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Dec 7 / Jonathan

AARiP-Off: Group Rakes in Funds from Medicare Prescription Drug Plans

James Ridgeway.

AARiP-Off: Group Rakes in Funds from Medicare Prescription Drug Plans


As the main lobby representing the 37 million Americans over 65 (12 percent of the population), AARP ought to be leading the charge against a program that puts corporate profits before its members’ health. Instead, its efforts have focused on reaping a large share of those profits itself.

Now, Bloomberg news has reported that AARP “collects hundreds of millions of dollars annually from insurers who pay for AARP’s endorsement of their policies…The insurance companies build the cost of these so-called royalties and fees, which amounted to $497.6 million in 2007, into the premiums they charge AARP members, according to AARP’s consolidated financial statement for that year.” Critics say that the AARP-sponsored policies often sell at inflated prices, and don’t offer the best coverage for the money.

A study released last week by the Center for Economic and Policy Research found that three years into the program, “most seniors experienced no reductions in their health care spending as a result of the Medicare Drug benefit.”

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