The United States Federal Government mandates retention rules for private sector entities. This is prevalent in the Health Insurance Portability and Accountability Act (HIPAA).
Section 164.316(b)(1) HIPAA requires that organizations:
“(i) Maintain the policies and procedures implemented to comply with this subpart in written (which may be electronic) form; and (ii) if an action, activity or assessment is required by this subpart to be documented, maintain a written (which may be electronic) record of the action, activity, or assessment.”
Section 164.316(b)(2)(i) also says:
“Retain the documentation required by paragraph (b)(1) of this section for 6 years from the date of its creation or the date when it last was in effect, whichever is later.”
Even the Internal Revenue Service (IRS) requires retention of individual tax returns and related documents for 3 years:
“Keep records for 3 years if situations (4), (5), and (6) below do not apply to you.”
If the government has the authority to mandate records retention requirements for private entities, we the people ought to invoke our authority to require reasonable records retention periods from our government.
Is 24 hours reasonable? The Rio Grande Foundation does not agree.
As such, the Foundation has filed a complaint with New Mexico Attorney General Hector Balderas after recent discovery of the executive retention policy of Michelle Lujan Grisham’s administration. In January of 2021, the executive branch issued a directive mandating automatic records deletion of all instant messages sent through the state’s messaging platform after 24 hours.
We find this to be an egregious assault on openness and transparency in government and implore the Attorney General to take immediate action.
Anthony Fauci’s emails have been released, and they tell an interesting tale about the government’s handling of the COVID-19 pandemic. One particular email stood out to me from Fauci to Sylvia Burwell discussing masks.
Within the body of the email, Fauci asserts that the use of masks in a public setting is generally to prevent infected individuals from spreading a virus. More specifically, he writes that the “typical mask you buy in the drug store is not really effective in keeping out virus, which is small enough to pass through the material.” This email was sent on February 5, 2020.
If the drug-store masks are ineffective, why were they forced on the general population for over a year? Did masks help contain the spread of COVID-19 at all? What else do we not know?
But I’m not here to argue about the efficacy of masks and Fauci’s handling of the pandemic. I’m here to emphasize the importance of why we are able to have this discussion today: open government and transparency.
Without access to these documents, the country might not have ever known to ask these questions. This is significant as we can analyze the events in early 2020 in a new light. Most importantly, we can hold individuals accountable if they recommended policies that were known not to be effective.
Here in New Mexico, we have a different ongoing dilemma, one that is also rooted in transparency. Thanks to the initial efforts of Searchlight New Mexico, the additional whistleblowers that have come forward since the initial Searchlight report, and some well-timed public records requests submitted by yours truly, we know that Governor Michelle Lujan Grisham and her administration are still actively depriving the people of New Mexico access to public documents through permanent and automatic deletion.
In January of this year, a directive from the governor’s office was implemented by the New Mexico Department of Information Technology: delete all messages after 24 hours. This directive came before the governor’s press secretary acknowledged the use of a creative new term: “transitory.”
The deleted messages were broadly considered “transitory” in nature, a definition that has already been debunked in the context of transparency and is not a qualified exception under the Inspection of Public Records Act (IPRA), New Mexico’s government transparency law.
“Transitory” messages have been unofficially described as “employee banter, routine check-ins between workers and other insignificant exchanges.” The rub is that they’re all public documents and subject to inspection requests, regardless of whatever “transitory” qualification they try to apply.
Fauci could have used the same term to describe his seemingly innocuous email to Burwell about masks. What if Fauci had deleted that email because it was “just transitory”?
All this and the responses from Michelle Lujan Grisham’s office that there are “no records responsive to your request” underlines a seriously dangerous trend and contemptuous attitude within the Governor’s administration. The widespread and systematic “paper shredder” policy is nothing short of criminal.
New Mexico’s Attorney General agrees: “public bodies acquiring information should keep in mind that the records they keep generally are subject to public inspection.”
The governor’s press secretary Nora Sackett said that the governor takes transparency and open government “very seriously.” If that’s true, then Michelle Lujan Grisham’s administration and all New Mexico state agencies should shed their cloaks of secrecy and immediately stop the destruction of public documents.
