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Does AARP Supplemental Insurance include undisclosed fees?

by Nathan Zachary

A recent investigation is looking at whether or not AARP supplemental insurance, known as Medigap, charges hidden and possibly illegal fees. Last year, a class action lawsuit alleged that AARP was involved in what appeared to be a bribery scheme when the organization accepted a nearly 5 percent commission on the sale of Medigap insurance plans issued by United Healthcare, essentially acting as unlicensed insurance agent.

What is Medigap insurance?

Officially known as Medicare Supplement Insurance, Medigap Policies like AARP Supplement Insurance provide coverage for out-of-pocket health care expenses, such as deductibles and copays that are not covered by the federal Medicare program. United Health offers these plans, which are marketed through it. Those who purchase coverage through AARP report being charged an additional, undisclosed rate of 4.95 percent.

What was the fee for?

According to AARP, the additional fee is a fee that insurance providers pay to AARP, which the organization maintains is “for the use of its intellectual property” and “AARP’s general purposes.” “The plaintiffs claim that the fee is actually a commission from the insurance companies, which it pays for the right to sell the products through the organization. Because it is not license as an insurance agent, it is legally prohibit from charging those commissions.

Why do they do it?

According to the lawsuit, AARP has never disclosed the amount of this fee to consumers. The plaintiffs contend that by calling the rate “canon” rather than “commission,” AARP is able to circumvent insurance regulations and avoid paying taxes on the income it receives from the sale of these policies.

A large number of consumers who have purchased supplemental insurance from its say that if they had known that the so-called “fee” was actually a sales commission, they would have purchased their Medigap policies elsewhere.

Are there alternatives to AARP supplemental insurance?

Several insurers offer Medicare supplement insurance. If you’re entitle to Medicare, you don’t have to buy Medigap coverage through it. If you’re concern about additional undisclosed fees, you can purchase a plan directly, rather than through it.

Keep in mind that no matter where you buy your Medigap coverage, it doesn’t cover things like long-term care, vision and dentistry (including hearing aids and glasses), or private duty nursing.

Also, don’t confuse Medicare supplement insurance with coverage like Medicare Advantage or Medicare prescription drug plans.

What if you already have an AARP supplemental insurance policy?

If you have already purchase Medigap insurance through it and believe you have been charge an extra fee without your knowledge, you may be entitle to recovery by taking legal action. An attorney experienced in Medicare matters can help you determine whether or not you have grounds to file a lawsuit or if you can join an existing class action lawsuit.

Join an AARP Medigap Class Action Lawsuit Investigation

If you purchased Medigap insurance through it, you may be eligible to join this its Medigap insurance overload class action lawsuit investigation.


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