This Site Requires Javascript
Burger Menu

AARP

Definition

AARP, Inc., formerly the American Association of Retired Persons, is a United States-based interest group with a membership founded in 1958 by Ethel Percy Andrus, Ph.D., a retired educator from California, and Leonard Davis, later the founder of the Colonial Penn Group of insurance companies.

wikipediaSource: Wikipedia
Last Sourced: 2017-08-01
This Article has been Edited for Accessibility

AARP

AARP, Inc., formerly the American Association of Retired Persons, is a United States-based interest group with a membership founded in 1958 by Ethel Percy Andrus, Ph.D., a retired educator from California, and Leonard Davis, later the founder of the Colonial Penn Group of insurance companies.

AARP is a 501c4 non-profit organization with a mission to enhance the quality of life for all as they age. The association advocates for positive social change and delivers value to members through information, advocacy and service. With nearly 38 million members, AARP is one of the most powerful lobbying groups in the United States.

AARP has several affiliated organizations:

Because of AARP's vast membership, it is able to generate its own income without being dependent on government grants or private donors, though it does receive both of these for specific programs. According to its 2015 Consolidated Financial Statement, AARP's largest sources of income were:

History

According to the group's official history, Dr. Ethel Percy Andrus founded AARP in 1958. AARP evolved from the National Retired Teachers Association (NRTA), which Andrus had established in 1947 to promote her philosophy of productive aging, and in response to the need of health insurance for retired teachers. After ten years, Andrus opened the organization to all Americans over 50, creating AARP. Today, the NRTA is a division within AARP. Dr. Andrus founded AARP while living in Ojai, California, where she had established an innovative new retirement home named Grey Gables. Ojai served as national headquarters for AARP from 1958 until the mid-1960s. Honors to Dr. Andrus include National Teacher of the Year in 1954, induction into the Women's Hall of Fame and, more recently, a medallion placed on the Points of Light Institute's "Extra Mile Pathway" in downtown Washington, D.C.

Critics of AARP offer an alternative version of the group's origins. 60 Minutes reported in a 1978 exposé that AARP had been established as a marketing device by Leonard Davis, founder of the Colonial Penn Group insurance companies, after he met Ethel Percy Andrus. According to critics, until the 1980s AARP was controlled by Mr. Davis, who promoted its image as a non-profit advocate of retirees in order to sell insurance to members. Possibly as a result of the 60 Minutes report, AARP conducted a lengthy competitive bidding process, and, in 1980, shifted the insurance contracts made available to members to Prudential Financial.

In the 1990s, the United States Senate investigated AARP's non-profit status, with Republican Senator Alan Simpson, then chairman of the United States Senate Finance Subcommittee on Social Security, Pensions, and Family Policy, questioning the organization's tax-exempt status in congressional hearings. According to Charles Blahous, the investigations did not reveal sufficient evidence to change the organization's status, though in an interview years later by the Des Moines Register, Senator Simpson remained "troubled by AARP's practices", calling AARP "the biggest marketing operation in America and money-maker" and an organization whose practices are "the greatest abuse of American generosity I witnessed in my time in the U.S. Senate".

The organization was originally named the American Association of Retired Persons, but in 1999 it officially changed its name to "AARP" (pronounced one letter at a time, "ay ay ar pee") to reflect that its focus was no longer American retirees. AARP no longer requires that members be retired, but they must be at least age 50 (although a membership includes free membership for a spouse or partner who may not yet be 50).

Activities

AARP is widely known for addressing issues affecting older Americans through a multitude of initiatives, including lobbying efforts at the state and national governmental level, an activity permitted by its 501(c)(4) status. The organization says that it is non-partisan and does not support, oppose or give money to any candidates or political parties. AARP's total revenue for 2006 was approximately $1 billion and it spent $23 million on lobbying. Middle-class security has been a major focus for the organization in recent years. AARP also provides extensive consumer information, volunteer opportunities, and events including the annual National Event & Expo (2013 in Las Vegas from May 30–June 1 and in Atlanta from October 3–5).

AARP launched Life Reimagined in May 2013, calling it a "first-of-its-kind series of online and offline experiences that guide people through life transitions by helping them discover new possibilities and connect with a community of people pursuing similar passions and goals". USA Today called Life Reimagined "the latest step for the AARP (formerly known as the American Association of Retired Persons) as it continues to rebrand itself and become the go-to address for feeling good about aging.

