People who buy a Medicare supplement to fill the gaps in Medicare (also known as Medigap insurance) go to the doctor too much. Therefore, people who buy Medigap insurance should pay a surcharge to Medicare because they are going to use the health care system too much. That is the conclusion President Obama and his advisers have reached as they seek out ways to reduce Medicare costs and cut government spending. Here is a letter I’m sending to the President.

Dear President Obama:

As an insurance broker working with Medicare-related products, I think your plan to impose a surcharge on seniors who purchase Medicare supplements is a bad idea. You seem to think everyone who buys Medigap insurance has lots of money, and you seem to think most seniors can afford to pay more of their health care costs.

Just yesterday, I met a woman who lives in a double-wide trailer in Tucson, Arizona and is thrilled to be turning 65 so she will once again have health insurance. Laura (not her real name) has numerous health issues that have received limited treatment because she has been without health insurance since she took early retirement from a large, well-known company. Once Laura gets her Medicare coverage, she will get an operation she needs on her thyroid. Then she will address a long list of other medical issues .

Laura makes too much money to qualify for help with her Medicare costs or Part D drug coverage because she has Social Security and a small pension that totals $1,600 per month.  The cost of a Medicare supplement plus a Part D plan premium each month will severely strain her budget, but the co-pays that come with a Medicare Advantage plan could add up to thousands of dollars each year.  Fortunately for Laura, she has a daughter who wants her to get a Medicare supplement and will help with the premiums – even though the daughter doesn’t have a lot of money herself.

Laura’s daughter wants her mother to get a Medigap plan so she won’t have to worry about whether or not she can afford to see a specialist, get the operation she needs, or get physical therapy for her bad knees.  Laura’s daughter has seen her mother suffer with health issues and put off care because she has not had insurance – and she wants that to stop.

Mr. President, I think you are listening to advisers who have no clue about people on Medicare and how many struggle to pay their Medicare supplement premiums or the co-pays that come with Medicare Advantage plans.

In looking over my Medicare supplement client list I see mainly lower-middle class seniors who are conservative about their planning for the future. Most of them are not sickly – they are just planners who have chosen to get the best coverage possible for their future needs. I also have clients like Laura who have serious health problems -  and serious concerns that they will be refused medical treatment in the future because they can’t afford the co-insurance.

What kind of country treats its seniors this way? And how do you calculate how much money each senior can afford to pay – or should pay – for their medical care? If seniors are getting too many tests and too many knee replacements, whose fault is that?  Seniors don’t decide to seek tests and treatment on their own – they listen to their doctors!

Mr. President, the idea of pushing more costs onto seniors is called “consumer-driven heath care”. This is a system where more and more costs are pushed onto patients – so they get to “ration” their own care.  I worked for a large insurance company and this was their mantra. I don’t know if you realize it, but your policies are right out of the insurance industry book – and will push more people into Medicare Advantage plans (which you have campaigned against).

There are other ways to control the Medicare budget without forcing seniors to ration their care based on ability to pay. I ask again, “What kind of country treats its seniors this way?”

Here are a couple of seniors trying to figure out how to use some fancy dancy high-tech thing on their computer.  Actually, they’re trying to  figure out how to take a picture of themselves using the camera that is built into their computer monitor. I’m sure everyone, old and not-so-old, has had a similar experience trying to figure out some new thing on the computer.

Medicare surveillance teams are on the lookout for insurance agents who break the rules for marketing and selling Medicare Advantage and Part D plans. While the “surveillance teams” are gearing up for the upcoming annual election period (October 15 – December 7), CMS (Centers for Medicare and Medicaid) just released its report on last year’s activities.

According to the report, the surveillance program sent secret shoppers to over 1,900 plan-sponsored marketing events during last year’s annual election period (which Medicare calls the “open enrollment period”).

The top states for surveillance activities were Florida with 310 “shops” (meaning secret shopper activities); California with 310 “shops”; New York with 142. Arizona came in fourth with 121 secret shopper activities.

The number of secret shopper activities is related to the number of complaints about agents and the companies that operate in these states. As well, Medicare Advantage is very popular in Florida, California, and Arizona, so I suppose we can expect to get special attention from Medicare during the annual election period/open enrollment period.

From the report, it appears that more attention will be spent this year on “targeted observations” outside retail stores, where agents sit at company-sponsored information booths or tables.

I had been thinking I should write about how agents will be all over the place as of October 1st and how I don’t like the idea of seniors sitting in a noisy store, getting a presentation on a Medicare Advantage plan, and signing up on the spot.  I’m surprised Medicare even allows this.

Agents will be manning tables in Walgreens, Frys, Walmart, and other stores from October 1 to December 7. 

Note to Medicare:  How about companies whose agents are sitting by the door of health care clinics that serve low-income seniors? How is that allowed?

The report mentioned two cases last year in which agents were dismissed by their Medicare Advantage company after they were secret shopped.

From the report:

One agent was using “scare tactics” with potential members entering a local retail store. The agent utilized superlatives in describing the plan sponsor’s products, stated that Medicare was going away and told the beneficiaries they needed to sign up for his plan or they would not have any drug coverage next year.

The other agent was marketing door-to-door at a low income housing complex, using scare tactics in an attempt to get dual eligible individuals to enroll.

According to the report, there will be more secret shopping activity this year, even though problems reported decreased significantly from 2009 to 2010. Insurance agents and brokers have been warned over and over again about the rules for presenting Medicare Advantage and Part D. Agents must present the entire summary of benefits for a plan (40 pages). Agents cannot say things like “this is the best plan”.  There is a long list of do’s and don’ts. Unfortunately there are still a few agents out there who don’t just cut corners – they seriously break the rules by going door-to-door in low-income housing complexes, or making cold calls to seniors, or pressuring seniors to make a decision on the spot.

The  infractions listed in the report were focused on group sales meetings, and the numbers of infractions seemed pretty small to me. 32 problems identified out of 1900 secret shops? That seems like overkill on the group sales event side.  All of these events must be reported to Medicare, so agents can expect to have a secret shopper in the audience monitoring every word they utter.

But does Medicare require Medicare Advantage companies to report to CMS that they are setting up tables in health care clinics for the poor, or the lobby of assisted living facilities? If that’s not against the rules, then Medicare is barking up the wrong tree.