Aging Advocacy
The complicated relationship between Medicare and AARP unveils the mixed incentives of consumer advocacy groups and the contradictory nature of nonprofit organizations.
This year, 2023, marked the first time that a majority (51%) of people on Medicare were insured through private rather than public plans. Speculations of Medicare’s demise typically focus on dour projections of trust fund solvency, but creeping privatization portends a more likely death: Medicare’s transformation from a public healthcare program into a public provider of funding for private health insurance. AARP, the iconic advocacy organization representing people above the age of 50, should be working to counter this trend, but in reality, it is participating in it.
Formerly the American Association of Retired Persons, AARP was founded in 1958 by Dr. Ethel Andrus in partnership with the National Retired Teachers Association (NRTA). Organizational lore recalls Andrus’ investigation into the quality of life of retired teachers in 1947 and her decision to better their condition after she found one retired teacher living in a chicken coop. Andrus later partnered with Leonard Davis, an insurance executive and direct-mail guru, forming AARP to provide retirees with access to health insurance. Thus, while portraying itself as an altruistic advocacy organization, AARP was birthed alongside other market alternative plans intended to compete with the nascent Medicare and dilute support for the Social Security Amendments of 1965 that established the program.
The passage of Medicare and other War on Poverty measures led to explosive growth for senior-based advocacy groups and associations in the late 1960s and ’70s. These welfare programs defined and entrenched “seniors” as a political constituency. At 38 million members, AARP constitutes a political double threat: not only is it the largest membership-based political advocacy organization in the United States, but it also represents a major demographic of voters. In 2016, AARP had 36 registered lobbyists, 21 on staff and 15 hired externally; by contrast, even large nonprofit advocacy organizations will typically rely on only 2 or 3 staff lobbyists. Between 1998 and 2016, they spent over $260 million lobbying. While AARP does not donate to or endorse candidates for elected office, it routinely launches multi-million dollar TV ad campaigns to support endorsed legislation.
One of the causes it devoted this massive advocacy operation to was the passage of the 2003 Medicare Modernization Act (MMA), which created the public-private Medicare Advantage (MA) program. MA is a classic case of market alternatives coming in to erode and supersede public programs. How is it that a mass member-based organization could whittle away a program beloved by its members without destroying itself? Understanding how a senior rights organization can work to undermine its own mission of senior betterment illustrates the nature of modern nonprofits and why our zombified civil society fails to protect our basic interests.
