AARP Suspends Marketing, Sales Of Benefit Plans Due To Grassley Inquiry

Main Category: Health Insurance / Medical Insurance
Article Date: 11 Nov 2008 - 7:00 PDT

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AARP on Friday said it would suspend marketing and sales of health insurance plans after Sen. Chuck Grassley (R-Iowa) last week said the plans are misleading and do not work in typical situations, CQ HealthBeat reports (CQ HealthBeat, 11/7). 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.

Grassley in a letter 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" (Kaiser Daily Health Policy Report, 11/3).

AARP CEO Bill Novelli in a statement said that AARP has launched a comprehensive review that includes hiring an independent expert to investigate marketing and sales of plans (CQ HealthBeat, 11/7). The group said suspension of sales will occur "as soon as possible" and will last until the review is completed. Grassley said that AARP's actions are a "step in the right direction" but that he still is concerned people who already have the plans might not understand their coverage. He said, "The AARP needs to do right by the more than one million people" who might have purchased the plans based on questionable marketing (Appleby, USA Today, 11/10).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation.  All rights reserved.

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