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Senior Citizen Politics
Medicare Advantage Marketing Would Be Regulated by
States in New Senate Bill
 Aging Committee’s Kohl says he is delivering on
promise to ‘Hold Feet to the Fire’
July 27, 2007 – Although the major Medicare
Advantage Plans agreed to stop marketing until they had cleaned up their
act, after a multitude of criticism of overly-aggressive marketing
tactics, it is not enough everybody in Washington. Yesterday, a group of
U.S. Senators introduced a bill to allow the association representing
state insurance commissioners to draw up marketing and sales regulations
for the MAs, which are approved and subsidized by the Centers for
Medicare & Medicaid Services.
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Note: Various stories on the battle over Medicare Advantage Plans
appear in the Medicare and Politics sections of this Website.
> Politics for Senior Citizens
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U.S. Senator Herb Kohl (D-WI), Chairman of the
Senate Special Committee on Aging, was joined today by Senators Byron
Dorgan (D-ND) and Ron Wyden (D-OR) in introducing the Accountability and
Transparency in Medicare Marketing Act of 2007.
The bill would give state insurance commissioners
the ability to develop standardized marketing and sales regulations of
Medicare Advantage (MA) and Medicare prescription drug plans, and
regulate both agents and companies in the marketing and sales of MA and
prescription drug plans.
If passed, the legislation would enable state
insurance commissioners to adequately serve and protect Medicare
beneficiaries in conjunction with CMS, the sponsors say.
Specifically, the Accountability and Transparency
in Medicare Marketing Act of 2007 would direct the National Association
of Insurance Commissioners to establish regulations, set standards for
agent conduct, and define prohibited activities with respect to the
sales and marketing of MA plans.
CMS and the states would then adopt these
regulations, allowing both federal and state governments to enforce
them. The legislation is comparable to a provision that has been
included in the U.S. House of Representatives’ SCHIP package (CHAMP
Act).
Currently, states are largely pre-empted from
regulating the marketing of MA and Medicare Part D plans.
The marketing guidelines for these plans were
established by CMS and have proven to be inadequate. Instead of
regulating these abusive marketing practices themselves, state
authorities must refer complaints to CMS where it appears little has
been done to quickly resolve the issues and prevent future problems.
“The Committee’s investigation into the sales and
marketing of Medicare Advantage plans has uncovered questionable
practices that border on outright fraud,” said Chairman Kohl. “It is
clear that a major disconnect in oversight exists, and it is simply
unacceptable to leave our seniors unprotected.”
“Since the Administration is not stepping up to
protect seniors from abusive marking practices, it makes sense to
authorize state governments to do so,” Senator Dorgan said. “Many state
governments have let us know they are very concerned about this problem.
They want to act where the Administration has failed to act. I am
pleased to co-sponsor legislation that would allow them to protect
seniors.”
“A decade ago I helped write a law that put an end
to Medicare supplement insurance scams, but today some of the same
deceptive practices have resurfaced in the marketing of Medicare
Advantage,” said Senator Wyden. “It is time to act to ensure that the
promise of health care is no longer used to prey on those who need
health care the most.”
The bill is being introduced in response to the
Aging Committee’s ongoing investigation of the marketing practices of
private Medicare plans and providers, which has uncovered such
questionable sales practices as removing seniors from traditional
Medicare without their knowledge, signing seniors up for plans they
cannot afford, and misleading seniors regarding which physicians and
hospitals accept the plan.
At a May 16 Aging Committee hearing on the topic,
officials representing the state insurance commissions from Wisconsin,
Oklahoma, and Georgia described a nationwide pattern of aggressive, and
at times deceptive, marketing practices employed by Medicare Advantage
sales agents.
Executives from three of the companies
participating in the voluntary moratorium (Humana Inc., UnitedHealth
Group, and WellCare) testified at the hearing that efforts would be made
to reform their marketing and sales practice guidelines.
Also in reaction to the Aging Committee hearing,
seven insurance companies—which together account for 90 percent of the
private fee-for-service (PFFS) Medicare Advantage market—voluntarily
agreed to temporarily terminate the marketing and sales of their
Medicare private fee-for-service plans to individuals.
Abby Block, Director of the Center for Beneficiary
Choices at the Centers for Medicare for Medicaid Services (CMS),
announced the voluntary moratorium on June 15, saying it will last until
such time that the insurers are able to fully comply with the six
provisions released earlier this year by CMS as part of new guidelines
for 2008.
This bill has received a letter of support from the
Medicare Rights Center.
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