Elderly consumers are increasingly being victimized by insurance companies selling private fee-for-service Medicare plans, according to Robert Pear of the New York Times. In 1997, Congress set up private Medicare plans -- so-called “Medicare Advantage Plans” -- allowing seniors to replace traditional Medicare health coverage with enrollment in a fee-for-service health insurance plan. Insurance companies are milking these plans for all they are worth, with aggressive marketing. Almost one-fifth of the 43 million Medicare beneficiaries are in some type of private plan, and they are the fastest growing segment of the private Medicare plans.

But some of these seniors who wind up in private plans didn’t even sign up for the plan. Take the case of Bobbie Whatley, pictured here. Wellcare insurance company sent an agent to her doorstep in Columbus, Georgia last November. When she declined to buy the private insurance, the Wellcare agent, forged her signature and a month later she received mail thanking her for joining the plan. As Bobbie says, “It turned into a nightmare... I have all my mental faculties. If I let somebody like this come into my home and take advantage of me, then I am really concerned about older people who are more debilitated and not able to take care of themselves.”

Agents pushing the private Medicare plans sign up unwilling or unwitting seniors, who are not exactly sure what they have bought. Some think that they have just bought prescription drug coverage. Insurance agents often do not explain to elderly consumers that these private plans have hefty co-pays that traditional Medicare does not charge - such as $100 a day co-pays for nursing home stays and hundreds, or even thousands of dollars in co-pays for prescription medications.

Seniors also aren’t told that their doctors or hospitals may not accept these private plans in place of Medicare.

One state insurance commissioner who fields complaints about these private Medicare plans says that the problem is that the law does not require insurers to make disclosures to consumers about the increased costs associated with these plans. “This is a prime example of what happens when the federal government passes a law without proper safeguards,” says Mr. Dale, Mississippi Insurance Commissioner.

To add insult to injury, Congress actually pays these private plans huge subsidies, paying 19% more on average per senior. Is it any wonder that the Medicare trust fund is projected to go broke by 2041??

Wellcare Insurance Company denies it authorizes improper sales tactics, but the Centers for Medicare and Medicaid Services says that Wellcare’s oversight of unscrupulous sales agents is “inadequate and unacceptable.” CMS vows to “step up supervision of private plans.”

You have to wonder if CMS is up to the job. CMS has been operating with only an acting director since October 2006. CMS is the same agency that is in charge of oversight of nursing homes. As described in yesterday’s Elder Advocacy Blog entry, the General Accountability Office has just issued a stinging critique of CMS’ oversight of nursing homes.

It’s a safe bet that the insurance companies don’t have much to fear from CMS. If CMS won’t act, Congress must. It’s time for Congress to pass mandatory disclosures for private Medicare policies and to stop providing subsidies to these insurance companies for these plans.

To read Robert Pear’s excellent article, click here.


Felicia Curran
www.ElderAdvocacyLaw.com