Good Times for the AARP; Not So Much For America’s Older Workers

Whatever else it is, the AARP is an extremely complex series of profit and non-profit legal entities that build upon each other to form one of the most powerful marketing juggernauts in the country. The AARP’s business is very good. According to its Financial Report, the AARP’s net assets rose from $3,026,971,000 in 2012 to $3,393,94,000 in 2013.

Advertisements

AARP

If only business was as good to America’s struggling older workers as it is for the AARP.

In 2010, the AARPs assets totaled $2,546,636,000. According to its 2013 Financial Report, the AARP’s net assets rose from $3,026,971,000 in 2012 to $3,393,94,000 in 2013.  The rise continued into 2014, when, according to its 2014 Financial Report,  the AARP’s assets totaled $3,585,853,000.

That’s an 40.8 percent increase.

Meanwhile, in my book, Betrayed: The Legalization of Age Discrimination in the Workplace, I show indisputably that older workers are suffering from unaddressed and epidemic age discrimination. The Age Discrimination in Employment Act of 1967 was weak to begin with and has been eviscerated by the U.S. Supreme Court. Older workers have far less protection than their counterparts under Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, sex, religion and national origin.  My attempts to interest the AARP in working to ensure that older workers obtain equal justice under the law have met a solid wall of disinterest. This, despite the fact that age discrimination in the workplace denies millions of older Americans the right to work and dooms them to poverty in their old age.

The AARP calls itself the leading advocate for Americans aged 50 and older. But the AARP also sells the most popular “Medigap” plans in the United States, AARP Medicare Supplement Health Insurance Plans.  What exactly is the AARP? The AARP is an extremely complex series of profit and non-profit legal entities that build upon each other to form one of  the most powerful marketing juggernauts in the country.

The AARP essentially uses its profit-making enterprise to market access generated by its non-profit enterprise to the AARP’s 37 million members.

The three major legal entities that comprise the AARP are:

AARP, Inc., is the engine that drives the AARP.  It was founded by Dr. Ethel Percy Andrus, a retired high school principal, to promote positive aging.  It was organized in 1958 as a 501(c)(4) tax-exempt not-for-profit corporation to “meet the needs and promote the independence, dignity and purpose of persons 50 and older.” AARP, Inc. is run by a 22-member Board of Directors that appears to control every other AARP affiliate. The organization boasts 37 million members.

The AARP’s “for-profit” arm  is AARP Services Inc., a wholly owned subsidiary of AARP, Inc. that was incorporated in Delaware in 1998. The Board of Directors of AARP Services Inc. is appointed by Board of Directors of AARP, Inc.

According to its 2013 annual report, AARP Services, Inc. “manages relationships” with private vendors that paid $763.2 million of royalty revenue to AARP, Inc. in 2013. This was an increase of $39.4 million or 5.4 percent over 2012.  These vendors include United Health Group, The Hartford, New York Life and JP Morgan Chase.  AARP Services, Inc. markets an ever expanding array of products that include health and long-term care insurance, automobile, home and life insurance, financial services and credit cards, technology-related products, flowers, college savings programs and services, and entertainment and travel packages. And here’s the brilliant part –these products and services are marketed by AARP to members  as a “benefit” of AARP membership.

AARP Services also serves as a consultant for unspecified third-parties, presumably private industries,  “for marketing development and other services.”

 The AARP Foundation is a non-profit, tax-exempt charity organized in 1961 in the District of Columbia to serve “vulnerable people 50+ by creating solutions that help them secure the essentials – food, housing, income and personal connection.” The AARP Foundation’s Board of Directors is appointed by AARP Inc.’s Board of Directors. The Foundation includes a legal arm called AARP Foundation Litigation and an affiliate called the AARP Institute (also known as the AARP Public Policy Institute).

Some light was shed on how the AARP entities interact with each other in a highly-critical  2011 report by two Republican Congress members who opposed President Obama’s  then proposed health care law.  The report, by Congress members Wally Herger  (R-CA) and Dave Reichert (R-WA), is entitled, Behind the Veil: The AARP America Doesn’t Know.

Herger and Reichert questioned why the AARP actively supported Obamacare “which contained nearly one half trillion dollars in cuts that independent analysts said would negatively impact seniors’ access to affordable health care services?” They concluded the AARP’s for-profit enterprise “conflicts with its legal requirements” as a tax-exempt organization ” to primarily operate to promote the common good and social welfare of a community of people.”  They said the AARP “refused to comply with repeated requests to share with Members of Congress its tax filings and other financial documents, beyond those that AARP is legally required to make available upon request.”

The AARP also was criticized by advocates of a single payer system or public option during the health care debate. They claimed the AARP failed to embrace single payer plan because it threatened sales of the AARP health insurance plans.

Author: pgb

Attorney at Law, author and blogger.

3 thoughts on “Good Times for the AARP; Not So Much For America’s Older Workers”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s