Empire of the Old : Old Age, Says the American Assn. of Retired Persons, Is a Privilege, Not a Punishment. And AARP Has the Money, the Members and the Clout to Prove It.

THE WEST COAST HEADQUARTERS of the American Assn. of Retired Persons is a three-story, matte-white complex in Lakewood. Its discreet corner logo and its giant parking lot blend into the surrounding business-park, suburban landscape. Like the interest group it represents, AARP at first glance is, well, retiring.

Inside, however, the organization’s real dimensions take shape. On the ground floor, a busy discount drugstore is linked to the nation’s second-largest mail-order pharmaceutical network, which fills 5 million prescriptions a year. In the penthouse are the offices of AARP’s glossy bimonthly magazine, Modern Maturity, which recently surpassed TV Guide to become the magazine with the largest circulation in America; it reaches 18 million households. On the second floor, sandwiched between the magazine and the drugstore, is the heart and soul of the organization: a massive IBM-3090 computer that contains the 28 million names and addresses--one out of every five registered voters--that make up the membership roll of AARP. Across the parking lot, in a warehouse larger than a football field, the busiest of AARP’s two national mailing centers churns out more than 4 million pieces of mail a month--a volume large enough to give the facility its own ZIP code, 90847.

The activities in Lakewood are vital signs of one of the largest and most powerful organizations in the country. They prove that AARP is doing very well indeed. In part, the rise of AARP is the result of demographic trends: The U.S. population is aging. In 1996, the first of America’s 76 million baby boomers will turn 50, crossing the threshold of AARP eligibility. It is also the result of the goals and strategies of AARP, which have made the $5 per couple or individual annual membership fee an offer that almost half of those over 50 can’t refuse. AARP is a service empire of the old, providing members with everything from political clout to health insurance, protection of rights to travel discounts, a positive image of aging to driver education.

AARP is built on three essential elements--selling an image, serving members and ensuring political influence--carried out by separate divisions. Image is the responsibility of the publications division in Lakewood, which produces Modern Maturity and more than 60 free brochures and pamphlets. Program and field services, the association’s largest division, administers 15 member-related programs. Politicking is handled by the legislative, research and public policy division, which is at the AARP national headquarters in Washington. AARP also runs the National Gerontology Resource Center and the Public Policy Institute, AARP’s think tank. And research grants to scholars from the AARP Andrus Foundation extend the association’s influence to the academic world. More than 400,000 volunteers provide most of the association’s manpower. But if they are the bricks from which AARP is built, the paid staff of 1,200 is the mortar that holds it together. Hired by Executive Director Horace Deets, The staff, based largely in Washington, provides administrative and technical support to the association’s 10 regional offices in addition to the Lakewood headquarters, where 450 staffers work.

“To watch AARP in action is to see great genius at work,” says Ken Dychtwald, a Berkeley gerontologist whose recent book, “Age Wave,” explores the demographics of a graying America. “AARP’s leaders are not a bunch of duffers sitting around the Moose Hall. They have a brilliantly sculpted image and strategy that is reinforced by a multidecade-long commitment.”

EVA SKINNER is 5 foot 4 with silvery hair, piercing gray eyes and amazing stamina. Carrying only a suit bag, Skinner, 74, spends a third of her time on the road, often giving as many as three speeches a week as the national point person for AARP’s top political priority: long-term health care for the elderly. As a member of AARP’s board of directors--all volunteers--she not only makes the organization’s policy but also executes it and even exemplifies it. “You could say my job is networking,” she says. “I don’t do badly when it comes to frequent flier mileage.”

AARP has a $10-million annual legislative affairs budget and about 125 paid political staffers, including 18 registered lobbyists, to follow the progress of specific bills that affect seniors. But it’s the volunteers beyond the beltway who create a climate that is generally favorable to the AARP political agenda. The two-tier attack has resulted in an impressive list of legislative victories. Medicare, Medicaid and the Federal Council on Aging exist because of AARP, according to the Washington-based Villers Foundation, which studies the economics of aging. In 1967, AARP was the principal force behind legislation outlawing age discrimination. Mandatory retirement was eliminated in 1986 after a campaign by AARP that lasted almost a quarter of a century. In 1985, AARP helped defeat a bill freezing Social Security benefits by commissioning a study that showed the proposed freeze would push 500,000 seniors below the poverty line. And last year, AARP pushed through the Catastrophic Coverage Act, which expanded Medicare benefits.

