Wednesday, November 3, 2010
AARP United Health Insurance
Affordable health insurance has been part of AARP’s mission since the group began more than 50 years ago. Ethel Percy Andrus, AARP’s founder, was appalled that retired teachers had inadequate health care coverage. “Getting health insurance for seniors was the driving force behind the organization,” says David Mathis, AARP Service’s senior vice president for health products and services. But there have been missteps along the way.
After Sen. Charles Grassley, R-Iowa, raised questions in 2008 about whether AARP’s health policies mislead customers into thinking they offered more coverage than they did, AARP suspended sales. Today AARP sells plans with three traditional PPO (preferred provider organization) versions from Aetna for people 50 through 64 and their dependents. These policies are available in 31 states (Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Louisiana, Maryland, Michigan, Mississippi, Missouri, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia and Wyoming) and Washington, D.C. In a PPO, the insurer contracts with selected hospitals and doctors to furnish services at a discount. You can seek care from outside the network, but you then pay more.
The Premier Plans resemble standard workplace policies. They cover 80 percent of the cost of preventative care, prescription drugs, doctor visits and hospitalization within the network, after you have covered your deductible. You can buy policies with different levels of annual deductibles: $1,500, $2,500 or $5,000 for singles and $3,000, $5,000 or $10,000 for families. You pay $20 to $35 for routine doctor visits; 40 percent of the bill for out-of- network services after meeting the deductible; 20 percent for hospitalization and lab tests. These comprehensive plans are the most expensive, and tend to be best for AARP members who want coverage for their dependent children.
High-Deductible Health Plans compatible with tax-sheltered Health Savings Accounts (HSAs) offer lower premiums but place more financial responsibility on the insured. They come with deductibles of $3,000 or $5,000 for singles; $6,000 or $10,000 for families. You pay the full network cost of doctor visits, lab tests and hospital admissions up to the deductible. So you’re basically trading lower premiums for higher routine costs. These plans are best for the self-employed, who may benefit from the tax advantages of an HSA, and people in good health who generally visit the doctor only a few times a year.
Preventative and Hospital Plans are the most affordable, because they provide coverage only for hospitalization and outpatient surgery. Deductibles are $1,250 or $3,000 for singles; $2,500 or $6,000 for families. You pay the full network costs for doctor visits and prescriptions (other than generics) out of pocket; they don’t count against your deductible. And you pay 20 percent of the bill after the deductible for hospital admissions and lab tests. These plans are best if you want to keep premiums down, but still have coverage for catastrophic care. They aren’t a substitute for comprehensive health insurance.
These health plans have four features worth noting:
* Unhealthy Conditions: Although AARP/Aetna asks you all the medical questions other insurers do, you’re more likely to get affordable coverage than with competitors if you have high blood pressure, high cholesterol or are overweight. That’s because AARP is more forgiving. “We have made accommodations around those common medical conditions,” says Ann Bryan, an Aetna vice president who manages the AARP program. As the comparison below shows, a healthy person won’t necessarily pay more with AARP than with other insurers, however.
* Medical History: AARP/Aetna looks into your medical history for pre-existing conditions over only the past five years, not the industry-standard 10 years. This can be advantageous if you, say, had a heart attack more than five years ago and are fully recovered.
* Dependents: AARP/Aetna lets AARP members insure their dependents even if they don’t buy coverage for themselves. This can be handy if your employer doesn’t offer family coverage.
* Preventive Care: All the plans, including the high-deductible and preventive hospital plans, cover an annual physical, a prostate exam for men and a mammogram and gynecological exam for women, as well as flu shots for a low $20 to $40 co-pay, depending on the plan. Normally, high-deductible and preventative plans require policyholders to foot the whole bill. Aetna also waives the deductible for a colonoscopy once every 10 years in its Premier plan, and even the high-deductible plans charge just a 20 percent co-pay for the procedure.
For our price check below, we compared the three types of AARP/Aetna policies against competitors for a healthy married couple in their mid-50s, living in Georgia with a child in college. We chose Georgia because many insurers sell PPO policies there. (Remember: these are only base rates; before a health insurer issues a policy, it will review your medical history and set rates accordingly.)
AARP/Aetna wasn’t always the least expensive, but was generally among the lowest-priced options. One important note: Comparing the base rates of health plans is just a starting point. Every plan in these head-to-head comparisons put its own twist on co-pays, doctor visits and prescriptions. “The problem with health insurance is that it’s not enough to just look at the premiums, the deductibles and the doctor visit co-pays,” warns Mila Kofman, Maine’s superintendent of insurance. “You can’t do an apples-to-apples comparison unless you see if the benefits and policy limits are the same.”
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