When Kim Andrews advises seniors in suburban Delaware County on choosing a Medicare drug plan, she finds that the AARP-branded options are not typically the cheapest.

The AARP plans often cost hundreds of dollars more a year than the lowest-priced competitors, according to estimates by the government's Medicare Web site, which Andrews uses.

"They're usually not in my top 10 on a comparison basis. They may be in the top 20," Andrews said. But seniors often "go with the [AARP] name even though it can be much higher."

That kind of loyalty has pushed the AARP-branded plans to the top of the Medicare heap. The group gives its name to the number-one-selling stand-alone Medicare drug plan in the country - the AARP MedicareRX Preferred - and to two of the top five. As the Dec. 31 deadline approaches for Medicare members to change plans or sign up, many seniors are choosing AARP to cut through the clutter of a confounding marketplace.

But AARP's role is not without controversy. The group makes millions from lending its name to Medicare plans. And experts who advise the elderly say that its drug offerings are not usually the bargains that many people expect. "They're not the most expensive, but they are not the cheapest either," said Tiffany Lombardi, who coordinates counseling for CARIE, an advocacy group in Philadelphia for the elderly.

AARP spokesman Anthony Deluise said the group encouraged people to select the best plan for their needs, whether it is AARP-branded or not.

"I'd say we're comparable with other plans," he said, referring to cost. AARP's plans help "set the standard for quality in the industry."

Trust plays a big role in picking a Medicare plan. The array of choices - which include 63 drug plans in Pennsylvania and 57 in New Jersey - overwhelms even many experts.

AARP, which lends its name to three plans run by UnitedHealthcare Services Inc., has risen to the top because of its reputation as a champion of people age 50 and over. "There clearly is a level of trust attached to the brand," said James Dougherty, health insurance practice leader for the survey firm J.D. Power & Associates.

Blue Cross plans have had similar success because of their longevity, while competitors such as Humana Inc., which runs the country's second- and third-largest Medicare drug plans, have enticed members by offering low-cost products. Humana, though, has raised premiums for 2008, betting that seniors will pay up and stay put.

Premiums among the nation's top 10 plans are rising about 21 percent in 2008, and insurers are placing more restrictions on what drugs they will pay for, according to Avalere Health, a consulting firm that tracks the Medicare business.

So it's key to shop around. The same plan that worked this year could cost a lot more in 2008.

While its cachet comes from advocacy, AARP is also an entrepreneurial juggernaut that profits from the Medicare drug benefit it helped pass. The Washington-based nonprofit crossed the $1 billion mark in revenue last year.

AARP gained the most - nearly $430 million - by lending its name to products, including Medicare prescription drug and Medicare Supplement plans. By contrast, the group's dues-paying members brought in $240 million in 2006, records show.

AARP now believes it has the largest collection of branded health-care products for people 50 and older. About 7.8 million people have flocked to AARP-branded Medicare plans, and the group projects that number will nearly double by 2014.

The group expects to collect $4.4 billion over the next seven years from deals announced this year with Aetna Inc. and UnitedHealthcare.

Also gaining is AARP's chief executive officer, William Novelli, a former public relations executive, who was paid more than $2 million in 2006, tax records show. His compensation included a onetime $1.2 million payment for completing five years of service.

With 39 million members, AARP is a potent political force that helped pass the Medicare drug benefit, which began in 2006.

But its dual role as advocate and commercial enterprise worries Judith A. Stein, executive director of the Center for Medicare Advocacy.

Stein has worked with AARP on lawsuits, and shares its outlook on many issues. But she called the Medicare law "a shameful boondoggle" for its generous support of insurers, and said she thought AARP might find it hard to change those subsidies when it was gaining so much from them.

"The privatization of Medicare in general is a very bad thing and a good thing for the companies that are making a huge profit," Stein said. "When one of those companies is benefited by the AARP brand, I think it's a conflict."

Deluise, the AARP spokesman, said the royalty income did not affect the group's advocacy. For example, he noted that some want to deal with rising Medicare doctor fees by cutting them or raising Medicare premiums. But AARP wants the money to come from insurers, he said.