AARP Services, Inc., founded in 1999, is a wholly owned taxable subsidiary of AARP. AARP Services manages the wide range of products and services that are offered as benefits to AARP's members. The offers span health products, travel and leisure products, and life event services. Specific products include Medicare supplemental insurance; member discounts on rental cars, cruises, vacation packages and lodging; special offers on technology and gifts; pharmacy services; legal services; and long-term care insurance. AARP Services founded AARP Financial Incorporated, a subsidiary that manages AARP-endorsed financial products including AARP Funds. In a filing with the Securities and Exchange Commission in June 2010, AARP Financial announced the discontinuation of AARP Funds AARP Services develops new products, manages and markets products and services, and creates and maintains partnership and sponsorship relationships.

AARP Foundation is AARP's affiliated charity. Foundation programs provide security, protection and empowerment for older persons in need. Low-income older workers receive the job training and placement they need to re-join the workforce. Free tax preparation is provided for low- and moderate-income individuals, with special attention to those 60 and older. The Foundation's litigation staff protects the legal rights of older Americans in critical health, long-term care, consumer and employment situations. Additional programs provide information, education, and services to ensure that people over 50 lead lives of independence, dignity, and purpose. Foundation programs are funded by grants, tax-deductible contributions and AARP.

The AARP Foundation's website claims the nonprofit "wants to win back opportunity for those now in crisis, so thousands of vulnerable low-income Americans 50+ can regain their foothold, continue to serve as anchors for their families and communities and ensure that their best life is still within reach." Key areas of focus are hunger, income, housing, and isolation. The Foundation's vision is "a country that is free of poverty where no older person feels vulnerable."

One of the goals of the AARP Foundation is to reduce hunger among seniors through the Drive to End Hunger. In 2011, AARP and AARP Foundation formed a relationship with NASCAR driver Jeff Gordon and Hendrick Motorsports to increase awareness of hunger in America with the No. 24 Drive to End Hunger race car and related food drives. Through the Drive to End Hunger program, AARP also sponsored Hendrick driver Kasey Kahne, beginning in 2016.

In 1979, AARP introduced the nation's first-ever driver safety course geared towards older adults. AARP Driver Safety, which can be completed in a classroom setting or online, teaches defensive driving techniques and provides "added information on age-related cognitive and physical changes that affect driving." The course is instructed and promoted by volunteers throughout the U.S.

As of 2017, the cost of the course in the United States is $19.95 for AARP members and $24.95 for non-members. The program is also supported by a grant from the automobile manufacturer, Toyota. Over half million drivers completed the course in 2012 and over 15 million people completed the courses since 1979.

AARP The Magazine with their approximately 37 million readers and the AARP Bulletin with 29.7 million, make the two magazines the largest-circulation publications in the United States.

The organization also produces radio and television programs and has a book division.

AARP en Español is the AARP's Spanish-language multimedia platform. Offerings include a Spanish-language website, a Spanish-language YouTube channel, and informational resources.

Health care

AARP has been active in health care policy debates since c. 1960 and its recent engagement is a reflection of this long-standing involvement.

AARP's public stances influenced the United States Congress' passage of the Medicare Prescription Drug, Improvement, and Modernization Act, which authorized the creation of Medicare Part D, in 2003, and also influenced the Congress by resisting radical changes to Social Security in 2005. AARP also addressed health care issues in their campaign targeting the 2008 elections with Divided We Fail.

In an editorial column within the Los Angeles Times, critic Dale Van Atta wrote that AARP does unauthorized lobbying for its membership, and lobbies against the best interests of its membership. Van Atta says that by lobbying for the Medicare Prescription Drug, Improvement, and Modernization Act, AARP leaders betrayed the membership.

In early 2017, AARP strongly opposed the American Health Care Act of 2017 they believe that older Americans would be unfairly burdened with higher premiums and smaller tax credits.

Approximately seven million people have AARP-branded health insurance, including drug coverage and Medigap, as of April 2007 and AARP earns more income from selling insurance to members than it does from membership dues. In 2008, AARP plans to begin offering several new health insurance products: an HMO for Medicare recipients, in partnership with UnitedHealth Group; and a PPO and "a high-deductible insurance policy that could be used with a health savings account" to people aged 50–64, in partnership with Aetna. AARP will likely become the largest source of health insurance for Medicare recipients, and AARP estimates the new products will increase its health insurance customers to 14 million by 2014.

While AARP is not an insurer, in that it does not pay insurance claims, it does allow its name to be used by insurance companies in the sale of insurance products, for which it is paid a commission.

Senator Charles E. Grassley (R-Iowa), senior Republican on the Senate Finance Committee, said in 2008 that the "limited benefit" insurance plans offered by AARP through UnitedHealth provided inadequate coverage and were marketed deceptively. One plan offered $5,000 for surgery that may cost two or three times that amount.

