On Monday, I had the opportunity to spend a little under an hour with the President of The Alliance for Retirement Prosperity, Dr. Larry Hunter. Dr. Hunter is a supply-side economist that has worked in the Reagan White House as well as numerous Conservative initiatives such as Empowering America and the Social Security Institute.
On September 15th, Dr. Hunter launched what may be the first credible challenger to AARP’s monopoly on senior citizen and baby boomer advocacy and support. From the Alliance website, wethealliance.com, their mission statement sums up the organization’s purpose.
The Alliance for Retirement Prosperity Association is an association of advocacy groups (“Allies” or “Alliance Partners”) and their members working to ensure a prosperous, enriched and secure retirement for today’s seniors and the seniors of tomorrow while working in the political arena to promote conservative American values, principles and public policies that affect the quality of our members’ lives.
In talking with Dr. Hunter I wanted to straighten out some conflicting information on the internet about the Alliance for Retirement Prosperity. Many sites report the Alliance as a 501(c)4, or non-profit and that Dick Armey, Jack Kemp and Dorcas Hardy are co-chairs. It would seem that this is all ancient history as Dr. Hunter explained that to be a very old press release detailing a past project.
The Alliance is now organized as a for-profit Virginia Business Trust, with Dr. Hunter as the President. Dr. Hunter explained why a for-profit model is required to compete against AARP:
If we were going to take on AARP, we had to take them on for what they are. That means you have to have a for profit business who can provide real goods and services to members to compete with them [AARP].
Dr. Hunter went on to explain that many attempts to take on AARP as a non-profit have struggled. Why would AARP as a non-profit have an advantage over other non-profits?
AARP.org states that their organization is a non-profit
Founded in 1958, AARP is a nonprofit, nonpartisan membership organization that helps people 50 and over improve the quality of their lives.
This statement is fact, AARP is a registered 501(c)4 non-profit organization as far as the law is concerned, but, as an article in the SeniorJournal stated, it’s behavior is not similar to most non-profits. It sells insurance products to the tune of several hundred million dollars per year and the membership that it’s members pay for is not a traditional membership .. they don’t vote for AARP officers.
In other words, AARP claims non-profit status for tax exemption purposes, but in all truth, appears to operate much like a for-profit organization – that does not have to pay any taxes. Imagine that, a tax-exempt insurance company?
With the Alliance choosing to engage AARP head-on, how will they offer better and less-expensive products to the 50+ crowd considering AARP’s questionable tax-exempt edge? Enter: the free market.
According to Dr. Hunter, AARP finds a vendor or carrier and first asks them for an endorsement fee. Then, for each product or service sold, a “cut” is taken by AARP. This double-hit is going to be passed on to someone – the members. These single endorsements might also be costly to the AARP membership as the vendors have little competition within the AARP population. The practices, as described by Dr. Hunter, do not seem competitive and would seem to limit choice. What pressure is there for these vendors/carriers to keep prices low? In fact, it seems more of a monopolistic approach wherein an AARP endorsement gives an endorsed vendor a choke-hold on a significant market.
The Alliance is taking a free-market approach. With a supply-side economist at the helm, could it have gone any other way? The Alliance is creating an exchange where vendors and carriers will compete for every dollar of Alliance member’s money. Dr. Hunter goes on to explain the exchange.
We are going to create a real-time shopping model. In which, we are not going to offer single-endorsed products, we are going to bring in a whole stable of top-of-the line insurance carriers and vendors and then those carriers and vendors are going to compete with each other for our member’s business.
Each vendor will know that they must provide a good quality product at an attractive price or they will be drummed out of the exchange by simple market economics. As an added differentiator, according to Dr. Hunter, the Alliance will not sell insurance like AARP. They will have insurance carriers in their competitive exchange for members to choose from.
I shared with Dr. Hunter that several of Conservative Daily News’ readers have emailed or commented that they feel that some of AARP’s programs and discounts are rip-offs and asked him how the Alliance might address these concerns.
I don’t know what [your readers] mean by rip-offs, but what I have seen is that companies will offer a discount. To get the discount, you have to sign-up with a credit or debit card. Your credit card or bank account will be hit each month in order to pay for whatever you signed-up for. Many times, people are signing up for these programs and don’t really understand what they are getting or what they are agreeing to do. They will come back in a couple months and their credit card has been hit four times. . I can guarantee your readers that we will have none of that. Our discounts are going to be a coupon- basis. For example we have a very good restaurant coupon. If you agree to pay $5 a month for the premium upgrade, you will automatically get a $25.00 restaurant coupon to the restaurant of your choice. .. if anybody comes back to us and says they don’t want to keep doing this .. we’ll give them their money back.
Along with questionable discounts, readers have also mentioned that AARP seemed to be pushing increasingly left-wing policies. Dr. Hunter even mentioned this AARP town hall video that illustrates how out-of-touch AARP may have become.
This brings out another facet of the Alliance’s competitive strategy against AARP – policy.
We are pursuing what we call a common sense conservative consensus. People have been thirsting to join an association that caters to baby boomers and seniors that they find compatible philosophically and politically.
So what policy initiatives would the Alliance be pushing in the near future? He said that the Alliance won’t get deeply involved in social or foreign policy issues, but did make clear some initiatives they will be pushing:
- “Do everything in our power to repeal Obamacare .. because it was enacted under false pretenses”
- Push for across-the-board government spending cuts
- Push for across-the-board tax cuts
- Get government back to within Constitutional limits
- Restore the Constitutionally provided for powers to States
The push for across-the-board spending cuts led to another question – how to cut spending but not gut Medicare and Social Security? I asked Dr. Hunter if the Alliance would play a part in helping reduce spending and defining that optimal government size.
If we do this the right way, we can protect all the safety net programs from major cuts for current retirees and baby boomers who are about to retire. Reform the programs for younger workers and cut other government programs. It is going to be a challenge, no doubt about that. But, not as much of a challenge as the liberals would have you believe.. we are going to fight like bulldogs against any proposals, Republican or Democrat, to take a hatchet to Medicare [or] Social Security.
Acknowledging that the Alliance represented a policy agenda that should appeal to a broad swath of Conservatives, I asked how someone under the required 50 year old age limit could help the Alliance in it’s goals.
He offered the idea of buying the membership for your parents and upgrade to the family plan so the children of seniors and boomers can also take advantage of the discounts, offers and community forums.