AARP Supplement Insurance Lawsuit Continues over Undisclosed Charges

A class action lawsuit filed last year against AARP alleges that the company illegally and deceptively collected commission fees on gap insurance policies. The case is still pending in a federal court in the District of Columbia.

AARP Supplemental Insurance Allegations

According to Forbes, the class action says AARP may have taken illegal commissions on premiums for Medicare gap insurance. Plaintiff Helen Krukas also claims that these fees were not disclosed to consumers. Krukas claims that AARP used deceptive practices and manipulation to fool consumers into paying an undisclosed 4.95 percent commission for AARP supplemental insurance policies.

In addition to allegations that the organization acted illegally as an insurance agent or broker, Krukas also says AARP’s purportedly undisclosed fees may have caused consumers to pay more than necessary for their AARP supplemental insurance policies.

AARP allegedly never discloses its commission fee to consumers who purchase gap insurance through the organization, she claims. AARP allegedly refers to the 4.95 percent fee collected on each policy it sells as a “royalty” for allowing insurers to use AARP’s intellectual property. However, Krukas claims the the fee is an illegal commission paid to AARP for soliciting its members to purchase Medigap policies. The fee is allegedly paid directly to AARP for every Medigap policy sold or renewed.

AARP is not a licensed insurance agent or broker, so Krukas argues it’s illegal for the organization to take a commission on these policies. By labeling the commission payment as a royalty, she claims AARP is able to avoid regulatory oversight, as well as paying taxes on this money.

Krukas seeks to represent a Class of senior citizens and disabled individuals across the United States (excluding California residents) who purchased AARP Medigap insurance and were affected by this alleged scheme.

About AARP Supplemental Insurance

AARP supplemental insurance or Medigap insurance helps to relieve the financial burden to consumers by covering some of the out of pocket costs that aren’t paid for by regular Medicare policies. As the name suggests, gap insurance pays for gaps in coverage. Gap insurance can help to cover the costs of copays, deductibles, and other expenses.

About AARP

AARP is a nonprofit, nonpartisan membership organization for people age 50 and older. The organization markets itself as an advocate for seniors, and its stated mission is “to empower people to choose how they live as they age.”  It has approximately 40 million members.

AARP Lawsuits

Multiple class action lawsuits have been filed against AARP alleging deceptive fees. These suits are generally filed by plaintiffs who claim they would not have purchased AARP supplemental insurance had they been aware of the hidden fees. Consumers who hire a qualified attorney and pursue litigation against AARP may be able to recoup costs for reimbursements as well as punitive damages.

Krukas’s AARP Lawsuit is 1:18-CV-01124 in the U.S. District Court for the District of Columbia.

Join an AARP Medigap Class Action Lawsuit Investigation

If you purchased Medigap insurance through AARP, you may be eligible to join this AARP Medigap insurance overcharge class action lawsuit investigation.

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