The AARP, founded in 1958 as the American Association of Retired Persons, officially changed its name to the acronym “AARP” in 1999, to convey that it no longer focused solely on retirees. By then, the organization had evolved into a political lobbying group that also offered for a low annual membership fee a “wide range of unique benefits, special products, and services” designed to “enhance the quality of life” for anyone aged 50 or older. With more than 2,500 local chapters distributed throughout all 50 U.S. states, AARP today has over 39 million members (with a median age of 65), making it the largest membership group in America. Its AARP Bulletin, delivered to 24 million homes each month, has a larger circulation than any other magazine in the country.
Relatively little of AARP’s income derives from membership dues. Of the organization’s $1.14 billion in 2008 revenues, for example, only $249 million came from dues. By contrast, fully $653 million came from “royalties,” as explained by AARP spokeswoman Elly Spinweber: “AARP licenses its name to carefully-selected providers to make various products and services available to our members. In exchange for use of AARP’s intellectual property, these providers pay AARP a royalty which we use to deliver on our mission …”
The royalties paid to AARP are generated chiefly by sales of health-related products and financial products. The former, which accounted for approximately $425 million in royalties during 2008, include such items as “Medigap,” an insurance program that covers healthcare expenses not paid by Medicare. Medigap is a product not of AARP but rather of the United Healthcare insurance company, which pays royalties to AARP in exchange for the right to sell its product under AARP’s brand name. This is just one of numerous health-insurance plans which companies like United Healthcare and Aetna sell in this manner.
In a similar fashion, AARP Financial, Inc.—a subsidiary of AARP—offers an array of financial products which generate additional royalties ($205 million in 2008) from companies like New York Life, Hartford Insurance, Chase, and Visa. These corporations market, under AARP’s name, such things as life-insurance policies, home and auto insurance, mutual funds, annuities, IRA retirement accounts, bank CDs, and credit cards.
Closely tied to congressional Democrats, AARP is the largest non-industry lobbying group in the United States, paying lobbyists huge sums to petition Congress and federal agencies on matters of social and political import. In 2008, the organization’s $27.9 million in lobbying expenditures were exceeded only by those of the U.S. Chamber of Commerce and Exxon Mobil. In 2009, AARP employed more than 60 in-house lobbyists, including luminaries like Nancy LeaMond (a former political appointee in the Bill Clinton administration), Michael Naylor (a former legislative director for Democrat Senator Chris Dodd), and Rhonda Sharon Richards (former staff director under Democrat Senator Barbara Mikulski).
AARP in 1961 established an affiliated 501(c)(3) charity known as the AARP Foundation, which is housed in AARP’s national headquarters and is authorized to accept both federal funds and tax-deductible private donations. (AARP, unlike the foundation, is a 501(c)(4) non-profit organization, meaning that while it does not pay any taxes, people’s donations to it are not tax-deductible.) Between 2001 and 2010, the AARP Foundation received almost $400 million in federal grants. In 2006, such grants funneled to AARP by way of its foundation accounted for $83 million of the organization’s $877.65 million in revenues. This government money is used not only to bankroll various AARP programs but also to underwrite no-cost services provided by the foundation e.g., job training and placement, tax preparation, financial counseling, legal assistance, crime-prevention instruction, and driver-safety education.
While AARP describes itself as politically “non-partisan,” it consistently supports leftist initiatives that reflect Democratic Party agendas and AARP’s own stated commitment to “collective purpose” geared toward “social change” advocacy. For example, the organization backs entitlements for migrant workers; favors a progressive tax structure that places a disproportionate burden on high earners; endorses the estate tax; opposes the privatization of Social Security; opposes the reformation of Medicare and Social Security entitlements; and favors strict gun control. In 2003, AARP lauded the passage of a massive Medicare prescription drug plan which added, by some measures, $15.6 trillion to America’s long-term entitlement deficit.
