There was little doubt that President Joe Biden would claim the ludicrously named Inflation Reduction Act as an accomplishment in his State of the Union address. American seniors ought to be outraged that he did. And they should be equally outraged with the AARP, the self-proclaimed advocate for older Americans, whose aggressive advocacy for the misguided spending bill possibly served as the political lynchpin ensuring its passage.
Hand in hand with Democrats, AARP told seniors that Biden’s IRA would lower their drug costs and improve their health care. The organization lobbied hard for the legislation, hosted supportive events for Democrat members of Congress, and spent millions in ads pitching the IRA as a historic milestone beneficial to the health and well-being of older Americans — it’s anything but. Instead, the IRA is a monumental betrayal of everything AARP purports to stand for — earning AARP the “Seniors’ Shame of the Union” award for serving as the captain of the disastrous bill’s cheerleading team.
The IRA — which, again, AARP went to great lengths to pull across the finish line — raids nearly $300 billion from Medicare, labels it “drug savings,” and then uses it to fund subsidies paid to big insurers, costly electric vehicle tax credits, and other spending unrelated to Medicare. Worse, the IRA prioritizes spending for Democrat’s pet projects before applying “savings” to lower drug costs for seniors in Medicare.
So, in the end, liberal Democrats got a big multi-billion piggy bank funded by Medicare cuts to pay for favored spending programs such as Obamacare expansions and Green New Deal handouts for wealthy consumers. Meanwhile, big health insurance corporations got rewarded twice. On the front end, new subsidies extended to higher-income people to pay for non-Medicare private health coverage (rather than reforms to drive down premiums). And on the backend, new government drug price control schemes will pad the record profits of big insurers-PBMs in the short-term.
Meanwhile, the IRA pushes seniors to the back of the line in terms of benefiting from the Medicare “savings” Democrats and the AARP sold to them. Drug developers have signaled a pullback on critical reserach-and-development investments in new cutting-edge medicines due to the IRA’s price controls — just as economists, and even the nonpartisan Congressional Budget Office, warned.
Why would AARP host dozens of town halls (almost exclusively for the benefit of Democrats in the House and Senate), conduct petition drives, and spend millions in paid media to enact a policy that raids Medicare and deprive seniors of access to new treatments and cures?
Follow the money. AARP now earns more than a billion dollars a year in corporate royalties — more than three times what its own members pay in dues — and most of it comes from its financial relationship with a single health insurer-PBM company, UnitedHealth Group. Over the last 15 years, research estimates that AARP has been paid around $8.2 billion due to its unique royalty and marketing relationship with the Minnesota-based insurance giant. All of which serves as a blatant conflict of interest for AARP’s advocacy for the IRA and other health care-related policies.
Whatever AARP’s reasons for advocating and celebrating the IRA, two things are clear: It has betrayed the very seniors it claims to represent and helped weaken Medicare — and for that, AARP deserves its recognition as the “Seniors’ Shame of the Union.”
Jon Decker is the executive director of American Commitment.