AARP under fire after $9 billion payment from UnitedHealthcare revealed

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(The Center Square) – AARP is facing new scrutiny after disclosures showed it will receive $9 billion from UnitedHealthcare under a restructured deal to market AARP-branded Medicare Advantage plans.

Financial statements on AARP’s website show the agreement replaces monthly royalties with a one-time payment of just over $9 billion. The deal comes as UnitedHealth Group faces a criminal investigation by the U.S. Department of Justice over possible Medicare fraud.

Critics question whether the payment represents what one called a “tax-funded bribe” to keep AARP tied to UnitedHealthcare.

“This creates the appearance of a tax-funded bribe to block AARP from cutting ties with United,” health policy expert Mark Merritt said in a statement. “AARP should operate independently, like Consumer Reports, which recommends products based solely on quality and value, not payments from businesses.

“AARP is getting more than the NIH spends each year on cancer research,” he added.

An AARP spokesman said the deal was made through a subsidiary, AARP Services Inc., which operates separately from the organization’s policy and advocacy work.

AARP spokesman Sarah Lovenheim told Axios that the restructured agreement between the company and UnitedHealthcare changes monthly royalties to a fixed upfront payment that "strengthens AARP's long-term capacity to deliver on our social mission and advocacy work for older Americans." 

She added that AARP will continue to review all Medicare products bearing its name to ensure they are of adequate quality and value.

UnitedHealthcare’s marketing relationship with AARP has existed since the 1990s and now covers about 10 million enrollees. Earlier this year, questions arose about whether AARP followed federal oversight rules for its Medicare Advantage partner.

AARP has faced similar scrutiny before. In 2022, it partnered with Oak Street Health, a clinic chain that later faced a Justice Department civil investigation into its marketing tactics. Oak Street denied wrongdoing.

AARP reportedly makes over $1 billion annually from corporate royalties, mostly from health insurance products sold under its name.

The $9 billion disclosure comes as Congress debates how much government spending will go to private health insurers in the ongoing debate over the continuing resolution.

Merritt said the AARP arrangement exemplifies that issue. 

“AARP should explain what seniors and taxpayers get for that kind of money,” he said.