Stanley Feld M.D.,FACP,MACE

“The Bush administration proposed on Thursday to crack down on the aggressive marketing of private Medicare insurance plans by outlawing unsolicited visits and telephone calls to beneficiaries, regulating commissions paid to sales agents and increasing the fines that could be imposed on insurers.”

If Medicare insurance coverage loses money why would an insurance company go after the Medicare business?

My answer is that Medicare doesn’t loss money. The government losses money by paying the healthcare insurance industry high fees to administer Medicare. I believe these fees are non discoverable in the context of the billing and reimbursement process.

Medicare Advantage is the private Medicare Plans sold by the healthcare insurance industry. The healthcare insurance industry has used high-pressure sales tactics led some people to sign up for unsuitable Medicare policies.

The government does not have the authority or manpower to regulate marketing of Medicare Advantage coverage. The Bush administration’s view is “states should not have the authority to regulate the marketing” of private Medicare plans. Doesn’t the Bush administration position on state authority sound smart?
It is a good thing we have freedom of speech and the press in America. It is a good thing we have the right to have political action groups. Political action groups have the ability to educate citizens and increase awareness about problems we face.

Paul Precht, policy director of the Medicare Rights Center, a group that counsels beneficiaries, said: “We need Congress to give the states a greater role in enforcement. The federal government does not have the manpower.”

The problems are door-to-door marketing of private Medicare plans, outright solicitations in parking lots as well as solicitations at free lunches.

The America’s Health Insurance Plans always welcomes new proposals and rules but say the proposals or rules goes too far.

Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, said she welcomed the proposals, though they go further than the industry had recommended in a few areas like cold calls.

The healthcare insurance industry has been marketing Medicare Advantage Plans by offering food and faulty healthcare coverage through misleading advertising. There will be no more “Have Lunch on Us!” fliers.
However, the fines proposed are less than the financial benefit derived by the healthcare insurance industry. The fines will probably not be a deterrent to abuse because of the government will be unable to enforce the rules.

Another important abuse is policy switching. Insurance agents’ commissions increase by policy switching.
The responsibility of the government is to educate the buyer to beware. The responsibility of the buyer is to beware of the tactics and abuse of the healthcare insurance industry.

Many carriers now pay higher commissions in the first year. Some pay only for the first year, with no commission in later years. This creates a “financial incentive for agents to encourage beneficiaries to change plans each year,” the administration said.

A $200 fee in addition to your Medicare premium payment increase the total cost of healthcare coverage. Medicare Advantage plans are healthcare plans offer patients private insurance. However, it appear that the coverage is not much different than traditional Medicare insurance. The government relinquishes most of its control over the reimbursement payment system to the healthcare insurance industry.

The National Association of Healthcare Underwriters issue the same “yes,but” statements as the America’s Health Insurance Plans.

Jessica F. Waltman, a vice president of the National Association of Health Underwriters, which represents agents and brokers, said, “We agree that insurers should eliminate financial incentives for agents to make quick sales and shift beneficiaries from one plan to another without regard to their health care needs.”
But, Ms. Waltman added, small differences in commissions in the first and subsequent years may be justified.

Uwe Reinhardt said physicians receive 20% of healthcare expenditures and 50% of that 20% goes for overhead.

Where does the other 80% go? When healthcare policy makers speak of healthcare reform they should remember that 80% of the Medicare dollars are used to pay the private healthcare insurance companies administrative fees and hospital charges. The majority of the money is not spent to pay physicians.  They should think twice before destroying the infrastructure that delivers medical care (physicians) to our senior citizens by constantly decreasing physicians’ reimbursement. The healthcare policy makers should concentrate on how to reduce 80% of the Medicare dollars spent on other non value added services.