AARP: America's Most Powerful Lobby and the Clash of Generations
By Charles R. Morris
Random House, 286 pp, 1996
I checked this book out of the library
because I wanted to learn how the American Association of Retired Persons
grew to arguably the most powerful lobby in Washington, DC.
Unfortunately, I didn't get much of an
answer to that question, other than the obvious: old folks vote, and AARP
reaches and communicates with nearly every old folk in the country.
AARP's principal founder, Leonard Davis,
established the organization in 1958 with Ethel Percy Andrus mainly as a
marketing tool to sell health insurance to seniors. This was before
Medicare, so there was a huge demand for insurance among the aged. By
1963, AARP boasted a membership of 750,000 oldsters and reaped huge
profits for Davis, who not so coincidentally owned the health insurance he
marketed. Davis created a series of companies and operated them under the
Colonial Penn Group umbrella. That cozy relationship between AARP and
Colonial, supposedly two separate entities, withered and fell apart as the
media and other groups discovered how bad a deal Colonial offered.
For example, by 1974, new competitor
Blue Cross's insurance policy that cost a little over six bucks a month
paid $92 per day for the first sixty days of hospitalization and $32 per
day after that, in addition to skilled nursing home care after twenty days
in the hospital. In contrast, the AARP policy that cost six bucks a month
"paid no benefits for the first week of hospitalization, only $20 per
day from the eighth through the sixtieth day, and $30 per day thereafter,
with no skilled nursing home coverage." It was worse, though. Blue
Cross paid out 93 cents in benefits for every dollar it took in, while
AARP paid out only 62 cents in benefits for every dollar it took in.
Davis and Colonial Penn loved this, of
course. In 1976, Colonial Penn's revenues were a staggering $445 million,
with nearly all of that coming from AARP members. And AARP was supposed to
be a non-profit organization!
Well, AARP members finally had enough of
this nonsense, lawsuits were filed, and in 1981 AARP opened its health
insurance business to bidders. Prudential won it. Davis' money-making
"relationship" with AARP and Colonial Penn was now history.
To its credit, AARP has learned from
this, and now offers its members competitive policies. In fact, AARP
offers its members a dizzying array of services and benefits, from the
well-known travel and hotel discounts to health, auto, and life insurance
and even sponsored mutual funds.
I don't have much of a problem with
this. My beef with AARP is political. They're basically a statist
organization, lobbying for more and more subsidies to the elderly. AARP
loves regulations and centralized government. I believe in neither. I
believe in low to non-existent taxation. If AARP got its way, the working
class would be earning peanuts because all of its money would go to
someone else. I do not believe in such redistribution. AARP lobbies for
Morris devotes the rest of his book to
the intricacies of the health care system, if it can afford to get bigger,
if medical costs will continue to skyrocket, how Social Security and
Medicare can be preserved forever (never once bringing up whether they
should be around forever). He also humbly offers his prescriptions for
reform, which, of course, will work if only the benighted politicians
would listen, and nearly all of which are badly out of date and no longer
Only the AARP part of the book
interested me. I don't think government should run a retirement system or
health care system. Social Security is essentially a pyramid scheme that
would be illegal for a private person or entity to run. Morris doesn't
even suggest this option, nor question where the federal government gets
the authority to operate such enterprises (it's not in the Constitution).
Furthermore, he barely touches on the
supposed "clash of generations." He implies that we should all
be happy paying payroll taxes, and it's a good thing that money that we
work for and stolen from our paychecks goes to someone else merely because