December 04, 2008
Do you AARP? Why Not Write a letter to William D. Novelli?

If you AARP, better think twice. According to an article in Bloomberg News, they’re charlatans, dishonest purveyors of overpriced products, con artists. Awe, never mind, let’s just come out and say it right. They’ve become a bunch of crooks, but maybe all of the above stated terms too. This article from Bloomberg spells out the extent of the racketeering in detail. Selected portions of the article appear below, but there is a lot more, so read the whole thing.

Arthur Laupus joined AARP because he thought the nonprofit senior-citizen-advocacy group would make his retirement years easier. He signed up for an auto insurance policy endorsed by AARP, believing the advertising that said he would save money.

He didn’t. When Laupus, 71, compared his car insurance rate with a dozen other companies, he found he was paying twice the average. Why? One reason, he learned, was because AARP was taking a cut out of his premium before sending the money to Hartford Financial Services Group, the provider of the coverage.

Laupus stumbled onto something that many members of the world’s largest seniors’ organization don’t know: The group, formerly called American Association of Retired Persons, collects hundreds of millions of dollars annually from insurers who pay for AARP’s endorsement of their policies.

AARP advertises that its Medicare supplemental insurance can save people thousands of dollars. While every type of supplemental policy sold by all companies must offer the same exact coverage under federal rules, AARP doesn’t sell the least expensive.

The AARP/UnitedHealth basic policy costs $582 a year more than a lower-cost competitor in New York and $428 more in Los Angeles, according to data on Medicare’s Web page. AARP spokesman Sohn says everyone should shop carefully.

Some members who didn’t quit have since concluded that their AARP-endorsed insurance costs are inflated. Richard Ostor of Indialantic, Florida, says he joined AARP seven years ago to get the lowest-cost car insurance.

He was satisfied with the insurance for a while -- until his rates started going up even though he had had no accidents or traffic tickets. In April, his AARP/Hartford premium rose to $950 a year. He shopped and switched to Geico after he found similar insurance for $640.

“AARP has great buying power, and people should be able to get the best deal,” says Ostor, 62, a retired divorce lawyer and bar owner. “AARP fell asleep at the switch or has a very sweet deal with The Hartford. This is unconscionable, what AARP has allowed to happen.”

Bill and Helen Cochran, an Abington, Maryland, couple who retired nine years ago, say they felt the same way when they learned they were paying more than they had to with AARP’s Medicare supplemental insurance.

AARP-endorsed life insurance policies are also more expensive than comparable coverage by competitors, says Mark Maurer of Tampa, Florida-based Low Load Insurance Services Inc., which sells policies to seniors.

A New York Life $50,000 permanent life insurance policy for a 65-year-old man available through AARP costs $286.17 a month, Maurer found. He says the same man can buy a $50,000 policy for 51 percent less from Cincinnati-based Columbus Life Insurance Co.

Where does all this money go? Well, in 2001, Horace B. Deets, executive director of AARP, earned $369,000, plus $141,806 in retirement benefits according to the NY Times. What does the executive for this organization earn now? It’s gone up quite a bit since 2001.

According to Charitywatch.org, William D. Novelli, Secretary & CEO and executive for the AARP Foundation & AARP, respectively, earned a total salary of $902,171. Too bad Social Security benefits haven’t risen that much in that time.

We may add this gentleman person to our wanted posters collection, this one with a nice title and picture stating “Wanted for Ripping Off Old Poor People”. Plastering the posters all over his neighborhood and the places he visits such as Country Club entrances, etc. would seem to be a nice gesture to show the gratitude that poor retirees must feel for the rip off policies peddled by his organization. And just think, this guy probably feels he “earned” his salary.

And in case you don’t know, the picture below is one of a house belonging or formerly belonging to one of the Irish Travelers of South Carolina. If you don’t know what many of them do, I urge you to take a look at this article. Mr. Novelli might want to find a house in this group’s location in Aiken, South Carolina. He’d probably feel right at home among this crowd.

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Posted by Buck Batard at December 04, 2008 06:11 AM
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AARP went from being an advocacy group to a profit exercise.

that road predictably leads to tears.

Posted by: karen marie on December 5, 2008 10:40 AM

AARP started out as a marketing tool for Colonial Penn Insurance Co. They haven't changed at all over the decades, as far as I can tell.

And you have to wonder where they get the money to solicit every American of drinking age monthly.

Medicare Part D was the worst boondoggle yet. The only card-carrying member of the AARP I know sent in his card with a letter of resignation on account of that debacle.

Posted by: Joyful Alternative on December 5, 2008 10:59 AM
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