Better Medicare Consumer Protections Are Needed, Says TSCL
Unsuspecting seniors have wound up in private health plans and discovered - too late - high, unexpected costs. Frequently, they didn't understand what they were signing up for, or that they were leaving the traditional Medicare.
Senate investigators recently learned that insurance agents in at least 39 states used illegal or unethical tactics to sell private Medicare health plans, known as Medicare Advantage plans. Insurers have signed up unwitting consumers by using "bait and switch" tactics, forging signatures, using personal information stolen from federal records, and even by submitting applications for deceased individuals. The New York Times reported that Albuquerque cancer specialist, Dr. Barbara L. McAney, said that many of their patients who signed up for such plans "suddenly found that they had huge new co-payments Ч $1,250 every three weeks for a combination of five intravenous chemotherapy drugs."
Agents of the private plans have worked out of booths in discount stores or tables set up in front of grocery or drug stores. Seniors might think they are signing up to get drug coverage or just more information. Then, if they later require hospitalization or other costly services, they may learn there are higher co-payments than normally would be charged under traditional Medicare.
Enrollment in Medicare Advantage plans has exploded in the past year with one out of five Medicare beneficiaries enrolled. According to the Medicare Payment Advisory Commission, however, the government pays the private plans 12% to 19% more than it would cost Medicare to serve the same people. The non-partisan Congressional Budget Office estimates that the cost for these extra payments will amount to $65 billion over the next five years. These extra payments are passed on to all Medicare beneficiaries in the form of higher Part B premiums.
According to a new report from the Medicare Rights Center (MRC), "private health plans often fail to deliver what they promise. Plan members encounter an obstacle course when trying to get care and coverage, and they may pay more out of pocket costs than what they would have in Original Medicare," the report says. The report is based on MRC's experiences in helping Medicare beneficiaries.
According to MRC there are common problems people have in Medicare Advantage plans, but many people only discover these flaws after they have joined the plan and most cannot switch until the following year. Problems can include:
- Care that costs more than it would under traditional Medicare.
- Difficulties in getting emergency or urgent care and care away from home.
- Choice of doctor, hospital and other providers is restricted.
- Promised extra benefits can be very limited.
CMS responded to the misleading practices by announcing that seven insurance companies; United Healthcare, Humana, WellCare, Universal American Financial, Coventry Health Care, Sterling Life Insurance and BlueCross BlueShield of Tennessee, will suspend marketing Medicare Advantage private fee-for-service plans until they meet six basic conditions, although the insurers can still sell policies to consumers who ask for them. Since the plans are cooperating with CMS voluntarily, it remains to be seen how effective they will be in policing their own marketing.
TSCL believes that Congress must provide strong oversight and consumer protections under the Medicare Advantage program. In addition TSCL calls on Congress to stop paying Medicare Advantage plans more than other Medicare supplemental plans. Doing so would save money for both the government and slow the rise of Part B premiums.
Sources: "Hard Sell Cited As Insurers Push Plans to Elderly," Robert Pear, The New York Times, May 7, 2007. "Too Good To Be True: The Fine Print In Medicare Private Plan Benefits," Medicare Rights Center, April 2007. "Plans Suspend PFFS Marketing," CMS, June 15, 2007.