19 Million Members : Association of Retirees a Major Force

Its magazine goes to more households than Newsweek, Time and People combined. Its representatives prowl Congress and all 50 state capitals. It produces television and radio shows carried throughout the country. It offers insurance to millions and runs the largest private pharmacy in the world.

Its membership now stands at 19.5 million, and it has been growing at the astonishing rate of 6,700 a day.

In terms of size and ambition, the American Assn. of Retired Persons is unique in American history. Cautiously and quietly, it has assumed a major role in American life.

‘Social Movement’

“You could almost describe it as a social movement,” said James E. Birren, dean of the gerontology center at the University of Southern California, which bears the name of Ethel Percy Andrus, AARP’s founder.

Although the public may identify AARP with lobbying for Social Security and Medicare, it offers a diverse and growing array of services, from widows’ counseling to driver re-education. It is so besieged with mail that both the Washington headquarters and a regional office in Long Beach have their own ZIP codes.

With a scope so colossal, AARP has found itself the subject of inevitable controversy. Some criticize it as being politically timid; others contend that it seeks too much, particularly for the affluent elderly. And some say it suffers from internal contradictions: Even as it emphasizes the elderly poor in its political lobbying, for example, it stresses the well-off when promoting its magazine to advertisers.

Although AARP represents an expanding gray army, it selects its skirmishes with great caution. Its member-soldiers are scattered philosophically as well as geographically, and there is little evidence that they would unite for anything beyond widely shared goals such as preservation of Social Security and containment of medical costs.

More Aggressive

However, the association has recently become more aggressive in promoting the rights of older people. For example, its opposition to mandatory retirement and other policies that judge workers by age rather than ability is now backed up by a willingness to challenge employers in court.

But such advocacy for the elderly is just one offering on AARP’s lengthy menu:

--About 3.7 million members pay more than $614 million in annual premiums for group health insurance policies that Prudential underwrites for AARP--an account large enough to keep more than 2,000 Prudential employees busy full time and to earn AARP $29.4 million.

--Modern Maturity magazine, which routinely turns down ads for canes, wheelchairs and other reminders of the less pretty side of old age, goes to 12 million households, more than any other magazine in the nation except Reader’s Digest and TV Guide. A full-page national ad costs up to $92,000.

--AARP this summer started a public-affairs television series, also named “Modern Maturity.” Since its June debut, 202 public television stations have signed up for the half-hour show, which features interviews conducted by Edwin Newman. AARP has budgeted $3.9 million for the show in 1986. In addition, about 500 radio stations carry AARP-produced broadcasts exploring issues of interest to the elderly.

--AARP this year began an investment program offering several mutual funds and a money market fund, under the management of Scudder, Stevens & Clark. Since January, members have invested half a billion dollars.

Offers Travel Service

--Through various contractual set-ups, AARP offers other insurance programs, a travel service, low-cost drug prescriptions, an auto club and more. The pharmacy service, once a storefront in downtown Washington, now fills more than 6 million prescriptions a year, making it the largest private mail-order drugstore in the world, according to AARP.

--Volunteer AARP tax counselors help more than 1 million fellow members fill out tax returns each year. Widowed members provide counseling to the recently widowed. Volunteer instructors conduct the “55 Alive” driver retraining program, which qualifies graduates for insurance discounts in some states.

For many people, such programs are too attractive to pass up. More than one out of three persons over age 55 belong to AARP. The organization has now extended its reach even further, lowering the age requirement for membership to 50.

“The beauty of this organization is that it offers something for everyone,” Steve Mehlman, AARP’s manager of editorial services, said. “We’ve got people who need the pharmacy service just to make it; but, on the other hand, we’ve got people able to live very comfortably who take advantage of the travel service.”

Has Legislative Unit

For those interested in politics, the 70-member division of legislation, research and public policy oversees national and state legislative activities. The nonpartisan association has 10 staff members who spend much of their time on the road, coordinating member committees active in all 50 state capitals. Twelve lobbyists are registered with Congress. A “legislative council” of members visits Washington each year to endorse a set of policy guidelines, under the watchful eye of AARP’s professional strategists.

But politics is kept in perspective at AARP: The $4.8 million spent last year on legislation and research was less than 5% of the association’s $110.8-million budget.

This mini-government of the elderly is the legacy of Ethel Percy Andrus, a red-haired, bespectacled educator whose advocacy of higher teachers’ pensions led to the formation of the National Retired Teachers Assn. in 1947. The retired Los Angeles school principal established the AARP in 1958 in an effort to assist the elderly in areas that the private and public sectors were not serving.