AARP supports and arms its volunteers in the political trenches, but it also relies on the persuasive power of firsthand knowledge and involvement. Explains Skinner: “Those of us in the Medicare age group bring our own experiences to the debate. We know how it feels to get old and have our finances restricted by medical expenses.”

For Skinner, staff support means travel arrangements, research, even speech writing. But when AARP staffers prepare a text, as they did for her recent appearance before the Assn. of California Life Insurance Cos. in Carmel, the speech Skinner eventually gives belongs to her.

Although Skinner’s Carmel presentation was not scheduled until afternoon, sunrise found her working with AARP speech writer John Meyers, 30, fine-tuning remarks he had brought from Washington the night before. For Skinner’s audience of private insurers, long-term health care is just one more issue in a lengthy list. But for AARP, it is crucial. Skinner’s job was to convince the insurance executives that the Catastrophic Coverage Act is only one step toward broader and more affordable long-term health coverage.

As the sun filtered into the room, sentences were read silently, then recited. “ ‘We do not know enough to accurately predict utilization in an insured environment,’ ” Skinner suddenly read aloud. “This doesn’t sound like me. We have to lose this sentence.”

By the third reading, the speech had a discernible flow. “Twenty percent of the population will need long-term care within the next five years,” Meyers mumbled. “That’s a solid figure we’ve used several times.”

Skinner nodded absently, then brightened. “At this point I’ll stop, tell them to look around the room, then pause for effect.” She smiled. “ ‘One in every four of you will spend time in a nursing home,’ ” she practiced. “That should get the attention of those guys who are getting close to 65.”

Five hours later, the perfected speech was delivered. No one rose to denounce the notion of more long-term health care; then again, Skinner says: “I don’t think I changed anybody’s mind. We still disagree on who should provide coverage and how much it should cost.” For Skinner, it’s a battle of inches. “If they just leave here aware of the need for more affordable insurance, I’ll be satisfied.”

As a captain with the Army Nurse Corps, Skinner spent most of World War II supervising field hospital operating rooms. She was one of the first nurses to confront survivors of the Holocaust. After the war, she worked in various veterans’ hospitals, then moved to Cedars-Sinai in Los Angeles. When she retired in 1981, she was clinical coordinator of geriatric services.

Skinner is rarely home in her Carthay Circle bungalow. But she regards her work with AARP--and the 12 other state and national aging commissions in which she participates--as an enviable tonic. “Many older people who stop working become depressed,” she says. “I’m fortunate to have a schedule that keeps me motivated and active.”

Skinner’s qualifications and brand of energy are found throughout the association. Competitive zeal and peer reviews are sufficient to keep leaders motivated. Several weeks ago, for example, nine regional AARP leaders flew to Los Angeles for a three-day conference. They had come from four Western states to evaluate their accomplishments of the past year and set goals for 1989.

As the leaders met in an airport hotel board room, the mood was strictly business. On one side of the table sat a former chief flight engineer for Lockheed and the past president of an oil drilling company. Opposite were several retired teachers, a former school superintendent and a retired engineer from General Motors Corp.

With an avuncular formality learned during 28 years at Portland General Electric Co., AARP area vice president Donald Reitzer tapped his goblet with a spoon and asked, “Nevada, what have you to report?”

“In Las Vegas, our weekly walk-a-thons have raised $2,000 for the VA hospital,” the state director replied. “A health symposium featuring Rep. Claude Pepper (D-Fla.) attracted 3,500 seniors. We’ve managed to place one of our people inside the Nevada Department of Aging and have another representative on the state Advisory Commission on Aging.”

“California?” Reitzer asked with a nod.

“We’re trying to expand our health-care coalition in Sacramento, but there’s strong resistance to anything involving new dollars,” said Legislative Committee chairman Gerald Hedden. “The governor is difficult to get to.”

“Well, hit him again,” interjected California’s outgoing state director, Helen Rogers. “He gave $100,000 to the Armenians. Strike again while he’s still in a generous mood.”

AARP’s persistence pays off, politicians in Washington and Sacramento agree. “AARP is instrumental to bringing about change,” says Rep. Edward R. Roybal, 73, chairman of the House Select Committee on Aging. “Its members appear at every committee meeting, make more phone calls than we can count and send individually written letters to their congressmen. In my book,” the Los Angeles Democrat says, “AARP gets an A.”

THE AMERICAN Assn. of Retired Persons began in 1958, founded by Ethel Percy Andrus, California’s first woman high school principal. The organization’s stated goal was “to promote independence, dignity and purpose for older persons.” AARP was the outgrowth of another Andrus-created organization, the National Retired Teachers Assn.

