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AARP Branded Medicare Advantage Plans Do Not Rank Among the Best Scorers

Medicare Advantage plan

The Affordable Care Act (“ACA” aka “Obamacare”) will bring new opportunities and challenges to health care consumers. With more people receiving coverage on the individual market, they will need to find ways to select health plans that meet their needs. Consumerism in the Medicare market predates Obamacare with choices of Medicare Advantage and Medicare Prescription Drug plans. In light of the movement toward individual choice, HealthPocket decided to look at the effect of brand awareness on decision making and focused on one well known and widely used branded Medicare Advantage program. We found that plans bearing the AARP brand in the Medicare Advantage market on average fall short of the industry in two measures of plan quality.

This report looked at 578 Medicare Advantage contracts with a particular focus on the government’s star rating and the overall opinion of the plan based on a survey of enrollees in that plan. The goal of this research is to compare how one of the strongest brands in the industry, AARP and its endorsed carrier, UnitedHealth, perform in these high level quality metrics compared with the universe of plans.

The Medicare Advantage program has been successful in many ways, including enrollment. There are now 14.4 million people enrolled in Medicare Advantage plans, and that figure has grown by almost 10 percent since 2012.1 Medicare Advantage market share represents over 28 percent of the Medicare eligible population.2 By contrast, the insurance industry reports that 10.2 million people had Medigap plans, which supplement benefits to traditional Medicare, at the end of 2012. This marketplace doesn’t show the same growth pattern seen in the Advantage market.3

Consumers have complex choices to make when deciding between traditional Medicare and Medicare Advantage. Once they conclude that an Advantage plan can best meet their needs, they then have to navigate an array of options available to them. There is much research regarding the paradox of choice and consumer decision making generally.4 One specific study of the Medicare Advantage market showed the market within a particular region generally grows when choice is limited to fewer than 15 plans, but could in fact shrink if choices become too numerous.5 The article expressed particular concern that beneficiaries with cognitive challenges could miss better plan opportunities because of having too much choice.

The Medicare plan quality star rating system is a key factor in helping enrollees differentiate plans. The rating provides a one to five (actual results start at 2 stars) scoring system for Medicare Advantage Plans.6 The overall rating reflects treatment, preventive care, and customer satisfaction collected on the Medicare Advantage plan. Consumers who are interested in poring through more detail can find sub-ratings on the Medicare plan finder website7 and on HealthPocket’s Plan Details page for each Medicare Advantage plan.8

Researchers are finding evidence that the star ratings are beginning to move market share toward the higher rated plans.9 However, HealthPocket also wanted to see the effect a brand might have on Medicare Advantage market share. Because choices can be so numerous in the Medicare Advantage market, a consumer might fall back on a basic comfort level that a known and trusted brand can provide a good choice. Research also indicates that some older people select from among fewer choices based on brand awareness.10

Background

UnitedHealth is the leading market share carrier for Medicare Advantage, with a reported market share of nearly 21 percent in February 2013.11 Humana has the second largest market share at nearly 17 percent. AARP branded plans are described on the AARP Member Advantages website12 as being structured the following way: “The AARP® MedicareComplete® plans are insured through UnitedHealthcare Insurance Company and its affiliated companies, a Medicare Advantage organization with a Medicare contract. UnitedHealthcare Insurance Company pays royalty fees to AARP for use of its intellectual property.”

Market share reports do not tend to break out AARP’s share from the rest of UnitedHealth’s, but a Congressional report in March 2011 stated that AARP branded plans then had an 11 percent market share and non-AARP branded UnitedHealth plans had an additional 7 percent market share.13

Star Ratings

The chart below compares the average star ratings for AARP Medicare Advantage plan contracts with the remaining universe of Medicare plan contracts: The data shows a significant oversupply of AARP contracts in the 3 and 3.5 range, while few AARP contracts reach 4 and none reach the excellent range of 4.5 and 5. In fact, only 8.5% of AARP plan contracts exceed 3.5 stars. Averaging all contracts with ratings excluding AARP, the average score equaled 3.47, while the average for the AARP contracts equaled 3.27.

The highest scoring plans across their average contract scores were nonprofit health plans, including Kaiser (7.9 percent market share, but still an average contract score of 4.93), Gundersen Lutheran Health System, Baystate Health and HealthPartners Inc.) However, for profit plans also had higher average contract scores than AARP, such as Humana (3.4) and Aetna (3.65.)

Members’ Overall Rating of Plan Results

HealthPocket also looked at how the branded AARP Medicare Advantage plans fared compared with the industry in how the plans were rated by a survey of their members. The chart below shows how the AARP plans compared with the remainder of the plans in the industry with respect to members who rated the plan highly.

The industry average for all plans excluding AARP for this response was 86 percent of members rated the plan highly, while AARP’s plan contract average was 83 percent. Perhaps more importantly, the AARP plans top out at 86 percent, while the rest of the industry has 62 plan contracts at 90 percent or higher and tops out at 95 percent.

