WASHINGTON, April 17 (Reuters) - AARP has expanded its line of health insurance plans for older Americans in conjunction with UnitedHealth Group Inc. (UNH.N: Quote , Profile , Research ) and Aetna Inc. (AET.N: Quote , Profile , Research ), the nation's largest lobbying organization for the elderly said on Tuesday.

AARP and UnitedHealth, which already offer a number of joint insurance plans, will add a Medicare Advantage managed care plan with prescription drug benefits for people who qualify for Medicare.

The typical such private plan provides an alternative to the nation's traditional insurance program for the elderly and disabled. Instead of direct government payment for medical care through a fee-for-service system, Medicare Advantage plans usually limit the patient's choice of medical providers in exchange for more benefits.

The new plan is part of a broader seven-year agreement between the two organizations to provide plans featuring financial incentives and penalties based in part on clients' management of chronic conditions such as diabetes and obesity, AARP said.

Their Medicare Advantage plan will be offered for two years as opposed to the minimum one year required by the federal government in an attempt to help stabilize the market, the group added.

AARP's new arrangement with UnitedHealth is expected to bring in an extra $22 million a year in royalties for the group, which said it could not comment on what the deal was worth to the insurer. It also said it aimed to boost current enrollment from 7 million AARP members in the insurer's various plans to 14 million by 2014.

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