UnitedHealth and AARP Shake Hands on $9 Billion Deal

Behind the Capitol Hill photo ops and consumer-friendly slogans, AARP, America’s most trusted seniors’ group, has close financial ties with America’s largest health care conglomerate.

In 2024, UnitedHealth Group (UNH) — the nation’s largest health insurer — paid AARP a one-time upfront royalty payment of just over $9 billion for the rights to use AARP’s name in marketing Medicare Advantage-type plans and Medicare supplement policies. According to financial statements for AARP, this windfall came as part of a restructured deal with UNH’s insurance unit, UnitedHealthcare, extending their partnership for an additional 12 years and recording a balance of about $8.72 billion in deferred revenue as of December 31.

AARP’s financial statements for December 31, 2024 and 2023.

What makes a deal like this so troubling is its implication: the organization that millions of older Americans consider their trusted advocate — AARP, with its packed magazines and covers featuring Bon Jovi, Samuel L. Jackson and Sally Field — is in fact functioning as a multimillion-dollar marketing arm for an insurer whose business model increasingly depends on enrolling seniors in private Medicare plans.

Let’s pause: Why do so many health care policy experts, providers, policymakers and advocates warn that Medicare Advantage (MA) can be a bad deal for older Americans?

Because while MA plans from private insurers are touted as “better value” alternatives to traditional Medicare, evidence shows they often severely restrict access to providers, impose unnecessary prior authorization hurdles that result in care denials or delays that can be deadly — and cost taxpayers nearly $100 billion more each year than original Medicare. One study, for instance, found that 1 in 3 MA beneficiaries experienced a denial of service each year, with such denials rising by 15% over five years. Another found MA plans cost the federal government roughly 22% more per patient compared to traditional Medicare. Meanwhile, AARP’s own website reports that among MA enrollees, “25 percent of respondents were confused about plan coverage and experienced surprise bills post-enrollment,” and with “17 percent of those prior authorizations ending in denial of coverage.” It’s important to note that original Medicare does not even maintain networks – almost all providers participate in original Medicare – and that only a small handful of treatments are subject to prior authorization.

So with MA, seniors need to make a trade (or a gamble): pay a lower premium up front, but accept a narrower network, more hoops to jump through and a higher risk of being stuck when the unexpected happens. All while they’re on a limited budget.

Cashing in on the golden years

Back to the story of AARP and UnitedHealth. AARP publicly defends the arrangement, stating that the royalty payment strengthens its long-term capacity to deliver on its mission and that its subsidiary that manages the agreement (AARP Services Inc.) is “managed separately and has no input on AARP’s policymaking.” But some independent critics, like Commitment to Seniors, are poking holes in the arrangement:

“As much as it tries to ignore the obvious, AARP’s large and growing ties to UnitedHealth severely compromise the integrity of its policy positions. If all its revenue from UnitedHealth disappeared, AARP would have difficulty remaining a viable organization without a major restructuring and/or job losses. AARP and its employees have every incentive to preserve a major source of revenue….”

We’ve known for years that AARP is earning billions from UnitedHealth to lend its trusted brand to Medicare Advantage products — while simultaneously lobbying on Medicare policy. And that combination is ripe for capture.

UnitedHealth’s payment to AARP did not come as a modest licensing fee: the $9 billion is a one-time advance that will be drawn down over time. That’s a financial anchor and a dependency. It’s hard to believe that AARP’s advocacy will remain uninfluenced when a major revenue stream depends on the financial health of one of the largest insurers selling to seniors. The point? If AARP is going to get another $9 billion from UnitedHealth some day, UnitedHealth has to keep extracting billions of dollars from taxpayers and Medicare beneficiaries. It’s a symbiotic relationship that benefits both AARP and UnitedHealth but not so much for the rest of us – and certainly not for the Medicare Trust Fund.

A brilliant, strategic play

Thanks to its check, UnitedHealth can utilize the credibility and reach of AARP — an organization trusted by nearly 38 million members who are 50 and older. And AARP doesn’t just print magazines. It also has a huge influence on Capitol Hill.

