Wall Street Journal | By LAURA JOHANNES
Receiving a membership pitch in the mail from AARP just before one’s 50th birthday is an American rite of passage.
The advocacy group, which itself turns 56 this year, is a powerhouse with 37.8 million members, known for its travel discounts and branded insurance products. In Washington and at the state level, it is the dominant voice speaking for older adults on issues from health care to utility rates.
But now, a handful of conservative-leaning groups are seeking to provide an alternative voice to AARP, which they say leans too far to the left despite its stated “nonpartisan” nature. These competitors include nonprofit advocacy groups and for-profit firms hoping to gain a slice of the lucrative market selling supplemental Medicare insurance. They generally describe themselves as supportive of free enterprise and family values.
While alternatives to AARP have existed for at least two decades, several groups say they have gotten a boost in recent years because of AARP’s support of the politically divisive Affordable Care Act, signed into law in 2010. One group, the American Seniors Association, urged members to tear up their AARP cards—and it now proudly displays them in a fishbowl in its Alpharetta, Ga., headquarters. Another group, the Association of Mature American Citizens, or AMAC, based in Lady Lake, Fla., says its membership shot to 1.1 million members last year from 40,000 in 2008, in part because of anger over the health-care law.
What’s the Motivation?
Judy Smith, age 72, is a member of AMAC. Her initial reaction to the Affordable Care Act: “This isn’t going to protect seniors; this is going to push us by the wayside.” A retired health-care administrator from Las Vegas, she says she quit AARP about three years ago after becoming disillusioned with the group’s support of the health-care overhaul and a general feeling that the group was “swinging farther to the left.”
Such reactions stem, in part, from how the new health-care law works. According to the Congressional Budget Office, spending on Medicare, the government health-care program for older adults, will slow by $716 billion between 2013 and 2022. Some older adults believe that AARP—which collects royalties on Medicare supplemental plans to which it lends its name—would stand to gain if spending cuts prompted more people to buy additional insurance.
“Who are they really interested in: seniors or lining their pockets?” asks Stephen Crawford, 61, a retired industrial engineer from Albany, Ga. He says he quit AARP in 2010 over the health-care law and later joined the 60 Plus Association Inc. in Alexandria, Va.
AARP did lose about 300,000 members due to its support of the ACA, says David Certner, director of legislative policy at AARP. But, he says, the group also lost members in 2003 when it was accused of being “an arm of the Republican Party” for supporting a GOP plan to add prescription-drug benefits to Medicare. Today, about one-third of AARP’s members are Democrats, a third Republican and a third independent, he says. “We try to represent the largest cross-section of our population,” he adds.
AARP backed the Affordable Care Act and even ran national ads in 2009 arguing that the nation’s health-care system was broken and in need of fixing. Polling of its membership showed “overwhelming support” for key provisions of the ACA, Mr. Certner says. Among them: making it illegal for insurers to deny coverage because of pre-existing conditions and limiting the amount they can raise rates based on age. It is false that AARP will gain financially from the ACA, he says.
Beyond politics and policy, rivals to AARP are interested in the lucrative market of selling insurance to older adults. In 2012, AARP collected $500 million in royalties on Medicare supplemental plans, dental insurance and other products sold by third parties under its brand name. American Seniors Association is a for-profit group that distributes profits to shareholders. AMAC is also a for-profit entity but returns all proceeds to the main organization to continue its advocacy work, says founder Dan Weber.
The 60 Plus Association doesn’t offer insurance and has nonprofit status; it gets money from individual donations and from conservative political-action committees, says the group’s chairman and founder, Jim Martin.
Of course, AARP has a big head start—in the insurance market and in gaining access to legislators. The group’s operating expenses in 2012 were $1.35 billion. In 2013, according to public filings, AARP spent $9.6 million on federal lobbying; it usually employs about 35 to 50 state and federal lobbyists, Mr. Certner says. In contrast, AMAC, which started hiring professional lobbyists in 2011, spent about $71,000 on federal lobbying last year.
The lobbying numbers, however, don’t include television advertising—an area in which 60 Plus has made itself noticed. During the 2012 election cycle, the group says, it spent some $15 million on television commercials, mailers and phone calls to older adults.
When it comes to membership numbers, it is difficult to make comparisons because the organizations use different calculation methods. Still, it is clear that the newer groups are David to AARP’s Goliath, says Susan MacManus, a political-science professor specializing in generational politics at the University of South Florida in Tampa.
“It’s a Catch-22,” she says. “How can you show there is a reason to join unless you are effective? How can you show you are effective unless you get people to join?”
The newer groups say that they will eventually make a dent, and that two or more may merge for greater clout.
The conservative groups have clear differences with AARP on several issues, but less so on others. Perhaps the biggest disagreement: They want to repeal the ACA, which AARP still supports. The 60 Plus Association has been a leader of the push to repeal the federal estate tax, while AARP says it supports keeping the current estate tax, which now applies only to estates larger than $5.34 million.
And to prop up the Social Security program, AMAC has a detailed plan that would gradually increase the earliest retirement age to 64 from 62 currently—but would also guarantee cost-of-living increases in a tiered structure based on income. AARP is “adamantly against” any cuts in Social Security to deal with the current budget deficit, Mr. Certner says, but is open to discussing ways to safeguard its future.
On other issues, the smaller groups’ differences with AARP are less clear. AMAC is lobbying to restore Medicare cuts in the wake of the health law, which will hit “very sick, very poor old people” who prefer to stay at home rather than move to nursing homes, says Andrew J. Mangione Jr., vice president of government relations. AARP, for its part, wrote the Centers for Medicare and Medicaid Services last summer expressing concern about those cuts.
Miss Johannes is a writer in Boston. She can be reached at [email protected].