Insurance from AARP
Anyone who has purchased health insurance on an individual basis (not through their employer) is finding health insurance to be quite expensive. How easy it is for us to get upset with the high cost of health insurance, especially when we remain healthy and are not receiving any benefits. We must keep things in perspective. The people who are dealing with serious illnesses thank their lucky stars everyday that they have comprehensive major medical insurance, no matter what the cost. They realize that their insurance policies are paying the biggest percentage of their medical expenses and without such coverage; they would be risking their life savings. So for those of us who are fortunate to not have many claims, we too should be most thankful that we are paying a premium, but not needing the benefit. That is what insurance is all about.
AARP offers a number of insurance policies directly related to our health and well-being. However, it does NOT offer comprehensive major medical health insurance.
Several weeks ago one of my clients called to tell me that her husband, who is a business owner, and on Medicare, wants to retire. She is considerably younger than her husband and when he goes out of business it means she must purchase health insurance on her own. Her attorney suggested she contact AARP for the best buy in health insurance. Her attorney should stick to practicing law. This person mailed me all the information from AARP because she found it overwhelming. While AARP does offer Medicare supplements and long term care and in-hospital policies, it does not offer comprehensive health insurance for those under the age of 65.
AARP is most famous for its Medicare supplements. It should be noted that in 1992 the government standardized the Medicare supplement (Medigap) by designing ten policies identified with alphabet letters A - J. It doesn’t matter from whom you purchase these Medicare supplement policies, they are all identical. The only difference is the premium you pay and the service you get from the company. There was a time when AARP offered the most competitive prices. That is no longer the case so if you are in the market for a Medicare supplement, you now have to do research to see where you can get the best premium.
AARP offers a Hospital Advantage Plan. My client’s attorney may have been thinking of this coverage for her, but this is not comprehensive major medical insurance. The hospital advantage plans from AARP offer you a daily benefit ranging from $300 to $700 per day for each day you are hospitalized. The average hospital bill in this geographic area is in access of $1,000 per day. In addition this policy will pay a set fee for surgery based on a surgical table. You may be reimbursed anywhere from $91.00 to $10,000 for a surgical procedure, depending on which of the hospital advantage plans you choose and on the type surgery. In addition, this policy will pay 50 percent of your drug cost, but only for the first 90 days following a covered hospital stay. The calendar year maximum is $500. Doctor visits are covered at the rate of $60.00 per visit, but it only pays for four visits per calendar year. As you can quickly see this is not a comprehensive major medical policy. This policy might be a nice addition for a high risk individual (meaning you have quite a medical history) and very limited health insurance or health insurance with an extremely high deductible. My concern with policies like these is that they give people a false sense of security. You are paying a monthly premium and therefore you think you have comprehensive major medical but that is not the case. If you have a good comprehensive major medical policy, it is really all the coverage you need for your medical expenses.
AARP also offers three hospital indemnity plans that pay either $60, $90, or $120 per day (depending on which plan you choose) for each day you are in the hospital overnight. To collect on this policy you must be admitted to the hospital. Sometimes a policy like this is a nice little extra for people with a substantial history. This policy does not take the place of any other health insurance that you may have. It merely provides you with a daily benefit and you are free to use that money for anything you choose. The check comes to you. You might want to use this money to pay the difference to be in a private room, you might want this money to pay for the television and the telephone etc. or to hire extra help in the house when you come home from a hospital stay.
The Metropolitan Life Insurance Company offers long term care insurance to AARP members but, once again, you must do your homework and carefully compare benefits and premiums to other products that are on the market.
New York Life Insurance Company offers limited life insurance to members of AARP. They advertise that this life insurance supplements your current life insurance plan. Once again, it sounds like this will be very limited.
In summary, AARP offers some excellent products for people over the age of 50, but it does not offer comprehensive major medical insurance, which is needed by people who are not yet eligible for Medicare. When you seek advise about insurance, seek your answers from a licensed insurance agent who is familiar with all of the products on the market. Likewise, when you need legal advice, see an attorney and when you need medical advice, see a doctor.
Irene Card & Betsy Card Chandler share the responsibilities of running Medical Insurance Claims, Inc. a health insurance services company . If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, or visit our contact page.
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