Abuses in Enrollment Tactics Found for Private Medicare
Wednesday, May 16, 2007
Insurance agents in at least 39 states used illegal or unethical tactics to sell private Medicare plans, in some cases enrolling the dead and mentally incompetent, impersonating Medicare representatives, and using personal information stolen from federal records, according to interviews and documents released to Congress.
"Medicare Advantage" plans and enrollments have exploded in the past year, touted by the Bush administration as a valuable alternative to Medicare, the federal health insurance program for seniors.
But Senate investigators have found that improper sales practices inspired by insurers offering high commissions have drawn civil and criminal cases, damaging the credibility of a program that some have called a model for revamping the Medicare system.
"There's a lamentable lack of oversight when it comes to the sales practices being used to sell Medicare Advantage plans to our seniors," said Sen. Herb Kohl (D-Wis.), chairman of the Senate Special Committee on Aging, which is to hold a hearing today on the abuse. "Our goal is that these plans must be represented in a transparent, honest and fair way."
About one-fifth of the 43 million seniors receiving Medicare are enrolled in a Medicare Advantage plan, for which the government pays insurers a set amount each month. The United States will pay $76 billion this year for care provided to plan members, up one-third from 2006.
Some of the plans provide extra benefits, such as dental coverage, or charge lower fees for care. But beneficiaries still pay monthly premiums to Medicare, and may pay one to the private plan as well.
Proponents say the plans offer more efficient care, especially for chronic conditions. A Medicare advisory panel recently reported that the plans cost the government an average of 12 percent more than care provided through traditional Medicare.
"If the goal were to privatize because you get more efficiency and lower cost, you could see why that makes sense. But none of those things are happening," said Bonnie Burns, a policy specialist with California Health Advocates, a Sacramento-based consumer group that works with that state's health insurance counseling program. "When you have a product few people understand, a very high commission and very short enrollment period, very bad results are just a given."
In Georgia, state investigators received hundreds of complaints and documented 15 improper sales practices, including agents who enrolled dead people using information lifted from Medicare records; told potential clients that Medicare was going out of business; and forged signatures on enrollment forms, according to information given to the Senate committee.
Regulators nationwide have issued consumer warnings this year after Medicare recipients reported being pressured into joining plans that caused them to lose benefits or access to their doctors, or obligated them to pay unaffordable fees.
In rural Lumberton, N.C., this year, sales agents visited a low-income housing complex and told 29 people that "they were signing up to receive $20 in free personal-care items," said state insurance department spokeswoman Chrissy Pearson. "The consumers had no idea" that they were signing up for a Medicare Advantage program offered by WellCare Health Plans, based in Tampa.
At the root of the problem, officials say, are short enrollment periods and big bonuses for agents for signing up new clients. A WellCare "Half-Time Giveaway" offered "volume producers" a chance to win a plasma TV and a $175 bonus per policy.