Andrus started the NRTA when, faced with the state’s mandatory retirement age of 65, she was forced to resign. She soon discovered that she had a pension but no prospects. Neither the state nor the state teachers’ union offered job training or retirement counseling. The NRTA, begun in 1947, filled the void by helping retired teachers start second careers and volunteer for community service. In editorials published in the NRTA Journal, which she edited, Andrus exhorted members to remain active and well-informed and support programs that improved their communities.

Andrus practiced what she preached. In Ojai, using association revenues, she built a nursing home, an apartment complex for convalescents and a retirement home she named Grey Gables. Teachers who paid $4,000 for one of Grey Gables’ 90 spaces received room, board and full lifetime medical care for a guaranteed monthly fee of $135. The NRTA financial advisers warned that the rates were too low and could result in expenses exceeding income, but Andrus persisted, promising to increase fees when vacancies became available.

The one thing Andrus could not provide for the retired teachers was health insurance. Her petition for group insurance was rejected by 31 companies because they considered people 65 and older uninsurable. Finally, in 1955, Andrus met Leonard Davis, a 32-year-old Poughkeepsie, N.Y., insurance broker who realized that a scarce commodity sold to a captive audience would produce a profit. He used this logic to persuade a Chicago company to provide coverage.

The Andrus / Davis alliance was a huge success. Retired teachers got their insurance, Davis made a profit and the NRTA received a commission on every policy sold. Before long, other retirees who had never been teachers were asking to join the NRTA. To meet their needs, Andrus combined NRTA insurance royalties with $50,000 from Davis and in 1958 started AARP. By 1963, it had 750,000 members, enough for Davis to start his own insurance company, Colonial Penn Group, which became the sole provider of AARP insurance.

Because of their solid beginnings, the NRTA and AARP survived Andrus’ death in 1967 and continued to grow, but by the mid-’70s, trouble loomed. Cash-flow problems were surfacing at the NRTA, as predicted, and the cost of Colonial Penn’s life insurance was no longer competitive with policies offered by other companies. Membership fell. Harriet Miller, then AARP’s executive director, says she tried to persuade the board and Davis to lower rates and make the insurance more attractive. In 1977, Miller was fired, accused of “empire building and cronyism.” She filed a wrongful termination suit. Davis, she said, engineered her dismissal. She also accused him of using AARP’s reputation and tax-exempt status to sell overpriced insurance.

AARP leaders today deny that the Colonial Penn policies were a bad buy, but in 1979, amid mounting negative publicity, the association decided to select its insurance providers by competitive bid. It ultimately endorsed a Prudential insurance plan. In 1980, Miller’s suit was settled out of court; she received $480,000.

The restructuring, however, did nothing to solve the NRTA’s financial woes. The retired teachers living at Grey Gables were living longer than expected. The NRTA had an estimated medical liability of $4 million, and the guaranteed fees didn’t come close to covering it. AARP had two choices: Let the NRTA go bankrupt or generate enough cash to cover its debts.

The organization began regrouping. It lowered its minimum membership age from 55 to 50 in 1982. It started aggressively promoting an expanded range of competitively priced financial services. Those interested in buying life insurance from Prudential were reminded that auto and homeowners’ insurance also were available.

Cyril Brickfield, the former executive director who directed AARP’s commercial expansion and today heads its new credit union, makes no apologies for the revenue-producing side of the organization. In fact, he traces the current strength of AARP directly to it. “If you’re going to play on the same field with the banking, housing and pharmaceutical industries,” Brickfield says, “you better have an organization with enough influence, numbers and financial resources to respond in an effective way.”

AARP’s energetically marketed financial services produced a net profit of $32 million in 1987, the latest year for which figures are available. Were it not a nonprofit organization, its $235-million annual cash flow would be enough to place AARP among California’s top 100 private companies.

AARP’S “BRILLIANTLY sculpted image” of old age is rooted in the philosophy of Ethel Percy Andrus, whose portrait hangs beside each entrance and elevator at Modern Maturity. Every office at the magazine seems to include several bound copies of Andrus’ essays, collectively referred to as “The Wisdom,” which staffers proffer with the intensity of Jehovah’s Witnesses. As Andrus did, AARP argues that retirement is not a period of boredom and decline but an opportunity--even for those living on modest fixed incomes--to start new careers, travel or volunteer in their communities. Andrus’ homespun vision is appealing to an age group that must constantly confront the clinging negative stereotype of the aged. As such, it is also a savvy marketing tool--and the spark of genius from which AARP derives its strength.

