Insurers Criticize Administration 'Gag Order'

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By David S. Hilzenrath
Washington Post Staff Writer
Tuesday, September 22, 2009; 5:12 PM

The federal government has ordered health insurers to stop telling Medicare beneficiaries that proposed health reform legislation could hurt seniors and jeopardize their benefits.

The government might take enforcement action against insurers that have tried to mobilize opposition to the legislation by sending their enrollees "misleading and confusing" messages, a senior official of the Department of Health and Human Services said in a memo Monday.

The mailings in question urge enrollees to contact their congressional representatives and protest the legislation, the memo said.

A spokesman for America's Health Insurance Plans, the industry's main lobbying group, issued a statement Tuesday criticizing what he described as the government's "gag order."

"Seniors have a right to know how the current reform proposals will affect the coverage they currently like and rely on," AHIP spokesman Robert Zirkelbach said.

Sen. Mitch McConnell of Kentucky, the Senate's Republican leader, denounced the HHS order as an attempt to squelch free speech.

"We cannot allow government officials to target individuals or companies because they do not like what they have to say," McConnell said.

"Is this what we believe as a Senate -- that this body should debate a trillion-dollar health care bill that affects every American while using the powerful arm of government to shut down speech?" McConnell said.

McConnell noted that Humana, an insurer at the center of the controversy, is based in his home state. The company has been a large contributor to McConnell, donating $112,452 over his career, according to Eric Schultz, communications director for the Democratic Senatorial Campaign Committee.

As an alternative to traditional fee-for-service Medicare, Medicare beneficiaries have the option of enrolling in health plans managed by private insurers, which are known as Medicare Advantage plans. The government has been grossly overpaying those health plans, according to President Obama, members of Congress, and a variety of analysts.

Proposed health reform legislation would sharply reduce funding for Medicare Advantage plans, and the insurance industry has been battling to prevent that from happening. The bill unveiled last week by Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, would directly cut payments to Medicare Advantage plans by an estimated $123 billion over 10 years, and it would indirectly reduce funding for those plans by another $15.6 billion, according to the Congressional Budget Office.

The big insurer Humana triggered the HHS crackdown with a letter to Medicare enrollees claiming that health reform proposals could hurt "millions of seniors and disabled individuals" who "could lose many of the important benefits and services that make Medicare Advantage plans so valuable." The letter was sent in envelopes marked "important information about your Medicare Advantage plan -- open today!"

HHS wrote to Humana last week instructing it to stop the mailings, and it wrote to all Medicare Advantage plans Monday, saying "such communications are potentially contrary to . . . federal law." The government regulates communications between the health plans and their members.

Baucus had urged HHS to crack down on the mailings.

"It is wholly unacceptable for insurance companies to mislead seniors," he said in a Monday news release. "The health care reform bill we released last week strengthens Medicare and does not cut benefits under the Medicare program -- and seniors need to know that," he said.

The AHIP spokesman countered that if the proposed cuts are enacted, "seniors will face premium increases, reduced benefits, and, in some parts of the country, will lose access to their Medicare Advantage plan altogether."

Humana spokesman Tom Noland said beneficiaries "deserve to know the impact that funding cuts of the magnitude being discussed would have on benefits and premiums."

McConnell said it was a "common sense conclusion" that the proposed cuts in payments to Medicare health plans would lead those plans to reduce benefits.


© 2009 The Washington Post Company

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