AARP Lays Out Plans To Expand Insurance Product Offerings
AARP officials on Monday announced plans to expand the number of health insurance products offered by the group that will target U.S. residents ages 50 to 64 who lack coverage, the Wall Street Journal reports (Fuhrmans, Wall Street Journal, 4/17).
As part of the expansion, AARP in 2008 will begin to market with Aetna a PPO for U.S. residents ages 50 to 64, as well as a high-deductible health plan possibly linked with a health savings account. AARP said that underwriting practices for the health plans for such residents -- who "often find that health insurance is unavailable or unaffordable" in the individual coverage market -- will "be less stringent than those of many commercial insurers," although the plans will deny coverage to some sick residents, according to the New York Times (Pear, New York Times, 4/17).
AARP initially will market the health plans in about half of the states.
In addition, AARP in January 2008 will begin to market with UnitedHealth Group a Medicare Advantage plan. Medicare beneficiaries who enroll in the plan will have no monthly premiums but will have to make copayments for physician visits and prescription drugs.
AARP initially will market the plan in about half of the states (Appleby/Wolf, USA Today, 4/17).
The plan is "guaranteed to be in the Medicare marketplace for two years," although premiums and copays could change after the first year, Dawn Sweeney, CEO of AARP Services, said.
AARP also will continue to offer Medigap plans (New York Times, 4/17). The new plans likely will double the number of residents who receive health insurance through AARP and UnitedHealth by 2014, according to Sweeney (Phelps, Minneapolis Star Tribune, 4/17).
AARP CEO William Novelli said, "In launching these initiatives, we are driven by our mission to create a healthier America" (New York Times, 4/17).
AARP plans to "drive its insurer partners to improve the quality of their care" with financial incentives for adherence to recommended treatment practices for conditions such as diabetes and hip fractures and financial penalties for failure to follow the practices, CQ HealthBeat reports. AARP will publicly report the performance of the new plans and revise payments to the plans annually based on their performance (Reichard, CQ HealthBeat, 4/17).
In addition, the new plans will provide coordinated care for members with chronic conditions and develop specialized programs to treat depression (New York Times, 4/17).
According to AARP, Aetna and UnitedHealth and their provider networks "will be pressured to reach out to underserved ethnic and minority populations and to offer services and materials in multiple languages," CQ HealthBeat reports. AARP also said that the new plans will provide members with information to help them "navigate the choices of competing drugs and medical technologies."
AARP said, "Our responsibility is to our members and society, which is why AARP will measure and continuously improve the clinical performance and efficiency of its health plans" (CQ HealthBeat, 4/17).
Sweeney said that the link between payments to the new plans and their performance places AARP "on the leading edge of health care reform" (USA Today, 4/17).
The new plans will raise an estimated $628 million in revenue annually for AARP, Sweeney said (Forster, St. Paul Pioneer Press, 4/16). AARP will use more than $400 million of the $628 million to finance the "Divided We Fail" campaign, which seeks to obtain universal health insurance in the U.S. and strengthen "long-term financial security" for residents, according to Novelli.
In addition, AARP will use $50 million annually, or $500 million over the next 10 years, to finance "AARP Health AID," which seeks to provide information about the cost and quality of medical services, the arrangement of long-term care in other cities and other health care issues.
The new plans are "sure to spark criticism that AARP is creating conflicts of interest," CQ HealthBeat reports.
AARP officials said that the group will continue to support a reduction in payments to Medicare Advantage plans despite the new plan (CQ HealthBeat, 4/17).
However, Judith Stein, director of the Center for Medicare Advocacy, said, "The new arrangements with insurance companies create a tremendous number of potential conflicts for AARP, which is a powerhouse, perceived as the most important voice for older people." Stein added, "AARP will not be perceived as a truly independent advocate on Medicare if it's making hefty profits by selling insurance products that provide Medicare coverage. AARP's role in this market could give a big boost to the privatization of Medicare" (New York Times, 4/17).
A health care policy analyst said the new plans represent "a remarkable conflict of interest," adding, "How can you possibly claim that you bring objective views on other Medicare policies when you have a major stake" in Medicare Advantage? (CQ HealthBeat, 4/17).