Modern Maturity is AARP’s main vehicle for spreading this philosophy. The magazine’s editorial content is a mix of personality profiles, recipes, health updates, fiction, travel stories and “mini-courses” on subjects ranging from toy collecting to lasers. Each issue contains consumer reports, capsules about programs and activities of interest to older Americans and 12 pages of AARP news and opinion.

Image making is most noticeable in the magazine’s advertising. There are no ads for wheelchairs or hemorrhoid remedies, no pictures of canes or of hands covered with liver spots. Publishing Director Robert Wood permits ads for adult diapers because they enable the incontinent to have fun without fear of embarrassment, but commercials for stair lifts and tub lifts are verboten . “We believe old age means growing, not growing old,” Wood says. “The most important thing we do is give the mature reader a sense of possibility.”

More important, apparently, than making money. AARP runs the magazine at a loss (Modern Maturity has an editorial budget of $70 million against advertising revenues of $34 million); it rejects nearly one-third of the ads that are submitted. Material judged inappropriate is returned to the offending agency along with a booklet called “How to Advertise to Maturity.”

Wood travels more than 120,000 miles a year giving speeches that explain AARP’s vision of aging. In a UCLA marketing class, Wood begins his presentation with a slide that shows an old man in obvious discomfort.

“Prune power,” Wood yells, cracking his wooden pointer against the blackboard. As the students giggle nervously, Wood reads the advertisement’s caption in a voice laced with disgust. “No muss . . . no fuss. Just trusty, traditional, user-friendly, all-natural prunes.

“I’d like to rearrange the nerve endings of the person who wrote that copy.”

Wood shows another ad, this one picturing a young woman reluctantly supporting a feeble old woman. The caption reads: “Menopause--You can feel it right down to your bones.”

“This calcium-supplement ad is truly insulting,” he tells the class. “Look at this lovely young creature holding up her mother as a talisman of shame. The caption should read ‘Timber-r-r.’

“The main thing to remember about old people is that they are just as diverse as young people. Many of these slides imply that older people don’t really count. Modern Maturity exists to prove that they do.”

But critics contend that Modern Maturity exists primarily to promote AARP’s revenue-producing services. Many of its articles espouse AARP’s political viewpoints, and as much as one-fourth of its ads focus on AARP financial programs. And Wood rejects all ads for enterprises that compete with AARP.

“Modern Maturity is an attractive publication,” says Leonard J. Hansen, a free-lance writer whose syndicated column, Mainly for Seniors, appears in 200 daily newspapers. “But when a magazine refuses to report on any products other than its own, it brings its own legitimacy into question.”

Wood maintains that ads for competing products are rejected because they might confuse readers. And he admits that the magazine’s mission is to serve AARP’s interests. “We want members to know what the association is doing for them,” Wood says. “Obviously, we want them to renew their memberships.”

The positive image may be a marketing ploy, but it is also a subtly self-fulfilling prophecy. Part of the secret of AARP’s strength lies in that role. Old age is good, says AARP; participate in AARP and old age will be better. Says Eva Londeree, 74, a retired legal secretary from Huntington Beach: “Why, just reading Modern Maturity makes me feel good.”

ALTHOUGH AARP’s image and political clout are attractive, of the three pillars on which its empire rests, service may have the most immediate impact. Its programs--which save money, promote new friendships and provide the opportunity for volunteerism--are among the first things explained to prospective members such as those who gathered recently to start a new AARP chapter in Pacoima.

In a classroom at a recreation center, the Pacoima chapter’s inaugural meeting is scheduled for 1 p.m., but by 12:30, the room is packed with more than 40 senior citizens. Coffee and doughnuts are available on one table; another is piled with pamphlets extolling the active and worry-free retirement that would result from joining AARP.

Each person entering the room is greeted effusively by Humphrey Nixon, 81. A retired barber from Santa Barbara, Nixon has spent months building support through personal visits and telephone calls for what he hopes will be AARP’s newest chapter. And when he calls the meeting to order it seems that his efforts were not in vain.

“Ladies and gentlemen, I believe we have more than enough signatures to form a new local,” he announces amid scattered applause. “But before we elect officers, I have a brief slide presentation that will explain a bit more about our organization.”

