InsuranceNewsNet Magazine February 2012 : 40
[ HEALTH WIRES ] Complaints Put AARP’s Tax-Exempt Status On Radar A new round has begun in the long-simmering complaint that the powerful seniors’ group, AARP, is actually a for-profit business and should not enjoy a tax-exempt status. Many insurance interests, including those in the health insurance business, have long voiced this complaint — often privately but sometimes publicly, in an under-the-breath fashion. Now, three Republicans on the House Ways and Means committee have put the complaint out on the public radar screen. Here’s what happened: in December 2011, the three committee members sent a four-page letter to Internal Revenue Service Commissioner Doug-las Shulman asking the IRS to examine new information regarding AARP’s financial arrangements with HearUSA and UnitedHealth Group. This request follows a year-long Committee investigation and an April 2011 report that, according to Ways and Means, raises “serious concerns” about whether AARP is fulfilling the requirements of a tax-exempt organization. After collecting additional findings, the committee members then sent the IRS their Dec. 21 letter and—not incidentally—also posted it on the Ways and Means website for all to see. In the letter, the members charge that AARP has contracted to do more than license partner use of its name. “The AARP relationship with both United and HearUSA seem to suggest a pattern of business partnerships and activities that permits AARP to engage in for-profit businesses under the cover of its tax-exempt status,” they allege. Agents can still get a copy of the letter and review the issues it raises at http://1.usa.gov/lettertoIRS. can expect to have health care expenses total $350,000, including premiums, for the rest of his lifetime, the IRI report says. For a 65-year-old woman, the total is 13 percent more—at least $417,000. And here’s another bite: the aver-age person on Medicare will have out-of-pocket medical expenses totaling more than $4,300 per year. IRI presi-dent and CEO Cathy Weatherford got it right when she said the findings under-score “the importance for Americans to properly plan for retirement and to con-sult with an advisor to ensure they will have enough money to cover health care costs and other necessary expenses in retirement.” WhAt fAmilies PAy for heAlth cAre dAily deAl sites: the neW comPetitors? Websites like Groupon and LivingSocial have begun competing for a share of the consumers’ health care wallet, according to an Associated Press report by Joseph Pisani. These “daily deals” websites are now offering “markdowns” on health care services such as teeth cleanings, eye exams, chiropractic care and medi-cal checkups, as well as deals on elective procedures such as Botox injections and Lasik eye surgery, the report says. In fact, DealRadar.com data shows that one of every 11 deals offered online is for a health care service, AP says. The advantage for participating pro-viders? They get paid right away — i.e., as soon as the consumer buys the deal. And who’s buying? The story suggests 40 InsuranceNewsNet Magazine February 2012 several possibilities, such as people look-ing to save money, try something new or fill in gaps in health care coverage. One buyer is a small business owner who had previously cancelled his own health insurance due to a premium increase, the writer notes. It doesn’t sound as if anyone is offering discounts on major medical through this venue, but agents will want to keep a heads up on this mar-ket all the same. An average family of four spent $3,633 on out-of-pocket health care costs in 2011, according to Simplee. That’s up 19 percent over 2010, says the health care expense and coverage tracker and pay-ment firm. In addition, the same family spent $5,208 in insurance premiums in 2011, making for a total average health care expense per family of nearly $9,000 in 2011. That’s a lot, but there is one other figure to keep in mind. The average fam-ily of four was billed a total of $15,512 in regularly priced medical care in 2011, the firm says. Considering that insur-ance probably has or will pay much of that, the insured families no doubt ended 2011 in better financial shape than families without insurance. “ QUOTABLE “Any discussion about reducing the deficit is going to focus on how we reduce the growth in healthcare costs. And employers are adopting more effective tools to keep putting downward pressure on healthcare cost increases.” —Ken Thorpe, professor of health policy at Emory University in Atlanta boomers fAce big heAlth eXPenses, desPite medicAre The Insured Retirement Institute is the latest to weigh in on average health care costs, but this time the study is on expected health expenses just for baby boomers in their 60s. The estimates are staggering. A healthy 65-year-old male @InsNewsNet
Publication List