AARP To Rate HMOs

WASHINGTON, D.C.: The American Association of Retired Persons is planning to lend its name and marketing muscle to health maintenance organizations by rating HMOs for its 33 million members, thus taking some of the fear out of choosing a managed care plan. AARP, which will begin surveying HMOs this summer, says that by 1998, it will license those plans which meet standards of quality, financial stability, price and popularity with members. The winners will pay a licensing fee to display the AARP name on their materials. An AARP spokesman said the group would constantly review any HMO provider it selected to ensure that its members received a good value, and would reserve the right to withdraw its endorsement at any time. But this practice is more than consumer advocacy: The national organization of over-50 Americans already sanctions some auto, homeowners and medical insurance policies, and generated $146 million from the practice in 1994. Since that money provided more than one-third of the AARP's annual budget, the organization would have a vested interest in the success of any plan it endorses. That sort of interest has been a red flag for retiring Senator Alan Simpson, who, as chair of the Senate finance committee, has held hearings to review the group's tax-exempt status. However, this is still a savvy move by AARP. TIME health correspondent Janice Castro says: "They can bring the market to the HMOs, and they are trying to position themselves as the Consumer Reports for senior citizen health coverage. Interestingly, AARP also proposes to provide marketing advice to the HMOs on selling services to seniors, but they are holding a hammer over the HMOs by rating them. It's not a bad idea for a new business, and AARP is in the best position to do it. The question is who will benefit most: AARP or the senior citizens it claims to serve?"