Senator Chuck Grassley commented on the announcement made today by the AARP (copied below) that it will suspend marketing and sales of fixed indemnity products for a comprehensive review of the questions raised by Senator Grassley in a letter sent Monday to the AARP. A copy of Senator Grassley's news release is below, along with posting information about his Grassley letters to AARP and state insurance commissioners and copies of AARP marketing materials for the plan in question. Senator Grassley is Ranking Member of the Committee on Finance, which is responsible for health care policy.
Senator Grassley's statement: "The marketing of this plan demands a comprehensive review, and the AARP needs to do right by the more than one million people who may have bought this AARP product because of the misleading marketing."
FOR IMMEDIATE RELEASE
November 7, 2008
CONTACT
Adam Sohn
202-434-2560
AARP RESPONDS TO SENATOR GRASSLEY, CONDUCTS COMPREHENSIVE
REVIEW OF MARKETING OF FIXED BENEFIT INDEMNITY PRODUCTS
"Ensuring the protection and keeping the trust of our members drives all that we do at AARP."
WASHINGTON—AARP CEO Bill Novelli issued the following response to a letter from Senator Charles Grassley containing questions about the marketing and sales of several AARP branded fixed benefit indemnity plans administered by UnitedHealthcare.
"Ensuring the protection and keeping the trust of our members drives all that we do at AARP."
"Based on Senator Grassley's letter we have launched a comprehensive review of the issues he raised. I have personally assured Senator Grassley that we are moving quickly to respond to his questions. We are also taking the following steps:
"We are engaging an independent expert to review the marketing and sales of the fixed benefit indemnity products and make recommendations as warranted; and
"AARP and UnitedHealthcare have agreed that the marketing and sales of these fixed benefit indemnity products will be voluntarily suspended as soon as possible, pending the conclusion of our review. Current members of the fixed benefit indemnity plans will continue to be served by the program.
"We have extremely high standards for the provider products that carry the AARP name. No one cares more about helping people stay healthy and secure as they age than AARP. Our organization was founded to serve older Americans and help them get access to the health care they need. That mission continues to drive this organization today through our public interest work, our membership services and our leadership in the marketplace."
AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have
independence, choice and control in ways that are beneficial and affordable to them and society
as a whole. AARP does not endorse candidates for public office or make contributions to either
political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+
Americans and the world's largest-circulation magazine with over 34.5 million readers; AARP
Bulletin, the go-to news source for AARP's 40 million members and Americans 50+; AARP
Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic
community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides
security, protection, and empowerment to older persons in need with support from thousands of
volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of
Columbia, Puerto Rico, and the U.S. Virgin Islands.
30-30-30
For Immediate Release
Monday, November 3, 2008
Grassley asks AARP about misleading marketing of product called health insurance
WASHINGTON -- Senator Chuck Grassley is asking the AARP to account for the way its marketing materials for a product it calls health insurance fails to limit policy holders' exposure to the potentially high cost of a serious illness. Grassley said the AARP materials include examples of medical expenses, but the examples are misleading and do not reflect how the policy would actually work in a typical situation.
"The pitch for these products should be straight up and informative, instead of designed to leave the impression of being comprehensive when the product is, in fact, very limited and leaves consumers seriously in debt if they need intensive medical care," Grassley said. "Individuals shopping in the health insurance marketplace shouldn't be taken advantage of. A big time advocate for health security should not target under- and un-insured Americans with misleading marketing. Consumers deserve better. It's not better than nothing to encourage people to buy something described as 'health security' when there's no basic protection against high medical costs."
Grassley is also writing to state insurance commissioners to ask if they've received complaints about the AARP policies or other limited benefit policies. Twenty-nine states recently entered into a settlement with the Mega Life and Health Insurance company for actions related to the misleading marketing of those policies which are also limited benefit policies similar to AARP's.
Grassley said his inquiry was prompted by the experience of a cancer patient treated at M.D. Anderson Cancer Center in Houston, who was forced to produce tens of thousands in payments up front before she would be treated. Lisa Kelly's health policy was an AARP limited benefit policy. Grassley said his review of the health policy led to the conclusion that the marketing materials are misleading and would cause an average person to believe he or she is buying real insurance when the coverage is not insurance.
Copies of Grassley's letters to the AARP and to insurance commissioners in Washington, D.C. and the 29 states where this plan is offered (Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, Georgia, Hawaii, Illinois, Indiana, Iowa, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Mexico, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, West Virginia and Wyoming) are posted with this news release at http://finance.senate.gov and http://grassley.senate.gov.