Insurers giving elderly hard sell on private health

Improper tactics get Medicare recipients to sign up, critics say

May 07, 2007|By New York Times News Service

WASHINGTON -- 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 such as trips to Las Vegas, have aggressively marketed the private plans, known as Medicare Advantage plans. Enrollment has skyrocketed in the past year, and Medicare officials foresee continued rapid growth in the next decade.

In Mississippi, George R. Dale, the state insurance commissioner, said: "Abusive Medicare insurance sales practices are spreading rapidly throughout the state."

Proponents of private plans say they are good for many older Americans because they coordinate care and might offer extra benefits, such as 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. But 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 can be more expensive than traditional Medicare for some patients, because co-payments for some services might be higher. And economists say that the cost to the government is also higher because in many counties, Medicare pays private plans more than the cost of traditional Medicare.

Richard S. Foster, 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.

Louisiana's insurance commissioner, James J. Donelon, said agents were using "overly aggressive tactics," including false promises, "to market Medicare-related products with little or no concern for the needs of the consumer."

James 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 permission. Officials in Kansas, Oklahoma and Wisconsin are 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 New Mexico, said many of her patients who signed up "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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