Lawmakers talked today about developing legislation to fight overly aggressive Medicare Advantage plan sales efforts.
Possibilities such as classifying certain Medicare Advantage plan sales practices as fraud, limiting the number of different types of Medicare Advantage plans that can be sold, and giving state insurance regulators more authority to regulate Medicare Advantage plan sellers came up during a hearing on Medicare Advantage sales practices that was convened by Rep. Bart Stupak, D-Mich., chairman of the House Energy and Commerce Committee oversight subcommittee.
Medicare Advantage program supporters say the flexibility of the program helps insurers design affordable benefits packages that Medicare beneficiaries really want, but Stupak said the flexibility of the program may be contributing to marketing problems.
“In Houghton, Mich., Medicare beneficiaries have 54 prescription drug plans to choose from plus 14 Medicare Advantage plans,” Stupak said. “That is nothing compared to other parts of the country. For instance, in Miami, there are at least 57 prescription drug plans and 55 Medicare Advantage plans available.”
Stupak also questioned a recent move by several Medicare private FFS insurers to suspend private FFS sales while the insurers work with the Centers for Medicare & Medicaid Services to revamp their marketing programs.
“The industry and CMS may claim they have ‘zero tolerance’ for deceptive sales practices, but what America’s seniors need is zero abuse,” Stupak said.
Today, despite a prohibition on door-to-door marketing of Medicare private FFS plans, “agents arrive on residents’ doorstep stating that the ‘president’ sent them or that they represent Medicare,” according to Kathleen Healey, director of the Alabama State Health Insurance Assistance Program. “These agents bear business cards touting themselves as ‘Medicare specialists’ or ‘senior service specialists,’ not insurance agents.”
Insurance regulators from Mississippi, North Dakota and Oklahoma testified at the hearing that they believe they have only very limited enforcement authority over the companies and individuals selling Medicare Advantage plans.
“I sit before you today to urge you to restore state regulatory authority over these programs,” said North Dakota Insurance Commissioner Jim Poolman. “Consider using the current Medigap insurance as a regulatory model.”
The staff at the CMS is “ill-equipped” to address Medicare Advantage plan members’ problems, Poolman said.
“For example, our contact with customer service staff at Medicare is totally unproductive,” Poolman said. “Not only do they lack the answers or information we need, but they also are inadequately trained. On occasion, CMS staff members have simply hung up the phone.”
Peggy Olson, a Portland, Ore., health insurance agent who is an active member of the National Association of Health Underwriters, Arlington, Va., also spoke at the hearing.
“The outrageous behavior of a dishonest few is in no way reflective of my entire industry,” Olson testified.
Most licensed producers who sell Medicare Advantage plans “spend countless hours advising their clients, answering questions and helping to select the best possible plan options based on their clients’ budgets and personal preferences,” Olson said.
Olson noted that about 80% of her clients who are eligible for Medicare use Medicare Advantage plans, because the Medicare Advantage plans in her area are affordable and offer excellent benefits.
Olson said improving education is one of the main ways to ensure that the producers selling Medicare-related products do so in the an ethical manner. She talked about NAHU’s efforts to work with America’s Health Insurance Plans, Washington, to develop programs to educate agents and brokers about the basic Medicare program and Medicare-related products, such as the private FFS coverage and Medicare drug coverage.
In a statement released after the House oversight hearing, the Association of Health Insurance Advisors, an arm of the National Association of Insurance and Financial Advisors, Falls Church, Va., says it supports calls for strict private FFS marketing guidelines.
As Medicare officials themselves acknowledge, most of the agents who sell private Medicare plans are helpful and responsible, but professional agents are outraged about the sales practices used by a small number of unethical individuals, AHIA says.
The agents carriers select to market the private FFS plans should demonstrate a clear understanding of the out-of-pocket limits and the ramifications for coverage when the carriers change plan designs or provider networks, AHIA says.
“AHIA looks forward to working with CMS to ensure our seniors are provided the quality service they deserve and to eradicate deceptive market practices immediately,” AHIA President Lawrence Lounds says in the statement.