Medicare Part D Open Season

From Asclepios, the Medicare Rights Center's weekly Medicare consumer advocacy update Less than one month from now, private insurance companies will begin marketing their 2009 Medicare health and drug plans, hoping to convince people with Medicare to sign up for coverage for the new year. The marketing of Medicare private health plans has been plagued by abuse. Unscrupulous agents who troll senior housing complexes and even nursing homes have misrepresented or outright lied about the plan benefits and coverage, and cajoled or tricked frail older adults into signing enrollment forms in order to gain the commissions, bonuses and prizes the insurance companies award for these enrollments. The passage this summer of the Medicare Improvement for Patients and Providers Act over President Bush’s veto sets some new ground rules for marketing this fall, including a ban on cold-calling and other unsolicited contact (such as accosting patients in hospital parking lots), and federal regulation of agent commissions. How these new rules are implemented and enforced will determine whether the Bush administration seizes, or squanders, its last chance to stop the abuse that has so far characterized the market for Medicare private health plans. Only aggressive oversight and enforcement—levying hefty fines and freezing enrollment—by the Centers for Medicare and Medicaid Services (CMS) will discourage plans from employing agents who flout the rules. (A little due diligence and oversight by the plans will uncover who most of these agents are.) CMS can send a signal of a new, no-nonsense approach with the marketing rules it sets for the new season. Here are three examples:

• No cold-calling prospective clients. Period. No exceptions, including cold calls that follow up mailings.
• No outrageous commissions, bonuses or promises of trips to Vegas that encourage agents to sell unsuitable plans to boost their sales volume. Reports of agents engaging in fraudulent and abusive marketing invariably lead back to plans that pay the highest commissions, or give volume-based bonuses. CMS needs to ensure high commissions are not used to push low-value plans.
• Clear explanation of plan benefits and coverage restrictions on all marketing material. In particular, the Summary of Benefits and the CMS plan finder must clearly list what, if any, services, are excluded from the financial protection provided by an annual limit on enrollee out-of-pocket spending.