Every summer in Washington, a small army of red-shirted AARP volunteers floods Capitol Hill during the organization’s “Lobby Day.” This year, according to AARP’s own website, staff and volunteers from all 53 states and territories held nearly 400 meetings with members of Congress to “stand up for Americans age 50 and older.”

But under the red shirts and behind the photo ops is a more complex story. AARP is not just a grassroots volunteer operation — it’s one of the most formidable lobbying machines in Washington. According to OpenSecrets, AARP’s lobbying expenditures totaled $11.75 million during just the first six months of this year, with another $735,000 paid out to outside government affairs firms. AARP has also amassed a small army of 72 of its own registered lobbyists. Of that army, also according to OpenSecrets, 52% are part of Washington’s notorious “revolving door,” which means they are either former regulators, congressional staff or ex-members of Congress who now use their Rolodex and connections to lobby the same institutions they once worked for.

That kind of presence rivals the biggest corporate interests in America because, in many ways, AARP is one. When an organization is handed $9 billion upfront by the nation’s largest private health insurer, it’s hard to imagine all that money being spent on glossy magazines or caregiver surveys. AARP insists that the deal with UnitedHealth was made through a “separate” subsidiary and “has no input on policymaking.” But money is fungible, and influence in Washington is fluid.

Another thing to keep in mind is that big money from corporations can also serve to keep receiving organizations on the sidelines during debates on legislation that, if enacted, could put a crimp on profit margins. AARP’s own storytelling about its Capitol Hill operations proves its influence. Its Policy, Research & International Division churns out state-by-state data and model policies that lawmakers often lift wholesale into legislation. And AARP proudly touts that 20 states this year have passed bills or regulations “incorporating AARP’s recommendations.”

Posts on AARP’s website.

It’s worth noting that, to its credit, AARP did put a statement on its website in support of the bipartisan No UPCODE Act, which would make it more difficult for Medicare Advantage insurers to raid the Medicare Trust Fund. The bill’s lead sponsor, Sen. Bill Cassidy (R-Louisiana), even included a quote from AARP in his press release about the bill. But I’m not hearing that AARP’s lobbyists are actively encouraging other senators to sign on as cosponsors or to get a companion bill introduced in the House. Maybe they are and I’m just not catching wind of it yet.

Despite continuing to take so much money from UnitedHealthcare, including billions more over previous years, AARP might be telling the company that it doesn’t want to have its name used in UnitedHealth’s TV and print advertising during this open enrollment period. Here in Philadelphia, I’m seeing UnitedHealth TV ads, but so far without the AARP co-branding. And a slick four-page flyer in a recent edition of the Philadelphia inquirer, which invited seniors to “reserve your seat” at one of many company-sponsored “Medicare presentations” in Philly suburbs, made no mention of AARP.

UnitedHealthcare Medicare Advantage flyer.

Another thing we’re not seeing, unfortunately, is AARP joining other advocates in calling on lawmakers to insist that UnitedHealthcare and other Medicare Advantage companies disclose the many “side effects” of MA plans, similar to what pharma and tobacco companies have to do in their ads and packaging. How can AARP endorse MA plans without making sure TV ads promoting them explain that, unlike original Medicare, MA plans make extensive use of prior auth and often have very limited networks of doctors and hospitals.

All this being said, AARP taking money from a giant corporation is not the least bit unusual in Washington. And advocacy on behalf of consumers and patients requires resources. But when an organization is simultaneously lobbying Congress on Medicare and cashing billion-dollar checks from the largest Medicare Advantage insurer, it’s no longer just an advocate for consumers and patients.

The hallmark of AARP’s identity has long been “we’re on your side” — the older-American’s friend, voice, protector. But today that message rings hollow when the same organization is accepting billions of dollars from a private insurance giant that, according to the Wall Street Journal, is under criminal investigation by the Department of Justice concerning its Medicare Advantage business.

When UnitedHealth pays AARP billions, seniors are being nudged — maybe unknowingly because of ads that do not disclose essential details— into plans that many seniors may live to regret but that pad the bottom lines of big insurance conglomerates.

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