AARP conducts a thriving business in marketing branded Medigap policies. As of October 2009, Medical care reform contained a proposal to trim an associated program Medicare Advantage, which was expected to increase demand for Medigap policies. However, as cited above, AARP also brands a Medicare Advantage plan (MedicareComplete), and would also be subject to cuts under health care reform.

According to an Annenberg Public Policy Center report, critics have said AARP had a conflict of interest in supporting the Act, because AARP "derives income from the sale of health and life insurance policies", by licensing its brand to insurance dealers such as New York Life, and would benefit financially from passage of the legislation.

In 2004 BusinessWeek said questions have arisen in the past about whether AARP's commercial interests may conflict with those of its membership, and characterizes many of the funds and insurance policies that AARP markets as providing considerably less benefit than seniors could get on their own.

Single-payer advocates have criticized AARP for not supporting the single-payer or public option during the health care debate. Single-payer advocates supported H.R. 676, proposed by Rep. John Conyers (D-MI). AARP released a statement explaining to its members why the organization was not supporting H.R. 676:

Starting over with a new, "single-payer" program will not eliminate the problems Medicare, Medicaid, and SCHIP currently face, such as the spiraling costs of procedures and prescription medications, as well as technological advances that are often not comprehensively tested to be proven safe or effective before marketing. H.R. 676 does not address the problem of increasing health-care costs. Rather, it allows costs to continue to grow, which will result in unaffordable coverage.

John Rother, AARP's former chief lobbyist, said the single-payer model would "disrupt the system that is currently in place" and "would require a very significant tax increase." But Rother admitted that it would be possible to design a system that would avoid these problems and function well. AARP's priorities now are to protect the current programs and implement the Affordable Care Act. Rother said that any effort to promote single payer would be undercutting health reform. Rother said. "To go to a single-payer you do have to trust government. The climate we're in right now is a very hostile climate for something like that."

Rother also thought that an educational effort on the benefits of single payer would undercut the ACA. AARP has not published any material relating to single-payer health insurance on its website, in its several hundred page policy book, or through its Public Policy Institute.

Approximately 60,000 AARP members quit AARP between July 1 and August 18, 2009, in a controversy that arose over AARP's support for U.S. health care reform. FOX News stated, "The Atlanta-based American Seniors Association, which is opposed to President Obama's health care plan, is trying to capitalize on growing public dissatisfaction with the AARP." AARP spokesman Drew Nannis responded that AARP loses about 300,000 members a month on average, and the controversial 60,000 of those that had left had specified leaving over the Health Care debate. Nannis also stated that the AARP gained 400,000 members and that 1.5 million members renewed their memberships within the same period of time. The American Seniors Association is a for-profit organization operated by the American Seniors Association Holding Group, Inc (ASAHG, Inc).

Social Security

Since March 2012, AARP's You've Earned a Say campaign has sought to foster nonpartisan conversations about how to strengthen Social Security and Medicare. The Richmond (VA) Times-Dispatch reported, "AARP took the debate about Medicare and Social Security from what it called behind closed doors in Washington to a series of town hall meetings around the country to make sure retirees have a voice in the discussion."

In June 2011, AARP dropped its longstanding opposition to cutting Social Security benefits. A news release emphasized "AARP has not changed its position on Social Security." In 2005 AARP led the effort to kill President George W. Bush's plan for partial privatization. AARP now has concluded that change is inevitable, and it wants to be at the table to try to minimize the pain. John Rother, AARP's policy chief and a prime mover for the new position, said "The ship was sailing. I wanted to be at the wheel when that happens." AARP declined to join a coalition of about 300 unions, women's groups and liberal advocacy organizations created to fight Social Security benefit cuts. Rother said, "The coalition's role was to kind of anchor the left, and our role is going to be to actually get something done".

Executive compensation, benefits, and travel

According to AARP's IRS annual return, Chief Executive Officer Addison B. Rand received $1,698,289 of salary and benefits in 2014 from AARP and its subsidiaries.

All board members, officers, and key employees fly first class on flights longer than five hours unless business class is available. The Chief Executive Officer flies first-class on all flights longer than 90 minutes.

AARP reported that it had spent $8,694,890 on compensation of its officers, directors, and key employees during 2014.

Charity Watch rated the AARP Foundation overall at 81.07 out of 100 possible points for fiscal year 2014, but gave the organization a Financial score of only 73.53 out of 100 for the same time period.


Additional Resources

  1. The Longevity Economy [erickson.umbc.edu]
  2. Ttc [erickson.umbc.edu]
  3. Aarp Opposes Congressional Vote To Block State ... []
  4. Beyond Millennials: Valuing Older Adults ... [brookings.edu]
  5. Workplace Retirement Plans Will Help Workers Build ... [brookings.edu]
  6. Fsi [healthpolicy.fsi.stanford.edu]