AARP to license its name to health care groups Move would give HMOs access to millions of retirees nationwide


In a move that could prompt millions of older Americans to join managed health plans, the American Association of Retired Persons will begin licensing its name to health maintenance organizations across the country later this year.

The 33 million-member association, best known as a lobbying group for the elderly, is already a big player in the insurance business, endorsing selected auto and homeowners policies, and insurance that pays medical bills not covered by Medicare.

In return, it receives substantial revenue from royalties and related income -- $146 million in 1994, which provided 38 percent of its budget.

The association said it would only deal with health organizations that met its standards on financial stability, commitment to quality, price and popularity with current members.

A consulting firm, Health Benefits America, is screening hundreds of HMOs for the association. Among other criteria, the association will use standards that are being developed by the National Committee on Quality Assurance, a nonprofit group sponsored by managed-care companies and employers.

The association will seek formal bids late in June or early in July, with the aim of entering into marketing contracts with one or more health organizations in each of 15 or 16 regional markets.

"Our name and logo would be associated with it," said Wayne Haefer, membership director of the association. The group will keep the health maintenance organizations under continuous review, he said, backed by the right to drop any that fail to measure up.

For HMOs, the prospect of winning the association's endorsement is a major opportunity. In a single stroke, they would gain access to a national brand name and to millions of potential customers, and benefit from the association's marketing prowess.

The association will promote the health care organizations in mailings, in its national magazine, Modern Maturity, and other publications. And it will provide the HMOs with lists of its members and advice on "how to talk with people of this age and needs," Mr. Haefer said.

The federal government and dozens of big companies with rosters of retirees are already promoting health maintenance organizations as a way of controlling the costs of health care for the elderly; Medicare HMOs are among the fastest-growing types of managed care.

But the push into managed care is fraught with risk for the nation's biggest membership association. AARP will be lending its name to businesses that at times limit or even refuse medical services, instead of just making sure that claims are paid.

That could create a backlash if some of the HMOs it approves do not satisfy elderly consumers.

Among the big companies offering managed care, spokesmen for Cigna, Kaiser Permanente, Humana, Prudential Life Insurance, U.S. Healthcare and the national Blue Cross and Blue Shield Association said they were interested. In several states, notably California and Florida, Medicare payment formulas generate high profits for health organizations.

"It's very exciting," said Karen Ignagni, president of the American Association of Health Plans, a trade group in Washington. "Interest is very high around the country."

Pub Date: 4/29/96

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