AARP doesn’t represent seniors. It overcharges them

WASHINGTON EXAMINER

With families still struggling after years of high inflation, “affordability” remains top of mind for policymakers in Washington. But one organization has little credibility on this front: AARP. Formerly known as the American Association of Retired Persons, a more accurate moniker might be Against Affordability for Retired Persons because AARP makes most of its money by overcharging its members.

As I outline in a new report for American Commitment, its most recently available financial statement shows that AARP received a payment of over $9 billion — yes, that’s “billion” with a “B” — from UnitedHealth Group. That doesn’t just make AARP financially dependent on the nation’s largest health insurer. It also reveals the way that the organization remains afloat.

According to its most recent Form 990 filing with the IRS, AARP paid over $135 million more in compensation to its employees than the organization received in membership dues. How can a membership organization remain financially viable if it pays out more in salary than it takes in from dues?

In the case of AARP, the difference comes from “royalty fees.” The organization claims those fees cover the use of its logo and intellectual property, but critics would argue that the “fees” amount to overcharging AARP members to buy AARP-endorsed products.

Whatever one’s view of their propriety, these “royalty fees” have benefited AARP substantially. Over the past quarter-century, revenue from such fees has increased every single year and totaled nearly $17.6 billion over the 25-year time span. Most of that revenue, an estimated $10.8 billion since 2007, came from UnitedHealth. And these numbers, substantial as they are, don’t even include the more than $9 billion payment UnitedHealth recently made, which represented an advance payment of “royalty fees” that AARP will recognize in the future.

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