AARP, formerly known as the American Association of Retired Persons, was established in 1958 by Ethel Percy Andrus. She was a retired educator from California who recognized pressing needs of America’s aging population. Her fundamental mission was to build an organization that would serve as a voice for older Americans. The original concept focused on areas like healthcare accessibility, long-term financial security, and consumer protection measures.
The organization has experienced remarkable growth and transformation since its beginnings, expanding far beyond what Ethel originally envisioned in those early days. Today, AARP has evolved into a formidable presence in American society. Its current enrollment is approximately 38 million members, representing a significant portion of the nation’s older population.
Throughout its more than six decades of existence, AARP has established itself as a crucial force in developing and shaping policies that benefit people aged 50 and older. The organization played a pivotal role in several landmark legislative achievements, including the establishment of Medicare in 1965, the implementation of the comprehensive Older Americans Act, and numerous important Social Security reforms. Beyond these major policy initiatives, AARP has been at the forefront of advocating for workplace protections, successfully championing legislation that safeguards pension rights and actively combats age-based discrimination in employment settings.
These significant accomplishments represent just a small sample of the many positive and lasting impacts AARP has successfully achieved in its ongoing mission to enhance the quality of life for the senior citizen community across the United States.
The dark side
I am a skeptic by nature—my wife becomes exasperated by my constant playing of devil’s advocate. So, when I saw a breakdown of AARP’s income streams, I couldn’t help but raise an eyebrow and do a bit of research.
According to ProPublica, an investigative journalism publication, AARP’s two main funding sources in 2023 were membership dues and donations at 17.9% ($312,540,344), while royalties made up a much larger portion at 65.1% ($1,134,321,120).
Let’s take a look at these royalty payments. United Health Care (UHC), one of the largest insurance companies in America, has established a lucrative arrangement with AARP where they pay approximately $1 billion annually for the right to use AARP’s trusted name and branding on their insurance products. This arrangement means that when seniors purchase an AARP Medicare Supplement or AARP Medicare Advantage plan, they are actually acquiring insurance policies from UHC—policies for which UHC compensates AARP through substantial licensing fees. The relationship between these two organizations runs deep, with UHC effectively paying AARP to leverage their reputation and established connection with the senior community.
This is a decades long agreement.
Being the skeptic I am, I find myself questioning how such a significant annual payment—approximately $1B in licensing fees—might influence AARP’s decision-making processes, especially when it comes to policy positions and advocacy efforts that could potentially affect their relationship with UHC.
This article from The Juniper Research Group had this to say about the AARP—UHC relationship:
The record shows not just that AARP holds serious conflicts of interest, but that AARP’s financial conflicts have prompted the organization to abandon its principles on numerous occasions, pursuing financial gain for itself and its partners over the organization’s stated mission and policy objectives
While AARP receives royalties from travel and retail partnerships, these amounts are insignificant compared to their United Health Care revenue—and they come with their own strings attached.
Given UnitedHealthcare’s significant financial stake, it begs the question: Has AARP transformed from a senior advocacy organization into an insurance business? They are clearly acting as an agent for United Health Care.
Conclusion
While AARP has undeniably played a crucial role in advocating for seniors’ rights and benefits throughout its history, the organization’s current financial structure raises legitimate concerns. The stark contrast between membership dues and insurance royalties suggests a potential conflict of interest that merits closer scrutiny.
Understanding the organization’s business model and who influences their decisions is an imperative.
Perhaps the most prudent approach is to view AARP as one of many resources available to seniors, rather than the definitive authority on retirement matters. After all, informed decision-making requires understanding both the benefits and potential limitations of any organization we trust with our well-being.
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