This is a clear assault on the people’s ability to keep a watchful eye on their elected government and should be alarming to everyone, especially those who care for our democracy.
As the far-left solidifies its stranglehold on all branches of New Mexico’s state government, more than ever we need an aggressive media and informed constituency to demand accountability in a system proven to produce abuses without. These abuses have never been more readily apparent than in the aftermath of a recent Searchlight New Mexico investigation.
In May 2021, the New Mexico Children, Youth and Families Department fired two high-level employees. Their terminations came after the two employees raised concerns about the agency’s recent shift to the use of encryption and the automated destruction of public records.
The department recently transitioned to the secure text messaging app Signal to discuss a wide range of official business, including the state’s response to the COVID-19 pandemic and the care of children in state custody. Officials asserted that they relied on Signal primarily for “transitory communications”. But what is “transitory” in the context of the Inspection of Public Records Act (IPRA), the state’s public records law?
CYFD Secretary Brian Blalock defines transitory communications as “employee banter, routine check-ins between workers and other insignificant exchanges not subject to public records laws”.
However, the New Mexico Attorney General’s IPRA guide addresses exceptions generally: “Because of the presumption in favor of the right to inspect, public bodies acquiring information should keep in mind that the records they keep generally are subject to public inspection.”
Wait: I’m confused. IPRA itself makes no explicit mention of the term “transitory”. In fact, IPRA only mentions a few and very specific exceptions under select qualified circumstances where a record is not to be disclosed. These exceptions include matters that fall under attorney-client privilege, certain personnel records, health records, and “protected personal identifier information” such as social security numbers and birth dates, as well as a few others.
These are reasonable exemptions to protect certain information of citizens. What does this mean? It means that no government agency will turn over your social security number to a requester. If a record contains a social security number, the number is redacted. This protects the privacy of citizens.
And protecting the privacy of citizens in this way is a good thing. One of the greatest freedoms we have is the freedom from interference or intrusion, the right “to be let alone,” a formulation cited by Louis Brandeis and Samuel Warren in 1890. Remember: transparency is for the government, privacy is for the citizens.
But CYFD employees are employed by a government agency. Do they have a right to privacy? In the conduct of their job, the law says no.
If it was already difficult to obtain certain records, what happens if the agency moves to a platform where text messages are encrypted and automatically deleted? That task is now impossible.
According to the law, these text messages constitute public records, regardless of how “transitory” they are in nature.
The New Mexico Attorney General’s IPRA guide offers insight to contradict the “transitory” qualification: “‘public records’ means all documents, […] regardless of physical form or characteristics, that are used, created, received, maintained or held by or on behalf of any public body and relate to public business, whether or not the records are required by law to be created or maintained”.
With CYFD setting a dangerous precedent, the governor’s office offered similar advice. “Every single text message that you send or receive likely qualifies as a ‘transitory record,’” the official guidance counsels. “We recommend that you delete all text messages which are ‘transitory records’ every ten days. You may delete them more often if you wish.”
This reminds me of George Orwell’s memory holes from his groundbreaking novel 1984:
“When one knew that any document was due for destruction, or even when one saw a scrap of waste paper lying about, it was an automatic action to lift the flap of the nearest memory hole and drop it in, whereupon it would be whirled away on a current of warm air to the enormous furnaces which were hidden somewhere in the recesses of the building.”
Well, it’s 2021 and I hate to be the bearer of bad news, but the obligation to provide these records to requesters has not been absolved. Denying access to records, defaming those who stand up, and delaying a solution to the problem undermines the already troubled credibility of government institutions and their leaders.
Let us conclude with the most important question of all: why would records need to be destroyed if there wasn’t something to hide?
Patrick Brenner is the Vice President of the Rio Grande Foundation, New Mexico’s free-market research institute and think tank. He leads the Foundation’s open government and second amendment efforts.
Ten people, including a Boulder police officer, were killed in a shooting at the King Soopers supermarket in Boulder on March 22. One of the victims was Denny Stong.
I knew Denny. I was planning to attend an event with him at the beginning of May. He was 20, and his life was tragically cut short. His death is a catastrophic loss for his family, his friends and his community.
