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Are Senior Citizens Being High-Pressured into HMOs?
HHS begins investigation of insurance company
drug plan sales tactics
Feb. 24, 2006 - Rep. Pete Stark (D-Calif.) said
health plans are using illegal sales tactics to persuade beneficiaries
to enroll in Medicare Advantage plans instead of stand-alone drug plans.
His office said health insurers convince beneficiaries to enroll in an
HMO when the seniors call to enroll in a stand-alone plan, and some
seniors have said they were enrolled in an HMO when they signed up for a
stand-alone plan, according to a report by KaiserNet.org.
 Medicare | HHS Inspector General
Investigates Whether Medicare Beneficiaries Were Pushed Into HMOs for
Drug Coverage
The
HHS
Office of
Inspector General has launched an investigation into whether
health insurers are using "high-pressure sales tactics to push" Medicare
beneficiaries into HMOs under the new prescription drug benefit, instead
of basic prescription drug plans, the
Chicago Tribune
reports.
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Related Stories |
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New Medicare Drug Program Enrollment Figures Face
Challenges
HHS says over 25 million senior citizens are now
enrolled
Feb. 23, 2006 – The Bush Administration yesterday
claimed it is on track to enroll 28 to 30 million senior citizens in the
Medicare drug program this year and claimed 25 million beneficiaries are
now covered. Critics, however, say the numbers are misleading, because
the vast majority of those included already had coverage. Adding to the
concern about the programs viability is a poll released by the Kaiser
Family Foundation, which says less than half – about 45 percent – of
senior citizens have enrolled or even plan to enroll.
Read more...
•
Texas, California are Leaders in Medicare Drug
Program Enrollment
•
Less Than Half of Senior Citizens Joining Medicare
Drug Plans
Read more on
Medicare Drug Program
Medicare Continues the Push for Medicare Advantage
Plans
Announces new plans for 2006, better rates
for suppliers in
2007
Feb. 23, 2006 – The 2003 Medicare Modernization Act
gave a big shot in the arm to the HMOs and PPOs in the Medicare
Advantage Program in an effort to make more of these programs, which are
usually less expensive than traditional Medicare, available to more
senior citizens. Last Friday, the Centers for Medicare & Medicaid
Services announced more Medicare beneficiaries are participating in
Medicare Advantage plans this year. They also announced new incentive
rates for the plans next year and the approval of 163 new plans for
2006.
Read
more...
Read more on
Medicare |
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Beneficiaries can sign up for stand-alone
prescription drug coverage or Medicare Advantage plans that cover all
Medicare services, as well as drugs.
Medicare Advantage HMOs have the added benefit of
providing extra services and more coverage, but they also can restrict
beneficiaries' choice of providers, according to the Tribune.
For health insurers offering the drug benefit,
enrolling a Medicare beneficiary in an MA plan "can mean several times
the revenue per senior than a typical drug plan," the Tribune reports.
For example, in the Chicago area, Medicare pays MA
plans between $700 and $800 per beneficiary per month, compared with
$110 per senior per month for stand-alone drug plans, according to the
Tribune.
Rep. Pete Stark (D-Calif.) said health plans are
using illegal sales tactics to persuade beneficiaries to enroll in MA
plans instead of stand-alone drug plans. His office said health insurers
convince beneficiaries to enroll in an HMO when the seniors call to
enroll in a stand-alone plan, and some seniors have said they were
enrolled in an HMO when they signed up for a stand-alone plan.
Stark said, "Beneficiaries are already overwhelmed
trying to navigate the new law. They should not be subject to
bait-and-switch tactics or other misleading marketing ploys once they
have made a decision to enroll in the plan."
In response to Stark's concerns, Daniel Levinson,
inspector general at the HHS OIG, said in a Feb. 8 letter to Stark that
his office will work with
CMS to
"monitor and resolve this situation." He added that the HHS OIG will
investigate "any beneficiary complaints about scenarios in which their
wishes regarding participation in any plan were not followed."
Focus on Humana
According to the Tribune, the investigation is focusing on
Kentucky-based
Humana,
which is paying sales representatives "more than double the commission"
if they enroll beneficiaries in MA plans instead of stand-alone drug
plans, according a recent
BusinessWeek
story, Starks' office said.
A spokesperson for Stark said that communications
between the HHS OIG and his office have named Humana, but the
investigation is targeting the entire industry.
Tom Noland, vice president of corporate
communications at Humana, said the company's commission structure
complies with Medicare's marketing rules, noting that commissions are
based on a percentage of the premium.
He added, "In each case, we explain fully the
structure and benefits of the plan." Mohit Ghose, a spokesperson for
America's Health
Insurance Plans, said members have ensured that brokers and
agents are complying with the "marketing and compensation guidelines set
forth in the regulations." CMS did not comment on the investigation
(Japsen, Chicago Tribune, 2/24).
Politics of Drug Benefit Examined
In related news, the Wall Street Journal on Friday examined how the
Democratic and Republican parties are seeking to use the Medicare drug
benefit to their advantage.
According to the Journal, Democrats this week
planned to hold more than 100 forums across the U.S. to discuss problems
with the benefit "in an effort to turn what was once viewed as a major
Republican health care victory into a political liability."
In addition, Democrats in close congressional races
are planning to focus on the drug benefit to challenge Republican
lawmakers who voted for it. The strategy is part of an effort to "tie
troubles with the drug benefit to broader campaign themes that the
Republicans are too cozy with big industries and that the Bush
administration stumbles when responding to crises," the Journal reports.
Democrats also are focusing their efforts on
changing the drug benefit to allow the government to negotiate directly
with pharmaceutical companies, to legalize the reimportation of
medications from abroad and to eliminate the financial penalty for
beneficiaries who sign up for coverage after the May 15 enrollment
deadline. A
t the same time, Republicans are "planning a blitz
of events and mailings" in anticipation of the deadline, the Journal
reports. The
Senate Republican
Conference provides supportive commentary in "Daily Medicare
Updates," and House Republicans are circulating newspaper articles
written after Medicare's creation in 1966 highlighting problems similar
to those experienced with the launch of the drug benefit this year (Lueck,
Wall Street Journal, 2/24).
Employer Subsidies Examined
The
New York Times
on Friday examined a
study
released by
Credit Suisse
First Boston on Wednesday that found the federal government
will pay the largest companies in the U.S. about $4 billion over the
next four years to retain their retiree prescription drug coverage.
According to the Times, 331 of the nation's 500
largest companies currently offer retiree health plans, and the subsidy
is proving "popular with big employers." The company that is expected to
benefit the most from the subsidy on a percentage basis is
Genuine Parts,
a distributor of auto replacement parts and office profits. The company
is expected to receive $6 million in subsidies over the next four years,
reducing its overall health care obligations to retirees by 62%,
according to the study (Williams Walsh, New York Times, 2/24).
"Reprinted with
permission from kaisernetwork.org (insert hyperlink to http://www.kaisernetwork.org).
You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign up
for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a free service of The Henry J. Kaiser Family
Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation.
All rights reserved.”
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