Proposal limits insurers’ contacts with elderly
Posted on Friday, May 9, 2008
WASHINGTON — Agents selling private health insurance plans to the elderly and the disabled would be barred under a federal rule proposed Thursday from cold-calling, door-to-door solicitations and pitching their products near hospital waiting rooms or pharmacies.
The rule is designed to make it harder to pressure Medicare beneficiaries into signing up for insurance products they don’t need or want. It essentially restricts faceto-face solicitations to inquiries initiated by the customer.
A new Medicare drug benefit began Jan. 1, 2006. Since then-participants and state insurance commissioners have complained that some agents use false information to enroll people into certain plans, particularly those offering comprehensive health insurance.
“We want to make sure that beneficiaries aren’t pressured into sales,” said Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services. “In parking lots, waiting rooms and those kinds of places, a salesman can create a pressure environment or a threatening environment where a beneficiary will agree to anything just to get away.” During congressional hearings, lawmakers urged the Bush administration to curb abusive marketing practices. Lawmakers also want to give states more authority to hold insurers accountable.
About 27 million people get coverage for their prescription drug needs through a private insurance plan that offers only the drug benefit or through a “Medicare Advantage” plan that offers comprehensive health benefits. In some cases, people were enrolled in plans even after they made it clear they didn’t want the product.
Advocacy groups said the rule takes a step in the right direction but doesn’t go far enough. They want states to regulate the insurance companies that offer Medicare Advantage plans. States now regulate only the activities of the agents selling the plans.
“CMS doesn’t have the boots on the ground to enforce even good rules like this,” said Paul Precht, policy director for the Medicare Rights Center.
But Weems said the rule also gives the Centers for Medicare and Medicaid Services authority to issue fines of up to $ 25, 000 per beneficiary affected by the company’s conduct. Before, the fine was $ 25, 000 per contract.
Several provisions in the new regulations already make up part of voluntary guidelines for the industry. But Medicare in some area went beyond what the insurance industry sought. For example, insurers routinely sent brochures in the mail explaining a product to a potential customer. Then agents would call to make sure they got the brochure. The proposed rule would bar them from making those calls.
Also, insurance agents commonly used their meetings about the drug benefit to pitch such other kinds of products as long-term care insurance or disability insurance.
The regulation would prevent them from doing so unless the agent cleared it with the potential customer before the meeting.
Karen Ignagni, president of America’s Health Insurance Plans, said the rule would prevent agents from marketing at health fairs or anywhere else where health care is delivered.
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