AARP Supplemental Medicare Insurance Class Action Survives Motion to Dismiss

Class action claims regarding AARP supplemental Medicare insurance have survived a dismissal attempt in federal court.

In March, Chief Judge Beryl A. Howell determined that AARP Inc. could not dismiss the Medigap insurance class action after she found that the plaintiffs had sufficiently argued their claims for fraudulent misrepresentation, unjust enrichment, claims of conversion, and material misrepresentations. None of the claims were even trimmed by the federal judge.

“For the foregoing reasons, the defendants’ motion to dismiss […] is denied as to all counts in the plaintiff’s complaint,” Judge Howell wrote.

AARP offers a Medigap supplement insurance program in partnership with UnitedHealth that helps consumers pay for the difference between their Medicare coverage and their out-of-coverage expenses. This may include copayments, deductibles, excess charges, travel emergencies, and more.

According to AARP’s website, UnitedHealth pays a “royalty” fee to AARP to use their intellectual property. However, the class action against the retirement organization claims that the company misrepresents these fees.

Instead of UnitedHealth paying AARP, consumers allegedly pay for these “fees” as a part of their premiums. The AARP supplemental Medicare insurance class action claims that consumers are “fooled into paying AARP an undisclosed 4.95% commission.”

Plaintiff Helen Krukas allegedly purchased an AARP Medigap policy in 2012 and paid her premiums until November 2016. Krukas claims that “[b]ut for Defendants’ deceptive and unlawful acts [she] would not have agreed to pay an additional 4.95% above the premium for an AARP Medigap policy, and would have sought out other, cheaper and lawful Medigap insurance.”

The company is allegedly not licensed to collect commissions from UnitedHealth. By accepting these commissions, AARP is allegedly acting as an illegal insurance agent.

AARP has faced several other lawsuits and class action lawsuits regarding this same issue. An AARP class action from New York was filed in 2015, claiming that the company violates state insurance regulations.

One class action from a Pennsylvania plaintiff also claimed that state law prohibits AARP’s behaviors because “a person doing business as an agent in this Commonwealth shall obtain a certificate according to this chapter.” Despite these requirements, AARP allegedly continues to accept illegal commission payments.

A newer lawsuit was filed in 2018, claiming that AARP should have told consumers that they were funding illegal 4.95 percent commission payments. The plaintiffs claim that, had consumers been aware of this fact, they may not have secured a Medigap insurance policy from AARP or would not have been willing to pay as much in their monthly premiums.

“Simply put, because AARP is not licensed as an insurance agent, it may not collect a commission for its marketing, soliciting, and selling or renewing of AARP Medigap Policies on behalf of UnitedHealth,” the AARP class action claims.

AARP continues to maintain that their practices are legal and that they do not misrepresent their policy terms.

The AARP Supplemental Medicare Insurance Class Action Lawsuit is Krukas v. AARP Inc., et al., Case No. 1:18-cv-01124-BAH, 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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