CMA Health Policy Blog

Medicare Private Insurance Companies Are At It Again

September 22, 2009 at 8:01 pm meshepard Leave a comment

Late last week Humana, one of the largest private insurance companies offering Medicare Advantage and prescription drug plans under Medicare, sent a letter to the Medicare beneficiaries enrolled in their HMOs and other Medicare Advantage plans.  The outside envelope warned that the letter contained important information about their Medicare benefits.  The letter itself said that Congress was considering cuts to Medicare in its health care reform legislation, these cuts would result in reduced benefits for Humana plan enrollees, and enrollees should contact their members of Congress to protest the cuts.

This is not the first time that private Medicare plans have written their enrollees with misinformation about alleged Medicare cuts.  The Center for Medicare Advocacy and a number of other beneficiary organizations have been concerned for years about these kinds of mailings by private Medicare plans.  We recently asked CMS to modify its guidance to private Medicare plans in order to specifically identify these communications as marketing materials,  which are subject to CMS oversight and review.  We said in our comments:

We are very concerned about plan sponsors soliciting their enrollees to join “grassroots” efforts to influence Medicare policy via member newsletters and other means. …We believe there should be a prohibition on plan sponsors soliciting members’ participation in political activities, particularly those that benefit the plan sponsor, and urge CMS to analyze whether such activity already violates current law.

CMS did not amend its guidance to plans per our suggestion, but it did take swift action against Humana.  CMS sent a letter to Humana yesterday telling the organization to stop sending misleading and confusing communications, and that it believed such communications are potentially contrary to federal regulations and guidance.  CMS further advised that the agency takes this matter very seriously and could pursue compliance and enforcement actions.  CMS also sent a comparable memo to all private insurance companies telling them not to send similar communications.

We thank CMS for acting so swiftly to curb misleading and confusing communications to people in their Medicare plans.  While we are pleased that the government is exercising its oversight and enforcement authority, we see this incident as another example of how reliance on private insurance companies can generate confusion and fear for Medicare beneficiaries. This happens because the interests of private Medicare plans are not always in accord with the interests of Medicare beneficiaries.

Entry filed under: Medicare, Public vs. Private Health Coverage.