Medicare Advantage sales tactics draw fire as Senate panel investigates

Lawmakers consider taking further action to regulate Medicare private health plans.

By Doug Trapp, AMNews staff. Feb. 25, 2008.

Washington -- Ongoing consumer complaints about misleading sales pitches for private Medicare health plans have spurred a powerful Senate committee to scrutinize their marketing practices and prompted calls for legislation. The problems have continued despite Centers for Medicare & Medicaid Services efforts to curb abuses.

The Senate Finance Committee since January has held three hearings about the marketing, costs and regulation of the plans.

"I know there are good companies and good, honest agents out there, but the system still allows for predatory marketing, and we have no room for this type of fleecing of America's seniors," said the panel's chair, Sen. Max Baucus (D, Mont.). He intends to offer legislation to address the problems.

Many physicians and consumer advocates are wary of the health plans, especially private fee-for-service products, which continue to see strong enrollment growth. They welcomed the committee's effort.

"Reports of marketing and sales abuses by Medicare Advantage plans are cause for alarm, and the Senate is doing the right thing by investigating the issue," said Edward L. Langston, MD, chair of the American Medical Association Board of Trustees.

One major concern is insurance companies' use of independent brokers and agents to sell private Medicare plans. When consumers want to complain about misleading marketing practices, they get stuck between the two, said Michael McRaith, director of the Illinois Division of Insurance. He testified on behalf of the National Assn. of Insurance Commissioners.