New Service for TodaysSeniorsNetwork.com readers...roll mouse over, click on highlighted links in stories to review items from Amazon

   Now, keep up to date with daily feeds of newly posted stories about America's Seniors...click on the box to the left

Senator McCaskill and seniors listened to an audio tape of aggressive sales tactics used to convince seniors to enroll in special needs plans (listen to audio here and here). 

Is Medicare Advantage helping or hurting seniors? McCaskill Senate hearing in St. Louis reveals problems with insurance plans utilized by 25 percent of local seniors

WASHINGTON, D.C. – Medicare may be aimed at making health care less burdensome for senior citizens, but insurance plans that are allowing seniors to receive Medicare benefits through private companies may be doing the opposite, saddling those who enroll with higher out-of-pocket expenses and reduced services. 

With Medicare Advantage (MA) plans growing rapidly in Missouri and across the country, U.S. Senator Claire McCaskill took a closer look at the program and its reported problems, including aggressive marketing targeting low-income and chronically ill senior citizens.

McCaskill brought to St. Louis Monday the Senate Special Committee on Aging to learn more about the issues surrounding Medicare Advantage in Missouri, including hearing from a local senior, an insurance industry insider, state insurance officials, and others involved in and affected by the program. 

“It’s a dangerous marketing environment. People are worried about their health and their finances from the time they wake up in the morning until they go to bed at night,” McCaskill said.

Medicare Advantage gives seniors more choice by allowing them to receive Medicare benefits through a private company, but the Government Accountability Office (GAO) found in a report released in February that the program frequently costs seniors more out-of-pocket while providing fewer services than traditional Medicare. 

Furthermore, Medicare Advantage plans often require people to drive long distances to receive care, hitting low-income and rural seniors hardest.  Because of federal pre-emption laws there is little the state can do to protect them.

“I think there is a tendency to give companies too much leeway in terms of bad behavior,” McCaskill said.

“It’s like raising kids. When they do something wrong, you say ‘don’t do that again’. Then they do it again and you say ‘don’t do that again’. And you know what? They’re going to do it again because nothing happened.”

Fueled by high profit margins, aggressive sales tactics are commonly seen in the marketing of Medicare Advantage plans. 

Leading up to this hearing, McCaskill’s office received reports from health care providers, the state health insurance assistance program and the MO Department of Insurance that some sales agents are encouraging seniors to enroll in programs that don’t match their needs. 

Marketing materials frequently leave the consumer with the impression that Medicare Advantage plans are part of traditional Medicare or that they need enroll in order to receive their Medicare benefits (see attached marketing examples). 

Inappropriate sales tactics are most egregious in the marketing of special needs plans.  Special needs plans are marketed to the most vulnerable seniors – individuals suffering from chronic and debilitating conditions. 

They are some of the fastest growing plans, with salespeople receiving higher commissions for selling special needs plans, as much as 19 percent.  At the hearing, McCaskill and seniors listened to an audio tape of aggressive sales tactics used to convince seniors to enroll in special needs plans (listen to audio here and here). 

With enrollment in Medicare Advantage plans increasing rapidly, McCaskill says she’s concerned that aggressive marketing will continue or get worse if action is not taken. Medicare Advantage plans have grown over 11 percent nationally in the last six months alone, and many seniors across Missouri are already enrolled in Medicare Advantage programs. 

Twenty-five percent of eligible seniors are enrolled in Medicare Advantage plans in St. Louis City and St. Louis County, while 27 percent in Jackson County and 30 percent in Greene County are enrolled. 

Despite often having higher out-of-pocket expenses and offering more limited services than traditional Medicare, Medicare Advantage plans made $35 billion in profits in 2005. 

On top of that, a GAO report issued just last week said that Medicare Advantage underreported their profits to the Centers for Medicare and Medicaid Services by $1.14 billion.  In addition, about 80% of beneficiaries were enrolled in plans which projected medical expenses greater than their actual medical expenses.

McCaskill pointed out the automatic deception with the use of the word “Medicare” in the title of the program.

She indicated that the association the insurance companies make with the trusted, government entitlement program, Medicare, gives seniors the feeling that they’re switching from one government program to a better government program, when in reality they’re often forgoing their government benefits for private plans that may put them at greater risk.

“Medicare is the green light,” McCaskill said. “There’s not a person in this room who doesn’t get that. There ought to be a law that says you can’t call yourself Medicare if you’re not Medicare.”

In fact, Medicare Advantage plans come at a high price for the government. 

The Medicare Payment Advisory Commission and the Congressional Budget Office say that on average the federal government is paying 12 percent more to allow seniors to receive their healthcare through a Medicare Advantage plan than it would to receive their care through traditional Medicare. 

Some Medicare Advantage plans cost the government as much as 19 percent more than traditional Medicare.  Medicare’s actuary has said that seniors remaining in traditional Medicare programs are subsidizing the Medicare Advantage program.

Congress last week attempted to pass legislation that would have helped prevent predatory sales tactics for Medicare Advantage plans.  McCaskill says she will continue to explore ways to protect seniors and ensure that tax dollars spent on Medicare Advantage programs are not wasted.