First, while AARP poses as a disinterested senior advocate, it functions as  an insurance conglomerate, with a liberal lobbying arm on the side. AARP depends  on profits, royalties and commissions to make up more than 50 percent of its  annual revenues. Membership dues from seniors account for only about 20 percent.  The sums involved aren’t chump change: AARP’s $458 million in health insurance  revenue in 2011 would rank it as the nation’s sixth most profitable health  insurer.

Second, AARP wins when seniors lose. Because AARP receives a “royalty fee” of 4.95 percent of every premium dollar paid by seniors buying  Medigap insurance from the organization, AARP earns more profit when seniors pay  more in premiums. Even former AARP executives admitLINK that the billions of  dollars raised from these business enterprises have compromised the  organization’s mission and independence.

Third, AARP’s policy positions just happen to coincide with its financial  interests. “Obamacare,” which AARP lobbied heavily for, could yield the group  windfall profits of more than $1 billion over the next decade by forcing seniors  off Medicare Advantage plans and into Medigap supplemental coverage. Conversely,  AARP engaged in a secret lobbying campaign to block Medigap reforms last year  that by one estimate would have saved nearly 80 percent of seniors an average of  $415 per year – but cost AARP billions in profits.