Sunday, May 31, 2009

Does AARP Have A Serious Conflict of Interest?

AARP presents itself as serving the needs of its members, people over age 50. But there is another side to AARP which merits attention.

AARP's 12/31/2007 Consolidated Financial Statements (click title above) show membership dues of $249,353 (in thousands). Many of its members buy policies and obtain insurance services from large national insurers which, in turn, pay AARP royalties for the use of its intellectual property, (name, logo and mailing list) which the financial statements show as $497,635 (in thousands), In addition, the consolidated financial statements describe the AARP Foundation, a 501(c)(3) (tax exempt financial affiliate which receives funding "principally from the federal government, AARP, foundations, corporations and individuals. The Foundation's Board of Directors is composed of members appointed by AARP, Inc.'s Board of Directors."

Typically, business executives (and AARP is a business) find dependable cash flow to be highly addictive. Cash is the life blood of any business. So, I ask, since the AARP, directly and indirectly, is involved in the process of health care reform, is AARP's dependence on cash flow derived from royalties from health insurers, and other funders, who would be affected by any meaningful health care reform a fatal conflict of interest for AARP? Who is AARP truly representing: its insurers, who pay royalties, its other funders, or its members? And how do we know how AARP is resolving this clear conflict?

Perhaps someone from AARP would care to tell us how AARP deals with this overt conflict of interests?

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