Implications for Consumers

A lot of factors drive consumers’ decisions regarding their health plan purchase. They will be heavily motivated by cost, including premiums, copays, deductibles and maximum out-of-pocket expenses. Many will want to make sure that key physicians participate in their plan and that specific health care facilities are in a plan’s network. Therefore, quality should play one important role in a mix that contains other factors. At least with respect to Medicare Advantage quality scores and consumer satisfaction data, the AARP branded plans are not top performers. Yet they are successful in achieving strong market participation. Fortunately for consumers CMS, the Medicare plans’ regulator, has done an excellent job of releasing data to the public and on its own plan finder website. This allows easier comparison of plans and brings plan quality into the mix for consumer decision making. Being able to see actual ratings and customer satisfaction might provide enrollees sufficient peace of mind to look beyond the brand in determining health plan selection.

METHODOLOGY

Data on attrition, complaints and star ratings were taken from 2013 CMS Medicare Part C Performance Data tabulations.14 The data was based on contract numbers, which can represent multiple plans. UnitedHealth contract numbers were compared against Medicare Advantage plan landscape data to determine which UnitedHealth plans carried the AARP brand. Medicare Advantage contract plans that were either too new or had insufficient data to a have star rating or overall plan rating were eliminated from this review. The remaining plans were not adjusted for market share.15 This study did not consider premium costs or other plan details. All analysis assumes the accuracy of the underlying government data. While every effort was made towards a representative collection of plans, HealthPocket makes no representation that every plan within the Medicare Advantage market was included in this study. Percentages are rounded according to standard industry practices.

AUTHOR

Steve Zaleznick, Executive Director for Consumer Strategy and Development at HealthPocket.com, completed this survey analysis.

Comments (50)

  1. Jan says:

    A friend referred me to AMAC for information on medicare advantage plans. My husband turned 65 in December and I will be 65 in March. Presently we have the Federal BlueCross/BlueShield. I have spent time researching medicare since September 2013 and still haven’t made a decision.

    We will both sign up in February to be effective March 1. This whole process has been a nightmare. The medicare site is confusing and frustrating. We have been looking at UHC through AARP (no I am not a member!) and may go with them.

    So here I am, joined AMAC to get information on their medicare advantage plans, have to submit my phone number for them to call. That is majorly irritating, I want to research their different programs before talking. Not sure this is going to work.

    After reading the other emails UHC is not the most reliable company. What other options are there, they all are pretty similar in their plans.

  2. Suzanne Jacobs says:

    It must be remembered that the healthcare industry has always been independent from the market place. They have never had to compete with anyone. This is the first year that any form of transformation in the American health care plan has taken place. Truman wanted to start health care reform but it never came to fruition. (The reasons are a parenthetical slippery slope scenario.) If you review the health care plans available to the uninsured you will see that the medical industry is attempting to take advantage of the system this first year and charge outrageous rates to those who can reasonably afford any insurance. ( Review the stock increases for healthcare.) If you are in the poverty level then there is cheaper options. I have opted for something other than the AARP plan this year to see what happens when the dust settles. Patience: the market place takes time to work and the medical industry has NEVER been a member of the market place. Meanwhile, any kind of choice and intelligent decisions made based on value and quality will transform a very ugly situation.

  3. john B in Calif says:

    We recently enrolled in AARP Advantage Complete plan 2 underwritten by United Health care/Secure Horizons. We have until the dend of Dec to opt and would like comments pro and con about this plan..

    • Eric DeWitt says:

      Was on that plan, they terminated the plan in our area the following year. Seems, whenever they experience a higher than average payout in a given area, they withdraw from the market.

      Their coverage was very good, but they are not dependable to stay in one given area.

      AARP does not endorse any of the advantage plans any more, per voice conversation with their offices.

      • Paul C says:

        That’s one of the disadvantages of medicare Advantage plans. AARP(United Healthcare) is not the only company terminating or changing plans. Nor is this the first or last time it will happen. That’s the risk you take with any insurance, especially Medicare Advantage.

  4. David Coker says:

    My mom has AARP Medicare Complete through United Healthcare and we received the 2014 Annual Notice of Changes in plenty of time to make a choice on whether or not to stay with her current plan. The problem is we did not receive a booklet telling us who was in the network of Providers. I called UHC, and 2 weeks later we still don’t know who is and who isn’t in the network because we still haven’t received the information requested. Was this done purposely by UHC so customers would not know who has left their network? I called again today and Keesha at UHC told me the booklet with the network providers was mailed out on Nov. 5. Well I still don’t have it. Very unprofessional and I smell something is rotten. I will give it one more day and then start looking for another company to get my mom’s Advantage Progam through.

  5. Ginny Brewton says:

    Just ran across this blog while looking for low-cost medicare plans for my 92 year old mother. She’s had a Medigap policy for years and years, but the cost has now increased to the point she can’t afford it. I am hoping to switch her to Kaiser Senior Advantage, but hope the lack of Part D on her plan won’t be a problem, as Medicare will penalize those with out “credible coverage” by imposing a fine every month. I hope her Drug discount card from Banker’s Fidelity will work.

    My daughter and son-in-law suggested Kaiser Senior Advantage for my husband and me. They are both Kaiser Doctors in CO. We are in Georgia and fortunate enough to live in a county where Kaiser is availabe. We pay NO monthly premiums, just a $30.00 co-pay for Dr. visits and high co-pays for procedures, still low enough for us to save money by not having a monthly premium…even with my recent hip-replacement! We both are very pleased with Kaiser and the Doctors we have selected. If we aren’t happy with any of them, we can just go online and with the click of a mouse can change and make a new appointment with another one!

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