“What we’re doing today is nothing more than carrying out what Dr. Andrus initiated more than 30 years ago,” Cyril F. Brickfield, the association’s executive director, said.

Major Scandal

Ironically, Andrus’ focus on group health coverage for the elderly, an innovation that is one of AARP’s achievements, led to the major scandal of its history.

About 25 years ago, Andrus arranged for the Colonial Penn Group of Philadelphia to offer group health coverage to members. This arrangement continued through the 1970s, when it began to receive critical scrutiny from federal investigators and the media. The basic question: whether AARP was a bona fide nonprofit organization or merely a marketing front for Colonial Penn, which maintained the AARP membership list.

Although it never acknowledged improprieties in the arrangement, AARP broke with its longtime partner in 1980, awarding the lucrative group health contract to Prudential Insurance after competitive bidding.

But, if this was a public relations victory, the association’s future was anything but secure. Colonial Penn retained a copy of the membership list, and nobody knew how much success it would have in holding on to its longtime AARP insurance customers, costing the association crucially needed cash.

“These were fearful days,” Brickfield recalled.

The fears turned out to be unfounded. In girding for a serious drop in income, AARP hiked yearly membership dues from $4 a household to the current level of $5, began accepting advertising in Modern Maturity and conducted a membership drive. Ultimately, about 80% of AARP members covered by Colonial Penn remained faithful to the association and its new insurance program.

Soaring Membership

And, for a variety of reasons--including the fast-growing number of elderly Americans, heightened concern about Social Security and Medicare and AARP’s growing visibility--membership soared.

The organization, which had only 2 million members in 1971, had 12 million a decade later. The total should exceed 20 million by the end of this year, and its officers hope it reaches 30 million by 1990. (AARP grants full membership to both a husband and wife if one spouse joins. The number of households is approximately 12.9 million.)

Already, membership dues and insurance fees have led to an embarrassment of riches for the association, which must apply its income toward broad social goals, such as the public welfare, to keep its nonprofit status. Although many advocacy groups barely scrape by, AARP had $124 million in revenues in 1984.

Because its membership list is an invaluable key to the doors of 19 million consumers, AARP jealously guards the information, which is stored on the computer disks of Communications Data Services, a Des Moines, Iowa, firm that specializes in helping magazines maintain their circulation lists.

“When you start to think about the numbers we are capable of reaching, it is mind-boggling,” said Vita R. Ostrander, 67, AARP’s president, a former Red Cross officer from Atlanta. “It would be naive to say that people don’t want to use us. It means we must be careful.”

Exception Made for Nixon

AARP has turned down requests for the list from ad agencies, home builders, politicians and a company that sought to market cancer insurance. According to Brickfield, a one-time exception was made in 1972--for the President of the United States.

The association complied that year with a request from campaign officials in the Richard M. Nixon White House for the names of leading AARP members. The assistance was later noted in the Congressional Record, to the association’s embarrassment.

Indeed, political advocacy is especially tricky for AARP because its members are so evenly divided, breaking down about 40% Republican, 40% Democratic and 20% independent.

“If they cast their philosophy in political terms, I think they’d be wiped out,” USC’s Birren said. “They’d cut their base in half.”

As a result, AARP is more the pragmatist than the ideologue, sometimes in ways so subtle that few members would notice. One example cited by an insider: An article in the February-March issue of Modern Maturity on Rosalynn Carter, wife of the former Democratic President, was followed in the next issue with a piece on Margaret M. Heckler, Republican secretary of health and human services in the Reagan Administration.

Avoids Divisiveness

In the 1960s, AARP left it to other organizations, such as the National Council of Senior Citizens, to be the chief advocates for Medicare. Today, AARP seeks an influential role in the health care debate, although it avoids divisive positions, pushing instead for such non-controversial goals as maintaining the quality of care while holding down costs. It publicly opposed this year’s effort in Congress to delay the annual Social Security cost-of-living adjustment but quietly signaled that it would relent if such a move were part of a comprehensive attack on the deficit.

If AARP’s positions sometimes seem a tad difficult to pin down, its clout on Capitol Hill is in the eye of the beholder as well. The riddle is this: How powerful is a group whose membership is united on only a few controversial issues? AARP has not always acted as though it were sure of the answer, some suggest.

“It’s almost as if they have shied away intentionally from being the major force they could be for fear of alienating large chunks of their mass of 19 million members,” observed Edward F. Howard, public policy coordinator for Villers Advocacy Associates, a group that lobbies for policies to aid the needy elderly.

Nonetheless, an association with 19 million voters cannot help but be a force. A congressional staff member put it this way: “It’s kind of like the Viet Cong when we were in Vietnam. You know they’re there. You can’t really see them--but you don’t want to take the chance of getting into their gun sights.”

