Older and disabled
Americans fall prey to private insurers’ aggressive
marketing tactics...Lack of Federal and State
oversight puts consumers at risk of losing access to
health care and paying more for their care, consumer
advocates report
Insurance agents are pushing people with Medicare
into private health plans that do not meet their
health care or financial needs, according to a new
report by leading consumer groups.
In
its study, California Health Advocates and the
Medicare Rights Center detail the unscrupulous sales
practices of insurers and call for heightened
government oversight of private insurers selling
Medicare health and drug plans.
“Older and disabled Americans are victimized by
private insurance agents who take advantage of the
confusing array of private plan options,” said
Clare Smith,
president and CEO of California Health Advocates, a
Medicare advocacy organization.
“Agents who enroll consumers into their company’s
more profitable, private health plan – instead of
their stand-alone drug plan – are rewarded with a
higher commission,” said Ms. Smith.
“The federal government must protect older and
disabled Americans from rampant exploitation,” said
Robert M. Hayes, president of the Medicare Rights
Center, a national consumer service organization.
“People with Medicare are being locked into costly
and ineffective health and drug plans without any
meaningful oversight of marketing activities by
federal or state regulators,” said Mr. Hayes.
The
consumer groups report a wide range of marketing
abuses such as agents going door-to-door
unsolicited, posing as Medicare representatives, and
telling consumers they will lose Medicare or
Medicaid if they do not sign up for a particular
plan.
Consequences of abusive marketing include people
winding up in health plans where their doctors do
not participate in the network, having to pay more
for their care than they need to, and losing access
to health care they previously had.
High-pressure private plan marketing – at times done
by poorly trained agents – is often done in the
privacy of one’s home. In-home marketing is known
to result in the highest “closing rates.”
After family and friends, insurance agents are the
next most frequently used source of information for
people considering enrolling in a Medicare private
drug plan, according to a June 2006 MedPAC study.
Insurance agents typically earn as much as $400 to
$500 for enrolling a consumer in a Medicare
Advantage plan, such as a HMO, PPO or private
fee-for-service plan (PFFS) but $60 to $80 when they
sign someone up for a stand-alone drug plan.
The
groups report that PFFS have been at the center of
many incidents of marketing misconduct.
Beginning in 2007, most people with Medicare can
only change health plans one time between January 1
and March 31; they are then “locked in” to their
plan for the remainder of the year.
Poor people with Medicare who also have Medicaid,
the dual eligibles, have the right to change drug
and health plans month to month, making them
vulnerable to aggressive marketing tactics
throughout the year.
In
their joint report “After
the Goldrush: The Marketing of Medicare Advantage
and Part D Plans, Regulatory Oversight of Insurance
Companies and Agents Inadequate to Protect Medicare
Beneficiaries,” California Health Advocates and
the Medicare Rights Center make several
recommendations to Congress, Centers for Medicare
and Medicaid Services (CMS) and the states that
would help end abusive marketing practices.
Among the recommendations in the consumer groups’
report are:
Congress must repeal lock-in and allow
people to change health and drug plans throughout
the year;
Congress must allow state regulatory
agencies to oversee plan marketing activities;
CMS must require 24-hour written advance notice
of what products will be marketed during a home
visit; CMS must require plans to accept enrollment
over the phone; and States should enforce and
expand current protections under state law to all
Medicare Part D sales.
A
"After
the Goldrush: The Marketing of Medicare Advantage
and Part D Plans, Regulatory Oversight of Insurance
Companies and Agents Inadequate to Protect Medicare
Beneficiaries,”
is also available at
http://www.cahealthadvocates.org/advocacy/index.html.