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Editor/Founder: Bill Smith, Ph.D. [aka: OzarkGuru & 2010 AFP National Blogger of the Year]
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One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. -- Plato (429-347 BC)

Saturday, January 09, 2010

AARP Dirty Secrets - Part 4: Does Not Exactly Help Seniors

“There’s an inherent conflict of interest….They’re ending up becoming very dependent on sources of income.” — Former AARP Executive Marilyn Moon, quoted in Bloomberg article

ARRA News Service - While AARP claims to serve as a seniors’ advocacy organization, many of its operations appear to serve at cross purposes with those stated claims, leading some to question whether and how the organization actually assists the elderly—and who it serves in their stead:

• A review of its financial statements finds that in 2008, AARP received $652.7 million in direct “royalties and fees” from selling products like Medigap supplemental insurance policies. Royalty revenues now comprise more than half — 60.3% — of all AARP revenues; in 2008, fully 38% of AARP’s $1.1 billion in revenue came directly from United Healthcare. How does relying on health insurance company royalty fees for more of its total revenue than membership dues, grant revenue, and private contributions combined make AARP an “independent” seniors advocacy organization?

• In November, news sources reported that AARP suspended the sale of “limited-benefit” health insurance policies, largely as a result of pressure from Members of Congress concerned that the organization was selling policies advertised as a “smart option for the health care insurance you need,” even though the policies would only pay up to $10,000 for surgery costs. However, the fate of the more than 1 million policy-holders who purchased limited-benefit coverage from AARP is unclear. How does AARP selling “bare bones” health coverage as an “option for the health care insurance you need” in order to pocket additional royalty fees help seniors?

• A Bloomberg news analysis published in December found examples of seniors charged hundreds of dollars above market rates for AARP-branded coverage—a practice which several of the organization’s own members called “unconscionable.” How does overcharging insurance applicants who buy AARP-branded coverage—so that AARP can receive royalty fees its members viewed as “kickbacks”—help seniors?

• As part of its support for Democrats’ health “reform,” AARP has supported cuts to Medicare Advantage plans that could cause millions of seniors to lose their current coverage. As a result, many more seniors may be forced to purchase supplemental Medigap policies should their existing Medicare Advantage plans be taken away from them. However, H.R. 3200 would place strict price controls on Medicare Advantage plans—requiring them to pay out 85% of premium revenues in medical claims — Medigap policies face a far less strict 65% requirement. How does forcing millions of seniors to lose their Medicare Advantage coverage — so that AARP can sell more Medigap policies, and generate additional “kickbacks” from same—help seniors?

• A review of AARP’s most recent Form 990 filing with the Internal Revenue Service finds that in 2008, then-CEO Bill Novelli received cash compensation of $788,957 and “other compensation” of $216,423, for total compensation of $1,005,830. AARP’s 18 highest officials (as well as company trustees) received total salaries of $6,623,777, along with nearly another million dollars ($924,556) in other compensation—an average of more than $51,000 in perquisites and additional compensation per employee. How does spending more than $7 million to fund 18 high-paid staff positions — and paying a CEO more than 78 times the average annual Social Security benefit of $12,738 ($1,061.50 per month) — serve seniors? Moreover, how many AARP members are aware that they pay dues to an organization whose CEO receives more than a million dollars in salary and perks?

• The Form 990 filing also reveals donations from AARP to various groups whose purposes do not appear directly to coincide with senior advocacy, including money for “affordable green housing,” donations to the host committees for the Republican and Democratic National Conventions, more than $1 million to 56 school districts, and over $2 million to a local PBS affiliate. How do millions of dollars in donations to elementary and high schools, as well as a public broadcasting station, help seniors?

Given these facts, many may question: Whom does AARP serve: Its members, or the political—and pecuniary—interests of its senior executives? And is AARP a seniors’ advocacy group, or a billion-dollar insurance company masquerading as a “charity” organization?
AARP Dirty Secrets - Part 1: Helping Seniors or Helping Itself
AARP Dirty Secrets - Part 2: AARP “Kickbacks” Fund Donations to Liberal Causes
AARP Dirty Secrets - Part 3: Will the Real AARP Please Stand Up?
Tags: AARP, dirty secret, government healthcare, kickbacks, medicare, Medigap, royalties, seniors To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Posted by Bill Smith at 12:14 PM - Post Link

12 Comments:

Blogger Ron Russell said...