This young man was also looking to obtain a concealed-carry permit from the state of Colorado. Unfortunately, Denny was too young: Colorado requires people to be 21 years of age to be issued a concealed handgun carry permit.
I blame the gunman for Denny’s death. But I also blame the government and Kroger Company for leaving him defenseless.
Denny and I recently connected through our mutual love of history. Our joint fascination with the American Civil War led us to working toward historical preservation in Colorado and the Southwest together, and we had plans to make a presentation to the public at a museum event in May.
An ardent supporter of the Second Amendment, one of his last public Facebook posts was his birthday fundraiser for the National Foundation for Gun Rights, an advocacy group that works to expand pro-gun precedents and defend gun owners.
Americans want to be able to defend themselves. In fact, first-time gun ownership is on the rise. Coupled with a study from the Cato Institute with the conclusion that crime rates decrease when concealed carry laws are enacted, Americans have proven they can defend themselves responsibly.
Policies and discrimination stand in their way. Our laws and Kroger Co. employment regulations disarmed Denny.
The 21-year age requirement not only serves no purpose, but also it has been costly, as with the case of Denny. Plenty of military men and women train with firearms every day, and many of those personnel are under 21. The Defense Manpower Data Center, responsible for Department of Defense data management, reports that over 19% of active-duty military personnel are between 18 and 21 years old. Why is 21 an appropriate cutoff-age for concealed-carry permits if you can own a firearm at 18?
King Soopers is a Colorado subsidiary of the Kroger supermarket chain. It operates more than 150 stores in Wyoming and Colorado, while Kroger is based in Cincinnati.
Kroger has recently changed its gun policies and sales practices. In 2019, Kroger asked shoppers to leave their firearms at home. The change in policy came a day after grocery rival Walmart made a similar change. The previous policy had been to defer to state or local gun regulations.
Even if Denny could not apply for a concealed-carry permit because of his age, he could not have exercised his right to open-carry a firearm in Colorado because of his employer’s strict anti-gun policies.
Around the country, there are many reports of concealed-carry permit-holders stopping crimes, including mass murderers.
On Jan. 17, 2019, Jay Brown, an IHOP employee in Huntsville, Alabama, stopped a gunman, potentially saving many lives. Another restaurant patron was proud he took action, “It’s amazing that he was able to think so quickly on his feet in that situation, because I think I probably just would’ve panicked,” Sierra Seay said. What if Denny could have been a Jay Brown?
Concealed-carry permit-holders can stop crime and save lives. Denny Stong was wrongfully deprived of his right to carry a concealed handgun by the government for no logical reason, and it probably cost him his life. I mourn his loss.
Government failed Denny Stong and robbed America of a hero. If Denny had been allowed to carry a concealed firearm, lives could have been saved. The outcome of Monday’s shooting should have been radically different.
“The right of the people to keep and bear Arms, shall not be infringed.”
Contractor-operated prisons, or so-called “private prisons,” have been vilified among progressives, even though their success in preparing inmates for productive engagement after their incarceration should be lauded by all social and political ideologies as part of the solution to social justice reform.
HB 40, which would eliminate all privately-managed correctional facilities in New Mexico, (was introduced in the recent 60-day legislative session but failed to clear the House).
Last month, President Biden signed an executive order to end new contracts between the Department of Justice and contractor-run corrections facilities, which almost exclusively house foreign citizens convicted of federal crimes.
Contractor-run correctional facilities perform a valuable service. They help control overcrowding in publicly-run prisons, while providing more and better rehabilitation opportunities. Typically, inmates are safer as rates of assault were lower at contractor-run facilities than rates in publicly-managed prisons.
Opened in 1998, the Lea County Correctional Facility in Hobbs is a contractor-managed facility, operated by GEO Group on a former World War II training base. As with all correctional facilities in the United States, it is managed in compliance with standards set by the American Correctional Association. The facility was most recently reaccredited in 2015 with a perfect score.
The facility provides inmates with training, work programming, recreation and educational opportunities. GEO’s in-custody and post-release “continuum of care” programming, developed by experts in criminal justice, substance abuse, psychology and other areas keeps residents engaged for positive change, is critical for them to be successful once they serve their sentence and to avoid reoffending. A study from the Rand Corporation found that inmates who participated in correctional education programs were 43% less likely to recidivate than inmates who did not. And, oftentimes, state budget cuts often hit prison programming first, while private contractors have flexibility and can invest their own resources to continue to do what is best for those in their care.
