OKLAHOMA CITY (AP) - Two months ago, Insurance Commissioner Kim Holland was in Washington expressing dismay to a Senate panel that government policies prevented her from protecting elderly Oklahoma consumers from unscrupulous Medicare marketing practices.
Last week, her appearance began to produce results.
Legislation filed by Wisconsin Sen. Herb Kohl, chairman of the Senate Special Committee on Aging, and two other Democratic senators on Thursday would give Holland and insurance commissioners in other states authority to regulate the marketing and sale of Medicare health and prescription drug plans.
The Accountability and Transparency in Medicare Marketing Act of 2007 would also give state insurance commissioners the right to regulate both agents and companies in the marketing and sale of Medicare products.
“It certainly appears to do the thing that we requested, and that's oversight of these products,” said Holland, who testified before Kohl's panel on May 16.
The legislation would give state regulators authority to monitor the activities of Medicare marketers and better protect elderly consumers, she said.
“They're not going to be discriminated against because they're over age 65 and are buying a Medicare product,” Holland said.
The Senate measure is expected to face stiff opposition from a powerful insurance trade organization.
America's Health Insurance Plans, based in Washington, represents insurers nationwide that provide health benefits to eight million Medicare Advantage beneficiaries and millions more enrollees in Medicare prescription drug plans, said spokesman Mohit Ghose.
“This is a federal program where we do not want to see 50 different types of regulatory initiatives on the same issue,” Ghose said.
Currently, states are largely pre-empted from regulating the marketing and sales of Medicare health and prescription drug plans. That responsibility falls primarily on the Centers for Medicare and Medicaid Services, a federal agency.
But Holland and insurance commissioners from Wisconsin and Georgia complained to Kohl's committee that the agency's marketing guidelines and enforcement activity are inadequate. Almost 500,000 Oklahomans are enrolled in Medicare Part D or Medicare Advantage programs but CMS has no employees in the state, according to state regulators.
Testimony before Kohl's committee revealed some seniors were removed from traditional Medicare without their knowledge, signed up for plans they could not afford and were misled regarding which hospitals accept the plan.
Holland's agency conducted a market examination of Humana Insurance Co., the second largest marketer of private health plans to Medicare recipients in the nation, after receiving numerous reports of insurance agents enrolling beneficiaries in Humana products that they did not understand and did not want.
The investigation found that the company accepted business from 68 agents who were not licensed to sell insurance in the state. Holland's office ordered Humana to take corrective action to better protect consumers from high-pressure sales tactics.
Officials at Louisville, Ky.,-based Humana said the company implemented a number of remedial steps, including upgrading the company's telephone referral system to assure that calls from Oklahoma Medicare recipients are routed to agents licensed in the state.
Humana spokesman Dick Brown said the company had voluntarily stopped marketing so-called private-fee-for-service plans until officials are sure “that we have everything ship-shape.”
“By and large, the agent community are made up of professionals who do care about their clients,” Holland said. “For the most part, insurance companies want the same things that we want.
“The bad apples in the bunch are making everybody else look bad.”
Regulators like Holland are not the only entities working with Kohl's committee on the Medicare issue. Ghose said AHIP's board of directors launched an initiative to protect beneficiaries in mid-May, contemporaneous with Holland's testimony before the committee.
“The marketing issue needed to be handled as expeditiously as possible,” Ghose said. “We have worked very hard to insure that Medicare beneficiaries understand that our members are working to provide them with the clearest and most actionable information so that they can make the coverage decision that suits them best.”
He said guidelines imposed by the trade group go beyond CMS requirements.
“A vast majority of agents and brokers adhere to the highest ethical standards,” Ghose said. He said the group wants to assure that all brokers and agents are accountable for meeting strict standards in marketing practices.
“No marketing abuses will be tolerated,” Ghose said.
But the insurance group opposes efforts sought by Holland to authorize state regulators to oversee the marketing and sale of Medicare plans.
“We can insure that beneficiaries are protected without going to 50 different state laws in this area,” he said.
Holland, a Democrat elected to her first full four-year term last fall, said she believes the Medicare marketing legislation has strong support and will eventually be approved by the Democrat-controlled Congress.
“In some form or fashion it stands a pretty good chance,” she said. “The problems are complex. It causes confusion. There's a pretty strong sentiment to make some changes.”