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AARP Splits Health Pie Between UnitedHealth And Aetna

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The insurance arm of a giant nonprofit group has decided to work with 2 carriers to provide health coverage programs for its members.

AARP Services Inc., a subsidiary of AARP, Washington, an organization that represents 38 million U.S. residents age 50 and over, says it will renew and expand its health insurance alliance with a unit of UnitedHealth Group Inc., Minnetonka, Minn.

The alliance has helped make UnitedHealth a giant in the Medicare supplement insurance market since 1997, when it won a 10-year contract to replace a managed care unit of the company that became Prudential Financial Inc., Newark, N.J., as the manager of the AARP Medigap operation.

UnitedHealth later began offering supplemental health insurance products and other products to some AARP members who were not old enough to qualify for Medicare.

AARP now has awarded a unit of UnitedHealth a new, 7-year contract that calls for UnitedHealth to continue to provide Medicare supplement insurance and Medicare Part D prescription drug plans for AARP members age 65 as well as to continue to provide indemnity insurance products for some of the 18 million AARP members who are under age 65.

UnitedHealth also will work with AARP to create a new Medicare Advantage program, AARP says.

The new, AARP-branded UnitedHealth Medicare Advantage program will guarantee that it will be in the market for at least 2 years, Aetna says.

AARP also has awarded Aetna a 7-year contract to develop individual health insurance products for members ages 50 to 64.

The new UnitedHealth and Aetna contracts are scheduled to take effect Jan. 1, 2008.

AARP is hoping the changes will increase the number of Americans AARP health coverage programs serve to 14 million in 2014, from 7 million today, AARP says.

Both new contracts promote use of electronic personal health records and tie carrier compensation to measures such as improvements in patient health, an increase in health care coverage for the uninsured, patient satisfaction scores, and implementation of care management programs, AARP says.

“In addition, both offerings will be required to reach performance measurements in diversity, ethics, and easy-to-understand language,” AARP says.

AARP says it will use $500 million of the royalty revenue it expects to collect from UnitedHealth and Aetna over the next 10 years to start an AARP Health AID program. The program will answer callers’ questions about health conditions and disease prevention, AARP says.

The information service also may compete with existing, for-profit elder care information services by providing answers about providing remote caregiving for older relatives and arranging long term care services.


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