Influential Studies

Rather than organize protest rallies, AARP sometimes exerts influence by conducting studies that less well-heeled groups could not afford. Earlier this year, for instance, AARP released a report showing that delaying the Social Security adjustment would push more than half a million persons below the poverty line by the end of 1986. According to a Senate staff member, that finding was the single most potent weapon in deflating the move to delay the increase.

Congress pays its respects to AARP with consistently heavy attendance at its annual legislative reception. Vice President George Bush spoke at AARP’s national convention last year in St. Louis.

John Rother, director of AARP’s division of legislation, research and public policy, predicted that the association would be increasingly assertive in promoting its members’ interests: “We’ve been very conservative in the past about not wanting to push too hard and not wanting to offend people . . . but we just can’t walk away.”

One price AARP pays for its growing prominence is criticism that it has become a privileged special interest, in light of the fact that the economic status of the elderly has improved considerably in recent years--at a time when poverty among children has increased .

“AARP represents the elderly as more selfish than I think they are, and that’s a problem because it convinces Congress that the elderly are selfish,” said Paul S. Hewitt, president of Americans for Generational Equity, a new organization that seeks to ensure that federal policies do not unfairly favor the old over the young.

‘Truth’ About the Poor

A recent editorial in American Demographics magazine maintained that AARP’s lobbying efforts were diverting public concern away from needy children and to the more comfortable elderly: “Never has an organization tried so hard to prove how badly its members are faring, focusing the nation’s attention away from the scandalous truth about who is really poor.”

And some question whether there is a contradiction between AARP’s depiction of happy, healthy seniors on the pages of Modern Maturity and its strategy of focusing on the elderly poor when discussing federal programs. Modern Maturity, in fact, is so fastidious about projecting a positive image of aging that it rejects more than 30% of proposed advertising.

“When they talk to Congress, they’re talking about the poor elderly; but, when they talk to advertisers, they’re talking about the wealthy elderly,” Hewitt said. “In that sense, AARP speaks with two voices and, while it may be strategically correct, it is hypocritical.”

AARP officers dismiss the charges. They point out that certain segments of the elderly, such as minority members and women, have extraordinarily high poverty rates and contend that Social Security and other benefits for the aged serve a broad public interest, because virtually everybody has older relatives--or will become old themselves one day.

Serves Two Factions

As for the charge that AARP speaks with two voices: “People think you should be all for the wealthy elderly or all for the poor elderly, and you can’t be for the two,” Rother said. “That’s one of the geniuses of AARP. It has figured out how to serve both.”

Undeterred by the criticism, AARP rolls ahead. Since 1983, it has announced “global initiatives” to promote health care cost containment and to improve conditions for older minority members, older women and older workers. This year, AARP carried its opposition to mandatory retirement to the Supreme Court, in separate briefs filed on behalf of public employees and Western Airlines flight engineers.

Even a few years ago, such an assertive approach would have been unthinkable for the cautious giant.

And, in what once would have been an uncharacteristically bold idea, AARP officers now muse of a day when hundreds of their most politically aware members communicate with headquarters through a computer network. Already, strategists are beginning to plan for active AARP political operations in every congressional district in the country. Another goal is to educate members on current issues through a program of public forums.

Commercial Activities

The more commercially oriented activities continue. The association, for instance, has held meetings with Chase Manhatten Bank to try to make it easier for its members to get credit cards, although no agreement is expected soon. And, starting in October, AARP plans to test out in six as yet unnamed states a new insurance program that will pay some nursing home benefits, an area of coverage traditionally ignored by the insurance industry.

Meanwhile, growth should continue. The 1983 decision to drop the age requirement for AARP membership to 50 from 55 was a sign of new interest in the problems of those workers just starting to think about retirement. But it had a notable side effect: The oldest members of the post-war baby boom generation will become eligible to join AARP in the late 1990s.

Vowed John Denning, a retired school superintendent, whose term as AARP president begins next May: “Give us a little time and you’ll look back and say: ‘I had no idea you could do this much.’ ”

AARP: WHAT IT EARNS, WHERE IT SPENDS Data from 1984 financial statement

In Millions Where the money comes from: Membership dues $46.8 Group insurance administrative revenues 29.4 Publication advertising 20.1 Interest income 16.5 Other 11.2 Total operating revenue 124.0 Where the money goes: Publications $48.3 Member benifits and solicitation 27.8 Volunteer services 16.9 Administration and facilities operation 13.0 Legislation, research and development 4.8 Total operating expenses 110.8