Sen. Grassley Questions AARP About Lack Of Catastrophic Coverage In Health Plans

Main Category: Health Insurance / Medical Insurance
Article Date: 04 Nov 2008 - 12:00 PDT

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Senate Finance Committee ranking member Chuck Grassley (R-Iowa) on Sunday sent a letter to AARP CEO William Novelli to request information about health plans offered by the group amid concerns that the plans might mislead members about catastrophic coverage, USA Today reports.

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. According to USA Today, such "limited benefit plans" account for a "small but growing segment of the market offered by many insurers" and in most cases cost less than traditional health plans.

In the letter, Grassley wrote, "Insurance is supposed to limit your exposure to the potentially high cost of a serious illness, and these plans do the opposite," adding, "It's especially alarming when the marketer is a big-time advocate for health security and the target market is under- and uninsured Americans."

Dave Mathis, senior vice president of health products for AARP said, "These are not comprehensive plans, and it's not our intent to market them as such." AARP Senior Vice President David Sloane said that, until the U.S. "reforms the system and gives everyone access to coverage," plans such as those offered by the group provide an important alternative. He said, "For people who ... need at least some protection, this is better than nothing" (Appleby, USA Today, 11/2).

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