharging seniors for insurance. For its Medicare supplemental plans sold via UnitedHealth, AARP receives a “royalty fee” that amounts to 5.95% of every premium dollar—a percentage-based structure that gives AARP a clear financial incentive to sell seniors coverage they may not need or want, just to benefit its own bottom line. AARP would have slightly more credibility lecturing Congress on insurance “affordability” if its entire business model didn’t center on making health insurance less affordable for its own members.
In the past, AARP executives have dismissed these inherent financial conflicts by claiming that they would gladly forego revenue to fix the health care system. But the amount of revenue it receives from UnitedHealth means that AARP cannot forfeit that income without jeopardizing its financial viability, demonstrating how badly compromised the organization has become.
If AARP cares so much about affordability for seniors, it has a simple solution staring it in the face—one which won’t involve a taxpayer-funded bailout of its partners at UnitedHealth. AARP can, and should, stop overcharging its members for insurance, and figure out another way to generate revenue—preferably one in which the organization’s actions actually align with its stated policy positions.
Mr. Jacobs is Founder and CEO of Juniper Research Group, and author of the book The Case Against Single Payer. He is on Twitter: @chrisjacobsHC.
