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Senior Citizen Politics
Seniors Falling Prey to Aggressive Tactics of
Private Insurers Says Report
Consumer advocates say lack of government oversight
increases risk of losing access, paying more for health care
Feb. 6, 2007 - 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 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.
"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 –
click here.
Editor's Notes:
California Health Advocates says it is dedicated to
Medicare beneficiary advocacy and education efforts for Californians. (www.cahealthadvocates.org).
Medicare Rights Center says it is the largest
independent source of health care information and assistance in the
United States for people with Medicare (www.medicarerights.org).
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