Selling tactics aimed at getting senior citizens to buy Medicare private plans came under attack yesterday in a congressional hearing investigating how sales personnel were handling their responsibility.
Comments by Sen. Charles Grassley (R-Iowa) questioned the loyalty of sales agents to serving customers, charging that they view the sale of such policies as lucrative opportunities to make commissions.
Grassley's comments came at a congressional hearing that began yesterday gathering testimony on the approaches for selling medical coverage to Medicare beneficiaries.
The sales tactics used in selling such plans is again in the spotlight, only seven months after the Centers for Medicare & Medicaid Services took the unusual step of barring seven companies from marketing the private fee-for-service plans to beneficiaries because of questionable sales tactics.
At one point in the hearing, Grassley pointed to a marketing listing on an Internet site that sought to recruit agents to sell Medicare Advantage plans to senior citizens, saying current agents are "making a great living right now."
The plans, promoted by the Bush Administration as a way to offload Medicare coverage from the federal government to the private sector, have come under attack both for the sales approaches and the confusion the plans cause in beneficiaries about what is covered and whether providers will accept participation in the Medicare Advantage plan.
Grassley said he heard from residents in his home state who bought an MA plan but were misled by the sales agent into believing that all physicians accepted the plan's coverage.
"I am hearing that seniors who are perfectly happy with their health coverage are getting a hard sell to change plans," he said. "I am hearing that seniors who asked for Medigap coverage have ended up in a Medicare Advantage plan. They are stunned to find out they're not, usually about the time they receive bills for costs that they thought their 'Medigap' policy covered."
Grassley commended CMS efforts in the past two years to clean up unethical sales practices and "rogue" sales agents, which were not employed or closely monitored by companies offering MA plans. However, the current approach of paying commissions to agents for MA sales injects adverse incentives into the system, Grassley said.
He cited the ad on Craigslist, a popular Internet site for individuals to post items for sales and job situations. One such ad sought to recruit sales personnel to "sign up" senior citizens for the Medicare Advantage program.
"The beauty of this opportunity is that it doesn't costd the recipient anything additional," the ad reads. "All they do is receive additional benefits to their existing Medicare program. It's really NOT a sale! It's a presentation. They sign up, and you get the commission…it's at least $200…and up! The visit can take as little as 45 minutes….so you do the math!"
"This ad tells me that something is wrong with how the agents, and perhaps the plans, are looking to Medicare Advantage," Grassley commented. While many agents provide important counseling to beneficiaries and won't sell inappropriate coverage, "not everyone out there is acting with the beneficiary's best interest in mind."
Grassley also charged he's received reports that agents are misleading beneficiaries by telling them that they're from Medicare or that they need to meet with the beneficiary to explain Medicare's new benefits.