Bonnie Alba
Nanny government & AARP, both growth industries
By Bonnie Alba
October 9, 2009

Who hasn't heard of the American Association of Retired People better known as the AARP? Organized as a non-profit seniors' organization in 1958 to lobby Congress, they have influenced legislation for over five decades. Have they reached their zenith?

Several years ago, disenchanted with AARP, I wrote an article
( ) exposing a myth they continued to perpetuate as true. In unison with the federal government, they claimed the existence of accumulated Social Security surpluses to the tune of $1.4 trillion. What many people don't know: Those surpluses don't exist.

In an Associated Press (Sept. 29) article, "Recession hurts Social Security," the myth was repeated and enhanced: "The deficits — $10 billion in 2010 and $9 billion in 2011 — won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion." (emphasis mine.) The myth continues.

Anyone see anything wrong with that statement? The $2.5 trillion surplus? Accumulation? Where would that surplus be?

In case you aren't aware — the federal government does not save a dime of collected revenues. Most years there have been surpluses of Social Security payroll tax revenues. But, here's the kicker, the Treasury takes the money and adds it to the General Funds while leaving worthless IOUs in their place. Of course, the feds spend all we give them and then some.

Evidently the AARP, AP and the feds believe IOUs are as good as gold. Try cashing them in when government is not collecting enough revenues to cover its ballooning annual expenditures. Hence, the deficit and the National Debt grows.

AARP and Healthcare

The AARP is considered one of the most powerful congressional lobby groups in Washington. Recently 60,000 members dropped out when Pres. Obama hinted that the AARP endorsed the democratic Health Care Bill. With 40 million members, AARP won't miss them.

According to GOP Policy News, , a 2008 House Republican Conference Report stated that AARP generated $652.7 million, over 60 percent of their revenues, selling Medigap supplemental insurance policies.

Where do these revenues come from? AARP endorses insurance companies and contracts with them for "Royalty fees." Of course, the insurance company doesn't pay those royalties — AARP members pay them in their insurance premiums.

What happened to "non-profit" organization? The revenue-raising AARP Services, Inc. steers members towards purchasing insurance policies including house, vehicle, Medigap, and other services. AARP endorsed insurance results in more expensive policies when compared to insurance companies unconnected to AARP.

In a December 2008 Bloomberg article some members learned why they pay higher insurance premiums and found less expensive insurance elsewhere. The collected royalty fees supposedly help pay for other AARP products and services. And you only wanted to pay for health or car insurance, right? Not pay for services you don't use.

They are in sync with the present chaotic congressional healthcare plan. AARP does not sell Medicare Advantage. But if that program is cut as proposed by Pres. Obama, AARP will be happy. They will continue to sell expensive Medigap policies and collecting their "royalty" revenue.

AARP Growth Matches Government

The AARP's original policy goal of serving seniors is becoming secondary to what's good for the "company." Its own over-reaching growth and power have ballooned from a once good-intentioned non-profit organization into a profit-making entity.

It is obvious that both the AARP and the federal government have "grown too big for their britches" as Grandma used to say. When Big equals Power. It appears the AARP is not satisfied with their monopoly over the Medicare crowd. The previous CEO, William Novelli, placed emphasis on marketing and steadily advancing to new horizons. He expanded their services to 17 different types of insurance.

It's a new day! The new AARP CEO is Barry Rand who came on board in April. He's also the first Black man to hold that position. Known as a humanitarian with business acumen, maybe he won't be enticed to "grow" the AARP bigger than it already is. Trying to keep pace with the federal government would be a waste. Let's hope he returns AARP to the original goal of serving seniors.

Otherwise, like government, they'll end up telling their members what's best for them.

Bigger and Better. Sounds like our Nanny Government, doesn't it?

© Bonnie Alba


The views expressed by RenewAmerica columnists are their own and do not necessarily reflect the position of RenewAmerica or its affiliates.
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Bonnie Alba

(Editor's note: Bonnie Alba passed away on February 12, 2017. You can read her obituary here.)

Bonnie Alba is a "politically incorrect" researcher-writer. Since 1995, her articles have appeared in California newspapers. Previously she served in various Department of Defense positions for over 16 years... (more)


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