According to a press release from Medicare today:

The Centers for Medicare & Medicaid Services (CMS) is investigating an alleged fraudulent scheme to enroll about 900 Arizona Medicare beneficiaries in different Medicare Advantage health plans without their consent.

Under the scheme, Medicare beneficiaries enrolled in Medicare Advantage health plans sponsored by Health Net and two other companies were switched without their consent to Medicare Advantage plans sponsored by United HealthCare. Most, if not all, of the switches are alleged to have been made by the same sales agent. Agents typically receive commissions of about $200 for every new member they enroll in a Medicare Advantage plan. Most of the affected beneficiaries were enrolled with Health Net during 2011, although some were members of Humana and CareMore plans.

CMS advises Medicare beneficiaries who suspect they may have been switched without their permission to call 1-800-MEDICARE (1-800-633-4227) and report their concerns. All affected beneficiaries will be re-enrolled in the plan of their choice with no interruption in medical coverage.

Word on the street is that an independent agent, who previously worked for Health Net, allegedly enrolled 900 current and former clients in the AARP Medicare Complete Medicare Advantage plan.  Allegedly, this agent was able to make these 900 enrollments online using a UnitedHealthcare website.  The website allows Medicare beneficiaries to fill out an application online and put in their insurance agent’s id number so the agent gets credit for the enrollment. But this is only supposed to be done after a meeting with the agent to review the details of the plan, including drug coverage.

I have heard from one insurance broker who got calls from several clients asking why they had received an id card from the AARP Medicare Complete plan when they had no desire to change from Health Net. The broker contacted Health Net and was told there was an ongoing investigation.

It looks like they didn’t have to look very far to find a hot trail of 900 online enrollments, each with one agent’s id number (allegedly).

One has to wonder how a person in their right mind could think they would get away with changing 900 people to another Medicare Advantage plan without their consent!!  Insurance agents and brokers are required to take annual training classes during which they are warned about the seriousness of Medicare fraud and the penalties involved, which include $25,000 fines for each incident as well as jail time.

Medicare already hates insurance agents and thinks they are all out to take advantage of seniors. Certainly there are some bad apples among insurance agents/brokers, but most are ethical and very helpful to their clients. This is one rotten apple (allegedly) who could spoil the Medicare barrel for everyone.

UPDATE as of January 10:  I have heard through the grapevine that United noticed the high enrollment numbers by one independent agent.  United supposedly confronted the independent agent who denied any wrongdoing. When the high numbers continued, United stopped commission payments and alerted Medicare about the problem.  But because the enrollments were done electronically/on-line, they went right to Medicare, and United couldn’t stop them.

I also got a call yesterday from KVOA channel 4, and it looks like they are starting their own investigation into this news story.  Apparently, a person who was a victim of this plan change fraud called KVOA around Christmas to ask that a news story been done about this incident. KVOA now has the time to investigate this, so we may see this story get some air time soon.

UNITEDHEALTHCARE  has asked that I include the following statement in this post:

Immediately upon being alerted to this third party agent’s conduct, we notified the appropriate authorities, investigated the matter and then terminated the agent.   Such conduct is not acceptable.   As importantly, all affected beneficiaries will be re-enrolled in the plan of their choice with no interruption in their medical coverage and we apologize for any inconvenience that may have occurred. Any  Medicare beneficiary who suspects they may have been switched without their permission should call 1-800-MEDICARE (1-800-633-4227) and report their concerns.

Thank you.

Matt Burns

Spokesman for UnitedHealthcare’s Medicare business

Medicare Advantage is the privatization of Medicare. Medicare Advantage will be killed by Obamacare, which reduces payments to these private Medicare plans.  Or will it?

In actuality, insurance companies that are highly involved in Medicare Advantage did very well in 2011, as CNN recently reported.

Among the top-performing Fortune 500 stocks of 2011, three – WellCare Health Plans (WCG, Fortune 500), Humana (HUM, Fortune 500), and Centene (CNC, Fortune 500) — were health insurers with a high proportion of Medicare Advantage enrollees. WellCare’s share price has nearly doubled while Humana and Centene are up about 50%.

UnitedHealth Group (UHC) and Aetna (AET, Fortune 500), each with significant shares of Medicare Advantage patients, also inked gains of more than 35% in 2011.

WellCare’s enrollments jumped 10% in the third quarter, mostly due to an increase in Medicare Advantage members. The increase helped the firm nearly double its third-quarter profits and raise its 2012 outlook.

Humana also reported an 11% jump in third quarter revenue and boosted its 2012 earnings-per-share outlook by roughly 56% after enrollment outpaced the company’s earlier forecasts.

So what do these insurance companies and their investors know that we, the general public, don’t know?  Who would think health insurance companies would be such a good investment with Obamacare already in place in some areas (no co-pays for preventive screenings; children up to age 26 allowed to stay on their parents’ employer health insurance plans; reduced payments to Medicare Advantage) and Obamacare lurking on the horizon in others (the mandate; a limit on companies administrative costs, including profit)?

On Wednesday of this week (November 30th) the Arizona  AARP held a town hall meeting in Tucson to talk about the Affordable Care Act. About 100 people heard a representative from the Department of Health and Human Services talk about a long list of things that are in the Affordable Care Act.

The attendees were overwhelmingly seniors who expected the meeting to be focused on Medicare, since the advertisement for the event  said it would be “a community conversation about new changes to your Medicare benefits”.  But Medicare and Part D drug coverage made up a small part of the presentation.

The speaker, Eric Alborg talked about health insurance exchanges that will be set up in each state so people can go on-line and sign up for coverage. But he did not make it clear that these exchanges do not apply to people on Medicare. They are for people under 65 or not on Medicare.  Medicare is a health insurance program.

Mr. Alborg did talk about the Part D donut hole (coverage gap) and how it is being phased out over the next several years.  He explained that anyone who goes into the donut hole in 2011 gets a 50% discount on their brand drugs.  This topic got the audience involved as many people wanted to talk about their own experience with their drug coverage and Medicare.

One lady said her expensive inhaler put her in the donut hole, and she is happy to get a discount on the full cost.  However, she said the retail cost of her inhaler had been raised by 50% in the last year, which meant her 50% discount wasn’t such a good deal.

A man said his prescription is being moved from tier 2 to tier 3  by his Part D plan in 2012. That will raise his co-pay from $45 this year to $95 next year.

The Health and Human Services representative was not prepared to talk about these kinds of details, and after the presentation it was clear that many of the seniors wanted to tell him about their problems with Medicare and Part D and were asking for some help. Mr. Alborg told a few of these folks that he would look into their issue, but he is a policy expert and not a problem-solver.

I was pleased to see a crowd of people exposed to the many good things I see in the Affordable Care Act (aka “Obamacare”) such as:

Insurance companies will have to accept everyone for coverage. Of course, this comes with the mandate that everyone get health insurance, if they don’t already have it through their employer. (begins in 2014)

Children up to age 26 can be kept on their parent’s employer health insurance. (already in effect)

Insurance companies must offer insurance to children with pre-existing conditions (in small group plans). (already in effect)

Insurance companies can no longer cancel an individual insurance policy when a person gets sick. (already in effect)

Lifetime benefits limits for health insurance plans are being phased out. (already in effect)

Insurance policies must cover preventive care. (already in effect for policies written after September 2010))

Companies with more than 50 employees must provide health insurance to their workers.  (2014)

Small companies will get tax credits for paying for some of their employees’ health insurance premiums. (already in effect)

Individuals who must buy their own health insurance will receive tax credits to help them pay their premiums.  (2014)