In 2009 AARP lobbied heavily in favor of health-care reform, supporting in particular the “public option” which was favored by Democratic leaders in the House of Representatives but was dropped from the final legislation because it imperiled the bill’s passage in the Senate. AARP’s motives for backing the so-called “Obamacare” plan were as much financial as they were ideological. Because the legislation eliminated hundreds of billions of dollars in subsidies from the MedicareAdvantage program which allowed 11 million Medicare beneficiaries to buy additional benefits from private insurance companies, AARP foresaw that many of those people would now be in the market for products like its own “Medigap.”
A large number of AARP members felt betrayed by the organization’s support for Obamacare. On July 28, 2009, for example, some 4,174 members called the organization to register their opposition to the proposed healthcare plan, while only 36 members called in support. The following day, the numbers were 2,656 opposed, 23 in support.
Seventy-one pages of emails released in September 2012 by the House Energy and Commerce Committee showed that throughout the Obamacare debates of 2009-10, AARP leaders—particularly policy chief John Rother, health policy director Nora Super (who later went to work for President Obama’s Health and Human Services Department), executive vice president Nancy LeaMond, and senior vice president David Sloane—had been in constant contact with President Obama’s top aides, most notably Nancy-Ann DeParle and Jim Messina. As the Wall Street Journal reports:
As early as July 2009, Mr. Sloane was sending the administration—”as promised”—his “message points” on Medicare. Ms. DeParle assured him “I think you will hear some of your lines tomorrow” in President Obama’s speech—which he did. Mr. Rother advised the White House on its outreach, discouraging Mr. Obama from addressing seniors since “he may not be the most effective messinger [sic] . . . at least to the McCain constituency.” Better to manage these folks, he counsels, through the “authoritative voices of doctors and nurses.”
AARP had long opposed cuts in fees to doctors treating Medicare patients, because such reduced payments would have caused many physicians not to accept patients with that form of insurance. But in its campaign to promote Obamacare, which would ultimately cut Medicare by $716 billion over a ten-year period, the organization maintained that patient “care” would ultimately be improved as a result of such “savings.”
In a November 2009 email, Ms. LeaMond told Mr. Messina and Ms. DeParle that she was “seized” with “concerns about extended coherent, strong messaging by Republicans on the Medicare savings.” To pass the legislation, LeaMond said, “we”—i.e., the White House and AARP—would have to employ a “concerted strategy.”
But AARP leaders understood that such a strategy would have to be hidden from its members, who were overwhelmingly opposed to the reform bill. In November 2009, for example, Mr. Rother declined a White House request to have an AARP representative participate in a roundtable. “I think we will try to keep a little space between us and the White House,” he explained, noting that AARP’s “polling” indicated that the organization was more “influential when we are seen as independent.” Thus he wished “to reinforce that positioning,” because “the larger issue is how to best serve the cause.”
When the Obamacare bill passed the House in March 2010, Ms. LeaMond emailed Mr. Messina: “This is the new AARP-WH/Hill—LeaMond/Messina relationship…. Seriously, a great victory for you and the President.”
Because of AARP’s stance on Obamacare, some 150,000 people cancelled their AARP memberships between July 2009 and April 2010.
Unlike most big-time lobbyists, AARP does not have a political action committee and thus makes no campaign contributions as an organization. Studies of the donation patterns of individual AARP staffers, however, reveal a dramatic preference for Democrats. For example, during the 2006, 2008, and 2010 election cycles, Democrats were the recipients of more than 90 percent of the money which AARP employees and executives gave to federal candidates or campaign committees.
In September 2013, AARP published a study titled “Social Security’s Impact on the National Economy,” which argued against reductions in Social Security benefits by claiming that “every dollar of Social Security benefits generates about $2 of economic output.” A National Review Online analysis remarked:
“Who knew that the U.S. could double its wealth by writing checks to seniors?… The trouble, obviously, is that the analysis leaves out all the economic activity that would have been generated by workers if they could have kept the taxes they paid toward Social Security.”