First Amendment
to the
AARP Health Insurance Agreement
by and among
American Association of Retired Persons,
Trustees of the AARP Insurance Plan
and
United HealthCare Insurance Company
The American Association of Retired Persons and the Trustees of the AARP
Insurance Plan hereby agree with the United HealthCare Insurance Company to
the Amendment of the AARP Insurance Agreement, entered into by said parties
and dated as of February 26, 1997, as set forth below:
A. Section 2.86 of the Agreement is amended to read as follows:
"SHIP PLAN means any health insurance plan, including any Medicare
Select plan, underwritten by United pursuant to this Agreement,
including without limitation any such plan described by any master group
insurance policy issued to AARP Trust by United (or its affiliates) and
insured or reinsured by United (or its affiliates) at any time during
the term of this Agreement."
B. Article 2 of the Agreement is amended by the addition of the following
Sections 2.117 and 2.118:
"2.117 MEDICARE SELECT means a Medicare Supplement policy or certificate
that contains restricted network provisions, and is offered
consistent with state law applicable thereto."
"2.118 NETWORK PROVIDER means any health care provider that has agreed
to participate in a Medicare Select plan made available under the
SHIP."
C. Section 3.2.2 of the Agreement is amended by the addition of new
subsections (f) and (g) to read as follows:
"(f) United shall make available to AARP members Medicare Select
plans at such sites and in accordance with such timeframe as may be
agreed to by the parties. United shall develop and maintain
arrangements with Network Providers providing for the furnishing of
the Medicare Select plans. such arrangements shall include payment
arrangements which provide cost savings opportunities to SHIP
Insureds participating in the Medicare Select plans. United will
manage the Network Provider relationships to
promote network stability and quality improvement and to address
service concerns that SHIP Insureds participating in Medicare
Select plans may have with Network Providers."
"(g) United will integrate care coordination services into the
Medicare Select plans made available under the SHIP. At the outset,
the care coordination services will include the NurseLine product,
as made available by Optum, a United affiliate which shall be
enhanced to address the needs of SHIP Insureds covered by a
Medicare Select plan. United will test and evaluate different care
coordination models within its Medicare Select plans with the goal
of maximizing the effectiveness of the services and SHIP Insureds'
satisfaction. United will provide AARP with periodic reports
relating to the effectiveness of new care coordination models
then being tested or in use. United will not implement any care
coordination model materially different from the program then in
place, in a test or any other format, without first obtaining the
approval of AARP."
D. EXHIBIT 3.2.4 is revised to read as set forth in the attached EXHIBIT
3.2.4, which is hereby incorporated by reference as the new EXHIBIT 3.2.4.
E. Article 6 of this Agreement is amended by the addition of the following
new Section 6.10:
"6.10 NEW PRODUCT TRANSFER PRICING. United shall be entitled to
receive amounts as set forth below in respect of the Medicare
Select and care coordination programs provided by United pursuant to
Section 3.2.2(f)-(g):
6.10.1 MEDICARE SELECT. United shall be entitled to receive *** of
the savings obtained as a result of discounts obtained from Network
Providers. Savings obtained means the amount that would have been
payable to a Network Provider for covered services by the SHIP
Plan, if no discount were available, less the amount that is
payable to the Network Provider for covered services by the SHIP
Plan, after the discount is taken. United's compensation under this
Section 6.10.1 will be recovered in the same manner as United
recovers other compensation payable hereunder and no separate
charge will be made to any SHIP Insured with respect to any
discount taken. United shall provide AARP with monthly reports of
all savings obtained in connection with the Medicare Select plans
during the month prior to the month in which the report is
generated. The compensation payable under this Section 6.10.1 shall
remain in effect for the duration of the Agreement, except as
otherwise agreed to by the parties and as set
*** Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
forth below. Any change in the compensation shall
become effective no sooner than January 1, 2002 and
shall require that any party seeking the same
provide the other with at least one hundred and
eighty (180) days notice of the same.
6.10.2 CARE COORDINATION. United shall be entitled
to receive *** per SHIP Insured covered by a
Medicare Select plan per month, for the care
coordination services provided pursuant to Section
3.2.2(g) of this Agreement. In addition to other
provisions of this Agreement, the parties agree to
modify the pricing for these services in the event
that there is a material change in the care
coordination model incorporated as part of the SHIP
Plan. The parties agree that any change in the fees
payable hereunder will be commensurate with the
impact of the change on the costs of providing the
service by United.
Except as otherwise may be agreed to by the
parties, the other compensation provisions of this
Article 6 remain applicable to the products
identified in this Section 6.10."
F. The provisions of this Amendment shall become effective January 1, 1998.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date first written above.
AMERICAN ASSOCIATION OF RETIRED PERSONS
By: /s/ Horace B. Deets
----------------------------------
Print Name: Horace B. Deets
--------------------------
Print Title: Executive Director
------------------------
TRUSTEES OF THE AARP INSURANCE PLAN
By: /s/ Horace B. Deets
----------------------------------
Print Name: Horace B. Deets
--------------------------
Print Title: Executive Director
------------------------
UNITED HEALTHCARE INSURANCE COMPANY
By: /s/ Lois Quam
----------------------------------
Print Name: Lois Quam
--------------------------
Print Title: Chief Executive Officer,
AARP Division
------------------------
*** Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission pursuant to Rule 24b-2
under the Securities Exchange Act of 1934, as amended.
Exhibit 3.2.4
FUTURE PRODUCTS
From and after the Commencement Date, United, in consultation with AARP and
consistent with the social welfare purposes of the AARP, shall undertake
product development activities as described in the Agreement with respect to
additional health care insurance products, including without limitation the
following:
- - 50 to 64 Group Health Insurance
Comprehensive insurance coverage for AARP members and their dependent
children to provide a seamless transition after the loss of job or a career
change.
- - Grandchildren's Health Insurance
Comprehensive health insurance coverage specially designed for dependent
grandchildren of AARP members, including indemnity, Preferred Provider
Organization (PPO), and Health Maintenance Organization (HMO) options.
- - EverCare
Medical care to frail, elderly residents of nursing homes.
- - Medical Equipment Service Vendor Arrangements
Access to vendors, selected by United, who will deliver discounted, high
quality services and durable medical equipment.
- - AARP CareLine
A telephonic service tailored to the health care information needs of two
groups of older Americans:
- Persons newly diagnosed with one of 10 serious or chronic medical
conditions; and
- Caregivers including spouses, children, and other loved ones who are
responsible for the care of a seriously ill or disabled person.
- - Foreign Travelers Services
Instant access to help and advice for policyholders who experience a serious
health problem while traveling abroad.
- - "Ask the Expert" Health Care Information Services
The latest clinical guidelines for serious and chronic medical conditions,
to be presented in clear and understandable language. This service
potentially will be available to all AARP policyholders and members. This
service will be available in both print and Internet form.
- - Transplant Centers of Excellence
Information and services will be offered to policyholders who need an organ
or tissue transplant.
United's product development activities with respect to those additional
products noted above shall be consistent with the commitment made by it in
its Supplemental Health Products Proposal to AARP dated May 15, 1996."