Press Release
FOR IMMEDIATE RELEASE
January 19, 2000
Deane Beebe
Communications Director 212-869-3850, ext. 19
dbeebe@medicarerights.orgHalf of the Time Insurance Companies Incorrectly Advise They Won't Cover Sick People Who Want to Buy Medicare Supplemental Insurance, Study Shows
--Wrong Information Puts Older and Disabled People Dropped by Medicare HMOs at Risk of Not Being Able to Buy Needed Coverage--[NEW YORK, NY] A study conducted by the Medicare Rights Center (MRC) found that customer representatives at insurance companies selling Medigap insurance -- policies that supplement Medicare coverage -- provided wrong information at least half of the time, jeopardizing the ability of older adults to buy Medigap policies when their HMOs end their Medicare contracts.
MRC's "Medicare Rights and Realities: Medigap Consumer Protections Fail" reports that fifty percent of the time insurance representatives incorrectly advised callers that their company would not sell a woman with cancer a Medigap policy, or that the Medigap policy would not cover her cancer care. Medicare law requires Medigap companies to sell certain policies to and cover preexisting conditions of people who are at least age 65 and whose Medicare HMOs end their coverage.
Insurance representatives also gave out wrong information 56 percent of the time regarding the rule that people dropped by their Medicare HMOs remain enrolled in their HMOs until December 31 in order to buy a Medigap plan. This rule protects people if they remain enrolled in their Medicare HMOs until their coverage ends on December 31 and they buy the Medigap policy no later than 63 days from the last day of the year.
"Laws designed to protect people are worthless if no one ensures that the frontline, customer service representatives know the rules," explained Joe Baker of the MRC. "These are not small mistakes -- older Americans suffer big financial consequences when they are misinformed," he explained.
About 327,000 of the 6 million Americans enrolled in Medicare HMOs were notified in October that their Medicare HMO coverage would terminate on December 31, 1999. About 79,000 people who have lost their Medicare HMO have no other Medicare HMO option in their community and were automatically enrolled in Original Medicare. People with Original Medicare often buy a Medigap policy to supplement Medicare. Currently, about 11 million people have a Medigap policy.
Four standard Medigap policies are guaranteed to people dropped by their Medicare HMOs. Depending on which policy is purchased, the policy covers some health costs such as coinsurance for doctors' services and hospital and outpatient deductibles. These Medigap policies range in price from about $26 to $189 per month. The cost varies state to state, as well as by companies within a state.
MRC's survey also found that in states where people with disabilities are entitled to buy Medigap, the insurance representatives gave callers wrong information 30 percent of the time. While federal law does not give people with disabilities who are dropped by their Medicare HMOs the right to buy a Medigap policy, 18 states have laws that give disabled Americans this protection.
"This misinformation has deplorable consequences," remarked Sally Hart of the Center for Medicare Advocacy. "In two-thirds of the country disabled people don't have the right to buy Medigap policies, and they're at risk even in the states that supposedly let them buy Medigap," she continued.
In the report, MRC recommends legislation which would guarantee Medicare supplemental insurance for everyone with Medicare -- both older and disabled people -- at the same price, whenever they have the right to sign up for Original Medicare
"Only when we offer the same Medigap policies, at the same prices and accessibility, to everyone with Medicare, will we have meaningful Medigap protection, " Mr. Baker noted.
To conduct the study, MRC surveyed four Medigap carriers in California, Florida, Illinois and Ohio, states that permit only older adults to buy Medigap insurance. MRC staff placed two calls to each insurance company, once stating they were calling on behalf of an elderly grandmother and another time as a MRC representative. MRC staff also said they were calling on behalf of a disabled mother and made calls to four Medigap carriers in both New York and Texas, states which allow people with disabilities to buy Medigap coverage.
"Until these very confusing enrollment laws are changed, it's best to check with the Medicare hotline in your state to find out if and when you can by Medigap insurance," advised Carol S. Jimenez of California Health Advocates.
To obtain a copy of "Medicare Rights and Realities: Medigap Consumer Protections Fail," please contact Deane Beebe at 212-869-3850, ext. 19, or by e-mail at dbeebe@medicarerights.org.
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