Thursday, October 13, 2005

Open season on people with Medicare

From Suddenly Senior

ACT NOW: State Attorney Generals Must Step Forward to Protect Consumers


October 13, 2005 . Volume 5, Issue 41

It is open season on people with Medicare for companies chasing profit from the new Medicare drug benefit. The companies, large and small, have a key strategic goal as the marketing of hundreds of drug plans blankets the nation: market share.

As consumers struggle to decipher the complex benefit plans being sold by scores of profit-seeking companies, these companies are launching multimillion-dollar campaigns to sell their products. The companies-UnitedHealth, Aetna, Humana, Medco and many more-see billions of dollars of sales at stake.

Even truthful marketing by the companies will not educate consumers on what to do. Marketing, by its nature, emphasizes what will appeal to a prospective buyer. A plan with low premiums will trumpet the premium cost in its marketing; you will have to search hard to find any mention of corresponding excessive prescription copayments.

You will also have to look hard to find any mention of the plans' gaps in coverage-the infamous doughnut holes-in these companies' marketing materials. Wrongly, the federal government is allowing misleading promotional materials to invade the homes of 43 million Americans with Medicare.

Worse yet, the White House and the Centers for Medicare and Medicaid Services (CMS) are playing a role in misleading people with Medicare as well-sometimes by design, sometimes by human error.

The administration just spent millions of taxpayer dollars to distribute an insert in Parade magazine that ran in hundreds of Sunday newspapers across the country. The insert was supposed to describe, in an educational and fair manner, the standard Medicare drug benefit.

However-whoops-the CMS insert neglected to even mention the "doughnut hole"-the nearly $3,000 gap in coverage whereby people will keep paying plan premiums but will receive no assistance paying for their medicine. That is propaganda, not education.

And then there is the mailing of 43 million copies of CMS's annual handbook, Medicare & You. It also contained a huge error, but unlike the purposeful propaganda that has been issued by the administration, it seemed to be an honest error. Still, people will be hurt if they rely on the official advice that low-income people receiving the so-called Extra Help Program's subsidy can sign up for any Part D plan without paying unaffordable premiums.

CMS and other federal agencies should be in the vanguard of protecting people with Medicare from the misrepresentations and fraudulent conduct of the marketplace. Up to now, the Bush administration looks more like an aider and abettor, not a protector from the unscrupulous.

In the months ahead, commission-based insurance brokers will be driving the national campaign to enroll people in the competing drug plans: they will have every financial incentive to maximize enrollment in the plan they are selling. They will have little incentive to help consumers make good choices from the array of confusing benefit options.

CMS, in its zeal to make the Medicare drug market profitable to plan sponsors, left the door wide-open to telemarketing scams. Salespeople working for the insurers have been authorized by CMS to call people with Medicare at home from 8 a.m. to 9 p.m. Even AARP, itself a large sponsor of profitable drug plans, pleaded with the Bush administration to bar telemarketing.

Yes, it will be open season on a vulnerable and often bewildered market of older Americans and those with disabilities. But, hey, there's money to be made.

There will be many good people at CMS, far below the ideological zealotry zone that conceived the convoluted structure of the Medicare drug benefit, who will try to protect people with Medicare from harm. But to trust the political leadership in Washington to choose the people's interest over the commercial interests of the drug and insurance industries is to trust the fox to guard the hen house.

State attorney generals, Republicans and Democrats, must step up as guardians and enforcers of consumer protections. They must shield consumers from misleading promotions, whether in the form of government propaganda, prescription drug plan marketing abuses or outright fraudulent activity.

Click here ( to send a message to Oregon Attorney General Hardy Myers, the chair of the National Association of Attorneys General Consumer Protection Committee.

Medical Record

"With millions of seniors eligible for Medicare's new Prescription Drug Coverage Plan, you can bet the bad actors are waiting to pounce," said National Association of Attorneys General President Steve Carter, Attorney General of Indiana (" President's Message: Medicare Rollout Raises Concerns for Fraud Against Seniors ( ," National Association of Attorneys General, October 2005).

Telemarketing scams are estimated to cheat one out of six consumers every year, costing Americans $40 billion a year. And 80 percent of the time, Americans over 65 are the primary target of these crimes (" Corzine Introduces Legislation to Ban Medicare Rx Telemarketing ( ," Press Release from Office of Senator Jon S. Corzine, September 2005).

Private plan representatives are allowed to make unsolicited phone calls-"cold calls"-but plans must honor the National Do-Not-Call Registry and "do not call again" requests. Private plans are prohibited from making door-to-door sales calls or sending unsolicited e-mails (" Final Part D Marketing Guidelines ( ," Centers for Medicare and Medicaid Services, August 2005).

People with Medicare often make the decision to join Medicare HMOs based on direct sales approaches, advertisements and word-of-mouth, not on a careful comparison of the advantages and disadvantages of enrollment (" Medicare HMO Marketing in the Information Age ( ," Medicare Rights Center, January 1999).

Fast Relief: What You Can Do

Let everyone-your colleagues, friends, families-know how we can improve the Medicare prescription drug benefit for people with Medicare and American taxpayers. Help us build a national network of concerned citizens who want to create the Medicare prescription drug benefit Americans deserve.

Click here ( to help build a national campaign for a real Medicare prescription drug benefit!

(Note from KB: Here's the buzz I keep hearing: if you are an STRS retiree on Medicare, you should NOT sign up for Medicare Part D. The STRS plan is as good as, if not better than, Medicare D. Be sure you do your homework.)
Larry KehresMount Union Collge
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