AARP Gets $762M From Royalties; Do Seniors Get Best Insurance Deal?

Nov. 30--Senior advocacy organization AARP receives $762.6 million a year -- more than half its total revenue of $1.3 billion -- from royalties on everything from health and car insurance deals to credit cards, records reviewed by The Palm Beach Post show.

That may be healthy for its bottom line, but its endorsed insurance plans are not always the best deals for consumers, groups who analyze choices in the market say.

Take Medicare supplement plans seniors choose in an open enrollment period that ends Dec. 7. UnitedHealthcare's ads are a common sight on TV this time of year, and it bills itself as the only Medicare supplement plan endorsed by AARP.

"You can't necessarily find the best deal for yourself watching TV advertisements," said Gavin Magor, senior analyst for Weiss Ratings in Palm Beach Gardens.

For example, three companies with equal or better financial-strength ratings from Weiss offer lower premiums for Medicare Plan A policies than UnitedHealthcare, a Weiss report for a sample customer in Palm Beach Gardens calculates.

To keep things in perspective, UnitedHealthcare stacks up pretty well on price against more than three dozen competitors in a number of categories -- such as Plan F policies, where only one company has a lower premium, the Weiss report indicates.

"Our plans provide members value and peace of mind, which is why more Medicare beneficiaries choose UnitedHealthcare than any other company," a UnitedHealthcare statement to The Palm Beach Post said. "Medicare is not one size fits all. We encourage beneficiaries to evaluate their coverage options during the Open Enrollment Period so they select a plan that best meets their needs for the year ahead."

UnitedHealthcare is apparently not feeling peace of mind about some of its insurance plans that are different from its Medicare supplement business. The company grabbed headlines this month for saying it may leave Affordable Care Act exchanges within two years, citing concerns about profitability there.

Weiss has its own economic aims -- it wants to sell reports to people who buy insurance -- but says its ratings are consumer-oriented and it does not take money from insurers.

An AARP spokesman declined to say how much the organization receives in royalties from UnitedHealthcare, but the most recent IRS Form 990 records available show non-profit AARP reported royalties of $762.6 million in 2013, more than half its revenue of $1.3 billion. That's up from $723. 3 million in royalties the previous year.

The money includes a portion of the premiums collected by AARP-endorsed insurers in fields including health and auto, along with royalties from other ventures such as credit cards.

"Royalty revenue realized from branded products is used to support AARP's mission to serve the needs of those 50-plus through education, programs and advocacy," said AARP spokesman Mark Bagley.

As for what constitutes the best option for seniors, he said, "the features of Medigap coverage plans -- -- as with most types of insurance -- vary considerably, and consumers should carefully choose the plan most suited to their personal situation and individual needs. This kind of critical evaluation is what AARP publicly advises during each and every open enrollment period."

Retiree Charles Bowen of Okeechobee said he appreciates many services AARP provides, and its endorsement of health insurance (UnitedHealthcare) and car insurance (Hartford) influenced his decision to buy from those companies.

But he said he never heard a response when he wrote to AARP in 2013 about concerns with UnitedHealthcare related to getting a wheelchair his wife Vivian needed. They wound up shopping around and choosing other insurers for health and car, carefully looking at price and other factors that may change year to year.

"You have to keep up with it all the time," Bowen said.

___

(c)2015 The Palm Beach Post (West Palm Beach, Fla.)

Visit The Palm Beach Post (West Palm Beach, Fla.) at www.palmbeachpost.com

Distributed by Tribune Content Agency, LLC.