AARP

AARP is the nation's leading organization for people age 50 and older. It serves their needs and interests through information and education, advocacy, and community services which are provided by a network of local chapters and experienced volunteers throughout the country. The organization also offers members a wide range of special benefits and services, including Modern Maturity magazine and the monthly Bulletin. Even AARP detractors credit California educator Dr. Ethyl Percy Andrus as "one of the truly great women of recent American history," as Dale Van Atta put it. Andrus had become the first female high school principal in the state of California, and upon her retirement she became interested in the poverty of her fellow retired teachers trying to live on tiny pensions. In 1958 Andrus and Davis created the American Association of Retired Persons to share the insurance benefits the NRTA had gained with the general retired population. Davis provided the $50,000 of start-up capital. The company publication, Modern Maturity, consumed much of this capital but proved an effective marketing tool, touting an "invitation to security" in the organization's health insurance plans. A company publication, the Bulletin, described the group's lobbying efforts. Thousands of volunteers also worked to promote the offerings of AARP/Colonial Penn. Andrus and Davis started an early mail-order pharmacy, the "AARP Drug Buying Service," in 1959, to help older persons manage the high cost of filling prescriptions. In fact, Andrus and pioneer drug discounter Herbert Haft, who briefly ran the service, testified at congressional hearings on high pharmaceutical prices. Established pharmacists tried to ban the drug program stores and in some cases boycotted its distributors. Pharmacists' groups, who resented the fact that neither AARP nor Retired Persons' Services, Inc. (RPS) paid taxes on their sales, continued to provide opposition based on safety, community, and service issues. John McHugh took over the drug service in 1962 and managed it for 30 years. Upon his retirement, it employed 250 pharmacists and filled eight million prescriptions per year. Besides price, privacy and convenience were key selling points. A line of generic products was added. The company's catalog expanded to include sundries, which eventually generated 40 percent of its sales. The service operated as a separate nonprofit organization, Retired Persons' Services, Inc., "not owned or controlled by AARP." Van Atta reported its sales as $440 million in 1993, with a one percent commission on gross sales payable to AARP. In 1983 Davis retired from Colonial Penn. A couple of years later, the company, which had lost AARP's health insurance contract, sued its former partner for not allowing competitors to advertise in Modern Maturity. The NRTA and AARP had merged officially in 1982. The membership age was lowered from 55 to 50, allowing for a larger pool of potential members. South Carolina native Horace Deets, a former Catholic priest, became chief executive of AARP in 1988. The organization lobbied to standardize Medigap coverage in the late 1980s, which Smart Money reported had the effect of drying up competition. AARP tried putting together a federal credit union, which was vigorously opposed by other bankers. AARP Federal failed within two years, since it decided not to open any regional branches, and senior citizens proved wary of placing transactions without speaking to tellers in person. Van Atta reported that the AARP Travel Service was another seemingly logical marketing concept that soon failed. In the mid-1990s an offering of a simplified cellular phone, the Roadphone, fell apart when the provider, ASCNet, went bankrupt. Van Atta noted that AARP initially refused to compensate members for the $200 phones but relented after an intense public outcry. AARP fought another publicity battle when Republican Senator Alan Simpson attacked the organization's tax exempt st