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Standardizing Medicare Private Health Plans
September 13, 2007 • Volume 7, Issue 36
People with Medicare have the right to basic consumer protections against the onslaught of aggressive and deceptive marketing of Medicare private health plans. These protections should not stop at rules on how plans are sold; they should include standards on which plans are sold.
Insurance companies that sell coverage to people with Medicare under the misleading name of “Medicare Advantage” plans should be prohibited from carving out specific services, such as chemotherapy and other drugs provided at the doctor’s office, from caps on enrollees’ annual out-of-pocket spending.
Insurance companies should be prohibited from charging more for specific services, such as home health care or hospitalization, then Original Medicare charges.
Insurance companies should be prohibited from designing benefit plans that look like they provide protection against high medical bills, but actually provide no financial protection against catastrophic illness.
Consumers should be able to easily compare their coverage options by choosing from a clear set of standardized Medicare private health plan benefit packages.
Medicare supplemental insurance—Medigap policies that cover the gaps in the standard Medicare benefit—have been provided solely through standardized benefit packages since Congress acted in 1990 to stem rampant marketing misconduct and consumer confusion. The standardization of Medigap policies has made choosing a supplemental Medicare insurance policy one of the easiest decisions older adults now face.
People with Medicare should have the same ability to make an informed choice when they are deciding whether to enroll in a Medicare private health plan. In many areas, consumers have more than 50 plans to choose from and each plan has a unique benefit plan, often designed specifically to hide the extra costs it imposes on enrollees with serious illnesses, like cancer. That makes it virtually impossible for consumers to make an informed choice, especially when they are subject to deception and bullying by plan sales agents.
The case for standardizing Medicare private health plans is laid out in a new report released today by the Medicare Rights Center and California Health Advocates. The report looks at the benefit packages that Medicare private health plans offer and finds many plans with loopholes and copayment rates that make them a financial and health hazard for people with serious illnesses. While distressing, the findings are not new—they concur with the results of previous research by the independent, nonpartisan Medicare Payment Advisory Commission (MedPAC) and other well-respected researchers.
The Centers for Medicare & Medicaid Services (CMS), however, has turned a blind eye to the problem, allowing insurance companies to peddle Medicare private health plans that are deliberately confusing to consumers and discriminatory against people with serious illness.
It is time for Congress to act to prohibit the sale of substandard Medicare private health plans and ensure that consumers can make an easy and informed choice among an array of meaningful benefit options.
Medical Record
“Today’s marketplace for Medicare private health plans bears marked similarities to the marketplace for Medigap plans before Congressional action mandated the standardization of these plans, a reform that successfully enhanced consumers’ understanding of their plan options and decreased the incidence of deceptive and abusive marketing. The regulatory structure for Medicare private health plans fails to prohibit benefit designs that disadvantage individuals with serious illnesses and does not provide consumers with the means for making an informed choice of plans. Drawing from its prior experience regulating Medigap plans, Congress should create a process to develop a limited number of benefit packages for Medicare private health plans that meet minimum standards of consumer protection” (Informed Choice: The Case for Standardizing and Simplifying Medicare Private Health Plans, Medicare Rights Center, September 2007).
“Although few plans use cost sharing that is higher than that for [Original] Medicare, the practices of some plans could lead to high levels of cost sharing for certain services that are less discretionary and affect few individuals, such as chemotherapy. There may be several reasons behind such benefit designs, but to the extent that a few plans use an explicit strategy of selection, the Commission finds this unacceptable” (Report to the Congress: Benefit Design and Cost Sharing in Medicare Advantage Plans, MedPAC, December 2004).
“I work with renal transplant patients who are in need of daily medications that are very expensive. Patients who are enrolled in Humana Medicare Advantage plans were surprised this year when their copays on anti-rejection medications rose from approximately $55 per month for one medication to 25% of the cost. For one individual this 25% amounted to $380 per month for one medication. Because these medications are covered under Medicare Part B they are not covered under Medicare D plans. A few patients have been assisted through the Pharmaceutical Assistance Program but some had to be switched to a medication that was not preferred by their doctors” (Story submitted to the Medicare Private Health Plan Monitoring Project, Medicare Rights Center, April 26 2007).
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Medicare Part D Monitoring Project
The Medicare Rights Center (MRC) would like to hear about your experience, or that of someone you know, enrolled in a Medicare private drug plan. With information about what the issues are with Medicare Part D, we will be able to demand that those problems be fixed.
Submit your story at http://www.medicarerights.org/partdstories.html.
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Asclepios—named for the Greek and Roman god of medicine who, acclaimed for his healing abilities, was at one point the most worshipped god in Greece—is a weekly e-newsletter designed to keep you up-to-date with Medicare program and policy issues, and advance advocacy strategies to address them. Please help build awareness of key Medicare consumer issues by forwarding this action alert to your friends and encouraging them to subscribe today.
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