WASHINGTON – Congressman Bart Stupak (D-MI) today led a U.S. House Energy and Commerce Committee Oversight and Investigations hearing examining the program known as “Medicare Advantage,” which provides private insurance options for Medicare beneficiaries. 
 
“Investigators for our Committee verified countless stories of deceptive sales practices by insurance agents who prey upon the elderly and disabled to sell them expensive and inappropriate private Medicare plans,” Stupak said.  “The public needs to realize that in many cases, signing up for a private, Medicare Advantage plan can disqualify a senior from their traditional Medicare plan.  Sometimes, the private fee for service plans being sold result in reduced coverage and higher out-of-pocket expenses that seniors on a fixed income can not afford.”
 
Stupak, who chairs the Oversight and Investigations Subcommittee, said the Subcommittee discovered instances in which sales representatives from Medicare Advantage plans claimed to be from Medicare, even presenting seniors with a blue, red and white card that resembles a real Medicare Card.  In other instances, sales representatives asked Medicare recipients to fill out a “request for more information form,” when in fact the “request” form is actually an enrollment form for whatever Medicare Advantage plan the agent is selling.  

“In some cases, Medicare Advantage plan representatives tell seniors that ‘Medicare is going private’ to scare them into enrolling into a particular Medicare Advantage plan,” Stupak added. 
 
During today’s hearing, the Subcommittee heard from victims of predatory sales practices, along with state regulators and federal regulators from Center for Medicare and Medicaid Services (CMS). 

“I was astonished to hear from the Deputy Commissioner of Insurance in Mississippi that they have received more complaints about predatory marketing of Medicare Advantage than they have received about Hurricane Katrina,” Stupak noted.  “Meanwhile, a representative from California Health Advocates informed me that while there are 12,000 to 14,000 volunteers, nationally, tasked with helping Medicare recipients navigate the system, there are over 200,000 insurance agents throughout the country pushing Medicare Advantage plans.”

Stupak noted that abuses in the marketing of Medicare Advantage plans can be linked to the complexity in the number of plans available.  

“In Houghton, Michigan, Medicare beneficiaries have 54 Prescription Drug Plans to choose from plus 14 Medicare Advantage plans,” Stupak noted.  “That is nothing compared to other parts of the country.  For instance, in Miami, there are at least 57 Prescription Drug Plans and 55 Medicare Advantage plans available.”

Due to the impending hearing, on June 15th, seven major health insurance companies agreed to stop marketing one type of Medicare Advantage plan, Private Fee for Service Plans, in response to complaints about deceptive sales practices, including forged signatures and the enrollment of dead people.  
 
“As often happens in the process of our investigation - usually just before this Subcommittee holds a hearing - those being investigated make a change in their practices to appear as though they are addressing the problems at hand,” Stupak noted.  “However, I remain concerned that abuses and predatory practices will continue to plague Medicare Advantage marketing.  In the meantime, all seniors, people with disabilities and Medicare recipients should be very careful when approached with Medicare Advantage plans.”

“The financial windfall to the insurance industry attributable to the Medicare Advantage program has been likened to the ‘Gold Rush,’” Stupak concluded.  “The industry and CMS may claim they have ‘zero tolerance’ for deceptive sales practices, but what America’s seniors need is zero abuse.”