The
product could be available in some states by early 2020.
AARP
will be offering short-term care insurance (STCI) to many of its 38 million
members.
The
group has picked Medico Insurance Company, a unit of American Enterprise Group
Inc., to be the STCI provider.
Medico
will provide a product designed exclusively for AARP members, AARP and American
Enterprise announced last week.
Medico
will try to have the product on the shelves in several states by early 2020
AARP is
a Washington-based group that serves people ages 50 and older.
Medico
is a Des Moines, Iowa-based issuer of life and health products aimed at older
consumers. Its parent, American Enterprise, also controls American Republic
Insurance Company and Great Western Insurance Company.
Medico
now sells a short-term recovery care insurance product to consumers ages 18 to
79. That policy can pay for recovery care for up to 12 months.
Like
the existing Medico recovery care product, the new AARP Medico STCI product
will help purchasers pay for short-term use of home health care, adult daycare,
hospice care, assisted living facility care and nursing home care,
according to AARP and American Enterprise.
AARP
and American Enterprise have not talked about what the new STCI prices or
underwriting process will be like.
An
agent field guide on the web shows the current individual product uses medical
underwriting. Applicants can be declined if they have conditions such as a
history of stroke, kidney failure, lupus, or an inability to dress themselves.
An
applicant who was 5 feet 6 inches tall would have to weigh somewhere between
106 pounds and 254 pounds to qualify for coverage.
AARP, the Member
Benefit Program Manager
AARP is
known for representing the interests of older people in Washington and in
state capitals.
The
group also offers members access to Medicare supplement insurance products,
long-term care planning products, and other products and services, through its
AARP Services Inc. unit.
AARP
Services helped AARP increase member benefits royalty revenue to $909 million
in 2017, from $880 million in 2016, according to AARP’s consolidated financial
statements.
AARP’s
relationship with a unit of UnitedHealth Group Inc. accounted for 69% of the
2017 member benefit program royalty revenue.
AARP and Producers
The
AARP-Medico deal could help all agents, brokers and insurers in the STCI
market, by increasing consumer awareness of the product.
The
relationship could also increase competition for the producers already working
to sell STCI.
AARP
has come under fire for insurance distribution arrangements in the past.
Migliaccio & Rathod LLP, for example, says it has been working with other
law firms to represent Medicare supplement insurance policyholder plaintiffs in
Krukas v. AARP.
The
plaintiffs in that case allege that AARP Services is collecting a 4.95% royalty
fee in connection with the sale of UnitedHealth Medicare supplement insurance
policies, and that AARP cannot legally collect that royalty, because collecting
that royalty means that AARP Services is acting as an unlicensed insurance
agent.
AARP
argues that the royalty is a charge for UnitedHealth’s use of AARP’s
intellectual property, such as its name and logo, not an insurance sales
commission.
Allison Bell, ThinkAdvisor's insurance editor,
previously was LifeHealthPro's health insurance editor. She has a bachelor's
degree in economics from Washington University in St. Louis and a master's
degree in journalism from the Medill School of Journalism at Northwestern
University. She can be reached at abell@alm.com or on Twitter at
@Think_Allison.
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