I heard yesterday that AARP has lost over 100,000 members this last year. I don't know what their current membership is, but it would seem this has to hurt. It does appear they care little about the welfare of their members.

1/09/2010  
Blogger Matt said...

Wow, these guys are screwing over the people that they are supposed to be helping for the Dems and profit!

1/09/2010  
Anonymous Windel Eaves said...

I had to let my membership in aarp lapse. When the executives paid themselves much more than they should have, I left. aarp is now a for profit enterprise. Windel

12/08/2011  
Anonymous Bob Inman said...

I have also let my 20 year membership lapse. It had become increasely obvious that AARP no longer had it's members interests at heart, but was just another organization up for sale to the highest bidder.

3/21/2012  
Anonymous Anonymous said...

Any senior citizen who votes for Obama must be suffering from severe dementia. He has conspired with the help of AARP to oppress seniors.

10/24/2012  
Anonymous Anonymous said...

what is the salary of the present ceo

3/18/2014  
Blogger Bill Smith said...

According to the House Ways and Means Committee, the noted in their 2011 report:

... The Charity Navigator annual survey of CEO
compensation at large non-profits, those with
expenses exceeding $500 million, found that median
compensation for the 2008 tax year was $695,379.205
Mr. Novelli’s 2008 total compensation of $1,005,380
was 44% higher than the median amount identified
by Charity Navigator.206
Their 2009 study, based on
2007 data, found the average compensation for CEOs
at a non-profit with a budget in excess of $100 million
was $462,037.207 AARP generally compensates their
executives more than similarly situated non-profits
surveyed.208 For example, in 2009, Mr. Novelli’s $1,647,419 in total compensation, including a severance payment
of $350,657,216 was well above that average. New AARP
CEO A. Barry Rand, who took over in April 2009, earned
$648,640 in compensation in just 9 months on the job.
Not long after joining AARP, Mr. Rand said, “I decided it
wasn’t about making money…”

In additional to a generous pay package, the CEO
of AARP is entitled to an annual $5,000 payment to
cover any “incidental expenses”, as well as an annual
allowance of up to $12,000 for maintenance expenses
related to his or her personal vehicle.218 AARP reported
that CEO A. Barry Rand also received relocation benefits
of $98,169 in 2009

Source Link: http://waysandmeans.house.gov/uploadedfiles/aarp_report_final_pdf_3_29_11.pdf

An article in Forbes 9/22/2012 is an interesting read and is titled:
How the AARP Made $2.8 Billion By Supporting Obamacare's Cuts to Medicare at http://www.forbes.com/sites/aroy/2012/09/22/the-aarps-2-8-billion-reasons-for-supporting-obamacares-cuts-to-medicare/

To see what other CEO of charities and nonprofits are making check out the American Institute of Philanthoropy published results for Dec 2013 at http://www.charitywatch.org/hottopics/Top25.html .

Personally, I do not envy business leaders, entertainers, professional athletes, investors, inventors, etc. making as much money as the market will bear. However, I do resent people who hold out their hands for contributions for charities making oodles of money off the contributions entrusted to them for the designated cause.

As for NGOs, not charities, it up to the membership and boards as to the decision as to what they pay their CEOs and I have have no heart burn in their efforts to recruit their best spokesman they can.

3/18/2014  
Anonymous Anonymous said...

I was thinking about joining AARP until I researched the salaries of the bigwigs. No way!

7/21/2015  
Anonymous Bill J said...

They make how much? Not on my dime they dont.

3/11/2016  
Anonymous Anonymous said...

I always said that a are was crooked institution and even though my wife said they helped her parents,I don't trust any of these suppose organizations including get the
American red cross. For a couplof years I have Google these supposed good organizations,
charities and animal welfare groups to find do out where the money goes. It stays in my
pocket.

4/08/2016  
Anonymous Anonymous said...

I have read several other reports similar to this one and these reports say basically the same thing. A.A.R.P. is concerned more with selling insurance than helping seniors. The membership is nothing but potential insurance customers. The A.A.R.P. foundation seems to be no more than a solicitor of donations.

6/03/2016  
Anonymous Anonymous said...

I am no longer renewing my membership with AARP due their continued effort to support mostly political aspects. They continue to push insurance sales, and quite frankly I see very little they are doing for the senior membership.

3/01/2017  

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