AARP Looks to Cash in on Government Shutdown

Congressional Democrats are demanding that Republicans agree to an extension of “temporary” COVID-era Obamacare subsidies as a condition for reopening the government. The American Association of Retired Persons (AARP) has now gotten behind that campaign – which could result in a multi-billion-dollar windfall of taxpayer money for UnitedHealth, which paid out an eye-popping $9 billion to AARP last year.

On September 19, just days before government funding expired, an AARP blog post explained that the group is “fighting for a permanent extension of savings that lower the price of Affordable Care Act coverage.” Those “savings” are the enhanced premium Obamacare tax credits passed as part of the Biden-era 2021 American Rescue Plan Act and extended in the 2022 Inflation Reduction Act. They expire at the end of this year.

As health policy professor Ge Bai explains in a recent Wall Street Journal op-ed, those subsidies were never meant to be permanent – hence why they were billed as “temporary” in Democrat messaging on the American Rescue Plan. The expanded premium subsidies enabled people who made up to 400 percent of the federal poverty line to purchase Obamacare plans capped at 8.5 percent of their annual income. (The real costs, of course, were passed along to taxpayers.)

As Bai reports, this means that “a family of four in Arizona making $600,000, a married couple in West Virginia making $580,000, and a single individual in Vermont making $180,000 all qualify for subsidies.” In other words, a program that was sold as providing cheap health insurance for needy individuals took a massive step toward becoming de facto socialized healthcare for huge swaths of the country. (Importantly, allowing the enhanced credits to expire would simply return things to where they were before the COVID-19 pandemic – not roll back any Obamacare coverage or subsidies that existed prior to that.)

Democrats didn’t make the enhanced subsidies permanent in 2021 or 2022 to avoid political blowback from the enormous cost associated with such a policy – nearly half a trillion dollars over the next decade alone. But they fully intended to make them permanent when the expiration date rolled around at the end of this year. As Milton Friedman famously remarked, “nothing is so permanent as a temporary government program.”

Democrats knew that the subsidized plans would be a point of political leverage, and now they’re taking full advantage of it. Quoting Bai again, “Simply put, since 2021, Congress has been bribing higher-income Americans to purchase expensive Obamacare plans by hiding the plans’ true price tags using taxpayer dollars.”

And who are those taxpayer dollars going to? A significant chunk are being funneled into the pockets of UnitedHealth, the nation’s largest health insurer – and a primary revenue source for AARP.

As a new report from the nonprofit American Commitment reveals, AARP took in $9.06 billion from UnitedHealth in 2024 – more than 30 times what AARP made in membership dues. “Contrary to its supposed focus on ‘affordability,’ that revenue comes from making insurance less affordable for AARP members,” the report reads.

AARP received its gargantuan payout from UnitedHealth “in exchange for the group health insurance provider receiving an exclusive license for the right to use AARP’s trade name and other intellectual property in marketing efforts for a particular health insurance program directly related to this agreement.” Critically, these royalties were advance payments for the next 12 years – meaning that AARP remains “financially obligated to the company for the foreseeable future.”

UnitedHealth – which is currently under federal investigation by the Department of Justice for deceptive billing practices – also pays a 4.95 percent royalty fee to AARP for every Medicare supplemental (Medigap) policy sold. This means that, while AARP claims that it is primarily interested in reducing plan costs, the organization has “a strong financial incentive to aggressively market, sell, and renew as many Medigap policies as possible.”

None of this is disclosed on any of AARP’s prominent messaging or communications to Congress. While billing its support for enhanced premium subsidies as being driven by concern for seniors, AARP hides the fact that its largest corporate partner, UnitedHealth, stands to rake in billions if the subsidies are extended.

American Commitment president Phil Kerpen put it even more bluntly in a statement following the release of the report. “Democratic leaders Chuck Schumer and Hakeem Jeffries have shut down the government until taxpayers fork over another $40 billion a year to massive health insurance companies,” Kerpen said. “It’s outrageous that they shut down the government to serve the same insurers who fund AARP’s billion-dollar kickbacks. Congress should say no to bailouts for big insurance.”

As even The Washington Post recently acknowledged, “the real problem is that the Affordable Care Act was never actually affordable.” Since Obamacare took effect, health insurance premiums have increased by 60 percent. Families who could once easily afford health insurance no longer can. The only real winners have been corporate giants like UnitedHealth – and by extension AARP – who suck up ever-increasing sums of taxpayer dollars while still jacking up premiums, outrageously denying claims, and putting sick and injured Americans through hell for trying to use their coverage.

The government may be shut down, but the money train between AARP and UnitedHealth is running right on time.

Shane Harris is the Editor in Chief of AMAC Newsline. You can follow him on X @shaneharris513.