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NAIC Questions Federal Consumer Notice Draft

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State insurance regulators are talking about what they say is misleading language in a proposed Medicare drug benefits notice.[@@]

The National Association of Insurance Commissioners, Kansas City, Mo., has outlined its concerns in a comment letter on the text of the proposed notice. The Centers for Medicare and Medicaid Services would send the notice to senior citizens and other Medicare beneficiaries to tell them about the new Medicare Part D drug benefits.

CMS used most of the content from an NAIC draft notice, but it made important changes to the draft, NAIC regulators write in the letter, which is addressed to CMS officials.

The CMS proposal “adds what the NAIC believes to be misleading language in an attempt to persuade beneficiaries to enroll in Medicare Part D,” the regulators write. “The proposed notice makes generalized, subjective judgments regarding the relative value of the enrollees’ current Medigap plan when compared to the new Part D.”

The NAIC letter was signed by Kansas Insurance Commissioner Sandy Praeger, who also chairs the NAIC’s Health Insurance and Managed Care (B) Committee.

The current CMS version of the drug benefit disclosure statement says the new Part D plan will “provide greater value,” the regulators write.

But “value can be measured in many ways, not just in the monetary value of benefits,” the regulators write.

In some cases, sticking with a private Medigap insurer that has provided good service in the past might be one type of value, the regulators argue.

“The insured stays with a company he or she knows and trusts, one that provides reliable customer service, and one that has proven staying power in the marketplace,” the regulators write in the letter, adding that there is “no promise” that a drug benefit available Jan. 1, 2006, will still be available 2 years later.

The regulators also take issue with language suggesting that the drug benefit in a Medigap plan is not equal to the new Medicare drug benefit and language that may give seniors the impression that they may enroll in the Medicare drug plan and still maintain a Medigap policy.

Of additional concern, the regulators write, is a claim in the disclosure statement that the longer an individual waits before enrolling in the Medicare plan, the higher the premiums will be. “While factually accurate, the NAIC finds this language troubling because the context within which it is placed suggests to the beficiary that enrollment in Part D is required, and that further delay portends dire financial penalties for having done so,” the regulators argue in their letter. “This is precisely the type of ‘push’ advertising technique that the NAIC and its members consistently oppose and prohibit at the state regulatory level.”


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