While visiting another GEO Group-managed facility here in New Mexico, I met residents and staff who spoke highly of their experiences with the programming offered. Many residents have struggled with substance abuse challenges and require acute counseling and rehabilitation programming to help overcome their addiction. According to the Sage Neuroscience Center, all of the top 10 causes of death in New Mexico can be at least partially attributed to drug and alcohol abuse. Program residents must complete the Residential Drug Abuse Program (RDAP) as part of their sentence. With new executive orders underway and the threat of HB 40, these programs could be shut down, potentially forcing these individuals into a jailhouse general population where they would not be able to get the services they need to survive and thrive after they serve their sentence. Revoking important substance abuse programs would destine many of these people to the damning cycle of ongoing drug and alcohol abuse, harming not only themselves, but also their families, and local communities.
In short, all contractor-operated facilities follow the same protocols, policies and procedures as publicly-run facilities under the New Mexico Department of Corrections. Furthermore, the contractors have strict oversight of their operations that include on-site monitors, something that the government facilities and the state lack. Additionally, contractors are held to the terms of their agreement with the state and are penalized for any shortcomings, unlike their government-run counterparts.
Most importantly, as our nation shifts its corrections’ paradigm to highlight judicial reforms and inmate reentry, we should leverage all of the successful tools at our disposal to provide inmates with the care, attention, and training they need inside facility walls – whether contractor run or publicly run – in order to be well-functioning members of society when they rejoin the public.
Continuing to wage war on contractor-run prisons doesn’t solve any problems or help inmates. If a program works, it shouldn’t matter who is managing it. By working together, we can rethink our prison system for the benefit of everyone.
The following article appeared in the Santa Fe New Mexican on March 10, 2021. It also appeared in several other New Mexico based outlets.
Contractor-operated prisons, or so-called private prisons, have been vilified among progressives, even though their success in preparing inmates for productive engagement after their incarceration should be lauded by all social and political ideologies as part of the solution to social justice reform.
House Bill 40, which would eliminate all privately managed correctional facilities in New Mexico, has been making its way through the Legislature this session.
Last month, President Joe Biden signed an executive order to end new contracts between the Department of Justice and contractor-run corrections facilities, which almost exclusively house foreign citizens convicted of federal crimes. Contractor-run correctional facilities perform a valuable service. They help control overcrowding in publicly run prisons while providing more and better rehabilitation opportunities. Typically, inmates are safer, as rates of assault were lower at contractor-run facilities than rates in publicly managed prisons.
Opened in 1998, the Lea County Correctional Facility in Hobbs is a contractor-managed facility operated by GEO Group on a former World War II training base. As with all correctional facilities in the United States, it is managed in compliance with standards set by the American Correctional Association. The facility was most recently reaccredited in 2015 with a perfect score.
The facility provides inmates with training, work programming, recreation and educational opportunities. GEO’s in-custody and post-release “continuum of care” programming, developed by experts in criminal justice, substance abuse, psychology and other areas, keeps residents engaged for positive change and is critical for them to be successful once they serve their sentence and to avoid reoffending.
A study from the Rand Corporation found inmates who participated in correctional education programs were 43 percent less likely to recidivate than inmates who did not. And, often, state budget cuts hit prison programming first, while private contractors have flexibility and can invest their own resources to continue to do what is best for those in their care.
While visiting another GEO Group-managed facility in New Mexico, I met residents and staff who spoke highly of their experiences with the programming offered. Many residents have struggled with substance abuse challenges and require acute counseling and rehabilitation programming to help overcome their addiction. According to the Sage Neuroscience Center, all of the top 10 causes of death in New Mexico can be at least partially attributed to drug and alcohol abuse.
Program residents must complete the Residential Drug Abuse Program as part of their sentence. With new executive orders underway and the threat of HB 40, these programs could be shut down, potentially forcing these individuals into a jailhouse general population where they would not be able to get the services they need to survive and thrive after they serve their sentence. Revoking important substance abuse programs would destine many of these people to the damning cycle of ongoing drug and alcohol abuse, harming not only themselves but also their families and local communities.
