Consumers Deceived By Medicare Private Health Plans Are Free To Leave Plans, USA

Main Category: Medicare / Medicaid / SCHIP
Article Date: 09 Aug 2007 - 1:00 PDT

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People in private Medicare health plans can disenroll from their plans if they signed up after receiving misleading information, according to the Centers on Medicare and Medicaid Services (CMS).

To date, neither CMS nor the insurance companies that operate Medicare private health plans have informed people enrolled in these plans that they can leave if they were duped into signing up. CMS has received thousands of consumer complaints about unscrupulous and aggressive sales tactics and seven companies have suspended marketing of their private fee-for-service plans.

"We applaud CMS for acknowledging the fraudulent marketing activities of private plans, but our concern now is righting the wrong," said Robert M. Hayes, president of the Medicare Rights Center, a national consumer service group.

"While CMS informed their own hotline operators that Americans with Medicare have the right to leave plans they were tricked into joining, most consumers remain in the dark about their right to change their Medicare coverage. What good is a new disenrollment period, if no one knows about it or how it works?"

The new right is known as the "exceptional circumstance special enrollment period" (SEP). Under CMS rules, most plan members are locked into their plans after March 31 for the rest of the year. More than 8 million people with Medicare are enrolled in Medicare private health plans this year.

The Medicare Rights Center requested details from CMS on how the SEP works because no official guidance about required time frames or other specifics has been released, other than a one-paragraph notice sent in June to State Health Insurance Assistance Programs (SHIPs), which counsel people with Medicare. CMS responded by providing the Medicare Rights Center with a summary of a script used by Medicare's hotline customer service representatives. After CMS sent this summary, last month it sent a one-page memo about the SEP to private health plans and other organizations.

According to CMS, plan members can find out if they can change their coverage by calling the 800-MEDICARE hotline. Further information obtained from CMS by the Medicare Rights Center says that they should provide as much detail as possible about the misleading information they were given, including, for example, the name of the person who provided the wrong information, along with the date and time. Documentation is not necessary.

Claims of misleading information can be made whenever the plan member discovers that a promised benefit is in fact not available. Staff at CMS regional offices will handle these claims "with a high priority," the summary states, but does not explain how long the disenrollment process should take.

The summary provided to the Medicare Rights Center also describes several examples of misinformation that would entitle the member to switch to a different plan. If the member was told that:

-- all health care providers participate in the plan when they do not;
-- incorrect assurance that they can transfer to traditional Medicare at any time;
-- other misleading information intended to convince an individual to enroll.

The new plan would begin the month after the member cancels the old plan or disenrollment can be retroactive. With retroactive disenrollment, the new plan would cover past bills that the previous plan did not, and begins the same day the previous plan took effect.

A copy of the CMS summary, entitled "New Exceptional Circumstance SEP Based on Incorrect or Misleading Information," is available online at http://www.medicarerights.org/TkptsMASEPScript.pdf and the memo to private health plan sponsors is available here.

Medicare Rights Center (MRC) is the largest independent source of Medicare information and assistance in the United States. Founded in 1989, MRC helps older adults and people with disabilities get high-quality, affordable health care.

http://www.medicarerights.org

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