The ranking senator on Congress’ Joint Economic Committee sent an Oct. 4 letter to President Barack Obama in response to his references to the America Association of Retired People (AARP) and its support of his positions in the Oct. 3 presidential debate.

“During your debate with Governor Romney last night, you criticized Medicare premium support proposals as leaving seniors ‘at the mercy of insurance companies,’ while trumpeting AARP’s endorsement of Obamacare,” wrote Sen. James W. DeMint, the senior Republican on the JEC and a leading member of the chamber’s Tea Party Caucus.

“However, as I outlined in a recent report about AARP, entitled ‘Profits Before Principles’” the evidence is clear that Obamacare places seniors at the mercy of one organization — AARP itself,” he said.

DeMint said there were three key areas where AARP profits from senior citizens with the blessing of the Obama administration.

“AARP makes most of its money selling health insurance to seniors – and profits financially when premiums rise,” he said.

“AARP received nearly half a billion dollars in ‘royalty fees’ – or what AARP members have called ‘kickbacks’ – from United Healthcare just last year,” he said.

Most of these revenues are from selling Medicare supplement plans that bridge the gap between what Medicare covers and what would otherwise be an out-of-pocket expenses, he said. These plans are sometimes called “Medigap” plans.

Because AARP receives a percentage of the premiums paid for the supplement policy, it benefits from an increase in premium rates, he said.

This arrangement is ethically questionable, the senator said.

The second area DeMint called on the president to address was AARP’s discrimination against senior citizens with pre-existing health conditions, he said.

This practice is supposed to be illegal in the president’s 2010 Patient Protection and Affordable Care Act that the AARP supported, he said.

“These practices not only violate AARP’s supposed commitment to ‘ending health status discrimination’ – they also violate your claim that insurance companies won’t be able to ‘jerk you around’ now that Obamacare has passed,” he said.

The third problem DeMint said demanded Obama’s attention was that the PPACA granted a waiver to AARP, and other sellers of Medigap plans, allowing them to continue to discriminate against seniors with pre-existing conditions.

“The Medigap insurance market – which AARP dominates – received a special exemption from the law’s ban on pre-existing condition discrimination, so AARP can continue its practice of restricting access to those with pre-existing conditions with your Administration’s blessing,” he said.

The PPACA grants other exemptions to Medicare supplement policy providers that govern executive compensation, the medical-loss-ratio rule that controls an insurance provider’s profit margins and internal expenses, he said. The law also exempts Medigap providers from the tax levied on other insurances plans.

“Your Department of Health and Human Services went even further, exempting Medigap insurance from premium rate review through regulations – even though AARP, the largest seller of Medigap plans, makes more in profit the higher premiums rise on seniors,” he said.

The South Carolina senator said Obama and AARP are actually partners.

“Documents recently released by House investigators also show a close nexus between your Administration and AARP during the rush to ram Obamacare through Congress,” he said.

During the fight over health care reform, White House staffers worked with AARP to influence Nebraska’s Sen. E. Benjamin “Ben” Nelson to vote to end a GOP filibuster, he said.

“For instance, Jim Messina – then your deputy Chief of Staff, now your re-election campaign manager – asked AARP for ‘immediate robo calls into Nebraska urging Nelson to vote for cloture’ on the bill,” he said. “In December 2009, the White House Office of Public Engagement asked AARP to put out talking points rebutting a Republican amendment related to Medicare.”

DeMint suspects a quid pro quo, where AARP worked to support the passage of PPACA and in exchange, and his re-election, Obama wrote in the special provisions that protect both their profits and their otherwise illegal practices, he said.

“HHS Secretary Sebelius has been very quick to attack other insurers’ practices, but has not dared criticize AARP – even though AARP’s insurance business is more profitable than many other insurance companies,” he said.