In short, all contractor-operated facilities follow the same protocols policies and procedures as publicly run facilities under the New Mexico Corrections Department. Furthermore, the contractors have strict oversight of their operations that include on-site monitors, something the government facilities and the state lack.
Most importantly, as our nation shifts its corrections paradigm to highlight judicial reforms and inmate reentry, we should leverage all of the successful tools at our disposal to provide inmates with the care, attention and training they need inside facility walls — whether contractor run or publicly run — in order to be well-functioning members of society when they rejoin the public.
Continuing to wage war on contractor-run prisons doesn’t solve any problems or help inmates. If a program works, it shouldn’t matter who is managing it. By working together, we can rethink our prison system for the benefit of everyone.
The Rio Grande Foundation provided testimony to the House Judiciary Committee yesterday evening as it considered House Bill 166, a bill banning ghost guns and 3D printing. A ghost gun is a term for a typically homemade or improvised firearm that lacks commercial serial numbers, making these firearms harder to trace.
There are laws already in place to prevent criminals from obtaining access to firearms. The bill also circumvents existing regulations from the Bureau of Alcohol, Tobacco, and Firearms. Furthermore, the bill’s intentionally vague and broad language and definitions will hamper continued advancement of 3D printing technology, which has many useful applications in industries like healthcare.
During the allotted 60 second window of testimony, the Foundation’s arguments were based on the unfair treatment of the 3D printing industry and how this legislation would negatively impact thousands of New Mexicans that would become criminals overnight.
HB 166: RELATING TO CRIME; CREATING NEW CRIMES RELATING TO FIREARMS; PROVIDING A PENALTY
This bill is seeking to do too much and will cause confusion. The unintended consequences of this legislation includes criminalization of an extraordinary number of New Mexicans that might not otherwise realize that they have broken the law.
A very particular example of “other code that may be used to program a three-dimensional printer” includes the mandatory Microsoft Windows print spooler software package. This software is included on all major distributions of the Microsoft Windows Operating System and is in the presence of many homes, whether the inhabitants possess firearms or not.
So… people that:
Have no firearms experience;
Have never held a firearm;
Do not own a firearm;
And have no intention of ever exercising their second amendment right;
But have a Windows computer in their home would be guilty of violating this new firearms law.
We can all agree that 3D printing has many useful applications. But passage of this bill will create disincentives that prevent continued advancements in this technology and in software development in general.
Now is not the time to enact this legislation as this bill exists in a state that is not ready for consideration by this committee. On behalf of the Rio Grande Foundation I urge the committee to table the bill.
Included here is the specific portion of the legislation subject to this interpretation:
“It is an offense for a person to distribute digital instructions in the form of computer-aided design files or other code or instructions stored or displayed in electronic format as a digital model that may be used to program a three-dimensional printer to manufacture a firearm, firearm frame or receiver or other major component of a firearm to a person in New Mexico who is not a federally licensed gun manufacturer.”
During the discussion portion of the committee hearing, the bill’s sponsor, Representative Tara Lujan, and her expert witness, Andrew Karwoski, the Deputy Policy Analyst with Everytown for Gun Safety, could not or refused to answer Representative Bill Rehm’s direct question about whether a ghost gun has ever been recovered from a crime scene in New Mexico.
The following piece by Patrick Brenner of the Rio Grande Foundation appeared in the Los Alamos Reporter on September 11, 2020:
As the country begins to re-open and we assess what the future will look like post-pandemic, states will have to take a hard look at where to allocate funds knowing there will undoubtedly be budget concerns for the foreseeable future. While budget cuts are imminent, and in New Mexico they are needed, that does not mean indiscriminately eliminating programs or services that provide real benefit to New Mexico residents who need them most, especially when they ultimately save taxpayers money in the long run.
Before everything shut down, I toured the New Mexico Men’s and Women’s Recovery Academies near Albuquerque where I met with both the residents and the staff who run both of these facilities. Not only did the residents and staff provide glowing reviews of the programming and facilities, but also the Department of Corrections official who toured with us said that she fights for this type of programming across New Mexico and spoke about how effective it has been. These types of programs are on the chopping block. But it is these same programs that serve as alternatives to incarceration and are incredibly effective in treatment, saving taxpayer money, and better outcomes for participants of these programs.
