AARP Hires Outside Investigator To Examine Sales Of Limited-Coverage Plans

Main Category: Health Insurance / Medical Insurance
Article Date: 20 Nov 2008 - 7:00 PDT

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AARP has hired an outside investigator to look into sales of its limited-benefit health insurance plans after a Senate inquiry found evidence of deceptive marketing, the New York Times reports (Pear, New York Times, 11/19). AARP last week said it would suspend marketing and sales of the plans after Sen. Chuck Grassley (R-Iowa) said the plans are misleading and do not work in typical situations. The plans, offered by UnitedHealth Group through AARP and aimed at people ages 50 to 64, have about one million members. The plans cap the amount that UnitedHealth pays for medical services but do not provide catastrophic coverage for members (Kaiser Daily Health Policy Report, 11/3).

Grassley, ranking member of the Senate Finance Committee, said marketing of the plans was misleading because it suggested that the plans offered comprehensive coverage. He said, "In fact, there's no basic protection against high medical costs. The products may leave consumers seriously in debt if they need intensive medical care." Grassley has said that he wants AARP to disclose profits made from sales of the plans.

Martha Jones, a spokesperson for UnitedHealth, said the company is cooperating with AARP's investigation. The investigation does not include the marketing of prescription drug plans and Medicare Advantage plans offered by UnitedHealth and endorsed by AARP (New York Times, 11/19).

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