AARP

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

AARP is a membership organization for seniors. It operates as a non-profit advocate for its members and is one of the most powerful lobbying groups in the United States.[citation needed]

AARP has seven affiliated organizations: AARP Experience Corps, a non-profit charity that encourages people over age 50 to mentor and tutor school children; AARP Financial Services Corporation, a for-profit corporation that holds AARP's real estate; AARP Foundation, a non-profit charity that helps people over age 50 who are at social and economic risk; AARP Insurance Plan, a non-profit social welfare organization that holds some of AARP's group health insurance policies; AARP Institute, a non-profit charity that holds some of AARP's charitable gift annuity funds; AARP Services Inc., a for-profit corporation that provides quality control and research, and Legal Counsel for the Elderly, a non-profit charity that provides low- or no-cost legal assistance to seniors in Washington, D.C. According to AARP's 2008 Consolidated financial statements, AARP Services, Inc. was paid $652,000,000 in royalties from insurance companies that sold products referred by AARP. AARP also received an additional $120,000,000 for the advertisements placed in its publications.



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".As of April 2014, AARP claims it has more than 37 million members, making it one of the largest membership organizations in the United States.

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.[8] 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).

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.

Health insurance

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