Personal Injury Law

AARP Faces Senate Inquiry Due To Misleading Marketing

By Greg Webb

The AARP, the lobby for older Americans, has hired an outside investigator to look into the sale of some of its more popular health insurance products after a Senate inquiry found evidence of deceptive marketing. The AARP and the UnitedHealth Group, one of the country’s largest insurers, have voluntarily suspended certain policies sold by the UnitedHealth Group that carry the AARP seal. Millions of Americans have purchased these policies, which have names like Essential Plus, AARP Medical Advantage and Hospital Indemnity Plan. These policies pay fixed cash benefits, often much less than consumers expected, for certain services. Charles E. Grassley, the Senior Republican on the Senate Finance Committee, claimed the marketing on the policies were often misleading since it suggested the policies offered complete coverage. For example, one of the AARP’s Medical Advantage plans pays only a maximum of $5,000 for surgeries that may cost two or three times that. The marketing material on this plan, however, misleads consumers by highlighting full coverage for relatively low-cost procedures.

The Senate inquiry is potentially embarrassing for the AARP since it has always taken pride in its position of a champion for its members and consumers in general. It accused the Bush administration of overstating the value of private healthcare plans offered to Medicare recipients along with criticizing the hard-sell tactics of private insurers. Grassley is asking the AARP to disclose the earnings it accumulated from selling the limited-benefit insurance products. The investigation does not include the marketing of specific prescription drugs or Medicare Advantage plans offered by UnitedHealth and endorsed by the AARP.

Full post as published by Charlottesville Personal Injury Lawyer on November 25, 2008 (boomark / email).