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Medicare News
Finance Committee Moves from Stimulus Plan to
Medicare Advantage Problems
Sen. Baucus says, There are too many problems and
abuses.
 Feb. 8, 2008 Fresh from a victory to get
low-income senior citizens included in the economic stimulus payments,
the Senate Finance Committee is looking at the marketing programs of the
Medicare Advantage Plans, which were supposed to have been corrected
last year.
Senate Finance Committee Hearing
Addresses Medicare Advantage Plan Marketing Abuses
Despite steps taken by
CMS over the past year, Medicare Advantage plans continue to engage
in aggressive marketing practices, according to witnesses at a
Senate Finance Committee hearing on Thursday,
CQ HealthBeat reports.
Witnesses recommended that Congress give states
joint authority with the federal government to regulate marketing
tactics used by health insurers. Finance Committee Chair Max Baucus
(D-Mont.) after the hearing said he would push for such a move in broad
Medicare legislation later this year, although the Bush administration
likely would oppose such a move, according to CQ HealthBeat.
Illinois Division of Insurance Director Michael McRaith, who was
speaking on behalf of the
National Association of Insurance Commissioners, listed several
marketing practices he says are used to take advantage of seniors. He
said that agents "pressure beneficiaries to enroll into inappropriate or
unsuitable plans" and get them to "enroll into Medicare Advantage plans
without fully understanding that enrollment would lead to the loss of
traditional Medicare and Medigap plans."
McRaith also said that beneficiaries are misled
about what their out-of-pocket costs will be and about whether their
physicians are in the networks of the plans being pitched. Another
tactic McRaith said agents use is "cross-selling," in which agents
develop a relationship with a beneficiary through marketing a Medicare
prescription drug benefit plan and then use that relationship to "sell
the senior an unrelated and often unsuitable product," such as an MA
plan or life insurance.
Patrick O'Toole -- vice president of Medicare sales
at
Humana, which is one of the largest MA plan providers -- said that
the company has cut back on outside sales agents and let go of almost
150 agents for violating marketing procedures.
In addition, he said that last year
America's Health Insurance Plans, the industry's trade group,
adopted a set of guidelines to prevent aggressive marketing to seniors.
CMS also instituted regulations to prevent such practices, such as
requiring insurers to call beneficiaries after enrollment in an MA plan
to ensure they understand the coverage and that it is not traditional
Medicare. The agency also started a "secret shopper" program to monitor
sales pitches.
McRaith said the results of CMS' new safeguards are
"mixed." In response to a question from Sen. Ron Wyden (D-Ore.), McRaith
said it is "absolutely correct" that marketing problems still continue.
Baucus said, "There are too many problems and
abuses. And it is not in just a few states. It is in most states." Sen.
Chuck Grassley (R-Iowa) said, "A key question is whether CMS guidelines
and enforcement action are enough to protect beneficiaries." According
to Grassley, there "are some areas that CMS did not address" (Reichard,
CQ HealthBeat, 2/7).
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