Strong finances, he continued, enable AARP to better serve its members. The group is committing $500 million over the next decade to run a call center called Health Aid to answer anyone's health questions for free. A pilot is to start next year.

AARP is not shy about marketing. It spent $90 million last year to attract members, sell products, and run advocacy ads, annual records show.

Medicare used to be a quiet market where few needed to advertise. Now it can be an endurance test to decide whether to pick Medigap insurance with an added drug benefit, or a Medicare Advantage plan, which typically comes with drug coverage included.

Even many advisers say they cannot choose without help. They often work by running a client's drugs through a public program at www. medicare.gov to identify the cheapest plans. The site estimates total drug costs, including co-pays, and indicates whether key drugs are on a plan's approved list, or formulary.

But the service is not foolproof. The federal Web site can be wrong or slow to update, advisers say. So seniors need to call the plan they prefer.

Customer service is another factor. Medicare gave all three AARP-branded plans four out of five stars for service, although many observers call the government's analysis a work in progress. Many advisers praise AARP's customer service.

The Medicare business has not always gone smoothly for AARP's partner, UnitedHeathcare, which runs the group's Medicare plans and pays AARP for using its name.

In June, the company was one of seven insurers that agreed to stop marketing certain Medicare Advantage plans amid concerns that its sales force was misrepresenting those products to consumers. Those plans had no connection with AARP. Medicare allowed UnitedHealthcare to resume marketing in September after the company reeducated its sales force.

The federal government also fined UnitedHealthcare $200,000 last year for failing to give timely notice of plan changes to members, including some in AARP plans.

Deluise noted that this year UnitedHealthcare's members got their notice of changes on time.

Despite its status as the one of the nation's largest health insurers, UnitedHealthcare is no match for AARP among the Medicare crowd.

The three AARP-branded Medicare drug plans run by UnitedHealthcare cover 4.1 million people, while the two plans sold strictly under UnitedHealthcare's name have just 600,000, company spokeswoman Kathleen Harrington said.

Richard G. Stefanacci, who directs the Center for Medicare Medication Management at the University of the Sciences in Philadelphia, has seen the allure of AARP firsthand.

Stefanacci, a physician who specializes in geriatrics and Medicare policy, showed his parents, who live in New Jersey, how they could save money by picking a regional drug plan. But they chose an AARP product that cost more, because they already were customers.

"It's peace of mind," Stefanacci said. "That's why AARP/United is able to get a premium."

Gene Bishop, a Philadelphia doctor who consults for the Pennsylvania Health Law Project, came to similar conclusions.

Modeling the needs of a typical patient - a diabetic with asthma and high blood pressure - Bishop ran seven common drugs through the Medicare Web site to estimate drug costs. The cheapest AARP plan was 33d, she found.

AARP "never has come up as the best financial option for consumers," said Juanita Way, Apprise coordinator at the Albert Einstein Medical Center, who has counseled more than 150 Medicare members this year. "It comes up on the list but never in the top three in terms of costs."

Way said she had never received any service complaints about AARP plans. And many people choose it anyway, because "AARP has a reputation," she said.

"But the cost can be $500 to $700 more a year. That's an important factor especially for someone who is low-income."

AARP All Over

The advocacy group not only puts its name on two of the five most popular Medicare drug plans, but also on a host of other insurance and health plans. The AARP Privileges program also gives discounts on travel-related and consumer products.

Here are some of the products that carry the AARP name:

AARP Dental Insurance.

AARP Vision Discounts.

AARP Long-Term-Care Insurance.

AARP Pharmacy Services.

AARP Credit Card Services.

AARP Motorcycle Insurance.

AARP Life Insurance Program.

SOURCE: AARPEndText

Last-minute Shopping

Open enrollment for Medicare health and prescription drug plans ends Dec. 31. Besides using the federal government's Web site to evaluate plans, senior citizens can get help through the following organizations:

Apprise runs a counseling program in Pennsylvania at 1-800-783-7067.

The State Health Insurance Assistance Program in New Jersey is at 1-800-792-8820.

The Medicare Rights Center in New York offers counseling at 1-800-333-4114.

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Contact staff writer Karl Stark at 215-854-5363 or kstark@phillynews.com.