February 11, 2007


WITH THE LEGISLATURE IN SESSION HERE IN Washington state, my part-time job with the advocacy journal has become momentarily full-time (never mind the fact my pay remains the same miserly sum), and I have simply not had an opportunity during the past week to do any contemplative writing, for which I nevertheless apologize.

Meanwhile, though, here’s something definitely worth contemplating: an analysis by the Medicare Rights Center of how the two parties structured the Medicare Prescription Drug Lord Benefit to do just what the Democrats, the Republicans and their corporate overlords intended:

The confusing array of private plan options for drug and medical coverage can make people with Medicare vulnerable to deception and bullying by unscrupulous insurance agents. Sales reps looking to maximize the commissions they receive from insurance companies often target frail older adults, people with cognitive disabilities and the poor and sick who are worried about paying their medical bills.

It is not enough, however, just to find the bad apples among the brokers and agents. If we follow the money trail, it becomes clear that the abuses are a direct result of marketing strategies and commission structure developed by the insurance companies, the lack of adequate oversight exercised by the federal government and the rulebook rigged up by Congress.

Insurance companies typically pay brokers about $500 for every person they enroll in a Medicare Advantage plan offering both medical and drug coverage, more than five times the commission they pay for signing someone up for a plan that just covers drugs and allows the individual to stay in Original Medicare. As a result, counselors across the country last year answered thousands of calls from individuals who found themselves in a Medicare Advantage plan when they thought they were signing up just for drug coverage. These individuals were often saddled with high medical bills when they discovered their doctors would not accept their new plan, or the plan imposed high cost sharing for major medical expenses.

Each Medicare Advantage enrollee generates thousands of dollars in additional taxpayer-funded subsidies for the insurance company offering the plan. The marketing abuses continue because the Centers for Medicare & Medicaid Services (CMS) allows the insurance companies to use higher commissions to steer people with Medicare to these plans, whether or not they are well suited to their financial or health care needs. Neither the insurance companies nor CMS ensures that brokers and agents adequately and honestly explain these plans to consumers.

Of all the Medicare Advantage plans, private fee-for-service plans are the ones most subject to aggressive and deceptive marketing. Typically, agents will tell prospective customers that “all doctors take this plan” or say it is just like Original Medicare. Neither claim is true. The reason insurance companies push private fee-for-service plans so hard is simple: they generate the largest subsidies from Medicare thanks to the payment plan devised by Congress.

In a backroom deal enacted late last year, Congress gave the insurance companies offering private fee-for-service plans another favor, allowing them to sign up any person with Medicare into these plans at any time during the year. That means millions more people with Medicare will be cajoled and hoodwinked into joining these plans, and taxpayers will shell out millions more in subsidies to these plans. The author of this provision was then-House Speaker Dennis Hastert, Republican of Illinois. He may have been repaying a favor. Aon Corporation, one of the largest purveyors of private fee-for-service plans, gave nearly $20,000 to his 2006 campaign.

It is time for the new Congress to do people with Medicare and taxpayers a favor. Congress should lift lock-in, which keeps people with Medicare stuck in a Medicare Advantage or drug plan for the whole year, even if it fails to meet their needs. It should stop overpayments to Medicare Advantage plans, and private fee-for-service plans in particular. Congress should take back the special favor it granted Aon Corporation and other companies pushing private-fee-for-service plans. Finally, Congress needs to hold hearings on these marketing abuses and enact legislation that holds both sales agents and insurance companies accountable and protects their constituents with Medicare.

And don’t let the liars tell you, “O that’s why it’s so important we elect Democrats.” In the original 2003 roll-call on the Prescription Drug Lord Benefit, only 11 of the Senate’s 48 Democrats dared vote no. Despite prophetically vehement protests from advocates for those of us who are elderly or disabled, the remainder of the Democrats -- 37 total (including two who couldn’t be bothered to vote) -- gave us all the metaphorical finger, serving the corporate fat-cats by smugly savaging anyone dependent on Medicare. And though some Democrats later changed their votes (when an amended version of the Prescription Drug Lord Benefit came up for approval a few months later), the apparent flip-flop was nothing more than an increasingly commonplace deception: the initial vote guaranteed the measure’s enactment, and thus the damage was already done.

Posted by Loren at February 11, 2007 04:22 PM | TrackBack