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Insurance Companies Pledge Medicare Marketing Reforms

June 18, 2007
After a stern admonishment by Congress, seven of the largest U.S. health insurance companies have promised to stop misleading marketing practices for private Medicare plans. The companies had been accused of abusive tactics aimed at signing up seniors.

The companies all said they will temporarily suspend sales of these plans will they draft new marketing guidelines, in cooperation with the Centers for Medicare and Medicaid services. They will resume sales once the new guidelines are in place.

In May, the Senate Special Committee on Aging heard testimony about the growing number of complaints about Medicare Advantage Plans offered by private health insurance companies. Some consumers complained that agents had engaged in abusive sales tactics, and even fraud, to sign up participants.

Investigators for the state of Georgia say they have uncovered hundreds of complaints and documented at least 15 improper sales practices in the marketing of these plans.

Investigators have reported agents who enrolled dead people using information taken from Medicare records. Others reportedly told potential clients that Medicare was going out of business and forged signatures on enrollment forms.

Senate investigators say they have found examples of improper sales practices in at least 39 states. In some cases, they report, aggressive sales tactics driven by unusually high commissions have resulted in both civil and criminal cases, causing damage to a program that has been offered as a blueprint for overhauling Medicare.

The companies suspending sales of the private Medicare plans are Humana, UnitedHealth, Wellcare Health Plans Inc., Universal American Financial Corp., Coventry Health Care Inc., Blue Cross/Blue Shield of Tennessee, and Sterling Life Insurance, a subsidiary of Aon Corp.

Some members of Congress have proposed cutting payments for Medicare Advantage, which costs more than government- administered Medicare benefits.

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