July 18, 2019

Insurance bill adds security Law seeks to protect elderly from hard sell

AUGUSTA – As if the Medicare Part D prescription drug benefit weren’t complicated enough, unscrupulous insurance agents sometimes take advantage of bewildered senior citizens to unload other, unnecessary insurance coverage, a legislative committee was told Tuesday.

Rep. Sharon Treat, D-Farmingdale, told members of the Insurance and Financial Services Committee that Maine law must protect vulnerable elderly residents against health insurance “sales tactics that are confusing and potentially coercive.”

Her bill, LD 416, would define certain insurance marketing practices as unfair trade practices, punishable by financial penalties.

According to a recent study by the private nonprofit Medicare Rights Center, conducted jointly with California Health Advocates, consumers interested in Medicare Part D coverage are being tricked and pressured into purchasing a variety of inappropriate and unaffordable products, including unneeded supplementary Medicare coverage, private coverage not accepted by their local providers, long-term care insurance and property insurance.

Medicare Advantage plans offered by private companies have been pushed especially hard, the study reports.

“Insurance companies typically pay brokers about $500 for every person they enroll in a Medicare Advantage plan offering both medical and drug coverage, more than five times the commission they pay for signing someone up for a plan that just covers drugs and allows the individual to stay in original Medicare,” says the study, titled “After the Goldrush: The Marketing of Medicare Advantage and Part D Plans.”

“As a result, counselors across the country last year answered thousands of calls from individuals who found themselves in a Medicare Advantage plan when they thought they were signing up just for drug coverage. These individuals were often saddled with high medical bills when they discovered their doctors would not accept their new plan, or the plan imposed high cost sharing for major medical expenses.”

Some consumers also have been duped into buying financial services and other products they don’t want or need, according to the report. Treat’s bill would protect consumers by making it illegal for an insurance company or agent to sell, solicit or negotiate the purchase of health insurance by “cold lead advertising,” that is, failing to disclose clearly the purpose of a telephone, mail or door-to-door sales call.

It also would specifically prohibit agents who are talking with potential customers about Medicare from discussing other types of insurance products during the same appointment.

While federal law offers some protections against such practices, Treat said, having a Maine law on the books would make them easier to enforce.

She noted that the elderly and disabled are especially vulnerable to trusting “expert” agents who offer what seems like a simple solution to the complexities of selecting the right Medicare Part D plan. Low-income individuals who are eligible for both Medicare and Medicaid are at even higher risk of being scammed, she said, since they are allowed to switch Medicare Part D plans every month, while other enrollees may switch only once a year.

Treat’s bill, which was submitted at the request of the Maine Bureau of Insurance, has the support of a number of consumer groups, including Legal Services for the Elderly and AARP.

Betsy Cantrell of AARP told committee members Tuesday that unethical insurance sales are a form of elder abuse and urged them to protect consumers.

“I’ve heard many horror stories,” she said.

The only testimony in opposition to the measure came from lobbyist Daniel Bernier, representing the Maine Insurance Agency Association and the National Association of Insurance and Financial Advisors. Bernier said his clients support the “cold lead” portion of the bill and even had suggestions for strengthening it.

But he argued that a broad prohibition against discussing other kinds of insurance during a Medicare sales appointment is too limiting and possibly could incur charges of malpractice against the agent.

The bill will be fine-tuned during a work session scheduled for Thursday.

For more information about the report from the Medicare Rights Center study, visit www.medicarerights.org/policyframeset.html.

Senior citizens with concerns about the marketing of Medicare Part D or other health insurance products are urged to contact the “Check It Out” program at their local Agency on Aging by calling toll-free (800) ELDERS1.

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