Class Action Lawsuit Says AARP, UnitedHealthcare Fraudulently Deny Medicare Supplement Claims

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A proposed class action lawsuit alleges that AARP and UnitedHealthcare have colluded to solicit sales and renewals of Medicare Supplement, Medicare-Gap and Medi-Gap insurance plans despite being fully aware that United has for decades failed to pay for medically necessary healthcare not covered by Medicare and intends to continue to systematically deny such claims on the basis of a “phantom, non-existent” condition mandating that a healthcare provider participate in Medicare.

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The 26-page insurance lawsuit relays that the plans at issue, which only AARP members may enroll in, are intended to pay for medically necessary healthcare for which Medicare does not pay. The filing contends that the healthcare giants have, for years, deceived consumers by touting that those enrolled in the AARP Medicare Supplement Plans from UnitedHealthcare may “see any doctor without getting a referral” and have their treatment covered.

In reality, the suit argues, AARP and UnitedHealthcare have worked in tandem to deny “countless” claims based on a non-existent clause in the Certificate of Insurance, a document that summarizes coverage details in an active insurance policy, requiring that the healthcare provider participate in or accept Medicare as payment in order for insurance claims to be accepted.

The class action lawsuit chides United for wrongfully and systematically denying Medicare Supplement, Medicare-Gap and Medi-Gap claims on “legally invalid” grounds, and AARP for continuing to “endorse” the policies—and receive royalty fees from sales of the policies—despite its knowledge of United’s intent to fraudulently deny proper insurance claims.

According to the suit, the end result of this fraudulent practice is that consumers are forced to pay out of pocket for necessary medical treatment and procedures that, though not covered by Medicare outright, they believed would be covered under the supplemental plan based on AARP and UnitedHealthcare’s promotions.

The plaintiff, a New Jersey resident described in the filing as a “senior citizen stroke survivor,” purchased an AARP Medicare Supplement policy in 2014 and has renewed it annually in the years since, the case says. The suit explains that in 2024, the plaintiff underwent a Mohs procedure to remove cancerous tissue from his eyelid, which was followed by a corrective surgery to repair his eyelid. Importantly, the case notes that neither the Mohs procedure nor the corrective surgeries were elective or cosmetic surgeries, but were necessary medical interventions deemed “vision-saving and life-saving-care.”

The suit contests that at no point was the plaintiff ever informed of the necessity that his healthcare provider participate in or accept Medicare under his insurance policy. Further, the plaintiff asserts that an AARP customer service representative assured him in a recorded phone call that his insurance claim for these procedures would be covered, even though that was not the case.

“Although the surgical repair of his eyelid was medically necessary, United refused to reimburse him by purporting to cite the ‘phantom,’ non-existent condition that appears nowhere in the Certificate Of Insurance, i.e., the healthcare provider must participate in Medicare,” the lawsuit asserts.

In the end, the plaintiff was left to pay nearly $8,000 in unexpected medical expenses, the suit shares.

As a result of the alleged deception, the plaintiff obtained an attorney in New Jersey to file suit over apparent violations of the New Jersey Consumer Fraud Act. During the litigation, the complaint says, United continued to “misquot[e] purported contractual language” that AARP ratified.

Eventually, after the plaintiff’s case was filed in 2025, AARP finally sent mail communications to policyholders informing them of the Medicare clause, but supposedly made no alterations to the issued Certificates of Insurance.

“AARP continues to the date of filing to ‘endorse’ the subject policies and receive royalty fees from the sales of its endorsed policies despite actual and constructive knowledge that United wrongfully and systemically denied, and continues to intend to deny, and continues to deny, proper insurance claims by purporting to cite non-existent ‘phantom’ conditions that appear nowhere in the policies’ Certificate of Insurance,” the suit summarizes.

The Medicare Supplement plan class action lawsuit seeks to represent all individuals who, at any time since 2014, were an AARP member and policyholder of an AARP Medicare Supplement plan from UnitedHealthcare and received one or more denials of reimbursement for the expense of medically-necessary healthcare on the grounds that the provider did not participate in or accept Medicare payment, and either resided in New Jersey, were present in New Jersey when the purchase or renewal of an AARP membership and/or UnitedHealthcare policy occurred, or received the medically necessary healthcare in New Jersey.

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