July 10, 2008
Congress Passes Cuts To Private Medicare
Private Medicare Plans Dogged By Insurance Agents Who Cheat Seniors
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(AP)
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Yesterday the Senate voted to cut payments to private Medicare plans known as Medicare Advantage. The savings will be used to avert a proposed cut in reimbursements to doctors who treat seniors on Medicare. The bill heads to the President’s desk later today where it may be vetoed.
Last year in a series called Medicare Dis-advantage. CBS News dug into the high costs of the program and exposed fraudulent sales practices.
About 20% of Medicare recipients choose privately run Medicare Advantage programs.
Critics of Medicare Advantage cite a recent report from the Government Accountability Office that shows seniors on Medicare Advantage often pay more money for their care. And critics add, it’s not just seniors who pay more, it’s also taxpayers.
Some private companies are paid between 12 and 19% more than it would cost the federal government to run Medicare. Without cuts, these “overpayments” will cost taxpayers up to $54 billion over the next five years according to the non-partisan Congressional Budget Office.
Opponents of the cuts, specifically the health insurance industry, point to an estimate by Congressional budgeters that if the cuts go through, seniors will feel the pinch. “More than two million seniors across the country stand to lose their Medicare Advantage benefits if these cuts become law,” said Karen Ignani of American Health Insurance Plans. Supporters like Ignani tout the extra services that some seniors can access through privately run Medicare plans.
But Medicare Advantage has also been dogged by insurance agents who cheat seniors.
When we aired our story, the Centers for Medicare and Medicaid Services (CMS) told CBS News that voluntary agreements by the insurance industry would curtail these fraudulent sales practices by insurance agents. But that appears not to be the case.
Just last month Senator Claire McCaskill brought the Senate Special Committee on Aging to her homestate of Missouri to hold a hearing on predatory sales practices. They heard testimony from seniors who said they were conned by shady insurance agents.
At the hearing, Senate staff played recordings of telemarketers pitching special needs Medicare plans that are aimed at the chronically ill and prove to be more lucrative to insurance agents.
The seniors on the calls asked tough questions like, “What is my advantage in all of this?” But the telemarketer sets up the appointment and is pleased to find a senior who might need the special needs plan. After the senior says goodbye, the telemarketer is recorded as saying, “She’s like, 'I do have a kinda breathing problem and I’m prescribed this blah blah blah' and I’m like, ‘perfect.’ Perfect.”
By Laura Strickler
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