AARP May Endorse HMOs for First Time

The American Assn. of Retired Persons is laying the groundwork for endorsing certain health maintenance organizations for the first time, which could mean big business for HMOs seeking to attract the lucrative market represented by consumers who will never see 50 again.

The proposed HMO program could also generate big returns for the 33-million-member AARP, which already garners more than a third of its annual income from the royalties paid by health and other insurers.

“We’re getting closer� to establishing a program to license the AARP name to approved HMOs, said AARP spokesman Tom Bobrow, stressing that the program is still being developed.�There are a lot of steps between now and when we have a product that will be offered to members. . . . A lot of things could happen.�

The AARP is establishing standards HMOs must meet if they are to bid to become part of the licensing program, Bobrow said. The standards include price, quality of care and financial stability. The AARP could issue a request for proposals in the next few months, he said.

The AARP said it would not become involved in the operation of HMOs but would give its stamp of approval to some by promoting them in its publications and in mailings to members, who must be 50 or older to join. As with its health insurance and other programs, the AARP would receive a royalty.

Most of the people who buy insurance now through the AARP buy supplemental policies that cover the expenses Medicare doesn’t. Prudential had been the sole health insurer offered by the AARP, but in November the group announced plans to open bidding to other firms and said it would explore adding managed-care products.

The AARP is investigating HMO endorsements because “the whole health insurance field is rapidly changing,� Bobrow said. “The traditional approach still meets the needs of some of our members, but there are other approaches that might meet the needs of other members.�

Half the AARP’s membership is under 65 and therefore doesn’t qualify for Medicare or the supplemental “medigap� insurance policies.

The plan raises many questions among advocates for older consumers, such as what prices would be charged and what liability the AARP would assume if something went wrong.