The New Mexico Men’s and Women’s Recovery Academies are both managed by the GEO Group, a private contractor that manages detention and corrections facilities. While often vilified in the media, this private contractor has spent $10 million last year alone on programming around substance abuse counseling and cognitive behavioral treatment. Rehabilitation programming like this provides care, compassion, and effective tools to help people and reduce recidivism rates.
When you visit, the most surprising element is the sense of community and pride that has been fostered among the residents and staff where the more tenured members act as mentors for the newer residents and they truly pull for one another through this tough transition. The graduates of this program see this as a new opportunity for their lives and they are less likely to fall back into their old ways. Funding these types of programs will not only help residents overcome their addiction and other issues, but they will also help New Mexico’s bottom line.
This programming in New Mexico is new. But inmates who participated in this same programming in facilities in Florida had a recidivism rate 30 percent lower than their peers that did not have the same programing. Assuming this trend holds and recidivism is reduced by one third of the average in Florida after participation in these programs, this could be a major cost saving measure for the state. In 2019 alone, this would roughly provide $8 million in cost avoidance for Florida because they will no longer have to house these reformed inmates. There is every reason to believe the Lea County Correctional Facility in Hobbs will see the same drop as Florida experienced and New Mexico could have the same experience with “cost avoidance”.
Corrections funding was already reduced during the recently-completed special session. When cutbacks occur in the 2021 session, programs like these should be among those preserved. The expertise of private sector providers can provide such services at a high quality and reasonable price, but the ultimate benefit is to the State and taxpayers of New Mexico who are desperately searching for ways to reduce crime and recidivism in their communities.
There is no “silver bullet” to solving crime. The COVID 19 epidemic will have unpredictable consequences for our society as well as crime rates and the criminal justice system at large for years to come. Even in times of tight budgets, New Mexico needs to continue investing programming, especially the kind that can be provided by private providers at a reasonable cost in our prisons and treatment facilities to ensure that we support inmates and residents. Short-sighted decisions now may have a negative impact on New Mexico for years to come.
Patrick Brenner is a policy analyst with the Rio Grande Foundation, New Mexico’s free market think tank. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.
The following appeared on CNSNews.com on August 24, 2020.
Congress is in recess until after Labor Day. As a result, people across the nation are furious with their elected representatives for leaving Washington without passing another COVID-19 economic relief package.
The implications for extra unemployment insurance that keeps people out of the workforce and stimulus checks that increase our national debt notwithstanding, there’s another silver lining: Speaker of the House Nancy Pelosi’s crony capitalist giveaway to health insurance giants is at least a few weeks closer to the ashbin of history.
Democrats in the U.S. House passed a bill that would fund COBRA premiums for nine months. This program allows recently unemployed people to keep their insurance plan if they pay the full premium. Pelosi’s plan would use federal funds to cover these premiums via direct payment to the insurance companies, which would have cost taxpayers $157 billion in the first four months and almost $500 billion by the end of the year.
Keep in mind, Pelosi and House Democrats planned this massive transfer of wealth from the U.S. Treasury to health insurance companies at the same time they are making money hand over fist. This is because insurance companies are continuing to collect premiums while millions of Americans are putting off going to the doctor due to COVID-19, resulting in far fewer claims to pay on their customers’ behalf.
As a result of this imbalance, the nation’s largest health insurer, UnitedHealth Group (UHG), posted its highest ever profit of more than $6.6 billion in the second quarter of the year. Profits are typically nothing to be ashamed of, but a megacorporation certainly doesn’t need a bailout during the most gainful time period in its history.
Why would Nancy Pelosi pursue a ham-handed giveaway of taxpayer dollars to a company worth $300 billion having the most profitable quarter of its existence?
The answer might be the AARP, an organization that “has become little more than a marketing scam for its big corporate financial sponsors — UnitedHealth and its wholly-owned OptumRx pharmacy business,” according to American Commitment President Phil Kerpen.
