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Senate Eyes Medicare Advantage Marketing Abuses

May 18, 2007
The Senate Special Committee on Aging is looking into a growing number of complaints about Medicare Advantage Plans, private health insurance packages offered to seniors as an alternative to Medicare.

Consumers have complained that some agents have 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.

At a committee hearing Wednesday, Wisconsin Insurance Commissioner Sean Dilweg testified that 37 out of 43 states that participated in a recent survey reported complaints about Medicare Advantage plan sales agents and their confusing or misleading marketing practices.

“In the most troubling of these cases, unscrupulous agents have enrolled beneficiaries with dementia into an inappropriate plan,” Dilweg said. “Seniors are being told that they can go to any provider without being told that they may only go to a provider that accepts Medicare, and also a provider that has agreed to accept the plan's payments.”

“Unlicensed agents are setting up shop in pharmacies, Wal-Marts and nursing home lobbies to prey upon seniors' confusion and concern over their medical care coverage,” Oklahoma Insurance Commissioner Kim Holland testified.”

Holland described the situation in Oklahoma as “virtual lawlessness,” and blamed a lack of federal oversight and enforcement.

Committee Chairman Herb Kohl (D-WI) called the situation “clearly unacceptable” and said the committee would draft legislation to address the abusive and fraudulent tactics.

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