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We still don’t know quite why the assassin of Brian Thompson targeted the CEO of UnitedHealthcare. But it’s hardly a secret that UnitedHealthcare has the worst record among all large insurers in denying necessary medical care to its subscribers.
The data confirm what far too many patients experience. In 2023, UnitedHealth’s denial rate of claims was 32 percent, compared to an industry average of 16 percent. Nonprofits had a far better record than for-profits.
I had assumed that UnitedHealth’s business model was to lowball premiums and then more than make up the profit by denying claims. But it’s even worse than that.
In Massachusetts, where I live, a supplemental Medicare policy from UnitedHealth costs $251 a month. An identical policy from Blue Cross, which has the state’s best record in not denying care, costs $212.
Why on earth would consumers buy such a flawed insurance product? It helps if they are captive customers, steered to UnitedHealth by a trusted source. That would be AARP.
AARP has just under 38 million members. But AARP is basically an insurance marketing scheme masquerading as an advocacy group for the elderly.
For 27 years, UnitedHealth has been the co-branded choice of AARP. If you are looking for a supplemental policy to conventional Medicare, or a Medicare Advantage product, or a Medicare drug insurance policy, AARP will steer you to UnitedHealth. And only to UnitedHealth.
The reason is shameful. UnitedHealth kicks back 4.95 percent of premium income from AARP subscribers to AARP. And the numbers are staggering. According to AARP’s audited financial report, AARP made $289.3 million from member dues, but $1.134 billion from kickbacks from insurers, of which the lion’s share, $905 million, was from health insurers. AARP delicately refers to these as royalties.
And somehow, because it is a nonprofit, AARP manages to avoid income taxes on this kickback income. Despite Congress’s efforts over the years to make nonprofits pay taxes on commercial income, AARP paid only about $3 million in federal income taxes on “royalties” of well over a billion.
Read here the full article by The American Prospect
