Health Care For America Now

The new revelation about fake letters to the editor from a public relations firm hired by America’s Health Insurance Plans (AHIP) is nothing new in the world of health insurance. In fact, when it comes to Medicare Advantage, the insurers have engaged in much more devious schemes to take advantage of elderly people to increase their bottom line.

This profile in the Huffington Post shows how one man in Washington, DC was deceived into signing up for a plan that was more expensive than his regular Medicare plan, and didn’t cover all his medical needs:

The next time Smith went to his pharmacy, he was told he was no longer covered. When he went to Howard University Hospital for a colon cancer procedure, he was told the same thing. His wife sent him to the local Legal Aid Society of the District of Columbia.

The woman who'd knocked was a sales rep from EverCare ("We care about healthcare"), a company that sells Medicare Advantage plans, which are privately run and can be more expansive - with vision and dental coverage - but have a smaller network of providers that participate. In practice, the extra vision and dental coverage is often of negligible benefit and doesn't outweigh what's lost by leaving traditional Medicare - but it looks good at first.

This was not an isolated incident. It turns out that there was a plague of deception on the part of the Medicare Advantage sales representatives with a variety of companies. In an series of stories, Avram Goldstein of Bloomberg News, reported that many incidents were uncovered in Congressional hearing last year:

June 26, 2008 (Bloomberg) Residents of Judiciary House, a residence for the elderly in Washington, testified today that Coventry agents misled them in a February sales briefing at their building. Mentally disabled residents were signed up improperly, and some are still trapped in plans that won't pay for visits to their regular doctors, they said.

. . .

Edith Williams, a multiple sclerosis patient, broke down in tears during the hearing as she described life-threatening problems after she was enrolled without her knowledge in Coventry's Advantage plan. She couldn't fill her regular prescriptions, she said.

August 9, 2008 (Bloomberg) The Centers for Medicare and Medicaid Services received 2,700 complaints between December and May 1 from among more than 8 million Medicare Advantage members.

[Avram Goldstein is currently heading the research department for Health Care for America Now.]

It’s not surprising that they would go to such great lengths to fool people into signing up for these plans. As the Dallas Morning News explains, “the government pays the plans an average of $1,000, or 14 percent, more per beneficiary a year than it would for someone in traditional Medicare.” Medicare Advantage is a huge source of profit for the insurers, but not necessarily a better product for the consumers. The benefits to the companies for the Medicare Advantage programs are significant. Avram Goldstein:

August 27, 2008 (Bloomberg) Medicare, the government health program for the elderly and disabled, will pay Humana and the other Advantage providers $76.3 billion this fiscal year, about $9.2 billion more than traditional coverage would cost, government figures show. . . .

Pete Stark, the California Democrat who chairs the House Ways and Means health subcommittee, last month said Humana was making "huge profits at taxpayers' expense."

While some customers are happy with their plans, there are many who are surprised by how little they cover. Dallas Morning News:

Virginia Leconti of Grand Prairie, Texas, on the other hand, joined a Medicare Advantage plan only to discover that her home health care agency wouldn't accept it. To keep her in-home care, she switched back to traditional Medicare.

"When the plan's salesman visited me, he played up the fact that the policy came with dental and vision benefits at no extra cost," she said. "I just assumed that my home health care was part of the package."

Warner says some health care providers don't take Advantage plans because they don't want to deal with more insurers.

In the end the companies were fined for their deceptive practices. Avram Goldstein:

August 27, 2008 (Bloomberg) — Humana Inc., the second-largest provider of U.S. government-sponsored health plans for the elderly, paid a record fine after Oklahoma regulators said the company used unlicensed agents to sell coverage.

At least 68 unauthorized sales people employed by the Louisville, Kentucky-based company sold Medicare plans to Oklahomans, said Marc Young, a spokesman for the state's Insurance Department. Humana paid a $500,000 fine, the state's largest for an insurance company.

With evidence like this, it is hard to believe that AHIP has the gall to say on their web site, “Join us in working toward an uniquely American solution - Affordable, high quality health care for every American.” With friends like these in health care, who needs enemies?