States Look to Rein In Private Medicare Plans

States Look to Rein In Private Medicare Plans

State officials will ask Congress for more power to regulate the marketing of Medicare Advantage and Prescription Drug plans because they are still receiving complaints of high-pressure sales tactics that have led some beneficiaries to sign up for unsuitable policies. Almost half of all Medicare beneficiaries are enrolled in one or both of these types of plans.

State insurance officials say they have received large numbers of complaints and have proposed that the Federal government set common standards for marketing the private plans, which could then be enforced by states. Congress will soon have an opportunity to tighten regulation of private plans as part of a bill setting Medicare payment rates for doctors and other health care providers. Unless Congress acts, doctors face a 10 percent cut in Medicare fees on July 1.

State officials say that federal payments to private Medicare Advantage plans have created a “tremendous incentive” for insurers to maximize sales by aggressive marketing, such as paying larger commissions and bonuses than agents would receive for selling other health insurance products. In 1990, Congress set tough standards for supplemental (Medigap) insurance, and that approach has worked relatively well. Senator Wyden of Oregon welcomed the proposal. “I helped write the 1990 law, which put an end to Medicare supplement insurance scams, but today some of the same deceptive practices have resurfaced in the marketing of Medicare Advantage.”

State officials also recommended that advertisements and marketing materials should specify the type of plan being offered, and avoid the use of confusing product names like “gold,” “silver” and “value,” which have no standard definition. They also recommend that when agents sell private Medicare plans, they should not be allowed to sell other insurance products such as annuities, life insurance, or long-term care to the same customer at the same time. Further, they recommend that when someone asks for information on a drug plan, they should not be pressed to buy a more comprehensive Medicare Advantage plan, which is more lucrative for the agent and the insurance company.

The administration and insurance industry have acknowledged problems in the Medicare market and have taken steps to curtail abuses. The Centers for Medicare and Medicaid Services sent “secret shoppers” to 240 marketing events last fall, and they found inaccuracies or omissions in three-fourths of the sales presentations. Further, two insurance industry trade groups have developed a training course for agents who market private Medicare plans.

Source: http://www.nytimes.com