As the slides flash on a portable screen, Nixon quietly surveys the crowd from the back of the room. A member of AARP for close to 20 years, he was put in charge of grass-roots organization in Southern California in July, 1987. Since then, he has established new chapters at a rate of one a month. Because all of AARP’s benefits and services are available with national membership, only 4% of the association’s 28 million members bother to belong to a local chapter. But AARP has stepped up its grass-roots efforts in the belief that new locals will produce additional revenue, stimulate member enthusiasm and widen its political base.

AARP benefits are a key draw. Consider the discounts--as much as 25%--on hotels and rental cars: “I signed up about 15 years ago because I needed my rights protected,” says Lakewood realtor C. A. (Doc) Grisham, 70. “But what I really like now is to go into a motel where the rooms cost $56, throw down my AARP card and hear the desk clerk say, ‘That’ll be $45 with your discount, sir.’ ” Or the discount pharmacy: “I joined to get the magazine,” says Francis Surrett, standing outside AARP’s pharmacy in Lakewood. “Then I discovered this.” She holds up a paper bag of glaucoma medicine. “I pay $135 for prescriptions that would cost $210 down in Garden Grove. If it wasn’t for this place, a lot of people just wouldn’t be able to afford their medication.”

Discounts are the least creative of AARP’s services. There is consolation for the grieving; a Tax Aid program with 28,000 volunteers who last year prepared 1.5 million tax returns for fellow members, and the Worker Equity Initiative: If a member thinks he or she has been discriminated against because of age, a group of retired attorneys will help prepare complaints for submission to the Equal Employment Opportunity Commission.

For some members, AARP provides the ultimate service: the opportunity, in the words of Andrus, “to serve, not to be served.”

“I began working for AARP just to keep busy,” says Ellen Sidenberg of Goleta, who for 17 years coordinated the campaign against offshore drilling as executive director of the citizens’ group GOO, Get Oil Out. As AARP’s new California state director, she hopes to increase state membership from 1.9 million to 2 million. “I don’t care if my work takes 80 hours a week,” she says. “Now that I’m retired I have plenty of time for a second career.”

DEMOGRAPHICS alone ought to make AARP’s future secure. But AARP no longer has the mature market to itself. The National Council of Senior Citizens, founded by the AFL-CIO during the fight for Medicare, has 4.5 million members. About half that number belong to the National Alliance of Senior Citizens. With chapters in 30 states, the activist Gray Panthers have about 74,000 members.

American Express has made affluent retirees a primary target for its travel packages. Sears’ Allstate now offers auto insurance policies written specifically for older motorists. One indication of increased competition is that AARP is starting to advertise on national TV.

AARP must also defend itself against attacks from within. Some members believe it is too willing to compromise; as an example, they point to last year’s Medicare Catastrophic Coverage Act. The act expands coverage, but it also requires a surtax on seniors. That, coupled with the fact that the coverage gained was not as complete as most consumers would have liked, left many AARP members confused by the association’s endorsement.

“There is a growing perception on Capitol Hill that the national AARP office ignores its own members on critical issues,” says Rep. Matthew J. Rinaldo, (R-N. J.), a former member of the House subcommittee on health and long-term care. “I’ve heard reports that some AARP chapters in Denver are so disenchanted about the financing mechanism in last year’s catastrophic bill that they’ve threatened to withdraw (from AARP). If this pattern continues, the organization runs the risk of further reducing its credibility.”

Another obstacle to AARP’s political advances may turn out to be its own success. Its adversaries--known within the organization as “granny bashers”--believe that increased aid to the elderly will take funds away from other social programs and endanger the Social Security system.

AARP executives admit that budget pressures--and the sense that seniors already have what they need--may present difficulties for their political agenda, but they aren’t worried. “We pick our battles very carefully,” says John Rother, the association’s legislative director.

As to the competition and the critics, AARP leadership shrugs. “The more successful you become, the more critics you attract,” Brickfield says. “There are 40 other organizations in this country, but people continue to join AARP. Why? Because we fought all the major battles.”

In the trenches, Eva Skinner pushes the point home. “You can bet your bottom dollar,” she tells a roomful of women at the National Council of Jewish Women on Fairfax Avenue, “if you have any left, that Medicare premiums will increase again in 1990, if not 1989.”

“The lack of health care is a national disgrace,” says a woman in a conservatively tailored suit.

“You sound like a communist, Fran,” says another, looking up from her knitting.

“So what can we do?” Skinner asks. “Write to the national office of AARP about how you feel. AARP cares. AARP is concerned. AARP will respond.”