Although AARP is a non-profit tax-exempt 501(c)(4), it earned a profit of $246.5 million in 2018 on a total of nearly $1.65 billion in gross revenue, a margin of nearly 15 percent. Not bad for a “non-profit” organization! Only 18 percent of AARP’s revenue in 2018 came from dues paid by members, while 57 percent came from selling AARP-branded goods and services to those members in the form of “royalty fees.” Between 2007 and 2018, the total royalties paid to AARP totaled a little over $9 billion, with $5.3 billion coming exclusively from UnitedHealth group.
AARP does not disclose how much money it receives from each of the plans it hawks for UnitedHealth Group, but it is required to include fine print on its Medigap plans that it receives a “royalty” of 4.95 percent for each plan sold. American Commitment’s report estimates this to be $350-400 million per year.
UnitedHealth Group certainly makes a tidy profit from the plans sold to AARP members, but it also gets something else for the cash: a bought-and-paid for lobbying group posing as a senior citizens organization. This could explain the sometimes-puzzling positions the AARP takes.
The Obamacare fight is a crystal-clear example of the organization fighting for its and UHG’s profits at the expense of seniors. In the runup to its passage, the bill was deeply unpopular with seniors.
A poll at the time showed strong opponents outnumbered strong supporters of Obamacare by more than two-to-one, with a total of 59 percent of seniors in opposition. Even more, a House Energy and Commerce Committee investigation uncovered an email from AARP lobbyists to the Obama White House that said, “We really need to talk. Our calls against [Obamacare] are coming in 14 to one.” Yet AARP went on to support the bill.
The American Commitment report explains how AARP looked out for its own financial interests during the legislative fight and how it ultimately hurt seniors:
“At the time of Obamacare’s passage, AARP claimed that it wanted to end ‘discrimination’ against individuals with pre-existing conditions. But what did AARP do to ensure that that policy applied to its lucrative Medigap insurance plans? Precious little. Press reports indicate that the seniors’ organization compelled then-Senate Majority Leader Harry Reid (D-Nevada) to close the ‘doughnut hole’ in the Medicare Part D prescription drug benefit before it would endorse the final version of the legislation.
By contrast, AARP imposed no such requirement on Democrats to ensure that Obamacare’s insurance provisions regarding pre-existing conditions applied to the Medigap insurance AARP sells. In fact, it stood idly by while Democrats stripped language applying pre-existing condition provisions to Medigap from the final version of the bill.”
Because of AARP’s inaction, “individuals with disabilities still cannot obtain access to coverage because of their pre-existing conditions.” AARP’s lucrative partnership and UHG’s profit margin were on the receiving end of other Obamacare carveouts: the tax on health insurance companies exempted Medigap policies, lower medical loss ratio standards for Medigap, and exempting Medigap insurance from the rate review process altogether.
Some ten years later, AARP is still pushing for Nancy Pelosi’s preferred policies that will pad UnitedHealth Group’s profit margin so they can continue to cash royalty checks and hurt seniors. Take H.R. 3, which will impose price controls on prescription drugs (if drug makers don’t accept it, they will face a 95 percent excise tax).
Americans for Tax Reform summarized the bill thusly:
“The Pelosi plan is not a good faith effort to negotiate lower prescription drug prices. It will end innovation in the U.S. and prevent the development of the next generation of life-saving and life-preserving medicines.
At present, the U.S. is the world leader in medical innovation with almost 60 percent of drugs being developed in the country.
This innovation benefits the U.S. in the form of high-paying jobs, a stronger economy R&D, and access to more life-saving medicines.”
While supporting these price controls that will slow cures for diseases, AARP also opposed a Trump plan to offer rebates directly to consumers instead of pharmacy benefit managers such as OptumRX, which is wholly owned by – you guessed it – UnitedHealth Group.
This triangle of crony capitalism between members of Congress, UnitedHealth Group, and AARP (which, as a non-profit, should be advocating for seniors, not its own revenues) is a perfect encapsulation of “the Swamp” that Americans loathe so much.
While Nancy Pelosi’s plan to transfer your tax dollars to the nation’s largest insurance company may be dead (for now), we need to stay vigilant to ensure it doesn’t return.
Patrick Brenner is a policy analyst for the Rio Grande Foundation, New Mexico’s free market think tank.