America’s Most Profitable Non-Profit < > ht
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Posted On: 12/17/2018 7:27:55 AM
America’s Most Profitable Non-Profit
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It is hard to imagine a non-profit organization that raises more money in a single year than the Gross Domestic Product of 19 nations ranked by the International Monetary Fund. But that is what AARP has become and they are increasingly coming under fire for their questionable financial tactics.
According to AARP’s 2016 filing with the Internal Revenue Service, the non-profit raised more than $1.6 billion (yes, billion with a ‘B’) and had in excess of $1.1 billion of net assets that year, all of it shielded from the IRS because of its 501(c)(3) tax status. As non-profit groups go, AARP has done pretty well for itself, but at what cost?
Cable news channels are happy to take advertising money from AARP to sell its branded health care plans but are less inclined to report news of various legal actions against AARP for business practices that raise legitimate questions about whether this non-profit is acting as a for-profit business.
A lawsuit filed against AARP in Pennsylvania in August, 2018, alleges that seniors in that state who signed on to the non-profits health plans, “were fooled into paying artificially inflated insurance charges for Medicare supplemental health insurance policies so that defendants could use the inflated portion of the payment for illegal purposes.”
In another lawsuit filed in May, 2018, AARP is accused of allegedly diverting $400 million in Medigap policy premium rebates, which would be a violation of law in Connecticut, where the lawsuit was filed. The $400 million figure is roughly 25% of AARP’s annual revenue so it’s not an insignificant sum.
A similar action against AARP was filed in Florida in February, 2018, claiming the non-profit allegedly, “acts as the de facto agent for UnitedHealth by helping market, solicit and sell AARP Medigap policies in exchange for a 4.95% commission from every policy sold or renewed.”
The spate of lawsuits against AARP is 2018 isn’t an anomaly. There was a similar action against AARP in California four years ago, alleging what other lawsuits have argued: that AARP is not acting as a non-profit but as an illegal agent for selling insurance, profiting from these acts, and avoiding taxes on hundreds of millions of dollars in revenue.
The non-profit argues that these hundreds of millions of dollars are not fees or commissions, but royalties paid to use AARP’s intellectual property. Whether this is true or not will be determined in court, but given that the group receives its payments based not on a flat fee but as a percentage of every policy sale, AARP’s lawyers have their work cut out for them.
AARP’s practices are so brazen that even its own members are starting to rebel. The website Salon reported this spring on how AARP members are fed up with the group’s aggressive and deceptive membership practices. According to Salon, “the renewal practices have been criticized as ‘deceptive,’ ‘a waste,’ ‘stupid’ and ‘an obscenity.’”
This is unsurprising in light of AARP’s political attacks on efforts to repeal and replace the Affordable Care Act. The group’s false attacks on what it called an “age tax” are especially ironic given AARP’s own age tax on seniors who paid nearly 5% more for their health care plans through AARP. Call it a royalty or a commission, seniors still paid it.
While promoting itself as a champion for senior citizens, AARP has become its own multi-billion-dollar special interest group whose duplicity was laid bare by Christopher Jacobs. Writing in The Federalist, Jacobs noted that the AARP received, “nearly $3.2 billion in profit over six years, just from selling insurance plans. AARP received much of that $3.2 billion in part because Medigap coverage received multiple exemptions in Obamacare. The law exempted Medigap plans from the health insurer tax, and medical loss ratio requirements.”
Small wonder AARP resorts to scare tactics to help their bottom line; it’s not easy running a $1.6 billion non-profit. They have benefitted handsomely from crony capitalism and captured a sizable share of the market for supplemental insurance programs. They’ll do whatever it takes to maintain that market share, even if it means attacking health care reform plans while charging their own members an age tax. It’s despicable and it has to stop.
Read more: https://www.americanthinker.com/articles/2018...z5ZwYWPmPX
Follow us: @AmericanThinker on Twitter | AmericanThinker on Facebook
< >
It is hard to imagine a non-profit organization that raises more money in a single year than the Gross Domestic Product of 19 nations ranked by the International Monetary Fund. But that is what AARP has become and they are increasingly coming under fire for their questionable financial tactics.
According to AARP’s 2016 filing with the Internal Revenue Service, the non-profit raised more than $1.6 billion (yes, billion with a ‘B’) and had in excess of $1.1 billion of net assets that year, all of it shielded from the IRS because of its 501(c)(3) tax status. As non-profit groups go, AARP has done pretty well for itself, but at what cost?
Cable news channels are happy to take advertising money from AARP to sell its branded health care plans but are less inclined to report news of various legal actions against AARP for business practices that raise legitimate questions about whether this non-profit is acting as a for-profit business.
A lawsuit filed against AARP in Pennsylvania in August, 2018, alleges that seniors in that state who signed on to the non-profits health plans, “were fooled into paying artificially inflated insurance charges for Medicare supplemental health insurance policies so that defendants could use the inflated portion of the payment for illegal purposes.”
In another lawsuit filed in May, 2018, AARP is accused of allegedly diverting $400 million in Medigap policy premium rebates, which would be a violation of law in Connecticut, where the lawsuit was filed. The $400 million figure is roughly 25% of AARP’s annual revenue so it’s not an insignificant sum.
A similar action against AARP was filed in Florida in February, 2018, claiming the non-profit allegedly, “acts as the de facto agent for UnitedHealth by helping market, solicit and sell AARP Medigap policies in exchange for a 4.95% commission from every policy sold or renewed.”
The spate of lawsuits against AARP is 2018 isn’t an anomaly. There was a similar action against AARP in California four years ago, alleging what other lawsuits have argued: that AARP is not acting as a non-profit but as an illegal agent for selling insurance, profiting from these acts, and avoiding taxes on hundreds of millions of dollars in revenue.
The non-profit argues that these hundreds of millions of dollars are not fees or commissions, but royalties paid to use AARP’s intellectual property. Whether this is true or not will be determined in court, but given that the group receives its payments based not on a flat fee but as a percentage of every policy sale, AARP’s lawyers have their work cut out for them.
AARP’s practices are so brazen that even its own members are starting to rebel. The website Salon reported this spring on how AARP members are fed up with the group’s aggressive and deceptive membership practices. According to Salon, “the renewal practices have been criticized as ‘deceptive,’ ‘a waste,’ ‘stupid’ and ‘an obscenity.’”
This is unsurprising in light of AARP’s political attacks on efforts to repeal and replace the Affordable Care Act. The group’s false attacks on what it called an “age tax” are especially ironic given AARP’s own age tax on seniors who paid nearly 5% more for their health care plans through AARP. Call it a royalty or a commission, seniors still paid it.
While promoting itself as a champion for senior citizens, AARP has become its own multi-billion-dollar special interest group whose duplicity was laid bare by Christopher Jacobs. Writing in The Federalist, Jacobs noted that the AARP received, “nearly $3.2 billion in profit over six years, just from selling insurance plans. AARP received much of that $3.2 billion in part because Medigap coverage received multiple exemptions in Obamacare. The law exempted Medigap plans from the health insurer tax, and medical loss ratio requirements.”
Small wonder AARP resorts to scare tactics to help their bottom line; it’s not easy running a $1.6 billion non-profit. They have benefitted handsomely from crony capitalism and captured a sizable share of the market for supplemental insurance programs. They’ll do whatever it takes to maintain that market share, even if it means attacking health care reform plans while charging their own members an age tax. It’s despicable and it has to stop.
Read more: https://www.americanthinker.com/articles/2018...z5ZwYWPmPX
Follow us: @AmericanThinker on Twitter | AmericanThinker on Facebook
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