Three House Ways and Means Committee Republicans say an AARP affiliate has control over the pricing and marketing of the AARP-endorsed Medicare supplement (Medigap) insurance policies sold by a unit of UnitedHealth Group Inc.
The affiliate, AARP Services Inc., Washington, also oversees the AARP-UnitedHealth Medigap marketing campaigns, and it oversees and monitors the agent certification process for the program, the Ways and Means Republicans say.
“ASI has consultation, review and consent rights related to any proposed plan design changes including but not limited to, annual budgets, premium levels and rates, and sales and distribution plans,” the lawmakers say in a letter about the AARP Medigap program that was sent to Internal Revenue Service (IRS) Commissioner Douglas Shulman.
AARP Services can review and modify UnitedHealth Medigap contracts with other vendors when the value of a contract exceeds $250,000, and the annual incentive program for senior executives at UnitedHealth, Minnetonka, Minn. (NYSE:UNH), depends in part on UnitedHealth’s success at meeting AARP and AARP Services goals, the lawmakers say.
The lawmakers – Rep. Wally Herger, R-Calif., the chairman of the panel’s health subcommittee; Rep. Charles Boustany Jr., R-La., the chairman of the panel’s oversight committee; and Rep. Dave Reichert, R-Wash., a committee member – focused in a hearing earlier this year on allegations that AARP is more heavily involved in insurance distribution than a nonprofit organization ought to be.