Methods Used by Insurers Are Questioned

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May 7, 2007

Methods Used by Insurers Are Questioned

By ROBERT PEAR

WASHINGTON, May 6 - Insurance companies have used improper hard-sell tactics to

persuade Medicare recipients to sign up for private health plans that cost the

government far more than the traditional Medicare program, federal and state

officials and consumer advocates say.

Insurance agents, spurred in some cases by incentives like trips to Las Vegas,

have aggressively marketed the private plans, known as Medicare Advantage plans.

Enrollment in them has skyrocketed in the last year, and Medicare officials

foresee continued rapid growth in the next decade.

In Mississippi, R. Dale, the state insurance commissioner, said, " Abusive

Medicare insurance sales practices are spreading rapidly throughout the state. "

State Senator Terry C. Burton, a Republican, said, " My office is receiving calls

daily from seniors who have been victims of unscrupulous salespeople. "

Proponents of private plans say they are indisputably good for many older

Americans because they coordinate care and may offer extra benefits, like

discounts on eyeglasses, hearing aids and dental care.

But federal officials said that the fastest-growing type of Medicare Advantage

plan generally does not coordinate care, does not save money for Medicare and

has been at the center of marketing abuses.

These " private fee-for-service plans " allow patients to go to any doctor or

hospital that will provide care on terms set by the insurer. In most cases, no

one manages the care. And some patients have found that they have less access to

care, because their doctors refuse to take patients in private fee-for-service

plans.

Moreover, those plans may be more expensive than traditional Medicare for some

patients, because the co-payments for some services may be higher. The Medicare

Payment Advisory Commission says that the cost to the government is also higher

because it pays the private fee-for-service plans, on average, 19 percent more

than the cost of traditional Medicare.

S. , chief actuary for the Medicare program, said " the additional

payments to Medicare Advantage plans, above and beyond the costs " of traditional

Medicare, were causing higher premiums for all beneficiaries and speeding the

depletion of the Hospital Insurance Trust Fund for Medicare.

Almost one-fifth of the 43 million Medicare beneficiaries are now in some type

of private plan.

Much of the growth in private fee-for-service plans has come in rural areas,

where doctors and hospitals are often in short supply.

In Georgia, two insurance agents were arrested last month and accused of

conspiring to defraud Medicare beneficiaries.

" The agents signed up unwilling consumers and even deceased individuals for

private Medicare plans, " said W. Oxendine, the Georgia insurance

commissioner. " This appears to be a national problem, based on my conversations

with insurance officials around the country. "

In an interview, Bobbie S. Whatley of Columbus, Ga., a 69-year-old nurse

practitioner, said that a young man wearing a blue denim shirt with a WellCare

logo showed up on her doorstep in November and talked to her about her

insurance.

Mrs. Whatley did not sign up, she said, but he " forged my signature, " and a

month later she received mail thanking her for joining one of WellCare's private

fee-for-service plans.

" It turned into a nightmare, " she said. " I spent two months trying to cancel my

enrollment. 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. "

N. Aberg, a spokesman for WellCare, said the company had terminated

contracts with 10 independent sales agents who had engaged in door-to-door

solicitation and other prohibited marketing practices in Georgia and several

other states.

" We have zero tolerance for any behavior that violates marketing guidelines, "

Mr. Aberg said.

The Louisiana insurance commissioner, J. Donelon, said some agents were

using " overly aggressive sales tactics, " including false promises, " to market

Medicare-related products with little or no concern for the needs of the

consumer. "

E. Long, the insurance commissioner in North Carolina, is investigating

complaints that insurance agents switched residents of an assisted living

community from traditional Medicare into private plans without their permission.

Officials in Kansas, Oklahoma and Wisconsin said they were investigating similar

complaints.

Insurers sell private fee-for-service plans as a replacement for traditional

Medicare and for Medicare supplement policies, known as Medigap insurance.

But Dr. Barbara L. McAneny, a cancer specialist in Albuquerque, said that many

of her patients who signed up for such plans " suddenly found that they had huge

new co-payments - $1,250 every three weeks for a combination of five intravenous

chemotherapy drugs. "

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