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Medicare Drug Sign-ups Causing Concern Among Regulators

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State insurance regulators are concerned about implementation of prescription drug plans that are part of Medicare legislation.

Enrollment in PDPs as a result of the Medicare Prescription Drug Improvement and Modernization Act of 2003 started in mid-November 2005.

Regulators at the recent winter meeting of the National Association of Insurance Commissioners raised several issues with federal regulators.

Both in correspondence with the Centers for Medicare & Medicaid Services, Baltimore, and in dialogue during the meeting, issues including waivers of state licensure and cross-selling were discussed.

In a letter to CMS dated Nov. 22, 2005, Jorge Gomez, Wisconsin insurance commissioner and NAIC senior issues task force chair, said several states have expressed concern over CMS waivers to entities that were not licensed as insurers in any state. Those waivers were granted, he wrote, without first checking with a state to see whether an application had been filed.

Gomez also raised the issue of cross-selling.

Bonnie Burns, a funded consumer representative with the NAIC and a training and policy specialist with California Health Advocates, Scotts Valley, Calif., said in California there are 47 PDP plans from which consumers must choose. California has no authority over these plans, she added.

And consumers have been getting marketing material that is advertised as promoting Part “D” plans, but, in fact, is marketing other types of insurance such as long term care, as well, she noted.

The only authority state insurance regulators have for Part “D” is over agent activities, Burns said. “This is a good example of why federal regulation is not a good idea.”

There is concern among those working with Part “D” enrollees that there will be gaps in coverage or people will fail to act and be automatically enrolled in plans, she said. Prescription drug coverage for specific medications depends on the plan and/or if the drug is covered, there might be requirements such as prior approval, she added.

Gomez said that while regulators can take action against agents for improperly selling Part “D” plans, this is not an efficient means of regulating the marketing of those plans to consumers. Regulators are continuing dialogue with CMS, he added.

If an optional federal charter was in place, at least there would be a holistic approach to regulation rather than a mix of both federal and state oversight, said Bruce Ferguson, senior vice president-state relations with the American Council of Life Insurers, Washington. Consumer protection would have to be established through district offices and the idea of an OFC will only gain acceptance in Congress if consumer protections are in place, he added.



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