Medicare proposes marketing curbs for health plans
Cites complaints of elderly being misled
WASHINGTON - Health insurers selling Medicare medical and drug plans would have to change marketing practices under proposed government rules after complaints that elderly people were talked into buying coverage that didn't meet their needs.
Agents for companies including UnitedHealth Group Inc. and Humana Inc. would be barred from "cold-calling" to promote Medicare Advantage health coverage and prescription drug plans, the Centers for Medicare and Medicaid Services said on its website. Companies would have to alter commission schedules for sales representatives.
Congress is debating whether the Medicare Advantage program, expected to cost taxpayers $86 billion this year, should pay lower rates to private insurers and have more state regulatory supervision.
Advantage plans had 9.76 million members last month, about 22 percent of the 44 million Medicare beneficiaries. Critics said the proposal falls short.
"The final regulation will need to be much tougher if it is to have the desired effect," said Robert M. Hayes, president of the New York-based Medicare Rights Center, in an e-mail. "Even the Bush administration, which has so zealously promoted the privatization of Medicare, recognizes that it must repeatedly reaffirm its instructions to these private, for-profit insurance companies to get them to play by the rules."
Medicare has already taken actions to strengthen marketing standards, including making insurers' deficiencies public and increasing surveillance of sales activities. Last year, congressional hearings highlighted marketing abuses, including agents who enrolled mentally disabled people and the dead.
"The Medicare Advantage program is a valuable source of enhanced benefits and coordinated care for beneficiaries, and it should not be undermined by the actions of a limited number of unscrupulous sales agents," said Kerry Weems, acting administrator of Medicare, the largest medical benefits provider in the United States, in the statement.
Yesterday's proposal would bar insurers from paying larger commissions for new enrollments than for renewals, a typical practice. The change would prevent agents from "churning" customers, moving them among plans to reap the highest commissions, Medicare said.
The agency also acknowledged an issue that state insurance commissioners have complained about, the use of brokers who aren't licensed in their states. Previously, the federal regulations did little to act on their concerns, commissioners said.
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