Wednesday, November 19, 2008

AARP caught in insurance marketing scam

I've never entirely trusted those AARP television ads hawking health insurance. I think the AARP is a worthy group, and I would like to believe that its imprimatur would mean that the health insurance it was selling was legitimate, and perhaps even better than what you might find on the open market.

It turns out my skepticism was warranted. The New York Times reports this morning that the AARP, with partner United Health Group, have suspended sales of the insurance after an inquiry by Sen. Charles E. Grassley (photo) found evidence of deceptive marketing.

More than a million people bought the plans, which claimed to provide comprehensive coverage. Ah, two slippery-er words were never heard: "comprehensive coverage." The plans in many cases pay only a fraction of what a medical procedure typically costs.

AARP, which fancies itself a kind of consumer watchdog with regard to health insurance--it has criticized the "hard-sell" tactics of insurers, the Times says--is caught with its hand in the cookie jar.

The Times adds that the AARP, known as an advocate for senior citizens, is also a business, selling travel services, life and homeowner's insurance, and mutual funds. Operating revenue last year was $1.2 billion.

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