The insurance arm of AARP has decided to split the health coverage business of its 38 million members between Aetna Inc. and a unit of the incumbent carrier, UnitedHealth Group Inc.
AARP Services Inc., a subsidiary of AARP, Washington, says it hopes its new contracts with UnitedHealth, Minnetonka, Minn., and Aetna, Hartford, will help it increase health coverage program enrollment to 14 million by 2014, up from 7 million today.
The new contracts represent the biggest change for AARP health coverage programs since 1997, when UnitedHealth won a 10-year contract to succeed a unit of what is now Prudential Financial Inc., Newark, N.J., as manager of the AARP Medicare supplement insurance business.
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 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 and over as well as to continue to provide indemnity insurance products for some of the 18 million AARP members who are under age 65.
In addition, UnitedHealth will work with AARP to set up 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.
Both contracts promote use of electronic personal health records and tie carrier compensation to measures such as patient satisfaction scores, improvements in patient health, an increase in health care coverage for the uninsured 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 giving advice about providing remote caregiving for older relatives and arranging long term care services.