| Releases & Statements
Public Advocate Betsy Gotbaum released
a report Misleading Marketing: How HMOs Lure Medicare Beneficiaries
today alerting the public to misleading advertising used to induce
seniors and other Medicare recipients to sign up for Health Maintenance
Organizations (HMOs) that can appear to offer more than they deliver.
“Medicare recipients need to
be on the look-out for health insurance companies offering plans
that sound too good to be true. Some HMOs make incomplete and
misleading claims about their offerings,” said Gotbaum.
She noted that because HMOs are currently rolling out their marketing
campaigns for the Medicare Part D prescription drug benefit, and
because of the impending “lock-in” rule, which will
prevent beneficiaries from switching plans, misleading advertising
may pose a more significant threat to the Medicare population
than ever before.
Currently, 24.2 percent of Medicare
beneficiaries in New York City are enrolled in private “Medicare
Advantage” plans instead of traditional Medicare. The majority
of Medicare Advantage plans offered in New York City are HMOs.
Gotbaum’s primary concern with
marketing conducted by some HMOs is that Medicare beneficiaries
may not understand network-based models of care or may be given
the impression that HMO coverage is free or cheaper than traditional
Medicare.
Gotbaum’s report identified
the following misleading and/or incomplete claims used by HMOs
to lure Medicare recipients to sign up for coverage:
• “$0 Premium” Promise
Many of the plan materials reviewed boast a $0 premium. This claim
can be misleading given that individuals must continue to pay
their Medicare Part B premiums. Advertisements by several companies
(Empire, Healthfirst, Oxford, Elderplan, and Aetna) make no mention
of the fact that beneficiaries must continue to pay the monthly
$78.20 premium for Medicare Part B.
• “Unlimited generic and
brand name prescription drug coverage” Promise
Consumers must be wary of promises of unlimited generic and brand
name drug coverage. Most HMOs cover only those medications listed
on a formulary or preferred drug lists. Beneficiaries may be lured
by the “unlimited” claim and may not understand applicable
limitations.
• “More benefits than Original Medicare” Promise
Plans that claim to offer more than original Medicare may in fact
provide additional benefits such as dental services, prescription
drugs or others. Consumers, however, must understand that these
added benefits come at a cost—namely, the freedom to use
the doctors and hospitals of one’s choice. A number of plans
were found to make “more than” claims including Aetna
(“More Benefits Than Original Medicare”), Touchstone
(“More Comprehensive Coverage than what Medicare offers”)
and Oxford (“Offers More than Traditional Medicare”).
• “WellCare Pays Your
Part B Premium for You”
A recent ad for WellCare’s Medicare Advantage plan states
that WellCare will pay beneficiaries’ Part B premiums, yet
benefit information obtained from the company indicates that enrollees
must continue to pay their $78.20 towards Part B and wait to be
reimbursed the amount.
Gotbaum’s report also alerts
New Yorkers to the tactics used by salespeople for these HMOs.
Senior citizens and others may be lured by the promise of a free
breakfast at a local diner advertised in a community newspaper.
One of Gotbaum’s staffers recently attended one such seminar
(run by Oxford) and observed questionable tactics on the part
of the sales representative. The salesperson discussed plan benefits
and co-payments but did not fully disclose limitations, such as
the plan’s drug formulary.
Gotbaum offers several recommendations to help Medicare beneficiaries
to navigate the system, especially in light of the Part D program.
They include:
• Individuals must become aware
of false or misleading claims. For help in evaluating plan options,
seniors can call the Medicare Rights Center HIICAP (Health Insurance
Information Counseling & Assistance Program) at 800-333-4114
or the Department for the Aging HIICAP at 212-333-5511.
• The Centers for Medicare and
Medicaid Services (CMS) must develop more stringent standards
governing Medicare Managed Care marketing materials.
• CMS should reconsider the
“lock-in” rule set to take effect next year. This
rule is intended to prevent individuals from jumping from plan
to plan, but enrollees can experience serious harm when stuck
in HMO plans that do not meet their needs or are otherwise problematic.
Beneficiaries with just cause must be permitted to switch plans
as necessary. Such protection is particularly important given
the vulnerability of the Medicare population and the confusion
surrounding the new Part D drug benefit.
The report also called into question
tactics used by an Oxford sales representative at a recent breakfast
seminar. Gotbaum called upon Oxford and any other company hosting
such seminars to be candid about all limitations associated with
their plans.
Gotbaum also wrote letters to several parties directly involved
in the marketing process: CMS as well as to the seven HMOs identified
in the report. In her letter to CMS Administrator Dr. Mark B.
McClellan, Gotbaum asked him to reconsider the “lock-in”
rule, to develop more stringent standards governing marketing
materials, and to block HMOs from awarding sales representatives
a commission until an individual has been enrolled in a plan for
a specific amount of time.
In a letter to Oxford’s Chief
Executive Officer Charles Berg, Gotbaum asked that the company
reconsider the use of potentially misleading advertisements and
exercise discretion when targeting the Medicare audience.
-#-
|
