WASHINGTON – Advocacy groups are applauding Rep. Pete Stark’s (D-Calif.) proposal to protect Medicare beneficiaries from marketing practices that he deems “propaganda.”
Stark, chairman of the health subcommittee of the House Ways and Means Committee, introduced the Medicare Advantage Truth in Advertising Act in late June to prevent Medicare Advantage plans from charging seniors and people with disabilities more than traditional fee-for-service Medicare for any service.
Judith Stein, executive director for the Center for Medicare Advocacy, said Stark’s Act “goes a long way as long as there are private plans making a profit” off of Medicare.
“This experiment with private plans has failed,” she said. “The extraordinary power of industry interests has been far greater than the interests of the taxpayers and beneficiaries.”
Bill Vaughan, senior policy analyst for the Consumers Union, said Stark’s Act is a “big step forward” in addressing problems with Medicare Advantage plans. “We need some standardization of benefit packages so more consumers can make better decisions,” he said.
Vaughan said Medicare Advantage plans have inherent flaws, including high commissions, which encourage private plans to be more aggressive in marketing to a population that is prone to various ailments, such as dementia, that can affect decision-making.
While Robert Hayes, president of the Medicare Rights Center, called Stark’s proposal a “solid piece of legislation” that would significantly reduce some of the common abuses, it doesn’t address the fundamental flaws – uncertainties and complex benefit practices – of the Medicare Advantage plans.
Still, Hayes said he’s encouraged by the political heat on President Bush and health plans and the Congressional attention that’s being focused on the issue.
Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare, said her organization is advocating the elimination of government overpayments to Medicare Advantage plans.
While insurance company lobbying has stifled political action, she said, “We believe Rep. Stark’s approach to rein in some of the more egregious plan abuses will achieve the same goal.”
Kennelly emphasized that marketing abuses are symptoms of the larger problem of overpayments. “As we have seen in many other areas, if the profit margins are high enough, there aren’t enough enforcers in the world to stop abusive practices,” she said.
“This is particularly true in this case, where the process essentially relies on the Medicare Advantage plans to develop their own benchmarks for what is abusive marketing and then police themselves,” she said. “It’s hard to imagine a more classic example of the fox guarding the hen house.”